Brazil loan growth cools, defaults hit highest since 2017

BRASILIA, March 30 (Reuters) - Outstanding loans in Brazil rose 0.4% in February from the previous month to 7.1 trillion reais ($1.36 trillion), central bank data showed on Monday, with 12-month credit growth slowing to 9.6% from 10.1% in January.

BY THE NUMBERS

• The central bank expects the loan stock to expand 9.0% this year, up from a prior 8.6%.

• The upward revision reflects stronger expected performance in non-earmarked lending to households and in earmarked credit to companies.

• A broad measure of defaults among consumers and businesses in non-earmarked credit reached 5.5% in February, up from 5.3% a month earlier.

• The ratio rose 1.0 percentage point over 12 months to its highest level since August 2017.

• The central bank has said the increase reflects both a genuine rise in delinquencies and the impact of new accounting rules introduced in January last year, which account for roughly half of the jump.

• Lending spreads in non-earmarked credit reached 35.3 percentage points in February, up 1.0 point on the month and 5.4 points year-on-year.

• The central bank began an easing cycle in March with a 25-basis-point cut to the benchmark Selic rate, bringing it to 14.75%.

• The move followed a prolonged hold at 15% - the highest level in nearly 20 years - since July last year aimed at steering inflation toward the 3% target.

• Consumer prices in the 12 months to mid-March rose 3.9%, above expectations.

($1 = 5.2394 reais)