Four banks dominate Brazil: Banco do Brasil, Bradesco, Caixa Econômica Federal and Itaú hold 73 percent of all active accounts and 80 percent of the country’s credit. For every 10 BRL deposited in the country, 7.67 BRL will end up in accounts held at one of these four. Even Brazil’s deepest recession has benefitted them, as the financial crisis toppled many emerging competitors.
This gives Brazil’s biggest banks a higher concentration of power than in the U.S., where, according to World Bank data, the top four hold just 42 percent of the market. They hold more power than those closer to home, as well: in both Mexico and Argentina, the five main banks hold approximately 70 percent of the market. However, domestic regulators assert that this is lower than other developed countries, such as Australia and Canada, where five banks cater to 93 and 83 percent respectively.
Numerous mergers and acquisitions in recent decades have led to Brazil’s current situation. When state-owned banks were privatized in the late 1990s, Bradesco, Itaú, and Santander all benefitted. Bank mergers between private companies are worth handsome sums: in 2008, the Itaú-Unibanco merger was valued at 575 billion BRL.