January 29, 2014 / 1:51 PM / in 4 years

UPDATE 1-Brazil bank lending rises as defaults remain low

(Adds details, context)

BRASILIA, Jan 29 (Reuters) - Brazilian lending growth accelerated in December as both state-run and private sector banks expanded their loan books in the wake of a decline in defaults, central bank data showed on Wednesday.

Loan disbursements by Brazilian banks rose 2.4 percent in December from the prior month and 14.6 percent in 2013, according to the central bank report.

Outstanding loans totalled 2.72 trillion reais ($1.11 trillion) last month, the bank added.

State-run and private-sector lenders stepped up loans last year as they eased lending standards for some segments following a decline in delinquencies.

Disbursements at Brazilian private-sector banks rose about 1.4 percent in December from November and 6.6 percent in 2013 from the prior year.

State-run lenders saw their loan books rise 3.2 percent in the month and 22.6 percent in the year, the report added, while disbursements from foreign lenders operating in the country expanded by 2.2 percent in the month and 9 percent in 2013.

The average lending rate fell by 0.3 percentage points to 19.7 percent in December. Rates on loans to individuals fell 0.5 percentage points to 25.6 percent, while corporate lending rates fell 0.1 point.


Spreads, or the difference between lending rates and funding costs, fell by 0.4 percentage points from November to 11.1 percent.

Loans in arrears for 90 days or more, a gauge of credit delinquencies were unchanged from November at 4.8 percent, remaining at their lowest level since April, 2011, the report said.

Defaults between 15 days and 90 days, a gauge of the future behavior of delinquencies, rose 0.2 percentage points to 2.4 percent for companies and 0.1 percentage point to 6.3 percent for individuals.

The annual pace of growth in earmarked loans, or credit aimed at encouraging investment for home building in accordance with government policies, sped to 24.5 percent in the 12 months through December from 24.4 percent through November.

Non-earmarked loans, or freely allocated loans in Brazil’s banking system, rose 7.8 percent in the 12 months through December, unchanged from the previous month. ($1 = 2.44 Brazilian reais) (Reporting by Luciana Otoni and Silvio Cascione; Writing by Asher Levine; Editing by W Simon and Sophie Hares)

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