Lender Banco do Brasil posts 8% profit increase, higher loan-loss outlook

By Andre Romani

SAO PAULO (Reuters) – Brazilian state-run lender Banco do Brasil posted on Wednesday an 8.3% increase in its third-quarter adjusted net profit from a year earlier, while it also said it now expects higher loan-loss provisions for this year.

Banco do Brasil posted an adjusted net profit for the quarter ended in September of 9.5 billion reais ($1.6 billion), while analysts polled by LSEG had expected a 9.4 billion reais profit.

WHY IT’S IMPORTANT

Banco do Brasil is one of Latin America’s largest lenders by total assets.

BY THE NUMBERS

The lender’s return on equity, a gauge of profitability, stood at 21.1%, down from 21.3% a year earlier and 21.6% in the second quarter.

Banco do Brasil’s total loan book rose 13% year-on-year to 1.2 trillion reais, while its delinquency ratio for loan payments overdue by more than 90 days was at 3.3%, up from 3% in the second quarter and 2.8% a year earlier.

The firm also said it now expects to put aside more funds to cover unpaid loans, raising its full-year provision forecast to between 34 billion reais and 37 billion reais, up from its previous projection of 31 billion reais to 34 billion reais.

Provisions jumped 34% in the third quarter.

The bank did trim its estimated administrative spending for the year, now seeing it between 5% to 7% higher than last year, down from the previously projected 6% to 10% growth.

($1 = 5.8061 reais)