State-run Banco do Brasil nearly doubles Q4 profit
www.forbes.com Reuters, 02.11.03, 8:44 AM ET BRASILIA, Brazil, Feb 11 (Reuters) - State-owned Banco do Brasil <BBAS3.SA>, Latin America's biggest bank, on Tuesday posted fourth-quarter and annual profits almost twice the size of the previous year thanks to strong credit growth. The Brasilia-based bank made a net profit of 600 million reais ($167 million) in October to end-December, compared with 332 million reais in the same period in 2001. Annual net profit rose 87 percent to 2.03 billion reais in 2002. Banco do Brasil's profits have forged ahead since it received a multibillion-dollar capital injection from the government in mid-2001 to unburden the bank of unprofitable farming and mortgage loans built up over years of politically motivated credit policies. Banco do Brasil also focused increasingly on commercial and retail operations which helped it buck sluggish growth by Brazil's economy due to high interest rates and a slowdown in the global economy. Banco do Brasil's credit portfolio grew 26.4 percent in 2002 to 63.1 billion reais, outperforming Bradesco <BBDC4.SA> (nyse: BBD - news - people), Brazil's largest private bank, whose portfolio rose 14 percent to 50.8 billion reais thanks largely to a spate of acquisitions. The bank's stock forged ahead 4.8 percent to 9.85 reais in early trade in Brazil. The country's benchmark Bovespa <.BVSP> stock index was 1 percent higher at the time. But the bank was not immune to Brazil's financial market turbulence as investors worried about the management of Latin America's biggest economy and state companies under the left-wing government of President Luiz Inacio Lula da Silva. In December, the state-owned National Economic and Social Development Bank (BNDES) was forced to cancel an offer of stock amounting to almost 18 percent of Banco do Brasil's capital due to institutional investors' worries the new government would reverse the bank's drive to greater profitability. The stock offer aimed to raise the bank's float to 25 percent of its share capital as part of a plan to list on the "New Market," a Brazilian stock index designed to attract new investors with more stringent laws of disclosure and improved shareholder rights. ($1 = 3.585 reais)