UPDATE 2-Banco do Brasil CEO quits under pressure from Bolsonaro

(Adds new CEO name, performance of shares)

SAO PAULO, March 18 (Reuters) - State-controlled Brazilian lender Banco do Brasil SA’s Chief Executive Andre Brandao submitted his resignation on Thursday after months of pressure for his ouster from President Jair Bolsonaro over cost-cutting plans.

Brazil’s government named Fausto de Andrade Ribeiro, current CEO of a Banco do Brasil small business unit to replace Brandao, who is expected to leave his post on April 1, adding to a wave of turnover at the country’s biggest state firms.

The resignation comes a month after Bolsonaro moved to replace the CEO of Petroleo Brasileiro SA, known as Petrobras, over fuel price hikes.

The head of state power company Centrais Eletricas Brasileiras SA, or Eletrobras, also quit in January over what he called a lack of political support in Congress for privatizing the company.

As Bolsonaro’s popularity slips amid a brutal second wave of coronavirus infections, the president has been abandoning the free-market approach that helped elect him in 2019. Eying the 2022 presidential election, Bolsonaro has taken a more populist approach.

The constant management changes underline how state-owned companies struggle to set strategy because of the constant political upheaval.

After an international career at HSBC, Brandao took the helm of Banco do Brasil in September, following the resignation of former CEO Rubem Novaes, who became CEO in January 2019.

In January, the bank announced a raft of measures aiming to save up to $500 million, responding to pressure from minority investors to increase its profitability. The plan included an employee buyout program and the closure of some 360 locations.

After that, media reported that Bolsonaro said he would oust the CEO and name a new one, as he did not agree with Brandao’s measures.

Fearing being ousted, Brandao decided to resign, two sources familiar with the matter said.

Shares in Banco do Brasil are down roughly 20% this year, underperforming Brazil’s biggest listed banks, following Bolsonaro’s interference in state-controlled lenders. (Reporting by Carolina Mandl; Editing by Brad Haynes and Stephen Coates)