BB’s dividend distribution will be maintained, says CEO – 03/19/2024 – Market

The unexpected withholding of Petrobras’ extraordinary dividends raised alarm among investors in state-owned companies listed on the Stock Exchange.

Asked whether Banco do Brasil is subject to similar changes at the request of the Lula government, the institution’s president, Tarciana Medeiros, denied that the recently approved profit distribution policy will be changed.

“[Essa política] was approved by the board of directors, which has five representatives of the majority shareholder [União]. It has already been approved and will be maintained”, said Tarciana during an event organized by Bloomberg, in São Paulo, this Tuesday (19).

In February this year, the BB board approved the increase in dividend distribution from 40% to 45% in 2024.

Petrobras, in turn, has a mandatory distribution of 25%, and there may be an extraordinary distribution, which happened in previous years, but not in relation to the 2023 result, by the vote of Union representatives on the state-owned company’s board.

The news caused a strong devaluation in the state-owned company’s shares, as investors were counting on the distribution of extraordinary dividends. The negative impact led the government to re-discuss the decision, which may be reviewed.

Agriculture in 2024

Despite the slowdown in agribusiness expected for 2024, BB projects significant growth in the sector this year, between 11% and 13%, which should contribute positively to the bank’s results, which has around a third of its credit portfolio linked to the sector.

Despite the drop in the soybean harvest, cotton and coffee harvests have been records, said Tarciana.

“BB has analytical and artificial intelligence models that already tell us with great precision what will happen to our credit portfolio and agribusiness based on climate issues that, today, affect us less than in the past, as around 90% of our portfolios are guaranteed, whether real or by insurance”, stated the president of the institution.

For the executive, the outlook for credit granting as a whole is positive this year, especially with the expectation of a fall in the Selic rate, currently at 11.25% per year.

“We work with the Selic projection at 9% in December, but we always want it to fall faster,” said Tarciana.