3 Key Points
—Banco do Brasil (BBAS3), Latin America’s oldest bank — founded 1808, half-owned by the Brazilian state — earned a recurring net profit of R$3.43 billion ($672M) in its latest reported quarter, down 53.5% year over year, with return on equity collapsing to 7.3% from 16.7% as loan-loss provisions jumped 86%, driven above all by souring farm credit.
—Management capitulated on the year: the cost-of-credit guidance rose from R$53–58 billion to R$65–70 billion ($12.7–13.7B) and the 2026 profit guidance was cut from R$22–26 billion to R$18–22 billion ($3.5–4.3B) — the old floor is the new ceiling.
—The stock prices a crisis, not a cycle: at R$20.76, Brazil’s biggest farm lender trades at 0.61x book value and 9.4x depressed earnings, against a consensus target of R$25.17 — the market’s bet being that a bank with a R$1.3 trillion ($255B) loan book and the federal government behind it is either cheap for a reason, or cheap enough to forgive it.
Banco do Brasil Profit Fall: What Happened
