BBAS3 Banco do Brasil

Banco do Brasil is a large financial institution with common shares traded on B3 under the ticker BBAS3. According to its 2025 Reference Form, the bank organizes its operations into different segments, with the banking segment accounting for the most significant share of results, with revenues predominantly generated in Brazil. Its consolidated activities involve typical universal bank operations such as funding, lending, provision of financial services and investment products, in addition to complementary businesses in insurance, payments, investments and asset management.

The core of Banco do Brasil’s business model lies in the banking segment, which accounted for more than 90% of total revenue in 2022, 2023 and 2024, according to management data presented in the Reference Form. This segment encompasses a broad range of products and services, such as deposits, various types of credit operations and banking services offered to different client profiles. Operations cover retail, wholesale and government markets, served both through the physical branch network and specialized teams, as well as business with micro-entrepreneurs and the informal sector via banking correspondents. Revenues in this segment derive from financial intermediation and fees for services rendered.

In operational terms, loan origination is preceded by a structured credit risk calculation, using internally developed methodologies that follow recognized risk management practices. Customer risk, associated with the probability of default within twelve months, is calculated based on internal and external information, as well as the relationship history. For individuals, microenterprises and rural producers, the calculation is massified, while for legal entities, public sector entities and other profiles there is a customized analysis by bank specialists, with approval by specific committees. The creation of new credit lines takes into account macroeconomic scenarios, client needs, institutional positioning, environmental and social impact, risks, applicable legislation, budget planning and internal controls and compliance principles, which directly influences the product portfolio offered.

On the funding front, Banco do Brasil structures deposit products and financial instruments designed to raise funds from clients, also using a development process that considers macroenvironment trends, client expectations, economic and financial returns, environmental and social impacts and regulatory requirements. These products can be contracted through various service channels such as ATMs, call centers, institutional website, app, banking correspondents and the branch network spread across the country. In December 2024, the bank held significant shares in different niches of the National Financial System’s deposit market, with a 24.3% share of demand deposits, 13.3% of time deposits, 21.1% of savings accounts and 40.0% of agribusiness credit bills, according to data from the Central Bank of Brazil and B3. The funding market in which Banco do Brasil operates is described as highly competitive and subject to seasonality, with higher deposit volumes in the fourth quarter and more redemptions in the first quarter.

In addition to the traditional banking business, Banco do Brasil maintains an investment segment, focused on the placement and issuance of securities, and an asset management segment, concentrated in BB Asset Management. In third-party asset management, BB Asset structures multi-shareholder or exclusive investment funds, based on monitoring of the local industry and identification of opportunities that complement the existing product range. Structuring complies with rules issued by the Brazilian Securities and Exchange Commission, the Central Bank and the Federal Revenue Service, as well as ANBIMA codes for third-party asset management and investment product distribution, among others. Portfolio management has specialized risk and compliance teams, segregated from the management teams, and fundamental, quantitative, credit and macroeconomic analysis structures for support. In December 2024, BB Asset appeared in an Anbima ranking for third-party assets under management, which reinforces the relevance of this segment within the group.

The distribution channels of Banco do Brasil and its asset manager form a broad platform for investor access to products, including retail investors, high-income and private clients, government and institutional clients. In addition to the bank’s traditional channels – such as app, website, ATMs, call center and branches – BB Asset offers funds to non-account holders via independent investment platforms, through funds operated on behalf of third parties and feeder/mirror funds at other financial institutions. It also distributes funds to Closed Pension Entities through investment advisory offices specialized in the institutional segment. Additionally, ETFs and real estate funds administered and managed by BB Asset can be traded on B3 via home broker and securities brokers, expanding the group’s presence in the capital markets.

In terms of markets where it operates, Banco do Brasil obtains the vast majority of its revenue in its home country. In the fiscal year ended December 31, 2024, the institution recorded revenue of R$ 293,834 million, 91% of which came from activities in Brazil, according to the Reference Form. The bank reports that it did not obtain material revenues in foreign countries during this period, which underscores the predominance of its domestic operations, despite having channels and products accessible abroad. In the credit market, Banco do Brasil held a 16.1% share of the financial system’s loan portfolio in December 2024, according to Central Bank data, in an environment of intense competition among financial institutions. The credit market shows seasonality, with higher disbursements in the second half of the year and, in particular, specific seasonal patterns in lines related to agribusiness, aligned with planting, harvesting and storage cycles.

From a regulatory standpoint, Banco do Brasil, as a financial institution, is subject to supervision and regulation by the Central Bank of Brazil under Law No. 4,595/1964, both in its lending and funding activities. The institution states it is not dependent on a small number of key suppliers, which reduces concentration risks in its services and technology supply chain. Regarding ESG practices, the Reference Form highlights that Banco do Brasil’s Annual Report is assured by an independent audit firm, and that the company prepares a Sustainability Plan with accountability, including references to the UN Sustainable Development Goals and initiatives related to climate change, although the specific details of these indicators and targets are described in dedicated reports available through investor relations channels. This set of information reinforces the formalization of governance and transparency practices around environmental, social and corporate governance topics.

For individual investors following BBAS3 shares on B3, Banco do Brasil therefore presents itself as a universal bank with a strong predominance of revenues in Brazil, broad activity in lending and funding, a significant presence in specific segments of the national financial system and complementary operations in investments, asset management, insurance, payments and consortia. The segmented structure, market share data and references to risk management, compliance and sustainability processes help in understanding the nature of the risk and return associated with the business, always based on information officially disclosed in its Reference Form and other annual reports.