Banco do Brasil Profit Falls 66.5% in Third Quarter

BRAZIL MARKETS · COMPANY NEWS

Updated 1 time · Latest: 12 November 2026

Shares in Banco do Brasil, the state-controlled lender at the heart of Brazil’s farm-driven economy, fell about 9% on Thursday after its profit miss. Citi, a US bank, rates the stock sell, and XP, a Brazilian brokerage, stays neutral.

Investors marked down Banco do Brasil on Thursday 12 November 2026, a day after it reported adjusted net profit (profit without one-off items) of R$1.3 billion (about US$0.23 billion), down 66.5% from a year earlier. BBAS3, its ticker on São Paulo’s B3 exchange, was quoted about 9% lower, at R$15.37 (about US$2.73), in late trading on Thursday, against R$16.89 (about US$2.99) at Wednesday’s close.

That is about a third of the R$3.9 billion (about US$0.69 billion) earned in the second quarter, and BTG Pactual, a Brazilian investment bank, had forecast R$1.9 billion (about US$0.34 billion). Brazil’s farmers are struggling to repay their loans, and their main state lender is absorbing the cost.

What Analysts Say After the Results

Citi recommends selling BBAS3 with a target of R$15 (about US$2.66), about 11% below Wednesday’s close. It first cut the bank to sell on Tuesday 27 October, before the results, and our earlier piece on Citi’s bearish call on the bank gives the background.

Genial Investimentos, a Brazilian brokerage, kept its hold rating with a R$20.10 target (about US$3.56) but will revise its estimates, target and rating after the investor call. XP, another Brazilian brokerage, rates the shares neutral with a R$21 target (about US$3.72).

Why It Matters

Profit before tax was negative at R$832 million (about US$148 million), according to the bank’s results. Genial notes that net profit was positive only because of tax credits of R$3.1 billion (about US$0.55 billion).

The mechanism is farm credit, where analysts name loan quality and higher credit costs as the weak points. Credit cost, the money a bank sets aside or gives up on loans that may not be repaid, reached R$21.2 billion (about US$3.8 billion), up 18.4% from a year earlier.

The bank also raised its 2026 credit-cost guidance to R$80–83 billion (about US$14.2–14.7 billion) from R$65–70 billion (about US$11.5–12.4 billion). That is the bank’s own forecast for what bad loans will cost it this year.

A Lower Profit Goal and a Smaller Dividend

The bank now guides for 2026 profit of R$9–11 billion (about US$1.6–2.0 billion), down from R$18–22 billion (about US$3.2–3.9 billion). Guidance is a company’s own forecast range.

With R$8.6 billion (about US$1.5 billion) earned in nine months, the new range implies a fourth-quarter profit of only R$0.4–2.4 billion (about US$0.07–0.43 billion). That is our arithmetic from the bank’s own guidance.

The bank also cut its dividend payout, the share of profit paid to shareholders, from 30% to 25% for 2026, the legal minimum. It will pay no interim dividends, advance payouts made during the year, in November or in 2027, and the 2027 payout will depend on its capital.

The strongest counter-view is that the shares already price much of this. Citi’s own R$15 target sits just below Thursday’s price of R$15.37, so its report leaves little further downside to its own estimate.

Who Is Affected

Holders of BBAS3 shares and the federal government, the bank’s controlling owner, bear the cost. Investors who hold Brazil through emerging-market funds should check whether Banco do Brasil sits in them.

Private rivals show the pain is concentrated in farm credit, as Itaú Unibanco, Brazil’s largest private bank, reported recurring profit, which excludes one-off items, of R$12.6 billion (about US$2.2 billion) and Bradesco, another large private bank, recurring profit of R$7.1 billion (about US$1.3 billion). Our guide to the Brazilian stock market explains how these shares fit into the index.

What to Watch Next

Genial will publish its revised rating and target after the investor call, but has not given a date. Management’s full-year 2026 results are the next big test, and the bank has not published their date.

What Is Not Known

It is not known how far farm defaults will go, or whether the R$9–11 billion (about US$1.6–2.0 billion) range is the floor. It is also not known what the federal government will do about the bank’s capital, and what the 2027 payout will be.

Conversions use R$5.64 per US$ (market data provider, 12 November 2026). Figures from earlier dates use the same rate.

More: Brazil news, every day from The Rio Times.

Frequently Asked Questions

Why did Banco do Brasil shares fall on Thursday?

BBAS3 was quoted about 9% lower, at R$15.37 (about US$2.73), in late trading on Thursday, after a 66.5% profit drop and a guidance cut. Analysts named farm-loan quality and higher credit costs.

What do analysts recommend on Banco do Brasil?

Citi rates it sell with a R$15 target (about US$2.66), while Genial keeps hold with a R$20.10 target (about US$3.56). XP stays neutral with a R$21 target (about US$3.72).

What changed in the dividend?

The payout falls from 30% to 25% for 2026, the legal minimum. There are no interim dividends in November or in 2027.

Sources: Banco do Brasil, third-quarter 2026 results release and guidance (11 November 2026); B3 (the São Paulo stock exchange) trading data; research reports by Citi, Genial Investimentos, XP and BTG Pactual; market data provider prices (12 November 2026).