Bradesco, based in Osasco, fell 3.1 percent to 31.40 reais ($17.98), the second-biggest decline on the 70-company benchmark Bovespa (IBOV) index and the largest loss for the stock since Nov. 17. That compares with a 0.4 percent gain for the gauge.
Adjusted net income, which excludes one-time items, rose 3.2 percent to 2.77 billion reais, or 2.93 reais a share, from 2.68 billion reais, or 2.61 reais, a year earlier, the lender said today in a statement. That missed the 2.88 billion-real average estimate of eight analysts surveyed by Bloomberg.
“Bradesco’s results are quite disappointing,” analyst Marcelo Telles, who has a “neutral” rating for the lender, wrote in a Credit Suisse Group AG report today. “Bradesco’s weaker results could be a prelude for what is yet to come during this earnings season.”
Bradesco’s costs rose as it opened 1,009 branches last year and purchased state-controlled Banco do Estado do Rio de Janeiro, or Berj, a deal that lets the company process payrolls for about 400,000 public servants. Bradesco lost to Banco do Brasil SA (BBAS3) the right to offer banking services in the nation’s post offices in May. The lender said payroll and management expenses rose 18 percent to 6.82 billion reais on expansion costs.
“After consistently meeting or exceeding consensus estimates since 2Q09, results fell short of expectations in 4Q11, which could pressure the stock in the short-term,” Mario Pierry, an analyst at Deutsche Bank Corretora de Valores SA, wrote in a note to clients today. He has a “buy” recommendation on the stock.
Bradesco will slow network expansion in 2012 as it did “strong work” opening branches last year, Chief Executive Officer Luiz Carlos Trabuco Cappi said in a conference call with journalists today. The bank will open about 70 branches this year, he said.
Provisions for loan losses rose to 2.66 billion reais at the end of December from 2.3 billion reais a year earlier as write-offs for loans at least 90 days overdue increased to 3.9 percent in the fourth quarter from 3.6 percent a year before and 3.8 percent in the preceding three-month period.
The bank said its portfolio of loans expanded 17 percent to 345.7 billion reais in the fourth quarter, compared with its 2011 guidance of 15 percent to 19 percent. Bradesco said it expects loan portfolio growth to accelerate to 18 percent to 22 percent in 2012.
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