Bank lending in Brazil rose for a second straight month in September, while default rates fell for the first time in a year, underscoring the impact of record-low borrowing costs and an improved scenario for the country's banks.
Brazil's economy, the largest in Latin America, emerged from recession in the second quarter and is showing solid signs of recovery, bolstering expectations that credit conditions will continue to improve, said Tulio Maciel, deputy chief of the central bank's economic research department.
"The normalisation of the credit market is already very near," Maciel told a news conference. Growth in new loan concessions in the country's banking system slowed to an average 3 percent in September from 7.3 percent in August, the central bank said on Tuesday.
Loan delinquencies measured as a proportion of total loans, or the average loan default rate, edged lower, to 5.8 percent, from 5.9 percent in August, the bank said. It was the first decline in defaults since September 2008, it added. Outstanding loans in the banking system were up 1.5 percent in September from August to 1.347 trillion reais ($777.3 billion), equivalent to 45.7 percent of gross domestic product. In August, outstanding loans equalled 45.3 percent of GDP.
Central bank president Henrique Meirelles said at a separate event in Sao Paulo that economic growth is an opportunity for credit expansion. But he said it needed to be a "healthy" credit expansion "without the creation of bubbles or situations that could generate problems in the future."
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