The recent acquisition of 58% of Banco Master’s capital by the Regional Bank of Brasilia (BRB) has the potential to intensify the competition in the Brazilian financial market, according to the evaluation of former Central Bank (BC) president, Gustavo Loyola.
In an exclusive interview with CNN MoneyLoyola shared his perspective on the impact of this fusion on the national banking scenario.
Loyola pointed out that the Brazilian financial market has undergone significant transformations in recent years.
“The market was concentrated, the Central Bank started a bank deconcentration agenda,” he explained.
This agenda, he said, involved a series of measures aimed at increasing the plurality of institutions in the sector.
Role of the Fund Credit Guarantee
A crucial factor in this deconcentration process, according to Loyola, was the Credit Guarantee Fund (FGC).
“I believe the existence of FGC facilitated this, as it guaranteed the founding of small banks,” he said.
The former BC president stressed that the FGC provided minor banks the possibility of raising funds in retail, a more stable form of funding compared to wholesale.
Loyola also noted that the financial market tends to undergo expansion and consolidation cycles.
“There is that thing of the Systoles and diastole. I think there is a time when the market expands, a very large number of institutions emerges, and suddenly also comes soon after a moment of consolidation,” he explained.
BRB strategy
As for BRB’s strategy, Loyola mentioned that, according to statements by, Paulo Henrique Costa, the bank seeks to become more universal and less concentrated in operations in the Federal District.
“This is not the first time BRB has tried such an operation,” Loyola added, suggesting that this acquisition is part of a broader bank expansion strategy.
A, therefore, is inserted in a context of transformation of the Brazilian banking market, and may contribute to a more competitive and diverse environment in the national financial sector.
