Zacks Analyst Interview Highlights: Banco Santander, Unibanco, Banco Itau and Banco Bradesco

CHICAGO--(BUSINESS WIRE)--Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Ann Heffron, who discusses Banco Santander (NYSE: STD), Unibanco (NYSE: UBB), Banco Itau (NYSE: ITU) and Banco Bradesco (NYSE: BBD).

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Do you see banks strengthening following Brazil’s upgrade to investment-level status?

Ironically, since Brazil was upgraded to investment grade by Standard & Poor’s on April 30, 2008 (followed by Fitch on May 30, 2008), the stock market has tanked. The BOVESPA index in Brazil has slumped 24.5% since April 30, while the S&P 500 is down only 9.9% over the same period. This reflects declining commodity prices, risk aversion to emerging markets in general, and global economic slowing.

For Latin American banks in the Zacks universe, the median stock price decline year to date is 21.4%, compared to 14.9% for the S&P 500.

In time, we believe that the upgrade to investment grade will be helpful to Brazil and Brazilian banks. However, this is currently being overshadowed by events on the global stage.

Overall, which are your top Buys/Sells these days?

I have two Buys: Banco Santander Central Hispano, S.A. (NYSE: STD) and Unibanco - Uniao de Bancos Brasileiros S.A. (NYSE: UBB).

Banco Santander Central Hispano, S.A. is the largest bank in the euro zone and the fifth largest in the world, based upon profit. Santander had total assets of €913 billion (US$1.3 trillion) in assets as of December 31, 2007, and is among the highest-rated banks in the world following recent credit rating upgrades. Banco Santander’s long-term credit ratings are AA by S&P and Fitch and Aa1 by Moody’s. We believe that Santander’s valuation is lower than it should be given its strong growth prospects relative to global peers.

Unibanco - Uniao de Bancos Brasileiros S.A. is Brazil’s fourth largest private bank, with total assets of R$150 billion (US$84 billion) at December 31, 2007. The bank offers a diverse array of products and services. Unibanco’s long-term credit ratings are Baa3 by Moody’s, BBB- by Standard & Poor’s, and BBB- by Fitch. UBB represents a good value relative to its strong growth prospects and also vis-à-vis Brazilian peers, Banco Itau (NYSE: ITU) and Banco Bradesco (NYSE: BBD).

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