NEW YORK--(BUSINESS WIRE)--Brazil's recently announced increase on the social security tax levied on banks could negatively affect the sector's net earnings, says Fitch Ratings. Fitch expects banks to adjust to the higher tax burden through loan repricings, resulting in a marginally higher cost of credit for borrowers, which could cause an uptick in delinquencies and further weaken loan growth. Fitch estimates that the net effect of the tax increase could trim banks' earnings by 4% on average.
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