DB:BZLA

Stock Analysis Report

Banco do Brasil

Executive Summary

Banco do Brasil S.A. provides banking products and services for individuals, companies, and public sectors in Brazil and internationally.


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Banco do Brasil's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BZLA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

30.7%

BZLA

4.4%

DE Banks

9.9%

DE Market


1 Year Return

-51.9%

BZLA

-37.7%

DE Banks

-17.5%

DE Market

Return vs Industry: BZLA underperformed the German Banks industry which returned -37.7% over the past year.

Return vs Market: BZLA underperformed the German Market which returned -17.5% over the past year.


Shareholder returns

BZLAIndustryMarket
7 Day30.7%4.4%9.9%
30 Day-42.5%-25.5%-16.6%
90 Day-54.4%-27.2%-24.8%
1 Year-50.3%-51.9%-35.7%-37.7%-15.0%-17.5%
3 Year-43.9%-46.3%-43.7%-46.4%-17.4%-24.5%
5 Year-23.0%-26.3%-41.2%-53.2%-16.6%-28.1%

Price Volatility Vs. Market

How volatile is Banco do Brasil's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Banco do Brasil undervalued compared to its fair value and its price relative to the market?

26.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BZLA (€5.15) is trading below our estimate of fair value (€6.97)

Significantly Below Fair Value: BZLA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BZLA is good value based on its PE Ratio (4.5x) compared to the Banks industry average (15.1x).

PE vs Market: BZLA is good value based on its PE Ratio (4.5x) compared to the German market (16.3x).


Price to Earnings Growth Ratio

PEG Ratio: BZLA is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: BZLA is overvalued based on its PB Ratio (0.8x) compared to the DE Banks industry average (0.8x).


Next Steps

Future Growth

How is Banco do Brasil forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BZLA's forecast earnings growth (6.4% per year) is above the savings rate (-0.4%).

Earnings vs Market: BZLA's earnings (6.4% per year) are forecast to grow slower than the German market (14.4% per year).

High Growth Earnings: BZLA's earnings are forecast to grow, but not significantly.

Revenue vs Market: BZLA's revenue is expected to decline over the next 3 years (-0.9% per year).

High Growth Revenue: BZLA's revenue is forecast to decline over the next 3 years (-0.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BZLA's Return on Equity is forecast to be low in 3 years time (15.9%).


Next Steps

Past Performance

How has Banco do Brasil performed over the past 5 years?

4.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BZLA has a large one-off loss of R$12.4B impacting its December 31 2019 financial results.

Growing Profit Margin: BZLA's current net profit margins (27.4%) are higher than last year (21%).


Past Earnings Growth Analysis

Earnings Trend: BZLA's earnings have grown by 4.1% per year over the past 5 years.

Accelerating Growth: BZLA's earnings growth over the past year (41.5%) exceeds its 5-year average (4.1% per year).

Earnings vs Industry: BZLA earnings growth over the past year (41.5%) exceeded the Banks industry 0.7%.


Return on Equity

High ROE: BZLA's Return on Equity (19%) is considered low.


Next Steps

Financial Health

How is Banco do Brasil's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: BZLA has a low level of unsold assets or inventory.

Debt Coverage by Assets: BZLA's debt is not covered by short term assets (assets are 0.9x debt).


Financial Institutions Analysis

Asset Level: BZLA's level of assets compared to its equity is moderate.

Allowance for Bad Loans: BZLA has a sufficient allowance for bad loans.

Low Risk Liabilities: BZLA's liabilities are made up of primarily higher risk sources of funding.

Loan Level: BZLA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: BZLA's loans are broadly funded by customer deposits.

Level of Bad Loans: BZLA has a high level of bad loans (3.58%)


Next Steps

Dividend

What is Banco do Brasil's current dividend yield, its reliability and sustainability?

8.28%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BZLA's dividend (8.28%) is higher than the bottom 25% of dividend payers in the German market (1.68%).

High Dividend: BZLA's dividend (8.28%) is in the top 25% of dividend payers in the German market (4.97%)


Stability and Growth of Payments

Stable Dividend: BZLA's dividend payments have been volatile in the past 10 years.

Growing Dividend: BZLA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.5%), BZLA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BZLA's dividends in 3 years are forecast to be well covered by earnings (41.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Rubem de Freitas Novaes (74yo)

1.17s

Tenure

Mr. Rubem de Freitas Novaes has been President and CEO of Banco do Brasil SA since January 2, 2019 and has been its Director since 2019 and serves as its member of Executive Board. Mr. de Freitas Novaes se ...


Leadership Team

NamePositionTenureCompensationOwnership
Rubem de Freitas Novaes
President1.17yrsno datano data
Carlos Vasconcelos Araújo
CFO, Investor Relations Officer1.17yrsno datano data
Walter Malieni
Chief Wholesale Officer & Member of Executive Boardno datano datano data
Carlos Bonetti
Chief Internal Controls & Risk Management Officer1.17yrsno datano data
João Rabelo
Chief Agribusiness & Government Affairs Officer1.67yrsno datano data
Carlos dos Santos
Chief Retail Business Officer1.17yrsno datano data
Fábio Augusto Barbosa
Chief Business Development Officer1.17yrsno datano data
Mauro Neto
Chief Corporate Officer & Member of Executive Boardno datano datano data
Rodrigo Ayub
General Manager of the Funding & Investment Unitno datano datano data
Eduardo Pasa
Accounting Officerno datano datano data

1.2yrs

Average Tenure

50yo

Average Age

Experienced Management: BZLA's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Rubem de Freitas Novaes
President1.17yrsno datano data
José Monforte
Independent Director0.25yrno datano data
Luiz Spinola Santos
Independent Director4.92yrsno datano data
Paulo Roberto de Lima
Independent Director0.92yrno datano data
Aldo Martins Braido
Member of Supervisory Board2.92yrsno datano data
Maurício de Severiano Cardoso
Member of Supervisory Board2.92yrsno datano data
Hélio Magalhães
Independent Chairman of the Board0.92yrno datano data
Débora Cristina Fonseca
Director0.92yrno datano data
Waldery Júnior
Vice Chairman0.58yrno datano data
Rafael de Araújo
Supervisory Board Member0.33yrno datano data

0.9yrs

Average Tenure

65yo

Average Age

Experienced Board: BZLA's board of directors are not considered experienced ( 0.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Banco do Brasil S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Banco do Brasil S.A.
  • Ticker: BZLA
  • Exchange: DB
  • Founded: 1808
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: R$82.649b
  • Listing Market Cap: R$14.567b
  • Shares outstanding: 2.85b
  • Website: https://www.bb.com.br

Number of Employees


Location

  • Banco do Brasil S.A.
  • Setor de Autarquias Norte
  • Quadra 5, Lote B
  • Brasilia
  • Distrito Federal
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BBAS3BOVESPA (Bolsa de Valores de Sao Paulo)YesOrdinary SharesBRBRLJan 1992
BDOR.YOTCPK (Pink Sheets LLC)SPONS ADR EA REPR 1 ORD SHSUSUSDDec 2009
BZLADB (Deutsche Boerse AG)SPONS ADR EA REPR 1 ORD SHSDEEURDec 2009

Biography

Banco do Brasil S.A. provides banking products and services for individuals, companies, and public sectors in Brazil and internationally. The company’s Banking segment offers various products and services, including deposits, loans, and services to retail, wholesale, and public sector markets, as well as to micro-entrepreneurs and the low income population. Its Investments segment engages in the intermediation and distribution of debts in the primary and secondary markets; equity investment activities; and rendering of financial services. The company’s Fund Management segment is involved in the purchase, sale, and custody of securities, as well as the management of portfolios, and investment funds and clubs. Its Insurance, Pension and Capitalization segment provides life, property, and automobile insurance products, as well as private pension and capitalization plans. The company’s Payment Methods segment is involved in the funding, transmission, processing, and settlement of transactions through electronic means. Its Other segment engages in the provision of credit recovery and consortium administration services; development, manufacturing, leasing, and integration of digital electronic systems and equipment, peripherals, programs, inputs, and computing supplies; intermediation of air tickets; and lodging and organization of events. Banco do Brasil S.A. was founded in 1808 and is headquartered in Brasília, Brazil. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 23:42
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.