Brazil banks foresee renewed lending growth this year

Significance The Brazilian financial system, which is still dominated by five state and private banks, saw slower loan growth and worsening asset quality in 2023 due to high inflation and interest rates, weak demand, corporate failures and elevated household debt. Impacts Large domestic banks will continue to dominate the financial system for years to come. Banks will cut more staff as they reduce their branch networks, but new jobs will be created in digital business areas. ESG initiatives will become increasingly important for banks, especially those listed on local and foreign stock exchanges.