Banco Santander (Brasil) (SANB4) Q2 2026 earnings summary

Executive summary

• Recurring managerial net profit for 2Q26 was R$3.0 billion, down 20.4% quarter-over-quarter and 17.6% year-over-year, with ROAE at 12.5% and efficiency ratio at 39.3%, reflecting a challenging macroeconomic environment and higher cost of risk.

• Total revenues reached R$20.7 billion, a 2.7% decrease sequentially but a 0.4% increase year-over-year; active customers grew 3% year-over-year to 34.4 million, with total customers up 6% to 76.2 million.

• Strategic focus on rebalancing product and customer mix to improve risk-return profile, prioritizing quality growth and long-term profitability.

• Funding from clients rose 6.9% year-over-year and 3.7% quarter-over-quarter to R$688.5 billion, with Individuals now 51% of the mix.

• Fee income increased 2.5% year-over-year, with cards (+10.5%), consórcios (+23.8%), insurance (+6.4%), and brokerage (+14.8%) as highlights.

Financial highlights

• Net interest income was R$15.3 billion, down 3.0% quarter-over-quarter and 0.4% year-over-year, mainly due to mix effects and lower mass-market exposure.

• Loan loss provisions rose 21.0% quarter-over-quarter and 6.5% year-over-year, totaling R$8.3 billion, reflecting a challenging credit environment and one-off effects.

• Efficiency ratio closed at 39.3%, pressured by lower revenue but supported by disciplined cost management.

• Market cap at quarter-end was R$100.3 billion, down 12.3% quarter-over-quarter and 8.9% year-over-year.

• Transactional deposits grew 18% year-over-year, strengthening funding composition.

Outlook and guidance

• Revenue growth expected to remain low single digits for the year, with improvement anticipated in the medium to long term as portfolio mix shifts.

• ROE expected to return to higher levels by next year, with further normalization as new origination cohorts mature.

• Accelerated adoption of AI and digital solutions is expected to drive customer engagement and operational efficiency.

• Tangible capital improvement and DTA consumption expected between 2027 and 2028.

• Payout policy to remain at 50%, with no planned changes despite current ROE pressure.