It seems likely that we will look back on 2018 as the year that Bradesco finally turned itself around. The bank has long been outgunned across financial metrics by its larger competitor Itaú, but in recent quarters has also been surpassed by a resurgent Santander Brasil – at least in the crucial return on equity ratio.
But Bradesco’s management and analysts think this relegation should be temporary. The bank’s scale and, more importantly, its mix of businesses leave it positioned to outperform its competitors in 2019 if the Brazilian economy performs as positively as the consensus expects.
Third-quarter 2018 results back up this optimism. The bank’s earnings grew 6% during the quarter and 14% year on year, which was the strongest bottom line expansion among the large banks.
Following the announcement of the results, Bradesco’s president, Octavio de Lazari, predicted further growth next year.
“We have the appetite to continue to grow our credit portfolio and to grow a lot,” he said – though he declined to give any specific forecasts for either credit or earnings growth in 2019.
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| Octavio de Lazari |
Perhaps more importantly, the bank also had the best net interest margin versus non-performing loan performance ratio in the market, with core net interest income increasing by 4% while NPLs (90 days) fell by 30 basis points.