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Banco Bradesco S.A. (NYSE:BBD) Q1 2024 Earnings Call Transcript

Banco Bradesco S.A. (NYSE:BBD) Q1 2024 Earnings Call Transcript May 3, 2024

Banco Bradesco S.A.  isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Marcelo Noronha: Hello. Good morning, everyone. I am Marcelo Noronha. I'm here to present the results for the First Quarter of 2024 of Bradesco. I'm here live speaking from Cidade De Deus, the City of God. It's 10:31 AM. It's a great pleasure to be with you once again. And before we start the presentation, I would like to say that unlike what we did in February when I started presenting the strategy in lengthier way. The idea here is not to present a strategy in so many details again, but we will summarize everything, and then we will revisit some of the topics as the questions pop-up. And so, I will talk throughout the presentation about what we delivered in addition to the numbers related to the first quarter. And I'm sure I think you have the opportunity to take a look at the members since we published we posted the presentations and the release after 6:00 AM.

Our net income, recurring net income was BRL4.2 billion. It was flat in relation to the previous quarter, but 46% better than the last quarter of '23. And there are some points of attention here that are highlights of our balance sheet. Some are challenging and some other topics relate to good deliveries that we've been doing. First, the improvement in ALL for both retail and wholesale. That also leads to an improvement of our NPL that is improving in all segments. We also increased loan in all segments. I think there is a colleague from the sales side the last quarter asked me a question. He said, do you think you would resume traction? And you will see through another charge that I'm about to show you that there is an inflection in that total loan portfolio and that's what we will show you.

A customer withdrawing money from an ATM, illustrating the company's widespread availability of accounts.
A customer withdrawing money from an ATM, illustrating the company's widespread availability of accounts.

We will show you growth in all loan segments with traction, and this is just to answer that question from the previous quarter. Well, the challenge is the gross client NII, but there is a justification for that and that justification is in our guidance. First, we have the loan book and then the margin follows suit and I will talk a little bit more about it when I talk about the loan book and the guidance. Another topic which is very satisfactory is the control of operating expenses, which grew 4.4%, as we will see, and a very sound performance of the Bradesco Insurance business. In all lines, we had a solid performance. So, the results for the first quarter was BRL4.2 billion, very much in line with what we intend to deliver this year. And as I said before, step-by-step we will gradually grow.


And I know that my clients on the sales-side, in particular, those that have been analyzing as they, they can look at the presentation from the last quarter 2023 and then take a look at everything I'm about to tell you and run a comparison with what we talked about the previous quarter. Therefore, our loan portfolio reached almost BRL890 billion. We grew 1.2% year-on-year. And looking at the quarter alone and the quarter says that we are growing steadily, we grew 1.4% quarter-on-quarter, the inflection of the curve, saying that in the last two quarters, the portfolio was coming down, but now it was declining. Now we are resuming growth. If we look at the free portfolio, if we were to look at the presentation from the previous quarter, you will see that traction now is much better based on the KPIs that we showed you in the previous quarter.

Looking at individual’s portfolio, we grew year-on-year 2% and 1.9% quarter-on-quarter, but this growth is well spread. Some portfolios give us a pretty good balance and there are other portfolios where we have to grow products with higher margins, but we are getting there. Payroll loans grew 4%, 2.1% growth quarter-on-quarter. Mortgage loan or real estate, I think we are probably the largest private bank to deliver growth 5.8% year-on-year and 1.8% quarter-on-quarter, credit card, we didn't grow. The risk was higher, but where is it that we are not growing? We are not growing in non-account holders. When we look at prime banking, we posted 12, almost 12% growth when we look at the credit card in the high-income segment. Personal loan, 10.1% growth quarter-on-quarter and 1.8% year-on-year.

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To continue reading the Q&A session, please click here.