Whilst by no means as famous, Brazil’s Safra family have long been called the “Rothschilds of Latin America” due to both their generational banking prowess and secretive nature. Indeed, members of the family have long held the title of “banking’s most secretive figure”.
Origins
Bearing the name meaning “gold” in Arabic, the Safra family have aptly been involved in the banking industry since the time of the Ottoman Empire.
Having settled in the trading city of Aleppo, where its often said that East and West met, the Safras began as money changers, exchanging various European, African and Asian currencies for the gold and silver bullion they could use in the souks (markets) of the city.
Soon rising to prominence as some of the best money changers in the city, the Safras became quite wealthy from the heavy commissions they charged for their exchange services.
And here is where they noticed something.
Not only could they make a fortune changing currencies like the Austrian Thaler, Ottoman Para and Venetian Zecchini, they could use that fortune to finance lucrative trade caravans across the Middle East and make an even greater profit.
Founding their first financial institution, Safra Frères et Cie., in 1840 to do this, the bank soon gained fame and prestige across the Middle East as highly selective financiers. They had a knack for financing only the most profitable caravans.
Indeed, the family was so successful that they added two more offices: one in the Ottoman capital of Istanbul and another in the Egyptian city of Alexandria. This, in effect, gave Safra Frères triple the reach and continued to make the family fabulously wealthy.
Enter Jacob Safra
It was into these circumstances that Jacob Eliaho Safra was born on January 9 1891. The only child of Elie Safra, a partner at Safra Frères et Cie., and his wife, Sabouth, Jacob was groomed to enter the family business from a young age.
When his father died suddenly in 1904, a 13-year old Jacob was taken in by his uncle, Ezra Safra, his father’s older brother and the head of his family’s bank.
Quickly realizing his young nephew’s raw talent and passion for the business, Ezra, a man with no children of his own (at the time – his son Albert would be born in July 1912), groomed Jacob to one day take over the family firm.
Whilst still only a teenager, Jacob was converting currencies into their gold and silver equivalents, gaining notoriety among the traders of Aleppo for his ability to calculate exchange rates mentally… all whilst his more experienced relatives used conversion tables.
Rising up through the ranks of his family’s bank at an astonishing pace, Jacob was a partner before he was 18 and in 1914 was sent by his uncle to personally oversee the opening of the bank’s fourth branch. This one being in the Lebanese capital of Beirut.
Beirut
Over the next four years, Jacob worked closely with the branch he helped establish, building it from nothing into one of the preeminent financial institutions in the city and increasing its connection to the main branch in Aleppo.
Following the collapse of the Ottoman Empire in the wake of their defeat in WWI, the flow of trade through Aleppo all but ended. Adapting to survive, Jacob, along with several other members of his family, left Aleppo for Beirut.
Initially working out of the Beirut branch of Safra Frères et Cie. still as partner, Jacob yearned to go out on his own.
After marrying the love of his life – his 16 year old cousin, Esther Tiera Safra – in early 1920, Jacob broke with his family a few months later to start his own bank, which he called Jacob E. Safra Bank.
Banking (no pun intended) on his reputation as a discreet and talented banker, Jacob E. Safra Bank soon became the bank of choice for much of Syria and Lebanon’s wealthy Jews, who trusted Safra to take care of their personal and business finances with the utmost care and discretion.
Indeed, Safra catered almost exclusively to the Middle East’s wealthy Jews through one simple thing: their own language.
For centuries, the Middle East’s wealthy Jews had been taught a language written in the Arabic script, but not intelligible with written Arabic. Only wealthy Jews knew this language, and they only taught it to other Jews.
And for Safra, this was perfect.
Most of his clients were wealthy and had known this language since childhood, so could easily understand any documents Jacob E. Safra Bank wrote in the language and sent to them. The bank’s internal records were similarly written in this language too.
And this was a stroke of genius of Jacob Safra’s part. His clients could understand what the bank was telling them, whilst if the bank was ever robbed or nationalized, the thieves/government wouldn’t be able to understand the documents!
In a time when wealthy Jewish businessmen feared losing their money to one or both of these things, Safra’s added layer of discretion reassured them and convinced them to deposit their money with him and not another bank.
Naturally, Jacob Safra became quite wealthy himself and was able to afford a comfortable lifestyle in a Jewish-majority neighborhood of Beirut for both himself and his ever-growing family.
The father of eight children, including four sons, as soon as they were old enough, Jacob had them learning the family business in the school holidays. His second oldest son, Edmond, formally joined the bank’s metal and foreign exchange division at 16.
A New Life
Indeed, it looked as though everything was set for the Safras. Their bank had never been more profitable, their founder was still young and in good health and there was a new generation ready and eager to take over.
This, however, was not to last.
The creation of the state of Israel and their subsequent victory in the 1948 Arab-Israeli War angered much of the Middle East. Levels of antisemitism in the region rose dramatically and Jews in the Middle East felt the brunt of this.
Initially unfazed by this, Jacob Safra began to fear for his family’s safety after he witnessed an openly antisemitic picket outside his bank, describing in vivid detail how they would kill the Safra family, their employees and burn its bank to the ground.
As for the police (Lebanese ISF), they did nothing.
Deciding he and his family had to leave Lebanon for their own safety, Jacob Safra moved the family to Milan, Italy in 1949, leaving the bank he’d spent the better part of three decades building in the hands of trusted employees.
Interestingly, one of these trusted employees was Nassim Eliau Sassoon, a member of the Sassoon banking dynasty (also called the “Rothschilds of the East”) and whose son, Elias, would become the wealthiest member of the family!
Not long after arriving in the Italian financial capital, Jacob used his reputation as one of the Middle East’s preeminent bankers to secure a job for Edmond in a precious metals trading firm, which saw him travel often to meet with producers and distributors alike.
Once again, this was a stroke of genius on Jacob Safra’s part. Though it’s unclear whether he intended for the family to stay in Italy, Edmond’s frequent traveling allowed him evaluate several countries as potential safe havens for the family.
Among those countries visited and evaluated by Edmond was Brazil, in particular its primary financial hub, São Paulo.
Long home to a vibrant and prosperous Jewish community, and where antisemitism was not only a crime but a social taboo, Edmond gave his family a glowing review of the city and country as a whole.
Indeed, this review must have been so positive that it convinced Jacob to relocate the entire Safra family to the country in 1952, following a wave of Jewish immigrants to the country.
For the next three years, the Safras worked hard to become vital pillars of São Paulo’s Jewish community, ingratiating themselves with the Jewish businessmen of the city, many of whom had set up shop as wholesale merchants, and trying to understand their worries.
Safra SA
In 1955, Jacob Safra and his four sons established the family’s first financial institution, Safra SA, to manage the wealth of their clients (São Paulo’s wealthy Jewish businessmen) and finance various projects of theirs.
For the next eight years, the Safra family expanded Safra SA into one of the largest financial institutions in the city.
Continuing the tradition of writing all sensitive internal documents in the Arabic script known only to well-educated Jews as he had at Jacob E. Safra Bank, Jacob Safra’s next stroke of brilliance was to send his heir to Geneva in 1956.
The effect of this was twofold.
Firstly, it allowed Edmond’s brothers to take up roles in the company’s management, whilst Edmond went to Geneva to establish the Trade Development Bank (TDB), a Swiss private bank owned by the Safra family.
But here is where the brilliance truly lay. Many of the Jews in São Paulo had come to Brazil from either Europe or the Middle East, where they had fled state-sanctioned antisemitism and had lost their businesses. and livelihoods in many cases.
A generation of refugees, São Paulo’s Jews feared that one day the Brazilian government would similarly turn against them and take their businesses by force, just as the Nazis and Arabs had done. They were constantly looking to protect their family’s money.
So when the Safras, a family of Jews who knew this all too well, offered to look after their money and they had a bank in Switzerland, a country with notoriously strict bank secrecy laws, many Brazilian Jews happily gave their money to the Safras.
If the Brazilian government ever turned against them, the Safras could move all their clients’ money to Switzerland and place it in a Swiss account in their name for them to get at a later date. Genius.
A Family Divided?
Naturally, this made Safra SA and Safra family who owned incredibly wealthy and successful. However, this success was not to last as tragedy struck the family on May 27 1963.
That day, the founder of the dynasty, Jacob Safra, passed away leaving his shares in the company to his three sons (his eldest, Elie, had retired from the company years previously to focus on philanthropy).
And this is where the family began to fragment. Both Edmond and his younger brothers, Joseph and Moise, had their own plans on the future of the company. And they were the polar opposites of one another.
Edmond, wanted to keep Safra SA as they and their father had founded it, and set up a separate, independent bank to expand into private and corporate banking, in a similar vein to how he had with the Trade Development Bank.
Joseph and Moise, however, wanted to do this through Safra SA, as it already had the clients, the name recognition (despite the fact the name would have to change) and would be less of a regulatory hassle.
With neither side willing to compromise, Edmond eventually left his family’s company in 1964 and sold his shares in the company to his brothers, giving both of them 50% ownership in the company.
Republic Bank of New York
Traveling to the United States, Edmond settled in New York and started his own bank, Republic National Bank of New York, using the assets of his Geneva bank (which he was the sole shareholder of) for financing and who took a 36% stake in the new bank.
Bringing on expert American banking talent to help get past regulators and through Safra’s political connections (going as far as the Kennedy family), the bank began trading in 1966.
The most well initially capitalized bank in US banking history with shareholders from more than 30 states and a dozen countries, Edmond expanded Republic by focusing on clients who did business internationally.
And this approach seemed to work. In their first month alone, the bank opened 20,000 new accounts. A record for a New York bank even today!
Attracting new customers using many of the same techniques his father had taught him, as well as new ones he’d learned as the head of TDB, Republic added more branches by acquiring its rivals until it was the third largest bank in the state with 80 branches.
The only banks that were bigger were Citigroup and Chase Manhattan.
In 1980, Republic Bank of New York was listed on the New York Stock Exchange to help raise the capital it needed to expand. Despite this, Edmond remained the largest shareholder and allowed him to expand the bank into Canada, London, Luxembourg and Monaco.
Banco Safra
Meanwhile, with Edmond’s departure, Joseph and Moise were successful in turning Safra SA into a full bank, renaming it Banco Safra.
Initially expanding through opening accounts for Safra SA’s original clients, the brothers added more accounts by attracting wealthy non-Jews in São Paulo as well as wealthy Jews in other major Brazilian cities like Rio de Janiero and Salvador.
