Very strong and diversified franchise in Brazil, with a market-leading banking and insurance franchise, diversified earnings, and good track record; and Low-cost, diversified and stable funding base that supports the business during market distress. Weak capitalization, although slower portfolio growth relieves pressure on risk-adjusted capital (RAC); Challenging credit environment as across-the-board asset quality pressure jeopardizes returns and leads to more refinancing; and Business concentration in Brazil, with limited international diversification. S&P Global Ratings' CreditWatch listing with negative implications reflects the possibility that we could lower the ratings on 38 Brazilian financial institutions, including Banco Bradesco, in the next three months amid more stressed political and economic dynamics. A politically weakened President Michel Temer, a long or disruptive transition process, or
