Santander Brasil's net profit up 44% in Q2, beating forecasts (updated)

Banco Santander Brasil SA

24/07/2024 11:42

(Rewrites)
       SAO PAULO, July 24 (Reuters) - Santander Brasil's
 SANB3.SA  second-quarter recurring net profit jumped 44.3% on a
yearly basis, the bank reported on Wednesday, topping market
forecasts helped by higher lending and fees.
    
    WHY IT'S IMPORTANT
    Santander Brasil is one of Brazil's largest banks and
typically its first big private lender to publish quarterly
results, setting the tone for upcoming reports from peers Itau
Unibanco  ITUB4.SA  and Bradesco  BBDC4.SA .
    Latin America's largest economy is a key market for Spanish
parent Banco Santander  SAN.MC , which reported its own
second-quarter results earlier in the day, raising profitability
goals after strong growth at its main retail business.
    
    BY THE NUMBERS
    Santander Brasil's quarterly bottom line came in at 3.33
billion reais ($596.23 million), up 44.3% year-on-year and above
the 3.19 billion expected by analysts polled by LSEG.
    Net interest income (NII) - earnings on loans minus deposit
costs - rose 10.6% to 14.75 billion reais. Return on average
equity, a gauge of profitability, hit 15.5%, up 4.3 percentage
points.
    Allowance for loan losses fell 1.4% to 5.89 billion reais,
while the bank's consolidated loan book increased 7.8% to 665.59
billion reais. 
    
    ADDITIONAL CONTEXT
    Santander Brasil in recent years has focused on being more
selective in its lending as credit conditions deteriorated. It
reported some poor results while implementing the strategy but
has been saying the worst is now behind it.
    
    KEY QUOTES
    "We delivered a clear expansion of client NII driven by
higher volumes, with market NII at positive levels. Fees also
grew consistently," chief executive Mario Leao said in a
statement.
    "In short, we are building a robust, diversified and
enduring portfolio, capable of generating sustainable results."
    ($1 = 5.5851 reais)

 (Reporting by Gabriel Araujo, Editing by Louise Heavens and
Mark Potter)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))