Banco do Brasil Sees Profits Rocket 50% in Third-Quarter
From Staff Reports
Banco do Brasil, Latin America’s largest bank, said profits rose 50% in the third quarter, due to borrowers taking advantage of record low interest rates.
Farmers comprise a large portion of the government-controlled bank’s borrowers. High crop prices - particularly sugar cane for ethanol production - gave farmers more financial leverage to borrow more to expand their operations, Bloomberg reported.
"Banco do Brasil has the best position to capture all the activity generated by such a positive environment in the agribusiness," Regis Abreu, who helps manage $1.08 billion (1.9 billion Brazilian Reais) in assets at Mercatto Gestao de Recursos in Rio de Janeiro, told Bloomberg. "It’s the bank that has a long-time relationship with farmers who are making a lot of money now."
Down the road, Banco do Brasil may reap massive profits from its growing credit portfolio, which expanded 27% this quarter. Brazil and its surrounding countries are promising emerging consumer markets where an increasing number of people will finance large-scale items such as cars and houses and sign up for credit cards for the first time.
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