Banco PanAmericano simply had sold loan portfolios to the big Brazilian banks, being Bradesco, Banco do Brasil and Itau its largest clients. Together, the three banks held loan portfolios of R$ 2.8 billion from the bailed out institution, which until then belonged to the entrepreneur and presenter Silvio Santos. PanAmericano, however, informed the Central Bank (BC) that it had sold only R$673.7 million in credit portfolios – which is 24% of the real sum. The remainder appeared in its balance sheet, in a clear (fraudulent) move to inflate the bank’s assets. The ranking of the banks most exposed to the crisis in Banco PanAmericano was prepared by the Central Bank (BC) and is part of an audit report prepared by the government.
Source: Valor
Panamericano was not bailed out to save the banks that had bought loan portfolios from them. Lets take the case of Bradesco for example since it was the bank that acquired the most loans from Panamericano. Bradesco has a total loan portfolio around of around R$300Billion, the R$1.4bn acquired from panamericano accounts for less than 1% of its loan portfolio. Even if there was something wrong with the acquired loans (which there wasn't) it hardly seems to be the case of requiring a bail out. Apparently whomever wrote this post does not understand how the scam worked. The problem was that once Panamericano sold the portfolio to another bank they were not taking that asset off their balance sheet, consequently overstating their assets. The banks management started doing this in 2008 in order to keep profits and their bonuses high. It got to the point that the R$2billion they were overstating in their balance was greater than the total equity of the business. Management literally pillaged the bank in order to fill their pockets.
MANAGERS RAPE THE COMPANIES AND MINORITY SHAREHOLDERS ALL THE TIME. SEE JACK WELCH, FROM GE, FOR EXAMPLE. OR EIKE BATISTA AND THE MINORITY SHAREHOLDERS OF PORT X. IT IS AMAZING THEY STILL HAVE SUCKERS BUYING STOCK.