Brazil lender BRB barred from taking federally guaranteed loans, Treasury says

About this update from Brb Banco De Brasilia Sa

Brazilian lender BRB (BSLIS3.SA) is currently unable to contract any credit operation backed by a federal government guarantee, Treasury Secretary Rogerio Ceron said on Wednesday. Ceron cited "delicate fiscal issues" at the regional bank's controlling shareholder, the Federal District government, acknowledging that such situation also creates "challenges" for BRB in securing loans without a federal guarantee.According to Ceron, state-owned lender Caixa Economica Federal is not leading any concrete initiative involving a potential acquisition, stake purchase or loan portfolio deal related to BRB. Ceron chairs Caixa's board of directors.Speaking at a press conference, he added that if BRB requires support, it would not necessarily have to come from a financial institution, and could involve the FGC private deposit insurance fund or other alternatives. The central bank has estimated that BRB will need to set aside more than 5 billion reais ($973.54 million) in provisions to shore up its liquidity position following questionable transactions carried out with failed lender Banco Master. Privately held Master was liquidated by the regulator in November, the same day federal police launched an operation probing the alleged sale of a fraudulent credit portfolio from the institution to BRB. ($1 = 5.1359 reais)

View stock analysis, news, and events for Brb Banco De Brasilia Sa