Banco Santander (Brasil) S.A.

The bank reported recurring net income of BRL 3 billion and ROAE of 12.5% for the second quarter. Management said client NII was virtually flat for the year but declined in the quarter, with the spread hit by about 10 basis points from deferred correspondent expenses and lower CDI. Provisions were pressured by BRL 700 million of specific wholesale cases and inventory adjustments from a new write-off methodology, and the efficiency ratio ended at 39.3%. On the balance sheet, Santander Brasil ended the quarter with 76.2 million clients, up 6% over 12 months, while transactional deposits grew 18% over 12 months. Management did not give formal next-quarter or full-year earnings guidance, but said revenue growth should remain low single digits for the year, payout policy stays at 50%, and they expect ROE to improve toward more reasonable levels by next year, with DTA normalization discussed as a 2027-2028 process.

The lead executives emphasized a deliberate shift toward a safer, more balanced franchise rather than near-term top-line growth. Carlos Muniz repeatedly said the bank is prioritizing quality, risk-adjusted profitability, and secured lending, even if that means lower revenue in the short run. Tone was cautious but confident: they framed derisking, better customer mix, and technology investments as necessary steps to build a more resilient and predictable bank.

Carlos Muniz said the quarter reflected a tougher macro backdrop, higher cost of risk, and deliberate balance-sheet decisions. He highlighted BRL 3 billion of recurring net income, 12.5% ROAE, a 39.3% efficiency ratio, BRL 700 million of one-off-like provision pressure, and 18% growth in transactional deposits over 12 months. He also said personnel and administrative expenses remained controlled and below inflation, while AI tools are now available to 100% of employees and are being used to reduce cost to serve. On capital allocation, he said the payout policy remains 50% and that DTAs should begin turning around between 2027 and 2028.

Analysts pressed on why revenue, NII, and risk-adjusted profitability were lagging despite the derisking strategy. Management answered that lower CDI, banking correspondent expense deferrals, and a shift toward secured/higher-income products are pressuring spread and fees now, but should improve the franchise over time; they said low single-digit revenue growth for the year is the current expectation. Questions also focused on provisions and NPLs: management said BRL 700 million of the quarter’s provision pressure was tied to specific wholesale cases and a write-off policy change, while the rest is concentrated in low-income individuals and smaller companies. On payouts and DTAs, management kept the 50% payout policy and said DTA normalization is likely a 2027-2028 story.