Banco Bradesco S.A.

Reported second-quarter net income was BRL 7.1 billion, up 16.2% year over year and 3.5% quarter over quarter, with ROAE of 16.2%. The loan portfolio grew 11.6% year over year to BRL 1.137 billion, with SME up 16.1%, large corporates up 12.7%, and individuals up 8.4%; agribusiness grew almost 25%, payroll loans rose 9.3%, and vehicles grew 26.8%. Total revenue reached BRL 37.6 billion, up 10.3% year over year; net interest income was almost BRL 20.9 billion, fee and commission income was BRL 10.5 billion, market NII was BRL 700 million, and insurance net income reached BRL 2.9 billion, up 28.3%. Management said cost of risk was 3.5% and client NII net of provisions was 4.5%, while fee and commission income was 1.7% and operating expenses rose 3.4% year over year. On capital, management discussed CET1 at 11%, expected recognition of another 140 bps from Bradsaúde, and the recently announced BRL 10 billion capital increase, which they said would support stronger tangible capital and take Tier 1 to about 13.6% and common equity to 12.2% after the Bradsaúde effect, based on the figures cited on the call. Forward guidance comments pointed to NIM staying around 9% for the year, with management saying it is comfortable moving through the center of guidance and expects no additional stress in 2026.

Marcelo de Noronha framed the quarter as evidence that Bradesco’s transformation is working: stronger commercial traction, more digital origination, and a portfolio mix tilted toward secured, higher risk-adjusted-return products. He repeatedly emphasized that the bank is choosing growth in the lines it wants, not chasing volume indiscriminately, and highlighted the new 'Meu Bradesco' hyperpersonalized platform and expanded use of AI, including BIA Gen AI serving all clients with 74 million interactions. His tone was confident and defensive at times, especially on capital and credit quality, but he insisted the bank is building resilience through diversification, efficiency and tighter portfolio management.

Cassiano Scarpelli focused on capital, liquidity and the mechanics behind earnings resilience. He said the BRL 10 billion capital raise is tied to tangible capital strength, gives the bank more comfort across macro scenarios, and helps manage tangible capital versus DTA consumption; he also noted there was no defined hedge policy, with treasury instead managing opportunistically through trading, ALM, energy and client desks. On funding and margins, management said funding costs improved, funding was up 19% quarter over quarter versus 2025, and NIM should stay near the 9% level, with 9.1% in both the first and second quarters. He also stressed that expenses rose only 3.4% year over year, below inflation, while the bank continues to invest in transformation.

Analysts focused heavily on capital, credit risk and the sustainability of earnings. Questions from Bank of America, Santander, UBS, Citi, Safra, Itaú BBA and BTG asked why Bradesco is holding so much capital, how to think about future cost of risk in a more challenging credit environment, whether ROAE can keep rising after the capital raise, and how much of the market NII jump is repeatable. Management answered that the Bradsaúde timing issue is pending regulatory approval, the capital increase reflects shareholder confidence and a desire for stronger tangible capital, and that higher capital is acceptable because it supports resilience and flexibility. On credit, management said FGI/FGO provisions and Stage 2/Stage 3 movements mostly reflect guarantee-claim timing, while portfolio quality in secured lines, payroll and corporate credit remains controlled; on NII, they said treasury performance, client-liability growth and commercial traction make the market NII improvement durable.