Banco Bradesco SA, Brazil’s second-largest private sector lender, reported that third-quarter recurring net income rose 19.6% to R$6.542 billion, in line with a Refinitiv analysts’ estimate, boosted by insurance results and consumer lending.

Analysts at Credit Suisse remarked in a note to clients that operating expenses had disappointed on higher marketing and personnel expenses.

Fee income also came in below the bank’s target, but CEO Octavio de Lazari Junior told the journalists it is likely to end 2019 in the 3% to 7% growth range set at the beginning of the year.

Lazari said he expects the bank to post a return on equity around 20% in the coming quarters, in spite of Brazil’s all-time low interest rates. Bradesco reported a profitability ratio of 20.2% in the third quarter.

The bank aims to speed up growth to hit its target.

«Gains of scale will be essential for the bank to maintain its profitability amid lower interest rates,»Lazari told journalists.

Bradesco’s loan book grew by 3.2% in the quarter, mainly driven by consumer lending and small companies. The CEO said consumer loan growth is likely to keep up its fast pace in coming quarters.

Loans in arrears over 90 days rose to 3.6%, up 0.4 percentage point. The bank said the rise was caused by issues with corporate loans. Loan loss provisions rose 4% from the second quarter.

Original Story: Reuters | Carolina Mandl
Photo: Site Bradesco
Edition: Prime Yield