Brazil Football Federation May Lose Half Of 2012 Profit Following Bank Failure
A "person familiar with the matter" said that Brazil's football federation may lose half its '12 profit following the collapse of a bank that had been at the center of a government graft scandal, according to Panja & Marcelino of BLOOMBERG. The person, who asked not to be identified because the information is private, said that Confederacao Brasileira de Futebol (CBF) deposited about 30M reais ($13.14M) with Belo Horizonte-based Banco Rural "over the last decade." Brazil's central bank liquidated Rural this month citing "serious" legal violations. Rural, which specialized in lending to small and medium-size companies, was closed after "successive losses generated abnormal risk to creditors," the central bank said Aug. 2. CBF, which had '12 sales of 382M reais ($165M) and net income of 55.6M reais ($24M), "risks losing the majority of its money held at Banco Rural because of the terms of the bank's liquidation." Brazil's deposit insurance fund "guarantees Rural's certificate of deposit, local agricultural letters of credit and deposits" of as much as 250,000 reais ($108,389M). According to a Rural statement on its web page, amounts above 250,000 reais "will be evaluated by the liquidator." The deposit insurance fund "also guarantees investments in the so-called DPGE, a local bank note," of as much as 20M reais ($8.6M) (BLOOMBERG, 8/12).