Reuters: US Dollar Report: UPDATE 1-Brazil lending rises in March; defaults down

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UPDATE 1-Brazil lending rises in March; defaults down Apr 25th 2012, 14:03 Wed Apr 25, 2012 10:03am EDT * Credit growth picks ups, continues recovery after January dip * Default rate slightly down to 5.7 pct of total loans BRASILIA, April 25 (Reuters) - Credit growth in Brazil accelerated in March led by increasing corporate demand and expanding subsidized loans, the central bank said on Wednesday, in the latest data available before the government started pressuring private banks to cut interest rates. Outstanding loans in Brazil's banking system rose 1.7 percent in March from February to 2.07 trillion reais ($1.1 trillion), up from a 0.4 percent expansion in the previous month. Loans in arrears for 90 days or more fell to the equivalent of 5.7 percent of outstanding loans in March, compared with 5.8 percent in February. President Dilma Rousseff has led an aggressive push to revive Latin America's top economy after it nearly fell into recession late last year. Her government has slashed the central bank's key interest rate to new lows, lowered taxes on manufacturers and pumped out billions of dollars in subsidized loans to support activity. Her government has also pressured private-sector banks to lower their interest rates, among the highest in the world's 20 largest economies. Banks like Bradesco and Santander Brasil have bowed to the government's pressure, but high default rates are likely to limit how much they can cut credit costs for consumers. Brazil largest private sector lender Itaú Unibanco already said this week it will pare back rate cuts due to rising delinquencies. After a dip in January lending rebounded in February largely due to more disbursements from state-owned banks Banco do Brasil , the country's largest lender, and Caixa Economica Federal. Link this Share this Digg this Email Reprints

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