(Adds details on 12-month lending growth rate, earmarked
BRASILIA Aug 26 Growth in Brazilian banks' loan
books slowed for a sixth straight month in July while
delinquencies rose, the central bank said on Tuesday, adding to
signs of a possible recession in Latin America's largest
Outstanding loans in Brazil's banking system rose 11.4
percent in the 12 months through July, down from 11.8 percent in
the previous month, the central bank said. According to Thomson
Reuters calculations, annual growth in lending is running at the
slowest pace since at least mid-2004.
Lending rose 0.2 percent in July from the
previous month, reaching 2.835 trillion reais ($1.25 trillion),
the report said. Loans in arrears for 90 days or more, the
industry's benchmark gauge for credit delinquencies, rose to 4.9
percent of outstanding loans from 4.8 percent in June.
Banks are scaling back disbursements after economic activity
lost steam in recent years, consumer debt hit record levels, and
quickening inflation hampered income. Brazil's economy probably
contracted in the second quarter at the sharpest pace in five
years and might have slipped into recession, a Reuters poll
showed on Monday.
Non-earmarked credit contracted 0.5 percent last month
whereas earmarked loans rose 1.0 percent, the central bank said.
Earmarked loans now account for 46.5 percent of outstanding
loans, up from 43.3 percent a year ago.
The weakness of Brazil's credit market prompted the central
bank to increase the capital available for commercial loans by
about 70 billion reais ($11.1 billion) since late July. The
measures may have helped bank lending recover this month,
although some economists said they could be ineffective due to
an apparent lack of demand for credit among consumers.
($1 = 2.2737 Brazilian reais)
(Reporting by Luciana Otoni; Writing by Silvio Cascione;
Editing by Jeffrey Benkoe and Meredith Mazzilli)