Government to list Caixa's insurance unit on stock exchange

Brazil's Finance Minister Joaquim Levy and the chairwoman of the state-run bank Caixa Econômica Federal Miriam Belchior announced Wednesday (Apr 8) the initial public offering (IPO) of Caixa Seguros, the bank's insurance unit. The measure does not affect Caixa's other activities, and the bank is to remain totally controlled by the government, ministers say. “If we can, we'll carry it out still this year. The goal has been set,” Levy said.

Caixa Seguros already has partners in the private enterprise. Studies will have as a parameter BB Seguridade, an insurance investment firm that belongs to the government-run Banco do Brasil.

According to Belchior, the operation will be key to expanding the bank's insurance business. “We have enough potential to find ourselves a firm position in the sector.”

Minister Levy said there are still no estimates as to  how much profit the change can bring to public coffers, but, he says, revenues will not be used for increasing the country's primary surplus.

The minister believes the IPO is a great opportunity to create a savings tool for small investors.

Levy further argued that the expansion in the insurance market causes an impact on the quality life of the population, who will be given easier access to goods. “We must do our best to benefit from a tool that's not just an opportunity to build up savings, but also to generate wealth at Caixa itself, but also in people's quality of life.”

Translated by Fabrício Ferreira