August 4, 2017 / 4:17 PM / in a year

Banco do Brasil says end of tax-free LCI could hurt mortgage loans

SAO PAULO, Aug 4 (Reuters) - Homebuilding financing at Banco do Brasil SA could suffer should the Brazilian government decide to end tax exemptions on debt securities backed by real estate receivables, Chief Executive Officer Paulo Rogêrio Caffarelli said on Friday.

The notes, known in Brazil as LCIs, account for 40 percent of Banco do Brasil’s funding for mortgage credit, Caffarelli said at an industry event in São Paulo. Local media reported this week that the government could end an income tax-exemption on the LCIs as a way to plug a growing budget deficit. (Reporting by Aluísio Alves; Writing by Guillermo Parra-Bernal)

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