Banco do Brasil has announced a notable decline in its profitability, with a reported net income of R$ 20.7 billion for the entire year of 2025, reflecting a staggering 45.4% drop compared to the previous year. The financial institution's fourth-quarter profits also fell sharply by 40%, landing at R$ 5.7 billion. These figures, however, surpassed analyst forecasts from Bloomberg, which had predicted annual earnings of R$ 19.16 billion and quarterly profits of R$ 4.1 billion. In addition to the profits, the bank reported a steep decline in its Return on Equity (ROE), plummeting from 21.4% to 11.4% year-over-year.

This drastic decline in profit can be primarily attributed to an increase in the provision for expected losses (PDD), which rose significantly to R$ 61.95 billion, marking a 73.5% increase over the prior year. The bank's rising costs are heavily linked to delinquency within the agribusiness sector, which faced a wave of judicial recoveries. The losses specifically tied to agribusiness accounted for R$ 32.35 billion of the total costs, indicating a sector under stress and raising concerns about the financial stability of the farmers and businesses involved.

Moreover, the report highlights a concerning trend in the consumer sector, where the rate of individuals with overdue accounts exceeding 90 days increased to 6.56%, representing a 55% rise in delinquency indicators. This uptick suggests broader economic challenges facing consumers and could indicate a potential tightening of credit markets as banks respond to the increased risk of defaults. As these challenges unfold, the implications for Banco do Brasil and the wider Brazilian economy could be significant, with increased scrutiny on lending practices and financial stability.