Banco Bradesco S.A. Q3 FY2025 earnings call

Recurring net income was BRL 6.2 billion this quarter, up 2.3% year-on-year. Total revenue was BRL 30 billion, up 13.1% year-on-year. Loan portfolio showed consistent growth. Operating expenses were under control, with footprint adjustment exceeding expectations. Insurance group had ROAE over 21%. Traction in customer base penetration and improved customer experience across segments contributed to revenue growth. Loan portfolio growth in secured lines, micro and SMEs. Fee and commission income grew due to commercial traction. Transformation process evolving well, including Principal segment growth, Prime customer base expansion, digital customers reaching over 14 million, Bradesco Expresso with over 39,000 bank correspondents, SME app expansion, and high employee engagement with 84% engagement in survey.

Total revenue was BRL 30 billion, up 13.1% year-on-year. Total net interest income had almost 4% growth, fee income almost 7% growth, and the insurance group grew 13% year-on-year. Loan portfolio was BRL 1.34 billion, up 9.6% year-on-year, with growth in secured lines, micro and SMEs showing 25% year-on-year growth. Client NII grew 19%, NII net of provisions grew 14.4% year-on-year. Fee and commission income grew almost 7%, credit cards up almost 14%, consortium management 22.1% year-on-year, asset management with assets under management reaching BRL 1 trillion. Investment banking had a drop but year-to-date growth 24.1%. Insurance group ROAE over 21%.

Loan portfolio expected to grow between 7% and 8%. NII net of provisions in upper end of guidance interval. Guidance for 2026 to be delivered at the end of the quarter, with all items falling in the higher end of the guidance range.

One-off provision case in wholesale bank, deviation related to John Deere Bank affecting delinquency metrics slightly. Macroeconomic factors and market condition changes could impact growth and profitability.

Q: About cost and footprint adjustment, will the pace of closing service points continue and about Elo and Alelo costs?

A: Marcelo de Noronha responded that Elo and Alelo costs grow at 20% due to volume and revenue growth, and footprint adjustment expectation is to be below 1,000 next year.

Q: On credit quality, explanation for slight increase in over 90 NPL for individuals and SME NPL?

A: Marcelo de Noronha said it was driven by John Deere Bank, but portfolio is safe, and SME NPL down due to good modeling and collateral. Cost of risk well balanced with one-off provision case in wholesale bank.

Q: About strategic plan KPIs, cost of capital, and real estate funding?

A: Cassiano Scarpelli and Marcelo de Noronha discussed cost of capital nearing target, real estate mortgage funding with opportunities to resume growth, and challenges in efficiency ratio and capital requirements.

Q: On client NII and ROE, outlook?

A: Andre Carvalho and Marcelo de Noronha mentioned NII traction, NIM expected to be stable, and ROE improvement driven by revenue and efficiency ratio, with confidence in medium to long-term profitability.