Brasília – The government of Brazil has decided to increase the Federal Savings Bank (Caixa) and the Brazilian Development Bank (BNDES) capitals. According to a decree published on Friday (27) in the Federal Official Gazette, Caixa will receive 2.5 billion Brazilian real (US$ 1.4 billion) and the BNDES, 4.5 billion reals (US$ 2.6 billion).
According to the decree, this capital increase should be made without share issues, but through the transfer of shares belonging to the Union. The BNDES will receive 139,754,560 Petrobras shares, but still guaranteeing the union share control of the oil company. In the case of Caixa, the number of shares should reach 77,641,422 shares transferred.
In a press statement, Caixa said that the expansion of capital should boost the business expansion capacity by approximately 50 billion reals (US$ 28.3 billion), after a capital increase of 2.5 billion reals (US$ 1.4 billion). With the capital increase, “the organisation’s credit portfolio gains potential to double in coming years and reach 300 billion reals (US$ 170 billion)”.
“The measure reflects the continuing process for strengthening the organisation’s capital, which started through emissions of Hybrid Instruments of Capital and Debt, in 2007 and 2009, for the value of 5.2 billion reals (US$ 3 billion) and 6 billion reals (US$ 3.4 billion), respectively," informed the Caixa.
Caixa added that the funds should allow the organisation to finance sanitation and urban infrastructure works, "aimed at events like the 2014 World Cup and the 2016 Olympics, in actions aligned to the Growth Acceleration Programme – PAC 2”.
“The bank’s capital transfer operations are part of the Federal Government’s strategy, making use of the current moment of growth of the Brazilian economy to supply the demand for financing for the purchase of homes," says the company.
*Translated by Mark Ament
