Brazil's Bradesco beats Q2 profit expectations

The bank's loan book expanded 17.7% to 855.38 billion reais, while its 90-day default ratio grew one percentage point to 3.5%. The growth in the default ratio was an expected trend, said the bank, given the product mix of its loan portfolio, which is more focused on individuals and personal credit.

Brazilian lender Banco Bradesco SA on Thursday reported its second-quarter recurring net income rose 11.4%, beating analysts expectations.

The lender posted recurring net profit, which excludes one-off items, of 7.04 billion reais ($1.35 billion), compared with a Refinitiv consensus of 6.73 billion reais. Bradesco's cash set aside for bad loans jumped 52.4% in the period to 5.31 billion reais, reflecting a more challenging economic environment in Brazil in light of repeated interest rate hikes and surging inflation.

On the other hand, higher interest rates also boosted Bradesco's net interest income (NII) from clients, which came in at 16.95 billion reais, up 25.8% from the year-ago quarter. The bank's loan book expanded 17.7% to 855.38 billion reais, while its 90-day default ratio grew one percentage point to 3.5%.

The growth in the default ratio was an expected trend, said the bank, given the product mix of its loan portfolio, which is more focused on individuals and personal credit. "The quality of the portfolio continues at normal and profitable levels, maintaining good coverage ratios," said Bradesco.

Return on equity reached 18.1%, or 0.5 percentage points above the previous three months. ($1 = 5.2119 reais)