Some of Brazil’s biggest banks are stepping up efforts to stem a surge in bankruptcy filings, Bloomberg reported today. In the past year, Itau Unibanco Holding SA, Banco do Brasil SA and Banco Santander Brasil SA have carved out divisions tasked with helping companies restructure their debts so they can avoid seeking protection from creditors. Banco Bradesco SA also is planning to create a similar unit, according to a company official who asked not to be identified because the information is private. The moves come as high interest rates and Brazil’s longest recession in more than a century make it harder for businesses to repay debt. In the first half of 2016, bankruptcy filings spiked 88 percent to a 10-year high. This means that banks have had to write down the loans they’ve made to those companies and increase the amount of money they set aside to cover losses. Brazilian lenders have ratcheted up their so-called bad-loan provisions for three straight quarters. They were equal to 6.2 percent of banks’ total lending in May, the highest ratio in almost six years.
