Brazil’s banking season began with profits in high gear and credit in low motion. Santander Brasil returned to the R$ 4 billion profit mark for the first time in three years, driven by efficiency and an unusually low tax rate. Its loan book grew just 3.8%, while non-performing loans over 90 days rose to 3.4%, revealing consumers’ fragile appetite for debt. Bradesco posted a R$ 6.2 billion recurring profit and 14.7% ROAE, in line with expectations. The client margin jumped 19% y/y, sustained by higher spreads and cheaper funding, yet the cost of credit rose to 3.3% and delinquency held at 4.1% — stable, but high for a bank still cleaning its balance sheet.
With the Selic rate stuck at 15% and inflation finally converging toward target, credit has ceased to be the economy’s engine and become its thermometer. It measures the pulse but no longer drives growth. Families and companies remain cautious, prioritizing refinancing and survival. Banks are playing for stability: slower origination, stronger guarantees, lower funding costs, and digital efficiency. Balance sheets look healthy, but their strength reflects cooling activity rather than expanding demand.
Santander and Bradesco are the first signals of the season. The full picture will come with Itaú Unibanco, Banco do Brasil, Caixa, and fintechs like Nubank, Inter, and PagBank, which may test whether rate cuts can reignite credit. Brazil stands in a pre-rate-cut moment, where easing could shift banks from risk control back to risk taking. For now, the system runs profitably but cautiously — measuring the temperature of the economy, not generating its heat.