Santander Brasil Reports First-Quarter Net Profit Increase

SAO PAULO: Santander Brasil announced a 27.8% increase in net profit for the first quarter compared to the previous year. The earnings slightly surpassed market predictions, despite concerns about a more demanding global economic landscape.

The lender’s net profit for the period reached 3.86 billion reais ($686.83 million), according to a securities filing. Analysts surveyed by LSEG had anticipated a net income of 3.77 billion reais. The company noted that the result remained relatively stable compared to the previous quarter.

As a subsidiary of Spain’s Banco Santander, the Brazilian unit typically leads the release of quarterly results among major private banks in Brazil, setting expectations for competitors like Itau Unibanco and Bradesco.

According to the firm, the recent financial results are a consequence of its deliberate strategy over the last few years, which involves being more selective in its lending practices in response to deteriorating credit conditions.

Chief Executive Mario Leao stated that their credit strategy remains focused on key business areas, maintaining strict capital allocation and prioritizing higher profitability and strong asset quality. He further added that they are continuously improving their funding mix with a greater emphasis on individual clients.

Santander Brasil’s net interest income, representing earnings on loans minus deposit expenses, increased by 7.7% during the first quarter, reaching 15.92 billion reais. Additionally, its return on average equity (ROAE), a profitability metric, increased by 3.3 percentage points to 17.4%. However, both figures experienced a slight deceleration compared to the preceding three-month period.

The allowance for loan losses saw a 5.7% year-on-year rise, amounting to 6.39 billion reais, while the expanded loan portfolio grew by 4.3% to reach 682.3 billion reais.

Leao assured that non-performing loans that are 90-day past due remain manageable and aligned with both the bank’s target portfolio and the prevailing economic conditions, adding that the lender is committed to maintaining a sustainable ROAE trajectory.

The Spanish parent company of Santander Brasil considers Latin America’s largest economy as an essential market and revealed its financial results earlier in the day.