Banco do Estado do Rio Grande do Sul (BRSR6) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was BRL 221.6 million, down 8.2% year-over-year, with ROAE at 7.9%, mainly due to higher credit risk losses and moderate administrative expense growth, despite a stronger financial margin and lower provisions.

• Loan portfolio grew 1.3% year-over-year to BRL 64.3 billion, with commercial loans comprising 60.9% of the total.

• Funding totaled BRL 111.3 billion, a 13.0% increase year-over-year, and total assets reached BRL 163.5 billion, up 8.1%.

• Management resolved major funding mismatches, reduced labor lawsuit risks, and focused on operational efficiency and risk mitigation.

• The bank expanded its corporate segment, launched new digital solutions, and invested in IT to enhance productivity.

Financial highlights

• Net interest income rose 12.5% year-over-year to BRL 1.7 billion, driven by higher interest income and Selic rates.

• Administrative expenses increased 6.4% year-over-year, mainly due to higher personnel costs, totaling BRL 1.2 billion.

• Service fee income was BRL 525.2 million, up 0.7% year-over-year and stable.

• Efficiency ratio improved to 57.1% from 64.8% a year earlier.

• Cost of risk rose to 1.9%, up 0.4 percentage points year-over-year, with expected net losses related to credit risk up 62.1% to BRL 542.5 million.

Outlook and guidance

• Management expects asset quality indicators to stabilize, with delinquency rates likely peaking and a slight reduction anticipated in coming quarters.

• 2026 guidance maintained: loan portfolio growth of 3–8%, financial margin up 8–13%, credit cost at 1.2–2.2%, and administrative expenses up 5–9%.

• Guidance may be revised in the second half of the year, but capital ratios and payout policies are expected to remain stable.

• Growth is expected in small and medium business lending, non-payroll loans, and credit cards, with cautious expansion in payroll-deductible loans.