I think now we are all set. Good morning. I'm Janaína Storti, Head of Investor Relations of Banco do Brasil. It's a pleasure to welcome you all to our second edition of our Investor Day in New York. This morning, we will discuss the key drivers shaping Banco do Brasil's future. Our event is bilingual, and all speeches and panels will be held in Portuguese. If you are here with us, you can choose your preferred language through the headset you received. Channel one for English, channel two for Portuguese. For those following us online, our event is being broadcast live on Banco do Brasil's YouTube channel. Now, I'll switch to Portuguese. Bom dia, eu sou a Janaína, Head de Relações.
Good morning, I am Janaína. I am Chief Investor Relations Department in Banco do Brasil. We are going to share some of the main strategies that support the future of Banco do Brasil. Before we start, I am going to talk about our dynamics. All of our body is present here almost. They are going to be part of some of the panels. The mediator will be Tiago, from the bank. There will be individual speeches. We will have a lunch during which we will talk about the macroeconomic scenario in Brazil. Before the lunch, we will have a session of questions and answers after all the speeches. There is a QR code so that you will give our opinions and we can improve our events. Now, we are going to talk about Banco do Brasil. 2025 has been one of the most challenging years in our history.
It's also one year in which we reaffirm our institutional strengths, and our balance sheet reflects how we faced the challenges. We also will talk about the return on the investment. Our CEO, Tarciana Gomes Medeiros, will talk about that. Good morning. Good morning, everyone. Thank you very much for being present here this morning. It's a great pleasure for us to hold this second edition of our Investor Day in 2024. We had great success, so we are repeating it. It is a great pleasure to receive you, and I would like to welcome all of our investors, shareholders, and colleagues who are following us online. We are here with all of our chief executives. About the Banco do Brasil strategy for 2025, we have made a lot of adjustments toward the growth of the bank for the future.
What 2025 brought for us, Janaína said it was very challenging. We work with a major team. Thanks to our colleagues from Banco do Brasil, the team has been really fantastic in terms of showing the quality of what we work internally. 2025 was really a year of many challenges. We use our values, our pillars, what makes Banco do Brasil the institution that it is. We always act with transparency and ethics, and we are very transparent towards the market. In the beginning of the year, we had to make some decisions about the first quarter. We had to tackle non-payments or non-compliance, and we didn't have a vision for what the future would bring us. Now we are on the right path. We suspended some credit lines. We performed an analysis of the scenario and what we would see in our projections.
It was somewhat difficult for us, but we did the necessary. We did the suspension of the guidance, and we went through a situation that people would describe as the difficult situation of Banco do Brasil. It has been a scenario that is similar to others that we faced before. We went through difficult situations, and any bankruptcies in the agribusiness brought us a pessimistic scenario. Along with that movement, there was a different movement of judicial recovery in the agribusiness. It was a different situation in terms of bankruptcy. We had some delays in the maturity of the amounts. We were waiting for the Plano Safra for 2025, 2026. In the second quarter of 2025, there were still resilient results of inadimplência resiliente, results of the bankruptcies or lack of payment.
We have now a situation where we control this situation, but there's a detour of the situation from 2024 to 2025. What was necessary to do? It was necessary for us to apply brakes and see what was happening. Otherwise, people would see us as facing a systemic situation. There were some crops in some regions of the country that were most impacted. It is important that we identify the problem and what was happening and with whom. We sought measures to mitigate the risk of elevation of a distressed situation. We work with supply chains that affect individuals as well as the institution of the bank. A tactical adjustment was used when that was a necessity. We adjusted our risk models, and that was for the framework of 2026. We had forecast that due to the legislations, and we made adjustments in the first quarter.
We have a resilience framework, and all of our pillars go through that through conception. In terms of the charges, the networks for collection, we also acted in a very tactical manner, and that's important for the investors. We had an understanding that we were tackling the collection of dues and that we saw what was necessary to adjust in that process for collection. In terms of the process of lending, we are not going to abandon our people, but granting credits. Now, using artificial intelligence tools, our lending process is safer. In terms of warranties, we are working so that all of the crops' operations are free of major risks. We have been working at that since 2025. Felipe is going to give you more details on that. Selective disbursement, we have been very careful, especially at the moment of this credit disbursement.
Each client is treated differently, taking into account the risk and the return regarding each client. We act according to the profile of the client. This selective disbursement has been proved very effective. As far as risks and internal controls, we would hear from public channels that Banco do Brasil was not taking care of the warranties. In addition to that, we had shared that with you. We had strategic links with the stakeholders that could support us in this work to anticipate solutions that could be a collaboration in the adjustment of those issues with Banco do Brasil. We worked with the Union Attorney's Office, and we worked jointly. Banco do Brasil is not a bank that buys the lands of the farmers. We are working with the National Council of Justice and the Attorney General of the Union.
We have discussed with the CMEN, with the Central Bank of Brazil, to enhance the discussions for the agribusiness portfolio, which has a different profile, especially during the maturity of the operations. Yeah, 466 was very important in that respect. We needed the information to show the regulating agency what would be a good plan for the agribusiness. That work was done together with the Federation of the Banks and also with the Ministry of Finance. With the federal government, we have a constant dialogue. We always see in the press news about our interaction with the government. When our majority shareholder needs to be called, they come to our meetings as well. To amortize the debt of the rural producers, the farmers, we have something else. We need sometimes solutions and measures so that farmers can go back to a good financial situation.
We adjusted the remedies for the situation in the agribusiness in the fourth quarter. We see some effects in our expectations. Felipe Guimarães Prince said, "Yeah, there's a movement from going up from in the elevator and coming down through the stairs." Basema legislation treats in a different way questions that consist in climate change issues. This was a very brief description of what is happening. We are very trusting of the adjustments that we are making for the future to grow again in the bank. There are some drivers here that are fundamental for the recovery of this movement. They are drivers of culture. I announced in our last statement that we would escalate the expansion of our digital platforms. It's about changing culture in the way to work and a different agility in the way we work. That happens across our organization.
This is the great driver in the change of culture. This is something that is not just for 2026 or 2027. It's a change in the culture of doing things in the bank. This is also a process of continuing learning. The credit to agribusiness, to individuals, this is the reason for the bank to exist. We will work with the government and will continue to invest. Its credit portfolio is very important. We are enhancing our resilience framework. Our conglomerate is the Banco do Brasil. It is part of a big conglomerate of 80 companies, all of them bringing profits for Banco do Brasil and some of them because of Banco do Brasil. They are a big strength in our profits and results, and agency in sustainable business. We take care of sustainability. We have been investing in that for more than 30 years. We celebrate that.
It's not just because sustainability is a nice word. It's part of the Banco do Brasil values. Talking about cultural transformation in this moment, we are adapting our model for all the strategic layers of our bank. Marisa is one of our collaborators. She is here and she's going to talk to us as well. What about this new way of doing things? To give you some numbers, as we have been implementing our model of digital acceleration, we saw an increase in customer satisfaction and an improvement in the employee satisfaction that works now in cooperation, collaboration with others, has more pleasure in doing their work. Our results are increased twice, thrice, five times more. Efficiency and effectiveness in this model. We are working in the upskill or training of our staff. We have 75,000 employees that are already working or being trained in digital acceleration.
We have an academy that offers to all employees courses of technology and artificial intelligence and so forth. They can be trained in accordance to the situation in the world. They are models that can be applied across the world. It's good that we know what's happening beyond the walls of the bank. We are doing that together with the whole organization that has had leadership at all hierarchical levels of the bank. We invest more than $41 million in 2024 in training. More than 5,000 employees were trained in the academy. More than 300 hours of training. The bank's analytical maturity, 125,000 employees across the conglomerate, is a good number. Artificial intelligence. When we talk about artificial intelligence, that's an investment in cybersecurity and also governance. We may make progress in our artificial intelligence, but we cannot dismiss the importance of security.
We are working in solutions in terms of the governance, in terms of the data. We are one of the first banks to tackle that. We are always careful to make governance something that represents a pillar of evolution in the bank. We have also plans to work with the client. We try to find out what is it that the clients need. We are a world model of CRM, the client relations. If the client changes a channel, we can accompany him through WhatsApp. We are the only bank in the world that works with WhatsApp in CRM. We have several millions, 20 million customers that do transactions through WhatsApp. We have a base of 30 million clients that use digital channels. A bank with 85 million clients, we think, 30 million, but these 30 million are recurrent clients.
It's not clients that use the digital channel only for transactions, but uses it constantly for other things.
The client has searched less and less the physical channel, and for that, we also have to modernize the physical model. The fact is we are a continental country and we have 15 million services a month at the bank agencies. People go to the bank in person. We have to be present where and when the client needs. For that, we are working lighter structures, more integrated, and resolutive strategies. Last year, BB in Recife was a great lab. We learned a lot with that experience, and we're going to take that experience in Belém. We have four agencies focused on the environment. We had four agencies in different locations. Today, we have the four agencies at a sole address integrated with other businesses, other outside Brazil. With this model, with the lighter structures, it's our goal and more adequate to the servicing.
We gained 40% more efficiency in the last five years. In 2026, we have to transform agencies in service hubs. We have a hub in Belém, Zagreb Sustainability, another in Bahia. The fact is that we're going to expand in 2026 to more 21 agencies, and we see that each agency becoming a hub, we have 40% less of expenses. Without letting go of people, we have space for everybody in a time when you need to hire specialized work. No one knows better than Banco do Brasil. We have a model that we are transferring to locations where they need services. We have aggregated value. 7% of the savings is a big difference. We have to continue expanding this model in the next years. We have to keep our presence without necessarily, according to each region.
To give an example of what we spoke before about our culture, more agile solutions, one of the examples that we have for this novel model is the credit to the worker. This product, consignated credit, this product was developed. I had told you that this private credit would be a leveraging that we are going to look for a more adequate service. With this credit to the worker, this became simple, more simple and fast. This is a simple credit. With this new methodology, we can develop this line of credit in the same way we provide credit for the public sector. We are ready to launch this product. This is something that we know how to do. The consignated credit. The consignated for the worker meets the strategy, thinking, analyzed, and well-analyzed and reviewed strategy. We were ready.
The development of this new line did not take 90 days with all the necessary measures. Up to now, we have given out $8.8 million of credit for workers. This means that is seven times more than what we had done in the history of private credit in six months. We have 728,000 clients. The interesting thing is 15% are newer clients; the rest were already clients. This is a high index. What does this mean? It means that the businesses are doing the consignation. They are launching within the salary of the worker, that consignation at the time that the salary is paid. An accounting above 85% is similar to the public sector. That means there's a low, a very low bankruptcy index. We have a portfolio very interesting, and we're going to look for in this year to strengthen that even more.
Here we have an example of what is possible through a model, an agile model, and a different work model. Behind that portfolio, we have a joint work of several teams working in a collaborative manner, something that's quite new in the bank. It gives us many results that we are already transferring to other solutions. In 2025, to adjust a guidance to a physical person was 10%. We are going to always use our resilience metrics and intensive use of AI. We have to tell the client what's the more adequate credit. If the worker is going to get credit to get in debt, we have a process of consulting that it's more adequate to that client. We don't want him to get into more debt.
If we have a process of a credit that it's more expensive in the market or with the bank, we will guide that client what's the best way for him. That means an accounting above 95%. Very secure. When we're talking about businesses, we're going to have this year a process of rebranding of the market. We're going to go to BB business, bringing here servicing and the relationship, something that the legal aspect demands, which is that relationship. The client of the physical person that is a partner of that business makes transactions at the digital level, but we still have conversations. We have to service, and we have a very specialized service, more than 1,673, not here, but we have 1,673 sites, servicing sites. We have 7,400 dedicated professionals for that market and 4,385 servicing sites, 85 million of the usual channel, of the digital channel.
We have a way of doing business with these people. At the legal level, we have another channel. How do we achieve the search for that process? Integrating within the navigating journey of this client with the bank, interactions that generate value for him and for his business. We launched a recommendation of an intelligence platform for the legal person, and we had more than 60 million recommendations, 60 million a month. Here, the users of that platform have evaluated really well the interactions. What's the next step? To advance for all the client base with the curatorship that we have that has already been done, and it to increase even more that satisfaction of these clients as a legal person. On the other side, there's a robust theme of the corporation. We see that we had a training with Cielo.
Cielo is a very sector, very important for the client base. With Cielo, we have adequate strategy to provide that to our clients. In 2025, it was a year for technological development in Cielo, system integrations. We are finishing that process, and our tendency is to advance more and more, looking for loyalty of that client with the bank. We have the idea that 2025, the last quarter of 2025 and 2026, it's going to be an important signal what that relationship with Banco do Brasil is going to be with the businesses, but we're having a complete ecosystem of business. No more segmented strategies. When we talk about agribusiness, we are talking that Banco do Brasil is the bank of the agribusiness. We'll continue to be like that. Agribusiness is a portfolio very important for Banco do Brasil. We have $400 billion of credit for the agribusiness, $405 billion.
In a few days, it's going to be $408 billion, but we're working strongly to develop that portfolio. We are their partners. We are the reference bank, but we have worked on selectivity. We have worked for the agribusiness, for the corporation, and for the physical person. It's important to highlight that we are talking about them because of the changes. They are included in the new resilience metrics focused on controlled costs. The 2025, 2026-hour strategy is going to be to provide credit for controlled resources and so that we have looked for the revitalization and the ability of the producers to repay. We're going to have controlled efforts, but we're going to also help our producer to renegotiate their debt with the bank and to restructure their ability to pay. In terms of warranties, people ask a lot of questions.
Yeah, we also have those, a lot of warranties. We have a client base of R$405 billion that came to us with a work model, and the knowledge of the client for the growth of the sustainable way is input. The guidance for 2025 in around 33% reflects this selectivity and also the need to restructure the ability of the producer to have new strategies for credit. We understand that sustainable business generates value for the bank, but not only for the bank, for the society of this planet. That's why we are very focused on a winning strategy, ESG, that we are the first bank advocating guidance for ESG strategy focused on sustainable business. We have R$396.5 billion. In 2030, we're going to achieve R$500 billion. We have the bank goals updated at the site, but it's important to avoid deforestation up to now almost 800,000 hectares.
We support the reforestation until 2030 at least. We are the world for the sixth consecutive time more sustainable. We will be having a leader role in COP30. It's very important in the country so that we have a voice about this country understanding that their natural resources must be used. It's a time that the country needs to be heard regarding the need to have financial and economic security for the residents of that region. When we look at the forest, we have a bioeconomic system that's taking place down there. We are aware of our role as an organization that has to take the preservation of our forest to the world, but we are aware of the peoples of that region. Our commitment with the sustainable development of the bank.
I'll be here if you want to talk to me, but this initial message, that's what I would like to tell you. I want to tell you that Banco do Brasil generates value. It's ready to generate more and more value because we are guided by our values. That's what makes the difference in our business. We thank you for your trust, and we want to tell you that we are convicted in our ability to generate results and value and much more, that in 2025, we are founding the growth of the bank in sustainability. Thank you very much. Thank you, Tarci. Really, 2025 tested our resilience, and in 2026, I hope we're going to be back here to say that we passed the test.
In the second quarter, we showed a detailed diagnosis regarding the credit situation, and I would like to call our CIO, Felipe Guimarães Prince, to go to talk a little more in-depth about that analysis. Is it on? Morning.
Morning, everyone. It's a great pleasure to be here with you for this opportunity to address our shareholders, our investors, the homes that are following us. We appreciate your feedback. To incorporate the data in our management, we are very happy to see you here. It's a very representative group here in New York. We have the opportunity again to bring the bank closer to the financial center of the world. Also, the possibility this time to transmit to all our shareholders and investors, clients, and our 125,000 colleagues that are watching us in Brazil, and also the opportunity to make known to everybody a little more about our organization and that we talk a little more in-depth about our performance. Okay. About our performance.
We also will be available to exchange ideas and to respond to any questions in our Q&A session. We have here an evaluation a little longer, longer since 2019. Since 2019, during the pandemic, that's when our credit cycle expanded faster. You see that we have an expansion of our credit portfolio. Of course, this portfolio brings risk, and the risk is measured by the provision expenses. Please see that we had been working with provision expenses that were quite level. In 2023, we have a huge, bigger impact. I will show you later the portfolio of the agribusinesses. Like Tarciana said here, our portfolio goes from 150 to 100 to more over 400 billion reals in three years. We take this opportunity that the agribusiness world brought. That was very clear with the results that we see, especially since 2023.
It's normal that in this cyclical activity, because the increase in expenses is based on the price of commodities that are volatile by nature and different cycles. This is a message that we would like to transmit. The bank shows great resilience to face this cycle of low business in the agribusiness in a very robust way. This also by absorbing what we are doing in 2025 in the volume of provisions that are attached to that follow-up. We had been doing transactions, like I said, annuity provisions that are consistent with the portfolio volume. Obviously, in 2025, that risk, it goes over that point where we say that is great for the management of the risk of the return of our activity.
That's why we're talking here about all the measures that are going to be adopted so that we can bring together, so we can bring again that risk into our average that is around 2.7 or 3%. As you can see, we are estimating that in 2020, the risk is higher. It's between 4.7 and 5%, which is higher than the average net level. On the other way, it strengthens the resilience that this organization has to face these cyclic periods. Here, you can see in this graphic, in this chart of that risk and provision expenses, the total of that amount that's connected to agribusiness expenses. We have a follow-up of those expenses, but it's normal that during that period, we have the wholesale system. The corporations have a higher volatility. The physical persons, like you can see, it's proportional to the growth of our portfolio.
Tatiana showed you our focus in the adequation of that portfolio and the growth of the physical person market so that we have that balance between the balance of the portfolio. That's where indeed we have the higher increase of the expenses. If we compare, if we take out $6 billion of the second quarter of 2025, we would have a volume of provision similar to the previous quarters, around $10 billion. Agribusiness also very close to the previous quarters, around $2 billion. Where is the credit risk hurting us? It's in the agribusiness portfolio. All the portfolios are in the process of selectivity. We are working strongly on the implementation of more advanced strategies to manage the credit risk so that we have a higher skilled qualification.
We have to manage the portfolio so that we can deliver, again, the results that all of us here in this room wish for. The question may come up. What happened that you didn't see or that the risk was beyond the risk that we had projected? Here we see we are bringing you the events that led to that, that they caused an increase in the risk that we were faced with. We had the pandemic and the boom of the commodities. This is clear in the chart. Our Banco do Brasil took advantage of that opportunity. We doubled, we more than doubled our portfolio of the credit for the agribusiness. This shows that the commercial force of the bank is really strong. It shows that we are ready to take the opportunities that are given to us. With this volume, we lose market share. Why does this happen?
Because in the likewise, in the same manner that we take advantage of the opportunities, newcomers also take advantage of the opportunities. This is good. We like competition. This makes us better. We will service our client better. On the other hand, the Brazilian productor is more in danger. This explains the bankruptcy. In 2022, the margin curve. Default. So, the.
There is a leveling of the margin for the farmer. We also face some extreme climate events that led the capacity of the producers to diminish, especially after the floods in Rio Grande do Sul and other points of Brazil. The crops diminished due to climate events. All that's connected to a scenario of an increase in the interest rates. The financial expenditure in the field is elevated, and the cash flow of the rural farmer suffers. You may ask yourself, what did the bank not see? This inflection, the curve of the interest rate, because the operations in agribusiness have something specific. They are this burst in once only, and they are also paid once. These operations are not amortized. They have a limit in time, especially in terms of expenditure. From 2024, 2025, in terms of operations, our projections were for 9.25% a year.
We made the decision to finance the farmers, knowing that during the cultivation, they would have to face a different level of... Our Central Bank changed the curve from low with the application of the SELIC rate. From there, we had the financial impact. There were resources on the fields for planting. They had those resources, those assets in their hands. We had those resources in the hands of our clients. The ones that have more leverage and greater profit margin started part of them to use movements that we had not noticed until then in function of the way we operated with the new plans. There was no request for a judicial recovery by those farmers.
It was not a practice that was expected, but it was adopted and accepted by our courts that led to a situation where we were faced with this type of requests and that led to more default situations. 70% of clients that were in a situation of default were not in default before the bank, which demonstrates that they adopted a new behavior given the new scenario, but partly also because of measures such as judicial recovery, which we don't think is the healthier one or brings sustainability to the crop fields. We are prepared to act in this movement. We revisited our credit matrix and portfolio in agribusiness, and we reduced our appetite so that we could see these lender holders with good perspectives.
At the same time, we reinforced our collection system so that we were seen as more mature, incisive, and would act in a different manner with our clients, activating processes of collection and execution of payment of debts with the migration, gradual migration of the portfolio, and with the warranties, some of them by trust sale and alienação fiduciária. We were able to recover the debts of our clients. We hope that these clients have recovery in their situation and help the growth of agribusiness in our country. In addition to the specific question regarding agribusiness, we have a cross-sale process, and this is a very profitable system on which we work very hard. When the risk increases, that type of activity, naturally, brings a risk with it in function of cross-selling that we use with our clients.
Default in the agribusiness is accompanied with default in our portfolio for individuals because the farmers make loans to buy vehicles. They have credit cards with us. When they are in difficulties, this default situation is not limited to agribusiness products, but it also has an impact in other portfolios. The good news is that even so, the impact is small. It is well administered or managed, even with a greater credit crisis in recent times. 6% of the portfolio comes from individuals. They represent 29% of default in payments by individuals. That's the big framework. These are the good news that we are bringing to you today, this morning. You have an understanding of what is happening in the space of debt recovery that we are accelerating.
In function of this risk scenario, we promoted and we continue to promote adjustments to correct that path and to make so that these portfolios increase their net profit. Our rentability in each business is increased, and we make sure that it is compatible with the risk that we are assuming. We corroborate the previsibility or imprevisibility. We had aggressive estimates about how non-payment in agribusiness would have an impact in our business. The way the portfolio is positioned, ultimately, in terms of risk models, it demonstrates that it would not be so acute. President Tarciana Gomes Medeiros, CEO Tarciana Gomes Medeiros, talked about that. You can see a seasonality from October to March. When we plan our budget, we did not have that seasonality for us to understand that we would have a very difficult year.
None of our projections was able to identify the volume of non-compliance that was supposed to happen in April. The level of non-compliance or default was higher than what we've seen before, even in more acute moments. We chose in the third quarter a readaptation or remodelation of guidance so that we could bring our best estimations for the end of 2025. The concentration of the maturities has passed. Now, what we have are the measures that we are implementing and that you will know more about when our Vice President Jilson Bittenkourt will talk about it to tackle that non-compliance or default in the agribusiness. This is a statement of our portfolio. You can see that in spite of the present scenario in agribusiness, the scenario is protected, hedged to face that reality. Today, across our portfolio, we have different models that are incorporated, unexpected loss by state.
We incorporate provisions not just in function of delay in the previous accounting, but also in function of the risks that we see for the future, these expected loss. That gives us a very concentrated portfolio that ratifies the quality of our portfolio, but also the stage of attention, stage two, and mainly stage three, where there was a deterioration of the clients. We are very provisioned, and our robustness of our balance sheet will give us strength to go on with this recovery that we are showing today. How to do that? When there is a highly elevated risk, there are two options to drastically reduce.
The risk or increase the volume of granting of credit of lending. If you adopt those strategies in an isolated form or non-connected form, you can lose business by reducing excessively the risk, or you can bring more risk inside, increasing excessively the disbursements. We are very much interested in a balance in our portfolio to support our recovery. How are we going to go about that? With the contention of the risk, either being more selective in revisiting the new businesses or the recovery of the credit that suffered with non-compliance. That way, we will have a reduction in the risk. The new crop seasons and the values and numbers in the third quarter will reinforce that strategy. We will go into reduce the risk in our portfolio. At the same time, we should not waste something that is a strength for us, which is the generation of receipts.
We should not lose traction in that process. With reduced risks, we can be more selective and we can conduct business. We can bring again our mantra of origination, which is the resilience matrix. That is reinforced by artificial intelligence. There are several variables: 105 million macro and microeconomic variables, regionalized variables, taking into account the specificities of each economy where we act. We also reflect the reality of our clients in a vision of score. The score can bring positive or negative results or data. We have in that process more information about our clients through the open files. All this framework of data is consolidated. With it, our clients today across the whole portfolio are classified in four quadrants where we define strategic clients, where we increase the granting of credit, clients that we continue to assist, and clients that need a credit solution.
We are present to offer to those clients the best product so they can have a better capability to pay. Also, clients whose payment capacity deteriorated, we put into action our collection processes. At the same time, we manage those portfolios. Regarding those portfolios, we believe that the origination process, and demonstrated by the amount of the results of the crops, the good news is that the disbursements still continue to exist. We continue with the commercial contraction. With those curves, with decreasing of the risk and the origination up, they will overcome the situation of non-payment of default that we experience today. There will be more liquidity. With less risk, we will have a bigger net margin, and that will improve our results.
E aqui, para trazer para vocês como isso pode ser uma pedra.
How can that be put into practice? We have an increase in disbursements focused on the alienation fiduciary trust sales. I exchange my warranty by a warranty that is more robust. We have a public of foreign investors. You can see that we can compare the process of judicial recovery when and processes that, yeah, first, mortgage sale is considered extra normal procedure. What have we been doing? We have used the resilience matrix to exchange in a gradual way these guarantees in our portfolio. The clients in these quadrants operate with this alienation fiduciary, these sales. The other clients, in a gradual way, we will allocate them to fiduciary alienation, that is fiduciary sale. We will tackle that process in a few years. That's the end of my presentation. Now I can entertain the questions. Thank you very much for you being present. Let's struggle for that recovery.
Thank you very much. Thank you, Prince. This diagnosis is important. It shows how we can tackle this scenario with a lot of discipline and also making the necessary adjustments for the landing in 2025. We have regulatory and government regulations that are important that can influence this process with the agrobusiness portfolio. I would like to invite our Vice President of Agribusiness and Family Farming, Bittenkourt. Jilson Bittenkourt. Hello, everyone. Good morning. Good morning, Jilson. This is our third management year. You are superior to him. Eu sou o segundo ano.
E você já compartilhou com a gente um pouco a sua experiência.
You are responsible for this agrobusiness. Can you share with us what was your first impressions and a little bit of the mandate that Tarciana has given you? Good morning, everyone. I have 35 years' experience in rural credit. I worked with agricultural plan statement plans. In the last 15 years of the 24, I was a participant in that plan, the National Agriculture Plan, and also in generations connected to recovery of those portfolio of the agrobusiness. I have this experience with these financial organizations working with different financial institutions. I have this experience of this agrobusiness and the moment we are experiencing. Banco do Brasil, in these last 45 to 40 days, is a new world, bringing a lot of new elements.
It's important to highlight that I was hired to contribute to the recovery and advancement of the rural credit, the farmers' credit process that were already going on. I was going to contribute and help with that issue. Tarciana told me, "Come and help in the recovery of these default credits and help in the building of a more sustainable and resilient agricultural business, agrobusiness portfolio." A very interesting issue, this VP 1314 that has been published, R$12 billion were made available to the farmers. Can you talk a little bit about the indirect impact of that VP? How much of that amount of R$2 billion that the PT was going to use? Can you give us an idea of that impact of the 1314? MP13.
MP1314 brings two possibilities. People are highlighting more the $12 billion, but I'm going to highlight the second part of MP, and then I'll go back to the $12 billion. MP provides that the financial institution can extend credit operations for up to nine years and credit operations that are still within the farmer credits or were converted to other credit operations. With that, you can bring these operations into default, but recovering their payment plans so that they can continue advancing in the next years and keep their activities. There's no limit for that line of credit. It's a line of credit that the financial institutions are going to use with their own resources. The interests are free, but within a dynamic of the rural or farmer credit. That ability to distribute income is up to nine years, but they have up to nine years.
They will kind of start paying in the second year. In the first year, we are already charging taxes. In the first year, we already are going to be getting paid that credit. Within that, the bank has about $20 million of default and between $50 to $57 billion of operations that have been extended. Not all those extended credit limit periods to pay are going to generate default. There's debt values among more than R$13 billion. We can operate within the whole country, especially in the regions where the payment default is related to cashing issues. We are focused. Those small producers have between 6% to 12%. Those amounts are affecting the financial market and is focused basically in producers that are located in municipalities that have the losses due to climate changes.
The expectation is that in the next few days, there's going to be new laws from the Monetary National Council. Now we have the BNDES that's going to address 100,000 municipalities and the municipalities who had that losses. Our participation in the agribusiness is around 50%. It varies. We will be in, we have 40% to 50% chance of those $12 billion being channeled to Banco do Brasil. We are focused on the first line of farmers that's going to be starting to operate next week. We're still waiting for the regulations of BNDES. We believe that in the next two weeks, we're going to be operating.
The most important issues are that farmers, like Prince said, a good part of those farmers that are in payment default do not have a history of defaulting, but they had issues, cash issues because, like Prince has said, the expectation is that with the ability to distribute better the income, we will bring those farmers back to normal. We will continue operating with the other lines of credit. Okay, Bittenkourt. I'm going to talk about the agricultural plan, the Plano Safra. There's a plan of R$280 billion for 2025. How are you seeing these disbursements according to what you have advocated for? Something that I forgot, I think that I should have mentioned it before. We expect to recover the payment default with that. We expect to have a capital gain, including the credit that we expect.
We're going to have an impact in the possibility of recovering also in our assets. We're going to continue loaning more ever more. Regarding our performance, we have all these mechanisms that we created to advance in our portfolio. In these two and a half first months, we have R$45.1 billion for the rural sector, R$39.2 billion in rural credit. In spite of the problems that we're having within our portfolio, we have more than 96.5% of the farmers paying. Those farmers are financed. Of course, we are being more careful when providing these credits to avoid payment default. We are loaning because agribusiness is crucial in Brazil, both for internal and external markets, and it's an engine of the economy. The granting of credit is doing well. In some cases, I think it's important to highlight the costs, especially for small farmers.
We see a decrease in the investment operations. It's not only something that Banco do Brasil sees. The whole financial market reduced or decreased their investment operations. Banks are being more careful, of course, but also because farmers, and that's the positive side of the process, are looking for a balance of their accounting, even those that are in payment default, in a way that the cash flow is rebalanced. Bittenkourt said that, like Kim said, we had in 2022 an increase in the credit granting because our interest rate was low and the farmers leveraged more than they could. The selling rate disturbed the cash flow. In this time of adjustment on behalf of the on the side of the farmers, this selling rate is important so that we can advance again in the increase of the productivity and the production in Brazil.
I have another question regarding the harvest of the plan Safra, especially corn and soy. Looking at the data, how can we accompany the performance of that harvest? In this year, 2024-2025 harvest has been a very positive harvest. The biggest harvest that we had in the last few years in the history of Brazil. This new one appointed by CONAB in 2025-2026 shows a record. These demonstrate that these issues related to payment default, they don't apply to all the agribusinesses. The agribusinesses produce, is advancing in production, but there's these bubbles that have been identified both by climate issues and also because some farmers have these issues with their cash flow. The expectation for the next harvest is positive. It's going to be a harvest that is being created in view of a better analysis in the future. The selling rate is high.
Our expectation is that the interest rate scenario will continue being a positive scenario, which is good for the farmer. This will show that the bank is interested in continuing the financing of the agribusinesses and to contribute to this sector that is crucial for our economy and to feed a big part of the world with the food they produce. For us that do not accompany this market sector, what are the main issues to accompany that sector? I think the bank has advanced in a very significant and important manner, accompanying their income. The bank is looking at the development as a whole of the market, as a market whole, so that we can look at the situation, not only at the moment of the payment, but during the whole life operation, the credit life operation. The production data today are available through the government official data.
CONAB is the main actor. The production costs that we had in the last two years, the computer bought the product when the dollar exchange rate was higher and then when it sold was lower. We see that we will see a recovery of the income recovery of the farmer so that they have a better cash flow and we have a better expectation of the rentability. I think that's important to accompany the process during the whole life of operation life. We also are looking to advance in innovations, not only when we grant credit, but also in the way that we are used to, but looking for other types of innovations, observing what the market has been doing. I think that these are some gains that we have to be proud of. Thank you very much for the issues that you brought. It helped us a lot.
Thank you. Thank you, thank you, Tiago, Jilson. The central agribusiness, not only for the bank, but for the Brazilian economy, is interesting to understand these dynamics. Thank you. We're going to have a pause. We'll come back in 10 minutes for a coffee. Hello, sites, please.
Hi. I would like to ask you guys, sites, please. We resumed the event.
We are back now. Thank you. Our next panel will discuss the main fronts for action in supply chains in terms of wholesale and government. We are going to talk also about sustainable business. I call Vice Presidents Francisco Lasalvia and Ricardo Saceron for another panel moderated by Tiago Batista. We are going to start this new panel. We are going to talk about the value supply that Banco do Brasil is enhancing in terms of a player. How can you use the value chain in customer relations? Good morning, everyone. Firstly, I think that it is important to make it clear that Banco do Brasil is a bank that is the main shareholder for the federal government. He is the main public sector bank as well in Brazil. We have many businesses with the Brazilian government. There is a whole value chain that we carry out.
We transfer resources to the federal and state government. We attend to half of the public employees. We collect payments and we manage funds and resources, funds, and social security funds. There's a series of businesses generated from the public sector in Brazil. We have a pillar of about 100,000 employees that work for municipalities and for the legislative and other sectors of the government. We have a value chain. Payments for the public employees are consignated to loans with operations with public employees. We manage their payroll and so on and so forth. We have credit operations for the public sector with municipalities and states that represent a significant portfolio for us. The default is zero because we have a guarantee from the Treasury. These are very significant operations and firm operations. We have the capability of guiding the economy at the municipal and the state level.
We carry out these operations. Our relationship with the states and municipalities helps us boost that business. For instance, there was a very interesting case that we have projections of receivables from companies that provide services for the municipalities. When we carry out this operation, we bring our capability, our way to negotiate and generate other business with these companies that are suppliers to the municipalities and states. All this value chain helps us to support the public sector to make their transfers and have launched new public policies and so forth. This value chain is very interesting for the bank and supports the governments. Still on that topic of value chains, in the wholesale, what about your competitors? The return in the wholesale business, how do you measure it? How are things? Good morning, Tiago. Good morning, everyone. Great to be with you here.
This is a very important day. We explain more in the Q&A section. The value chain question, Jilson also mentioned something about it because we are presenting solutions adapted to each client. When we talk about value chain, we talk about servicing the client back to back. We give attention to all the clients, no matter their size, to diminish the risk to the bank. If you compare semester to semester, we had approximately 8,000 agreements in the wholesale sector, and now 13 times more. They are agreements that go beyond the value chain. It's the payroll and the payments to suppliers. As Jilson said, we have agreements amounting to billions of dollars so that we channel funds to the smallholder farmers. We have $70 billion in assets. We have to support the results.
I don't mean that our profits have to be 30% or 40% linked to those smallholder farmers. We have to measure the generation of results. We are the Banco do Brasil of agribusiness. We have more than 2,000 agreements with companies that use the value chain. Our portfolio grew more than 50%, 30% in results. We are also a bank operating externally. Another thing that I mentioned is that these results, these profits are associated to risks that are better understood. Perfect.
A question to both of you about the ESG. ESG is something that Banco do Brasil dedicates a lot of attention to. We have the ESG guidance. Can you talk about that in two or three points? What opportunities do you see in decarbonization and expansion of ESG and the returns in the bank by adhering to ESG? Firstly, I always like to remind people that Banco do Brasil was elected as the most sustainable bank in the world. We have great pride in that. It's an acknowledgment of what we have been doing in terms of ESG. R$1.3 trillion, that's the amount that we generate. This is all linked to ESG. This is a point that we always stress. We have almost R$400 billion of credits as ESG credits divided in several areas. In agribusiness, R$170 billion in the portfolio, low carbon, and other fronts.
We have R$20 billion financed in renewable energy. As was mentioned in the beginning, 860,000 hectares of preserved areas. By 2030, we want to reach 2 million hectares with 1.5 million of recovery of degraded areas. This is all part of our ESG portfolio. In renewable energy, we want to reach R$30 billion by 2030. About carbon credits, that is very important and interesting. It has grown in Brazil. We have a rating that increased. We have voluntary credit, and our presence is very strong in the regulated credits. We have 32 projects of REDD+, biogas, and other fronts. What we want to do, our goal in the carbon market, is to participate in the generation and implementation of projects and commercialization of carbon in the carbon market. We have an ESG advisory that serves states and municipalities. We are doing an inventory of carbon emissions.
We work in the chain in all fronts, commercialization and so forth, showing the companies the advantage of them to compensate the emission of greenhouse gases. That will help land preservation and so forth. We will use all those advantages for the commercialization of carbon. Brazil is going to improve that system of carbon credits. We want to have a strong presence in that market. Just to complement the Ciceron scope, scope three is a challenge, a big challenge. When we talk about doing an inventory or a list of our clients, we will determine the main clients that represent generation of credit and the clients that will have difficulty in that compensation.
Regarding big business in the agribusiness or the smallholders, when you link that opportunity to understand who the client is and include the client in an inventory, and also to capture more funds from multilateral funds and funds from abroad, that has to be adapted to the needs. We raise money from foreign countries. If we adopt also other innovations in our metrics, we will have big opportunities. We've been doing this for more than two years. In terms of individuals, we have R$10 billion in ESG funds, either individuals or private organizations. When we add that to the value chain, we use the resources and we leverage that in terms of scope 3. Ciceron, you talked about renewable energy. Artificial intelligence has to do with the renewable energy.
How is the bank positioned to expand or fund this clean energy in Brazil with the potential of consumption that is helped by artificial intelligence? Firstly, the energy matrix grid is the cleanest, one of the cleanest in the world. It is important that we have that sense of pride about that. In terms of this energy, we have credit operations from the individual client that wants to install solar panels in their house. In the Brazilian market, that is being done. We have funding for big companies, wind farms, and all the energy that we consume in the Banco do Brasil comes from renewable energy. We have solar plants in Brazil. We also lend to the public sector in municipalities. We always use energy effectiveness. We are doing this work today regarding artificial intelligence and the data centers. Our goal is to continue with the granting of these loans.
We have the goal of R$30 billion by 2030. There is also a consortium in the northeast of the country that generates R$130 billion. One of the pillars of this call to investment was to create or implement data centers in the northeast of Brazil. This will grow the renewable energy sector. There are several launchings of these new projects.
The market is clearly expanding in the last few years. We're seeing a very important focus.
They want to attract the high-income markets. How does Banco do Brasil, how has it been acting in that respect? How do you see your success in that project? Good question. I think that we have to take a step back to explain that, formating a high income. We created the private sector, and high income, 20 years ago in the bank. Since we created that, we have been expanding. We are within that value chain. We follow the client through an organic process, and then we acquire an external client. When we look at the high-income segment, sometimes we decide to service those clients within bigger agribusiness clients because they have great investments. We also can control their active operations and payment default. When I look at the bank income, we have 29 offices. No other bank in Brazil has that structure.
Twelve of those are geared to the agribusinesses, and the rest toward the great investments in the country. Looking at the bank structure and its ramification within a regional structure, we have the closest and most efficient structure. The high income of clients is the highest in the market. We think that this success is because the client believes in our work. The surveys of satisfaction are the highest. When the client trusts the bank, we have the highest income. When you compare the bank, we have grown double, more than the market, a little more in the last year. When we look at the portfolio of the agribusinesses, also it's aligned with the market growth, more than R$7 million. The bank has also been awarded the highest sustainable technology. The bank, the highest training, the E2 to the training in the bank.
The bank also had earned a prize to support women. The results of that satisfaction surveys are the result of what we have been doing in the high-income sector. We know that there's a lot of competition, but in the last few years, we have been perfecting that work. That growth compared to the rest of the market gives us the answer and gives us that we have to have what we have. We're trying to develop a bank closest to the client. This is a result of what we have been implementing, which is to service the client in a close way. They're giving us signals at the panel. They have a final message looking at the ESG aspect. We have been performing at a high level in the economy, exploring. We started at the Amazon biome, and we are expanding to other biomes.
This is very important because you're helping with the preservation of the environment. At the same time, we're supporting the populations of that region to develop products, to develop the value chain linked to the products that need to be produced. We have implemented a bank of economy in Pará, in Amazonas, in Bahia, and now in Mato Grosso to explore all those biomes and to generate value with the products of the region that sustain the populations. We have a very strong relationship with them. Yesterday, coincidentally, we signed a technical agreement with the government of Pará in New York, which is a state that is going to host COP30, and it's very significant to show this collaboration.
I think that when you're talking about resilience in the construction of better results for the bank, and all that you talked about, the models and the businesses, the next steps are the value chain. This is building construction not in the short term, but a long-term sustainable and in accordance with the values of the country. Thank you very much, everyone. Hello, everybody. Before we give the floor to our next guest, I'm going to say something regarding our strategy, adding to our strategy. to add a little, a strategy for individuals?
Regarding the physical, the client, the persons, it's very important. Our goal is to grow more and more our.
Esses produtos são comuns? Esses produtos são comuns no seu nível de carreira?
The individual, I think that in our strategy, especially in the high-income level, we have a portfolio more adequate to the clients. We will launch Casa Estilo, which is a model of co-creation with the clients, a model that was created upon hearing the clients. It's geared to the clients according to their needs and the causes that he holds dear. We have the prerogative that we are the bank for the public employees. That gives us a big advantage, but we want more. When we are talking about rebranding the business sector, we know that we have a niche that's very important that we have to bring to the bank, which are the business owners of the small and medium businesses. The relationship with the corporations is within Banco do Brasil, but not also with the individuals.
When we focus on the high-income sector, we have products and services geared to the needs of the follow-up, the environment where the client is. We are geared for the future, the future that we're talking about within this week. We're going to have a rebranding of our marca Estilo, style. We're going to have new developments in the Estilo segment and private segment. We are going to be focused on the high-income and also agribusiness. When an agribusiness client is an individual client, we have to work together with both. We're having some news that are coming in the high-income segment in the next few months in the fourth quarter. I hope that we're going to show you in a more structured way that strategy that's going to be leveraged in 2026.
The issue is in 2025, we're going to work in the portfolio with the individuals and in 2026 in the high-income sector. Thank you. We're talking about the future that's around the corner. I'm going to talk, I'm going to call about the agribusiness strategy that has promoted a big change with a lot more productivity. Our CIO, Marisa Reguinha. Hello.
Good morning, everyone. It's a great, it's an honor to be here with you today to tell you a little bit about how our culture is emerging within Banco do Brasil. Before I talk about how this new culture is happening, I want to bring some data about our technology. We have one of the highest data centers in the southern hemisphere. We process currently about 15 billion transactions a day. Every time the client accesses the app, logs in, and prints a statement, those are the transactions. In the last 10 years, we invested over R$14 billion in our technological hub, our solutions in training in the technology area. Also, in the cybersecurity area, we have increased the investment 70%. In these last few years, we also increased 70% our workers, our employees, bringing new people in Banco do Brasil through candidacy.
All these 15 billion transactions daily that I mentioned that our clients used in our digital channels. Today, 94% of all that our clients use are within the bank channels by WhatsApp and internet. In the last four years, we have been investing in the cultural transformation of Banco do Brasil, bringing this new culture that aims to bring closer the business and technology teams so that we can deliver faster the best solution for our client in a channel that he wishes to log in and the moment he wishes to use. That change is not that simple because we need to talk about and change some attitudes within the bank, especially regarding behaviors and mentalities. We are now an agile business. We have a team that is independent. They can directly interact with the client because they know the subject.
This high management of the team makes that we have delivered faster and more continually, allowing a faster feedback of the clients. This means that we can correct any solution that we're trying to develop. Now, I'm going to talk a little bit about how we're doing all of this. I'm going to show you three elements. The first one is that what we call business units. What are business units? Squads, multidisciplinary squads within these teams. They have all the necessary knowledge to deliver those solutions to the client. We no longer have something that we had before that was a project that we had a beginning, middle, and the solution. The main difference now is that every squad has a defined scope and then has the necessary abilities. Let me give you an example.
Before, the business areas were defining the processes, and then they ended in our to the technology area. Now, within the squads, we have the business analysts, the technology analysts, the cybersecurity, IT. They developed all these competencies. It's very, very business units. Now, there's a very important difference. Every squad that adds up to this higher unit, we have the double leadership. Why is it important? Because we have the technology and the business leadership. With that leadership, we can start deciding or evaluating the best decision if it's more you're going to be more focused on the business or if that business is going to be developed. That brought us a solution, a very important solution within the bank. The second element is the COE. The COEs in the big business, especially in Banco do Brasil, we need to have some disciplines in a very specialized way.
Here, you see some security. This is a big concern of any CEO of any business regarding cyber attacks to ensure security for our clients when they're logging in or sending wiring money. Like Tarciana said, this is a very important reality in the world and in Banco do Brasil. These are examples of disciplines that we need to have professional, high-specialized professionals that study the market, study the best solutions, deliver the best standards for the other teams to develop. That specialized centers that are specialized in the subject, they act within the business units. This makes that the business units will have more time to think about the business solutions, using specialized knowledge of those colleagues to act in the area that they know better. In this example, in my example, is AI and security. The other example are the platforms.
I put in a design down there because they are permeating all the elements of this model. Where are the platforms? They are all those businesses or data systems that I may develop at one time and earn an escalation for the other bank processes. I'm going to quote Mobile example again. Within our mobile, the client can be serviced within all the mobile services. Imagine if for each business unit that we develop a solution that goes into the mobile. Imagine if each business unit had to develop a solution for the mobile. That would not be so efficient. That platform gives us this ability. As it happens at the mobile level, we have a team that develops all the mobile platforms. The core of our app makes it available to the other team to develop only that business unit, for example.
That helps us to develop more efficiency, to be more robust, and accelerates our movement. Tarciana talked about our private payroll loan. That solution has been developed in this new model. I brought some numbers here so that we can compare. The day we had the resolution in Brazil, we had to wait for the resolution to approve that the bank started the development. The day the resolution was approved, it was the day that we delivered to the first client to be able to hire. Thirty-seven days passed because teams were working together. New sketches, as I said, worked to have that solution. If we did not have this new model, obviously, it was going to take 90 to 120 days to make that delivery. That's a big, huge difference for us. Here, there are some other examples of businesses that are already included in this model.
Working capital and receivables, we delivered 80 new solutions to now. The fact that they're together allows us to deliver more, makes us a more constant delivery because we receive the feedback almost instantly that tells us what's going wrong if something is wrong. That allows us to work in capital and receivables of $19.8 billion. The other is the AI that goes within our analytic platform. Let's say a client goes into an agency, a Banco do Brasil, and it's something that's not so, you know, a matter of fact. Our colleague had to go into the system and had to understand all the system rules, how he has to achieve what the client wants. All of that was going to take long. To that AI platform, we have included AI within that system of instructions.
When the client goes to the agents and if the employee needs to check some information, he goes into a set where he receives the response directly and automatically. What you're asking, you have to go to such and such and such system. All of that made that we profit, we earned 40,000 productivity hours because in the old way, we had to consult the instructions to achieve the solution suitable for the client. More important numbers, we had a decrease of 74% in the solutions development cycle time. That process gave us more time to market to deliver solutions for the clients. All of this, according to our understanding, is that this change of culture and operational model brings us growth within this year. In view of those numbers, we made a decision. This is a chart showing that in October 23rd, we started to talk about the meta.
In May of 2024, we had 200,000 people. In May of 2025, we have 3,400 people. Since we learned this new model and has brought so many positive results, and it's a catalyzer of these events, we decided to advance the delivery time. The whole movement was going to end in 2028, beginning 2029. We anticipated so that it will finish by December of 2026. It means that in December of 2026, we'll have 10,000 employees that represent the whole Brazil headquarters, all the areas, technology, business, security in this new model that I explained to you. We also have, in 2026, 98 elements of those that I spoke about, 15 excellent centers in these disciplines, form 41 platform lines, and 41 business lines.
The number is similar, the platform and business, precisely because the platform lines deliver that scalability, allows us to make more business, to have more business in the business lines so that the platforms are permeating all those lines. Like I said, this is our new way of working. It's present. Every new day, we are becoming better and learning and the charts, like you saw, it's growing. Thank you. Thank you, Marisa. If with 3,000 colleagues in our nimble model, imagine how it will be when we attain 10,000. Talking about drivers of results, I want to call our CFO, Giovanni Tobias.
Thank you. Good morning, everyone, ladies and gentlemen. We are reaching the end of our session of Banco do Brasil Investors Day here in New York. I would like to rehash all the information that was already given. This was the most challenging year for Banco do Brasil, a year that is testing our resilience. What gives us pride is that with all our employees and strategies that we worked out, we have faced this moment and the impact, at the same time, delivering consistent results and demonstrating the strengths of Banco do Brasil. What I would like to highlight here is how Banco do Brasil today has shown the capacity of results change and its success. We announced a revised outlook and looking at our growth of financial results, even in an environment of interest rates that are higher and increase the risks.
We have liabilities in the amount of more than R$400 million. We managed to reinforce our margin with the clients. You can see in the chart in 2025, R$42.6 billion. This growth is based on the growth of our credit portfolio, especially among our individual clients. Within a more selective context, as Prince said, within what we call resilience matrix, we are very cautious along the whole process to ensure that when we make contracts, we cover the higher risks and ensure higher returns. Our performance within the year, we hope to deliver basically a gross financial margin in comparison to 2024. The interests in 2024 were lower. The selling rate was about the same, with the structure of liabilities and the assets that we had, there was a recapitalization process, but the growth of our portfolio and the indicators show a higher investment in the individual's lending.
My colleagues talked about the consignated loans in comparison with Banco Santander Brasil. We are the two big players, and the bank is also among this specific product. This will allow us to increase our share in the portfolio of individuals. We see positive reactions. We see 4.6 and this margin with the clients throughout the year will see a significant improvement as far as our profitability. Our capacity of resilience is to be highlighted, we had a resumption in our growth towards 2026. Banco do Brasil has shown that it is a machine that generates businesses. When we have this nimble model, we can expect more generation of businesses, it is linked to our diversification of receipts of revenues. We have 125,000 employees. We have shares in the corporations. We have some income that was brought by our affiliates. In terms of the agribusiness, we saw higher resilience.
We have BB Seguridade, a leader, a big consortium that deals with a high rate of interest. Our clients that way can realize their dreams of consumption. These consortiums represent a not-so-common product here in the United States, but it is very common in Brazil. In our asset management, we made partnerships with private wealth managers, with Vale and BNDES and other entities. We partner for businesses for an increase in the profits of Banco do Brasil in addition to the current businesses. The means of payment is shown there, food vouchers and food vouchers. We also have a credit card, Bandeira Elo. This, as far as our equity income. Other capital share also shown in our Bank of Investments branch of activities. We also act internationally. We have the President of Banco do Brasil Americas and the Banco Patagonia.
Our aim is to be closer in proximity with our clients wherever the client is. BB Tecnologia e Serviços is also a company that is probably invisible to you, but has been crucial in the expansion of the digital business in Brazil and also in the enhancement of our efficiency. It has helped us go forward in the digital technology. The conglomerate of Banco do Brasil goes beyond banking activities. We deliver the value to our shareholders. There are the profits, accounting profits. The level of our rentability or profitability increased considerably. We are sure, and we have the guarantee that the generation of those businesses, our focus in selectivity and inclusion of individuals and the selection of other companies is going to contribute to the delivery of those results. You can look at the chart. The businesses originating from those companies reach R$12.6 billion.
We cannot dissociate the action of Banco do Brasil without the contribution of those other companies to resume this level of growth from 2026 and pass this troubled period with the rural portfolio. We have to look at our capital basis, our equity basis. We decided to reduce our payout. We have a principal of 10.97%. We believe that 11% will be ideal to support this growth in a sustainable way going forward. We have contracts for next year to reduce that basis. We acted prudentially, adjusting our payouts. The bank today is among the Brazilian banks that shows more attractive dividends than our peers. We are confident that we will manage to go through this moment with this equity basis.
We have described several practices, and President and CEO Tarciana Gomes Medeiros talked about the individual's portfolio and also the provisional measure 13, 14, and also the consignated credit, public, private sector. Along with the credit cards, it will allow us to resume the profitability in comparison to last year. This is what I wanted to highlight as a summary. I invite all my peers, all the executives in Banco do Brasil, saying that in Banco do Brasil, we believe in the resilience and in the growth resumption. Tarciana, Marisa, Giovanni, Cicerone, Prince, Elasofia. Now, we go on to the Q&A session. Thank you, Giovanni. We'll start our question and answer Q&A session.
Let's just take a break in advance. The major question in Portuguese or English. Can you answer in Portuguese or, excuse me, in Portuguese? We are going to reply in Portuguese, though.
Pessoal, é o Mário Pierre do Bank of America. Obrigado aí pela apresentação.
Mário Pierre, Bank of America, thank you for the presentation. I want to talk a little more about the societary participation. Giovanni talked about that. The bank has been intensifying, increasing. They have all the businesses. They have 60% BB Seguridade. You were talking later about capital. I want to ask you, how do you see the monetizing possibility of those societal participations? If the bank needs to increase its capital, do they need to sell? We see Bank Patagonia out of Brazil, which is outside of Brazil. Do you think that in the future you're going to have to sell something? Also, BB Seguridade participation is 66%. Are you thinking in decreasing that participation? How do you see the renegotiation of the contract with BB Seguridade? Thank you. Thank you, Mário, for the question. The best way to reinforce our capital base is with increasing profit.
Our main focus is to regain our rentability so that we can sustain the capital that we consider optimal and to finance the growth of our business. Those participations, no doubt, they are like an insurance policy. In the case we need, we cannot within an exit of the business, quite the contrary, but it's because of this diversification. We have the resilience to face the aggravation of the farmer risks. We are fully aware that the first option is to have the goes towards our interests. Our focus is our client. If there are other services that our conglomerate BB business allows us to offer, we'll go for it. Cicerone talked about the payroll that we have with the public sector that we earned. We have a power force between those different sectors. We have to loan to the private sector and the public sector.
We are disputing with a lot of players of food vouchers. What I would say is that any participation sale of the bank has to be authorized by the shareholders at the shareholders' meeting. We also know that possibly there's a monetization if it's necessary. Yes, it's possible. Are we looking at that in the short term? No. Patagonia has a rationalization strategy. We want to be where our clients are. We know that in 2024, Patagonia had a positive result in the market. We are now receiving more negative impact, given the current conditions in Argentina. We know that they are an important partner within the trade balance. I would like to add another point regarding that. Summarizing in terms of capital, the organic generation of capital is the most important thing that we need to sustain our capital. We need to regain the rentability in 2026.
Just to complement, Mario, you can see that most of our participations, they are over 60% or 70%. In case of need, like Giovanni said, we can let go certain equity holdings without letting go of those guarantees. We are pitching, for example, with BB Consortiums, which is a business of the BB Consortiums. We were leaders in that. We have the fruits that are available so that we can generate that income or earnings to generate capital. Do Goldman Sachs, did the barter?
The question is, get to a recent update on the agribusiness because when we look at the Central Bank of Brazil data, you continue to see deterioration in the portfolio. Do you think we're past the worst of it? You maintain your guidance here for the year. Are you comfortable still with your provisioning levels? Do you think there will be further deterioration? In terms of you thinking about profitability improving next year, do you think you'll be able to be on track for that? Given the maybe following up on the capital with the reduction in the dividend this year, do you think in 2026 you'll be able to increase the dividend back more to historical levels, or is there still some uncertainty, or when would you decide that?
Thank you for the question, Tito. It is our most challenging year ever, as we have already explained to you. The guidance we disclosed is not a walk in the park. We have been crystal clear when talking about the third quarter. We mentioned that when we disclosed our second quarter financials, that the third quarter we would continue seeing the deterioration in the credit book, mainly coming from the agri book. You should expect a third quarter similar to the second one. As Bittenkourt mentioned, with this new provisional measure executive order that we disclosed here, and this is something that we mentioned to all investors we would be pursuing due to this new regulation of provisioning that the Central Bank of Brazil put in place in Brazil. This is the answer for all of you.
We were able to succeed on that negotiation, explaining the differences between our agri book and the new regulation regarding upfront provisioning that was pouring or deteriorating our results. We are confident that from the fourth quarter on, you saw also shown by Prince the volume of repayments that we are expecting to see. The peak of it is in the third quarter, and that's why the third quarter numbers tend to be similar to the second one. From the fourth quarter on, we expect to have a flattening in our delinquency in the agri book, allowing us to bring more results to our P&L. With regard to dividend policy, it's important to mention that it's up to the Board of Directors to set what will be the dividend policy for Banco do Brasil. We were very cautious when reducing it to 30% for 2025.
From 2026 on, it will depend on our prospects for results. If our strategies towards increasing the individual's book become successful, the way we are expecting to become, definitely we will be posting higher profitability and will allow us to better assess what would be our minimum dividend policy. It doesn't mean that I cannot, depending on extra results that I may see happening, I couldn't pay an extra dividend, not necessarily having an increase in the payout ratio, but adding extra dividend payments for 2026 that would comprise a higher payout ratio by the end of the year instead of committing myself with a higher payout ratio at the beginning of the fiscal year. Good morning, everyone. Renato here from Autonomy.
Good morning. This is Renato of Autonomy Research. In short and long term, you have communicated that you have less income, and you communicated that to the agribusiness. How are you balancing that? Further on, I want to understand a little bit how are you using the Cielo's integration? Legal.
Primeiro, não é uma correlação direta.
First of all, it's not a direct correlation. It's an opportunity that we're going to explain better. Our portfolio is quite internal. We have business poles that are similar to the business. It's worse when you have worst performance in the farmers of such community that affects the small businesses around or linked to them. That's what's been happening. Since the same way that we are less exposed to services within cities when the default payment we have in the agribusinesses, these communities, if they have a payment default, this affects the small business. From the beginning of the year or even at the end of the last year, we had a process of improvement of the origination of that portfolio. We are being more selective.
We are using, like we said, and referring to the resilience metrics, we are looking to foment new disbursements with the best clients, less risky, and the best economy development and regions that have performed better. This translates in originating crops, which are the best crops when we follow up small and micro and small business. The fact is that because I have a better selectivity, I have a better rhythm of disbursement. The payment default happens at the level of the previous crops. We expect that those curves in the third trimester are going to be, we're still going to see them, but we're going to see a fall of this portfolio mainly starting in 2026. Going to the strategy of that portfolio, yes, we are seeing a migration of the unprotected transferred because part of that, part of them are from government funds guaranteed by government funds.
A part of this transfer, we are gradually migrating to a portfolio of anticipating receivables, especially credit when we have a bigger revolving. You have the assurance because the warranty or guarantee is linked mainly because we have the ability to centralize the cash flow of the client within the bank. That centralization of the cash flow not only brings more guarantees, but allows us to model the real financial situation of the client within that moment of his business life. There's this AI engine that we call pulsation that measures exactly the payments and the receivables and the payments made so that we measure their performance. From there, we adopt the more adequate measurements of increasing the credit or renegotiation or collecting depending about the pulsation that we identified.
On the other hand, we have the possibility of putting into the network a whole commercial strategy. Until now, we saw imbalance when we wanted to deliver a solution to a client in addition to risk and more adequate granting of credit. We have more adequate means to negotiate with the client. We know that there was a gap, and we are prepared to close that gap. Now, I would ask especially to Marcelo Rebello to explain something about the resilience work we are doing. We have an economics team that analyzed the situation of each one of the municipalities in Brazil, and we integrated that in the modeling we are working on so that each municipality participates in the booming that we are aiming for. I would like to give credit to the team that is working in that respect. Nicola Rivers, do.
I think they're probably going to be for Giovanni. The first one is regarding your presence in the bond markets. You recently announced you're going to be calling the $1.81 billion bond in October. It seems to me that the idea is to use the local market to raise either Tier 2s or AT1s and to use maybe both the international and the local market to raise senior debt. I wanted to confirm that if the plan again is to use mainly the international market just to refinance dollar senior debt. Second question on capital. I think you showed a slide towards the end of the presentation, 11% CET1, I think, at the end of June, and then the projection for 2026. I think it was the negative impact. I think it was roughly 100 basis points from different items.
I wanted to ask if you, what would be your target, your projection for CET1 and for total capital by the end of 2026? If you have some kind of target as well for capital ratios, both CET1 and total capital. That's my second question, capital. The third question, Giovanni, is on this noise in recent weeks about the Mnitzky law that my understanding is it's been applied towards a Supreme Court justice in Brazil, Alexandre Moraes. There's been no sanction on any institution or bank. I wanted to ask you if you can make any comment regarding your exposure to some of these individuals which have already been sanctioned, such as Alexandre Moraes, members of his family. If the bank is involved or if the banking association is involved in any discussions with the Brazilian administration and the U.S.
administration to prevent any banks from being sanctioned by the U.S. administration and any systemic risk for the banking sector. Thanks.
Thank you for the three questions. I'm going to try to answer them and perhaps divide here with Prince. Okay. Let's start with the first one regarding the call in our Bambura. This was something that we were analyzing. We had already called another Bambura that was outstanding. This one particularly, we were making plans to see if we would continue keeping it or calling it. The good thing is that in our local markets, the market opened for 81s, domestic 81s, at a very competitive cost for us. In order to make a better management of our assets and liabilities, it became clear to us that calling the 81, but at the same time, financing this call with domestic 81s at a very lower cost makes much more sense. It will continue supporting the growth of our interest margin when we do this exchange.
Definitely, we have no, how can I say, strategy looking forward to issue new 81s internationally. Regarding senior bonds, we are always paying attention to market conditions. For now, it doesn't seem to us attractive. We do have a very strong external liquidity to finance our dollar-denominated liabilities. We don't need to issue senior bonds in the short run. As I mentioned, we continuously keep paying attention to market opportunities. Once they spread, it's good. We have already adjusted our liabilities throughout time, reducing the need for large payments in the short run. We were able to smooth our curve throughout time. That's why we don't have in the short run any will to issue senior bonds. Finally, with your third question, I will start answering and then transfer to Prince. First of all, we are not allowed to make comments on whatever banking activities of any clients.
There is a law in Brazil that prevents us from doing that. It's important for you all to know that we fully comply with regulations in all the geographies we operate. We are fully complied with all legislations. Despite all the rumors, there is a huge noise, basically a political noise regarding this issue in Brazil. Unfortunately, sometimes this noise ends up coming here to the U.S. as well. I would like to transfer to Prince to make more comments on the Mnitzki.
Do you have a target or projection for CET1, total capital ratio by the end of the year?
We believe that the sound CET1 level for us is around 11%. All these adjustments we did in reducing the payout ratio, etc., is taken into consideration a three-year term projection. There is a prudential minimum level of capital that my board approved. Whenever I see with these regulatory improvements that the Central Bank of Brazil is promoting, if by any chance this goes below the average level we consider is comfortable, we take actions to prevent us from having a capital issue in the future. This decision has nothing to do with the short run, has much more to do with the long run, considering all the regulatory improvements the Central Bank of Brazil is promoting regarding Basel III adjustments.
That's why I mentioned at the beginning of my presentation when I addressed the capital slide that I have already contracted a 100 bps reduction next year, due mainly to regulatory changes. In a moment that my organic result suffered from the losses from the agri book. That's why we decided to adjust the payout ratio.
Giovanni, I think that your answer is totally completed. I would like just to reaffirm that we are a 215-year bank with a 60-year presence here in the U.S. We are totally prepared to deal with these things here in the U.S. or in Brazil in total compliance.
Carlos.
Hello. Carlos Gomez, HSBC. I'll ask in English. In terms of capital transactions that you mentioned that they come and they pitch you, we understand. Realistically, over the next year and a half, do you expect to do something? I mean, are you open to any type of transactions, buying, selling, changing in any way the configuration of the bank? There was a question about BB Seguridade and the renewal of the contract. I wonder if you have any comment about that. The second question, unrelated, is about the agricultural portfolio. We have a new situation. We have the judicial recovery. We could potentially have higher losses on a permanent basis. How does the agricultural business look three, five years from now relative to what it is today? Is it going to be the same, larger, smaller?
In the long run, would you like to change your reserve requirements from going to agriculture to perhaps going to mortgages, which is what the other banks do and perhaps has more growth potential? Thank you so much.
Thank you, Carlos, for the question. I'm going to start with the first part of it regarding capital. We have a number of different alternatives to boost our capital, not only the payout that we have already done, but we can also consider perhaps even raising capital or selling shares of, yeah, I don't know why you're smiling, but definitely, there are a number of different alternatives that we can look. We don't want to stop growing our business. That's why our main focus is on recovering our profitability. That's why we have focused on growing faster our individual's portfolio. As long as we continue delivering higher growth on that part of the book, I will be adding higher spreads and coping with this deterioration scenario and bringing higher profits. For 2026, you should expect Banco do Brasil coming back to the mid-twins meetings, sorry, ROEs.
We believe we will be able to add extra capital just organically through higher profits. It's part of our strategy, focusing on other alternative assets that could bring us one-off impact, improving our capital. Don't forget that all these agri book restructuring programs will end up on adding extra capital as well. That's why I mentioned to Mario Pierre that it's not part of our short-run strategy to start selling assets, especially these companies that bring us good results, as I showed to you, and help us diversify the profits of Banco do Brasil. This doesn't mean, for instance, that I could consider IPO-ing consorcios. That is something that is extremely profitable. We know that the market would love to have a share of this business. Once again, this is not us from us to decide. This decision is up to the shareholders' meeting.
Definitely, in the short run, this is not part of our strategy. With regard to the agri book, Bittenkourt, would you like to add comments?
Sim. Uma coisa importante para esse debate é a pessoa física ou de fornecedor de serviços. A nossa inadimplência está muito concentrada em grandes produtores que têm terra, que têm máquinas, que têm conhecimento e que têm capacidade.
Means and acknowledge a productive capacity. Even if we have a payment default, the farmers who have the land will continue producing. That's why those measures are important for us, because we don't want to exclude the farmer from our base. We believe that one time that we have both opportunities to renegotiate, we will bring back the farmer to return to make this payment so that we continue operating with those farmers. We are talking about farmers from important regions in the country, not only concentrated in Rio Grande do Sul, where we have a series of medium and small producers who have been affected by the climate change. We have also farmers in Mato Grosso, Goiás, Bahia, representing significant numbers, and they will continue producing. Due to the cash flow difficulties, they had that payment default.
In the future, when we have these two measurements active, we will be starting a new phase. Of course, we're going to still have payment defaults, but starting in October, not only us, but we hope that the producers come to us so that we can invert the curve of the payment default. I think that's important. It's different from a bit of commerce where once you are in payment default, it's harder to recover. Agriculture is not as difficult. Second issue is that in spite of all this renegotiation process that we are talking about, as of next week, we're going to receive the proposals of that tax-free line. We are highlighting the recovery starting 2026, starting the repayments of our portfolio. We are highlighting these notes because we're going to have a renegotiation tomorrow that we're going to get the producer from stage one to stage one.
We are having, we're going to be working with that portfolio. If the producers will be repaying the interest and principal in a constant manner, we will have this provision. We will think that the future will be better. We have to look at that portfolio renegotiation. Jilson, Banco do Brasil owns 50% of the market. As a whole, there's another 50% in the market. The measure benefits all the financial market. We have to remember that the client is not only a client of Banco do Brasil. He operates in the financial market. This partnership with other institutions and the other players is important so that the producer starts another, not to get into a new payment default next year. The renegotiation will going to be up to nine years. We are going to work with the producers looking case by case.
It is important to highlight that the profile of the producer is not happening only with Banco do Brasil. It happens in the market as a whole. That renegotiation is very important because, one more time, we are reinforcing the guidance of 5.3%. As is to conclude, I hope it covers all your questions. Giovanni shows that the CGPE was the incentive in capital to grant credits to the people that invested during the pandemic. We see that $0.6 billion of capital investment adds up to $6 or $7 billion. The agribusiness portfolio had $20 billion of payment default in June. How did this temporary measure give to all the market that every real renegotiation will be incorporated into the capital? We have a good value to be paved for the reconstruction of the part of the capital that will kind of fall in 2026 with this new program.
BB Seguridade has the challenge of adding more rentability. We know that part of the earnings was impacted due to the rural portfolio. We expect to recover that. We are announcing a new president, who is Labuto, to help us in the new negotiation with our partners, aiming at generating more results to Banco do Brasil. You have to add, you want to add anything else to BB Seguridade? No, I think that you mentioned that any negotiation that is done in the future, it will always be aimed at increasing the BB Corretora. I think Labuto has an important mission and is going to talk to you soon about that. Delano is here. Any questions, you can ask him as well. Soon, we are going to be able to talk about in a more structured manner about BB Seguridade.
We have to expand and penetrate other segments in the market. We have a very important client base, but we want to look for rentability and modernization of the portfolio. We need to modernize our portfolio in security. With this agricultural insurance issue, we had a fall in BB Seguridade and its impact in this recurring profit. In this last trimester, we had a possibility to recover part of that amount still in 2025. We have time to ask another question. Let me ask you another question. Can you talk a little about the third trimester, especially with these recent changes? We expect to have the estimation that in the third trimester, we still have 15% money due in September. With these efforts, we have to be very careful because the payment default, the BVD, is above what the historic value or amount is. We are close to 4%.
It always was 2% to 2.5%. In that regard, we have been working to increase our profits. I think this is clear. We have been working hard to fight this payment default. We are going to have results of more adjusted path. That's a resource that we have been working since yesterday. The last issue before we close, I'm going to ask you, those who have asked the survey, please respond. To close, I'm going to give the floor to Tarci, and I'm going to thank you all for being here. Thank you. Here, I want to tell you that Banco do Brasil has, when they grant credit and finance the production and the foreign business in sustainable development of the country on ESG practices, it's its main vocation.
I think that the scenario that is before us today is that, faced with all of the history and the robust position of Banco do Brasil, we have a new dimension. It's a new dimension, more digital. This is a bank that is able to adapt and reinvent itself according to the needs of the market and what the world demands from us. I believe that the Banco do Brasil that we're building today is a bank that is going to become ever more agile, more close to clients, more resilient to the changes in the world, but a bank that has the conditions to adapt fastly, has the abilities before an economic point of view to recover fast. I think that we are proud in our management that we deliver a more sustainable bank, a bank that returns to the investor what he gets.
We have a huge ability to deliver results. We have a management that, we say that when we are, we are restless. It's a restless management. We just want to move forward. We want to assure you that we're going to work every day at all times so that this solid, resilient bank continues to be this Banco do Brasil that is, but it's not the Banco do Brasil from Brazil, but a global reference globally in adapting to macroeconomic scenarios, a bank that delivers more results and generates more value for the society. Thank you very much for this morning and for this day dedicated to the investor day. Let's see us again in 2026.