Santander Brasil’s Credit Costs Reverse as Loan Growth Slows
Loan-loss allowances worsened 8.9% to R$25.88 billion in 2025 as household and corporate stress increased.
Santander Brasil’s credit costs reversed direction in 2025, with the allowance-for-loan-losses result worsening 8.9% to R$25.88 billion after improving 5.7% a year earlier. Higher household indebtedness, increased corporate judicial-reorganization filings and additional provisioning required by a new resolution contributed to the result.
Santander Brasil (BSBR), the Brazilian arm of Spain’s Banco Santander, also reported slower growth in its core spread business. Managerial gross financial margin increased 1.8%, down from 14.2% growth in 2024. Client net interest income rose 9.5%, while market net interest income was hurt by the bank’s negative sensitivity to rising interest rates.
On an IFRS basis, net interest income rose 1.7% to R$57.63 billion from R$56.68 billion, as growth in interest income was largely offset by higher interest expense.
The expanded loan portfolio reached R$708 billion at year-end, up 3.7%, compared with 6.2% growth to R$682.7 billion in 2024. Growth was concentrated in higher-return categories: credit cards increased 13.4%, consumer finance and small-business lending each rose 13.0%, and real-estate loans advanced 9.6%.
Fee momentum also moderated. Managerial commissions rose 3.5% to R$21.65 billion after increasing 13.3% in 2024, with cards and insurance providing the strongest gains at 12.0% and 8.7%, respectively.
Customer funding increased 3.9% to R$670 billion, led by growth in real-estate and agribusiness credit notes and in financial bills and other instruments. The share sourced from individuals reached 50% in December 2025, up from 43% two years earlier, a shift that reduced deposit costs.
Expense control partly offset the slower revenue growth and renewed credit pressure. General expenses increased 0.8% to R$26.04 billion, compared with 4.5% growth in 2024, due to technology use, streamlined processes and cost discipline. Even so, the credit assessment shifted from describing 2024 nonperforming-loan ratios as under control to reporting heightened pressure on nonperforming indicators throughout 2025.