After a very good year in 2004, the biggest banks in Brazil have done it again: turning in record profits in 2005, as well. In fact, the best in 10 years, according to Austin Rating.
The state-run Caixa Econômica Federal and Banco do Brasil, along with private banks Unibanco, Itaú and Bradesco, all reported record gains in financial operations, fees and interest charges.
Bradesco, Brazil’s biggest private bank, had the biggest profits in Latin America: US$ 2.566 billion (5,514 billion reais), an increase of 80% over 2004. Bradesco’s loan portfolio was worth US$ 37.7 billion (81.1 billion reais), up 29.2% for the year.
Itaú had profits of US$ 2.444 billion (5.251 billion reais), up 39%. Itaú’s loan portfolio rose to US$ 31.511 billion (67.7 billion reais). Unibanco had profits of US$ 851.8 million (1.83 billion reais).
As for the big state-run banks, Banco do Brasil’s profits were up 37.4% (to US$ 1.95 billion) (4.2 billion reais) and the CEF (Caixa Econômica Federal, Brazil’s Savings Banks) had its biggest profits ever at US$ 1.256 billion (2.07 billion reais), up 46%.
31% of GDP
The amount of credit provided by the Brazilian financial system in January reached US$ 285.89 billion (608.87 billion reais), the equivalent of 31% of GDP, and an increase of 20% since January 2004.
However, Altamir Lopes, a Central Bank director, points out that compared to December, the increase was a weak 0.3%, which he calls "an activity accommodation."
Lopes explains that in January there was a reduction in the volume of credit operations in industry, commerce and the services sector, while they increased in the area of personal loans – with people seeking to pay taxes and school expenses.