Banco Bradesco's Profitability Is Recovering but 2027 Could Bring New Challenges
Banco Bradesco is seeking to complete its recovery from a period of weak performance. Credit costs rose industrywide in 2023, but the bank was a notable underperformer relative to its peers, with its more than 90-day nonperforming loan ratio reaching a peak of 5.7% in June 2023. High credit costs combined with poor loan growth and net interest margin compression led to a dramatic decrease in earnings. Banco Bradesco's results have been recovering since then, but consumer leverage in Brazil is rising uncomfortably fast and the bank will need to prove that its operational issues have been solved before our confidence in the firm is restored.
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