Banco do Brasil (BBAS3.SA): A Glimmer of Hope?

Research evidence excerpt

Banco do Brasil (BBAS3.SA): A Glimmer of Hope?

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17 Jul 2026 16:32:55 ET │ 10 pages

Banco do Brasil (BBAS3.SA)

A Glimmer of Hope?

CITI'S TAKE

Neutral The government issued MP 1,376/26 establishing a framework to

restructure rural debt for producers affected by adverse climate events Price (16 Jul 26 18:00) R$20.76

and financial distress. The measure authorizes the creation of a new credit Target price R$21.00

line that can be used to refinance or amortize existing rural loans and Expected share price return 1.2%

CPRs, while also allowing the federal government to participate in a Expected dividend yield 5.1%

guarantee fund to support these operations. Detailed parameters, Expected total return 6.3%

including eligible borrowers, pricing, maturities, and operational rules, will

Market Cap R$118,972M be defined by the National Monetary Council (CMN). According to the

US$23,425M Ministry of Finance, the program has the potential to address up to

R$100bn of rural debt. Overall, we view the measure as modestly

positive for banks, mainly for Banco do Brasil, as it should facilitate

restructurings, reduce near-term NPL formation in agricultural Gustavo SchrodenAC

portfolios, and lower loss-given-default, although the ultimate impact +55-11-4009-5858

will depend on the final CMN regulation and the level of bank gustavo.schroden@citi.com

participation.

Brian Flores, CFA

+55-11-4009-2842

Potentially positive for Banco do Brasil, although quantification remains premature. luis.brian.flores@citi.com

While it is still too early to quantify the potential impact of the new rural debt

Arnon Shirazi, CFArestructuring framework on Banco do Brasil, we view the measure as qualitatively

+55-11-4009-7906

positive. In our view, the program should help improve asset quality metrics by