Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring managerial results of R$9.04 billion ($1.84 billion) for third-quarter 2023, up 11.9% year over year.
The results were supported by higher revenues and an increase in managerial financial margin. Rising total deposits and assets reflected a strong balance sheet position. However, an escalation in non-interest expenses was an offsetting factor.
Revenues & Costs Increase
Operating revenues were R$39.53 billion ($8.06 billion) in the reported quarter, up 8.1% on a year-over-year basis.
The managerial financial margin jumped 9.9% year over year to R$26.27 billion ($5.35 billion). Also, commissions and fees were up 2.7% to R$10.69 billion ($2.18 billion).
Non-interest expenses totaled R$14.74 billion ($3 billion), up 5.8% year over year.
In the third quarter, the efficiency ratio was 40%, down from 41.4% in the year-earlier quarter. A decrease in this ratio indicates increased profitability.
Credit Quality Weak
The cost of credit charges climbed 15.9% on a year-over-year basis to R$9.26 billion ($1.88 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 3% in the third quarter, up from the prior-year quarter’s 2.8%.
Balance Sheet Position Strong
As of Sep 30, 2023, Itau Unibanco’s total assets rose 3.6% to R$2.67 trillion ($0.52 trillion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.32 trillion ($0.26 trillion), inching up 1.4% on a sequential basis.
Itau Unibanco’s credit portfolio, including corporate securities and financial guarantees provided, increased 1% from the last quarter’s reported figure to R$1.16 trillion ($0.22 trillion) as of Sep 30, 2023.
Capital & Profitability Ratios Rise
As of Sep 30, 2023, the Common Equity Tier 1 ratio was 13.1%, up from 11.7% as of Sep 30, 2022.
Annualized recurring managerial return on average equity was 21.1% in the third quarter, up from 21% in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s third-quarter results were driven by a rise in managerial financial margin. The declining efficiency ratio indicates a rise in profitability, which is a positive factor. However, weak credit quality was concerning.
Itau Unibanco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Deutsche Bank (DB - Free Report) reported a third-quarter 2023 profit attributable to its shareholders of €1.03 billion ($1.12 billion), down 7.5% from the year-ago quarter. DB reported a profit before tax of €1.72 billion ($1.88 billion), up 6.7% year over year.
DB generated net revenues of €7.13 billion ($7.76 billion), up 3.1% year over year. This upside primarily resulted from higher revenues in the Corporate Bank and Private Bank segments.
Barclays (BCS - Free Report) reported a third-quarter 2023 net income attributable to ordinary equity holders of £1.27 billion ($1.61 billion), down 16% from the prior-year quarter.
BCS recorded an increase in revenues, along with higher credit impairment charges. Operating expenses increased marginally in the quarter under review.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring managerial results of R$9.04 billion ($1.84 billion) for third-quarter 2023, up 11.9% year over year.
The results were supported by higher revenues and an increase in managerial financial margin. Rising total deposits and assets reflected a strong balance sheet position. However, an escalation in non-interest expenses was an offsetting factor.
Revenues & Costs Increase
Operating revenues were R$39.53 billion ($8.06 billion) in the reported quarter, up 8.1% on a year-over-year basis.
The managerial financial margin jumped 9.9% year over year to R$26.27 billion ($5.35 billion). Also, commissions and fees were up 2.7% to R$10.69 billion ($2.18 billion).
Non-interest expenses totaled R$14.74 billion ($3 billion), up 5.8% year over year.
In the third quarter, the efficiency ratio was 40%, down from 41.4% in the year-earlier quarter. A decrease in this ratio indicates increased profitability.
Credit Quality Weak
The cost of credit charges climbed 15.9% on a year-over-year basis to R$9.26 billion ($1.88 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 3% in the third quarter, up from the prior-year quarter’s 2.8%.
Balance Sheet Position Strong
As of Sep 30, 2023, Itau Unibanco’s total assets rose 3.6% to R$2.67 trillion ($0.52 trillion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.32 trillion ($0.26 trillion), inching up 1.4% on a sequential basis.
Itau Unibanco’s credit portfolio, including corporate securities and financial guarantees provided, increased 1% from the last quarter’s reported figure to R$1.16 trillion ($0.22 trillion) as of Sep 30, 2023.
Capital & Profitability Ratios Rise
As of Sep 30, 2023, the Common Equity Tier 1 ratio was 13.1%, up from 11.7% as of Sep 30, 2022.
Annualized recurring managerial return on average equity was 21.1% in the third quarter, up from 21% in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s third-quarter results were driven by a rise in managerial financial margin. The declining efficiency ratio indicates a rise in profitability, which is a positive factor. However, weak credit quality was concerning.
Itau Unibanco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Deutsche Bank (DB - Free Report) reported a third-quarter 2023 profit attributable to its shareholders of €1.03 billion ($1.12 billion), down 7.5% from the year-ago quarter. DB reported a profit before tax of €1.72 billion ($1.88 billion), up 6.7% year over year.
DB generated net revenues of €7.13 billion ($7.76 billion), up 3.1% year over year. This upside primarily resulted from higher revenues in the Corporate Bank and Private Bank segments.
Barclays (BCS - Free Report) reported a third-quarter 2023 net income attributable to ordinary equity holders of £1.27 billion ($1.61 billion), down 16% from the prior-year quarter.
BCS recorded an increase in revenues, along with higher credit impairment charges. Operating expenses increased marginally in the quarter under review.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on BCS - FREE
Get the latest research report on DB - FREE
Get the latest research report on ITUB - FREE