Brazilian fintech Pagbank's slight profit growth misses forecasts

PagSeguro Digital

24/08/2023 21:29

SAO PAULO, Aug 24 (Reuters) - Brazilian financial
technology firm Pagbank  PAGS.N  said on Thursday its
second-quarter net profit grew 5% from a year ago, landeding
slightly below analysts' expectations though executives said
earnings should improve in coming months.
    The firm, which operates as a digital bank and as a payment
processor, posted net profit of 385 million reais ($79 million),
while analysts polled by Refinitiv expected 399 million reais.
    Total payment volume (TPV) for its payments arm totaled 92.7
billion reais in the second quarter, up 4% from a year earlier.
    The quarter ending in June was a weak period for the payment
processing industry, Pagbank CEO Alexandre Magnani told Reuters,
but stressed its TPV for the start of the third quarter is
showing improvements.
    Revenue fell 2% from the previous year to 3.83 billion
reais, also missing analysts' estimate of 3.99 billion reais, as
the firm's financial services business took a hit from a new cap
for prepaid cards' interchange fees introduced in April. 
    Chief Financial Artur Schunck, however, said the drop in
revenue was a one-off and should be reversed in the coming
quarters. 
    The firm's credit portfolio slightly dropped from the
previous quarter to 2.6 billion reais ($533 million), reflecting
a write-off made in the period and its increasing focus on
secured low-risk products.
    Pagbank said that at the end of June about 52% of its
portfolio was made up of secured credit products, compared to
44% in the previous quarter.
     
($1 = 4.8762 reais)

 (Reporting by Peter Frontini; Editing by Isabel Woodford)
 ((Peter.Siqueira@thomsonreuters.com; +55 11 56447727;))