Bradesco announced on Wednesday evening, July 29th, a private capital increase of up to R$ 10 billion, justifying it as a way to continue supporting the bank's ongoing transformation plan, at a time when the deteriorating economy is weighing on default rates and the results of financial institutions.
According to the relevant fact disclosed by the institution, the operation will be carried out through a private subscription of shares, with an investment of up to R$ 8 billion guaranteed by a firm commitment from the controlling group, which reportedly requested the capital increase.
The operation also includes the advance payment of a total of R$ 6.5 billion in interest on equity (JCP) already declared, allowing shareholders to use these resources to exercise their preemptive rights.
The bank will issue up to 302,876,396 new common shares and up to 301,976,357 new preferred shares, at an issue price of R$ 15.43 for common shares and R$ 17.64 for preferred shares. The price was set at a 6% discount compared to the closing price on July 28, "which aims to encourage shareholders to participate in the capital increase," according to the relevant fact.
The period for exercising the preemptive right will be from August 6 to September 4, in the proportion of 5.72% on the shares of the same type that the shareholder owns on August 4.
The projection is that Bradesco's share capital will rise from R$ 93.8 billion to R$ 103.8 billion and that the CET1 ratio — which measures a bank's highest quality capital in relation to its risk-weighted assets — will increase by approximately 0.90 percentage points, reaching 13.6%, considering the pro forma level of 12.7% recorded in the first quarter.
According to Bradesco, the operation will allow it to sustain strategic investments, "through the expansion of relevant investments in technology, commercial efficiency, business expansion, as well as the institutional commitment to sustainable financing."
"The controlling shareholders have a legitimate interest in continuing to invest in the bank, where they emphasize and reiterate their high confidence in the ongoing transformation plan, which is being executed rapidly and successfully, bringing increasing positive impacts on Bradesco's operational efficiency and competitiveness in the market," says an excerpt from the relevant fact.
At the end of 2023 , the bank embarked on a process of transforming its operations, with investments to accelerate its technological agenda and measures to restore profitability without taking on excessive risks. The initial forecast is that the entire initiative will last about five years, progressing step by step , as Marcelo Noronha , the bank's CEO, has emphasized in recent quarters.
These investments — made over the past few quarters and aimed at shedding the image of a cumbersome bank, dependent on branches and pressured on profitability — now find themselves in an economy severely impacted by high interest rates.
Santander Brasil , the first to kick off the second-quarter earnings season, released results below expectations , hampered precisely by macroeconomic conditions.
Bradesco, which scheduled the release of its second-quarter results for August 5th, adopted a more conservative tone at the start of the year, although the expectation for 2026 remains one of growth in net interest income.
According to analysts at Banco Safra , the capital increase aims to sustain the current growth rate, while improving the bank's profitability and strengthening its capital position ahead of a more challenging cycle.
"In our opinion, the real objective is to improve the capital position to face the coming months and increase the capital base to sustain the tax benefit of IoC [interest on equity] at a substantial level, contributing to ROE," says an excerpt from a commentary sent to clients.
However, the bank's research team adds that, considering the current macroeconomic scenario, the operation likely points to a "slower recovery in ROE at the banking level, compared to the outlook at the beginning of the year."
Bradesco's common shares closed yesterday's trading session down 2.25%, at R$ 16.04, while preferred shares fell 2.24%, to R$ 18.35. Year-to-date, the shares have accumulated gains of 2.56% and 0.71%, respectively. The bank's market capitalization is R$ 182.1 billion.
