(Bloomberg) – Brazilian bank Banco Bradesco SA is finally beginning to reap the results of a turnaround process that began with CEO Marcelo Noronha seizing Reins about a year and a half ago.
Bradesco reported net revenue for the first quarter on Wednesday, beating analyst estimates. The renegotiated loans have also been improved, according to Citigroup Inc., led by Gustavo Schroden.
Bradesco’s shares rose 17% on Thursday in St. Paul (the biggest earnings since March 2020), while the bank’s U.S. deposit revenue rose as much as 20% in New York, the most since November 2008. Brazil’s shares fell 32% last year.
Noronha took over the task of turning the loss in November 2023, with high crime and regulations. XP Inc. analysts Bernardo Guttmann and Matheus Guimaraes said in a research note that the CEO’s transformation plan continues to boost momentum even in a challenging macroeconomic environment.
“This may be the first quarter of the organic revenue trends that propose structural improvements, with no relevant jumps in any remaining line,” Schroden and his colleagues wrote in a note to clients. They also cite the bank’s growing risk.
Despite the earnings exceeding expectations, banks have not changed guidance for the year. “The bank’s trend is to move towards guidance throughout the year,” Noronha said in a post-graduation call with reporters, adding that the company’s goal is to “get better results than the middle of guidance”.
Noronha said in an interview with Bloomberg News in the second half of last year that the goal is to restructure the business, making it competitive even in the case of high interest rates, and in the case of the rise of fintech.
XP analysts say that in the coming quarters, the first quarter performance is not guaranteed, and the transition process for one of Brazil’s largest banks is “gradual and complex”.
“The ongoing restructuring plan is very profound, and the rate at which bank outcomes evolve may not follow a linear trajectory,” Guttmann and Guimaraes wrote.
– Assistance with Raphael Almeida Dos Santos.
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