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BTG Pactual's Q2 profit jumps 13.6% as revenues soar

BTG Pactual Group, which controls Banco BTG Pactual SA, posted a 13.6% annual increase in its adjusted profit for the second quarter as total revenues jumped from a year earlier.

The company booked adjusted net income of 685 million Brazilian reais, or 78 centavos per unit, for the second quarter, up from 603 million reais, or 67 centavos per unit, in the year-ago period. When considering a 62.6 million reais impact from nonrecurring items and goodwill, the bank's second-quarter net income increased to 622 million reais from 503 million reais a year earlier.

The result came as total revenues soared 46% to about 1.24 billion reais from 851 million reais a year earlier. Investment banking revenues surged to 210 million reais from just 19 million reais a year ago, while sales and trading revenue ticked 74% higher to 267 million reais, due to "better performance from our FX desk."

Meanwhile, revenues from asset management and wealth management improved 39% and 38% to 149 million reais and 123 million reais, respectively. However, corporate lending revenues fell 19% year over year to 234 million reais, mainly due to higher provisions for loan losses in the second quarter.

At the same time, total operating expenses increased 17% to 584 million reais from 498 million reais in the second quarter of 2017, which the company said is mainly attributable to the depreciation of the Brazilian real. Expenses related to salaries and benefits rose 15% to 152 million reais, while administrative and other expenses inched 2% higher to 218 million reais.

BTG Pactual's broader credit portfolio held about 32.82 billion reais at the end of the second quarter, expanding 16.5% from about 28.18 billion reais in the prior-year period.

Annualized return on average equity increased to 14.5% from 13.3% a year earlier. The bank's BIS capital ratio fell to 17.3% from 19.0%.

As of Aug. 7, US$1 was equivalent to 3.71 Brazilian reais.