UPDATE 1-Brazil’s Bradesco first-quarter profit drops less than expected

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SAO PAULO, May 2 (Reuters) – Brazilian lender Bradesco reported a 1.6% decline in first-quarter recurring net profit on Thursday compared with a year earlier, which still beat analysts’ estimates as the bank had lower provisions for bad loans.

Bradesco reported recurring net profit of 4.21 billion reais ($810.61 million) in the quarter, while analysts polled by LSEG expected 3.92 billion reais.

After a series of weak earnings pressured by rising delinquency and higher costs, Bradesco installed a new chief executive at the end of last year and began implementing a plan to gradually recover its profitability.

“The result is in line with our expectations of expanding loan portfolio, falling defaults and gradual growth in net income,” CEO Marcelo Noronha said in a statement.

During the quarter, the Osasco-based lender had to set aside 7.81 billion reais for loans that are likely to default, 17.9% less than the figure reported a year ago and 25.8% less than in the previous quarter.

Its return on equity, a gauge of profitability, improved by 3.3 percentage points from the previous quarter to 10.2%.

($1 = 5.1936 reais) (Reporting by Peter Frontini Editing by Bernadette Baum)

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