Daycoval ups Q2 earnings 17.1% on strong loan growth

Wednesday, July 27, 2011

Earnings for Brazilian midsize bank Daycoval were 75.2mn reais (US$49mn) in 2Q11, up 17.1% on 2Q10 and 72.9% from the previous quarter, on impressive growth in its loan book, the bank said in its latest financial statements.

The bank noted that first quarter income was impacted by non-recurring events, thus not fully reflecting its real performance. Second quarter earnings were attributed to "the strong growth in credit operations revenues, which have been growing as a result of the increase in the portfolio and a reduction in provision expenses."

For the first six months of the year, Daycoval's net income decreased 0.1% to 119mn reais.

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Daycoval expanded its loan portfolio - which includes SME lending, payroll lending and car loans - by 45.9% from end-2Q10 and 7.1% from end-March 2011, to 7.07bn reais at end-June.

The bank's ROAE was 17.6% for the second quarter, compared to 16.0% in the year-ago period and 10.1% recorded in 1Q11.

The annualized net interest margin (NIM) was 10.3%, versus 10.1% in 2Q10 and 8.0% in 1Q11, due to an increase in loan operation revenues and the maintenance of spreads, the statement reads.

Daycoval's efficiency ratio worsened to 27.9%, from 24.1% in 2Q10, but improved from 37.6% in 1Q11.

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

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