Brazil Banks Raise Delinquency Forecasts as Credit Risk Deteriorates

Febraban's survey shows banks now expect year-end free-resource delinquency of 6.1%, up from 5.8%, and 2027 at 5.9% (from 5.6%), reflecting a worsening credit cycle. Central Bank data already shows record delinquency of 6.6% in August, up from 6.4% in July, indicating the upward revision is corroborated by hard data. This signals rising consumer and corporate stress in Brazil, which could pressure bank earnings and weigh on growth.