The Finance group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Bank of Montreal (BMO) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Finance sector should help us answer this question.Bank of Montreal is a member of the Finance sector. This group includes 869 individual stocks and currently holds a Zacks Sector Rank of #3. The Zacks Sector Rank considers 16 dif ...

Company Overview - Banco Bradesco (BBD) is a financial holding company headquartered in Osasco, with a price change of 59.16% year-to-date [3] - The company currently pays a dividend of $0.03 per share, resulting in a dividend yield of 3.83%, which is higher than the Banks - Foreign industry's yield of 3.33% and the S&P 500's yield of 1.53% [3] Dividend Performance - The annualized dividend of Banco Bradesco is $0.12, reflecting an 11.1% increase from the previous year [4] - Over the past five years, the company has increased its dividend four times, achieving an average annual increase of 9.01% [4] - The current payout ratio is 7%, indicating that the company paid out 7% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - Banco Bradesco is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 at $0.39 per share, representing an 18.18% increase from the previous year [5] Investment Appeal - Dividends are favored by investors for various reasons, including tax advantages and reduced portfolio risk, which can enhance stock investing profits [6] - Larger, established companies like Banco Bradesco are often viewed as better dividend options compared to high-growth firms or tech start-ups that typically do not pay dividends [7] - Banco Bradesco is considered an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Investors interested in Finance stocks should always be looking to find the best-performing companies in the group. Is Banco Bradesco (BBD) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Finance sector should help us answer this question.Banco Bradesco is a member of our Finance group, which includes 870 different companies and currently sits at #6 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measurin ...

Core Insights - The article compares Banco Bradesco (BBD) and HDFC Bank (HDB) to determine which stock offers better value for investors [1][3]. Valuation Metrics - BBD has a forward P/E ratio of 7.49, while HDB has a forward P/E of 22.91, indicating that BBD is significantly cheaper relative to its earnings [5]. - BBD's PEG ratio is 0.43, suggesting it is undervalued considering its expected EPS growth, whereas HDB's PEG ratio is 1.77 [5]. - BBD's P/B ratio stands at 1.05, compared to HDB's P/B of 2.96, further highlighting BBD's relative valuation attractiveness [6]. Analyst Outlook - BBD currently holds a Zacks Rank of 2 (Buy), indicating stronger earnings estimate revision activity compared to HDB, which has a Zacks Rank of 3 (Hold) [3][7]. - The stronger estimate revision activity for BBD suggests an improving analyst outlook, making it a more appealing option for value investors [3][7]. Value Grades - BBD has been assigned a Value grade of B, while HDB has a Value grade of C, reflecting BBD's more favorable valuation metrics [6].

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even though momentum is a popular stock char ...

Core Viewpoint - Investors in the Banks - Foreign sector should consider Banco Bradesco (BBD) and HDFC Bank (HDB) for potential value opportunities [1] Group 1: Zacks Rank and Value Assessment - Banco Bradesco has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision compared to HDFC Bank, which has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank strategy focuses on companies with positive earnings estimate revisions, while the Style Scores system evaluates companies based on specific traits [2] Group 2: Valuation Metrics - BBD has a forward P/E ratio of 7.10, significantly lower than HDB's forward P/E of 21.77, suggesting BBD may be undervalued [5] - BBD's PEG ratio is 0.40, while HDB's PEG ratio is 1.68, indicating BBD's expected EPS growth is more favorable relative to its valuation [5] - BBD's P/B ratio is 0.99, compared to HDB's P/B of 2.81, further supporting BBD's position as a more attractive value option [6] Group 3: Overall Value Grades - BBD has a Value grade of B, while HDB has a Value grade of C, highlighting BBD's superior valuation metrics and earnings outlook [6]

I am raising my recommendation from Hold to Buy on Bradesco shares (NYSE: BBD ) after the Q1 2025 earnings release. This article is a continuation of my introductory coverage article published on May 23, 2024.More than 5 years of experience in equity analysis in LatAm. We provide our clients with in-depth research and insights to help them make informed investment decisions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to init ...

[Key Information](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) [Risk Factors](index=6&type=section&id=3.D.%20Risk%20Factors) The company faces diverse risks, including macroeconomic instability in Brazil, industry-specific challenges like credit and market risks, operational failures, regulatory changes, and risks related to its shares and ADSs [Risks relating to Brazil](index=10&type=section&id=Risks%20relating%20to%20Brazil) The company's performance is significantly affected by Brazil's macroeconomic environment, including government influence, high inflation, interest rate volatility, currency depreciation, and geopolitical conflicts - The Brazilian government's influence over the economy, coupled with political and economic uncertainties, directly impacts the company's business and the value of its securities[36](index=36&type=chunk)[38](index=38&type=chunk) Key Brazilian Economic Indicators (2022-2024) | Indicator | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Inflation (IPCA) | 4.83% | 4.62% | 5.79% | | Real/U.S. Dollar Depreciation | 27.9% | (7.2)% | (6.5)% | | Year-End Exchange Rate (R$/US$) | 6.19 | 4.84 | 5.22 | | Year-End SELIC Rate | 12.25% | 11.75% | 13.75% | - The Brazilian government enacted Constitutional Amendment No. 132/23 for tax reform, which will replace five sales taxes with a dual VAT system (CBS and IBS); the impact on the company's operations cannot yet be estimated[56](index=56&type=chunk)[57](index=57&type=chunk) - Geopolitical conflicts, such as those in Eastern Europe and the Middle East, create widespread uncertainty, impacting commodity prices, global inflation, and risk appetite, which could negatively affect the Brazilian economy and the company's operations[73](index=73&type=chunk)[74](index=74&type=chunk) [Risks relating to the Company and the Brazilian Banking Industry](index=15&type=section&id=Risks%20relating%20to%20us%20and%20the%20Brazilian%20banking%20industry) The company faces industry-specific risks including credit risk (with a **4.0%** delinquency ratio in 2024), market risk from fair value investments, liquidity challenges, operational risks like cybersecurity, evolving regulatory compliance, and intensifying competition from fintechs - The delinquency ratio for loans overdue more than 90 days decreased to **4.0%** as of December 31, 2024, compared to **5.1%** as of December 31, 2023[84](index=84&type=chunk) - As of December 31, 2024, investments classified as "fair value through profit or loss" and "fair value through other comprehensive income" represented **25.5%** of the company's assets, exposing it to significant market volatility[80](index=80&type=chunk) - Compulsory deposits with the Central Bank of Brazil amounted to **R$109.8 billion** as of December 31, 2024; changes in these requirements can reduce operating margins[101](index=101&type=chunk) - The company faces increasing competition from other large banks, both public and private, as well as new players like fintechs and bigtechs, intensified by the implementation of Open Finance in Brazil[160](index=160&type=chunk) - Failure to adequately protect against cybersecurity risks could materially affect the company; in 2022 and 2023, subsidiaries experienced two significant security incidents, though none occurred in 2024[166](index=166&type=chunk)[174](index=174&type=chunk) - The company is subject to legal proceedings regarding inflationary adjustments from economic plans of the 1980s and 1990s; an agreement was reached with savers' representatives, and its term was extended for another 30 months in December 2022[150](index=150&type=chunk)[155](index=155&type=chunk) [Risks relating to Shares and ADSs](index=33&type=section&id=Risks%20relating%20to%20our%20shares%2C%20preferred%20share%20ADSs%20and%20common%20share%20ADSs) Investors in the company's shares and ADSs face risks including limited voting rights for ADS and preferred share holders, volatility and lower liquidity in the Brazilian securities market, and potential suspension of dividend payments - Holders of ADSs will only receive voting instructions if the company authorizes the depositary bank to do so, potentially limiting their ability to vote at shareholder meetings[193](index=193&type=chunk)[194](index=194&type=chunk) - Under Brazilian Corporate Law, preferred shareholders have limited voting rights, which similarly restricts the voting ability of preferred share ADS holders[195](index=195&type=chunk) - The Brazilian securities market is substantially smaller, less liquid, and more volatile than major markets, which may limit an investor's ability to sell shares at a desired price and time[197](index=197&type=chunk) - Dividend payments to ADS holders are dependent on the company paying dividends on its common and preferred shares; the Board may suspend mandatory dividends if payment is deemed incompatible with the company's financial condition[199](index=199&type=chunk)[200](index=200&type=chunk) [Information on the Company](index=36&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) [History and Development](index=36&type=section&id=4.A.%20History%20and%20Development%20of%20the%20Company) Founded in 1943, Bradesco has evolved into a leading Brazilian multi-service bank, strategically expanding its digital, healthcare, and financial services through recent acquisitions and partnerships - In 2024, the company engaged in several strategic partnerships and acquisitions to enhance its market position, particularly in healthcare and specialized financing[217](index=217&type=chunk)[219](index=219&type=chunk)[225](index=225&type=chunk) - Key Strategic Transactions in 2022-2024 - **Banco Digio S.A.:** Completed the acquisition of the remaining **49.99%** stake in February 2022, making Digio a wholly-owned subsidiary focused on digital financial services[214](index=214&type=chunk) - **Tivio Capital:** Acquired a **51%** stake in the investment management firm (previously BV DTVM) in February 2023[216](index=216&type=chunk) - **Hospital Santa Lúcia:** Acquired a **20%** stake in the largest hospital network in Brazil's Midwest region in September 2024[217](index=217&type=chunk) - **Hospital Mater Dei:** Entered an investment agreement to develop and operate a new hospital in São Paulo, holding a **51%** stake in the SPE[218](index=218&type=chunk) - **Atlântica and Rede D'Or Partnership:** Formed a new hospital network, Atlântica D'Or, with Rede D'Or, holding a **49.99%** stake, to develop hospitals in several regions[219](index=219&type=chunk)[221](index=221&type=chunk) - **Cielo S.A.:** Completed a tender offer in September 2024 to take the payment solutions company private, increasing its total ownership to **50.72%**[222](index=222&type=chunk)[421](index=421&type=chunk) - **Bradesco Asset (BRAM):** Merged its asset management subsidiary BRAM into the parent company in July 2024 to optimize structure[223](index=223&type=chunk) - **John Deere Bank:** Entered into a strategic partnership to acquire a **50%** stake in Banco John Deere S.A., strengthening its position in agribusiness financing, completed in February 2025[225](index=225&type=chunk) [Business Overview](index=39&type=section&id=4.B.%20Business%20Overview) Bradesco operates in Banking and Insurance, Pension Plans, and Capitalization Bonds segments, serving **73.2 million** clients through a strategic plan focused on operational efficiency, customer experience, and digital capabilities, leveraging an extensive distribution network - In February 2024, Bradesco announced a new strategic plan to streamline its operating model, creating specialized Business Units (Wholesale, Wealth, Retail, Digital, etc.) to enhance agility and customer-centricity[230](index=230&type=chunk) - The company's sustainability strategy focuses on sustainable business, climate change, and financial citizenship; in 2024, it surpassed its **R$250 billion** target for financing socio-environmental activities and was recognized in the Dow Jones Sustainability Index for the 19th consecutive time[243](index=243&type=chunk)[261](index=261&type=chunk)[269](index=269&type=chunk) Revenue by Business Segment (R$ in thousands) | Segment | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Banking** | | | | | Interest and similar income | 101,599,850 | 101,912,948 | 100,297,936 | | Fee and commission income | 36,213,830 | 34,269,254 | 33,802,362 | | **Insurance, Pension Plans & Capitalization** | | | | | Insurance Income | 121,003,371 | 106,546,307 | 95,343,634 | | Fee and commission income | 1,923,437 | 1,164,685 | 1,701,005 | - As of December 31, 2024, the bank served **73.2 million** clients, comprising **36.4 million** individuals and **1.8 million** companies with checking accounts, plus **66.6 million** savings accounts[375](index=375&type=chunk)[400](index=400&type=chunk) - Digital channels accounted for **99%** of all transactions in 2024, with mobile and internet banking representing **95%** of this total; the bank has **27.8 million** active individual mobile app users[514](index=514&type=chunk)[515](index=515&type=chunk) [Competition](index=90&type=section&id=4.B.60%20Competition) Bradesco operates in a highly competitive Brazilian financial market, facing strong competition from large banks and growing fintechs, intensified by Open Finance, while maintaining significant market shares in key segments Market Share of Key Products (2024) | Product/Service | Market Share (%) | Source | | :--- | :--- | :--- | | Savings Deposits | 12.5% | Central Bank of Brazil | | Loans (Total) | 10.2% | Central Bank of Brazil | | Payroll-Deductible Loans | 14.4% | Central Bank of Brazil | | Housing Loans | 10.8% | Central Bank of Brazil | | Insurance Premiums & Contributions | 22.9% | SUSEP/ANS/FENAPREVI | | Investment Funds & Managed Portfolios | 16.7% | ANBIMA | - The Brazilian financial market is highly concentrated, with the five largest institutions holding **65.5%** of deposits as of September 2024[555](index=555&type=chunk) - Competition is intensifying due to the growth of fintechs and regulatory initiatives like Open Finance, which aims to stimulate innovation and competition by standardizing data sharing between institutions[551](index=551&type=chunk)[160](index=160&type=chunk) [Regulation and Supervision](index=94&type=section&id=4.B.70%20Regulation%20and%20Supervision) Bradesco's operations are extensively regulated by Brazilian authorities, covering capital adequacy, compulsory deposits, lending limits, AML/anti-corruption, and recent developments like Open Finance and evolving tax legislation - The company is subject to capital adequacy standards based on Basel III, requiring minimum ratios for Common Equity, Tier I Capital, and Total Capital; as of December 31, 2024, the bank was in compliance with all requirements[577](index=577&type=chunk)[916](index=916&type=chunk)[921](index=921&type=chunk) - Financial institutions must maintain compulsory deposits with the Central Bank; as of December 2024, the requirements were **21.0%** for demand deposits and **20.0%** for savings and time deposits[595](index=595&type=chunk)[596](index=596&type=chunk) - The implementation of Open Finance in Brazil, mandated by the Central Bank, is a key regulatory development designed to foster innovation and competition by enabling standardized data sharing among financial institutions[551](index=551&type=chunk)[552](index=552&type=chunk) - The company must comply with stringent anti-money laundering (AML) and anti-corruption laws, including Law No. 9,613/98 and Law No. 12,846/13, which require robust internal controls, client due diligence, and reporting of suspicious transactions to COAF[660](index=660&type=chunk)[672](index=672&type=chunk) [Operating and Financial Review and Prospects](index=134&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Operating Results](index=134&type=section&id=5.A.%20Operating%20Results) In 2024, Bradesco's net income increased by **21.0%** to **R$17.5 billion**, driven by higher net interest income and insurance profits, and reduced loan loss expenses, despite a **R$2.25 billion** net loss on fair value financial assets Consolidated Income Statement Highlights (R$ in thousands) | Line Item | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | 67,454,564 | 55,082,419 | 22.5% | | Fee and commission income | 28,336,487 | 26,956,763 | 5.1% | | Gross profit from insurance and pension plans | 8,942,260 | 5,235,711 | 70.8% | | Expected loss on loans and advances | (26,636,777) | (30,176,989) | (11.7)% | | **Net income for the year** | **17,542,153** | **14,502,765** | **21.0%** | - Net interest income increased by **22.5%** to **R$67.5 billion** in 2024, primarily due to a **R$12.1 billion** (**7.7%**) reduction in interest expenses, reflecting lower average interest rates on funding liabilities like time deposits and insurance contracts[815](index=815&type=chunk)[831](index=831&type=chunk) - Expenses for expected loss on loans and advances decreased by **11.7%** to **R$26.6 billion** in 2024, driven by an improved credit portfolio profile and more efficient collection processes[835](index=835&type=chunk) - The company experienced a net loss of **R$2.25 billion** on financial assets at fair value through profit or loss, compared to a **R$10.9 billion** gain in 2023, mainly due to lower returns on investments in government securities[833](index=833&type=chunk) [Liquidity and Capital Resources](index=149&type=section&id=5.B.%20Liquidity%20and%20Capital%20Resources) Bradesco maintains robust liquidity and capital, with LCR at **141.1%** and NSFR at **121.2%**, primarily funded by **R$648.8 billion** in customer deposits, and capital ratios well above Basel III minimums, with **R$6.25 billion** in 2024 capital expenditures Key Liquidity and Capital Ratios (as of Dec 31, 2024) | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Liquidity Coverage Ratio (LCR) | 141.1% | 191.6% | | Net Stable Funding Ratio (NSFR) | 121.2% | 126.7% | | Tier 1 Capital Ratio | 12.4% | 13.2% | | Total Basel Ratio | 14.8% | 15.8% | - The bank's principal funding sources are customer deposits (**R$648.8 billion**) and securities sold under repurchase agreements (**R$283.0 billion**) as of year-end 2024[882](index=882&type=chunk)[887](index=887&type=chunk)[891](index=891&type=chunk) - Net cash provided by operating activities was **R$50.2 billion** in 2024, a significant improvement from a net use of **R$177.6 million** in 2023, mainly due to changes in the portfolio of financial assets at fair value through profit or loss[904](index=904&type=chunk)[905](index=905&type=chunk) Capital Expenditures (R$ in thousands) | Category | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Infrastructure | 799,913 | 1,071,481 | 752,394 | | Information Technology | 5,452,546 | 5,223,193 | 5,992,979 | | **Total** | **6,252,459** | **6,294,674** | **6,745,373** | [Directors, Senior Management and Employees](index=164&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [Board of Directors and Board of Executive Officers](index=164&type=section&id=6.A.%20Board%20of%20Directors%20and%20Board%20of%20Executive%20Officers) The company's governance is structured with an **11-member** Board of Directors, including four independent members, and a **21-member** Board of Executive Officers, all subject to Central Bank approval - The Board of Directors is composed of **11** members, with **four** being independent; the Chairman is Luiz Carlos Trabuco Cappi[954](index=954&type=chunk)[957](index=957&type=chunk)[960](index=960&type=chunk) - The Board of Executive Officers consists of **21** members, led by Chief Executive Officer Marcelo de Araújo Noronha, and is responsible for the company's management and operations[956](index=956&type=chunk)[1007](index=1007&type=chunk) - The election of all members of the Board of Directors and the Board of Executive Officers requires approval from the Central Bank of Brazil[957](index=957&type=chunk) [Compensation](index=182&type=section&id=6.B.%20Compensation) In 2024, total compensation for directors and executive officers was **R$611.9 million**, with **50%** of variable pay deferred in shares, and **R$547.8 million** contributed to pension plans - In 2024, the total compensation for directors and executive officers amounted to **R$611.9 million**[1099](index=1099&type=chunk) - The company's compensation policy requires that **50%** of net variable compensation be deferred and paid in restricted shares over three years[1099](index=1099&type=chunk) - Contributions to pension plans for directors and officers totaled **R$547.8 million** in 2024[1100](index=1100&type=chunk) [Employees](index=186&type=section&id=6.D.%20Employees) As of December 31, 2024, Bradesco had **84,022** employees, with a diverse workforce (**50%** women, **29%** Black), investing over **R$141 million** in employee education and training Employee Headcount | Year | Total Employees | | :--- | :--- | | 2024 | 84,022 | | 2023 | 86,222 | | 2022 | 88,381 | - The company promotes diversity and inclusion, with a workforce comprising **50%** women and **29%** Black individuals as of year-end 2024[1130](index=1130&type=chunk)[1131](index=1131&type=chunk) - In 2024, over **R$141 million** was invested in employee education through UniBrad, which saw more than **1.5 million** participants in its training programs[1139](index=1139&type=chunk) [Major Shareholders and Related Party Transactions](index=189&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) [Major Shareholders](index=189&type=section&id=7.A.%20Major%20Shareholders) As of December 31, 2024, Bradesco's share capital includes **5.31 billion** common and **5.29 billion** preferred shares, controlled by Cidade de Deus Participações (**46.08%** voting shares), with Fundação Bradesco holding **31.63%** of total capital Major Shareholder Ownership (as of Dec 31, 2024) | Shareholder | % of Common Shares | % of Total Shares | | :--- | :--- | :--- | | Cidade de Deus Participações | 46.08% | 23.09% | | Fundação Bradesco | 17.23% | 8.63% | | NCF Participações | 8.52% | 5.39% | - Fundação Bradesco, a non-profit institution focused on education, holds a total of **31.63%** of the company's capital through direct and indirect ownership[1156](index=1156&type=chunk) - As of December 31, 2024, foreign investors held **11.91%** of common shares and **58.11%** of preferred shares[1167](index=1167&type=chunk) [Financial Information](index=192&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) [Legal and Regulatory Proceedings](index=193&type=section&id=8.A.20%20Legal%20proceedings) As of December 31, 2024, the company provisioned **R$17.9 billion** for probable legal losses across civil, tax, and labor claims, with additional **R$46.9 billion** in possible tax contingent liabilities Provisions for Probable Losses (as of Dec 31, 2024) | Category | Provisioned Amount (R$ million) | % of Total | | :--- | :--- | :--- | | Civil Matters | 7,827.3 | 43.7% | | Tax and Social Security | 7,457.2 | 41.7% | | Labor Claims | 2,613.4 | 14.6% | | **Total** | **17,897.8** | **100.0%** | - Contingent liabilities classified with a possible risk of loss, which are not provisioned, amounted to **R$46.9 billion** for tax matters and **R$11.6 billion** for civil claims[1174](index=1174&type=chunk)[1818](index=1818&type=chunk) - A criminal proceeding from Operation Zealots against two former executive officers was concluded with their acquittal, which became final and unappealable on January 31, 2025[1172](index=1172&type=chunk) [Market Risk Disclosures](index=219&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) [Market Risk Management](index=219&type=section&id=Market%20Risk%20Management) Bradesco manages market risk from interest rate and foreign exchange fluctuations using VaR, stress testing, and sensitivity analysis, with a maximum one-day VaR of **R$44.1 million** in 2024 and a potential **R$13.7 billion** loss from a **50%** adverse shock Sensitivity Analysis of Trading and Banking Portfolios (as of Dec 31, 2024, R$ in thousands) | Scenario | Impact on Net Income | | :--- | :--- | | 1 bp shock (interest) / 1% shock (prices) | (60,070) | | 25% shock (prices and rates) | (7,221,066) | | 50% shock (prices and rates) | (13,738,128) | - The Value at Risk (VaR) for the trading portfolio (1-day horizon, 99% confidence) ranged from a minimum of **R$7.8 million** to a maximum of **R$44.1 million** during 2024[1358](index=1358&type=chunk) - The VaR model's adherence is monitored via backtesting; in 2024, the daily results exceeded the **99%** confidence level VaR twice in the hypothetical view and three times in the effective view, which is considered within acceptable parameters[1357](index=1357&type=chunk) [Controls and Procedures](index=224&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) [Management's Assessment of Internal Controls](index=224&type=section&id=Management%27s%20Assessment%20of%20Internal%20Controls) As of December 31, 2024, Bradesco's management concluded that both disclosure controls and internal control over financial reporting were effective, a conclusion concurred with by KPMG Auditores Independentes Ltda - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective at a reasonable assurance level[1370](index=1370&type=chunk)[1371](index=1371&type=chunk) - Based on the COSO 2013 framework, management assessed its internal control over financial reporting as effective as of December 31, 2024[1375](index=1375&type=chunk) - The independent registered public accounting firm, KPMG Auditores Independentes Ltda., audited and issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[1377](index=1377&type=chunk)[1378](index=1378&type=chunk) [Corporate Governance and Other Matters](index=225&type=section&id=ITEM%2016.%20%5BRESERVED%5D) [Principal Accountant Fees and Services](index=226&type=section&id=16.C.%20Principal%20Accountant%20Fees%20and%20Services) In fiscal year 2024, total fees paid to KPMG Auditores Independentes Ltda. for audit, audit-related, and other services amounted to **R$73.8 million** Accountant Fees (R$ in thousands) | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit fees | 69,548 | 63,298 | | Audit-related fees | 802 | 725 | | Other fees | 3,479 | 1,761 | | **Total fees** | **73,829** | **65,784** | [Share Repurchase Program](index=227&type=section&id=16.E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) The company's share repurchase program, active until November 2025, authorized acquiring up to **53.4 million** common and **53.2 million** preferred shares, with **23.8 million** common and **21.3 million** preferred shares repurchased in 2024 Share Repurchases in 2024 | Share Class | Total Shares Repurchased | | :--- | :--- | | Common Shares | 23,843,100 | | Preferred Shares | 21,344,200 | [Cybersecurity](index=231&type=section&id=16.K.%20Cybersecurity) Bradesco prioritizes cybersecurity with a multi-layered framework for threat identification, protection, detection, and response, governed by dedicated departments and committees adhering to best practices and regulations like CMN Resolution No. 4,893/21 - The company's cybersecurity strategy is built on a framework of identifying threats, protecting against attacks, detecting incidents, and ensuring effective response and recovery[1402](index=1402&type=chunk)[1413](index=1413&type=chunk) - A multi-layered security infrastructure is in place, utilizing technologies like WAAP, DDoS prevention, firewalls, and Endpoint Detection and Response (EDR) to protect internal and external perimeters[1404](index=1404&type=chunk) - Cybersecurity governance is managed by the Corporate Security Department and the IT Infrastructure Department (DITI), with oversight from various committees, and follows a three-lines-of-defense model to ensure integrated risk control[1411](index=1411&type=chunk)[1414](index=1414&type=chunk)[1432](index=1432&type=chunk) - The company adheres to Brazilian regulations, including CMN Resolution No. 4,893/21, which sets requirements for cybersecurity policies and the hiring of cloud computing and data storage services[1409](index=1409&type=chunk) [Financial Statements](index=240&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) [Consolidated Financial Statements](index=243&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for 2024 reflect a strong financial position with total assets growing to **R$2.07 trillion** and net income increasing **21.0%** to **R$17.54 billion**, driven by higher net interest income and insurance profits Consolidated Statement of Financial Position (R$ in thousands) | Item | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total assets | 2,069,484,362 | 1,927,523,249 | | Total liabilities | 1,900,541,870 | 1,760,509,125 | | Total equity | 168,942,492 | 167,014,124 | Consolidated Statement of Income (R$ in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net interest income | 67,454,564 | 55,082,419 | | Income before income taxes | 16,900,514 | 10,208,351 | | Net income | 17,542,153 | 14,502,765 | | - Attributable to shareholders of the parent | 17,252,900 | 14,251,329 | Earnings Per Share (in R$) | Share Class | 2024 | 2023 | | :--- | :--- | :--- | | Common Share | 1.55 | 1.27 | | Preferred Share | 1.71 | 1.41 | Consolidated Statement of Cash Flows (R$ in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from operating activities | 50,228,485 | (177,628) | | Net cash from investing activities | (5,013,549) | 83,606,232 | | Net cash from financing activities | (23,676,490) | (23,062,770) | | Net increase in cash and cash equivalents | 21,538,446 | 60,365,834 |

Group 1 - Banco Bradesco reported 4Q24 results that show a lack of positive performance compared to peers, particularly in loan growth and net interest income (NII) [1] - The bank's loan growth continues to lag behind its competitors, with NII growth not keeping pace with loan growth [1] - Expenses are increasing at a rate higher than both NII and fees, indicating potential operational inefficiencies [1] Group 2 - The analysis emphasizes a long-only investment strategy, focusing on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The approach suggests that only a small fraction of companies should be considered for buying at any given time, with most recommendations being holds [1]

Financial Data and Key Metrics Changes - The net income for Q4 2024 was BRL 5.4 billion, representing a growth of 37%, while the total net income for 2024 reached BRL 19.6 billion, indicating a 20% growth [9][71] - Total revenue exceeded BRL 32 billion, growing by 7.9% year-on-year, with net interest income (NII) increasing by 5.4% year-on-year [15][77] - The total loan portfolio grew to over BRL 980 billion, marking an almost 12% year-on-year increase [17][79] Business Line Data and Key Metrics Changes - Insurance sales increased by 49%, and the assets under management (AUM) reached BRL 122 billion [12][74] - Fee and commission income grew by 7.9% year-on-year, contributing to the overall revenue growth [15][31] - The payroll loan segment grew by 5.8%, with Bradesco holding a 14.3% market share in payroll deductible loans [20][83] Market Data and Key Metrics Changes - The customer base expanded by over 2 million clients, with 99% of transactions occurring through digital channels [11][73] - The loan portfolio for micro, small, and medium-sized companies grew by 28% during the period [18][80] - The insurance business reported a net income of BRL 2.5 billion for the year, with a return on average equity (ROAE) of 21% [38][100] Company Strategy and Development Direction - The company is focusing on a cautious growth strategy for 2025, considering the macroeconomic scenario while remaining optimistic about its operational performance [4][62] - A transformation plan is underway, emphasizing efficiency gains and increased activities across all business lines [7][69] - The company is investing in technology modernization and enterprise agility, with a dedicated team of over 10,000 people [54][116] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, indicating a potential impact on growth due to monetary policy changes [62][64] - The company is committed to controlling its risk appetite and maintaining a high-quality loan portfolio [26][89] - Despite a cautious outlook, management remains confident in the bank's ability to grow profitability and revenues [65][66] Other Important Information - The company completed the acquisition of a 50% stake in John Deere and closed the capital of Cielo, enhancing its market position [14][75] - A share buyback program is in place, with approximately 50 million shares repurchased [104] - The company is actively working on integrating generative AI into its operations to enhance customer experience and operational efficiency [49][55] Q&A Session Summary Question: What is the outlook for the company's growth in 2025? - The company is working with two scenarios for 2025: a base scenario of 70% and a more cautious scenario of 30%, reflecting the current economic conditions [62][64] Question: How is the company managing its risk appetite? - The company is continuously regulating its risk appetite and focusing on maintaining a high-quality loan portfolio [26][89] Question: What are the key drivers of revenue growth? - Revenue growth is driven by increased activity levels across all business lines, with significant contributions from fee and commission income and insurance sales [31][15]