Banks increase credit expansion forecast to 11.4% in 2022, says survey

Brazilian banks raised their forecast for the credit in 2022, now expecting an expansion of 11.4% in the total portfolio this year, according to a survey released this Monday (22) by the Brazilian Federation of Banks (Febraban ).

In the previous survey, from June, the projection was and high of 10.4%. All non-earmarked credit categories had an increase in the forecast. Free credit for individuals leads expectations, with an expected increase of 15.3%. For companies, banks expect growth of 13%.

Febraban also points out that the majority of respondents, 73.7%, project an accommodation in the pace of expansion of the loan portfolio until the end of 2022, but modestly, continuing with high growth in the year.

The survey also asked about evaluations regarding the cycle of high interest rates in Brazil. For 60% of respondents, the signal by the Monetary Policy Committee (Copom ) that the basic interest rate, the Selic rate , will not rise more was adequate. Already 35% opined that the signaling should not have been done, and that it can lead to a greater undocking of expectations.

For 65% of the participants, the excerpt from the minutes of the last Copom meeting that indicated the possibility of a small adjustment of the Selic in September did not change expectations for interest rates. Most respondents, 55%, expect the cycle to end at a rate of 13.75% per year.

According to the federation, banks are divided as to when the Copom will start cutting interest rates. For 50%, the process will start in the second quarter of 2023, while 50% expect the decline to start from the third quarter. The exchange rate projection until the end of the year is in the range of R$ 5.20 to R$ 5.25.

Asked about the Gross Domestic Product (GDP ) in Brazil in 2022, 55% project a gradual slowdown in the second half of the year, with forecasts ranging between 1.5% and 2% growth this year. Already 45% expect a slower slowdown than the market consensus, with a rise above 2%.

Regarding the state of the economy of the United States 65% understand that a slowdown is inevitable amid the interest rate hike process, stating that downward revisions to GDP are already “relatively priced”.

Credit grows 0.8% in July

Released on the same day, Febraban’s monthly credit survey brought a forecast of a 0.8% increase in total operations in July compared to the previous month.

The sector’s expectation is that credit to families will grow 1.4% in 2022, supported by factors such as the “reopening of activities, recovery of the labor market and also by rural credit, due to the beginning of the 2022/2023 Crop Plan”.

Based on this projection, the expansion of the total loan portfolio in the 12 months ended in July should be 16.3%, slightly lower than the figure for June, 16.9%.

Febraban points out that “the deceleration is lower than that of inflation, which went from 11.89% to 10.07% in the month, due to the deflation registered in July of 0.68%, indicating that credit accelerated in real terms, from 5% to 6.2%, still suggesting a positive scenario for the segment”.

For individuals only, the projection is that the loan portfolio will increase by 21.5% in 12 months, with a “very expressive expansion rate”. For companies, the decline in July should be 0.2%, with the free credit portfolio being hampered by the seasonality of cash flow lines.

“On the other hand, the targeted portfolio (+0.6%) should gain momentum with the new round of the pronampe (National Support Program for Micro and Small Businesses), with operations starting in the last week of the month, but whose impact should be greater in August. In 12 months, the PJ portfolio should accommodate to 9.3%”, observes the association.

For the volume of credit concessions, the projection is for a fall of 0.4% in July in the monthly comparison. In the 12-month period, the volume should have growth of 23.8%, compared to 23.7% in June.

“The result indicates that the injection of credit in the economy has remained quite widespread, despite the increase in the Selic rate and the signs of high default rates”, highlights Febraban.

“The survey shows a scenario of continuity of the strong rhythm of credit growth at the beginning of the second semester, in line with the even more positive numbers that we have observed for economic activity and the job market throughout the year, composing a favorable scenario for expansion of credit operations”, says Rubens Sardenberg, director of Economics, Prudential Regulation and Risks at Febraban.