Analysts Say Caixa Economica Does Not Need More Money

01/22/2018 - 10h45

Market specialists and members of the Brazilian government say that Caixa Economica, the second largest state-owned financial institution in Latin America, does not need a new contribution of capital this year and, perhaps, not even in 2019.

They believe the R$ 15 billion (US$ 4.5 million) input the bank received from resources from the FGTS, the Government Severance Indemnity Fund for Employees, would serve only to increase credit in 2108, an election year.

President Michel Temer authorized an aid earlier this month. The discussion on the funds transferred was overshadowed by the scandal in which high members of Caixa Economica were accused of corruption.

In a long report on Caixa Economica, Fitch said that, even in 2019, when the bank will have to adjust to comply with the Basileia 3 rules, it is not certain that the bank will need more input.

This will depend on variables such as the bank's profitability, demand for credit, reviewed costs and the amount paid as dividends to the government.

Amid the dispute, in addition to the political and party-driven interferences, the redefinition of Caixa Economica's size is at stake. Government sources are certain that the bank does not need more resources as long as it gradually stops working in areas such as loans for vehicles and starts favoring its biggest vocation: real estate credit.

This area has 60% of Caixa Economica's credit portfolio, followed by sanitation and infrastructure (11.4%), which has been growning annually, and consigned credit (9%), among others.

Caixa Economica has a background of having a major role in the execution of economic and social policies related to the concession of credit to people with low income.

Translated by THOMAS MUELLO

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	Samuel Costa - 26.mai.2015/Folhapress
	Caixa Economica bank branch in São Paulo