Caixa gauges growth where Itau sees risk

Bloomberg

Caixa Economica Federal, the state-controlled bank poised to become Brazil’s biggest lender, is boosting its credit portfolio while competitors not owned by the government pull back in response to the worst recession in a
century.
First-quarter lending at Caixa rose 9.2 percent to 684.2 billion reais ($194 billion) from a year earlier, the Brasilia-based bank said in an e-mailed statement. Itau Unibanco Holding SA, the nation’s biggest bank by market value, said last week that its loan book declined 4.2 percent to 554.3 billion reais.
Many of Brazil’s biggest banks are reining in loans because of weak demand and to avoid taking on riskier loans. Itau and Banco Bradesco SA, the nation’s second-biggest bank by market value, reported first-quarter earnings that missed analysts’ estimates as provisions for bad debt soared.
Caixa expects lending to
expand 7 percent to 7.5 percent in 2016, the low end of its March forecast of 7 percent to 11 percent, Chief Financial Officer Marcio Percival said in an interview Monday. The bank previously expected to boost its loan book by 9.6 percent this year, he said. Delinquency rates will be between 3.5 percent and 3.85 percent this year, according to Percival.
Caixa is a Brazilian bank headquartered in the nation’s capital, Brasília. It is the second largest government-owned financial institution in Latin America, after Banco do Brasil.
It is the fourth largest bank in Brazil by assets and one of the largest in Latin America.