Banco Bradesco S A : Bradesco 1Q21 - Press Release

1Q21 Highlights

Recurring Net Income

in the quarter

in 12 months (1Q21 x 1Q20)

Quarterly ROAE 12-month ER

in the quarter	lower historic ratio
	(1Q21 x 1Q20)
in 12 months (1Q21 x 1Q20)

Operating expenses		Operating income from
		insurance
(1Q21 x 1Q20)
			in the quarter
			in 12 months (1Q21 x 1Q20)
Expanded loan portfolio			in 12 months
			in the quarter

in 12 months	in 12 months
in the quarter	in the quarter

Expanded ALL			in the quarter
			in 12 months (1Q21 x 1Q20)
Coverage ratio over90days		Delinquency ratio over90days

Press Release

Analysis of the 1Q21 Income

We started the first quarter of 2021 with a recurring net income of R$6.5 billion, 73.6% higher than the income for the first quarter of 2020, mainly because of lower ALL expenses carried out in the period. Regarding the previous quarter, we had a slight reduction in our net income, partly reflecting the lower economic activity in the 1Q21 and the end-of-year seasonality observed in the 4Q20. Our operating income showed growth in all the comparative periods.

Our indicators of profitability (ROAE and ROAA) showed an improvement in comparison to the first quarter of 2020, registering 18.7% and 1.6%, respectively, highlighting the significant improvement of the ROAE, which evolved 7 p.p. in the period mentioned.

Our expanded loan portfolio continues in constant evolution (+2.6% in the quarter and +7.6% in 12 months), with emphasis on the strong acceleration in the Individuals portfolio (+3.8% in the quarter and +13.0% in 12 months), driven mainly by personal loans, payroll-deductible loans and real estate financing. In the companies portfolio, we can highlight SMEs operations, which evolved 4.4% in the quarter and 18.6% in the year.

Our Basel I Ratio ended the quarter at 13.6%, remaining at levels well above the regulatory limits.

In March 2021, our expanded portfolio net of amortizations totaled R$44.1 billion, showing a reduction of 20.3% since September 2020 and 8.1% in the last quarter. The balance of operations in grace period closed the quarter with R$2.9 billion (of which 55% were already settled in April) and R$3.9 billion in arrears, which represents a delinquency of 0.7% of the total portfolio.

In this quarter, even after taking into account the reinforcement of the supplementary ALL constitution, the expanded ALL expenses showed a reduction of 41.8% in comparison to the 1Q20 and 14.5% in comparison to the previous quarter. It is also worth noting the coverage ratio over 90 days, which accounted for 349.8% in March 2021, demonstrating our high level of provisioning.

The delinquency ratio reached 2.5%, a reduction of 1.2 p.p. in the last year. In the quarter, this ratio showed a small increase of 0.3 p.p., which is explained, to a large extent, by the seasonality of this period.

The net interest income reached R$15.6 billion, featuring an increase of 7.4% in comparison to the first quarter of 2020. In the quarterly comparative, the reduction of 6.5% is mainly related to the good performance of the market portion in the 4Q20. The client portion remained stable during the quarter.

We highlight our strong cost control, a fact that has enabled us to reduce our operating expenses, both in the quarterly (-2.4%) and in the annual comparative (-4.7%). It is also worth noting our 12-month ER, which reached 45.3%, an improvement of 3.8 p.p. in comparison to the same period of the previous year. This is the best ratio in our historical series.

This quarter, our fee and commission income has been impacted by the worsening of the adverse economic scenario and by the end of year seasonality.

The operating income from Insurance grew 7.0% in comparison to the 1Q20, mainly justified by the largest financial income and the revenue increase, which were offset by the higher claims ratio. In the quarterly comparative, the growth of 37.5% mainly reflects the establishment of long-term technical provisions in the 4Q20, in Bradesco Saúde, and the revenue increase in the segments of life and health in the 1Q21.

Recorring Net Income			ROAE					12-month ER
					%					%
											49.1
												46.3	45.3
	R$ million	6,801	6,515
					20.0
		18.8					18.7
		25.0
3,753				11.7
30.9	81.2
		75.0
69.1
						1Q20	4Q	1Q21
	1Q20	4Q	1Q21				1Q20	4Q	1Q21
	Banking Activities %	Insurance Activities %

Main Information

Variation %

(unless otherwise stated)

	1Q21	4Q20	1Q20	1Q21 x	1Q21 x
	4Q20	1Q20
R$ million (unless otherwise stated)
Recurring Income Statement
Recurring Net Income (1)	6,515	6,801	3,753	(4.2)	73.6
Book Net Income	6,153	5,464	3,382	12.6	81.9
Operating Income	9,768	9,672	5,397	1.0	81.0
Net Interest Income	15,578	16,657	14,499	(6.5)	7.4
Expanded ALL	(3,907)	(4,568)	(6,708)	(14.5)	(41.8)
Fee and Commission Income	8,067	8,717	8,283	(7.5)	(2.6)
Operating Expenses	(11,204)	(11,483)	(11,757)	(2.4)	(4.7)
(Personnel, Administrative and Other Operating Income / (Expenses))
Income from Insurance, Pension Plans and Capitalization Bonds	3,137	2,281	2,931	37.5	7.0
Statement of Financial Position
Total Assets	1,662,619	1,644,804	1,486,358	1.1	11.9
Loans - Expanded Loan Portfolio	705,160	686,968	655,094	2.6	7.6
- Individuals	270,220	260,258	239,214	3.8	13.0
- Companies	434,940	426,711	415,880	1.9	4.6
Shareholders' Equity	144,240	143,703	129,548	0.4	11.3
Assets under Management	2,550,871	2,508,295	2,252,994	1.7	13.2
Capital and Liquidity - %
Total Ratio	15.4	15.8	13.9	(0.4) p.p.	1.5 p.p.
Tier I Capital	13.6	13.8	11.4	(0.2) p.p.	2.2 p.p.
Liquidity Coverage Ratio (LCR)	162.9	178.4	141.6	(15.5) p.p.	21.3 p.p.
Net Stable Funding Ratio (NSFR)	114.8	120.1	110.7	(5.3) p.p.	4.1 p.p.
Profitability and Efficiency %
Annualized Return on Average Equity (ROAE) (2)	18.7	20.0	11.7	(1.3) p.p.	7.0 p.p.
Annualized Return on Average Assets (ROAA)	1.6	1.6	1.0	-	0.6 p.p.
Efficiency Ratio (ER)	45.0	44.6	49.3	0.4 p.p.	(4.3) p.p.
Market Indicators
Recurring Net Income per Share (accumulated 12 months) - R$ (3)	2.29	2.00	2.41	14.2	(5.1)
Market Capitalization (4)	222,092	226,778	158,941	(2.1)	39.7
Dividends/Interest on Shareholders' Equity	1,754	1,557	1,012	12.6	73.2
Price/Earnings Ratio (5)	10.0	11.7	6.8	(1.7)	3.2
Price to Book Ratio	1.5	1.6	1.2	(0.1)	0.3
Dividend Yield - % (6) (7)	2.5	2.6	10.0	(0.1) p.p.	(7.5) p.p.
Portfolio Indicators - %
Delinquency Ratio (over 90 days)	2.5	2.2	3.7	0.3 p.p.	(1.2) p.p.
Delinquency Ratio (over 60 days)	3.3	2.9	4.6	0.4 p.p.	(1.3) p.p.
NPL Creation - 90 days	1.2	0.7	1.5	0.5 p.p.	(0.3) p.p.
Coverage Ratio (> 90 days)	349.8	402.8	227.9	(53.0) p.p.	121.9 p.p.
Coverage Ratio (> 60 days)	266.7	310.6	184.2	(43.9) p.p.	82.5 p.p.

1. According to the non-recurring events described on page 31 of Report on Economic and Financial Analysis; (2) It excludes the asset valuation adjustments recorded under the Shareholders' Equity; (3) For comparison purposes, shares were adjusted in accordance with bonuses and stock splits occurred in the periods; (4) Number of shares (excluding treasury shares) multiplied by the closing price for common and preferred shares on the period's last trading day; (5) Recurring net income in 12 months; (6) Source: Economatica; and (7) Calculated by the share with highest liquidity.