Bradesco (BBD) Q3 2026 Results: Provisions Up 24% as Insurance Revenue Falls

Bradesco (BBD) third-quarter 2026 results, filed on Form 6-K on October 23, 2026 for the quarter ended September 30, showed higher profit but weaker earnings quality in both lending and insurance [1]. Going into the quarter, the open questions were whether net interest income after provisions could keep rising each quarter, whether fee income could catch up with full-year guidance, whether insurance revenue could hold against a high prior-year base, and where capital would land after the share offering. Provisions grew far faster than loans and insurance revenue fell year over year, while fee income just reached the growth rate at the bottom of guidance and the capital increase was completed in full [1]. Recurring net income rose 14.6% to R$7.109 billion, carried mainly by market net interest income, fees and cost control, while the contribution from client lending weakened [1].

Banco Bradesco is a commercial bank headquartered in Osasco, Brazil, and also owns the insurance group Bradesco Seguros [1]. The bank lends to individuals, micro, small and medium-sized enterprises (MSMEs) and large corporates. It earns loan spreads, card and account fees, and insurance underwriting and reserve investment income [1].

Change 1: Provisions outgrew loans, and government guarantees explain only part of it

Bradesco's provisions grew more than twice as fast as its loan book in the third quarter. Expenses with expanded loan loss provisions were R$10.642 billion, up 24.3% year over year, and the annualized cost of risk rose to 3.7%; the expanded loan portfolio grew 11.1% [1]. Net interest income after provisions was R$10.730 billion, below R$10.887 billion in the second quarter. Client net interest income after provisions was R$9.855 billion, down 3.5% from the prior quarter and 2.0% from a year earlier, and the total was held up by market net interest income of R$875 million, up 30% quarter over quarter [1].

The drivers of higher provisions now go beyond government-guaranteed loans. In the second quarter, management said losses on roughly R$80 billion of FGI/FGO government-guaranteed loans were very low and that credit cost would be slightly higher but within expectations [2]. This quarter, the company attributed the increase in provisions to a concentration of rural loan installment due dates and higher delinquency in retail operations for individuals, and said it had reassessed the risk of older vintages [1]. Management said the over-90-day NPL ratio rose 0.3 percentage points to 4.6%, with about half of the increase coming from FGI/FGO loans and about 10 basis points from seasonality at John Deere Bank [3]. Provision coverage of new Stage 3 (impaired) loans was 83%, and it exceeded 100% only when government emergency programs were excluded [1].

Margins also narrowed. The average gross client margin fell to 8.9%, 0.2 percentage points below the second quarter, as unsecured retail lending was tightened and large corporates took a larger share of the book [1][3]. Management expects the margin to recover in the fourth quarter and sees a possible cost-of-risk inflection only in late 2027 or 2028 [3]. Net interest income after provisions totaled R$32.002 billion for the first nine months; the company kept its full-year guidance of R$42 billion to R$48 billion and said it is currently in the lower half of that range [1][3].

Change 2: Insurance revenue declined as claims outpaced premiums

Bradesco's insurance revenue turned negative year over year. Income from insurance, pension plans and capitalization bonds was R$5.590 billion, down 2.0% [1]. In the second quarter, the insurer's management expected full-year revenue to land between the midpoint and the top of its 6% to 8% guidance [4]; third-quarter revenue was already below the quarterly average implied by that statement for the second half.

The decline came from the underwriting mix. Earned premiums rose only 4.2% year over year while retained claims rose 10.2%, and financial results on reserves were R$2.131 billion, up just 1.0% [1]. The company said the claims ratio moved in line with seasonal patterns, but in a year-over-year comparison seasonality is unlikely to explain a 6-percentage-point gap [1]. Insurance group net income was R$2.889 billion, still up 14.1% year over year, but the growth came mainly from other expenses falling from R$886 million to R$258 million, and the reason for that decline was not disclosed [1].

Progress: Fee income on target and the capital increase completed

Fee income and capital met earlier expectations. Fee and commission income was R$10.924 billion, up 3.1% year over year, and record card income of R$4.830 billion offset a 5.0% year-over-year decline in checking account fees [1]. The R$10 billion capital increase was approved by the Central Bank of Brazil on October 8, 2026 [5], and the common equity tier 1 ratio rose from 11.3% at the end of June to 12.1%; the remaining capital benefit from the Bradesaude transaction is still under regulatory review and was not included [1].

Conclusion

Bradesco's profit growth in the quarter came from market activities, fees and cost control rather than client lending, and operating expenses fell 1.0% year over year [1]. Because the extra provisions came from older client cohorts outside the guaranteed programs, improvement in credit cost is likely to take longer. The capital constraint has largely been removed, but management is keeping a cautious risk appetite. The next tests are whether fourth-quarter provisions stop rising, whether the margin recovers, whether insurance claims fall back within premium growth, and whether market net interest income can be sustained.

Sources

[1] BBD 6-K filed 2026-10-23 · 3Q26 earnings press release, Banco Bradesco 6-K, 2026-10-23, https://www.sec.gov/Archives/edgar/data/1160330/000129281426004994/bbdpr3q26_6k.htm [2] BBD 2Q26 earnings call 2026-08-07 · FGI/FGO growth and cost of credit, Bradesco 2Q26 earnings call, 2026-08-07, https://www.bradescori.com.br/en/ [3] BBD 3Q26 earnings call 2026-10-23 · Drillr call summary, Bradesco 3Q26 earnings call summary (Drillr), 2026-10-23 [4] BBD 2Q26 earnings call 2026-08-07 · insurance guidance and capital, Bradesco 2Q26 earnings call, 2026-08-07, https://www.bradescori.com.br/en/ [5] BBD 6-K filed 2026-10-09 · Central Bank approval of capital increase, Banco Bradesco 6-K, 2026-10-08, https://www.sec.gov/Archives/edgar/data/1160330/000129281426004874/bbd20261008_6k.htm