Reactive power compensation with Capacitor Banks (CBs) is one of the most successful approaches used in distribution systems, mainly due to their versatility, long-term acceptance in the power industry, and reduced costs. Most allocation methods, however, lack specific strategies to handle the limited discrete nature of CBs sizes seeking to improve the overall optimization and computational performance. We present an algorithm for the Optimal Placement of Capacitor Banks (OPCB) in distribution systems by means of a hybrid Flower Pollination Algorithm (FPA)–Exhaustive Search (ES) approach. The pollination process itself determines the sets of buses for placement, while CBs sizes and the final fitness values of each pollen are selected after a full-search is conducted in the sizing space. As the sizing phase works on the limited search space of predetermined discrete bank values, the computational effort to find the optimum CB capacity is greatly reduced. Tests were performed on distribution systems of 10, 34, and 85 buses with respect to the objective function, final losses, and voltage profile. The algorithm offers an excellent compromise between solution quality and computational effort, when compared to similar approaches.