October 8, 2019 / 8:51 PM / 8 days ago

UPDATE 2-Santander Brasil predicts loan book growth above 10% through 2022

(Adds CEO comments)

By Carolina Mandl

SAO PAULO, Oct 8 (Reuters) - Banco Santander Brasil SA expects to see its loan book grow by more than 10% per year through 2022 and maintain its current profitability ratio at 21%, Chief Executive Officer Sergio Rial said on Tuesday.

Rial told analysts at an event at the bank’s headquarters in Sao Paulo that consumer lending and companies in the agribusiness sector will drive Santander’s loan book growth.

Santander also disclosed in a securities filing that it sees its client base growing more than 7% per year until 2022. The bank currently has 25.5 million clients.

Still, Rial does not see room for improvements in the bank’s return on equity, which reached 21.3% and is likely to remain around 21%. He noted that competition among financial institutions is likely to increase in the coming years.

To boost grow, Rial said the bank will not increase its payout ratio. In 2018, Santander Brasil paid shareholders 54% of its profit.

The announced targets come after a more aggressive push for market share in recent quarters. The bank’s loan book grew by 9.3% in the first half, bolstered by its willingness to lend to consumers shunned by larger rivals.

In the first half, Brazil accounted for 29% of the Spanish parent’s profit, making it the biggest single contributor, as well as the largest country in terms of clients.

Brazil and Mexico have helped the Madrid-based bank offset restructuring costs related to the acquisition of Banco Popular and a weak performance in Britain. (Reporting by Carolina Mandl; Editing by Sandra Maler, Will Dunham and Dan Grebler)

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