Business Context and Reporting Period
Company: Banco Bradesco S.A. (Bank Bradesco)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter and Full Year ended December 31, 2025
Context: Bradesco reported strong financial performance in 2025, driven by commercial traction across core product lines and the accelerated execution of its transformation plan. The bank maintained a risk appetite focused on high-quality new credit vintages while managing delinquency ratios. The reporting period includes the adoption of new accounting practices (CMN Resolutions No. 4,966 and No. 4,975) effective January 1, 2025, which impacted the measurement of expected credit losses and financial instruments.
Key Financial Metrics
| Metric | 4Q 2025 | Full Year 2025 | YoY Change (FY) |
|---|---|---|---|
| Recurring Net Income | R$6.5 billion | R$24.7 billion | +26.1% |
| Return on Average Equity (ROAE) | 15.2% | 14.7% (Annualized) | +3.3 p.p. |
| Total Revenues | R$36.1 billion | N/A | +9.8% (4Q YoY) |
| Net Interest Income (NII) | R$19.2 billion | R$73.2 billion | +14.9% (12M YoY) |
| Fee and Commission Income | R$11.1 billion | R$41.8 billion | +8.9% (12M YoY) |
| Expanded Loan Portfolio | R$1.089 trillion | R$1.089 trillion | +11.0% (YoY) |
| Cost of Credit | 3.2% | 3.2% (Annualized) | Stable |
| Delinquency Ratio (>90 days) | 4.1% | 4.1% | +0.1 p.p. (YoY) |
| Efficiency Ratio | 50.0% (12M) | 50.0% | -2.2 p.p. (Improvement) |
| Tier 1 Capital Ratio | 13.2% | 13.2% | +0.8 p.p. (YoY) |
| Common Equity Ratio | 11.2% | 11.2% | +0.7 p.p. (YoY) |
Material Changes vs. Prior Period
- Profitability Growth: Recurring net income grew 26.1% year-over-year in 2025, marking eight consecutive quarters of profitability growth. ROAE in 4Q25 reached 15.2%, exceeding the cost of capital.
- Revenue Expansion: Total revenues in 4Q25 grew 9.8% year-over-year, driven by a 13.2% increase in Net Interest Income and an 8.0% increase in Fee and Commission Income. Client NII grew 18.4% year-over-year.
- Loan Portfolio Growth: The expanded loan portfolio grew 11.0% year-over-year to R$1.089 trillion. Growth was led by the MSME segment (+21.3% YoY) and Individuals (+12.7% YoY).
- Asset Quality: The delinquency ratio (>90 days) remained stable at 4.1%. Problem assets in the restructured portfolio decreased by R$10.5 billion year-over-year, while cured assets rose 58.2% year-over-year.
- Insurance Performance: Bradesco Seguros reported net income of R$2.8 billion in 4Q25 (+10.6% YoY) and R$10.1 billion for the full year (+11.2% YoY), with a ROAE of 24.3% in the quarter.
- Expense Management: Operating expenses rose 8.5% year-over-year, influenced by transformation investments and profit-sharing. However, the efficiency ratio improved by 2.2 percentage points due to stronger revenue growth.
Guidance, Outlook, and Risks
Guidance and Outlook
- 2025 Guidance Review: The loan portfolio growth exceeded the upper limit of the guidance range (4% to 8%), driven by Large Companies segment traction. Insurance income also outperformed expectations.
- 2026 Outlook: Management expects profitability to evolve through revenue increases while maintaining credit risk under control. The bank plans to continue significant investments in transformation efforts to boost competitiveness.
- Sustainability Targets: Bradesco surpassed its 2021-2025 goal of allocating R$350 billion to socio-environmental activities, achieving R$381.9 billion (109% execution). The new target is to direct a cumulative R$450 billion by December 2026.
Risks and Contingencies
- Macroeconomic Environment: The Brazilian economy slowed in the second half of 2025 due to restrictive monetary policy. Inflation closed 2025 within the target range but two years above the midpoint. Management projects weaker GDP growth in 2026.
- Regulatory Changes: The adoption of CMN Resolution No. 4,966/21 (IFRS 9 convergence) in 2025 changed provisioning methodologies to an expected loss model, impacting the measurement of credit losses and revenue recognition (stop-accrual rules).
- Legal and Tax Provisions: The bank maintains significant provisions for tax, civil, and labor contingencies. Key tax disputes involve PIS/COFINS calculation bases and the constitutionality of economic plans affecting savings accounts.
- Operational Risks: Cybersecurity and electronic fraud remain key risks in a digitized environment. The bank is investing heavily in technology and resilience to mitigate these threats.
Investor Verification Checklist
- Provisioning Adequacy: Verify the sufficiency of the R$58.0 billion allowance for expanded loans under the new expected loss model (CMN 4,966) given the macroeconomic slowdown.
- Transformation ROI: Monitor the impact of increased operating expenses (up 8.5% YoY) on future efficiency ratios and profitability as transformation investments mature.
- Loan Portfolio Quality: Track the stability of the 4.1% delinquency ratio and the continued reduction of the restructured portfolio in the face of high interest rates.
- Insurance Claims Ratio: Review the claims ratio performance in the health segment, which improved 3.8 percentage points year-over-year, to ensure sustainability of the 24.3% ROAE.
- Capital Ratios: Confirm that Tier 1 (13.2%) and Common Equity (11.2%) ratios remain well above regulatory minimums (9.5% and 8.0% respectively) amidst loan growth.
- Shareholder Returns: Verify the payout of R$3.9 billion in interest on shareholders' equity for 4Q25 and the total 2025 payout of R$14.5 billion (62.2% gross payout).