Banco do Brasil’s second-quarter results led to an exclamation of shocked surprise from a Santander analyst, whose report was headlined: ‘BBAS3 porrada!’ Depending on your translation of Brazilian slang, this may or may not be a palavrao (swear word)—a surprisingly tricky question, judging by the opinions of Brazilians I polled on the subject—but it does refer to a fight or brawl.
What is probably more certain is that the state bank’s surprising set of results will have turned the blue sky into Bradesco. It’s one thing for Santander Brasil that has knocked Bradesco out of the top two Brazilian banks in terms of profitability. It’s quite another for state-run Banco do Brasil to report a significantly higher return on equity (ROE): 20.6% compared to Bradesco’s 18.1%.
And no one saw that coming. Yes, Euromoney has followed the clear improvement in the performance of Banco do Brasil in recent years, giving the institution the award for the best banking transformation in Latin America in 2019. Finally, the steady improvement in cost management, which continued in the last quarter, with spending growth at an annual rate below inflation of 5.7%, has also attracted attention.
