Brazil bank lending rose in April

Brazilian outstanding bank lending expanded for second consecutive month, the latest sign that Latin America’s largest economy is pulling out of its deepest contraction in over a decade. The central bank of Brasilia today decalred that state and non-state bank lending rose 0.4 % to 1.25 trillion reais ($621 billion) last month from a revised 1.24 trillion reais in March. Lending climbed 22.6 % from the same month last year. The average annual interest rate Brazilian banks charge customers fell to 38.6 %, the lowest level since June 2008, from 39.2 % in March. The default rate on personal loans fell to 8.2 % from revised 8.4 % in the previous month, which was the highest since at least December 2007. Loans as a percentage of the country’s gross domestic product increased to 42.6 % from 42.5 % in March. Government- controlled banks represented 37.7 % of the credit market, up from 37.5 % in March. Finance Minister Guido Mantega said last week that Latin America’s biggest economy is showing signs of recovery after the deepest contraction on record in the last quarter of 2008 and shrinking for a second straight quarter in the first three months of 2009. The government has sought to revive growth by cutting taxes and easing bank reserve requirements while the central bank has cut its benchmark rate to a record. Government reports this month showed that the jobless rate in the country’s six largest cities fell to 8.9 percent in April, the first decline this year, while retail sales have risen in the year to date.