Brazil Credit Monitor: May’26: Asset quality deteriorated further; loan growth stable

Research evidence excerpt

Brazil Credit Monitor: May’26: Asset quality deteriorated further; loan growth stable

Equities

Commercial Banks Brazil Credit Monitor

May’26: Asset quality deteriorated further; loan growth stable Brazil

Credit growth was subdued, delinquencies picked up. Brazilian (+90bp y/y). The NPL ratio for individual rural credit (12% of total

banking system loans grew 9.5% y/y in May 2026, outpacing the 4.8% individual loans, including large farmers) increased to 7.6% from 3.4% a CarlosHead ofGomez-Lopez,EM and LatAmCFAFinancials

inflation rate and resulting in c4.5% y/y real growth. Private bank loans year ago. NPLs rose 30bp m/m for credit cards (at 9.5%) and 40bp m/m HSBC Securities (USA) Inc.

continue to lead with 10.7% y/y (-60bp m/m); public banks grew 8.2% for personal loans (at 10.5%). Early delinquencies (15-90 days) grew carlos.gomezlopez@us.hsbc.com +1 212 525 5253

y/y (-20bp m/m). Asset quality showed meaningful deterioration with 20bp m/m to 4.7%, reflecting similar worsening for both individual and

Neha Agarwala, CFA

early delinquencies for non-directed individual segment up 20bp m/m; corporate segments. Loan loss reserves were 7.9% of gross loans, and Senior Analyst, Fintech & LatAm Financials

unsecured personal and private-sector payroll delinquencies rose 60- system coverage was 168.1%. HSBC Securities (USA) Inc.

neha.agarwala@us.hsbc.com

70bp m/m, credit card eased 20bp m/m; NPL ratios for these three Spreads: The overall spread was stable m/m at 22.1%, with +1 212 525 5418

segments rose 30-40bp m/m. individuals at 28.2% (+20bp m/m) and corporates at 8.9% (flat m/m).

Average lending rates have started to fall for both corporates and retail Issuer of report:

Loan growth by segment (y-o-y, %) HSBC Securities (USA) Inc.