SAO PAULO, May 9 (Reuters) - State-controlled bank Caixa Econômica Federal, Brazil’s largest mortgage lender, will not need a capital injection, a senior executive told Reuters on Monday after the bank reported a 46 percent drop in net income as delinquency rates rose.
Brasilia-based Caixa reported quarterly profit of 838 million reais ($235 million), as its delinquency rate rose to 3.51 percent from 2.85 percent a year ago.
Analysts concerned about deteriorating asset quality have wondered if the bank will need fresh capital. Caixa’s return on equity fell to 10.3 percent from 13.7 percent a year earlier.
Chief Financial Officer Marcio Percival said the 90-day delinquency rate could reach 3.8 percent by year-end, but that the state lender would compensate losses with higher interest rates on its credit portfolio.
“There are no hidden losses and our financial statements are transparent,” Percival said in an interview following the release of the company’s results.
He said the bank estimated the loan book would grow around 7 percent this year.
Even with higher delinquency rates, Caixa reduced the loan-loss provisions from a year earlier by 24 percent to 3.8 billion reais ($1 billion).
$1 = 3.56 Brazilian reais Reporting by Aluisio Alves; Writing by Tatiana Bautzer; Editing by Bernadette Baum