I - Financial system credit operations
In the month of October, the outstanding balance of financial system credit operations reached R$2,926 billion, up 0.8% in the month and 12.2% over 12 months, against respective expansions of 1.3% and 11.7% in September. With this result, the credit/GDP ratio came to 57.3%, compared to 57.2% in September and 54.7% in October of last year. Monthly growth was generated by respective increases of 1.3% and 0.4% in the household and corporate portfolios, highlighting expansion of earmarked credit operations in both segments.
The balance of nonearmarked credit operation reached R$1,538 billion, up 0.2% in the month and 4.9% over 12 months. Monthly growth was concentrated in the different modalities of operations with individual borrowers, with expansion of 0.7% to R$773 billion, particularly under payroll-deducted loans and credit card operations with immediate payment. The balance of corporate operations dropped 0.2% to R$765 billion, with the sharpest reductions occurring under discounting of trade bills and short-term working capital loans. Advances on exchange contracts turned in the sharpest growth of the month. Earmarked credits totaled R$1,388 billion in October, with expansion of 1.5% in the month and 21.5% in 12 months. These results were mainly driven by house financing operations with individuals and investments with BNDES resources with corporations.
Credits granted to the private sector, involving operations with both nonearmarked and earmarked resources, came to R$2,739 billion in October, rising 0.8% in the month, led primarily by household operations. The balance of house financing operations for purposes of both construction and acquisitions increased 2.2% to R$485 billion, corresponding to 9.5% of GDP, against 8% in October 2013. Impacted by greater demand for agricultural investments by individuals, rural credit operations increased 0.4% in the month, adding up to R$249 billion. With regard to industrial credit operations, the balance came to R$534 billion, growth of 0.4%, especially in the sectors of mining, food and beverages, and machines and equipment. The volume of loans to the commercial sector increased 0.5%, driven by operations with the wholesale segment, while the segment of other services expanded 0.2%, with the sharpest growth occurring under financial services. The balance of financing for the public sector totaled R$187 billion, up 1.6% in the month, as a consequence of 1.7% expansion in credits to states and municipalities and 1.4% in operations targeted to the federal government.
I.1 - Interest and default rates
Considering operations based on nonearmarked and earmarked resources, the average rate of interest on financial system credit operations reached 21.3% per year in October, with growth of 0.3 p.p. in the month and 1.5 p.p. in 12 months. The average cost of nonearmarked credit closed at 32.8% per year, reflecting growth of 0.9 p.p. in the month and 3.8 p.p. in 12 months. In the case of earmarked credit operations, the average rate came to 7.9% per year, dropping 0.2 p.p. in the month and growing 0.5 p.p. over 12 months.
In the household segment, the average cost rose 0.6 p.p. in the month and 1.9 p.p. over 12 months, closing at 28.1% per year. Operations based on nonearmarked resources posted monthly expansion of 1.2 p.p. to 44% per year. In the case of earmarked credits, the average cost of operations at the household level increased 0.1 p.p. in the month to 8% per year.
With regard to business loans, the average rate of interest reached 15.9% per year, up 0.1 p.p. in the month and 1.1 p.p. in 12 months. In operations with nonearmarked resources, the average rate rose by 0.6 p.p. to 23.4% per year, while earmarked credit operations dropped by 0.4 p.p. in the same period, closing at 7.9% per year.
The banking spread for operations with nonearmarked and earmarked resources increased 0.1 p.p. in the month and 1.2 p.p. in 12 months, closing at 12.8 p.p. Indicators for the household and corporate segments reached 19.2 p.p. and 7.7 p.p., respectively. In the case of nonearmarked credits, the spread rose by 0.5 p.p. in the month to 21.3 p.p., and, in the earmarked segment, dropped by 0.2 p.p. to 2.8 p.p.
Financial system credit operations defaults of more than 90 days, including nonearmarked and earmarked resources, dropped 0.1 p.p. in the month and 0.3 p.p. in 12 months, closing at 2.9%. The overall rate remained stable at 4.2% in the case of household credits, against 1.9% in corporate operations, reflecting a reduction of 0.1 p.p. In the nonearmarked and earmarked segments, default levels dropped 0.2 p.p. and rose 0.1 p.p. in the month, respectively, closing at 4.8% and 1%.
II - Monetary aggregates
The monetary base registered an average daily balance of R$234.2 billion in October, up 1% in the month, due to growth of 1.2% in currency issued and 0.3% in banking reserves, and 7.9% in 12 months.
Analysis of the monthly flows of the factors that condition monetary issuances indicates that the most important items - operations with federal public securities, including Central Bank operations to adjust money market liquidity, coupled with adjustments under operations with derivatives - generated contractive impacts of R$3.7 billion and R$6.8 billion, in that order. In contrast, deposits of financial institutions, including reserve requirements, generated growth of R$3 billion. The impact of operations with public securities reflected net sales of R$55 billion on the secondary market and net redemptions of R$51.3 billion on the primary market.
The average daily balance of the restricted money supply (M1) reached R$317 billion in October, for monthly growth of 0.4%, as a result of 0.6% expansion under currency held by the public and 0.2% under demand deposits. Accumulated M1 growth over 12 months reached 4.8%.
In the case of the M2 concept, which corresponds to M1 plus savings deposits and private securities, the money supply balance expanded 0.1% in October to R$2.1 trillion. The volume of savings deposits climbed to R$647.5 billion, with monthly growth of 0.3% and net inflows of R$540 million, while the balance of private securities added up to R$1.1 trillion, down 0.1% in the month, following net redemptions of R$8.8 billion under time deposits.
M3, which encompasses M2, quotas of fixed-income funds and the public securities used as backing for repo operations between the public and the financial sector, expanded 0.6% in the month to R$4.2 trillion, reflecting growth of 1.2% in the balance of quotas of fixed-income funds to R$2 trillion. The M4 concept, which includes M3 plus public securities held by nonfinancial entities, registered expansion of 1.2% in the month, impacted by ma monthly expansion of 5.3% in the balance of federal securities to R$707 billion. Over the last 12 months, M4 increased 12.9%, reaching a level of R$4.9 trillion.