But the Maximum Bank SA - 88 th largest bank by total assets - sees an opportunity amid the bleak scenario. This is because the difficult scenario is making the biggest giver of mortgage loans, Caixa Economica Federal, retreat. The retrac loan credit insurance tion of the state bank is creating a gap for others who previously had little chance of competing with the giant, said Saul Sabbá, founding partner of Max Bank, which is headquartered in Sao Paulo. It plans to triple the portfolio of bank loans to R $ 500 million ($ 129 million) by the end of the year.
This amount would still be well below the port loan credit insurance folio of R $ 367 billion of cash. The bank headquartered in Brasilia controls about 70% of the home loans market in Brazil, providing subsidized credit. The institution raised three times interest rates this year, which helped motivate a drop of 43.3% in the origination of mortgages in the 12 months through August, according to the latest data compiled by Abecip, an association of real estate lenders.
"We want customers that they are no longer serving," Sabbá said. "When the case was aggressive in new loans, as in recent years, it was difficult for smaller players to compete with their subsidized rates. Now there is a window, we have to approach customers to which we had no access before. "
The Maximum Bank initiative can be seen as "quite risky," said Ri loan credit insurance cardo Humberto Rocha, a finance professor at the School of Business Insper, based in Sao Paulo. Economists now estimate that the recession in Brazil will continue until next year. The crisis has led the unemployment rate in the country at the highest level in five years, making it harder for Brazilians maintain payments of their debts.
