Brazilian state bank Caixa Econômica Federal will use proceeds raised in a new joint venture with France’s CNP Assurances SA to boost its capital ratio. The news was advanced to Reuters by the bank’s Chief Executive Officer, Nelson Antonio de Souza.
Under this joint-venture, Caixa will sell CNP life insurance products in its branches, and the French company will pay R$ 4.65 billion ($1.13 billion) for a 40% stake in the new company.
As told by Souza, Caixa is exploring the sale of other assets, including lottery licensing unit Caixa Instantanea SA, part of its loan portfolio and real estate. After failing to sell Caixa Instantanea earlier this year, the bank intends to resume its sale effort by December.
The bank faced high delinquency rates after its aggressive loan book expansion unde the country’s former Workers Party government.
Souza also said that Caixa wants to grow its loan book in credit lines that require less capital, such as payroll-backed loans. ($1 = 4.1056 Brazilian reais)
Original Story: Reuters | Aluisio Alves
Photo: Caixa Econômica Federal/Rodrigo de Oliveira
Translation & Edition: Prime Yield