09/10/13 Brazilian Banks, Unions Set Talks - Wall Street Journal - WSJ.com
stream.wsj.com/story/latest-headlines/SS-2-6339...
09/10/13 Brazilian Banks, Unions Set Talks - Wall Street Journal - WSJ.com
stream.wsj.com/story/latest-headlines/SS-2-6339...
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Participação em matéria do Wall Street Journal (09/10/2013): Brazilian Banks, Unions Set Talks

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Transcript of "Participação em matéria do Wall Street Journal (09/10/2013): Brazilian Banks, Unions Set Talks"

  1. 1. 09/10/13 Brazilian Banks, Unions Set Talks - Wall Street Journal - WSJ.com stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-350303/ 1/2 A new round of negotiations will start Thursday, as a nationwide strike over better pay and conditions enters its fourth week and the first signs of a slowdown in bank lending appear. By Rogerio Jelmayer SÃO PAULO—Brazilian banks will start a new round of negotiations with labor unions on Thursday, as a nationwide strike over better pay and conditions enters its fourth week and the first signs of a slowdown in bank lending appear. Brazilian banks have produced handsome profits in recent years on the back of a rapid increase in lending, and workers have enjoyed higher-than-inflation wage increases. Strikes by bank employees in Brazil have become an annual ritual. Last year, employees went on strike for nine days, demanding a 10.25% increase, eventually settling for 7.5%. But after three years of subpar growth, bank profits have declined from records, and private-sector banks have cut back on making new loans. Defaults have risen, pushing banks into looking for ways to trim costs. After several rounds of talks, the two sides appear to be as far apart as ever, prompting some concerns that the strike is starting to affect bank lending. Data released this week by credit bureau Serasa Experian showed that demand for new loans dropped 9.8% in September, compared with August. The agency’s economists attributed the decline to the closure of bank branches due to the strike. The slowdown in lending may only be temporary, however, as most Brazilians that want new loans may be postponing the decision until the strike ends. Last year, a decline in September during a strike was followed by a sharp increase in October after it ended, said Andre Riva, a senior analyst who covers Brazilian banks for Grupo Bursatil Mexicano. “This doesn’t have a big impact on banks as it’s just a delay in new loan concessions,” said Mr. Riva. Last Friday, the Brazilian Federation of Banks, or Febraban, which represents Brazil’s banks in negotiations with the union, made its latest proposal for a 7.1% wage increase, but that was rejected by workers, who stuck to their demand for an 11.93% raise. The union argues that with inflation running at about 6% a year, the proposal represents only a rise above the increase in the cost of living. “Our expectation is that the banks will present a higher salary hike proposal,” said Carlos Cordeiro, president of the National Confederation of Financial Sector Employees, or Contraf-Cut, which represents a number of banking unions in the negotiations. Febraban wasn’t immediately available to comment. Salaries account for about 30% of bank costs in Brazil. The average monthly salary for a bank employee in Brazil is 4,400 reais, or about $2,000, well above the average salary in Brazil of about 1,848 reais a month. According to Febraban, salaries for bank tellers have risen 58% over the past seven years, while inflation has risen 42% over the same period. It has said the negotiations 9 MINS AGO MARKETS Brazilian Banks, Unions Set Talks Signs of Slowdown in Lending Start to Appear
  2. 2. 09/10/13 Brazilian Banks, Unions Set Talks - Wall Street Journal - WSJ.com stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-350303/ 2/2 require caution given slower growth and has said employees should look to preserve those gains and not increase costs. Union membership is obligatory for formally employed workers in Brazil. The unions that are part of the Contraf-Cut federation said they represent about 95% of the country’s 490,000 bank employees. The union doesn’t disclose how many of its members have joined the strike but claims that about half of the 20,000 bank branches in Brazil are closed. Most administrative staff continue to work, which mean Internet and ATM services have been maintained, allowing most Brazilians to continue to pay bills and transfer money. About 11% of all banking transactions in Brazil are carried out in branches, down from 18% in 2008, according to Febraban, and about 40% of transactions are done over the Internet. The strike hasn’t affected the share prices of many big banks. An index of bank stocks is up 4.7% over the past month, while the broader Ibovespa index is down 3.7%.

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