Banco Santander Brasil (NYSE:BSBR) Posts Earnings Results, Misses Estimates By $0.12 EPS

Key Points

• Banco Santander Brasil missed quarterly expectations: EPS was $0.08 versus the $0.20 consensus, while revenue of $3.59 billion fell short of the $4.17 billion estimate.
• Profitability faced pressure from weaker revenue growth, higher credit costs and approximately BRL 700 million in wholesale provisions and methodology-related write-offs. The bank is de-risking its loan portfolio, shifting toward secured and higher-quality borrowers.
• Shares fell 7.2% to $5.08, although the bank declared a quarterly dividend of $0.1045, implying an annualized yield of about 8.2%. Analysts have an average “Reduce” rating and a $6.50 consensus price target.

Banco Santander Brasil (NYSE:BSBR - Get Free Report) released its earnings results on Wednesday. The bank reported $0.08 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.20 by ($0.12), FiscalAI reports. The business had revenue of $3.59 billion for the quarter, compared to analysts' expectations of $4.17 billion. Banco Santander Brasil had a return on equity of 10.49% and a net margin of 7.06%.

Here are the key takeaways from Banco Santander Brasil's conference call:

• Recurring net income was BRL 3 billion and ROAE was 12.5%, with profitability pressured by weaker revenue growth and a higher cost of risk in a challenging macroeconomic environment.
• Santander is accelerating its portfolio de-risking, reducing exposure to lower-income individual customers while prioritizing secured lending, higher-quality vehicles, mortgages, government-backed loans, and larger corporate customers. This is weighing on near-term spreads and fees but is intended to improve long-term risk-adjusted returns.
• Loan-loss provisions were affected by approximately BRL 700 million in wholesale cases and a new write-off methodology, while pressure continues in low-income individuals, smaller companies, and agribusiness. Management also expects a potentially more adverse macroeconomic scenario to affect provisions in coming quarters.
• Customer engagement and funding trends remained strong, with the customer base up 6% year over year to 76.2 million, transactional deposits up 18%, and early Santander Rewards cohorts showing higher engagement and card spending.
• Expenses remained under control, growing below inflation, while AI adoption and broader global platforms are expected to improve operating leverage. Management reaffirmed its 50% payout policy and expects ROE to return to more reasonable levels by 2027, supported by lower provisions, non-credit revenue growth, and efficiency gains.

Banco Santander Brasil Trading Down 7.2%

Shares of NYSE BSBR traded down $0.40 during trading hours on Wednesday, hitting $5.08. 1,763,146 shares of the company traded hands, compared to its average volume of 1,199,721. The company's 50 day moving average price is $5.33 and its 200 day moving average price is $5.91. Banco Santander Brasil has a 12 month low of $4.62 and a 12 month high of $7.32. The company has a debt-to-equity ratio of 3.25, a quick ratio of 1.29 and a current ratio of 1.29.

Banco Santander Brasil Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Monday, August 17th. Stockholders of record on Thursday, July 30th will be issued a $0.1045 dividend. The ex-dividend date is Thursday, July 30th. This represents a $0.42 dividend on an annualized basis and a dividend yield of 8.2%.

Insiders Place Their Bets

In other Banco Santander Brasil news, CEO Mario Roberto Opice Leao bought 276,851 shares of the company's stock in a transaction on Tuesday, June 16th. The stock was acquired at an average price of $5.38 per share, for a total transaction of $1,489,458.38. Following the completion of the transaction, the chief executive officer directly owned 536,751 shares of the company's stock, valued at approximately $2,887,720.38. This represents a 106.52% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Eduardo Alvarez Garrido sold 7,500 shares of the stock in a transaction that occurred on Wednesday, May 20th. The stock was sold at an average price of $5.43, for a total value of $40,725.00. Following the completion of the sale, the insider owned 24,701 shares in the company, valued at approximately $134,126.43. The trade was a 23.29% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have acquired 500,251 shares of company stock worth $2,651,888 in the last quarter. Company insiders own 0.06% of the company's stock.

Institutional Trading of Banco Santander Brasil

A number of large investors have recently made changes to their positions in the stock. Royal Bank of Canada increased its stake in Banco Santander Brasil by 288.1% in the 4th quarter. Royal Bank of Canada now owns 5,038 shares of the bank's stock worth $31,000 after buying an additional 3,740 shares during the period. Cubist Systematic Strategies LLC bought a new position in Banco Santander Brasil in the first quarter worth approximately $46,000. Squarepoint Ops LLC purchased a new position in Banco Santander Brasil during the 3rd quarter worth $78,000. Vise Technologies Inc. purchased a new stake in shares of Banco Santander Brasil in the 4th quarter worth $93,000. Finally, Engineers Gate Manager LP grew its position in shares of Banco Santander Brasil by 40.9% during the 2nd quarter. Engineers Gate Manager LP now owns 18,910 shares of the bank's stock worth $103,000 after buying an additional 5,490 shares in the last quarter. 14.53% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on BSBR shares. Weiss Ratings lowered shares of Banco Santander Brasil from a "hold (c+)" rating to a "hold (c)" rating in a report on Monday, June 29th. Zacks Research cut shares of Banco Santander Brasil from a "hold" rating to a "strong sell" rating in a research note on Friday, July 3rd. JPMorgan Chase & Co. cut their price objective on Banco Santander Brasil from $7.00 to $6.50 and set an "overweight" rating for the company in a research report on Tuesday, July 7th. Finally, Wall Street Zen lowered Banco Santander Brasil from a "buy" rating to a "hold" rating in a research note on Sunday, July 12th. One equities research analyst has rated the stock with a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has an average rating of "Reduce" and a consensus price target of $6.50.

About Banco Santander Brasil

Banco Santander Brasil SA is the Brazilian unit of Spain-based Grupo Santander and one of the country's major commercial banks. Headquartered in São Paulo, the bank serves a broad client base across Brazil through an integrated network of branches, ATMs and digital channels. Its shares are represented abroad via American Depositary Shares listed on the New York Stock Exchange under the ticker BSBR.

The bank offers a full range of financial products and services for retail, small and medium-sized enterprises, and corporate clients.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.