Banco Bradesco (NYSE:BBD) said it completed a BRL 10 billion capital increase and reported continued loan growth, higher revenue across several business lines and progress in its operating-efficiency and digital-transformation initiatives during its third-quarter earnings call.
Marcelo Noronha said the bank’s loan portfolio totaled BRL 1.15 trillion, up 11.1% from a year earlier and 1.1% from the preceding quarter. He said the expansion reflected selective growth in products and customer segments where the bank sees acceptable risk-adjusted returns.
“We continue to have traction, but we have traction where we have risk appetite,” Noronha said, contrasting Bradesco’s growth with data he cited from Brazil’s national financial system.
Loan Growth Tilted Toward Corporates and Secured Products
Bradesco said lending to large corporations rose 14.8% year over year, with the large-corporate portfolio reaching BRL 341 billion after increasing by more than BRL 50 billion during the year. Noronha said the shift toward large-corporate lending affected the bank’s net interest margin because those loans carry different margins than consumer and small-business products.
He said that, excluding the growth in large corporates, the bank’s net interest margin would have been about 9.3%, rather than approximately 9%.
Within consumer lending, Bradesco reported growth in payroll-deductible loans, vehicle financing and mortgages. Private payroll loans increased 102% year over year and 13.3% from the prior quarter, while vehicle lending rose almost 27% following the rollout of a new technology platform. Mortgages and real-estate lending grew 15.2%.
At the same time, Noronha said Bradesco was reducing exposure to unsecured personal loans and maintaining controlled risk appetite in credit cards. The bank also reported lower lending to rural individual borrowers, while continuing to grow certain agricultural and corporate loans supported by collateral and guarantees.
- Loans to companies increased 14.1% year over year.
- FGI- and FGO-guaranteed lending rose 31.5% year over year.
- Unsecured working-capital loans to small and medium-sized businesses declined.
- Public payroll loans, a portfolio of nearly BRL 60 billion, increased 11.1% year over year.
Asset Quality Pressured by Specific Portfolios
Bradesco’s nonperforming-loan ratio for loans more than 90 days overdue increased to 4.6% from 4.3% in the prior quarter. Noronha said roughly half of the 30-basis-point quarterly increase came from FGI and FGO guaranteed lending, while the John Deere Bank business accounted for nearly 10 basis points because of seasonal factors.
The executive said the guaranteed portfolios have lower expected losses than unsecured consumer credit despite their effect on reported delinquency measures. He added that Bradesco’s coverage ratio for stage-three loans was 105% when the FGI and FGO portfolio was separated.
Noronha also pointed to pressure in unsecured consumer credit, including personal loans, credit cards and rural lending to individuals, citing higher household debt burdens and elevated real interest rates. Still, he said Bradesco’s portfolio remained under control and that its 90-day delinquency rate was below the 5% level cited for the broader financial system in August.
In response to analyst questions, Noronha said vehicle-loan rollovers were performing well and that wholesale loan-loss provisions remained “flat and stable.” He said the bank was monitoring court reorganizations but had not participated in many compared with the broader market.
Revenue Growth and Treasury Performance
Noronha said total net interest income increased 14% year over year and 2.4% from the previous quarter. He said revenue expanded across assets, liabilities, fees and commissions, insurance, and treasury-related operations.
Fee income benefited from credit operations, custody and brokerage services, investment banking, asset management and consortium products, according to the presentation. Noronha said Bradesco’s asset-management business gained market share through assets under management, while its consortium operation remained resilient.
The insurance unit maintained a 22% return on equity, Noronha said. Insurance premiums and insurance-related revenue increased, with Bradsaúde highlighted as a contributor. Technical provisions totaled nearly BRL 480 billion, up year over year.
Management also expressed confidence in market net interest income, with Noronha saying the treasury operation was generating recurring results through client activity, asset-liability management, trading and newer business lines such as the energy desk. He said the bank expected market NII to remain strong in the fourth quarter and estimated treasury income could be around BRL 3 billion for the year.
Efficiency, Capital and Digital Transformation
Chief Technology Officer Cassiano Ricardo Scarpelli said expense discipline was driven by structural initiatives rather than one-time factors. The bank is reviewing its branch and office footprint, renegotiating procurement contracts and technology licenses, and using artificial intelligence to improve processing capacity.
Scarpelli said Bradesco was targeting roughly 40 points of additional efficiency over the next two to three years. He said the bank was nearing the end of its footprint adjustment and expected future gains to come from productivity and lower-cost technology.
The bank reported a common equity Tier 1 ratio of 12.1% and a Tier 1 capital ratio of 13.7% following the capital increase. Noronha said the stronger capital position would support continued investment in the business.
On the digital front, Scarpelli said more than 45 million customers had migrated to digital wholesale services. Bradesco’s BIA virtual assistant handled more than 15 million interactions, with about 90% of cases resolved without transfer to a human agent, he said. The bank also increased the number of generative-AI use cases using its Bridge tool to more than 1,000 from about 500 in the prior quarter.
Noronha said the transformation program was progressing “at full speed,” while reiterating that the bank expects to keep expanding lending, fee income and liabilities in areas where it has risk appetite. He said lower interest rates would be positive for the organization and its customers, though improvements in credit risk would take time to develop.
About Banco Bradesco (NYSE:BBD)
Banco Bradesco SA is a Brazilian financial services company headquartered in Osasco, São Paulo. Founded in 1943, the bank serves individuals, businesses and institutional clients through a broad network of branches, digital channels and automated banking services.
Bradesco offers traditional banking products and services, including checking and savings accounts, personal and commercial loans, credit and debit cards, payment solutions, foreign exchange and investment products. Through its related businesses, the company also provides insurance, pension and capitalization products, asset management, brokerage and other financial services.
The company primarily serves customers in Brazil and maintains international activities to support corporate and institutional clients, including services related to international banking and trade.
