Itaú Unibanco Earnings: Rising Net Interest Income and Stable Credit Costs Drive Strong Results

No-moat Itaú Unibanco reported solid third-quarter earnings that were largely in line with our expectations. The bank’s operating revenue increased 8.1% from last year and 1.8% from last quarter to BRL 39.5 billion. Meanwhile, recurring managerial results increased 11.9% year over year to BRL 9 million, which translates into a return on equity of 21.1%. As we incorporate these results, we do not plan to materially alter our $5.40 per-share fair value estimate and we see the shares as roughly fairly valued.