Social and fiscal have to go hand in hand, says president of Itaú Unibanco

The president of Itaú Unibanco, Milton Maluhy Filho, said this Thursday (1st) that the government needs to prioritize both social investment and fiscal responsibility so that the country can achieve long-term sustainable economic growth.

“There is a concern regarding the sustainability of the country’s debt in the long term. This has effects. We say a lot that the social and fiscal aspects have to go hand in hand, because if you don’t have sustainable growth, you don’t solve the problem. long-term, and if there is a relevant fiscal issue, it ends up having a very large impact on inflation, which consequently affects, above all, the population with lower income”, said Maluhy Filho, during a virtual event promoted this Thursday morning by Itaúsa , a holding company that holds a relevant stake of 37% in the bank.

The president of Itaú Unibanco stated that, in the midst of the ongoing government transition, there are still many uncertainties about the new government of president-elect Luiz Inácio Lula da Silva (PT).

“We have to wait to see what decisions are going to be taken, new ministries, policies, both in education and the environment, but mainly economic and fiscal policy. What is the new government’s objective, in fact.”

Maluhy Filho also stated that the government has important challenges to be addressed in 2022, but that he is optimistic about the prospects for the country.

“The companies [médias e grandes] are with little leverage, and, therefore, with a very good credit performance. But, for this to be sustainable in the long term, it is important that we work in a lower interest rate environment in which we are working, because this interest rate significantly impacts these companies’ ability to invest and their ability to honor their your commitments. For this, GDP needs to grow, interest rates need to fall, and inflation needs to return to targets. The challenges are relevant, but we are optimistic that we will succeed. That the country will have to do its homework and we will move forward”, said the executive.

He said that lower interest rates boost the country’s growth, and that it is possible for financial institutions to offer credit in a more relevant way, with a reduction in defaults in the long term, bringing sustainability to portfolios.

Praise for the reduction in the role of the BNDES in financing large companies

The bank’s president also stated that there has been an important change in the market in recent years, with less dependence on the BNDES (National Bank for Economic and Social Development) in financing large companies, which has expanded and stimulated the growth of the capital market in the country. Brazil.

“It’s really healthy [que isso aconteça]🇧🇷 These are companies that have access to capital from local investors and international investors under very competitive conditions, so that we can free up the bank’s balance sheet and make room to finance slightly smaller companies, even retail, individuals. It’s a very good cycle when you have an efficient capital market, you can operate credit as we have operated.”

Maluhy Filho also stated that 2023 is a “more challenging year”, with a relevant degree of uncertainty, which has led the bank to reduce the pace of growth of loan portfolios in recent quarters.

“Individuals are having a very difficult year, especially in low-income groups, and the main reason is inflation. Inflation is the biggest enemy, people lose purchasing power, have little ability to catch up on their obligations, and end up correctly spending their resources on what is a priority, basic needs, and end up having more difficulty in honoring their commitments”, said the executive, on the rise in default rates observed recently.