Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

As Brazil Has Slowed, Itau Unibanco Has Battened Down The Hatches

As Brazil's largest private sector bank, and the second-largest bank overall with about 16% of system assets, Itau Unibanco's (NYSE:ITUB) ("Itau") fortunes are certainly tied to the health of the Brazilian economy. That doesn't sound like such a good thing, as Itau Unibanco and Bradesco (NYSE:BBD) are both looking for sub-2% GDP growth in Brazil for the next two years and early-stage delinquencies are starting to tick up. Management runs a tight ship, though, with better efficiency and NPL ratios than its rivals, and management has been shifting toward lower-risk loan types, building up its fee-generating businesses, and expanding outside of Brazil. The shares are not hugely cheap today, but still hold some long-term appeal....

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