Brazil bank lending down 0.1% in April, default rates up
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Loading... - Liisa Turunen
- 01 Jun 2023
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According to data released on Tuesday by the central bank, loans in Brazil exhibited a slight decline of 0.1% in April compared to the previous month. This contraction was primarily driven by a decrease in corporate credit, while the level of delinquency worsened.
The overall credit stock in the country amounted to 5.363 trillion reais ($1.07 trillion), with the growth rate over the past 12 months slowing down to 11.1% in April, down from 12.1% in March.
The central bank reported a 0.6% decrease in bank lending to businesses during April. However, credit extended to individuals experienced a marginal increase of 0.2%.
Additionally, a comprehensive gauge of default rates for non-earmarked credit, encompassing both individuals and businesses, rose to 4.7% in April from 4.5% in March, reaching its highest level since March 2018.
Simultaneously, bank lending spreads expanded by 1 point to 32.7 percentage points compared to the previous month.
The central bank recently cautioned about the challenges that bank profitability in Brazil will face in the medium term. It highlighted the persistently high credit risk, citing the possibilities of weaker economic activity, slower credit growth, increased defaults, and elevated inflation.
