Business

Brazil’s biggest banks are likely to post tepid results in the first quarter as they set aside more cash to cover bad loans, which have risen amid slower economic growth. “We expect results to be a big reality check,” Credit Suisse said in a recent research report. “Results should support our bearish stance on the sector and prove banks’ guidances continue to deviate from reality.”

Brazil’s banks have consistently argued that with Brazil’s central bank cutting its key interest rate, non-performing loans shouldn’t be worrisome. The central bank has slashed its Selic rate by 2.75 percentage points since late August, to 9.75%, and is expected to cut the rate again next week.

Brazil’s real recovered most of Tuesday’s losses in the final hour of trading, despite the concerns about Greece’s debt restructuring. More >