Bradesco(US:BBD)2024-05-03 22:52Financial Data and Key Metrics Changes - The company's recurring net income for Q1 2024 was BRL 4.2 billion, flat compared to the previous quarter but 46% higher than Q4 2023 [4] - The loan portfolio reached almost BRL 890 billion, growing 1.2% year-on-year and 1.4% quarter-on-quarter, indicating a resumption of growth after a decline in the previous two quarters [6][7] - Operating expenses grew by 4.4%, which is below inflation, indicating effective cost control [6][16] Business Line Data and Key Metrics Changes - The individual loan portfolio grew by 2% year-on-year and 1.9% quarter-on-quarter, with payroll loans increasing by 4% and mortgage loans by 5.8% year-on-year [8][9] - In the SME segment, there was a 2.3% growth quarter-on-quarter, showing improved traction [9] - The insurance business reported a net income of €2 billion, a 10% increase, with significant growth in premium income and technical provisions [18] Market Data and Key Metrics Changes - The company gained market share in February and March compared to January, indicating improved performance in the competitive landscape [12][39] - The Central Bank's more restrictive policies are expected to impact funding costs, but the company remains optimistic about its treasury position [41][42] Company Strategy and Development Direction - The company is focused on a transformation plan aimed at becoming a more agile and digital bank, with over 800 people engaged in 2,600 initiatives [36] - There is a strong emphasis on improving credit quality and risk management through machine learning and new credit policies [44][45] - The company plans to expand its footprint with the opening of 122 branches dedicated to companies, enhancing service delivery [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for net interest income (NII) through better origination and improved margins [33][39] - The outlook for the market is positive, with expectations of declining interest rates benefiting the company's treasury position [42] - The company is committed to maintaining a conservative approach to provisioning while aiming for growth in higher-margin segments [55][60] Other Important Information - The company has made significant changes in its credit policies and processes to enhance agility and improve customer experience [46] - The digital transformation is a key focus, with 98% of transactions conducted through digital channels [22][23] Q&A Session Summary Question: What is different in the transformation plan compared to the original plan? - The transformation plan has been ratified with more visibility and engagement, leading to a more agile and digital bank [36][37] Question: How do you see the three levers of origination, margin, and provisioning performing throughout the year? - The company expects improvements in all three areas, with a focus on growing the loan portfolio and managing delinquency effectively [39] Question: How does the more restrictive Central Bank affect funding and market NII? - The company does not anticipate major changes in market NII due to the Central Bank's policies, viewing the situation as beneficial for their treasury position [41][42] Question: What adjustments have been made to credit processes and risk management? - The company has implemented new credit policies and enhanced modeling using machine learning to improve risk management [44][45] Question: How does the coverage ratio compare to peers, and what is the outlook for capital? - The coverage ratio is cyclical and currently adequate, with no anticipated changes in capital throughout the year [55][56]