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Itau Unibanco Holding S.A. (ITUB - Free Report) reported recurring managerial results of R$10.1 billion ($1.93 billion) for the second quarter of 2024, up 15.2% year over year.
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.
Revenues & Expenses Increase
Operating revenues were R$41.8 billion ($8.01 billion) in the reported quarter, up 7.7% year over year.
The managerial financial margin increased 6.4% year over year to R$27.7 billion ($5.31 billion). Also, commissions and fees rose 9.4% to R$11.3 billion ($2.17 billion).
Non-interest expenses totaled R$15.1 billion ($2.9 billion), up 5.6% year over year.
In the second quarter, the efficiency ratio was 38.8%, down from 39.6% reported in the year-earlier quarter. A decrease in this ratio indicated increased profitability.
Credit Quality Improves
The cost of credit charges declined 6.7% on a year-over-year basis to R$8.8 billion ($1.7 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.7% in the second quarter, down from the prior-year quarter’s 3%.
Balance Sheet Position Strong
As of Jun 30, 2024, Itau Unibanco’s total assets rose 5.1% to R$2.9 trillion ($518.2 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.43 trillion ($250.2 billion), which increased 4.7% on a sequential basis.
As of Jun 30, 2024, ITUB’s credit portfolio, including private securities and financial guarantees provided, rose 8.9% to R$1.25 trillion ($223.3 billion) year over year.
Capital & Profitability Ratios Rise
As of Jun 30, 2024, the Common Equity Tier 1 ratio was 13.1%, up from 12.2% as of Jun 30, 2023.
Annualized recurring managerial return on average equity was 22.4% in the second quarter, up from 20.9% reported in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s second-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 a second-quarter 2024 loss attributable to its shareholders of €143 million ($155.6 million) against the year-ago reported profit attributable to shareholders of €763 million ($830.7 million).
DB’s results were negatively impacted by an increase in expenses and a rise in provision for credit losses. This led investors to turn bearish on the stock, resulting in a decline of nearly 6%. However, an increase in commissions and fee income and stable net interest income acted as a tailwind.
Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported profits attributable to owners of the parent for first-quarter fiscal 2025 (ended Jun 30) of ¥678.1 billion ($4.35 billion), up 21.8% year over year.
MUFG’s results were supported by increased gross profits, a rise in net interest income, and net fees and commissions. Also, a rise in loan and deposit balances was positive. While a decline in net trading profit and a rise in credit costs acted as a spoilsport.
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Itau Unibanco (ITUB) Q2 Earnings & Revenues Increase Y/Y
Itau Unibanco Holding S.A. (ITUB - Free Report) reported recurring managerial results of R$10.1 billion ($1.93 billion) for the second quarter of 2024, up 15.2% year over year.
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.
Revenues & Expenses Increase
Operating revenues were R$41.8 billion ($8.01 billion) in the reported quarter, up 7.7% year over year.
The managerial financial margin increased 6.4% year over year to R$27.7 billion ($5.31 billion). Also, commissions and fees rose 9.4% to R$11.3 billion ($2.17 billion).
Non-interest expenses totaled R$15.1 billion ($2.9 billion), up 5.6% year over year.
In the second quarter, the efficiency ratio was 38.8%, down from 39.6% reported in the year-earlier quarter. A decrease in this ratio indicated increased profitability.
Credit Quality Improves
The cost of credit charges declined 6.7% on a year-over-year basis to R$8.8 billion ($1.7 billion).
The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.7% in the second quarter, down from the prior-year quarter’s 3%.
Balance Sheet Position Strong
As of Jun 30, 2024, Itau Unibanco’s total assets rose 5.1% to R$2.9 trillion ($518.2 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$1.43 trillion ($250.2 billion), which increased 4.7% on a sequential basis.
As of Jun 30, 2024, ITUB’s credit portfolio, including private securities and financial guarantees provided, rose 8.9% to R$1.25 trillion ($223.3 billion) year over year.
Capital & Profitability Ratios Rise
As of Jun 30, 2024, the Common Equity Tier 1 ratio was 13.1%, up from 12.2% as of Jun 30, 2023.
Annualized recurring managerial return on average equity was 22.4% in the second quarter, up from 20.9% reported in the year-earlier quarter.
Our Viewpoint
Itau Unibanco’s second-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 #3 (Hold). 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 a second-quarter 2024 loss attributable to its shareholders of €143 million ($155.6 million) against the year-ago reported profit attributable to shareholders of €763 million ($830.7 million).
DB’s results were negatively impacted by an increase in expenses and a rise in provision for credit losses. This led investors to turn bearish on the stock, resulting in a decline of nearly 6%. However, an increase in commissions and fee income and stable net interest income acted as a tailwind.
Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported profits attributable to owners of the parent for first-quarter fiscal 2025 (ended Jun 30) of ¥678.1 billion ($4.35 billion), up 21.8% year over year.
MUFG’s results were supported by increased gross profits, a rise in net interest income, and net fees and commissions. Also, a rise in loan and deposit balances was positive. While a decline in net trading profit and a rise in credit costs acted as a spoilsport.