Banco do Brasil Profit Beats Estimates on Faster Credit Growth

Banco do Brasil SA, Latin America’s largest lender by assets, said fourth-quarter profit rose 5.1 percent, beating analysts’ estimates, after credit expanded faster than its guidance.

Adjusted net income, which excludes one-time charges, climbed to 3.18 billion reais ($1.63 billion) from 3.03 billion reais a year earlier, the Brasilia-based company said today in a filing. The average estimate of five analysts in a Bloomberg survey was for profit of 2.63 billion reais.

Banco do Brasil, led by Chief Executive Officer Aldemir Bendine, 49, expanded the loan book above the 2012 forecast for domestic lending growth of 17 percent to 21 percent. Domestic credit reached 480.6 billion reais in the fourth quarter, up 23 percent from a year earlier, according to the filing. Total credit expanded 25 percent to 580.8 billion reais. The bank said total credit growth may decelerate to between 16 percent and 20 percent this year.

Banco do Brasil dropped 5.1 percent this year, compared with a decline of 7.8 percent for the benchmark Bovespa index.

Brazil President Dilma Rousseff pushed federally controlled banks Banco do Brasil and Caixa Economica Federal to boost lending and reduce borrowing costs to stimulate the economy. Non-government lenders Banco Bradesco SA (BBDC4) and Itau Unibanco Holding SA (ITUB4) slowed credit expansion amid rising delinquency rates. Bradesco’s loan book grew 12 percent last year as Itau reduced its auto-loan portfolio to 51.2 billion reais from 60.1 billion reais in 2011.

To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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