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Igor Cornelsen Offers Four Basics to Help Potential Investors Understand Brazilian Banking


At the close of 2014, an anomaly by Brazil’s banking institutions left the banking world puzzled. During 2014, Brazil’s leading private banks including Banco Bradesco and Itau Unibanco experienced an increment in their shares by one-third.

Both banks also witnessed profit growth in that Bradesco’s third-quarter rose by 28% while that of Itau Unibanco increased by 36% from the previous year. According to Igor Cornelsen, an investment expert and leading banker in Brazil, the secret to overcoming economic problems is experience gained over other troubled years and knowledge of the market.

Lulu revealed that Igor Cornelsen cited that private banks in Brazil only lend money to creditworthy borrowers. This move not only provides the banks with a sense of security but also helps to streamline costs.

In addition, it means that individuals with undesirable credit are left to focus on public banking institutions, cash-based spending or abandon their business plans. Consequently, doing so interferes with the country’s development and macro-economy. For this reason, here are various pointers for investors on Brazilian banking as follows:

Both Braziland China have been trading partners for a significant duration, which means that their economies are inherently linked. As such, a stable Chinese economy ultimately translates to better prices for Brazilian raw materials.

According to Igor Cornelsen, Guido Mantega’s vision of the new economic matrix did not bear fruit. For him, the concept was grounded on ideology as opposed to rational economics. Nevertheless, the appointment of a new finance minister, Joaquim Levy, brings the much-desired hope for Brazil’s banking institutions.

For several years, Brazil’s currency had been overvalued. In turn, it has led to the loss of competitiveness in the export of industrialized goods. This situation has resulted in significant current account deficits.

Cornelsen expects the less intervention from the new administration to cause a continued devaluation of the real in a controlled pace. By doing so, exports of manufactured goods will be more competitive.

Brazil is undeniably the eighth largest economic globally and the largest economy in South America. The country’s economy is supported by ten state and privately owned investment and commercial banks.

Some of these institutions include Itau Unibanco, BTG Pactual, Caixa Economica Federal, Banco Bradesco and Banrisul among others.

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