Banco do Brasil (BBAS3) investor relations material

Strategic evolution and business model

• Emphasis on long-term sustainability, shifting from short-term focus to a multi-year, conglomerate-driven strategy, with diversification into insurance, capital markets, payments, and international operations.

• Conglomerate approach now contributes about 50% of results, integrating over 80 companies for value creation and resilience, averaging 52% of net income.

• Technology investments exceeded BRL 19 billion in the last decade, with half in the past two years, accelerating digital transformation and AI-driven personalization.

• Governance changes include new strategic participation and applied intelligence departments, and leadership rotation to accelerate critical areas.

• Commitment to maintaining a strong presence across Brazil, integrating physical and digital channels to build trust and long-term relationships.

Financial performance and risk management

• Robust growth in business, net income, and return on equity above 15%, with steady increases in net interest and fee income since 2014.

• Expanded loan portfolio by 30% and distributed over R$33 billion in dividends, maintaining a leading cost-to-income ratio.

• Historic increase in agribusiness delinquencies led to a sharp rise in credit risk and provisions, with R$8 billion per quarter in 2025 compared to R$868 million previously.

• New resilience matrix, stricter collateral requirements, and tactical adjustments in collection workflows, with real collateral coverage rising from 31% to 69%.

• Selective credit origination and proactive client engagement aim to restore payment rates to 95% in 2026, with recovery in results growth expected.

Sustainability, ESG leadership, and diversity

• Leading reference in sustainable finance in Latin America, with a BRL 415 billion sustainable credit portfolio and a target of BRL 500 billion by 2030.

• First Brazilian bank to provide guidance for the sustainable portfolio and pioneer of the first "Nature" labeled bond globally, raising US$500 million.

• R$45 billion in funding for ESG initiatives and R$30 billion allocated to renewable energy by 2030.

• Diversity targets for 2030: 50% women, Black, and Indigenous people in leadership, with significant progress since 2023.

• Social and environmental initiatives include funding for small farmers, reforestation, carbon credits, and support for local economies.