Bradesco, one of Brazil's largest banks, reported a remarkable financial performance for the first quarter of 2025, with a recurring net profit of R$ 5.9 billion. This impressive figure marks a significant increase of 39% compared to the same period last year, where profits stood at R$ 4.21 billion. The results, announced on May 7, 2025, exceeded analysts' expectations, which had projected a profit of R$ 5.3 billion, according to Bloomberg's consensus.
The bank's annualized return on average equity (ROE) also showed a strong upward trend, rising to 14.4% from 10.2% a year earlier. The financial margin, which reflects the bank's profitability from its lending operations, reached R$ 17.2 billion, representing a 13.7% increase compared to the previous year. This growth was attributed primarily to a robust performance in the bank's customer margin, which climbed 15% year-on-year to R$ 16.7 billion.
Bradesco's total revenue for the quarter hit R$ 32.3 billion, a 15.3% increase from the prior year. The bank's credit portfolio also exceeded R$ 1 trillion, growing 12.9% year-on-year and 2.4% in the quarter. The proportion of lines with guarantees increased from 54% in the fourth quarter of 2024 to 57% in the first quarter of 2025, indicating a strategic shift towards more secure lending practices.
Despite the positive financial indicators, the bank faced challenges in maintaining control over its non-performing loans (NPL). The default rate for loans overdue by more than 90 days remained stable at 4.1%, reflecting a slight decrease of 0.9 percentage points from the previous year, although it increased marginally by 0.1 percentage points in the quarter. "We continue to reduce our risk appetite while ensuring we make sound business decisions," stated Bradesco's management in their earnings report.
Operating expenses for the bank rose by 12.3% year-on-year to R$ 15 billion, in line with expectations. However, provisions for credit losses fell by 2.2% compared to the previous year, totaling R$ 7.6 billion. This decrease signals a cautious optimism regarding the quality of the bank's loan portfolio.
The insurance segment of Bradesco also demonstrated strong performance, reporting a recurring profit of R$ 2.4 billion, which is a 25.3% increase compared to the same period last year. The return on equity for the insurance business was reported at 22.4%, although this was a decrease from the previous quarter's 25%. The bank noted a significant decline in the loss ratio for health insurance, indicating resilience in this sector despite broader economic challenges.
Bradesco's CEO, Marcelo Noronha, highlighted the importance of operational improvements and the ongoing transformation plan as key drivers of the bank's profitability. "Our profitability improvement is underway, reflecting a combination of operational advancements and benefits from our transformation plan. The outlook for the remainder of the year remains aligned with our current guidance," he remarked.
In a competitive landscape, Bradesco is adapting its strategies to ensure sustainable growth while managing risks effectively. The bank's focus on maintaining a healthy balance sheet and ensuring the quality of its credit portfolio will be crucial as it navigates the complexities of the current economic environment.
As Bradesco continues to refine its operations and expand its services, investors are optimistic about the bank's future prospects. The recent results have sparked a positive response in the market, with Bradesco's American Depository Receipts (ADRs) rising by 5.2% in after-hours trading in New York.
Overall, Bradesco's first-quarter results illustrate a robust financial performance characterized by significant profit growth, improved margins, and a strategic focus on secure lending practices. The bank's ability to adapt to changing market conditions while sustaining profitability will be closely monitored by analysts and investors alike as the year progresses.
