Banks approve expansion of credit lines, this news will undoubtedly please many of you who follow us, but be careful, there are specific rules for approval.
The lines for 2020 grew around 15% in 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, follows the environment of greater optimism regarding the Brazilian economy for this year, however it also reflects greater efforts by banks to maintain profits in a scenario of interest rates at a historic low and in the face of an employment rate with a recovery below expectations.
Banks use these lines because they seek a difference between the cost of raising funds and the cost of lending, and therefore are able to maintain profits. However, the stronger presence of fintechs and the still low GDP limit this gain.
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Credit lines 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 its 2019 balance sheet, the credit line that grew the most was personal loans, with an increase of 45.2%.
However, payroll loans rose 14.3%, and credit cards, 10.7%. BB's profit was R$$ 17.8 billion in 2019.
Finally, according to what was disclosed, the total portfolio fell by 2.6%, driven by the decline in loans to large companies. As a huge reflection, the bank reinforced its focus on resource management.
Controlling these indicators is important, especially 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 banks' profits will also undergo a structural change.
In conclusion, banks' revenues will be more hybrid, therefore, they will no longer be solely based on credit.
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Source: Economic Value