The Brazilian banking sector is enjoying heady days, propelled by a roll-out of a number of key banking services on a major scale. Lending, particularly consumer credit, is exploding despite high costs. Another couple of points lower on rates and other markets, such as mortgages, will flourish. The one cloud on the horizon is a bracing dose of foreign competition.
In the consolidated banking world in Brazil, where a clutch of domestic banks dominate the national scene, the slowly unfolding takeover of ABN AMRO is the dominant topic of conversation. The tussle for ABN between the Santander-Fortis-Royal Bank of Scotland consortium and Barclays will be pivotal for the competitive landscape of the banking industry.
