Agi (AGBK) Q3 2026 earnings review
Agi's fees and profit climb, but more borrowers pay late
Agi, a Brazilian bank that lends to retirees against their pensions, earns more again while its late loans rise. Profit before tax jumped 63% from the second quarter, because fee income almost doubled and overhead held steady. Founder Marciano Testa wrote that "the inflection point we presented in 2Q26 has materialized".
| Profit before tax | R$187.2M +63% from last quarter; −15% from a year ago |
|---|---|
| Fee income | R$244.1M +80% from last quarter |
| Loans more than 90 days late | 3.5% 3.3% last quarter |
| Company outlook | Unchanged profit to keep recovering; no figures given |
⚖️ Verdict: 🟢 Bullish
The story got better because the promised profit recovery came from fees and costs, not only from tax credits. Agi+, a paid membership with shopping discounts, passed 700,000 members and began billing. One caution: late loans reached 3.5% of the book, and Agi blamed its growing share of loans to private-sector workers.
The question now is whether those new private-sector loans keep paying as they age. If they do, upfront loss charges fade and the lending margin can recover; if not, loss charges absorb the fee gains. Fourth-quarter figures on late loans, due early next year, will tell.
🐂 Bull Case
Pre-Tax Profit Rose 63% From Last Quarter
In August, Agi told investors that earnings would start rising again in the third quarter, after heavy costs and loan-loss charges in the first half. The opposing view held that those costs had become permanent. Founder and chief executive Marciano Testa now writes that the turn he promised "has materialized".
On costs, the quarter backs him. Staff spending fell 11% from the second quarter, which Agi put down to "lower accruals for annual bonuses". Overhead stayed almost unchanged while fee income nearly doubled, so the bank kept a larger slice of what it earned.
- Profit before tax: R$187.2 million, against R$115.0 million in the second quarter
- Staff costs: 7.5% of operating income (lending income plus fees), down 1.7 percentage points
- Overhead, meaning selling, general and administrative costs: 29.9% of operating income, down 2.9 points
Part of the gain may not repeat, because bonus accruals can rise again. Profit before tax also still trails last year's third quarter. Loan-loss charges grew 9% from June, so this recovery rests on fees and cost control rather than on cheaper credit.
What to watch: profit before tax for the fourth quarter, when Agi said in August that the recovery would show more clearly. A second rise without help from bonus accruals would show that the cost base is under control.
Agi+ Membership Fees Lifted Fee Income 80%
Agi+ is a paid monthly membership that gives customers discounts on phone top-ups, pharmacies, restaurants and other everyday spending. Testa says it lets the bank "diversify and increase revenues without capital allocation", meaning income that needs no loans behind it.
Members passed 700,000 by the results date, nearly three times the August count. Fee income climbed to R$244.1 million, and Agi credited insurance brokerage and "the first quarter of Agi+ revenues". The bank did not say how much came from memberships.
Critics argue that Agi signs up many members when it grants a loan, which could draw regulators' attention. In August, finance chief Marcello Dubeux said 1 million members by year-end was possible. By our math, that needs about 6,000 sign-ups a day, against roughly 4,600 since August.
What to watch: a separate revenue figure for Agi+, which the bank has not yet published. A figure near the R$600 a year per member that Dubeux described would confirm the plan's economics.
Agi Won 10% of Brazil's Pension Loan Market
Agi's core business is payroll loans to retirees paid by INSS, Brazil's social security agency. The agency deducts each instalment straight from the pension. Between May and August, new rules made this lending harder across the whole market, Agi said.
Agi kept lending. It lent R$10.2 billion in the quarter, its highest in six quarters. Its share of INSS lending reached 10.0%, which Agi called "our first double-digit share ever". The loan book grew 4.5% from June.
This matters because pension loans make up most of the book, so share gains there add steady income. INSS loans grew only 3.3% in the quarter, however, because Agi put more of its new lending into private-sector loans.
What to watch: INSS market share in the fourth quarter, the first full quarter without the May limits. A further gain would show Agi can win share in a calm market, not only when competitors struggle.
All Three Rating Agencies Now Rate Agibank AA
Agi funds its loans by selling bonds and deposit certificates and by packaging loans into funds that investors buy. A better credit rating lets it borrow at lower rates. In August, S&P raised Agibank, the group's bank, to brAA, after Fitch and Moody's Local had raised it earlier.
Agi also sold a R$2.1 billion fund backed by payroll loans, paying 1.05 percentage points over Brazil's interbank rate. Big investors now supply nearly two-thirds of its funding, against about half a year ago, and Agi said the upgrades should allow "greater diversification of funding alternatives".
This matters because interest paid on funding is the bank's largest expense. The new fund's money arrived on October 1, so its cost shows up only from the fourth quarter.
What to watch: what Agi pays on its funding in the fourth quarter, set against Brazil's policy rate. A lower spread would show the upgrades are reducing costs.
🐻 Bear Case
Private-Sector Loans Pushed Late Payments Higher
Private payroll loans go to private-sector workers, who repay them from their salaries. The book grew 60% in the quarter, and Agi says newer loans show "better credit quality metrics in the cohorts". Supporters see a fast-growing, profitable new market for the bank.
The quarter's numbers point the other way. Loans more than 90 days late rose to 3.5% of the book, from 3.3% in June. Agi said the rise came "mainly due to a credit mix effect", meaning the larger share of private-sector loans. Reserves now cover 157% of late loans, against 237% a year ago.
- Private payroll loans: 5.8% of the loan book, against 2.8% a year ago
- Loan-loss charges: 39.3% of operating income, up 7.3 percentage points from a year ago
- Cost of risk, loan-loss charges over 12 months as a share of loans: 6.1%, against 5.4%
This matters because Agi books expected losses on new loans at once, while their interest arrives "over the life of the loans". Fast growth therefore cuts profit now and pays off only if borrowers keep paying. In August, Dubeux put this year's cost of risk at about 6%, and the 12-month figure already sits slightly above it.
What to watch: the share of loans more than 90 days late in the fourth quarter, as this year's private-sector loans age. A further rise would mean the newer loans perform no better than the old ones.
Agi Earns Less Interest on Each Loan
Net interest margin measures what Agi earns on loans and cash after paying for its funding, as a share of those assets. It slipped to 11.8% from 12.9% a year earlier. Agi blamed the shift toward pension and other secured loans.
By our math, Agi earned an annualised 25.0% on its average loans, down from 27.8% a year ago. Unsecured personal loans shrank 5.1% over the year, while secured lending kept growing. Interest expense took 51.4% of total revenue, 0.9 percentage points above a year ago.
Interest on cash and securities now supplies 17% of revenue, so the headline revenue figure flatters the lending business. Agi sees "room for interest margins to recover in the future", but only as new loans mature.
What to watch: the yield on loans in the fourth quarter, set against loan growth. A further drop would mean the mix shift costs income faster than new lending adds it.
Tax Credits Still Supply a Third of Profit
Testa called net income of R$276.0 million "our best quarterly net income year to date". But Agi paid no net tax. It booked a tax benefit of R$88.8 million, so net income came out above profit before tax.
Most of the benefit came from a deferred tax credit, an accounting gain that the bank can set against future tax bills. Agi linked its low tax to the "tax-efficient allocation of IPO proceeds". Deferred tax assets on the balance sheet grew 14% in the quarter.
By our math, the tax benefit supplied 32% of net income, after a negative tax rate in the second quarter too. Profit before tax still sits 15% below a year earlier. Agi has not said what tax rate to expect once earnings recover.
What to watch: the effective tax rate in the fourth quarter. A positive rate alongside rising net income would show the recovery no longer leans on tax credits.
Risks this quarter didn't answer
Four standing concerns got new facts but no answer this quarter, so each still depends on a figure or a statement that Agi has not yet published.
- Payroll-loan rules: Agi's business rests on INSS rules that changed twice this year; any new suspension or limit would move this.
- Capital: the capital adequacy ratio, capital held against risk-weighted assets, slipped to 18.1% from 18.7%; the fourth-quarter ratio will show whether growth keeps eroding it.
- Operating costs: overhead rose 19.5% from a year ago with a flat headcount, and Agi still gives no split between customer acquisition, servicing and technology.
- Staff share purchases: Agi has not said who lends executives the money to buy shares under its partnership programme.
👓 Other Themes
Brazil Lifted Its Temporary Pension Loan Limits
In May, Brazil's Desenrola 2.0 programme cut the share of income that borrowers could commit to payroll loans from 45% to 40% and added paperwork. Agi said the changes "caused temporary challenges for market-wide origination". The limits lapsed at the end of August, when the programme's term ended, so the fourth quarter runs fully under the old rules.
💲 Other KPIs
Agi added about 679,000 active customers in the quarter, its most ever, and the base now stands 29% above a year ago. Quarterly growth has quickened for three quarters in a row, from 5.1% to 8.9%. Each new customer can buy fee products such as Agi+, but also brings acquisition costs before any income.
Return on equity, net income as a share of shareholders' money, recovered to 22.4% on an annualised basis from 16.9%. It had fallen for three quarters in a row before this one. Tax credits lifted part of the gain, and the 12-month figure still slipped to 21.0%.
The share count sits about 18% above a year ago because of February's New York listing. Profit per share therefore grew 11%, about a third of the pace of net income. In late October, Agi announced a one-year buyback of up to 3 million shares, roughly 2% of the total by our math.
🔮 Guidance
Unchanged. Testa wrote that the work of the first half is now "bearing fruit in 3Q26 and beyond", so the plan still has profit rising. Agi gave no figure, which leaves the fourth quarter without a number to test. In August, Dubeux spoke of a full recovery in 2027, a later date than Testa's.
Unchanged. Agi expects the membership to become an "additional driver of recurring fee revenue in the following quarters". The fourth quarter will be the first full quarter with the larger member base. The bank still gives no revenue figure for the plan, so investors cannot yet separate it from insurance commissions.
New. Agi says its efficiency ratio, operating costs as a share of income, can keep "improving in the coming quarters". It fell to 44.2% from 48.9%, helped by lower bonus accruals. The ratio has moved in both directions this year, so one quarter does not yet set a direction.
New. Agi expects its lending margin to recover as this year's loans mature, but tied that to "market and interest-rate conditions" and set no date. The margin after loan-loss charges fell to 6.3%, its lowest in five quarters. Agi books loss charges on new loans at once, so the recovery depends on growth slowing or loans seasoning.
❓ Key Questions
How much fee income came from Agi+ memberships?
Agi credits the membership for part of the 80% jump in fees but gives no figure. Without it, readers cannot test the R$600 a year per member that the finance chief described in August.
What tax rate should investors expect as profit recovers?
Tax credits supplied about a third of net income this quarter and more in the second. A normal tax rate would change how much of the profit recovery reaches shareholders.
How are this year's private-sector loans paying after several months?
Agi says newer loans perform better, but late loans rose on the mix shift. Early-default and 15–90-day late rates for 2026 loans would show whether the growth is safe.
When does Agi expect a full earnings recovery?
In August, Testa pointed to the fourth quarter and Dubeux to 2027. The release repeats neither date, and the answer decides how long loss charges outrun income.
Who finances executives' share purchases under the partnership programme?
Participants buy shares with credit instruments, and Agi has not named the lender. A loan from Agibank itself would tie bank capital to insiders' shareholdings.