August 13, 2019 / 9:56 AM / 4 days ago

UPDATE 2-Brazil's Banco BTG Pactual sees 30% loan book growth this year

(Adds CFO comments)

By Carolina Mandl

SAO PAULO, Aug 13 (Reuters) - Latin America’s largest independent investment bank, Banco BTG Pactual SA, expects its loan book to grow at least 30% this year, Chief Financial Officer João Dantas told Reuters on Tuesday.

“Companies started to ask for loans at a more regular pace and the potential approval of a pension reform is likely to increase demand for loans,” said Dantas, adding that the bank has appetite for a higher pace of growth in loans.

BTG’s expanded loan book stood at 43.6 billion reais in June, up 33% from a year earlier and 8.5% from March.

Besides extending loans to large companies, BTG has been seeking small- and medium-sized corporate clients as a way to expand its loan book.

Dantas said the bank targets providers of services and products to its own big clients through a digital platform of receivables-backed credit.

In addition to loans, Dantas said the bank will offer checking accounts for small companies next year.

BTG’s move comes as an increasing number of digital platforms has been targeting smaller companies, such as C6 Bank and Nubank.

BTG on Tuesday posted a 50.2% jump in second-quarter recurring profit, as trading and proprietary investment gains increased, as well as management fees.

Recurring net income, which excludes onetime items, rose to 1.029 billion reais ($258 million) from 685 million reais a year earlier.

BTG’s total second-quarter revenues came in at 2.181 billion reais, up 76% from the same period a year earlier, mainly helped by trading gains.

Higher profit at retail bank Banco Pan SA and gains with energy companies PetroAfrica and Eneva also contributed to the jump in BTG’s net income.

The bank is currently revamping its retail business, aiming to become Brazil’s sixth-largest retail bank by client total, new senior partner Amos Genish said in May.

Fees from its asset and wealth management businesses also grew as BTG continued to attract new money from clients.

The Sao Paulo-based bank reported an annualized return on equity, a measure of profitability, of 20.6%, up 5.5 percentage points from the previous quarter.

Shares in BTG were up more than 3% in afternoon trading after the bank reported results. Still, analysts questioned whether this upward trend is likely to continue.

“Main questions will be on the sustainability of results, as all three of these business lines can be volatile,” Goldman Sachs’ analysts said in a note to clients, referring to the bank’s trading, investment banking and proprietary investments. ($1 = 3.9848 reais) (Reporting by Carolina Mandl; editing by Jason Neely, Susan Fenton and Jonathan Oatis)

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