Summary

Brazilian banking sector is strong, diversified and adequately capitalized. Its high levels of capitalization have allowed it to weather the recent global credit crunch well. Despite the economic slowdown, the credit extension as well as bank deposits continued increasing in 2008 and are expected to maintain the pace in the coming years also. 

With a favorable ratio of long-term to short-term deposits and a relatively low reliance on wholesale funding coupled with cautious credit policies, the banking sector in the country is expected to continue recording sizable growth in the coming years. In terms of assets, the sector is expected to grow at a CAGR of nearly 10% during 2009-2013, as per our new research report "Opportunities in Brazil Banking Sector".
 
There has been huge demand for bank loans in the recent past, mainly due to the release of long-repressed demand in the consumer sector. However, the corporate credit also grew strongly in the past two years. Strong appetite for personal credit was stimulated by a marked recovery of real incomes and increased confidence in the prospects for continued macroeconomic stability.

Moreover, the deposits in the system remained mostly unaffected from global credit crunch. The deposits grew at a CAGR of over 29% during 2002-2008 with people still believing banks as the safest place for keeping their money and earn stable returns. Therefore, the deposit/GDP ratio in the country is found to be very high by both regional as well as international standards, having achieved an estimated 70% in 2008.

Our report "Opportunities in Brazil Banking Sector" provides detailed analysis of the banking sector in Brazil. It gives deep insight into each of the banking parameters like assets, loans, deposits and payment instruments. Most importantly, the report gives future outlook for each of the important industry aspects (assets, loans, deposits, etc.), considering the effects of global economic crisis on base drivers, opportunities and challenges faced by the banking sector in the country.

Additionally, the report contains detailed information of key industry players (both domestic and foreign), their business strategies and market share. The key players discussed in the report are Ita¨²-Unibanco, Banco do Brasila, Banco Bradesco, Banco Santander, HSBC and CitiBank.

Table of Contents

1. Analyst View
2. Macroeconomic Scenario
3. Banking Industry Overview
4. Industry Performance and Future Outlook to 2013
     4.1 Loans
            4.1.1 Consumer Loans
            4.1.2 Corporate Loans
            4.1.3 Short-term Loans
            4.1.4 Long-term Loans
     4.2 Deposits
            4.2.1 Current Account Deposits
            4.2.2 Time & Savings Deposits
     4.3 Payment Cards
            4.3.1 Credit Cards
            4.3.2 Debit Cards
     4.4 Card Facilitators
            4.4.1 ATMs
            4.4.2 POS Terminals
5. Recent Industry Trends
     5.1 Mergers & Acquisitions
     5.2 Specialized Lending
     5.3 Real Estate Financing
     5.4 Bancassurance
     5.5 Role of IT into Banking Sector
     5.6 Non-performing Loans
     5.7 Borrowing Cost
     5.8 Interest Income
6. Risk Assessment and Ratio Analysis
7. Government Initiatives
8. Competitive Landscape
     8.1 Domestic Banks
            8.1.1 Ita¨²-Unibanco
            8.1.2 Banco do Brasila
            8.1.3 Banco Bradesco
     8.2 Foreign Banks
            8.2.1 Banco Santander
            8.2.2 HSBC
            8.2.3 CitiBank

List of Figures:

Figure 2-1: Real GDP Growth (%), 2008-2013
Figure 2-2: FDI into Financial Sector (Million US$), 2007 & 2008
Figure 2-3: Disposable Income (US$/Head), 2008-2013
Figure 3-1: Bank Assets (Billion US$), 2002-2008
Figure 3-2: Forecast for Bank Assets (Billion US$), 2009-2013
Figure 4-1: Bank Loans (Billion US$), 2002-2008
Figure 4-2: Forecast for Bank Loans (Billion US$), 2009-2013
Figure 4-3: Consumer Loans (Billion US$), 2000 & 2008
Figure 4-4: Forecast for Consumer Loans (Billion US$), 2009-2013
Figure 4-5: Corporate Loans (Billion Real), 2000 & 2008
Figure 4-6: Forecast for Corporate Loans (Billion Real), 2009-2013
Figure 4-7: Short-term Loans (Billion US$), 2002-2008
Figure 4-8: Forecast for Short-term Loans (Billion US$), 2009-2013
Figure 4-9: Long-term Loans (Billion US$), 2002-2008
Figure 4-10: Forecast for Long-term Loans (Billion US$), 2009-2013
Figure 4-11: Bank Deposits (Billion US$), 2002-2008
Figure 4-12: Forecast for Bank Deposits (Billion US$), 2009-2013
Figure 4-13: Current Account Deposits (Billion US$), 2002-2008
Figure 4-14: Forecast for Current Account Deposits (Billion US$), 2009-2013
Figure 4-15: Time & Savings Deposit (Billion US$), 2002-2008
Figure 4-16: Forecast for Time & Savings Deposit (Billion US$), 2009-2013
Figure 4-17: Number of Credit Cards (Million), 2002-2008
Figure 4-18: Forecast for Number of Credit Cards (Million), 2009-2013
Figure 4-19: Credit Card Usage (Billion Real), 2002-2008
Figure 4-20: Number of Debit Cards (Million), 2002-2008
Figure 4-21: Forecast for Number of Debit Cards (Million), 2009-2013
Figure 4-22: Debit Card Usage (Billion Real), 2002-2008
Figure 4-23: ATM Terminals ('000), 2002-2008
Figure 4-24: POS Terminals Accepting Credit Cards ('000), 2002-2008
Figure 4-25: POS Terminals Accepting Debit Cards ('000), 2002-2008
Figure 5-1: Bank Spending on IT (Billion Real), 2007 & 2008
Figure 5-2: Non-performing Loans (%), Sep 2008 & Mar 2009
Figure 5-3: Average Cost of Credit (%), 2007 & 2008
Figure 5-4: Net Interest Income (Billion US$), 2002-2008
Figure 5-5: Forecast for Net Interest Income (Billion US$), 2009-2013
Figure 6-1: Banking Sector Risk (Nov 2008 to Apr 2009)
Figure 6-2: Capital Adequacy Ratio (2007 & H1 2008)
Figure 6-3: Loans to Deposits Ratio (2002-2008)
Figure 6-4: Loans to Assets Ratio (2002-2008)

List of Tables:

Table 4-1: ATMs Distribution by State (2008)
Table 4-2: POS Terminals Distribution by State (2008)
Table 8-1: Top Ten Domestic Banks by Assets (Billion US$), 2008
Table 8-2: Top Ten Foreign Banks by Assets (Billion US$), 2008