Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

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Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Brazil’s credit quality trends to June remain constructive</li>
<li>System loan growth accelerated slightly on a YoY basis to 16.3%</li>
<li>Compared to May, consumer credit quality was well controlled and arrears (15-90 days delay) data remains an encouraging early signal for medium-term NPLs</li>
<li>Credit quality of corporates showed that risks improved in micro-enterprises and SMEs, even if the differential was still wide with large corporate whose NPLs were well contained</li>
<li>The NPL ratio rose in the case of private international banks, yet these delinquencies were more than fully covered by provisions as in the case of the banking system generally</li>
<li>Credit spreads edged higher in June, on a MoM basis, with corporates offsetting the marginally lower spreads for individual borrowers</li>
<li>We continue to see value in the Brazil bank sector, and stick to our positive view on <a href="https://www.smartkarma.com/entities/banco-do-brasil-sa" target="_blank" data-smartkarma-citation="entities:24564:1" rel="noopener">Banco Do Brasil Sa (BBAS3 BZ)</a> </li>
<li>Risks to positive view on these big cap Brazil banks include worse than expected credit quality, weak opex control and erosion of credit spreads</li>
</ul>


Brazil’s credit quality trends to June remain constructive
System loan growth accelerated slightly on a YoY basis to 16.3%
Compared to May, consumer credit quality was well controlled and arrears (15-90 days delay) data remains an encouraging early signal for medium-term NPLs
Credit quality of corporates showed that risks improved in micro-enterprises and SMEs, even if the differential was still wide with large corporate whose NPLs were well contained
The NPL ratio rose in the case of private international banks, yet these delinquencies were more than fully covered by provisions as in the case of the banking system generally
Credit spreads edged higher in June, on a MoM basis, with corporates offsetting the marginally lower spreads for individual borrowers
We continue to see value in the Brazil bank sector, and stick to our positive view on Banco Do Brasil Sa (BBAS3 BZ) 
Risks to positive view on these big cap Brazil banks include worse than expected credit quality, weak opex control and erosion of credit spreads


Brazil Bank Sector Trends to June in Ten Charts

Banco do Brasil

Brazil Bank Sector Trends to June in Ten Charts