UPDATE 2-Brazil state lender Caixa wants insurance unit IPO this year

miércoles 8 de abril de 2015 13:49 GYT

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By Alonso Soto and Guillermo Parra-Bernal

BRASILIA/RIO DE JANEIRO, April 8 (Reuters) - Brazilian lender Caixa Econômica Federal plans to list its insurance unit this year on the São Paulo Stock Exchange, Finance Minister Joaquim Levy said on Wednesday, in a bet that growing demand for insurance products will attract investors.

The government, which owns 100 percent of Caixa, will conduct a feasibility study on an initial public offering of Caixa Seguridade, as the unit will be called, Levy told reporters in Brasilia.

Caixa, Brazil's No. 1 mortgage lender, will remain a state bank, he added.

Levy did not give an estimate of how much the unit, majority-owned by France's CNP Assurances SA, could fetch.

The IPO would try to replicate the success of state-controlled Banco do Brasil SA, which listed BB Seguridade Participações SA in a $6.7 billion deal in April 2013, the world's largest IPO that year.

Current conditions for a listing, however, are not as attractive as they were for BB Seguridade, when investors were drawn in by low interest rates, stable household income and a strong job market that fanned demand for retirement packages and health and auto insurance.

The Caixa Seguridade listing would take place during an economic downturn that is spilling over into the job market, reducing the spending power of Brazilians.   Continuación...