Brasilia - The BRB crisis continues to escalate. On one hand, former president Paulo Henrique Costa was arrested by the Federal Police for allegedly receiving bribes from banker Daniel Vorcaro of Banco Master; on the other, the public bank in Brasilia sees an increased risk of liquidation by the Central Bank (BC), the last and most drastic measure that can be taken in this case.
NeoFeed has learned from top officials at the state-owned bank that this previously unthinkable alternative may become a reality, as time passes and the financial institution faces increasing difficulties in attracting investors to its capitalization plan agreed with the monetary authority.
BRB employees have supported the stance of the governor of the Federal District, Celina Leão, who has sought to demonstrate greater commitment than her predecessor Ibaneis Rocha (MDB) in the attempt to save the bank. However, they admit that if it takes too long, the Central Bank will have no alternative but to liquidate the bank controlled by the Federal District government.
The coming months, therefore, will be crucial for the bank's survival, according to people leading the negotiations. Both the Central Bank and the bank have been striving to avoid this option, especially since it has the explosive potential to cause a possible systemic risk in the financial sector.
Furthermore, the liquidation of regional or state-owned banks is uncommon in the market – the most common outcome is privatization, a source at BRB points out. However, this alternative has already been rejected by BRB's president, Nelson de Souza.
In theory, one way to avoid a feared intervention or liquidation by the Central Bank would be to federalize BRB, but the Ministry of Finance and the two public banks have already denied that there is such an intention. And on Thursday, April 16, the new Minister José Guimarães (Institutional Relations) stated, at the Palácio do Planalto, that he is "radically opposed to bailing out BRB".
In the first days of her administration – Celina was vice-governor during Ibaneis's administration – the current governor and President Nelson have already traveled to São Paulo to meet with the president of the Central Bank, Gabriel Galípolo, and have had conversations with private institutions and virtual investors who may buy BRB portfolios.
BRB is experiencing a deep crisis and has been trying to obtain a loan of R$ 6.6 billion from the Credit Guarantee Fund (FGC) and banks. At the same time, it is negotiating the sale of well-valued credit portfolios worth R$ 4 billion. The independent asset manager Quadra Capital, which manages ports in Espírito Santo, has shown interest in acquiring the asset portfolio that BRB bought from Master.
The loan, however, would be secured by properties belonging to the GDF's (Federal District Government) public assets, which have already generated unease in the market and political disputes. One of the properties, an environmental protection area known as "Serrinha do Paranoá," ended up in court, and upon taking office, Celina removed it from the list.
The responsibility for the future of BRB now rests with Celina, following the departure of Ibaneis Rocha (MDB) from the GDF to run for the Senate elections, after strong pressure from the local opposition, which has even publicly advocated for his arrest.
“The bank is under new management. It’s important to separate the bank from this whole situation, because BRB is a solid bank, it’s a bank that will truly emerge from this difficult moment,” Celina stated on Thursday, April 16th, at an event in Brasília.
Next Wednesday, April 22nd, a new attempt is scheduled for an extraordinary general meeting of BRB to vote on a capital increase for the bank, after the first meeting was canceled. The bank intends to sell shares to raise up to R$ 8.8 billion.
Compliance strikes again.
The Federal Police (PF) launched on Thursday, the 16th, the fourth phase of Operation Compliance Zero, which investigates an alleged fraud scheme estimated at over R$ 12 billion between Banco Master and BRB. This time, former president Paulo Henrique Costa was arrested.
In the first phase, he was removed from the presidency and has been identified as a key figure in uncovering the details of the attempted purchase of Master by the public bank of Brasília and possible irregularities.
Based on messages exchanged with Vorcaro, a negotiation involving the payment to Paulo Henrique for six properties in São Paulo and Brasília, valued at R$ 146 million, was revealed. In one of the messages on the Master banker's cell phone, he stated to a real estate agent: "I need him to be happy."
In a statement, Governor Celina Leão maintained that Paulo Henrique Costa's involvement in the Banco Master scandal is a matter for the Judiciary, which is responsible for judging it.
"The new administration leading the GDF reaffirms its commitment to transparency, respect for institutions and legality, and will continue to collaborate with the competent authorities," he added.
