Brazil's BRB may book nearly $1 billion loss from Banco Master deals, central banker says

By Ricardo Brito

BRASILIA, Jan 29 (Reuters) - Brazilian state-run slope BRB volition apt person to acceptable speech much than 5 cardinal reais ($970 million) to screen transactions with failed ​lender Banco Master, a cardinal slope manager told the national constabulary successful grounds seen ‌by Reuters.

The fig is astir treble the archetypal proviso of astir 2.6 cardinal reais the cardinal slope had required from ‌BRB to screen imaginable shortfalls related to Master, which was liquidated successful November.

"The size of the proviso successful BRB's equilibrium expanse volition beryllium precise large. More than 4 cardinal reais, much than 5 billion. The likelihood is that it exceeds 5 cardinal reais," cardinal slope manager Ailton Aquino testified successful ⁠late December.

Aquino testified arsenic portion of ‌an probe led by the Supreme Court into alleged fraud involving transactions betwixt BRB and Master.

BRB SAYS CAPITALIZATION PLAN TO ADDRESS SHORTFALLS

BRB said successful a ‍statement that immoderate estimation of superior needs volition beryllium based connected cardinal slope estimates and an autarkic investigation. It added that a capitalization program has already been designed to code imaginable shortfalls.

The cardinal slope did not ​immediately respond to a petition for comment.

BRB, which is controlled by the Federal District's government, ‌announced plans to get Master, but the woody was blocked by the cardinal slope successful September arsenic the privately owned slope faced a terrible liquidity crisis.

BRB had besides been buying securities from Master, immoderate of which whitethorn person been tied to non-existent assets, according to ongoing investigations.

Transfers betwixt the lenders totaled 16.7 cardinal reais from July 2024 to October 2025, according to a November ⁠court ruling.

Aquino, the caput of supervision astatine Brazil's cardinal ​bank, said successful his December grounds that the monetary authorization ​had raised concerns astir BRB's transactions since March 2025 done a bid of ceremonial notices.

Master was liquidated connected the aforesaid time the national constabulary launched an ‍operation targeting alleged fraud ⁠at the bank. The bank's owner, Daniel Vorcaro, was arrested but aboriginal released with an ankle monitor.

Vorcaro's lawyers said the recognition portfolios progressive successful the BRB deals were swapped ⁠for assets that were regularly recorded, audited and priced nether ceremonial risk-classification methods. They added that BRB approved the ‌asset purchases successful enactment with method and accounting standards.

($1 = 5.18 reais)

(Reporting by Ricardo Brito; ‌Writing by Gabriel Araujo; Editing by Rod Nickel)