* Zabalza was former head of Santander's Latin America unit
* Portela dealt with soaring defaults, executive departures
* Santander Brasil to report first-quarter results Thursday
SAO PAULO, April 24 Banco Santander Brasil SA
named Jesús Zabalza as chief executive on Wednesday
as investors continue to question the ability of Brazil's
largest foreign lender to stem the impact of declining interest
rates and a spike in defaults.
Zabalza, 55, replaces Marcial Portela Álvarez, who had been
in charge of the main unit of Spain's Banco Santander SA
since December 2010. Portela will preside over
Santander Brasil's board, the second time he will hold the
position in 3 1/2 years, according to a securities filing.
The São Paulo-based lender, which reports first-quarter
earnings early on Thursday, has struggled with two years of
sub-par economic growth in Brazil that stoked loan
delinquencies, as well as with a government campaign to force
banks to trim borrowing costs that has weighed on revenue. The
stock is down 4.7 percent in the past year.
Spain-born Zabalza is an industrial engineer who was
previously a general director of Santander's Latin American
commercial division overseeing the bank's units in Argentina,
Chile, México, Perú, Puerto Rico and Uruguay.
In the past quarter, investors balked at Portela's strategy
of aggressively trimming bad-loan provisions to bolster profits
and offset the impact of lower revenue and rising delinquencies.
During his stint, Portela, 68, also had to deal with departures
of some key lieutenants, such as José Berenguer, who quit as
head of retail banking and is now head of JPMorgan Chase & Co's
Santander Brasil is forecast to post a 14.2 percent
quarter-on-quarter drop in profit excluding one-time items to
1.33 billion reais ($661 million), according to estimates
provided by 10 analysts polled by Thomson Reuters. The poll
predicts strong loan-book growth, rising nonperforming loans and
slightly higher provisions.
Santander Brasil and peers have failed to accurately predict
default trends in the past two years, leading them to increase
bad-loan provisions. But, unlike rivals, Santander Brasil saw
delinquencies rise in the fourth quarter, and forward-looking
indicators signaled this trend would continue.