Brazil's Bradesco sets aside $462 mln for COVID-19 loan losses
Recasts headline, adds details
SAO PAULO, Oct 28 (Reuters) - Brazilian lender Banco Bradesco SA BBDC4.SA reported higher-than-expected third-quarter recurring net income on Wednesday, despite a spike in loan-loss provisions amid the coronavirus pandemic.
Brazil's second largest private-sector lender posted net income of 5.031 billion reais ($894.56 million), roughly 15% above analysts' consensus estimate according to Refinitiv, but down 23.1% from a year earlier.
Bradesco set aside 5.588 billion reais for bad loans, up 67.5% from a year earlier, but down 37.1% from the previous quarter. That includes 2.6 billion reais in extraordinary provisions related to potential losses stemming from the coronavirus crisis.
"The results shows the first signs of a return to normality," Bradesco Chief Executive Octavio de Lazari said in a statement.
As the bank gave grace periods of up to 180 days to help clients weather the economic crisis stemming from the coronavirus pandemic, its 90-day default ratio went down 0.7 of a percentage point to 2.3%.
The bank said it conceded grace periods to 73 billion reais in loans.
Its loan books rose only 0.5% in the quarter, mainly on consumer lending, although Brazil is set for a recession and unemployment is at the highest in eight years.
The bank also showed it has put into action some cost-cutting measures as they went down 5.7% from a year earlier, but were up in the quarter.
Return on equity was at 15.2%, recovering from the second quarter, when the bank decided to set aside extraordinary provisions to face the coronavirus pandemic.
($1 = 5.6240 reais)
(Reporting by Carolina Mandl; Editing by Leslie Adler and Sam Holmes)
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