Banking Sector: Domestic Headwinds Will Persist

BMI View: Deteriorating asset quality alongside an erosion of capital buffers are increasing stress on Brazil's banking sector. However, w e anticipate broad stability, with the loan-to-deposit and leverage ratios still in line with regional peers.Brazil's banking sector is coming under increasing stress, as asset quality is likely to continue deteriorating and capital buffers have been eroded in the last several quarters. We acknowledge that the next few years will be difficult for the...

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