Boston, MA 04/23/2014 (wallstreetpr) – Banco Bradesco SA (ADR) (NYSE:BBD) is Brazil’s second largest bank; the bank feels it has not captured the local market fully. There is still a lot of untapped local market, and it does not make sense to venture into international markets right now.
In the future if the need arises the bank is open for expansion in overseas markets. Banco Bradesco SA already has a huge network of marketing and bank branches in place for selling their products to the local people.
Different Approach:
Brazil is world’s second largest emerging market, and it is growing at around 2 percent. The banking sector is outperforming the other sectors. BBD is a $61billion company, it plans to tailor make the product for the Brazilian people and earn maximum profit, keeping their expenses under control.
Banco Bradesco SA (ADR) (NYSE:BBD) is eyeing on long term growth and return on their loans; for that it has an agreement with the Brazilian oil company Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). This oil company has taken a loan of a sum of $1.82 billion at the rate of interest of 9.5 percent tenure of the loan is for 17 years.
BBD thinks right now some of the international markets might look good, but if you calculate the return on invested equity the return you get will be very less; so it is better to leverage the existing network. BBD also plans to invest in Brazil’s retail sector as it sees this as the right time to do so.
Helping Electricity Sector:
The Brazilian electricity sector is badly hit by drought, thus increasing the spot price. BBD is one of the many banks who are lending to the electricity sector, and is actively in negotiations with the Brazil government on the loan of $3.6 billion which is to be issued to electricity clearing house.
Banco Bradesco SA (ADR) (NYSE:BBD) is also mulling on giving loan to the distributors rather than giving them bonds.
