Check out the results for Itaú, Bradesco, Santander and BTG |  Discount

Check out the results for Itaú, Bradesco, Santander and BTG | Discount

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The major private banks have already released their results for the second quarter of 2022. In this special report, we’ll talk about Itau, Bradesco, Santander, and BTG Pactual. Find out who was better.

Itaú Unibanco (ITUB4)

The largest bank in Latin America made a profit of 7.7 billion Brazilian Realan increase of 17% over the same period in the previous year, with a return on equity of 20.8%, which is a very high figure.

Coverage ratio (bad debt reserve) closed the quarter 14% lower than the first quarter of 2022. If it maintains the same level of provisions, the natural income will be R$4.4 billion. However, the bank led by the Setubal family has excess provisions above what is required by the central bank, at 34%, which we consider quite conservative.

The bank’s equity grew by R$ 6.7 billion, reaching a total of R$ 160.7 billion, which is the largest increase compared to large private banks.

Overall, we see the result as the best among conventional banks.

Santander (SANB11)

The Spanish dominant bank made a profit of 4 billion Brazilian riyalsin line with the same period in the previous year, with a return on equity of 20.8%.

In terms of quality, Santander ended up with a better coverage ratio compared to the previous quarter, at 224%. It is a 9% growth in loss reserve compared to the previous quarter when the ratio was 215%.

However, the improvement in the figure occurred because the bank renegotiated the 31.7 billion R$ with clients at risk of default, thus improving the level of defaults by its clients.

The supplemental provision was 10% higher than the regulatory requirements required by the central bank at the quarterly close and 3.3% lower than the last result shown. Thus, if the level of additional provision is maintained, Santander’s normal profit will be R$ 3 billion.

The bank’s equity grew by 1.1 billion reais, reaching 80 billion reais. This increase was not in line with the corporation’s earnings, given the marketing of the general bond portfolio in the market – which should do better in the third quarter, with the lower long-term interest rates we’re seeing in Brazil.

Bradsko (BBDC3)

Bradesco’s results posted a profit of 7.1 billion Brazilian Realan increase of 11% compared to the same period in 2021. Return on equity was 18.1%.

The bad debt coverage ratio closed the second quarter of 2022 at 218%, down 27% from the previous quarter, which was 235%. If the financial institution had maintained the same coverage ratio, the profit for the second quarter of 2022 would have amounted to R$3.2 billion. Bradesco’s supplemental provision is 18% more than what the central bank is requesting.

The bank’s equity grew by R$1.6 billion, reaching a total of R$154 billion. As in the case of Santander, the increase was not in line with the corporation’s earnings due to the transfer of the public stock portfolio to the market. Following the same logic above, this portfolio should do better in the third quarter, with the lower long-term interest rates we’re seeing in Brazil.

BTG Pactual (BPAC11)

On Tuesday morning (9), the largest investment bank in Latin America released the result of the second quarter of 2022: Profit 2.2 billion Brazilian realsAn increase of 27% over the same period of the previous year. The return on equity was 21.6%.

BTG maintained a high level of profitability, in line with the first quarter of 2022; Revenue grew by 20% and reached R$4 billion. This was driven by the interest-linked sectors, which are the parts of the bank devoted to public debt: they, of course, benefited from higher interest rates. Another area that has seen a significant increase is the credit sector, which is mainly dedicated to large corporations.

Total shareholders’ equity amounted to R$41.4 billion in the period, with an annual growth of 18%. Finally, the coverage ratio was 228%, well above the 166% reported in Q121.

We observed that the BTG result is positive.

Now, if you want to know the best banks in Brazil to invest in, Click here and learn about the Alpha Actions seriesfrom the analysis house Inv.

Joao AbdouniCNPI Analyst at Inv Publications.

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