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Overview
- The Federal Police in São Paulo opened a confidential inquiry into suspected crimes against the financial system, including possible fraudulent management at Banco Master.
- The case is based on documents the Central Bank sent to the Federal Prosecutor’s Office after rejecting BRB’s proposed purchase in early September following roughly five months of review.
- Regulatory concerns reported included succession risk that could leave BRB exposed to Master’s liabilities and irregularities flagged during credit-portfolio transactions preceding the deal’s announcement.
- Central Bank president Gabriel Galípolo is scheduled to meet the Credit Guarantee Fund on Friday as a roughly R$4 billion FGC line granted to Master in May—rolled for 30 days—reaches its deadline this week, with any further extension not confirmed.
- Master has sold the insurer Kovr and is seeking additional asset sales, while Fitch downgraded the bank after the deal collapsed and Moody’s affirmed BRB’s B1 rating and removed it from negative review.