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BTG Pactual posts 25% increase in Q1 net income; AUM sinks

BTG PactualGroup reported combined net income of about 1.07 billion Brazilianreais for the first quarter of 2016, up 25% from 854 million reais earned inthe year-ago period.

Earnings per unit for the company, which owns , came to1.19 reais, compared to 94 centavos in the first quarter of 2015.

Total revenues reached about 3.61 billion reais in the firstquarter of 2016, up sharply from 1.96 billion reais a year earlier. Operatingexpenses, meanwhile, rose to 1.81 billion reais from 791 million reais.

Revenues from sales and trading increased by 67% year overyear to 1.96 billion reais, while investment banking revenues jumped 52% higherto 62 million reais. Revenues from BTG's asset management operations fell 33%annually to 182 million reais. The bank's revenue from corporate lendingactivities fell 35% to 206 million reais.

BTG noted that it recorded amortization expenses of 54.6million reais in the first quarter of 2016 related to the goodwill from theacquisitions of Celfin and Bolsa y Renta.

The balance of the lender's broader credit portfolio fell to72.5 billion reais in the first quarter from 80.8 billion reais in the linkedquarter. BTG attributed this decline mainly to sales and prepaymenttransactions aimed at strengthening its liquidity and an approximately CHF500million decrease in Swiss unit BSI SA's credit portfolio, driven by weaker clientdemand for financing. BTG agreed to sell BSI to EFG International AG for about  CHF1.33 billion in February as part of aneffort to shore upits liquidity position.

BTG noted that its assets under management and assets underadministration stood at 135.6 billion reais at the end of first quarter of2016, down from 192.5 billion compared to the end of the fourth quarter of2015.

The company's annualized return on average shareholders'equity was 18.8% in the first quarter of 2016.

As of May 10, US$1 wasequivalent to 3.48 Brazilian reais.