Banrisul Q1 earnings fall 11.9% on higher loan provisions

Brazil's Banrisul, the bank controlled by the state government of Rio Grande do Sul, booked 1Q09 earnings of 107mn reais (US$51.6mn), a decline of 11.9% compared to 1Q08, as loan loss provisions ballooned, the bank said in its latest financial statements. Net profits were down 38.0% from the fourth quarter. Banrisul's ROE in the first quarter was 14.4%, lower than the 24.7% in the previous quarter and 18.4% in 1Q08. Service fee income came to 142mn reais in the quarter, up 2.6% from 1Q08. Banrisul's loan book reached 11.8bn reais at the end of March, for growth of 33.6% on end-March 2008. During the first quarter, Banrisul spent 150mn reais on loan-loss provisions, up 269% on the same quarter in 2008, and the ratio of non-performing loans overdue by more than 60 days deteriorated to 4.0% at end-March, compared to 3.3% at the end of December and 3.5% at end-March 2008. The bank had a capital adequacy ratio of 19.1% at end-March, lower than the 20.1% three months earlier and 24.2% at the end of March 2008. Banrisul had 26.5bn reais in total assets at end-March for an increase of 22.5% on 12 months prior, while shareholder equity hit 3.14bn reais, up 11.3%.