Earnings Presentation February 4 th, 2026 4Q25 BRGAAP Disclaimer This presentation may contain certain forward-looking statements and information pertaining to Banco Santander (Brasil) S.A. ("Santander Brasil") and its subsidiaries, which reflect the current views and / or expectations of Santander Brasil and its management regarding its business performance and future events. Forward-looking statements include, without limitation, any statement that may predict, forecast, suggest or imply future results, p ...

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Core Insights - Investors interested in undervalued bank stocks may consider Banco Santander-Brazil (BSBR) and Erste Group Bank AG (EBKDY) as potential options [1] Valuation Metrics - BSBR has a forward P/E ratio of 7.59, while EBKDY has a forward P/E of 11.01 [5] - BSBR's PEG ratio is 0.67, indicating a more favorable valuation compared to EBKDY's PEG ratio of 0.83 [5] - BSBR's P/B ratio stands at 0.96, compared to EBKDY's P/B of 1.08, suggesting BSBR is more undervalued relative to its book value [6] Investment Outlook - Both BSBR and EBKDY currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - BSBR has a Value grade of B, while EBKDY has a Value grade of C, further supporting the notion that BSBR is the superior value option at this time [6]

Financial Performance - Net profit for Q3 2025 reached R$4.0 billion, representing a 9.6% increase quarter-over-quarter and a 9.4% increase year-over-year[14]. - Net profit for the quarter reached R$ 4.0 billion, reflecting a 9.4% increase year-over-year and a 9.6% increase quarter-over-quarter, with a ROAE of 17.5%[63]. - The company reported a managerial net profit of R$ 4,009 million in 3Q25, a 9.6% increase from the previous quarter and a 9.4% increase year-over-year[81]. - Total revenues grew by 1% year-over-year and quarter-over-quarter, driven by a 4.1% increase in fees, particularly from cards and insurance[64][65]. - Total revenue for the quarter was R$ 20,760 million, reflecting a 0.8% increase from the previous quarter and a 1.0% increase year-over-year[81]. Return on Equity and Efficiency - Return on equity (ROAE) improved to 17.5%, up 1.2 percentage points QoQ and 0.5 percentage points YoY[13]. - Expenses remained stable, decreasing by 0.5% year-over-year and increasing by 0.2% quarter-over-quarter, resulting in an efficiency ratio of 37.5%[69]. - The efficiency ratio stood at 37.5% in 3Q25, increasing 0.7 p.p. quarter-over-quarter and decreasing 1.4 p.p. year-over-year[125]. Loan Portfolio and Client Funding - Expanded loan portfolio totaled R$688.8 billion, reflecting a 2.0% increase QoQ and a 3.8% increase YoY[12]. - Client funding increased to R$659.5 billion, marking a 2.4% rise QoQ and a 2.8% rise YoY[13]. - The loan portfolio reached R$ 89,623 million, increasing by 4.0% quarter-over-quarter and 12.4% year-over-year, with growth concentrated in the loan portfolio[147]. - The expanded loan portfolio, including guarantees and private securities, reached R$ 688,801 million, increasing by 2.0% quarter-over-quarter and 3.8% year-over-year[134]. - The Individuals segment accounted for 47% of customer funding, stable QoQ and up 3 percentage points YoY[152]. Customer Base and Activity - The customer base expanded by 7% YoY, reaching a total of 72.8 million customers[16]. - The number of active customers increased to 33.7 million, a 4% rise YoY[18]. - The individual investor client base grew by 7% year-over-year, with the share of individuals in total funding increasing by 3 percentage points from 44% to 47%[43]. Fee Income and Revenue Sources - Fee income grew to R$5.5 billion, up 6.7% QoQ and 4.1% YoY, indicating diversified fee expansion[13]. - Fees totaled R$ 5,552 million in 3Q25, up 6.7% quarter-over-quarter, driven by higher revenues in cards, insurance, and capital markets[85]. - Card revenues increased by 5.7% quarter-over-quarter to R$ 1,568 million, with a 14.4% increase year-over-year attributed to higher credit-card turnover[87]. - Insurance commissions rose to R$ 1,148 million in 3Q25, an 11.8% increase from the previous quarter and an 8.5% increase year-over-year[91]. - Securities brokerage and placement fees amounted to R$ 426 million, up 20.5% quarter-over-quarter and 21.6% year-over-year due to increased capital market transactions[93]. Non-Performing Loans (NPL) and Risk Management - The NPL ratio (over 90 days) remained stable year-over-year, reflecting disciplined lending practices[34]. - The short-term NPL ratio improved by 0.2 percentage points quarter-over-quarter, while the over-90-day NPL ratio increased by 0.1 percentage points year-over-year[68]. - NPL formation totaled R$ 6,637 million in 3Q25, up 1.1% quarter-over-quarter and 12.5% year-over-year, with a ratio of NPL formation to the loan portfolio at 1.23%[107]. - Write-offs amounted to R$ 4,875 million in 3Q25, down 39.0% from the previous quarter and 13.5% year-over-year, resulting in a write-off ratio of 0.89%[110]. - The cost of risk was stable at 3.86% quarter-over-quarter, reflecting lower provision expenses and portfolio growth, but increased by 0.2 p.p. year-over-year[105]. Sustainable Business and Innovation - The company enabled R$ 36.5 billion in sustainable business, achieving a portfolio of R$ 44.9 billion, with a 43% market share in carbon credits[58]. - New product launches included Pix via credit card, enhancing customer payment flexibility and experience[10]. - The company participated in the Eco Invest II auction, aimed at attracting foreign investments for ecological transformation[59]. Capital and Financial Ratios - The BIS ratio improved to 15.2%, up 0.2 percentage points QoQ, primarily due to quarterly net profit contributing to a 1.9% increase in adjusted capital[153]. - CET1 ratio reached 11.7%, an increase of 0.2 percentage points in the quarter and 0.8 percentage points year-over-year, driven by quarterly profit growth[153]. - The bank's Tier II capital rose to R$ 17,396 million, reflecting a 4.1% increase QoQ and a 16.5% increase YoY[153]. - Shareholders' equity increased to R$ 94,171 million, up 1.9% quarter-over-quarter and 6.1% year-over-year[130].

Financial Data and Key Metrics Changes - The company reported a net profit of BRL 4 billion for the quarter, marking a nearly 10% increase quarter-on-quarter and year-on-year, with a profitability ratio of 17.5% [4][27] - Expenses grew by only 0.2% quarter-on-quarter and decreased by 0.5% year-on-year, indicating effective expense management [6][27] - The efficiency ratio increased slightly but remains at a better level, with a year-on-year improvement of 140 basis points [6][27] Business Line Data and Key Metrics Changes - Client net interest income (NII) increased by 2.7% quarter-on-quarter and 11.1% year-on-year, while market NII dropped due to market conditions [5][23] - Fees grew by 6.7% quarter-on-quarter, with strong diversification across different fee lines [5][25] - Consumer finance continues to grow at double digits annually, with a 43% year-on-year growth in fees, particularly in insurance [15][16] Market Data and Key Metrics Changes - The total customer base exceeded 73 million, reflecting a 7% year-on-year growth [8] - The company reported a significant increase in active customer engagement, with a record individual NPS of 61 points and a corporate NPS of 52 points [8] Company Strategy and Development Direction - The company aims to build a more diversified and resilient operation, focusing on customer-centricity and digital transformation [7][14] - The "One App" initiative is a key strategic focus, designed to enhance customer experience and streamline interactions [12][36] - The company is committed to disciplined capital management and credit portfolio diversification to achieve higher profitability [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate short-term volatilities and maintain sustainable profitability [28][30] - The macroeconomic environment remains challenging, with expectations of continued high interest rates impacting funding [52][78] - The company is focused on improving customer satisfaction and maintaining a disciplined approach to credit origination [30][50] Other Important Information - The company has implemented AI-driven initiatives to enhance customer interactions and improve operational efficiency [10][31] - There is a strong emphasis on hyper-personalization in customer service, with over half of digital interactions now being personalized [9][10] Q&A Session Summary Question: Expected effects of the One App implementation - Management believes the One App will significantly enhance customer experience and reduce costs through more digital interactions [34][35] Question: Cost of risk and credit quality - Management confirmed no changes in credit policies and emphasized a disciplined approach to managing the loan portfolio [41][42] Question: Risk appetite and portfolio growth expectations - Management indicated a focus on growing in high-profitability segments while maintaining a disciplined approach to credit risk [48][50] Question: Market NII sensitivity and future expectations - Management acknowledged the impact of fewer business days and high interest rates on market NII, with expectations for gradual improvement [81][85]

Financial Data and Key Metrics Changes - The company achieved a net profit of BRL 4 billion in the quarter, marking a nearly 10% increase quarter-on-quarter and year-on-year, with a profitability rate of 17.5% [4][27] - Expenses grew by only 0.2% quarter-on-quarter and decreased by 0.5% year-on-year, indicating effective expense management [6][27] - The efficiency ratio increased slightly but remains at a better level, with a year-on-year improvement of 140 basis points [6][27] Business Line Data and Key Metrics Changes - Net interest income (NII) dropped quarter-on-quarter, particularly in market NII, while client NII increased by 2.7% quarter-on-quarter and 11.1% year-on-year [5][23] - Fees grew by 6.7% quarter-on-quarter, with strong diversification among different fee line items [5][25] - Consumer finance continues to grow at double digits annually, attracting 1 million new clients and achieving a 43% year-on-year growth in fees [15][16] Market Data and Key Metrics Changes - The company reported a stable performance in the individual's mass income segment, with a focus on reducing exposure to higher risk profiles [22] - The corporate segment showed positive evolution, maintaining price discipline despite market challenges [22] Company Strategy and Development Direction - The company aims to build a more solid and resilient operation, focusing on diversification and predictability in its customer franchise [7][14] - The "One App" initiative is a key strategic focus, designed to enhance customer experience and streamline interactions [12][35] - The company is committed to a disciplined capital management approach, emphasizing value creation and modernization [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory towards sustainable profitability, despite macroeconomic challenges [28][30] - The focus remains on improving customer satisfaction and maintaining a disciplined approach to credit origination [30][52] Other Important Information - The company is leveraging AI to enhance customer interactions and improve operational efficiency [10][31] - The introduction of the "One App" is expected to significantly impact customer experience and operational costs [35] Q&A Session Summary Question: Expected effects of the One App implementation - Management believes the One App will primarily enhance customer experience and enable better cross-selling opportunities, while also contributing to cost reduction [34][35] Question: Changes in cost of risk and credit quality - Management confirmed no changes in policies or management regarding cost of risk, emphasizing a disciplined approach to loan origination and recovery [42][43] Question: Risk appetite and credit growth expectations - Management indicated a focus on growing in high-profitability sub-segments while maintaining a disciplined approach to credit risk [50][52] Question: Market NII performance and future expectations - Management acknowledged the impact of fewer business days and high interest rates on market NII, with expectations for improvement as the portfolio stabilizes [81][84]

Financial Data and Key Metrics Changes - The company reported a net profit of BRL 4 billion for Q3 2025, marking a nearly 10% increase quarter-on-quarter and year-on-year, with a return on equity (ROE) of 17.5% [4][26] - Net interest income (NII) decreased quarter-on-quarter, particularly in market NII, while client NII increased by 2.7% quarter-on-quarter and 11.1% year-on-year [5][21] - Expenses grew by only 0.2% quarter-on-quarter and decreased by 0.5% year-on-year, indicating effective expense management [6][26] - The efficiency ratio increased slightly but remained at a better level, with a year-on-year improvement of 140 basis points [6][26] Business Line Data and Key Metrics Changes - Consumer finance continues to grow at a double-digit rate annually, with a 43% year-on-year growth in fees, particularly in insurance [15][16] - The SME business has seen revenue growth and diversification, with a significant increase in the number of field experts [16] - The mass income segment has experienced a 14% increase in deposit volume, despite a 6% reduction in the loan book [18][20] Market Data and Key Metrics Changes - The company has a market share close to 30% in home equity, indicating strong performance in real estate credit [35] - The percentage of the portfolio in arrears from 15 to 90 days decreased to 3.9%, reflecting improved credit quality [25] Company Strategy and Development Direction - The company aims to build a more diversified and resilient operation, focusing on customer-centricity and digital transformation [6][14] - The "One App" initiative is a key strategic focus, designed to enhance customer experience and streamline interactions [32][34] - The company is committed to disciplined capital management and credit portfolio diversification to enhance profitability [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate short-term volatilities and maintain sustainable profitability [26][28] - The macroeconomic environment remains challenging, with expectations of continued high interest rates impacting funding [45][46] - The company is focused on maintaining a disciplined approach to credit origination and risk management [42][44] Other Important Information - The company has successfully integrated AI into its operations, enhancing customer interactions and internal processes [10][12] - The customer base has grown to over 73 million, with a 7% year-on-year increase [7] Q&A Session Summary Question: Expected effects of the One App implementation - Management believes the One App will significantly enhance customer experience and reduce costs through more digital interactions [30][32] Question: Impact of regulatory changes on funding - Management views regulatory changes positively, particularly in real estate credit, and expects to continue growing in this area [35] Question: Clarification on cost of risk and provisions - Management confirmed no changes in policy or management regarding cost of risk, emphasizing a focus on new loan originations and portfolio quality [37][38] Question: Future credit appetite and growth expectations - Management indicated a disciplined approach to credit growth, focusing on high profitability cohorts while managing risk [42][44] Question: Strategy for PIX in installments - Management is advocating for a seamless customer journey in PIX transactions and believes the regulatory framework should support this [46][52]

Financial Performance - Net profit reached R$4009 million, showing a 9.6% increase QoQ and 9.4% increase YoY[9, 46] - ROAE was 17.5%, up 1.2 percentage points QoQ and 0.5 percentage points YoY[9, 48] - Total revenues amounted to R$20760 million, a 0.8% increase QoQ and 1.0% increase YoY[46] - Fees expanded by 6.7% QoQ and 4.1% YoY, indicating diversification[9] Loan Portfolio and Funding - The loan portfolio expanded to R$688801 million, a 2.0% increase QoQ and 3.8% increase YoY[36] - Funding from clients reached R$659479 million, a 2.8% increase YoY[36] - Consumer Finance loan portfolio reached R$79 billion, with a 12.6% increase YoY[36] Customer Growth and Engagement - Total customers reached 72.8 million, a 7% increase YoY[10] - Active customers totaled 33.7 million, a 4% increase YoY[10] - Customers with primacy increased by 7% YoY[10] Digital Transformation and Efficiency - Consumer Finance fees growing 7% YoY[29] - General expenses decreased by 0.2% QoQ and 0.5% YoY[9, 46] - The company is focused on hyper-personalization and using AI to enhance customer journeys[55] Risk Management - Cost of risk was 3.86%, stable compared to 2Q25 but up 0.2 percentage points compared to 3Q24[46, 49]

Core Insights - The article emphasizes the importance of identifying undercovered stocks in Brazil and Latin America, suggesting that these often present the best investment opportunities [1]. Group 1: Company Insights - The analyst holds a long position in the shares of BSBR and ITUB, indicating a positive outlook on these companies [2]. - The analysis is based on personal opinions and does not reflect any business relationships with the mentioned companies [2]. Group 2: Industry Insights - The focus on Brazil and Latin America highlights the potential for growth in these emerging markets, which may be overlooked by mainstream investors [1].

Group 1 - Banco Santander Brasil SA ADR (NYSE:BSBR) is recognized as one of the best bank penny stocks to buy currently [1][4] - On September 3, 2025, Brazilian banks, including Banco Santander Brasil SA ADR, faced regulatory scrutiny due to inquiries from the U.S. Treasury Department [2][3] - The scrutiny was related to compliance measures under the Magnitsky Act following sanctions on a Brazilian judge, indicating a broader push from Washington for clarity on compliance expectations with foreign financial institutions [3] Group 2 - Banco Santander Brasil SA ADR provides a diverse range of banking products and services to individuals, SMEs, and corporate clients both in Brazil and globally [4]