May 30, 2016 / 10:57 PM / in 2 years

Brazil's BNDES to change entire board under new leadership -sources

BRASILIA, May 30 (Reuters) - Brazil’s new interim government will replace the entire board of its state development bank BNDES this week, two sources familiar with the matter told Reuters on Monday, in what would be the latest leadership overhaul in state-run lenders.

Interim President Michel Temer named Maria Silvia Bastos, a former chief executive of steelmaker CSN, as the new head of the BNDES, by far the country’s main source of long-term corporate credit.

Bastos is expected take office on Wednesday and lead the overhaul of the bank’s board to follow new policy guidelines, said a senior BNDES executive familiar with the matter. Including the president, the board has eight members.

Temer is responsible for naming the new director.

An industry source close to Bastos told Reuters the administration will replace the entire board.

A third source close to Bastos said Vinicius Carrasco, an economic professor, and Ricardo Baldin, a former executive with private bank Itau-Unibanco, will join the new board.

The three sources declined to be named because they are not allowed to speak publicly.

The BNDES press office declined to comment for the story. Temer’s press office did not answer an email seeking comments.

Temer, the former vice president who replaced President Dilma Rousseff this month while she stands trial for allegedly breaking fiscal rules, has vowed a shift toward more market-friendly policies to revive an economy mired in recession.

Last week the government named Paulo Caffarelli, a former finance ministry official, as the new head of the Banco do Brasil, the country’s largest bank.

His government has agreed with the BNDES for the early repayment of 100 billion reais ($28.00 billion) in debt owed to the Treasury in the next three years, in a move that will save the administration 7 billion reais per year.

The government aims to reduce the BNDES participation in the credit market to open the way for private banks to give more long-term corporate credit, senior government officials have said recently. ($1 = 3.5718 Brazilian reais) (Reporting by Alonso Soto and Guillermo Parra-Bernal; Editing by David Gregorio)

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