BBDC3

Banco Bradesco S.A. (tickers BBDC3 and BBDC4) is one of Brazil’s main private financial institutions, with shares traded on B3. Founded in 1943 as Banco Brasileiro de Descontos S.A., it began as a commercial bank and, from 1948 onward, entered an intense expansion cycle that led it to become the country’s largest private commercial bank by the late 1960s. During the 1970s, it expanded its presence throughout Brazil, reaching both urban and rural markets. In 1988, taking advantage of a regulatory change introduced by the Central Bank, it reorganized itself as a multiple bank, incorporating the mortgage credit company and starting to operate with Commercial and Mortgage Credit portfolios, under the name Bradesco S.A. - Banco Comercial e de Crédito Imobiliário. In 1989, its corporate name was again adjusted to Banco Bradesco S.A., a structure that remains the organizational backbone to this day.

Over the years, Banco Bradesco has consolidated a universal banking business model, offering a wide range of financial products and services to individuals and businesses, including small, medium and large companies. The institution highlights that it is one of the largest banks in Brazil in total assets and that it has the broadest branch and service network among private-sector players in the country, which helps support a diversified client base. The bank operates both in Brazil and abroad, although it does not derive material revenues from its international operations. Its financial intermediation model combines traditional lending and deposit-taking with services such as credit cards, consórcios, insurance, capitalization bonds, leasing, collections, payment processing, pension plans, asset management and securities brokerage.

From an internal organization standpoint, Bradesco structures its operations in two major segments: the banking segment and the insurance, pension and capitalization segment. The banking segment includes financial institutions, holdings that manage financial resources, credit card companies and asset managers, and concentrates most of net revenue. In 2024, the banking segment accounted for 79.2% of net revenue, while insurance, pension and capitalization represented 19.8%. In 2023, this breakdown was 74.7% for banking and 19.9% for insurance, pension and capitalization, with the remainder related to other operations, adjustments and eliminations. This composition shows that, although the group has a strong presence in insurance and pension plans, its core activity remains banking intermediation.

Among its flagship banking products, Bradesco offers a wide range of deposit accounts, including checking accounts for individuals and businesses, the Conta Fácil format that combines checking and savings under a single number and card, specific solutions such as Click Conta for children and young people aged 0 to 17 and University Accounts for undergraduate clients, in addition to checking accounts geared to companies and public entities. In savings, the bank offers remuneration linked to the referential rate (TR) plus interest pegged to the Selic target rate, in line with current regulations. As of December 31, 2024, the bank had 38.2 million checking account holders, of which 36.4 million were individuals and 1.8 million were businesses, and 66.6 million savings accounts, illustrating the scale of the client base attached to BBDC3 and BBDC4 shares traded on B3.

In its loan portfolio, Bradesco operates in several niches, for both individuals and businesses, with products such as working capital, personal loans, payroll-deductible loans, rural credit, mortgage financing, vehicle financing, BNDES/Finame onlending, microcredit, import and export financing and leasing. As of December 31, 2024, the total loan and advances to customers portfolio amounted to R$ 720.2 billion, of which 56.0% to individuals and 44.0% to businesses. Notable items include mortgage loans for the acquisition and construction of residential and commercial properties, with terms of up to 35 years for residential units, and its role as an onlending agent for BNDES funds, with disbursements of R$ 11.4 billion in 2024, 63.8% of which went to micro, small and medium-sized enterprises.

The bank also carries out significant foreign trade financing, supporting exporting and importing clients through foreign currency lines and structures such as Advances on Exchange Contracts (AOCs), export prepayment and programs backed by BNDES-Exim and PROEX. To this end, it maintains an extensive network of correspondent banks abroad, with 806 institutions, 81 of which were providing credit lines or guarantees as of December 31, 2024. In leasing, Bradesco, through Bradesco Leasing, reports market leadership according to ABEL, with a 33.5% share of the sector’s portfolio at present value, and contracts that include trucks, cranes, aircraft, vessels and heavy machinery, underscoring the diversification of its corporate credit activities.

In the insurance, pension and capitalization segment, the group operates through the so-called Grupo Bradesco Seguros, which offers life, personal accident, health, auto, property and casualty, liability insurance, capitalization bonds, private pension plans and reinsurance. Although this segment represents a smaller share of net revenue compared to the banking segment, its relevance to earnings is substantial: in 2024, banking activities accounted for 51.8% of managerial net income, while insurance, pension and capitalization represented 47.5%. This near parity in profit contribution highlights the strategic importance of the insurance arm within the conglomerate, including moves such as the acquisition of 20% of Grupo Santa and the creation of the Atlântica D’Or hospital network, designed to strengthen the insurer’s operations.

Regarding the regulatory environment, Banco Bradesco is subject to the framework of the Brazilian National Financial System, whose cornerstone is Law No. 4,595/64, which created the National Monetary Council (CMN) and the Central Bank of Brazil. The CMN sets guidelines for monetary, credit and capital market policy, while the Central Bank implements these policies, regulates and supervises financial institutions, controls foreign currency flows and sets capital requirements, reserve requirements, concentration limits, leverage and liquidity rules, in line with Basel III standards. The Brazilian Securities and Exchange Commission (CVM), in turn, regulates and oversees the securities market, covering Bradesco’s shares on B3 and requiring transparency through audited financial statements and periodic disclosures. Specific constraints, such as limits on exposure to a single client, rules for related-party transactions, interest caps on payroll-deductible loans and caps on interchange fees in payment schemes, are part of the set of regulations that shape the bank’s activities.

On the ESG agenda, Bradesco states that it publishes an Integrated Report and an ESG Report, which bring together financial and non-financial information, assured by KPMG as independent auditor. These documents are prepared in line with GRI and IIRC methodologies, and also take into account SASB guidelines, the Abrasca Code and transparency requirements associated with indices such as B3’s ISE and the Dow Jones Sustainability Index. The materiality matrix was revised at the end of 2024 and began adopting the concept of double materiality, assessing both the bank’s impacts on society and the environment and the effects of ESG issues on its financial performance. Among the highlighted material topics are innovation and technology, ethics, integrity and transparency, and the management of climate-related risks and opportunities, with monitoring of indicators such as the use of artificial intelligence in digital channels, employee training in ethics and anti-money laundering, and greenhouse gas emissions, including coverage of financed and invested emissions. These initiatives form part of the context in which investors assess BBDC3 and BBDC4 shares, in a bank that combines scale, revenue diversification and growing attention to sustainability criteria.

Finally, Bradesco’s recent strategy includes internal reorganization moves and a focus on digital channels, such as reviewing its organizational structure with fewer hierarchical levels, strengthening IT teams and expanding the use of digital channels, including the Bradesco Expresso platform and app enhancements. In 2024, the bank rolled out initiatives to place the client at the center of decisions, such as revamping the app, reorganizing product areas, implementing active listening programs and creating a customer council. In the high-income segment, it launched Bradesco Principal, with a new service concept. It also completed a tender offer for Cielo shares, aiming for greater commercial flexibility in solutions for corporate clients, especially SMEs, and entered into a partnership with Banco John Deere S.A. to reinforce its presence in agribusiness. These moves are part of a cultural transformation agenda, embodied in the #SouBradesco movement, focused on making the bank more agile at scale and client-centric, in an environment of heightened banking competition and regulatory and technological change in the Brazilian financial system.