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Caixa to release 5.8B reais in housing loans

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Caixa to release 5.8B reais in housing loans

Caixa Econômica Federal said it will release an additional 5.8 billion Brazilian reais worth of housing loans to meet demand in the segment by the end of the year, O Globo reported.

The resources will go to loan applications that had already been approved but not yet released. Meanwhile, Caixa will delay new applications for families with income above 9,000 reais to January 2018.

Earlier, the bank said it had released loans worth 8.7 billion reais with resources from state workers' fund FGTS in order to keep up with demand for real estate loans through Nov. 30.

In an interview with news service Broadcast, Caixa President Gilberto Occhi said the bank's capital issue has become "critical." Without a financial bailout from the National Treasury, the bank has to adjust the release of its loans, so that its portfolio does not grow as fast as in the past, Occhi said.

Caixa is under pressure amid fears that it might not meet Basel III capital requirements by January 2019. As the bank looks to boost its capital levels, several plans have been discussed, including its conversion to a traditional corporation and a comprehensive restructuring.

As of Nov. 20, US$1 was equivalent to 3.26 Brazilian reais.