Brazil High Rates Test Bank Resilience: Delinquency Up, Profits Hold

Brazilian banks face persistent high nominal (14%) and real (~9%) interest rates despite a 100bp Selic cut in 2025-2026. Delinquency remains elevated, credit growth is cautious, and provisioning expenses (PDD) are rising, though profitability persists. The outlook for 2026 suggests continued credit quality challenges, signaling potential pressure on financial-sector earnings and lending activity.