Opinion – Marcos de Vasconcellos: Defaults in the US and Brazil signal pitfalls and opportunities

The flood of uncertainties after major crises forces investors to drive with their heads out of the window, seeking to gather information that allows them to see the road more clearly. This explains, in part, the increased need to understand what is happening in other countries at this time of overcoming the Covid-19 pandemic.

The world’s largest economy, the United States dictates the colors of the traffic lights of world markets. And they turned on, in the last week, a yellow light regarding the risk of a wave of defaults.

1 in 6 American households are in arrears on utility bills. A series of threats of power cuts in the United States affects 20 million families.

Neada (National Association of Energy Assistance Directors) said this is the worst crisis the group has ever documented in history. According to the association, accumulated debt has doubled since the pre-pandemic period, reaching US$ 16 billion (R$ 81.4 billion) in overdue accounts.

On this side of Ecuador, Brazilian default rates reached a record in July. Today, 41.8% of the adult population is in arrears, according to the latest data from Serasa Experian.

And the other bad news is that we are going into debt to pay off debts. Consumer demand for credit has never been as high as in May this year. Especially among those who need less than R$ 500, points out another study, also by Serasa.

A large part of this demand for credit has been absorbed by the supply of credit cards. Despite the conviction of the president of the Central Bank of Brazil, Roberto Campos Neto, that the credit card will soon run out, every Brazilian has three or more of them. And they have often used them to pay the bills.

In the first half of this year, the volume transacted by credit cards reached R$ 1 trillion – an increase of 42% compared to the same period in 2021, points out the Abecs (Brazilian Association of Credit Card Companies and Services). New technologies (which capture your data at all times) have made risk analysis cheaper for banks, leading to the proliferation of card offerings focused on classes C and D.

The rise in default tends to hurt companies in sectors such as retail, real estate and education. A survey carried out by the newspaper Valor Econômico, by the way, showed that the ten largest retail companies on the Stock Exchange set aside R$ 7.79 billion to cover the possible default of customers from January to June this year, an increase of 42% in relation to the same period last year.

On the other side of the counter, banks that have the structure to last longer without receiving the money borrowed and to collect payment, with fines and interest, tend to gain from the problem in the medium term.

This year, while the Ibovespa, the main indicator of our market, rose 7.8%, the IFNC, which gathers the shares of banks and brokers in Brazil, has already risen 18%.

After the release of the figures for the first half of the year, shares of traditional banks, such as Bradesco, Itaú and BTG, have been recommended by analysts from institutions such as JPMorgan, Safra and Citi, with the expectation of maintaining their appreciation in the coming months.