Brazil bank carnage defies better profit forecast as stock rout worsens

Sao Paulo

BRAZIL'S biggest banks are trading at the cheapest levels in three years compared with the Ibovespa stock index, even as analysts boost their earnings estimates.

Itau Unibanco Holding SA and Banco Bradesco SA posted the worst weekly declines since May as the stock gauge slumped. Their valuation discount to the equity index is now wider than 40 per cent. Meanwhile, analysts covering the lenders have lifted their earnings estimates by at least 9 per cent this year.