BTG Profit Beats Estimates Amid Commodity-Business Expansion

Aug 06, 2014 1:15 pm ET

(Updates with CEO comment in sixth paragraph.)

Aug. 6 (Bloomberg) -- Grupo BTG Pactual, the bank controlled by Brazilian billionaire Andre Esteves, said profit rose 48 percent in the second quarter, beating analysts’ estimates as commodities revenue increased.

Adjusted net income, which excludes one-time items, climbed to 962 million reais ($422 million), or 1.06 reais a share, from 650 million reais, or 72 centavos, a year earlier, the Sao Paulo-based bank said yesterday in a regulatory filing. That beat the 98-centavo average estimate of five analysts surveyed by Bloomberg.

BTG’s bet on commodities is helping to offset a drought in initial public offerings in Brazil. Revenue from sales and trading, which includes the commodities business, advanced 40 percent to 647 million reais in the second quarter from a year earlier.

The results “provide further evidence of the bank’s diversified and resilient business model,” Citigroup Inc. said today in a report to clients.

Esteves, 46, is leading an international expansion including an agreement last month to acquire Assicurazioni Generali SpA’s Swiss private-banking BSI Group unit for 1.5 billion Swiss francs ($1.7 billion) and reinsurer Ariel Re from Global Atlantic Financial Group Ltd.

“We have investors interested in providing hybrid capital to finance part of the BSI acquisition,” Esteves said on a conference call.

BTG’s capital ratio under Basel III rules dropped to 16 percent in the second quarter from 17.8 percent a year earlier, according to the earnings statement.

BTG fell about 1 percent to 36.35 reais at 2:09 p.m. in Sao Paulo. It has gained 33 percent this year, compared with the 10 percent advance for Brazil’s Ibovespa benchmark index.