Brazil Banking & Financial Services Report Q1 2018
BMI View: Brazil's financial services sector is the largest and most-developed in Latin America. The economy's size and undeveloped potential, together with a stable regulatory framework, make it a long standing favourite among emerging market investors. That said, the country has only just begun to emerge from a severe recession sparked by a plunge in commodity prices and still-developing corruption investigations that have touched all levels of the political and business establishment. With an upcoming election generating substantial policy uncertainty, lending in the commercial banking sector is likely to remain constrained. That said, many investors believe the country is past the worst and now ready for a sustained bounce. As a result, asset managers are benefitting from substantial inflows and the stock market has sustained a bull run that has attracted a renewed market for IPOs. Barring a substantial reversal of policy direction, Brazil's financial services are likely to see growth pick up over the coming quarters.