BTG Pactual adapts quickly to the “coronavirus economy” and pleases BB – Money Times


Caution: exchanging market operations for loans to companies was a decision praised by analysts (Image: Linkedin / BTG Pactual)

O BB Investimentos, the manager of Bank of Brazil, liked the speed with which the BTG Pactual (BPAC11) adapted its operations to the economy of the coronavirus. And speed, in this case, means taking a more cautious stance so as not to take unnecessary risks.

“Part of our perception of a good quarterly result for BTG was due to the rapid defensive posture that the bank took in the face of the crisis”, affirm Rafael Reis and Wesley Bernabé, who sign the BB Investimentos report on the numbers released by BTG Pactual this Tuesday (12).

A movement praised by analysts was the reduction of the bank’s exposure to the market, by slowing down the pace of Sales and Trading operations. This is the area of ​​BTG Pactual responsible for operating the market, with services ranging from asset trading to market formation for companies listed on B3.

This unit’s revenue fell 33% from the fourth quarter of 2019 to the first quarter of this year, and totaled R $ 455 million. According to BB Investimentos, this allowed BTG Pactual to channel resources (the famous liquidity) and efforts to areas more protected from the economic and health crisis.

Defensive focus

This is the case of the Corporate Lending segment, responsible for credit to companies, such as revolving credit, working capital and discounting of securities. Revenues generated by this area totaled R $ 267 million, an increase of 16% over the fourth quarter and 43% over the first quarter of 2019.

Another point praised by BB Investimentos is the bank’s capitalization. Analysts note that BTG’s Basel index rose from 14.9% to 19.4% between December and March.

“In general, we understand that high liquidity and a comfortable balance sheet will help BTG to navigate the current crisis in a calm manner”, says the report.

BB Investimento reiterated its purchase recommendation for the bank’s units (BPAC11), with a target price of R $ 56.30, with a potential for appreciation of 54% over the quotation used as a reference by analysts.


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