BBDO - Banco Bradesco S.A. (BBD) Q4 2023 Earnings Call Transcript
2024-02-07 20:57:06 ET
Banco Bradesco S.A. (BBD)
Q4 2023 Results Conference Call
February 07, 2024 08:30 AM ET
Company Participants
Marcelo Noronha - CEO
Andre Rodrigues Cano - Executive Vice President at Banco Bradesco
Cassiano Scarpelli - Director Vice President
Carlos Firetti - IRO
Conference Call Participants
Thiago Bovolenta Batista - UBS
Daniel Vaz - Santander
Bernardo Guttmann - XP
Mario Pierry - Bank of America
Tito Labarta - Goldman Sachs
Jorge Kuri - Morgan Stanley
Eduardo Nishio - Genial Investimentos
Rafael Frade - Citi
Arnon Shirazi - Santander
Yuri Fernandes - JPMorgan
Pedro Leduc - Itau
Paulo Gomes - HSBC
Presentation
Marcelo Noronha
Good morning, I am Marcelo Noronha, and I'm here live speaking from Cidade de Deus, it’s 10:32 AM to present the numbers for the full year of 2023 and of Q4 2023. After that, we will have a second topic. Our guidance for 2024. You probably read our book in our guidance for 2024. To us, 2023 was a challenging year.
It's not the result we would have loved to deliver to you. And the guidance of 2024 falls short a bit. But to us, 2024 will be a year of transition of transformation at Bradesco. And lastly, the third topic is our strategic plan, of course, here bringing the executive summary of the plan that we put together in the last 60 days. I will present that to all of you.
And then we'll be able to debate that during the Q&A. And I will be available to all investors for us to talk later. We already have some meetings scheduled for buy-side and sell-side investors so we can speak about our clients for the next five years in more detail from 2024 to 2028. So now I have the challenge of presenting at the same time that we present an income statement of Q4 '23 to speak about full-year results, the guidance, and the strategic plan in an executive summary, as I mentioned. So I'll try to do this as quickly as possible so we can have our Q&A.
Let's start with our numbers. Our results. As you can see, we have an additional number in lighter color was the end of the quarter with KRW4.3 billion. Here, we had an ALL enforcement for two cases in the wholesale bank. We were a little more conservative in these two cases.
We reduced the ratings, that's why our recurring net income was KRW2.9 billion. In addition, we had two major nonrecurring events. As you can see here in this last topic here on the right of the screen. The provision for the restructuring that we had and the contingent liabilities. I think you should comment on some positive aspects of our income statement.
Wholesale ALL was forced in the two cases that I mentioned, and this is relevant. We have a comfortable coverage level for the wholesale bank for this year with the reduction of ALL in mass retail. Just that we're going to show a reduction in all delinquency ratio. We cannot show the higher delinquency that we had for SMEs and mass retail. Credit stats accelerating.
I will show you that this happened for individuals and SMEs. We had market NII recovering, total NPL dropping 50, and here, there's another positive point which differentiates with this in a position. We are growth that has a bank business and also the largest insurance login Latin America. Our insurance group with a higher level with an ROAE close to 25% in 2023. Our operating expenses were within the guidance, and I will detail more on our expenses.
So moving forward, like I said, we had an inflection of the curve for both individuals and SMEs in the vital going 1.3% despite a reduction we had in our appetite for risk in 2022, 2023 and also a change of level for SMEs, posting a 1.5% growth quarter-on-quarter. We had the write-off of a well-known case, which happened in the end of 2022 in Q4 of 2022 to call your attention to our average daily production. In the second half [indiscernible] increased because we changed our credit models and to policy for individuals, which became more restrictive than in the past. Yes, it's true. But we've had new controlled vintages, the singles for SMEs.
We tested modules in April, we implemented the new models as of September, and restarted to grow again in the segment of small and midsized companies, again, with more control and credit policies. So we won't have any issues in the new vintages, which are performing really well. As I mentioned, the delinquency ratio. We can see all curves of NPLs dropping, some for the second to second. So we have this portfolio under control....
Banco Bradesco S.A. (BBD) Q4 2023 Earnings Call Transcript