AGI (NYSE:AGBK) used its first earnings call as a public company to emphasize the strategic rationale behind its hybrid banking model and to detail what management described as strong fourth-quarter and full-year 2025 results, alongside commentary on temporary operational suspensions related to Brazil’s Social Security Administration (INSS).
Management frames a hybrid model focused on underserved Brazilians
Founder, Chairman, and CEO Marciano Testa opened the call by outlining the company’s long-term strategy: serving Brazil’s payroll-linked financial ecosystem, including social security beneficiaries and payroll workers who have historically been underserved by traditional banks and challenging for digital-only banks to serve.
Testa said the company’s long-term philosophy is anchored by three principles:
- “We live for the customer,” with a focus on engagement and multi-product relationships.
- Continuous technology enhancement, including investments supported in part by IPO proceeds.
- An entrepreneurial culture oriented toward long-term compounding returns.
INSS audit process and temporary suspensions
CFO Marcelo Dubet highlighted the company’s contractual relationship with INSS, which administers payroll for 42 million beneficiaries. He said Agibank and INSS executed two operational agreements as part of an ongoing audit process—one in November 2025 related to benefit payments into Agi accounts, and another in January 2026 related to the origination of INSS payroll credit.
Dubet said the discussions led to temporary suspensions that affected INSS credit origination in the fourth quarter of 2025, but that operations fully resumed by mid-January 2026.
In response to questions, management said it believes the audit process and the signing of the two agreements validate the company’s processes going forward as long as it remains compliant. Dubet said operations are “fully normalized,” and Testa said the company sees the matter as “a turned page” in the INSS relationship.
Customer, loan growth, and market share
Dubet said Agi exited the fourth quarter with 6.7 million active clients, which it defines as customers using at least one product at quarter end, representing 73% growth in active customers during 2025. He added that customers with primary banking relationships average more than five products, rising above seven products among more mature cohorts.
Total loan balances grew 44% in 2025 to BRL 34.9 billion, according to the company. Dubet said the credit portfolio mix remained heavily weighted toward secured lending:
- Secured loans: 86% of total, or BRL 29.9 billion
- Unsecured loans: 14% of total, or BRL 4.9 billion
Management discussed growth initiatives across payroll products. Private payroll credit—launched in March 2025—reached BRL 0.9 billion by year-end, while public payroll credit finished 2025 at BRL 0.3 billion. Unsecured lending, which Dubet said is restricted to account holders with a primary relationship and directed deposit arrangements, expanded 18.3% to BRL 4.8 billion.
Within INSS payroll credit, Dubet said the company’s market share reached 8.9%, up 250 basis points versus 2024.
Credit quality, margins, and profitability
Non-performing loans (NPLs) above 90 days ended 2025 at 3.7%, which management attributed primarily to a higher mix of private payroll credit (which it said has structurally higher delinquency than INSS loans), as well as effects tied to INSS-related suspensions that affected origination and portfolio growth. Dubet said the coverage ratio (provisions over NPLs above 90 days) was 189.4% at year-end.
On profitability, the company reported fourth-quarter net income of BRL 215 million and full-year net income of BRL 1.05 billion, up 31.8% year over year, with return on equity of 35.8%.
Total revenue in the fourth quarter was BRL 2.96 billion, up 6% quarter over quarter. Full-year revenue reached BRL 10.7 billion, up 46.8% year over year. Net interest income rose 19% for the year to BRL 4.7 billion, and net interest margin was 12.5% for 2025, which Dubet said reflected a portfolio more weighted toward secured loans.
During Q&A, management addressed why NPLs rose from the third to the fourth quarter and why net interest margin declined sequentially. Dubet cited mix effects (including growing private payroll and unsecured products), slower portfolio growth during the suspension period affecting the denominator in the NPL ratio, and the impact of Brazil’s Selic rate increases—he noted the Selic rose nearly 300 basis points in the second half of 2025, affecting funding costs. Investor Relations head Felipe Gaspar Oliveira added that growth in treasury allocation versus lending operations affected the mix of interest-bearing assets, contributing to net interest margin dynamics.
Fees, operating expenses, and AI investments
Asked about a quarterly decline in commissions and fee revenue, Dubet tied part of the impact to the slowdown in production and cross-sell during the INSS-related disruption, which affected insurance sales. He said the user experience for acquiring insurance was “totally normalized” after adjustments made under the agreements with the authority and described insurance as an important revenue stream going forward.
Management also discussed a notable quarter-over-quarter decrease in SG&A expenses. Dubet attributed the decline to two main factors: reduced variable “cost to serve” tied to disruptions during the suspension period, and a non-recurring adjustment to lawsuit provisioning after deploying AI tools to improve legal defense preparation and outcomes. In a follow-up, he confirmed there was a reversal based on the updated model and said, in response to another question, that roughly 20% of the SG&A reduction came from variable costs and 80% from the SG&A reduction linked to the legal provisioning adjustment.
Looking ahead, Testa said the company plans to invest heavily to become “an AI-driven company” over the next 12–24 months, targeting applications across underwriting, customer service, fraud prevention, collections, marketing, and efficiency. He cited internal metrics including expected call-center cost avoidance and improved efficiency of AI agents versus human contact, as well as reduced fraud alert review times.
On funding and capital, Dubet said deposits reached BRL 37.8 billion, up 50% from 2024, with institutional counterparties representing 51% of funding and retail 49%. Capital adequacy ratio ended 2025 at 15.5% with a Tier 1 ratio of 14.2%. Dubet noted IPO proceeds would appear in first-quarter 2026 financial statements, and said that if reflected in 2025 capital, the company estimates a capital adequacy ratio of around 19%.
About AGI (NYSE:AGBK)
Our mission is to revolutionize financial services for the largest and fastest growing segment of Brazil’s population: individuals who have been underserved by incumbent banks and have not been effectively reached by digital-only banks. We seek to make credit and banking solutions more accessible and affordable for the Brazilian consumers who we believe need it the most, including social security beneficiaries and private and public sector workers. We have designed a unique value proposition for this population, who may be older, have a lower income, be less tech-savvy or have less access to education.
