Bradesco Recedes as Competition Join Forces

Bradesco is unlikely to recover its number one spot in the rankings of Brazil’s and LatAm’s banks by assets and market cap any time soon, say sellside and ratings agency analysts. While more bank mergers could still happen in the wake of Itau’s purchase of Unibanco, there are few options that would give the tightly run Bradesco a chance to catch up with the merged institution to be. Bradesco is expected to be 25%-30% smaller than Itau Unibanco, according to Goldman Sachs. Medium sized banks like Votorantim, and state-owned entities like Banrisul and Nossa Caixa remain potential targets for buyers like Banco do Brasil, say equity analysts who declined to be named. But those are seen as insufficient to bridge the gap. “There’s nothing else to buy that would make a big difference,” says Moody’s banks analyst Celina Vansetti, noting one has only to run through the list of the country’s top 50 banks and pick out the ones that might be for sale to understand that. “Bradesco remains very solid as it is still among the top four or five banks,” adds Fernando Sotelino, professor at Columbia University and, until 2004, CEO of Unibanco’s wholesale banking unit. “But with Santander-ABN and now Itau-Unibanco, some banks like HSBC start to move farther away from the country’s group of top banks,” he notes.