Brazil’s Banco do Brasil reported that a delay in payment exceeding 90 days from a single client – totaling R$3.6 billion (approximately $715 million USD) – impacted the institution’s non-performing loan ratio in the fourth quarter.
The bank did not disclose the client’s identity, citing banking secrecy laws. However, sources familiar with the matter indicated that the company in question is Braskem. In a statement released late in the afternoon, Braskem denied having such financial exposure to Banco do Brasil and stated it remains current on its obligations, also denying any default during the last quarter of the previous year.
Braskem: atraso de R$ 3,6 bi com o Banco do Brasil Foto: Daniel Teixeira/Estadão
The loss incurred by Banco do Brasil, according to reporting from Estadão/Broadcast, stemmed from shares of Braskem pledged as collateral by Novonor (formerly Odebrecht), which previously held a controlling stake in the petrochemical company. In December 2025, IG4 Capital reached an agreement to acquire debt secured by Braskem shares, moving to take control of the company.
The transaction was estimated at approximately R$20 billion (roughly $4 billion USD) and involved the transfer of bank credits held by a consortium of creditors to Novonor, including Banco do Brasil, Itaú, Santander, and Bradesco.
Felipe Prince, Banco do Brasil’s Vice President of Internal Controls and Risk Management, told the press, without naming the company, that the debt had been transferred to a fund specializing in higher-risk credit, often referred to as “special situations” managers.
“This represents an older case where several solutions were attempted, and we ultimately were unable to implement them in the past,” Prince said. He added that the bank had established a framework to facilitate the regularization of this credit in 2025. “During negotiations, the operation became delinquent,” Prince stated.
The issue was resolved in January, and the credit was subsequently assigned to a fund. Prince indicated that this specific case is not expected to have further impact in the first quarter of 2026.
Without accounting for the company’s delinquency, Banco do Brasil’s non-performing loan ratio, considering arrears of over 90 days, would have been 4.88% in the fourth quarter. Including the case, the indicator rose to 5.17%.
The situation also affected the bank’s loan loss reserve coverage ratio, which decreased to 155.4% in the fourth quarter. Without the impact of this case, the ratio would have been 164.7% – meaning for every R$1.00 of credit exposure, R$1.64 was available to cover potential losses.
