Banco do Brasil Reports Q3 Profit Increase

By Andre Romani

SAO PAULO (Reuters) – Brazilian state-run lender Banco do Brasil posted an 8.3% increase in its third-quarter adjusted net profit from a year earlier. It also announced an expectation for higher loan-loss provisions for this year.

Key Financials

Banco do Brasil reported an adjusted net profit for the quarter ending September of 9.5 billion reais (approximately $1.6 billion), surpassing analysts’ expectations of 9.4 billion reais profit.

Why It Matters

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

By The Numbers

• Return on Equity: 21.1%, down from 21.3% a year earlier and 21.6% in Q2.
• Total Loan Book: Rose 13% year-on-year to 1.2 trillion reais.
• Delinquency Ratio: 3.3% for loans overdue by more than 90 days, increased from 3% in Q2 and 2.8% a year earlier.

The bank now expects to allocate more funds for unpaid loans, raising its full-year provision forecast to between 34 billion reais and 37 billion reais, up from a previous estimate of 31 billion to 34 billion reais. Provisions surged 34% in Q3.

Additionally, the bank revised its estimated administrative spending for the year down to 5% to 7% higher than last year, from the previously projected 6% to 10% growth.

$1 = 5.8061 reais