Bradesco earns BRL 4.3 billion in the 1st quarter, down 37% – 5/4/2023 – Market

Bradesco recorded recurring net income of BRL 4.3 billion in the first quarter of 2023, which corresponds to a 37.3% drop compared to the same period last year, according to a balance sheet released this Thursday (4) .

The number came above the expectations of market analysts, who projected a profit of R$ 3.5 billion. Compared to the fourth quarter of last year, the result represented a strong increase of 168.3%.

According to the bank, reductions in the liquidity cushion to prevent possible defaults and in expenses with administrative costs contributed to the results presented in the first quarter of the year.

Bradesco’s credit portfolio ended March at R$879.28 billion, an increase of 5.4% on an annual basis and a decrease of 1.4% in the quarterly comparison. The result was below the guidance released by the bank for the year 2023, which indicates a portfolio expansion of between 6.5% and 9.5% for the year.

According to the Cidade de Deus bank, in Osasco, the result of the loan portfolio reflected the current moment of the credit cycle, as well as the repositioning of the policy towards lower risk modalities.

The loan portfolio aimed at individuals reached R$365.3 billion, growth of 10.2% year-on-year and 1.2% in the quarter. Among the biggest increases in the segment on an annual basis, credit card (22.4%), rural credit (19.3%) and consumer finance (10.4%) stand out.

Among legal entities, the portfolio reached BRL 513.9 billion, up 2.2% over the same period in 2022, and down 3.2% on a quarterly basis. In the segment, real estate financing expanded by 20.8% in the annual comparison, while rural credit increased by 18.5%.

The default rate reached 5.1% at the end of the quarter, compared to 3.2% in the same period of 2022 and 4.3% in December.

“Delinquency is concentrated in the mass portfolio of Individuals, Micro and Small Companies, segments that naturally suffer more in adverse scenarios of persistent inflation and high interest rates”, says the bank in a report.

In the case of individuals, the rate of arrears over 90 days reached 6.3%, against 4.4% in the same month of the previous year and 5.5% in the last quarter.

Among micro, small and medium-sized companies, the default rate also rose, to 6.2%, compared to 3.6% a year ago and 5.3% in December.

Among large companies, delays were only 0.2%, against 0.1% in March and December 2022.

The PDD (Provision for Doubtful Accounts), in turn, which indicates the possible losses that the bank may suffer due to non-payment by defaulting customers, totaled R$ 9.517 billion in the first quarter of the year, growth of 96.8% on a annually, but a 36% drop at the margin.

In the last quarter of 2022, Bradesco’s PDD had jumped by more than 100%, due to the provisions related to the problems involving the Americanas retailer.

The ROAE (annualized return on equity), an indicator that measures the profitability of the operation, reached 10.6%, compared to 18% in March 2022 and 3.9% in the fourth quarter of last year.

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X-RAY | BRADESCO

Foundation: 1943, in Marília (SP)
Net income in the 1st quarter of 2023: BRL 4.3 billion
Agencies: 2,855
Employees: 86,212
Customers: 76.7 million
Mainly competitors: Itaú Unibanco, Santander, Banco do Brasil, Caixa Econômica Federal