São Paulo – Starting on Friday (25), foreign investors may have a greater share of the Bank of Brazil. A decree signed by Brazilian president Dilma Rousseff, published in the Official Gazette, provides the possibility for foreigners to own up to 30% of the bank’s capital. Up to Thursday (24), investors from abroad could own no more than 20% of the shares.
Foreigners are increasing their presence in the financial institution. According to information available on the Investor Relations site of the Bank of Brazil, foreign capital totalled 17.5% of the organisation’s share capital in June 2012. This percentage rose to 18.5% in December last year, to 19.1% in March this year and to 19.4% in June.
The main shareholder of the Bank of Brazil is the Union, which has 58.3% of shares. The Bank of Brazil Employee Pension Fund (Previ) owns 10.4% of the organisation’s shares, the Brazilian Development Bank share capital area (BNDES-Par) owns 0.2% and another 0.9% of shares are withheld in the organisation’s treasury, while 30.2% of capital is listed on the stock market, that is, in the hands of foreign investors, natural people and companies.
The presidential decree shows that the increase of Bank of Brazil share capital “is of interest to the Brazilian government”. Since 2009, the institution has been expanding the volume of shares available to foreigners in the bank’s capital. That year, the top percentage allowed was 12%. It was then expanded to 20% and now to 30%.
According to news agency Reuters, the Financial Management and Investor Relations vice president at the Bank of Brazil, Ivan Monteiro, said that the institution has called for the government to increase foreign presence due to changes in calculation of the Bovespa, the São Paulo Stock Exchange, index. The Bank of Brazil believes that the change in the calculation of the index should increase the demand for the organisation’s shares.
On Friday, Bank of Brazil shares were up. At 1:19 pm, they were traded at R$ 28;70, with appreciation of 1.27%.
*Translated by Mark Ament
