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 adjusted net income was R$3.8 billion, down 48% from Q1, mainly due to higher credit costs and regulatory changes.

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

• Total assets reached R$2.44 trillion, with shareholders' equity at R$183.5 billion as of June 2025.

• CET1 ratio was stable at 10.97% in Q2, with a capital adequacy ratio of 14.14%.

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

Financial highlights

• Net interest income for 1H25 was R$48.9 billion, down 4.6% year-over-year; 2Q25 NII was R$25.1 billion, up 4.9% sequentially.

• Fee income for 1H25 was R$17.1 billion, up 4.7% quarter-over-quarter, with positive performance in asset management and insurance.

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

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

• Expanded loan portfolio grew 11.2% year-over-year to R$1.294 trillion, with strong growth in companies and agribusiness.

Outlook and guidance

• Loan portfolio growth guidance for 2025 revised: individuals 7%-11%, companies 7%-10%, agribusiness 3%-6%, 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.

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

• 2025 expected to be a year of lower profitability, with recovery targeted for 2026.