By Aluisio Alves
SAO PAULO (Reuters) – BTG Pactual on Monday presented a more optimistic approach than other large banks on the chances of recovering resources committed to Americanas, hoping to recover even more than it has already provisioned for the case.
Without name mentioning, as the banks have done in relation to the company, the bank’s chief executive, Roberto Sallouti, stated that the extra provision of 1.12 billion reais for the “specific case” made in the balance sheet for the fourth quarter, is enough and that BTG can recover even more than that.
The surplus value provisioned is equivalent to about 60% of the bank’s exposure to the retailer, which filed for bankruptcy last month after detecting ‘accounting inconsistencies’ of around 20 billion reais. Last week, Itaú Unibanco and Bradesco announced provisions for 100% of the exposure to the company.
“Because it is a fraud, we can recover even more than that,” Sallouti said on a conference call with analysts about fourth-quarter results. BTG’s exposure to the company is around 1.9 billion reais.
The executive revealed that Americanas was “the only case” of a large client in which BTG assessed the credit risk based on its main shareholders, not on the company individually. Billionaires Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira are Americanas’ main shareholders.
BTG has tried, so far without success, to block part of the funds approved for Americanas in court.
The head of BTG also said that the bank has no exposure to other companies in a condition of financial fragility, but did not provide details. Marisa announced last week that it hired advisors for a financial restructuring. And Livraria Cultura was declared bankrupt.
Sallouti said that the current more hostile economic scenario should make banks more selective and charge higher fees on operations with corporate receivables, but that BTG considers the provisions it plans to make in 2023 to be adequate. “We don’t see anything extraordinary on the horizon”.
CONSTRUCTIVE FORECAST
Even with the impact linked to Americanas, BTG had a largely positive reaction from analysts to the mix of results for the fourth quarter and perspectives for 2023. The bank projected that this year it will have a return on equity higher than the 22% of last year. BTG had a net profit of 1.64 billion reais in the fourth quarter of 2022, compared to 1.74 billion a year earlier.
Goldman Sachs and Citi called the BTG scenario “constructive” and maintained a buy rating for the shares. Bradesco BBI and Safra also praised the results and continued with ‘outperform’. Itaú BBA, on the other hand, called the projections “ambitious” and maintained a ‘market perform’ recommendation for the unit, which rose 3.76% at 2 pm, while the Ibovespa advanced 0.84%.
(Additional reporting by Paula Arend Laier; Editing by Paula Arend Laier)
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