CompanyGraph
Banco Bradesco S.A.
BBDC3 · Brazil
Bradesco collects deposits, makes loans, and sells insurance through the same 4,600+ branches across Brazil.
Banco Bradesco collects deposits and originates real-denominated loans through 4,600+ Brazilian branches while also underwriting insurance through Bradesco Seguros, a SUSEP-licenced subsidiary sitting inside the same legal group — meaning every branch simultaneously takes deposits, writes loans, and sells and services insurance policies without routing customers to a third party. Because insurance premiums are automatically debited from the same Bradesco checking accounts that receive payroll deposits, the deposit base and the insurance distribution engine grow and shrink together through a single channel. BACEN's compulsory reserve requirements, however, immobilise between 21% and 45% of every real deposited as non-interest-bearing holdings at the central bank, so the share of deposits Bradesco can actually redeploy as loans or use to fund insurance operations is capped before it starts. If COPOM raises the SELIC rate sharply, depositors tend to pull money out of Bradesco accounts and into government bonds, which simultaneously shrinks the loanable pool, reduces the deposit base cross-selling insurance, and leaves the fixed cost of 4,600 physical locations unchanged.
How does this company make money?
Bradesco earns the difference between the interest rate it charges borrowers and the lower rate it pays depositors — this is its net interest income, all in Brazilian reais. Bradesco Seguros brings in insurance premiums from policyholders. When customers use Bradesco-branded credit and debit cards, Bradesco collects interchange fees on those transactions. Bradesco Asset Management charges fees to customers whose money it invests in its funds.
What makes this company hard to replace?
Many Brazilians receive their salary directly into a Bradesco account because their employer's payroll system is connected to Bradesco through Brazilian labour law compliance requirements. Switching banks means unwinding that payroll link. Customers who hold Bradesco Seguros policies also have premiums automatically debited from their Bradesco checking account — moving to another bank would break that connection. Businesses with CNPJ accounts tied to municipal tax collection agreements face an additional layer of administrative complexity to switch, because those agreements are attached to the Bradesco account directly.
What limits this company?
BACEN forces Bradesco to park between 21% and 45% of demand deposits at the central bank, earning nothing on that money. That rule is a hard ceiling on how much Bradesco can lend or use to fund its insurance operation. Meanwhile, the fixed cost of running 4,600+ physical branches does not shrink when the reserve ratio rises, so a higher ratio means less profitable activity spread across the same large cost base.
What does this company depend on?
Bradesco cannot operate without its BACEN banking licence, which authorises it to take deposits and make loans in Brazil. It also relies on access to SPB, the Sistema de Pagamentos Brasileiro, to move money between banks. Bradesco Seguros depends on its SUSEP insurance licence to underwrite policies. The entire operation runs on Oracle FLEXCUBE as its core banking system. And the branch network itself depends on physical lease agreements across 4,600+ locations throughout Brazil.
Who depends on this company?
Brazilian small and medium-sized businesses rely on Bradesco for working capital loans in reais — if Bradesco stopped lending, many would lose access to day-to-day operating funds. Individual Brazilians who receive Bolsa Família and other social program payments through Bradesco accounts would lose that payment channel. Bradesco Seguros policyholders would face disruption to claims payments. Brazilian municipalities that use Bradesco for treasury management and payroll services would lose those functions.
How does this company scale?
The branch model replicates across new locations using standardised technology and shared infrastructure, so adding a branch also adds a deposit point, a loan desk, and an insurance sales unit simultaneously. What cannot be automated away is the physical presence itself — Brazilian regulations require in-person account opening in many settings, and local economic development mandates mean Bradesco must maintain branches in interior municipalities where digital-only competitors do not operate.
What external forces can significantly affect this company?
When the real weakens, the quality of Bradesco's loan book — which is entirely denominated in reais — can deteriorate as borrowers are squeezed. COPOM's decisions on the SELIC rate directly compress or expand the margin Bradesco earns on lending, and a high SELIC encourages depositors to pull money out of Bradesco accounts and into government bonds, shrinking the deposit base that funds everything. A longer-term pressure is Brazil's demographic shift toward digital banking, which steadily reduces how much work each physical branch can justify.
Where is this company structurally vulnerable?
If SUSEP, Brazil's insurance regulator, were to require that insurance underwriting businesses be legally separated from their affiliated banks, Bradesco Seguros would have to operate as an outside party rather than an internal subsidiary. The automatic premium debit from Bradesco accounts would be severed, shared branch servicing would end, and the full underwriting profit would collapse into a basic referral fee — eliminating the core structural advantage the dual-licence arrangement currently provides.