Banco do Brasil posts profit drop with surge in agricultural defaults
Banco do Brasil recorded an adjusted net profit in the 3rd quarter that was 66.5% lower compared to the same period last year.
TL;DR
- Banco do Brasil's adjusted net profit fell 66.5% to R$1.3 billion in Q3 2026 compared to the previous year.
- Year-to-date profit decreased by 42.4% to R$8.6 billion.
- The bank cut its 2026 profit forecast to R$9-11 billion.
- Credit costs surged to R$21.2 billion in the quarter, impacting the gross financial margin.
- Agribusiness defaults, linked to 'moral hazard' and adverse climate events, were a primary driver of the profit decline.
- The payout ratio for profit distribution was reduced from 30% to 25% to preserve capital.
- Intermediate dividend announcements for November 2026 were canceled.
- The bank is increasing selectivity in rural credit and shifting focus to lower-risk loans, including public payroll loans.