Banco do Brasil SA's board voted to resume the search for international partners for investment banking unit, BB-Banco de Investimento SA, Valor Econômico reported.

The state-controlled Brazilian bank is hoping to convert the unit into an independent investment bank with a greater weighting in the group's state business. BB BI, as the unit is known, previously functioned as a division within state-owned Banco do Brasil, until it was officially transformed to into a separate entity at the beginning of 2019.

However, Banco do Brasil had been preparing for the creation of the investment bank for a longer time and reportedly has been looking to a form a joint venture partnership with a foreign company. According to Valor, the lender had advanced discussions with Switzerland's UBS Group AG to participate in the plan.

But after the change of government at the start of the year, when President Jair Bolsonaro took office and announced plans to shrink state-run lender and streamline credit disbursement from such institutions, the BB BI's joint venture plans were put on hold, until now.

Since then, BB BI has reportedly formed technical and legal support areas and segmented internal controls, unnamed sources told Valor Econômico. UBS is still the most likely partner, according to the paper, but talks were also held with Bank of America Corp. and Citigroup Inc.