Brazil bad-loan rate hits record in July despite tight labor market

• Total outstanding bank credit rose 0.3% in July from the previous month to 7.4 trillion reais ($1.43 trillion).
• Annual credit growth slowed slightly to 9.5% from 9.7% in June.
• The share of household income committed to debt servicing hit a record 28.9% in June, separate central bank data showed.

($1 = 5.1629 reais)

• Data add to signs that years of rapid credit expansion and elevated borrowing costs are weighing on consumers in Latin America's largest economy.
• Among households, payroll-deducted loans to private-sector workers again saw one of the sharpest deteriorations, with delinquency jumping 1.3 percentage points to 10.0%.
• Delinquency on revolving credit card balances, incurred when consumers fail to pay their monthly bills in full, rose 3.2 percentage points to 65.8%.
• Policymakers are growing increasingly concerned about rising household indebtedness.
• Central bank chief Gabriel Galipolo said this week the institution was studying macroprudential measures and international experiences to address the buildup in household debt.

Brazil's delinquency rate on non-earmarked loans climbed to a record high in July, central bank data showed on Friday, highlighting growing strains despite rising incomes and historically low unemployment.

The share of non-performing loans in the free-credit segment, where lenders set interest rates, rose to 6.4% from 6.0% in June, reaching the highest level since the series began in March 2011.