Banrisul Q2 2026 profit rebounds but credit risks prompt guidance cut

Banco do Estado do Rio Grande do Sul S.A. (Banrisul) reported a rebound in second-quarter 2026 profit, reversing a first-quarter decline, but trimmed its full-year guidance citing elevated credit risks.

The state-owned bank’s slides, released ahead of its earnings presentation, showed net income rose 12% quarter-on-quarter to 1.4 billion reais ($260 million), recovering from a 1.1 billion reais loss in Q1 2026. Loan loss provisions increased 8% to 1.8 billion reais, reflecting growing concerns over asset quality amid Brazil’s economic slowdown.

Banrisul reduced its 2026 net income forecast by 15% to 4.2 billion reais, down from an earlier estimate of 4.9 billion reais. The bank cited higher-than-expected default rates in its retail and SME portfolios as key drivers behind the revision. Provisions for bad loans now account for 3.2% of total loans, up from 2.8% in Q1.

Credit risk management remains a priority, the bank stated, with a focus on tightening underwriting standards for unsecured personal loans. Banrisul also noted that its capital adequacy ratio remains well above regulatory minimums, providing a buffer against potential further deterioration in asset quality.

The guidance cut follows similar moves by peers in Brazil’s financial sector, where lenders are adjusting earnings outlooks amid rising unemployment and tighter monetary policy. Banrisul’s shares, listed on B3, were down 2.3% in pre-market trading following the announcement.

Analysts at XP Investimentos maintained a neutral rating on the stock, citing the bank’s strong regional franchise but warning that credit costs could pressure profitability in the second half of 2026.