SÃO PAULO - Banco Bradesco, one of Brazil's largest lenders, experienced a drop in profit during the second quarter due to an increase in the amount of money set aside for bad loans.
According to the bank's report, net income stood at 4.5 billion Brazilian reais (approximately $915 million), compared to 7.1 billion Brazilian reais recorded in the same period last year. However, if we consider recurring net income that excludes one-time items, the decline is from 7.0 to 4.5 billion Brazilian reais.
While net interest income saw a slight increase from 16.4 to 16.6 billion Brazilian reais year-on-year, Bradesco had to provision 10.3 billion Brazilian reais in the second quarter for loan losses. This amount is significantly higher compared to the 5.3 billion Brazilian reais provisioned in the same quarter a year earlier.
The increase in provisions for bad loans can be attributed to the challenging economic environment, which has led to more borrowers struggling to repay their debts. Bradesco's delinquency ratio among clients with loans more than 90 days overdue rose from 3.5% in the year-earlier period to 5.9%.
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