Brazil’s top five banks saw a 3.1% increase in profits, reaching R$ 28.4 billion (approximately $5.8 billion) in the third quarter compared to last year.
This rise is highlighted in data from Broadcast. Leading this growth are Itaú Unibanco, Banco do Brasil, and Caixa Econômica Federal, primarily through credit revenues.
The banks displayed varied credit growth. Caixa’s portfolio grew by 11.7%, driven by agribusiness and housing credits.
Banco do Brasil experienced a 10% increase, largely in agribusiness loans.
In contrast, private banks like Santander and Itaú reported growths of 7.9% and 5.7%, respectively. Bradesco saw a marginal decrease of 0.1% over 12 months.
Looking ahead, public banks expect stronger credit operation advancements in 2024, buoyed by cuts in the Selic rate.
BB’s Vice President Geovanne Tobias foresees potential high single or low double-digit growth.
Caixa’s growth, as noted by Marcos Brasiliano, is partly due to other banks’ reduced focus on mortgage lending.
In the private sector, banks are readying to increase riskier credit lines as default rates decline.
Bradesco anticipates gradually expanding credit origination, normalizing by the end of the year.
Santander’s President, Mario Leão, predicts a more favorable 2024, aiming for a balance between loans and service revenues.
Itaú focuses on deepening client relationships, especially in the middle and high-income segments.
Their strategy involves increasing loyalty among customers who currently use a limited range of banking products.
All three private banks plan to revise their approach to the low-income sector, aiming for more cost-effective structures.
Conversely, Caixa intends to maintain its focus on this demographic, potentially integrating them into capital markets.
This evolving financial landscape showcases Brazil’s banking sector’s diverse strategies and outlooks as they navigate changing economic conditions, each aiming for growth and resilience in the coming year.