Banco Bradesco S.A. (BBD) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 4, 2023 9:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Carlos Firetti

Hello, good morning everyone. Welcome to our Second Quarter 2023 Earnings Video Conference. Thank you very much for your participation. In the opening part of the event, our President, Octavio will present the Bank's results. Then, we will have the question-and-answer session. The presentation and other materials are available for download on our Investor Relations' website. [Operator Instructions]

The presentation will be in Portuguese with simultaneous interpretation into English. Audio language can be selected directly from the window you are watching. You can also choose audio always in Portuguese even when questions are asked in English.

And now I'll turn the floor over to Octavio, who will begin our presentation of results. We'll meet again later in the Q&A section, see you soon.

Octavio de Lazari

Thank you, Firetti. Good day everyone. Thank you for joining us on our earnings video conference. We start our presentation with highlights for the period. Net income for the second quarter of 2023 was R$4.5 billion, a rise of 5.6% versus the previous quarter, within our expectations. As we've stated over the past few quarters, the recovery process will be gradual.

Our Basel ratio posted a 34 bps boost in Tier 1 capital, even with the full constitution of IoC. Market NII improved even further and will continue to progress over the next half year and in 2024. Client NII, however, is impacted by the momentary lower origination and lower risk mix. The bank's performance is pressured by credit provisions expenses.

On the other hand, we've been able to control NPLs with an improvement in the 15 to 90-day index as a result of the adjustments in credit policies that we have made over the last few quarters. New vintages demonstrate an improvement in quality, and this has allowed an initial resumption of origination, primarily in personal loans for middle-income individuals and a good pipeline in the wholesale bank for the second half.

This resumption will continue over the coming quarters, expanding to other credit lines as well as to retail. The Insurance Group, again, saw a growth results in the income. We see strong momentum for the insurance business, contributing positively to the group's performance this year, with a counter-cyclical effect.

We continue with our strategic and efficiency initiatives, the key ones being the reduction of the cost-to-serve in retail, strengthening our high-income operation and the bank's digital transformation. Our primary focus is on serving our 72 million clients even better, placing them at the center of everything we do. Our work, centered on providing excellent service to our clients, is geared towards contributing to their achievements.