By Brazil Stock Guide – Banco do Brasil SA reported a sharp drop in second-quarter profit as rising loan losses in agribusiness and small- and medium-sized enterprises weighed on results, missing analysts’ estimates.
The state-controlled lender posted adjusted net income of 3.8 billion reais ($708 million) for the three months ended in June, down 60% from a year earlier, according to a statement released late Thursday. That fell short of the 4.99 billion reais consensus estimate compiled by LSEG. Return on equity was 8.4% in the period.
First-half profit slid 40.7% to 11.2 billion reais from 18.8 billion reais a year earlier. President Tarciana Medeiros said 2025 is a “year of adjustment for accelerating growth,” reaffirming the bank’s full-year profit forecast between 21 billion and 25 billion reais.
The lender’s expanded loan portfolio grew 11.2% from a year earlier to 1.24 trillion reais, led by a 14.7% jump in corporate loans to 468 billion reais. Personal loans rose 8% to 342.6 billion reais, while agribusiness lending — a key segment for Banco do Brasil — climbed 8% to 404.9 billion reais.
Administrative expenses increased 4.7% to 9.7 billion reais, driven by higher personnel costs. Loan-loss provisions surged 89.3% in the first half to 31.6 billion reais, reflecting higher delinquency rates in the agribusiness and SME portfolios.
In the statement, Banco do Brasil said it took immediate actions to address the deterioration in asset quality, including reviewing collection processes, prioritizing disbursements in resilient segments, increasing lending in operations with guarantees or mitigators, and strengthening client relationships.
Leave a Reply