By Rogerio Jelmayer
SAO PAULO--Latin America's largest bank on Monday said it plans
to spin off its pension and insurance arm into a separate unit and
take it public through an initial public offering of shares.
Brazil's state-run Banco do Brasil SA (BDORY, BBAS3.BR) said
that it plans to hold the IPO of the new company, to be called BB
Seguridade, sometime next year in order to separate its insurance
and pensions business from its traditional banking operations.
BB Seguridade accounts for between 15% and 20% of Brazil's
revenues and profits, according to the bank's latest results.
In preparation, Banco do Brasil said it will consolidate all its
insurance and pensions business in a single company. The move will
help reduce costs and expand the pensions and insurance business,
BB said.
The bank said it will list the new unit's shares on the Novo
Mercado mechanism, which is the most rigorous in terms of corporate
governance. To qualify, a company must sell at least 25% of shares
to the public, and all its shares must be ordinary rather than
preferred stock.
The bank said that Spanish insurer Mapfre SA (MAP.MC) will
remain as its partner in BB Seguridade. Currently, Mapfre has
partnership with Banco do Brasil in certain insurance business.
Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com
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