Brazilian banks expect credit expansion to lose momentum in 2026, while loan delinquency should tick up slightly, according to a survey released by Febraban, the Brazilian banking federation.

The survey shows banks estimate that total credit grew 9.2% in 2025, but they now forecast a more modest increase of 8.2% in 2026. Even so, the outlook represents a slight improvement from earlier projections, supported mainly by government-backed lending programs for companies and the continued resilience of the housing credit market, which has helped offset weaker growth in rural lending.

Delinquency remains a key concern. Banks expect the default rate to remain at 5.1% in 2025, before rising marginally to 5.2% in 2026. The figures suggest that, despite expectations of an interest-rate easing cycle, borrower stress is not expected to decline meaningfully in the near term.

Febraban said the data reflect a credit market that is still expanding, but at a gradually slower pace, with risks linked to repayment capacity still on the radar.

Original Story: MSN
Edition and translation: Prime Yield