Brazil Insurer’s Profit Falls 14% in Third Quarter

BRAZIL MARKETS · INSURANCE

Porto, a Brazilian insurer that also lends money, says its core profit fell 14% in the third quarter as more customers fell behind on card payments.

Porto sells car insurance to Brazilians and credit cards to the same customers, and in the third quarter lending dragged down the whole group. The São Paulo group, one of Brazil’s main insurers, reported recurring net profit of R$713 million (about US$131 million) on Thursday 5 November, 14% below a year earlier.

Revenue still grew about 10% to roughly R$11.4 billion (US$2.08 billion), so the core business kept growing. The squeeze came from the lending arm and from investments, a pattern that matters for anyone tracking Brazil’s economy.

All dollar figures use the 5 November rate of R$5.46 per US dollar.

Why Profit Fell While Reported Profit Rose

Porto reports two profit numbers, and they point in opposite directions. Reported net profit rose 0.9% to R$839 million (US$154 million), while “recurring” profit, which strips out one-off items, fell 14%.

Analysts had expected about R$798 million (US$146 million) in profit. Reported profit ran about R$126 million (US$23 million) above the recurring figure, and we could not confirm which one-off items explain the gap.

The Bank Arm Is Where It Hurts

Porto Bank booked R$843 million (US$154 million) in credit losses, up 48% from a year earlier. Chief executive Paulo Kakinoff said the credit environment had turned tougher and that Porto had become more cautious, setting aside more cash.

The sore spot is the credit card. Card balances overdue by more than 90 days reached 10.2% of the portfolio, against 7.2% a year ago.

Investments added to the drag. Porto’s financial result fell 19% to R$309 million (US$57 million), because low-inflation bonds paid less and its stock holdings trailed Brazil’s main share index.

Health Insurance Adds Pressure

Porto Saúde, the health insurer, paid out 82% of premiums as claims, 4.7 percentage points more than a year ago. Porto attributes about two-thirds of the rise to disruptions in cancer care and an unusual pattern of surgeries in July.

Its net profit fell 34% to R$84 million (US$15 million). Porto’s core insurance arm, Porto Seguro, still grew revenue 9% to R$6.2 billion (US$1.14 billion).

What Porto Now Expects for 2026

Porto lifted its 2026 forecast for Porto Bank credit losses to R$3.4 billion–R$3.8 billion (US$623 million–US$696 million), from R$3.1 billion–R$3.5 billion (US$568 million–US$641 million). It trimmed bank revenue guidance to R$7.5 billion–R$7.9 billion (US$1.37 billion–US$1.45 billion), from R$7.7 billion–R$8.1 billion (US$1.41 billion–US$1.48 billion).

The expected financial result, mostly investment income, also fell, to R$1.1 billion–R$1.5 billion (US$201 million–US$275 million) from R$1.4 billion–R$1.8 billion (US$256 million–US$330 million). Porto also plans its 2027 budget around zero growth for Brazil’s economy, as a defensive scenario.

For comparison, the company’s second-quarter results showed recurring profit of R$889 million (US$163 million), so the drop since then is steep. Shares in Porto (ticker PSSA3) closed Wednesday at R$44.89 (US$8.22), 6.8% below their 26 October level of R$48.18, before the results.

What It Means for US Readers

The pressure falls on lenders with large credit-card books. Porto’s trouble shows how stretched some Brazilian card borrowers are, which also matters for Brazil’s stock market, where banks and insurers carry heavy weight.

Travellers and expats are not directly affected. Watch the minutes of the central bank’s rate-setting committee on Tuesday 10 November (6:00 a.m. ET) and October inflation on Thursday 12 November (7:00 a.m. ET) for signs on Brazil’s interest rates.

What Is Not Known

Porto has not said what drove the gap between reported and recurring profit. It also has not said whether the extra credit-loss provisions mark the peak.

Frequently Asked Questions

Why did Porto’s profit fall in the third quarter?

Recurring profit fell 14% to R$713 million (US$131 million) because of higher credit-card losses at Porto Bank, weaker investment income and higher health claims.

Did Porto lower its 2026 outlook?

Yes. It raised its expected Porto Bank credit losses to R$3.4 billion–R$3.8 billion (US$623 million–US$696 million) and cut bank revenue and investment-income guidance.

Sources: Porto, third-quarter 2026 results release and filing with the CVM (Brazil’s securities regulator), 5 November 2026; RT, a market-data provider (PSSA3 and USD/BRL, 4–5 November 2026, and its Brazil economic calendar).