Brazil’s Itau Reports Q4 Profit Down 26% on Higher Provisions

RIO DE JANEIRO, BRAZIL – Itau Unibanco Holding SA , Brazil’s largest bank, on Monday, February 1st, reported a 26% drop in fourth-quarter recurring net income from a year earlier, roughly in line with analysts’ estimates.

In a statement, Itau’s incoming CEO Milton Maluhy said that to weather a challenging 2021 the bank will seek to cut costs and accelerate growth.

Itau’s recurring net income totaled R$5.388 billion (US$991.9 million), roughly in line with a consensus estimate of R$5.440 billion compiled by Refinitiv.

The bank’s net interest income and provisions for bad loans remained under pressure, while fee income declined.

Return on equity, a gauge of profitability, rose 0.4 percentage points from the third quarter to 16.1%.

Itau’s loan book grew by 2.7% in the quarter, while its 90-day default ratio remained roughly stable at 2.3%.