⚠ The Credit Book More Than Doubled in a YearHigh threat
StoneCo (STNE) — threat to the moat
A loan book that doubles is mostly composed of loans too young to have failed, which is exactly how 2021 looked at this stage.
At the end of 2024 StoneCo's credit portfolio stood at R$1,207.6 million with expected credit losses of R$144.5 million. Twelve months later the portfolio was R$2,836 million and the loss provision R$389.7 million1. The book more than doubled, and the provision nearly tripled.
Growing a loan book at that pace is the single most reliable way a lender gets into trouble, for a mechanical reason: losses arrive on a delay. A loan written in March does not default in April. A portfolio that doubles in a year is mostly composed of loans too young to have failed yet, so the reported loss ratio flatters the underwriting until the book seasons. Every credit disaster in history has looked excellent at this stage.
The company knows this better than most, because it lived through it. The 2021 credit episode forced a write-down and a suspension of the product, and the rebuilt version is deliberately different — secured against the merchant's own receivables, sized against payment flow the company can observe, and extended to merchants it already banks.
That is a genuinely better design, and design is not the same as proof. The provision rising faster than the book is the honest signal, and management guided cost of risk down from the low twenties toward the mid-to-high teens.
Watch the loss rate on loans originated a year earlier rather than the headline cost of risk on the whole book. The first is evidence. The second is arithmetic dominated by loans that have not had time to go wrong.
- ReportedThe credit portfolio reached R$2,836 million with expected credit losses of R$389.7 million at end-2025, against R$1,207.6 million and R$144.5 million a year earlier.StoneCo Ltd. Form 20-F for FY2025 (CIK 1745431) — active payment clients of 4,803.5 thousand at 31 December 2025, against 4,172.7 thousand in 2024 and 3,522.1 thousand in 2023; TPV of R$560.9 billion, against R$516.2 billion and R$438.3 billion; revenue of R$14,153.8 million and adjusted net income from continuing operations of R$2,477.2 million; more than 3.6 million banking active clients, the majority of whom are also payment clients; retail deposits of R$11,091.0 million against R$8,704.8 million and R$6,119.5 million; a credit portfolio of R$2,836 million with expected credit losses of R$389.7 million, against R$1,207.6 million and R$144.5 million a year earlier; clients divided into MSMBs (micro-merchants and SMBs) and Key Accounts, 'comprised of platform services and sub-acquirers'; StoneCo became in 2017 the first non-banking entity authorised by the Central Bank to operate as an Acquirer through a payments-institution licence, and is among the six largest players by total card volume per ABECS; distribution through proprietary and franchised hubs sold on 'service differentiation as the main driver', digital channels, and more than 500 Strategic Partners at December 2025; per the Central Bank, Pix's share of the total number of transactions rose from 1% in Q4 2020 to 52% in H1 2025 and its share of monetary volume from 1% to more than 26%; the filing warns that 'the concentration of our clients by geography and economic sector may increase our risk' and that the company experiences churn from business closures and account transfers; interest rates directly affect both revenue generation and cost of funds, most third-party funding being linked to the Brazilian interbank rate; StoneCo's own analysis notes that US MSMB take rates have been stable over five years despite penetration around 120% of consumption, and finds no indication of saturation-driven price reductions in Brazilian cities with low cash usage — FY2025 · publ. 2026 · source ↗