Banco do Brasil Profit Falls 66.5% as Farm-Loan Defaults Climb

Banco do Brasil, the country's largest agricultural lender, reported adjusted net profit of 1.27 billion reais for the third quarter, down 66.5% from a year earlier. According to the state news agency Agência Brasil (in Portuguese), rising defaults, mainly in agribusiness, drove the decline.

Metrópoles reported that loans to agribusiness more than 90 days overdue rose to 6.92% in September from 4.84% a year earlier. Arrears on loans to individuals rose to 9.14% from 6.01%. Credit-loss expenses rose 18.4% to 21.2 billion reais. Return on equity fell to 2.8% from 8.4%, and the Basel capital ratio fell to 13.45% from 14.81%. According to Metrópoles, the bank cut its 2026 earnings guidance from 18-22 billion reais to 9-11 billion reais and will pay out only 25% of profit as dividends, the legal minimum.

The financial site InfoMoney called the result a "widespread disappointment." It cited weak loan growth and growing doubts about dividends and the bank's ability to generate capital, and said the result puts the bank's recovery in question.

The same day, Planning Minister Bruno Moretti presented a fiscal adjustment package. Folha explained that the plan is meant to help the economic team reach the midpoint of its primary-balance target (the budget balance before interest payments). Moretti told Congress the measures could yield 50 to 60 billion reais in 2027, Gazeta do Povo reported. The bill would also allow the government to lower the cap on real spending growth from 2.5% to 2% if needed.