Brazil’s Bradesco quarterly profit drops 23%, lending outlook deteriorates

SAO PAULO, Nov 8 (Reuters) – Brazilian lender Banco Bradesco SA (BBDC4.SA) on Tuesday reported a 22.8% drop in recurring net profit in the third quarter and raised its earmarked funds forecast which may be required to cover bad debts.

Bradesco’s recurring net profit totaled 5.22 billion reais ($1.01 billion), which was lower than the Refinitiv consensus estimate of 6.76 billion reais.

The lender also raised its expectations for the amount of money it will set aside for non-performing loans this year. It now expects to hold provisions in the range of R$25.5 billion to R$27.5 billion, as high interest rates have led to deterioration in asset quality.

During the July-September period, Bradesco set aside 7.27 billion reais, more than double the amount from a year ago.

In September, Brazil’s central bank halted an aggressive monetary tightening cycle, leaving its main Selic interest rate at 13.75% after 12 consecutive hikes. The central bank’s rate-setting committee also left its benchmark rate unchanged in October.

Bradesco said its 90-day default rate was 3.9% at the end of September, up 1.3 percentage points from a year earlier and 0.4 points above the ratio of second trimester.

($1 = 5.1440 reais)

Reporting by Peter Frontini; Editing by David Alire Garcia and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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