Rousseff's Caixa IPO plan sparks doubts, irks Brazil bank workers

viernes 13 de febrero de 2015 15:11 GYT

By Guillermo Parra-Bernal

SAO PAULO Feb 13 (Reuters) - Brazilian President Dilma Rousseff's recent move to replace Caixa Economica Federal's chief executive is aimed at pushing the big state-controlled bank closer to an initial public offering but a flotation still faces serious obstacles.

Rousseff's decision this week to tap former Budget and Planning Minister Miriam Belchior to replace Jorge Hereda as Caixa's CEO is likely intended to take the IPO plan a step forward, a senior vice president at the lender told Reuters.

Belchior is seen as loyal to Rousseff, who in her first term instructed state banks to boost access to credit and slash borrowing costs to jumpstart economic growth. Now Rousseff is looking for ways to plug a yawning budget deficit, a task that would be helped by the up to 20 billion reais ($7 billion) government officials estimate a flotation could bring.

But workers at Brazil's No. 1 mortgage lender are resentful at the prospect of facing investor scrutiny, and their objections could slow, if not entirely halt, the process.

Beyond their objections, investor wariness about a company as vulnerable to government intervention as scandal-hit Petróleo Brasileiro SA makes Rousseff's stated timetable of 18 months look unrealistic, according to bankers with five of Brazil's top-ten equity underwriters.

In what is being called the country's worst corruption scandal in history, prosecutors allege that politicians from Rousseff's ruling coalition used Petrobras to skim billions of reais through overpriced contracts for over a decade.

"Without more clarity on the Petrobras scandal and its consequences to the company and minority shareholders, the IPO of any public institution in Brazil could be a difficult task," Natalia Corfield, an analyst with JPMorgan Securities, wrote in a recent client note.