Brazil bank default ratio should not exceed 4%, central bank says
By Marcela Ayres
BRASILIA, Oct 15 (Reuters) - Brazil's 90-day loan delinquency ratio is likely to reach 4% at most next year amid the economic crisis stemming from the coronavirus pandemic, the country's central bank supervision director Paulo Souza said on Thursday.
Currently, the central bank sees banks' default ratio peaking at between 3% and 4%, Souza told reporters in a report on financial stability.
If this scenario materializes, the crisis would be less severe for Brazilian banks than the period between 2015 and 2016, when the country was hit by a deep recession.
The central bank also said in the report it sees 90-day delinquency ratios going up by year-end and the beginning of 2021, as grace periods extended by banks to consumers and companies come to an end, and more companies should file for bankruptcy protection.
Still, Souza said the central bank is unsure if a cap on dividend payouts for banks would be necessary next year, as economic activity is picking up. In May, central bank restricted banks dividends through December.
"It will depend on how risks stemming from the pandemic will materialize. I am sure lots of things will happen by year-end," he said, adding the regulators will reassesses banks' capital ratio before making any decision.
(Reporting by Marcela Ayres, writing by Carolina Mandl Editing by Chizu Nomiyama and David Gregorio)
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