June 15 (Bloomberg) -- Banco do Brasil SA, the nation’s largest federally controlled lender, increased lending available for small companies by 11.6 billion reais ($5.93 billion) to help to increase their working capital.

The bank also cut interest rates on credit lines to small companies, the lender said today in Brasilia. The loans will benefit as many as 303,000 companies that are already Banco do Brasil’s clients and that have never defaulted, the bank said. At the end of the first quarter, the Brasilia-based bank had 37.4 billion reais in loans to small companies.

Aldemir Bendine, who was made Banco do Brasil’s president in April, has expanded credit to individuals by 13 billion reais, reduced rates on consumer loans and mortgages and extended the maturity of car loans in a bid to revive consumer spending damped by the global financial crisis. The boost to personal loans benefited 10 million clients, about a third of its total, the bank said on May 25.

“Banco do Brasil is giving an important sign to the market that it’s willing to lend more,” said Andre Caminada, a partner at Sao Paulo-based Victoire Brasil Investimentos. “It’s being aggressive in that commercial side and it’s marketing itself well.”

The bank also announced today it formed a partnership with New York-based American Express Co. to start offering a new type of credit card, the lender said in an e-mailed statement.

Banco do Brasil said in April it would lend 20 million reais to Cyrela Brazil Realty SA Empreendimentos e Participacoes to build 500 homes in Sao Paulo, play a stronger role in home financing for low-income families and offer a new monthly 1.99 percent rate credit line for durable goods included in recent government tax cuts.

To contact the reporters on this story: Telma Marotto in Sao Paulo at tmarotto1@bloomberg.net; To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net

Last Updated: June 15, 2009 16:08 EDT