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UPDATE 1-Brazil to oust senior Banco do Brasil execs-sources
May 12, 2012 / 12:26 AM / 6 years ago

UPDATE 1-Brazil to oust senior Banco do Brasil execs-sources

(Adds background on Vale, Previ, paragraphs 4-5)

* Head of Previ fund, vice president to leave bank

* Previ’s Flores is chairman of mining giant Vale

* Clean-up in No. 1 bank began with recent dismissal

By Jeferson Ribeiro and Ana Flor

SAO PAULO, May 11 (Reuters) - Two senior executives at state-controlled Banco do Brasil will be ousted in coming days, sources told Reuters on Friday, in the latest twist of a power struggle at Brazil’s largest bank.

Federal government officials already informed both executives - Ricardo Oliveira and Ricardo Flores - of the decision, said the sources, who declined to be quoted because of the sensitivity of the issue.

Their ouster comes five months after the bank removed Allan Toledo from his post as senior vice president for wholesale, private banking and international businesses.

Oliveira, a senior vice president for government relations, and Flores, who chairs Previ, the pension fund for the bank’s employees, were kept for a few weeks longer than planned once the decision to fire them was made, to facilitate government-sponsored plans to lower Banco do Brasil’s borrowing costs, one of the sources said.

Last month, President Dilma Rousseff called on private-sector banks to boost lending and cut rates to help revive a slowing economy. Banco do Brasil and Caixa Econômica Federal are speeding up loan disbursements and cutting rates to force their rivals to follow suit.

Flores, as Previ president, sits as chairman of mining giant Vale, also Brazil’s No. 1 private sector company. Flores was tapped as head of Previ last year amid efforts by the government to increase its influence in Vale.

Previ is one of the largest shareholders in the mining company and as a representative to state farms and other institutions has the right to elect Vale’s chairman.

The sources said Banco do Brasil Chief Executive Aldemir Bendine, a protegé of Finance Minister Guido Mantega, and Flores have been involved in a fierce tussle for control of the bank for at least the past year.

Banco do Brasil is Brazil’s largest bank by assets, controls about a third of farming loans in the nation and has spearheaded a plan by the government to use public institutions to foster faster growth in Latin America’s largest economy. Bendine took over as CEO in April 2009, replacing a predecessor who opposed to greater government intervention in the lender.

Banco do Brasil declined to comment. Efforts to contact Flores and Oliveira were unsuccessful. A spokesman for the presidential palace in Brasilia did not confirm the information.

Other changes in Previ’s senior management are expected, one of the sources said. Bendine will remain as CEO of Banco do Brasil, another source added.

Oliveira could be replaced by César Borges, a former senator and Bahia state governor, to replace Oliveira, a third source said. Rousseff sounded out Borges as a possibility for the post, said the source. (Additional reporting by Aluísio Alves in São Paulo; Writing by Guillermo Parra-Bernal; Editing by Gary Hill)

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