Mr Zaghen hopes Banespa will sell for more than its book value of 3.8 billion reals.

ECONOMIST: Brazilian banking

For large local banks, bidding for Banespa is a way to stop a rival grabbing that opportunity.

ECONOMIST: Brazilian banking

Among the Brazilian bidders, Bradesco needs Banespa to stay out in front, and Itau needs it to come close to the top spot.

ECONOMIST: Brazilian banks

Banespa's efficiency is poor: its running costs amount to 114% of its income from interest and commissions (ie, it makes an operating loss).

ECONOMIST: Brazilian banks

For that, blame the politicians' failure to liquidate Banespa in 1994.

ECONOMIST: Brazilian banking

Meanwhile, the central bank has cleaned up Banespa's operations.

ECONOMIST: Brazilian banking

Thanks to this deal, Banespa is sitting pretty.

ECONOMIST: Brazilian banking

Since the government has relieved Banespa of most of its bad debts, its new owner should also have plenty of room to expand its lending (this time, perhaps, to people who will actually pay the money back).

ECONOMIST: Brazilian banks

When Banespa is privatised, any buyer will gain a large and very liquid bank with a well-sited network of more than 550 branches in Sao Paulo state, Brazil's biggest financial and business market, says Paulo Zaghen, the central-bank director in charge of rescuing state banks.

ECONOMIST: Brazilian banking