SAO PAULO (Reuters) - Banco Santander Brasil SA plans to accelerate loan book growth this year as Brazilian economy recovers from recession and credit demand begins to pick up, Chief Executive Officer Sergio Rial told journalists on Wednesday.
Rial expects loan book growth to exceed the 6.1 percent achieved in 2017, concentrating expansion in payroll-backed credit, vehicle financing and mortgages to individuals, without setting a target.
After years lagging the largest Brazilian listed banks in recurring return on equity, Santander Brasil beat estimates last quarter with a 18.3-percent recurring ROE. Since taking the helm two years ago, Rial made clear his main goal was to raise bank’s profitability and market share.
Analysts said the CEO strategy is working.
“Santander Brasil has successfully turned around its business and now boasts one of the highest levels of profitability in our coverage,” said Deutsche Bank’s analyst Tito Labarta.
The CEO added that although the bank remains committed to growing return on equity, there may be ups and downs as interest rates hit their all-time low in the country and banks increase competition in loans. This may affect margins in the near term, he said.
Shares of Santander Brasil were up 1.8 percent, at 36.37 reais and show a 19-percent gain so far this year.
Rial and Chief Financial Officer Angel Santodomingo said Santander Brasil is being cautious in risk management to avoid rising default rates as the credit expansion picks up pace.
Santander Brasil had a 3.2 percent delinquency rate in the fourth quarter, 0.3 percentage point above the previous quarter.
($1 = 3.1633 reais)
Reporting by Carolina Mandl; Editing by Jeffrey Benkoe and Nick Zieminski