Key facts
- Santander Brasil's Q2 net profit was R$3.01 billion, a 17.6% decrease year-over-year.
- The reported profit missed analyst expectations of R$3.9 billion.
- Total revenues increased 3.3% year-over-year to R$20.6 billion.
- The allowance for loan losses increased by 16.4% year-over-year.
- The bank aims for a 20%-21% ROE target in the coming years.
Banco Santander Brasil's net profit for the second quarter fell 17.6% from a year earlier to 3.01 billion reais, missing analyst expectations of 3.9 billion reais. The lender attributed the decline to a challenging macroeconomic environment and its ongoing digital transformation efforts.
Despite the profit drop, the bank reported a 7% year-over-year expansion in its customer base to 71.7 million, with active customers reaching 34 million and primacy customers up 20%. Net interest income saw a year-over-year increase of 4.4% to 15.4 billion reais, though it was down 3.3% quarter-over-quarter. Fee income rose slightly year-over-year and quarter-over-quarter, contributing to total revenues of 20.6 billion reais, up 3.3% from the previous year. Expenses increased 1.5% year-over-year, but the bank achieved its best efficiency ratio in three years at 36.8%. The allowance for loan losses increased by 16.4% year-over-year, reflecting a higher cost of risk and regulatory changes. The loan portfolio grew 1.5% year-over-year to 675.5 billion reais.
Santander Brasil maintains a profitability target of 20%-21% return on equity (ROE) in the coming years, driven by efficiency, technology, and digital transformation. Management anticipates continued growth in high-income, consumer finance, and SME segments, with selective risk-taking and active portfolio management. Fee income is expected to grow at double-digit rates, supported by cards, insurance, and capital markets. Market net interest income is projected to remain under pressure as long as the Selic rate stays at 15%, with improvements anticipated if rates decline in 2026.