Brazil’s Bradesco’s quarterly profit falls 23%, lending outlook worsens

Sao Paulo, Nov. 8 (Reuters) – Brazilian lender Banco Bradesco SA (BBDC4.SA) on Tuesday reported a 22.8% decline in recurring net income in the third quarter and raised its forecast for retained funds it may need to cover its bad debts.

Bradesco’s net recurring profit totaled R$5.22 billion ($1.01 billion), below Refinitiv’s consensus forecast of R$6.76 billion.

Lenders also raised expectations about the amount they set aside for bad debts this year. As high interest rates have caused a decline in asset quality, we will now hold reserves in the range of R$25.5 billion to R$27.5 billion.

Between July and September, Bradesco secured R$7.27 billion. This is more than double what he was a year ago.

Brazil’s central bank paused its aggressive monetary tightening cycle in September, leaving the main Sellic rate unchanged at 13.75% after raising it for 12 consecutive times. The central bank’s rate-setting committee also kept its benchmark rate unchanged in October.

According to Bradesco, the default rate for 90-day loans was 3.9% at the end of September, up 1.3 percentage points from the same period last year and 0.4 percentage points higher than in the second quarter.

($1 = 5.1440 Real)

Reported by Peter Frontini. Edited by David Alire Garcia and Lisa Shumaker

Our criteria: Thomson Reuters Trust Principles.

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