According to the balance sheet released this Thursday, the 9th, Bradesco ended the third quarter of this year with a recurring net profit of R$4.621 billion. The result is 11.5% lower than the same period last year, but 2.3% higher than that recorded in the second quarter of this year.
In the quarter, the country’s second-largest private bank showed a more stable trend in default indicators, which rose more rapidly than its peers last year. However, slow growth of the credit portfolio as a result of Bradesco’s greater selectivity put pressure on the bank’s margins, leaving profitability below average.
“The second quarter result is in line with expectations of a sequential improvement, but below normalized levels,” Carlos Fireti, the bank’s director of investor relations and controls, said in a podcast to comment on the results.
Bradesco’s credit portfolio reached R$877.500 billion at the end of the quarter, a decline of 0.1% over a year, but an increase of 1% compared to the previous quarter. This was driven by operations for individuals, which increased by 2.3% in the year. Default based on the criteria of delay of more than 90 days was 6.1%, an increase of 2.2 pp in one year.
According to Firetti, the bank is gradually increasing lending to the retail sector, but this increase is not enough to replenish the portfolio. For example, among small and medium-sized companies, he said originations are still below normal.
For example, the bank’s margin with customers, which reflects profits in credit operations, fell 9.6% year-on-year to R$15.836 billion. According to Bradesco, the result reflects a movement toward reducing portfolio risks, leading to a migration toward less profitable products.
At the treasury, the bank once again showed positive results after one year, with a profit of R$23 million, compared to a loss of R$1.243 billion in the same period last year. “Treasurys have returned to positive territory and should follow the trend with portfolio rebalancing movement in the coming months,” Firetti said on the podcast.
Bradesco’s gross financial margin fell 9.6% to R$15.836 billion in the third quarter compared to the same period last year. There was a decline of 4.9% in one quarter.
The bank ended the third quarter with R$1.931 trillion in assets, an increase of 2.1% year-on-year and 2.5% in the three months. Net equity was R$160.801 billion, an increase of 2.5% over a year.
In the quarter, return on equity was 11.3%, down 1.7 percentage points on a year, but up 0.2 pp on a quarter.