The entire world was left wondering on the situation of the banking system in Brazil in 2014. A troubled economy will have an adverse impact on the economy, but it was not the case for two private banks, Banco Bradesco (BBD) and Itau Unibanco (ITUB). These two banks surprisingly recorded a recommendable increase in profit of 28% and 36% respectively.
The real question is how the Brazilian banks prosper in the storm. Igor Cornelsen, a top Brazilian investment expert and banker says that the secret behind these banks’ fortunes is the vast knowledge of the banking market. He also credits their experience of operation acquired in the other former turbulent years.
The private banking sector is only offering loans to creditworthy people only. This will leave the people without a credit history or with an undesirable credit with no option but seek financial assistance from public banks. This situation negatively impacts on the economic growth of Brazil.
What Should Be Done By the Brazilian Government?
Having an uncertain climate should make the government come in and formulate favorable policies for investors to consider Brazil as their destination.
According to Igor Cornelsen, investors are essential to economic growth and should feel secure especially with the government making more fiscal austerity and lots of market-oriented reforms.
Brazil is an attractive market in South America. This is due to the presence of abundant natural resources. The niche that makes it an interesting market is the high need for infrastructure developments which is essential for its rising population.
Things That Could Change the Face of Brazil
Brazil should pay attention to China. China is its largest trading partner. China is also their biggest competitor to their industrialized exports. Definitely for Brazil to succeed, then they should be critical in understanding all their connected markets. Learn more about Igor Cornelson: https://pt-br.facebook.com/igor.cornelsen
Brazil’s currency has been overvalued for years. This has made exports too expensive and loosing competitiveness in the market. It has lead to series of current account deficits. Read more: Investing in the Future Success
A controlled pace of devaluation of the currency would awaken investment levels and make the exports less expensive and competitive. This will lead to favorable of economies of trade hence correcting the disequilibrium of the current account.