Despite the good results, the default rate at the State Bank increased. Looking at the index that measures delinquency over 90 days, this was 3% in June. In March it was 2.9% and in June 2023 it was 2.73%. However, default rates are still lower than the national financial system, which was 3.2% in June and March 2024.
The bank kept more money to cover defaulters. The expanded provision for doubtful accounts (PCLD) increased by 8.8% over the past 12 months to R$7.8 billion. In the first half of the year, the variance was 25.5%, totaling R$16.3 billion. The bank also raised its forecast for expanded PCLD in 2024, to between R$31 billion and R$34 billion. At the beginning of the year, the forecast was between R$27 billion and R$30 billion.
Is the default worrying?
This increase may worry investors. This is because it may harm the profit and thus the profits of the state bank in the second half of the year.
Nobody changes the profits. But according to Giovan Tobias, CFO of Banco do Brasil (BBAS3), the institution still proposes to operate with profits between R$37 billion and R$40 billion this year, and dividends will not be affected even with the increase in provisions. “It is important to understand that the increase in provisions for doubtful debts is offset by an increase in business,” Tobias commented live with reporters.
It's better to be safe than sorry. Bruno Oliveira, CNPI analyst, from the Vida de Acionista project, sees the increase in provisions for doubtful debts as a conservative stance by Banco do Brasil rather than a measure to address any damage. “It is within the objectives and I see this move as a conservative measure, something more conservative, but interesting for shareholders,” he declared.
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