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Brazil's central bank reportedly monitoring 9 banks

Bnamericas Published: Thursday, May 19, 2016
Brazil's central bank reportedly monitoring 9 banks

Brazil's central bank is closely monitoring the liquidity and stability of the operations of nine banks.

According to a report from Reuters, Banif, Maxima, Ficsa, Gerador, Pottencial, BPN Brasil, Mercantil do Brasil, Pan and BTG Pactual are named in an undated internal document from the central bank as being under "special surveillance." The news agency said the document is labeled as a presentation for May 19.

The central bank released a statement on the Reuters report, saying "the published information is incomplete, out of context and included elements that did not correspond to reality, as said to the media outlet on April 28, which only denotes the irresponsibility of the report."

The monetary authority also denied in the statement that a list of banks under watch would be presented at Wednesday's meeting of the financial stability committee known as Comef.

Reuters also reported that the document questioned the banks' stability and showed concern from regulators with their "excessive leverage, recurring losses, tough-to-sell assets or reputational risks."

The nine banks on the list are focused on niche markets and have little or no presence in the country's large retail banking market.​

A former central bank official told Reuters that having more than six banks on the surveillance list is cause for concern, although it does not necessarily mean they have solvency problems.

"There are always banks under surveillance and you would expect the list to grow in an economic recession," the former official said to Reuters. "The chances of getting off the list easily also depend on the economy."

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