(Adds context, Rial quote from third paragraph)
CUIABÁ, Brazil, May 25 An ongoing slide in
Brazil's interest rates will allow private-sector banks to
increase lending to farmers and commodities processors, Banco
Santander Brasil SA Chief Executive Officer Sérgio
Rial said on Thursday.
Speaking as the host of an agribusiness conference in Mato
Grosso, Rial said he expected changes in the agricultural
financing environment, long dominated by state-run Banco do
Brazil's government, pressured by a fiscal crisis, is
cutting the share of subsidized loans in the annual farm
financing plan, increasing room for private banks to fund
farmers at market rates.
Declining interest rates, as Brazil's central bank reacts to
plunging inflation, make private bank lines more affordable.
Santander has hired several agronomists and streamlined
credit analysis processes to expand its agricultural loan
portfolio, the bank said in a statement distributed ahead of
The bank has 17 branches in the state of Mato Grosso and
will open at least another three in Brazil's largest
grain-producing state, Rial said.
"With one-digit interest rates, private banks have an
important role to play in agribusiness financing," he said.
His remarks underscore a push under Rial, a former executive
of Cargill Inc and Marfrig Global Foods SA,
to reposition Santander as a competitive agribusiness lender in
Latin America's largest economy.
The agribusiness sector, which accounts for more than 20
percent of Brazil's $1.9 trillion economy, has been
traditionally dominated by Banco do Brasil and large private
bank Banco Bradesco SA.
Santander's agribusiness loan portfolio stands at 40.5
billion reais ($12.31 billion), the bank said.
At the event, Brazil's Agriculture Minister Blairo Maggi
said the new farm financing plan should be announced next week.
He estimated interest rates could fall on average 1
percentage point from last year's plan but does not expect the
total size of the package to rise.
($1 = 3.2887 reais)
(Reporting by Ana Mano; Editing by Christian Plumb and Lisa Von