Stock Analyst Note
Itaú Unibanco Earnings: Strong Loan Growth and Low Credit Costs Drive Double-Digit Net Income Growth
No-moat-rated Itau Unibanco reported decent second-quarter earnings that were largely in line with our expectations. The bank's operating revenue increased 7.7% from last year and 3.6% from last quarter to BRL 41.8 billion. Meanwhile, recurring managerial results increased 15.2% from last year, as the bank benefits from lower credit costs, to BRL 10.1 billion. These results translate to a return on equity of 22.4%. As we incorporate these results, we do not plan to materially alter our $5.70 per ADR share fair value estimate. We see the shares as roughly fairly valued.