Bradesco's Q1 2025 Earnings Call: Unpacking Contradictions in Credit Costs, Risk Appetite, and Capital Strategies

Credit cost stability in corporate loans, risk appetite and customer quality, client NII growth expectations, capital management strategy, and cost of deposits and funding strategy are the key contradictions discussed in Banco Bradesco's latest 2025Q1 earnings call.



Revenue Growth and Diversification:
- Bradesco reported net income of BRL5.9 billion for Q1 2025, growing 39% year-on-year and 8.6% quarter-on-quarter.
- The growth was driven by a strong performance across different business lines, including total revenue growing 15% year-on-year, with notable contributions from insurance (32.7% growth) and fee and commission income (10.3% increase).

Loan Book Expansion and Quality:
- The expanded loan portfolio totaled BRL1 billion, growing 4.9% year-on-year and 2.4% quarter-on-quarter, excluding the John Deere Bank.
- This growth was driven by increases in individual loans (16.2% growth), micro, small, and medium-sized enterprises (30% year-on-year), and a strategic focus on secured loans with good risk-adjusted returns.

Insurance Segment Performance:
- The insurance group contributed BRL30 billion in revenue from insurance premiums, premium contributions, and capitalization bonds, with a technical provisions increase of 11% year-on-year.
- This growth was supported by strong management strategies, a high combined ratio, and effective commercial capabilities enhancing insurance penetration in the customer base.

Digital Transformation and Productivity:
- The company saw significant improvements in digital channels, reducing delivery lead time by 32% and increasing business development hours by 53%.
- The transformation initiative included utilizing GenAI to enhance productivity and efficiency, contributing to the company's overall growth.