Banco Bradesco Q2 Earnings Call Highlights

Key Points

• Strong Q2 performance: Banco Bradesco’s net income rose 16.2% year over year to BRL 7.1 billion, with ROE reaching 16.2% and revenue increasing 10.3% to BRL 37.6 billion. Insurance net income climbed 28.3% to BRL 2.9 billion.
• Secured lending led growth: The loan portfolio expanded 11.6%, driven by SME, corporate and vehicle financing, as well as government-backed FGI/FGO credit lines. Bradesco emphasized its shift toward secured loans, with 69% of individual lending collateralized, while maintaining a 3.5% cost of risk.
• Capital and outlook remain supportive: Management expects to meet its 2026 guidance and forecasts market net interest income approaching BRL 2 billion. A planned BRL 10 billion capital increase, alongside potential regulatory recognition of an additional 140 basis points of capital, is intended to support growth and strengthen resilience.

Banco Bradesco NYSE: BBD reported second-quarter 2026 net income of BRL 7.1 billion, up 16.2% from a year earlier and 3.5% from the prior quarter, as the Brazilian lender cited expansion in secured lending, improved commercial traction and resilient insurance results. Return on average equity reached 16.2%, which management said was ahead of market expectations.

The bank said total revenue rose 10.3% year over year to BRL 37.6 billion. Total net interest income was nearly BRL 20.9 billion, while fee and commission income totaled BRL 10.5 billion. Banco Bradesco’s insurance operation contributed BRL 2.9 billion in net income, up 28.3% from a year earlier.

Secured Lending Drives Portfolio Growth

Management said the loan portfolio grew 11.6% year over year, led by lending areas with collateral, guarantees and what it described as attractive risk-adjusted returns. Small and medium-sized enterprise lending increased 16.1% from a year earlier, large-corporate lending rose 12.7%, and lending to individuals increased 8.4%.

The bank emphasized its focus on government-backed FGI and FGO credit lines, mortgages, payroll-deductible loans and selected corporate financing. It said earmarked credit expanded 21.4%, compared with 12.7% growth in the broader market. In corporate lending, Banco Bradesco reported 14.7% growth versus 7.9% market growth.

FGI and FGO originations increased 52.7% in the second quarter from the first quarter, and the bank said it held a 21.6% market share in the programs. Its FGI/FGO portfolio for retail and SMEs grew 64.5% year over year. Management said BRL 31 billion of the BRL 37 billion year-over-year increase in SME lending came from FGI and FGO lines, with most of the remainder coming from leasing, consumer financing, aircraft and boat financing for wealth-management clients, and Plano Empresário lending.

Vehicle financing grew 26.8% year over year. Management said it had upgraded its platform and deployed machine learning and artificial intelligence in pricing, risk modeling and credit policies. The bank said it was selectively pursuing opportunities in used and semi-new vehicles rather than broadly increasing risk exposure across all vehicle segments.

Payroll-deductible lending increased 9.3%, with strong growth in private-sector loans. Banco Bradesco said its overall payroll-loan delinquency rate of more than 90 days was 2.5%, compared with 3.3% for the market. In private payroll loans, it reported a 4.7% delinquency rate, compared with 8.9% for the market excluding Bradesco.

Credit Costs and Asset Quality

Management acknowledged pressure on certain credit-quality indicators from the timing of FGI and FGO guarantee claims, the integration of John Deere Bank-related portfolios and a specific wholesale client that was restructured. It said provisions are recorded while the bank awaits payment under government guarantees, a process that can take between 120 and 185 days.

The bank said its cost of risk remained proportionally flat at 3.5%, despite those factors. Management described the FGI/FGO effect as temporary and said the relevant delinquency curve should normalize once guarantee claims are paid.

Agribusiness lending rose almost 25% year over year, helped by two wholesale transactions totaling BRL 6 billion involving highly rated clients and guarantees. Management said the bank remains selective in agribusiness, where it estimated its market share at about 12%. It also said its share of judicial-reorganization exposure was 3.5%.

The bank said 69% of its individual loan portfolio was secured, characterizing the mix shift as a result of tighter portfolio management and a lower appetite for unsecured credit.

Revenue, Expenses and Capital

Cassiano Ricardo Scarpelli, Banco Bradesco’s vice president, chief financial officer and chief transformation officer, said market net interest income increased nearly 21.7% year over year to BRL 700 million, supported by treasury activities including trading, asset-liability management, energy and client desks. Client net interest income rose nearly 14%, aided by loan growth as well as higher liabilities and funding activity.

Scarpelli said the bank expects market NII to exceed its prior “soft guidance,” with management pointing to a range approaching BRL 2 billion. He added that the bank expects net interest margin to remain near 9% for the year, after reporting 9.1% in both the first and second quarters.

Fee and commission income rose 1.7% year over year. Management highlighted 10% growth in consortium and asset-management revenue and a 26.4% increase in custody and brokerage services. It said current-account fees are unlikely to be a major driver of future fee growth, with greater emphasis on asset management, consortiums, investment banking, brokerage and other diversified businesses.

Operating expenses rose 3.4% year over year, below inflation, as the bank continued to review its physical footprint and invest in its transformation plan.

Management also addressed a planned BRL 10 billion capital increase, of which controlling shareholders intend to anchor at least BRL 8 billion. The bank said regulatory approval is still needed to recognize an additional 140 basis points of capital related to a Bradesco transaction. Management expects that recognition to lift common equity tier 1 capital, while the new capital raise would further strengthen tangible capital, support growth and provide resilience against macroeconomic volatility.

Outlook and Transformation

Banco Bradesco said it remains committed to increasing net income quarter by quarter and expects to deliver its 2026 guidance ranges. Investor Relations Officer André Costa Carvalho said insurance performance is expected to be around the midpoint of guidance or somewhat higher, service revenue near the upper end of its range, expenses closer to the lower end, and NII net of provisions slightly below the midpoint.

Ney Dias, chief executive of Bradesco Seguros, said the insurer’s second-half performance should be broadly in line with guidance because the comparison base from the second half of 2025 was high.

Management also highlighted its digital initiatives, including the “Meu Bradesco” personalization platform and BIA GenAI. The bank said BIA had recorded 74 million interactions and was available to all clients with access. It said Bradesco had nearly 800,000 Principal clients, nearly 4.3 million Prime clients and 36 million fully digital clients at midyear.

About Banco Bradesco (NYSE:BBD)

Banco Bradesco SA is a major Brazilian financial institution headquartered in Osasco, São Paulo. Founded in 1943 by Amador Aguiar, the bank has grown into one of Brazil's largest private-sector banks, offering a full range of financial services to retail, small and medium-sized enterprises, corporate and institutional clients. It operates across the banking value chain, including deposit-taking, lending, payments, trade finance and treasury services, and it participates actively in Brazil's retail and corporate credit markets.

The company's product and service mix extends beyond traditional banking to include insurance, pension plans, asset management, leasing and credit card services, delivered through a combination of branches, automated teller machines and digital channels.

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