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Fair value of financial assets and liabilities | 12 Months Ended
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Dec. 31, 2025
Notes and other explanatory information [abstract] |
Fair value of financial assets and liabilities |
| 29. | Fair value of financial assets and liabilities
According to IFRS 13, the measurement of fair value using a fair value hierarchy that reflects the model used in the measurement process must comply with the following hierarchical levels: Level 1: Determined based on unadjusted public price quotations in active markets for identical assets and liabilities, including public debt securities, equities, and listed derivatives. Level 2: Represents derivatives of data other than the quoted prices included in Level 1, which are observable for the asset or liability, either directly (such as prices) or indirectly (derived from prices). Level 3: Derived from valuation techniques that incorporate data for assets or liabilities not based on observable market variables (non-observable data). Financial Assets and Liabilities Measured at Fair Value through Profit or Loss or through Other Comprehensive Income Level 1: Securities and financial assets characterized by high liquidity and observable prices in an active market are classified within level 1. This level includes most Brazilian Government Securities (notably LTN, LFT, NTN-B, and NTN-F), stocks listed on the stock exchange, and other securities traded in the active market. Level 2: When price quotes are not observable, Management, utilizing its own internal models, makes its best estimate of the price that would be established by the market. These models rely on data based on observable market parameters as a key reference. The most reliable evidence of the fair value of a financial instrument at initial recognition is the transaction price, unless the fair value can be derived from other market transactions involving the same or similar instruments, or can be determined using a valuation technique where the variables used include only observable market data, particularly interest rates. These securities are classified at level X of the fair value hierarchy and primarily consist of Government Securities (NTN-A), repurchase agreements, cancellable LCI, and are in a market that is less liquid than those classified at level 1. Level 3: In cases where information is not based on observable market data, Banco Santander employs internally developed models to accurately measure the fair value of these instruments. Instruments with low liquidity are primarily classified at level 3. Derivatives Level 1: Derivatives traded on stock exchanges are classified within level 1 of the hierarchy. Level 2: Derivatives traded over-the-counter, in the valuation of financial instruments (mainly swaps and options), observable market data such as exchange rates, interest rates, volatility, correlations between indices, and market liquidity are typically utilized. In pricing the referenced financial instruments, the Black-Scholes model methodology (exchange rate options, interest rate index options, caps, and floors) and the present value method (discounting future values based on market curves) are employed. Level 3: Non-exchange traded derivatives, for which there is no observable information in an active market, have been classified as level 3, encompassing exotic derivatives.
Category | Type Asset/Liability | Valuation technique | Main unobservable inputs
Linear derivatives | Coupon Fra | BMF Closing Prices | Currency Coupon rate - long term
Inflation Swap | Discounted cash flow | IGPM Coupon rate
Interest Rate Swap | Discounted cash flow | Pre-fixed rates – long term
Non linear derivatives | Equities Options | Black&Scholes | Implicit volatility- long term
Inflation Options | Black&Scholes | IPCA Implicit volatility- long term
Interest Rate Options | Black&Scholes | IDI Implicit volatility- long term
Currency Options | Black&Scholes | USD/BRL Implicit volatility- long term
Cash | Pension Plan Liability | Actuarial Model | IGPM Coupon rate
Private Bonds | Discounted cash flow | Discount rate ("Yields")
Public Bonds | Discounted cash flow | NTN-C and TDA Discount rate ("Yields")
Put options | Put Options | Discounted cash flow | Growth and Discount rates
The table below provides a summary of the fair values of financial assets and liabilities for the fiscal years ended on December 31, 2025 and 2024, classified according to the various measurement methods the Bank has adopted to determine their fair value.
Schedule of fair values of financial assets and liabilities |  |  |  |
|  |  |  | 12/31/2025
| Level 1 | Level 2 | Level 3 | Total
Financial Assets Measured At Fair Value Through Profit Or Loss | 84,368,028 | 174,725,164 | 3,313,957 | 262,407,149
Debt instruments | 79,505,635 | 14,889,571 | 1,150,820 | 95,546,026
Equity instruments | 4,862,393 | - | - | 4,862,393
Derivatives | - | 64,266,589 | 1,323,617 | 65,590,206
Loans and advances to customers | - | 5,574,067 | 839,520 | 6,413,587
Reserves at the Central Bank of Brazil | - | 89,994,937 | - | 89,994,937
Financial Assets Measured At Fair Value Through Other Comprehensive Income | 65,444,645 | - | 4,001,938 | 69,446,583
Debt instruments | 65,444,625 | - | 3,909,595 | 69,354,220
Equity instruments | 20 | - | 92,343 | 92,363
Hedging derivatives (assets) | - | 217,492 | - | 217,492
Financial Liabilities Measured At Fair Value Through Profit Or Loss | - | 110,545,164 | 1,926,147 | 112,471,311
Derivatives | - | 57,901,839 | 1,926,147 | 59,827,986
Short positions | - | 49,380,059 | - | 49,380,059
Bonds and securities obligations | - | 3,263,266 | - | 3,263,266
Hedging derivatives (liabilities) | - | 184,005 | - | 184,005
|  |  |  | 12/31/2024
| Level 1 | Level 2 | Level 3 | Total
Financial Assets Measured At Fair Value Through Profit Or Loss | 90,905,041 | 132,973,627 | 7,123,218 | 231,001,886
Debt instruments | 88,260,075 | 15,624,289 | 3,700,691 | 107,585,055
Equity instruments | 2,644,966 | 296,834 | 27,023 | 2,968,823
Derivatives | - | 39,468,524 | 707,294 | 40,175,818
Loans and advances to customers | - | 2,223,593 | 2,688,210 | 4,911,803
Reserves at the Central Bank of Brazil | - | 75,360,387 | - | 75,360,387
Financial Assets Measured At Fair Value Through Other Comprehensive Income | 88,640,516 | - | 3,438,024 | 92,078,540
Debt instruments | 88,620,903 | - | 3,438,004 | 92,058,907
Equity instruments | 19,613 | - | 20 | 19,633
Hedging derivatives (assets) | - | 30,481 | - | 30,481
Financial Liabilities Measured At Fair Value Through Profit Or Loss | - | 82,213,242 | 509,368 | 82,722,610
Derivatives | - | 38,771,080 | 509,368 | 39,280,448
Short positions | - | 39,396,666 | - | 39,396,666
Bonds and securities obligations | - | 4,045,496 | - | 4,045,496
Hedging derivatives (liabilities) | - | 129,826 | - | 129,826
Level 3 Fair Value Changes The tables below detail the transactions that occurred during the year 2025 and 2024 assets and liabilities classified as Level 3 in the fair value hierarchy:
Schedule of fair value hierarchy |  |  |  |  |
| Fair Value | Gains/ losses (Realized/Not Realized) | Transfers to Level 3 | Additions / Low | Fair value
12/31/2024 | 12/31/2025
Financial Assets Measured At Fair Value Through Profit Or Loss | 7,123,218 | (283,424) | (1,798,299) | (1,727,538) | 3,313,957
Financial Assets Measured At Fair Value Through Other Comprehensive Income | 3,438,024 | 130,982 | - | 432,932 | 4,001,938
Financial Liabilities Measured At Fair Value In Profit Or Loss Held For Trading | 509,368 | 127,254 | (421,435) | 1,710,960 | 1,926,147
| Fair Value | Gains/ losses (Realized/Not Realized) | Transfers to Level 3 | Additions / Low | Fair value
12/31/2023 | 12/31/2024
Financial Assets Measured At Fair Value Through Profit Or Loss | 6,568,685 | (67,560) | (4,276,225) | 4,898,318 | 7,123,218
Financial Assets Measured At Fair Value Through Other Comprehensive Income | 2,610,638 | (167,705) | (98,568) | 1,093,659 | 3,438,024
Financial Liabilities Measured At Fair Value In Profit Or Loss Held For Trading | 914,261 | (214,958) | (189,987) | 52 | 509,368
| Fair Value | Gains/ losses (Realized/Not Realized) | Transfers to Level 3 | Additions / Low | Fair value
| 12/31/2022 | 12/31/2023
Financial Assets Measured At Fair Value Through Profit Or Loss | 3,652,114 | (50,682) | 1,093,895 | 1,873,358 | 6,568,685
Financial Assets Measured At Fair Value Through Other Comprehensive Income | 1,503,441 | 30,764 | 1,090,459 | (14,026) | 2,610,638
Financial Liabilities Measured At Fair Value In Profit Or Loss Held For Trading | 233,762 | (109,800) | 384,082 | 406,217 | 914,261
Fair Value Changes Linked to Credit Risk Fair value changes attributable to credit risk are determined based on fluctuations in credit default swap prices relative to similar obligations of the same debtor, when such prices are observable, as credit default swaps more accurately reflect the market's assessment of credit risks for a specific financial asset. When these prices are not observable, the fair value changes attributable to credit risk are calculated as the total of fair value changes not attributable to shifts in the benchmark interest rate or other observable market rates. In the absence of specific observable data, this approach provides a reasonable approximation of the changes attributable to credit risk, estimating margin changes over the benchmark value that the market may demand for the financial asset. Financial assets and liabilities not measured at fair value The Bank's financial assets are measured at fair value in the consolidated balance sheet, except for financial assets measured at amortized cost. Similarly, the Bank's financial liabilities, excluding those held for trading and those measured at fair value, are measured at amortized cost in the consolidated balance sheet. i) Financial assets measured at a value other than fair value Below, we present a comparison between the carrying amounts of the Bank's financial assets measured at values other than their fair values and their respective fair values as of December 31, 2025 and 2024:
Schedule of financial assets measured at other than fair value and their respective fair values |  |  |  |  |
|  |  |  |  | 12/31/2025
Assets | Accounting Value | Fair Value | Level 1 | Level 2 | Level 3
Open market investments | 20,232,729 | 20,232,729 | 20,232,729 | - | -
Financial Assets Measured At Amortized Cost: |  |  |  |  |
Loans and amounts due from credit institutions | 35,947,923 | 35,947,923 | - | 20,311,427 | 15,636,496
Loans and advances to customers | 558,134,969 | 558,401,338 | - | - | 558,401,338
Debt instruments | 114,708,615 | 114,803,683 | 53,703,410 | 2,426 | 61,097,847
Reserves at the Central Bank of Brazil | 91,754,315 | 91,754,315 | - | 91,754,315 | -
Total | 820,778,551 | 821,139,988 | 73,936,139 | 112,068,168 | 635,135,681
|  |  |  |  | 12/31/2024
Assets | Accounting Value | Fair Value | Level 1 | Level 2 | Level 3
Open market investments | 37,084,254 | 37,084,254 | 37,084,254 | - | -
Financial Assets Measured At Amortized Cost |  |  |  |  |
Loans and amounts due from credit institutions | 30,177,627 | 30,177,627 | - | 6,757,021 | 23,420,606
Loans and advances to customers | 561,178,111 | 554,791,402 | - | - | 554,791,402
Debt instruments | 84,529,222 | 84,380,507 | 34,616,776 | - | 49,763,731
Reserves at the Central Bank of Brazil | 92,439,824 | 92,439,824 | - | 92,439,824 | -
Total | 805,409,038 | 798,873,614 | 71,701,030 | 99,196,845 | 627,975,739
ii) Financial liabilities measured at a value other than fair value Below, we present a comparison between the carrying amounts of the Bank's financial liabilities measured at values other than their fair values and their respective fair values as of December 31, 2025 and 2024:
Schedule of financial liabilities measured at other than fair value and their respective fair values |  |  |  |  |
|  |  |  |  | 12/31/2025
Liabilities | Accounting Value | Fair Value | Level 1 | Level 2 | Level 3
Financial Liabilities at Measured Amortized Cost: |  |  |  |  |
Deposits of credit institutions | 146,867,521 | 146,867,521 | - | 25,279,956 | 121,587,565
Customer deposits | 593,328,796 | 593,328,796 | - | 76,561,726 | 516,767,070
Marketable debt securities | 156,662,290 | 159,163,562 | - | - | 159,163,562
Debt instruments Eligible Capital | 28,113,937 | 28,113,937 | - | - | 28,113,937
Other financial liabilities | 67,414,002 | 67,414,002 | - | - | 67,414,002
Other financial liabilities | 992,386,546 | 994,887,818 | - | 101,841,682 | 893,046,136
|  |  |  |  | 12/31/2024
Liabilities | Accounting Value | Fair Value | Level 1 | Level 2 | Level 3
Financial Liabilities at Measured Amortized Cost: |  |  |  |  |
Deposits of credit institutions | 158,565,482 | 158,565,482 | - | 35,608,595 | 122,956,887
Customer deposits | 605,068,163 | 605,831,373 | - | 81,663,106 | 524,168,267
Marketable debt securities | 135,632,632 | 137,664,088 | - | - | 137,664,088
Debt instruments Eligible Capital | 23,137,784 | 23,137,784 | - | - | 23,137,784
Other financial liabilities | 79,177,179 | 79,177,179 | - | - | 79,177,179
Other financial liabilities | 1,001,581,240 | 1,004,375,906 | - | 117,271,701 | 887,104,205
The methodologies and assumptions applied in estimating fair value are outlined below: Loans and other receivables from credit institutions and customers - The fair value is estimated for groups of similar credit transactions. The fair value of loans is determined by discounting future cash flows using the interest rates of new contracts. In other words, the future cash flow of the current loan portfolio is projected based on contractual rates, and then, spreads derived from new loans are incorporated into the risk-free interest rate curve to calculate the fair value of the loan portfolio. Regarding behavioral assumptions, it is important to underscore that the prepayment rate is applied to the loan portfolio, thereby enabling a more realistic projection of future cash flows. Deposits from credit institutions and customers - The fair value of the deposits was calculated by discounting the difference between the cash flows under contractual conditions and the current market rates for instruments with similar maturities. The fair value of variable-rate time deposits was considered to be close to their carrying amount. Liabilities arising from securities - The fair values of these items were estimated by calculating the discounted cash flows, using the market interest rates for liabilities with similar terms and maturities. Debt Instruments Eligible as Capital – these refer to the transaction fully executed with a related party, within the context of the Capital Optimization Plan, whose carrying amount is similar to the fair value. The valuation techniques employed for estimating each level are detailed in note 2.e. Management reviewed the criteria for classifying the fair value level of assets and liabilities measured at amortized cost, which are presented exclusively for disclosure purposes, and concluded that they are more appropriately classified as level 3, given the observable market data.

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