Banco Bradesco's preferred shares (BVMF:BBDC4) posted a 2.6% gain last week, but the advance failed to keep pace with the broader Brazilian market. The Ibovespa benchmark climbed 3.0% over the same period, highlighting Bradesco's continued laggard status among major Brazilian lenders.
The stock's weekly performance was heavily influenced by an unusual concentration of trading activity. More than 56% of BBDC4's weekly turnover occurred on June 24 and 25, two sessions in which the share price actually declined. On those days, a combined 127.9 million shares changed hands, representing 56.5% of the week's total volume of 226.4 million shares. The price slipped from 17.84 reais to 17.62 reais over that span before rebounding 1.7% on Friday to close at 17.92 reais.
Friday's volume of 54.8 million shares was roughly 1.9 times the stock's average daily volume of 28.69 million shares, according to Google Finance data. Despite the late-week bounce, BBDC4 still underperformed its peers. Itaú Unibanco preferred shares (BVMF:ITUB4) surged 5.94% for the week, while Banco do Brasil common shares (BVMF:BBAS3) rose 4.74%. Bradesco's common shares (BVMF:BBDC3) climbed 3.17%. Only Santander Brasil units (BVMF:SANB11) fared worse, falling 1.97%.
Investors are now focused on an upcoming dividend event. Bradesco has declared a semiannual dividend of 0.2862 real per share, with a record date of July 3 and an ex-date of July 6. Based on Friday's closing price, the dividend yield is approximately 1.6% for BBDC4. This payout is likely to attract income-focused investors in the near term.
Valuation metrics present a mixed picture. BBDC4 closed at 17.92 reais, still 17.7% below its 52-week high of 21.77 reais but 24% above its 52-week low of 14.46 reais. The stock trades at 7.97 times earnings, with a dividend yield of 5.67% and a market capitalization of 177.62 billion reais, according to Google Finance.
The bank's first-quarter results offered some positive signals. Recurring net income reached 6.811 billion reais, up 16.1% year-over-year, while net interest income rose 16.4%. However, loan-loss provisions jumped 26.5%, and loans more than 90 days past due stood at 4.2%, underscoring ongoing credit quality concerns.
Brazil's macroeconomic backdrop remains a key driver for banking stocks. The IPCA-15 inflation index came in at 0.41% for June, with 12-month inflation at 4.80%. The IBGE reported unemployment at 5.6% for the quarter ending in May, while real earnings rose 4.0% year-over-year. The central bank cut the Selic rate to 14.25% last week, but subsequent comments from officials caused some market confusion about the policy outlook. Goldman Sachs economist Alberto Ramos noted, 'We expect the Copom to halt the rate normalization cycle and to resume cuts at the earliest by fourth quarter of 2026.'
Bradesco's performance will likely hinge on two factors: credit demand and the pace of future rate cuts. As the bank navigates a challenging environment of rising provisions and uncertain monetary policy, its relative underperformance against peers suggests investors remain cautious about its near-term prospects.
