This paper discusses the low participation of foreign banks in the Brazilian market over the last two decades. Although the country went through an explicit and, to some extent, accelerated process of opening up of this sector in the 1990s, foreign banks have presented market shares that have never been historically expressive in relative terms -compared to those of their local competitors and to those presented by foreign banks in other emerging countries in the same period. Moreover, since 2001 their market shares have fallen significantly. This research analyzes this phenomenon from the evaluation of structural elements of the Brazilian market, the influence exerted by the particular presence of large state-owned banks in the country and, finally, from the behavior of local private banks in relation to their endogenous protection strategies towards foreign competitors. Additionally, a brief case study based on the comparison between two foreign banks with opposite trajectories in Brazil, HSBC Brasil and Santander Brasil, is presented illustratively, in order to complement the proposed discussion. The conclusions of the paper indicate that the competitive environment of the Brazilian banking market has not been favorable, nor even neutral, for foreign players, and therefore their low participation levels are not essentially due to external phenomena (which could be associated, for example, with scenarios of deglobalization or scale-downs). Evidence suggest that foreign banks in Brazil have suffered to a significant extent from the country's structural and institutional particularities, and have been directly targeted, in competitive terms, by their local competitors.
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