By Brazil Stock Guide – Banco Bradesco S.A. (B3: BBDC4 / BBDC3) ended the third quarter of 2025 with recurring net income of R$6.2 billion, up 2.3% quarter-on-quarter and 18.8% year-on-year, marking another step in its profitability recovery. Return on equity rose to 14.7%, while total revenues climbed to R$35 billion, supported by higher lending spreads and robust results in insurance and fee income.
Yet, as the tone of its earnings call made clear, the real challenge is no longer profit recovery—it’s sustaining credit expansion without compromising risk discipline. Analysts pressed executives on whether Bradesco’s stability in non-performing loans, which held at 4.1%, reflects structural improvement or temporary relief.
CEO Marcelo Noronha set the tone, saying the focus remains on risk-adjusted returns. “We continue to deliver consistent growth with controlled delinquency,” he said. “Our transformation is solid and sustainable.” But analysts wanted proof that such caution wouldn’t stifle lending momentum.
Daniel Vaz, from Banco Safra, questioned the pace of branch closures and the rising costs of affiliates such as Elo and Alelo, as operating expenses reached R$12.9 billion, up 5.5% year-on-year. Noronha said the footprint adjustment will slow next year but remains strategic. “If I can spend one billion to gain two, I won’t hesitate,” he said, defending the ongoing overhaul.
Chief Financial Officer Cassiano Scarpelli added that much of the expense increase reflects IT investments and cultural transformation. The efficiency ratio held steady at about 50%, signaling that “the short-term cost pressure is the price of long-term competitiveness.”
Pedro Leduc, from Itaú BBA, focused on the slight uptick in retail delinquencies, particularly linked to Banco John Deere operations. Noronha confirmed the impact was isolated and fully provisioned. “Our credit book is sound, with strong vintages. Without this case, the cost of risk would have been flat,” he said.
Bradesco’s cost of credit rose marginally to 3.3%, totaling R$8.6 billion, due to specific corporate provisions. The restructured loan portfolio dropped R$1.8 billion versus the previous quarter and R$8.2 billion year-on-year—evidence, executives said, of improving asset quality.
Leduc also asked about the acceleration in SME lending, which grew 4.6% quarter-on-quarter and 24.8% year-on-year, driven by guaranteed lines under FGI and FGO programs. Noronha said Bradesco now holds more than 20% market share in that segment. “We grew with collateral and strong credit discipline,” he noted.
Asked bluntly why Bradesco remains cautious if delinquency is under control. “Why not accelerate?” Noronha replied that the bank’s appetite remains firm but selective. “We’ll keep growing with prudence—no adventures in higher-risk lines,” he said.
Scarpelli emphasized that Bradesco’s loan portfolio reached R$1.03 trillion, expanding 1.6% quarter-on-quarter and 9.6% year-on-year, outpacing Brazil’s financial system average. “It’s not slowdown, it’s layering a high-quality book,” he said.
Thiago Batista, from UBS, asked which goals of Bradesco’s strategic plan have proven hardest to achieve—efficiency, capital, or profitability. Noronha said the 14.7% ROE is now approaching the cost of equity and that efficiency will be the next priority. “We aim to cut the efficiency ratio by ten percentage points by 2028,” he added.
Scarpelli highlighted that capital remains solid, with a Tier I ratio of 13.4% and core capital at 11.4%, despite balance sheet growth and investments in affiliates. “Capital discipline underpins sustainable returns,” he said.
Investor Relations Director André Carvalho reported that client net interest income reached R$18.6 billion, rising 4.8% quarter-on-quarter and 19% year-on-year, with the average spread widening to 9%. He expects the margin to remain stable in the fourth quarter, benefiting from cheaper funding.
The insurance arm again played a key stabilizing role, posting R$5.7 billion in operating income and R$2.5 billion in net profit, with a 22.4% ROE. The combined ratio improved, while the loss ratio stood at 72.8%, reflecting disciplined underwriting amid growth in health and life products.
Yuri Fernandes, from JPMorgan, asked about the sustainability of NII gains and the growing weight of fee-based revenues, which increased 6.9% year-on-year on strong performance in cards, consortia, and asset management. Carvalho said diversification is part of Bradesco’s long-term profitability hedge.
Henrique Navarro, from Santander, sought details on the R$354 million in corporate provisions and asked whether the balance sheet was now “clean.” Noronha confirmed it was tied to a single exposure and “100% provisioned.” “There’s no new risk on the horizon,” he added.
Navarro followed up by questioning why Bradesco didn’t revise its guidance upward, since most indicators are running above the midpoint. Noronha said the bank prefers to remain conservative. “We’re at the upper end of the range, but adjustments will come in 2026,” he noted.
Gustavo Schroeder, from Citi, asked about capital drivers and tax-credit realizations. Scarpelli said the higher ratio reflects internal capital optimization, not structural changes. Schroeder also inquired about Cielo, after Bradesco’s move to delist the payments firm. Noronha said Cielo remains strategic, especially for SMEs, adding that “its reorganization brought agility and commercial focus.”
Noronha closed the call stressing consistency over speed. “We’re moving in the right lines, with risk-adjusted returns and disciplined costs. The challenge is growing without losing quality—and that’s exactly what we’re doing.”
Read more: Bradesco’s 3Q25 Profit Rises 19% as Bank Strengthens Retail Lending