IT LOOKS like a bad joke: the world’s fastest man promoting a bank in the world’s fastest-shrinking big economy. Yet the use of Usain Bolt’s image on posters for Banco Original, a five-year-old Brazilian bank, is apt in a way. In 2015 Original raced ahead at a clip worthy of Mr Bolt: profits increased by half compared with the previous year, to 111m reais ($30m). Its loan book grew by two-thirds, to 4.25 billion reais, even as Brazil’s economy shrivelled by 3.8%.
Original’s lightning loan-growth stands out. Demand for credit has sagged as the worst recession since the 1930s deprives Brazilian businesses of customers and workers of income or, worse, jobs. With non-performing loans (NPLs) on the rise, banks think twice before lending. After a decade of expansion, outstanding credit barely budged last year; in real (ie, inflation-adjusted) terms it contracted.
But look at Brazilian banks’ bottom lines, and most, like Original, have had a remarkably good crisis so far. Out of 180-odd institutions monitored by the central bank only 25, most of them small, posted losses in 2015. In the year to September the banking sector as a whole…Continue reading