January 29, 2020 / 12:03 PM / a month ago

UPDATE 2-Santander pushes for South American integration -CEO

(Recasts with CEO comments on integration, adds company details, share movement)

By Carolina Mandl

SAO PAULO, Jan 29 (Reuters) - Banco Santander SA South America head Sergio Rial told journalists on Wednesday the bank is taking steps to better integrate its businesses in the region, as it seeks to boost results outside Brazil.

The move comes less than a year after Rial, who is also chief executive officer of Banco Santander Brasil SA , was tapped to lead the bank in South America. He plans to replicate the Brazil bank's successful consumer lending strategy.

The region accounted for 37% of the Spanish group's profit in the fourth quarter.

Rial said the bank will launch a regional data and customer relationship unit based in Sao Paulo based on artificial intelligence to analyze data for South American low-income clients. Roberto Jabali, former cards and risk analytics director at Citibanamex, will lead the new unit.

Rial said the bank is also preparing to launch its card processing company, GetNet, in Argentina by year-end, after starting business in Chile two months ago.

Santander also plans to open a consumer finance division in Argentina and to boost the existing ones in Peru, Colombia and Chile.

Earlier on Wednesday, Banco Santander SA beat analysts' expectation with a 35% increase in fourth-quarter net income from a year earlier, as solid Latin America units offset European business.

BRAZIL

Net income in Brazil rose 9.4% to 3.726 billion reais ($890.83 million), thanks mainly to higher consumer lending and fees.

The bank's strategy of expanding its client base and consumer loan book ensured Santander Brasil a quarterly return on equity of 21.3%, up 0.2 percentage point from the previous quarter.

Its loan book grew by 15.3% in 2019, and Rial said it is likely to continue to increase at a two-digit rate in this year.

In a securities filing, the bank said its market share in loans increased 0.75 percentage point in 2019 to 10%, the highest level in the last 10 years.

Rial said it is still early to predict profit growth in 2020, but added that Brazil's economic growth is likely to help banks' results. Analysts project little or no net income growth in Brazilian banks this year, after years of double-digit expansion for profit, amid fierce competition and higher taxes.

Despite the sharp rise in loans, its 90-day loan delinquency ratio came in roughly stable at 2.9%.

Shares of Santander Brasil were down 1.5% in early afternoon trading, as analysts said numbers came in line with expectation. ($1 = 4.1975 reais) (Reporting by Carolina Mandl in Sao Paulo Editing by Mark Potter and Matthew Lewis)

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