Santander Brasil Profit Rises Slightly, As Provisions Charges Increase

By Rogerio Jelmayer

SAO PAULO--The Brazilian unit of Spanish bank Banco Santander posted a net profit increase of just 1.7% in the first quarter, as the bank was obligated to assume more provisions to cover bad loans.

Banco Santander Brasil SA's net profit totaled 1.66 billion reais ($476 million) in the first quarter, up from BRL1.63 billion in the year-ago period.

Meanwhile, bank's provision expenses for bad loans increased nearly 18% to BRL3.03 billion in the period.

The increase in provisions came as Brazil's economic recession deepened and economists expect the country's labor market to deteriorate. After contracting 3.8% last year, economists expect Brazil's economy to shrink at the same level this year.

With a poor economy, Brazilians shows little appetite for new loans. Santander's loan portfolio dropped 3.8% to BRL312 billion at the end of the first quarter, versus the year-ago period.

The lender's nonperforming loan rate covering loans that were more than 90 days overdue ended the first quarter at 3.3%, up from 3% in the first quarter of 2015.

The banks figures were published using Brazil's generally accepted accounting principles.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

April 27, 2016 07:18 ET (11:18 GMT)

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