Investment banking revenue hits five-year low in Brazil

Total investment banking revenue reached $651 million in 2025, a 12% decline from the previous year and less than half the record $1.5 billion booked in 2021.

Dealogic’s data covers mergers and acquisitions, debt, equity, and syndicated loan activity. However, investment bankers caution that the consultancy—widely used in industry rankings—does not capture all transactions. Cross-border deal fees, for example, may be booked in bank subsidiaries outside Brazil.

M&A deals generated $248 million in revenue last year, while debt transactions accounted for $325 million. Equity deals brought in $71 million, and syndicated loans added $8 million.

2026 outlook

Looking ahead, bankers are more optimistic about 2026, helped by renewed foreign capital inflows. Business owners have shown more willingness to engage, and many companies are expected to raise capital for investment.

In contrast, 2025 was marked by more structured transactions, particularly in the equity space, as highly leveraged companies sought to rebalance their finances. These deals replaced more traditional follow-on offerings.

Examples include Cosan’s share offering and Azul’s debt-to-equity conversion. Equity revenue data also includes block trades, which reached record levels last year.

With the expected start of the rate-cutting cycle, sentiment has shifted. André Moor, head of investment banking at Bradesco BBI, described 2025 as a “lean” year for capital markets in Brazil, dominated by structured deals.

He expects a more active 2026, especially in the first quarter, with a rebound in equity offerings and even initial public offerings, which have been absent from the B3 exchange for four years.

“The mindset now is to take advantage of favorable stock market conditions and fuel up for the second half of the year,” he said.

Resilient bond market

Cristiano Guimarães, head of investment banking at Itaú BBA, said 2025 turned out better than expected, thanks to a still-strong fixed-income market following a record year in 2024. “Issuance levels in the local market remained quite high,” he said. For 2026, he believes that even with the volatility of an election year, lower interest rates will help stimulate markets.

“The positive angle is that the rate-cutting cycle will likely begin. By nature, that should foster overall market development, make investments easier, and restore some business confidence. That, of course, drives both debt and equity activity,” he said.

Even with improving conditions, election years typically bring volatility, which could prompt companies to rush deals into the first half of the year.

IPO pipeline

Among IPO-ready candidates are sanitation companies such as BRK and Aegea. Other deals are heading to the U.S., where PicPay has already completed its offering to strong demand in New York, a path that Agibank is also expected to follow.

Leonardo Cabral, head of investment banking at Santander Brasil, said 2026 has started on a more optimistic note, driven by the return of equity deals and the anticipation of lower interest rates.

“There’s strong demand for Brazilian assets from a range of geographies,” he said, noting that Santander will also benefit from fees booked in 2026 from deals closed at the end of 2025.

Anderson Brito, head of investment banking at UBS BB, noted that recent years were nowhere near the levels seen during the pandemic, when liquidity was abundant and rates were at rock bottom.

But in 2026, he sees improvements across all business lines and believes risk appetite will increase after the elections. “The election removes a major uncertainty and reopens the market,” he said.

Alessandro Farkuh, head of M&A at BTG Pactual, said Brazil benefited in the second half of 2025 from a reallocation of foreign capital. BTG is entering the new year with a “robust pipeline,” he said.

On the equity side, partner Fabio Nazari said companies are pursuing IPOs both domestically and abroad. “It’s all happening in the wake of rate cuts here and overseas,” he said. “The willingness to take on risk is much higher.”

At Bank of America, Bruno Saraiva, co-head of investment banking in Brazil, said the bank is taking a more constructive view, particularly on the outlook for equity offerings both in Brazil and the U.S., especially from technology companies.

His counterpart Hans Lin added that 2026 will be a shorter year in terms of deal activity because of the elections. As a result, equity placements are expected to continue primarily via block trades, which hit a record in 2025.