By Tatiana Bautzer
NEW YORK (Reuters) – Brazilian digital bank C6, which is backed by JPMorgan Chase (NYSE:), posted its first ever profit in the first quarter, as its revenue increased and credit losses fell.
C6 posted a 461 million-real ($90 million) profit in the first quarter, compared to a $57.3 million loss a year earlier. The Brazilian digital bank, which has around 30 million clients, had a $131.23 million loss last year.
The bank was able to reduce losses by switching to less risky loans like payroll or auto lending, C6 founder Marcelo Kalim told Reuters in an interview on Monday, and also increase loan volume.
“The percentage of collateralized lending in the portfolio is now close to 80%”, he added.
JPMorgan has a 46% stake in C6 and has not decided whether it plans to increase its interest, Chief Operating Officer Daniel Pinto said last year.
In an interview on Monday, JPMorgan’s Chief Executive Officer of International Consumer Banking Sanoke Viswanathan said the bank is already a strong partner with C6 management and works very closely with founder Kalim.
Other than C6, JPMorgan only currently operates a digital bank in the United Kingdom, but is looking at expanding to other European countries, Viswanathan said. He said Brazil is the world’s third-largest market for retail banking in terms of revenue.
C6 plans to keep its focus in Brazil on the medium term and has no plans to expand to other Latin American countries like some of its competitors.
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“There is a large opportunity in Brazil and going to other countries in the region would be a distraction”, Viswanathan said.
Kalim said the bank is also trying to increase accounts held by small and medium-sized businesses, a group C6 began to target over the past six months.
($1 = 5.1131 reais)
(This story has been corrected to change the profit to 461 million reais ($90 million), not 416 million reais ($81 million), in paragraph 2)
