Banco Bradesco S.A. American Depositary Shares (Each representing one Preferred Shares) 2026 Q3 Earnings Call

Hello, good day, everyone. It is a pleasure to be here with you once again. I am Marcelo Noronha. I am speaking directly from our studio in Cidade de Deus, our Bradesco headquarters, to present our third quarter earnings results. Today, I will start with a special thank you to all of our shareholders. We have just completed our capital increase of BRL 10 billion. Let's move on. As always, I always talk about the cause and effect, it will be no different today. I would like to have the net income in the last slide. I spoke about this in the last quarter because we always speak about the cause and the effect. One cause is revenue generated by several line items of the balance sheet.

I'd like you to look at the complete release, and you'll see that we grew in NII, NIM in our liabilities. Look at our complete earnings release and that contributes to NII. We grew in fee income and also in the insurance group. There's a baseline, but when we look at the premiums, we've posted significant growth as well. Our loan portfolio totaled BRL 1 trillion 150 billion, growing 11.1% year-over-year. In the quarter, growing 1.1% quarter-on-quarter. The first conclusion is that we continue to have traction, but we have traction where we have risk appetite. If we look at the national financial system that has data published by the Central Bank until August, the national financial system grew 9.2%. If we exclude Bradesco, that has a significant share in the national financial system, the market is growing even less.

In the quarter, in August and July, we would have about 0.5% growth in the national financial system. We grew less in individuals, 7.4%, and grew more in legal entities, particularly large corporates, growing 14.8%, and I am going to detail that. Our expanded loan portfolio. On this slide, I bring you our NIM. Our NIM is explained here. If you look at the third quarter 2025 earnings release, you are going to see this same slide, but with a huge difference when we looked at large corporates. We had a minus of 3.5% growth, and in the second quarter, it was also dropping. Here, we had BRL 341 billion, large corporates grew this year more than BRL 50 billion. How do we explain the NIM? Individuals were growing more, 13.8, and SMEs were 24.8. This has been growing a lot. The weighted distribution of our portfolio was different.

If we take large corporates, if we exclude them, and you can do any calculation, if you removed BRL 50 billion, if you deduct BRL 50 billion, you get to a higher NIM. I'll tell you, zero growth in large corporates, even if we had a zero growth, our NIM would not be 9, it would be 9.3. That is the explanation. This is the weighted average of NIIs generated by the portfolio. You can see the tractions that we have. Where do we have risk appetite? Let's look at individuals. In payroll-deductible loans, we continue to grow 7.4. Private payroll loans, we accelerated after some other competitors in the market have been growing quite a lot, but we grew 102% year-over-year, 13.3% in the last quarter. I am going to talk about default in payroll loans, and we can debate that.

But in public payroll loans, we have been growing, and INSS, we have been growing less. Actually, we posted a decrease. Do you know why? For one basic reason. The market continued to operate with BPC, and we stopped operating BPC since 2024. We are going back to growing, also with INSS payroll loans. Vehicles. With our new technological platform, offering a totally different experience to customers, a new operational and commercial secret. The result is we grew almost 27%. We are accelerating the top line where we have risk appetite. Same for mortgages and for real estate, and we are growing 15.2%. For credit cards, this kind of portfolio is a more stressed portfolio. This is a relationship product. We are growing more in high income, but it is a product in which we have controlled risk appetite. Here, personal loans, we do not have risk appetite.

We are reducing the portfolio. For rural loans, for individuals, this is the effect of the baseline, but we can see a decrease of 2.2. Unlike the wholesale bank, where we have companies with good ratings, good crop, and we are growing quite well with guarantees. For legal entities, where we have more risk appetite, it is growing in general 14.1% for companies. You see here FGI, FGO, 31% growth. We grew nonstop in 2024, 2025, and 2026. Here we have a lot more guarantees. This is collateralized assets, but it has other effects, which I will explain in a moment. Moving on. To show this risk appetite, as I have been commenting, we see here working capital and without guarantee, non-secured SMEs, dropping quarter-on-quarter, year-on-year. If you compare with September 2025, we dropped 11.4%. With guarantees, FGI, FGO, 31.5%, as I mentioned.

This means capital management, portfolio management. This is the choice we are making. In rural loans, individuals, and small and medium-sized enterprises in December dropping almost 6%, but for large corporates, growing more than 40%. Clean personal loans. I just mentioned that. In credit card, again, we are growing, but we are growing in high income segments. Private payroll loans, 102%, and 15.3%. In the public, we have a huge portfolio, almost BRL 60 billion, growing 11.1% year-over-year. In vehicles, 27%, and real estate for individuals and legal entities, 2.8% and 2.9%. Another interesting point to highlight and compare in terms of our portfolio, rural individuals. In December 2025, our over 90 NPL was 3.9%. We ended August, to compare with the national financial system, 3.1. The market, 6.6%, increasing to 9.7%. Private payroll loans, Bradesco in December 2025, 4.9%.

In August, again to compare with the national financial system, 5.4%. Look at the market, 5.5% increasing to 10.6%. INSS, Bradesco, 1.7%, 1.8% in August. Market, 1.9 and 2.2. When we get global private payroll loans, INSS and public and private, of course, we increased in December 2025 from 2.7 to 2.8, and the market 2.8 to 3.8. You just have to look at the sequence of disclosure by the Central Bank. They disclosed a series from January to August. If you look at it attentively, in the last month, the level of NPL grew again to 5%. If Bradesco has a lower level of delinquency, it means that there are some players, not everyone, but some players in the market that are posting greater NPL than we have. Our portfolio is under control, but we are also affected by the macroeconomic scenario.

We gained market share in the national financial system until August, 1%. The highlight goes to earmarked loans, we highlight FGI, FGO, 20% compared to 12.9%. We have non-earmarked loans where we have much lower risk appetite than the market. We showed this in the last quarter. We are managing this with this FGI and FGO influencing more and more our over 90 NPL. We are going to detail that momentarily. It goes to level 2, it influences level 3 at a greater proportion. The expected loss is lower than a clean personal loan, for example. It is totally different. If we do not understand this dynamic, we do not really understand what is happening with the portfolio. You see over here, our over 90-day non-performing loan, it was 4.1 increasing to 4.6. When I look at the quarter, it was 4.3 increasing to 4.6.

Where is this coming from? It is coming from FGI and FGO. FGI and FGO guarantees, but the expected loss here is lower because we have very good guarantees. Half of the growth is coming from here. This dynamic did not happen only this quarter. It happened before that, it started influencing the asset quality. The Banco John Deere that has seasonality in this period from May to now, almost 10 bps. These two portfolios explain the variation of our over 90-day NPL. Now let us look at some other things here. When I look at SMEs, we have 4.9%, which is the effect of FGI, FGO guarantees that influences the main curve. We have the service. Here we have the five top stages, 1, 2, and 3. We have write-offs, of course, but it is not a write-off of FGI portfolio.

When we exclude the Banco John Deere, we are kind of flat, but we have an effect in stage 3 of FGI and FGO guarantees. You see this dynamic. If we do not understand this dynamic, we cannot really pinpoint what is happening with the portfolio. When we detail, this is Bradesco's portfolio. In August, this index of the national financial system was 5%. If we look at December to date, we grew 4.5%, I am showing you where exactly we are growing. When we look at the national financial system from January to September, it grew 0.8%, which means that if we exclude Bradesco, which has an important share in the national financial system, we will see that the national financial system has NPL, which is higher than 5%, because we are pulling the delinquency of the national financial system down.

Our coverage of guarantees, I have been showing you this. We look at individuals, 72% secured loans for individuals, the restructured portfolio is totally under control. When we look at the level of coverage of stage 3 with FGI and FGO that accounted for a more substantial portion, we see the level of drop in coverage. When we split and separate that portfolio, our coverage is 105%. Sometimes we debate things, but we do not understand the dynamic of the portfolio. Now about revenues. All of the revenue lines, as I said at the beginning, assets, liabilities, fees and commissions, the insurance group, the weighted average is 8.4%, but our total NII was up by 14% and 2.4% in the quarter, meaning to say that we still have a very strong traction. We grow where we want to grow.

Please look at the entire release and look at all of the liabilities and the growth we posted. We posted 4% growth, meaning that we are growing in every line. Fee and commission income, look at the quarter's performance. It's interesting to notice, especially when I break the numbers down. When you look at credit operations, we defer according to Resolution 4966. That's why this will continue to grow. We see solid growth going forward. In the insurance business, the same thing, but if you look at the insurance premium, you will also see growth. Moving forward, look at our NII. The effect of NIM that I mentioned before. Here we grew 10.1, but the effect of NIM is right here, because if you look at the wholesale bank portfolio, this will be 9.3.

If we were still in the same situation we had in the third quarter of 2025, this would be 9.3 or 9.4. Certainly, the NII net of provisions is almost flat, but it comes from the fact that there was an increase in the cost of credit. Now, look at our total NII or NII net of provision. It's still growing about 5% with the growth of gross margin and almost BRL 1 billion right here. I've been saying this to you for quite some time, that our treasury is constantly operating in a recurring fashion. Okay, I have my client desk. When do we zero out the positions during trading? The dynamics, it's quite robust. We also introduce other verticals like the energy desk.