Banco do Brasil (BBAS3) investor relations material

Executive summary

• Adjusted net income for 2Q26 was R$3.9 billion, up 13.9% quarter-over-quarter and 3.3% year-over-year, driven by higher net interest income and treasury results, though first half net income was R$6.26 billion, down from R$9.81 billion in 1H25 due to higher credit risk provisions.

• Management focused on disciplined credit growth, risk mitigation, digital transformation, and customer-centric strategies, supporting long-term sustainability.

• Provisional Measure 1376 is expected to support significant loan renegotiations, especially in agribusiness, aiming to restore payment rates and reduce cost of risk.

• The bank maintained strong liquidity and capital positions, with a CET1 ratio of 11.27% and a Capital Adequacy Ratio of 13.91% as of June 2026.

Financial highlights

• Net interest income reached R$27.5 billion in 2Q26, up 0.2% sequentially and 12.1% year-over-year for 1H26.

• Fee income totaled R$9.1 billion in 2Q26, up 3.4% quarter-over-quarter and 4.2% year-over-year; 1H26 fee income grew 4.9%.

• Cost of credit was R$18.5 billion in 2Q26, down 2.1% sequentially but up 16.1% year-over-year; 1H26 cost of credit rose 43.3% year-over-year.

• Expanded loan portfolio reached R$1.31 trillion at June 2026, up 0.6% sequentially and 1.5% year-over-year.

• Loss recovery improved to nearly R$2 billion, a 51.4% increase from the previous quarter.

Outlook and guidance

• Management expects improvement in agribusiness portfolio performance due to Provisional Measure 1376, targeting a return to 90% on-time payment rates and convergence of cost of risk within guidance.

• 2026 guidance: loan portfolio growth 0.5–4.5%, net interest income 7–11% growth, fee income 2–6% growth, administrative expenses 5–9% growth, adjusted net income R$18–22 billion.

• Cost of risk is targeted to decline to 3.5% for the full portfolio by 2027, contingent on successful restructuring.

• Guidance maintained for the year, with profit expected at the lower end and provisions at the higher end of the range.

• The bank is closely monitoring regulatory changes, including tax reform and sustainability reporting requirements, with implementation expected in 2027.