Banco Bradesco S.A. (NYSE:BBD) Q4 2022 Earnings Call Transcript

In terms of time, I would say we believe we will close the year already with a higher level of return than what we have right now, maybe not exactly the — what we think is the sustainable levels and we’ll keep progressing in ’24. I would say, at some point in ’24 on a quarterly basis, it’s possible we can get to those levels. That’s what we view. Regarding the deterioration. As we pointed in the presentation, we have already seen the performance of new vintages of loans, especially in the consumer, consumer loans, retail loans improved, improving materially. We believe that keep going with those trends considering we have tightened meaningfully our credit policies, it will lead to a stabilization in NPLs as we pointed probably at the end of the first half, second quarter, let’s call it and I think this is kind of the trend we expect.

Tito Labarta: Okay, great. That’s helpful. Maybe just one follow-up, if I may. And just to understand a little bit on the deterioration and I know part of it is your lower income exposure but just thinking of other peers that have perhaps a similar exposure, the deterioration hasn’t seemed as severe, at least until now. I mean, we’re still getting more data on that. But just kind of curious, if there was anything specific to Bradesco that had your deterioration at least looking worse than peers in the industry?

Carlos Firetti: Tito, we believe we have more exposure to low income. We have — we are — given our presence, given our historical positioning, we think we are fairly well-positioned in this segment. And we think this is a strength and I mentioned even at this moment, we are suffering given the cycle. But it is a segment that we believe have very high prospects in the future. The low-income segment in small companies, in our view, suffered more than any other segment in Brazil and considering that probably we are more exposed with suffered more. We admit that probably we took longer than we should for tightening our credit policies. Probably that made us to suffer a little bit more than we should. But anyway, I think we have more exposure to the sectors than our peers.

I think there are some peers that are expanding their exposure but we are already there. We are already playing with small companies. We have credit limits with low-income individuals. We are a bank that has a strong presence there. I think that’s probably the difference. But again, the message here, Tito, is really that we see the trends in credit quality already improving. And we believe we’re going to make this path soon.

Operator: Our next question comes from Mario Pierry with Bank of America.

Mario Pierry: So 2 questions. Can you share with us the macro outlook that you have for 2023 and what is driving, right, like so that we get a better sense for your guidance, if you can share GDP growth and employment, inflation, that would be helpful. And then finally seeing the impact of that on the corporate. So if you could make some comments on how do you see corporates in general? I know you talked about like you don’t expect to have reversals of provisions but if you can help us understand like if there are any specific sectors that you’re most concerned about or should we get — start getting concerned about like a more significant, more pronounced deterioration in the corporate segment in Brazil?