ABC Brasil Q2 profits up 20% on credit growth, contained provisions

Monday, August 8, 2011

Brazilian midsize bank ABC Brasil reported net income up 20% year-on-year to 60.2mn reais (US$37.7mn) on strong lending growth and sustained control over loan loss provisions, the bank said in its financial statement.

"Net income continues growing as a result of economies of scale achieved by the bank. The increase in the number of products applied to cross-selling and the positive development of portfolios, which remain high quality, are key drivers," the statement reads.

ABC Brasil, the local unit of Bahrain-based Arab Banking Corporation (ABC), increased its quarterly gross interest income by 7.84% to 274mn reais from 2Q10, with loan revenues rising 6.56% to 200mn reais during the same period.

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Loan-loss provisions plummeted 99.8% to only 1.70mn reais in the second quarter from 2Q10, managing to outweigh a 5.94mn-real loss on derivative financial instruments, compared to a 15.9mn-real derivative gain a year ago.

Interest expenses fell to 136mn reais, a 10.7% drop from the year-ago period. Overall, net interest income increased 35.4%, to 138mn reais.

ABC Brasil grew lending 9.1% year-on-year in 2Q11 to 7.47bn reais at end-June, while its total credit portfolio, including loans and guarantees issued by ABC Brasil, expanded 19.3% to 12.2bn reais at end-2Q11.

The bank's 90-day non-performing loan (NPL) ratio improved to 0.15% at end-2Q11 from 0.17% at end-1Q11. The bank did not provide figures for a year-on-year comparison.

To read the full statements, in English, go to this link

To read the full statements, in Portuguese, go to this link