Banco do Brasil (BBAS3) CEO in 2025: "Hold If You Own It, Buy If You Don’t" – Here’s Why
- Why Is Banco do Brasil's CEO Telling Investors to Buy Amid the Storm?
- The Dividend Dilemma: Payout Cut vs. Yield Promise
- Herd Mentality or Fundamental Warning?
- 200 Years vs. 200 Days: The Long-Game Argument
- FAQ: Your Banco do Brasil Investment Questions Answered
Banco do Brasil's CEO Tarciana Medeiros made a bold statement amid the bank's turbulent 2025 performance: long-term investors should hold or buy BBAS3 shares now. While short-term challenges persist, management believes 2026 will mark a turnaround, backed by the bank's 200-year dividend history. We analyze the conflicting payout reduction, current valuation at 60% of book value, and why some analysts remain skeptical.
Why Is Banco do Brasil's CEO Telling Investors to Buy Amid the Storm?
When Tarciana Medeiros told investors "hold if you own it, buy if you don’t" during Banco do Brasil's 2025 earnings call, she wasn’t just spinning corporate optimism. The statement came as BBAS3 shares had plunged 30% year-to-date, trading at just 60% of book value – a level CFO Geovanne Tobias called "historically disconnected" from the bank’s fundamentals. Medeiros anchored her confidence in two pillars: the bank’s cumulative 85% dividend payout over 2023-2024 (exceeding the prior five years combined), and what she termed "2026’s recovery roadmap."
The Dividend Dilemma: Payout Cut vs. Yield Promise
Here’s where things get controversial. Banco do Brasil simultaneously announced cutting its payout ratio from 40% to 30%, which Safra calculates reduces JCP (interest on equity) payments to R$6.2 billion – a 5.4% gross yield (4.6% net). "That doesn’t support an attractive dividend thesis," admits Safra’s report. Yet Medeiros counters: "Small investors who trusted us with their savings will see dividend expectations honored." The apparent contradiction stems from management’s bet that 2025’s earnings trough will reverse next year. As Tobias noted, "Compare our 6% yield at 60% book value – you’re effectively buying R$1 of assets for R$0.60."
Herd Mentality or Fundamental Warning?
CFO Tobias didn’t mince words about the 30% share price drop: "Social media-driven herd behavior – buying high, selling low." He emphasizes BB delivered its fourth-highest profit ever in 2025, suggesting the selloff reflects short-term noise rather than broken fundamentals. TradingView data shows BBAS3’s P/B ratio at 0.6x versus its 5-year average of 1.1x, while its 14-day RSI sits at 28 – technically oversold. But skeptics point to the reduced payout and 2025’s "peak pain" guidance as red flags. "The bank’s asking for patience," observes one analyst. "Problem is, retail investors’ patience wears thinner than their wallets."
200 Years vs. 200 Days: The Long-Game Argument
Management’s TRUMP card? History. "This is a 200-year-old institution that survived hyperinflation, currency changes, and the 2008 crisis," Tobias reminded investors. The implied message: short-term turbulence won’t sink a bank that paid dividends through wars and recessions. Medeiros highlighted BB’s digital transformation (70% of transactions now digital) and rural lending dominance (40% market share) as structural advantages. But with Brazil’s 2025 GDP growth revised downward to 1.2%, some question whether even legendary resilience can offset macroeconomic headwinds.
FAQ: Your Banco do Brasil Investment Questions Answered
Is Banco do Brasil a good dividend stock in 2025?
While the 30% payout ratio yields 5.4% gross (4.6% net), management expects improved payouts in 2026. Historically, BB averaged 7-8% yields pre-2023.
Why is BBAS3 trading at 60% of book value?
The discount reflects 2025’s earnings decline and payout reduction. CFO Tobias attributes it to short-term herd mentality rather than asset quality issues.
Should I buy BBAS3 now for long-term holding?
CEO Medeiros’ "buy" recommendation assumes 2026 recovery. Analysts suggest dollar-cost averaging given ongoing volatility.
