BB defends dividend policy after Lula’s criticism

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Executives at Banco do Brasil on Thursday (10) defended its shareholder remuneration policy and the use of “meritocracy” to define the succession in command, in the wake of surprisingly strong quarterly results.

“We consider that the current level of shareholder remuneration [40% do lucro] is adequate,” said José Ricardo Forni, vice president of finance and investor relations at the bank, in a conference call with journalists.

BB announced the day before that it had an adjusted profit of R$ 8.36 billion in the third quarter, up 62.7% over a year earlier and above the average forecast of analysts. The performance came against private banks, such as Bradesco and Santander Brasil, which had lower profits.

According to Forni, the definition of what percentage of the profit will be distributed in 2023 should be released between next month and January of next year.

The comments come after BB’s policy on shareholder remuneration was criticized by then-candidate and now president-elect Luiz Inácio Lula da Silva (PT), who defended “framing Banco do Brasil”, as he understood that government-controlled banks could not earn the same profits as private banks.

“This result was only obtained because of the bank’s governance,” said Forni on Thursday.

The executive president of BB, Fausto Ribeiro, in turn defended the use of “meritocracy” as a criterion to define the succession in charge of the bank. Ribeiro, appointed by the current government, said he must personally deal with Lula’s transition team, who takes over in January.

“Meritocracy is something fundamental within BB for the succession process at the bank”, he said.

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