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BRB Says It Can Restore Capital as Probes Into ‘Master’ Portfolios Continue

Officials also say the finance minister has not discussed any bailout with the Brasília government.

Overview

  • In a market filing, BRB said it has full capacity to rebuild capital if losses are confirmed and noted its stress capital plan has not been triggered.
  • The bank stated it has received no communication or order from the Central Bank requiring a capital injection, countering media reports of such a demand.
  • The Finance Ministry said Fernando Haddad did not, formally or informally, address the case with the Federal District or BRB, despite reports of a R$4 billion ultimatum.
  • The exposure stems from R$12.2 billion in portfolios acquired from Master that may be fraudulent, with Kroll and Machado Meyer conducting independent reviews.
  • BRB said any potential capital contribution from its controlling shareholder would not divert funds from public policies and indicated it is studying sales of recovered assets.