...As expected, the recent performance of Brazilian banks has shown the effects of the dramatic economic slowdown, but has also shown that the banks are, and should continue to be, in position to face these pressures without significant harm to their generally strong financial profiles. Recent results have showed an expected drop in profitability, as slower loan growth affected revenue growth and loan loss provisions rose steadily in Q408 and Q109. Despite these pressures, profitability measures continue to show ROAs above 1% and ROEs in double digits, levels which compare well across the global banking industry in emerging and developed markets and should be sustainable. Margins, which benefited from initially greater loan demand in an environment of tight liquidity, peaked around end2008, and have receded slightly since then. The steady drop in interest rates will put pressure on margins. In the short term, these pressures should be partially offset by the treasury gains inherent in stillsignificant...
|
