SAO PAULO (Reuters) -Brazilian lender Santander Brasil on Wednesday reported higher second-quarter net profit on a sequential basis but saw its results weigh on group performance as they remained well below last year's levels.

The bank, an unit of Spain's Banco Santander, said in a securities filing its net income reached 2.26 billion reais ($475.76 million) in the period, up 5.5% from a soft previous quarter but sliding nearly 45% from a year ago.

That affected the Spanish parent firm, which reported robust quarterly results on a strong performance in Spain and other European countries but saw those positive figures partially offset by weakness in Brazil, one of its main markets.

Santander Brasil's bottom line was also slightly below market expectations, as analysts polled by Refinitiv had forecast it to reach 2.47 billion reais.

There were, however, some silver linings, as provisions for loan losses fell 11.6% quarter-on-quarter to 5.98 billion reais, which management said reflected its strategy of trying to be more selective in lending amid deteriorating credit conditions.

"We stared to experience the positive effects of the increased lending selectivity implemented since the end of 2021," chief executive Mario Leao said in a statement.

"We noted improvements in the allowance for loan losses and in the short-term non-performing loan ratio this quarter," he added, "evidencing the quality of the new vintages, which allows for a bias towards improving cost of credit over 2023 and enhances our ability to resume growth."

Santander Brasil's loan portfolio remained roughly stable in the second quarter from the previous three months at 499.3 billion reais.

($1 = 4.7503 reais)

(Reporting by Gabriel Araujo, Editing by Louise Heavens and Steven Grattan)