Banco do Brasil (BBAS3) investor relations material

Strategic adjustments and risk management

• Faced significant challenges in 2025, particularly in agribusiness, leading to suspension and later readjustment of financial guidance, with a focus on risk mitigation and selective credit disbursement.

• Enhanced risk models and resilience frameworks, leveraging artificial intelligence for safer lending and more robust client analysis.

• Collaborated with government and regulatory bodies to address sector-specific risks, especially in agribusiness, and implemented new credit recovery and renegotiation measures.

• Adopted a more selective approach to credit origination, focusing on clients with stronger profiles and shifting guarantees to more robust fiduciary structures.

• Expectation of risk normalization and improved portfolio quality from Q4 2025 onward, with a target CET1 capital ratio of around 11% to support sustainable growth.

Digital transformation and operational efficiency

• Accelerated digital transformation, with 94% of transactions now digital and 30 million recurrent digital clients.

• Invested over R$14 billion in technology and cybersecurity over the past decade, and established a new agile, squad-based operational model to speed up solution delivery.

• Reduced solution development cycle time by 74%, aiming to have 10,000 employees in the new model by end-2026, advancing the original timeline by two years.

• Launched innovative products such as private payroll loans, achieving rapid market penetration and high client satisfaction.

• Enhanced employee training, with over $41 million invested in 2024 and more than 5,000 employees trained in digital and AI skills.

Financial performance and capital strategy

• Achieved record adjusted net income of R$35.6 billion in 2023, up 11.4% from 2022, and delivered the best performance on the Ibovespa in 2023.

• 2024 guidance projects adjusted net income between R$37 and R$40 billion and ROE around 21%.

• Maintained profitability and reinforced margins despite higher risk and provision expenses, especially in agribusiness.

• Diversified revenue streams through subsidiaries and partnerships, including BB Seguridade, asset management, and international operations.

• Reduced payout ratio to 30% for 2025 to preserve capital, with a focus on organic capital generation and potential for extra dividends in 2026 if profitability improves.