Santander Brasil loan book will reach R$400 billion by December

Banco Santander Brasil SA’s aggressive pace of growth in lending may decelerate this year, as Chief Executive Sergio Rial recently said that demand for corporate loans has been weak and competition is likely to be fiercer.

Rial told journalists he expects the bank’s extended loan book to reach around 400 billion reais ($101.5 billion) by December. «We will surpass 400 billion reais. If not, we will be close to 400 billion reais,» he said.

If Santander does not surpass this target, it would mean a loan book growth of roughly 3.5% in 2019, around one-third of the 11.2% growth posted in 2018.

Santander Brasil’s loan book remained at 386.9 billion reais in the first quarter, stable from the previous quarter, although lending for consumers grew.

The bank had been outpacing its competitors in previous quarters by extending loans to consumers shunned by other mainstream banks. However, Banco Bradesco SA, Brazil’s second largest lender, is closing the gap with Santander.

Still, the bank beat analysts’ first-quarter profit estimates.

Recurring net income at the Brazilian unit of Spain’s Banco Santander SA rose 21.9% to 3.485 billion reais and topped the 3.296 billion reais expected by analysts, according to Refinitiv data, helped by lower loan-loss provisions.

The bank’s return on equity remained stable at 21.1%.

Brazil made up 29% of the euro zone’s biggest bank by market value in the first quarter. Latin America’s importance has increased for Santander, as its businesses in the region have posted higher profitability growth, compensating for lower gains in Europe.

Its 90-day delinquency rate also remained stable at 3.1% from the previous quarter.

Chief Executive Sergio Rial, who also became the bank’s regional head for South America earlier this month, said he intends to boost the bank’s consumer finance business in the region at his new position. In Argentina, the bank will launch a consumer finance unit soon.

Spain’s Santander reported a net profit fall of 10 pct due to restructuring costs in Britain and Poland.

Original Story:Reuters | Carolina Mandl and Paula Laier
Photo: Santander site
Edition:Prime Yield