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Finance

Santander Brasil's net profit up in Q1 despite 'challenging' macro scenario

Published by Global Banking and Finance Review

Posted on April 30, 2025

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SAO PAULO (Reuters) -Lender Santander Brasil on Wednesday reported a 27.8% year-on-year rise in its first-quarter net profit, landing slightly ahead of market expectations despite what it called a more challenging global macroeconomic scenario.

Santander Brasil's bottom line for the period came in at 3.86 billion reais ($686.83 million), it said in a securities filing, while analysts polled by LSEG expected net income of 3.77 billion reais.

The result was roughly stable on a sequential basis, the company added.

The lender, a unit of Spain's Banco Santander, is usually the first major private bank in Brazil to publish quarterly results, setting the stage for peers such as Itau Unibanco and Bradesco.

The firm said the latest earnings reflect a strategy it has built over the past few years, being more selective in lending as credit conditions deteriorated.

"In credit, we are still focused on strategic businesses, keeping our strict discipline in capital allocation, while concentrating on higher profitability lines and good asset quality," Chief Executive Mario Leao said in a statement.

"In funding, we continue to make progress in our funding mix with a greater share of individual clients," he added.

Santander Brasil's net interest income - earnings on loans minus deposit costs - rose 7.7% in the first quarter to 15.92 billion reais, while its return on average equity (ROAE), a gauge of profitability, was up 3.3 percentage points to 17.4%.

Both, however, slowed slightly from the previous three-month period.

Allowance for loan losses rose 5.7% on a yearly basis to 6.39 billion reais, while the expanded loan portfolio was up 4.3% to 682.3 billion reais.

Leao said that 90-day non-performing loans remain under control and in line with the bank's target portfolio and the macroeconomic environment, adding that the lender continues "on the path of sustainable ROAE evolution".

Latin America's largest economy is a key market for Santander Brasil's Spanish parent, which reported its own results earlier in the day.

($1 = 5.6200 reais)

(Reporting by Gabriel Araujo; Editing by Andrew Heavens and Ed Osmond)