Santander Brasil Reported Net Profit of R$ 3.917 Billion in the First Nine Months of 2009, up 30.3% -- Net interest income grows 17.8% in twelve

SAO PAULO, Brazil, Oct. 28 /PRNewswire-FirstCall/ -- Banco Santander (Brasil) S.A. (NYSE: BSBR) reported net profit of R$ 3.917 billion in the first nine months of 2009, an increase of 30.3% compared to the R$ 3.007 billion recorded in the same period last year, according to International Financial Reporting Standards (IFRS). This evolution was better than in the first half of 2009, when profit growth over 2008 totaled 13%.

Santander is releasing its financial statements under IFRS before the mandatory implementation of these standards on December 31, 2010, in accordance with CMN Resolution 3786 of September 31, 2009. The institution believes that by doing so, align the interests of shareholders and potential investors, since IFRS standardizes basic accounting principles, facilitating analysis by local and foreign investors. Furthermore, these standards are already similar to those adopted by the Santander Group.

One of the highlights of the first nine months was the 17.8% year-on-year growth in net interest income (or R$ 2.47 billion), mainly driven by the 16.8% increase in average credit volume in the same period. The expenses, on the other hand, fell by 3.6% year-on-year, with capture of synergies related to the integration process.

Performance indicators were also favorable in 9M09: the efficiency ratio reached 34.4%, down 8.3 percentage points compared with the same period of 2008, while the recurrence ratio (fees / expenses) stood at 56.8%, an increase of 2.3 percentage points in twelve months. ROE (adjusted by goodwill(1)) increased by 3.3 percentage points in the same period to 21.2%.

On 3Q09 the BIS ratio reached 17.8% and coverage ratio 101%, showing a sound balance sheet.

The total credit portfolio closed September at R$ 132.9 billion, 3.7% up on the R$ 128.2 billion recorded between January and September last year, also impacted by the exchange variation on the portfolio in U.S. dollars. Loan to individuals was the period highlight, recording growth of 13% to R$ 42.4 billion, fueled by credit cards (+22.2%), payroll loans (+44.2%) and mortgages (+41.8%). Loans to large companies totaled R$ 35.3 billion, up 5.7% year-on-year. On the other hand, loans to small and medium-sized businesses fell by 2.1% in twelve months, partially due to lower demand caused by the financial crisis.

Total deposits fell by 2.6% in twelve months and recorded a small decline of 2.3% in the quarter due to less need for market funding to finance portfolio growth. Savings were the deposit highlight, increasing by 19.5% in twelve months, thanks to the increased attractiveness of such investments in a scenario of falling interest rates. Demand deposits increased by 3.1% in twelve months and fell 3.4% in the quarter.

Investment funds recorded twelve-month and quarterly growth of 8.8% and 8.9%, respectively, also due to the recovery of the attractiveness by achieving higher yields in an environment of lower interest rates and stock market up.

Under Brazilian accounting standards (BR GAAP), adjusted net income totaled R$ 2.914 billion in the first nine months (excluding, specially, the amortization of goodwill from the acquisition of Banco Real), 30.7% up year-on-year.

DISCLAIMER: As a result of the acquisition of Banco Real, in August 2008, the operating results of Banco Santander (Brasil) S.A. for the nine-month period ended September 30, 2008 and 2009, "9M08" and "9M09" respectively, are not directly comparable. Therefore, in order to enable a more accurate analysis of the Bank's businesses, the numbers in this performance report include the pro-forma information of the first nine-months of 2008, as if Banco Real had been consolidated in January 2008.

(1) Goodwill of Banco Real and Real Seguros Vida e Previdencia acquisition

SOURCE Banco Santander (Brasil) S.A.