Brazil’s biggest banks have struck a landmark agreement with the country’s Attorney General’s Office to settle more than a million disputes that began three decades ago.
The deal, agreed on December 11, will see the participating lenders reimburse depositors for losses caused by the banks’ response to four unconventional economic plans launched by the government between 1987 and 1991, which were designed to stop hyperinflation. The disagreement boils down to whether the banks were right to adjust inflation-linked savings accounts to reflect rising prices, as required under the government schemes.
Party to the agreement are Brazil’s consumer protection group, savings body and the federation of banks. According to local media reports, up to 12bn reais ($3.6bn) could be distributed to savers.
The country’s top banks are the first to accede to the agreement, including Itaú Unibanco, Latin America’s biggest lender with $35.6bn in Tier 1 capital, and Banco do Brasil (BdB), which has $27.7bn. They are joined by Bradesco, which closely trails BdB with $24.2bn, Santander’s local subsidiary ($17.3bn) and Caixa Econômica Federal ($16.7bn).
Others banks have 90 days to join the agreement, which must still be approved by the Supreme Court.
All data sourced from www.thebankerdatabase.com
