What is the loss in bank profits after the FGC bailout in the Master case? Citi did the math.

The bill for the nearly R$52 billion bailouts of Banco Master, Will Bank, and Banco Pleno by the Credit Guarantee Fund ( FGC ) is about to arrive in the coffers of financial institutions. And now, with a new framework. According to Citi's calculations, the impact on the profits of Brazilian banks will be limited.

In a report to clients, Citi says that the fund's new funding structure requires an advance capital contribution: institutions will have to advance contributions equivalent to up to 84 months and also absorb an additional recurring charge of 6 basis points (bps, equivalent to 0.06%) per year.

For banks, the costs involve holding money today that would be paid over the years, plus an extraordinary annual operational charge. In practice, the schedule being worked on in the market is in three stages: an "immediate" advance of 60 months throughout 2026; another 12 months in 2027; and another 12 months in 2028 – totaling 84 months.

To estimate the impact on profits, Citi uses 100% of the CDI (that is, it assumes that the money "locked" in the advance ceases to yield the basic rate), capitalizing this cost over time. From this comes the conclusion: despite the large volume over several months, the effect on the result tends to be contained in relation to the size of the balance sheets.

The bank estimates a “modest” financial impact in 2026: somewhere between 0.4% and 1.9% of profit, and about 8 bps of pressure on core capital, based on figures from the fourth quarter of 2025.

According to Citi's analysis, the impact is more concentrated on traditional incumbents: in 2026, the "total" (60-month advance plus the extraordinary fee) reaches 1.9% of profit at Banco do Brasil; 1.8% at Bradesco and 1.6% at Inter, with Santander Brasil at 1.5% and Banco ABC Brasil at 1.4%; Itaú Unibanco appears below this group, at 1.3%, while Nubank is the "least affected", with 0.4%.

The institutional turning point occurred on January 22, 2026, when the National Monetary Council (CMN) approved changes to the FGC's statute and regulations, expanding the fund's flexibility to adjust rates and determine advance payments in situations requiring cash flow.

According to Citi, the next step is for the Central Bank of Brazil to formalize the schedule for repaying the 60-month advance. This is something that, according to market analysts, could happen between March and May, with implementation expected in the first half of the year.

And, given that it is an extraordinary requirement, the possibility of some kind of flexibility in the application of the rule cannot be ruled out, depending on the Central Bank's assessment of the capital space of parts of the system.

Cost buffers

In any case, banks are already discussing how to lower the price. The most obvious way is to redirect assets that are currently idle: compulsory deposits. If these resources are already held at the Central Bank without remuneration, using them to finance the advance payment to the FGC reduces (or at least softens) the opportunity cost embedded in the measure.

The second buffer is internal: efficiency. If the additional charge becomes a "new fixed cost" of the system, the natural reaction is to accelerate productivity and digitization initiatives to preserve return on equity, especially at a time when banks are also facing strong competition in pricing and changes in the funding mix.

The third, and most sensitive, factor is passing on the price increase. Citi points out that part of the ROE protection can come from credit repricing — which, in practice, means trying to distribute the cost of the new framework to the final borrower, especially in lines where elasticity allows adjustments without significantly losing volume.

For banks, the most important thing will be to understand how the installment schedule will be affected, the possibility of using (or not using) reserve requirements, and, above all, whether the prepayment will be treated as a one-off event for restructuring or whether it sets a precedent for a structurally more expensive FGC (Credit Guarantee Fund) during stress cycles.