Three weeks ago Banco do Brasil’s directors held a board meeting to discuss, among several important issues, the public banks’s financial results. But it was another issue that caught all directors by surprise: a request to inject  R$ 1.5 billion into one of its subsidiaries, Banco Votorantim, a small bank acquired by BB in 2009 in a controversial deal valued at R$8 billion. Just fyi, Banco Votorantim lost R$ 597 million in the last quarter alone.

According to Brasil247, BB is now trying to find a solution for the Titanic Votorantim. One alternative is the transfer of its bad loans to a state-owned asset management company (Emgea), sort of a bailout (discussed here before).

Votorantim resembles bailed out Banco Panamericano

Banco Votorantim has been a problem to Banco do Brasil for the past three years. The banks losses, unlike what happened with Banco Panamericano, for instance, were not inherited from old management but appeared during the current administration.

According to internal documents, the “bailout” would be made in three installments of R$$ 500 million. As BB’s management team seems to be against an injection of capital, they are now trying to solve the problem with the government in the form of transferring “toxic assets” to a government-owned entity.

The pictures below are pieces of documents written by bank executives requesting BB’s board of directors a “tiny gift” of R$1.5 billion…

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