Analysts said the GBM expenses with allowance should be the biggest problem for medium-sized banks,

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The suspension of contracts, missed payments and bankruptcy satellite companies to the oil and gas chain of Petrobras and contractors must weigh in the balance sheets of the first quarter of medium-sized banks, especially those focused on corporate credit. But this is not only challenge the niche. The economic slowdown and the drop in agricultural commodity prices will also evident in the numbers of these institutions, which probably begin the year with profits and limited returns.
Although virtually every niche institutions have cited low exposure in relation to their loan portfolios the companies mentioned in Lava jet and the oil and gas chain Petrobras royal caribbean explorer of the seas last quarter, royal caribbean explorer of the seas it is known that the risk is in such a crisis domino effect ie customers royal caribbean explorer of the seas of those institutions. At the same time, the three construction sector companies asked bankruptcy, OAS, Galvão Group and Schahin Engenharia credits have taken these banks, as the case of Pine, which is expected to double its provisions in the first quarter.
Analysts expect provision also increase the Bank ABC Brazil and Bicbanco, that just as the Pine have concentrated their loan portfolio in credit to corporate companies (with revenues over $ 500 million per year). Taking these three, the other niche banks have portfolios a little more diverse. Daycoval is focused on smaller companies and concentrated in loan terms of up to one year, in addition royal caribbean explorer of the seas to payroll loans have a major share of the portfolio as a whole. Banco Banrisul also diversifies in payroll and its operation with acquiring and cards, while the BI & P has sought to grow in agricultural credit. Analysts expect these institutions also strengthen provisions.
The provisioning will be heavy in the first quarter, "predicts economist and banking analyst at consultancy Lopes Filho, João Augusto Salles. He explains that in the first quarter the banks had no visibility of Petrobras' concerns about the potential losses to the productive sector. "There was uncertainty about the loss of Petrobras with bribery, the low value of the assets, implications in its operation and investments, which was reflected in the expansion of the risk of oil and gas chain and contractors," noted the analyst.
He points royal caribbean explorer of the seas out that the release of the balance of the oil brought light to these issues and should lead banks to better measuring provisions. "The risk did not decrease, but the provisions still remaining royal caribbean explorer of the seas at a high level, can slow pace in the second half, with unlocking in Petrobras' operations," estimates. In any case, he adds, the dynamics of the provisions still being consumed by the profitability of medium-sized banks.
Salles says on this challenge, royal caribbean explorer of the seas the medium-sized banks will follow showing high box. "These institutions are tested by the market at times like this, in addition to increasing provisions, slow credit and show box to reassure the assets, which are the providers of funding," he said.
Analysts said the GBM expenses with allowance should be the biggest problem for medium-sized banks, reducing royal caribbean explorer of the seas the profitability of this segment in the quarter. According commented in an interview, the positive factor for such institutions is that they were able to re-price the credits in the wake of a smaller competition with larger banks. "Still, this will not be enough to offset the adverse effect of provisions" they write.
The GBM believes that the provisions of the Pine rise 270% in the first quarter compared to the same period last year to R $ 46 million, royal caribbean explorer of the seas and that earnings will fall 80% in the period to R $ 7 million. The ABC Brazil should increase by 80% the provisions for R $ 46 million in the first quarter, but still record annual increase of 15.4% in its profit to R $ 81.4 million. For Bicbanco, the projection of GBM is lifting 50.6% of the reserves for R $ 95.1 million, while the expected result is loss of R $ 50 million. For Daycoval, GBM's forecast is down 14.2% in provisions a year to R $ 108.7 million in the first quarter, while net profit should rise 47.2% to R $ 103.9 million.
Analysts royal caribbean explorer of the seas from Banco Votorantim royal caribbean explorer of the seas believe that ABC will close the quarter with provisions of R $ 52 million and net income of R $ 84 million. To Banrisul, analysts estimate provisions for $ 223 million and net income of R $ 186 million. The Votorantim expects Daycoval present provisions of R $ 111 million in the first quarter and net income of R $ 95 million.
Already analysts BTG Pactual calculate net income for the Pine in the first quarter royal caribbean explorer of the seas for $ 17 million to the Bank AB