Like feijoada, Brazil’s national dish, a deal simmering in the banking sector could turn cut-price ingredients into mouthwatering fare. A merger between recently battered Banco Itaú, the country’s second largest lender, and Unibanco, in third place, was warmly received by investors who figured a combined institution would be better able to weather the financial storm that has now reached their shores.

The banks say they have been in discussions for 15 months, but recent events probably spurred the announcement. The most obvious impetus was the carnage in Brazil’s capital markets, which is now threatening its corporate sector. Another was the announcement on Friday by Emilio Botín, chairman of Spanish banking group Santander, that he is targeting aggressive growth in Brazil after acquiring Banco Real from ABN Amro. He is seeking 15 per cent of the local market within the next few years though organic growth.