Caixa Econômica Federal's board has set a profit target of 9 billion Brazilian reais for 2018, which it will look to achieve with the help of a reduction of 2.6 billion reais in operating costs, Folha de S.Paulo reported May 15.
The majority of the cost-cutting will come from closing around 100 branches where either operations are considered unsustainable or are located near another branch, bringing the number of bank branches to 4,100, according to people involved in the talks.
Fenae, the federation of Caixa employees, criticized the branch shuttering as a "dismantling" of the financial institution.
Cost-cutting measures also include sharing bank products and services with other companies, such as Banco do Brasil SA and Banco Nacional de Desenvolvimento Econômico e Social.
Additionally, Caixa aims to strengthen its capital and meet international requirements with the measures. The bank also plans to lower its dividend payouts to the TCU audit court to 25% of profits during the next two years, as well as sell off properties, which should result in revenue of 500 million reais.
As of May 14, US$1 was equivalent to 3.62 Brazilian reais.