Banco Bradesco Reports Mixed Results as Impressive Loan Growth Is Offset by High Expenses

No-moat Banco Bradesco reported weak fourth-quarter earnings as good loan growth was offset by signs of inflationary pressure on the bank’s cost structure and poor performance in its market portfolio. Recurring net income during the quarter decreased 2.8% year over year and 2.3% sequentially to BRL 6.6 billion. Excluding provisions for credit losses, the bank's revenue grew 3.1% from the prior year’s quarter and these results translate to a return on average equity of 18.1% in the fourth quarter. As we incorporate these results, we will maintain our fair value estimate of $4.20 per ADR share.