Brazil’s four largest listed lenders used the latest earnings season to signal a common shift: growth will lean more heavily on secured products and borrowers with stronger incomes. Banco do Brasil, Itaú Unibanco, Bradesco and Santander Brasil are reducing appetite for riskier unsecured consumer lending.
The caution contrasts with a labor market that remains strong and an economy that has performed better than expected. Household leverage is the constraint: debt sits near a record and equals roughly 50% of disposable income, leaving many borrowers with less capacity to absorb another credit cycle.
Credit access broadened through regulation, fintech expansion and digital payments. Government measures that supported consumption and lending also added cyclical leverage through credit cards and personal loans, so current portfolio stress reflects both structural financial inclusion and recent borrowing intensity.
The macroeconomic runway is narrowing. The median estimate in a central-bank survey of more than 100 economists points to about 1.5% GDP growth next year after roughly 2% this year, while Banco do Brasil expects expansion closer to 1% in 2027. These are forecasts, not realized outcomes.
Itaú chief executive Milton Maluhy Filho said market credit volume had risen beyond consumers’ capacity to absorb it, supporting a tilt toward collateral and away from unsecured exposure. Bradesco chief executive Marcelo Noronha likewise described much lower appetite for lower-income borrowers and a preference for secured structures.
Santander Brasil is cutting exposure to people earning less than 4,000 reais a month, about $771 at the cited exchange rate and roughly two and a half minimum wages. Chief financial officer Carlos Muniz said the bank cannot compete sustainably below that threshold and seeks collateral above it; about 70% of employed Brazilians earn no more than twice the minimum wage.
Banco do Brasil plans to expand through public- and private-sector payroll loans, which deduct payments from salaries and can lower default risk. Chief executive Tarciana Medeiros has also made a 25% increase in high-value clients by 2030 a strategic priority; the target is an internal ambition, not an achieved result.
The shift creates room for digital lenders but also tests their underwriting. Nubank’s loans more than 90 days overdue rose to 6.9% in the second quarter from 6.5% both a quarter and a year earlier, even as profit growth beat expectations and management rejected a broad deterioration narrative. Selectivity, rather than a complete credit freeze, is becoming the industry’s defining response.
