Brazil: Market value of banks is still lower than in 2019

The 4 largest banks listed on the B3 (São Paulo Stock Exchange) are worth 62% of the market value registered in 2019, R$951.9 billion in the pre-pandemic period.

The survey was carried out by analyst Einar Rivero, from TradeMap, and sent exclusively to Poder360. It considers the numbers of BB (Banco do Brasil), Bradesco, Itaú Unibanco and Santander Brasil. The values ​​are quarterly, from the 1st quarter of 2010 until the close of Wednesday (24 Nov 2022).

The nominal market value of the 4th quarter of 2019 was the peak recorded in the historical series. Since then, the closest the 4 largest banks closed was in the 4th quarter of 2020, when they totaled R$796.1 billion in market value.

Since the 4th quarter of 2019, banks have devalued R$361.3 billion, which corresponds to a 38% drop. The market value of institutions fell by R$77.7 billion from the 3rd quarter of 2022 until the close of November 22nd.

RETURN ON EQUITY

BB recorded the highest return on equity among banks in Brazil, the United States and companies in the sector listed in New York, according to the survey. It was 19.68% in 12 months until the 3rd quarter of 2022.

Return on equity (ROE) is calculated by dividing net income by equity. It serves to measure the total return in financial gain in relation to equity.

When considering the 4 largest banks in Brazil, the median return on equity was 19.09%, the highest since the 4th quarter of 2019.

Dividends and interest payments on equity of Brazilian banks fell from BRL 12.8 billion in the 3rd quarter of 2021 to BRL 8.8 billion in the same quarter of 2022.

BANK PROFITS

The nominal net income of financial institutions rose 13.7% in the 3rd quarter of 2022 compared to the same period of 2021. More than 33.4% of the total came from Banco do Brasil.

Banco do Brasil recorded the highest nominal profit in history among publicly traded banks in Brazil. It totaled R$8.1 billion in the 3rd quarter, an increase of 75.7% compared to the same period last year.

But the value does not enter the top 10 of highest real net profits – when considering the correction for inflation. The record was in 2013, also by Banco do Brasil. In the 2nd quarter of 2013, it had a profit of R$12.8 billion, in values ​​corrected until September.

With information from Poder360/Hamilton Ferrari