From valorinternational · · 1m 10s
Banco do Brasil's Value Destruction
Banco do Brasil's ROE falls below cost of capital for six quarters, sparking stock drop and credit crisis.
In brief
Banco do Brasil's ROE falls below cost of capital for six quarters, sparking stock drop and credit crisis. Banco do Brasil's return on equity has fallen below its cost of capital for six consecutive quarters, causing a 30.12% stock decline and worsening farm loan defaults. Originally reported by valorinternational.
ROE below cost of capital
Banco do Brasil reported a return on equity below its cost of capital for six consecutive quarters.
Farm credit crisis intensifies
BB faces one of its worst farm credit crises, CEO says.
Profit plunges 66.5%
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BB profit plunges 66.5% on farm loan defaults.
ROE drops to 2.8%
In Q3, BB generated an unprecedented ROE of 2.8% as loan-loss provisions rose to protect against agribusiness defaults.
ROE trend over time
BB's ROE was 8.4% in Q2 and Q3 of 2025, rose to 12.4% in Q4 2024, fell to 7.3% in Q1 2026, and reached 8.3% in Q2 2026.
Stock price falls 30.12%
BB shares have fallen 30.12% between end of 2024 and yesterday's close.
Capital constraints emerge
BB's capital levels are under pressure as ROE falls below cost of capital for six quarters.
In short
Banco do Brasil's return on equity has fallen below its cost of capital for six consecutive quarters, causing a 30.12% stock decline and worsening farm loan defaults.
