Banrisul: 1Q26: ROE constrained by weak revenue generation and worse asset quality

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Banrisul: 1Q26: ROE constrained by weak revenue generation and worse asset quality

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Banrisul

1Q26: ROE constrained by weak revenue

generation and worse asset quality

Maintain Rating: UNDERPERFORM | PO: 11.00 BRL | Price: 14.54 BRL

Net income declined 8% YoY; ROE declined to 7.9% 14 May 2026

Recurring net income of R$222mn (-8% YoY and -33% QoQ) yielded ROE of 7.9% Equity

(-400bp), in line with BofAe. The decline in profitability reflected weak operating trends:

Antonio Ruette >>

i) sharp increase in provision charges, pressured by continued asset quality deterioration, Research Analyst

ii) weakening loan growth, consequence of a more restrictive credit origination policy, Merrill Lynch (Brazil) +55 11 2188 4225

and iii) further fee income growth deceleration. On a positive note, NII grew at solid antonio.ruette@bofa.com

pace, supported by lower funding costs and better loan mix. CET1 ratio expanded 10bp Mario Pierry

QoQ to 14.1%, although the renovation of the payroll with state of Rio Grande do Sul is Research Analyst BofAS

expected to demand c.200bp of capital, potentially leading to CET1 closer to 12% in +1 646 743 0047

2Q26. We maintain our Underperform rating, as ROE continued to run well below the mario.pierry@bofa.com

bank’s cost of equity. AugustoResearch UeharaAnalyst >>

Merrill Lynch (Brazil)

Key operating highlights +55augusto.uehara@bofa.com11 2188 4651

Loan growth (-): decelerated further and remained flat YoY (+5% in 4Q), pressured by Ernesto Gabilondo >>

rural and consumer lending, given the continued decline of payroll loans (-11%). Research Analyst

Merrill Lynch (Mexico)

Meanwhile, corporate loans grew at a strong pace (15% vs 20% in 4Q), supported by +52 55 5201 3428

loans to large companies, while growth to SMEs decelerated.