O Bank of Brazil (BAAS3) reported, again, figures that far exceeded the already high expectations of analysts.
On Wednesday night (10), the state-owned company announced adjusted net income of R$7.8 billionabove Bloomberg’s R$6.2 billion.
The bank’s figures also pleased the XP. Analysts Renan Manda and Matheus Guimarães classified the numbers as positive.
According to them, the numbers were mainly driven by a stronger performance in the gross financial margin (NII), which was benefited by the “solid growth of its loan portfolio in recent quarters”.
Furthermore, the duo recalls, delinquency remained the lowest in the industry at 2% and stable provisions led to a coverage ratio of 271% (the highest in the industry), “which we consider healthy”.
“We anticipate a positive reaction from the actions and reiterate the BAAS3 like ours top pick (favourite) in the sector”, he says.
Bank of Brazil numbers
An escalation in credit boosted second-quarter profit Bank of Brazilwhich also raised its forecasts for key performance lines in 2022.
As with the main private rivals that have already published their results for the period, BB’s performance was based on the strong expansion of loans, with the expanded portfolio at the end of June reaching 919.5 billion, after growing 19.9% in 12 months, driven by credit card lines (+51.7%), guarantees and receivables (+59%) and agribusiness (+27.3%).
One of the results of this evolution was the 45% increase in BB’s credit revenues year on year, to 26.2 billion reais.
But the BB was more successful in controlling the quality of the portfolio, with the rate of arrears of customers over 90 days increasing by just 0.14 percentage point in a year, to 2%.
On the whole, the BB had a return on equity of 20.6% in the quarter, a jump of 6.1 percentage points over a year earlier.
On another front, Banco do Brasil’s fee and service revenues grew 8.9% year-on-year, to 7.85 billion reais.
Finally, the BB it also had a 136% increase in its treasury result, at 7.45 billion reais, also clashing with the weaker result of its peers in this line.
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