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Reuters
2 days ago
- Business
- Reuters
Banco do Brasil facing record agribusiness default levels, CEO says
SAO PAULO, Aug 15 (Reuters) - Banco do Brasil ( opens new tab is facing the highest default level ever recorded in its agribusiness loan portfolio, opens new tab, CEO Tarciana Medeiros said on Friday, adding that the deterioration had not been anticipated even in the most pessimistic forecasts. The state-run lender on Thursday reported weaker-than-expected second-quarter results, opens new tab and announced a sharp cut to its full-year outlook, following an already challenging, opens new tab first quarter marked by high delinquency in the agribusiness segment. Most of the defaults stem from soybean, corn, and cattle producers in Brazil's center-west and southern regions, Medeiros said during a call with analysts. "We have a portfolio of over 600,000 clients, of which 20,000 are in default. And 74% of them had never been in default until December 2023," she said. Many farmers in Brazil - a top global supplier of grains, coffee, meat, cotton and sugar - have struggled in recent years with bad weather, high interest rates, opens new tab and elevated input costs, leading to an increase in the number of bankruptcy filings. Banco do Brasil reported a 90-day default ratio of 3.49% in the sector in the April-to-June period, up from 3.04% in the previous quarter and 1.32% a year earlier. The bank, long seen as a pillar of farm credit in the South American agricultural powerhouse, expects the sector to continue to hurt its results in the very short term, Medeiros said. She pointed to a "still stressed" third quarter and said the lender did not want market participants to have unrealistic expectations, as it has debt from the 2024/25 season maturing through September. The bank hopes that favorable weather conditions, forecasts for a bumper 2025/26 grain crop and improving commodity prices will help lower delinquency in agribusiness in the new season. Banco do Brasil expects some improvement in its overall results from the fourth quarter onwards, driven by net interest income growth. Its shares fell as much as 4% in early Sao Paulo trading, before reversing course to trade up 1%. They had plunged more than 30% since the weaker-than-expected first quarter results and are still down 13% year-to-date. "Certainly a weak quarter, but somewhat expected," analysts at Itau BBA said in a note to clients. "We remain cautious, looking for more visibility on the still-worsening credit quality trends, but do not expect a major negative reaction," they added. ($1 = 5.3934 reais)
Reuters
2 days ago
- Business
- Reuters
Banco do Brasil quarterly profit slides, slashes yearly outlook and dividend
SAO PAULO, Aug 14 (Reuters) - Brazilian state-run lender Banco do Brasil SA ( opens new tab on Thursday reported a 60% slide in second-quarter adjusted net profit, and it announced a sharp cut to its full-year outlook and dividend payout. Net profit came in at 3.8 billion reais ($702.4 million), below the 5 billion reais expected in an LSEG poll. "2025 is a year of adjustments for growth acceleration," Chief Executive Tarciana Medeiros said in the earnings statement. Banco do Brasil, which was the last among Brazil's largest listed banks to release results, posted a return on equity of 8.4%, down from 21.6% a year earlier and 16.7% in the first quarter. In a separate filing, Banco do Brasil cut its 2025 shareholder payout to 30% of its profit, down from the previous range of 40% to 45%, attributing the move to factors including the results, cash needs and capital projections. The earnings follow a challenging first quarter, when higher-than-expected delinquency in its key agribusiness loan portfolio and regulatory changes hurt earnings. The bank's shares have fallen more than 30% since the first-quarter report, which had led the lender to suspend some of its initial 2025 projections. Banco do Brasil resumed forecasts for those metrics on Thursday, projecting full-year adjusted net profit between 21 billion and 25 billion reais, far below its initial range of 37 billion to 41 billion reais provided at the start of the year. The mid-point of the fresh range, 23 billion reais, also falls short of the 26.8 billion reais expected by analysts polled by LSEG. The lender also cut the estimate for its credit portfolio growth to between 3% and 6% this year, from its previous expectation of between 5.5% and 9.5%. ($1 = 5.4101 reais)
Reuters
2 days ago
- Business
- Reuters
Banco do Brasil misses profit forecast, slashing yearly outlook and dividend
SAO PAULO, Aug 14 (Reuters) - Brazilian state-run lender Banco do Brasil SA ( opens new tab on Thursday reported a 60% slide in second-quarter adjusted net profit, missing analysts' forecasts, and announced a sharp cut to its full-year outlook and dividend payout. Net profit came down to 3.8 billion reais ($702.4 million), below the 5 billion reais expected in an LSEG poll. The results follow a challenging first quarter, where higher-than-expected delinquency in its key agribusiness loan portfolio and regulatory changes hurt earnings. The bank's shares have fallen more than 30% since the first-quarter report, which had led the lender to suspend some of its initial 2025 projections. Banco do Brasil resumed forecasts for those metrics on Thursday, projecting full-year adjusted net profit between 21 billion and 25 billion reais, far below its initial range of 37 billion to 41 billion reais provided at the start of the year. The mid-point of the fresh range, 23 billion reais, also falls short of the 26.8 billion reais expected by analysts polled by LSEG. In a separate filing, the lender also cut its 2025 shareholder payout to 30% of its profit, down from the previous range of 40% to 45%. ($1 = 5.4101 reais)
Reuters
3 days ago
- Business
- Reuters
Banco do Brasil's adjusted net profit falls 60% in second quarter
SAO PAULO, Aug 14 (Reuters) - Brazilian state-run lender Banco do Brasil ( opens new tab posted on Thursday a net adjusted profit of 3.8 billion reais ($702.4 million) for the second quarter, down 60.2% from a year earlier and below the 5 billion reais expected in an LSEG poll. The lender also said it expects adjusted net profit for the year to reach between 21 billion reais and 25 billion reais, after it had placed a previous estimate under review in May. ($1 = 5.4101 reais)
