Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>We close out our long on Inter downgrading it from buy to neutral; Inter was the more profitable half of our prior pairs trade with our past short on Nubank</li>
<li>This is in part a tactical downgrade, locking in gains but it also reflects that Inter is no longer a bargain neobank in terms of valuations</li>
<li>In addition, Inter’s neobank metrics continue to lag those of its core peer Nubank meaningfully, and its risk weighted asset growth is accelerating, consuming more of its modest capital cushion</li>
</ul>


We close out our long on Inter downgrading it from buy to neutral; Inter was the more profitable half of our prior pairs trade with our past short on Nubank
This is in part a tactical downgrade, locking in gains but it also reflects that Inter is no longer a bargain neobank in terms of valuations
In addition, Inter’s neobank metrics continue to lag those of its core peer Nubank meaningfully, and its risk weighted asset growth is accelerating, consuming more of its modest capital cushion


Inter (INTR US) – Closing Out Our Long Position on Inter

<ul>
<li>We close out our short on Nubank; despite the sharp share price move post 2Q25 results, our pairs trade just worked</li>
<li>We therefore upgrade Nubank to a neutral from a sell on the back of a solid set of 2Q25 results, largely due to its sound operational performance</li>
<li>We continue to recommend a long on Inter for its healthy credit quality credentials, improving operating performance and its very attractive valuations with premium earnings growth potential</li>
</ul>


We close out our short on Nubank; despite the sharp share price move post 2Q25 results, our pairs trade just worked
We therefore upgrade Nubank to a neutral from a sell on the back of a solid set of 2Q25 results, largely due to its sound operational performance
We continue to recommend a long on Inter for its healthy credit quality credentials, improving operating performance and its very attractive valuations with premium earnings growth potential


EM Neobanks – Closing Out Our Short on Nubank (NU US), Stick with the Long on Inter (INTR US)

<ul>
<li>We turn positive on KakaoBank, for its increasingly secure competitive positioning in Korea, its attractive digital efficiency ratio, its low customer acquisition cost and for its high activity rate</li>
<li>We switch our buy rating from PAN to Inter as the latter has improved operationally, it is sound on capital and attractive on valuations</li>
<li>Nubank is executing well, but we remain cautious on Nubank shares as we continue to see potential capital constraints as a key risk, along with its stretched valuations</li>
</ul>


We turn positive on KakaoBank, for its increasingly secure competitive positioning in Korea, its attractive digital efficiency ratio, its low customer acquisition cost and for its high activity rate
We switch our buy rating from PAN to Inter as the latter has improved operationally, it is sound on capital and attractive on valuations
Nubank is executing well, but we remain cautious on Nubank shares as we continue to see potential capital constraints as a key risk, along with its stretched valuations


EM Digital Banks – We Turn Positive on KakaoBank and Inter, Cautious on Nubank and Neutral on PAN

<ul>
<li>Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost</li>
<li>SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers</li>
<li>These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions</li>
</ul>


Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost
SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers
These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions


US Neobanks; Warning Signals from SoFi and Varo 4Q Results

Banco Do Estado Do Rio Grande / Equity Bottom-Up

<ul>
<li>Bradesco’s re-rating is supported by credit quality improvements and by its solid insurance operations’ returns; we now estimate that the insurance operations account for close to half of group value</li>
<li>We add small cap Banrisul to our coverage and also to our buy list for its deep value qualities and improving returns, with Banrisul ranking top in our proprietary scorecard</li>
<li>Banco do Brasil remains a neutral, due to heightened political risk and worsening credit quality; holdco Itausa remains an attractive vehicle through which to gain equity exposure to Banco Itaú</li>
</ul>


Bradesco’s re-rating is supported by credit quality improvements and by its solid insurance operations’ returns; we now estimate that the insurance operations account for close to half of group value
We add small cap Banrisul to our coverage and also to our buy list for its deep value qualities and improving returns, with Banrisul ranking top in our proprietary scorecard
Banco do Brasil remains a neutral, due to heightened political risk and worsening credit quality; holdco Itausa remains an attractive vehicle through which to gain equity exposure to Banco Itaú


Brazil Banks – Stick with Bradesco, Adding Small-Cap Banrisul to the Buy List

Brazil

Inter & Co, Inc. operates as an investment holding company. The Company, through its subsidiaries, serves customers in Brazil.

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Inter & Co (INTR US)

Inter (INTR US) – Closing Out Our Long Position on Inter

We lock in gains from our Inter long position, downgrading from buy to neutral. Inter's valuation no longer makes it a bargain among EM neobanks,...

Victor Galliano

EM Neobanks – Closing Out Our Short on Nubank (NU US), Stick with the Long on Inter (INTR US)

Nubank upgraded to neutral after solid 2Q25 results, pairs trade (largely) successful; Inter stays on EM neobanks buy list for good credit...

Victor Galliano

EM Digital Banks – We Turn Positive on KakaoBank and Inter, Cautious on Nubank and Neutral on PAN

KakaoBank raised to buy for its firm business niche, its positive banking and capital ratios; Inter is also a buy for its undemanding valuations...

Victor Galliano

US Neobanks; Warning Signals from SoFi and Varo 4Q Results

Varo bank's 4Q results revealed lower quarterly cash burn through cost control, but revenue per client declined; SoFi seemed to have done a bit...

Victor Galliano

Brazil Banks – Stick with Bradesco, Adding Small-Cap Banrisul to the Buy List

Bradesco is re-rating due to banking recovery and solid insurance arm, Banrisul added to buys for its deep value, Itausa offers exposure to Banco...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Inter (INTR US) – Closing Out Our Long Position on Inter

​We lock in gains from our Inter long position, downgrading from buy to neutral. Inter's valuation no longer makes it a bargain among EM neobanks,...

Victor Galliano

EM Neobanks – Closing Out Our Short on Nubank (NU US), Stick with the Long on Inter (INTR US)

​Nubank upgraded to neutral after solid 2Q25 results, pairs trade (largely) successful; Inter stays on EM neobanks buy list for good credit...

Victor Galliano

EM Digital Banks – We Turn Positive on KakaoBank and Inter, Cautious on Nubank and Neutral on PAN

KakaoBank raised to buy for its firm business niche, its positive banking and capital ratios; Inter is also a buy for its undemanding valuations...

Victor Galliano

US Neobanks; Warning Signals from SoFi and Varo 4Q Results

Varo bank's 4Q results revealed lower quarterly cash burn through cost control, but revenue per client declined; SoFi seemed to have done a bit...

Victor Galliano

Brazil Banks – Stick with Bradesco, Adding Small-Cap Banrisul to the Buy List

​Bradesco is re-rating due to banking recovery and solid insurance arm, Banrisul added to buys for its deep value, Itausa offers exposure to Banco...

Victor Galliano

We lock in gains from our Inter long position, downgrading from buy to neutral. Inter's valuation no longer makes it a bargain among EM neobanks,...

Nubank upgraded to neutral after solid 2Q25 results, pairs trade (largely) successful; Inter stays on EM neobanks buy list for good credit...

Bradesco is re-rating due to banking recovery and solid insurance arm, Banrisul added to buys for its deep value, Itausa offers exposure to Banco...