Bradesco (BBDC4.SA): Capital Raise: Opportunity or Necessity?

Research evidence excerpt

Bradesco (BBDC4.SA): Capital Raise: Opportunity or Necessity?

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29 Jul 2026 21:30:35 ET │ 11 pages

Bradesco (BBDC4.SA)

Capital Raise: Opportunity or Necessity?

CITI'S TAKE

Buy Bradesco announced via a communiqué a R$10bn rights offering to

existing shareholders, with controlling shareholders committing to Price (29 Jul 26 18:00) R$18.35

subscribe up to R$8bn. Management mentioned that the capital raise is Target price R$21.00

intended to support its transformation plan, including investments in Expected share price return 14.4%

technology, commercial efficiency and business expansion, while also Expected dividend yield 7.6%

strengthening its regulatory capital. The bank estimates the transaction Expected total return 22.0%

would add ~90bp to its CET1 pro-forma ratio from ~12.7% to 13.6%, if fully

Market Cap R$194,363M subscribed. In our view, there could be three main interpretations

US$37,981M behind this step: i) Bradesco could be acting opportunistically from a

position of strength, taking advantage of a receptive market to enhance

capital flexibility and accelerate investments, ii) management may be

seeking to raise capital as the credit cycle continues to deteriorate and Gustavo SchrodenAC

provisions remain elevated, or iii) the potential capital increase could +55-11-4009-5858

accelerate DTA utilization driven by the capacity to accelerate RWA gustavo.schroden@citi.com

growth and generate taxable income.

Brian Flores, CFA

+55-11-4009-2842

As of 1Q26, tangible book value represented only 1% of total assets (R$26bn), luis.brian.flores@citi.com

leading us to believe that the level could make the bank more open to further

Arnon Shirazi, CFAcapital raises that include the usage of IoC.

+55-11-4009-7906

arnon.shirazi@citi.com