Brazil’s leading banks significantly increased their provisions for credit losses in the first quarter of 2026, against a backdrop of high interest rates and rising default rates across the country. According to a survey released by the financial market, Banco do Brasil, Itaú Unibanco, Bradesco, and Santander recorded approximately R$44.8 billion in expenses related to covering potential loan defaults, representing a substantial increase compared with the same period of the previous year.
The move reflects the greater caution adopted by financial institutions in response to the growing risk of default by both households and businesses, particularly in credit operations that are more sensitive to the current economic environment. The maintenance of the Selic rate at elevated levels continues to put pressure on borrowing costs and reduce consumers’ ability to meet their financial obligations.
In addition to domestic factors, external developments have also contributed to heightened concerns within the financial market, including international economic fluctuations and slower-than-expected prospects for interest rate cuts by the Central Bank.
The increase in provisions demonstrates the strengthening of the protective strategies adopted by banks in the face of rising credit risk, with direct impacts on lending policies, debt renegotiation practices, and debt recovery efforts throughout the financial system.