Brazil's Banco Bradesco shares down as COVID - 19 related claims hit

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SAO PAULO, 4 Aug -- Shares in Brazil’s second largest lender, Banco Bradesco SA, were down almost 3% on Wednesday morning as the bank's insurance unit took a hit from COVID - 19 related claims in the 2nd quarter.

Chief Executive Octavio de Lazari told reporters that the shock is temporary as vaccination roll-out is speeding in Latin America's largest economy, but analysts wrote notes to clients they were unsure about future performance.

It is difficult to estimate how quickly insurance numbers will react, analysts at Banco BTG Pactual said.

Gains within this unit fell to 1.574 billion reais 58.3% as the number of deaths and cases of COVID - 19 in Brazil increased in the second quarter. COVID - 19 related claims amounted to 1.848 billion reais in the second quarter, about the same as reported for the entire year of 2020.

Claims related to COVID - 19 are likely to go down by the year-end, Lazari said. Still he pointed out that the insurance unit should account for less than 25% of the Bank's results this year, which is its usual contribution.

Bradesco said on Tuesday it sees 2021 gains up Insurance between 15% and 20% from last year.

Bradesco reported on Tuesday a one-off net income which excludes recurring items of 6.319 billion reais, up 63.2% from a year earlier.