Brazil: New non-earmarked loans decline after sharp December hike

Overall seasonally-adjusted delinquency went up 0.1 p.p. in January to 3.4%.

The Brazilian Central Bank released today the credit figures for January. The daily average of new non-earmarked loans fell 6.2% mom/sa in real terms, after soaring 6.8% in December. Meanwhile, new earmarked loans declined 2.5% mom/sa. Overall seasonally-adjusted delinquency went up 0.1 p.p. in January to 3.4%. Overall interest rates and average spreads increased.

The performance of the daily average of new non-earmarked loans was driven by declines of 11.2% in loans for non-financial corporations and 2.0% for households, adjusted for inflation and seasonality. In the earmarked segment, new loans dropped 13.1% for non-financial corporations, but expanded 6.4% for households.
Total outstanding loans continued to shrink in January in year-over-year real terms, by 3.1% (-3.4% in December). In the non-earmarked segment, the drop in outstanding loans became milder, at 0.6% yoy (-1.1% in December). Meanwhile, the decline in outstanding loans in the earmarked segment slowed down to 5.5% yoy (-5.6% in December).

The share of state-owned banks in the credit market remained at 54.1%. In year-over-year real terms, state-owned banks’ credit dropped again, by 6.0% (-6.1% in December). On the other hand, private banks’ outstanding loans advanced 0.7% (0.1% in December).

Seasonally-adjusted delinquency in non-earmarked loans increased 0.2 p.p. to 4.9% among non-financial corporations and was virtually unchanged among households, at 5.2%. As for earmarked credit, delinquency was stable at 1.3% among non-financial corporations and rose to 2.2% from 1.8% among households.

Average interest rates charged on non-earmarked loans climbed to 41.1% from 40.3%, rising for non-financial corporations and households alike. Average spreads in these transactions also widened for both segments. Average interest rates charged on earmarked loans went up to 9.5% from 9.1%, increasing for non-financial corporations and households. Average spreads in these transactions also became higher for both segments.

 

Rodrigo Tolentino

 

Fuente: ITAU

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