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SÃO PAULO – Santander Brazil (SANB11) ushered in the Q2 2018 balance sheet season for the big banks on the right foot, in a context of credit robustness and control of operating expenses . As a result, newspapers jumped more than 7% at the height of the day.
Corporate earnings (benchmark for shareholder compensation) stood at $ 2.92 billion and reached the highest estimate of badysts surveyed by Bloomberg.
The loan portfolio grew at an accelerated pace, at 290.48 billion reais, 13.1% in 12 months, with a peak in consumer credit, which jumped 23%. Trading volume also increased, and with higher spreads (the difference between the cost of financing and the amount billed to customers), revenue from credit activities increased by 20.1% over the same period last year. 2017.
Provisions for bad debt decreased by 1.8%, while general expenses grew more slowly than revenues and despite the increase of 1,400 employees in the last twelve months.
ROE (return on equity), which measures the way a bank pays the capital of its shareholders, increased to 19.4%, notably by closing the gap with its private counterparts.
from Brazil Pluriel, probably with better profitability than Bradesco (BBDC4) for the quarter and behind only Itaú Unibanco (ITUB4), which also points out that the Spanish bank was operating with ROE of less than 10% in 2013. And that Unlike its peers, Santander continues to increase the number of branches and employees through its growth strategy.
Credit Suisse also pointed out the surprising result, noting that badet quality was a positive badet, with training In addition, says Safra, strong performance in delinquency and cost control suggest that the company However, amid the sharp increase in business units, which are up 15% in 2018 only, while the Ibovespa is up about 5% , the higher part of the badysts is not encouraged to recommend the eyes of the bank on the badessment, considered already stretched. BTG Pactual, XP Investimentos, Credit Suisse and Safra have a neutral recommendation for badets, while UBS reiterated its recommendation to sell, noting that the adjusted valuation remains unattractive.
BBI Bradesco also underestimated the below-market performance ratio recommendation) as it sees a relatively larger share of cash-flow profits relative to other banks, which can be reversed if the slope of the yield curve is more important. On the other hand, there are those who are still optimistic about the bank's badets, in the case of Brazil Plural, which raised the recommendation to the units at the beginning of the week considering the attractive dynamics for profits; for badysts, valuations returned to attractive levels after the last sell-off – stocks jumped from close to $ 40 at the end of March to $ 28 a share in mid-June.
For many, this fall was not enough and the badets remain expensive, with badysts such as BTG Pactual highlighting the preference for Itaú and Bradesco in comparison with Santander and Banco do Brasil. One thing is certain: the good result of the Brazilian subsidiary of the Spanish bank has boosted other banks, such as Itaú (ITUB4), Bradesco (BBDC4) and Banco do Brasil (BBAS3).
Bradesco's figures will be revealed and at the end of the month it will be Itaú's turn on the night of the 30. According to XP badysis, Itaú should have another solid result, with a net income reaching $ 6.8 billion, up 124 basis points over the same period to 22.1%, a result that should be supported by growth in the Retail portfolio (+ 2.7%). Bradesco should see the results of its cost reduction, with operating expenses becoming stable, while Banco do Brasil is expected to have growth in its loan portfolio, mainly in particular.
It is therefore important to keep an eye on the results of the next financial institutions, which may or may not confirm the positive balance sheet evolution also for other companies in the sector.
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