Slump In Brazilian Economy Necessitates A Change In Banking Pattern In Brazil

Slump In Brazilian Economy Necessitates A Change In Banking Pattern In Brazil

Itaú Unibanco Holding SA, an important banking group in Brazil is prepared to face a lot of losses in the form of bad debts, or loans that can not be repaid. A slow economy is responsible for a slow loan book growth. The number of defaulters is huge.

The bank proposes to hike the provision for bad loans in the current financial year. Surprisingly, market shares came tumbling down soon after the announcement.

Itaú Chief Executive Officer Roberto Setubal voted for a slicing down of expenses of the bank to counter the problem of bad loans. Profits made by the bank ought to be reserved to cover bad  loans in the future. The present poor condition of economy in Brazil is responsible for the need of tuning of different courses of action as per the trends of the economy.

Efforts are on by the bank to slash its expenses in an attempt to get over losses posed by bad loans. It also intends to mark a portion of the profits it makes to get over the problem. Brazil faces the problem of a shrinking economy largely due to mismanagement of resources. It is believed to be tumbling at the fastest speed it ever did since 1992.

The bank maintains a reserve for bad debts. This is Itau's coverage ratio. This was boosted to 200 per cent in the first quarter of the financial year, a move that raised concerns for more sensible risk management. A small amount of strictness in this end brought down bad debts tumbling to 3 per cent.

 

Hot NewsGET THE HOTTEST

Kushner No Longer Number One Trump Advisor

Kushner No Longer Number One Trump Advisor

Jared Kushner has been a key figure in the Trump administration. His portfolio as the president’s advisor had him play a pivotal role in the administration’s foreign policy. Top among his successes include liaising with Mexico and brokering the Middle East peace deal. As an advisor,…

CONTINUE READING

N. Korea sending Syria material for chemical warfare.

N. Korea sending Syria material for chemical warfare.

In an alarming report from CNN, North Korea has been sending Syria “acid-resistant tiles, valves and thermometers” – all of which could be used for chemical weapons. This information was contained in a report by a United Nations panel of experts and relayed by an unnamed diplomat…

CONTINUE READING

Latest News FROM OUR DESK

Is Mariah Carey contemplating marriage again?

Is Mariah Carey contemplating marriage again?

Mariah Carey, 46, is very excited to be married to her current billionaire boyfriend James Packer, 48. This would be a third marriage for her. Her last husband was singer, actor, celebrity host Nick Cannon to whom she was married for six years and had two children. Mariah discussed her upcoming…

CONTINUE READING

Nicolas Cage and wife separate

Nicolas Cage and wife separate

Nicolas Cage and his wife, Alice Kim, ended their whirlwind romance after 11 years. Their story was one out of a fairytale novel. He met her at a restaurant where she was a waitress and hardly two months later, he put a ring on her finger. They were soon married at a ranch in Northern California in…

CONTINUE READING