RIO DE JANEIRO, BRAZIL - Major Brazilian banks will have to accelerate the pace of spending cuts this year to cope with tight financial margins, according to an analysis by Moody's.
The rating agency points out that the economic recovery should support revenues and the decline in bad debt provisions will boost profits. However, given historically low-interest rates and increasing competition, cost control will be essential.
"Stronger business volumes should boost origination, and interest rate developments should support margins. However, funding costs will rise along with the prime rate, so margin improvement is likely to be modest. Banks also . . .
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