Business Context and Reporting Period
Company: Banco Bradesco S.A. (Bank Bradesco)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Quarter 2026 (ended March 31, 2026)
Context: Bradesco reported its ninth consecutive quarter of increased recurring net income, driven by a 14.0% year-over-year surge in revenues. The bank continues to execute an accelerated transformation plan, including the consolidation of healthcare assets into a new entity, "Bradsaúde," and the expansion of digital channels. Management maintains a moderate risk appetite with a conservative bias, noting some deterioration in legacy rural credit and agribusiness sectors.
Key Financial Metrics
| Metric | 1Q26 Value | Q/Q Change | Y/Y Change |
|---|---|---|---|
| Recurring Net Income | R$6.8 billion | +4.5% | +16.1% |
| Total Revenue | R$36.9 billion | +2.2% | +14.0% |
| Net Interest Income (NII) | R$20.1 billion | +4.2% | +16.4% |
| Fee and Commission Income | R$10.4 billion | -6.4% | +6.2% |
| Insurance Operating Income | R$6.4 billion | +13.0% | +20.4% |
| Operating Expenses | R$16.2 billion | -4.6% | +7.8% |
| Cost-to-Income Ratio | 46.9% | -3.3 p.p. | -2.8 p.p. |
| Expanded Loan Portfolio | R$1,090 billion | +0.1% | +8.4% |
| Over 90 Days Delinquency Ratio | 4.2% | +0.1 p.p. | +0.1 p.p. |
| ROAE (Return on Average Equity) | 15.8% | - | - |
| Basel Total Capital Ratio | 14.9% | - | - |
Note: Book Net Income was R$5.0 billion, impacted by non-recurring tax provisions of R$1.8 billion related to the PTI adherence and tax debt settlements.
Material Changes vs. Prior Period
- Profitability Growth: Recurring net income grew 16.1% year-over-year, marking the ninth consecutive quarter of growth. This was primarily driven by a 14.0% increase in total revenue.
- Revenue Drivers: Net Interest Income (NII) rose 16.4% y/y due to increased credit volume and spreads. Insurance income surged 20.4% y/y, supported by a 22.1% expansion in industrial results and improved claims ratios.
- Expense Management: Operating expenses declined 4.6% quarter-over-quarter, with administrative costs dropping 14.2% due to footprint optimization. However, technology expenditures increased.
- Asset Quality: The over-90-day delinquency ratio increased slightly to 4.2%, influenced by the MSME segment and working capital operations. The secured loan portfolio share increased to 60.8%.
- Capital Structure: Capital ratios declined slightly due to regulatory changes but remain above thresholds. The creation of Bradsaúde is expected to provide capital benefits.
Guidance, Outlook, and Risks
2026 Full-Year Guidance
- Expanded Loan Portfolio Growth: 8.5% to 10.5%
- NII Net of Provisions: R$42 billion to R$48 billion
- Fee and Commission Income Growth: 3% to 5%
- Operating Expenses Growth: 6% to 8%
- Insurance Income Growth: 6% to 8%
Management Commentary and Risks
- Transformation: The bank is accelerating GenAI-intensive transformation to boost productivity and security. Digital clients now number 28 million.
- Risk Appetite: Management maintains a conservative stance, monitoring market delinquency indicators. Specific concerns include deterioration in the legacy rural credit portfolio and agribusiness lines.
- Macroeconomic Outlook: Management forecasts a Selic rate of 12.50% by year-end 2026 and GDP growth of 1.5%.
- Contingencies: Non-recurring tax provisions of R$1.8 billion were recorded in 1Q26 related to the Comprehensive Transaction Program (PTI) and historical tax debts.
Investor Verification Checklist
- Tax Provisions Impact: Verify the sustainability of earnings by excluding the R$1.8 billion non-recurring tax provision that reduced Book Net Income to R$5.0 billion.
- Delinquency Trends: Monitor the MSME segment and legacy rural credit portfolio for further deterioration in the over-90-day delinquency ratio.
- Secured Lending Mix: Confirm the continued shift toward secured lending (currently 60.8%) as a risk mitigation strategy.
- Bradsaúde Integration: Assess the operational and capital efficiency benefits of the new healthcare conglomerate consolidation.
- Expense Discipline: Track the balance between footprint reduction savings and rising technology investments to ensure the cost-to-income ratio remains below 47%.