Brazil is quietly transforming both on the high street and within the banking sector. In Q2 2025, official company filings from Inter&Co, Pague Menos, and Banco Mercantil reveal how leading firms are navigating Brazil’s rapidly changing marketplace.
These filings—required by regulators and available to investors—offer more than headline profits. They reflect the growing pressure from inflation, competition, and regulatory demands facing even the country’s largest service providers.
Behind each number, the strategy changes: digital banking seeks scale, retail pharmacy leverages local presence, and an old-school lender bets on serving older Brazilians with a hybrid approach.
Population growth, aging demographics, and new spending patterns push business leaders to rethink what works. International observers and domestic investors can read these numbers as a signal: neither full digitalization nor old-fashioned customer service alone wins.
Real growth now requires agility, brand discipline, and constant adaptation. In this context, Brazil’s largest publicly-traded service firms show what is at stake for the nation’s evolving consumer economy.
Inter&Co: Digital Growth at Scale, But Risks Rise
Inter&Co, which runs Banco Inter, reported a net income of R$315 million ($55 million) for the second quarter of 2025, marking a 50% annual increase according to official filings.
Q2 2025 Insights from Inter&Co, Pague Menos, and Banco Mercantil on Brazil’s Evolving Business Landscape. (Photo Internet reproduction)
The company’s return on equity reached 13.9%, fueled by high-margin lending products, including FGTS-linked and home equity loans. Revenue climbed to R$2 billion ($351 million).
These gains reflect the payoff from expanding the client base, which now exceeds 40 million. Such scale allows cross-selling financial products and gives Inter&Co major visibility in the digital banking race.
But the story does not end with record profits. Brazil’s higher interest rates and cost inflation set the context for these achievements. Competition among digital banks is fierce, with each new client adding both opportunity and cost.
To maintain its growth, Inter&Co must not only keep recruiting customers but also convince them to stay—no simple task in a fast-paced, app-driven sector.
The firm has signaled plans to lift return on equity toward 30% by 2027. Hitting this requires sharper execution: more efficient operations, stronger risk controls, and relentless innovation.
The bigger Inter&Co grows, the more it must prove it can defend its margins and justify investor trust. Its latest results confirm impressive momentum, but remind us that in Brazil’s digital banking landscape, success today does not guarantee leadership tomorrow.
Pague Menos: Pharmacy Chain Balances Expansion With Market Realities
Pague Menos, one of Brazil’s largest pharmacy groups, posted revenue of R$3.69 billion ($647 million) and net income of R$50.2 million ($9 million) for Q2 2025 as stated in its official results.
With a profit margin at 1.4%, the company maintains stable performance in a low-margin, high-volume sector. The company’s greatest successes still come from its core region.
In Northeast Brazil, Pague Menos holds over 20% market share, heavily outpacing rivals. However, its efforts to expand into the South and Southeast reveal a different story.
The company’s market share in these wealthy regions remains under 2%, but same-store sales growth is much higher—22% in the Southeast and nearly 20% in the South—above the national average of 18%.
Pague Menos operates roughly 1,600 stores. About 400 have exceeded R$1 million ($175,000) in monthly sales, particularly in established regions. Local branding and consumer loyalty drive these results, proving physical presence still matters.
The company’s integration of Extrafarma, acquired in 2022 for R$700 million ($123 million), produced an additional R$260 million ($46 million) in EBITDA according to regulatory filings.
Transitioning the Extrafarma brand remains slow, as leaders prioritize gradual adoption to preserve local value. Meanwhile, rising costs and inflation threaten to squeeze profits—even as demand stays high due to population aging and medicine’s essential role.
The official data show a company not simply surviving tough conditions, but carefully targeting where to grow, how to excel, and when to hold back.
Pague Menos’ story is not just one of regional dominance and digital breakthroughs. It is about managing risk, watching expenses, and converting its strengths into lasting, profitable gains.
Banco Mercantil: Hybrid Banking Finds a Niche With Older Customers
Banco Mercantil’s official second-quarter report delivers a net profit of R$243 million ($43 million) and an eye-catching return on average equity of 46%.
The company’s loan portfolio stands at R$19.279 billion ($3.383 billion), including R$12.594 billion ($2.209 billion) in payroll-deductible loans, preferred by pensioners and public workers.
Unlike many sector peers, Banco Mercantil has expanded its branch network, opening 43 branches in 2025 to reach 321 nationwide. Most sit in cities with over 100,000 people. This locally-focused brick-and-mortar model is no accident.
The bank targets a customer base aged 50 and above, who still value face-to-face service despite growing digital adoption. In fact, more than 80% of all credit transactions now happen digitally, showing that the bank’s hybrid approach works.
However, regulatory changes, especially new biometric verification rules, slowed fresh loan issuance by 21% in the period to R$1.8 billion ($316 million).
Administrative expenses climbed to R$321 million ($56 million), and loan-loss provisions hit R$131 million ($23 million), both rising with the cost of doing business.
Non-performing loans also edged up to 2.3%. Service fee revenues stand at R$207 million ($36 million), with most coming from insurance and assistance products. The company’s Basel Index is 17.1%, confirming solid capitalization.
Banco Mercantil proves that blending old-school service and digital maturity can bring profitable results—if applied smartly to the right customers.
As others move exclusively online, Mercantil expands locally and digitally, reflecting careful observation of client needs over sheer technological enthusiasm.
The Story Behind the Story
Inter&Co, Pague Menos, and Banco Mercantil reflect a broader truth in Brazil today: survival and growth require real flexibility. Each company adapts differently—one with digital scale, one by region and discipline, and one by customer profile.
Their official reports show why: inflation, increased competition, and regulatory change pressure all players to rethink the basics.
For outside investors and market watchers, these filings describe more than plans. They reveal a tested path for growth in an era when no single strategy guarantees results.
The headlines may focus on profits, but the underlying story is one of adapting to real-world limits and working relentlessly to meet changing customer expectations—one number at a time.
