Goldman Sachs (NYSE: GS) and Bank of America (NYSE: BAC) Developing Brazilian Wealth Management Business

Bank of America (NYSE: BAC) is in a major hiring mode as it develops a new wealth management Brazil to compete with a similar effort by Goldman Sachs (NYSE: GS).

The United States’ largest bank in terms of assets is setting up a new private banking unit for high-net worth clients in Brazil to compete with rivals including Goldman Sachs and Banco Santander SA that are expanding their efforts in the Brazilian economy that has lead the region out of a recession this year.

Antonio Costa, head of Bank of America’s global wealth management division in Brazil said in a statement that “We are in an important hiring mode to get people to structure products and systems and be financial advisers. One of the biggest differences with other countries is that Brazilians are very entrepreneurial and for the wealth management business you have to show innovative and differentiated structures.”

It’s expected that Brazil’s economy will expand by about 3.5% in 2010 as record low interest rates help improve consumption and investment in the country, according to forecasts by the IMF. Comparatively, the International Monetary Fund believes that the region’s major economies will contract by 2.7% this year and grow by 3.0% next year, whereas Brazil’s economy only shrank by 0.7% this year.

Goldman Sachs is hiring 11 banks in the company to start a private banking operation and an asset management business in the country. The bank recently brought in five private bankers from Itau Unibanco Holding SA and two bankers from UBS AG’s former UBS Pactual unit.

Brazil’s largest homegrown bank, Banco Santander, recently raised $12.3 billion real ($7.2 billion) in October, which was the country’s largest IPO in history to expand its local unit, including private banking efforts.