Brazil's BTG Pactual Profits Fall

SÃ O PAULO—Brazilian investment bank Banco BTG Pactual saw an 8% decline in its net profit in the second quarter, as its expenses increased more than its revenues and as its corporate-lending portfolio shrank.

The bank reported a profit of 940 million reais ($302 million), down from 1.02 billion reais in the year-ago period.

BTG's total revenue reached 2.59 billion reais, up 26.7% from 2.05 billion reais in the year-ago period. The bank's operating expenses increased 55% in the quarter to 1.58 billion reais.

The bank's corporate-lending portfolio ended the second quarter with 21.7 billion reais, down drastically from 41.68 billion reais in the year-ago period.

Its return on equity ended at 16.1% in the second quarter, down from 21% a year earlier.

At the end of last year, the Brazilian bank started selling certain assets to generate cash and restore investors' confidence since the arrest of its former CEO and founder André Esteves.

Mr. Esteves was arrested in November on charges of obstructing a federal investigation into corruption at state-run oil company Petró leo Brasileiro SA, or Petrobras. Mr. Esteves was released from jail in December.

In May, Mr. Esteves rejoined BTG as "a senior partner focused on partnership matters advising Banco BTG Pactual on strategy and supporting the development of its activities and operations."

Mr. Esteves, who remains a major shareholder of the bank, previously denied wrongdoing.

At the end of July, Brazilian federal court has accepted charges against Mr. Esteves for alleged obstruction of justice.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

August 10, 2016 07:25 ET (11:25 GMT)

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