Brazil's central bank authorized state-run Banco do Brasil SA , the nation's largest lender by assets, to book 8.1 billion reais ($3.4 billion) from a capital injection made by the National Treasury as common capital and Tier 1 capital. The central bank decision, which Banco do Brasil unveiled in a securities filing on Monday, is retroactive to Aug. 28.
According to the filing, the decision will help increase Banco do Brasil's common equity ratio by 98 basis points and its regulatory capital ratio, or the gauge used to measure how much capital a bank has available under Basel II reules, by 20 basis points. A basis point represents one-hundredth of a percentage point.
Shares of Banco do Brasil tumbled 4.7 percent in São Paulo, outpacing a decline in the benchmark stock index Bovespa of 1.7 percent on Monday.
$1 = 2.40 Brazilian reais