Published Wednesday, 28 October, 7:15 a.m. ET · Source: Santander Brasil third-quarter results
Key Facts
- The number. Santander Brasil earned R$2.885 billion (about US$539 million) in the third quarter, down 28% in a year.
- The cause. Money set aside for unpaid loans rose 14.4% to R$7.46 billion (about US$1.39 billion).
- The return. Return on equity, a measure of profit per dollar invested, fell to 11.9% from 17.5% a year ago.
- Still unknown. Whether defaults have peaked; they stood at 3.4% of loans, against 2.8% a year earlier.
One of Brazil’s largest banks just reported a sharp drop in profit, and the reason is simple: more of its customers are not paying back their loans. Santander Brasil, the local arm of Spain’s Banco Santander, said on Wednesday, 28 October, that third-quarter profit fell to R$2.885 billion (about US$539 million at R$5.35 to the dollar).
That is 28% below the same quarter of 2025 and 4.3% below the second quarter of 2026. The result also came in under the average forecast of analysts.
For anyone who owns Brazilian bank shares, the quarter is a reminder that Brazil’s economy is not just about growth figures. It is also about whether families and farmers can carry their debt.
Why the Profit Fell
A bank earns money on the gap between what it charges borrowers and what it pays savers. It also has to set money aside in advance for loans that may never be repaid, and that bill grew.
Santander Brasil put aside R$7.46 billion (about US$1.39 billion) for expected bad loans, up from R$6.52 billion (about US$1.22 billion) a year earlier. That is an increase of 14.4%, and it ate directly into earnings.
The share of loans more than 90 days overdue reached 3.4%, up from 2.8% a year ago. The bank called the credit environment still challenging and said it is managing risk with prudence.
How Much Less the Bank Earns on Its Money
Return on average equity, or ROAE, tells shareholders how much profit the bank makes on the money they have invested. It was 11.9% in the third quarter, against 12.5% in the second quarter and 17.5% a year ago.
A fall of 5.6 percentage points in one year is large for a bank of this size. It means the same shareholder money now produces about a third less profit.
The loan book reached R$721.26 billion (about US$135 billion), up 4.7% in a year. So the bank is still lending, but it is earning less on each real it lends.
A New Chief Faces an Early Test
Gilson Finkelsztain took over as chief executive on 1 July 2026, replacing Mario Leão. He previously ran B3, Brazil’s stock exchange in São Paulo.
This is the first full quarter under his leadership. Investors will now look for signs that the bank can restore its profit without lending to riskier borrowers.
What It Means for US Readers
Santander Brasil’s shares trade in São Paulo under the code SANB11. Rising defaults at one of the country’s largest banks are a signal for the whole sector, including the rival lenders covered in our report on Bradesco’s quarter.
High borrowing costs also shape the exchange rate and the Brazilian government’s own debt bill; our guide to the Selic rate, Brazil’s benchmark interest rate, explains how the central bank sets them. Travellers and expats are less directly affected, though tighter credit can slow spending in shops and restaurants.
What Is Not Known
It is not yet clear whether defaults have peaked. Nor is it clear whether other lenders will report the same pressure in the weeks ahead.
The next clues will come from the remaining third-quarter reports of Brazilian banks. Each will show whether the squeeze is specific to Santander Brasil or common across the sector.
Sources
Santander Brasil, third-quarter 2026 earnings statement (28 October 2026) · RT, USD/BRL spot rate on 28 October 2026 (R$5.35) · The Rio Times, Brazil economy guide
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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Frequently Asked Questions
How much profit did Santander Brasil make?
Santander Brasil earned R$2.885 billion (about US$539 million) in the third quarter of 2026. That is 28% less than a year earlier and 4.3% less than in the second quarter.
Why did Santander Brasil’s profit fall?
The bank set aside 14.4% more money for loans that may not be repaid, R$7.46 billion (about US$1.39 billion). Loans more than 90 days overdue rose to 3.4% of its book from 2.8%.