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Santander Brasil (NYSE: BSBR) and Itaú Unibanco (NYSE: ITUB) are the most exposed among big Brazilian retail banks to the government's decision to double the IOF tax on consumer loans - excluding mortgages - to 3%, Deutsche Bank said in a research note.
The tax hike was the government's latest in a series of measures to cool down lending amid fast-rising inflation. Finance minister Guido Mantega is seeking to bring down loan growth this year to "adequate" levels of 12-15%, from the 20.5% loan expansion seen in 2010.
Deutsche Bank said Santander Brasil and Itaú Unibanco's loans to individuals represent 47% and 40% of their respective loan books, compared with 34% and 33% at Bradesco (NYSE: BBD) and Banco do Brasil (BB).
Deutsche Bank has a buy recommendation on the stocks of BB, Itaú Unibanco and Bradesco, and a hold recommendation on Santander Brasil.