The stable outlook on our rating on Bradesco reflects the outlook on Brazil over the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on Bradesco to continue to move in tandem with the sovereign ratings. We would likely downgrade the bank following a similar action on the sovereign. We would likely raise the ratings on Bradesco following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher stand-alone credit profile than the rating on the sovereign. General Criteria: National And Regional Scale Credit Ratings Methodology, June 8, 2023
