Brazilian banking sector profits fall 20 pct in 2016

The Brazilian economic crisis hit its banks hard in 2016, with profits for leading banks down almost 20 percent year-on-year, according to a newly released report by the Economatica consultancy firm.

The net profits of the country's four largest listed banks. Itaú Unibanco, Banco de Brasil, Bradesco and Santander - reached a combined 50.29 billion reais (16.19 billion U.S. dollars) in 2016, a drop of 18.8 percent from 2015.

The combined results from the nine banks to publish their results to date show a larger drop of 20 percent year-on-year.

Itaú did the best out of the four, ranking in 6.65 billion U.S. dollars, dropping by just 7 percent. However, Bradesco brought in 17 percent less, Santander saw its profits dwindle by 21 percent and Banco de Brasil was the worst-hit, with its profits down by a whopping 44.2 percent at 2.58 billion U.S. dollars.

In 2016, Itaú became the largest bank in Brazil in terms of assets, surpassing the state-owned Banco de Brasil.

The country's Economic Activity Index, published Thursday by the Central Bank shows that a preliminary economic estimate of GDP growth estimates the Brazilian economy contracted by 4.34 percent in 2016.

If confirmed, this would be the second-straight year of economic contraction and the worst GDP result since 1990, when the economy dropped by 4.35 percent. Enditem