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Indusval books another Q1 loss as loan-loss provisions rise, loan book shrinks

Brazil-based Banco Indusval SA booked a net loss of 69.1 million reais in the first quarter of 2018, compared to net losses of 61.6 million reais in the linked quarter and 31.6 million reais a year earlier.

The company attributed the quarterly result to the voluntary reduction policy of its credit portfolio, the cost of cash carryover and assets without financial compensation as well as the increase in loan-loss allowances due to the bank's conservative management and the impact of the economic recession.

Revenues from loan operations and agro bonds fell 74.4% year over year to 14.8 million reais in the first quarter, while revenues from securities, derivatives and forex operations declined 46.4% to 29.6 million reais.

The bank's net interest margin with clients for the quarter fell to 0.00% from 3.85% in the linked quarter and 4.74% a year earlier.

The bank also booked 67.1 million reais in loan-loss allowance expenses, up from 10.1 million reais a year earlier. This led to a loss of 65.8 million reais in the bank's results from financial intermediation, widening from a 1.2 million reais loss recorded in the year-ago period.

Personnel and administrative expenses, meanwhile, ticked 12.1% higher from a year ago to 44.1 million reais.

Banco Indusval's expanded loan portfolio totaled about 1.04 billion reais at the end of the first quarter, a 45.2% drop from a year earlier, which the company described as an "intentional retraction." Loans more than 90 days past due totaled 47.7 million reais, down from 55.2 million reais a year ago.

As of May 18, US$1 was equivalent to 3.76 Brazilian reais.