Itaú sees high interest rates and restricted credit as challenges for 2027

Itaú Unibanco raised an alert for 2027. In a press conference on the 3rd quarter results, CEO Milton Maluhy Filho stated that the bank considers itself more prepared for an adverse economic cycle, according to Money Times.

Among the obstacles to credit, Maluhy cited interest rates that are expected to remain high for longer, a weaker pace of expansion and the chance of unemployment rising. Also according to Money Times, families must have a greater commitment to their income, and companies will need to renegotiate their debts by paying more expensive rates.

The problem is not restricted to the banking sector. According to Revista Oeste, Pedro Ricco, CEO of Delta Global Bank, estimates that, with more expensive credit, producers' margins could fall between 10% and 15%. The publication points to high interest rates, expensive rural credit and climate uncertainty as risks to agriculture in 2027 and remembers that Brazil imports a large part of its fertilizers, which makes the purchase of inputs more pressured when financing becomes expensive.

The background is fiscal. According to InfoMoney, four issues will shape the economy in 2027: the balance of public accounts, high interest rates, tax reform and changes in the job market. Gross debt, close to 83% of GDP, continues to rise, and the market expects that Luiz Inácio Lula da Silva's new mandate will be guided by a spending policy.

The projections cited by InfoMoney for 2027 are GDP of around 1.3%, inflation of around 4.3% and Selic of approximately 12% at the end of the year. The situation combines weak growth with still high interest rates, a combination that tends to weigh on borrowers.

At stake is the payment capacity of families and companies and, with it, the quality of the banks' credit portfolio.

What changes for the investor

For those who follow ITUB4 and other securities linked to credit, the warning suggests that defaults, provisions for losses and demand for loans may gain weight in the next results presentations, as these variables directly affect banks' profits. For indebted companies and agribusiness, more expensive refinancing is the most immediate point of attention. This article does not constitute a purchase or sale recommendation and does not project quotations.

Automatically translated from Portuguese.