Bradesco's Capital Call: A Bold Bet on a Strengthened Balance Sheet
With ROAE at 16.2%, a BRL10bn control-shareholder capital raise and a portfolio doubling down on guaranteed FGO/FGI credit, Bradesco is signaling confidence in its transformation.
BBD · Earnings Call · 2026-08-06
Control-Shareholder Capital as a Confidence Signal
Bradesco's second-quarter 2026 print was ahead of expectations on its own terms: net income of BRL7.1bn, up 16.2% year-on-year, and an ROAE of 16.2% — a level the market expected only by year-end. But the number that dominated the call was not in the earnings release. Days before reporting, the bank announced a BRL10bn capital increase, anchored by controlling shareholders who committed up to BRL8bn. “We do believe that strong capital is always very healthy for a banking organization... having a strong common equity, that's a positive thing. We were questioned about that. We had a very strict capital discipline.” — Marcelo de Noronha, CEO · 2026-08-06 The message is a deliberate shift from where the bank stood just six months ago. “In terms of CET1 of around 11%, that's what we expect to have throughout 2026.” — Andre Carvalho, Investor Relations or IR representative · 2026-02-06 The new capital, plus the pending recognition of Bradsaúde and the bank's focus on tangible capital, is intended to push common equity above 13% — a step-change in a bank that had been managing to an 11% CET1 baseline. Finance chief Cassiano Scarpelli framed it not as caution but as optionality: a stronger capital base absorbs macro shocks, reduces tax-credit drag, and lets the franchise lean into growth. This is more than a balance-sheet mechanic. It is the controlling shareholders making their largest public commitment to the turnaround plan since it was announced in 2024, and it arrives just as the bank's own credit portfolio is accelerating.Guaranteed Lending Drives the Book
The loan book grew 11.6% year-over-year, with SME up 16.1% — but the composition matters more than the headline. Most of the growth is in guaranteed, government-backed lines. FGO and FGI origination jumped 52.7% sequentially and Bradesco now claims a 21.6% market share, the highest in the system. “Our SME growth year-over-year was BRL 37 billion. BRL 31 billion out of that came from FGO and FGI within that stop loss. So the level of loss is minimal.” — Marcelo de Noronha, CEO · 2026-08-06 The emphasis on secured lines is a deliberate de-risking of the mix. The guarantee claim process creates temporary noise in NPLs and cost of risk — the over-90 ratio rose 10 basis points, and Stage 2 was affected by FGO/FGI maturities and the John Deere consolidation. Management's rebuttal is that the curve will flatten as guarantee payments arrive, and that the bank is operating inside its stop-loss parameters. Even so, the market has to calibrate to a slightly higher cost of risk while the portfolio rotates toward collateralized products. There is also a sharper edge to the growth: private payroll loans, a segment with contested risk models across the industry. Bradesco grew it 88% year-over-year in the public segment and is chasing a bigger share of the private market, where its delinquency is 4.7% versus a market without Bradesco of 8.9%. The filters, they argue, are finally working.Market NII and the Cross-Sell Engine
The other fresh signal is the market NII. It reached BRL700m in the quarter, and management has abandoned its old soft guidance. “The market NII was surprising. I think it's important to say... It was very important work from the treasury area and from all the desks... We don't have a hedge policy that is defined.” — Cassiano Scarpelli, Executive (likely CFO or similar senior finance role) · 2026-08-06 CEO Marcelo de Noronha went further: "that soft guidance was left behind because we have larger figures coming close to BRL2 billion." A year ago the expectation was a range of zero to one billion; today they are talking about a sustainable doubling. That is not just trading noise — it's a function of commercial traction in wholesale, middle market, and the energy desk. Autos are another quietly large lever. Vehicle financing grew 26.8% year-over-year after the bank rebuilt its platform around pricing models and client experience. The cross-sell is embedded directly: auto insurance production through Bradesco Financiamentos roughly doubled year-on-year. Vehicles are now a growth quadrant with disciplined risk-adjusted return, not a retreat. “We saw an opportunity for growth at a specific market at specific ratings. We are not present in the market as a whole... And we are very confident in relation to what we've been doing.” — Daer Labarta, Analyst · 2026-08-06 The prior narrative was that NIM would stay at 9% by year-end, with efficiency doing the heavy lifting. “Our NIM got to 9% now in September... we are still expecting 9% in December. That's the base scenario.” — Andre Carvalho, CFO or Executive (likely CFO) · 2025-10-30 Today, the mix shift toward secured, longer-dated, government-guaranteed assets, combined with a continuing fall in funding costs, gives management more room.Bradesco's management is untangling the insurance group, strengthening capital, and deliberately rotating the loan book into guarantees. Whether the market will pay for that optionality is the next chapter.On February 20, if I'm not mistaken, our market cap was of BRL 240 billion. With Bradsaúde, net equity at BRL 14 billion... We listed the capital of this company unleashed a value of BRL 42 billion, and we have a market cap of approximately BRL 182 billion... I think the discount is good.