Banco Bradesco Earnings: Credit Losses Continue to Improve

No-moat-rated Banco Bradesco reported improved third-quarter results as the bank benefits from good loan growth and improved credit performance, partially offset by net interest margin compression. Net revenue increased 3.5% year over year and 3.7% from last quarter to BRL 30.6 billion. Meanwhile, net income increased 13.1% from last year to BRL 5.2 billion. These results translate to a return on equity of 12.4%. Despite the increase in net income, the bank’s return on equity is still below the firm’s long-term historical average. We will maintain our $2.90 per ADR share fair value estimate for Banco Bradesco, and we see the shares as modestly undervalued at the current price.