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Brazil's Caixa plans U.S. IPO of its digital bank by early 2022

Caixa Tem boosted Brazil's greatest financial inclusion process amid the COVID-19 pandemic

Pedro Guimarães, Caixa's CEO. Photo: REUTERS/Adriano Machado
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  • Caixa’s digital arm was created as the government used the state-owned lender to pay emergency payments to Brazil’s poorest amid the pandemic;
  • Caixa already has two capital market operations in progress, with the sale of shares it holds in Banco Pan and the listing of its Caixa Seguridade insurance unit.

Brazil’s state-owned bank Caixa Economica Federal is planning an initial public offering of its the newly created ‘digital’ arm in the U.S. by early 2022, Chief Executive Pedro Guimaraes said on Thursday.

“We are just waiting for the approval of the Central Bank,” Guimarães told reporters during a presentation on Caixa Econômica’s results for the fourth quarter.

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Known as Caixa Tem, Caixa’s digital arm was created as the government used the state-owned lender to pay emergency payments to Brazil’s poorest amid the pandemic. Caixa Tem reached 107 million users, according to a presentation this Thursday.

In May 2020, after the payment of the first two installments, Caixa’s CEO and his team estimated that from one third to 40% of the beneficiaries of emergency aid were people who had no bank account before.

Also, Caixa already has two capital market operations in progress, with the sale of shares it holds in Banco Pan and the listing of its Caixa Seguridade insurance unit, both under analysis by the Brazilian Securities and Exchange Commission (CVM, in Portuguese).

READ ALSO: Brazil’s instant payments system can reach 20 million users in its first year

“There is huge interest and the market is getting to know Caixa Seguridade,” said Guimarães about the IPO. The bank also intends to list in Brazil’s stock exchange B3 in the second half of this year another arm of the business, the management of third party resources.

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Caixa intends to use part of the proceeds from the sale of these stakes to resume payments to the federal government of loans taken in the last decade in the form of Hybrid Capital Instruments (IHCD), said Guimarães.

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