Brazilian banks have the highest profit in history

Profits of Brazilian banks grew by 17.40% between 2017 and 2018. This was pointed out by the Brazil Central Bank's Director of Inspection, Paulo Souza. According to him, the net profit recorded by banks in Brazil at the end of 2018 was R$ 98.5 billion.

According to the banks, the factors that contributed to this result are the reduction of defaults and administrative expenses. The profits of the country's four largest banks (Banco do Brasil, Bradesco, Itaú Unibanco, and Santander) were R$ 69 billion in 2018. This represents a 20% increase compared to 2017.

This exceptional performance contrasts with a country where the majority faces a framework 63 million people unable to clear their names and regain their credit, where 13 million are unemployed and more than 30 million work in informality.

It is very difficult to understand how a country with stagnant economic performance, industry hitting negative records, falling per capita income, rising poverty levels may have a sector with so much profitability.

For some economists, these results are a direct result of the banking oligopoly that exists today in Brazil. This oligopoly guarantees extravagant profits. If Brazil had a more competitive banking system, the fees charged by banks would be lower, the services would be better and profits would not be so exorbitant.

According to economist Eduardo Moreira, the five largest single-rate banks charge more than R$ 130 billion of their clients every year. To get an idea of the size of this amount, the entire health budget in Brazil is R$ 120 billion per year. For him, the banks' performance is a machine of the concentration of wealth and abusive collections of interest and taxes on the middle class and the poor Brazilians.