AGI NYSE: AGBK executives highlighted a “solid start to 2026” while detailing the company’s recovery from a temporary disruption in Brazil’s payroll credit ecosystem, customer growth, and profitability metrics during the first quarter earnings call.
Management cites customer growth and platform changes
Founder, Chairman and CEO Marciano Testa said the quarter showed progress against three operating principles: customer engagement and multi-product usage, platform enhancement, and an entrepreneurial culture focused on long-term returns.
Testa said total active clients grew more than 50% year-over-year to over 7 million. He also pointed to deeper product usage, stating that customers with a primary relationship “use on average more than six products,” rising to “above seven products among our most matured cohorts.”
Testa also described an organizational redesign intended to support scale. He said the company evolved into a “business units driven organization where each vertical owns the full customer journey,” alongside centralized risk management, data, and artificial intelligence across the platform. He characterized the shift as “a structural upgrade” aimed at improving decision-making speed, reducing cost to serve, and supporting efficient scaling.
Origination rebounds after payroll credit disruption
Testa said the company saw a recovery after a “temporary disruption in the payroll credit ecosystem,” adding that by March, credit origination had reached 106% of pre-suspension levels. He also said there was an inflection in the fee business in March following adjustments earlier in the year.
CFO Marcello Dubeux said the company ended the quarter with 7.1 million active customers, up 53% year-over-year and 5% quarter-over-quarter, defining active customers as those using at least one product at quarter end.
On the lending side, Dubeux reported total loan balances of BRL 35.5 billion, up 30% year-over-year. Secured loans represented 87% of the portfolio (BRL 30.7 billion) and unsecured loans represented 13% (BRL 4.8 billion).
- Private payroll credit: Dubeux said the portfolio reached BRL 1 billion after one year in market following its March 2025 launch, and that appetite remains strong after enhancements to the credit model.
- Public payroll credit: He said the portfolio was stable at BRL 0.3 billion.
- Unsecured lending: Dubeux said unsecured lending for primary relationship clients expanded 4.8% year-over-year to BRL 4.7 billion, though it was slightly down sequentially due to the earlier interruptions.
In response to a Goldman Sachs question on whether unsecured origination was picking up, Dubeux said production “normalized” in March, while noting the overall unsecured portfolio size remained 2% lower than the fourth quarter due to the short-duration nature of those loans and the disruptions during the period.
Market share gains and credit quality trends
Dubeux said the company’s INSS payroll credit market share in the quarter was 9%, up 210 basis points year-over-year, adding that the company maintained share despite recent regulatory volatility.
Credit quality improved modestly during the quarter. Dubeux reported non-performing loans (over 90 days) declined slightly to 3.6%, and said the company’s NPL level remained below the average for consumer credit in Brazil. The coverage ratio (provisions over NPLs over 90 days) was 165% at the end of March, which he described as a comfortable operating level.
During Q&A, the company addressed a large volume of write-offs highlighted by Itaú BBA analyst Pedro Leduc. Management attributed the change to a revised write-off timing policy, shifting from 360 days to 270 days, “in line with best market practices.” They said the write-off increase was “naturally offset by provision reversals because of the accounting,” and that cost of risk and NPLs stayed stable quarter-over-quarter. In response to a follow-up, management said the timing change applied to the total portfolio, not a specific product.
Revenue, margins, and efficiency
Dubeux reported total revenue of BRL 3.0 billion, up 24% year-over-year and 1% quarter-over-quarter. Net interest income rose 9% year-over-year and 4% quarter-over-quarter to BRL 1.3 billion.
He attributed a decline in net interest margin on a last-twelve-months basis primarily to asset mix, including a lower contribution from personal loans and a higher allocation to other interest-bearing assets with lower yields than loans. Dubeux said analyzed NIM was 12% and NIM after provisions was 7.3%, up 50 basis points quarter-over-quarter, which he said suggested a normalization path following the suspension impacts.
When asked about the NIM trajectory, Dubeux said the company was not providing guidance, and pointed to two factors: the path of Brazil’s Selic rate and the time needed for the unsecured portfolio to recover its contribution to revenues. An executive also noted that annualized NIM after provisions in the first quarter was higher than the fourth quarter, calling it a “sign that is stabilization in terms of margins,” while adding that the mix between loans and treasury within interest-bearing assets had been a headwind historically.
On expenses and efficiency, Dubeux said the operating efficiency ratio improved to 43.2% in the first quarter, down 250 basis points quarter-over-quarter excluding non-recurring events from the fourth quarter of 2025. Recurring net income was BRL 186.5 million, up 14.7% from the prior quarter after adjusting for non-recurring effects mainly related to legal outcomes from civil contingencies.
Regulatory developments: INSS discussion and Desenrola 2.0
Several analysts questioned the evolving regulatory backdrop for payroll lending and related products. Addressing talk of a potential TCU (Federal Court of Accounts) suspension involving INSS payroll loans, Testa said it was “not specific to Agi” and that the company did not have concern about the decision, describing it as part of ongoing dialogue among government and regulatory bodies.
Testa said the government had appealed and suggested maintaining payroll credit while keeping credit cards suspended for a period to review implementation. He said a “relevant portion” of issues raised had already been identified and were being addressed by INSS, Dataprev, and the financial system, adding: “For now, our operational remain fully operating as usual.” He also said any temporary suspension of the credit card would not materially affect origination and would be a small part of the portfolio.
On Desenrola 2.0, Testa said the federal government initiated a new phase aimed at reducing households’ debt service ratios, particularly for low-income segments. He said roughly 25% of the company’s unsecured portfolio was eligible for benefits under the program, which he estimated at about BRL 1.2 billion. Executives described measures to reduce the INSS income commitment from 45% to 40%, with an intended reduction of 2 percentage points per year down to 30%, as structurally positive over time, citing potential benefits to customer financial health and portfolio quality.
In other fee-related commentary, Citi analyst Gustavo Schroden asked about insurance brokerage revenue declines. Dubeux said March showed a “very steep recovery” after the company reshaped the user experience to ensure compliance with potential norms, which required taking the product “for a few days, weeks out of the market.” He said the company expected gradual recovery toward last year’s pace, adding that changes extending payroll credit duration from 96 to 108 months “might have an impact on the production of insurance as well.”
Executives repeatedly said they were not providing formal guidance for 2026 net interest income, loan, or net income growth.
On longer-term portfolio composition, Dubeux said secured lending would likely remain the dominant share and “probably slightly go a little bit up over time to reach up to 90%,” with unsecured potentially reaching 10% over time. He also reiterated a longer-term ambition to surpass a BRL 100 billion credit portfolio by the end of the decade.
About AGI NYSE: AGBK
Our mission is to revolutionize financial services for the largest and fastest growing segment of Brazil's population: individuals who have been underserved by incumbent banks and have not been effectively reached by digital-only banks. We seek to make credit and banking solutions more accessible and affordable for the Brazilian consumers who we believe need it the most, including social security beneficiaries and private and public sector workers. We have designed a unique value proposition for this population, who may be older, have a lower income, be less tech-savvy or have less access to education.
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