Brazil's lower house of congress has approved key parts of presidential measure MP 443, which granted federally controlled Banco do Brasil (BB) and Caixa Econômica Federal (CEF) several new powers, congressional news service Agência Câmara reported.
The lower house passed the measures allowing the two banks and their subsidiaries to buy stakes in or full ownership of other financial institutions, including banks and private pension providers. It also rejected an amendment that would have scrapped CEF's authority to set up an investment bank, CaixaPar.
The bill now passes to Brazil's senate, where it could potentially face large numbers of amendments, Afonso Colla Francisco of law firm Bastos-Tigre, Coelho da Rocha e Lopes Advogados, told BNamericas.
In the meantime, MP 443 as it was drafted by the executive branch in October is technically in full effect and any amendments that are eventually added will not be retroactive, he noted.
It is unclear whether BB will wait for congressional passage of the bill to complete some of its upcoming purchases, including São Paulo state bank Nossa Caixa, as some reports indicated in previous weeks. BB's board approved the purchase of state bank Banco do Piauí (BEP) this week, while negotiations for Banco Votorantim are ongoing.
BB has been seen seeking acquisition opportunities with greater zeal after the announced merger of Itaú (NYSE: ITU) and Unibanco (NYSE: UBB) last week, which would create the biggest bank in Latin America.
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