J.P. Morgan GEMS FTM 20 May 26 Jentech Precision Industrial Co.; Korea Autos; Banco ABC; MBRF; Nedbank Group Ltd and More

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J.P. Morgan GEMS FTM 20 May 26 Jentech Precision Industrial Co.; Korea Autos; Banco ABC; MBRF; Nedbank Group Ltd and More

Global Equity Research AC Global Equity Research

20 May 2026 J P M O R G A N

gr_publications@jpmorgan.com

Last week we met with Banco ABC’s CEO Sergio Lulia. Overall, management continues with a very disciplined mindset,

prioritizing profitability over growth - especially in a moment of pressured corporate credit spreads. Asset quality remains a

point of attention given higher for long rates in Brazil, but management is comfortable in keeping cost of risk around 0.8%.

Despite weaker-than-expected 1Q26 results (link), management remains constructive on gradually growing fees and new

business lines while keeping costs under control, which should generate “positive jaws” and drive efficiency towards its ~35%

long-term goal (vs ~42% in 1Q26 and 37.5-39.5% guidance for 2026). Finally, management has also reinforced the strength of

its balance sheet, with sound capital ratios and healthy tangible equity. We take the opportunity to update our model and trim

our 2026 earnings estimate by 2% to R$1,048mn, implying ~5% growth Y-o-Y and 14.7% ROE, placing us 4% below BBG

consensus. We also raise our Dec-26 price target to R$30 per share (vs R$28 previously). We see ABC trading at 0.8x P/BV

and 5.4x P/E 26E, which screens undemanding for a ~15% ROE bank, but further upside needs to be on or higher ROE, or

lower CoE, which we are unsure will be a catalyst in the short-term, thus we keep our Neutral rating.

MBRF (Lucas Ferreira) (MBRF3 BZ, OW, PT R$21.50), Brazil

Cutting Ests Despite 1Q Beat. Reiterate OW on Expected Earnings Improvement and Valuations

We are reiterating our OW rating on MBRF but cutting estimates and price target despite an earnings beat in 1Q.