Profits drop 44% at Indusval in Q4

Bnamericas Published: Wednesday, February 11, 2009
Brazilian midsize bank Indusval had profits of 13.5mn reais (US$5.91mn) in the fourth quarter, down 43.5% from the same quarter in 2007, the bank's latest financial statements showed. Earnings declined 30.1% from the third quarter, but for 2008 the figure hit 71.8mn reais, 58.1% higher than in 2007. ROE dropped to 12.7% for 4Q08 from 26.3% in 4Q07, but was up slightly for the year at 16.8% compared to 16.3% in 2007. At end-December, Indusval's total loan portfolio stood at 1.72bn reais, falling 13.7% from end-September, which the bank said was part of moves to reduce risk through stricter credit standards as well as a result of less funding availability. Year-on-year, however, the portfolio grew 37.3%. The bank's non-performing loan ratio of loans overdue by more than 90 days increased to 2.7% from 1.4% at end-2007. The bank also increased its spending on loan loss allowances to 23.0mn reais in the fourth quarter, up 191% from the same period in 2007. Total deposits at Indusval were down to 825mn reais at end-2008, a decline of 31.4% from the end of the previous quarter, which the bank pinned on risk aversion from the global financial crisis. The figure was up 1.8% on end-2007. The bank's total assets declined 30.3% in the last three months of 2008, falling to 2.23bn reais. This was nearly flat on end-2007, but shareholder equity rose 10.3% over the year to 449mn reais. Indusval also commented on its planned move to the more rigorous Novo Mercado index on stock exchange Bovespa, saying that it had received the required approvals from securities regulator CVM and would wait for market conditions to convert preferred shares to common shares as the index requires. The bank also noted it would not be opening new branches in the current economic environment and it laid off 51 employees in 2008.

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