Banco Bradesco Earnings: Weak Net Interest Income and High Credit Losses Pressure Results

No-moat-rated Banco Bradesco reported weak second-quarter results as strong performance from its insurance business was offset by lower net interest income and higher credit costs in its lending arm. Net revenue decreased 16.5% from last year to BRL 19.8 billion. Recurring net income decreased 35.8% from last year but increased 5.6% from last quarter, to BRL 4.5 billion. This translates to a return on average equity of 11.1%, below the bank's historical average. As we incorporate these results, we do not expect to materially alter our fair value estimate of $3.70 per ADR share.