Brazilian Banks Wage Silent War for Clients in Real Estate Loan Area

RIO DE JANEIRO, BRAZIL – Financial institutions wage a silent war for clients in the real estate credit area in Brazil. Among the five largest banks in the country – Caixa, Banco do Brasil, Bradesco, Itaú and Santander – none have agreed to disclose their latest figures on credit portability to Broadcast (the Estado Group’s real-time news system).

These data are deemed “strategic” by the institutions, even more so at this time when the housing credit market is opening up.

In 2015, the total of real estate loans migrating to another institution amounted to only R$68.93 (US$17) million. Last year, this figure was already R$1.46 billion by November. The numbers only reflect the start of the war for clients, in a market that today has a total stock of R$630 billion for loans to private individuals.

The Caixa Econômica Federal, which has the largest slice of real estate loans in Brazil, states that its priority is to grant new financing, but also offers portability to interested parties. When clients request to move from Caixa to another bank, the state-owned institution assesses the specific situation.

Bradesco, Santander, and Banco do Brasil also stated, through a press office, that they evaluate the situation of those wishing to migrate their financing to another bank “case by case”. In general, the goal is always to retain clients seeking their competitors.

In this scenario, smaller institutions are also struggling to capture a larger market share. The Bank of Brasília (BRB), which today focuses on the Federal District, recorded growth of 368 percent in real estate credit over 2019.

“We had 228 portability contracts in the second half of 2019 alone,” said the bank’s president, Paulo Henrique Costa. “Today, distribution is close to one-half between new contracts and portability contracts.”

According to Costa, real estate credit is strategic. “We understand that real estate credit is a special product, which entails a long-term relationship. It enables expanding the relationship with the bank and the consumption of other products,” he says.

For the next few months, BRB’s goal is to launch new products, such as pre-fixed contracts indexed to the IPCA (Broad Consumer Price Index), including for those wishing to transfer their loans to the bank.