What’s Behind the Sharp Rise in Bank Lending in Brazil?
Financial Services Partner Steven Sandretto was interviewed by the Financial Services Advisor, a publication of The Dialogue, about the rise in bank lending in Brazil. The level of bank lending in Brazil grew more than 15 percent for the 12-month period through November. The figure marks the sharpest increase in bank lending since September 2013. Mr. Sandretto highlights the factors driving bank lending in Brazil, but notes that the trend is not expected to continue in 2021.
“The significant expansion of bank lending in Brazil in 2020 was largely a result of the coronavirus pandemic as many companies were forced to seek financing in order to preserve liquidity. The Brazilian central bank approved a package of measures aimed at expanding banks’ lending capacity in order to restore liquidity, allowing banks to offer increased loans and more flexible terms." said Mr. Sandretto. "The expiration of the central bank’s loan forbearance programs will likely lead to an increase in impaired loans and credit losses and, therefore, less lending going forward into 2021."