Banco Bradesco S.A. (NYSE:BBD) Q3 2023 Earnings Call Transcript November 10, 2023
Carlos Firetti: Hello. Good day, everyone. Thank you for participating in our video conference call to discuss third quarter earnings results. It is a pleasure to have you on board. In the initial point of the event, Octavio will present the results of the bank. Then we are going to start the Q&A session. If you want to ask a question, you can send them via email or use WhatsApp in the address and phone number that you see on the screen. The presentation will be in Portuguese with simultaneously interpreting into English. And you can select the audio preference directly in the window that you're watching. I'd like to remind you that the presentation and other materials are available for download in our Investor Relations website. I now turn the floor to Octavio who will start presenting the results. I'll see you again momentarily in the Q&A session. See you later.
Octavio de Lazari: Thank you, Firetti. Good morning, everyone, and thank you for joining us on our earnings video conference call. We will start our presentation with the highlights slide with the main numbers of the third quarter. Then we will talk about some strategic initiatives that aim not only to control costs, but mainly the increase in revenue. And finally, we will talk about the quarter's numbers. So Bradesco had a net income of BRL4.6 billion, up 2.3% compared to the previous quarter. With operating income growing 5%. ROE was 11.3% in the quarter, still below the level we would see as appropriate. As you will see during the presentation, we have made progress on several key points, but we are fully aware of the challenges ahead.
The portfolio of the book loan or the loan book grew 1% driven mainly by large corporates. Delinquency rates were down, which reflects an NPL creation, falling BRL1.6 billion and lower credit provision expenses by BRL1.1 billion. Our 90-day delinquency indicator improved by 10 bps with reduction in large corporate and individuals despite the portfolio shrinking, which has an important denominator effect on the ratio. In small- and mid-size enterprises, the indicator still grew. But we are now seeing an improvement in 15 to 90 day delinquency ratios and in the quality of the most recent credit vintages. Basel ratio Tier 1 rose 55 bps. Finally, the insurance group continued to show a good level of result, making a significant contribution to the bank's performance.
I'd like to speak a little about BRADigital. We had an important addition in our innovation system, a new technology hub and innovation that we just implemented to more than 600 employees working at this hub in Helsinki with total connection with the universities, the academia, proximity of partnering companies, projects using emerging technologies as blockchain, cloud and gen AI. In addition we had important acquisitions in the world of payments analytics and in gen AI such as Aarin and Kunumi, companies specialized in these technologies. We also have excellent partnerships. We have more than 300 data scientists and around 500 models that use generative artificial intelligence Bradesco experience, which is an area in Bradesco which has a mandatory presence in all of the organization's squads, has the objective of making the client's journey always more current, fluid and enjoyable, and has been recognized by clients and from publications and awards specialized in this subject.
Now talking about focus on digital. This entire transformation leads us to a process of rapid evolution in our digital channels with very significant numbers. In individuals, for example, on average clients that access our individual account at 20 times a month and there are now over 60 million accesses per day. BIA Bradesco artificial intelligence is a pioneer among Brazilian banks capable of giving your transactions. And it continues to evolve with the slogan, make it easier with Bradesco, which is already in the media. In addition to all the products and services already running, it is now doing PIX instant transactions using WhatsApp and working to prevent fraud in case of suspicious transactions through messages to our clients. Everything we are doing in digital gives us certainty about the path we are following with our clients, allowing greater autonomy with a better experience and for us much more business and with a lower cost to serve.
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