Brazil | What Really Mattered Last Week

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Brazil | What Really Mattered Last Week

Latin America | Banks EquityMayResearch11, 2026

Exhibit 1 - Private payroll loan market:Brazil | What Really Mattered Last Week

Backbook by players (BRLbn)

Payroll loans, asset quality and profitability/funding growth dispersion drove the 120

debate last week. Seven charts frame the story, with credit trends as the core 100

link—amid fading expectations for material rate cuts. 80

Regulation back in focus | Regulatory interventions often lead to outcomes that diverge from 40

policymakers’ original intent. Agibank’s (NC) share price action last can serve as a good illustration: 20

despite measures that are likely to constrain payroll loan supply across the board, the market was 0

quick to price in a potential offset, as more specialized players may pivot toward topping up payroll Q1 25 Q2 25 Top 5Q3 25Others Q4 25 Q1 26

credit limits with unsecured loans at higher spreads. Notably, unsecured lending rates in the INSS .Source: Jefferies estimates.

segment can be >4x payroll rates, creating a strong economic incentive to shift mix.

Exhibit 2 - Brazilian Banks: Ex-Insurance Pre-

Payroll loans; Growth, fragmentation and risks | We continue to monitor the private payroll space tax to RWAs at selected players, % - Q1 26

very closely. The segment has expanded rapidly (from ~BRL40bn to ~BRL102bn in just over 12 4.54.0 4.0

months) with fragmentation taking hold from day one. Our estimates suggest the five incumbent 3.5

banks’ market share has declined materially, from ~76% to ~41% since Q1 25 (see Exhibit 1), pointing 3.0

to aggressive entry from smaller private players and a sharp redistribution of market shares. What 2.5 2.4

stood out last week was the implied cost of risk indirectly disclosed by Inter & Co (NC). The data 2.01.5 1.4