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(Adds new 2021 guidance, CEO comments)
By Carolina Mandl
SAO PAULO, Nov 4 (Reuters) - Banco Bradesco SA, Brazil's second-biggest lender, on Thursday posted a third-quarter profit slightly above analysts' expectations and raised its outlook for lending and fees this year.
Recurring net income, which excludes one-off items, rose 34.5% from a year earlier to 6.767 billion reais ($1.21 billion), above a consensus estimate of 6.469 billion reais compiled by Refinitiv.
Bradesco predicted its loan book will grow between 14.5% and 16.5% this year, up from a previous forecast of 13%. Fee income should expand up to 6%, the bank said, raising a prior projection of up to 5%.
Chief Executive Octavio de Lazari said the improved outlook comes as operations have returned to pre-pandemic levels.
"Despite some uncertainties, when we look in the rear view mirror, we see that the pandemic is behind us," he said in the earnings report.
Bradesco's loan book grew 16.4% from a year earlier and 6.5% in the quarter, boosted by credit cards, mortgages and the corporate segment. Total net interest income, a measure of earnings on loans minus deposit costs, rose 2.7% from a year earlier to 15.702 billion reais despite lower trading gains.
Bradesco's return on equity, a gauge of profitability, rose one percentage point from the prior quarter to 18.6%.
The bank's profit was also helped by lower loan loss provisions, which fell 39.9% from a year earlier, as expected defaults stemming from the pandemic crisis did not materialize.
Its 90-day loan default remained roughly flat at 2.6% in quarter.
($1 = 5.6020 reais) (Reporting by Carolina Mandl Editing by Brad Haynes)