Brazil’s Itau reaffirms 2022 guidance as first-quarter net profit rises

A man is reflected in an Itau branch window in Rio de Janeiro, Brazil April 29, 2019. REUTERS/Sergio Moraes

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SAO PAULO, May 9 (Reuters) – Brazilian lender Itau Unibanco Holding SA (ITUB4.SA) said on Monday that first-quarter recurring net profit rose 15% year-on-year, driven by higher credit volume then that its loan portfolio was accelerating, and reaffirmed its guidance for the full year.

The country’s biggest bank posted quarterly recurring net profit of 7.36 billion reais ($1.45 billion), in line with the 7.35 billion reais expected by analysts polled by Refinitiv.

It follows its counterpart Banco BTG Pactual SA (BPAC3.SA), which posted record quarterly net profit and revenue.

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The growth in Itau’s net profit came even as provisions for loan losses jumped 57.8% to 6.998 billion reais, it said in a securities filing.

“Our first quarter results show the consistency and sustainability of our performance even in a difficult scenario,” said Chief Financial Officer Alexsandro Broedel.

He added that Itau had all the necessary conditions to maintain an “extremely strong balance sheet” in 2022.

Itau’s return on equity, an indicator of profitability, was 20.4% in the quarter – roughly flat from the 20.2% seen in the previous three months, which analysts said from Goldman Sachs, could point to “mostly solid trends,” according to an earnings snapshot. .

The bank’s loan portfolio grew 13.9% year-on-year to R$1.03 trillion, boosted by secured personal loans such as those related to real estate and credit cards, which grew by about 40% each.

The lender expects its loan portfolio to grow between 9% and 12% in 2022, while financial margin with customers is estimated between 20.5% and 23.5%. The cost of credit was estimated between 25 and 29 billion reais.

Despite falling nearly 15% since mid-April as investors began to shy away from riskier assets such as equities, Itau shares are up more than 10% year-to-date. based on Friday’s closing price.

($1 = 5.0776 reais)

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Reporting by Gabriel Araujo, editing by Louise Heavens, Toby Chopra and Emelia Sithole-Matarise

Our standards: The Thomson Reuters Trust Principles.

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