Itau Unibanco Holding S.A. ITUB reported recurring managerial results of R$10.8 billion ($1.87 billion) for the fourth quarter of 2024, which increased 14.9% year over year.

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Higher revenues and an increase in managerial financial margin supported the results. Improving credit quality was an added advantage. However, an increase in non-interest expenses acted as a spoilsport.

For 2024, the company reported recurring managerial results of R$41.4 billion ($7.15 billion), which increased 18.2% year over year.

ITUB’s Revenues & Expenses Increase

Operating revenues were R$44.1 billion ($7.6 billion) in the reported quarter, up 7.6% year over year.

For the year, operating revenues were R$169 billion ($29.2 billion) in the reported quarter, up 7.8% year over year.

The managerial financial margin increased 8.3% year over year to R$29.4 billion ($5.13 billion). Also, commissions and fees rose 4.5% to R$11.7 billion ($2 billion).

Non-interest expenses totaled R$16.7 billion ($2.9 billion), up 8.9% year over year.

In the fourth quarter, the efficiency ratio was 39.5%, down from 39.9% in the year-earlier quarter. A decrease in this ratio indicates increased profitability.

ITUB’s Credit Quality Improves

The cost of credit charges declined 5.5% on a year-over-year basis to R$8.6 billion ($1.5 billion).

The non-performing loan ratio (loan transactions overdue more than 90 days) was 2.4% in the fourth quarter, down from the prior-year quarter’s 2.8%.

ITUB’s Balance Sheet Position: Mixed Bag

As of Dec. 31, 2024, Itau Unibanco’s total assets fell 6.6% to R$2.85 trillion ($492.8 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$2.63 trillion ($454.7 billion), which increased 82.6% on a sequential basis.

As of the same date, ITUB’s credit portfolio, including private securities and financial guarantees provided, rose 6.3% to R$1.35 trillion ($233.4 billion) from the prior quarter.

ITUB’s Capital & Profitability Ratios Rise

As of Dec. 31, 2024, the Common Equity Tier 1 ratio was 15%, up from 13.7% as of Dec. 31, 2023.

Annualized recurring managerial return on average equity was 22.2%, up from 21.2% in the year-earlier quarter.

Our View on ITUB

Itau Unibanco’s fourth-quarter results were driven by a rise in managerial financial margin. The declining efficiency ratio indicates an increase in profitability, which is a positive factor. Growth in commissions and fees, insurance operations’ results and efforts to have a healthy credit portfolio are positives.

Itau Unibanco Holding S.A. Price, Consensus and EPS Surprise

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.

Earnings Release Dates of Other Foreign Banks

Barclays BCS is expected to report fourth-quarter and 2024 results on Feb. 18.

Over the past seven days, the Zacks Consensus Estimate for BCS’s 2024 earnings has been unchanged at $1.53 per share, indicating a rise of 10.9% from the prior-year quarter’s actual.

HSBC Holdings HSBC is expected to announce the fourth quarter and 2024 results on Feb. 19.

Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2024 earnings has been unchanged at $6.67 per share, indicating a rise of 5.5% from the prior-year quarter’s actual.

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