Thursday, August 11, 2005

 

Brazilian banks have record profits

The two major private Brazilian banks have reported record profits for the first semester of 2005.
Last week, Ita├║ announced profits of R$ 2,47 billion (a little more than US$ 1 billion); this was 35% more than same period last year, and the biggest profit ever of the bank.
This week, Bradesco announced profits for the same periof of R$ 2,62 billion; this is up 109% compared to same period last year, and is also a record.
Brazilian interest rates are still the highest in the world. Basic interest rate is running at 19.75%, while inflation estimates for the next twelve months are around 5.5%. This has caused side effects like the over evaluation of the Brazilian currency (last week, it reached a three year low of R$ 2.30 against US$ 1, versus a peak of nearly R$ 4 a few years ago), and now these record profits by banks.

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