Santander Brasil has profit below expectations in the 4th quarter – 02/02/2023 – Market

Santander Brasil released this Thursday (2) net profit of R$ 1.69 billion in the fourth quarter of last year, a drop of 46% compared to the previous quarter. The value was also well below the expectations of analysts, who expected BRL 2.86 billion, according to data from Refinitiv.

The drop in the result is due to the increase in provisions for loan losses, which increased 18.6% in the period.

The financial vice president, Angel Santodomingo, said that the results of the last quarter occurred in the wake of an operational adjustment to better position itself in a more challenging macroeconomic scenario, with possible repercussions on the dynamics of credit.

“We applied greater selectivity in granting and we have observed the materialization of the deterioration of credit conditions,” he said in a statement, noting that the bank’s margins were pressured by changes in the product mix and higher interest rates – a trend that should persist throughout this year.

Considering the year 2022, Santander Brasil’s net profit fell 21.1%, to R$ 12.9 billion.

Santander Group has record profit of 9.6 billion euros in 2022

Brazil accounts for more than a quarter of the Santander group’s revenues, which saw an 18% jump in profit to a record 9.6 billion euros (R$ 53.1 billion) in 2022. A solid increase in revenues with loans enabled the result, offsetting higher provisions set up in uncertain economic conditions.

The euro zone’s second-largest bank by market value had fourth-quarter net profit of 2.29 billion euros (R$12.6 billion), up about 1% from the same period a year ago and above. of the 2.07 billion predicted by analysts, on average, according to Reuters data.

Net income for 2022 – which slightly exceeded the 9.4 billion euros (R$ 52 billion) expected by analysts – was driven by higher interest rates and revenues, the acquisition of seven million new customers and solid performance of the investment and companies unit.

In the fourth quarter, the Santander group’s loan loss provisions more than doubled from a year earlier, to €3.02 billion, mainly in the US and Brazil, although slightly below analysts’ forecasts and following the release of 750 million euros (R$ 3.8 billion) in the previous year.

Banks across Europe are starting to benefit from higher borrowing costs. Santander’s net interest income — loan income minus deposit costs — rose 17% to 10.2 billion euros in the quarter, in line with forecasts. Net margin for the year increased by 16%.

Revenues increased 12% in 2022, above market forecasts, and the bank is targeting double-digit revenue growth for 2023.