Banco Santander (Brasil) (SANB4) Q1 2026 earnings summary

Executive summary

• Net profit for 1Q26 was R$3.8 billion, down 7.3% quarter-on-quarter and 1.9% year-over-year, with ROE at 16.0%, while profit before taxes reached R$4.6 billion, up 5.4% sequentially but down 3.5% year-over-year.

• Total revenues grew 0.8% quarter-on-quarter and 0.9% year-over-year to R$21.2 billion, with net interest income up 3.1% sequentially but down 0.7% year-over-year.

• Customer base expanded 6% year-over-year to 75.2 million, with 34.2 million active customers (+3% YoY), and a focus on high-income and active clients.

• Strategic shift continues toward a healthier, more resilient loan mix, emphasizing collateralized products and de-risking low-income portfolios.

• Expenses remained flat sequentially and up 0.9% year-over-year, reflecting strict cost control.

Financial highlights

• Net interest income totaled R$15.8 billion, up 3.1% quarter-on-quarter but down 0.7% year-over-year.

• Fee income was R$5.4 billion, down 5.5% sequentially but up 5.8% year-over-year, led by cards and insurance.

• Efficiency ratio improved to 37.7%, down 1.1 p.p. sequentially, with nearly zero expense growth.

• Cost of risk remained stable at 3.73% both sequentially and year-over-year.

• CET1 Basel ratio at 11.2% and total Basel ratio at 15.2%, supporting ongoing capital distribution.

Outlook and guidance

• Continued focus on growing high-income and SME segments, aiming for double-digit growth and sustainable long-term profitability.

• Expectation to achieve 20%+ profitability by 2028 as portfolio mix improves and de-risking completes.

• Anticipated cost savings of BRL 400 million annually from Gravity platform migration starting Q3, and EUR 200 million in AI-driven efficiency by 2028.

• Continued investment in technology, automation, and digital channels to enhance customer experience and operational efficiency.

• Cost of risk expected to remain stable, with potential for reduction in the longer term as portfolio quality improves.