Brazil’s BTG Pactual Shines with Record Profits in Challenging Times

BTG Pactual (BPAC11) started 2024 strongly, recording a net profit of R$2.9 billion ($568.6 million) in the first quarter, up 27.7% from last year.

The bank also posted R$5.9 billion ($1.16 billion) in total revenues, a 22.7% increase.

In tough economic conditions, BTG Pactual attributes its success to higher net inflows, broader client bases, and strategic diversification.

The bank’s return on equity (ROE) reached 22.8% for the quarter, outperforming Itaú Unibanco’s (ITUB4) 21.9%, the highest among Brazil’s major retail banks.

CEO Roberto Sallouti emphasized growth in client services and business diversification as key to the bank’s success and commitment to excellence.

During the quarter, BTG reported R$64 billion ($12.55 billion) in net new money inflows.

Wealth management added R$43.6 billion ($8.55 billion) to the total, with R$15.9 billion ($3.12 billion) coming from the acquisition of Órama Investimentos.

Meanwhile, asset management contributed an additional R$20.2 billion ($3.96 billion).

These inflows increased total assets under management to R$1.64 trillion ($321.57 billion).

The investment banking division’s revenue jumped 151% to R$654 million ($128.24 million), fueled by record M&A activity and robust debt market performance.

Corporate lending and business banking revenues grew 20.5% year-over-year to R$1.4 billion ($274.51 million).

The bank’s loan portfolio expanded 26.7% to R$181.6 billion ($35.61 billion), showing growth across both large and small-to-medium enterprises.

Sales & trading earned R$1.37 billion ($268.63 million), managing risks effectively in uncertain economies, with a VaR of 0.36%.

Brazil’s BTG Pactual Shines with Record Profits in Challenging Times

The asset management arm reported record quarterly revenue of R$574 million ($112.55 million), up 29.8%, managing R$880 billion ($172.55 billion).

Wealth management and personal banking also hit a record with R$ 879 million ($172.35 million) in revenue, a 26.7% increase.

BTG will discuss these results in an analyst teleconference at 11 AM (Brasília time). Despite a year-to-date drop of 10.87%, BTG units have increased 31.50% over the past year.

Goldman Sachs praised BTG’s strong billing and revenue mix, keeping a buy recommendation with a target price indicating a 25.3% upside.

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