BBDC4 Banco Bradesco

Banco Bradesco S.A. (tickers BBDC3 and BBDC4) is one of Brazil’s leading 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, starting in 1948, 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 operations across the entire national territory, reaching both urban and rural markets. In 1988, taking advantage of a regulatory window opened by the Central Bank, it reorganized itself as a multiple bank, incorporating the mortgage credit company and beginning to operate with Commercial and Mortgage Credit portfolios under the name Bradesco S.A. – Banco Comercial e de Crédito Imobiliário. In 1989, the corporate name was once again adjusted to Banco Bradesco S.A., a structure that remains the backbone of the organization to this day.

Over the years, Banco Bradesco has consolidated a universal banking business model, with a broad range of financial products and services for individuals and companies, including small, medium and large enterprises. The institution highlights that it is one of the largest banks in Brazil in total assets and that it has the country’s most extensive private-sector branch and service network, which helps support a diversified customer base. The bank operates both in Brazil and abroad, although it does not obtain material revenue from its international operations. Its financial intermediation model combines traditional lending and deposit-taking with services such as credit cards, consortiums, insurance, capitalization products, 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 encompasses financial institutions, holdings that manage financial resources, and credit card and asset management companies, concentrating 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 share was 74.7% for the banking segment 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 predominant activity remains banking intermediation.

Among its main banking products, Bradesco offers a wide range of deposit accounts, including checking accounts for individuals and companies, the Conta Fácil product that combines a checking and savings account under a single number and card, specific solutions such as Click Conta for children and young people aged 0 to 17 and the University Account for undergraduate clients, as well as checking accounts geared toward companies and public entities. In savings, the bank operates with returns linked to the reference rate (TR) plus interest tied to the Selic target rate, in line with current regulation. On December 31, 2024, the bank had 38.2 million checking account customers, of which 36.4 million were individuals and 1.8 million were legal entities, and 66.6 million savings accounts, illustrating the scale of the customer base associated with BBDC3 and BBDC4 shares traded on B3.

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

The bank also conducts significant foreign trade financing operations, supporting exporting and importing clients through foreign-currency lines and structures such as Advance 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 provided 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 in present value, and contracts involving trucks, cranes, aircraft, vessels and heavy machinery, which underscores 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, pension plans and reinsurance. Although this segment accounts for a smaller share of net revenue compared to the banking segment, its relevance to overall results is significant: in 2024, banking activity accounted for 51.8% of managerial net income, while insurance, pension and capitalization represented 47.5%. This near parity in profit contribution underscores 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, aimed at strengthening the insurer’s operations.

With respect to the regulatory environment, Banco Bradesco is subject to the framework of the National Financial System, whose cornerstone is Law No. 4,595/64, which established the National Monetary Council (CMN) and the Central Bank of Brazil. The CMN sets monetary, credit and capital markets policy guidelines, while the Central Bank implements these policies, regulates and supervises financial institutions, controls foreign currency flows, and sets capital requirements, reserve requirements, credit concentration limits, and 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, including Bradesco’s shares traded on B3, and requires transparency through audited financial statements and periodic disclosures. Specific restrictions, such as limits on exposure to a single client, rules for related-party transactions, interest rate caps for payroll-deductible loans and caps on interchange fees in payment arrangements, make up the set of rules 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 independent auditor KPMG. The preparation of these documents follows GRI and IIRC methodologies, and also considers SASB guidelines, the Abrasca Code and transparency requirements associated with indices such as the B3 ISE and the Dow Jones Sustainability Index. The materiality matrix was revised at the end of 2024 and adopted the concept of double materiality, assessing both the bank’s impacts on society and the environment and the effects of ESG topics on its financial performance. Among the key material topics highlighted are innovation and technology, ethics, integrity and transparency, and 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 analyze BBDC3 and BBDC4 shares in a bank that combines scale, revenue diversification and increasing attention to sustainability criteria.

Lastly, Bradesco’s recent strategy includes internal reorganization and a focus on digital channels, such as the review of its organizational structure with fewer hierarchical levels, strengthening of IT teams and increased activation of digital channels, including the Bradesco Expresso platform and enhancements to the app. In 2024, the bank implemented initiatives to place the client at the center of decision-making, such as revamping the app, reorganizing product areas, active listening programs and the creation of 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 broader cultural transformation agenda, summarized in the #SouBradesco movement, focused on making the bank more agile at scale and client-centric, in an environment of increasing banking competition and regulatory and technological changes in the Brazilian financial system.