Safra: a family at war over the will of the world’s richest banker

While the world’s richest banker lay bedridden in late 2019, dazed by the effects of heavy medication and suffering from resurgent brain tumours, a plot was allegedly unfolding to redraw his final wills.

Joseph Safra, the Lebanese-Brazilian heir to a venerable line of financiers, was losing his grip on a $25bn global empire of banks, property and agribusiness interests he had steadily built up over decades. 

Just over a year later, the enigmatic magnate died aged 82. It was shortly afterwards that Joseph’s middle son, Alberto Safra, learned he had been deprived of his rightful inheritance at the hands of his own mother and two brothers. 

At least, that is the claimed version of events outlined by the 43-year-old Alberto in a series of explosive lawsuits against other family members — who strenuously deny any wrongdoing.

In legal papers submitted to a New York state court earlier this year, Alberto argues he was wrongly disinherited following disputes with his younger brother, David, that resulted in him leaving the management of the lending house Joseph constructed. He claims his father, beset by physical and neurological ailments, was medically unfit to sign the relevant documents. 

The rest of the immediate Safra family have strongly rejected the accusations. They say Joseph was “fully competent” and that he disowned Alberto for setting up a competing venture and poaching talent, in defiance of entreaties to stay.

It was this “betrayal” that led the late banker to alter his wills, attorneys for his widowed wife Vicky have submitted.

Following the fallout, Joseph even barred Alberto from setting foot on the premises of his main Brazilian bank, a lawyer for one member of the family claimed.

“The family regrets the path adopted by Alberto, who first attacked his father while he was alive and now does so against his memory, and refutes his allegations,” it said in a statement in response to the lawsuit. 

Because much of Joseph’s fortune was transferred to his wife and children during his lifetime, they also contend Alberto received over $3.6bn of assets prior to the patriarch’s passing.  

The Safras are currently due to file further arguments for a dismissal of the case by early December, after which a New York judge will rule on whether it should proceed to what would be a high-profile trial.

It is all part of a multi-jurisdictional legal battle, playing out in offices and courtrooms from New York to Switzerland via São Paulo and London. The affair has shone a rare spotlight on a brand comparable to the Rothschilds or the Lazards and famed for its discretion, a hallmark of the private banking services it provides to the some of the world’s wealthiest individuals.

Court filings — some of which have been heavily redacted — reveal a bitter rift at the heart of a very private banking dynasty and a struggle for power and riches reminiscent of the TV series Succession. 

In one such document, Alberto alleges that his mother and brothers contracted a medical expert without his knowledge to attest that his father was sound of mind. He also claims other family members froze him out of discussions relating to Joseph’s care and prevented him from visiting.

“It’s a family of bankers respected everywhere,” said Rafael Schiozer, a professor at the Fundação Getulio Vargas. “Of course, all these disputes may harm this reputation.” 

Aleppo to São Paulo

The banking heritage of the Safra family — the surname means yellow, the colour of gold — goes back 180 years to the northern Syrian city of Aleppo. From this centre of trade in the Ottoman times, they financed camel caravans and exchanged currencies, expanding to Constantinople and Alexandria.

But today’s financial powerhouse had its origins in Beirut in the 1920s, when Joseph’s father, Jacob, founded a bank that would become entrusted with the wealth of the city’s affluent Sephardic Jewish residents. 

In 1953, Jacob moved his family to São Paulo, then a fast-growing metropolis home to a Syrian-Lebanese population and a Jewish diaspora.  

Along with his elder brothers Edmond and Moise, Joseph followed his father to Brazil. Edmond enjoyed a brilliant career outside South America, crossing Wall Street with Swiss private banking mystique, but died tragically in a fire at his Monte Carlo penthouse in 1999.  

Joseph and Moise built on the foundations laid by their father in Brazil, developing Banco Safra into a major commercial lender, investment bank — and trusted guardian of the financial secrets of the super-rich. International expansion followed and from its 24-storey headquarters on São Paulo’s famous Paulista Avenue, the group’s flagship entity is Brazil’s fifth-largest private sector bank by assets.

Affectionately called Seu José (Mr Joseph) by employees, Joseph Safra was known for his attention to detail and exacting standards. “It’s a winning culture. They are very serious and work a lot — different from other families who get rich and just like to enjoy life,” says one of ten current or former employees who spoke to the Financial Times. 

Staff who came up through the ranks describe the apprenticeship fondly. Yet while some experienced professionals from outside firms stay for years, others have occasionally found it difficult to adapt, according to ex-employees.

“Safra’s policy in relation to its executives has always been to maintain the best staff, strategic people and mix youth and seniority,” said Banco Safra.

Although he sealed some high-profile deals, such as the £726mn purchase of London’s “Gherkin” office building in 2014 and a half-share in banana grower Chiquita the same year, Joseph did not court publicity. A philanthropist renowned for donations to hospitals, schools and Jewish causes, the late banker shunned the limelight and rarely gave interviews.  

“He was not the sort of person that wanted to be seen at Davos,” says one person close to the family, referring to the annual gathering of global elites in Switzerland for the World Economic Forum. 

The Safra Group is moulded in his image. It has a reputation for being conservative and risk averse, prompting rivals to snipe that Joseph only lent to those who didn’t need it. None of the banks are listed on stock exchanges, choosing instead to remain privately owned. 

Joseph and his Greek-born wife Vicky Sarfaty had three sons — Jacob, Alberto and David, all educated at the prestigious Wharton business school in the US — and a daughter, Esther, who is not directly involved in the family enterprise. As the moment approached for the next Safra generation to assume the mantle, tensions were already building. 

Siblings at war

Under Joseph’s meticulous succession planning, eldest son Jacob was put in charge of operations outside Brazil, including J Safra Sarasin, a leading European private bank based in Basel. 

The two younger brothers were made co-heads of Banco Safra. Alberto ran corporate banking and David, the youngest of the trio, was put in charge of individual and investment banking. 

Internally it was no secret they had differences of opinion, according to ex-employees, before things finally came to a head. 

“It is history repeating itself,” says one figure in Brazilian finance, referring to an earlier internecine dispute.

In the 2000s, Moise’s refusal to sell his stake in the family business to Joseph prompted the younger brother to start a rival operation, J Safra, across the street in São Paulo from Banco Safra. It targeted the existing bank’s clients until Moise finally relented and sold out to his sibling in 2006, handing him full control of the group.

Alberto’s court filings state that his brother David “never accepted the role that was determined for him by our father” and “wanted to increase his control over areas of the bank for which I was responsible”. 

“[His] ambition for more power and influence led to substantial professional and personal disagreements,” it added. 

Their rows were mediated by Joseph until his declining health prevented him from intervening in day-to-day business issues, according to Alberto’s account. With his own power ebbing away, Alberto resigned from the board in October 2019.

In a document lodged with the New York court, lawyers for the rest of the family branded Alberto’s departure “an act of disloyalty and ingratitude” that caused his father “profound sadness”.

The document further accuses him of abusing “his position of trust to sabotage human resource documents, steal dozens of employees and misappropriate proprietary data”.

In the wake of the schism, Alberto claims that his mother and brothers conspired to drastically reduce his inheritance, acting to persuade Joseph to alter his wills even though the octogenarian father “was cognitively impaired at the time, and either he did not in fact approve and sign them, or only did so through the [family’s] undue influence”.

Bringing into question cognition and undue influence and who is persuading who — it is always unfortunate, it is painful, and quite frankly, it’s very hard to prove

Alberto further argues that following Joseph’s death, his mother and brothers have continued to take actions to harm his interests in various Safra businesses. 

However, the rest of the family say it was Joseph himself, upset by his son’s disloyalty, who “promptly took steps to reduce [Alberto’s] stake in the family business”.

Legal experts say the challenge for Alberto will be to demonstrate that Joseph was indeed unduly influenced, which in New York can be proved using circumstantial evidence.

His lawyers will have to rely on “emails, personal accounts of what transpired and lean on the fact that [Joseph] was vulnerable”, according to Cori Robinson, a trusts and estates attorney who practises in the state.

“The burden is pretty high,” she says. “Bringing into question cognition and undue influence and who is persuading who — it is always unfortunate, it is painful, and quite frankly, it’s very hard to prove.”

The case in the New York state court relates to SNBNY, a holding company for Safra National Bank of New York, whose head office is on Manhattan’s Fifth Avenue. A former Safra Group employee describes that institution as “one of the jewels in the crown . . . it’s like a shop window for Safra”.  

Alberto’s lawsuit alleges his mother and brothers, along with company directors, acted to unlawfully reduce his stake in SNBNY from 28 per cent to roughly 13.5 per cent, by issuing new shares through “improper accounting manoeuvres”. It also says he was blocked from appointing a board member. 

The rest of the family have argued that the share issue was Joseph’s decision and that New York is not the appropriate forum for the action, given that the holding company is domiciled in Gibraltar. They want the case dismissed.

A separate New York court handed Alberto an important early win in 2022 by accepting his request for to compel the disclosure of Joseph’s medical records from hospitals including Mount Sinai and the Memorial Sloan Kettering Cancer Center. Doctors are expected to testify as to Joseph’s soundness of mind in his final years before authorities in Switzerland, where he had a residence and where some of his last wills and testaments will ultimately be executed.

According to a 2022 legal ruling, Alberto intends to use the medical evidence to challenge the validity of two wills in the central European country. The case will be heard in a courtroom in the Alpine commune of Crans-Montana, thousands of miles from New York and São Paulo.

Not so bad for business

Whether a settlement may be brokered between the warring parties before then has been the subject of media speculation, with reports that Alberto is open to selling to the family his stakes in various Safra companies. There are also arbitration processes taking place in London behind closed doors.

A resolution would reduce the prospect of a drawn-out dispute in various courts that would bring further unwanted attention upon the grandees of Brazilian banking.

“It’s Alberto against the world,” says Robinson, adding that the family will be keen to stop the case going before a jury. She says once you reach court “the cat is out of the bag . . . I can’t imagine anyone, especially people of this enormous wealth and legacy, want their business aired like that.”

Alberto’s representatives declined to comment for this article, as did the Safra family.

So far, the family fight does not appear to have affected performance at a marque renowned for its solidity. Full-year results for Banco Safra show it passed 4 million customers in 2022. Net income increased slightly to a record R$2.2bn ($424mn), despite a R$1.2bn provision linked to a retail chain hit by an accounting scandal that affected several other lenders in Brazil. Return on equity — a key industry metric for profitability — was 13.6 per cent, down from 14.8 per cent the year before. 

However, there is scepticism about Safra’s ability to attract a younger generation of customers. “Their image is not of a very modern bank, as is required today for growth,” says Schiozer, the professor. “That’s their Achilles heel”.

Executives at Banco Safra rebuff such criticisms as a problem of perception and insist it is investing in technology and innovation, propelled by a R$7.4bn capital injection by shareholders last year. “We look to grow sustainably and with quality,” says one.  

Banco Safra said that it many of areas of activity it “has historically performed well above the market average.”

The bank is advancing in retail, where its strengths are secured loans and investments for affluent clients, but observers point out it is a competitive sector in Brazil with established high-street lenders already under pressure from challengers.

Other onlookers say David is renewing the institution alongside Silvio de Carvalho, a chief executive recruited from outside the family. “He’s made significant investments and there have been lots of hires recently,” says David Panico, founder of business consultancy Orbiz Capital, who led Safra’s investment bank for two years. “I think David’s mind is much more open to making the bank a . . . complete platform.”

Meanwhile Alberto has pursued his personal venture ASA Investiments, a multi-strategy asset management firm. Its main fund beat all 188 Brazilian peers tracked by Bloomberg in 2022, with a 39 per cent return after fees. 

Armínio Fraga, founder of Gávea Investimentos in Rio de Janeiro and the former governor of Brazil’s central bank, sums up a common view of the family and their resilience: “They take a long-term view and have a reputation [for] being survivors and moneymakers.”