BCO Estado do Rio Grande do Sul SA (BSP:BRSR3)

Q2 2026 Banco do Estado do Rio Grande do Sul SA Earnings Call (English, Portuguese) Transcript

Aug 13, 2026 / 05:30 PM GMT

Release Date Price: R$16.93 (-1.91%)

Transcript

Key Points

Positve

Net income grew 46% quarter-over-quarter in Q2 2026, with ROE improving to 11.4% from 7.9% in Q1.
Successfully resolved major labor disputes and signed agreements, reducing overtime costs and cleaning up the bank's labor liabilities for a more stable future.
Total funding grew over 12% in the past 12 months, reaching $116.8 billion, demonstrating strong client confidence and a solid funding base.
Strategic shift towards higher-spread corporate and rural loan portfolios is underway, with the corporate portfolio share increasing from 15% to 17%.
Maintained a strong coverage ratio of nearly 150% for problematic loans, providing a robust buffer against potential credit losses.
Implemented technology initiatives, including AI and robotization, aimed at increasing productivity and reducing costs over the next 12-18 months.

Negative

Net income for the first half of 2026 decreased by 11.7% year-over-year, primarily due to a weak Q1 performance.
Delinquency rates peaked due to the new Central Bank ordinance 4,966, leading to higher-than-expected write-offs and a cost of risk of 2.1% in Q1 2026.
Fee and service revenues are under pressure and growing below inflation due to intense competition from digital banks and market trends eliminating traditional fees.
The bank's Tier 1 capital ratio fell to 12.4% after a significant payment for the state payroll, a level below its historical average of around 14-15%.
The cost of funding has increased, with CDB costs rising to 88% of the CDI benchmark, squeezing the bank's net interest margin.
The bank revised its loan portfolio growth guidance downward from 3%-8% to 2%-7%, reflecting a more cautious outlook for the remainder of the year.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

BRSR6.SA - Banco do Estado do Rio Grande do Sul SA
Q2 2026 Banco do Estado do Rio Grande do Sul SA Earnings Call (English, Portuguese)
Aug 13, 2026 / 05:30PM GMT

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Presentation
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Unidentified_1 [1]
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Good afternoon ladies and gentlemen.

Welcome to the B conference to discuss the second quarter of the year 2026.

This video conference is being recorded and the replay can be accessed on our investor relations website a few hours after this event.

Furthermore, we have simultaneous translation into English for this broadcast.

If you wish, click at the bottom of your zoom screen. This event will be divided into three parts.

In the first part, our President, Mr. Lemos, will talk about some highlights and make comments. Then our CFO, Mr. Sagas, will discuss the highlights and figures for this quarter.

And finally, last

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