In May, average bank interest rates rise to 45.4% per annum

In new hires for companies, the average credit rate was 23.8% per year, stable in the month and up 1.9 pp in 12 months. In contracts with families, the average interest rate reached 59.9% per annum, up 0.3 pp in the month and 9.5 pp in 12 months.

In free credit, banks have the autonomy to lend money raised in the market and define the interest rates charged to customers. Directed credit, which has rules defined by the government, is basically intended for the housing, rural, infrastructure and microcredit sectors.

In the case of earmarked credit, the rate for individuals was 12.1% per annum in May, up 0.6 pp in relation to the previous month and 1.7 pp in 12 months.

For companies, the rate dropped 0.9 pp in the month and increased by 0.8 pp in 12 months, reaching 13.4% per year. Thus, the average rate on earmarked credit reached 12.4% per annum, an increase of 0.3 pp in the month and 1.5 pp in 12 months.

Selic

The behavior of average bank interest rates occurs at a time when the economy’s basic interest rate, the Selic, is at its highest level since January 2017, in 13.75% per year, defined by the Monetary Policy Committee (Copom). In March of last year, the Central Bank began a cycle of monetary tightening, amid rising food, energy and fuel prices.

The Selic is the main instrument used by the Central Bank to reach the inflation target. In April, influenced by the increase in medicine prices, the Extended National Consumer Price Index (IPCA) was 0.61%, according to the Brazilian Institute of Geography and Statistics (IBGE). The result is lower than the March rate of 0.71%. In 12 months, the indicator accumulates 4.18%.

With low inflation, the decision to maintain the Selic is the target of criticism of the federal governmentas the effects of the monetary tightening are felt in the rise in credit and the slowdown of the economy.

The minutes of the last Copom meeting, released this Tuesday (27) by the Central Bank, inform that the “predominant assessment” expressed by the members of the collegiate was an expectation of greater confidence for a drop in interest rates from from august. The Copom meeting took place on the 20th and 21st.

The raising of the basic rate helps to control inflation because it affects prices, since higher interest rates make credit more expensive and stimulate savings, containing heated demand.

credit card

For individuals, the month’s highlight was credit cards, whose rates increased by 1.6 pp in the month and 29.6 pp in 12 months, reaching 106.2% per annum.

In revolving credit, which is the one taken by the consumer when he pays less than the full amount of the card bill and lasts 30 days, there was a rise of 7.8 pp from April to May and an increase of 86.3 pp in 12 months, going to 455.1% per year. After 30 days, financial institutions pay the debt in installments. In the case of the installment card, interest fell 6.2 pp in the month and registered an increase of 21.6 pp in 12 months, going to 194.3% per annum.

As for overdrafts, there was a reduction of 2.8 pp in the month and an increase of 2.8 pp in 12 months, going to 130.7% per annum.

A payroll loan rate contracted by 0.1 pp in the month and increased by 1.7 pp in 12 months (25.8% per year). In the case of non-payroll-deductible personal loans, interest fell by 0.9 pp in May and grew by 5.2 pp in 12 months (86.7% per year).

New hires

The maintenance of high interest rates, a result of monetary tightening, and the economic slowdown itself are leading to a slowdown in bank credit, especially for families. Last month, credit concessions fell 0.5% for individuals and had an increase of 4.2% for companies.

In May, the stock of all loans granted by the banks of the National Financial System (SFN) was R$ 5.387 trillion, with a positive variation of 0.3% in relation to April. The result reflected the stability in the balance of credit operations agreed with legal entities (R$ 2.090 trillion) and the 0.5% increase in credit operations with individuals (R$ 3.296 trillion).

In the interannual comparison, total credit grew 10.4% in May, evidencing deceleration compared to the 11.3% in twelve months observed in April. On the same basis of comparison, the balance with companies decelerated to 4.4%, compared to 4.8% in April, as well as the volume of credit to families increased from a growth of 15.8% in April to 14.6% in last month.

Extended credit to the non-financial sector, which is credit available to companies, families and governments regardless of the source (banking, bond market or external debt) reached R$ 15.096 trillion, growing 0.2% in the month, mainly due to 1.5% increase in external debt loans.

In the interannual comparison, expanded credit grew by 9.9%, with increases prevailing in the loan portfolio, 10.3%, and in debt securities, 9.3%.

indebtedness

According to the Central Bank, default (considering arrears of over 90 days) has remained stable for a long time, with small fluctuations, and registered 3.6% in May. In free credit operations for individuals, it is at 4.2% and for companies at 2.5%.

Household indebtedness – ratio between the balance of debts and income accumulated in 12 months – was 48.5% in April, stable in the month and with a decrease of 1.4% in 12 months. With the exclusion of real estate financing, which takes a considerable amount of income, it was 30.8% in the fourth month of the year.

The commitment to income – the ratio between the average amount for paying off debts and the average income calculated in the period – stood at 27.9% in April, an increase of 0.3% at the end of the month and 1.7% in 12 months.

These last two indicators are presented with a greater lag of the month of release, as the BC uses data from the National Household Sample Survey (Pnad), from the Brazilian Institute of Geography and Statistics (IBGE).