In This Article:
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Banco Santander (Brasil) SA (NYSE:BSBR) reported a record profit of 3.4 billion, a 19% increase from Q1 2024.
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The company achieved a strong CT1 capital ratio of 12.9%, reaching an all-time high.
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Net fee income grew close to double digits, supported by strong customer activity and high-value services.
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The bank's diversified earnings and improving profitability allow for a planned distribution of up to $10 billion to shareholders through share buybacks.
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Retail profit grew strongly year on year, driven by solid revenue and improved efficiency.
Negative Points
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Loan loss provisions increased by 7% year on year, with some deterioration in Brazil due to higher rates and inflation.
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The cost of risk in Brazil is currently at its worst, impacted by a challenging macro environment.
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Expenses grew 6%, showing a need for continued focus on cost management despite revenue growth.
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The depreciation of the Brazilian real and Mexican peso introduced some distortions in financial reporting.
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The company faces potential regulatory headwinds, with an estimated impact of 60 basis points for the year.
Q & A Highlights
Q: How should we think about net interest income (NII) going forward given changes in rate expectations across your core markets? Also, could you discuss any M&A and asset disposal opportunities? A: We have confidence in achieving our ROT target of 16.5% despite macro volatility. We reiterate our NII guidance, expecting it to be slightly up in constant euros and slightly down in current euros. Regarding asset disposals, we are in discussions for a potential sale of a 49% stake in Santander Polska, but there is no certainty of an agreement yet. (Hector Grisi, CEO)
Q: Could you give more color on group cost evolution throughout the year and the performance of DCB Europe? A: We aim to deliver lower costs in current euros for 2025 versus 2024, despite inflation and FX pressures. Retail and consumer costs are flat, with revenue growing by 2%. For DCB Europe, NII is on track to benefit from lower rates, and market share is growing. The impact from regulatory changes in Germany is a one-off. (Hector Grisi, CEO)
Q: Can you share the rationale for exiting Poland and how you intend to redeploy the proceeds? Also, what percentage of your digital transformation is complete? A: We are reviewing offers for our stake in Poland but cannot provide details yet. Regarding digital transformation, by the end of this year, 80% of our customer base will run on our new backend system, Gravity. We expect to see benefits from this transformation for years to come. (Hector Grisi, CEO and Jose Garcia Cantera, CFO)