Brazilian banks fared very well during the country’s recession – little wonder, then, that analysts expect the cyclical recovery to power years of outperformance within emerging markets.
UBS’s financial analyst Philip Finch believes that a potent mix of stronger than-expected-loan growth, improving net interest margins (as the country’s base rate, Selic, rises), a falling cost of risk (if pensions reform is passed) and improved efficiency ratios from branch rationalization will improve the profitability of Brazil’s leading banks.
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Philip Finch, UBS |
Floating all these specific boats is the cyclical recovery of the Brazilian economy that should come this year.
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