06/02/2024 – 7:36
Itaú Unibanco recorded a net profit of R$35.6 billion last year, an increase of 15.7% compared to the 2022 result. In the fourth quarter, the bank's net profit was R$9.4 billion, 22 .6% higher in the annual comparison and an increase of 4% over the third quarter.
The growth of the credit portfolio and the increase in operating margins combined with the increase in revenue from service provision (fees), driven mainly by the card segment, contributed to boosting the bank's annual profit last year.
The credit portfolio of the largest bank in Latin America reached R$1.17 trillion in contracted operations, a jump of 5.3% compared to 2022. The increase was driven mainly by financing for individuals, which grew 4.2% and reached a balance of R$415.5 billion. If the variation in the dollar is discounted, the increase was 3.1%. Loans to companies grew just 0.5%, to R$303.7 billion, impacted by the 2.6% drop in credit for working capital.
The margin with customers, which accounts for the gains generated by credit operations, rose 8.5% in one year, to R$26.293 billion.
Default, measured by delays of more than 90 days in financing payments, remained under control, falling 0.1%, to close the year at 2.8%.
“In 2023, we will reap the results of our cultural and digital transformation,” said Itaú president Milton Maluhy in a statement. According to him, highlighting that the bank managed to maintain sustainable growth levels. “We enter 2024 optimistic and committed to delivering even more value to our customers, shareholders and employees, taking advantage of all the changes we have made to the organization.”
Profitability
The bank's revenue from services totaled R$11.2 billion in 2023, a volume 7.4% higher than in 2022. The highlight in this area was revenue from cards (issuance and acquiring), which expanded by 12.3% reaching R$4.6 billion.
In the insurance, pension and capitalization segment, Itaú Unibanco had a gain of R$8.57 billion last year, 14.5% more than in 2022. According to the bank, the greater result is the result of the growth in premiums earned, revenue net capitalization and also the managerial financial margin. Insurance premiums earned totaled R$1.65 billion, an increase of 8.5% in one year.
As a result of this combination of improved results on different fronts, the profitability (measured by return on equity, ROE) of Itaú's retail area increased by 5.7 percentage points, reaching 22.5%. In the wholesale segments, profitability was 27.3%, a drop of 1.1 points compared to 2022.
Dividends and JCP
The institution also expanded its treasury results by 12.4%, with a result of R$840 million. In addition to accounting for Itaú's exposure to the Brazilian market, which includes interest, the bank's treasury also considers the exchange rate protection that the bank provides for the capital it has in its operations in Latin America.
For Itaú's Financial Director, Alexsandro Broedel, the numbers point to a year of 2023 of solid and consistent results. The executive also highlighted the remuneration that the bank will give to shareholders. “Also noteworthy is the payment of R$11 billion in additional dividends to our shareholders which, added to the Interest on Equity (JCP) already declared, resulted in a payout (fraction of net profit) of 60.3% for the year.”
Itaú Unibanco had R$2.69 trillion in assets in December, an increase of 9.2% in one year. Its net worth amounted to R$180.7 billion, a figure 12.3% higher than a year before, and the return on equity.
More discerning, bank consolidates leadership in the sector
Despite the record default scenario in the country, Itaú – the largest Brazilian bank – managed to stand out and go through a challenging period for the banking sector with very positive results. The bank reaches 2024, the year of its centenary, with profitability superior to that of its competitors.
Between January and September last year, Itaú recorded a net profit of R$24.9 billion, 9.9% more than in the first nine months of 2023. It was the third consecutive increase for the period.
The numbers of its main competitors fell in 2023. Santander's profit fell 36% in the first nine months of the year, and Bradesco's, 29.7%. It was the second consecutive year of decline in both financial institutions.
Itaú's detachment from its private competitors has been occurring for around three years, a period in which the basic interest rate, the Selic, rose until it exceeded double digits. With interest rates rising, large banks passed on this increase to customers seeking loans, even though they were higher risk account holders. Itaú, however, while holding back this transfer a little, granted credit only to lower risk customers.
“The competitors ended up having problems. Those who took out credit with a higher rate were only those who were already heavily in debt and needed the money badly. It ended up having an adverse effect on banks, which saw default rates increase”, says analyst Thiago Batista, from UBS BB.
The effects of these strategies – both from Itaú and its competitors – should continue, at least, for more than this year. This is because, when a bank is affected by an increase in defaults, recovery is slow, as credit granting falls and the need to make provisions on the balance sheet for loans that may not be paid increases, according to Batista. “The bank keeps cleaning up the accounts of the past.”
The good prospects for Itaú are also noted by stock analysts at Citi, who, in a report released in January, placed the shares of the Brazilian bank with the greatest weight in their suggested ideal portfolio, alongside the mining company Vale.
The information is from the newspaper The State of S. Paulo.
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