Banco do Brasil Profit Rises 24% on Higher Revenue From Lending

Banco do Brasil SA, Latin America’s largest bank by assets, said first-quarter profit rose 24 percent, matching analysts’ estimates, as revenue from lending and its insurance business increased.

Adjusted net income, which excludes one-time items, climbed to 3.03 billion reais ($995 million) from 2.44 billion reais a year earlier, the Brasilia-based lender said in a regulatory filing Thursday. That was in line with the 3.02 billion-real estimate of eight analysts surveyed by Bloomberg.

Banco do Brasil, led by Chief Executive Officer Alexandre Abreu, boosted lending revenue as the central bank raised interest rates to control inflation. The Selic benchmark rate rose 2 percentage points to 12.75 percent at the end of first quarter from the same period of last year. Banco do Brasil’s net interest income, or revenue from interest earned on assets compared with payments to depositors, climbed 18 percent to 14 billion reais in the first quarter from a year earlier.

The bank also benefited from gains at its BB Seguridade Participacoes SA insurance unit. That business, in which the bank has a stake of about 66 percent, said last week that profit surged on life and home insurance sales.

Net income rose to 5.82 billion reais from 2.68 billion reais. Results got a boost from a one-time gain of 3.21 billion reais related to the credit-card joint venture Banco do Brasil agreed to form with Cielo SA in November.

Banco do Brasil rose 14 percent this year through Wednesday, compared with 13 percent for the Ibovespa benchmark index.

Itau Unibanco Holding SA and Banco Bradesco SA, Latin America’s biggest banks by market value, previously reported profit gains off higher lending revenue. Bradesco said last month its adjusted net income rose 23 percent to 4.27 billion reais from a year earlier and Itau said on May 5 its recurring net income climbed 28 percent to 5.81 billion reais.