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.