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Caixa to incur impact of 300M reais from FGTS, PIS-Pasep withdrawals

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Caixa to incur impact of 300M reais from FGTS, PIS-Pasep withdrawals

Caixa Econômica Federal will incur a negative impact of about 300 million reais in annual revenues due to withdrawals from the FGTS workers' severance fund and PIS-Pasep employee funds, Diário Comércio Indústria e Serviços reported.

According to CEO Pedro Guimarães, the effect will be "very small" compared to Caixa's profit. The management of the FGTS fund only accounts for 1% of the bank's total revenues, Guimarães previously has said.

The federal government announced that it will free up 42 billion reais from the FGTS fund, of which 30 billion reais will be released this year, in an effort to boost still-slow economic growth. About 106 million Brazilians will have access to withdrawals from the FGTS and PIS-Pasep funds.

The FGTS withdrawals will begin on Sept. 13, according to a separate DCI report.

As of Aug. 2, US$1 was equivalent to 3.89 Brazilian reais.