Profit of large banks grows 7.6% and reaches R$ 24.8 billion in the 3rd quarter

The profit of the four large Brazilian banks —Itaú, Bradesco, Santander and Banco do Brasil— totaled R$24.8 billion in the third quarter of 2022, which corresponds to an increase of 7.6% compared to the same period of the year past.

While Santander and Bradesco were the negative highlights, with drops of more than 20% in reported profit from July to September, BB emerged on the opposite end, with an increase of almost 63% in profit in the period.

The state-owned bank profited R$8.4 billion in the third quarter, up 62.7% year-on-year, with a 19% growth in the expanded loan portfolio, albeit with a 0.5 percentage point increase in delinquency to 2.34% in September.

“Increasingly, we use data intelligence to support our strategic decisions. This has allowed us to build a sustainable relationship with our different customer profiles. As a result, our default rate remains below the average for the financial system. [de 2,80%] “, said Fausto Ribeiro, president of BB.

According to Marco Barbosa, an analyst at Mirae Asset Wealth Management, the state-owned bank presented an “excellent performance”, with record results and profitability above private peers.

“We reiterate our buy recommendation for BBAS3 shares, making reservations only to possible decisions of the new economic team that may change the bank’s key guidelines in the sense of valuing operations that combine good profitability without high risk, technological innovation and continuity of good cost and expense control”, points out the Mirae Asset analyst.

The last of the big banks to release the results, Itaú’s figures released this Thursday (10) were also well received by investors, with a growth of about 20% in profit in the third quarter, to R$ 8.1 billion.

“Itaú presented a good result, in line with our estimates. With the disclosure of bad results from its private peers, there were market concerns about a possible negative surprise from the bank. However, that was not what happened”, the analysts point out. of Ativa Investimentos in a report.

Specialists point out that bad debt, an indicator that had been the terror of this quarter for the sector, rose only 0.12 percentage points on a quarterly basis, reaching 2.82%. “Itaú showed the differential in the management and quality of its portfolio in the face of the adverse scenario for the entire banking sector.”

Santander and Bradesco point to economic scenario and conservatism to justify results

Among the results that disappointed analysts, Bradesco saw its shares plummet 17.4%, the biggest drop since September 1998, after the bank surprised the market with a 23% drop in third-quarter profit, to R$5, 22 billion.

Executive President of Bradesco, Octavio de Lazari Junior stated that the economic scenario, with inflation and high interest rates, affected customers’ ability to pay.

“We are now entering a time of increased provisions, a trend that should continue until part of 2023. Delinquency has grown in the mass segment, for individuals and micro and small companies,” said Lazari.

Guide’s analysts assess that the bank delivered a “significant worsening” of the numbers referring to the third quarter, with an accelerated growth in delinquency and the renegotiated portfolio that could result in the continuous advance of the provision for bad debts.

“For this movement, we believe that Bradesco will continue to register worsening of its indicators.”

Banco Santander Brasil, in turn, reported net income of BRL 3.122 billion in the third quarter of 2022, which corresponds to a decrease of 28% compared to the same period last year and 23.5% compared to the previous quarter. , according to results released this Wednesday morning (26).

According to Mario Leão, CEO of Santander Brasil, the result was within internal expectations, as, at the end of last year, the bank predicted a deterioration in the country’s macroeconomic scenario, which led it to step on the brakes in 2022, with a reduction in the granting of credit, especially for individual customers with a worse risk assessment.

“The current moment is more challenging and it is reflected in the results, but it is part of a known, anticipated, calculated cycle, which, therefore, does not surprise us”, said Leão, during a conversation with journalists.

Analyst at Suno Research, José Eduardo Daronco said that the increase in delinquency in the individual portfolio was the main factor responsible for the reduction in the bank’s profitability.

“As Santander has a credit portfolio that is highly exposed to credit cards, vehicle financing and personal credit, the recent increase in interest rates ends up having a direct impact, increasing delinquency and causing the bank to increase its allowance for doubtful loans. “, explained the analyst, who expects the bank to continue with its results under pressure in the coming quarters, mainly due to the increase in interest rates.