The board of Banco Indusval SA approved a reverse stock split of the company's shares at a ratio of up to 1 for 10, as the company looks to temper volatility in its shares.

The reverse stock split also aims "to provide a better level for the quotation of the company's issuance shares in order to avoid that negligible fluctuations — in centavos — represent higher percentages in line with the guidelines and registration rules of B3 issuers," the bank said in a filing.

The bank's stock has lost almost 34% of its value since the start of the year, closing at 77 Brazilian centavos on Aug. 10.

Banco Indusval continued to be in the red in the second quarter of 2018, booking a net loss of 51.8 million reais. The bank said it is "actively pursuing new alternatives to further strengthen its capital base" after its Basel capital ratio sank further into negative territory, falling to -12.5% in the second quarter from -6.9% three months earlier and 9.3% a year ago.

Brazil's central bank requires that banks in the country have a minimum equity percentage of 8.625% as calculated under Basel III rules. It also imposed an additional capital buffer of 1.875% of risk-weighted assets.

Brazil's central bank recently approved Banco Indusval's planned sale of Guide Investimentos, which the company said should bolster its capital position.

As of Aug. 10, US$1 was equivalent to 3.85 Brazilian reais.