High conviction financials for 2025

Financials

Galliano's Financials Research

Bradesco, Hana Financial and Bank of Baroda are Victor Galliano’s top picks amongst the GEM banks due to deep value with positive returns catalysts, while his sell on premium-valued Nubank is due to fundamental return headwinds emerging. In the Japanese banks, Victor identifies Mizuho and Resona as key beneficiaries of higher benchmark rates going forward, alongside very attractive valuations and supported by strategic share portfolios. CME Group is his 2025 pick in global exchanges, as a "flow monster" with a very strong competitive position. PagSeguro is his deep value, contrarian pick in payments.

- 13 December, 2024

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

LatAm Banks

Financials

Galliano's Financials Research

Victor Galliano examines key balance sheet ratios of the LatAm Banks looking into liquidity, credit quality and capital adequacy, at a time of investor nervousness and concern - Victor likes Bradesco and Bancolombia as value plays with Banco de Chile, BanBajio and BanRegio as high quality names. His bearish picks are Banorte (even though it is a quality name in terms of capital and credit quality, it is more exposed on the importance of its securities portfolio) and BCI, despite its strong liquidity, with its small US (Florida) banking subsidiary.

- 31 March, 2023

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