Even so, the result is the second largest quarterly earnings in the history of Brazilian banks…
Itau Unibanco (NYSE:ITUB) said Tuesday that its first-quarter profit fell as expenses due to provisioning soared during the period. The bank posted a first-quarter profit of 3.43 billion Brazilian reais ($1.82 billion), down from BRL3.53 billion in the year-earlier period.
The bank’s nonperforming loan rate was 5.1% in the first quarter, up from 4.9% in the fourth quarter and 4.2% in the year-earlier period.
Itau’s big local rival Bradesco (NYSE:BBD), although it posted a slight increase of its profit in the first quarter, also saw a rise in default rates. Bradesco’s bad loans rose to 4.1% in the first quarter, up from 3.6% a year earlier. The bank saw a default rate of 3.9% in the fourth quarter of 2011.
“I admit that we’ve been trying to find an explanation for this,” said Rogerio Calderon, Itau Unibanco’s corporate controller director, in a conference call. “But there is no clear answer. We think the best explanation is the fact that Brazil’s economy slowed during the second half of 2011 and that has affected the ability of consumers to pay debts in the first quarter of this year.”
Source: Dow Jones Newswire