June 24, 2019 / 12:00 PM / 3 months ago

UPDATE 2-Brazilian state bank Caixa is in talks to sell stakes in Banco Pan

(Adds CEO comments on results)

SAO PAULO, June 24 (Reuters) - Brazilian state bank Caixa Economica Federal is mulling the sale of its stakes in mid-sized lender Banco Pan SA and insurance broker Wiz Solucoes e Corretagem de Seguros SA, its chief executive said on Monday, as it seeks to streamline operations.

CEO Pedro Guimaraes told journalists on Monday the sale of Pan likely would take place through a share offering, adding that Caixa is in talks with co-owner Banco BTG Pactual SA to coordinate a stake sale this year, although no decision had been taken yet.

Caixa plans to sell a series of assets to return funds to the government, reducing public debt, as Guimaraes seeks to run the bank in a more market-friendly manner. Among assets up for sale is a stake worth nearly 2 billion reais in Petroleo Brasileiro SA.

Caixa holds a 41.7% stake in Banco Pan, which is worth roughly 1.6 billion reais ($418.41 million). Preferred shares in Banco Pan are up more than 300% this year as it has sought to broaden its offerings from its longtime specialties of auto and payroll loans.

Guimaraes said Wiz is not seen as a strategic investment for the bank. Caixa Seguros, which has Caixa and France’s CNP Assurances SA as partners, holds a 25% stake in Wiz.

The state bank reported on Monday that its first quarter net income rose 22.9% from a year earlier to 3.920 billion reais as loan-loss provisions fell 24.4%.

Caixa also said its loans in arrears more than 90 days reached 2.5%, down 0.4 percentage point in 12 months.

Guimaraes said loan-loss provisions are not likely to increase in the coming months despite the recent bankruptcy filing of Brazilian conglomerate Odebrecht SA, as Caixa has already provisioned almost 100% of loans extended to the group in the past.

“Losses will be very small,” he said, adding that only loans with real estate assets as collateral have not been provisioned. ($1 = 3.8240 reais) (Reporting by Carolina Mandl Editing by Steve Orlofsky and Bill Trott)

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