Cynthia Cohen Freue, managing director and sector lead for Latin America financial services at S&P Global Ratings: “Persistently high interest rates are hurting Brazilian banks’ asset quality metrics because elevated rates increase the debt burden on individual and commercial borrowers through higher financing costs. We also expect bankruptcy filings by small and medium-sized companies, which have already reached record levels in 2024, to continue into 2025. Because of the pressures on asset quality metrics, banks will likely need to increase provisions in 2025, which will squeeze their profitability. In addition, banks’ focus on larger corporates with stronger credit quality intensifies competition. The tougher competition, along with banks’ focus on secured lending, strains margins. To offset the negative effects, banks are increasing…”