Banco Do Brasil Sa S/Adr

Hello everyone, welcome to another videocast to talk about the result of the fourth quarter of Banco do Brasil. I am Janaine Stott, Head of Relations with BB Investors, and it is a pleasure to be here again with you, together with Giovanni Tobias, our CFO, and Marcelo Alexandre, our specialist in R&D. And to open up our conversation, I want to start by talking a little bit about the gardens, Giovanni. It was a challenging year, but as we can see here on the screen, we reached all the ranges, we were within all the ranges with the exception of agribusiness and here a lot due to the risk environment and the measures that we have been taking throughout the year to control inadimplency. But besides that, I wanted to hear a little bit from you about the composition of profit and your vision of this result.

Well, just making one note here, When she says that we practically hit almost everything in the Guidance, it is important to remember that in 2025 we had three Guidances. When we announced at the beginning of the year what we had as the best expectation and forecast for the year 2025, we did not imagine what would happen in terms of result and mainly in terms of forecast with the implementation of 4966 and also the advance of inadimplency in the agribusiness sector. And that's why we suspended the Guidance, so that we could take a break and understand exactly what was happening, what was the reflection. So, we had that moment to go deeper, to study, to understand and to bring to the market, in the promotion of the semester, what would then be our Guidance, our best vision for the whole year of 2025. And then, finally, we ended more or less in November, making another adjustment, mainly in the risk line, the expected loss, the provisions. So, when we look at the result of this year, without a doubt, it is a result that shows mainly, not only a transparency of ours, to come and tell the investors, look, there is something happening, we will understand it well and we will come back to you and tell you what is happening and where we think we are going to go. But also a resilience, a commitment and discipline in the execution of our strategy, so that we would be today coming and telling you, This guidance here, that we are practically within all lines, except for the agribusiness issue, It was the result of a lot of work. So, now going directly to the answer to your question, if we can now go to the next sheet. This sheet, I think it is very emblematic, because we saw there, since 2023, a flood of results of an extremely competitive, attractive profitability. We were delivering ROEs, Returns on Liquid Patrimony, above 20%, quarterly profits in the range above R$ 9 billion. And then, when 2025 comes, our Returns on Liquid Patrimony falls to 16.7%. That's when we realized something was happening. Why is it so far from what we expected? We were signaling that 2025 was delivering a profit in the range of 40 billion reais, provisions in the range of 30 and a few billion reais. So it was at this moment that we looked, something is happening, so let's do what we need to do. And then it became clear to us. So, without a doubt, I think these numbers here reflect, and not only, a courage to face and look, but at the same time, a capacity to execute our strategic plan. and focus on what would effectively help us to go through this adjustment moment. And we've been talking about this since the beginning. 2025 is a year of adjustment. We achieved 3.8 billion in profit in the second TRI, practically 3.8 billion also in the third TRI. We came with several initiatives in the physical person to help bring more margin with customers to face the advance of the supply volume. And in agro specifically, calling not only the government, but also the central bank, talking to our entire network, calling the clients to come talk to us, renegotiate, explain what was happening. And then we end the year, in the fourth quarter, with a profit of R$ 5.7 billion, which I consider to be a profit that already demonstrates an inflection of this trend, of value reduction and we managed to deliver a return on the liquid heritage of 12.4% in the fourth quarter. And if I tell you that it was not easy Because if an investor stops to think, throughout 2025, only in results were 60 billion reais of provision. And if I add up the provisions that we made in the liquid heritage as soon as the implementation of 4966, I exceed 80 billion reais. And then I ask you, which financial institution in Brazil would be able to face a challenge of this magnitude that we had never faced in the history of Banco do Brasil, to register R$ 80 billion in provisions and, even so, end up with a profit of R$ 20.7 billion, a return on capital of 11.4%.

And this, Giovanni, I believe has only to do with a balance of a robust bank, right? And we had all the possibility to absorb this impact that was really very big, but with other elements to face it. So we have a financial margin that comes within what we expected, even in this context of greater aggravation. We have revenue from services that also support a level of results, deficit actions and all this corroborates so that we have the possibility to close the year by presenting a profit of 20 billion, even in a scenario of greater volatility.