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SAO PAULO May 8 BB Seguridade Participações SA
beat first-quarter profit estimates on Monday as
Brazil's largest listed insurance holding company underwrote
more dental insurance premiums, helping offset lower investment
income amid a harsh recession.
The insurance unit of state-controlled Banco do Brasil SA
earned 992.8 million reais ($313 million) in net income
excluding one-time items last quarter, above a consensus
estimate of 959.260 million reais. Recurring profit, as the
indicator is commonly known, fell 8 percent from the previous
Revenue at BB Seguridade's business lines - underwriting and
accumulation, distribution and investments - fell last quarter.
Recurring return on equity hit the lowest level in almost four
years as an aggressive interest-rate cutting cycle by the
central bank trimmed average yields for BB Seguridade's bond
The numbers reflect Chief Executive Officer Jose Mauricio
Coelho's challenge of increasing BB Seguridade's revenue as
parent Banco do Brasil downsizes branches and other
sales channels to cut costs. BB Seguridade's recurring net
income grew 3.7 percent in the 12 months ended in March, within
a 1 percent-to-5 percent target for this year.
Recurring ROE slipped to 47.3 percent last quarter from 52.2
percent in the fourth quarter and 55.2 percent a year earlier.
The number missed a Reuters poll estimate of 49.4 percent.
A surge in dental insurance premium underwriting offset
declining net life, mortgage and rural sales last quarter.
Revenue at BB Seguridade's underwriting and distribution
businesses rose less than analysts expected.
Management plans to discuss results later in the day.
($1 = 3.1744 reais)
(Reporting by Guillermo Parra-Bernal; Editing by W Simon)