I - Financial system credit operations
The stock of financial system credit operations, including nonearmarked and earmarked funds, reached R$2,830 billion in June, expanding 0.9% in the month and 11.8% in the twelve-month period, against respective changes of 0.9% and 12.7% in May. The balance of household credit operations totaled R$1,324 billion, up 1.0% and 14.3%, while that of corporate operations, R$1,506 billion, up 0.9% and 9.7%, in the same comparison basis. The credit/GDP ratio reached 56.3%, against 56.2% in the previous month and 55% in June 2013.
The trajectory of the credit market over the first half of the year highlighted a slowdown in both nonearmarked and earmarked credit portfolios, in a scenario of upward interest rates and stable default rates. In the period, the performance of household operations was more favorable than that of the corporate segment, with emphasis on payroll-deducted loans, rural and house financing loans, which are lower risk credit modalities with longer terms.
Credit operations with nonearmarked funds, accounting for 53.8% of the total system portfolio, added up R$1,524 billion in June, up 0.7% in the month. Corporate operations reached a balance of R$765 billion, up 1.1%, with emphasis on advances of foreign exchange contracts, export financing and acquisition of receivables. Nonearmarked household credit operations turned in a balance of R$759 billion, up 0.3%, with emphasis on the expansion of payroll-deducted loans and the decline of purchase of automotive vehicles.
The balance of loans with earmarked funds reached R$1,306 billion in June, up 1.2% in the month, with emphasis on the household portfolio, up 2.0% in the month, reflecting the steady expansion in house financing and rural credits at regulated rates. The balance of corporate credit operations increased by 0.6%, especially operations for investment financing with BNDES funds.
Loans to the private sector, encompassing nonearmarked and earmarked operations, reached R$2,659 billion in June, up 0.9% in the month, with emphasis on the 2.1% growth in the house financing portfolio to R$449 billion, corresponding to 8.9% of the GDP. Credit operations to the industrial sector reached R$527 billion, up 0.9% in the month, especially with the energetic, sugar, chemical and pharmaceutical sectors. The balance of loans to the rural sector, driven by the demand for agricultural investment and costing operations related to the 2013/2014 crop, increased by 1.2%.
The public sector banking debt reached R$171 billion, up 1.9% in the month, emphasizing operations for investment financing that led to a 2.1% expansion in the balance related to states and local governments and 1.7% in credits to the federal government.
II - Interest and default rates
The average interest rate of financial system credit operations, including nonearmarked and earmarked operations, closed at 21.1% p.a. in June, for changes of -0.3 p.p. in the month and 2.6 p.p. in twelve months. Regarding nonearmarked credits, the average rate remained stable in the month, 32% p.a., and expanded 5.4 p.p. in twelve months, while the average rate of the earmarked credit operations reached 7.8% p.a., dropping by 0.6 p.p. in the month and expanding 0.7 p.p. against June 2013.
With regard to household operations, the average cost remained at 27.9% p.a. in June, up 3.7 p.p. in twelve months. In operations with nonearmarked funds, the average rate increased by 0.5 p.p. in the month to 43% p.a., reflecting respective highs of 3 p.p. and 0.6 p.p. in overdraft accounts and personal credit modalities. Regarding earmarked funds, the average cost reached 7.7% p.a., dropping by 0.2 p.p. in the month.
In the corporate segment, the average rate closed at 15.7% p.a., for a decline of 0.6 p.p. in the month and an increase of 1.6 p.p. in twelve months. Nonearmarked operations reached an average rate of 22.6% p.a., decreasing by 0.4 p.p. in the month, reflecting respective falloffs of 1.2 p.p., 0.8 p.p., and 0.7 p.p. in foreign onlendings, guaranteed accounts and discount of trade bills. As far as operations with earmarked funds are concerned, the average cost reached 7.9% in June, dropping by 0.8 p.p. in the month, reflecting a reduction of 1 p.p. in investment financing with BNDES funds.
Bank spreads related to nonearmarked and earmarked operations reached 12.7 p.p., for a decline of 0.1 p.p. in the month and an increase of 1.8 p.p. in twelve months. Spreads related to the household and corporate segments reached 19.1 p.p. and 7.7 p.p., respectively. In June, the spread related to nonearmarked credit operations increased by 0.3 p.p. to 20.9 p.p., while that related to operations with earmarked funds dropped by 0.5 p.p. to 2.8 p.p.
Financial system default, corresponding to operations overdue for more than ninety days, reached 3%, dropping by 0.1 p.p. in the month and 0.4 p.p. in twelve months. The default rate regarding household operations reached 4.3% (a reduction of 0.2 p.p. in the month), while, in the corporate segment, remained stable at 2%. In the nonearmarked and earmarked segments, default rates closed at 4.8% (drop of 0.2 p.p. in the month) and 1% (drop of 0.1 p.p. in the month), respectively.
II - Evolution of monetary aggregates
The average daily balance of the monetary base reached R$223.4 billion in June, with increases of 0.2% in the month and 9.4% in twelve months. The monthly trajectory resulted from a decline of 7.9% in bank reserves and an increase of 2.1% in currency issued.
Among the monthly flows of factors affecting the monetary base, it should be highlighted operations with federal public securities, including Central Bank operations aimed at adjusting the money market liquidity and net purchases of foreign exchange on the interbank market, with respective expansionary impacts of R$4.2 billion and R$8.1 billion. On the other hand, adjustments in operations with derivatives were responsible for a contraction of R$3.4 billion. The impact associated with operations with public securities reflected net purchases of R$37.0 billion on the secondary market and net placements of R$32.8 billion on the primary market.
The restricted money supply (M1) turned in a daily average balance of R$307.3 billion in June, up 0.4% in the month and 3.7% in twelve months. In the same comparison basis, currency outside banks grew by 1.6% and 11%, while demand deposits declined by 0.8% and 2.5%, respectively.
The balance of money supply in the M2 concept, corresponding to M1 plus savings deposits and private securities, increased 0.4% in June to R$2.0 trillion. This result reflected an expansion of 0.7% in savings deposits, accumulating R$627 billion in deposits, due to net inflows of R$3.2 billion in the month. The balance of private securities remained stable in the month, totaling R$1.1 trillion, with net redemptions of R$2.5 billion in time deposits.
M3, corresponding to M2 plus quotas of fixed income funds and public securities backing repurchase operations between the public and the financial sector, aggregated R$4 trillion, for an expansion of 0.5% in the month. The balance of quotas of fixed income funds grew 1.4% to R$1.9 trillion. M4, corresponding to M3 plus public securities held by the nonfinancial public, increased 1.6% in the month and 10.6% in twelve months, totaling R$4.7 trillion.