Telefonica Brasil (NYSE:VIV) S.A. (B3: VIVT3; NYSE: VIV), a leading telecommunications company, announced the approval by the Central Bank of Brazil for its request to operate Vivo Pay Sociedade de Crédito Direto S.A. ("Vivo Pay SCD"), a credit society indirectly controlled by the company. This development, disclosed in the Official Gazette on Monday, marks a significant step for the firm in expanding its financial services offerings.
Vivo Pay SCD is designed to operate within the financial sector, providing credit directly to consumers. The authorization from the Central Bank allows the company to proceed with its plans under the regulatory framework governing credit institutions in Brazil. This move aligns with Telefonica (NYSE:TEF) Brasil's strategy to diversify its services and tap into the growing financial technology market.
The company's Chief Financial Officer and Investor Relations Officer, David Melcon Sanchez-Friera, confirmed the news, emphasizing Telefonica Brasil's commitment to broadening its business horizons and delivering innovative financial solutions to its customers.
Telefonica Brasil, which operates under the brand Vivo, is part of the global Telefonica Group, one of the largest telecommunications companies in the world. With this new venture, the company aims to leverage its extensive customer base and technological capabilities to establish a strong presence in the fintech space.
The announcement was made in compliance with the regulations of the Securities Exchange Act of 1934, and the report was signed by João Pedro Carneiro, the company's Investor Relations Director. The information provided is based on a press release statement from Telefonica Brasil.
In other recent news, Telefonica Brasil, also known as Vivo, has reported a series of significant developments. The company has expanded its share buyback program from R$1.0 billion to R$1.5 billion, aiming to enhance shareholder value by efficiently applying available cash resources and optimizing capital allocation. The acquisitions, facilitated by multiple financial institutions, will utilize funds from statutory profit reserves and are set to conclude by March 2025.
In terms of financial performance, Vivo has reported robust Q2 2024 earnings, showcasing considerable growth in total revenue, EBITDA, and net income. This growth is attributed to an expanding customer base and advances in mobile and fiber-to-the-home connectivity. The company's B2B digital services and new businesses now account for 9.9% of total revenues, indicating a commitment to digital transformation.
Furthermore, Vivo has reported a strong operating cash flow of R$6.5 billion in the first half of the year, despite increased operational costs. The company has also signaled interest in exploring M&A opportunities in the broadband and B2B sectors and has applied for an SCD license from the Central Bank to enhance its services.
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