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; client net interest income was R$15.3 billion, down 3.0% QoQ and 0.4% YoY.

• Customer base grew 6% year-over-year to 76.2 million, with active customers up 3% to 34.4 million and increased engagement from new rewards and digital initiatives.

• Strategic focus on rebalancing product and customer mix to improve risk-return profile, prioritizing quality growth and profitability, with emphasis on high-income and secured lending segments.

• Funding from clients rose 6.9% YoY and 3.7% QoQ to R$688.5 billion, with Individuals now 51% of the mix.

Financial highlights

• Loan portfolio grew 5.8% YoY and 1.3% QoQ to R$714.8 billion, led by Consumer Finance (+15.3% YoY), cards (+13% YoY), and SMEs (+11.5% YoY).

• Fee income totaled R$5.3 billion (+2.5% YoY), with strong growth in cards (+10.5%), consórcios (+23.8%), insurance (+6.4%), and brokerage (+14.8%).

• Loan loss provisions rose 21.0% QoQ and 6.5% YoY to R$8.3 billion, impacted by BRL 700 million in one-off items and revised write-off methodology.

• General expenses were R$6.6 billion, down 0.8% QoQ and up 2.6% YoY, remaining below inflation.

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

Outlook and guidance

• Revenue growth expected to remain subdued in the short term due to ongoing portfolio de-risking and macro headwinds; improvement in ROE anticipated by next year, with further normalization expected by 2027-2028.

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

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