Banco Bradesco S.A. Q2 FY2025 earnings call

• Operating results were consistent across line items, with top line growth and operating expenses under control. - Gen AI initiatives included use for efficiency, enterprise agents, multi-agent projects, and technology culture development. - Wholesale bank and SMEs had strong penetration, with digital transformation for SMEs including app integrations and API use. - Cost and effect was balanced, with operational results growing and traction from change and run the bank initiatives.

Bradesco reported total revenue of BRL 34 billion in Q2 2025, up 15.1% year-on-year and 5.2% quarter-on-quarter. Net interest income (NII) net of provisions was BRL 9.9 billion. Fee and commission income was BRL 10.3 billion, growing 10.6% year-on-year and 5.5% quarter-on-quarter. The Insurance group had technical provisions of BRL 425 billion, up 11.2% year-on-year. The loan book reached BRL 1.018 trillion, growing 1.3% quarter-on-quarter and 11.3% year-on-year, with growth in Individuals (16% Y/Y) and SMEs (25.2% growth).

• Fee and commission income guidance revised to 5%-9%, Insurance group guidance revised to 9%-13%. - Portfolio growth expected to converge to guidance, with NII net of provisions target. - Anticipated slower economic growth in the second half, but focusing on maximizing opportunities.

• Economic slowdown impact on demand for credit. - Delinquency monitoring vintage-by-vintage, but confident in risk-adjusted policies. - Sensitivity to interest rate changes and market dynamics.

Q: Regarding the positioning of the bank in the low income segment, can it be profitable?

A: Yes, working strongly in digital mass market with transformation, using banking correspondents and CRM for better service.

Q: Elaborate on the slowdown in economic activity in the SME segment and Cielo's opportunities.

A: SMEs up to BRL 3 million have some risk, but opportunities in government programs and secured loans, with Cielo growing via APIs and in-house solutions.

Q: About operating expenses, why the increase in 'other' line item?

A: Adjustments for change the bank initiative, but personnel and administrative expenses under control, with trend towards normalized curve.

Q: On trading and market NII, can it exceed BRL 1 billion?

A: Guidance was BRL 0-BRL 1 billion, currently at BRL 700 million, expecting to stay in range with good strategy.

Q: Concern about portfolio growth slowdown and delinquency control.

A: Baseline higher, lower credit demand, but using risk-adjusted return, vintage monitoring, and restrictive policies for control.

Q: Path to normalize net interest margins to 5% and ROE to high teens.

A: Focus on risk-adjusted return, pricing macro risk, and expected trend of NIM recovery, with sensitivity to interest rates and economic slowdown.

Q: Growth in agribusiness portfolio and resilience.

A: Resilient due to models, specialized teams, and controlled expected loss, comfortable with expansion.

Q: Footprint reduction and other value release initiatives.

A: Using technology, productivity improvement, digital mass market, and reengineering legal processes for value release.

Q: Payroll deductible loans and agribusiness growth.

A: Payroll loans to grow with new regulation, agribusiness has favorable outlook with right customers and collaterals.

Q: DTA and capital base.

A: DTA increase due to PTI provisions, but expectation to consume DTAs without capital impact, core Tier 1 stable at 11.1%.

Q: Capital base and dividend payout.

A: Core Tier 1 stable, dividend payout around 60%, with buffer to take advantage of opportunities without capital restriction.