STXNEWS LATAM-UBS cuts earnings estimates for Brazilian banks on weak growth
Analysts at UBS Securities led by Phillip Finch cut 2013 profit estimates for the largest Brazilian banks by an average 2 percent, citing slowing economic growth, heightening competition, unfavorable earnings momentum and valuations that fail to reflect growing risks. UBS has an "underweight" recommendation on Latin American banks, especially because of Brazil and in spite of its positive view on Mexican lenders and a "neutral" stance on Andean region peers.
Among non-bank financial companies, UBS has a "neutral" recommendation with a preference for companies with limited competitive pressure such as financial exchange operator BM&FBovespa SA. UBS' least-preferred Latin American bank is state-run Banco do Brasil SA, while private sector rival Itaú Unibanco Holding SA remains the shop's only "buy"-rated bank in Brazil.
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