Profit Surge in Q1 2025 Lifts Bradesco Shares 14% but Deposit Drain Tests Recovery

According to Bradesco’s securities filings, the bank reported recurring net income of R$5.86 billion ($977 million) for Q1 2025, a 39% annual surge.

Total revenue climbed 15% to R$32.3 billion ($5.38 billion), fueled by net interest income of R$17.23 billion ($2.87 billion) and fee income of R$9.77 billion ($1.63 billion). Its insurance unit contributed R$2.40 billion ($400 million), with a 22.4% return on equity.

The lender expanded its loan portfolio by 13% to R$1.005 trillion ($168 billion), led by retail and small business segments. Mortgage and personal credit grew faster than corporate lending.

Asset quality held steady, with 90-day delinquencies at 3%, while provisions reached R$7.64 billion ($1.27 billion). Operating expenses fell 9% to R$15.01 billion ($2.50 billion), aiding a 14.4% return on equity.

Shares surged 14% intraday as markets welcomed CEO Marcelo Noronha’s restructuring progress. Since late 2023, he has slashed management layers, reassessed 1,000 branches, and prioritized digital tools like AI-driven credit analysis.

Bradesco Faces Challenges Amid Share Buyback and Margin Growth

The bank renewed a share buyback program for 106.58 million shares through 2026. Challenges persist despite brighter margins. Demand deposits plummeted 26% quarterly, pressuring funding costs as clients shifted to higher-yield products.

The Tier 1 capital ratio rose to 11.1%, but profitability remains below pre-crisis levels. Analysts warn sustained recovery hinges on diversifying revenue beyond interest income and reversing deposit outflows.

Bradesco retained its 2025 guidance, targeting R$22.2 billion ($3.70 billion) net profit, though Q1 trends suggest upper-range outcomes. Noronha’s overhaul, aided by McKinsey, faces scrutiny over execution risks in Brazil’s volatile economy.

The central bank’s 14.75% benchmark rate complicates credit expansion despite a 1.8% GDP growth forecast. The bank’s tech investments aim to counter digital rivals, but branch closures and workforce adjustments risk customer attrition.

For now, markets reward improved cost control and capital buffers. Yet with shares still down 6% since Noronha’s appointment, skepticism lingers over whether this rebound marks a lasting turnaround or another false dawn.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.