* Recurring profit at 1.598 bln reais beats poll estimates
* Provisions slump 15.2 pct even after defaults increased
By Guillermo Parra-Bernal
SAO PAULO, Jan 31 Banco Santander Brasil SA
said on Thursday that fourth-quarter profit beat
analysts' expectations because of an aggressive cut in bad-loan
provisions despite sagging revenue and a spike in delinquencies,
according to a securities filing on Thursday.
The São Paulo-based bank, also the local subsidiary of
Spain's Banco Santander SA, reported recurring profit,
or net income excluding one-time items, of 1.598 billion reais
($803 million), compared with 1.501 billion reais in the prior
Brazil's largest foreign lender was expected to post
recurring profit of 1.29 billion reais in a Thomson Reuters poll
of six analysts.
Compared with the same period of 2011, recurring profit
dropped 8.5 percent from 1.643 billion reais. Investors in
Brazil follow quarter-on-quarter results more closely than
Management slashed provisions on bad loans by 15.2 percent
from the third quarter to 3.096 billion reais even as
delinquencies spiked. Santander has cut provisions, or the
amount of earnings set aside to cover for credit-related losses,
by more than 700 million reais in the past two quarters.
Annualized return on average equity at Santander Brasil rose
to 12.2 percent from 11.7 percent in the third quarter. ROE, as
the widely used indicator for profitability in the banking
industry is known, was 13.5 percent a year earlier.
Loans in arrears for 90 days or more, the benchmark for
delinquencies, rose to the equivalent of 5.5 percent of its loan
book, compared with 5.1 percent in the prior three months.