BBAS3

Banco do Brasil is a large financial institution whose common shares are 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. The consolidated activities involve typical universal bank operations, such as raising funds, granting credit, providing financial services and offering 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 managerial data disclosed in the Reference Form. This segment includes a wide range of products and services, such as deposits, several types of credit operations and banking services offered to different customer profiles. Operations cover retail, wholesale and government markets, served both by the physical branch network and specialized teams, as well as business with micro-entrepreneurs and the informal sector through banking correspondents. Revenues from this segment derive from financial intermediation and fees for services rendered.

In operational terms, credit disbursements are 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 relationship history. For individuals, micro-enterprises and rural producers, the calculation is massified, while for legal entities, public-sector entities and other profiles, a customized analysis is carried out by the bank’s specialists, with approval by specific committees. The creation of new credit lines takes into account macroeconomic scenarios, customer needs, institutional positioning, environmental and social impact, risks, applicable legislation, budget planning and internal controls and compliance principles, which directly influence the product portfolio offered.

On the funding side, Banco do Brasil structures deposit products and financial instruments aimed at raising customer funds, also through a development process that considers macroenvironment trends, customer expectations, economic-financial return, environmental and social impacts and regulatory requirements. These products can be contracted through various service channels, such as ATMs, call center, 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 deposit market within the Brazilian Financial System, with a 24.3% share in demand deposits, 13.3% in time deposits, 21.1% in savings accounts and 40.0% in 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 its traditional banking business, Banco do Brasil maintains an investments 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-class or exclusive investment funds, based on monitoring of the local industry and the identification of opportunities that complement the existing product lineup. Structuring observes rules issued by the Securities and Exchange Commission of Brazil (CVM), the Central Bank and the Federal Revenue Service, as well as ANBIMA codes for third-party asset management and distribution of investment products, among others. Portfolio management relies on specialized risk and compliance teams, segregated from the management teams, and on fundamental, quantitative, credit and macroeconomic analysis structures for advisory support. In December 2024, BB Asset appeared in an Anbima ranking for third-party assets under management, reinforcing the relevance of this segment within the conglomerate.

The distribution channels of Banco do Brasil and its asset manager form a broad platform for investor access to products, including retail individuals, high-income, private banking, government and institutional clients. In addition to the bank’s traditional channels – app, website, ATMs, call center and branches – BB Asset offers funds to non-account holders via independent investment platforms, through funds operated on an omnibus basis and feeder 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 brokerage firms, which broadens the conglomerate’s presence in the capital markets.

In terms of markets, 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 a highly competitive environment among financial institutions. The credit market is seasonal, with higher disbursements in the second half of the year and, in particular, specific seasonalities in agribusiness-related credit lines, aligned with planting, harvest and storage cycles.

From a regulatory standpoint, as a financial institution Banco do Brasil is subject to the supervision and regulation of the Central Bank of Brazil under Law No. 4,595/1964, both in its lending and funding activities. The institution states that it is not dependent on a small number of material suppliers, which reduces concentration risks in the 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 climate change-related initiatives, although specific details on these indicators and targets are described in the bank’s own reports, available on its 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 tracking 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 relevant 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 explain 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.