#Brazil #São Paulo #dividends #Financial Services #PagBank

PagBank Reports Strong Financial Results for Q1 2025

PagBank (NYSE: PAGS), a leading online bank in Brazil, has released its financial results for the first quarter of 2025, highlighting a successful quarter filled with substantial income growth and strategic initiatives to enhance shareholder value. The bank recorded a net revenue of 4.9 billion BRL, reflecting a year-on-year increase of 13%. Additionally, the recurring net income stood at 554 million BRL, a 6% rise from the previous year, showcasing the bank's resilience amid challenging economic conditions.

During this period, a gross margin of 1.9 billion BRL was achieved, representing a 7% increase year-over-year, driven by the cumulative performance of its payment, banking, and credit units. Notably, the earnings per share reached 1.72 BRL, up 14% compared to the same period last year, reaffirming PagBank's commitment to growth and value creation for its shareholders.

PagBank's loan portfolio showed remarkable expansion, totaling 3.7 billion BRL, an impressive 34% increase year-over-year and 6% growth quarter-over-quarter, while maintaining a prudent credit profile, with 85% of these loans secured by guarantees. The bank also reported a consistent non-performing loan (NPL) ratio of 2.3%, significantly lower than the market average of 4.4% for Q1 2025.

Alexandre Magnani, CEO of PagBank, emphasized the company's ongoing evolution and strong performance, stating, "More than just a payment service provider or online bank, we are true partners in our clients’ success. Our commitment is to deliver a comprehensive ecosystem that is simple, secure, and accessible, based on our three core pillars: payments, banking, and credit. Today, we proudly serve over 32 million customers, with 17.7 million actively engaged in our ecosystem."

Sustainable Growth Amid Rising Interest Rates

PagBank's financial margin and earnings per share growth come despite rising interest rates in Brazil. The company has effectively managed to balance profitability with the cost of borrowing, resulting in a gross margin improvement of 39% compared to the previous quarter. The return on equity reached 15%, reflecting disciplined capital management and a focus on value creation for shareholders.

The bank's total deposits amounted to 33.9 billion BRL, marking an annual growth of 10.9% while maintaining a stable financial cost, indicative of effective fundraising strategies in a high-rate environment. The total payment volume processed hit 129 billion BRL, representing a 16% increase year-over-year, with receivables reaching 83 billion BRL, a 26% year-over-year surge, which highlights strong client engagement in the banking platform.

Since August 2024, PagBank has executed its second share repurchase program, which saw over 353 million BRL worth of shares bought back, underscoring management's confidence in its growth strategy and commitment to enhancing shareholder value. Additionally, the bank has announced its first dividend payment of 0.14 USD per ordinary share, set to be distributed on June 6, 2025, with the ex-dividend date on May 24, 2025. PagBank plans to distribute annual dividends equivalent to approximately 10% of its net income, subject to market conditions and board approval.

About PagBank

PagBank specializes in offering innovative financial services and payment solutions. It simplifies the buying, selling, and transferring processes, making business operations straightforward and secure for individuals and companies alike. Being a part of the UOL group—Brazil's leading internet provider—PagBank provides comprehensive solutions for online and in-person payments, regulated by the Central Bank of Brazil. It also offers a variety of payment methods, ensuring ease and flexibility for its customers.

With plans for continuous growth and increased service offerings, PagBank remains committed to enhancing the financial landscape for its clients, firmly establishing itself as a significant player in Brazil's financial system.