Santander signs US$3.47bn loan deal with workers' unions

Brazilian bank Santander Banespa has signed a contract with Brazil's three largest national workers' unions - Central Geral dos Trabalhadores (CGT), Central Unica dos Trabalhadores (CUT) and Forca Sindical - to provide loans to its workers, Brazilian press reported. The bank has set aside 10bn reais (US$3.47bn) for the loans, in which the bank will receive payment via an automatic withdrawal on employees' monthly checks. Interest rates will run from 1.75% to 3.3% monthly, under maturities of between six and 48 months. Banespa has granted some 1,000 loans under the paycheck-withdrawal scheme, a new financing product approved recently by the central bank for private sector employees. The CGT is using Banespa as its exclusive paycheck-withdrawal loan partner currently, but says it is in negotiations with other banks as well. CGT earns a commission on the resultant loan volume with Banespa.