DECEMBER 2025
Having achieved an annualized return of 25.4% in 2025, BOCOM BBM celebrates the fourth consecutive year with a sustainable return on average shareholders’ equity (ROAE) in excess of 20%, one of the highest in the Brazilian market. This result, and above all the way in which it was constructed, consolidated the success of a unique project begun in 2016 with Chinese capital, intense participation and management by Brazilian executives, and a long history of collaborative teamwork.
As we embark on BOCOM BBM’s tenth year, we are proud of our successful strategy of diversification into new business areas, including expansion in debt capital markets, treasury products for clients, and Asset Management. These sources of income, which are not directly linked to credit spreads, accounted for 47.5% of the Bank’s total revenue in the year, representing significant growth compared with 22.3% in 2016, when the BOCOM BBM project began.
It is an honor and a pleasure for us to support our clients, who believe in this country and create jobs, to continue investing in training and education, and above all to contribute to the development of Brazil-China financial relations, creating opportunities for both countries and promoting harmony and mutual understanding.
With regard to the global macroeconomic outlook, despite the ongoing trade disputes and tariff war, the risk of widespread protectionism resulting in a sharp global economic downturn has receded. In the United States, inflation continues to display benign dynamics even though prices of tradable goods are now starting to reflect the tariffs. The US economy is slowing slightly, but a robust labor market is providing a sound basis for future growth. For the emerging-market economies, the global economic deceleration, weaker dollar and redirecting of Chinese manufactured goods to other countries are all factors that contribute additionally to disinflation. In Brazil, monetary policy has been very restrictive for a long time, and rate cuts are expected in 2026. The lagging effects of the restrictive monetary policy will lead to a degree of economic slowdown, but fiscal expansion and labor market resilience, with unemployment at its lowest since 2012, may act in the opposite direction.
Although current inflation displays benign dynamics, the resilience of economic activity and de-anchoring of expectations could make the disinflation process slower, requiring rates to remain in restrictive territory in 2026. This context presents challenges but also opportunities. The high level of nominal and real rates in Brazil compared to most other countries in the world is attracting foreign investors in pursuit of diversification and new investment opportunities outside the US.
The implications of this context for market dynamics in the first half persisted in the rest of the year: on one hand, corporate credit continued to be the key allocation destination for many investors; on the other hand, the top-tier banks set out to rebuild the strong platform for originating capital market and bilateral transactions they had in 2024, and continued to accelerate the performance of new transactions. Credit spreads were squeezed as a result, and along with the tight monetary policy this made the risk-taking environment extremely asymmetric. Given this context, the Bank tactically used market windows to place a number of issues, focusing on 12,431 debentures for the institutional market, while also increasing treasury transactions for clients to take advantage of the added volatility. In addition, the Bank continued to develop new Asset Management products, including the launch of a real estate investment fund (FII) to offer clients the opportunity to profit from the development of a residential project in a prime area of São Paulo.
In light of the competitive environment described earlier, we maintained our cautious growth strategy but succeeded in adapting our production function so as to prioritize productions targeting transactions with lower expected credit loss allowance (ECL). As a result, we were able to end 2025 with a larger portfolio than a year earlier.
Throughout the year we continued to strengthen our corporate commitment to the well-being of our employees, clients and suppliers, and the local community where we operate. Our sponsorships and donations supported several projects that enrich education for vulnerable groups. For example, we continued to support a project located near our Rio de Janeiro offices called Arte Tech, which is run by Gamboa Ação, an NGO that offers extracurricular classes for underserved children. Through Viver Solidário, another NGO, we supported a number of philanthropic entities in Rio by donating food and hygiene products during the festive season. In addition, we supported universities and training courses in areas of strategic importance to the Bank, such as the economics departments at the Pontifical Catholic University of Rio de Janeiro (PUC-Rio) and Getúlio Vargas Foundation (FGV), both of which have leading business schools. We also supported a course called “China Today”, offered by Tsinghua University, Beijing, to enable Brazilian executives to learn about economic trends in China from renowned experts, academics and policymakers. To our ongoing initiatives relating to representation, talent retention and career advancement we added the creation of a diversity committee. Our sustainability committee continued to promote important internal initiatives, such as the measurement, certification and offsetting of the Bank’s carbon emissions.
We participated in the commemoration of 50 years of Brazil-China relations by supporting several projects that highlighted cultural exchanges between the two countries over the years. One of these was restoration and maintenance of Casa Pacheco Leão, a historic building in Rio’s Botanical Garden which hosted an exhibition on the “Tea Road” in 2025. Our continuing partnership with Rio’s Botanical Garden will further explore the cultural and botanical connections between Brazil and China, showing that there are myriad opportunities for even greater integration between the two countries.
