Banks maintain interest even with a fall in the Selic, says Procon – 02/17/2024 – Market

The reduction in the basic interest rate (Selic) last month did not mean a drop in the rates charged for personal loans in the four largest banks in Brazil, according to a monthly survey carried out by Procon in São Paulo.

On a downward trajectory, the Selic rate fell another 0.5 percentage point at the last meeting of the Central Bank’s Copom (Monetary Policy Committee), in January, and was set at 11.25% per year. The Selic serves as a reference for other interest rates in the financial market.

Between January and February, according to Procon research, the average personal loan rate at the six largest banks fell just 0.01 percentage points, from 7.95% per month to 7.94%.

The survey was carried out with banks in Brazil, Bradesco, Caixa Econômica Federal, Itaú, Safra and Santander on February 5th.

Of these, only Bradesco and Itaú reduced their rates, while the other banks maintained them. Bradesco fell from 9.64% per month to 9.61%, a reduction of 0.03 points. Itaú reduced from 9.57% to 9.53%, a reduction of 0.04 points.

Bank	Pre-fixed maximum monthly rate for customers non-preferential practices carried out in Feb./24 for personal loan
Bank of Brazil	6.27%
Bradesco	9.61%
Caixa Econômica Federal	4.96%
Itaú	9.53%
Harvest	7.25%
Santander	9.99%

The Procon-SP Foundation also found that there was no change in the rates charged by institutions for special checks, which averaged 7.96%. Since January 2020, this rate has been limited to 8% by Central Bank resolution.

Bank	Pre-fixed maximum monthly rate for customers non-preferential practices carried out in Feb./24 in special check
Bank of Brazil	7.73%
Bradesco	8%
Caixa Econômica Federal	8%
Itaú	8%
Harvest	8%
Santander	8%

“The consumer’s budget continues to suffer the effects of spending at the end of the year and typical expenses at the beginning of the year. Despite the fall in the Selic rate, interest rates remain high for credit borrowers”, say the Procon researchers, who claim It is “advisable to reflect before taking out a loan.”

“Consumers should analyze their budget and, if there are outstanding debts on their credit card, perhaps the best solution would be to take out a cheaper line of credit (with a lower interest rate) and pay off outstanding debts”, concludes the Center’s monthly survey of Intelligence and Research at the School of Consumer Protection and Defense at Fundação Procon-SP.

This Friday night (16), the report sought out the banks mentioned in the Procon survey and awaits their positions.

Banco do Brasil stated that it was “in tune with the recent decisions” of the Copom and said that it has “promoted successive reductions in interest rates since the beginning of the current Selic low cycle”.

The institution cites the CDC Salary (credit for those who receive salaries at the bank) reduced from 3.38% per month to 2.42% per month between July last year and February 2024, “higher than the Selic reduction in the same period “. Other lines also had their rates reduced, says the bank, including the Guaranteed Loan and the CDC Benefit (for retirees and pensioners who receive INSS through the bank).