Brazilian banks lead LatAm in stock gains

Tuesday, November 29, 2016

Brazilian banks continue to lead Latin America in gains on the stock market, up 3.2% last week, according to a report from Deutsche Bank.

Gains in the country were led by Santander Brasil, up 7.3%, with Banco do Brasil rising 4.2% following the announcement of its restructuring to cut costs at the bank. Bradesco also saw gains, with an increase of 2.1%, and Itaú Unibanco was nearly flat at -0.2%.

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Banco do Brasil's CEO Paulo Rogério Caffarelli said on Monday that the early retirement plan that is a part of the financial institution's restructuring could save up to 2.2bn reais (US$648mn). This is in addition to the 750mn reais initially expected to be saved with the retirement plan and the closing of hundreds of branches. He added that the bank does not plan to launch an IPO for its credit card division or its real estate title distributor, but that the sale of non-core assets, such as Neoenergia and Kepler Weber, is being considered.

Meanwhile, October credit data released by the central bank showed negative year-on-year loan growth, as well as a "deterioration in asset quality driven by corporate NPLs, but offset by rising credit spreads," Deutsche Bank said.