Why Banco Santander Brasil SA (BSBR) Stock Is Surging Today

NEW YORK (TheStreet) -- Banco Santander Brasil SA  (BSBR) surged Tuesday after the bank beat analysts' profit estimates in the first quarter, and its parent company initiated a buyout offer.

Banco Santander reported net income, excluding items, of 1.427 billion reais, or $637 million, which slightly beat the 1.404 billion reais estimate from analysts polled by Thomson Reuters. The company's loan delinquencies measured by the 90-day default ratio increased to 3.8% of outstanding loans, in line with estimates.

Banco Santander's Spanish parent bank also initiated an offer to buy out the 25% of its Brazilian unit that it does not already own. Banco Santander Brasil CEO Jesus Zabalza told investors in an earnings conference call on Tuesday the buyout offer "reflects the great confidence the group has in the future of Brazil and its business in the country" and that the market is not evaluating the true value of Banco Santander Brasil and of Brazilian businesses in general, according to Reuters.

Zabalza said the deal could be worth as much as 4.7 billion euros, or $6.5 billion, and expects it to close by October.

The stock was up 15.4% to $6.67 at 10:57 a.m. on Tuesday.

Must Read: Warren Buffett's 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

BSBR Chart

BSBR data by YCharts

STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

More from Markets

Dow Futures Plunge, Global Markets Rocked as Trump Takes Trade War to Next Level

Dow Futures Plunge, Global Markets Rocked as Trump Takes Trade War to Next Level

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Trump Threatens More Tariffs and 4 Other Stories to Watch Tuesday Morning

Trump Threatens More Tariffs and 4 Other Stories to Watch Tuesday Morning

Trump Issues New Trade Threats, Apple, ZTE, GameStop - 5 Things You Must Know

Trump Issues New Trade Threats, Apple, ZTE, GameStop - 5 Things You Must Know

China-Focused Stocks Hit Hard as Beijing Responds to Trump Tariff Threats

China-Focused Stocks Hit Hard as Beijing Responds to Trump Tariff Threats