By Brazil Stock Guide – Bradesco (B3: BBDC4; NYSE: BBD), one of Brazil’s largest private-sector banks, reported recurring net income of R$7.05 billion ($1.36 billion) in the second quarter of 2026, up 16.2% from a year earlier and 3.5% from the previous quarter. It marked the bank’s 10th consecutive quarter of profit growth.
Annualized return on average equity, or ROAE, reached 16.2%, compared with 15.8% in the first quarter and 14.6% a year earlier, underscoring the gradual recovery in Bradesco’s profitability.
The strongest feature of the results was positive operating leverage. Total revenue rose 10.3% to R$37.6 billion, while operating expenses increased by just 3.4%. Net interest income climbed 15.7%, supported by loan growth and stronger treasury results.
“We reaffirm our commitment to increasing our profit, step by step,” CEO Marcelo Noronha said. He added that the bank’s transformation initiatives were beginning to improve competitiveness and make revenue more diversified and resilient to Brazil’s challenging macroeconomic environment.
Reported and recurring net income were both R$ 7.05 billion in the second quarter, as Bradesco booked no significant nonrecurring items during the period.
The sequential comparison in reported profit, however, was flattered by a R$1.78 billion nonrecurring tax-related expense recognized in the first quarter. Excluding that charge, profit increased by 3.5% quarter over quarter, rather than the reported 40.2%.
Recurring net income totaled R$ 13.86 billion in the first half, up 16.2% from the same period of 2025. Reported net income rose just 1.8% to R$ 12.08 billion because of the tax charge recognized earlier in the year.
Revenue Growth Outpaces Expenses
Total net interest income reached R$ 20.87 billion. Client-related NII increased 13.8%, reflecting higher average loan volumes and improved spreads on deposits and other funding products.
Market-related NII more than doubled to R$ 673 million, supported by derivatives, structured products and asset-liability management.
After credit-loss provisions, net interest income rose 9.9% to R$ 10.89 billion.
Fee income delivered a more modest performance, increasing 1.7% to R$ 10.49 billion. Growth in asset management, purchasing-pool products, custody and brokerage offset weaker revenue from checking-account fees, credit operations and capital-markets advisory.
Bradesco’s efficiency ratio improved to 46.5% from 49.9% a year earlier. The improvement partly reflects a smaller physical network and greater use of digital channels.
The bank ended June with 4,107 branches and other service locations, 1,119 fewer than a year earlier, while its number of fully digital customers exceeded 30 million.
Technology investment continued to rise. Data-processing and communications expenses increased 26.4%, while costs related to physical locations declined 8.6%.
Credit Quality Remains the Main Watchpoint
Bradesco’s expanded loan portfolio – which includes loans, guarantees and certain credit securities – reached R$ 1.137 trillion, up 11.6% over 12 months.
Corporate lending increased 14.1%, outpacing the 8.4% expansion in loans to individuals. Lending to small and midsize companies grew 16.1%.
The bank continued to shift its portfolio toward secured products, which accounted for 61% of total credit, up 2.5 percentage points from a year earlier. Growth was led by vehicle financing, private-sector payroll loans, secured working-capital facilities and agricultural credit.
The expansion was accompanied by a higher cost of risk. Credit-loss provision expenses rose 22.6% from a year earlier to R$ 9.99 billion. The cost-of-credit ratio remained stable from the previous quarter at 3.5%, but continued to face pressure from the mass-market portfolio.
The ratio of loans overdue by more than 90 days rose to 4.3%, from 4.2% in March and 4.1% a year earlier. The deterioration was concentrated among individuals and small and midsize companies, while the ratio for large corporate borrowers remained at 0.2%.
Other indicators painted a less negative picture. Stage 3 exposures – the accounting category for credit-impaired assets – declined to 7.2% of the portfolio from 7.9% in June 2025. The volume of problem assets fell by R$ 5.5 billion, or 22%, over the same period.
“With wars abroad and elections approaching at home, we will continue to take a measured approach to risk,” Noronha said.
Insurance and Capital Strengthen the Balance Sheet
Bradesco Seguros, the group’s insurance arm, reported net income of R$2.94 billion, up 28.3% from a year earlier, with ROAE of 22.8%.
The combined operating result from insurance, private pensions and savings bonds increased 8.3% to R$ 6.12 billion.
Noronha also highlighted the creation of Bradsaúde (B3: SAUD3), which consolidated the group’s healthcare assets under a company listed on B3’s Novo Mercado, the exchange’s highest corporate-governance segment. Following the reorganization, Bradesco owns 91.35% of Bradsaúde.
The banking group’s Common Equity Tier 1 ratio rose to 11.3% from 10.2% in March, while its total Basel capital ratio stood at 15.5%.
On a pro forma basis, the capital increase of up to R$ 10 billion approved after the end of the quarter, together with the remaining regulatory effects of the Bradsaúde reorganization, would lift Bradesco’s CET1 ratio to 13.6%.
Bradesco maintained all of its guidance for 2026. The bank expects expanded loan growth of 8.5% to 10.5%, net interest income after credit-loss provisions of R$42 billion to R$48 billion and fee-income growth of 3% to 5%.
It also forecasts increases of 6% to 8% in both operating expenses and the combined result from insurance, private pensions and savings bonds.
The decision to leave the guidance unchanged, despite stronger growth in several business lines during the first half, suggests Bradesco is not extrapolating the recent pace of improvement as credit risks and macroeconomic uncertainties persist.
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