{"id":40734,"date":"2023-07-26T11:31:10","date_gmt":"2023-07-26T15:31:10","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/bradesco-lagging-behind-brazils-top-banks-nysebbd\/"},"modified":"2023-07-26T11:31:13","modified_gmt":"2023-07-26T15:31:13","slug":"bradesco-lagging-behind-brazils-top-banks-nysebbd","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=40734","title":{"rendered":"Bradesco: Lagging Behind Brazil’s Top Banks (NYSE:BBD)"},"content":{"rendered":"
\n
<\/picture>
<\/figcaption><\/figure>\n

Bradesco (NYSE:BBD<\/span>) is one of Brazil’s largest private banks. It has been working on “getting its house in order” after dealing with the toxic loan provisioning related to the Lojas Americanas retail scandal in the not-so-distant past.<\/p>\n

In recent years, I believe the bank has followed a misguided lending strategy, leading to an excessive provision to cover the debts of troubled companies. This has continued to put pressure on its financial results and return indicators.<\/span><\/p>\n

As the earnings season for Brazilian banks commences, Wall Street expects Bradesco to report <\/span>weaker numbers, particularly compared to its domestic peers Ita\u00fa Unibanco (ITUB) and Banco do Brasil (OTCPK:BDORY). The main reasons for this are the high provisions and a likely increase in delinquencies, mainly due to the challenging macroeconomic situation in Brazil.<\/p>\n

While Bradesco is not a bad business, its current position relative to its peers indicates that it has fallen behind. Considering this, having a bullish thesis for Bradesco shares is challenging, and a bearish outlook seems more appropriate.<\/span><\/p>\n

Lagging behind its peers<\/span><\/h2>\n

Over the past few quarters, Bradesco has been underperforming its main peers, Ita\u00fa and Banco do Brasil, as it has struggled to grow its loan portfolio substantially, delivered lower returns, and suffered from defaults.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n
<\/td>\nLoan Portfolio (R$ bi)<\/em><\/td>\nLoan Portfolio Growth (YoY)<\/em><\/td>\nGross Margins (R$ bi)<\/em><\/td>\nDelinquency Rate<\/em><\/td>\nALL (R$ bi)<\/em><\/td>\nCoverage Ratio<\/em><\/td>\nROAE<\/em><\/td>\nBasel<\/em><\/td>\n<\/tr>\n
Bradesco<\/strong><\/td>\n879.3<\/td>\n5.40%<\/td>\n16.7<\/td>\n5.10%<\/td>\n-9.5<\/td>\n182%<\/td>\n18.20%<\/td>\n12.60%<\/td>\n<\/tr>\n
Banco do Brasil<\/strong><\/td>\n1032<\/td>\n16.80%<\/td>\n21.1<\/td>\n2.62%<\/td>\n-5.8<\/td>\n202%<\/td>\n21%<\/td>\n16.70%<\/td>\n<\/tr>\n
Ita\u00fa Unibanco<\/strong><\/td>\n1153<\/td>\n11.70%<\/td>\n24.69<\/td>\n2.90%<\/td>\n-9.1<\/td>\n212%<\/td>\n20.30%<\/td>\n15%<\/td>\n<\/tr>\n<\/table>\n

<\/span><\/span>