More challenging prospects
Growth rates mask lower quality lending in December
December data continued showing an overall credit deceleration, with
growth in credit outstanding slowing to 1.6% m-o-m versus 2% in
November, representing the slowest expansion since February 2008. In
y-o-y terms, credit outstanding grew 31% to BRL1,227bn.
Monthly grantings of credit registered something of a recovery in
December for corporates, with new grantings increasing 16.8% m-o-m,
and 11.9% y-o-y. For consumers, new monthly grantings increased 8.1%
m-o-m and 1.3% y-o-y, with the m-o-m recovery helped by a m-o-m
upturn of 32% in auto credit (due probably to tax incentives). We believe
that the growth in new grantings is being led by the public sector banks,
and due to reluctance from the private sector banks.
Asset quality continues to deteriorate, and in the consumer area we are
especially concerned about auto and credit card exposure, which are the
lowest quality consumer lending categories. These categories are also the
fastest growing in terms of new credit grantings for December, which we
believe represent a poor omen for the system’s consumer asset quality
prospects for 2009. The consumer NPL ratio for December 2008 was
8.1%, versus 7% at December 2007. Corporate NPL ratio is at a low 1.8%
for December 2008, down from 2% at December 2007, but we believe
that corporate asset quality peaked in September 2008 and will now
deteriorate with the economic cycle through 2009.
Spreads remain high in the near term, despite the slight decline in lending
rates, as banks appear reluctant to pass on lower funding costs to
borrowers in a climate of worsening asset quality and general uncertainty.
Our estimate for system loan growth of 10-14% in 2009 is more
conservative than the guidance from the major Brazil banks.

目录

Brazil banks valuation 3
Brazil bank sector barometer 4
Brazil bank sector data 7
Public and private sectors 8
Asset quality 10
Interest rates and spreads 15
Funding 17
Corporate sector outlook 18
Individual sector outlook 20
Credit concessions 22
Maturity structure 23
Profitability 25
Mid-cap Brazilian banks 26
Major Brazilian banks 28
Banks performance 29
Macroeconomics and HSBC
estimates 30
Disclosure appendix 32
Disclaimer 36