I - Financial system credit operations
The total balance of the financial system's credit operations, with both earmarked and nonearmarked resources, reached R$3,115 billion in August, remaining stable in the month and falling by 0.6% over twelve months (-0.4% and +0.2% in July, in the same comparison basis). In the month, the decrease of 0.6% in the corporate portfolio to R$1,575 billion was offset by an equivalent expansion in the household portfolio to R$1,540 billion. The credit/GDP ratio reached 51.1%, compared with 53.6% in August 2015.
The credit portfolio with nonearmarked resources totaled R$1,550 billion, dropping 0.3% in the month and 3.2% over twelve months. Corporate credit operations reached R$747 billion (-1.1% in the month), with emphasis on decreases under working capital (-1.6%) and operations related to foreign trade, particularly advances of exchange contracts (-1.9%). Conversely, household credit grew by 0.5% in the month, reaching R$803 billion, most significantly in payroll-deducted loans taken by social security beneficiaries (+1.3%) and credit card transactions (+3.3%).
Financing with earmarked resources reached a balance of R$1,565 billion, increasing by 0.2% in the month and 2% over twelve months, consequent upon household credit operations of R$736 billion (+0.6% in the month), mostly due to house financing (+ 0.8% in the month). Corporate earmarked credits dropped by 0.2% to R$828 billion, mainly reflecting the decline of 0.7% under investment financing with BNDES resources.
With regard to economic activity sectors, it should be highlighted credit channeled to the industry, R$777 billion, a decline of 0.8% in the month, notwithstanding an expansion of 0.2% to the mining segment. Credit to the service sector fell by 0.4% to R$740 billion, despite the growth of 2.3% in the credit channeled to the public administration.
Considering operations above R$1,000 per region in Brazil, credit balances remained stable in the South (R$543 billion), the Northeast (R$399 billion) and North (R$116 billion), and declined in the Central-West (-0.3%, R$324 billion) and Southeast (-0.1%, R$ 1,674 billion) regions.
I.1 - Interest and default rates
The average interest rate of financial system credit operations reached 32.9% p.y. in August (-0.1 p.p. in the month and +3.9 p.p. over 12 months). In the nonearmarked segment, the average interest rate continued to rise, reaching 53% p.y. (+0.3 p.p. in the month and +7.6 p.p. over 12 months), while, in the nonearmarked segment, the average cost reached 11.3% p.y. (-0.3 p.p. in the month and +1.1 p.p. over 12 months).
In the household segment, the average interest rate fell by 0.2 p.p. in the month to 41.9% p.a., albeit with a rise of 4.9 p.p. over 12 months. The average cost of credit with earmarked resources reached 71.9% p.y. (-0.1 p.p. in the month), mainly in renegotiated debts (-2 p.p.). In the earmarked segment, the interest rate fell by 0.2 p.p. in the month to 10.4% p.y.
The average interest rate of credit taken by corporations closed at 22% p.y. (-0.1 p.p. in the month and +1.6 p.p. over 12 months). In operations with nonearmarked resources, the average cost rose by 0.3 p.p. in the month to 30.7% p.y., with emphasis on rises in advances on exchange contracts (+0.4 p.p.) and external transfers (+5.8 p.p.). As for credit operations with earmarked resources, the rate reached 12.3% p.y. (-0.5 p.p. in the month), reflecting a fall of 0.4 p.p. under investment financing with BNDES resources.
The overall banking spread reached 23.2 p.p. in August, remaining stable in the month and increasing by 4.4 p.p. over 12 months. The indicators referring to the household and corporate segments reached 32.1 p.p. (stable in the month) and 12.4 p.p. (. -0.1 p.p.), respectively. In the nonearmarked segment, the spread increased by 0.3 p.p. to 40.7, while, in the earmarked segment, the rate fell by 0.1 p.p. to 4.4 p.p.
The default rate of financial system credit operations related to credit balances overdue for more than 90 days remained stable at 3.6% in August, growing by 0.5 p.p. over 12 months. In the household credit segment, the indicator remained stable at 4.1%, rising by 0.1 p.p. to 3.1% in the corporate segment. In the nonearmarked segment, the default rate remained stable at 5.7%, and increased by 0.1 p.p. to 1.5% in the earmarked segment.
II - Evolution of monetary aggregates
The average daily balance of the monetary base totaled R$237.2 billion in August, dropping by 0.1% in the month and growing by 3.4% over twelve months. The monthly variation reflected a reduction of 0.2% in currency issued and a growth of 0.5% in bank reserves.
Among the monthly flows of factors conditioning the monetary base, items worth highlighting are financial institutions' deposits, including variations in compulsory deposits, coupled with operations with federal public securities, with respective contractionary impacts of R$5.1 billion and R$5.8 billion. Conversely, National Treasury operations expanded by R$5.5 billion.
The average daily balance of the restricted means of payment (M1) reached R$301.4 billion in August, for a monthly decrease of 0.9%, resulting from falls of 1.3% in demand deposits and 0.6% in currency outside banks. M1 grew by 0.6% over twelve months.
The balance of the means of payment in the M2 concept, which corresponds to M1 plus savings deposits and private securities, increased by 0.5% in August to R$2.3 trillion. The balance of savings deposits, R$643.7 billion, remained stable when compared with the previous month, with net redemptions of R$4.5 billion offset by the addition of deposits' earnings. The balance of private securities grew by 0.9% to R$1.3 trillion, consequent upon net inflows of R$6.8 billion in time deposits.
M3, which comprises M2, quotas of fixed-income funds and government securities backing repurchase operations between the public and the financial sector grew by 1.2% in the month to R$5.1 trillion. The balance of fixed-income funds grew by 2% to R$2.6 trillion, while repurchase transactions fell by 1% to R$210 billion when compared with July. M4, which comprises M3 and government securities held by the nonfinancial public fell by 0.5% in the month and grew by 11.5% over twelve months, totaling R$5.9 trillion.