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Credit Suisse upgraded Itau Unibanco Holding SA
ITUB from Neutral to Outperform.
Credit Suisse analyst M. Telles wrote, "Meaningful improvement in provisions in 2014 and tight cost control leading to significant pick up in ROE: After a detailed analysis of asset quality performance on a product by product basis, we came to the conclusion the year of 2010 is not enough of a proxy for cost of risk for Itau Unibanco. The tighter credit policies and specially the change in mix towards
lower-risk segments (such as mortgages and payroll) are so material that should lead to much lower cost of risk, with provisions to average loans declining to 4.7% by '14 well below the 5.9% in 2010. […] The reduction in the cost of risk will finally expose the benefits of the impressive cost containment effort, overshadowed in '12 and '13 by the still high level of provisions."
Itau Unibanco Holding SA closed at $17.96 on Friday.
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