Banco do Brasil (BBAS3) recorded net income of R $ 13.9 billion in 2020, according to a balance sheet released yesterday (11) by the financial institution. This represents a drop of 22% in relation to the profit obtained in 2019.
The drop occurred, despite the increase in fourth quarter profit, which totaled R $ 3.7 billion and rose 6.1% in relation to the previous quarter. In a statement, BB informed that most of the annual reduction in profit was due to the prudential anticipation of R $ 8.1 billion in provisions made over the quarters.
Provisions are financial reserves that institutions maintain to protect themselves against crises and an increase in defaults. Because of the covid-19 pandemic, banks have increased provisions to prevent possible losses.
Bank of Brazil
In a message sent to shareholders, the president of Banco do Brasil, André Brandão, said that the financial institution managed to face the covid-19 pandemic with growth in the credit portfolio.
He also cited the release of emergency lines, such as Pronampe, a special line for micro and small companies, and Peac Maquininhas, a type of credit guaranteed by sales with digital payment machines for individual microentrepreneurs and micro and small entrepreneurs.
“Banco do Brasil ended 2020 better prepared to continue growing in its business this year. Even with the difficulties of the pandemic, we went through this period with a 9% growth in the loan portfolio. We met with our customers, both individuals and companies, at the times when they most needed our support, ”said Brandão.
When disregarding provisions, BB's structural result grew 5.9% in 2020, totaling R $ 42.4 billion. According to the bank, the performance was influenced by the 5.1% growth in the gross financial margin, the control of administrative expenses and the reduction in the legal risk line.
The expanded credit portfolio grew 9% in the last 12 months and reached R $ 742 billion. The volume of credit to individuals increased by 6.7%. Rural credit rose 6.8%. The greatest expansion occurred in credit to micro, small and medium-sized companies, which grew 25.6% last year.
The default rate, with operations overdue for more than 90 days, ended December at 1.9%. At the end of 2019, the indicator was 3.27%.
Revenues from services rendered grew 1.5% compared to the third quarter, driven by the fund management lines (+ 3.8%) and current account fees (+ 2.3%). In 2020, however, there was a reduction of 1.7%.
Despite the annual drop in service revenues, some segments, such as insurance, pension plan and capitalization revenue lines (+ 4.8%), consortia (+ 14.5%) and fund management (+ 7.2%) grew in 2020. Administrative expenses totaled R $ 31.6 billion in 2020, with a slight expansion of 0.1% in relation to 2019.
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