Lula asks public banks to expand credit for the poor – 03/08/2024 – Market

President Luiz Inácio Lula da Silva (PT) demanded that public banks move forward with the credit agenda and expand loans for small businesses and the poorest population.

The matter was discussed in a meeting this Friday (8) with the presidents of five federal banks (Banco do Brasil, Caixa, BNDES, Banco da Amazônia and Banco do Nordeste). The president wants financial institutions to work aligned around the credit stimulus agenda, a priority to sustain GDP (Gross Domestic Product) growth this year after the 2.9% increase in 2023.

The meeting took place after the release of the banks’ balance sheets in the first year of the Lula 3 government. At the meeting, the president received data on the release of credit by the five banks.

Minister Alexandre Padilha (Institutional Relations of the Presidency of the Republic) told Sheet that Lula is obsessed with the credit expansion agenda. “He wants to know what is being done to make the offer of credit cheaper for the poorest population and small business owners”, stated the minister.

According to Padilha, the expectation is that this agenda will move faster. Lula will meet regularly with the directors of public banks to evaluate the goals.

“Several things were approved last year that contributed, such as the guarantee framework, but it [o presidente] keeps insisting [em mais resultados]”, he highlighted.

The president of Banco do Brasil, Tarciana Medeiros, said that the alignment work between the banks has been important. “The president brought to us the need to keep the bank strong, taking care of credit,” she said. According to her, Lula wanted to know information about credit for family farming, agribusiness and the Minha Casa, Minha Vida program.

Medeiros took advantage of the meeting to value the bank’s results last year with President Lula. “We took a little from what we did, from the results we had. The bank’s shares appreciated by almost 80% in the year”, he highlighted.

Banco do Brasil had an adjusted net profit (not counting extraordinary items) of R$35.5 billion in 2023 — the best result in nominal terms (not considering inflation) in its history.

The president of BNB (Banco do Nordeste), Paulo Câmara, said that in the conversation with President Lula the emphasis that has been given is “to talk a lot and really seek to work together”.

“As we are public, we have to work by talking a lot and without overlapping tasks to reach more locations, with more activities and each one respecting the other’s competence”, he stated.

The Minister of Finance, Fernando Haddad, who also participated in the meeting, recently launched an offensive to reduce the banking spread, as a way of reducing the cost of credit and expanding supply. Most of the agenda depends on the approval of eight projects that are already in Congress.

He and the Secretary of Economic Reforms, Marcos Pinto, are doing a kind of road show (series of presentations to investors) to sell the spread reduction package to businesspeople from various sectors.

At meetings, Haddad has asked for support for microeconomic reforms to increase the country’s productivity and growth. The president of the Chamber, Arthur Lira (PP-AL), signaled support for this agenda.

The meeting with public banks was held after opinion polls showed a drop in the president’s popularity, despite the improving scenario in the economy and the job market — factors that traditionally influence the government’s assessment.

Padilha said that the government will dedicate itself to better understanding which diagnosis influenced the outcome. “All surveys reaffirm that the vast majority of the population considers Lula’s government to be better than Bolsonaro’s. In all areas, in the economy, in health, in the president’s stance”, he highlighted.

The minister admitted, however, that it is possible that some economic aspects had an impact on the drop in popularity, such as a seasonal increase in food prices.

“We’re going to dedicate ourselves to understanding. The Quest one was at the beginning of the week, the Atlas one was yesterday. Let’s analyze it further,” said Padilha. In her assessment, the government has enough experience not to be scared and rush based on “any snapshot of the moment that the surveys bring” and forget about economic recovery, growth, the drop in unemployment and controlling inflation.