Brazilian lender Itau reaffirms 2022 guidance as Q1 net profit jumps | Investment News

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SAO PAULO (Reuters) – Brazilian lender Itau Unibanco Holding SA said on Monday first-quarter recurring net profit rose 15% on an annual basis, driven by higher credit volume as its loan book swelled. was accelerating, and he reaffirmed his full-year orientation.

Although analysts considered the results strong, Itau shares fell 2.7% to 23.15 reais in morning trading, while the broader Bovespa stock index fell 1.8%. .

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.

Itau followed in the footsteps of its counterpart, Banco BTG Pactual SA, which on Monday posted record net profit and quarterly revenue.

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 challenging scenario,” said Itau Chief Financial Officer Alexsandro Broedel.

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

BTG Pactual analysts said it was a “clean quarter” for Itau and the results did not change their view for the year, with Itau and Banco do Brasil their top picks among banks. Brazilian large-cap companies.

Guide Investimentos analysts said Itau’s results were strong overall, but noted that some key indicators such as the default rate deteriorated in a deteriorating macroeconomic scenario.

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.

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.

(Reporting by Gabriel Araujo, editing by Louise Heavens, Toby Chopra, Emelia Sithole-Matarise and Paul Simao)

Copyright 2022 Thomson Reuters.

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