Itau Unibanco Holding SA (ITUB4), Latin America’s biggest bank by market value, gained the most in a week after Credit Suisse Group AG raised its recommendation to the equivalent of buy.
Shares advanced 1.1 percent to 35.97 reais at 1:30 p.m. in Sao Paulo. Trading volume was 44 percent of the full-day average of the past three months, data compiled by Bloomberg show. The benchmark Bovespa index slipped 0.4 percent.
Credit Suisse raised the stock from the equivalent of hold, citing a better outlook for loan provisions and costs in 2014 and evidence of reduced government intervention in the industry. The MSCI Brazil/Financials Index (MXBR0FN) has dropped 10 percent in the past year as President Dilma Rousseff pushed banks to lower borrowing costs and reduce profits to “civilized levels” as part of policies intended to boost growth that last year was the slowest since 2009.
“From our conversation with banks and other industry players, banks’ relationship with the government and the discussion on credit spreads is better at the margin,” Credit Suisse analysts including Marcelo Telles wrote in a research note dated yesterday. Easing government pressure is “allowing banks to buy more time and reduce the rate on the revolving credit lines on a more gradual basis,” the analysts wrote.
Itau shares have dropped 6.9 percent in the past year.
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