Brazilian Financials: What to Expect in 2Q26?

Research evidence excerpt

Brazilian Financials: What to Expect in 2Q26?

ruments), which keeps the near-term

setup more neutral; we think this can be partially balanced by steadier market-related line.

In our view, fees should track towards the low end of guidance, mainly reflecting softer

activity (notably investment banking) and weaker performance fees. On costs, we expect

a sequential increase but at a slower pace than in 2Q25, with the run-rate gradually

converging toward full-year guidance. Finally, we see scope for a lower effective tax rate

versus prior expectations driven by higher TJLP rate effects - helping protect the bottom-

line. Overall, we model ~R$12.6bn in earnings (25% ROE).We take the opportunity to

establish new December 2027 PT of R$51/sh vs previous December 2026 PT of R$50/sh.

• BBDC (N): Despite investors’ increasing concern over asset quality, management is

confident in delivering its step-by-step and full-year guidance. We expect BBDC to

continue outperforming peers in terms of revenues, although market NII performance

from 1Q26 will be hard to repeat. Provisions may go up at the margin, but our base case

is still for risk-adjusted NII expansion. Additionally, we expect Bradesco to deliver better

performance in fees - within DCM, the company has been gaining share over peers.

Insurance should also perform well. On the other hand, we believe costs should remain

somewhat pressured by investments in the transformation plan, despite ongoing

headcount reductions, which should gradually support efficiency. All in all, we are

forecasting ~R$7.0bn net income (16% ROE).

• SANB (OW): Similar to other quarters, we expect a soft print for loan growth. This

should limit client NII expansion, and higher for longer rates should also reduce the pace

of improvement in market NII.