SAO PAULO, April 25 Reuters Banco Santander Brasil SA on Tuesday reported a first quarter net profit of 2.14 billion reais 425.09 million, down 46.6 from a year earlier but still above analysts39; forecasts of 1.83 billion in a Refinitiv poll.

The Brazilian unit of Spain39;s Banco Santander SA has been trying to be more selective in lending for more than a year now, as credit conditions deteriorated, but in the meantime posted some weak quarterly results.

The lender39;s chief executive, Mario Leao, said in a statement that Santander started 2023 with a focus on strengthening its balance sheet, but even so managed to increase its portfolio in some strategic businesses such as auto, payroll and real estate loans.

Santander Brasil39;s loan portfolio totaled 500.3 billion reais in the quarter, up roughly 10 from a year earlier, while loanloss provisions jumped 46.7 to 6.76 billion reais although slowing down 8 on a sequential basis.

Allowance for loan losses and the rise in the cost of credit are appropriate for current circumstances, as they continue to be influenced by prior vintages, Leao said, while highlighting a oneoff event that generated revenue from the reversal of tax provisions in the quarter.

Quarterly return on average equity ROAE, a gauge of profitability, recovered to 10.6 after plummeting to singledigit levels in late 2022, but remained well below the 20.7 seen a year ago, Santander Brasil said.

Its Spanish parent firm, which has in Brazil its main…