When Euromoney reported on Brazil's banking sector earlier this year, the expectation was that the long-awaited and much-postponed sale of Banespa, the bank formerly controlled by the state of São Paulo, would spark a wave of consolidation in the industry during the second half of the year. The sale has been postponed yet again - it may now not take place before 2001 - but the industry, tired of waiting, has got on with consolidation anyway.
So far, it has consisted of two big banks buying two medium-size ones. More deals can be expected. The question now is whether the biggest banks themselves will survive as they are, be forced to merge with each other, or be bought by multinationals. First-half results suggest they are in better shape than you'd expect just 18 months after a currency crisis. As the economy grows and interest rates continue to fall, however, competition for market share will become more and more a fight for survival.
The sale of Banespa must be the longest-running non-event in global banking.