1. Home
  2. /News
  3. /The second-largest Brazilian bank has lost 20% of its value in one week

The second-largest Brazilian bank has lost 20% of its value in one week

Ignacio Teson•Tuesday, February 13, 2024•2 min read

The second-largest Brazilian bank has lost 20% of its value in one week

Bradesco Bank has fallen 20% in the last week due to its poor results and an unhelpful context.

Bradesco is the second-largest Brazilian Bank.

The bad news for Banco Bradesco continues. After falling 16% due to poor results and proposing a business restructuring, Brazil’s second-largest bank dropped 2.5% today, reaching its lowest values since April 2023.

The bank reached $2.67 per share on Wall Street, down from around $3.40 just a week ago. Bradesco’s shares are approximately 50% below pre-COVID values.

Brazilian bank Bradesco has reduced its net profit by 21.2% in 2023 compared to the previous year. According to the institution, this decline in profit is attributed to the provisions set aside for potential losses and the contraction of interest income per client. Additionally, the operating result has decreased by 36.4% compared to the previous year.

Despite the bank’s expectation of a year-on-year increase in interest income between 3% and 7% and between 4% and 8% for the insurance, pension plans, and capitalization bonds segment, investors perceived the news as a turning point. They punished the bank’s stocks by 16% on Wednesday.

Bradesco, with ticker BBD, prepares for a year of transformation, focusing on strategic initiatives to regain market share and improve profitability.

Banco Bradesco is Brazil’s second-largest private bank, holding approximately 15% of deposits, and the largest insurance provider in Brazil, commanding roughly 20% to 25% of the market share.

Bradesco’s stocks are currently in a “buying opportunity” zone if we consider their historical performance and price-action. Bradesco is a consistent dividend payer and might be suitable for investors seeking exposure to LATAM equities.

Its stock performance is closely tied to the economic trajectory of Brazil, which has faced challenges in sustaining consistent growth in recent years.

The Brazilian economy has faced challenges in terms of fiscal deficit and public debt. Lack of fiscal discipline and the need for structural reforms have been recurring themes in the country’s economic discourse.

Investors and market observers will be attentive to how Banco Bradesco navigates the challenges and opportunities in the fintech-dominated landscape, as well as the bank’s efforts to enhance its competitiveness and market position.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
Related Articles
img
Mexican Peso Surpasses 20 per Dollar as U.S. Election Nears
5 months ago
img
Mexican Peso Falls for Second Straight Session Ahead of Local Inflation Data
5 months ago
img
The Mexican stock market started the week with a 1.08% decline.
5 months ago
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Add 3442

HFM crypto add fxleaders

Add 3440

XM

Best Forex Brokers