Banks approve expansion of lines of credit, this news will undoubtedly please many of you who follow us, but stay tuned, there are specific rules for approval.
The lines for 2020 grew around 15% in the portfolios of the four largest banks in the country (Bradesco, Itaú and Santander, in addition to the state-owned Banco do Brasil) in 2019.
The flow, according to economists' perspectives, accompanies the environment of greater optimism with the Brazilian economy for this year, however it also reflects greater efforts by banks to maintain profit in a scenario of interest rates at a historic low and in the face of an employment index with recovery below of the expected.
Banks resort to these lines because they seek a difference between the cost of funding and the cost of borrowing, therefore, they manage to maintain profit. But the stronger presence of fintechs and the still low GDP limit this gain.
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Payroll lines of credit and real estate financing
These credit lines grew by 16.6% and 9.6%, respectively, when considering the four banks. In the case of Banco do Brasil, the last of the four to release the 2019 balance sheet, the credit line that grew the most was the personal loan, with an increase of 45.2%.
However, payroll loans increased by 14.3%, and credit cards, by 10.7%. BB's profit was R$ 17.8 billion in 2019.
Finally, as reported, the total portfolio fell by 2.6%, driven by the decline in loans to large companies. As a huge reflex, the bank reinforced its focus on asset management.
The control of these indicators is important, mainly in relation to cost cuts, which remain essential for this year”, he says.
And it doesn't stop there, the expectation is that the composition of bank profits will also undergo a structural change.
To conclude, bank revenues will be more hybrid, therefore, they will no longer be solely based on credit.
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Source: Economic Value
