In the recent years, Brazil’s economy has been one of the most turbulent globally. This situation has greatly affected the banks that are operating in the country. To this end, many people have been left wondering how the banks have been able to survive and stay afloat in such turbulent business environment.
According to PR Newswire, Igor Cornelsen posits that many banks have weathered the storm owing to their vast market knowledge and experience. They have also devised appropriate business strategies that are specifically tailored for Brazil’s turbulent economy.
The two banks of particular interest in the country are Itau Unibanco and Banco Bradesco. Both the companies’ shares gained about 30 percent in 2014. In the same year, Bradesco’s profits jumped by 28 percent while Itau’s bottom line increased by 36 percent in the third quarter.
Igor Cornelsen pointed at the safe loaning approach used by the banks in the private sector. According to him, the banks only lend money to borrowers who are most creditworthy. This approach protects the banks from bad loans that are potentially higher compared to if they were to loan to individuals outside this bracket. Individuals with less desirable credits only access loans from banks in the public sector. Read more: Investing in the Future Success
The obvious question remains: why Brazil? The answers to this question are simple. First, the country has abundant natural resources. These resources are used both locally and outside the country to make items that most people cannot live without. This way, investors are keen to enjoy a piece of this pie.
Secondly, the country has a fast growing middle class. This buying power is unmatched in many countries. It has helped in securing Brazil’s spot as the eighth largest economy worldwide.
A new finance minister could also bring around the Brazil’s economic stability anytime. It has been clear that in Brazil, the finance minister is an influential figure. The past ministers have used this influence to come up with populist policies. All these policies have failed to stabilize the economy. However, a new minister may deviate from this trend.
Finally, Igor Cornelsen points at the close link between Brazil’s economy and China’s. In the past, a stronger Chinese economy has always meant more demand for raw materials from Brazil, and consequently good prices. Notably, Brazil competes with China in exporting industrialized goods to Latin American countries. This information was originally mentioned on Prnewswire.com