Profitability Is Recovering, but Banco Bradesco Still Faces Headwinds

Banco Bradesco is seeking to complete its recovery from a period of weak performance. Credit costs rose industrywide in 2023, but the bank was a notable underperformer relative to its peers, with its more than 90-day nonperforming loan ratio reaching a peak of 5.7% in June 2023. High credit costs combined with poor loan growth and net interest margin compression led to a dramatic decrease in earnings. Banco Bradesco's results have been recovering since then, but the bank will need to prove that its operational issues have been solved.