economic and financial analysis report

1Q24

Managerial Analysis of

Management

Results

Report

Consolidated

Videoconference

commenting on the results

Financial Statements

May 2nd at 9h30 AM

(US Eastern Time)

Table of Contents

Managerial Analysis of Results

5

Press Release

6

Bradesco Results | 1Q24

7

recurring net income statement

8

net interest income

9

funding sources

10

loan portfolio

11

expenses with expanded ALL

16

loan indicators

17

fee and commission income

20

operating expenses

22

Bradesco Seguros

23

basel

28

indicators, guidance & economic perspectives

29

Additional Information

31

corporate strategy | customer-centric

32

NPS | our people

33

sustainability

34

digital in figures | BIA

35

international operations | Bradesco Bank | My Account

36

Ágora

37

next | digio

38

service points, clients and market share

39

return to shareholders

40

additional information

41

selected information

43

consolidated balance sheet - bradesco

44

consolidated balance sheet - insurance

45

statement of income - managerial vs. recurring | BRGAAP vs. IFRS comparative

46

Independent Auditor's Report

47

Consolidated Financial Statements

51

Some numbers included in this Report have been subjected to rounding adjustments.

As a result, some amounts indicated as total amounts in some charts may not be the arithmetic sum of the preceding numbers.

Percentage variations not presented in the framework of this report, are related, in their majority, to the low value balance s

compared with the other periods presented.

BRADESCO | Economic and Financial Analysis Report

4

Managerial

Analysis of Results

Press Release

For us at Bradesco, the year of 2024 is one of transition and transformation. We started implementing the strategic plan that accelerates and deepens changes in the bank, while the operation gained traction at the same time. The trends of the fall in delinquency and acceleration of

credit origination observed in the past quarters, remained the same. The loan portfolio rose in 1Q24 after declining in 2023. At the beginning of the year, there was expansion in all segments. The quality of the new vintages is good, and the delinquency of the portfolio is falling, which results in a trend to normalize the cost of risk. We accelerated the adjustment of our physical network, while continuing to invest in digital channels. Improving the way of serving and clients' experience will gradually increase efficiency and profitability, keeping us close to our clients. The transformation office was implemented and is now in full operation. The main benefit of this transformation will be seen in the operating indexes, in profitability recovery and in the bank's evolution, so that it has greater agility and efficiency in a sustainable way.

The recurring net income was R$4.2 billion in 1Q24, implying an ROAE of 10.2%, which was driven by lower ALL expenses, controlled operating expenses and income from insurance operations, but still pressured by the client NII. The efficiency ratio improved 2.3 p.p. in the quarter compared to 4Q23.

We believe that the loan portfolio reached a turning point this quarter. After declining in 2023, it started an increase trajectory that is predicted to last. In retail individuals segment, we generated more loans in 1Q24 than we did in the pre-pandemic period, reinforcing our strategy of increasing the market share in the segment and our connection with these clients. We had an acceleration in Micro and Small sized Enterprises, but we still have a long way to go until we normalize the origination in this segment.

The most recent loan vintages continue to show significant improvement in quality, even with the acceleration of origination. As a result, the delinquency ratio over 90 days registered a fall of 0.3 p.p. in the quarter, with emphasis on the reduction of 0.4 p.p. in the indicators of Individuals and Micro, Small and Medium-sized Enterprises.

The net interest income contracted in 1Q24, mainly reflecting the reduction in the client NII, which is pressured by the credit mix with a smaller spread, and by the lower volume of transactions with

Micro and Small-sized Enterprises. The prospect of NII improvement is clearer for the second half of the year.

The fee and commission income reached R$8.9 billion in 1Q24. Also, a positive highlight was the performance of consortia and loan operations. The reduction compared to 4Q23 is related to seasonal effects, such as cards income.

The performance of insurance operations was, again, one of the positive highlights of the quarter, with an ROAE of 19.8%, rising 1.6 p.p. compared to 1Q23. The operating income from insurance was R$4.0 billion (+8.9% vs. 1Q23) and net income reached R$2.0 billion (+10.2% vs. 1Q23), marked by the reduction of the claims ratio and administrative efficiency, increase in revenues, and as a consequence, improvement of the combined ratio. We believe that the prospects remain positive for the rest of 2024.

Tier I capital ratio closed the quarter at 12.7%, increasing 0.2 p.p. compared to the same period of the previous year, but falling 0.5 p.p. from December 2023, mainly due to the increase in intangible assets and mark-to- market effects. In the quarter, we allocated R$2.6 billion in Interest on Own Capital to shareholders.

We began the implementation of the strategic plan accelerating the transformation of the bank. We set up the transformation office, with resources 100% dedicated to work fronts. In the area of people and organizational structure, we are strengthening the teams, increasing synergy, and reinforcing business units such as technology and credit, to name a few examples. We are adjusting our physical presence, aiming to improve the way of serving: We closed traditional branches, opened companies branches - with 122 units in operation - and added more correspondent banking to Bradesco Expresso. The benefits of the strategic plan will be seen in our operational income, partly in 2024, and on a larger scale from 2025 onwards.

Finally, we want to highlight our sustainability strategy. We are one of the leaders of the Carbon Disclosure Project (CDP) index, considered a benchmark for Climate Change Reporting, with a rating above the global average in the sector of financial services, which reinforces our commitment to sustainable development. On the climate agenda, we are committed to raising awareness and the financing of our clients in the transition to a greener, more inclusive low-carbon economy. To

strengthen this performance, we joined the Net-Zero Banking Alliance, assuming the commitment of the decarbonization of our loan and investment portfolios to achieve zero net emissions by 2050.

Our journey is one of change, evolution, and dedication, with each step reflecting the strength and enthusiasm that has brought us here. Together with society and stakeholders, we have the power to build an even stronger Bradesco and face the future with a proactive stance, transforming challenges into opportunities.

Enjoy the Reading!

BRADESCO | Economic and Financial Analysis Report

6

Bradesco

24

RESULTS

MAIN DATA SELECTED

1Q24 vs. 4Q23 (q/q)

1Q24 vs. 1Q23 (y/y)

Recurring Net Income

Expanded Loan Portfolio

R$4.2 bi

R$889.9 bi

1.4% (q/q)

1.2% (y/y)

46.3% (q/q) 1.6% (y/y)

Quarterly ROAE

Individuals

R$372.6 bi

10.2%

1.9% (q/q)

2.0% (y/y)

3.3 p.p. (q/q)

0.4 p.p. (y/y)

Quarterly ER

Companies

R$517.4 bi

51.1%

1.1% (q/q)

0.7% (y/y)

2.3 p.p. (q/q)

4.0 p.p. (y/y)

SMEs

Large Corporate

Basel - Tier I

2.3% (q/q)

1.2% (y/y)

0.5% (q/q)

1.6% (y/y)

12.7%

0.5 p.p. (q/q)

0.2 p.p. (y/y)

Total Net Interest Income

Delinquency

R$15.2 bi

15 to 90 days

%

Over 90 days 4.8%

6.1% (q/q) 9.0% (y/y)

4.1

0.3 p.p. (q/q)

0.3 p.p. (y/y)

Stable (q/q)

0.5 p.p. (y/y)

Fee and Commission Income

Expanded ALL R$7.8 bi

R$8.9 bi

25.8% (q/q)

17.9% (y/y)

1.8% (q/q)

1.3% (y/y)

Operating Expenses

Retail ALL R$7.3 bi

R$13.4 bi

13.7% (q/q) 22.3% (y/y)

10.5% (q/q) 4.4% (y/y)

INSURANCE GROUP

Recurring Net Income

Quarterly ROAE

Income from

Revenue

Claims Ratio

R$2.0 bi

operations

19.8%

R$28.0 bi

78.4%

R$4.0 bi

21.6%

(q/q)

5.0 p.p. (q/q)

15.8%

(q/q)

0.2% (q/q)

0.1 p.p. (q/q)

1.6 p.p. (y/y)

11.8% (y/y)

10.2%

(y/y)

8.9%

(y/y)

3.7 p.p. (y/y)

KEY HIGHLIGHTS

  • Improvement of crop quality in all segments and Individual production above historical levels
  • Improvement of ALL in retail and wholesale
  • Reduction of the delinquency ratio over 90 days in all segments
  • Control of operating expenses | Review of the footprint

• Good performance of the insurance operations

BRADESCO | Economic and Financial Analysis Report

7

recurring net income statement

Variation %

R$ million

1Q24

4Q23

1Q23

1Q24 x 4Q23

1Q24 x 1Q23

\ Net Interest Income

15,152

16,128

16,653

(6.1)

(9.0)

- Client NII

14,522

15,432

16,965

(5.9)

(14.4)

- Market NII

630

696

(312)

(9.5)

-

\ Expanded ALL

(7,811)

(10,524)

(9,517)

(25.8)

(17.9)

\ Net Interest Margin

7,341

5,604

7,136

31.0

2.9

Income from Insurance, Pension Plans and

3,997

4,745

3,669

(15.8)

8.9

Capitalization Bonds

Fee and Commission Income

8,861

9,028

8,746

(1.8)

1.3

Operating Expenses

(13,360)

(14,935)

(12,793)

(10.5)

4.4

Personnel Expenses

(6,368)

(6,516)

(6,031)

(2.3)

5.6

Other Administrative Expenses

(5,483)

(5,972)

(5,418)

(8.2)

1.2

Other Income / (Operating Expenses)

(1,509)

(2,447)

(1,344)

(38.3)

12.3

Tax Expenses

(1,918)

(2,077)

(1,955)

(7.7)

(1.9)

Equity in the earnings (losses) of unconsolidated

56

134

41

(58.2)

36.6

and jointly controlled subsidiaries

\ Operating Income

4,977

2,499

4,844

99.2

2.7

Non-Operating Income

14

67

39

(79.1)

(64.1)

Income Tax / Social Contribution

(675)

390

(499)

-

35.3

Non-controlling interests in subsidiaries

(105)

(78)

(104)

34.6

1.0

\ Recurring Net Income

4,211

2,878

4,280

46.3

(1.6)

Non-Recurring Events

-

(1,175)

-

-

-

Provision for Restructuring

-

(570)

-

-

-

Contingent Liabilities

-

(547)

-

-

-

Impairment of Non-Financial Assets

-

(58)

-

-

-

Book Net Income

4,211

1,703

4,280

-

(1.6)

Profit Movement in the Quarter | R$ million

2,713


  1. 1,546

1,575

(748)

(1,064)

2,878 (910) (66)

1,167

(167)

4,211

4Q23

Client NII

Market NII

Retail

Wholesale

Fee and

Operating

Operating Income Others (1)

1Q24

Commission

Expenses

from Insurance

Net Interest Income

Expanded ALL

Income

(Personnel +

Administrative +

Others)

  1. Tax Expenses, Equity in the Earnings of Affiliates, Non-Operating Income, Income Tax/Social Contribution and Minority Share.

ROAE Quarterly and Accrued

ER / Risk-Adjusted ER

%

10.9

%

84.8

86.6

84.2

10.6

11.0

10.0

10.2

79.8

84.0

45.9

47.3

10.6

11.1

11.3

46.8

48.7

49.7

6.9

10.2

47.1

46.1

48.2

53.4

51.1

1Q23

2Q

3Q

4Q

1Q24

1Q23

2Q

3Q

4Q

1Q24

Quartely

Accrued

Quarterly

12-month

12-monthrisk-adjusted

BRADESCO | Economic and Financial Analysis Report

8

net interest income

1Q24

4Q23

1Q23

1Q24 x 4Q23

1Q24 x 1Q23

R$ million

R$

%

R$

%

\ Net Interest Income

15,152

16,128

16,653

(976)

(6.1)

(1,501)

(9.0)

\ Client NII (1)

14,522

15,432

16,965

(910)

(5.9)

(2,443)

(14.4)

Average Balance

710,662

718,376

723,153

(131)

(231)

Average Rate

8.5%

8.8%

9.9%

(779)

(2,212)

\ Market NII (2)

630

696

(312)

(66)

(9.5)

942

-

  1. It relates to the income from operations made with assets (loans and others) and liabilities sensible to spreads. The result calculation of the assets sensible to spreads considers the original rates of the deducted operations from the internal funding cost, and the liabilities result represents the difference between the cost of raising funds and the internal transfer rate of these funds; and (2) It is composed by Assets and Liabilities Management (ALM), Trading and Working Capital.

Client NII

Client NII | Indicators

Product Mix - Individuals (%)

R$ billion

Total Client NII

Client NII -

ALL net

9.9%

9.7%

9.1%

8.8%

8.5%

4.2%

3.6%

3.8%

2.7%

3.8%

17.0

16.7

15.8

15.4

14.5

7.4

6.3

6.6

4.9

6.7

Mar24

Dec23

Mar23

Mar24 x

Mar23

\ Individuals

41.9

41.7

41.5

0.4 p.p.

Payroll-deductible Loans

10.5

10.5

10.2

0.3 p.p.

Real Estate Financing

10.2

10.2

9.8

0.4 p.p.

Credit Card

7.8

8.2

8.2

(0.4) p.p.

Personal Loans

6.6

6.1

6.6

-

Vehicle

3.7

3.8

4.0

(0.3) p.p.

Rural Loans

2.0

1.9

1.8

0.2 p.p.

Other

1.0

1.0

1.0

-

1Q23

2Q

3Q

4Q

1Q24

Gross NIM Annualized

Net NIM Annualized

\ Large Corporates

38.8

39.2

38.7

0.1 p.p.

\ SMEs

19.3

19.1

19.8

(0.5) p.p.

Change in the Client NII | R$ million

6% (-910)

15,432

37% (+1,803)

7,811

14,522

2,713

4,908

6,711

(10,524)

(131)

(432)

(202)

(145)

4Q23

Expanded

Net Client

Average

Spread

Products

Number

Expanded

Net Client

Expanded

1Q24

ALL 4Q23

NII of ALL

Volume

Mix

of Days

ALL

NII of ALL

ALL

4Q23

1Q24

1Q24

The performance of the client NII between the periods is impacted by the lower average volume of operations, mainly in Micro and Small-sized Enterprises, alteration of the product mix of Individuals, increasing the share of payroll-deductible loans, real estate and rural loan within the portfolio and by the greater risk discrimination, favoring profitability by net interest income.

  • In Individuals, the new loan crops already present quality and production volume higher than the previous year and the pre-pandemic period, contributing to the growth of the expanded portfolio and, consequently, of the client NII.
  • In Micro and Small-sized Enterprises, the latest crops have been performing well in terms of default, but in volumes still lower than the historical levels.
  • The liability margin presented a positive contribution both in the annual and quarterly comparison, with increase in volumes and improvement in the mix.

Market NII

696

630

23

The market NII in the periods reflects the recovery of the

ALM result, highlighting the improvement of R$942 MM

1Q23

2Q

3Q

4Q

1Q24

compared to 1Q23.

  1. (96)

BRADESCO | Economic and Financial Analysis Report

9

funding sources

Funds Raised and Managed

1.9% q/q

Funds Raised

7.7% y/y

8.5% y/y

Funds and Managed Portfolios

9.7% y/y

Mar24

Variation %

R$ million

Mar24

Dec23

Mar23 Quarter

12 months

Demand Deposits

41,839

51,083

47,967

(18.1)

(12.8)

Savings Deposits

127,387

131,004

128,312

(2.8)

(0.7)

Time Deposits + Debentures

456,676

458,247

417,364

(0.3)

9.4

Borrowings and Onlending

46,977

48,751

51,123

(3.6)

(8.1)

Funds from Issuance of Securities

265,101

256,325

242,411

3.4

9.4

Interbank Deposits

1,998

2,355

1,309

(15.1)

52.6

Subordinated Debts

50,284

50,338

47,886

(0.1)

5.0

\ Subtotal

990,262

998,104

936,371

(0.8)

5.8

Obligations for Repurchase Agreements Working Capital (Own/Managed) Foreign Exchange Portfolio

Payment of Taxes and Other Contributions

Technical Provisions for Insurance, Pension Plans and Capitalization Bonds

309,512

288,730

274,156

7.2

12.9

127,711

128,256

124,315

(0.4)

2.7

24,185

19,028

25,215

27.1

(4.1)

5,806

940

5,649

-

2.8

372,673

360,803

332,905

3.3

11.9

\ Funds raised

1,830,149

1,795,860

1,698,611

1.9

7.7

\ Investment Funds and Managed Portfolios

1,214,293

1,192,511

1,107,422

1.8

9.7

\ Total Assets under Management

3,044,442

2,988,371

2,806,033

1.9

8.5

Loans vs. Funding

We meet the need for resources required for loan operations primarily by our funding activities, through the capacity to obtain funding from clients effectively.

In order to evaluate loan operations vs. funding, we deducted from the total client funding the amount committed to reserve requirements at Bacen, as well as the amount of funds available within the customer service network, and we added the funds from domestic and foreign lines of credit that provide funding to meet the demand for loans and financing.

Variation %

R$ million

Mar24

Dec23

Mar23

Quarter

12 months

\ Funding vs. Investments

Demand Deposits + Sundry Floating

47,644

52,023

53,616

(8.4)

(11.1)

Savings Deposits

127,387

131,004

128,312

(2.8)

(0.7)

Interbank Deposits

1,998

2,355

1,309

(15.1)

52.6

Time Deposits + Debentures

456,676

458,247

417,364

(0.3)

9.4

Funds from Financial Bills

257,579

248,956

233,600

3.5

10.3

\ Customer Funds (1)

891,285

892,585

834,201

(0.1)

6.8

(-) Reserve Requirements

(124,265)

(133,722)

(103,691)

(7.1)

19.8

(-) Available Funds (Brazil)

(14,478)

(14,862)

(14,495)

(2.6)

(0.1)

\ Customer Funds Net of Reserve Requirements

752,543

744,001

716,015

1.1

5.1

Borrowings and Onlending

46,977

48,751

51,123

(3.6)

(8.1)

Other (Securities Abroad + Subordinated Debt + Other Borrowers - Cards)

85,298

88,289

88,401

(3.4)

(3.5)

\ Total Funding (A)

884,817

881,042

855,540

0.4

3.4

\ Expanded Loan Portfolio (Excluding Sureties and Guarantees) (B)

783,095

771,056

781,455

1.6

0.2

\ B / A

88.5%

87.5%

91.3%

1.0 p.p.

(2.8) p.p.

  1. It considers: Demand Deposits, Sundry Floating, Saving Deposits, Interbank Deposits, Time Deposits, Debentures (with collateral of repurchase transactions) and Funds from Financial Bills (considers Mortgage Bonds, Letters of Credit for Agribusiness, Financial Bills and Structured Operations Certificates).

BRADESCO | Economic and Financial Analysis Report

10

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Banco Bradesco SA published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 09:16:23 UTC.