Banco Central do Brasil has greenlighted Banco Mercantil do Brasil SA's 60.0 million Brazilian reais capital increase, according to a regulatory filing.

The capital hike, which the board of the Belo Horizonte-based bank approved in December, involves the issuance of 3,000,000 common shares, to be transferred to their holders May 16, Banco Mercantil said.

The transaction is aimed at strengthening capitalization to support the expansion of the bank's business and to maintain an adequate ratio of its shareholders' equity to risk-weighted assets.

As of May 9, US$1 was equivalent to 3.60 Brazilian reais.