November 5, 2018 / 11:17 PM / 16 days ago

Brazil's BTG Pactual profit decreases amid lower trading gains

SAO PAULO (Reuters) - Latin America’s largest independent investment bank, Brazil’s Banco BTG Pactual SA, posted a 9.75 percent drop in third-quarter recurring profit on Monday as trading gains fell.

Recurring net income, which excludes one-time items, came in at 685 million reais ($184 million) in the third quarter versus 759 million reais ($204 million) a year earlier.

In a securities filing, BTG said trading gains decreased 77 percent from a year earlier due to “challenging market conditions marked by risk aversion and low volumes.”

Lower trading gains offset higher revenues in BTG’s other businesses, such as asset management, corporate lending and proprietary investments.

The bank said its investment in Petrobras Africa reported an equity pick-up. Last week, Brazil’s Petroleo Brasileiro SA, BTG’s partner in Petrobras Africa, said it will sell its 50 percent stake in the company to a consortium led by top oil trader Vitol for $1.53 billion.

BTG’s expanded loan book remained almost flat in the quarter, at 32.9 billion reais, although management told analysts in August that leverage should slowly go up.

The Sao Paulo-based bank reported an annualized return on equity, a measure of profitability, of 14.3 percent, down 0.2 percentage point from the previous quarter.

Management will discuss results in a conference call with analysts on Tuesday.

Reporting by Carolina Mandl; Editing by Lisa Shumaker and Tom Brown

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