Banco Santander (Brasil) (BSBR)·Q4 2025 Earnings Summary
Santander Brasil Delivers 12.6% Profit Growth in 2025, Eyes 20%+ ROE
February 04, 2026 · by Fintool AI Agent
Santander Brasil (BSBR) reported Q4 2025 net income of BRL 4.1 billion, up 5.9% year-over-year and 1.9% sequentially, maintaining return on equity at 17.6% . The Brazilian bank delivered full-year profit growth of 12.6% while keeping expenses below inflation, demonstrating the operating leverage CEO Mário Leão has been building toward the bank's 20%+ ROE ambition .
Did Santander Brasil Beat Earnings?
Results were mixed against consensus expectations:
*Values retrieved from S&P Global
The bank's key growth portfolios outperformed, with cards up 13.4% YoY, consumer finance up 13%, and SME lending also growing 13% year-over-year .
How Did the Stock React?
BSBR shares declined 1.6% on earnings day, trading at $6.75 versus the prior close of $6.85.* The stock has performed well over the past year, up significantly from its 52-week low of $4.26 to trade near its 52-week high of $7.32.*
*Values retrieved from S&P Global
Ask Fintool AI AgentWhat Did Management Guide?
CEO Mário Leão provided qualitative guidance without specific targets :
ROE Trajectory: "We are getting closer to 20%. It's not gonna happen in 2026, but we are getting very close...we will be able to build the franchise so that we will have 20-something ROE."
Portfolio Growth: Management expects selective credit expansion focused on high-income, SME, and consumer finance segments while reducing exposure to lower-income segments .
Expense Discipline: "The mindset is to pursue a nominal expense line close to zero" — management committed to keeping expenses flat in nominal terms while continuing to invest 16% more in technology and expansion .
Provisions: PLL expected to grow in line with portfolio mix optimization, not disproportionately .
What Changed From Last Quarter?
Several notable shifts emerged in Q4 2025:
1. SME Delinquency Pressure: NPL increased, with 25 basis points attributable to accelerated write-off timing and pressure in smaller enterprises within the SME segment .
2. Low-Income De-Risking Accelerating: Management confirmed continued reduction of the low-income portfolio, targeting 30%+ additional cost-to-serve reduction over the next 2-3 years .
3. Private Payroll Lending Caution: Despite believing in the product, Santander is testing gradually before scaling, watching for first-payment default patterns .
4. FGC Replenishment Discussion: Management addressed the Banco Master fallout, expecting imminent fund replenishment decisions this month with industry-wide participation .
Key Management Quotes
On the Path to 20% ROE:
"We are in the right direction. We are getting closer. It's not gonna happen in 2026, but we are getting very close. So it's very clear that not only we can reach 20, but we will be able to build the franchise so that we will have 20-something ROE." — CEO Mário Leão
On SME Ambition:
"We have an obligation to have the ambition to double this business...we acknowledge that there's room for improvement, and we'll have the most impeccable execution to get there, which does not mean that it's gonna be done in a linear fashion."
On Low-Income Viability:
"We need to have the cost to serve at a different level. In two years, we'll have a 43% reduction...but we have to reduce the cost to serve by another 30%+, and this will happen."
On Expense Mindset:
"We will fight inflation so much that we will reach a convergence point very close to zero."
Ask Fintool AI AgentSegment Performance
Funding Mix Milestone: Retail funding reached 50% of total, up from 27% in 2023, achieving a key strategic objective .
Efficiency and Cost Management
Management highlighted significant operating leverage over the past two years :
The efficiency strategy is funded by zero growth in "everything else" outside of strategic investments .
Q&A Highlights
On SME Delinquency (Yuri Fernandes, JPMorgan): CFO Gustavo Alejo noted pressure is concentrated in smaller enterprises rather than specific industries. Medium-sized enterprises and corporates are performing well .
On Branch Strategy (Thiago Batista, UBS): Leão explained the shift from traditional branches to two formats: modern "branch format stores" and experience-focused "cafés." Branch visits are down 70%, but physical presence remains relevant .
On AI Deployment (Mário Pierri, BofA): The bank is using AI for both efficiency (ombudsman, fraud) and growth (Pitch Maker for advisors). Gen AI is being integrated into risk and recovery models .
On M&A (Carlos Gomes, HSBC): Large M&A in Brazil is "unlikely" as the franchise is mature enough to achieve growth organically. Management applauded the group's U.S. acquisition but sees no need for similar moves in Brazil .
Risk Factors Flagged
- Macro Headwinds: Fifth consecutive year of high Selic rates pressures smaller enterprises
- SME Quality: Short-term delinquency pressure may continue into H1 2026
- Low-Income Segment: Still a profitability detractor requiring 2-3 more years of de-risking
- FGC Replenishment: Near-term expense impact expected from fund replenishment after Banco Master
- Market NII Volatility: Treasury results remain a headwind in the current rate environment
Forward Catalysts
- Technology Milestones: Core system migration to new platform expected by year-end 2026
- One App Expansion: New versions launching in 2026 with enhanced engagement features
- Private Payroll Scaling: Origination curve expected to steepen "throughout 2026"
- SME Coverage Expansion: Continued build-out of micro-regional coverage teams
Ask Fintool AI AgentThe Bottom Line
Santander Brasil delivered consistent profit growth in a challenging macro environment, maintaining its trajectory toward 20%+ ROE. The bank's disciplined approach to expense management (5% growth vs 17% revenue growth over 2 years) is creating operating leverage, while selective credit expansion in SME, high-income, and consumer finance segments is improving portfolio mix. Near-term headwinds from SME delinquency and low-income de-risking are acknowledged but actively managed. Management's confidence in reaching sustainable 20%+ ROE within the next few years appears credible given the demonstrated execution track record.
Full transcript available at Santander Brasil Q4 2025 Earnings Call