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 Capital Markets

<ul>
<li>PicPay is a Brazilian fintech offering a range of digital banking and financial services including payments to consumer and small and medium business clients</li>
<li>No valuation range has been released yet for PicPay’s IPO, but press reports indicate a USD500m potential offering; we assume a post-money market capitalisation at IPO of USD2.5bn</li>
<li>PicPay is higher quality than Banco PAN, especially in terms of NPL ratio, but PicPay falls short, in terms of its operating metrics, versus Inter and well short of Nubank</li>
</ul>


PicPay is a Brazilian fintech offering a range of digital banking and financial services including payments to consumer and small and medium business clients
No valuation range has been released yet for PicPay’s IPO, but press reports indicate a USD500m potential offering; we assume a post-money market capitalisation at IPO of USD2.5bn
PicPay is higher quality than Banco PAN, especially in terms of NPL ratio, but PicPay falls short, in terms of its operating metrics, versus Inter and well short of Nubank


PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

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

<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 apply our weighted scorecard with metrics adapted for the EM neobanks; Kakaobank screens best whilst Bank Jago is the bottom marker</li>
<li>Despite this, we believe that the most compelling investment ideas are in Brazilian neobanks in the form of a pairs trade, and we add qualitative factors to the investment thesis</li>
<li>We recommend a long on Inter, the second best rated neobank on the scorecard, against a short on Nubank, the latter having the second worst rating on the scorecard</li>
</ul>


We apply our weighted scorecard with metrics adapted for the EM neobanks; Kakaobank screens best whilst Bank Jago is the bottom marker
Despite this, we believe that the most compelling investment ideas are in Brazilian neobanks in the form of a pairs trade, and we add qualitative factors to the investment thesis
We recommend a long on Inter, the second best rated neobank on the scorecard, against a short on Nubank, the latter having the second worst rating on the scorecard


EM Neobanks – Pairs Trade; Long Inter and Short Nubank

Brazil

Nu Holdings Ltd. is a Brazilian financial technology firm that offers digital banking services, including credit and debit cards, mobile payment solutions, and investment platforms. The company provides spending, transactional, savings, investing, borrowing, and protection solutions for individuals and businesses across Brazil, Mexico, and Colombia. Nu Holdings Ltd. was founded in 2013 and is headquartered in São Paulo, Brazil.

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Nu Holdings (NU US)

PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

We base Brazil fintech PicPay's initial IPO valuation on those of LatAm fintech peers. We see it as higher quality than Banco PAN but it lags...

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

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 Neobanks – Pairs Trade; Long Inter and Short Nubank

Brazilian neobanks present compelling opportunities, with Inter recommended as a long and Nubank as a short based on their weighted scorecard...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

We base Brazil fintech PicPay's initial IPO valuation on those of LatAm fintech peers. We see it as higher quality than Banco PAN but it lags...

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

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 Neobanks – Pairs Trade; Long Inter and Short Nubank

Brazilian neobanks present compelling opportunities, with Inter recommended as a long and Nubank as a short based on their weighted scorecard...

Victor Galliano

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...

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...