Banking - Brazil

Lower provision expenses, higher fee income boost Q2 profits at Brazil's Banrisul

Lower provision expenses, higher fee income boost Q2 profits at Brazil's Banrisul

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Brazilian lender Banrisul increased its second quarter net income 4.8% year-on-year to 215mn reais (US$93.3mn), the Rio Grande do Sul state bank said in its latest earnings release.

Banrisul said that the net income increase was due to a reduction in provision expenses and higher revenue from services and fees.

The bank's ROE decreased marginally to 19% in 2Q13 from 19.3% in 2Q12.

Net interest income dropped 2.7% year-on-year in the second quarter to 929mn reais. The decline was mainly due to the reduction in the central bank's monetary policy rate and mark-to-market of foreign bond and swap contracts, the bank said.

Banrisul increased its lending to individuals by 6.9% to 9.64bn reais during the 12 months through June and to companies by 6.7% to 8.21bn reais. During the second quarter, lending to individuals was up 1.7% while lending to companies was down 2.2%.

The non-performing loan ratio for loans past due more than 90 days climbed to 3.4% at close of second quarter from 3.3% at the end of the first quarter and from 2.6% at the end of last year's second quarter.

Banrisul grew its asset base to 52.5bn reais at the end of June from 42.8bn reais at end-June 2012.

Banrisul is the largest bank in the southern state of Rio Grande do Sul and it had 485 branches at the close of the second quarter compared to 468 branches at the end of last year.