Banco do Brasil Faces Rising Loan Defaults and Prepares for a Challenging 2026
Banco do Brasil confronts soaring loan defaults in agribusiness and increasing delinquency rates, committing hefty contributions to credit guarantee funds amid a challenging outlook for 2026.
- • Banco do Brasil reported a net profit decline of 45.4% in 2025 due to soaring defaults, especially in agribusiness.
- • Loan defaults in agribusiness rose approximately 500% compared to historical averages, impacting financial results.
- • Delinquency rates increased to 6.56% for individuals and 3.75% for corporate loans in early 2026.
- • Banco do Brasil will make a R$ 5 billion early contribution to the credit guarantee fund (FGC) and an additional R$ 500 million annually.
- • The bank projects a net profit between R$ 22 billion and R$ 26 billion for 2026 despite the challenging environment.
Key details
Banco do Brasil closed 2025 with a net profit of R$ 20.68 billion, a steep 45.4% decline from 2024, largely due to a dramatic increase in loan defaults, particularly in the agribusiness sector. According to CEO Tarciana Medeiros, the bank experienced a roughly 500% rise in agribusiness loan defaults compared to historical averages, severely impacting financial results alongside new accounting regulations.
Looking ahead, the bank projects a net profit between R$ 22 billion and R$ 26 billion for 2026, anticipating a challenging year amid increasing credit risks. To bolster market stability, Banco do Brasil will make an early contribution of R$ 5 billion to the Fundo Garantidor de Crédito (FGC), aiming to support liquidity after the liquidation of Banco Master, and plans an additional extraordinary annual contribution of R$ 500 million. Medeiros stressed the importance of maintaining a robust FGC as a protective measure for investors and called for regulatory adjustments to prevent future market disruptions.
Credit portfolios reveal concerning trends: the individual credit portfolio grew by 1.8% in the last quarter and 7.6% year-over-year, but personal loan delinquency rose from 6.01% to 6.56% compared to the previous quarter. The corporate credit portfolio remained stable; however, corporate loan defaults increased from 3.40% to 3.75% in the same period. Notably, the bank reported a significant R$ 3.6 billion default by a single company.
These developments underscore mounting challenges for Banco do Brasil, emphasizing rising inadimplência in both individual and corporate sectors, coupled with strategic moves to strengthen financial safeguards and maintain leadership in payroll loans for public and private sector employees. The bank's efforts aim to navigate turbulent market conditions while fostering recovery and stability in 2026.
This article was translated and synthesized from Brazilian sources, providing English-speaking readers with local perspectives.
