Bank Bradesco SA (BBD) Q3 2024 Earnings Call Highlights: Strong Net Income Growth and Expanding ...

In This Article:

  • Recurring Net Income: BRL 5.2 billion, up nearly 11% quarter-on-quarter.

  • Total Revenue: BRL 30.6 billion, a 3.7% increase quarter-on-quarter.

  • Net Interest Income (NII): Grew 2.7% quarter-on-quarter.

  • Fee and Commission Income: Increased by 2.8% quarter-on-quarter.

  • Insurance Group Revenue: Grew 8.7% quarter-on-quarter.

  • Loan Book: Approximately BRL 944 billion, up 3.5% quarter-on-quarter.

  • Loan Growth by Segment: Individuals up 10%, SMEs up nearly 17%, large corporates up 0.7%.

  • Insurance Group Net Income: BRL 2.4 billion with an ROE of 23.7%, up 8.1% quarter-on-quarter.

  • Operating Expenses: Grew 2% quarter-on-quarter, excluding Cielo consolidation.

  • Tier 1 Basel Ratio: 12.7%, up 0.1 quarter-on-quarter.

  • Footprint Revision: 1,041 points of sale adjusted, with an additional 1.8 million clients.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Bank Bradesco SA (NYSE:BBD) reported a recurring net income of 5.2 billion barrels, marking an 11% growth compared to the previous quarter.

  • The bank's profitability is on a solid growth trajectory, with a notable reduction in loan loss provision expenses.

  • The insurance group delivered a significant return on equity (ROE) of nearly 24%, showcasing strong performance across various lines.

  • The bank's loan portfolio grew by 3.5% quarter-on-quarter, with notable growth in small and medium-sized enterprises (SMEs) at almost 17%.

  • Bank Bradesco SA (NYSE:BBD) is expanding its client base, adding 1.8 million new clients, and is launching a new segment for high net worth individuals to enhance its service offerings.

Negative Points

  • The bank faces challenges in accelerating growth in mass retail for both SMEs and individuals due to cost of risk considerations.

  • There is a noted decline in the share of credit cards in the net interest income (NII), attributed to a shift towards high net worth clients who pay off their balances monthly.

  • The bank's operating expenses have increased due to investments in technology and senior hires, impacting overall cost management.

  • The consolidation of Cielo had a negative impact on earnings, slightly lowering the bank's quarterly results.

  • The bank's growth in demand deposits and savings accounts is facing competition, impacting overall deposit growth.

Q & A Highlights

Q: Can you elaborate on the bank's strategy for loan portfolio growth, especially given the lower profitability in corporate and payroll-deducted loans? A: Marcelo de Araujo Noronha, CEO, explained that the bank is focusing on a safe portfolio with the right risk-adjusted return. They are leveraging programs like FGI and ProNEP to achieve better risk-adjusted returns, even if it means lower NII, as it requires fewer provisions. The bank is confident in its strategy and is monitoring the economic scenario closely.

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