Bradesco reported fourth-quarter net income of 6.801 billion reais ($1.27 billion), above the 5.546 billion reais consensus estimate of analysts polled by Refinitiv, and up 2.3% from a year earlier.
Operating expenses fell 9.3% as the bank tightened its belt to weather the COVID-19 related slump, closing 1,083 branches.
“2021 will be another year of overcoming challenges, but it will be a year of recovery more than adversity,” CEO Octavio de Lazari said in a statement, forecasting growth in loans and declines in provisions.
In 2020, net interest income, a measure of earnings on loans minus deposit costs, jumped 8% year-over-year, mostly on trading gains.
The bank’s return on equity was a better-than-forecast 20%, maintaining a recent upward trend.
Loan-loss provisions rose 14.7% from a year earlier, to 4.568 billion reais. Still, the bank’s loan delinquency ratio came in at 2.2%, down slightly from the third quarter.
Amid coronavirus-related quarantines, fee income dropped 1.3% year-over-year due to fewer card transactions and less visits to bank branches.
For 2021, Bradesco predicted its loan book will expand between 9% and 13%, compared with an increase of 10.3% last year.
It sees loan-loss provisions declining to between 14 billion reais and 17 billion reais, from 25 billion reais in 2020.
Fee income is also seen higher, growing at between 1% and 5%.
Even so, Bradesco will keep its cost cutting program in place and operating expenses are expected to fall by between 1 and 5% this year. ($1 = 5.3534 reais) (Reporting by Carolina Mandl; Additional reporting by Aluisio Alves; Editing by Christian Plumb and Richard Pullin)