Banco do Estado do Rio Grande do Sul (BRSR6) Q1 2026 earnings summary

Executive summary

• Net income for 1Q26 was R$221.6 million, down 8.2% year-over-year, with ROAE at 7.9%, mainly due to higher credit risk losses and moderate administrative expense growth, despite a stronger financial margin and lower provisions.

• Loan portfolio reached R$64.3 billion as of March 2026, up 1.3% year-over-year, with commercial loans comprising 60.9% of the total.

• Funding totaled R$111.3 billion, a 13.0% increase year-over-year.

• Management resolved major funding mismatches, reducing the gap from BRL 20 billion to BRL 4 billion, and labor lawsuit liabilities were significantly reduced through agreements covering 40% of affected employees.

• The bank continued to expand its corporate segment, launched new digital solutions, and focused on operational efficiency and risk mitigation.

Financial highlights

• Net interest income rose 12.5% year-over-year to R$1.7 billion in 1Q26.

• Administrative expenses increased 6.4% year-over-year, mainly due to higher personnel costs.

• Service fee income was R$525.2 million, up 0.7% year-over-year.

• Efficiency ratio improved to 57.1% from 64.8% a year earlier.

• Expected net losses related to credit risk increased 62.1% year-over-year to R$542.5 million, reflecting higher delinquency.

Outlook and guidance

• Management expects asset quality indicators to stabilize, with delinquency rates likely peaking and a slight decrease anticipated.

• 2026 guidance maintained: loan portfolio growth of 3–8%, financial margin up 8–13%, credit cost at 1.2–2.2%, and administrative expenses up 5–9%.

• Guidance may be revised in the second half of the year, but capital and payout policies are expected to remain stable.