Midsized Brazilian Banks Face Challenges

Midsized Brazilian Banks Face Challenges

Bonds Structured Finance Brazil

Brazilian midsized banks could face significant challenges to their business models despite experiencing significant growth, according to a Fitch report. The high level of risk associated with wholesale funding is a major concern, says the report. “The evident mismatch in terms of funding (concentration and tenor) and assets (midterm retail loans) results in a credit negative for this segment,” says Fitch. Rapid loan growth is also cause for concern. Profitability could be impacted by lower-than

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