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Banrisul believes in decreasing interest rate and 25% more credit

Banrisul believes in decreasing interest rate and 25% more credit

Confident in the outlook of gradual reductions in the interest rates over the year after marked increases in October and November, 2008, the Banco do Estado do Rio Grande do Sul (Banrisul) forecasts a R$ 3 billion expansion in the credit portfolio for 2009. The amount corresponds to an expansion of around 25% over the end of last month’s figures (R$11.5 billion), and exceeds by nine percentage points the estimates by the Central Bank for the sector in the year.

According to the bank’s CEO Fernando Lemos, with a more stable interest rate, the bank can better adjust credit costs and, little by little, reestablish terms that have shortened due to the financial crisis. In the case of Banrisul, terms for corporate working capital loans have reduced from 2-3 years to 5-12 months.”In October, there were nearly no operations”, he explained.

In November, major companies resumed taking credit domestically, given the shortage in foreign credit facilities, and the expectation for 2009 is that small- and medium-sized corporations will also look for credit. Among the most promising sectors for the bank are the retail, wine, agriculture and agribusiness-oriented metal-mechanical industries. Vehicle financing operations, which greatly reduced in the end of 2008, account for no more than 2% of the portfolio.

The projected scenario for the institution includes a growth of around 3% in the country’s GDP (Gross Domestic Product) in 2009. The Selic rate, currently at 13.75% is estimated to drop to 12.75% early in the year and to 11.75% in late-2009, with annual inflation reaching 5%. At the first meeting of the Central Bank’s Monetary Policy Committee (Copom), this month, a 0.25 point reduction is expected in the basic interest rate, according to Lemos.

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