Banco do Brasil (BBAS3) investor relations material

Strategic evolution, direction, and business model

• Emphasis on long-term sustainability, shifting from short-term focus to multi-year strategy, especially after unprecedented agribusiness credit risk in 2025.

• The bank diversified beyond agribusiness into insurance, capital markets, payments, and international operations, with over 80 companies contributing about 50% of results.

• Strategic reorganization included a new governance unit for subsidiaries and leadership rotation to accelerate critical areas and integrated value creation.

• Technology investments exceeded BRL 19 billion in the last decade, with half in the last two years, supporting digital transformation, AI, and hyper-personalization for 90 million clients.

• The bank maintains a strong physical presence across Brazil, especially in underserved regions, combining digital and human channels for a 'phygital' approach.

Financial performance and resilience

• Robust business growth with net interest income, fee income, and equity gains rising steadily from 2014 to 2025.

• Conglomerate structure contributes to resilience, averaging 52% of net income, helping cushion earnings volatility.

• Return on equity (ROE) has remained strong, with recent years above 15%, and adjusted net income consistently growing.

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

• Management prioritizes sustainable results, transparency, and engagement with market, regulators, and government.

Risk management and credit portfolio

• Agribusiness portfolio faced a 'perfect storm' due to geopolitical, climate, and market shocks, leading to a spike in provisions and a focus on improved guarantees and collateral.

• New resilience matrix and stricter collateral requirements increased real guarantees from 31% to 69% in the latest crop year, reducing moral hazard and delinquency.

• The Regulariza Agro program (MP 1.314) helped rebalance farmers' cash flows, with 96% of operations now backed by real estate collateral.

• Management expects 2026 to mark a recovery in results growth, following concentrated adjustments in 2025.

• Private payroll loans are a key growth avenue, with a disciplined risk model, 13% market share, and ambitions to reach 20%.