Press Release
For us at Bradesco, the year of 2024 is one of transition and transformation. We started implementing the strategic plan that accelerates and deepens changes in the bank, while the operation gained traction at the same time. The trends of the fall in delinquency and acceleration of
credit origination observed in the past quarters, remained the same. The loan portfolio rose in 1Q24 after declining in 2023. At the beginning of the year, there was expansion in all segments. The quality of the new vintages is good, and the delinquency of the portfolio is falling, which results in a trend to normalize the cost of risk. We accelerated the adjustment of our physical network, while continuing to invest in digital channels. Improving the way of serving and clients' experience will gradually increase efficiency and profitability, keeping us close to our clients. The transformation office was implemented and is now in full operation. The main benefit of this transformation will be seen in the operating indexes, in profitability recovery and in the bank's evolution, so that it has greater agility and efficiency in a sustainable way.
The recurring net income was R$4.2 billion in 1Q24, implying an ROAE of 10.2%, which was driven by lower ALL expenses, controlled operating expenses and income from insurance operations, but still pressured by the client NII. The efficiency ratio improved 2.3 p.p. in the quarter compared to 4Q23.
We believe that the loan portfolio reached a turning point this quarter. After declining in 2023, it started an increase trajectory that is predicted to last. In retail individuals segment, we generated more loans in 1Q24 than we did in the pre-pandemic period, reinforcing our strategy of increasing the market share in the segment and our connection with these clients. We had an acceleration in Micro and Small sized Enterprises, but we still have a long way to go until we normalize the origination in this segment.
The most recent loan vintages continue to show significant improvement in quality, even with the acceleration of origination. As a result, the delinquency ratio over 90 days registered a fall of 0.3 p.p. in the quarter, with emphasis on the reduction of 0.4 p.p. in the indicators of Individuals and Micro, Small and Medium-sized Enterprises.
The net interest income contracted in 1Q24, mainly reflecting the reduction in the client NII, which is pressured by the credit mix with a smaller spread, and by the lower volume of transactions with
Micro and Small-sized Enterprises. The prospect of NII improvement is clearer for the second half of the year.
The fee and commission income reached R$8.9 billion in 1Q24. Also, a positive highlight was the performance of consortia and loan operations. The reduction compared to 4Q23 is related to seasonal effects, such as cards income.
The performance of insurance operations was, again, one of the positive highlights of the quarter, with an ROAE of 19.8%, rising 1.6 p.p. compared to 1Q23. The operating income from insurance was R$4.0 billion (+8.9% vs. 1Q23) and net income reached R$2.0 billion (+10.2% vs. 1Q23), marked by the reduction of the claims ratio and administrative efficiency, increase in revenues, and as a consequence, improvement of the combined ratio. We believe that the prospects remain positive for the rest of 2024.
Tier I capital ratio closed the quarter at 12.7%, increasing 0.2 p.p. compared to the same period of the previous year, but falling 0.5 p.p. from December 2023, mainly due to the increase in intangible assets and mark-to- market effects. In the quarter, we allocated R$2.6 billion in Interest on Own Capital to shareholders.
We began the implementation of the strategic plan accelerating the transformation of the bank. We set up the transformation office, with resources 100% dedicated to work fronts. In the area of people and organizational structure, we are strengthening the teams, increasing synergy, and reinforcing business units such as technology and credit, to name a few examples. We are adjusting our physical presence, aiming to improve the way of serving: We closed traditional branches, opened companies branches - with 122 units in operation - and added more correspondent banking to Bradesco Expresso. The benefits of the strategic plan will be seen in our operational income, partly in 2024, and on a larger scale from 2025 onwards.
Finally, we want to highlight our sustainability strategy. We are one of the leaders of the Carbon Disclosure Project (CDP) index, considered a benchmark for Climate Change Reporting, with a rating above the global average in the sector of financial services, which reinforces our commitment to sustainable development. On the climate agenda, we are committed to raising awareness and the financing of our clients in the transition to a greener, more inclusive low-carbon economy. To
strengthen this performance, we joined the Net-Zero Banking Alliance, assuming the commitment of the decarbonization of our loan and investment portfolios to achieve zero net emissions by 2050.
Our journey is one of change, evolution, and dedication, with each step reflecting the strength and enthusiasm that has brought us here. Together with society and stakeholders, we have the power to build an even stronger Bradesco and face the future with a proactive stance, transforming challenges into opportunities.
Enjoy the Reading!
BRADESCO | Economic and Financial Analysis Report
Bradesco | 24 | ||||||
RESULTS | |||||||
MAIN DATA SELECTED | 1Q24 vs. 4Q23 (q/q) | ||||||
1Q24 vs. 1Q23 (y/y) | |||||||
Recurring Net Income | Expanded Loan Portfolio | ||||||
R$4.2 bi | R$889.9 bi | ||||||
1.4% (q/q) | 1.2% (y/y) | ||||||
46.3% (q/q) 1.6% (y/y) | |||||||
Quarterly ROAE | Individuals | R$372.6 bi | |||||
10.2% | 1.9% (q/q) | 2.0% (y/y) | |||||
3.3 p.p. (q/q) | 0.4 p.p. (y/y) | ||||||
Quarterly ER | Companies | R$517.4 bi | |||||
51.1% | 1.1% (q/q) | 0.7% (y/y) | |||||
2.3 p.p. (q/q) | 4.0 p.p. (y/y) | SMEs | Large Corporate | ||||
Basel - Tier I | |||||||
2.3% (q/q) | 1.2% (y/y) | 0.5% (q/q) | 1.6% (y/y) | ||||
12.7% | |||||||
0.5 p.p. (q/q) | 0.2 p.p. (y/y) | ||||||
Total Net Interest Income | Delinquency | ||||||
R$15.2 bi | 15 to 90 days | % | Over 90 days 4.8% | ||||
6.1% (q/q) 9.0% (y/y) | 4.1 | 0.3 p.p. (q/q) | 0.3 p.p. (y/y) | ||||
Stable (q/q) | 0.5 p.p. (y/y) | ||||||
Fee and Commission Income | Expanded ALL R$7.8 bi | ||||||
R$8.9 bi | |||||||
25.8% (q/q) | 17.9% (y/y) | ||||||
1.8% (q/q) | 1.3% (y/y) |
Operating Expenses | Retail ALL R$7.3 bi | ||||||
R$13.4 bi | |||||||
13.7% (q/q) 22.3% (y/y) | |||||||
10.5% (q/q) 4.4% (y/y) | |||||||
INSURANCE GROUP | |||||||
Recurring Net Income | Quarterly ROAE | Income from | Revenue | Claims Ratio | |||
R$2.0 bi | operations | ||||||
19.8% | R$28.0 bi | 78.4% | |||||
R$4.0 bi | |||||||
21.6% | (q/q) | 5.0 p.p. (q/q) | 15.8% | (q/q) | 0.2% (q/q) | 0.1 p.p. (q/q) | |
1.6 p.p. (y/y) | 11.8% (y/y) | ||||||
10.2% | (y/y) | 8.9% | (y/y) | 3.7 p.p. (y/y) | |||
KEY HIGHLIGHTS
- Improvement of crop quality in all segments and Individual production above historical levels
- Improvement of ALL in retail and wholesale
- Reduction of the delinquency ratio over 90 days in all segments
- Control of operating expenses | Review of the footprint
• Good performance of the insurance operations
BRADESCO | Economic and Financial Analysis Report
recurring net income statement
Variation % | |||||
R$ million | 1Q24 | 4Q23 | 1Q23 | 1Q24 x 4Q23 | 1Q24 x 1Q23 |
\ Net Interest Income | 15,152 | 16,128 | 16,653 | (6.1) | (9.0) |
- Client NII | 14,522 | 15,432 | 16,965 | (5.9) | (14.4) |
- Market NII | 630 | 696 | (312) | (9.5) | - |
\ Expanded ALL | (7,811) | (10,524) | (9,517) | (25.8) | (17.9) |
\ Net Interest Margin | 7,341 | 5,604 | 7,136 | 31.0 | 2.9 |
Income from Insurance, Pension Plans and | 3,997 | 4,745 | 3,669 | (15.8) | 8.9 |
Capitalization Bonds | |||||
Fee and Commission Income | 8,861 | 9,028 | 8,746 | (1.8) | 1.3 |
Operating Expenses | (13,360) | (14,935) | (12,793) | (10.5) | 4.4 |
Personnel Expenses | (6,368) | (6,516) | (6,031) | (2.3) | 5.6 |
Other Administrative Expenses | (5,483) | (5,972) | (5,418) | (8.2) | 1.2 |
Other Income / (Operating Expenses) | (1,509) | (2,447) | (1,344) | (38.3) | 12.3 |
Tax Expenses | (1,918) | (2,077) | (1,955) | (7.7) | (1.9) |
Equity in the earnings (losses) of unconsolidated | 56 | 134 | 41 | (58.2) | 36.6 |
and jointly controlled subsidiaries | |||||
\ Operating Income | 4,977 | 2,499 | 4,844 | 99.2 | 2.7 |
Non-Operating Income | 14 | 67 | 39 | (79.1) | (64.1) |
Income Tax / Social Contribution | (675) | 390 | (499) | - | 35.3 |
Non-controlling interests in subsidiaries | (105) | (78) | (104) | 34.6 | 1.0 |
\ Recurring Net Income | 4,211 | 2,878 | 4,280 | 46.3 | (1.6) |
Non-Recurring Events | - | (1,175) | - | - | - |
Provision for Restructuring | - | (570) | - | - | - |
Contingent Liabilities | - | (547) | - | - | - |
Impairment of Non-Financial Assets | - | (58) | - | - | - |
Book Net Income | 4,211 | 1,703 | 4,280 | - | (1.6) |
Profit Movement in the Quarter | R$ million
2,713
1,546
1,575 | |
(748) | (1,064) |
2,878 (910) (66)
1,167
(167)
4,211 |
4Q23 | Client NII | Market NII | Retail | Wholesale | Fee and | Operating | Operating Income Others (1) | 1Q24 |
Commission | Expenses | from Insurance | ||||||
Net Interest Income | Expanded ALL | Income | (Personnel + | |||||
Administrative + |
Others)
- Tax Expenses, Equity in the Earnings of Affiliates, Non-Operating Income, Income Tax/Social Contribution and Minority Share.
ROAE Quarterly and Accrued | ER / Risk-Adjusted ER | ||||||||||||||||
% | 10.9 | % | 84.8 | 86.6 | 84.2 | ||||||||||||
10.6 | 11.0 | 10.0 | 10.2 | 79.8 | 84.0 | ||||||||||||
45.9 | 47.3 | ||||||||||||||||
10.6 | 11.1 | 11.3 | 46.8 | 48.7 | 49.7 | ||||||||||||
6.9 | 10.2 | ||||||||||||||||
47.1 | 46.1 | 48.2 | 53.4 | 51.1 | |||||||||||||
1Q23 | 2Q | 3Q | 4Q | 1Q24 | 1Q23 | 2Q | 3Q | 4Q | 1Q24 | ||||||||
Quartely | Accrued | Quarterly | 12-month | 12-monthrisk-adjusted | |||||||||||||
BRADESCO | Economic and Financial Analysis Report
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Banco Bradesco SA published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 11:51:45 UTC.