Brazilian banks: small is beautiful

Overview

Brazil’s small and mid-tier banks are heading in droves to the stock market, raising capital to fuel the expansion in lending which has been gathering pace over the past two years. As front-runners in the highly lucrative and low-risk game of payroll-deducted loans, these smaller banks have shown they can innovate. But as banks of all sizes adapt to the lower interest rate environment, competition in this segment will intensify.

So to sustain their recent growth, the mid-tier banks...