Banco Master, a Brazilian lender recently acquired by state-controlled bank BRB, is advancing in negotiations with investment bank BTG Pactual to sell a range of assets, sources say by Reuters.
These assets, which include court-ordered payments and private equity holdings, are valued between 15 billion reais and 23 billion reais ($2.7 billion to $4.1 billion).
The move follows BRB’s acquisition of the majority of Banco Master’s capital, signaling a new chapter in the lender’s trajectory. As part of the deal, which is still pending regulatory approval, a portion of Banco Master’s assets was excluded, and these are now the subject of BTG Pactual’s interest. One of the sources revealed that the bank is considering acquiring either all or some of the remaining assets, with the final structure of the deal yet to be determined.
Despite these negotiations, Banco Master is also pursuing parallel discussions to secure international funding to support its operations moving forward, underscoring its ongoing efforts to stabilize its position in Brazil’s highly concentrated banking sector. Banco Master declined to comment on the matter.
BTG Pactual, for its part, confirmed that it is actively exploring consolidation opportunities that could enhance value for its shareholders, provided these transactions receive the necessary regulatory approvals. The investment bank has emphasized that it constantly evaluates potential deals that align with its long-term strategy.
The recent sale of Banco Master to BRB marked a significant shift in the lender’s funding model. Historically, Banco Master had relied heavily on issuing high-yield debt securities, distributed through investment platforms. This strategy had fueled its rapid growth, but has also attracted mounting scrutiny. Critics have expressed concerns about the sustainability of this model in Brazil’s banking environment, where competition is intense and regulations are stringent.
In response to regulatory concerns and changing market conditions, Banco Master began lowering yields on its new debt securities, known as CDBs, earlier this week. The bank aims to gradually bring these yields closer to the market average following its transition to BRB’s control.
The discussions between Banco Master and BTG Pactual are set against the backdrop of broader changes in the Brazilian financial sector, with growing calls for more robust regulatory oversight of funding strategies that rely on high-risk securities.
