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Bradesco announces the results of a dispute with Santander

The Spanish bank won Brazil's second place among the most profitable in the country, behind Itaú

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January 31, 2019, 07:06 – Posted on January 31, 2019, 06h42

O Bradescothe country's second largest private bank in the fourth quarter announces high-quarter fourth-quarter results.

After Santander surprised the market yesterday by announcing that its return on equity (ROE) rose to 21.1%, investors wanted to know whether Bradesco was even lagging behind in financial institutions.

Santander took second place in the second quarter of 2018, when its return rose from 16.1% a year to 19.5%. Brazilian competitor ROE increased from 18.1% to 18.4% over the same period.

According to the information provided by Itaú BBA Investment Bank Thiago Bovolent Batista, Tiago Binsfeld and Alexandre Spada, Bradesco's profitability was to be 19.2% between October and December 2018.

Return on equity is one of the key indicators that stock market investors take into account when deciding which shares to buy.

Although its ROE increases, Santander has attracted shareholders who want to pay more for their role. Last year, Santander's share increased by 33.6%, but yesterday was 48 times, while Bradesco's preferred share increased by 17% to 42.84 times and Ibovespa was the main stock market in the domestic market. 8% to 94 133 points.

"Santander has announced outstanding results in its first Brazilian banking market, as well as the eternal trucks of Itaú and Bradesco," said Eduardo Rosman and Thiago Kapulskis, BTG Pactual analysts. .

However, Bradesco, together with Banco do Brasil, is the main indicator of Italian BBA analysts for investors.

"Bradesco is expected to announce another fourth fourth of good results and stable risk costs," analysts say. Bradesco's profit margin is expected to decrease from 4.1% to 3.9% between the last three months of 2017 and the same period of 2018, but the provision for doubtful accounts is expected to fall by 13.6% to 3.38 billion. euro. real.

At the beginning of the month, Bradesco changed its lead in reducing the number of vice presidents from six to four in order to succeed in the fight with Santander.

Competition aside, all Brazilian banks benefit from the credit market recovery.

Loans in the country increased by 5.5% in 2018, loans to individuals increased by 8.6% and corporate loans increased by 1.9%, according to Central Bank data published on 29 January. According to investment analysis consulting Lopes Filho accounts, the total amount of credits in the system is expected to be 9% this year.

The expected acceleration of economic recovery this year will also help to improve the quality of banking results, not only in terms of funding but also in sales of other products such as insurance and investment instruments, as João Augusto Frota points out. Salles, an analyst at Lopes Filho, said in his report.

Industrial leader Itaú announces its figures on February 4th. Its ROE in the third quarter of 2018 was 21.3%. By improving the economic scenario for all banks, the dispute at the top of this market should be more and more.

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