The removal of so-called macroprudential measures on consumer loans by Brazilian central bank BCB will benefit most the federally controlled Banco do Brasil (BB), Deutsche Bank (NYSE: DB) said in a research report.
BCB reduced the risk weighting on payroll deductable loans with maturity of less than 60 months and on personal loans with a less than 36-month maturity, to 75-100% from 150%, thus lowering capital requirements for both. Risk weightings for longer-term loans remain unchanged.
BB will benefit most among the country's largest banks from the removal, as some 66% of its consumer portfolio is concentrated in auto and payroll loans, along with its high level of capital constraint, according to the report.
The BCB move comes as Brazil's economy is slowing down and amid market concerns regarding the possible introduction of more restrictive measures on bank lending to control inflation.