Bradesco (BBDC4 BZ) Buy: Still a complex recovery story

研报英文原文证据摘录

Bradesco (BBDC4 BZ) Buy: Still a complex recovery story

nc. gwill (%) 14.8 15.7 16.6 16.4

Reliance on insurance continues. We highlight the high contribution of Bradesco 52-WEEK PRICE (BRL)

Seguros, the insurance segment of the group, which accounts for 41% of 1Q26 earnings

23.00

and 53% of operating earnings. Insurance earnings look cyclically high (24% ROAE over

the last three years) and may challenge the bank’s capacity to consume its DTAs. 18.50

Capital at 10.2% before Bradesco Saude transaction. The combination of dividends, 14.00 05/25 11/25 05/26

capital consumption, and regulatory changes (IFRS implementation, higher risk weighting Target price: 21.00 High: 21.76 Low: 15.20 Current: 17.65

for operational risk) brought the CET1 ratio to 10.2%, the lowest level since 2008 Q2. The

Source: LSEG IBES, HSBC estimates

merger of Bradesco Saude (the bank’s healthcare business) with Odontoprev, which took

effect on April 30, generated a large gain and raised the ratio to a much healthier 12.5%, Carlos Gomez-Lopez, CFA

as well as consuming DTAs. Still, while the transaction optimizes the structure of the Head of EM and LatAm Financials HSBC Securities (USA) Inc.

group, it improves the ratios but does not bring fresh capital into the bank. carlos.gomezlopez@us.hsbc.com

+1 212 525 5253

DTA amortization commences. After the implementation of Resolution 4,966 (IFRS),

Neha Agarwala, CFA

the stock of DTAs will be amortized over 10 years, in 120 monthly instalments. Bradesco Analyst, LatAm Financials & Fintech

has the highest amount of DTAs (BRL113bn, or 65% of equity), vs. 55% for Santander HSBC Securities (USA) Inc.

neha.agarwala@us.hsbc.com

Brasil, 45% for Banco do Brasil and 36% for Itau. Generating the taxable earnings to +1 212 525 5418