Caixa Econômica Federal's second-quarter profit rose 21.6% from a year earlier mainly driven by a substantial increase in income from financial intermediation.
The government-owned bank said its book net income reached 4.21 billion Brazilian reais in the three-month period, up from 3.46 billion reais in the second quarter of 2018. Book net income for the first half of 2019, meanwhile, jumped 22.2% to 8.13 billion reais.
Caixa's gross financial margin income totaled 14.09 billion reais in the second quarter, ticking 12.4% higher from 12.53 billion reais a year earlier. Income from financial intermediation improved 16.3% year over year to about 10.70 billion reais from 9.19 billion reais.
Income from services and banking fees came in at 6.64 billion reais, virtually unchanged from a year earlier.
The bank booked 3.40 billion reais in allowance for loan losses in the second quarter, up just 1.7% from 3.34 billion reais a year earlier. Allowance expenses for the first half totaled 6.23 billion reais, down 12.0% from the prior-year period. The bank attributed the decline in first-half allowances to a smaller credit portfolio and a greater focus on low-risk loans.
Administrative expenses, meanwhile, fell slightly to 7.88 billion reais in the second quarter from 7.94 billion reais a year ago. Other operational expenses, however, grew 57.5% to 4.19 billion reais.
Caixa's amplified loan portfolio held 682.45 billion reais at the end of June, shrinking 1.9% from the close of the second quarter last year. The bank's 90-day nonperforming loan ratio was 2.46% in the second quarter, down from 2.47% in the linked quarter and 2.50% a year ago. The company said its delinquency ratio is below the market average of 2.93%.
Return on equity fell to 15.63% from 17.88% year over year, while return on average assets was unchanged at 1.01%.
As of Sept. 2, US$1 was equivalent to 4.16 Brazilian reais.
