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Banco do Brasil Profit About Unchanged Amid Loan Growth

Banco do Brasil SA, the Brazilian lender whose insurance unit held the world’s largest initial public offering this year, said first-quarter profit fell less than 1 percent and loan growth accelerated.

Adjusted net income, which excludes one-time charges, declined to 2.69 billion reais ($1.33 billion), or 91 centavos a share, from 2.7 billion reais, or 89 centavos, a year earlier, the Brasilia-based lender said today in a regulatory filing. The results compared with the average estimate of 2.72 billion reais in a Bloomberg survey of four analysts.

Banco do Brasil and the nation’s other federally controlled lenders, Caixa Economica Federal and development bank BNDES, were pushed by President Dilma Rousseff to increase credit as the Brazilian economy slowed. Banco do Brasil, led by Chief Executive Officer Aldemir Bendine, 49, boosted credit by 26 percent in the first quarter, compared with its growth forecast of an expansion of 16 percent to 20 percent this year.

“The state-owned banks continue to post accelerated growth rates,” GBM Grupo Bursatil Mexicano SA analysts Andre Riva Gargiulo and Gilberto Tonello wrote in an April 26 note to clients, adding that those lenders increased lending by “an astonishing” 29 percent in March from a year earlier. Brazilian privately owned banks boosted credit 7 percent in March from a year earlier, central bank data show.

Banco do Brasil has gained 0.3 percent since April 29, when its insurance unit, BB Seguridade Participacoes SA, started trading in Sao Paulo. The division advanced 5.9 percent from the 17-real IPO price. The offering produced a gross gain of 8.37 billion reais and “the funds raised were fully reverted to Banco do Brasil,” the bank said in the earnings statement.

Loan Book

The bank’s loan book reached 592.7 billion reais in the first quarter, according to the earnings statement. Total assets climbed 17 percent to 1.18 trillion reais. The rate of debt payments overdue more than 90 days was 2 percent, down from 2.2 percent a year earlier and 2.05 percent in the three previous months.

Banco do Brasil reduced provisions for bad loans to 3.28 billion reais from 3.64 billion reais in the fourth quarter and 3.58 billion reais a year earlier.

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