Although inflation might have taken a toll on the lower-income population, they said, purchasing power in Brazil should recover in the second half of the year when most unions conduct annual salary increase negotiations.
Seymour echoes similar bullishness on Brazil's employment prospects and its positive impact on Brazilian financials.
“You don’t have consumer credit problems when people have jobs,” he says. “In Brazil, you’ve got unemployment at historical lows, wages are going up and there’s a shortage of quality labor, but that’s a big offset to the credit concern.”
Ultimately, investing in Brazilian financials comes down to valuation, Seymour points out.
“These are some of the best banks in the emerging world, and certain banks, like Itau is one of the best banks in the world,” he says. “Itau is actually at a bottom of a range that you can feel comfortable buying, even if there’s some choppiness for the markets.”
Will Landers, who runs BlackRock’s Latin American portfolio, says Itau and Bradesco cover 15 percent of the firm’s entire Latin American holdings. BlackRock has owned Brazilian banks since 2002, and they have become their biggest overweight in the last six months.