Bradesco’s stock is approaching its 52-week high as the Brazilian central bank signals potential interest rate cuts in March. On January 29, 2026, the U.S.-listed shares of Banco Bradesco SA (BBD) rose 0.1% to $4.16 in premarket trading. This figure positions the bank close to the upper end of its 52-week price range.
Brazil Central Bank’s Rate Decision
The Central Bank of Brazil maintained the Selic rate at 15%, its key policy benchmark. However, the institution hinted at the possibility of reductions commencing in March. Officials emphasized a careful approach regarding the timing and extent of any easing. Flavio Serrano, Chief Economist at Banco BMG, expressed that policymakers provided clear indications of shifting toward rate cuts. He predicts a 50-basis-point reduction in March, noting that a basis point equates to 0.01 percentage points.
Bank Lending Trends
Recent data shows that bank lending in Brazil increased by 10.2% in 2025. This growth outpaced the central bank’s forecast of 9.4% from December. The rise is attributed to an uptick in household borrowing, supported by government credit initiatives. As of December, total loans reached 7.1 trillion reais (approximately $1.37 trillion), expanding by 1.8% for that month.
Credit Quality and Default Rates
Despite rising loan volumes, the overall default rate rose slightly to 5.4%. Lending spreads, however, experienced a mild tightening. Bradesco and other financial institutions are navigating a complex landscape: while high interest rates can bolster income in certain sectors, they also put strain on borrowers, potentially leading to increased problem loans.
Market Reactions and Future Outlook
Investors are closely monitoring signs of loan growth and defaults, particularly in anticipation of Bradesco’s upcoming fourth-quarter earnings report. The earnings announcement is scheduled for February 5, with results expected to be disclosed after market hours in both Brazil and New York, followed by a webcast on February 6.
Other Brazilian bank ADRs also experienced gains in early trading. Itau Unibanco (ITUB) increased by approximately 1.1%, while Santander Brasil (BSBR) climbed about 1.4%. However, risks remain. If inflation rises or if economic growth exceeds policymakers’ expectations, the central bank might adjust rates more slowly than anticipated, which could increase default risks—especially for lenders heavily focused on retail.
