Jeffrey T. Lewis
SAO PAULO – Banco do Brasil SA’s profit surged in the second quarter from a year earlier as the bank set aside smaller bad loan provisions.
The state-controlled bank reported net income of R $ 5.52 billion (US $ 1.1 billion) from R $ 3.21 billion in the second quarter of 2020, and adjusted net income rose to R $ 5.04 billion from $ 3. R $ 31 billion a year earlier. Net interest income rose 0.6% to R $ 14.38 billion.
Banco do Brasil, along with other Brazilian banks, have built large reserves since the first quarter of last year to prepare for the expected rise in bad loans due to the coronavirus pandemic. While the sharp drop in economic activity has led to a rise in unemployment and a blow to corporate income, banks have yet to see a rapid rise in NPL rates.
Banco do Brasil allocated R $ 2.87 billion to cover losses on loans and rentals in the second quarter, up from R $ 5.72 billion a year earlier. The bank’s NPL ratio fell to 1.86% at the end of June from 1.95% at the end of March.
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