Brazil's Federal District seeks R$6.6bn loan to recapitalize Banco de Brasília

The government of Brazil's Federal District plans to raise a R$6.6 billion loan, secured by a guarantee from the country's major banks, to recapitalize Banco de Brasília (BRB). The loan would be provided directly to the Fundo Garantidor de Créditos (FGC), with the banks offering full guarantees and receiving counter‑guarantees from the district's future participation fund revenues.

BRB faces a capital shortfall of at least R$12 billion after acquiring doubtful assets from Banco Master, prompting the need for additional funding beyond the loan. The bank also expects R$2.2 billion from securitizing its active debt and R$5 billion from selling Federal District land. Market participants doubt the combined resources will close the gap, and private banks have raised constitutional concerns about the counter‑guarantees, urging Banco do Brasil and Caixa Econômica Federal to act as intermediaries.