Brazil’s state-owned bank Caixa Econômica Federal reported signs of stabilization in its agricultural loan portfolio after the over-90-day default rate surged to 20.74% in the second quarter, up from 18.29% in the first quarter and 7.02% a year earlier.
Executives attributed the stabilization to a deceleration in the default curve, with the rate stabilizing around the 20% mark in June and July. Adriano Assis Matias, retail vice-president, noted that the trajectory had improved sequentially, though the portfolio remains under pressure compared with historical levels.
Caixa’s recurring net income rose 5.9% year-on-year in the second quarter, supported by an almost 12% expansion in its credit portfolio. Gross financial margin increased 16% in the first half to R$ 37.9 billion, with the bank guiding toward an annual expansion range of 11.5% to 15.5% for 2026, potentially exceeding the upper bound.
Return on equity fell to 9.16% in the second quarter, down 2.70 percentage points year-on-year and 0.15 points quarter-on-quarter, though executives expect the metric to return to double-digit territory by December. Marcos Brasiliano, vice-president of finance and controller, said the trend in financial margins is expected to persist.
The bank highlighted the role of the Novo Desenrola debt renegotiation program in managing individual credit compliance, while noting that the broader financial market faced challenging conditions during the quarter. Caixa’s president, Carlos Vieira, described the second quarter as "extremely challenging" for financial markets.
