Banco Bradesco's preferred shares (BBDC4) declined 2.6% on Friday, closing at R$20.61, as the market reacted to the bank's latest financial results and forward-looking guidance.
Earnings and Targets in Focus
The Brazilian financial institution reported a recurring net income of 6.5 billion reais for the fourth quarter of 2025, with a return on average equity of 15.2%. Concurrently, management outlined its 2026 objectives, which include expanding its loan portfolio by 8.5% to 10.5% and forecasting a rise in operating expenses between 6% and 8%.
Cost Management Under Scrutiny
During the earnings discussion, CEO Marcelo Noronha emphasized ongoing investments in technology, a key component of the bank's transformation strategy. However, analysts questioned the persistent increase in costs, placing the bank's expense discipline in the spotlight.
The broader performance of Brazilian banks is often tied to interest rate movements. While higher rates can boost lending margins, they also increase the risk of borrower defaults, presenting a complex environment for Bradesco's turnaround plan focused on digital growth and credit quality.
Investors now await Brazil's January IPCA inflation data, scheduled for release on Tuesday. This report is a critical indicator for future central bank policy decisions, which directly influence the banking sector's profitability. Additionally, market liquidity may be affected by the upcoming Carnival holiday, with exchange operator B3 set to close on February 16.
Bradesco's American Depositary Receipt (BBD) ended the New York trading session at $3.98.