The large insurance and private pension operations of Brazil's third biggest bank, Bradesco (NYSE: BBD), could make its earnings more volatile than its peers, ratings agency Moody's said in a credit opinion on the bank.
Bradesco owns the country's largest insurance, pension and savings bond group, Grupo Bradesco Seguros, which contributes with roughly one-third of the bank's net income.
Moody's noted that investment income from the insurance operations and significant investments in government securities by the pension arm are potential sources of reduced earnings stability for Bradesco.
Overall, Moody's said Bradesco's earning stability is "supported by its scale and product diversification, which ensures the generation of predominantly recurring earnings."
To read the full credit opinion, go to this link