The release of the results of Banco do Brasil (BBAS3) on Monday night (14) ends the balance sheet season of large retail banks, which released the numbers for the fourth quarter and for the year 2021.
BB obtained a managerial profit of R$ 5.9 billion in the fourth quarter. The result was 23.4% above the R$ 4.78 billion expected by the market and 67.3% above the fourth quarter of 2020. In the accumulated of 2021, the accounting net income was R$ 19.7 billion, an increase of 55.1% compared to BRL 12.7 billion in 2020.
According to the bank, the improvement in results was due to “lower expenses with provisions, growth in the loan portfolio, increase in service fees and gross financial margin”.
Recalling briefly. Itaú Unibanco (ITUB4) announced on Friday (11) a managerial profit of R$ 7.16 billion in the fourth quarter, up 32.9% over the same period in 2020. In the year, managerial profit was of R$ 26.9 billion, an increase of 45% compared to 2020. When commenting on the results, the bank attributed the good performance to the control of expenses. The result pleased the market, and the shares rose nearly 6% in the first trading session after the release.
Bradesco announced on Wednesday (9) a managerial net income of R$ 6.6 billion in the quarter, a slight decrease of 2.3% compared to R$ 6.8 billion in the same period of 2020. however, the result rose 34.3%, from R$19.5 billion in 2020 to R$26.2 billion in 2021.
The worsening of Bradesco’s quarterly results was due to the increase in provisions for doubtful accounts. Contrary to what happened with Itaú, the result disappointed investors and the bank’s shares, both common and preferred, dropped more than 8%.
Santander Brasil (SANB11) was the first to disclose its results, on February 2nd. The bank reported fourth quarter corporate net income of BRL 3.79 billion, a slight decrease of 1.5% compared to BRL 3.859 billion in the same period in 2020. In the year, Santander profited BRL 14.9 billion, up 11.3% compared to 2020.
Adding the results of the four big banks, it can be seen that last year was good for the sector. In the accumulated of the four quarters, the profit was BRL 87.3 billion, up 35.8% compared to BRL 64.3 billion in 2020. Considering only the period between October and December, the retail giants profited BRL 23.5 billion, up 20% from BRL 19.6 billion in the fourth quarter of 2020.
The closing of the balance sheet crop shows two very different narratives. Banco do Brasil and Itaú Unibanco presented better numbers than expected by the market. Santander and Bradesco’s results were below expectations.
The name of the game last year was attention to costs, both operational and financial – the money banks paid to raise money, the main input to credit. Despite the increase in the Selic, which was passed on to the cost of loans, banks had to face an increase in funding expenses.
From now on, what should define the results of the financial system for 2022 is an attention to the margins. The combination of an increase in the Selic rate and a slowdown in the economy will most likely increase defaults, especially among individuals and small companies, requiring an extra dose of caution from bankers.
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