Prepared remarks
Good morning, everyone. I am Marcelo, speaking from Bradesco's headquarters to share some insights on our results for the third quarter of 2025. I believe you have had the chance to review the results published last night, so I'll highlight a few key points. Our recurring net income for this quarter was BRL 6.2 billion, reflecting a 2.3% increase year-on-year and a slight rise of 0.1 percentage points to 14.7%. We are pleased with these consistent results, especially following our transformation plan over the past seven quarters. The focus here is on profitability, which continues to grow steadily with operational consistency. Our revenues are increasing across nearly all segments, including net interest income, fees and commissions, and the insurance group, with a particular emphasis on client net interest income. Delinquency rates are well-managed, and our restructured portfolio is decreasing as you will see later. Our secured portfolio improved quarter-on-quarter, nearing 60%. Operating expenses are in line with our expectations and well contained. I will provide more details on this shortly. We have also expedited our footprint adjustment, achieving results that exceeded our expectations. Our insurance group's performance remains strong with a return on average equity exceeding 21%. Total revenue reached BRL 30 billion, an increase of 13.1% year-on-year. Our total net interest income grew nearly 4%, fee income nearly 7%, and the insurance group saw a 13% year-on-year growth, demonstrating our ongoing expansion. This growth can be attributed to our deepening penetration into our customer base, which has improved the customer experience across all business segments, enabling consistent revenue growth. Now, turning to our loan portfolio, which stands at BRL 1.34 billion, showing consistent growth of 9.6% year-on-year. While I won't go into too much detail now, we will provide further specifics later. The growth in both individual and corporate loans is primarily linked to secured lines, with notable growth seen in micro and SMEs, reaching nearly 25% year-on-year, which is a well-managed portfolio with significant collateral that supports our sustainable growth. The next slide delves into specific credit lines as these represent our growth drivers. We observe strong commercial traction across all areas. Our solid customer base and penetration are critical to this growth. Additionally, our credit modeling in the business units, particularly in portfolio management—which includes advanced machine learning models—contributes to this progress. We have added over 200 new hires to our credit business unit and implemented extensive training, resulting in ongoing advancements across all segments, not just in individuals and SMEs, but also in the wholesale banking sector. I would also like to highlight a few points. I mean, Bradesco's payroll loan ended the quarter with almost BRL 102 billion. Our share is approximately 14.2%. Among private banks, we are the largest one. We lost in this commercial disputes to public banks but our public portfolio share was 15.4% public, 14.3%; and private 7.5%. We were very conservative in terms of granting private loans. But then further on, we can elaborate on this. But we put together a more restrictive credit policy at the very beginning because we didn't want to run into many risks. So our policy is to work with the companies that we used to work in the past, and for the employees of these companies that were employed by the companies for at least a year. So in the first case, the level of delinquency for lack of payment was 12%. So this number is coming down. Operationally speaking, the market is oiling the wheel. So on average, I'm not referring to any specific organization. But on average, the delinquency level in this particular portfolio for these new cohorts is around 11%. And ours is 3%. So we didn't grow. I mean that portfolio decreased on the private side year-on-year. And then year-to-date, as well. But then when we look at the third quarter, the Central Bank just released the numbers for this portfolio for September. And then I think you can look at that. So we are resuming growth on the private side, our policy is now a bit more open, but we are also growing on the public side. INSS with all of the changes that were done in the first half of the year went from a market production of BRL 7.5 billion to BRL 3.5 billion. And shortly, what is happening here since this was the largest portfolio among private banks, our monthly settlement is higher. If you look at the Central Bank numbers, you see that there was a drop in the INSS portfolio, and now we will start growing again, meaning that we accelerated public portfolio and the expectation is to grow next quarter and to grow next year consistently in all these lines. So security, public and private and look at our share. So we don't have anything to lose. We always have to gain more. So this is the outlook. And credit cards, if you look at the numbers, we grew substantially in the high-income line. In terms of real estate, our share is about 20%. There are three or four banks whose market share is slightly higher. But in the last quarter, I mean this entire year, in general, we preserved margins. Now we see opportunities with also some modifications to accelerate real estate again. And rural portfolio, the portfolio of the bank loan grew 25% very collateralized or secured. SMEs, we are growing consistently quarter-on-quarter and year-on-year, almost 25% year-on-year and when we released the plan we anticipated that we would struggle to remain in that leadership position. I'm talking about companies that have revenues or banks that have revenues up to BRL 200 million a year, and we gained share with SMEs as well. This is just to say that we will continue to grow. We will continue to grow our loan portfolio. And as a reminder, last year, we had a write-off of the restructured portfolio of almost BRL 10 billion and large corporate growth. And large corporate, we didn't have that growth. And if everything were to remain stable, if there were no write-offs and if large corporate portfolio had not declined, our loan portfolio would have grown even more. So we are well positioned. We have the desired clients. We have demand, and we will continue to grow and we expect to gain market share in payroll loans. We will continue to expand in real estate and SMEs as we have gained market share. Our commercial traction is strong, resulting in a nearly 17% growth in total NII and a 14.4% increase in NII net of provisions year-on-year. Client NII grew by 19%, and when we factor in provisions against the risk costs in the portfolio, it reached an 18% growth, nearing BRL 10 billion. We anticipate ongoing growth. Regarding expenses with LLP, we recently addressed this in a press conference. There was a BRL 500 million variation in credit costs quarter-on-quarter, which can be attributed to two specific cases. One is related to our wholesale bank where we made provisions, and while I can't disclose names, the public report will reflect the provisions for both mass retail and wholesale segments. In wholesale banking, the costs typically range from BRL 200 million to BRL 300 million each quarter, with this instance being a one-off that spiked to about BRL 500 million. We also provided credit within wholesale banking, which necessitates advance provisions. This is typical seasonality. If we exclude this and consider the contributions from the John Deere Bank, our position remains strong. The average cost now stands at 3.2%, down from 3.3%, indicating no concerns as our portfolio quality is solid. After extensive discussions with Cassiano, I can share that this slide highlights mostly positive developments. I’d like to address a specific question regarding some figures: the Stage 1 growth rate fell from 7.9% to 7.7%, representing a drop in the restructured portfolio of nearly BRL 10 billion year-on-year, a notable decrease from over BRL 12 billion in early 2024. The loan portfolio has also improved, as evidenced by the declining total portfolio numbers. Additionally, we have nearly 60% secured portfolio, showcasing effective efforts to enhance performance. Delinquency rates are stable, although there is a minor increase in accounts over 90 days due to the John Deere Bank. However, I do not view this as problematic, as they have alternative financing options in agribusiness, and our overall portfolio is under control. This stability will aid us in advancing and generating more revenue. Now fee and commission income, if we do not have commercial traction, if we cannot deliver a better experience to our customers and good and adequate relationship, we could never post a good fee income that grew almost 7% and the highlight comes from credit cards, almost 14%. And consortium management, we grew 22.1% year-on-year. But this product comes from customers at different levels, I mean, mostly corporate customers. Our rates are about 15% of the Selic rate. So it's very attractive. Asset management. I mean with these levels of growth, our asset management is a highlight. It reached BRL 1 trillion of assets under management. And if you look on the right side, I will draw your attention to loan operations. I mean we are still traction. And I'll draw your attention to our investment banking. Investment banking shows a drop of 29.9% because the baseline of the previous quarter was a growth of 75%. Therefore, if we look at year-to-date this year, it is growing 24.1%. And this is not about buying work because this involves growth in new teams, engaged teams. Certainly, also this involves pipeline generation coming from all different segments of the banks like wholesale, middle market in addition to custody and brokerage services, which also posted growth year-on-year. Now, regarding operating expenses, I would like to highlight an adjustment to our footprint, which exceeds our initial expectations. This year, we have 1,269 points compared to 1,600 points a year ago, reflecting positive progress. This achievement is driven by our team's talent and intelligence, and we anticipate this trend will continue. Looking ahead to our guidance for 2026, we will share our expectations for next year. Operating expenses are increasing by 9.6%. It's important to note that personnel and administrative expenses grew by 5.5% year-on-year. If we exclude the impact of higher variable compensation, our growth rate would be 2.5%. Overall, our expenses are well managed, and I want to emphasize that without EloPar and Cielo, the growth rate would be 8.5% instead of 9.6%. In our full report, you'll find additional details on operating expenses. Specifically, while administrative expenses reflected a decline year-to-date and year-on-year, a closer look shows that some expenses increased while others, like transportation, decreased. Notably, the technology line saw an absolute growth of BRL 140 million this quarter. I want to point out that when we consider our balance sheet and consolidate associated companies, the growth of administrative expenses exceeds 20%, contributing significantly to that BRL 140 million increase. Regarding personnel expenses, Cielo did not affect administrative expenses this quarter, but its personnel expenses grew a little over 7%. After excluding variable compensation and focusing on fixed compensation, we would notice that personnel expense growth would drop to below 3% without the equivalent adjustments with Cielo. Thus, I can confidently state that our expenses are under control. Although we experienced a notable increase in this result, we view it positively. Adjustments to provisions during collective bargaining negotiations, which exceeded 100%, complicate indexing these personnel expenses. Overall, we see our expenses well managed moving forward. Transitioning to the insurance group, as mentioned previously, our net income remains stable, with strong profitability year-to-date at a 11.4% increase, equating to a 6.5% growth and an ROE above 21%. Notably, our insurance group’s operating results show consistent growth, with total earnings up 13% year-on-year and operating results at 10.2%, while financial results increased by 18.3%. This growth is the result of positive variations across customer segments and all distribution channels, including brokers and digital platforms. Our technical provisions reached BRL 435 billion, marking a 10.5% growth. As we conclude this presentation, despite the increasing loan portfolio, our common equity grew by 30 basis points to 11.4%, and our CET1 ratio increased by 0.4 percentage points. Our guidance indicates that we should close the quarter within the higher end of expectations across all items, including expenses. We expect loan portfolio growth between 4% and 8%, currently growing at 9.6%. By comparing our earnings presentation from the fourth quarter of 2024, we will see significant portfolio growth, from BRL 981 billion to BRL 1.034 billion today, with an additional BRL 16 billion contributing to our baseline. Looking at our transformation process, we have made substantial progress across all segments. By the end of the year, Bradesco Principal aims to have around 300,000 clients and 62 offices across nearly 40 cities in Brazil. Prime continues to enhance its value proposition, and we anticipate surpassing 3 million customers. Our fully digital customer base has grown to over 14 million, supported by Bradesco Expresso, which has expanded its reach with more than 39,000 correspondents across Brazil. In the SME sector, our new app facilitates easier loan applications, enhancing our customer experience. Additionally, our segmentation process is proving effective with increased penetration in this area. I also want to highlight our internal culture; last year, we reported 74% engagement in employee surveys, which has risen to 84% this year, showing significant progress. To wrap up, I've discussed Gen AI frequently, but I’ll now let BIA present a short video. The avatar shown will be different next quarter, and I’m excited for you to see it. Let’s take a moment to watch the brief video, and I’ll return for final remarks.
Digital transformation through enterprise agility and the massive leverage of Gen AI is generating impressive results. Look at this. I can highlight 4 fronts of progress to you. First is the increase in productivity, hyperpersonalization, risk management and customer engagement and journey. We've already reached a productivity increase of 109% this year, and we built a new income model with a drastic reduction of 95% in the time to create an expressive increase in accuracy. At the same time, we increased security with sophisticated biometrics, and we offer hyper-personalized experience. And customer service has full engagement with a 90% retention rate on BIA's chat and innovations such as fixed by voice. Here, Bradesco Gen AI goes beyond technology. It is a part of our transformation at the service of our customers and our business. So that's it. Thank you very much. Now it's back to you on the studio real life Marcelo.
That's a tough one, right? The next one will not be this avatar. We're going to have another one. So I'll head to my conclusions here, restating what I said at the beginning of the presentation about our commitment to increase profitability. We are getting close to the return on cost of equity. But step by step, as we said since the beginning of our plan, revenues is the main driver of profitability, increased expenses under control, credit portfolio with a balanced growth, always prioritizing risk-adjusted return. Risk appetite that I said at the end of last year remains moderate. But the delinquency rates, portfolios, vintages are completely under control. So we have a lot of traction in the brand bank, change the bank, and we're confident that we will have a good quarter at the end of this year, and we will also have good quarters next year, 2026. So now I invite you for the Q&A with my colleagues, Cassiano Scarpelli, CFO; and our colleague, Andre Carvalho, IR Director. So Andre, over to you. Thank you.
Thank you, Marcelo, Cassiano. It's great to be here with you. Good morning, everyone. I want to remind you that our CEO of the insurance group, Ivan Gontijo, is joining us remotely. Now, let's move on to the first question from Daniel Vaz. Daniel, please go ahead.
Questions and answers
Thank you, Andre. Good morning, Noronha, Cassiano, everyone. I'd like to discuss costs and the expansion of your footprint that you have significantly accelerated over the past two years by closing many more service points than anticipated for both 2024 and 2025. It seems you have surpassed those targets. My question is about 2026. Should we expect the same closure pace, or will the focus shift towards improving operating efficiency to reach the goal of 40%, down from 48% as stated in your strategic plan? Additionally, regarding costs, you mentioned that Elo and Alelo are growing at 20% year-on-year, which suggests this growth rate may be sustained. Are there any one-off circumstances that might lead to an increase in costs for these two companies?
So I'll start with your second question. Thank you, Daniel. What I have to say is they do not grow in personnel expenses. So it was on the other way around. I only mentioned that to say we have different dynamics. But they have been growing in terms of volume, revenue, earnings, and they have been investing. So naturally, when you increase the customer base, you also increase the cost of processing and this type of cost, it's natural to see an increase. The expectation is that it will grow indefinitely at a level of 20%. I don't see that. But they are doing well. They're balanced. They're bringing returns. But when you show the transformation plan, what I mentioned was that we have a plan to reach that level of efficiency that's very important, and we're pursuing that and having a very strong control of expenses with a fine-tuned execution and a lot of discipline, Daniel. But now if I tell you that I have an opportunity to spend BRL 1 billion to make BRL 2 billion, we will not flinch. We'll not hesitate to move forward and make adjustments because life is dynamic. So the opportunities came up, and that's how we do it. That's not what we expect. We expect to have very well-controlled expenses. But once you consolidate, you may look and see, but shouldn't it be going down or you may see a deviation here and there. But as for the footprint, we talk about 1.6 if we review in the last 12 months, the expectation going forward, if you look at 12 months, would be to a smaller adjustment, Daniel. We're closing this number according to our transformation plan, but it should be below 1,000. That's the expectation for the next year.
So just to add to what Marcelo said, once we anticipated the footprint adjustment. Of course, we have more provisions for labor, and that shows up in our OpEx line. When we actually reduce the footprint adjustment, we should see a slowdown of the labor provisions, and that should be clear from now on. I would also like to add to Daniel, we can't have to remember investments that's there for the depreciation, strong investments we've been making naturally in technology for the bank overall as a whole and depreciation on the side. So there's a little bit of that. In theory, they are offenders, but actually, they are what boosts the new level of efficiency at the bank. Of course, also competitiveness, right, Cassiano, what we're saying, and we have a more conservative guidance at the end of last year, but we will make it a point to make any investments required in terms of competitiveness. So thank you, Daniel.
Moving on to the next question. Pedro Leduc Itaú BBA.
The first, I think you've already answered actually in this high level of labor provisions that we see this year is like building inventory that may be normalized next year. So I think this is already clear. That was a big offender of the results. But the other question would be in the credit quality. We see a slight increase in over 90 NPL for individuals. So I'd like to get some explanation about this a little bit, maybe the John Deere side, if that's been done or if there's more to come on provisions and also SME NPL, that's quite curious. It's been going down. So congratulations, but I would also like to understand this a little bit more, maybe the relevance of government lines going up. If you can give us an order of magnitude, if it's 10%, 20%, 30% of the SME portfolios, how is the performance of these government lines as they come out of the grace period and if there's any major concentration that we should look at. And at the end, what I'm trying to understand is if this increase in the cost of risk that we saw in this quarter is a trend going forward or not?
Thank you, Pedro. Good questions. So thank you. It's a pleasure to see you. So first, so individuals, delinquency, it was driven by John Deere. So we don't see any other issues. Our portfolio is very safe and good vintages, and you will see a good quarter on the fourth quarter in this aspect. Now for the wholesale bank, that's the case that we had. So going back actually to John Deere that you asked. Look, the capillarity is a lot greater and have smaller or larger funding depending on the size of the deal and the agribusiness side. So it's natural. It's not breaking with any history of what we've seen, and there's recovery that comes over time. That's what we saw there. So that affected a little bit because of the consolidation, but it doesn't keep us up at night, and it doesn't discourage us. With the John Deere business and our growth in agribusiness, both in the wholesale bank and directly at the retail companies and individuals as well. We are excited with this industry. Of course, we're very cautious. We've been working with collateral always here in this type of line. We do not have any deviation in our portfolio for rural credit. About the wholesale bank now, that provision that I mentioned, there's irregularity there in a specific case, one-off that was a little bit outside of the market rationale because the market is there. So we decided to provision for that with a good coverage ratio now. I don't see any other issues here. So I see the cost of risk being very well balanced. If you were to remove that case of the wholesale bank and the deviation that we had from John Deere, it would have been flat, Leduc, it would be flat. So the order of magnitude for you about this case, I can't give you the specific number, but it's around BRL 200 million more or less, BRL 200 million that we had. So we are very comfortable with our portfolio. As for SMEs, why did it go down? Obviously, we have numerator denominator here that we are warming up well, but we're growing well with collateral. So we chose modalities in FGI/FGO. Remember that I said we had a share of around 18%. We were #2 last year. At the closing, I said that at the beginning of this year. And I said that this year, we would be a leader and with more than 20% market share, and that was what led us to grow with quality because the models take into consideration those intervals so that there may be occasionally a break with those thresholds that are accepted by FGI/FGO. So we are doing very well, delivering very good quality, creating a huge culture of cost of risk in our company segments and our business of the companies of up to BRL 50 million a year in revenue. So the portfolio is under control with no hiccups. Of course, wholesale bank, there may be here and there something different. But it is worth noting or remembering what I said in the presentation, is corporate. That's the middle segment that starts at BRL 50 million and goes geographically. It's a larger extension up to BRL 1 billion. And there, depending on the expected loss or the modality we operate, you have a little bit more provision upfront because of the expected loss. It doesn't mean that delinquency didn't see the movement of Stage 3. No, because it's there on Stage 1, it's good, but you have that expected loss for that type of target you're working on. But always with that risk-adjusted returns, and that goes for everything for SMEs, for the wholesale bank for vehicles and everything for all of them.
Next question from Mario Pierry with Bank of America. The floor is yours.
Congrats on the results. I have two questions as well. My first question is mainly a provocation. You're saying that credit cohorts are performing well. NPL is under control. But at the same time, we are expecting a decrease in credit. I would just like to understand why you were so cautious about credit because if you anticipate that things are performing well, why are you making that move? The second question has to do with your market margin and the increase in the Selic rate. How do you expect NII performing once you expect Selic rates to go down?
I would like Cassiano to start answering your question, and then I will discuss that acceleration.
Good morning, okay. Market NII, we did some very important work. I think it's the first time we acknowledge this year an important work done from our treasury and the balance. I think we still maintain that BRL 1 billion of soft margin. And I think we refer to that in previous occasions. So we do acknowledge that work, and we understand that this will be globalized until the end of the year, making up that a total of BRL 1 billion. Well, certainly, with a lower rate next year, we should see an improvement. And so right now, we are looking at the budget, and we may bring you some news next year. But certainly, this is a good possibility of an improvement in the market NII for next year. Well, thank you, Mario, for your question and your provocation.
We should have a positive outlook in 2026. However, starting in the second quarter of 2026 and beyond regarding ALM, the other lines are performing well. Concerning the deceleration you mentioned, I would say the situation has changed. Looking at the Central Bank's data released yesterday, I discussed private payroll loans, which have seen a year-to-date decline and a decrease year-over-year. However, we are beginning to see an uptick, and we will align with market growth. This does not indicate a deceleration in the country. As for the other portfolios, while the INSS portfolio is still declining, it is also starting to recover. The public portfolio shows good traction and is growing, and we are gaining market share. We are performing well with SMEs and are not experiencing a deceleration, but it is essential to match the right lines with the right clients. Based on the market dynamics and the Central Bank data, which I am not disclosing any privileged information from, if we look at orders, we expect to grow slightly below market growth over the year but have surpassed market growth in the recent quarter. This suggests we have a strong risk appetite, and while we may be taking on slightly more risk with credit, the focus remains on net interest income after provisions, ensuring that our risk-adjusted returns are adequate.
Next question comes from Thiago Batista with UBS.
I have two questions. My first question, going back to the strategic plan. I mean, you released that in 2024, that has been almost 1.5 years ago. And back then, you talked about 3 or 4 KPIs. One was something about 2 and 2.5 efficiency over 200 bps. And then you talked about cost of equity. So some time has passed. But can you tell me that considering your initial diagnostics, how do you see the market? More challenging, less challenging cost of capital, cost of equity, are you going to deliver numbers very close to what was anticipated? I mean cost of capital and ROE, I think you addressed that efficiency maybe you didn't get there yet. So what is more challenging and what is more comfortable related to your strategic plan. When you talked about real estate, looking at Bradesco today, the bank has about BRL 112 billion in mortgage, BRL 120 billion of savings and LCI. So do you see any possibility of issuing more LCI after the transition? So how do you see this change in funding of real estate mortgage?
Our portfolio exceeds BRL 140 billion, including the corporate side. The change is positive and presents an opportunity for us, particularly in reducing the savings reserve requirement. We have maintained our margin, which is why we have been cautious. However, we have the capacity to resume growth, and we will do so. This growth will become more evident by the end of the year, as we have ample capacity for expansion. I believe this is beneficial for the system, despite four major banks having greater influence. Regulatory changes introduce complexities, and you're likely aware of this. Starting in 2027, we need to consider that the removal of the 15% free resource reserve may lead to a long-term decoupling. This regulation will be reviewed annually, allowing for some flexibility and adjustments. Without it, there may be a lack of appetite or the incentives could work against us. We are eager to adapt, and this can lead to more loyal and profitable customers. We have significant work ahead, and rising interest rates pose challenges for mortgage lending.
I would start by discussing the significant actions we've taken regarding deposits this year to optimize our customers' resources. One of the measures involved reducing our LCR from around 190% to 150%. The minimum regulatory requirement is 100%, so we still have plenty of room for movement. However, we let go of expensive resources, particularly in wholesale, which has led to a reduction in funding. This was a strategic decision aimed at lowering our cost of funding to enhance our funding margin and optimize our customers' resources. Looking ahead, I believe our cash management initiatives will lead to two key platforms: one for financial solutions for SMEs and another for wholesale companies, which we refer to as Global Solutions. Both of these initiatives can significantly enhance the payment experience and improve our funding performance while favorably impacting our funding margin.
Thank you Marcelo. So in terms of the sustainability of the results of the insurance group, we see looking retrospectively, we will find in the last three quarters consistently and in a linear way, we see growth not only in our operations, but also in our results. So there's no oscillation, no variation even up or down. And that makes us comfortable to look prospectively also under a very positive light. On the last quarter, we had growth in health of 9%. In this last quarter, we also saw growth in life insurance close to 10%. And the pension plans with all of its challenges also grow, especially VGBL and portability of VGBL as well as the products that we created, adding the risk or the premium, and that has been making a lot of difference for our growth. Now in the business line and real estate and equipment, we grew close to 15%. And that makes us confident as well to look forward and say that we should continue or maintain the same level of growth, reaching the top of the guidance that we committed to at the beginning of the year.
Thank you, Ivan. And that's well noted. Bradesco Saúde, it's a premium insurance.
Next question from Nishio with Genial.
My question is about the credit cycle, particularly regarding SMEs and individuals. I would like your thoughts on these two areas. We have observed strong performance in SMEs, as seen in both non-performing loans and growth, with each positively influencing the other. Therefore, I want to know if you believe there is still potential for further improvement in SME delinquency. Additionally, when considering the individual segment, despite improvements, your non-performing loans remain higher than those of your peers. Do you see potential for improvement here? What stage are you currently at in terms of portfolio cleaning, and do you believe you are moving towards growth? The cycle of 2021 affected both SMEs and individuals. Have you effectively cleaned up the portfolio? Are you prepared for further growth, or do you still perceive room for improvement in delinquency?
Thank you, Nishio. So first of all, over night, it was 4.1% in September. The base scenario is 4.1% in December. Slight deviations, I mean, about these numbers is natural, but the basic scenario shows stability of our NPL in aggregate terms. SME, Marcelo, is insisting on that point. First of all, we were very cautious to concentrate our business in the secured portfolio, discount of receivables, rural credit with guarantees or collateral. So the new cohorts are showing good performance. And this is what is bringing NPL down. It could fall a little bit more, but the base scenario is for a certain stability given the economic stability that we anticipate going forward. So I think this is an important aspect. When it comes to restructured portfolio, as Marcelo indicated, in 12 months, the troublesome part of it was down by almost BRL 12 billion. And that was an important cleanup, but it's still possible to proceed with the derisking of our credit group.
Nishio, thank you for your questions. I would just like to add to what Andre said. I still see SME as a line that will post a decrease in NPL. Everything is under control. But if I look at individuals, if I look at a further horizon going towards 2026, it depends on the mix that you have. I said that in the year, the market grew more than in vehicles. But in the quarter, we grew more than the market. But if you draw the mix, you may even have a higher NPL. But eventually, I'm not saying it's there. But if you change the mix, like the auto, and you grow more than payroll loan, for instance, right? So then in this case, you could strike a balance in 2026. But always, return will be adjusted to risk. It will be a risk-adjusted return. So I don't see any problems with delinquency or NPL, but I see some decline with the SME portfolio still this quarter.
Next question comes from Tito Labarta from Goldman Sachs.
My question pertains to the growth you mentioned, specifically in segments where you feel more comfortable, such as secured lines, while other segments are not experiencing growth, although you might increase your risk appetite in the future. Marcelo, since you became CEO, part of your strategic plan included potentially raising market share in loans from 14% to a range of 15% to 19%. However, your market share has remained relatively stable since then. How crucial do you believe it is to increase your market share for continued profitability improvement? Should the emphasis instead be on more profitable segments where overall market share might not be as significant? How should we consider your capacity to gain market share moving forward and how vital will that be for enhancing profitability?
When we announced that mission of increasing market share by 14% in that range of 15% to 19%, that was February last year. That involved a 5-year plan, right? And in these 5 years, we have to take into account the economic landscape. Back then, interest rates were down. And what came next was an increase in the Selic rate to 15%. And now we are seeing the deceleration of the Brazilian economy as a consequence of this monetary squeeze. So considering the economic landscape now is appropriate to keep your risk appetite under control. I mean the financial situation of companies and families will improve with time. So naturally, the risk appetite of banks and companies will get better. And then if that happens, we can look for better market share. At the time, we are very cautious. But as Marcelo was saying, our approach is very segmented. When we see that there are opportunities to gain market share, we will certainly go after it. I mean, high RER because what we want is to increase our share. So in all the lines that we see opportunities, we will certainly grow market share. I mean, short time is not the main goal. The main goal is to increase profitability consistently.
I would like to add something, Tito. Thank you for your question. Looking ahead, our mission is to gain share in the interval I showed you in the plan. In the short term, we experienced good growth. If we hadn't faced an issue in the large corporate portfolio, our year-on-year decline would have been over 10%. In terms of traction, we have seen payroll loans for individuals, which make up about 15% of our total portfolio, and we expect to gain share there. For mortgage loans, while other banks may gain some market share, we anticipate increasing our share as well, both on the corporate and individual sides where we hold close to 20% market share. We also see opportunities in auto loans. Looking at the bigger picture, there are different areas to consider. With new vehicles, individuals seem more eager to pursue these clients, and the same applies to corporate clients. We have strong relationships with rural clients and a good appetite to extend our services to both individuals and entities. So all of these lines are priority lines, and they are a good focus for us. The idea is that at the end of 2028, we will be in that interval that we presented when we introduced our transformation plan. But we're doing everything with the right choices, adequate risk appetite, portfolio management and growing in areas that can be traction and penetrated most of it through digital and the physical world. And we will just go forward because the idea is to gain more share with risk-adjusted return. Again, I insist on that point. I was saying that we were growing above market in the quarter, but always with risk-adjusted returns.
We now conclude the Q&A session. The questions that could not be answered at this time, our IR team will then answer your questions after the presentation. And before I turn the floor over to Marcelo for his final remarks, I would like to say that this presentation is available in the entire material related to this earnings release presentation is available in our IR website.
First of all, I would like to thank you very much, Andre, Cassiano and all my colleagues that are always here with us in our studio. I would like to thank the entire team of Bradesco, all of our employees and the ones that are constantly engaged every day, looking at customer engagement, looking at everything that happens in the bank, including the insurance company, consortia, the consumer finance area of the bank. And most of all, I'd like to thank you, sell-side analysts. You are always interested in participating in this event. So we have an IR team very much engaged and ready to talk to you about the results and the outlook and the buy side guys as well, clients that are with us at this time as well. So again, thank you very much. And I reinstate the trust we have in everything we're doing. I do apologize again for that avatar because we were asking for a change, and then they put my avatar. But I promise that next time, I won't have that avatar again. But let's move on. We are certain that next quarter, we will certainly deliver great numbers. Thank you all, and have a very nice week.