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Brazil's state-run bank Caixa Ecônomica Federal will need to sell some of its assets and cut dividends if it wants to avoid having to ask the government for a capital injection in 2018, according to the bank's new president Gilberto Occhi.
"We are taking a number of measures to reduce the likelihood that we will need the government's capital [in 2018]," Occhi told The Wall Street Journal in an interview on Monday.
Occhi also noted that the bank would probably not need any help this year or next.
Caixa is facing deteriorating loan quality and tougher global capital requirements, according to the daily.
The bank is currently considering selling its lottery division, as well as other assets, to improve its financial situation. It is also looking at negotiating down the mandatory dividend it pays to the government.
Caixa has remained profitable despite Brazil's severe economic crisis, but it has struggled during the recession, leading Occhi to keep the idea of a capital injection in 2018 on the table.
"We need to evaluate the scenario, to see if the government will agree to reduce the dividend and also the advance of our assets sales plans," he said. "[It] also depends on the market, how the economy will behave in the coming year."