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Banco ABC Brasil's Q4 profit grows 1.9% as provisions fall

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Banco ABC Brasil's Q4 profit grows 1.9% as provisions fall

Banco ABC Brasil SA's profit for the fourth quarter of 2017 improved marginally from a year earlier as a fall in interest income was offset by lower loan-loss provisions and higher income from service fees.

The bank showed quarterly net income of 110.6 million Brazilian reais, up 1.9% from the 108.5 million reais earned in the year-ago period. Earnings per share reached 57 centavos, compared to 61 centavos in the fourth quarter of 2016.

The lender's net interest income fell 2.4% year over year to 276.6 million reais, while income from service fees jumped 20.4% to 83.7 million reais. The bank's net interest margin was 4.4%, compared to 4.1% in the linked quarter and 4.7% a year earlier.

Banco ABC booked 50.8 million reais in loan-loss provisions for the fourth quarter, down 8.2% from 55.3 million reais a year ago. Personnel and other administrative expenses, meanwhile, ticked 4.7% higher to 82.0 million reais.

The bank's expanded credit portfolio held about 24.53 billion reais at the end of the fourth quarter, representing growth of 8.1% from 22.70 billion reais at the close of 2016. Loans more than 90 days past due accounted for 1.20% of the total portfolio at the end of the three-month period, compared to 1.43% in the linked quarter and 0.70% at the end of 2016.

Annualized recurring return on average equity fell to 13.6% from 15.2% a year ago, while annualized return on average assets declined to 1.6% from 1.8%.

The bank's full-year 2017 recurring profit reached 433.0 million reais, up 5.4% from 411.0 million reais in 2016.

In its guidance for 2018, the company said it expects to see its expanded credit portfolio grow between 9% and 13%, while personnel and other administrative expenses are forecast to rise 4% to 6%.

As of Feb. 5, US$1 was equivalent to 3.24 Brazilian reais.