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Itau Unibanco Holding SA ITUB

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Itau Unibanco Reports Decent First-Quarter Results; We Maintain Our $ 4.30 Fair Value Estimate

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

No-moat-rated Itau Unibanco posted decent first-quarter results, with recurring net income of BRL 6.4 billion, up 63.6% year over year. However, recurring net income is still 12.3% lower than BRL 7.3 billion in the fourth quarter of 2019, before the coronavirus pandemic. The first-quarter results equate to a return on average equity of 18.5%, which can be attributed to a sequential improvement in net interest income, higher loan balances, lower credit costs, and controlled operating expenses. We do not plan to change our $4.30 per ADR fair value estimate for the firm.

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Company Profile

Business Description

Itau Unibanco is the largest privately held bank in Brazil, the result of the 2008 merger between Banco Itau and Unibanco. In addition to Brazil, the bank has significant operations in Chile, Colombia, Argentina, Uruguay, and Paraguay. Its commercial and consumer loans account for 33% and 41% of the bank's total loans, respectively, while foreign loans now account for 26% of the bank's portfolio. In addition to banking, Itau operates the fourth- largest insurer in Brazil; it specializes in consumer-related insurance.

Praca Alfredo Egydio de Souza Aranha, 6th Floor, 100-Torre Conceicao
Sao Paulo, SP, 4344902, Brazil
T +55 1127943547
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 97,097