UPDATE 1-Brazil's BTG Pactual posts net profit up 25.5% to quarterly record

(Recasts with details, context)

SAO PAULO, Nov 8 (Reuters) - Brazil's Banco BTG Pactual SA on Tuesday reported a record net profit for the third quarter in a row despite what it said was a "pretty volatile year," driven by interest gains and rising revenues from its main units including sales and trading.

Latin America's largest investment bank reported a third quarter net profit of 2.19 billion reais ($424.69 million), up 25.5% from a year ago and roughly in line with estimates of 2.22 billion reais from analysts polled by Refinitiv.

Total revenue reached a quarterly record at 4.8 billion reais, up 24% on a yearly basis, with BTG's return on average equity (ROAE) - a gauge of profitability - hitting 22%.

"Our businesses are increasingly diversified and recurring, with higher contribution from customer franchises and rising operating leverage each quarter," chief executive Roberto Sallouti said in a media release.

BTG's closely watched sales and trading division reported revenues up 6% on a yearly basis at 1.38 billion reais, boosted by higher client activity, the lender said.

It also highlighted interest revenue almost tripling year-on-year due to higher benchmark rates in Brazil. Revenues from its corporate and SME lending and wealth management units also jumped 46% and 60%, respectively.

Amid the consecutive quarterly net income records, Brazil-traded units in BTG Pactual have soared roughly 40% so far this year.

Analysts at Itau BBA, however, have recently

downgraded

the investment bank to "market perform," challenging its valuation multiples by saying the firm had a "fairly balanced risk/reward ratio" right now. ($1 = 5.1567 reais) (Reporting by Gabriel Araujo; Editing by Andrew Heavens and Louise Heavens)