BB earns BRL 9 billion and reserves 50% of Americanas’ debt – 02/13/2023 – Market

BB (Banco do Brasil) had higher profits than its main competitors in the fourth quarter of 2022, and also differentiated itself in the strategy to protect its capital from Americanas’ debts. The bank decided to make a reservation of 50% of its exposure to retailers, while Itaú Unibanco and Bradesco chose to protect 100% of the amounts due.

BB’s profit between October and December of last year was BRL 9 billion, a growth of 52% compared to the final quarter of 2021. In the accumulated result for the year, profit was BRL 31 billion, an increase of 57%.

The reserve made to cover a possible default by Americanas added up to R$ 788 million, half of the total amount owed by the retailer, as informed by BB in its balance sheet. Together, the four largest publicly traded banks in the country have set aside approximately R$10 billion to cover possible losses on financing the company.

According to BB, there is constant monitoring of the case, and the volume of the provision may change according to the negotiations in the judicial recovery of Americanas.

The bank says that “possible need for additional risk aggravation and its impact on provisions are already duly contemplated in the corporate projections for 2023.”

Without considering the Americanas case, BB’s profit in the quarter would be R$ 9.4 billion, and in the year, R$ 32.2 billion.

BB’s credit portfolio surpassed the BRL 1 trillion mark in December 2022, with growth of 14.8% in one year and 3.7% in three months.

Among the segments, the biggest advance was in the agribusiness portfolio, which advanced almost 25% in 12 months and more than 8% in the quarter.

Delinquency for more than 90 days also grew over the course of last year. Delays reached 2.51% of the total portfolio, double the registered mark at the end of 2021.

Expenses with provisions for loan losses, which already include the separate amounts for the Americanas case, grew by more than 72% in 12 months, reaching R$ 6.5 billion in the fourth quarter of 2022.

Projections for 2023

Like its competitors, BB expects a more difficult 2023. The forecast for loan portfolio growth is between 8% and 12%, compared to the almost 15% observed last year.

Default protection expenses should also increase, rising from R$16.7 billion in last year’s total to an interval between R$19 billion and R$23 billion in 2023. For this projection, the 50% exposure does not count to Americanas already provisioned.

Even so, BB expects growth in net profit. The projection is for a range between BRL 33 billion and BRL 37 billion in 2023.