Brazil's Caixa: Banks Optimistic on Recovery in Second Half

Date : 08/08/2012 @ 1:41PM
Source : Dow Jones News
Stock : Citigroup, Inc. (C)
Quote : 61.95  0.0 (0.00%) @ 4:48AM

Brazil's Caixa: Banks Optimistic on Recovery in Second Half

Citigroup, Inc. (NYSE:C)
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BRASILIA--Brazilian banks are optimistic about the prospects for a recovery of the local economy during the second half of this year, the president of state-controlled bank Caixa Economica Federal, Jorge Hereda, said Wednesday.

Hereda made the declaration following a meeting with Brazilian Finance Minister Guido Mantega, Central Bank President Alexandre Tombini, and executives of top private sector banks in Brazil.

"The minister spoke with the banks about the perspectives for the second half," Mr. Hereda said. "The opinion of all the banks is that the economy is going to recover and we'll have good growth."

According to recent central bank market surveys, Brazil's economy is seen growing by about 1.9% this year after growth of 2.7% in 2011. Government officials, however, have said they believe the economy will be growing at a rate of more than 4% by the end of the fourth quarter due to recent government stimulus measures and central bank interest rate cuts.

The Caixa president, meanwhile, said that government officials at Wednesday's meeting didn't express concerns that interest rates on loans from the local banking sector were too high to help promote a recovery.

"The reduction of banking spreads is already occurring," Mr. Hereda said.

Banking sector officials also at the meeting included Banco Itau President Roberto Setubal, Banco Santander President Marcial Portela, Citibank Brasil President Helio Lima Magalhaes, HSBC President Andre Brandao, Banco Bradesco Vice-President Julio Araujo, Banco BTG President Persio Arida, and Banco Safra Vice-President Silvio Aparecido de Carvalho.

Private bank officials present, however, declined to make comments on the discussions at the meeting.

Write to Gerald Jeffris at gerald.jeffris@dowjones.com

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