Itau Unibanco Earnings: Loan Growth and Lower Credit Costs Lead to Double-Digit Net Income Growth

No-moat-rated Itau Unibanco reported strong third-quarter results as the bank benefited from both accelerating loan growth and lower credit costs. Net revenue increased 8% from last year and 2.1% from last quarter to BRL 42.7 billion. Meanwhile, net income increased 18.1% from last year to BRL 10.7 billion. This translates into a return on equity ratio of 22.7%, a strong showing and better than the bank’s peers. As we incorporate these results, we do not expect to materially alter our $5.70 per ADR share fair value estimate.