This article first appeared on GuruFocus.
Total Revenue: BRL3.2 billion in Q2 2026, up 26% year-over-year and 6% quarter-over-quarter.
Net Interest Income: BRL1.3 billion, up 11% year-over-year and 3% quarter-over-quarter.
Recurring Net Income: BRL200 million, up 7% quarter-over-quarter.
Credit Portfolio: Total loan balances grew 21% year-over-year to BRL37.1 billion, with secured loans at BRL32.6 billion (88% of total) and unsecured loans at BRL4.4 billion (12%).
Private Payroll Portfolio: Grew to BRL1.4 billion, up 48% sequentially and 184% year-over-year.
NPL (90+ days): Declined to 3.3% in Q2, with a coverage ratio of 182%.
Active Customers: Reached 7.6 million, up 36% year-over-year and 7% quarter-over-quarter.
INSS Market Share: 9.6%, up 60 bps quarter-over-quarter and 160 bps year-over-year.
Fee Revenue: Exceeded BRL135 million, up more than 35% quarter-over-quarter.
Gross Credit Origination: Over BRL7 billion in Q2, with 600,000 new customers added.
Agi+ Subscriptions: Over 250,000 active subscriptions in 45 days, with an estimated annual ARPAC of BRL600 and contribution margin of approximately 80%.
Total Deposits: BRL39.9 billion, up 18% year-over-year.
Return on Equity (LTM): Stable at 21.6%.
Capital Adequacy Ratio: 18.7% at the holding level, with Tier 1 capital ratio of 17.6%.
Release Date: August 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
AGI Inc (NYSE:AGBK) achieved record growth in Q2 2026, with over 600,000 new customers and 7.6 million active clients, demonstrating strong operational recovery.
The company’s INSS payroll market share increased to 9.6%, up 60 basis points quarter-over-quarter, reflecting competitive strength despite regulatory disruptions.
AGI Inc (NYSE:AGBK) launched Agi+, a subscription platform, which gained over 250,000 subscribers in 45 days, with an estimated 80% contribution margin and potential to reach 1 million subscribers by year-end.
Fee revenues grew over 35% quarter-over-quarter to BRL135 million, with brokerage fees up nearly 80%, indicating robust business activity and diversification.
Credit quality improved, with NPLs over 90 days declining to 3.3% and coverage ratio at 182%, while the company received credit rating upgrades from Moody’s and Fitch to AA.
Private payroll loan portfolio grew 48% sequentially and 184% year-over-year, with origination doubling, supported by enhanced credit models and strong cohort performance.
Negative Points
Pretax profit declined 47% quarter-over-quarter to BRL115 million, missing consensus, due to upfront costs from rapid growth and higher provisions.
Net interest margin (NIM) compressed to 11.9% annualized, with NIM after provisions down 50 basis points, pressured by high interest rates and asset mix shifts.
The company faces a negative effective tax rate, which may normalize upward, potentially impacting future profitability.
Cost of risk remains elevated at 5.9%, reflecting higher provisions from the growth in private payroll and unsecured lending, which could pressure margins.
The unsecured loan portfolio remained flat year-over-year, with a slight sequential decline, due to short-term duration and the 13th salary amortization, delaying NIM recovery.
Operating efficiency ratio increased to 48.9%, up 570 basis points quarter-over-quarter, due to higher expenses tied to customer acquisition and technology investments, which may not immediately translate to revenue.
Q & A Highlights
Q: What gives you comfort that the 48% quarter-over-quarter growth in private payroll loans is the right level without risking higher NPLs, especially given peers have seen delinquency above expectations? Also, what caused the 47% quarter-over-quarter decline in pretax profit, and is it transitory? A: CFO Marcello Dubeux explained that the growth is based on improved credit models, allowing for a comfortable pace of BRL200 million to BRL250 million in net originations per month. He noted that first payment defaults are below teens, and the bank uses a loss absorption concept (NII divided by expected cost of credit) of 1.4x-1.5x to guide appetite. Regarding pretax profit, he characterized the decline as transitory, driven by upfront costs from accelerated growth in clients and originations, including expected losses, cost to serve, and transactional costs. He emphasized that revenues will compound over time, and the bank is confident in a stronger second half.
Q: How should we think about profitability going forward given the need to book additional provisions for private payroll growth and the negative tax rate? Also, can you provide color on Agi+ adoption by tier and how quickly it can penetrate the client base? A: CFO Marcello Dubeux stated that the cost of risk should remain around 5.9%-6%, with NPLs at 3.3% and coverage at 180%, providing a comfortable cushion. He noted the negative tax rate is due to a lower pretax base, IPO proceeds in offshore instruments, and deferred tax assets, but expects it to normalize upward as pretax earnings recover. For Agi+, he highlighted that the entry-level tier is the strongest seller, with an average ARPAC of BRL600 and an 80% contribution margin. The company targets reaching 1 million subscribers by year-end, with 250,000 already added in 45 days.
Q: Can you explain the NIM compression and the flat unsecured loan mix, and whether the increase in interest expenses is due to funding costs? A: CFO Marcello Dubeux clarified that the NIM compression is due to the asset mix, with a lower contribution from unsecured personal loans, and the high SELIC rate. He noted that funding costs are actually improving, with recent credit rating upgrades from Moody’s and Fitch to AA. The increase in interest expenses is partly due to issuing a large BRL2.5 billion FIDC ahead of deployment, which temporarily weighs on margins. He expects NIM to recover as unsecured origination (up 80% in the quarter) seasons and the mix normalizes.
Q: Are the current G&A expense levels sufficient to sustain growth, and can you provide a breakdown of what drove the increase this quarter? A: CFO Marcello Dubeux stated that the expense level is well-aligned with the size of the client base and does not expect significant movements going forward. The increase is driven by variable costs tied to the growth in principality clients, cost to serve per client, and investments in technology and AI usage. He emphasized that these are relatively smaller variable components of total expenses.
Q: How is the core fee business evolving, and is insurance distribution recovering this quarter? A: CFO Marcello Dubeux noted that Agi+ has not yet contributed to Q2 revenues but will start in Q3. Core fee business is recovering strongly, with brokerage fees up almost 80% quarter-over-quarter, driven by high product growth and new client originations. He mentioned that portability fees were smaller this quarter due to new regulations tied to the Desenrola program, but this is a temporary and small part of the fee business.
Q: Can you elaborate on the upfront investment required for the rapid acceleration in loans, and whether provisions truly reflect this growth? A: CFO Marcello Dubeux explained that the cost of credit as a percentage is slightly higher at 5.9% due to the mix, with more private payroll loans requiring higher provisions. He confirmed that provisions are taken seriously under CMN instruction 4699, and NPLs declined with coverage rising to 180%. He reiterated that expenses are variable with client growth and originations, and will be surpassed by compounding revenues and NII growth going forward.
Q: When do you expect the NIM to inflect and start going up? A: CFO Marcello Dubeux stated that NIM will bounce back once unsecured portfolio balances grow more than secured ones, which is a matter of a few months. He noted that the SELIC rate is higher than expected six months ago, so the trajectory also depends on base rates. He did not commit to a specific quarter but expressed confidence in the operational conditions for improvement in the second half.
Q: How should we think about the tax rate normalizing from here, and will it stay negative in the short term? A: CFO Marcello Dubeux indicated that the tax rate will normalize upward, likely returning to positive in the short term, possibly by the fourth quarter or even the third quarter. He explained that the negative rate is due to the lower pretax base, which could not offset deferred taxes, but as pretax earnings recover, the rate will normalize.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.