Bradesco is the third largest bank in Brazil. Unlike what happens in most developed countries, where small banks and credit unions are always present, in Brazil the banking sector is characterized by a well-established oligopoly, in which the 4 main institutions together hold about 70% of the market share. This oligopoly, together with the high switching costs in the banking sector, gives these 4 banks a significant advantage in terms of pricing.
The banking sector in Brazil is also prudently regulated and highly profitable, with spreads above 10%. These two factors considerably reduce the risk for small investors in these banks.
Bradesco has over 800 billion dollars in assets and an ROE around 20%. Its two main segments are banking and insurance activities, each of which contributes almost equally to the company’s net income.
With 4,600 branches throughout the country, Bradesco is the only one among the large banks to be present in every city in Brazil. This strong presence will allow Bradesco to benefit from Brazil’s growth in the coming decades.
Bradesco’s competitive advantage is based on its presence, brand, scale, high switching costs, and the oligopoly in the sector. These factors, together with its exposure to a fast-growing market, ensure that Bradesco receives the highest EBI Rating: 5 stars.
Banco Bradesco S.A.
| ADR Ticker | BBD |
| Bovespa Ticker | BBDC3, BBDC4 |
| Latibex Ticker | XBBDC |
| Website | http://www.bradescori.com.br/site/conteudo/home/default.aspx?idiomaId=2 |
| Sector* | Banks, Insurance |
| EBI Rating |  |
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