BTG, Santander, Bradesco and Itaú Seen As Banks Most Exposed to Americanas’ Debts

Brazilian banks may face a 1%-7% impact on net income because of the retailer’s crisis, which acknowledged finding accounting inconsistencies of almost $4 billion

The discovery of 20 billion reais of debts could affect banks
January 16, 2023 | 07:46 PM

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Bloomberg Línea — Bradesco (BBDC4), Santander (SANB11), Itaú (ITUB4) and BTG (BPAC11) are the banks that are most exposed to Brazilian retail giant Americanas’ loans, according to a Citi analysis published Monday.

According to the report, the exposure in relation to the banks’ total loans is 1.6% for BTG, 0.6% for Santander, 0.5% for Bradesco, 0.3% for Itaú and 0.1% for Banco do Brasil.

In terms of amounts, Bradesco is the bank with the largest amount of loans to Americanas, with R$4.7 billion, followed by Santander (3.7 billion reais), Itaú (3.4 billion reais), BTG (1.9 billion reais) and Banco do Brasil (1.3 billion reais).

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Citi estimates that the financial impact on the banks’ net income can vary from 3% to 7% for Santander, BTG and Bradesco. In the case of Itaú and Banco do Brasil, the impact should vary from less than 1% to 3%.

An isolated case

Analysts at Citi see the Americanas case as an isolated situation, with limited impact on the Brazilian banking sector, however.

“We reiterate our view that the Americanas case is more an isolated case than a trend among companies, with limited impact on the banking sector,” says the report of the team led by Rafael Frade.

On Monday, the banks’ shares saw a sharp decline after the court ruled in favor of Americanas on Friday, January 13, suspending the early execution of the company’s debts. The judge in the case gave the company 30 days to present a plan or decide whether to file for legal restructuring.

In its report, Citi says it believes that an agreement with creditors is the most likely solution for the case at the moment.