UPDATE 1-Santander Brasil's Q4 net income down 19% from previous quarter
(Adds details, CEO quotes)
SAO PAULO, Jan 31 (Reuters) - Lender Santander Brasil on Wednesday reported a fourth-quarter net income of 2.2 billion reais ($444.48 million), down 19.2% from the previous quarter and below the 2.87 billion expected by analysts polled by LSEG.
The local unit of Spain's Santander saw provisions for loan losses rise 8.7% in the quarter to 6.11 billion reais, saying it was impacted by a "specific case in the wholesale segment," which it did not name.
Santander Brasil has been trying for the past couple of years to be more selective in its lending as credit conditions deteriorated, but reported some poor results while implementing the strategy.
Its management had pledged in the previous quarter to improve net interest income (NII) going forward, saying the worst was behind it, which proved right as the metric rose 4.8% in the quarter to 14.055 billion reais.
Clients NII increased due to stronger transactionality in the period, Santander said, while markets NII kept improving as it experienced a favorable impact from its sensitivity to interest rates, which have been falling in Brazil.
"We are ready to move forward with our growth strategy," chief executive Mario Leao said in a statement, adding the lender's "solid, enduring" portfolio was capable of generating sustainable results.
"Regarding the quality of our loan portfolio, the new vintages continued to perform well, as well as recurring allowance for loan losses, which remained under control," Leao said. ($1 = 4.9496 reais) (Reporting by Gabriel Araujo; Editing by Steven Grattan)
