Brazilian state-owned bank Caixa Econômica Federal has reported a second quarter recurring net profit of 3.9 billion reais, an increase of 5.9 percent from the same period in 2025.
Caixa, Brazil's largest entirely state-owned financial institution and the primary administrator of federal social programs, posted the results as executives noted a stabilization in defaults within its agricultural credit portfolio.
Caixa president Carlos Vieira described the second quarter as challenging, particularly for the financial market, during a presentation of the bank's balance sheet on Wednesday.
The bank's agricultural credit portfolio recorded a default rate for loans more than 90 days overdue of 20.74 percent in the second quarter. This figure represents an increase from 18.29 percent in the first quarter and a significant rise compared to 7.02 percent in the same period a year earlier.
Caixa vice president Marcos Brasiliano Rosa stated that the bank views this trajectory as a stabilization, characterized by a loss of speed in default growth.
Executives attributed the continued improvement partly to renegotiations facilitated by a rural sector debt restructuring program introduced by the Brazilian government last month.
Credit expansion and renegotiation
The bank's overall second quarter performance was supported by an expansion in its credit portfolio, which concluded the period at 1.45 trillion reais. This marks an 11.9 percent increase year on year, alongside growth in funding and service fee revenues.
The broader default rate across the bank stood at 3.64 percent for the second quarter. Executives indicated that this dynamic is unlikely to prompt a more restrictive approach to credit, as the overall figures remain under control.
Caixa retail vice president Adriano Assis Matias addressed the impact of the government's Novo Desenrola debt renegotiation program on commercial credit outcomes.
Novo Desenrola is a federal initiative designed to help borrowers clear defaulted debts and regain access to credit markets. Matias noted that Caixa's results would have been worse without the initiative, adding that the program has played a significant role in managing the portfolio's compliance.
Increased risk provisions
Despite the controlled overall default rates, Caixa increased its provisions for credit risk by nearly 98 percent. These provisions represent the funds the institution sets aside to cover expected losses from loans at risk of default.
The bank allocated 7 billion reais for credit risk provisions in the second quarter, bringing the total for the first half of the year to 13.5 billion reais.
