In a recent press release featured on CNBC.com, Igor Cornelsen gave a short rundown on the success of Brazilian banks and how to approach investing in Brazil in years to come. When a country’s economy fails to grow, as Brazil’s did in 2014, you would typically assume that the banks in that country would also fail to grow. However, two of the largest private banks in Brazil grew at impressive rates. Banco Bradesco (BBD) and Itau Unibanco (ITUB) both had impressive share growth, and both grew profits for the third quarter: Bradesco’s by 28%, Itau’s by 36%. Igor Cornelsen explains these unique results on the knowledge of local bankers knowing their market and their customers. Cornelsen has listed a few things to keep in mind when looking at Brazilian banks.
– There are 10 major players in the banking market.
– Fresh faces in the new government could spur growth.
– China is key to Brazil’s growth.
– Currency valuation of the real is out of step with reality.
All of these factors listed above influence the Brazilian economy, and by extension, the Brazilian banking sector. China is both the biggest market and biggest competitor of Brazil in South America. While China is Brazil’s largest trading partner, it is also Brazil’s largest competitor in terms of exports to other Latin American countries. It is important to pay attention to the interconnectedness of the markets around the world, and Brazil is no exception to this rule.
See the original article with Igor Cornelsen’s recent comments on cnbc.com for more information.