Increased loan-loss provisions pull down ABC Brasil, profits come in flat

Friday, February 11, 2011

Brazilian midsize bank ABC Brasil reported net income of 54mn reais (US$32.4mn) in 4Q10, a mere 0.56% increase compared with 4Q09, on continued higher loan transactions, but offset by higher provisions for loan losses, the bank said in its 4Q10 financial statements.

ABC Brasil, the local unit of Bahrain-based Arab Banking Corporation (ABC), increased its quarterly gross interest income by 27.4% to 245mn reais from 4Q09, with loan revenues rising 34% to 199mn reais during the same period.

However, loan-loss provisions surged 212% to 12.7mn reais in the fourth quarter. Interest expenses rose to 130mn reais, a 32.7% increase from the year-ago period. Overall, net interest income increased 21.9% during the fourth quarter to 115mn reais.

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ABC Brasil grew its loan portfolio by 35.2% in 2010 to 7.63bn reais at end-December. The bank's 90-day non-performing loan (NPL) ratio improved significantly from 0.57% recorded at end-4Q09 to 0.11% recorded at end-4Q10.

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

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