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Caixa looks to generate 15B reais through unit listings, CEO says

Caixa Econômica Federal is looking to raise about 15 billion Brazilian reais by listing four of its subsidiaries through the first half of 2020, CEO Pedro Guimarães said in an interview with O Globo.

Caixa is considering listing the subsidiaries, which include the state-run bank's insurance, asset management, lottery and card businesses, in São Paulo and New York.

The bank plans to list the insurance and card units between September and December, while the lottery and asset management businesses are scheduled to be listed during the first four months of 2020, Guimarães told O Globo. The company will conduct roadshows for the card and insurance units in June, he added.

Meanwhile, Caixa has also set up a working group tasked with reducing the bank's expenses by 3.5 billion reais in the next two years, the CEO said.

Additionally, the bank is willing to participate in potential bailouts of struggling Brazilian states in 2019 as long as the loans are guaranteed by Brazil's national treasury. A Brazilian media report earlier in March said states in economic crisis this year will receive financial support from foreign banks instead of local banks.

Caixa recently sold its entire stake in IRB-Brasil Resseguros SA. That sale was part a divestment strategy in line with the government's efforts to downsize public banks.

As of March 8, US$1 was equivalent to 3.86 Brazilian reais.