The coordinator of the Economics and Market Commission of the Association and Syndicate of Banks of Rio de Janeiro (Aberj/Sberj), Alexandre Póvoa, declared that the International Monetary Fund’s (IMF) report, “Stabilization and Reform in Latin America,” released last week, is mistaken in contending that there is no competitiveness among Brazilian banks.
According to Póvoa, Brazilian banks are in no way inferior to international financial entities when it comes to technology, customer relations, and Internet services.
He admitted that competition is perhaps not as intense as one would like, because demand in the country remains limited, and the volume of credit in the economy is low in relation to Gross Domestic Product (GDP).
He said that the portion of the population with bank accounts is very modest, currently about 15% of the total. Besides the small volume of demand, its quality is not good, and, as a result, customer services are not entirely satisfactory.
In consequence of bank spreads, as well as the heavy tax burden, the volume of credit in the economy, that is, the amount of money that is loaned, is very low: 27% of the GDP.
Póvoa believes that “when the national economy resumes its growth in a more consistent fashion, the volume of credit will tend to expand, and competition will appear.”
Translation: David Silberstein