May 20, 2019 / 3:36 PM / 7 months ago

Brazil's Caixa seeks partnerships in pre-paid cards, loyalty program units -sources

SAO PAULO, May 20 (Reuters) - Brazilian state-owned lender Caixa Econômica Federal is seeking three partners, including for its pre-paid cards and loyalty program units, two sources with knowledge of the matter said.

At first, Caixa considered luring a partner for only its card acquiring business in a deal that is likely to attract Brazil’s largest card acquirers such as Cielo SA, Redecard SA, GetNet, PagSeguro Digital Ltd and StoneCo Ltd.

Caixa then decided to look for two other partners for the pre-paid and loyalty services, said the sources, who requested anonymity to disclose private plans.

The partnerships would precede the initial public offering of the card business and Caixa intends to name the unit Caixa Payments, one of the sources said.

The move shows how Caixa Chief Executive Officer Pedro Guimarães is trying to unlock value in the bank’s units and boost profitability. Such partnerships are likely to increase the company’s value before taking it public.

Caixa will hire investment banks as advisers to forge these partnerships and also the card unit IPO in the coming days, one source said.

The bank has 103 million active cards, but only 6.3 million are credit cards, indicating potential to increase this base.

Guimarães plans to list four units controlled by Caixa: insurance, cards, lottery and asset management. This strategy is part of Caixa’s plan to raise up to 100 billion reais from the sale of assets the unlisted state-owned lender owns or manages. (Reporting by Tatiana Bautzer and Carolina Mandl; editing by Grant McCool)

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