By Brazil Stock Guide – Brazil’s Federal Police scheduled testimony for Monday, Dec. 1, from former Banco de Brasília (BRB) CEO Paulo Henrique Costa as part of an escalating probe into the bank’s negotiations with Banco Master. The inquiry, first reported by Broadcast, centers on BRB’s multibillion-real acquisition of allegedly non-existent payroll-loan portfolios from Banco Master.
Costa’s deposition was set following a request by his legal team, led by criminal attorney Cléber Lopes. He was removed from BRB’s leadership by court order and targeted in search-and-seizure operations under Operação Compliance Zero, which investigates suspected misconduct inside the bank.
Federal investigators say BRB, under Costa’s management, authorized transactions that transferred R$12.2 billion to Banco Master through the purchase of credit portfolios that police allege “contained grotesque flaws” and lacked any substantive due-diligence review. Previous reporting by O Estado de S. Paulo detailed evidence that the assets had not undergone proper technical assessment before approval.
Authorities are seeking to determine why BRB’s top executives opted to inject liquidity into Banco Master—whose holding company, Banco Master S.A., is not publicly traded—despite red flags raised internally. Investigators claim the bank’s leadership acted deliberately in approving the operations without applying standard risk-mitigation procedures.
The testimony is expected to help clarify the decision-making process behind one of the most contentious financial transactions involving a Brazilian state-controlled bank in recent years. BRB is controlled by the Federal District government but does not have a listed ticker, while Banco Master also operates as a privately held institution without a stock-market symbol.
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