We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring managerial results of R$8.07 billion ($1.54 billion) for third-quarter 2022, up 19.2% year over year.
The results were supported by an increase in operating revenues. Increases in total deposits and credit portfolios reflect a strong balance sheet position. However, a rise in non-interest expenses was an offsetting factor.
Revenues Rise, Costs Increase
Operating revenues were R$36.7 billion ($7 billion) in the reported quarter, up 20.3% on a year-over-year basis.
The managerial financial margin increased 22.5% year over year to R$23.9 billion ($4.56 billion). Also, managerial commissions and fees were down 0.8% to R$10.4 billion ($1.90 billion).
Non-interest expenses totaled R$13.93 billion ($2.65 billion), up 8.7% year over year.
In the third quarter, the efficiency ratio was 41.1%, down from 44% in the year-earlier quarter. A decrease in this ratio indicates increased profitability.
Credit Quality Weak
Cost of credit charges climbed 52.7% on a year-over-year basis to R$7.99 billion ($1.52 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) (NPL) was 2.8% in the third quarter, up from the prior-year quarter’s 2.6%.
Balance Sheet Position Strong
As of Sep 30, 2022, Itau Unibanco’s total assets increased 5.6% to R$2.42 trillion ($0.44 trillion) from the last reported quarter. Liabilities, including deposits, debentures, securities, and borrowings and onlending, totaled R$1.21 trillion ($0.22 trillion), increasing 3.2% on a sequential basis.
Itau Unibanco’s credit portfolio, including corporate securities and financial guarantees provided, reached R$1.11 trillion ($0.20 trillion) as of Sep 30, 2022, up 2.5% from the last reported quarter.
Capital Ratio & Profitability Ratios Up
As of Sep 30, 2022, the Common Equity Tier 1 ratio was 11.7%, down from 11.3% on Sep 30, 2021.
Annualized recurring managerial return on average equity climbed to 21% in the third quarter from 19.7% in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s third-quarter results were driven by the rise in the managerial financial margin. The declining efficiency ratio indicates a rise in profitability, which is a positive factor. However, the weak credit quality was concerning.
Itau Unibanco Holding S.A. Price, Consensus and EPS Surprise
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. Expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
UBS Group AG (UBS - Free Report) reported a third-quarter 2022 net profit attributable to shareholders of $1.73 billion, down 37.6% from the prior-year quarter.
UBS’ performance was affected by a fall in revenues and a decline in total net credit loss releases. Nonetheless, operating expenses decreased from the prior-year quarter.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Itau Unibanco (ITUB) Q3 Earnings & Revenues Increase Y/Y
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring managerial results of R$8.07 billion ($1.54 billion) for third-quarter 2022, up 19.2% year over year.
The results were supported by an increase in operating revenues. Increases in total deposits and credit portfolios reflect a strong balance sheet position. However, a rise in non-interest expenses was an offsetting factor.
Revenues Rise, Costs Increase
Operating revenues were R$36.7 billion ($7 billion) in the reported quarter, up 20.3% on a year-over-year basis.
The managerial financial margin increased 22.5% year over year to R$23.9 billion ($4.56 billion). Also, managerial commissions and fees were down 0.8% to R$10.4 billion ($1.90 billion).
Non-interest expenses totaled R$13.93 billion ($2.65 billion), up 8.7% year over year.
In the third quarter, the efficiency ratio was 41.1%, down from 44% in the year-earlier quarter. A decrease in this ratio indicates increased profitability.
Credit Quality Weak
Cost of credit charges climbed 52.7% on a year-over-year basis to R$7.99 billion ($1.52 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) (NPL) was 2.8% in the third quarter, up from the prior-year quarter’s 2.6%.
Balance Sheet Position Strong
As of Sep 30, 2022, Itau Unibanco’s total assets increased 5.6% to R$2.42 trillion ($0.44 trillion) from the last reported quarter. Liabilities, including deposits, debentures, securities, and borrowings and onlending, totaled R$1.21 trillion ($0.22 trillion), increasing 3.2% on a sequential basis.
Itau Unibanco’s credit portfolio, including corporate securities and financial guarantees provided, reached R$1.11 trillion ($0.20 trillion) as of Sep 30, 2022, up 2.5% from the last reported quarter.
Capital Ratio & Profitability Ratios Up
As of Sep 30, 2022, the Common Equity Tier 1 ratio was 11.7%, down from 11.3% on Sep 30, 2021.
Annualized recurring managerial return on average equity climbed to 21% in the third quarter from 19.7% in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s third-quarter results were driven by the rise in the managerial financial margin. The declining efficiency ratio indicates a rise in profitability, which is a positive factor. However, the weak credit quality was concerning.
Itau Unibanco Holding S.A. Price, Consensus and EPS Surprise
Itau Unibanco Holding S.A. price-consensus-eps-surprise-chart | Itau Unibanco Holding S.A. Quote
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
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. Expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
UBS Group AG (UBS - Free Report) reported a third-quarter 2022 net profit attributable to shareholders of $1.73 billion, down 37.6% from the prior-year quarter.
UBS’ performance was affected by a fall in revenues and a decline in total net credit loss releases. Nonetheless, operating expenses decreased from the prior-year quarter.