Financial sector stocks: banks, insurers, ROE

The Financial sector page on FundamentalRadar groups Brazilian banks, insurers, pension managers and diversified holdings into a single analytical view. This guide explains what the page displays, how medians are calculated, and what each metric means for the reader interpreting the data.

TL;DR

• Three regulator labels: B3 classifies financial companies under "Financeiro", "Previdência e Seguros" (insurance and pensions) and "Holdings Diversificadas"; FundamentalRadar merges all three under one page and publishes medians per label so subsectors stay comparable.
• Medians, not averages: each company contributes exactly one share class — the most liquid — and a P/E or P/B of exactly 0.00 is treated as missing data; the dividend median counts payers only.
• Leaders ranked by ROE, data updated on request: the page reprocesses from the latest screener snapshot on every load; market cap and price are supplementary, never sorting criteria.

What the financial sector page displays

Brazil's financial sector is not a monolithic block. It includes commercial banks, insurers, pension administrators, reinsurance companies and diversified holding companies whose predominant activity is financial services. The FundamentalRadar page consolidates these and presents:

Source: FundamentalRadar Financial sector page

The footer on every page states: "FundamentalRadar · informative sector analysis, not investment advice."

How B3 classifies financial companies

The Brazilian stock exchange B3 assigns companies to sectors using a hierarchical taxonomy. B3 classification criteria describes how firms are placed based on their primary revenue source. For the financial sector, three official labels matter:

Because FundamentalRadar groups all three labels under one "Financeiro" heading, the page publishes medians per subsector in a breakdown table — not a single pooled median that would mix banks, insurers and holdings into one number the reader cannot reconcile.

Understanding the core metrics

Price-to-Earnings (P/E)

The P/E ratio measures how many times investors are paying per unit of annual earnings. B3's P/E guide defines it as:

$\text{P/E} = \frac{\text{Share price}}{\text{Earnings per share (EPS)}}$

In Brazil's financial sector, P/E varies by subsector:

• Large banks: typically 7×–12×, reflecting stable but cyclical earnings tied to the Selic rate and credit growth.
• Insurers: generally 8×–13×, with more predictable underwriting margins.
• Holdings: wider range, depending on how much value is attributed to the controlling stake in listed subsidiaries rather than standalone earnings.

A snapshot from July–August 2026 on Fundamentus shows Itaú Unibanco (ITUB4) at a P/E of 10.1×, Bradesco (BBDC4) at 8.3×, Santander Brasil (SANB11) at 6.5× and Banco do Brasil (BBAS3) at 8.1×. These are point-in-time trailing figures, not forecasts.

Price-to-Book (P/B)

The P/B ratio compares market price to book value per share — the accounting value of shareholders' equity. B3's glossary explains P/B as:

$\text{P/B} = \frac{\text{Market price per share}}{\text{Book value per share}}$

For banks and insurers, P/B is arguably more informative than P/E because profitability is directly connected to the equity base. A P/B below 1.0× can indicate that the market values the company below its accounting equity — but for financial firms this may also reflect risk concerns about asset quality, loan loss provisions or regulatory capital requirements.

The same July–August 2026 snapshots show ITUB4 at P/B 2.33×, BBDC4 at 1.13×, SANB11 at 1.04× and BBAS3 at 0.63×. Itaú's premium P/B reflects its consistent ROE above 20%, while Banco do Brasil's discount reflects its lower current return on equity.

Return on Equity (ROE)

ROE measures how efficiently a company converts shareholders' equity into profit:

$\text{ROE} = \frac{\text{Net profit}}{\text{Shareholders' equity}} \times 100$

In financial sectors, ROE is elevated compared to industrial sectors because banks operate with regulated leverage — typically 10× to 15× assets-to-equity. This means a bank with 1.5% return on assets can achieve 15% ROE.

The IFNC index (B3's financial-sector index) reported a weighted-average ROE of 22.48% as of August 7, 2026. Individual bank ROE ranges from 7.7% (Banco do Brasil) to 23.2% (Itaú), illustrating why the page ranks leaders by ROE rather than treating the sector as homogeneous.

Dividend Yield

Dividend yield measures annual distributions per share as a percentage of the current price:

$\text{DY}(\%) = \frac{\text{Dividends per share (last 12 months)}}{\text{Current share price}} \times 100$

The financial sector median on FundamentalRadar counts only companies that paid dividends — the "payers only" rule. A company that distributed exactly R$0.00 has a true yield of zero (that is the actual measurement), but it is excluded from the median so the sector figure reflects what paying companies actually yield. B3's dividend yield guide includes both dividends and JCP (Juros sobre Capital Próprio) in distribution calculations.

The IFNC index reported a median dividend yield of 6.20% as of August 2026 (Investidor Atento). Among individual banks, Santander Brasil's trailing yield reaches approximately 8%, while Banco do Brasil and Itaú have historically maintained yields between 4% and 8%.

Market Capitalization

Market cap is supplementary data, not a sorting criterion. It appears in the leaders table for context:

$\text{Market Cap} = \text{Share price} \times \text{Shares outstanding}$

The five largest listed Brazilian banks — Itaú, BTG Pactual, Bradesco, Santander Brasil and Banco do Brasil — had a combined market capitalization of approximately R$1.17 trillion at year-end 2025 (Exame). Among insurers, BB Seguridade (BBSE3) led at roughly R$72 billion, followed by Caixa Seguridade (CXSE3) at approximately R$50 billion and Porto Seguro (PSSA3) at about R$31 billion.

Why medians matter more than averages

Medians resist outliers. If a sector has ten companies with P/E ratios of 5, 7, 8, 9, 10, 11, 12, 14, 18 and 200×, the median is 10.5× while the average is 28.4×. The 200× outlier — perhaps caused by a one-time loss that depressed earnings — would distort the average but barely move the median.

FundamentalRadar applies specific rules to preserve median integrity:

1. One share class per company: when ITUB4 and ITUB3 coexist, only the more liquid class enters the calculation.
2. Zero exclusion for P/E and P/B: a ratio of exactly 0.00 indicates a missing denominator, not a measurement.
3. Payers-only for dividend yield: a company distributing nothing is excluded from the median.
4. Implausible outliers: statistically impossible values are filtered before the median is computed.

The page shows the share of base (e.g., "58 of 438 stocks") and the number of distinct companies, so you can assess whether the median is computed over a meaningful population or a handful of tickers.

Reading the per-label breakdown

When the page groups multiple regulator labels — as it does for Financeiro — it publishes medians per subsector in a breakdown table:

This matters because pooling banks, insurers and holdings into a single median would produce a number no individual subsector recognizes. A bank's P/E of 10×, an insurer's P/E of 9× and a holding's P/E of 16× do not average into a meaningful 11.7× — they require separate medians to remain comparable.

The leaders ranking

The page ranks companies by ROE, showing tickers, price, P/E, ROE, dividend yield and market cap. Leaders come from the same endpoint that provides sector medians — the platform does not re-sort or recompute. Price and market cap are joined from the screener because the endpoint does not carry them.

As of the B3 IFNC index composition (August 7, 2026), the five largest financial-sector positions are:

Source: Investidor Atento — IFNC

These five account for roughly 80% of the index. A valuation shift in any one of them materially moves the aggregate P/E and P/B — another reason medians (equal weighting) are more informative for comparison than index-level weighted averages.

Coverage and data freshness

The page shows what share of the total B3 stock universe is classified in named financial-sector labels. FundamentalRadar calculates "substantive coverage" — excluding catch-all buckets like "Outros" or "Multicategoria" that name no specific industry. A sector reporting 100% coverage when most of its papers sit in "Outros" is misleading; the page separates this.

The data refreshes on each page request from the latest screener snapshot. Two timestamps appear: the "requested" time (when you loaded the page) and the "generated at" time (when the snapshot was created). Prices and price-derived metrics update daily during B3 trading; fundamental ratios lag behind because companies file quarterly reports within 45 days of quarter-end and annual statements within four months (Baker McKenzie).

Common errors and fixes

Frequently Asked Questions (FAQ)

Why does the page group banks, insurers and holdings under one "Financeiro" heading?

B3's taxonomy assigns these companies to separate labels — "Financeiro", "Previdência e Seguros" and "Holdings Diversificadas" — based on their primary revenue source. FundamentalRadar merges them under one page for discoverability but publishes medians per label, so the reader can compare banks against banks, not banks against insurance companies.

How does the platform handle a company with both ON and PN shares?

Only the most liquid share class enters median calculations. If Bradesco has BBDC3 (ON) and BBDC4 (PN), the platform picks whichever trades more volume, preventing double-counting of the same company's earnings and book equity.

Why is the dividend yield median labeled "payers only"?

Including companies with zero distributions would artificially lower the median. The "payers only" label makes explicit that the figure reflects the yield of companies that actually distributed income — dividends or JCP — over the trailing 12 months. A company that distributes nothing has a true yield of zero, but that zero is excluded from the median to keep it meaningful.

Can I use the P/E of the financial sector to compare with technology or utilities?

Cross-sector P/E comparisons require caution. Financial companies operate with regulated leverage and earn interest income, making their P/E structure different from asset-light technology firms or regulated utilities. A 10× P/E in financials does not carry the same implications as 10× in technology. Compare within the same sector first.

Does market cap affect median calculations?

No. Medians are computed over per-share multiples — P/E, P/B, ROE and dividend yield — where each company counts equally regardless of size. A R$5 billion insurer and a R$400 billion bank each contribute one data point. Market cap appears in the leaders table for context only.

How often do the financial ratios update?

Prices update daily with each B3 trading session. Fundamental ratios update when companies publish financial statements — quarterly (ITR within 45 days of quarter-end) and annually (DFP within four months). The sector median reprocesses from the latest available screener snapshot on each page load.

Is the page a recommendation to buy or sell financial stocks?

No. The page is educational analysis only. It displays metrics, rankings and coverage statistics from public B3 data. Users should examine each company's financial statements, consider risk tolerance and consult a qualified professional before making decisions.

Sources

Related Resources

• Sector analysis: median P/E, ROE, and dividend yield by sector
• What is P/E ratio
• What is ROE and how to calculate return on equity
• What is dividend yield