We recently published a list of 10 Worst Performing Bank Stocks in 2024. In this article, we are going to take a look at where Banco Bradesco S.A. (NYSE:BBD) stands against other worst performing bank stocks in 2024.
Banking Sector Trends for 2025
On December 12, 2024, Goldman Sachs global investment research managing director & senior analyst Alex Blostein joined Yahoo Finance to discuss the top trends for the banking sector heading into 2025. Goldman Sachs had held financial conferences with banking executives before Alex Blostein appeared for this interview, thus his analysis of the sector brings in the perspective of industry experts.
Blostein noted that they have hosted more than 100 executives from the industry ranging from bankers to brokers and asset managers. The key takeaway from the perspective of all the experts points towards optimism around the economy and some data points support this optimism. He noted that the pent-up capital market activity seems to be translating to more actionable steps, therefore the capital markets and the merger and acquisition activity are likely to accelerate materially in 2025. Another theme that Blostein noted is that all sub-sectors around private markets are feeling healthy and the years of concentration around private credit have started to broaden into private equity. Blostein further mentioned that from his talks with banking executives, it seems that real estate has also started to get a little better than it was previously. He also emphasized that one of the key themes for the industry is the large amount of capital sitting at the sidelines. Blostein estimates there is around $7 trillion of capital sitting as money market fund, which has now started to make its way into the market, initially through fixed income, but may extend to equities. Therefore all of these themes advocate for a bullish financial sector in 2025.
While talking about what the positive change for the sector will look like, Blostein noted two areas that people keep under the spotlight the capital market and M&A. On the M&A front, the sector is running around 10% to 15% below cyclical averages. This means that the markets have gone up considerably, which presents an upside of 15% to 30% for M&A volumes over the next couple of years. On the other hand, the equity capital markets in 2024 were running around 30% to 40% below the 2021 peak levels. This topped with the pent-up demand from the clients puts the private market and equity firms to return some of the capital back through M&A and equity capital market routes. Therefore the overall economic condition plus the themes discussed above makes a bullish case for the financial and banking sector.
Our Methodology
To curate the list of 10 worst-performing bank stocks in 2024, we used the Finviz stock screener. Using the screener we aggregated a list of bank stocks both diversified and regional banks that have fallen by at least 15% over the past year. Next, we checked the performance of each stock and ranked the stocks in descending order of their 1-year performance. We have also added the number of hedge funds holding each stock sourced from Insider Monkey’s Q3 2024 database. Please note that the data was collected on February 11, 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Banco Bradesco S.A. (BBD) the Worst Performing Bank Stock in 2024?
A customer withdrawing money from an ATM, illustrating the company's widespread availability of accounts.
Banco Bradesco S.A. (NYSE:BBD) together with its subsidiaries provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two main segments Banking and Insurance. The Banking segment provides, checking accounts, savings accounts, loans, and credit card services.
The stock has been down 23% over the past 12 months, however, the fiscal fourth quarter of 2024 highlighted growth across several financial indicators. The bank reported a net income of BRL 5.4 billion during the quarter, marking a 37% year-over-year increase, with full-year net income reaching BRL 19.6 billion, up by 20%. Management of Banco Bradesco S.A. (NYSE:BBD) attributed growth in net income to its strong loan portfolio. The loan portfolio exceeded BRL 980 billion, growing by approximately 12% year-over-year, with significant growth in micro, small, and medium enterprises (MSMEs).
The bank is also focusing on improving its digital presence during the fourth quarter; nearly all transactions (99%) occurred through digital channels, enhancing efficiency and customer experience. Management also noted about closing some of its physical branches to allocate more funds for its digital endeavor. It is one of the worst-performing bank stocks in 2024.
Overall, BBD ranks 6th on our list of worst performing bank stocks in 2024. While we acknowledge the potential of BBD to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BBD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
