Brazilian lender Itau’s higher earnings slightly beat bad debt provisions forecast
SAO PAULO, Nov 10 (Reuters) – Brazilian lender Itau Unibanco SA (ITUB4.SA) posted a 19% jump in its recurring net profit on Thursday, which nevertheless landed slightly below expectations as it raised provisions for bad debts in a context of rising interest rates.
Latin America’s largest bank reported third-quarter recurring net profit of 8.08 billion reais ($1.51 billion). Analysts polled by Refinitiv had expected a profit of 8.11 billion reais.
High interest rates prompted Itau to increase the provisions it has set aside for bad debts by 49.8% to 8.27 billion reais, in line with actions taken by fellow Brazilian lenders Bradesco SA (BBDC4.SA ) and Santander Brasil SA.
Unlike its peers, Itau did not raise its 2022 forecast for loan loss provisions.
Chief Financial Officer Alexsandro Broedel said in a statement that the quarterly results reflect “the strength and consistency of our performance over time, across different business lines.”
The net interest income (NII) of its customers jumped 33% compared to the previous year to reach 23.38 billion reais.
The NII it earned in the market, however, fell 73.2% to 516 million reais, he said, citing a larger personal loan portfolio.
Itau reported a 90-day default rate of 2.8% at the end of September, surpassing 2.7% in the previous quarter, but at a much slower pace than its peers.
($1 = 5.3665 reais)
Reporting by Peter Frontini; Editing by Sarah Morland
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