Bradesco’s positive balance supports up to 67% share valuation bets – Money Times


The decrease in contributions to provisions may marginally increase Bradesco’s profit (Image: Money Times / Gustavo Kahil)

On Wednesday night (28), after the market closed, the second largest private bank in Brazil revealed that its operations during the third quarter of 2020 fared better than ordered, despite the effects triggered by the pandemic of coronavirus.

THE Bradesco (BBDC4) had a net profit of 5.031 billion reais, about 15% above the average of analysts’ estimates, according to data from Refinitiv, but 23.1% below the positive result of a year earlier.

A XP Investments points out that, unlike Santander Brazil (SANB11), Bradesco’s default rate between 15-90 days was stable at 2.6%.

“We believe that the control of default it is a good sign, since 75% of the extended operations have already been carried out and are in good standing, with 98% up to date ”, emphasizes the financial sector analyst Marcel Campos.

A Mirae Asset is even more incisive in raising Bradesco’s morale against its Santander Brasil partner, which also shared opinions with the disclosure of its balance sheet for the 3rd quarter.

“Santander showed a better return, but Bradesco’s profitability surprised, exceeding market expectations”, says analyst Pedro Galdi.

Market agents liked Bradesco’s performance better than that of rival Santander Brasil (Image: Reuters / Ricardo Moraes)

Bradesco set aside 5.588 billion reais for loan losses, up 67.5% year-on-year, but down 37.1% over the previous quarter.

In assessing the Safra Bank, who is more optimistic about actions At Bradesco, the analysis team notes a significant improvement in the allocation of reserves in quarterly comparisons.

“We assumed the prospect of a recovery in economic activity at the beginning of 2021, so in the following year, Bradesco’s provision contributions should be even lower. Such a guideline can still marginally increase the bank’s profits ”, reveal analysts Luis Azevedo and Silvio Doria.


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