I - Financial system credit operations
In August, financial system credit operations expanded more significantly than in the previous month, notwithstanding two working days less than in July, reflecting a seasonal recovery in the demand for nonearmarked credits by corporations and the rural sector, coupled with the sustained expansion of house financing.
The balance of total loans and financing reached R$2,864 billion in August, up 1% in the month and 11.1% in twelve months, compared to corresponding variations of 0.2% and 11.5% in July. This amount represents 56.8% of GDP, against 56.6% in July and 55.1% in August 2013. The monthly change reflected respective increases of 1.2% and 0.8% in the household and corporate portfolios, which totaled R$1,348 billion and R$1,516 billion, respectively.
Nonearmarked credit operations totaled R$1,524 billion, corresponding to 53.2% of the total financial system portfolio, expanding 0.5% in the month and 5% when compared to the same month in 2013. This trajectory was mainly due to increases of 0.5% on household operations, especially payroll-deducted loans and credit card operations, and 0.4% in corporate operations, highlighting working capital operations with terms over 365 days and guaranteed accounts.
Earmarked credit operations reached R$1,340 billion in August, growing 1.5% in the month and 19% in twelve months. With regard to household credit operations, with a total balance of R$584 billion and monthly expansion of 2.1%, it should be emphasized expansions of house and rural financing. As for corporate operations, the total balance reached R$756 billion, an expansion of 1.1% in the month, highlighting operations aimed at investment financing with BNDES funds.
Credit to the private sector reached R$2,687 billion in August, growing 1% in the month and 10.3% in twelve months. House financing maintained the significant growth trajectory, expanding 2% to R$468 billion, reaching 9.3% of GDP (compared to 7.8% in August 2013). Rural sector financing, after stability in July, rose by 2.1% in August to R$243 billion, with emphasis on household financing for agricultural investment and funding operations. Credit to the industry increased 0.6% to R$529 billion, especially in the construction, energy and chemicals and pharmaceuticals segments, while credit to the service sector rose by 1% to R$423 billion, with emphasis on telephone and consulting activities. Credit to the public sector grew by 0.8% to R$177 billion in August, with emphasis on the energy sector, reflecting expansions of 1% in the balance of credits related to the federal government and 0.6% to states and municipalities.
I.1 - Interest and default rates
The average lending rates of the financial system credit operations (considering nonearmarked and earmarked resources) closed at 21.1% p.a. in August, declining 0.3 p.p. in the month and expanding 1.8 p.p. in the 12-month period. The indicator for nonearmarked credit operations reached 32.2% p.a., with a 0.1 p.p. decrease in the month and a 4.1 p.p. increase in twelve months. In the earmarked segment, the average rate reached 8% p.a., dropping 0.2 p.p. in the month and increasing 0.8 p.p. in twelve months.
In the household segment, the average cost closed at 27.9% p.a., declining by 0.3 p.p. in the month and expanding by 2.7 p.p. in the twelve-month period. In operations with nonearmarked resources, the average cost decreased by 0.1 p.p. in the month to 43.1% p.a. In the earmarked segment, the average rate reached 8.1% p.a., a drop of 0.1 p.p. in the month, reflecting the 0.1 p.p. decrease in house and rural financing operations.
In the corporate segment, the average rate reached 15.8% p.a., declining 0.2 p.p. in the month and rising 1.1 p.p. in twelve months. In the nonearmarked segment, the average rate fell by 0.3 p.p. in the month to 22.8% p.a., reflecting a 0.3 p.p. drop on working capital loans. In operations with earmarked resources, the indicator rose by 0.2 p.p. in the month to 8% p.a.
The spread of financial system credit operations (including nonearmarked and earmarked resources) closed at 12.7% p.a., a decline of 0.4 p.p. in the month and expansion of 1.4 p.p. in twelve months. The spreads of household and corporate operations reached 19.1 p.p. and 7.8 p.p., respectively. The spread of nonearmarked operations decreased by 0.2 p.p. in the month to 21.2 p.p., while the spread of earmarked operations declined by 2 p.p. to 2.8 p.p.
The overall financial system default rate, corresponding to operations in arrears of more than ninety days, closed at 3.1%. In the household and corporate segments, the indicator remained stable at 4.4% and 2%, respectively. In operations with nonearmarked resources, the default rate remained stable at 5%, while, in the earmarked segment, the default rate increased by 0.1 p.p. in the month to 1.1%.
II - Evolution of monetary aggregates
The daily average balance of the monetary base reached R$226.3 billion in August, up 0.2% in the month and a 6.3% twelve months. The monthly variation was due to a 0.7% increase in currency issued and a 2.5% decrease in banking reserves.
Among the monthly flows conditioning the currency issue, it should be mentioned the expansionary impacts of R$30.5 billion of financial institutions deposits, reflecting adjustments in the rules for compulsory deposits implemented in July and August1. Conversely, operations with federal government securities, including the Central Bank's operations aimed at adjusting the market liquidity, exerted a contractionary impact of R$21.8 billion. The impact of operations involving public securities reflected net sales of R$41 billion on the secondary market and net redemptions of R$19.2 billion on the primary market.
The average daily balance of the restricted money supply (M1) totaled R$306.5 billion in August, declining 0.8% in the month and expanding 2.9% in the twelve-month period. In the same periods, currency held by the public grew by 0.8% and 9.7%, while demand deposits fell by 2.3% and 3.1%, respectively.
The balance of money supply in the M2 concept (M1 plus savings deposits and corporate bonds) rose by 0.4% in August to R$2 trillion. The stock of savings deposits, which reached R$638.5 billion, increased by 0.3% in the period due to net inflows of R$518 million. The balance of private bonds remained stable at R$1.1 trillion, with net redemptions of R$10 billion in time deposits.
The M3 concept, comprising M2 plus quotas of fixed-income funds and government securities underlying repurchase agreements between the public and the financial sector, expanded by 2.3% in the month to R$4.1 trillion, reflecting expansions of 2.4% in the stock of fixed-income funds to R$1.9 trillion, and 25% in repurchase agreements to R$189.7 billion. The M4 concept, comprising M3 plus government securities held by nonfinancial entities, grew by 1.8% in the month and 12.2% in the twelve-month period, totaling R$4.8 trillion.