Brazilian Financial Institutions: Feedback from the US: caution amidst rising uncertainties

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Brazilian Financial Institutions: Feedback from the US: caution amidst rising uncertainties

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Brazilian Financial Institutions

Feedback from the US: caution amidst

rising uncertainties

Industry Overview

Investors remain defensive 22 June 2026

We met 15 global investors in New York and Boston last week. In general, investors Equity

seemed cautious on Brazilian financials given deteriorating earning visibility from: i) Brazil

higher for longer interest rate environment, ii) presidential elections in October, and iii) Financial Institutions

deteriorating asset quality trends. Itau and BTG Pactual remained preferred, despite Mario Pierry

their premium valuations. Nubank was the most debated name, with most investors Research Analyst

seeing recent share price weakness creating an attractive entry point for those with a BofAS+1 646 743 0047

longer-term investment horizon. Investors were more constructive on B3 and insurers, mario.pierry@bofa.com

while there was limited interest in XP, payments and small caps. Antonio Ruette >>

Research Analyst

Merrill Lynch (Brazil)

+55 11 2188 4225Itau and BTG Pactual remain core holdings

antonio.ruette@bofa.com

Investors remain mostly allocated on Itau and BTG Pactual as defensive alternatives,

Augusto Uehara >>

given their superior management teams and profitability levels. On the other hand, most Research Analyst

investors expressed concern about a deteriorating asset quality cycle, given record-high Merrill Lynch (Brazil)

+55 11 2188 4651

bankruptcy protection filings and elevated consumers’ debt service levels. Investors augusto.uehara@bofa.com

seemed more negative on Banco do Brasil, Bradesco and Santander. Ernesto Gabilondo >>

Nubank was the most debated stock Merrill+52 55Lynch5201 (Mexico)3428