Banco do Brasil’s Farm-Loan Strain Revives the Privatization Debate

Banco do Brasil’s Farm-Loan Strain Revives the Privatization Debate
Banco do Brasil reported adjusted net profit of R$1.27 billion in the third quarter, down 66.5% from a year earlier, as overdue rural loans mounted. Its rate of loans more than 90 days past due rose from 4.84% to 6.92% over the year, according to the detailed account from the Brazil Right grouping.

The bank is especially exposed because it is Brazil’s largest agricultural lender, with a rural-credit portfolio of R$403.6 billion—about half of the country’s total rural credit, the report said. Finance director Geovanne Tobias described the moment as “a crisis without precedent in Banco do Brasil’s recent history,” comparing its scale with the financial-sector disruption around the 1994 Real Plan.

That account frames the defaults as the result of a difficult adjustment for farmers: commodity prices that were high from 2020 to 2022 encouraged investment and expansion, then receded while repayment obligations remained. It also points to persistently high interest rates, reduced lending for the next harvest and weaker crop-insurance coverage as pressures on producers’ ability to repay.

The Brazil Left item reaches the same core finding in its headline—“Profit Drops 66.5% Amid Rising Agricultural Delinquency”—but provides no additional interpretation or supporting detail. Thus, the available coverage does not present a substantive competing explanation for the decline.

A more political response came from Rodrigo Constantino, who reacted to the reported collapse in profit and rise in delinquencies with a brief call: “Privatize now!” That view treats the results as evidence for ownership reform, whereas the detailed reporting focuses on credit conditions, commodity cycles and insurance protection as the immediate drivers of the bank’s strain.

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