Brazil’s banks see multiple drivers for 2018 growth

GDP and credit growth should offset lower NII; greater efficiencies also sought to preserve strong results.

As the Brazilian central bank nears the end of its cutting cycle – with the Selic (the Brazilian central bank’s overnight rate) predicted to be at or near 7% in the first quarter of 2018 – the focus for the improvement in the results of the country’s banks is set to switch to credit growth.

Brazil’s banks have been profiting from an improvement in the cost of the country’s risk, better economic prospects and reduced political noise.

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