When asked about a possible new increase in the payout of the Bank of Brazil (BBAS3), the company’s CFO, Marco Geovanne Tobias, denied the possibility.
Earlier in 2024 the Banco do Brasil payout was raised from 40% to 45%, in a movement that increased dividends paid by the financial institution.
Even so, and despite BB’s large capitalization – as well as other players in the sector -, Tobias denied an increase without signaling a re-discussion of the topic in the medium term.
“Today we have a level of 45%, in addition to a 15% Basel Index, which we consider comfortable. The increase we made was through an analysis by the financial area, which understood that this would be the appropriate level”, said the CFO of Banco do Brasil.
“There is no discussion for an increase, our intention is to maintain the current 45%”, stressed the executive during a BB press conference, held this Thursday (9).
Is Banco do Brasil provisioning a problem?
On the same occasion, bank executives were also asked about the level of provisioning – perhaps one of the only concerns of investors and analysts with the 1Q24 of Banco do Brasilwhich again showed the highest profit in history for an accumulated first quarter.
The Provision for Doubtful Credit (PCLD) indicator showed R$8.5 billion this quarter, signaling that the bank is heading towards the top of its guidance – which foresees a range between R$27 billion and R$30 billion.
If this figure were replicated equally in the following three quarters, the bank would exceed its guidance by R$4 billion.
Despite this, the executives highlighted that they remain calm with the current scenario, highlighting that the peak of default has already passed, remaining in December 2023.
Tarciana Medeiros, CEO of Banco do Brasilcommented that the provisioning rates “are already done” and sees no surprises in what was reported in 1Q24.
Tobias, the CFO, added that looking at the increase in defaults in agribusiness, there is also no concern “since it is a level that can be provisioned”.
In this sense, the executive also highlighted the data presented during the press conference, relating to non-performing loans (in English, non-performing loan or NPL), which totaled R$ 9.53 billion in the quarter, still below 1% of the Banco do Brasil credit portfolio.
Along with this, questions were asked about the impacts of the floods in Rio Grande do Sul (RS). The assessment, at the moment, is that it is too early to quantify the damage.
Tarciana pointed out that “it is an event that not only affects the bank, but the entire economic cycle of the place and is related to it”.
“That said, we have a premium to deal with accidents, when it comes to the insurance company. We entered into partnerships with the main reinsurers in the world, and they were well prepared as this type of event is more common in other places in the world. We know that when the water recedes, the risks will be covered and customers will be able to count on help,” she declared.
Rio Grande do Sul currently represents 4% of the country’s credit portfolio. Bank of Brazil and 6% of the credit portfolio aimed at agribusiness.
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