Brazil's BTG Pactual reports surge in quarterly profit

By Natalia Siniawski

(Reuters) - Brazil's Banco BTG Pactual's third-quarter adjusted net income jumped 15% from the same period last year supported by higher revenue and improved operational leverage.

Adjusted net income for the quarter came in at 3.21 billion reais ($557.83 million), the bank said in a securities filing, while revenue at the largest investment bank in Latin America grew 14% to 6.45 billion reais.

"Client franchises continued to expand, posting record revenues in Wealth, Asset, and Corporate Lending businesses," BTG said.

The growth came despite Brazil's central bank raising interest rates to 11.25% and analysts predicting a slowdown in BTG's earnings growth due to the knock-on effect on corporate credit and capital markets.

Still, investment banking revenue was down 36%, reflecting challenges in deal-making and market activity in the higher-rate environment.

The return on average equity (ROAE), a gauge of profitability, hit 23.5% in the quarter.

The bank last month received preliminary approval from the country's antitrust regulator to buy the hotel operations of AccorInvest in Brazil for 1.7 billion reais.

BTG funds have $5.5 billion in assets under management in the real estate sector, most of it in Brazil.

Through its Cayman Islands branch the bank issued in October a $500 million 5-year Unsecured Senior Note at a yield of 5.875%, down from 6.45% in an April sale and its tightest spread ever.

($1 = 5.7544 reais)

(Reporting by Natalia Siniawski, Editing by Louise Heavens, Kirsten Donovan)

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