Brazil banks ready for latest stress test
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazil banks ready for latest stress test

Previous crises led to consolidated, profitable sector that should be able to weather coming storm.

oncoming storm_780

The financial fallout from the coronavirus in emerging markets is hitting Brazil hard, but the solidity – and profitability – of its banking sector is helping alleviate the pain.

A recent report from Goldman Sachs highlighted the extent of Brazil’s financial exposure to Covid-19: Brazil has seen its equity markets sell off more than any other large country and the real has also been one of the worst-performing currencies.

However, the country’s banking sector looks set to withstand this latest crisis.

Large banks in Brazil may have several flaws... But there is one thing nobody can deny – they are rock-solid - Eduardo Rosman, BTG Pactual

A report from BTG Pactual highlights the positive aspects of having a consolidated banking system – it increases ease of coordination and regulation during crises and tends towards strong profitability of those players during good times and bad.

“Over the years, banks faced hyperinflation, price freezes and the Collor Plan, which hijacked savings accounts,” argues Eduardo Rosman, financial institutions analyst at BTG Pactual.

Gift this article