Banco Bradesco Sa American Depositary Shares

Hello, good morning everyone. I am Marcelo Noronha. I'm here to present the results for the first quarter of 2024 of Bradesco. I'm here live speaking from Cidade de Deus, the City of God. It's 10.31 a.m. It's a great pleasure to be with you once again. And before we start the presentation, I would like to say that unlike what we did in February when I started presenting the strategy in a more, you know, lengthier way, the idea here is not to present a strategy in so many details again, But we will summarize everything, and then we will revisit some of the topics as the questions pop up. And so I will talk throughout the presentation about what we delivered in addition to the members related to the first quarter. And I'm sure I think you have the opportunity to take a look at the members since we posted the presentations and the release after 6 a.m. Our net income, recurring net income was $4.2 billion. It was flat in relation to the previous quarter, but 46% better than the last quarter of 23. And there are some points of attention here that are highlights of our balance sheet. Some are challenging and some other topics relate to good deliveries that we've been doing. First, the improvement in ALL for both retail and wholesale that also leads to an improvement of our NPL. that is improving in all segments. We also increase loan in all segments. I think there is a colleague from the sales side that last quarter asked me a question. He said, do you think you would resume traction? And you will see through another chart that I'm about to show you that there is an inflection in that total loan portfolio. And that's what we will show you. We will show you growth in all long segments with traction. And this is just to answer that question from the previous quarter. Well, the challenge is the gross client NII, but there is a justification for that, and that justification is in our guidance. We have the loan book, and then the margin follows suit. And I will talk a little bit more about it when I talk about the loan book and the guidance. Another topic which is very satisfactory is the control of operating expenses, which grew 4.4%, as we will see, and a very sound performance of the Bradesco insurance business. In all lines, we had a solid performance. So the results for the first quarter was 4.2 billion BRLs, very much in line with what we intend to deliver this year. And as I said before, step by step we will gradually grow. And I know that my clients on the sales side, in particular those that have been analyzing as they can look at the presentation from the last quarter of 2023 and then take a look at everything I'm about to tell you and run a comparison with what we talked about the previous quarter. Therefore, our loan portfolio reached almost $890 billion. We grew 1.2% year on year. And looking at the quarter alone, and the quarter says that we are growing steadily. We grew 1.4% quarter on quarter. The inflection of the curve saying that in the last two quarters, the portfolio was coming down, but now it was falling. with Dick Klein, and now we are resuming growth. If we look at the free portfolio, if we were to look at the presentation from the previous quarter, you will see that traction now is much better based on the KPIs that we showed you in the previous quarter. Looking at individual's portfolio, we grew year-on-year 2% and 1.9% quarter-on-quarter, but this growth is well spread. Some portfolios give us a pretty good balance. and there are other portfolios where we have to grow products with higher margins, but we are getting there. Payroll loans, we grew 4%, 2.1% growth quarter-in-quarter. Mortgage loan or real estate, I think we are probably the largest private bank to deliver growth, 5.8% year-on-year and 1.8% quarter-in-quarter. Credit card, we did grow. The risk was higher, but we're... is that we are not growing. We are not growing in non-account holders. When we look at prime banking, we posted almost 12% growth when we look at the credit card in the high-income segment. Personal loan, 10.1% growth quarter-in-quarter, 1.8% year-in-year. Vehicles also. And real credit, the lines that are more secure

These are lines that are long-term lines, but at the same time, they carry smaller margins.

Now, looking at SMEs or companies, in wholesale banks, large companies, we grew 1.6%, and SMEs, micro, small, and mid-sized companies, We are beginning to see more traction, so we grew 2.3% quarter-on-quarter, but I will elaborate further on SMEs later on. Something new that I am now bringing to you is an example of the vintages, vintages for meth. Individuals or individuals mass market. So we started with 100 back in 2019 and look at the second quarter of 2022. The vintages that we have been acquiring, that's the blue line starting with the base of 100. But the bar in... gray means origination for 2019 so so origination for individuals mass market you know and this is again answering the question that you asked it back in the third quarter what about the mass market this is proof of our principality meaning We are increasingly bringing better ratings, even in mass market, and this is proof of what we are saying. I'm talking about vintages over 30, etc. With time, we are not going to see, you know, vintages being right here. They will be slightly above because we will get into products that carry a bit more risk, but they also lead to better margins. Here we have to the right, you know, payroll loans, installments, finance. Cards alone is the only line that is not growing. And I already explained, and that was due to non-account holders, clients that come from OpenSea and from the digital segment. But delinquency is coming down, and this is due to the quality of the collection service we are now providing. And now let's look at SMEs. I am exclusively talking about SMEs. starting with the base of 100, but look at the quality of the vintages. In terms of SMEs or companies, the bars have not yet reached the levels of 2019 because we're being more conservative. Now, I would like to highlight a few lines of growth, but there are some lines that we're not growing as much because of the risk involved. This, today, is a segment that presents the highest credit risk, but Nevertheless, we continue to grow, and this certainly explains why we haven't yet increased in the total NII. Now you see delinquency levels falling, and soon I will talk about the net margin.