The Vice President of Internal Controls and Risk Management, Geovanne Tobias, said the first quarter of 2025 is “incomparable” with other quarters. (Image: LinkedIn)
THE Banco do Brasil (BBAS3) disclosed results that left part of the worried analysts, with profit and profitability well below expectation, which were no longer so good.
The numbers were enough to change the recommendation of some analystswho now see a more risky and uncertain bench.
BBAS3 It ended this Friday’s session (16) with a fall of 12.69%, to R $ 25.67.
In a teleconference of results, the management, however, tried to put hot cloths. The vice president of internal controls and risk management, Geovanne TobiasHe said that the first quarter of 2025 is “incomparable” with other quarters.
This because of the norms of Resolution No. 4,966, that equate the Brazilian rules to international, forcing the bank to make greater provisioned. The measure hurt the margins.
Another problem was the agribusiness default, which was above expected and showed worrying deterioration.
“This is a transition balance, as it was already being signaled. A continuity is already anticipated in the deterioration of the agribusiness portfolio,” he said.
Also according to Tobias, “it is not a profit to throw away, quite the opposite.” “Clearly demonstrates the Fortress of Banco do Brasil”.
Already the CEO, Tarciana Medeiroshe recalled that the result of R $ 7.4 billion in the first quarter of 2025 is the third best first quarter in the history of BB, and the previous two also occurred under this management.
“When it comes to ‘worst result’, especially in relation to Agro, it is essential to highlight the diversified composition of the credit portfolio: approximately 30% agro, 30% individual and 30% legal entity. It is far from representing a weak balance. It is essential to highlight this point.”
Is the worst behind?
Questioned by Money Times During the teleconference with journalists if the worst is left behind, Tobias says that now the bank is in time to analyze the Impacts of the resolution.
Tobias points out, however, that the harvest is underway and must be a record, which can reverse this movement. “Combined with the measures already adopted in the collection and protest fronts, there is expectation of stabilization of this portfolio.”
He also recalls that it is important to consider the rural sector calendar: harvest occurs between March and April, varying according to the region, and marketing happens in the sequence.
“Therefore, the second quarter will be decisive to verify if the results will remain at the same level or will have recovery.”
Also according to the executive, from the new crop, the expectation is to improve in the second half.
“At this time, it is not yet possible to state if there will be resumed in the second quarter; the results may be similar to those of the first.”
Anyway, he says, it will be possible to establish a comparison base, as the first trimester is atypical and not comparable to the previous ones, “due to specific accounting and the reinforcement of provisions in the rural portfolio.”
BANCO DO BRASIL ROE below 20%
Another negative surprise from BB was the ROE (Return on Equity)which plummeted 4% and is now 16.7%, below Santander (Sanb11) and Itaú (Itub4).
According to Tobias, Banco do Brasil maintains full capacity to continue delivering return above the cost of capital even at this time of transition and increased default, with ROE around 17%, already aiming at the resumption of results of over 20% in the future.
“It is worth remembering that as soon as the basic interest rate falls again, there will be a positive impact on the bank’s financial margin, due to liabilities, with mostly post-fixed captures-a volume of approximately R $ 380 billion.”
He states that, with the reduction in the interest rate, the cost of catchment immediately improves, which increases the margin and generates more result.
Part of the market is divided as to the first cut. Some speak at the end of the year, others say it will occur next year.
Change in BC?
One of the exits for default at Agro would be to talk to the Central bank to find forms that allow a soft transition from the institution in the implementation of Resolution 4.966.
“We are already opening conversation with the regulator to bring different treatment propositions from Agro’s portfolio,” said BB’s executive president.
“These are operations with different payment and receipt flows… it makes perfect sense, and we need to do this work. This is one of the reasons that we remain with the guidance Under review, because it depends on possible adjustment, ”added the executive.
Source: Moneytimes
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