Central Bank Orders Extrajudicial Liquidation of Banco Master as Public Pension Exposure Faces Scrutiny

Overview

• Brazil’s central bank halted Banco Master on Nov. 18 and appointed a liquidator to wind down operations and pay creditors according to legal priority.
• Rioprevidência says retiree and pension payments are safeguarded and reports about R$960 million in Letras Financeiras exposure, while the state audit court cites about R$2.6 billion tied to Master.
• Rioprevidência notes its monthly payroll is roughly R$1.9 billion and says it is negotiating a swap of bank letters for federal precatórios.
• Municipal pension funds also hold Master instruments, including Santo Antônio de Posse (R$8.2 million), Araras (about R$34 million) and São Roque (R$93.15 million), despite earlier MPC-SP risk alerts.
• Only up to R$250,000 per investor is covered by the credit guarantee fund, leaving larger holdings in Letras Financeiras exposed to recovery outcomes and ongoing investigations requested by legislators and opened by prosecutors.