Banco do Brasil (BBAS3) Q2 2025 earnings summary

Executive summary

• Adjusted net income for 1H25 was R$11.2 billion, up 18% year-over-year, but Q2 net income fell 48% sequentially to R$3.8 billion, mainly due to higher credit costs and agribusiness/MSME delinquency.

• ROE improved to 21.7% in 2Q25 from 16.7% in 2Q24, but was 12.6% YTD and 8.4% for the quarter.

• Net interest income for 1H25 was R$48.9 billion, down 4.6% year-over-year, impacted by higher funding costs and regulatory changes.

• Expanded loan portfolio reached R$1,294.3 billion, up 11.2% year-over-year, with strong growth in companies and agribusiness.

• 2025 is described as a year of adjustments, with a focus on risk management, credit recovery, and digital acceleration.

Financial highlights

• Fee income for 1H25 was R$17.1 billion, nearly flat year-over-year, but up 4.7% sequentially in Q2.

• Cost of credit in 1H25 totaled R$26.1 billion, up 56.7% year-over-year, mainly due to agribusiness provisioning.

• Administrative expenses for 1H25 reached R$19.2 billion, up 5.8% year-over-year, reflecting wage increases and tech investments.

• CET1 ratio was 10.97% at June 2025, stable quarter-over-quarter, but lower than the 14.14% reported elsewhere.

• Expanded loan portfolio at R$1.294 trillion, with strong growth in secure lines.

Outlook and guidance

• Loan portfolio growth guidance for 2025 revised: business and agribusiness 3%-6%, individuals 7%-11%, corporates 0%-3%.

• Net interest income and cost of credit guidance are under review due to regulatory changes.

• Adjusted net income guidance for 2025 set at R$21–25 billion, below previous and market expectations.

• 2025 expected to be a year of lower profitability, with a return to growth and higher profitability targeted for 2026.

• Fee income guidance for 2025 is R$34.5–36.5 billion; administrative expenses expected at R$38.5–40.0 billion.