Santander Brasil posts Q1 net profit down 46.6% (updated)

Banco Santander Brasil SA

25/04/2023 11:44

(Adds details, CEO quotes)
       SAO PAULO, April 25 (Reuters) - Banco Santander Brasil
SA  SANB3.SA  on Tuesday reported a first quarter net profit of
2.14 billion reais ($425.09 million), down 46.6% from a year
earlier but still above analysts' forecasts of 1.83 billion in a
Refinitiv poll.
    The Brazilian unit of Spain's Banco Santander SA  SAN.MC 
has been trying to be more selective in lending for more than a
year now, as credit conditions deteriorated, but in the meantime
posted some weak quarterly results.
    The lender's chief executive, Mario Leao, said in a
statement that Santander started 2023 with a focus on
strengthening its balance sheet, but even so managed to increase
its portfolio in some strategic businesses such as auto, payroll
and real estate loans.
    Santander Brasil's loan portfolio totaled 500.3 billion
reais in the quarter, up roughly 10% from a year earlier, while
loan-loss provisions jumped 46.7% to 6.76 billion reais - 
although slowing down 8% on a sequential basis.
    "Allowance for loan losses and the rise in the cost of
credit are appropriate for current circumstances, as they
continue to be influenced by prior vintages," Leao said, while
highlighting a one-off event that generated revenue from the
reversal of tax provisions in the quarter.
    Quarterly return on average equity (ROAE), a gauge of
profitability, recovered to 10.6% after plummeting to
single-digit levels in late 2022, but remained well below the
20.7% seen a year ago, Santander Brasil said.
    Its Spanish parent firm, which has in Brazil its main
market, reported results earlier in the day, beating forecasts
with a 1% rise in net profit but saying weaker trade in Latin
America's largest economy offset a strong performance in Europe.
    ($1 = 5.0342 reais)

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