BANKING

Banco Master, a problematic lender, gets liquidated. And its owner is arrested

Since the beginning of the year, Banco Master has made headlines for all the wrong reasons. Photo: Amanda Perobelli/Reuters/Folhapress

The Brazilian Central Bank on Tuesday took the extraordinary step of liquidating Banco Master, a mid-sized lender that had grown rapidly on the promise of high-yield retail products. The move came as the Federal Police launched an operation to investigate the bank’s executives for what authorities describe as a years-long scheme of selling non-existent credit portfolios to cover mounting losses.

The liquidation was ordered after the Central Bank concluded that Master’s balance sheet had deteriorated beyond repair. On Monday, a little-known firm, Fictor Holding (which has interests in the food and education sectors), announced plans to acquire Master in partnership with Emirati investors. 

The deal, which would involve…

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