Banco Bradesco Sa American Depositary Shares

Good morning, everyone.

I am Marcelo Noronha. I'm here live from Cidade de Deus, the headquarters of Bradesco, for this early release presentation related to the fourth quarter of 2025. And why not say that the full year of 2025, today is February 6th, and my watch shows 10.31 a.m.

I've started This presentation saying that all of this material has been released last night after the market closing, and I think you had access to it.

And I start with our recurring net income, 6.5 billion barrels, growing 26% year on year. and 24.7 billion for the full year, 26.1% growth. And, however, with an ROE of 15.2%, exceeding our cost of capital for the first time in this quarter. And that's why we say that we will continue to grow our ROE equal as the coming quarters and years to come. Here I have all of the operating highlights. I'm not going to go over each one of them because I will change a little bit today's presentation and I would like to bring you some

element related to our transformation plan that in fact was published February 7th of 2024, so less than two years ago.

It will be two years as of tomorrow, so that's when we released the plan.

And I would just like to remind you of what we did back then. So we started with a diagnosis about Bradesco, about the Brazilian market and also we drew up a worldwide benchmark with all of the relevant aspects like technology. Out of that diagnosis, we drew up a plan knowing all of our strengths. The plan has, the bank has several

strengths and the organization as a whole for that matter.

Back then we said that we had 70 million clients. We also said that we were leaders in SMEs, SMEs understood as a segment defined by the central bank because every bank has its own format. These are companies that grows up to 300 million a year. We also said that there was high penetration in the high income segment and certainly we have the largest insurance group in Latin America in addition to having a stake in many other companies and we also said that we will work on our strengths to create a new positioning with the clear goal to increase competitiveness in the short and long run. But it's important to remember that we put a deadline of up to five years. It wouldn't happen overnight, and it hasn't even been two years. When we presented the plan, we came up with this mandala with all the main topics, the ten main items, that were carefully looked at with more than 200 new initiatives. I will go over some of them, I will not talk about all of them, otherwise we will be here for two hours and you will be really tired. But our IR team and the transformation office, everybody is available to give you further clarification, especially those that want to talk to investors to discuss some particular area of this mandala. And if you have additional questions, we are certainly at your disposal. So I'll briefly cover some of the most important highlights, and then I'll go back to the core numbers, and we wrap up the presentation. So then, after the presentation, we have the Q&A. Well, we're starting with digital retail. We haven't been bringing a lot of elements for you, but after this period, At year end, we came up with 19 million clients full of digital. They are fully assisted through the digital channel with our VIA GenAI with the level of resolution which is very high. So BIA is retaining 90% of all calls that come through digital retail. But it's also important to look at the engagement level. Our efficiency in this client lifecycle that allow us to move on. I mean, I'm not going to... getting to the details of every topic. But I would like to draw your attention to this item here down below. The direct cost to serve to all of these clients in the digital platform that was reduced by 40 times. This is an important number, and what we envision for 2026 vis-à-vis our digital retail. First, we go from 19 million to approximately 40 million clients between account holders and non-account holders. And certainly our objective, not only for 2026, but going forward, is to reduce the cost to serve and to continue growing our customer base. The second topic is... affluent clients, and we are talking about principal and prime segments. We promoted an upgrade to more than 3.1 million clients with a new value proposition. And at the same time, we introduced a new position in this segment of clients, prime, and at the year of 2.3 million clients. Well, we train 3.5 thousand managers, we focus on that training. But notice the level of accuracy for BIA changes. Accuracy was 93% at BIA customers. And then I go to Principle. You may recall that we launched Principle in November of 2024 with three offices, one in Faria Lima, another one in Campinas, and the other one in Leblon, in Rio, and then we started the expansion process. In fact, I invited sell-side and buy-side clients to look at our management model rather than just the business model. So we are just going through this phase in other segments. So we launched a new segment in November of 24. By the end of last year, We had 62 offices in 36 municipalities, approximately 320,000 clients in this segment with this current level of NPS. So, a new value proposition. And this created this... new differential. And what do we expect to see next year out of these two affluent segments? I mean, a new upgrade with more than 1.5 million clients reaching 4,700,000 clients. And as for principal, we will open almost 50 additional offices in Sao Paulo, reaching 70 municipalities, and we will have almost 800,000 clients by the end of the year. But you might recall our target, because it's not something that we change overnight, because this is gradually built. So we will expand our share of wallet, and this is what you see down below when it comes to the affluent segments. And next comes SMEs. As I said at the beginning, we were market leaders. We had approximately 14.3% of market share in SMEs of almost 300 million a year. But notice what happened here. We built a much more robust segment with a new digital model, with a new value proposition. So mostly, you know, digital and remote service and also companies and business segment. This is a segment where we introduce 150 new branches during 2024 and we change the segmentation of the business segment. the configuration of their management model for managers. We delivered a new internet banking, a new app for companies, and look at what happened to our NPS. These are numbers that were not disclosed before. We went from 56 to 74 points. So I like to say that nothing happens by divine order. It happens because You know, we work hard in the background, and we execute based on the plan. But I would draw your attention to say that we have more than 5,000 managers in this segment, and we are present in 2.1 thousand service points. And this adds value to clients, regardless of having this level of evaluation in metrics. robust capacity to serve clients because they can do self-service and at the same time have a very good experience. But we can still serve these clients in the physical channels. But I would like to draw your attention to something that I said at the beginning. We had 14.3% share. We are leaders in this market, but look at what happened up to September 2025. We gained market share. We reached 16.6% market share, and we continue on the right track in terms of this segment. Our purpose, not only for 2026, but for, you know, a more distant future, is to increase our penetration in these segments. And we believe, and this was stated in the diagnosis, that in this segment of up to 300,000 a year of SMEs, it's a segment that tends to increase its share in the financial system in the next coming years, up to 300 million a year. And I mean, payments and cash. I'm not going to get into many details, but Bradesco Global Solutions with global cash. And obviously, our goal is to increase the share of wallet and customer centricity through time. I mean, credit. We introduce a credit view. Of course, I will talk about cause and effect because, as I said, things don't happen by divine chance. We introduce the credit BU at the beginning of our plan, and within this business unit, we introduce a portfolio management area. They are working with different client segments, and they are also operating in the live portfolio, be it wholesale and retail, bank, customer finance, etc. So within this business unit, we also introduced a new pricing area to serve all segments and businesses, all the verticals I mentioned to you before, and all of that to generate more risk-adjusted return, and this is a very important part of our strategy. But when we put this together, I told Andrea that we wouldn't, get any lack of resources there will be enough resources so to that end we hired 250 professionals and we gave them full technology support to enhance the models for all customer segments Also, to manage the portfolios and looking at the timeline of credits and loans that are not only decided on prediction models, but mostly decided by human judgment, and they support all of that. And the consequence is that this SME growth level is still the same that we have with payroll loans. And if we hadn't put this together in the way it is, certainly we wouldn't be growing SMEs the way we've been growing today and the way we grew in 2025. And what do we expect in terms of our objectives? I mean, this unit together with the client segment. We want more competitiveness in some lines and segments, but growth with quality and, moreover, a very strict, you know, risk-adjusted returns. We have also many other initiatives. Maybe there is one. that will take longer to deliver. But our clear objective is not only to have back office and front office, but moreover, having an end-to-end experience that will really boost our productivity. I mean, model, culture, in addition to the area led by Silvana, which is people, they are contributing with upskilling, reskilling, and despite everything we are doing, including new variable compensation, KPIs, etc., we conducted a new survey, new engagement survey, 84% engagement when compared to 74%. posted in the survey of 2024 and that's why we are focused on keeping a very engaged team and fully committed to everything we want to do with the capacity to change as well and adjust people are crucial competent teams and teams that can certainly deliver and change as we go so that we can deliver more competitiveness in the short and long run So organizational structure was the first thing I showed during the plan. So we reduced layers. We reduced the span of control. I mean, we increased the span of control. And we brought C-levels and directors to different areas. I talked about the credit area more recently. But we also promoted inorganic growth. I'm not going to get into the details, but in the insurance company as well with the hospitals, and what will we expect out of this organizational structure to gain more efficiency and agility when it comes to decision-making.

Technology. This is a chapter that I've been talking about all the time.

Our investments in AI. For us, our culture is AI first.

AI first. And AI is not just a gen AI. It's machine learning for our mathematical models. but also multi-agents. We have been working with a number of initiatives on the slide. I spoke about be a client with that level of retention using Gen AI, but we have be a corp, be a tech, be a client, and so on and so forth. So what happened in these two-year period? We gained productivity, we reduced lead time, and the consequence was this that I mentioned before. With a base 100 of delivery of apps for clients, internally for review processes and gaining productivity or for regulatory points, we ended 2025 with 300. We grew our capacity by three times over less than two years. That's when we started this whole move.

We invested and reinvested in cybersecurity.

We improved our second and third lines of defense for cyber. And we expect greater productivity gain, more and more intensive gen AI use, but more competitiveness, innovation, and time to market. And I'd like to mention some other things here, because I'm going to get to the numbers in a minute, and we'll speak about guidance eventually. But we invested... Last year, we invested heavily in technology. Investment in technology grew in 2025 compared to 2024 by 22%. And if you look at our guidance, which I will refer to in a minute, of those about 8% of growth approximately, About 3 or slightly over 3% come from the investments that we will continue to make. We will not give up on investing. I see technology as a big driver of our productivity and our ability to deliver a lot more to our clients with hyper-personalization, which we have been doing. And during the Q&A, we can speak more about that if you want.

Synergies and innovations.

We had a number of actions with CLR, tap on phone, ridiculous zero receivables discount, all invented in our corporate app. In Verdesco Financiamentos, we also gained investment with new hirings. not just efficiency in the unit cost, but commercial efficiency at Prodisco Financiamentos. And what are the next steps? We expect, well, with the next steps, to increase our share of wallet, increase growth, productivity, and innovation. With different verticals, And now I'm speaking again about profitability to give you more numbers. I mentioned that before and feel free because our team is ready to talk with you and explain this in much more detail.

If we look at the net income, almost tell my team.

This should be in the last slide and not in the first. Because again, we speak here about cause and effect. And this is the effect. Effect of what? the fact of a plan that is being executed, and that is showing our capacity, revealing and proving the strengths that we talked about, but strengths that were driven by actions of the plan. And we have a growing number, eight quarters delivering always a little bit more, and step by step, step by step, You don't change the strategic plan overnight. You correct the course. You correct the tactics. But there is a strategic continuity. And with execution discipline, and this is in a colossal discipline, we are showing this with our whole team in the Transformation Office. Moving on. Total revenue. We're bringing in all revenues. NII, we see here the growth of NII and fee and commission income. When we remove this yellow tender offer, the growth is 5.5%. Insurance and pension plans at 16.1%, another robust quarter, and a growth expectation. But why is total revenue growing? Again, cause and effect. It's not by divine providence. It's by an increased penetration, credit traction in NII, a reduction of liabilities, cost better, liability management, and so on and so forth, with all of the initiatives adopted. Looking at our loan portfolio, almost 1.1 billion in December 2025. In the previous quarter, we were at 9.6.

And now 11.

The highlight goes to micro, small, medium-sized companies growing 21.3.

And that's what we're getting, share.

But looking at all of the portfolios, we're growing in all of them. Again, why are we growing? We are growing because we have a client base. We are growing because we have high penetration in all client segments and in the verticals that we work with. And so it is important because we have an engaged team, a team that works supported by client management systems, Gen AI, a better offering for clients. In a nutshell, it is a set of measures that we improved over the spirit. And looking at the portfolio and the loan quality indicators, they're all flat.

Over 90 day NPL, totally easy.

Over 15 days, if we look on the slide, it's absolutely flat. Restructured portfolio. Repaid 10.5 billion in 2025. 20.5 the reduction of problematic assets. Look at our stages. Stage 3 dropping quarter after quarter. Stage 1 increasing quarter after quarter with the evolution of the secured portfolio. So we are totally at ease with our loan portfolio and with our ability to continue to originate even more, particularly with some leaders. Net interest income, 14.9, increase, and the client NII up 17.4%. Again, this is, we see 17.4% growth, and here this hits the bottom line, 4.8 to 10.3 billion, growing 22.6%. Cost of risk absolutely under control and flat.

and market NIA delivering our expectation, the expectation of our treasury.

The commission income grew at the proportion that I mentioned before, but please note that I should highlight three. Card income, 14.4% increase in high income, 25%. Consortium management, a lot of traction, growing 17.3%. I can look at loan operations with a lot of traction as well. Why is it not growing? Because part of it is being deferred because of the 4966. But look at what happened with capital markets. 29.2% increase for year 25 compared to full year 24. This is not divine providence. Again, this is investment. We changed the structure with Bruno's team and the whole team. We created the every business segment. We changed our investment banking structure to broaden the team and capture a lot more in DCM, M&A and other line items such as project finance.

The result is this level of growth. We have a DCM share. that we had in 2022.

So we grew, we're doing well in the rankings, and we continue to grow. But there are two offenders here that do not help these levels, which are checking account and collection, which normally in this market pull the results down. But overall, we are delivering, and we are delivering well. Operating expenses, 8.5% increase. I told you, and I will repeat it. Investments in technology. We grew 22% our technology investments in 2025 compared to 2024. And we will continue to invest in technology. But if we break our expenses down into personnel and administrative, we grew 5%, in line with the average IPCA. PR is one of the factor on expenses. Without profit-sharing payment, increase would be 2.5%. We continue to reduce our footprint. If we look at the complete period, 2,800 points. If we exclude ELOPAR and Cielo, as we have been doing in past quarters, growth of operating expenses would be 7.2%. But is it Q&A? If you want, you can ask, and we can debate administrative expenses. But overall, growth is negative. We have personal expenses with this variable that I mentioned, the profit sharing program, and investment in technology, in transformation. For example, the whole implementation of the 59 principal offices. Almost 50 more will be added next year. We continue to invest in reviewing our footprint and focusing on the necessary investments in each one of the departments to help us grow. Our insurance group, another strength of our organization, ROE 24.3, but in the full, we're almost 22%. Spoke about this already. We are growing in all lines, with a lot of balance, client-based growing. I was checking this with Ivan earlier today. The results of insurance operations exceeding the guidance, 16.1%, and growth in operating result, and not necessarily in financial results, with technical provisions of 446%, growing more than 10% year on year. Moving to the end of my presentation,

When we look at this, capital. Capital. Capital discipline. We have year-on-year growth. If we look at December 2024 compared to December 2025, in Tier 1, 12.4 to 13.2.

In the quarter, there is a slight reduction of 20 basis points in common equity in Tier 1. But if we look at common equity, we also posted growth year-on-year of 0.7 percentage points. And this is something that I mentioned with all of you, with the sell side, with the buy side, that I spoke about this, that we have this under control.

And lastly, our guidance.

Well, we delivered at the top of the guidance in practically all items in expanded loan portfolio. We were growing 9.6% in September, and we ended up with 11%. Good, because of our traction in the bill we had to execute. We start 2026 with even more traction. Insurance operations, 16.1% beyond the guidance. And we have the guidance for 2026 listed here. I am here, and I am ready to discuss this with you. And now I will sit down with my colleagues, André Carvalho, IR officer, and Cassiano, for us to start our Q&A.

But I would... and my speech saying that.

We have heard comments since last night when we released the results, some positive comments regarding the 2025 numbers. I didn't hear anyone saying bad things, negative things, but the expectations were much higher for our 2026 guidance. Our share between December 31st, 2024, and today is February 6th, had increased 106%, appreciated 106%. It is only natural. It's part of the game of sell side by side to have price adjustments. Not 29, it's 27.5, or the middle of the guidance. It's up to you. But we will not move side of our horizon because the shares have to be adjusted by 5%.

No problem. Can you imagine?

Today, with the level of conviction that we have, with the level of delivery that we have, I am super confident in our organization. I'm happy. I had a meeting just yesterday with our leadership team. With the level of engagement we have in our company. So on that, over to you. Thank you very much for joining us in this call.

Good morning, everyone.

Thank you, Marcelo and Cassandra. I would like to let you know that Ivan Gontiju, CEO of our insurance company, is joining us remotely. To start the Q&A session, I would like to present three alternatives. for questions. First, you can send your questions by email, investigores at bradesco.com.br. You can also send questions through WhatsApp, 1199974438238. And the third option is by pointing your camera to the QR code and then ask a question. The first question comes from Pedro Leducchi from Itaú BBA. Go ahead, Pedro. Good morning, Pedro.

Good morning, good morning, everyone. Noronha, Cassiano, and Andre.

Thank you for the presentation, and congratulations on this wonderful year and your trajectory. My question is related to how you see the underlying business trends, so we could look at the NII guidance less LLP, I mean, I think you're going to grow low two digits, slightly above the portfolio. I just want to understand what's behind it when we think about NII in isolation or LLP. I think These two things have to talk to one another, but to understand what is part of it, so that I will have a good idea of your views about mix, spread, credit quality, as, you know, the year is just beginning. Okay, Pedro, I will start. You know, Cassiano will start as well. It's good to see you again, Pedro. Our NII remains focused on our standard. I mean, we changed our mix for 2025. I mean, secured products remains our main lever. Obviously, the quality of our credit BU allows us to work in any credit line. You know, secured and unsecured, we're very secure. very comfortable with the quality of our portfolio and the way we are operating it the average rate should be maintained until the end of the year and our lop should grow in line with with our operation these are the main you know drivers of our NII and we will maintain it with a very high degree of engagement. Okay, I have a few things to add. It's important to say and highlight what you just said, portfolio mix, spread level, always focusing on risk-adjusted return. This is the goal. And I also talked about pricing. The pricing area comes to reinstate that point. I mean, we have some very important levers that go through different segments, like payroll loans. In all of its lines, I'm talking about public, INSS, and private, we have approximately slightly above 14% market share. But I would like to remind you that we have the lowest market share on the private side. So we have a lot of opportunities, and we already saw this level of growth. And I would just like to add that we are – I mean, we are – Placing our hiring offerings 24 by 7, and this is hyper-customized with microseconds that go and come and already respond, give us a response about the risk of the borrower, the company, and pricing, which is adjusted to risk, is risk-adjusted pricing. Therefore, I'm saying that we will grow in payroll loans. We see a lot of traction coming from the clients. INSS has its own challenges, market challenges. It's not all, you know, ours. But in previous quarters, year over year, we were growing 5% and now in this past quarter we grew 6.8%. But this is, you know, payroll loan, SME, we are still growing and we continue to grow in lines with you know, secure lines backed by receivables, via direct receivables or some, you know, lien, et cetera. So we will grow with auto for companies and individuals. We are very optimistic in terms of future growth with a credit quality that is absolutely under control. I do not see any deviations. We are not concerned with that because certainly you know that we did our homework when it comes to portfolio management and our modeling scheme. And then you also mentioned an important aspect. You talked about NII growing slightly above the portfolio. Well, this has to do with the mix. We're a wholesale bank. We can fluctuate, as it happened this quarter, on the positive side, but could also fluctuate on the negative side because we do the turnover of the portfolio. Thank you. And the next question is from Mario Pieri with Bank of America. good morning guys congratulations on your results we understand that a lot has been done in the first two years but you still have a lot more to do going forward but what you have already demonstrated is that you are the right track my i have two questions you had an additional expense of 700 million brls you spent that to restructure and the structure that is suggested for 2026 and this is almost twice as much in terms of provisions you posted last year so could you please highlight where these restructuring will focus more whether it has to do with the number of branches and Noronha, we understand that we are getting a lot of questions from our clients. Your guidance says that you will grow expenses by 8%. At the top, you said that 3%. relates to investments and technology. But this also means for the rest of the bank, it will grow or is growing 5% in line with inflation. And just like you said, you already reduced 2.2%. know eight points or two thousand eight hundred points in the past two years so how come expenses are not growing below inflation that's why in the consensus i was hoping for a number close to 20 million rather than 27 and a half we thought that the bank's core expense should be growing below inflation thank you well thank you for your questions

If you take, if you look at our admin expenses and if you look at some of the lines in our full publication, you will see, okay, third-party services,

maintenance conservation lease all of these lines were down in transportation transportation of currency so what did it attract us here i'm just summarizing there are some that are very positive but technology it grew 22 percent and then when we look at it it will continue to grow we will continue to invest to increase our competitiveness Second, I mean, profit sharing, we increased profit and we paid out more. And the third detractor, I'm not going to refer to small lines, we had some changes on the advertising side, but we found three good opportunities at the end of the year and we decided to invest, like when we launched Principle. And that's when we did the coverage at the airports. It's out of what we expected to do at that time. And thirdly, there are other expenses that also go through some lawsuits. We have a very good provision coverage. We've been working a lot based on these root causes. And when you work in that root cause, you do not expand the incoming, but that is coming down with time. So I believe that these lines will be below 207028. And this is what you look at when you look at expenses or other expenses in addition to expenses with technology. And talking about investment and restructuring, I will tell you that first of all, we continue to review the footprint. We were doing less than what we did, less than what we would do in 2025. And so we will do more than what we did last year. But we will open, as I said before, about 50 offices earmarked for principal. But we are also refurbishing some physical offices. stores with private, meaning that we continue to invest in this transformation, making footprint adjustments, also increasing our capacity to invest more and reduce cost to serve in retail and digital. So our cost is 40 times lower. Well, thank you for your question. There is one more thing I would like to add in addition to that 3% you mentioned in terms of technology investment. 5%, it's only related to human resources. Well, that's important to remember. In addition to profit sharing, you will see that our expenses are very much under control. Oh, there is one more thing, because you said that twice... as what it was last year. If you look at 2024, it's very close to the number that we posted in 2024. Maybe the difference is about 100 million, 40% higher on average or greater on average. There is another point related to efficiency. Our efficiency ratio was down by 2.2%, from 2.2% to 50%, so our ambition is to reach 40% by 2028, meaning that the trend is downwards in 2026. And this drop will be even more accentuated in 2027, 2028. When the top line grows a lot, it's just natural that some OPECs grow. You see growth with OPECs. And our top line growth will be almost 10% in 2026. As you increase transactions, certainly the variable cost, I mean, it's different.

Next question from Gustavo Schroeder with Citi.

Good morning. Andrei, Marcelo, it's always good to see you.

Congratulations on resuming for a week, starting from 10 to 12, now over 15. I would like to think a little about the investment cycle, more specifically, and linking with operating efficiency and efficiency ratio. Marcelo, you're very clear in And I heard an interview you gave when you said that you won't stop investing, that the focus is to maintain competitiveness. It means that you're thinking about the future of the bank in a sustained fashion. So let's understand, what part of the cycle would you say the bank is in? particularly in terms of technology investments or investments in new products or segments. And should we start thinking about the benefits coming from operating leverage, operating efficiency and reducing efficiency ratio, thinking that in 2026, revenue should continue to support this step-by-step ROE improvement so that in 2027 we'll start seeing the benefits of operating efficiency. Thank you. Thank you, Gustavo. Gustavo, I would say that we are in the middle of the cycle. We are not at the end of the cycle. If you look at our plan, we spoke about stretching this until 2028, and along that period, some things are quick wins. You capture the benefits in the short term. Other things you invest in, and you're going to reap the fruits later. But we'll continue to invest in the whole renovation of the bank. Look at some US banks and Asian banks and what they have been saying. In September, I was in Asia. I had an opportunity to talk with CEOs of other Asian organizations and to speak with peers of that region. And everyone is investing. Again, an AI first. We see opportunities to improve efficiency, and to gain competitiveness in our relationship with our clients. We will not stop investing. We want to improve our infrastructure, our architecture, constantly in terms of technology. So efficiency doesn't come only because we're going to invest less.

And I'm going to give you my opinion.

in the opinion of all world banks. I don't see anyone stopping investing in technology. Technology will require growing constant investing over time. That's my opinion. But we are going to gain in other lines. For example, lawsuits, debts and barriers where we are going to have a reduction, but not only in 2026.

So we have to have efficiency gains, and we will have these efficiency gains.

But this will be driven to the top line. Gustavo, you can ask me if I don't deliver the top line, but I want to deliver the top line, increase penetration, continue to grow, and delivering ROEs even better than what we currently have.

My colleague yesterday said,

An airplane will never fly backwards. We are not going to fly backwards. It was 15.2% in this quarter, and we expect it to increase. If we can deliver more and more, which was the case of the loan book in the past quarter, we will do it. Thank you, Gustavo. Next question from Daniel Vaz with Safra. Daniel? Daniel?

Good morning.

Good morning, Andrea. How are you doing? All good. Thank you. Congratulations on the results in the deliberations at the beginning of this strategic plan. I think we can see how dedicated the management is in readapting the bank and improving the whole quality of the portfolio while still growing. My question is focused on Cielo. Cielo is A strategic asset of yours, you're talking about integrating Cielo, particularly in SMEs, integrating Cielo even more if it's already partially integrated.

But in terms of TPV, Cielo had a big difference compared to the network.

So perhaps you're thinking about those big accounts, not SMEs. There's an important difference in trajectory. So I'd like to hear from you.

What is the strategy for the large accounts?

Perhaps there's a loss of profitability and you don't want to change that. And it doesn't mean you advance a lot, also in terms of governmental programs. And that's an important liquidity for the system.

But, you know...

The Cielo part, in terms of strategy, the strategy is not so clear to me in 2026, 2027. I'd like to understand what is the integration stage you're at. Well, thank you, Daniel, for the questions. Number one, regarding Cielo. Cielo has also been undergoing a process of transformation, which is rather significant.

Over there, we created separate teams for the two partners. Today, we have a connection at different sides with the wholesale and the corporate retail segment.

And we worked with them in a plan so that we'll be a lot more connected in a verticalized way. talking about cash and talking about affiliation more than having a segregated company where I would originate something and they would work with it. No, they have to improve logistics. They did. They had to deliver tap on phone. They did deliver. They had to deliver a whole new pricing system for diesel. They did. They needed to deliver a connection to our app. We delivered it together. So all of that is done. But you're correct. I think that there were two or three cases. I don't remember.

Two or three of large accounts.

And the Stanley Lau team went to the limit. They took it to the limit and decided to give up the TPV, which was important, rather than losing profitability.

So...

We see an ability to grow and grow a lot because we're very accelerated and structured in SMEs. And we reduce the attrition with our distribution channels. And this is an army of more than 5,000 mini-nutries. in addition to all of the digital offerings that we have. So we are going to move forward. You can rest assured of that. But we are not going to throw away money with margins that are effectively very rigid. Regarding SMEs, our SMEs, we are growing not only in government lines. Our expectation is to continue to grow. with a very similar number that we had in 2025. Indeed, we haven't got the final number, okay, Daniel? The final number regarding government or total government programs, but we have an And the estimate is that we had 25% to 26% market share. We were the bank that operated the most government lines last year. We have an initial estimate, our own estimate, not market estimate. But let's wait for official data. but that's kind of that level. We have a good traction, but we can only do all that because of the kind of structuring we have in the SMEs segment, and also because of our technology deliveries, our ability to hire through our digital channels, the whole modeling of the credit, BU, portfolio management, So we are not granting credit just because we have a government guarantee. We have a lot of criteria, and it's always about our risk-adjusted return. We have a program to price each one of these government programs. We have a lot of traction. We ended the year with high traction, and we believe that we will continue to deliver good results. And Marcelo, come here. This is one of the important pillars of technology this year. We created our app for business with totally different technology embedded to it. And this is a very important reinforcement for this. Yeah, we're migrating 500,000 clients to this new experience that Cassiano just mentioned. So that's another important information. We are increasing our competitiveness with Cielo being integrated to it.

Next question from Yuri Fernandez with JP Morgan. Thank you, Andrea. Good morning. Thank you. I mean, your long-term view. Your long-term view. I mean, I know sometimes it's not easy to invest in the future, but you are delivering improvements. Gradually. So thank you and congratulations for it. My question is about capital. I mean, CET1 is very close to 11. I think this quarter was 11.2. But for 2026, there might be some challenges. There are some prudential adjustments coming forward, 49.66, operating risks. So can you please elaborate a little bit about the capital outlook, whether C21 should remain at 11 or maybe possibly it will be slightly lower and you would gradually increase it? And in addition to that prudential adjustment, my other question has to do with your portfolio growth. I mean, you posted a very positive growth message, and like you said, the bank is well-attractioned, but this 9.5% growth in the portfolio with retained profit, the retained profits in the middle of the guidance also might imply some capital consumption. So going back to my question, Will it remain at 11 or it will go slightly above? So if you can tell me something else about CET1, I would appreciate it. Thank you. You are constantly provoking us about this topic, and I really enjoy your provocation, so thank you again for joining us today. I would like Andrei to start answering your question, and then I will follow through. Thank you, Yuri. In terms of CET1 of around 11%, that's what we expect to have until about 2026.

We are here talking about, you know, loan books growing at 9.5%, and we look at full CET1.

of 9.2% in the first quarter, going up vis-à-vis what it was in 2025. So, interest on equity that was 14 billion and a half last year, it will go up this year for above 50 million barrel. Our capital absorbs that. portfolio growth, increase in interest and equity, and here we also have DTA, like you said. So CET1, it's around 11%. In the first quarter of the year, we know that we have the regulatory measures, operating risk, the 4966 issue, so everything has been computed whenever when we mention CET of around 11% for this year. There might be some fluctuations, but it will be around the 11 number. But our baseline is 11. But there might be some fluctuations. For the reasons already explained by André, but it will be around 11, and this is important. I'm not going to repeat what they said, because this is what we expect to see. But two years ago, We told you that we have a lot of discipline when it comes to capital, and every year we review our DTA or tax credit horizon for 10 years, meaning that we are constantly monitoring that, and we also evaluate all of the opportunities, as you put it yourself. Therefore, we are constantly looking at that. And back then we said that we would have enough capital. But look at our allocation in our loan portfolios, turnover of the wholesale bank. Therefore, everything we are doing is very well planned and coordinated. So I can even go further. I think we can surprise you more than anything else. Just, you know, in terms of our CT or common equity.

And, of course, net income will grow and our return as well.

Obviously, 1467 is a challenge. More for some banks than others. But it is for the period of 10 years. But there is an intersection here, which is 26, 27 and 28 are the heaviest years. But after that, when the horizon may change. Therefore, we are very confident. We're confident about everything we are doing and in terms of the capital that we are allocating. Well, thank you. Thank you for your provocations. Thank you, Yuri. Next question from Nair Duhils with Santander Bank. Nair, go ahead.

Hi.

Good morning. Now you can hear me. Good morning and thank you for the presentation and for taking my questions. I would just like to revisit the payroll loan. I think you, Noronha, said something about it, but if you could elaborate a bit more about your appetite and expectations for payroll loans, and more specifically private payroll loans, and I know that on the public side you gained some important and relevant market share.

Well, we are very, very well positioned to grow.

Gain market, of course, that depends on the competition, but I think we are well positioned to gain market share. Well, we gain market share on the public side. INSS, that involves a lot of market discussions and and things related to the management of INSS when it comes to payroll loans. But we are also very well positioned with INSS. But on the private side, we tend to increase our share. And as I said, we deploy models that are highly competitive 24 by 7. We are growing. We've seen that in the past quarter of 2025, the last quarter of last year, and we will see the same things happening throughout the year. Therefore, I'm very optimistic in terms of everything that we are doing to grow and to gain share. Thank you for your question.

Next question from Renato Meloni with Autonomous.

Good morning. Thank you for the question.

I'd like to second my colleagues and congratulate you on the deliveries since the plan was announced. I think that the results show the whole work that was done. Over the year, you showed a lot of ROE expansion, but when we look at the guidance at the mid-range, It will be similar to that of Q4. So I'd like to understand, do you expect 2026 to be a year of accommodation, settling, or the uncertainty regarding the elections may be more conservative in the curtains? Now, moving to 2027. If we have this scenario of accommodation, I think that in 2027, we'll bring the euro to more reasonable levels. What would be the levers in revenue to increase profitability? Thank you.

Renato, thank you for the question. I'd say that I don't see a year of settling for us.

I think it's part of our plan. Again, we will improve step-by-step because we'll continue to invest to increase competitiveness. I don't want to be repetitive, but this is our mantra. We focus on this all the time.

Regarding the ROE, again, it's kind of an internal joke.

Yesterday, we were laughing about this. An aircraft will not fly backwards. So, there's no chance the world will last in 15.2%. Actually, Andre, you're my witness, and Cassiano as well. I said a year ago I'm more optimistic, I'm more pointing to the upper branch of the guidance than focusing on the lower branch of the guidance. Of course, this year I'm a little more optimistic. So what we actually saw, Renato, is that the market somehow started bringing the expectation of a net income to 30, 31 billion. And the role of IR is to correct the course.

You don't have a 30, 40% PE year on year.

Because we continue to invest in our transformation. Remember that. I see a higher and growing ROE. Indeed, you mentioned the macroeconomic aspect. It is true we should have a little more volatility in the second half because of the elections. That is only natural. But I am optimistic regarding what we are doing and our ability to compete. in terms of the expectation of our economists. We'll have the GDP growth and unemployment rate very balanced, so we have a lot of opportunity for growth. With the interest rate cuts, they happen a little faster This will help some companies regarding their costs if they're a little bit more leveraged. So, of course, the macroeconomic environment does have an influence for all players in the market. But I see us with a lot of opportunities to grow the ROE. And if we can deliver superior absolute results, just like the loan book that grew 11% when in September it was growing 9.6%, we'll do it. We're not wasting time. We're not wasting space or losing space.

And please remember what I explained here, Renato.

We are well aligned. Increasing penetration. I spoke about principal segment, SMEs, corporates doing well, the insurance company. I mean, they are delivering a lot. And there are several verticals. Earlier today in the press conference, Ivan spoke about the continuity of growth in pension plans acting.

So I see 2026 with optimism.

I think that there is a structural issue in Brazil in terms of the fiscal aspect and the public debt. But if we're able to look at the public debt, regardless of the presidential candidate, if we improve that for 2027-2028, we'll improve the market expectations. Oh, and he asked about the levels to increase profitability. Renato, I can say that it's almost everything credit. We're growing it. We're the right drivers. But we are not operating in the higher risk segments for credit card, mid-income, and high income.

In lower income, our risk appetite is lower.

Credit is a big driver. Liability management. The liability management we've been doing and the growth that we've been posting. And we've posted a lot of growth.

Fee and commission income, the main levers and the detractor. So that's another line. The insurance group, again. And

And the other areas, payments, our consortium business at full speed, the ability for auto loans in our own channels and external channels, and so on and so forth. So I see a lot of opportunity because our organization is diversified. We have different revenue sources at different moments. And this year, we will review the journals, and this will increase our selling a lot. We spoke about the Disco Expressor, distributing a lot more consortia, operations, insurance, payroll deductible loans, but also the Disco financiamentos. selling more insurance, so we have a number of opportunities for cross-selling. Our business apps, we'll have Cielo, we'll soon have insurance, dental insurance, so it's all part of operating leverage for us.

Thank you, Renato.

Next question from Tiago Batista with UBS.

Thiago?

Good morning, Andrea, Leroy, Cristiano. Good morning, everyone. My question has to do with what you just mentioned, the good performance of the insurance group.

In recent years, the share of the insurance group was about 20%.

It got to almost 50% in 2023.

It was dropping, but in recent quarters, it became relevant again.

I think that in consolidated income, a much higher percentage came from the insurance group. This is due to an ROE of 18% close to that.

Can you see the banks still a bit under pressure? So, two topics.

One is the relevance, when we think about the mid-time, in five years' time, how much of the results should come from the insurance group? And number two, is the power of the organization hurting the consumption of DTAs at the bank? Because in 2026, will DTAs start dropping or not?

Thank you, Tiago.

Well, the insurance group is not getting in the way in terms of consumption of DTAs, and that is important to mention. What we have been saying in terms of DTAs is that this is a year when we will try to neutralize the nominal portion. We will see a reduction of DTAs in 2027-28, and this is part of our plan stretching until 2028, as Marcelo mentioned.

And that is super important.

And I think that we've had the best allocation possible in managing the cost of capital. And it has to do with the tax credits.

What was the second part of the question?

Well, a comment to make. Periodically, the insurance group also pays dividends to the controlling shareholder.

So we declare it and we pay it.

So you see, the insurance group is a strength to us, and not the other way around. It is diversified. It is the biggest insurance group. in Latin America, we have a huge fraction in the bank's channels to distribute insurance, but we also have external distribution of insurance reaching out to other clients which were not necessarily reached out by our internal channels. But we don't hope that the insurance group will do less. We want them to do more. We have an expectation of growing even more. This is what we are seeing. But the bank is investing a lot.

We are investing in technology.

22% in 2025 over 2024.

The bank is investing in technology.

And sometimes We captured the value considering BF consortium and so on and so forth. So what I see is over time we should have two-thirds from the bank, one-third from the insurance group. But if this means that the insurance group will grow a lot more and have a bigger share, I'm happy. I want to deliver more. And this is our expectation. We are very pleased with the results there and with the other related companies. So you'll see that we will be taking off in our ROE an absolute profit.

Thank you.

Next question from Matheus Guimarães with XP. Good morning.

Good morning, Andréa.

Good morning André, Cassiano and Noronha. Congrats on the results and thank you for taking my question. I would like to revisit the SME topic. I think André talked about market share and that was a relevant information and historically This has been the bank's strength, I mean SMEs, but we've seen some competitors, even in our new bank talking about SME. Of course, the concept of SME varies in terms of the size of the company. But what would we expect for 2026 in that portfolio? Because given that this is a very relevant portfolio for you in terms of growth and even in terms of, you know, growth going forward. Mateus, thank you for your question. We are very pleased with our position. In restating our position, I must say that I've been working directly with Rocha. Rocha is the VP in charge of that area, but I've been working with all of my colleagues, Alexandre Panico, Mario Pessarolo, Marcelo, the entire corporate team or company team, and also wholesale with Bruno, etc., and the middle market team. First of all, we always look at what places the central bank, in terms of assets, companies up to 300 million a year, because this allows to draw a comparison. Competition in this area is very fierce. We always knew that.

But our distribution strength is very important.

We delivered a lot in digital channels.

We higher government progress through digital channels. The journey is very efficient. And we continue to invest.

If there is a place to put money, it is precisely in SME, micro and small and mid-sized companies. The levers continue to be government lines, but also we provide funding to company vehicles and other investments that have even sounder guarantees. you know, prepayment to suppliers, all of that, it's part of our journey. But then, when you look at the digital need with, you know, the new internet app, I mean, a new app when we're migrating over 500,000 clients, the retention rate has been enormous and great growth opportunity and the commercial team In the back office, it's supported by GenAI and U2. We just deployed Salesforce back in 2024 for the company segment. And now we are expanding that to the entire business segment and the previous platform we had so we can manage this whole set of things much better with more than 5,000 managers in 21 points of sales. I am very, very pleased with the results. So look at the level of market share we have and see all that we were able to deliver in terms of our loan portfolio. And that was not by chance, but rather because we implemented new tools, new segmentation, new tools to our clients, new experiences, and certainly with business unit models and products that are much more suitable. with smes not only we reduce the risk but we increase penetration and this is what we have to do ai is here to help us there are things that are a lot of you know involve a lot of machine learning and other things involved gen ai so there are things that we do to manage our portfolio some predicted predictive, deep role models. And engagement to grow, this means, you know, the client life cycle, a client totally connected to our analytics via CRM, which has also been revisited. Therefore, we are sticking to our position. I mean, going from 16.6 to 17 or 16.4, that's not what changes the game. We have to continue to grow. And at the same time, reaching our fair share of everything that is important to us. And I'm very much, you know, aware of our potential and the growth that we can pose for either corporate and individuals.

Thank you, Mateo. Next question from Carlos Gomez Lopez. Now I'll turn into English. Thank you very much, and congratulations on your second year under the new management. I have two very brief questions. The first one is about the absence of cockroaches, as you call them, you know, bad corporate cases. We haven't had any this quarter. In your guidance for next year, do you expect corporate defaults to stay where they are, or do you incorporate some deterioration? The second is, could you comment on what tax rate you expect for next year? Thank you.

Hi, Carlos.

The answer is no. But, André, you can just start answering on the tax rate, and then I can add if necessary.

Okay.

The tax rate that we are working is between 16% and 21%, and 18.5% or 19% to calculate net income. you know and why is it that the tax rate was 20 in 2025 and it dropped a little bit first of all because we anticipate higher payment of interest on equity like i said 14.5 billion in 2025 so i'm saying between 15 and 16 billion in 2026 certainly this is a number that certainly depends on interest on equity to be announced by the government. It's not a fixed number, this is just the best estimate, but we anticipate growth in IOE so that we can take more advantage of the embedded benefit. And secondly, is what Marcelo said, part of our investments you know, bring about competitive gains and like consortia. We've been highlighting that almost every quarter we could also talk about other financing that had positive good performance in the past three months. We have several examples. even with BBI, all of the companies are posting very strong performance, and this helps reduce the rate of tax rate. That doesn't mean that this is operating weakness, but on the contrary, this is very well distributed, and this year in particular, the tax rate will drop a bit. Depending on the company, the rate is... It's different. The insurance business has a lower tax rate. Yeah, go ahead. I think this is the answer. And we have no concerns when it comes to the wholesale bank. So thank you, Carlos.

Next question comes from Tito Labarta from Goldman Sachs. Tito. Morning.

Hi, good morning. Thanks, Andre. Good morning. Marcelo Casiano. How are you? Thank you. Good, good. How are you? Thank you for taking my question. You may have just answered it, but just wanted to make sure, right, because if we do ROE on a pre-tax basis, it's actually been a little bit more stable throughout the year, right? And I think on the guidance, our tax rate will be a little bit lower. Just because of the tax benefits you have, you know, I think as your profitability generation improves, I would expect that tax rate to go up. And I think you mentioned, you know, the insurance tax rate is a bit lower. But just to understand in terms of the underlying sort of earnings potential of the business, do you think that keeps improving or do you think this tax rate sort of remains low because of the tax benefits that you do have? Just to kind of think about that. excluding the tax rate, the ROE of the business, and how you see that continuing to evolve.

Thank you. First comment, Tito.

Regarding the operational results of the group, the operational results of the group before taxes grew 27% in 2025.

Very strong. Secondly, looking at 2026, the answer is no. Yes, we will post strong operational results.

And it's not about a weaker operational and a lower tax rate. It is all well distributed with insurance, very strong consumption. very strong, the discofinanciamento is very strong. It's a very big group with several companies. When we consolidate it all, we see a small reduction of the income tax rate.

Let me stress this, Tito.

We spoke about this in the other question. The insurance group has a smaller tax rate. If you go to other affiliates as well, for example, in payments, it's the same thing. We consolidate it all. And sometimes, in one channel, for example,

the complete connection of Bradesco financiamentos with this one single channel for checking account holders or not checking account holders.

So I have, it's a different situation sometimes. It's not because of the tax rate, but there are other companies that have different tax rates, which is the case of CLO. You see, there is a mix of tax rates. And you should not forget that sometimes in the end of a period, there are some fiscal aspects, a certain law here and there. For example, the insurance group benefited from that in the past quarter. They benefited from one law that affected the tax rate. So this is kind of what explains it. Nothing different, as André mentioned.

Thank you very much, Tito.

The next question from Eduardo Nishio with Genial. Nishio, it's always a pleasure to see you. Good morning. Are your microphone is muted, Nishio?

Still muted?

No, we can't hear you. Still, no sound.

Okay. Let's move on. The next question comes from Andrew from Morgan Stanley. Andrew.

Hi, everyone. Congratulations on the great results, and thank you for the opportunity to ask questions. I know you have discussed at some length credit growth and some expectations for payroll loans, secured loans. I was hoping you could maybe elaborate a bit more on each of the different segments and how they fit into the loan portfolio guidance, 8.5 to 10.5, kind of where you're expecting better growth, maybe where you're expecting some weaker growth, and where there could be some upside by segment if possible.

Okay.

Thank you. Andrea.

Well, actually, as Marcelo mentioned, we start 2026 stronger than we started 2025. We had a positive surprise in credit in Q4 2025. So we struck the year already with a lot of traction. So we see a continuity of that movement. So what do we see in terms of trends? Very strong SMEs followed by individuals and then wholesale. Wholesale competing with the capital market funding. As Marcelo mentioned, sometimes very high tickets making a difference in view for a positive difference for us. That doesn't happen always though. But I think that the expectation, the prospects for those segments would be this. SMEs, individuals, wholesale. We have traction across all fronts and we're ready to capture all opportunities. Right, but Andrew, there are some different situations when we speak about the affluent segment.

In principle, we have relationship products such as investments,

The credit card with a value proposition that is unique for these clients, totally different experiences for these clients. The same goes for Prime, which is different than the relationship for INSS retirees. For that audience, we offer deductible loans. And when we get to prime and principal mortgages, so we have these mixes of products that sustain these segments. And this is just to mention a few, mind you. And in terms of companies, legal entities, we have a huge mix of products growing in small and medium-sized enterprises. in different lines, by the way, increasing our penetration there. And with the wholesale bank, we are recycling the portfolio in what we call OPD book, Origination for Distribution, which is the case. When the capital market spread was very crushed, we can compromise risk-adjusted returns. So we don't work looking at that.

So it is better to distribute than effectively keeping it in our books.

And we have a set of fees which are also important for us in different lines of business.

And there's also cash management.

It is a super important platform for small, medium-sized enterprises, as well as for the wholesale. We have a new technology platform, which over the year will bring us important improvements. That is another key point to improve profitability.

Let's see if Nishio is back.

We still cannot hear you. Not yet. Maybe if you remove your headset, maybe it will be better. We cannot hear.

We're receiving a question about mass income. That's it. Okay, tell me a little bit about the mass income proposal.

So, if you need any more information, I can add.

Okay, mass income is probably one of the major transformations of our banking cycle. Since the beginning of our... track record our history. I think we are bringing some good news. I think Marcelo mentioned it quite well. 90 million clients are already fully digital in the mass retail with a totally different value proposition. But again, it's much easier to operate. Not only they use BIA Gen AI, but there is a specialist that can help with a customized with changes that paradigm of having an individual physically present in a branch. The second relevant aspect is the engagement. Our capacity to serve that client with GenAI tools and integration tools that are very important to boost sales, and I think this has been a major evolution. We anticipate 45 million, so throughout the year we will be fully digital. This will be our mass retail bank. This is a very important aspect. And today, February 6th, we already have 25 million digital clients, because every week The numbers are growing with zero resistance, zero friction with clients. And this has been a very key experience, very good experience. And behind all that, all of that is supported by a very good technological platform for individuals, and this will encompass all the individuals. And I think we've been telling you about that in the past quarters, and this will certainly grow rapidly. or help us decrease cost to serve, which has been significantly reduced, and this has an important correlation to our footprint.

Thank you very much for joining us. I know you had a slight problem with the sound, but thank you.

We are always available to talk to you and also to welcome you here at the bank. And the same thing goes for our IR team. I think Cristiano gave you a good backdrop. Well, you saw more than 40 million with the other 26, you know, starting with 19 million, but engagement is increasing and improving. And certainly, we are able to reduce direct costs to serve by 40 folds. We are very committed to what we're doing. There are still people that look at the physical space, the physical world, and we are testing different models all the time with our Bradesco Espresso so that we can address these things. And this is a challenge. In fact, I said that I went to Asia last September, and I heard comments from some banks. They have the same challenges we have. when it comes to footprint adjustments, cost to serve and consume. Therefore, Nishio, we are sticking to our plan and we will bring this year, and in particular in the second half, more information about this digital retail. And thank you. Thank you, Nishu. And with that, we conclude the Q&A session. Questions that couldn't be answered right now will be answered by our IRT. And before I turn the floor to Marcelo to... his final comments i must say that this presentation and the full material of this release is available in our ir website well thank you andrea thank you and i extend this thanks to all of our team who helped us you know in this video conference and thank you our audience for your interest and for the time that you spent with us it's what i said this is the summary of our transformation eight quarters delivering good numbers with the focus that I said without losing sight of the plan that we set up for ourselves step by step of delivering improved ROE and improved absolute net income with a very engaged team with clients and with the Bradesco team. So thank you once again, and our team is entirely available to give you more details, not only about this earnings presentation, but also about our transformation program. Thank you all very much, and thank you for joining us.