trending Market Intelligence /marketintelligence/en/news-insights/trending/V4r_HAJR4W5ii1pRcPBARg2 content esgSubNav
In This List

Report: Partial IPO of Caixa Seguridade could generate more than 10B reais

Blog

Spotlight on sustainability: How banks can overcome the challenges of achieving net-zero emissions by 2050

Blog

Insight Weekly: US election scenarios; borrowing costs rise; commercial REIT fears

Podcast

Street Talk | Episode 100 - KBW CEO offers optimism for bears fearful of bank liquidity, credit

Blog

Insight Weekly: Stocks endure more pain; bank branch M&A slows; debt ratios fall


Report: Partial IPO of Caixa Seguridade could generate more than 10B reais

Caixa Econômica Federal could raise up to 10.3 billion Brazilian reais if it sells a 49% stake in insurance unit Caixa Seguridade Participações SA through an initial public offering, Valor Econômico reported.

The subsidiary's market value ranges from 17 billion reais to 21 billion reais, according to estimates from Carlos Daltozo, head of variable income at Eleven Financial Research.

Newly appointed Caixa Econômica Federal CEO Pedro Duarte Guimarães has revealed plans to sell stake in at least two subsidiaries in 2019, in line with privatization guidelines set out by Economy Minister Paulo Guedes.

Caixa Seguridade was created in 2015 to consolidate the state-run bank's insurance and pension operations. The company attempted an IPO a few years earlier, but the offering was called off early in 2017. At the time, market estimates predicted that the IPO could generate about 7.5 billion reais.

Caixa Seguridade is the fourth largest insurer in Brazil and earned 1.00 billion reais in premiums in the first three quarters of 2018, up 7.8% year over year, according to Valor.

The newspaper reported that Caixa Seguridade will likely need to strike product sale partnerships with other insurance firms prior to the possible IPO. As a result, analysts expect the offering to take place in the second half of 2019.

According to Valor, the most likely scenario is that Caixa Econômica Federal will use proceeds from the potential IPO to support its repayment of 40 billion reais in debt owed to Brazil's Treasury.

As of Jan. 10, US$1 was equivalent to 3.68 Brazilian reais.