BBAS3: Banco do Brasil stock drops over 10% as Q3 profit falls 66.5%

What BB is. Banco do Brasil is a state-controlled bank with R$2.55 trillion in total assets at the end of September. Its expanded loan book is R$1.3 trillion, of which R$403.6 billion is agribusiness. CEO Tarciana Medeiros said: "We are, and remain, the bank of Brazilian agro."

The quarter. Adjusted net income was R$1.27 billion, down 66.5% from the third quarter of 2025 and 67.5% from the second quarter of 2026. Analysts compiled by LSEG expected R$3.474 billion. Credit cost, BB's measure of loan-loss charges, rose 18.4% to R$21.2 billion. For nine months it is R$58.6 billion, up 33.2%. Return on equity was 2.8%, against 8.4% a year earlier.

Why it happened. BB says the rise reflects continued defaults in part of its agribusiness book and one-off provisions at some large corporate clients. Agro defaults over 90 days reached 6.92%, from 4.84% a year earlier. The overall 90-day default ratio was 6.08%, from 4.51%. On the earnings call Medeiros said the agro defaults are concentrated in medium and large clients, in soy, corn and cattle, mainly in the Center-West, and that 85% of those clients became delinquent from 2024. She also said BB has more than 540,000 rural borrowers and that 90% of them are paying on time.

The CEO's words. Medeiros said the result is "well below what is expected" and that BB is going through "the most severe cycle" in its history. She added that BB "is not just a default cycle".

Guidance and dividends. The 2026 profit guidance was cut from a range of R$18-22 billion to R$9-11 billion. Credit cost is now expected at R$80-83 billion, up from R$65-70 billion. The loan book is now seen between flat and down 2%, instead of up 0.5% to 4.5%. The board cut the payout to 25% for 2026 and set it at 25% for 2027, with no interim dividends in 2027. Paying even that depends on capital projections. BB calls the measures prudential and temporary. Its common equity ratio was 10.80% in September, against 11.16% a year earlier. The Basel ratio was 13.45%, against 14.81%.

The market. InfoMoney reported BBAS3 down 10.66% at R$15.04 at 10:17 Brasília time on 12 November. Valor reported the shares down more than 11% early in the session and down 7.70% at R$15.59 around 10:40. XP analysts called the disappointment widespread and warned that leading credit indicators point to a risk of further deterioration.

Limits. All amounts are in Brazilian reais. Share prices are intraday moves, not closing prices. Adjusted net income is BB's own measure. Guidance is a company forecast, not a promise. This is not investment advice.

Hechos confirmados

• BB's adjusted net income for Q3 2026 was R$1.27 billion, down 66.5% from Q3 2025 and 67.5% from Q2 2026.^[1][3][4]
• Analysts compiled by LSEG expected R$3.474 billion.^[3]
• Return on equity was 2.8%, against 8.4% in Q3 2025.^[1][3]
• Credit cost was R$21.2 billion, up 18.4% on the year; for nine months R$58.6 billion, up 33.2%.^[1][3]
• 90-day defaults were 6.08% of the loan book, against 4.51% a year earlier; agro defaults were 6.92%, against 4.84%.^[1][3]
• 2026 adjusted profit guidance was cut from R$18-22 billion to R$9-11 billion; credit cost guidance raised from R$65-70 billion to R$80-83 billion.^[1][3]
• Loan book guidance moved from growth of 0.5% to 4.5% to a range between flat and a 2% fall; gross financial margin guidance from up 7-11% to up 2.5-4.5%.^[1][3]
• The board cut the 2026 payout to 25% from 30% and set 2027 at 25% with no interim dividends, calling the measures prudential and temporary.^[2][3]
• Common equity ratio was 10.80% in September 2026 (11.16% a year earlier); Basel ratio 13.45% (14.81%).^[1]
• BBAS3 fell 10.66% to R$15.04 at 10:17 Brasília time on 12 November.^[3]
• Valor reported BBAS3 down 7.70% at R$15.59 around 10:40, after falling more than 11% early in the session.^[4]
• CEO Tarciana Medeiros said BB is going through "the most severe cycle" in its history.^[4]
• Medeiros said agro defaults are concentrated in medium and large clients in soy, corn and cattle, mainly in the Center-West, and that 85% of them became delinquent from 2024.^[4]
• BB had R$2.55 trillion in total assets and an expanded loan book of R$1.3 trillion in September 2026; the agro book was R$403.6 billion. InfoMoney describes it as state-controlled.^[1][3]
• XP analysts said the disappointment was widespread and that leading credit indicators point to a risk of further deterioration.^[3]

Implicaciones

• ConfirmadoShareholders should not expect interim dividends from BB in 2027, and the minimum payout itself depends on capital projections.
• ConfirmadoCapital ratios fell over the year, and BB cited capital projections as a reason for the payout cut.
• Nuestra lecturaThe guidance implies a weak fourth quarter: nine-month adjusted profit was R$8.6 billion against a full-year range of R$9-11 billion, so the last quarter would bring roughly R$0.4-2.4 billion. This is our arithmetic.

Todavía no se sabe

• Whether farm-loan defaults have peaked.
• Whether BB will revise its guidance again.
• How the payout and capital plans change if losses keep growing.
• Where the shares close after the intraday drop.

A quién afecta

Brazil, Latin America, Global. People who hold Brazilian stocks or ADRs, follow emerging-market banks, or track farm credit in Brazil

Fuentes

1. Banco do Brasil Investor Relations (ri.bb.com.br): Sumário do Resultado 3T26 11 de noviembre de 2026 · oficial
2. Banco do Brasil Investor Relations (ri.bb.com.br): Fato Relevante: Remuneração aos Acionistas em 2026 e 2027 11 de noviembre de 2026 · oficial
3. InfoMoney: BBAS3: ação do BB desaba mais de 10% com balanço abaixo em todas as frentes 12 de noviembre de 2026 · medios
4. Valor Econômico: BB está atravessando o ciclo mais severo de sua história, diz presidente; ações desabam 12 de noviembre de 2026 · medios