Authorities in Brazil are preparing for the initial public offering (IPO) of a new digital bank, specifically created by the federal government to assist in support and recovery from the COVID-19 pandemic.
At a recent online event, Brazil’s Minister of Economy, Paulo Guedes, said the federal government was in advanced stages of planning the initial offering of shares in the freshly created Caixa Econômica Federal, Reuters reported.
The move comes amid reports Brazil is on the cusp of joining the Organization for Economic Cooperation and Development, which Guedes said would work alongside the new bank in attracting further investment to the country.
Caixa Econômica Federal was set up to assist the government in distributing support to some 64 million people. According to reports, Caixa has already proved instrumental in identifying individuals and channeling support as needed, in response to the effects of the pandemic.
As a result, Guedes said Caixa will IPO as a bank that already has 64 million customers, creating new market opportunities for investors.
“We digitalized 64 million people. How much is a bank with 64 million people worth? Low-income people, but people that were (bank-registered) for the very first time, so they are going to be loyal for the rest of their lives.”
He went on to say that the government would be prepared to offer further guarantees to investors, in order to sure up the risks of the new bank.
“If the private sector abroad wants to pay extra money to have a guarantee […] we can give it to them for a certain price. If they want it, we’ll provide it.”
Remarking that Brazil had already met two-thirds of the criteria for joining the OECD, Guedes said he expects the country to become a full member within the next year.