Banco Bradesco (BBDC4 BZ) Brazil
Report by Galliano's Financials Research
Bradesco is Victor Galliano’s key pick in big-cap Brazilian / LatAm banks - he believes that post-provision earnings will recover in 2H24, which should drive a meaningful lift in group ROE. It is also looking to squeeze opex, and given its underwhelming efficiency ratio, there is potential to find savings. Bradesco has an attractive earnings yield for lesser political risk than Banco do Brasil, but it is also attractive on its (recovery) growth potential as reflected in the PEG ratio and it has undemanding PE multiples and PBV ratios. NuBank is a digital bank success story, but one that Victor considers has challenges in terms of credit quality and it has potential capital constraints given its fast loan growth.