Banco do Brasil SA : Banco do Brasil 2nd-Quarter Profit Declines to BRL3 Billion
08/14/2012| 07:27am US/Eastern
--Banco do Brasil earnings down as expenses increase
--Bank's provisions charges up 21% in the second quarter
--Bank's administrative expenses rise 18%
(Adds details of bank's credit portfolios in the fourth and fifth paragraphs)
By Rogerio Jelmayer
SAO PAULO--Latin America's biggest bank by assets, Brazil's state-run Banco do Brasil SA (BDORY, BBAS3.BR), saw a 9.6% decline of its profit in the second quarter as its expenses, mainly with provisions, increased.
The bank reported Tuesday a second-quarter net profit of 3 billion Brazilian reais ($1.48 billion), down from BRL3.3 billion in the second quarter of 2011.
Banco do Brasil's credit portfolio reached BRL508 billion in the second quarter, up from BRL422 billion a year earlier.
The bank's consumer-credit portfolio rose 14% to BRL139.3 billion, while its corporate-credit portfolio reached BRL233.9 billion, up 22% from a year earlier.
Farm loans rose 17% to BRL95.67 billion, while the overseas credit portfolio soared 55% to BRL36.27 billion.
With the rise of its credit portfolio, Banco do Brasil also increased its provision expenses in the second quarter, to BRL3.68 billion from BRL3.05 billion.
Administrative expenses increased to BRL6.95 billion from BRL5.88 billion.
Banco do Brasil's nonperforming loan rate was 2.1% in the second quarter, up slightly from 2% a year earlier. The bank's return on equity fell to 21.4% in the second quarter from 27.5%.
The bank ended the period with total assets of BRL1.05 trillion, up from BRL904 billion in the year-ago period.
Write to Rogerio Jelmayer at email@example.com