Banco Santander (Brasil) (SANB4) Q2 2024 earnings summary

Executive summary

• Net profit reached BRL 3.3 billion in Q2, up 44% year-over-year and 10% sequentially, reflecting strong business momentum and strategic execution.

• ROE improved to 15.5%, up from 14.1% in the previous quarter, now above cost of capital.

• Strategic focus on digital transformation, customer primacy, and multi-channel experience, with NPS at historical highs.

• Launched 'Free' for mass income and expanded 'Select' for high-income, driving client reactivation and portfolio quality.

• Completed merger with Pluxee (Sodexo), reinforcing the balance sheet with a BRL 1.9 billion extraordinary gain.

Financial highlights

• Net interest income totaled BRL 14.8 billion, up 10.6% year-over-year, with client NII up 3% QoQ and 5% YoY.

• Fees and commissions reached BRL 5.2 billion, up 6.1% sequentially and 17.5% year-over-year, led by cards and insurance.

• Loan portfolio expanded 8% year-over-year to BRL 665.6 billion, with strong growth in cards, payroll, and SMEs.

• Funding from clients reached BRL 642.4 billion, up 10.3% year-over-year.

• Cost of credit dropped to 3.7%, down 80 bps year-over-year; NPL formation at 1.2%.

Outlook and guidance

• Expect continued sequential growth in client NII and profitability, focusing on sustainable, mid-to-long-term results.

• Targeting mid-to-high teens ROE in coming quarters, aiming for 20% in the medium term.

• Portfolio mix to shift toward lower-risk, collateralized products and increased retail funding.

• Growth in strategic businesses (cards, payroll, consumer finance, SMEs) to outpace market in selected segments.

• Ambition to double SME business and strengthen leadership in premium and mass market segments.