By Brazil Stock Guide – Santander Brasil SA (SANB11) is expected to report a softer first-quarter performance, with net income likely coming in near R$4 billion, as higher provisions and weaker client income weigh on results, according to a report by BTG Pactual.
The forecast was published Tuesday (13) by BTG Pactual, ahead of the bank’s earnings release scheduled for April 29 before market open.
BTG estimates the lender’s profit may fall about 2% below the market consensus of R$4.1 billion, with return on equity projected in the range of 16.6% to 17.1%. The expected underperformance reflects pressure on net interest income from clients and an uptick in credit costs.
Loan growth is seen contracting roughly 1% quarter-on-quarter, reflecting seasonal weakness early in the year and the impact of a stronger Brazilian real on dollar-denominated portfolios. Client net interest income is also expected to decline slightly due to lower deposit volumes.
By contrast, market-related net interest income is projected to improve, supported by fewer business days and still-elevated interest rates, partially offsetting the weakness in core lending revenues.
Provisions for loan losses are expected to rise to around R$6.5 billion, up from R$6.1 billion in the previous quarter, indicating normalization from unusually low levels and some deterioration in corporate credit quality.
Early-stage delinquency is also likely to worsen modestly on a quarterly basis, reflecting tighter liquidity conditions typically seen at the start of the year.
On the cost side, Santander Brasil continues to deliver efficiency gains, with operating expenses expected to grow below inflation and further reductions in headcount following last year’s restructuring efforts.
Fee income is projected to grow about 5% year-on-year, despite seasonal softness in segments such as cards and insurance during the first quarter.
Looking ahead, BTG Pactual sees 2026 as a transition year for Santander Brasil, with loan growth expected in the 5% to 6% range and client net interest income expanding at a slower pace of 3% to 4%.
The bank is focusing on reducing earnings volatility, increasing retail funding, and boosting fee-based revenues, with a long-term goal of delivering return on equity above 20% by 2028.
BTG estimates full-year net income at about R$17.4 billion, up 11% year-on-year, though it flags downside risks from higher provisions, corporate credit exposure and a potential normalization of the tax rate after an unusually low level in the previous year.
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