By Brazil Stock Guide – Santander Brasil closed the fourth quarter of 2025 with net income of R$4.1 billion, its strongest quarterly result in the past four years, supported by selective loan growth, resilient fee income and tight cost control. Return on average equity (ROAE) stood at 17.6%, broadly stable quarter-on-quarter and nearly flat year-on-year, underscoring the bank’s consistent execution in a still-challenging macroeconomic environment.
For full-year 2025, net profit reached R$15.6 billion, up 12.6% from 2024. The expanded loan portfolio grew to R$708.2 billion, rising 2.8% quarter-on-quarter and 3.7% year-on-year, reflecting disciplined capital allocation and a focus on strategic segments. Client funding totaled R$670.4 billion, up 3.9% YoY, driven by a higher share of retail deposits, with individuals now accounting for 50% of total funding, helping to improve the bank’s funding mix.
Net interest income totaled R$15.3 billion in the quarter, increasing 0.8% QoQ but declining 4.0% YoY, as losses in the market-related margin continued to weigh on performance. The market margin posted a negative R$1.5 billion result, reflecting sensitivity to interest rate volatility and weaker treasury performance. This was partially offset by the client margin, which grew 6.6% year-on-year, benefiting from higher volumes, better mix and stricter pricing discipline, supporting spreads amid a cautious credit environment.
Fee income reinforced its role as a structural growth pillar, reaching R$5.8 billion in the quarter, up 3.6% QoQ and 4.3% YoY, led by cards, insurance and asset management. Credit-related fees remained under pressure due to accounting reclassification under Brazil’s CMN Resolution 4,966, which shifted part of origination revenues into net interest income. Excluding this effect, underlying fee growth would have been stronger.
Asset quality remained under macro pressure, though sequential trends improved. The cost of credit edged down to 3.76%, helped by lower provisioning expenses and the absence of one-off corporate cases. Still, delinquency indicators deteriorated modestly: non-performing loans above 90 days rose to 3.7%, with pressure concentrated in lower-income retail clients and SMEs, reflecting high household leverage and tighter financial conditions.
Operating expenses increased 3.3% quarter-on-quarter, driven by year-end seasonality, technology investments and higher personnel costs, but declined 2.0% year-on-year, signaling structural efficiency gains. The efficiency ratio reached 38.8%, worsening both sequentially and annually, largely due to weaker market margin performance.
Capital levels remain robust. The Basel ratio stood at 15.4%, while the core equity Tier 1 ratio reached 11.6%, providing ample buffers to support selective growth into 2026. Management reiterated its focus on sustainable profitability, deeper client engagement and continued expansion across credit, investments and transaction services, supported by intensive use of data, analytics and digital platforms to protect margins in a demanding macro cycle.
Leave a Reply