Brazil bank lending rises 1.2% in November, 12-month growth edges higher

BRASILIA, Dec 27 (Reuters) -

Outstanding loans in Brazil rose 1.2% in November from the previous month, reaching 6.3 trillion reais ($1.02 trillion), central bank data showed on Friday.

On a 12-month basis, growth showed a slight acceleration to 10.7%, just above the 10.6% recorded through October.

In its quarterly inflation report released earlier this month, the central bank had revised down its annual projection for outstanding loan expansion in Latin America's largest economy to 10.6% from 11.1%.

According to policymakers, the adjustment reflected a tighter monetary policy environment and slower growth in corporate loans with earmarked resources, which carry government-defined interest rates.

The central bank attributed the slowdown to a reassessment of rural credit and loans to Rio Grande do Sul state, which have underperformed relative to earlier projections

Brazil's southernmost state was devastated by unprecedented floods in May.

For next year, the outlook points to more modest growth of 9.6% in overall outstanding loans, primarily due to higher borrowing costs, the central bank said.

Policymakers accelerated the pace of interest rate hikes with a 100 basis-point increase in December, bringing the country's benchmark Selic rate to 12.25% and signaling matching rises at the next two meetings to combat rising inflation.

A broad measure of default ratios for Brazilian consumers and businesses, covering nonearmarked credit, fell to 4.3% in November from 4.4% the previous month.

Meanwhile, lending spreads widened slightly to 28.5 percentage points from 28.3 percentage points in October.

($1 = 6.1808 reais) (Reporting by Marcela Ayres; Editing by Gabriel Araujo)