Banco Bradesco profit down, 2022 outlook positive -Breaking
SAO PAULO, Brazil – Banco Bradesco (Reuters), Tuesday reported fourth quarter net income that was slightly lower than analysts expected. However, it indicated a positive outlook for 2022 despite the dim economic growth prospects for Latin America.
Bradesco’s recurring net revenue, which excludes one off items, was at 6.613 trillion reais ($1.26billion), less than the 6.916 billion consensus by Refinitiv analysts and up 2.8% over a previous year, due to higher operating costs.
The return on equity stood at 17.5%. This was 2.5 percentage points lower than the quarter before.
Bradesco stated that despite Brazil’s difficult economic climate in 2022 Bradesco believes its loan portfolio will continue to grow by at least double the rate.
Bradesco expects that the economy will slow this year and even recession. However, its credit portfolio is expected to grow between 10%-14% in 2022. That’s below what it saw last year. The net interest income of clients should grow between 8% to 12%.
Bradesco stated that Brazil’s inflationary rise has impacted consumers’ income and his loan-loss provisions will likely be between 15 billion and 19 billion Brazilian Reals, which is 26.6% higher than the previous year.
The bank’s fees income is increasing despite fierce competition from fintechs.
Bradesco’s insurance business is expected to grow its 2022 profits, with the bank predicting that it will see an increase in insurance revenues between 18%-18%.
Costs will rise between 3% to 7% due to inflation, while they were 1.1% in 2021.
While inflation was at double-digit levels in Brazil, pushing up wages, operating costs for the bank rose 12.1% from the previous year’s quarter.
The amount of cash set aside to pay off bad loans decreased 6.2%, reaching 4.283 million reais. However, the 90-day default ratio of the bank rose 0.2% to 2.8% during the quarter.
The quarter saw a 5.1% increase in Bradesco’s loan portfolio, driven mainly by consumer lending. The total of 2021 saw a 18.3% increase.
Inflation income (a measure of the earnings on loans and minus deposits costs) rose by 1.8% to 16.96 Billion reais.
($1 = 5.2593 reais)
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