I - Financial system credit operations
The total volume of financial system credit operations reached R$3,107 billion in December, increasing by 0.1% in the month and falling by 3.5% in the year, compared with an increase of 6.7% in the previous year. In the month, corporate credit operations fell by 0.5% to R$1,546 billion, while household credit operations grew by 0.7% to R$1,561 billion. The credit/GDP ratio dropped to 49.3%, compared with 53.7% at the end of 2015.
The decline of lending operations in 2016 reflected the slowdown of economic activity and its impact on the credit demand for consumption and investments, as well as the increased risk perception in the financial system. It is worth highlighting the decrease in the corporate portfolio, which also reflected the impact of significant contract settlements by large companies.
Credit operations with nonearmarked resources reached R$1,557 billion (+0.6% in the month and -4.9% over 12 months). In December, corporate credit operations rose by 1.1% to R$747 billion, reflecting the seasonality of trade activities, with emphasis on expansions under discount of trade bills and other nonearmarked credits, in addition to declines under guaranteed accounts, working capital and those modalities referenced in foreign currencies. The balance of the household portfolio reached R$809 billion (+0.1% in the month), highlighting credit card operations with immediate payment.
Earmarked credit operations totaled R$1,550 billion (-0.4% in the month and -2% in the year), reflecting a monthly decrease of 2% under corporate credit operations to R$798 billion, with emphasis on settlements of transactions with BNDES resources. The balance of the household portfolio reached R$752 billion, up 1.4% in the month, with expansions under rural credit and house financing.
Among borrowers' economic activity segments, industry's operations fell by 1.7% in the month to R$747 billion, highlighting decreases in manufacturing (-2.3%) and construction (-5.1%). In the services segment, the balance grew by 0.7% to R$741 billion, especially under trade (+2.8%) and other services (+1.6%).
Considering operations above R$1,000, the regional credit portfolio grew in the Central-West (+0.9%), South (+0.8%) and North (+0.4%) in December, totaling R$329 billion, R$553 billion and R$116 billion, respectively. The balances in the Southeast and Northeast fell by 0.5% and 0.1%, respectively, to R$1,650 billion and R$397 billion.
I1 - Interest and default rates
The average interest rate of financial system credit operations, including operations with nonearmarked and earmarked resources, reached 32% p.y. in December, reflecting a reduction of 1.1 p.p. in the month and an increase of 2.2 p.p. over the year (+6.1 p.p. in 2015). In the nonearmarked segment, the average interest rate closed at 52% p.y. (-2.0 p.p. in the month and +4.7 p.p. over the year), while, in the earmarked segment, the average interest rate reached 10.7% p.y. (+0.1 p.p. and + 0.9 p.p. in the same comparison periods).
The average cost of credit operations in the household segment decreased by 1.2 p.p. in the month and increased by 3.6 p.p. over 12 months, closing at 41.5% p.y. As for nonearmarked credits, the interest rate reached 71.5% p.y. (-2.1 p.p. in the month), highlighting declines under overdraft accounts (-2.0 p.p.) and installment credit card operations (-1.6 p.p.). As for earmarked credits, the rate reached 10.4% p.y. (+0.2 p.p.).
In the corporate segment, the average rate closed at 20.1% p.y. (-0.9 p. p in the month and -0.6 p.p. over the year). With regard to credit operations with nonearmarked resources, the rate decline to 28.2% p.y. (-1.8 p.p.) was consequent upon reductions in several modalities, among which discount of trade bills (-3.6 p.p.) and working capital (-1.5 p.p.). In the earmarked segment, the average cost for companies decreased by 0.1 p.p. to 11% p.y.
The bank spread of operations with nonearmarked and earmarked resources reached 22.5 p.p. in December, falling by 1.1 p.p. in the month and growing by 3.9 p.p. over the year (+3.7 p.p. in 2015). Spreads related to the household and corporate segments reached 31.9 p.p. (-1.2 p.p. in the month and +5.3 p.p. over the year) and 10.9 p.p. (-0.7 p.p. and +1.2 p.p.), respectively. In the nonearmarked segment, the spread fell by 1.7 p.p. in the month to 40.2 p.p., and remained stable at 3.8 p.p. in the earmarked segment.
The default rate of financial system credit operations related to credit balances overdue for more than 90 days corresponded to 3.7% in December, following a decrease of 0.1 p. p in the month and an increase of 0.3 p.p. over the year (+0.7 p.p. in 2015). In the household segment, the default indicator continued on a downward trend (-0.2 p.p. in the month and -0.3 p.p. over the year), closing at 3.9% in December. In the corporate segment, the default rate remained stable at 3.5% in the month, but increased by 0.9 p.p. in the year. As for operations with nonearmarked and earmarked resources, the default level reached 5.7% and 1.8%, respectively, dropping by 0.1 p.p. in December.
II - Evolution of monetary aggregates
The average daily balance of the monetary base amounted to R$265.4 billion at the end of 2016, with increases of 9% in the month and 3.5% over twelve months. The monthly expansion reflected the seasonal demand increase for currency, as the balance of currency issued and bank reserves grew by 9%.
Among the monthly flows of factors conditioning the monetary base, items worth highlighting were operations with federal government securities, representing an expansionist effect of R$79.4 billion (net purchases of R$71.7 billion in the secondary market and net redemptions of R$7.7 billion in the primary market) and National Treasury operations, with a contractionary effect of R$52.4 billion.
The average daily balance of the restricted means of payment (M1) reached R$340.8 billion in December 2016, for a monthly expansion of 9.8% (+2.6% over twelve months), consequent upon monthly increases of 10.1% in demand deposits and 9.5% in currency outside banks.
The balance of the means of payment in the M2 concept, which corresponds to M1 plus savings deposits and private securities issued by financial institutions, registered a growth of 2.5% in December, totaling R$2.4 trillion. This result reflected monthly increases of 1.9% in savings deposits to R$665 billion, and 1.1% in private securities to R$1.4 trillion. In the month, net inflows of time deposits and savings deposits reached R$10.9 billion and R$10.7 billion, respectively.
M3, which comprises M2, quotas of fixed-income funds and government securities backing repurchase operations between the public and the financial sector grew by 2% in month to R$5.3 trillion. The stock of fixed-income funds rose by 2.4% to R$2.7 trillion in December, while repurchase operations fell by 9.8%. M4, which comprises M3 and government securities held by the nonfinancial public grew by 1.6% in the month and 10.8% over the year, totaling R$6.2 trillion.