Banco Master's Will Financeira deal drew guidance from ex-central bank official
What's the deal? Banco MasterDealroom has a profile for this one. Try Dealroom → acquired Brazilian consumer lender Will FinanceiraDealroom has a profile for this one. Try Dealroom →, one of several purchases that a former central bank official helped banker Daniel Vorcaro push through, according to Federal Police documents released by Brazil's Supreme Federal Court. The deal value was undisclosed.
Who's involved? Paulo Souza, former head of supervision at Brazil's central bank, advised Vorcaro on the acquisitions of Will Financeira and the banks VoiterDealroom has a profile for this one. Try Dealroom → and LetsbankDealroom has a profile for this one. Try Dealroom →, the documents show. Will Financeira is a consumer finance company; Voiter, formerly IndusvalDealroom has a profile for this one. Try Dealroom →, was positioned as an investment bank.
Why it matters? The acquisitions helped lift Vorcaro's conglomerate's deposits insured by Brazil's Credit Guarantee Fund (FGC) by R$26 billion over 2024, according to an audit by the Federal Court of Accounts (TCU).
What's the concern? WhatsApp messages between Souza and Vorcaro, published this morning, show the ex-official coaching the banker on how to ease doubts among the central bank's technical teams reviewing the deals. In a December 2023 message, Souza suggested arguing that buying Will Financeira would add payment and checking services to CredicestaDealroom has a profile for this one. Try Dealroom →'s existing base of "around four million" individual clients, steering the group toward retail operations more aligned with FGC funding.
The backdrop: Newspaper Valor reported that the central bank already knew of some irregularities and balance-sheet imbalances at Master in 2024, yet still allowed the purchases. The Voiter approval came on March 26, 2024 — just over two weeks after the bank's supervision department ordered Master to fix serious liquidity problems.
The capital question: Master was out of compliance with an additional capital requirement at the time. When queried, the supervision department told the unit reviewing the deals that the Voiter transaction's capital injection would resolve the shortfall. Souza told Vorcaro the Voiter deal would generate "a net worth of 800 million, important given the new FGC leverage rule."
The pattern: The Will Financeira approval landed on May 27, 2024. A day later, supervision ordered Master to correct a R$885 million capital deficiency and irregular operations involving the Bravo Fund.
The signal: The disclosures point to how tight coordination between a former regulator and a fast-consolidating bank helped clear deals despite known weaknesses — raising questions about oversight of Brazil's deposit-guarantee system as one group's insured funding swelled by tens of billions of reais.
Image credit: Generated with Gemini
