Oct. 27 (Bloomberg) -- Banco Santander Brasil SA, Brazil’s fourth-largest bank by market value, advanced the most in 11 weeks after European leaders agreed to expand a bailout fund, easing concern the lender’s Madrid-based parent company will be affected by the region’s debt crisis.
Santander Brasil rose 5.7 percent to 15.85 reais at the close of Sao Paulo trading, the most since Aug. 9. The stock was the best performer on the MSCI Brazil/Financials Index.
“Shares are gaining on the back of the news from Europe,” Marco Saravalle, an equity analyst at Coinvalores Corretora de Valores, said in a telephone interview from Sao Paulo. “The new rescue plan reduces the odds of a banking crisis, which is positive for Santander’s headquarters in Spain, and thus also has an indirect impact in the Brazilian unit.”
European leaders persuaded bondholders to accept 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis- fighting package intended to shield the euro area. Measures include recapitalization of European banks, a potentially bigger role for the International Monetary Fund and a commitment from Italy to do more to reduce its debt.
Optimism about Europe outweighed a drop in Santander Brasil’s third-quarter profit, Saravalle said. The lender reported net income of 866 million reais ($501 million) in the third quarter, a 15 percent decline from a year earlier, according to a regulatory filing.
--Editors: Glenn J. Kalinoski, Marie-France Han
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