Banco do Brasil (BBAS3) Q3 2024 earnings summary

Executive summary

• Adjusted net income reached R$9.5 billion in 3Q24, up 8.3% year-over-year, and R$28.3 billion in 9M24, up 8.4% year-over-year, reflecting disciplined execution and diversified business performance.

• ROE was 21.1% in 3Q24 and 21.5% year-to-date, indicating strong profitability.

• Value added to society totaled R$63.4 billion in 9M24.

• Focus on hyper-personalization, digital transformation, and ESG initiatives, including R$36 billion in sustainable funding over three years.

Financial highlights

• Loan portfolio expanded 13% year-over-year to over R$1.2 trillion as of Sep 2024, with strong growth in payroll, corporate, and agribusiness segments.

• Net interest income rose 13.9% year-over-year to R$77.2 billion in 9M24.

• Fee income increased 4.8% to R$26.3 billion in 9M24, led by asset management and insurance.

• Administrative expenses grew 4.9% to R$27.5 billion in 9M24, with a cost-to-income ratio at a historic low of 25.4%.

• Payroll loans grew over 11% year-over-year, with INSS and private payroll loans up more than 21% and 23%, respectively.

Outlook and guidance

• 2024 guidance maintained: adjusted net income R$37–40 billion, loan portfolio growth 8–12%, NII growth 10–13%, fee income growth 4–8%, and administrative expenses growth 5–10%.

• Single-digit net income growth expected for 2025, with margin improvement from credit card and non-payroll loan expansion.

• NPLs in agribusiness expected to normalize to around 1.7% in 2025 as provisions stabilize.

• Sustainable ROE targeted around 20% or high teens.