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By Guillermo Parra-Bernal
SAO PAULO, Aug 20 (Reuters) - Banco Bradesco SA, Brazil's second-largest private sector bank, will focus on distributing more financial services in a faster and more cost-effective way to weather a flagging Brazilian economy, executives said on Wednesday.
Bradesco, based in Osasco, will focus on offering the most complete platform of lending and financial services products in order to leverage growth across the country, Chief Executive Officer Luiz Carlos Trabuco told investors at an event in São Paulo.
Boosting distribution, or the bank's ability to reach different clients for different services using its branches, relationships and digital networks, "will give us a competitive advantage for the coming years as we expand nationally," Trabuco said.
"In products in which we lack the necessary scale to win, we may underperform, so that is why we are obsessed in this organization on gaining scale," Trabuco said. "Pursuing scale is the key to the sustainability of our earnings."
The remarks underscore the lender's efforts to recoup some of the ground lost in recent years to its larger rivals, state-run Banco do Brasil SA and private-sector giant Itaú Unibanco Holding SA. Bradesco is investing heavily in technology to allow customers to use Internet and mobile banking channels.
As the bank's efforts center on Brazil, the scope for a potential overseas expansion is narrowing, Chairman Lazaro de Mello Brandão said at the event. If Bradesco were to expand outside Brazil, it would do so through its wholesale and private banking platforms, rather than its retail banking unit, Brandão and other executives noted.
Chief Financial Officer Luiz Carlos Angelotti said he expects that net interest margin will end the year at 7.3 percent, compared with 7.7 percent in the second quarter.
He said the default ratio for the large corporate segment is expected to return to the quarterly average of 0.3 percent this quarter, and that the 90-day default ratio should be stable at current levels next year.
Angelotti said growth in Bradesco's card business could help it top fee income growth guidance of 9 percent to 13 percent this year, though he ruled out any changes to the dividend policy.
Banco do Brasil, the nation's largest bank by assets, has for the past three years invested in stepping up cross-selling - the sale of different products to the same customer in the branch network.
Itaú has done that as well, but has also boosted the scope of investment banking, to provide more fee-related services to some of the nation's and Latin America's largest companies.
Reporting by Guillermo Parra-Bernal; Editing by Chris Reese and Leslie Adler