Santander Brasil reported a third-quarter profit of BRL4bn ($746mn), up 9.4% from a year earlier and above Bloomberg’s forecast of BRL3.75bn. Shares rose more than 2% on Wednesday after the results, Folha reported.
The bank cut operating expenses to offset higher provisions for loan losses as it prepares for tougher lending conditions.
“The macroeconomic scenario is more favourable for highly leveraged companies to face challenges. It would be an exaggeration to call it a credit crisis, but we are seeing a deterioration,” chief executive Mário Leão told reporters, adding that the economy shows signs of slowing.
The lender’s loan portfolio grew 3.8% year-on-year to BRL688.8bn, while provisions for bad loans increased 10.9% to BRL7.5bn.
Leão said the bank will be “more selective” in granting credit, with small businesses, low-income clients and agribusiness most exposed to higher rates.
Santander reduced staff by 2,171 and closed 157 branches to contain costs. Return on equity reached 17.5%, supported by insurance and card revenues. Leão reaffirmed a target of 20% ROE in the medium term.
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