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BTG Profit Beats Analysts' Estimates Private-Equity Gains

November 06, 2012

Grupo BTG Pactual, Brazil’s top generator of investment-banking fees, said third-quarter profit more than tripled, beating analysts’ estimates on gains in the private-equity division.

Adjusted net income, which excludes one-time items, climbed to 793 million reais ($390 million), or 0.90 reais a share, from 231 million reais, or 0.29 reais, a year earlier, the Sao Paulo- based lender said yesterday in a regulatory filing. The average estimate of three analysts surveyed by Bloomberg was 0.85 reais.

BTG, led by Chief Executive Officer Andre Esteves, 44, said revenue from principal investments, which includes the private- equity division, was 566 million reais in the third quarter, compared with negative 91 million reais a year earlier, the filing shows. The division benefited from the sale of its stake in STR Projetos e Participacoes em Recursos Naturais, an oil and gas holding company, for 699.7 million reais in July.

The results reflect “our continued ability to deliver superior return on equity,” Esteves said in the filing. Return on equity, a measure of profitability, was 24.9 percent in the quarter, up from 12 percent a year earlier, the company said.

BTG advanced 0.3 percent to 31.50 reais in Sao Paulo yesterday, and has gained 0.8 percent since its initial public offering in April. The firm and its shareholders raised 3.66 billion reais in the IPO, the first time a stand-alone investment bank in Brazil listed itself on a stock exchange.

Investment-banking revenue increased 59 percent to 148 million reais in the third quarter from a year earlier, the filing shows. BTG took the top ranking in investment-banking fees this year through Oct. 26 from Itau BBA, the wholesale- banking arm of Itau Unibanco Holding SA (ITUB4), according to Dealogic.

Sales and trading revenue declined 7.7 percent to 407 million reais, the bank said. Operating expenses more than doubled to 617 million reais as bonus payments almost quadrupled to 335 million reais.

To contact the reporters on this story: Francisco Marcelino in Sao Paulo at; Cristiane Lucchesi in Sao Paulo at

To contact the editor responsible for this story: David Scheer at

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