Itaú Unibanco (ITUB4) announced this Monday (9) that it recorded recurring net income in the first quarter of 2022 (1Q22) of R$ 7.36 billion, an increase of 15.1% year on year.
The numbers were in line with the expectation of net profit of R$ 7.35 billion from analysts consulted by Refinitiv.
The average annualized recurring return on equity (ROE) was 20.4%, an increase of 1.9 percentage points (pp) compared to 1Q21.
The cost of credit totaled R$7.0 billion in the first quarter, an increase of 69.5% when compared to the same quarter last year. This increase was due to the 57.8% growth in the allowance for loan losses (PDD) expenses, as a result of the expansion of the retail credit portfolio over the period.
The total loan portfolio grew 13.9% compared to the first quarter of 2021, reaching R$1.0322 trillion in March 2022. In the individuals portfolio, the increase is related to the volumes of lines associated with guaranteed credit, such as real estate (44.5%), and also from other lines, such as credit card (41.4%), compared to the same period in 2021.
Services and insurance revenues grew 9.6% in the first quarter of 2022 compared to the same period in 2021, driven by the expansion of credit and debit card revenues, both in issuing and acquiring and in higher revenues from current account, especially in the segment of small and medium-sized companies. In addition, the increase in earned premiums contributed to the 24.1% growth in insurance results in the same period.
Non-interest expenses reached R$12.8 billion in the first quarter of 2022, an increase of 2.9% compared to the same period of the previous year, while accumulated inflation was 11.3%. The bank’s efficiency program has contributed decisively to this performance. In this sense, the efficiency ratio (accumulated in the last 12 months) improved by 3.8 percentage points compared to the same quarter of the previous year.
The bank explains that the increase in profit is due to the growth in the financial margin with customers, driven by the greater volume of credit and the change in the product mix, with greater relative growth of products with better spreads and growth in revenues from cards, due to higher billing.
Total assets amounted to R$2.183 trillion in 1Q22, against R$2.128 trillion in 1Q21.
The default rate was 2.6% in the first quarter of 2022, an increase of 0.3 pp compared to the same period in 2021.
The managerial financial margin totaled BRL 21.047 billion between January and March this year, up 12.9% compared to the same period in 2021.
The cost of credit totaled BRL 6.968 billion in the first quarter of 2022, an increase of 69.5% compared to the same quarter of 2021
“The increase in the cost of credit in the quarter and compared to the same period of the previous year was mainly due to the higher expense of the allowance for doubtful accounts in the Retail Business in Brazil, due to higher origination in consumer credit products no guarantees. In addition, we had lower recovery of credits written off as losses, which are seasonally lower in the first quarter, and greater impairment of private securities in the Wholesale Business in Brazil”, explains the bank.
Itaú Unibanco maintained its projections for the year 2022. The total loan portfolio is expected to grow between 9% and 12%.
As for the financial margin with customers, Itaú projects growth of up to 23.5% this year.
The bank estimates a 6.5% increase in revenue from services rendered and insurance results.
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