Brazil’s President Dilma Rousseff plans to sell a stake in the insurance unit of the state-owned bank Caixa Economica as part of a plan to shore up public accounts.
The government will hire investment banks to carry out a feasibility study on market conditions and investor interest in the shares, Caixa’s Chief Executive Officer Miriam Belchior told reporters in Brasilia along with Finance Minister Joaquim Levy.
“We would like to do it this year, it would be ideal,” Levy said, adding the initial public offering will hinge on the feasibility study. “The move strengthens the capital market and will give an opportunity for people to invest.”
Caixa’s insurance unit is majority owned by France’s CNP Assurances.
Rousseff is trying to unravel policies that boosted the budget deficit, including financial support to state banks, in an effort to prevent a credit downgrade. Funding of state banks has helped push Brazil’s gross debt to a record high 65.5 percent of gross domestic product, according to the central bank series that starts in 2006.