Brazilian lender Itau reaffirms 2022 guidance as Q1 net income jumps

A person is mirrored in an Itau department window in Rio de Janeiro, Brazil April 29, 2019. REUTERS/Sergio Moraes

SAO PAULO, Might 9 (Reuters) – Brazilian lender Itau Unibanco Holding SA (ITUB4.SA) reported on Monday that first-quarter recurring web revenue rose 15% on a year-on-year foundation, pushed by increased credit score quantity as its mortgage e-book accelerated, and it reaffirmed its full-year steerage.

Though analysts considered the outcomes as stable, Itau’s shares have been down 2.7% at 23.15 reais in morning buying and selling, whereas the broader Bovespa inventory index (.BVSP) fell 1.8%.

The nation’s largest financial institution posted a quarterly recurring web revenue of seven.36 billion reais ($1.45 billion), in keeping with the 7.35 billion reais anticipated by analysts polled by Refinitiv.

Itau followedin the footsteps of its peer, Banco BTG Pactual SA (BPAC3.SA), which posted file quarterly web revenue and income on Monday.

The underside line development for Itau got here whilst loan-loss provisions jumped by 57.8% to six.998 billion reais, it mentioned in a securities submitting.

“Our first quarter outcomes present the consistency and sustainability of our efficiency even in a difficult state of affairs,” Itau Chief Monetary Officer Alexsandro Broedel mentioned.

He added that Itau had all of the circumstances wanted to maintain an “extraordinarily sturdy stability sheet” in 2022.

Analysts at BTG Pactual mentioned it was a “clear quarter” for Itau and that the outcomes don’t change their view for the yr, with Itau and Banco do Brasil (BBAS3.SA) being their high picks amongst large-cap Brazilian banks.

Information Investimentos analysts mentioned that Itau’s outcomes have been stable general, however famous that some key indicators such because the default ratio worsened amid a deteriorating macroeconomic state of affairs.

Itau’s return on fairness, a gauge of profitability, was at 20.4% within the quarter – roughly flat from the 20.2% seen within the earlier three months.

The financial institution’s mortgage e-book rose 13.9% on a year-on-year foundation to 1.03 trillion reais, boosted by secured private loans similar to actual estate-related ones and bank cards, which grew about 40% every.

The lender expects its mortgage e-book to develop between 9% and 12% in 2022, whereas the monetary margin with purchasers is seen between 20.5% and 23.5%. Value of credit score was estimated at 25 billion to 29 billion reais.

($1 = 5.0776 reais)

Reporting by Gabriel Araujo, Enhancing by Louise Heavens, Toby Chopra, Emelia Sithole-Matarise and Paul Simao

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