Fast-Growing Bank Sends Shudders Through Brazil Financial System

Brazil’s central bank president, Gabriel Galipolo, cleared his schedule on Monday to make room for some urgent meetings. The guest list included Andre Esteves, chairman of financial giant Banco BTG Pactual SA, and Paulo Henrique Costa, the leader of a smaller, more obscure bank owned by the government of Brasilia.

The topic was a third bank that had brought all their fates together. Until recently, Banco Master SA had been a high flier, expanding its lending portfolio by 86% a year on average, leasing a splashy office in Miami and acquiring rivals. But to grow so quickly, ...