SAO PAULO, Aug 21 (Reuters) - State-run Banco do Brasil SA said on Wednesday it had postponed a plan to increase its stake in troubled lender Banco Votorantim SA for an “indefinite time.”
Votorantim specializes in auto and corporate loans. Lending in those two segments went through a serious downturn last year as some borrowers increasingly fell behind on payments as a result of an economic slowdown.
In a securities filing, Banco do Brasil said the delay was mutually agreed with Banco Votorantim’s main shareholder, Votorantim Financas SA, but that both parties remain focused on “capturing synergies” between the two institutions.
Banco do Brasil currently holds a 49.9 percent stake in Votorantim and, according to a previous securities filing, any transaction between the parties would only involve the purchase of preferred shares of Banco Votorantim.
Banco do Brasil could use Votorantim’s units, including a fully-fledged trading desk and treasury unit as well as an investment banking arm, to grow in areas where its presence is still developing, such as financial and capital markets advisory, brokerage and other financial services.