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Report: Bradesco plans new division to help companies restructure debts

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Report: Bradesco plans new division to help companies restructure debts

Banco BradescoSA plans to create a division responsible for supporting debtrestructuring efforts by companies in order to reduce their chances ofbankruptcy, Bloomberg News reported, citing an anonymous company official.

The move would be in line with a recent trend among somelarge Brazilian banks to form similar units amid the country's economicdownturn and high borrowing costs. Itaú Unibanco Holding SA, and haveall created such divisions during the last year, according to the report.

According to credit research firm Serasa Experian, thenumber of bankruptcy filings in Brazil jumped 88% in the first half. One suchfiling was from telecommunications firm Oi, following which Moody's said itbelieves banks do not have sufficient reserves to cover potential losses.

Meanwhile, data from Banco Central do Brasil showed that the ratio ofnonperforming loansin the country hit a record high of 5.9% of total loans in May.

"Large banks are devoting more people and resources toworkout areas to discuss more creative solutions," Bloomberg quoted LuisDe Lucio, a managing director at restructuring advisory firm Alvarez &Marsal Inc., as saying.