Itau Unibanco Holding S.A. ITUB reported recurring managerial results of R$10.7 billion ($1.93 billion) for the third quarter of 2024, which increased 18.1% year over year.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Higher revenues and an increase in managerial financial margin supported the results. Rising total deposits and assets reflected a strong balance sheet position. However, an increase in non-interest expenses acted as a spoilsport.

ITUB’s Revenues & Expenses Increase

Operating revenues were R$42.7 billion ($7.7 billion) in the reported quarter, up 8% year over year.

The managerial financial margin increased 6.4% year over year to R$28.5 billion ($5.13 billion). Also, commissions and fees rose 5% to R$11.2 billion ($2 billion).

Non-interest expenses totaled R$15.9 billion ($2.9 billion), up 8.2% year over year.

In the third quarter, the efficiency ratio was 40.2%, down from 40% reported in the year-earlier quarter. A decrease in this ratio indicates increased profitability.

ITUB’s Credit Quality Improves

The cost of credit charges declined 11% on a year-over-year basis to R$8.2 billion ($1.5 billion).

The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.6% in the third quarter, down from the prior-year quarter’s 3%.

ITUB’s Balance Sheet Position Strong

As of Sept. 30, 2024, Itau Unibanco’s total assets rose 2.6% to R$3 trillion ($551.2 billion), up 2.6% from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.44 trillion ($264.6 billion), which increased marginally on a sequential basis.

As of the same date, ITUB’s credit portfolio, including private securities and financial guarantees provided, rose 1.9% to R$1.28 trillion ($235.2 billion) from the prior quarter.

ITUB’s Capital & Profitability Ratios Rise

As of Sept. 30, 2024, the Common Equity Tier 1 ratio was 13.7%, up from 13.1% as of Sept. 30, 2023.

Annualized recurring managerial return on average equity was 22.7%, up from 21.1% in the year-earlier quarter.

Our View on ITUB

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. 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