4. Banco Bradesco ( BBD) is a private sector commercial bank and is one of the top five banks in Brazil, in terms of assets.
The stock has gained 23% during the last one year and 60% of analysts covering the stock give a buy rating. Total loan growth during the third quarter stood at 20% year-over-year. Loan growth was slower than forecasted as corporate and auto loans, accounting for two-thirds of total loans, were sluggish. However, personal loans, and SMEs grew rapidly at 50% and 27.5%, respectively. Analysts hold a positive outlook on the stock, given its medium-term growth prospects. Earnings are expected to grow at 20-30% during 2011. Improved asset quality would also upgrade earnings profile in 2011. The bank's provision coverage stands at 122.6%, up 100 basis points from the June quarter. Tighter spreads that declined 30 basis points quarter-over-quarter plunged net interest margins (NIM) to 7.5% at the end of September. Moreover, the bank has a 25% market share in insurance premiums. Dividend yield stands at 0.9% with a capital adequacy ratio of 16.8%, as of March 2010. The stock is trading at 3 times its 2011 book.