Santander Brasil Falls on Delinquency, Slower Credit Growth

Banco Santander Brasil SA, the Brazilian unit of Spain’s biggest lender, fell the most in three months after first-quarter revenue stagnated on a slower expansion in credit and increased loan delinquency.

Shares declined 3 percent to 14.13 reais at the close of trading in Sao Paulo, the steepest drop since Jan. 22. The stock was the worst performer on the MSCI Brazil/Financials Index, which advanced 0.8 percent.

Santander’s adjusted revenue in the first quarter was 10.3 billion reais ($5.1 billion), almost the same as a year earlier, according to data compiled by Bloomberg.

“Santander Brasil is suffering from earlier bad credit that is likely to end by the second half of 2013, but we are still skeptical about the bank’s ability to reach a larger set of good clients to recover loan growth without undermining asset quality,” Regina Longo Sanchez, Thiago Bovolenta Batista and Alexandre Spada, analysts at the investment bank Itau BBA, wrote in a research note to clients.

Santander said in a regulatory filing today that its loan portfolio rose 6.2 percent to 211.7 million reais in the three months through March from the same period a year earlier. That is the slowest pace since at least the first quarter of 2011, according to data posted on the bank’s website.

The lender’s delinquency rate increased to 5.8 percent in the first quarter of 2012 from 4.8 percent a year earlier, according to the filing.

Shares have fallen 5.6 percent this year while the MSCI index of Brazilian financial stocks gained 2.4 percent.

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