Brazil's Caixa Econômica Federal has set up a new wholesale business area that will help the state-owned bank boost corporate lending to medium-sized companies, Valor Econômico reported.

The new division will focus on firms with annual revenues of between 30 million reais and 500 million reais, a segment in which the bank's performance has historically been poor, according to the report.

Caixa has established 59 specialized offices to serve wholesale customers across Brazil, with 51 of them dedicated to midsize companies. A team of 1,200 employees has been assigned to work in new business area.

"The changes are a milestone for Caixa," said Eduardo Dacache, the company's vice president of wholesale, adding that the new division will streamline the bank's business model.

Caixa is slowly shifting away from lending to larger companies and has decided not to renew short-term loans for some bigger firms, instead directing them toward the capital market. However, it is still open to project financing in sectors such as construction, infrastructure and agribusiness.

As of Jan. 8, US$1 was equivalent to 4.07 Brazilian reais.