Banco Bradesco (BBDC4 BZ)

Financials

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.

- 06 September, 2024

Big cap GEM Bank investment recommendations for 2024

Financials

Galliano's Financials Research

Victor Galliano favours four longs and one short as his conviction calls for the year ahead. 1) Bank Mandiri (Indonesia) continues to generate improving returns and has strong capital ratios, credit quality and liquidity metrics. 2) KB Financial (South Korea) is a deep value pick. 3) China Merchants Bank is a contrarian pick, which looks well positioned to confront concerns re. Chinese NPLs and also on very attractive valuations. 4) Banco do Brasil screens well re. valuations and returns; its growth potential also looks particularly appealing. 5) Victor’s key sell is Kotak Mahindra Bank (India) as it is richly valued, exposed to low prospective earnings growth and has low credit quality coverage.

- 12 January, 2024

FinTech & Financials: 2022 investment themes

Financials

Galliano's Financials Research

1. A shift into value in EM banks; cautious on digital banks - top picks are Sberbank, Banco do Brasil and HDFC Bank. Nubank likely to be one of the EM FinTech big negative surprises of 2022.
2. Southern Europe banks, position for the prospect of higher interest rates - highlights BBVA and Banco BPM.
3. Exchanges, competitive pressures are real, but are they priced in - B3 and Singapore Exchange standout.
4. Growth and value in digital payments - highlights Mastercard and, for its deep value, PagSeguro.
5. Digital wealth managers, picking a potential winner - BTG Pactual.

- 07 January, 2022

LatAm Financials: Focus on the value opportunities

Financials

Galliano's Financials Research

Victor Galliano identifies the most attractive stocks based on value and GARP metrics. In Brazil, he highlights Banco do Brasil and Bradesco, but has recently turned cautious on Banco Inter. He continues to see further upside in Banorte (Mexico). Credicorp (Peru) is one to watch closely - most attractive PEG ratio among LatAm banks; plus investors have begun to cover short positions. Amongst the payment companies, Victor sees strong growth potential at PagSeguro. Within the wealth management sector he remains cautious re. XP's prospects due to eroding take rate and rising IFA costs.

- 14 May, 2021