Banco Do Brasil Sees Brazil Credit Growing 17% To 21%% In 2012

Brazil's largest bank sees credit this year growing as fast as in 2011, as falling unemployment and higher salaries continue to drive borrowing.

Banco do Brasil SA (BBAS3.BR), controlled by the Brazilian government, sees total consumer lending in Brazil rising between 17% and 21% this year, compared with 19% growth in 2011. Consumer loans are likely to be up between 19% and 23%, while commercial loans could rise between 18% and 22%.

Brazil's government sees credit growth as key to lifting economic growth prospects for 2012 above the relatively meager 3.5% expected by most analysts at the moment. After trying to slow credit growth in early 2011, to try to abate rising inflation, the government is now once again taking steps to encourage more borrowing.

Speaking at a press conference to discuss fourth-quarter financial results, Banco do Brasil's chief executive, Aldemir Bendine, said that the main focus for the bank this year will be to ramp up business through the Banco Postal network, in partnership with the Brazilian postal system, the Correios.

In May 2011, Banco do Brasil won a bid to provide financial services through Brazil's post offices for five years, taking over from Banco Bradesco SA (BBD, BBDC4.BR).

The bank is no longer eyeing overseas acquisitions and wants to improve its existing investments, the executive said. "I don't see any acquisition in focus," Bendine said.

The executive also said that there are no plans afoot to capitalize Banco do Brasil nor is the bank preparing to sell any bonds.

One of the bank's main rivals in the domestic market, Itau Unibanco Holding SA (ITUB, ITAB4.BR), recently unveiled plans to buy out minority shareholders in credit card firm Redecard SA (RDCD3.BR), and fold it into its operations. Bendine said that Banco do Brasil and its partner, Banco Bradesco SA (BBD, BBDC4.BR), had no such plans with their own credit card join venture, Cielo SA (CIEL3.BR, CIOXY).

"The strategy with regards to Cielo is maintained, we will continue with the same share and our partnership with Bradesco, and we have no interest in buying the Cielo shares which are in circulation. Everything continues," Bendine said.

Meanwhile, Spain's Iberdrola SA (IBE.MC, IBDRY) has made an offer for Banco do Brasil's stake in Brazilian electric power firm Neoenergia SA (GNAN3.BR), which is being examined.

"There has been an offer and we are analyzing whether the sale is in our interest. It all depends on price. It's not part of our core business so we're analyzing," Bendine said.

-By Rogerio Jelmayer and Matthew Cowley, Dow Jones Newswires; [phone]; [e-mail]