Banco Santander (Brasil) SA (BSBR) Q2 2024 Earnings Call Highlights: Strong Net Income Growth ...

GuruFocus News
4 min read

In This Article:

  • Net Income: BRL3.3 billion, a 44% increase year-on-year.

  • Return on Equity (ROE): 15.5%, up from 14.1% in the previous quarter.

  • Net Interest Income (NII): Grew 11% year-on-year.

  • Loan Portfolio Growth: 8% year-on-year increase.

  • Funding Growth: 10% year-on-year increase.

  • Loan to Deposits Ratio: Reached an all-time high of 93%.

  • Fees and Commissions Growth: 18% year-on-year increase.

  • Cost of Credit: 3.7%, reduced by 80 basis points over 12 months.

  • Common Equity Tier 1 Ratio: 11.20%.

Release Date: July 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Banco Santander (Brasil) SA (NYSE:BSBR) reported a 10% quarter-on-quarter growth, reaching BRL3.3 billion, indicating consistent portfolio growth and results delivery.

  • The company's profitability increased year-on-year to 15.5%, an improvement from the previous quarter's 14.1%, showcasing a positive trend in return on equity.

  • Net interest income (NII) grew by 11% year-on-year, reflecting successful strategic execution in both client and market NII.

  • The bank's loan portfolio grew by 8% year-on-year, with positive evolution across all segments, particularly in credit cards and payroll loans.

  • Banco Santander (Brasil) SA (NYSE:BSBR) achieved a record origination quarter in agribusiness, with a portfolio growth of almost 20% over two years, demonstrating strong performance in this sector.

Negative Points

  • The bank experienced an increase in delinquency rates in the SME segment, particularly among very small companies, which could pose a risk to future performance.

  • Market NII saw a reduction in the quarter due to lower results in treasury operations, attributed to market volatility.

  • Despite overall growth, the bank's ALL (Allowance for Loan Losses) remains stable at almost BRL6 billion, indicating ongoing challenges in managing credit risk.

  • The company's focus on reducing renegotiated portfolios may impact short-term NII, as these portfolios are being de-risked.

  • The bank's strategic shift towards a more balanced credit mix may result in lower nominal spreads, potentially affecting short-term profitability.

Q & A Highlights

Q: Why did we see an increase in SME delinquency this quarter, and how does it relate to your strategy and risk management? A: Our strategy aims to double our SME business in the coming years, focusing on sound growth. The increase in delinquency is linked to our more restrictive renegotiation policies, which have improved portfolio health. Our risk management has improved with experts across Brazil managing client relationships more effectively. (Mario Roberto Opice Leao, CEO)

Recommended Stories