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BTG Pactual's adjusted Q4 profit improves 9.4% on higher sales, trading revenue

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BTG Pactual's adjusted Q4 profit improves 9.4% on higher sales, trading revenue

BTG Pactual Group, which operates through Banco BTG Pactual SA, said its adjusted profit for the fourth quarter of 2017 increased 9.4% from a year earlier on the back of higher revenues from investment banking and sales and trading.

The bank posted adjusted net income of 744 million Brazilian reais for the quarter, or 84 centavos per unit, up from 680 million reais, or 74 centavos per unit, in the year-ago period.

Results for the period include total revenues of about 1.37 billion reais, up 34% from 1.02 billion reais a year earlier. This growth was driven by a 26% jump in investment banking revenues to 144 million reais and a 177% increase in sales and trading revenues to 691 million reais.

Sales and trading performance in the fourth quarter of 2017 "was significantly better than the same quarter of 2016, mainly due to the performance of our equities desks and brokerage, which performed below par" a year earlier, the company said.

Revenues from asset management and wealth management improved 50% and 16% year over year to 169 million reais and 98 million reais, respectively, while corporate lending revenue declined 8% to 162 million reais.

BTG Pactual's total operating expenses reached 746 million reais in the fourth quarter, rising 42% from 527 million reais a year ago. Administrative and other expenses ticked 32% higher to 250 million reais.

The company also recorded goodwill amortization expenses of 53.8 million reais in the fourth quarter related to its acquisitions of Celfin, Bolsa y Renta and the sale of its Swiss unit to EFG.

BTG's broader credit portfolio held 28.62 billion reais at the end of 2017, expanding from 24.33 billion reais at the close of 2016. Annualized return on average equity improved to 16.0% in the fourth quarter from 15.1% a year earlier.

The company's full-year 2017 adjusted net income fell to 2.95 billion reais from 3.41 billion reais in 2016, as total revenues declined to 5.53 billion pesos from 8.80 billion pesos.

As of Feb. 27, US$1 was equivalent to 3.25 Brazilian reais.