Private banks are cautious about falling interest rates after Selic – 03/08/2023 – Market

Private banks adopted caution in reducing the interest rates offered to individuals and companies. The movement comes after the Copom decision, which lowered the Selic rate to 13.25% per annum – the Central Bank had been keeping the rate fixed at 13.75% per annum since August 2022.

A Sheet consulted 13 financial institutions, including private banks, digital banks and credit unions about the impact of the Selic drop on bank interest rates. Most cautiously assess whether they will make cuts and how much the reduction will be.

Three banks reported reductions in part of their credit lines. Four private institutions did not change the rates and are still assessing whether there will be a decrease and five banks have not manifested themselves.

Public banks Caixa and Banco do Brasil announced cuts in INSS (National Social Security Institute) payroll rates on the same day as the Selic rate fell. Caixa said it did not change other lines of credit in addition to the payroll loan for retirees and pensioners. BB, on the other hand, stated that other products, aimed at legal entities, also had a reduction in interest rates.

Itaú reported that it will transfer the Selic interest rate reduction to its personal credit line. The change will be valid for the maximum rate in the case of individuals who contract the service from this Friday (4). The bank did not detail the amounts that will change according to the customer’s profile and relationship.

C6 Bank announced that it has reduced its fees for paying credit card bills in installments. The minimum rate dropped from 5.99% to 3.00% per month, a condition that is already in effect.

By the end of August, the C6 forecasts a further reduction in interest rates on this line of credit. The rate should remain at a level of 1.99% per month. The bank reported that it will extend the deadline for payment of the invoice to up to 72 months.

Banco Daycoval said in a note that it will automatically reduce interest rates on all its credit products based on the Selic rate. This is the case of working capital lines and guaranteed accounts. The institution did not mention details on the rate cuts.

Inter said it is evaluating it internally and will communicate any changes soon. Bradesco said it is evaluating changes to its rates. Santander and Mercantil said that, for the time being, there have been no changes in interest rates. BMG said it would not comment, as it is in a quiet period due to the disclosure of financial results.

PagBank preferred not to comment. Nubank, Pan and Banrisul did not respond until the publication of this text.

Public banks reduced INSS payroll interest

Caixa said that, for the time being, there was only a change in the payroll rate for INSS beneficiaries. This Wednesday, the public bank announced that interest would fall from 1.74% to 1.70% per month, a measure valid from this Thursday (3).

Banco do Brasil announced that its new rates will come into effect on Friday (4). In INSS payroll interest, BB reduced from 1.81% to 1.77% per month, at the minimum range, and from 1.95% per month to 1.89% per month at the maximum level. The bank said that there was also a cut in loans for legal entities and micro and small companies, with conditions varying according to the customer’s profile.

Today, the loan rate with a direct discount on the social security benefit is 1.97% per month for the personal loan and 2.89% per month for the credit and benefit card.

Analyst at Senso Investimentos, João Frota Salles says that default at still high levels is a factor that ends up inhibiting private banks from reducing interest rates even after the fall in the Selic rate.

BC data show that, for every R$10 loaned to formal and informal workers in microcredit, R$2 are overdue for more than 90 days.

“Delinquency does not fall overnight, we are going to have a second half with a still high default even with the fall in interest rates”, says the expert.

For Salles, in the case of the public, the government’s direction to make the contracting of credit more attractive and, thus, stimulate the economy’s growth, at the cost of less care with the risk of default.

Financial institution risk analyst at Austin Rating, Luis Miguel Santacreu recalls that, since the beginning of the government, President Luiz Inácio Lula da Silva (PT) has made several criticisms of the high level of interest rates and the impact that monetary tightening brings to population consumption.

Therefore, when the monetary authority starts the process of reducing the Selic rate, nothing more natural than public banks being the first to start the process of lowering rates, says Santacreu.

The Austin analyst predicts that, as the public ones start to attract greater demand from customers in search of more attractive interest rates, the private ones will follow with similar actions, starting to charge lower interest rates, not to run the risk of losing market share. . The decision of banks under government control could end up stimulating competition, he says.

Collaborated with Lucas Bombana