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Brazil's PagSeguro Q4 profit jumps 35%, beating forecasts

SAO PAULO (Reuters) -Brazilian financial technology firm PagSeguro Digital on Thursday posted a 35% jump in its fourth-quarter net profit, beating expectations on the back of growing market share and more secured loans.

The New York-listed company, which operates as a digital bank and as a payment processor, posted net profits of 408 million reais ($78.4 million) for the quarter, surpassing the 400.13 million reais estimated by analysts polled by Refinitiv.

Net revenues from PagBank, the company's digital bank, reached 329 million reais, while its loan portfolio landed at 2.7 billion reais at the end of December, 43% higher than a year earlier.

The company said it was focusing more on "secured credit products" backed by collateral, "a move that began long before the substantial increase in indebtedness and defaults in the Brazil over 2022."

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Persistently high interest rates have caused banks to dramatically raise their provisions for bad loans, as higher borrowing costs raise the risk of customers defaulting on their debts.

PagSeguro's payments arm, meanwhile, recorded a 25% revenue growth in the quarter to 3.65 billion reais, which finance chief Artur Schunck attributed to "gains in market share and assertive pricing."

Total payment volume (TPV) in the last three months of 2022 grew 19% from the year-ago period to 94.3 billion reais.

($1 = 5.2070 reais)

(Reporting by Peter Frontini; Editing by Sarah Morland and Richard Chang)