Santander Brazil Forecasts Revenue Growth to Beat Itau, Bradesco
Banco Santander Brasil SA expects its revenue growth to beat that of Itau Unibanco Holding SA and Banco Bradesco SA this year and in 2011 as it expands retail services such as credit cards, as well as investment banking, said Vice-President for Finance Carlos Lopez Galan.
“We’re very well positioned in services for individuals,” Lopez Galan said in an Oct. 8 interview in Rio de Janeiro. “We’re increasing corporate and investment banking services, taking advantage of our global platform.”
Santander Brasil, which raised 12.3 billion reais ($7.4 billion) in an initial share offering a year ago, expects consumer-led services to drive growth as Latin America’s biggest economy expands at the fastest pace in two decades, according to Lopez Galan. The local unit of Spain’s largest bank plans to open 600 new branches in Brazil by the end of 2012, he said.
Bank lending in August expanded 2.2 percent from the previous month, the fastest pace since July 2009, led by an increase in mortgage lending, according to the central bank.
Three Brazilian banks - Itau, Bradesco and Banco do Brasil SA - are among the world’s 10 biggest credit-card issuers, according to data from London-based research and consulting firm Lafferty Group.
Sao Paulo-based Santander Brasil, which is Brazil’s fourth- largest bank by market value, rose 3.2 percent this year, compared with a 9.2 percent gain for Itau and an 18 percent rise in Bradesco. Return on equity is at 4.9 percent so far this year, compared with 31 percent at Itau and 21 percent at Bradesco, according to data compiled by Bloomberg.
Lagging Peers
The underperformance is partly explained by the impact of costs related to its acquisition and integration of Banco Real, ABN Amro Holding NV’s unit, said Victor Martins, who recently started covering the bank as an analyst at Planner Corretora de Valores in Sao Paulo.
“Santander’s returns are below its peers partly because it’s still dealing with the integration and costs related to the Real acquisition,” said Martins.
Santander ranks fifth among equity sales underwriters in Brazil, having worked as a coordinator of Petroleo Brasileiro SA’s $70 billion share offer last month, according to data compiled by Bloomberg.
Santander Brasil posted a 9.5 percent rise in net income in the second quarter to 1.77 billion reais compared with 1.61 billion reais in the same period last year.
Itau, the country’s largest bank by market value, increased earnings by 23 percent to 3.2 billion reais in the second quarter from 2.6 billion reais. Osasco-based Bradesco, Brazil’s second-largest bank, said second-quarter net profit rose 4.3 percent to 2.4 billion reais compared with 2.3 billion reais.
To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net;
To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net
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