Release Date: August 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Banco do Brasil SA BB Brasil (BDORY) reported a strong adjusted net income of BRL11.2 million in the first quarter, indicating robust financial performance.
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The bank’s fee income increased by 4.7% compared to the first quarter, showcasing diverse revenue streams supported by its conglomerate companies.
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The expanded loan portfolio grew significantly, reflecting strong growth in secure lines, particularly for individuals and worker loans.
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Banco do Brasil SA BB Brasil (BDORY) maintains a strong and robust balance sheet with a CET1 ratio of 10.97%, indicating adequate capital levels.
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The bank is actively leveraging innovation and artificial intelligence to enhance credit journeys and improve customer experience, preparing for sustainable growth in the coming years.
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The cost of credit increased by 56% compared to the first quarter, driven by agro delinquency and pressure from micro and SMEs.
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The bank experienced a significant increase in delinquency rates, particularly in the agribusiness sector, reaching unprecedented levels in its history.
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The need for increased provisions due to Resolution 4,966 has put pressure on the bank’s results, impacting profitability.
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The bank’s guidance for 2025 reflects a challenging year of adjustments, with expectations of lower profitability compared to previous years.
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The agribusiness portfolio faces challenges due to adverse weather events and high leverage, leading to increased delinquency and provisions.
Q: How does Banco do Brasil view its CET1 ratio, and what are the plans for maintaining or improving it? A: The CFO, Jovannito BDS, explained that the minimum regulatory CET1 level is 8%, with a prudential target around 11%. As of June, the CET1 was 10.97%, which is considered comfortable. The bank plans to improve net income retention to maintain this level, focusing on resuming profitability to reach the 11% target. There are no current capital restrictions, and the bank is focusing on assets with better risk-adjusted returns to improve retention.
Q: What is the strategy for balancing origination and preservation of NII given the new net income guidance? A: CEO Taciana Medeiros stated that the bank aims to grow in lines with better risk-adjusted returns, particularly in the individuals’ portfolio. The bank is focusing on secured lines like payroll loans, which offer better margins. Despite higher provisions due to resolution 4,966, the bank is confident in its ability to deliver on its net income guidance by growing margins and increasing NII.
