Banco do Brasil 2Q Net Income Rose on Smaller Bad Loan Provisions

By Jeffrey T. Lewis

SAO PAULO--Banco do Brasil SA's profit rose in the second quarter from a year earlier as the bank set aside smaller provisions for bad loans.

The state-controlled bank reported net income of 5.52 billion reais (US$1.1 billion) in the period, from 3.21 billion reais in the second quarter of 2020, while adjusted net income rose to 5.04 billion reais from 3.31 billion reais a year earlier. Net interest income rose 0.6% to 14.38 billion reais.

Banco do Brasil, along with other Brazilian banks, made large provisions starting in the first quarter of last year to prepare for an expected rise in bad loans due to the coronavirus pandemic. While the sharp drop in economic activity sent unemployment higher and hit businesses' income, banks so far haven't seen rapid rises in delinquent loan ratios.

Banco do Brasil provisioned 2.87 billion reais for allowances for loan and lease losses in the second quarter, down from 5.72 billion reais a year earlier. The bank's non-performing loan ratio fell to 1.86% at the end of June from 1.95% at the end of March.

Write to Jeffrey T. Lewis at [e-mail]

(END) Dow Jones Newswires

08-05-21 1003ET