Santander Brasil's profit rises in Q3, bank sees 'challenging' macro backdrop

SAO PAULO, Oct 29 (Reuters) - Banco Santander Brasil's SANB3.SA third-quarter net profit rose 9.4% from a year earlier, a securities filing showed on Wednesday, despite a "challenging macroeconomic environment" marked by global uncertainty and high local interest rates.

WHY IT'S IMPORTANT

Brazil is a key market for Spanish parent Banco Santander SAN.MC, which reported its own quarterly results earlier in the day citing weakness in Latin America's largest economy mostly due to the local currency's depreciation.

BY THE NUMBERS

Santander Brasil's net profit reached 4.01 billion reais ($742.06 million) in the July-September quarter, the bank said. Net interest income - earnings on loans minus deposit costs - fell 0.1% to 15.21 billion reais.

Return on average equity (ROAE), a gauge of profitability, hit 17.5%, from 17% a year earlier and 16.4% in the second quarter.

Provision for loan losses rose 10.9% on a yearly basis to 6.52 billion reais, while the expanded loan portfolio was up 3.8% to 688.8 billion reais.

KEY QUOTES

CEO Mario Leao said in a statement that the company is strengthening its balance sheet and "building an increasingly resilient portfolio for 2026."

"In terms of asset quality, we already see improvements in short-term indicators, reflecting the better quality of recent vintages, although long-term ratios remain under pressure given the macro backdrop," he added.

MARKET REACTION

Analysts at JPMorgan said Santander Brasil delivered a soft top-line performance, anticipating a neutral market reaction.

($1 = 5.4039 reais)