Very strong and diversified franchise in Brazil with a market-leading banking franchise, diversified and resilient earnings, and good track record amid slow economic expansion in Brazil; and Low-cost, diversified, and stable funding base that supports the business during market distress. Moderate capitalization; however, slower portfolio growth relieves pressure on risk-adjusted capital (RAC) Challenging competitive environment as public banks boost their participation in the system; and High concentration in Brazil, with limited international diversification. The negative outlook on Banco Bradesco S.A. reflects that on the sovereign, given the bank's significant exposure to the government debt. We rarely rate banks above the sovereign long-term rating because, during sovereign stress, the sovereign's regulatory and supervisory powers may restrict a bank or financial system's
