Banco do Estado do Rio Grande do Sul (BRSR6) Q2 2025 earnings summary

Executive summary

• Net income for 1H25 reached up to R$630.2 million, rising between 42.4% and 56.4% year-over-year, with ROAE improving to as high as 14.3% and total assets growing to R$156.3 billion.

• Loan portfolio expanded to R$64.1 billion, up to 17% year-over-year, with funding surpassing R$104 billion and equity rising to R$10.8 billion.

• Digital transformation, new product launches, and improved client experience drove growth, with 87.8% of transactions now digital.

• Foreign exchange portfolio grew 51.1% year-over-year, reflecting strong export activity.

• Moody’s upgraded the rating to AA-.br, and Fitch affirmed BB- and AA+ (bra) ratings, citing resilience and improved business profile.

Financial highlights

• Net interest income for 1H25 was R$3.2 billion, up 9.5% year-over-year, with Q2 2025 net interest income at R$1.64 billion, up 9.8% year-over-year.

• Administrative expenses grew up to 5.2% year-over-year, remaining below inflation, with personnel expenses up 6.3%.

• Fee and service revenues reached R$1.05 billion in 1H25, with cards and insurance segments contributing most to the increase.

• Asset quality improved, with a global default rate as low as 1.4% and coverage ratio up to 254.9%.

• Earnings per share for 1H25 was up to R$1.54, rising as much as 43% year-over-year.

Outlook and guidance

• Management expects continued resilience in the Brazilian economy, focusing on digital channels, innovative products, and prudent risk management.

• 2025 guidance maintained: loan portfolio growth of 6–10%, financial margin up 7–12%, credit cost at 1.2–2.2%, and administrative expenses up 7–11%.

• Ongoing investments in IT modernization and digital transformation are planned to enhance customer experience and operational efficiency.

• Cautious credit expansion continues, especially in companies and agribusiness, due to high interest rates.

• No major surprises expected in agribusiness portfolio; risk remains controlled.