Itaú Unibanco, Bradesco, Santander, and state-controlled Banco do Brasil (BB) ended last year with a combined profit of R$107.8 billion, down 4.4% from 2024. However, the consolidated figure masks stark differences.

BB was the main drag on performance, with its profit plummeting 45.5% due to losses in agribusiness. If only private-sector banks are considered, the combined profit would have grown 16.4%.

Gross financial margin for the four institutions rose 6.4% to R$362.6 billion. But provisions for bad loans surged 22.7% to R$170.2 billion, driven by two main factors. There was a deterioration in asset quality, requiring banks to beef up their loss reserves.

In addition, a regulatory change played a role. Under Resolution 4,966, the Central Bank mandated a new accounting model based on expected credit losses, forcing banks to increase their cushions as they anticipate credit deterioration.

BB’s defaults

Last year, delinquency rates among the country’s largest banks remained mostly stable, except at BB. While the market average rose from 3% at the end of 2024 to 4.1% in late 2025, the large banks saw little change.

Itaú’s rate fell 0.1 percentage point, Bradesco’s rose 0.1 point, and Santander’s increased 0.5 point. BB stood out, with its delinquency rate jumping 2 points to 5.17%. The bank posted deterioration across all segments, but was hit especially hard by agribusiness losses and a specific corporate case.

The four publicly listed banks also slowed credit growth. Their combined loan portfolio reached R$4.58 trillion in 2025, a 5.8% increase, well below the national financial system’s average growth of 10.2%.

For 2026, a similar scenario is expected, with major banks maintaining a more conservative approach than the broader market. This trend is reflected both in their forecasts and in statements from executives.

Election-year caution

The Central Bank projects 8.6% credit growth in 2026. Itaú’s guidance ranges from 5.5% to 9.5% (7.5% at the midpoint); Bradesco expects between 8.5% and 10.5% (9.5% midpoint); BB forecasts just 0.5% to 4.5% (2.5% midpoint). Santander does not provide public guidance but has adopted a more cautious tone than its peers.

Itaú expects higher profit and sustained strong return on equity in 2026. Asked whether the bank’s guidance was too conservative, CEO Milton Maluhy Filho said it was not defensive, but rather “realistic,” especially in an election year, which tends to bring heightened uncertainty. “It wouldn’t make sense to aggressively expand credit and later have to pull back. But if we see opportunities and can deliver more, we will,” he said.

Santander CEO Mario Leão said the key is to grow in the segments the bank has prioritized, even if it means losing share in others. “I chose to grow in high-income clients and small and midsize companies. In those two segments, I need to grow disproportionately,” he noted.

Santander’s CFO, Gustavo Alejo, said the bank expects more pressure on provisions in portfolios like agribusiness and small businesses. These sectors are more sensitive to the base interest rate, which is expected to remain high even as the rate-cutting cycle begins.

“Given that we’re still in a high-Selic [base rate] environment, it’s only natural to see pressure,” Alejo said. “Obviously we’re working to reduce that pressure, and we’re preparing for it.”

Bradesco sees traction; BB to focus on retail

Recovering and executing its strategic plan, Bradesco appears more “geared up,” as CEO Marcelo Noronha put it. “We’re seeing commercial traction, important credit growth, and potential for market share gains in specific segments.”

MNoronha is optimistic about the macroeconomic outlook. With inflation under control, he said, the Selic rate could fall to 12% by year-end. “That’s our horizon. I see Brazil moving forward, unemployment is under control, and we’re still optimistic, not pessimistic.”

At Banco do Brasil, the plan is to expand its retail portfolio, which has better risk-adjusted returns, while corporate and agribusiness lending is expected to remain flat. Overall credit growth at BB will be less than a third of the market average.

BB CEO Tarciana Medeiros said Thursday (12) that 2025 was the most challenging year in her 26-year career at the bank, largely due to agribusiness losses stemming from Resolution 4,966 and a wave of bankruptcy filings.

Still, she noted that even with nearly R$80 billion in provisions, BB posted a profit of R$20.7 billion and delivered on its guidance, which was revised twice during the year.