Santander Brasil (SANB11.SA): Provisions up, lukewarm fundamentals - 2Q26 Results

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Santander Brasil (SANB11.SA): Provisions up, lukewarm fundamentals - 2Q26 Results

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29 Jul 2026 07:10:24 ET │ 11 pages

Santander Brasil (SANB11.SA)

Provisions up, lukewarm fundamentals - 2Q26 Results

CITI'S TAKE

Neutral Santander Brasil reported earnings of R$3.0bn, -4% and -20% vs. Citi and

Bloomberg consensus, for an ROE of 12.3%. The expanded portfolio was Price (28 Jul 26 18:00) R$27.67

+1%QoQ, led by consumer finance and corporate, while credit card and Target price R$28.00

mortgages continued supporting retail growth (leases and auto loans had Expected share price return 1.2%

a sharp -15%QoQ contraction). Although provisions increased materially Expected dividend yield 7.5%

during 2Q26, part of the pressure reflects specific wholesale exposures Expected total return 8.7%

and a revised write-off methodology that accelerates loss recognition in

Market Cap R$103,742M unsecured products. NPL formation and early NPL trends suggest

US$20,257M stability, while SME indicators improved QoQ. With weak fees, the

discipline in opex could not aid the efficiency ratio, which increased 150bp

QoQ. The bank reported a CET1 ratio of 11.2%.

Gustavo SchrodenAC

Implications — A weak quarter impacted by higher provision expenses, while +55-11-4009-5858

Santander continues rotating the portfolio toward higher-return segments such as gustavo.schroden@citi.com

Consumer Finance, cards and SMEs, while reducing exposure to lower-return mass-

market products. At the same time, the bank implemented a more conservative Brian Flores, CFA

write-off framework, bringing forward loss recognition for several unsecured +55-11-4009-2842

portfolios rather than necessarily recognizing larger losses. The change creates near- luis.brian.flores@citi.com