O Bank of Brazil (BBAS3) releases its results this Wednesday (8). The vast majority of the market remains optimistic about the company.
The Bloomberg consensus expectation is that the Banco do Brasil profit be R$8.82 billion in the first quarter of 2024 (1Q24).
The adjusted net profit of the Bank of Brazil in the first quarter of 2023 (1Q23) it reached the figure of R$8.5 billion.
Same houses that expect a better last line for the result Banco do Brasil remain optimistic, as is the case with XP, which projects R$8.71 billion in recurring net profit and continues with a purchase recommendation for BBAS3with a target price of R$36.50.
“We expect another quarter of robust growth in Banco do Brasil’s credit portfolio, probably in line with the midpoint of its guidance (8% – 12%), despite recent concerns related to a stronger slowdown than expected in the agribusiness sector”, says the house.
“BB has apparently managed to navigate this more difficult scenario. We expect its gross financial margin to increase by 14% compared to last year and -6.6% compared to the previous quarter, mainly due to more modest credit operations”, he adds.
XP’s projections for the Banco do Brasil in 1Q24 They also include a Return on Equity (ROE) of 21% and revenue from services of R$8.53 billion.
BTG Pactual, which also recommends purchase for shares of Banco do Brasilprojects a profit of R$9.16 billion in the first quarter of this year.
“We still prefer Itaú and BB over Bradesco and Santander, looking at the incumbent banks. Given Itaú’s recent underperformance, the stock is our top pick among banks, ahead of BB”, notes the house.
Goldman Sachs sees Banco do Brasil profit above R$9 billion
Goldman Sachs, which also recommends purchasing BB shares, expects recurring net profits above R$9 billion.
“Based on February data released by the Central Bank, we infer Banco do Brasil profit in 1Q24 at R$9.3 billion, just 1% below what we estimated, while the results are generally underestimated by 5%”, notes the house.
Genius expects ‘sequential advancement’
In line with other analyses, Genial highlights that it expects BB to show “another quarter of robust results”.
The company’s expectation is for a net profit of R$9.26 billion, with a slight drop of 2% compared to the previous quarter, but an increase of +8.4% compared to the same stage of the previous year.
“In addition, we estimate profitability (ROE) of 21.1%, representing an increase of 0.4 pp compared to the previous quarter (q/t) and 1.4 pp compared to the same quarter of the previous year (q/t). a), reflecting BB’s current phase of strong performance”, says the house.
“In 4Q23, the Patagonia subsidiary brought an exceptional result, contributing a significant amount of R$1.8 billion. However, Banco do Brasil chose to strengthen its balance sheet, reserving between R$2.5 billion and R$3.0 billion in provisions”, he adds.
Therefore, apart from the “exceptional events”, the expectation is for a performance in 1Q24 that will not be very different from that observed in 4Q23.
Despite this, analysts draw attention to what they consider “important movements”:
- Improvement in provision for doubtful debts on a quarterly basis
- Higher tax rate on a quarterly basis
- Lower contribution from Patagonia
“In this way, the Bank of Brazil should present a pre-tax result growing 3% compared to 4Q23. However, we expect lower net profit on a quarterly basis due to a higher tax rate. Furthermore, we anticipate an improvement in default, driven mainly by the individual segment and the write-off of Americanas credits (AMER3), 100% provisioned for loss”, concludes Genial.
 in 1Q24: Another glorious quarter?){kind=link}