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Itau Unibanco Holding S.A. (ITUB - Free Report) reported recurring managerial results of R$9.8 billion ($1.98 billion) for first-quarter 2024, up 15.8% 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 increase in non-interest expenses was an undermining factor.
Revenues & Costs Increase
Operating revenues were R$40.35 billion ($8.15 billion) in the reported quarter, up 7.8% year over year.
The managerial financial margin increased 8.9% year over year to R$26.9 billion ($5.43 billion). Also, commissions and fees rose 4.9% to R$10.9 billion ($2.2 billion).
Non-interest expenses totaled R$14.4 billion ($3.09 billion), up 4.3% year over year.
In the first quarter, the efficiency ratio was 38.3%, down from 39.8% in the year-earlier quarter. A decrease in this ratio indicated increased profitability.
Credit Quality: Mixed Bag
The cost of credit charges declined 3.2% on a year-over-year basis to R$8.8 billion ($1.8 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.7% in the first quarter, down from the prior-year quarter’s 2.9%.
Balance Sheet Position Strong
As of Mar 31, 2024, Itau Unibanco’s total assets rose 3.4% to R$2.8 trillion ($558.13 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.37 trillion ($273.1 billion), which increased 1.7% on a sequential basis.
As of Mar 31, 2023, ITUB’s credit portfolio, including corporate securities and financial guarantees provided, increased nearly 1% from the last quarter’s reported figure to R$1.18 trillion ($235.21 billion).
Capital & Profitability Ratios Rise
As of Mar 31, 2024, the Common Equity Tier 1 ratio was 13%, up from 12% as of Mar 31, 2023.
Annualized recurring managerial return on average equity was 21.9% in the first quarter, up from 20.7% reported in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s first-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. Growth in commissions and fees, results from insurance operations and efforts to have a healthy credit portfolio are positives.
Itau Unibanco Holding S.A. Price, Consensus and EPS Surprise
Deutsche Bank (DB - Free Report) reported first-quarter 2024 profit attributable to its shareholders of €1.3 billion ($1.41 billion), up 10.1% year over year. The Germany-based lender reported a profit before tax of €2 billion ($2.17 billion), up 10% year over year.
DB’s results were positively impacted by higher net revenues and lower expenses. This led investors to turn bullish on the stock, resulting in a gain of 8.7%. However, higher provision for credit losses was an offsetting factor.
Barclays (BCS - Free Report) reported first-quarter 2024 net income attributable to ordinary equity holders of £1.55 billion ($1.97 billion), down 13% year over year.
BCS recorded lower revenues in the quarter, which was a negative. However, a decline in operating expenses, along with lower credit impairment charges, aided the results to some extent.
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Itau Unibanco (ITUB) Q1 Earnings & Revenues Rise Y/Y, Costs Up
Itau Unibanco Holding S.A. (ITUB - Free Report) reported recurring managerial results of R$9.8 billion ($1.98 billion) for first-quarter 2024, up 15.8% 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 increase in non-interest expenses was an undermining factor.
Revenues & Costs Increase
Operating revenues were R$40.35 billion ($8.15 billion) in the reported quarter, up 7.8% year over year.
The managerial financial margin increased 8.9% year over year to R$26.9 billion ($5.43 billion). Also, commissions and fees rose 4.9% to R$10.9 billion ($2.2 billion).
Non-interest expenses totaled R$14.4 billion ($3.09 billion), up 4.3% year over year.
In the first quarter, the efficiency ratio was 38.3%, down from 39.8% in the year-earlier quarter. A decrease in this ratio indicated increased profitability.
Credit Quality: Mixed Bag
The cost of credit charges declined 3.2% on a year-over-year basis to R$8.8 billion ($1.8 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.7% in the first quarter, down from the prior-year quarter’s 2.9%.
Balance Sheet Position Strong
As of Mar 31, 2024, Itau Unibanco’s total assets rose 3.4% to R$2.8 trillion ($558.13 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.37 trillion ($273.1 billion), which increased 1.7% on a sequential basis.
As of Mar 31, 2023, ITUB’s credit portfolio, including corporate securities and financial guarantees provided, increased nearly 1% from the last quarter’s reported figure to R$1.18 trillion ($235.21 billion).
Capital & Profitability Ratios Rise
As of Mar 31, 2024, the Common Equity Tier 1 ratio was 13%, up from 12% as of Mar 31, 2023.
Annualized recurring managerial return on average equity was 21.9% in the first quarter, up from 20.7% reported in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s first-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. Growth in commissions and fees, results from insurance operations and efforts to have a healthy credit portfolio are positives.
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 #4 (Sell).
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 first-quarter 2024 profit attributable to its shareholders of €1.3 billion ($1.41 billion), up 10.1% year over year. The Germany-based lender reported a profit before tax of €2 billion ($2.17 billion), up 10% year over year.
DB’s results were positively impacted by higher net revenues and lower expenses. This led investors to turn bullish on the stock, resulting in a gain of 8.7%. However, higher provision for credit losses was an offsetting factor.
Barclays (BCS - Free Report) reported first-quarter 2024 net income attributable to ordinary equity holders of £1.55 billion ($1.97 billion), down 13% year over year.
BCS recorded lower revenues in the quarter, which was a negative. However, a decline in operating expenses, along with lower credit impairment charges, aided the results to some extent.