Banco Bradesco S A : Transcription - English Conference Call (d195bb?origin=2)

Published: 2026-05-11 14:37:09 ET BBDC4.SA

Published on 05/11/2026 at 02:37 pm EDT

All this material was made public last night after the market closed. Our recurring net income for the first quarter of 2026 was R$6.8 billion, an increase of 16.1% y/y and 4.5% q/q, delivering an ROE of 15.8%. In the last quarter of 2025, we posted an ROE of about 15.2%. We grew 0.6 percentage points. What drove these earnings? Our total revenues grew by 14% y/y, which is a key factor for not only our profitability growth in this quarter, but will naturally boost our results throughout the year. We have clearly expressed our moderate appetite. I have been commenting on a moderate appetite for the entire market for a number of quarters. We just adopted a more conservative stance. But this doesn't mean we're reducing the appetite for the growth of our loan portfolio. We will continue to grow and maintain the pace. However, for certain ratings, segments or groups we may choose to not do business. We aim to have a portfolio with increasingly more guarantees within our organization. Next, we'll look at our restructured operations, and I'll also touch on provisions and the market. The cost of risk was a bit higher, and I will comment on this sometime later, it was a specific case of the wholesale bank that effectively drove this increase. We decided to increase the provision, in order to adopt a more conservative stance. There is also a small portion related to rural credit for past vintages, which may be in stage three (as cured) or in stage two. That's what we've seen. We've been underwriting agricultural credit with a much more guarantees. Our insurance group again delivered very consistent results, topping nearly 22% ROE. In addition, last week, on the 30th, we wrapped up our launch of Bradsaúde, which has combined all the health assets of our organization. This has had a positive impact on our capital, but above all, it has unlocked value for our shareholders. It's quite a significant operation. It's valued at roughly R$46 billion in market value, meaning that it's brought an added value of more than R$30 billion to our organization. This is a significant achievement that, I believe, has potential for future appreciation. Our transformation is progressing rapidly, including the increasing use of high technology and Generative AI (GenAI). We are consistently improving efficiency, allowing us to increase our output. I'll start the presentation by discussing some cause and effects. This represents our recurring results, but we did incur a non-recurring expense of R$1.8 billion. This stems from a tax contingency that we were able to settle under current legislation. We had a contingency of R$5 billion, and we decided to pay it off completely using Deferred Tax Assets (DTA). So, this is promising and very positive news. Again, it's cause and effect. The cause is seizing the opportunity to act, and the effect is to have a balance with even higher quality. And furthermore, in the last two years, we have eliminated tax contingencies by about 20%. It was an opportunity that we needed to take advantage of because it reduces the risk on the balance sheet over time. I'm pleased with the accomplishment of this position. This does not change our recurring profit at all, but it improves the quality of our balance sheet.

As I mentioned before, total revenues were almost R$37 billion, up 14% y/y. We highlight all revenue lines. We start with insurance, pension plans, and savings plans, which posted a growth of 20.4% y/y, surpassing the initial guidance at this early stage. Obviously, the guidance is annual, but we do reiterate the guidance. And let me tell you something: I expect that we will be at or above half of the guidance, just as I stated last quarter. Confidence remains the same. The business is performing well, with strong traction. Again, I'm talking about cause and effect. Fees grew 6.2% y/y in a quarter that is generally considered the worst for the financial system overall.

The credit card area, for example, sees its highest volume in the fourth quarter, while in the first quarter, both volume and, consequently, commissions decline. Even so, we continue to grow. And there's also our net interest income (NII), which is one of the big highlights. Obviously, both the insurance group and fees are growing, but the standout performer here is this, which represents the largest absolute contributor. We grew 16.4% y/y, and 4.2% q/q. This should continue to drive our growth over time. And as you can see, this is a consistent pattern. Our message is consistent. Our overall message is consistent, with the only adjustment being the capital consequence of unlocking value at Bradesco. I will provide more details on each topic.

The client NII and market NII are the result of the activity. Our current operations are strong, as is our ability to originate. Why have we originated credit and liabilities? First, by setting up our credit business unit (BU), with a robust portfolio management department, a new pricing team that works with client segments to set appropriate prices, a strictly monitoring of the vintages to know if we are within the pricing range, a strong commercial traction, supported by increasingly tailored experiences for each client segment and individualized engagement through our channels, which has materially strengthened our distribution performance. This is why we've achieved meaningful growth on both the asset and liability sides of the balance sheet, as well as, for example, in fees and in the distribution of insurance and consortium products. This, of course, boosts our NII, which soared 16.4% y/y, as I spoke about earlier. I'll cover expanded credit provision expense a bit later. The cost of risk was 3.5%, and our NII net of provision was R$10.4 billion. When we look at the client NII, the NIM grew to 9.1%. Our expectation is to maintain the NIM around 9%, fairly stable. In client NII we posted growth of 16.3% y/y and 2% q/q, but excluding the calendar effect that weighed on the first quarter, the performance would have been stronger: 5% q/q. We expect NII to continue expanding. I'd also like to point out the significance of the market NII, which reached R$600 million. That's no accident. It grew because there was a lot of work, a lot of origination on the client desk, which is also handled by trading, the energy desk, and ALM. We have a strong combination, which includes skilled professionals, a solid team, and the ability to seize opportunities. ALM is delivering positive outcomes, and we do not see it as an isolated occurrence, but rather as a consistent condition that leads to delivering strong treasury results throughout the year. Going back to the calendar effect, the same logic applies here for the client NII net of provision, which has a direct impact on the bottom line. The net NM fell slightly to 4,5%, and the volume fell from R$ 10.3 billion last quarter to R$ 9.8 billion now, a drop of 4.5%. However, without the calendar effect, we would have a growth of 1% q/q, which would take this number to R$ 10.3 billion. Now, let me show you another effect. We detail our cost of risk at the wholesale and in the other segments. Note that we saw a greater growth in wholesale. There are some provisions, in one specific case we increased provision, which accounted for the bulk of this volume. If we exclude this, the NII net of provision would have been higher. That doesn't mean this provision volume will be recurring, as we took a more conservative approach. Despite ongoing negotiations and the expectation of a favorable recovery, we increased the provision. Now, I'd also like to introduce the credit provision we refer to as the mass-market, which actually applies to other segments. Take a look at these indicators: we grew R$ 500 million, R$ 300 million, R$ 400 million q/q. And we create a provision as our portfolio grows. I'll also discuss the portfolio soon so we can establish that number. Our portfolio grows and, consequently, we make a provision. This is the effect of Resolution 4,966. We manage portfolios (as was the case across the market) that, under Resolution 2,682, reached breakeven by M+1. In Resolution 4,966, we only reach the break-even point at M+5, M+6, because we anticipate more expected losses. This is the case with credit cards. We're seeing positive growth in vehicle financing, payroll-deductible loans, and SME. So, we're experiencing portfolio growth and, naturally, we'll be making more

provisions. This doesn't just mean the portfolio is past-due. And look at these indicators (mass-market: expanded credit provision / expanded loan portfolio; quarterly) illustrated on the slide: 1.3%, 1.4%, 1.3%, 1.4%. That's what we track quarter by quarter. Anyone who takes a look at the full disclosure will see a presentation with this annualized indicator. But q/q, that's what it means. As such, the cost of risk should continue to grow at the same rate. It may increase by R$500 million, R$300 million, but we're making provisions as we build and stack portfolio, which naturally guarantees our NII. That's what we've seen, and we're pretty sure about everything we're doing. I'll also touch on asset quality.

Our portfolio amounted to nearly R$1.1 trillion, representing a growth of 8.4% y/y. However, the exchange rate effect from the appreciation of the Brazilian Real had a significant impact, particularly on large and medium-sized companies. If we disregard this effect, we would be growing 9.5% y/y, even with a moderate risk appetite. In the individual segment, you see 9.5% y/y. Again, it's cause and effect; it's the result of a lot of work in the client base, penetration and new experiences. Micro, small and medium-sized enterprises (SME) grew 14.4% y/y. And I'll discuss other elements soon. And large companies, which, as we've observed quarter by quarter, can fluctuate by R$10 billion up or down. We have a short-term portfolio and I'll point out some notable features in our plan. Again, it's cause and effect. We're not seeing growth in vehicle financing by accident. We are growing in vehicles exactly because we planned it. We carried out a deep dive into our target market across the new vehicle, heavy machinery, motorcycle (with low appetite and small market share), and pre-owned and used vehicle segments. I'll refer to the older cars as used, and the newer ones represent the largest market in Brazil in absolute terms. We consider all market possibilities and analyze the experience of our managers, dealers, and clients. We saw that we needed to change. We had two platforms, one for the account holder and one for the non-account holder at the dealerships. What have we done? We changed the platform within our transformation project. We implemented a single platform that provides a much better experience for our managers, for dealers and, above all, for our clients. It's much more operationally efficient because it is unified, and much more effective in terms of pricing, enabling quick credit decisions, for any pricing scenario, within the RAR (risk adjusted return) range. We operated this quarter from 20% to 28%, which is satisfactory for us. Our growth reflects strong commercial capacity, penetration across clients and dealers, and a more competitive platform, combined with disciplined risk selection. This led to 7.3% q/q growth. Sustaining this pace, as in other portfolios, we frontload provisioning costs under Resolution 4,966 to build the NII over time and capture that value throughout the period. The performance of credit card operations does not differ from what we've previously presented; it's shown a consistent growth of 10.6% y/y, particularly in the high income segment, which saw growth of nearly 19% y/y. Our payroll loans: when analyzing historical data, you'll notice that we were growing about 5% y/y in payroll loans. The growth has now reached 8.3% y/y, we grew 3.2% q/q. It is important to note that we have a portfolio that reached R$107 billion. We're well positioned in the public payroll-deductible loan, and I'll be talking about the private loan a bit later. The INSS implemented a number of changes that reduced market output. At certain times, it was slightly below 50%. The market, like us, began to resume production. This is why we're not showing portfolio growth, as we have a sizable portfolio that also carries monthly settlements. However, overall, we are growing and we will grow in the INSS. In the private segment, we grew almost 43% y/y and approximately 31% q/q. And remember, we mentioned "we will accelerate in the private market only at the appropriate time, once we have complete confidence in the registrations jointly processed by the banks and Dataprev". This is how we did it, including selecting clients who provided a good risk-adjusted return. This aspect is important for us. Considering the delinquencies in the market, we saw rates of 6.7%, 6.8%, almost 7%

delinquency in the private sector. In our case, we're talking about just over 4% delinquency over 90 days. So, we're doing very well in those portfolios as well. In the general payroll-deductible loan portfolio, the market has about 3% of over 90 day delinquencies, 2.97%, if I remember correctly, while we have 2.4% of the total. So, we're in control of this area. Our working capital has increased by 16.3% y/y, and this growth is evident both in large companies as well as in SME. Observe the FGI and FGO government lines. Last year, we represented 26% of all FGI and FGO production, as I discussed in the last quarter. At year-end on December 31, we reset and restarted the production count. We ended March with about 20.6% of production share, taking the lead in this market. Clearly, we have strong competitors in the marketplace. Competition is healthy, because it pushes us, just as we drive others. Naturally, competitive pressures have been mounting as banks push one another, this healthy competition is positive for the overall market and for businesses alike. Here we show how much our portfolio has grown, nearly 81% y/y. This means that we grew less in the portfolios with less collateral to reach this level (16.3% y/y). We are not obsessed with being the leader, as we look for - and I reinforced this to the team recently - risk-adjusted returns. This is the return we want, obviously, with scale and expanding the relationship we have with these SME customers. We're pretty sure about everything we're doing. We maintain our appetite in agribusiness. Our 2025 and 2024 vintages are backed by substantially stronger collateral, and have good quality. We are seeing a bit more stress in past vintages. We saw floods in the South of Brazil that turned into drought. Companies of large, medium and small size and individuals renegotiated their debts. Banks, generally, granted a two-year grace period, even when there was a fiduciary lien. The grace period have begun to come due, and certain vintages are still not in a position to be repaid. This is why I'm presenting my expectation regarding a worsening situation in the rural sector.

Continuing on the portfolio, our over 90 is stable. I'll also address another phenomenon in a bit. Our stage 3 has fallen back to 7.1%. I'll comment next on stage 2. Our restructured portfolio, between December 2023 and March 2026, saw a reduction of R$14 billion. However, when examining the most problematic asset, it declined by R$ 15.7 billion, a rather significant amount, settling at 3.1% (of the total portfolio). Someone might question what the expected size of this portfolio is. I believe that a portfolio of around 2.9% to 3.1% would be our natural size, noting that it naturally begins to stabilize over time. Note the evolution of our secured portfolio, which we release on a quarterly basis. We went from 59.3% in December, at the end of the previous quarter, to almost 61% of our entire portfolio with guarantees. In individuals, close to 70%. We are satisfied with both our performance and the quality of our portfolio. Note that stage 2 is experiencing a slight growth. The over 90 days delinquency is stable, but is increasing slightly ins SMEs, in government lines, FGO and FGI. The reason for the increase is that, although most companies are paying, there is a portion that fails to make payments after the grace period expires. With the rapid 80% portfolio growth we presented on the previous slide, it naturally puts temporary pressure on our over 90-day delinquency figures. And through 4,966, as much as the expected loss is lower, it also advances to stage 2. The FGO coverage settlement period totals 185 days, comprising 180 days of delay plus 5 additional days for settlement completion. The period for the FGI programs consists of 90 days of delay plus an additional 30 days for settlement execution, which comes to a total of 120 days. This is what happens. There have been no meaningful changes, with delinquency conditions remaining stable in the individuals segment and very favorable among large corporate. Another noteworthy point is that the level of coverage of our stage 3 is increasing. There is a shift phenomenon between stage 3 and stage 1, and from stage 2 to stage 3. In other words, there is a transfer between stages. As such, I was referring to the legacy agricultural portfolio, which in certain instances might be included here under cured exposures, for example. And it can migrate to restructured operations, even with a

bit more collateral. So, while there are some shifts under Resolution 4,966, we are absolutely comfortable with them. Now take a look at this: there's another footnote, which refers to the write-off. It was a question we got from IR. The write-off grew in absolute value, and also in the previous quarters. It grows or decreases depending on the vintage and the mix that arrived, but the relative value is 1%. You can check, q/q. It remains around 1%. In better cycles, it's 0.9%. In worse cycles, it is 1.1%. So, it's stable. As I spoke about before, when 4,966 was adopted, we maintained the same write-off criteria that we previously had with Resolution 2,682. We haven't changed it. We are therefore quite confident with everything we've done in our portfolio. I have tracked the cycles with the credit BU, risk team, and client segment teams. And I can tell you that we have a price range and a stress level. In the over 30 MoB4, which is the best proxy we have, all of them are within the predicted range. A particular product segment may have exhibited a slight deviation, and our teams have the autonomy to promptly review and recalibrate models and policies whenever necessary. This is why we remain confident in the quality of our assets. As I said before, the rise in the cost of credit is primarily attributable to portfolio growth and a somewhat more challenging macroeconomic environment, with no additional underlying concerns.

Fees grew 6.2% y/y. This quarter is known to be weaker for banks and the financial system. But there are some important highlights. We lead the consortium business in some very important lines. We contemplated almost R$ 4 billion in paid assets in 1Q26. And the growth of these fees was almost 20% y/y. In custody and brokerage services, 15.5% y/y. It is important to remember that all this is recurring, it is the result of activity. It is the result of a lot of work and the new experiences we offer to clients. The capital markets have drawn some attention. In a recent press conference, a journalist asked about the sector's prospects, noting that "you've grown over 60% in investment banking". I'll provide some additional data that's not included here. We have rankings in investment banking. Our fixed income team has grown. We have originated a lot more. Once again, this growth wasn't an accident. It is the direct result of our increased origination efforts and our ability to distribute products in a market with very high demand. Last year, we were the second-largest bank in terms of fixed-income origination in the Brazilian market, according to ANBIMA. In the previous year, we had a 14.1% share. We saw a growth of 69%, also in second place, at the end of the first quarter, but with 22% market share in fixed income origination. So, we're engaged throughout the organization, in different lines of business and client segments.

Operating expenses: absolutely under control, as we have mentioned q/q. There was a growth of 7.8% y/y, and a reduction of 4.6% q/q. And I also point out personnel and administrative expenses. There was a growth of 5.4% y/y, and reduction of 8.8% q/q. Clearly, the greatest impact on personnel expenses is profit sharing (PLR), which is positive. The full disclosure points out that personnel expenses are negative or stable, except for variable compensation. This is favorable. Looking at administrative expenses, it can also be seen that transactional expenses, which result from processing due to high activity, are increasing. However, expenses related to cash transport, rentals, and maintenance show declines both y/y and q/q. We continue to adhere to our footprint revision process. This quarter, with 238 reductions.

Moving ahead, our insurance group, as I mentioned at the beginning, has delivered highly significant results. An ROE of nearly 22%, with net income of R$ 2.8 billion and growth of 13% y/y, and premium volume of R$ 29 billion. As you can see, the result of insurance operations, which includes the entire insurance group, including Bradsaúde, showed growth of 20.4% y/y. The 22.1% y/y growth in operating profit is a highlight. It represents practically two-thirds of the result posted in the first quarter, which is positive. In addition, our technical provisions continue to grow, almost 10%, reaching R$455 billion. We're very pleased with everything that's been done within the insurance group, and in other financial and payments companies.

On the topic of capital, we are presenting pro forma capital. Tier 1 capital grew to 14.5% and the Core Tier 1 (CET1) ratio reached 12.7%. All the information is available for you to analyze the Bradsaúde's movement, which has affected our capital. This is good for us. We're can answer your questions, and our IR and finance teams are available to explain the details of this decision, which puts us in a very comfortable position in terms of capital. We did not change our outlook; with or without it, we'd be continuing on this path. There are particularities, there is a tendency for a slightly larger drop in capital during the first quarter. We had anticipated this, and IR informed you constantly. We then stabilized for the year. There is the IoC, set aside for the year.

And now, a bit on our transformation. As I mentioned at the start, I made a comprehensive assessment of the transformation in the previous quarter. So, I won't tire you by going over everything again.

Let me just point out a few things as I wrap up. I have already spoken a bit about the new vehicle platform. So, I won't go into it. There have been a number of innovations involving the intensive use of artificial intelligence. I don't need to go through each one of them. The key takeaway here is that we are continuously gaining momentum and investing significantly in our growth. We've got this great new tool in our treasury department called Easy Trade, which gives our SME clients direct access to seamlessly execute their own trades. There are also two or three other things I'd like to point out. I recall showing BIA Clientes, in Prime, last quarter when it already had a high level of accuracy. We grew even more, topping 94%. It is learning, we're gaining productivity and, most importantly, improving the client experience. We continue to make upgrades for Prime and Principal clients, as we mentioned before. We have a number that can be found in the previous presentation, which you check on. During the first quarter, we successfully migrated over 500,000 clients to higher tiers. We are moving forward with our rollout, opening new Principal offices and expanding our Prime. And digital retail: we closed out last year with 19 million fully digital clients, and now we have 28 million, as we had indicated, we would reach a much higher number than this. We're moving ahead with confidence and speed in our transformation, which is yielding productivity and meaningful benefits across the organization, especially in efficiency and enhancing the client experience.

My conclusions: first, there was a strong operating performance in the first quarter. That's what we're seeing. We're really pleased with this result. It's growing nearly 8% q/q and consistently close to 15% y/y. I've already spoken about Technology, so I won't repeat. The new client segmentation has been raising NPS and providing positive experiences, and obviously drives the run the bank. At the start, I discussed how we've adopted a more conservative stance in terms of our risk appetite. We continue to have a more moderate risk appetite, but we're keeping the momentum going. We will deliver what we expect in the guidance. We're competitive, and we remain competitive in the areas aligned with our risk appetite. I'm very convinced of that. Another thing worth highlighting again is our net income, not just in the bank, but in the financial institutions and the insurance group. We maintain our commitment to gradual increase and step-by-step growth. We remain committed to investing and strengthening our competitiveness over the short and long term, as I've stated. And our Bradsaúde, as the most complete health ecosystem in Brazil, has provided significant added value. It's a highly regarded company that's much more diverse. We will comment a bit more about this soon. I just wanted to let you all know that we're really proud to have received these awards from The Banker in various categories: Machine Learning, Mobile, and Artificial Intelligence. We've won some top level awards that have been received by international banks that are leaders in technology. That's why this is so important. And that concludes my presentation. I'm going to make myself available to you for our Q&A session.

Q&A Session

André Carvalho - Thanks, Marcelo, Cassiano, Marinelli and Ney. Good morning, everyone. I just wanted to mention that if you'd like to ask any questions, please send them by email to [email protected] or through WhatsApp using the number (11) 97443-8238. Or use the phone's camera to scan the QR Code that appears on the screen. The first question comes from Mario Pierry, from Bank of America. Mario.

and which segments concern you most when looking at credit over the next 12 months. Thank you.

peers, and I wanted to understand when you can return to convergence with your peers, such as Itaú, Santander, etc., in terms of costs. When you analyze your cost trends, which have been under more pressure in the short term, when could we expect costs to converge more toward an average, closer to inflation or less? So, I'd like to hear from you what might surprise us in the short term, and whether costs could be a factor, looking ahead to 2026 and 2027. Thank you.

Marcelo Noronha - Thanks, Daniel, thanks for being here with us once again. I'd put it this way: hearing you, I'm already regretting using the term 'more conservative,' because our risk appetite remains moderate. It's more conservative only in the sense I mentioned earlier: in certain models, we tighten. In certain policies, we take less risk. That is the ongoing work of our credit business unit. That's what we're seeing. So, we continue to see strong momentum on the asset side, but it is also important to remember that the build-up in our NII has been supported by the liability side as well. We have significantly reduced our funding costs here at the bank. Market NII, as I mentioned, the treasury results as well, have been very important, even exceeding our expectations. We remain focused on the same objectives, but I am now even more confident in what we are doing on that front as well. The other side of the story, of growth or decreased expenses. I think we've really been doing our homework on efficiency. As you can see, some of our administrative expense lines have actually declined y/y and q/q. The difference lies in our IT and core transaction processing costs, which are rising due to our extremely high transaction volumes. Financial system costs, some of which we are required to pay, have also increased. But when you look at everything in the complete presentation, Daniel, you'll see that we're doing very well. Obviously, we still have some labor and civil contingencies, which, at some point, will converge to a smaller number. I have no expectation for today, but in terms of 2027 or 2028, we'll definitely see some impacts from these actions that we've been doing. So I see that revenues will leverage us a lot more. You may recall that, last quarter, we mentioned that we wouldn't be giving up on our investment in technology. And that, between Opex and Capex, we grew 26% in 2025, from investments. We're continuing to invest in improving our competitiveness across various areas, but particularly in the technological sphere and across all lines, including cybersecurity. This effort is to enhance the client experience, streamline internal processes, and deliver a new vehicle platform, as I spoke about before. Cassiano, feel free to add anything.

level going forward or whether it will increase in the upcoming quarters, or whether there would actually be a positive seasonal effect on the mass market, and the corporate case would no longer be present in the second quarter. If we can work with a slightly lighter credit provision in the coming quarters.

being the need for the effective tax rate to continue rising, as well as the provisioning issue. One point of pushback we consistently hear from investors is not that Bradesco needs to materially strengthen provisions, but rather that it would be healthy to maintain a higher average provisioning level relative to some peers. So, naturally, as Bradesco improves, it could be reinforcing the provision. So, my question is: what is the sustainable ROE? And I'm not looking for guidance here, but for you to help me understand what Bradesco can achieve when it's "at cruising speed"? Because if I take a weighted average of everything I hear from investors about sustainable ROE, the number is 18%. So, my question for you, Noronha, is whether that 18% figure bothers you, because, let's face it, it's not exactly a very high sustainable ROE. Thank you.

question, regarding large corporates. We understand that Marcelo mentioned there is always the risk of one case or another emerging, but I've been getting questions from investors because this specific case was already a known situation. What was particularly notable was the fact that it was a known case, which would normally already carry provisions. So, Marcelo, if you could share some additional color with us, all three of you, specifically regarding your coverage levels for large corporate exposures, because, whether we like it or not, there continues to be a significant amount of news flow around other potential judicial or out-of-court restructuring cases. My second question is on the issue of balance sheet efficiency. This Bradsaúde transaction, in our view, was successful and that the numbers support this conclusion. Given the number of subsidiaries or assets that Bradesco holds within the conglomerate, if the bank believes this is an avenue that can be explored to improve balance sheet efficiency, as was the case with Bradsaúde. Not only the effect on capital, but the unlocking of value. Thank you.

a proxy of Stage 3 formation from the expanded portfolio, the provision taken, though substantial, was not enough to offset that formation. So, my question is this: should we perhaps keep the provisions, this credit cost, higher so that you can bolster them, or not? Is that somewhat the message you conveyed, that we have more security, that we're moving towards more secure portfolios, so, maybe even the first quarter will be a little higher, I don't want to say it's a peak because, in Brazil, we know it's very uncertain, but we might see some improvements in the provision. So, I'm just trying to gain some insight into stage 3 and the way provisions are being managed in the first quarter. Thank you, everyone.

Marcelo Noronha - Thanks, Ney. Matheus, regarding the INSS, the product has, in fact, undergone numerous changes in the contracting process. You know that the suggested portability modus operandi created a significant risk for those carrying out the transfer. There was an official communication from Febraban asking for the modification, and it seems that this request was granted. The reduction in the payroll loan margin is favorable in our case, as although we had the INSS card, we do not operate with the benefit card, and the INSS card had limited penetration. Moreover, we operate with lower rates. And this additional margin that can be made in a traditional product is positive for us. And we had already returned to growth, even though the market had shrunk in terms of production. We received notice yesterday that the official letter has arrived, temporarily suspending certain modalities. However, starting on the 19th, we will be fully authorized to begin operations under these new modalities. But, Matheus, I have high hopes for all three payroll loan segments: the INSS segment, the public sector, which should continue to grow, and the private sector as well. Thank you for your question, it's a pleasure to speak with you.

diligence and care, supported by the knowledge and experience gained through more than 40 years in the healthcare market.

Cassiano Scarpelli - Good morning Nishio, good to see you again. There were no other impacts. What you mentioned regarding the PTI is actually a bilateral transaction, a direct negotiation with the Brazilian Federal Revenue Service, which improves the quality of the bank's balance sheet. We reduced a claim from approximately R$5.4 billion to R$1.8 billion, paid with DTA, which is very important and beneficial for the balance sheet as a whole. As such, there are no other effects beyond this one. In the case of Bradsaúde, the impact is positive. It is reflected exactly as I mentioned, both in the 0.8 p.p. referred to in one of your colleague's questions, and in the 2.5 p.p. figure. These are the two positive effects related to Bradsaúde as a whole. We don't expect any additional future impact from this. As of April 30, it is fully effective. This is reflected in our 12.7% CET1 ratio, and going forward we intend to maintain or even improve it. I believe that's the main goal. In terms of the footprint, this is a four-year process. As we have been reporting, the first two years likely concentrated the largest volume and the bulk of the adjustments, particularly because we had important work to do in migrating clients to our digital bank. Marcelo mentioned at the beginning of the presentation that between 28 and 29 million customers are already using digital channels. We are expecting to reach 50 million customers in Bradesco Digital over the

course of this year, which will create a possibility to make further adjustments. Now, the adjustments are more sporadic, less significant, and much more precise, but they'll still have a noticeable impact. When you look at the headcount, it's important to note that we've been hiring a lot of people, so this impact isn't that visible. We've been engaged and investing in reskilling and upskilling, whether in credit, in technology more broadly by bringing developers in-house, strengthening the bank's architecture and infrastructure, and also in data and pricing. So, in total, we see a headcount of approximately 1,700 people. Regardless of how it might be perceived in terms of size or scale, we believe it is moving in the right direction towards achieving the best possible adjustment in efficiency, which we intend to capture in the future. Thanks, Nishio.

portfolio we had some years ago. As such, we remain very confident about the quality of our portfolio. Credit costs may increase as we continue expanding the loan book, but that does not mean that our coverage levels are low. As André mentioned before, there are movements within the restructured portfolio that reduce provisions. So, there are constant movements back and forth depending on the stages involved, particularly within the restructured portfolio, which, as I mentioned, Renato, we reduced by R$14 billion from December 2023 through March 2026. If you look at the problematic assets in restructured portfolio, outlined in red, you'll see that we reduced it by R$15.7 billion. As a result, we also reduced the level of provisioning associated with that portfolio. That's how I see it, unless my colleagues would like to add anything else. More collateral, more guarantees. We've clearly seen that trend. We reached 60%, almost 61%, and in individuals, close to 70%. So, we now have a much healthier portfolio. And that is exactly why we're not pursuing extraordinary margins. Instead, we're going step by step, while continuing to grow NII and the other revenue levers. Thanks for joining us, Meloni. Hope you're doing well.

consolidated everything, if we wanted to do it, the ROE would already be higher, but we take a comprehensive view of the organization and ensure this return that we now deliver of 15.8% against a cost of capital that should be closer to 14.5% today. So, thank you for your question. We're moving ahead with firm conviction in the work we're building both today and for the long term. Thanks, Tito. Have a good week.

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Banco Bradesco SA published this content on May 11, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 11, 2026 at 18:36 UTC.