SAO PAULO, May 15, 2026, 14:03 BRT
• Banco Bradesco shares trading in New York slipped $0.115 to $3.455 on Friday.
• Recurring profit for the first quarter came in at R$6.81 billion, though credit provisions also moved higher.
• Sentiment around Brazilian banks tightened after Banco do Brasil, the state lender, reported a 54% plunge in profit and trimmed its 2026 outlook.
Shares of Banco Bradesco S.A. slipped on Friday, despite a second straight quarter of profit growth from Brazil’s number-two private lender. Investors focused on rising credit costs and renewed strains hitting the country’s banking sector. The U.S.-listed American depositary shares changed hands at $3.455, a drop of $0.115 from Thursday’s close.
Timing is critical here. Bradesco is pushing to show its turnaround story holds up even as Brazil’s interest rates remain high—Selic sits at 14.50%, trimmed only slightly after a pair of quarter-point cuts. The central bank, weighing external risks and inflation, kept future policy moves undecided.
The broader market isn’t cutting much slack. Banco do Brasil delivered a 54% plunge in first-quarter adjusted net profit, according to Reuters, and trimmed its 2026 guidance. Political jitters—this week’s headlines around the collapsed Banco Master and presidential contender Flavio Bolsonaro—haven’t helped sentiment in Brazilian markets.
Bradesco turned in numbers that didn’t look soft at first glance. Recurring net income—profit minus one-offs—landed at R$6.81 billion, a 16.1% jump over the same period last year. Total revenue improved by 14.0% to R$36.88 billion. Net interest income, that crucial gap between lending earnings and funding costs, advanced 16.4%.
But on the expense side, things looked worse. Expanded loan-loss provisions—funds reserved for potentially bad loans—jumped 26.5% from a year ago, reaching R$9.67 billion. Loans overdue by more than 90 days ticked up too, now at 4.2%, compared with 4.1% in the same period last year.
Chief Executive Marcelo Noronha told investors Bradesco has taken on a “more conservative stance,” though he stressed this doesn’t signal the bank is scaling back loan growth. He flagged a particular wholesale exposure along with aging rural-credit portfolios as the main reasons behind the uptick in risk cost. MarketScreener
The gulf between the two banks isn’t shrinking. According to Jefferies figures shared by Investing.com, Bradesco delivered just 26% of Itaú Unibanco’s banking profits—way down from the roughly 80% slice it held in the first quarter of 2022. Jefferies also pegged Bradesco’s adjusted pre-tax return on risk-weighted assets at about 1.4%, falling short of Itaú’s 4% and Santander Brasil’s 2.4%.
There’s still a cushion from rate-cut optimism. On Polymarket, traders are betting with a 75.5% implied chance the central bank cuts the Selic in June; the probability for staying put sits close to 25.1%. For lenders, a rate cut could bring some relief to borrowers and potentially boost credit appetite. The risk? Lending spreads might shrink if funding costs don’t drop in tandem.
“Monetary policy remains quite restrictive,” Banco Inter chief economist Rafaela Vitoria said to Reuters after the latest rate cuts. For Bradesco, the dilemma is clear: the lender needs to grow its loan book, but not if it risks undoing two years of hard work cleaning up asset quality. Reuters
Insurance made a difference for the quarter. Income from Bradesco’s insurance, pension, and capitalization operations climbed 20.4% year-over-year. The insurance division delivered R$2.8 billion in recurring net income. Noronha pointed to Bradsaúde, the healthcare consolidation effort, as a strategic decision for capital and shareholder value.
There’s a risk here: credit jitters might not stay contained. Should rural loans, small-business working capital, or even big corporate exposures slip further, Bradesco could see provisions start to bite into the net interest income it’s banking on. And if rate cuts stall or political tensions flare up—weakening the real and stoking inflation—that outlook gets tougher.
Bradesco’s profit has bounced back for now. But investors are still looking for firmer evidence that the gains can hold up, and not just get wiped out by rising loan losses.
