April 30, 2019 / 11:22 AM / 3 months ago

UPDATE 2-Banco Santander Brasil's lending growth may slow, says CEO

(Adds CEO, analysts comments)

SAO PAULO, April 30 (Reuters) - Banco Santander Brasil SA's aggressive pace of growth in lending may decelerate this year, as Chief Executive Sergio Rial said on Tuesday that demand for corporate loans has been weak and competition is likely to be fiercer.

Rial told journalists he expects the bank's extended loan book to reach around 400 billion reais ($101.5 billion) by December. "We will surpass 400 billion reais. If not, we will be close to 400 billion reais," he said in a press conference.

If Santander does not surpass this target, it would mean a loan book growth of roughly 3.5 percent in 2019, around one-third of the 11.2 percent growth posted in 2018.

Santander Brasil's loan book remained at 386.9 billion reais in the first quarter, stable from the previous quarter, although lending for consumers grew.

The bank had been outpacing its competitors in previous quarters by extending loans to consumers shunned by other mainstream banks. However, Banco Bradesco SA, Brazil's second largest lender, is closing the gap with Santander.

Still, the bank beat analysts' first-quarter profit estimates on Tuesday.

Recurring net income at the Brazilian unit of Spain's Banco Santander SA rose 21.9 percent to 3.485 billion reais and topped the 3.296 billion reais expected by analysts, according to Refinitiv data, helped by lower loan-loss provisions.

The bank's return on equity remained stable at 21.1 percent.

Units in Santander Brasil were down 2.27 percent in early afternoon trading. In a note to clients, Bradesco BBI's analysts said that although results were good, Santander Brasil is trading at a higher price when compared to peers.

Brazil made up 29 percent of the euro zone's biggest bank by market value in the first quarter. Latin America's importance has increased for Santander, as its businesses in the region have posted higher profitability growth, compensating for lower gains in Europe.

Its 90-day delinquency rate also remained stable at 3.1 percent from the previous quarter.

Chief Executive Sergio Rial, who also became the bank's regional head for South America earlier this month, said he intends to boost the bank's consumer finance business in the region at his new position. In Argentina, the bank will launch a consumer finance unit soon.

Spain's Santander reported earlier on Tuesday a net profit fall of 10 pct due to restructuring costs in Britain and Poland.

$1 = 3.9407 reais Reporting by Carolina Mandl; additional reporting by Paula Laier; editing by Jason Neely, Bernadette Baum and Jonathan Oatis

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