BB is still evaluating whether it will offer payroll-deductible loans to Auxílio Brasil beneficiaries

The president of BB (Banco do Brasil), Fausto Ribeiro, stated that the public bank has not yet decided whether to offer payroll-deductible loans to beneficiaries of the Auxílio Brasil social program (formerly Bolsa Família).

“We are, together with Caixa, carrying out an analysis on the question of the form, how this will be implemented, the form of consignment, the deadlines, the financial conditions, and soon we will have a position on this topic” , said Ribeiro this Thursday (11), during a conversation with journalists to comment on the bank’s results in the second quarter of 2022.

Ribeiro also stated that the bank “surely” will enter the payroll loan for the public of the BPC (Continued Provision Benefit). This benefit is granted to seniors aged 65 and over and people with disabilities earning up to a quarter of the minimum wage per person in the family.

As for Auxílio Brasil credit for the public, Ribeiro said that the position adopted will be “extremely technical”, and that the bank has not received any request to enter this credit line.

“We are, as a market bank, looking for alternatives. And if we think we should enter, because the line offers satisfactory conditions, so that we have security in terms of risk and good financial condition, we will certainly enter”, said Ribeiro. .

Private banks such as Bradesco and Itaú have stated, in recent days, that they will not offer payroll-deductible loans to beneficiaries of Auxílio Brasil, as they understand that this is an operation that is not consistent with the profile of potential borrowers.

Regarding the appeal made by President Jair Bolsonaro (PL) during a meeting with banks at Febraban (Brazilian Federation of Banks) to reduce as much as possible the interest charged on the credit line assigned to the BPC, the president of BB stated that the issue It is also still in the evaluation phase.

“[O presidente] asked all banks to look at this public, which is a little more vulnerable, dependent on these resources. He did not go into specific merits about what the rate would be, he only asked banks to take into account the vulnerability of this public and offer rates that are really consistent with what fits in these people’s pockets”, said Ribeiro.

“The installment has to fit in the pocket to make sense, but also, on the other hand, it has to bring an adequate return to shareholders, and this position will be taken into account.”

Bad debt should continue to rise in the coming quarters

In line with the signals transmitted by private peers, BB also stated that delinquency should continue to rise during the coming quarters, especially in the case of individuals.

“We see the default scenario increasing, not only our portfolio, but the market as a whole”, said Ricardo Forni, vice president of financial management at BB.

“We do not believe that default levels will reach pre-pandemic levels this year, but there will be an increase”, said Forni, adding that the movement comes in the wake of a mix of the credit portfolio more focused on the higher risk and return line. , such as credit card and personal loan.

The delinquency rate over 90 days, in turn, rose to 2% in the second quarter, against 1.86% in June 2021 and 1.89% in March this year. In March 2020, BB’s default rate was 3.20%.

“In all credit lines where we have already seen delinquency increase, a little above the rate we expected, there is already a lot of credit risk action aimed at adequate control and a healthy evolution of the portfolio”, said the vice president of BB.

During the press conference this Friday, the bank also announced that it is in initial discussions to close an agreement with UBS (Swiss investment bank) to provide financial advice to the bank’s high net worth clients abroad.

“BB Securities signed a non-binding letter of intent with UBS to deepen discussions on a potential commercial agreement to provide offshore wealth management services and investment expertise for Private clients,” said Ribeiro.

BB shares soar on the stock market after balance

Banco do Brasil’s shares are on the rise on the Stock Exchange this Friday, with the market receiving the numbers for the second quarter in a very positive way.

At around 12:50 pm, the bank’s shares rose by 5.3%, while the Ibovespa fluctuated close to stability, with a slight increase of 0.1%.

“Even with the increase in delinquency and the drop in the coverage rate, the bank still maintains these indicators at comfortable levels, compared to its peers, combining this with the consistent growth of its portfolio, especially among clients with higher ratings”, point out the Guide Investimentos analysts in report.

Analysts also point out that “the bank delivered figures well above market expectations, maintaining its margins even in the midst of a more difficult macroeconomic environment.”

“Banco do Brasil reported another strong result, with a net profit 21% above our expectations”, say analysts at Goldman Sachs, who maintained the buy recommendation for the bank’s shares, with a target price of R$ 45 in 12 months, which corresponds to an appreciation potential of 12.6% in relation to the closing of the previous day.