Update: Banco Bradesco S.A.

The stable outlook on Bradesco reflects that on Brazil. The ratings on the latter constrain those on Bradesco, given its exposure to sovereign risk. Therefore, we expect the ratings on the bank to move in tandem with the sovereign ratings for the next 12 months. On a stand-alone basis, we expect Bradesco's resilient performance to help it cope with economic headwinds, such that we believe the bank's credit fundamentals will remain stable. Moreover, Bradesco will continue shrinking its physical branch network while investing in digital channels in order to maintain its dominant market position in Brazil. We could lower the ratings on Bradesco following a similar action on the sovereign ratings on Brazil. Bradesco's 'bbb-' SACP is three notches above

...As one of the largest financial groups in Brazil, Bradesco's business resilience continues to benefit from strong franchise. Bradesco's sound position in banking and insurance in Brazil, with significant domestic market shares in both sectors, contribute to its sound business stability, which we view as a rating strength. As the second-largest private bank in Brazil, with R$1.8 trillion in assets as of September 2022, and the largest insurance group in the country, Bradesco takes advantage of the synergies of its product offerings, while continuing to widen the range of services to clients. In addition, Bradesco's leading position in the insurance industry through its subsidiary, Bradesco Seguros S.A. (brAAA/Stable/--), contributes to the group's business diversity and helps offset potential downturns in credit cycles. Growing credit costs have cut into Bradesco's third-quarter bottom-line results. Credit loss provisions surged in the third quarter of 2022, accumulating a year-to-date amount...

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