Profits of large banks reach BRL 81.6 billion in 2021

​Benefited by an environment of resumption of activities after the stoppage caused by the pandemic, the four large banks (Itaú Unibanco, Bradesco, Santander and Banco do Brasil) reported a consolidated net profit of R$ 81.632 billion in 2021.

The nominal value (without discounting inflation) represents a growth of 32.5% compared to 2020, according to a survey prepared by financial information provider Economatica — a record, having been slightly above the previous peak of BRL 81.508 billion recorded in 2019. .

Adjusted for inflation, measured by the IPCA (Broad Consumer Price Index), the consolidated profit of the four large banks in 2021 is the fourth highest in the historical series. By this criterion, the best result so far was obtained by the quartet in 2019, of R$93.761 billion.

According to market analysts, last year’s result was influenced by the weakest comparison base in 2020, weakened by the pandemic, as well as by the double-digit growth of credit portfolios to individuals and companies in general.

“In the pandemic, banks made more provisions for bad debts, which is basically taking some money out of profits and provisioning for a larger default. And last year, with the economy improving, they reversed part of these provisions”, says Bruce Barbosa, founding partner of investment analysis firm Nord Research.

Pedro Galdi, an analyst at Mirae Asset Wealth Management, says that the major positive highlights were the figures for Itaú and Banco do Brasil.

“The best result in my evaluation was that of BB, with strong growth in revenue and in the loan portfolio, keeping the delinquency rate well behaved”, says Galdi.

“The view that remains after the bank balance sheet season is that BB’s shares are very discounted compared to private peers”, adds the Mirae analyst, also remembering that the results of Bradesco and Santander came a little below the consensus of market, with a drop in the main profitability indicators.

After a year marked by the recovery of profits, the expectation for 2022 is that the low growth of the GDP (Gross Domestic Product), added to the high interest rates, will cause a slowdown in the pace of portfolio expansion, with an increase in the levels of delinquency, says João Daronco, an analyst at Suno Research.

“For 2022, the main point of attention is how the default rate will behave”, says Daronco, adding that the banks themselves have signaled to expect an increase in overdue accounts.

“The macro scenario is different in 2022 from what we saw in 2021. And we come from an important portfolio growth in recent years. We are always comparing the growth of the year against the previous year, and as we had a very strong year in 2021, it is natural that there will be a slowdown in 2022, either on the basis of comparison, or because of what we are seeing from a macro perspective looking forward”, said the president of Itaú Unibanco, Milton Maluhy Filho, after the disclosure of the quarterly balance sheet.

In the same vein, Bradesco’s president, Octavio de Lazari Jr., pointed out that the uncertainty about the Bolsonaro government’s ability to balance public accounts, as well as pressured inflation and high interest rates, should affect the recovery of the economy this year.

“Unfortunately, there are still fiscal uncertainties and high inflation, a global phenomenon, with some local flavor, which ended up leading to a sharp rise in interest rates. in 2022″, said the executive.

Sérgio Rial, chairman of the board of directors of Santander Brasil, also commented that he expects a slowdown in credit, especially in lines that are more dependent on the level at which interest rates are.

“I think we will naturally see a slowdown in real estate credit, when compared to the last two years. This slowdown will occur”, said Rial.

In the case of BB, the bank’s president, Fausto Ribeiro, said this Tuesday (15) that the institution will focus its operations on lines of greater risk and profitability, in order to maintain the profitability of the operation.

“We are going to explore more profitable lines. The idea is to invest a lot in non-account holders”, stated Ribeiro. In this sense, the president of BB mentioned the Non-Consigned Direct Consumer Credit (CDC) and the credit card among the lines that should receive greater focus by the bank in the coming months.

According to Rafael Bevilacqua, chief strategist at Levante, although the growth rate of banks points to a slowdown this year, the sector’s shares on the stock exchange are at attractive levels.

“We should see bank profits growing an average of around 20% in 2022, and they are assets traded at low multiples on the stock exchange,” says Bevilacqua.

He recalls that the ongoing rotation motivated by the rise in interest rates on a global scale, from high-growth technology stocks to more cyclical businesses, should contribute to a positive performance of banking sector stocks throughout the year.

“Banks have been left a little aside by investors in recent years by the perception that fintechs would take over the market. And they have, in fact, reached an absurd number of customers, but they have not yet become profitable, while banks continue growing its revenues”, says the Levante strategist.