Banco do Brasil More Agribusiness Support to Come – Mixed Views – Improving Debt Service or Postponing Problems?

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Banco do Brasil More Agribusiness Support to Come – Mixed Views – Improving Debt Service or Postponing Problems?

J P M O R G A N Latin America Equity Research

21 May 2026

Banco do Brasil Neutral

BBAS3.SA, BBAS3 BZ

More Agribusiness Support to Come – Mixed Views – Price (19 May 26):R$20.23

Improving Debt Service or Postponing Problems?

Latin American Financials

We have seen a growing number of news articles on government initiatives to Yuri R Fernandes AC

support the agribusiness sector (link). The Brazilian Senate was expected to (1-212) 622-3400

consider Bill 5,122/2023 yesterday, which would allow up to R$180bn of yuri.r.fernandes@jpmorgan.com

agribusiness loans to be refinanced at subsidized rates. The vote was postponed J.P. Morgan Securities LLC

while the government debates the fiscal cost and other potential solutions, such as Guilherme Grespan

creating a Guarantee Fund, similar to an FDIC to the sector with contributions from (55-11) 4950-3058

guilherme.grespan@jpmorgan.com

the government, banks and farmers. The current draft of Bill 5,122/2023 indicates Banco J.P. Morgan S.A.

that credit risk would remain with banks, which differs from the Desenrola 2 Fernanda Sayao

program announced for retail borrowers (link), which included government- (55-11) 4950-6588

backed guarantees. Still, how this will work is unclear to us, and the devil is in the fernanda.sayao@jpmchase.com

details (as we discuss below). Overall, while we think investors may react Banco J.P. Morgan S.A.

positively if something is announced, we are unsure whether additional Diego Marquez Antonio

refinancing would simply postpone the problem—and for us the main question is (52-55) 5339-94899

how equalization for subsidized rates will work. diego.marquez@jpmorgan.com

J.P. Morgan Casa de Bolsa, S.A.