The Brazilian state-run bank Caixa Economica Federal, the state-controlled Banco do Brasil SA and private bank Banco Bradesco SA have signed a memorandum of understanding to jointly operate the recently created credit card company ELO.

ELO was founded this year by Banco do Brasil and Bradesco, the country's second-largest private bank in terms of assets, to compete locally with Visa Inc. and MasterCard Inc.

At a press conference, Banco do Brasil President Aldemir Bendine said on Monday that the three banks will hold equal shares in ELO.

"We expect ELO to issue its first credit card by the end of the year," Bendine said.

Monday's announcement superseded the original division of ownership in ELO. When the joint venture was first unveiled, Bradesco had a 50.01% stake, and Banco do Brasil had 49.99%.

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