Banco do Brasil Hands Its Own Debtor a $448m No-Bid Deal
Governance
Key Facts
—The contract. Banco do Brasil (B3: BBAS3) signed a R$2.307bn ($448m) postal-services deal with Correios on 26 June, running sixty months.
—No competition. The bank took no rival quotes, citing the postal monopoly, which covers 97.84% of its postage spending.
—The disclosure. The bank filed it as a related-party transaction, and announced it to the market on 7 July.
—The counterparty. Correios lost R$8.5bn ($1.65bn) in 2025 and R$3.16bn ($613m) in the first quarter of 2026 alone.
—The other hat. Banco do Brasil is also one of five lenders behind a R$12bn ($2.33bn) Treasury-guaranteed loan to Correios, with roughly R$7bn ($1.36bn) more under negotiation.
—The uplift. The ceiling rose 6.3% from the 2021 contract, which the bank attributes entirely to inflation, with no change of scope.
Banco do Brasil has just agreed to pay a loss-making state company nearly half a billion dollars over five years. It did so without asking anyone else for a price, and its own filing calls the arrangement a related-party transaction.
The counterparty is Correios, Brazil’s state postal operator. The deal covers conventional, special and telematic postal services at home and abroad, and it was signed on 26 June and took effect on 2 July.
The bank disclosed it to the market on the evening of the seventh. Nothing about it appears to be unlawful, and that is precisely what makes it worth examining.
Why Banco do Brasil could not hold a tender
Brazil still runs a genuine postal monopoly. Article nine of the 1978 postal law reserves to the state the receipt, transport and delivery of letters, postcards and grouped correspondence.
Card mailings, statements and legal notices fall inside that reservation. The bank says such services make up almost ninety-eight percent of its postage spending, so a tender would have had nobody to invite.
For the small remainder outside the monopoly, the bank says it checked market prices and found the state operator’s rates comparable. It adds that no private firm reaches the remote towns its branches serve.
There is a wrinkle the coverage has missed. The same article exempts a company that carries letters between its own premises, by its own means, without commercial intermediation.
The monopoly binds a bank only when it hires somebody. Brazil’s law does not force the bank to buy the service, but it does dictate whom the bank must buy it from once it decides not to do the job itself.
Lender, customer, sibling
Now hold the two positions together. In December the postal company borrowed twelve billion reais, about two and a third billion dollars, from a syndicate of five banks, guaranteed in full by the National Treasury.
Banco do Brasil is one of those five lenders. It is now also the counterparty of a five-year no-bid contract with the same borrower, and both companies answer to one controlling shareholder, the Brazilian state.
The bank says the decision was taken independently, through its own technical and legal review, with no part played by Correios in the talks. Its own paperwork still classifies the deal under related-party transactions.
Roughly seven billion reais more, some one and a third billion dollars, is under negotiation in a second credit round. The audit court has already flagged weaknesses in the government’s assessment of whether the postal company can service what it has borrowed.
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As a rescue, the sums are small
Spread across sixty months, the contract is worth about four hundred and sixty million reais a year, roughly ninety million dollars. Set that against a company that lost eight and a half billion reais last year.
A full year of the contract covers a little over five percent of that hole. Take the first quarter of this year alone, with a net loss of three point one six billion reais.
Against that quarter, a whole year of postal revenue from the bank comes to under fifteen percent of a single quarter’s deficit. That loss was eighty-three percent worse than the same quarter a year earlier.
As a bailout this contract is a rounding error. That is exactly why the interesting question is not the money.
One detail invites a second look. The ceiling rose by about six percent from the contract signed in 2021, an increase the bank puts down entirely to inflation, with the scope of services unchanged.
Brazilian consumer prices rose by a good deal more than six percent across those five years. Either the earlier ceiling was never fully drawn down, or the correction is far gentler than the word inflation implies.
For a minority holder of Banco do Brasil stock, the lesson is structural rather than scandalous. A statutory monopoly lets the state route recurring revenue to a failing company through the purchase ledger of a listed bank, and every step of it is legal.
Did Banco do Brasil break any rule?
Nothing published suggests so. The postal monopoly is set by a 1978 statute, and the bank disclosed the deal as a related-party transaction.
Why does the no-bid contract matter?
Because the buyer is also one of the seller’s lenders, and both are controlled by the same shareholder. Legal purchasing and indirect rescue become hard to tell apart.
How badly is Correios doing?
It lost eight and a half billion reais in 2025 and a further three point one six billion in the first quarter of 2026, eighty-three percent worse than a year earlier.
Background: Inside Brazil’s Biggest-Ever Bank Fraud: The Banco Master Scandal.
Frequently Asked Questions
Did Banco do Brasil do anything illegal by skipping a competitive tender?
No, nothing in the filing or reporting suggests any law was broken. Brazil’s 1978 postal law gives Correios a monopoly over the mail services that make up nearly 98% of the bank’s postage spending, so there was effectively no one else to invite.
How much will this contract actually help Correios financially?
Very little. Spread over five years, the deal is worth roughly R$460 million a year, which covers only about 5% of the R$8.5 billion Correios lost in all of 2025, and less than 15% of what it lost in just the first quarter of 2026. It is far too small to fix the company’s finances.
Why is it notable that Banco do Brasil is both paying Correios and lending to it?
Because the bank is at once a customer handing Correios a five-year no-bid contract and one of five lenders behind a R$12 billion Treasury-guaranteed loan to the same company. Both Banco do Brasil and Correios are controlled by the Brazilian state, so the bank, its debtor and its lender all sit in one ownership structure.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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