Brazil bank rate increases seen outstripping inflation

In order to increase revenues, Brazilian banks have been raising rates charged to account holders at a pace well above that of inflation, reported Folha de S Paulo, citing data from consumer protection association Proteste.

According to Proteste data, fees were adjusted up 169% between January 2013 and August 2015. The IPCA – consumer price index – increased 19.63% over the same period.

The country's central bank requires financial institutions to offer a minimum package of free services to all customers. There are no rules, however, on how much they can charge for other package options, which may have annual adjustments.

The increase in rates is a way of expanding banks' earnings. In the first half of this year, revenues from bank fees for Bradesco increased 14.3%, for Itaú 11.1% and for Banco do Brasil 9.1%, Folha de S Paulo reported.

With poor credit performance, banks have managed to maintain – and sometimes increase – their gains, thanks in large part to increased revenues from services.

"You cannot attribute the increase solely to inflation, because it has far surpassed the official index," Renata Pedro, a technician at Proteste was quoted as saying. "Rates [paid by clients] go straight to the banks' earnings, and they can charge whatever they think is feasible."