A market rollercoaster marked the year 2024. After two years of high taxes, a brief cycle of interest rate cuts gave rise to new increases in the second half of the year. Banks, however, have positively surprised observers. The revenues of the 90 institutions that joined this edition in the MELHORES E MAIORES (EXAME best and biggest companies) ranking jumped from 1,44 trillion Brazilian reais in 2023 to 1,65 trillion in 2024, an increase of almost 15%.

Banks, of course, earn more with high interest. But prolonged periods of very elevated interest rates usually lead to an increase in payment failures, which weighs on rentability. This was not what happened last year. The combined net profit of evaluated companies increased even more than revenue, rising to 21% and 196.75 billion reais.

“There was a fear over the worsening of payment failures in 2024 that did not come true. The economy reacted well, and this trend continues now in 2025”, affirms Pedro Gonzaga, head of analysis and partner of Mantaro Capital. Total assets reached 15,58 trillion reais and net patrimony reached 1,32 trillion.

Before the pandemic, some of the biggest banks in Brazil operated with closer rentabilities, but after the pandemic, the differences stood out. The increase of single-digit interest rates to higher levels and the withdrawal of economic stimuli affected primarily institutions exposed to the lower-income public.

In this environment, the standout was Itaú Unibanco once more. In addition to focusing more on higher-income individuals and participating less in small and medium-sized companies in their portfolio, the bank successfully led the digital transformation as a vanguard among neobanks, which have much lower service costs due to intensive technology usage, such as Inter and Nubank.

In 2024, Itaú had a 9% revenue increase, to 242,25 billion reais. With improvements in efficiency and rentability, net profits increased by 26%, reaching 42.12 billion reais. Returns over patrimony jumped to 22,2%, an increase of 1,2 percentage points in relation to the previous year. On this year’s ranking, followed Banco do Brasil, Bradesco, Caixa and Santander.

Elevated tax rates should continue to support these results: Selic taxes reached 15% in June 2025, the highest it's been in almost two decades. Indeed, in the first semester of this year, banks continued to show robust results. Itaú had its most considerable quarterly net profits in history, reaching 22,6 billion reais, an increase of 14,1% over the same period of the previous year. Smoothing its operations, Bradesco also showed an expressive recovery of its profitability after years suffering with losses in the PMEs portfolio.

But the fear of payment failures and sky-high interest rates already causes institutions to slow down on loans, focusing on maintaining their portfolio quality. In Itaú, the credit portfolio has grown 7,5% in the first semester in comparison to the same period in 2024 – a lower rate than last year’s increase of 13%. Bradesco saw an 11.7% expansion in the portfolio, but the projection of 4% to 8% for this year indicates a slowdown in the second semester. Santander was the most cautious, with an expansion of only 1,5% in their portfolio in the first half of the year.

One of this year’s primary concerns has been rural credit, with an expressive increase in late loans and judicial recoveries for rural companies. Banco do Brasil, owner of the biggest agribusiness portfolio in Brazil, was the most affected, with a 44,7% setback in the first semester, to 9,8 billion reais.

To Samuel Barros, head of Ibmec in Rio de Janeiro, the consolidated performance of the sector – whether with higher or lower interest rates, or by adjusting concession speed and volume – is a display of its solidity. “It is an extremely resilient segment, even before market oscillations.”

This resilience explains why the sector is still among the favorites of institutional investors. Classified as defensive, it tends to benefit in any scenario. “Banks win with high interest rates, because they maximize returns, and also at low rates, by expanding operations. In a country that hops from crisis to crisis, it is a sector that protects portfolios”, notes Barros.