By Brazil Stock Guide – BTG Pactual (BPAC11 BZ) delivered another record quarter as growth in corporate lending, consumer finance and asset management more than offset a sharp decline in investment-banking revenue, underscoring how far the Brazilian firm has moved beyond its traditional dealmaking roots.
Adjusted net income reached R$ 5.14 billion in the second quarter, up about 23% from a year earlier and 7% from the first quarter. Adjusted revenue rose 15.9% year over year and 4% sequentially to a record R$ 10.37 billion, while annualized adjusted return on average equity, or ROAE, stood at 26.7%.
The performance took first-half adjusted net income to R$ 9.95 billion, a 31.4% increase from the same period of 2025, while revenue climbed 24.2% to R$ 20.34 billion — the strongest six-month period in BTG’s history.
The main engine remained Corporate Lending & Business Banking, where revenue hit a record R$ 2.5 billion, rising 18.7% year over year and 7.2% from the first quarter. The corporate and SME credit portfolio reached R$ 288.5 billion, up 21.3% from a year earlier, as BTG continued to expand lending while describing spreads and underwriting discipline as healthy.
The fastest growth, however, came from Consumer Finance & Banking. Revenue surged 73.7% from a year earlier and 37.4% quarter over quarter to R$ 1.55 billion, reflecting the consolidation of a larger stake in Banco Pan, organic expansion and the contribution from MeuTudo. Consumer credit rose to R$ 78.2 billion, up 35.2% year over year, with growth concentrated in vehicle finance and private-sector payroll loans.
That expansion is becoming increasingly important to BTG’s earnings mix. Credit-related revenue within the consumer business jumped 46.2% from the previous quarter to about R$ 1.4 billion, helped by better performance in vehicle loans, higher payroll-lending revenue and the recognition of BTG’s 48% interest in MeuTudo.
Asset gathering remained another bright spot. Combined assets across asset and wealth management reached roughly R$ 2.7 trillion, up 24.6% from a year earlier, after BTG attracted R$ 59 billion in net new money during the quarter. The bank reported R$ 332 billion of net inflows over the previous 12 months.
Asset Management revenue rose 27.2% year over year to R$ 793.5 million, with assets under management and administration reaching R$ 1.36 trillion. The business attracted R$ 29.4 billion of net inflows during the quarter despite net redemptions across the broader fund industry, according to BTG.
Wealth Management & Personal Banking was more mixed. Revenue increased 16.8% from a year earlier to R$ 1.45 billion, but fell 4.5% sequentially as weaker client activity and a less favorable product mix reduced monetization. Wealth under management nevertheless exceeded R$ 1.3 trillion, supported by R$ 29.1 billion in quarterly net inflows.
The clearest weak spot remained Investment Banking. Revenue dropped 46.1% year over year and 32.9% from the first quarter to R$ 421.4 million, as debt-capital-markets activity slowed. BTG said issuance volumes started improving in June and that its M&A pipeline remained robust.
Sales & Trading was comparatively resilient, generating R$ 1.86 billion, broadly flat sequentially and down 2.9% from a year earlier. BTG also reduced average daily value-at-risk to 0.22% of average equity, from 0.32% in the previous quarter, pointing to more conservative risk deployment amid volatile global markets.
Operating leverage remained supportive. Expenses rose just 1.2% from the first quarter to R$ 4.28 billion, allowing the adjusted cost-to-income ratio to improve to 37.1% from 38.1%. The compensation ratio fell to 19.5%. Higher salary and administrative expenses, partly linked to Banco Pan and MeuTudo, were offset by a more favorable tax mix.
BTG also ended the quarter with a solid capital and liquidity position. Total assets rose 9.4% sequentially to R$ 925.2 billion, the Basel ratio stood at 16.0%, and the liquidity coverage ratio was 160.3%. Unsecured funding increased to R$ 405.3 billion, up from R$ 378.7 billion three months earlier, as deposits and securities issuance expanded.
The quarter therefore reinforces the central investment case around BTG: earnings are increasingly supported by recurring, scalable businesses such as lending, asset gathering and consumer finance, reducing dependence on volatile investment-banking fees. The trade-off is a larger balance sheet and greater exposure to credit and consumer risk, making asset quality and capital discipline increasingly important as the franchise continues to expand.
Leave a Reply