Credit granted by banks should grow 14.6% this year, BC estimates

The balance of credit granted by banks should grow 14.6% this year, according to the Inflation Report , quarterly publication of the Central Bank (BC), released today (16). The result comes from the 18.6% growth in credit for families and 9.6% for companies.

The estimate is higher than that observed in the previous report, at 12.6% . "This revision resulted from positive surprises in the last three months in the nominal balances of individuals and companies and the impact of the increase in inflation expected for the end of the year", says the report.

The balance of credit modalities for individuals based on nonearmarked resources was revised from 18% to 20%, and those based on earmarked resources from 14% to 17%. In corporate financing, projections for the increase in the balance were raised from 13% to 15% in the free segment, and from zero to 1% in the earmarked segment.

Free credit is one in which banks have the autonomy to lend money raised in the market and set the interest rates charged to customers. Directed credit, on the other hand, has rules defined by the government, and is basically destined for the housing, rural, infrastructure and microcredit sectors.

According to the BC, bank credit market data released since the last Inflation Report showed higher-than-expected growth in non-earmarked credit and household credit portfolios.

“Among loans to households with free resources, credit card and non-consigned personal credit modalities stand out. In credit directed to individuals, mortgages at a high level continued to boost the balance. Rural credit, in turn, surprised by the significant increase in concessions throughout the year, in line with the high prices of commodities and agricultural inputs”, says the report.

In credit to companies, BC observes in recent months greater expansion of discount lines for receivables and revolving credit. "As expected, the growth in the balance of credit directed to legal entities continues to show a relevant deceleration", explained the autarchy.

The growth in credit takes place even amid rising interest rates. Last week, the BC's Monetary Policy Committee (Copom) raised for the seventh consecutive time the basic interest rate, the Selic, to 9.25% per year, maintaining the more contractionary trajectory for monetary policy to contain the advance of inflation. This reflects on prices because higher interest rates make credit more expensive and encourage savings. In addition, banks consider other factors when defining the interest charged to consumers, such as risk of default, profit and administrative expenses.

Forecast for 2022

For 2022, the projection is for growth of 9.4% in the stock of credit, compared to 8.5% in the previous report. “The review considered the persistence in nominal credit growth and the higher levels of current and projected inflation, factors that offset the deterioration of the prospective scenario for economic activity and the higher expected level of interest rates”, says the report.

The loan portfolio to individuals is expected to grow by 11.7% (compared to a projection of 11.1% in September), with increases of 13% in the balance of loans based on nonearmarked resources and 10% in financing based on earmarked resources. According to BC, in particular, real estate financing, which is already showing signs of loss of strength, should have growth contained in the current context of rising interest rates.

For the corporate segment, the projection went from 5% to 6.3%, with 12% growth in non-earmarked credit and 4% contraction in earmarked credit. “This projection continues to represent a scenario of deceleration in credit, both directed and free, for the second consecutive year. The forecast considers the maintenance of the companies' deleveraging process and the search for alternative sources of financing for domestic bank credit, even if under less favorable conditions than those registered in 2021”, says the report.

The BC highlights that the new credit stock growth projections for 2021 and 2022 are higher than those indicated in the previous report, but continue to indicate a gradual deceleration compared to 2020. "Current projections take into account a more challenging scenario for economic activity , with more restrictive financial conditions, but incorporates the recent positive surprises in the nominal evolution of credit and higher inflation expected for 2022”, explained the BC.

In 2020, the credit balance grew 15.6%, with an increase of 11.2% for families and 21.8% for companies.

Text translated using artificial intelligence.