Itaú’s profit is affected by the Americanas crisis, and the bank increases its default reserve

Itaú Unibanco announced this Tuesday (7) that it had a recurring profit of BRL 7.668 billion in the fourth quarter of 2022, an increase of 7.1% over the same stage of 2021, but below the average projection of analysts consulted by Refinitiv, of R$ 8.24 billion for the period.

One of the factors that weighed most on the result being lower than expected by the market was the item known as PDD, the Provision for Loan Losses, an expense that represents a cushion that the bank is obliged to make to protect its capital against possible arrears on loans granted.

Itaú had an increase in expenses with this provision of R$ 1.7 billion in three months, from R$ 8.2 billion in the third quarter of 2022 to R$ 9.9 billion at the end of last year.

In the report, the bank mentioned having recognized “impacts arising from an event subsequent to the closing date related to a specific case of a large company that entered into judicial recovery”, in reference to the Americanas case.

For this reason, it reinforced the provision for expected losses with defaults “to cover 100% of the exposure, generating an impact of R$ 719 million” on the final result.

This is a trend that had already been detected in the balance sheet of Santander Brasil, released last Thursday (2). Expenses with provisions increased 14% in three months, also with the impact of the Americanas case.

Despite the billionaire profit, one of the items that should draw the attention of investors the most is the Return on Equity, which shows the relative profitability of banks. In the case of Itaú, profitability fell by almost 2 percentage points in three months, from 21% to 19.3%, the same level registered in 2021.

Itaú Unibanco’s credit portfolio ended 2022 at R$1.1 trillion, with the highest growth in operations for individuals, exceeding 20% ​​in 12 months.

Noteworthy is the portfolio increase in riskier categories, such as credit cards, which rose 20.5% in 12 months and almost 5% in the quarter, and personal credit, with an increase of almost 27% in one year, and 3. 4% in three months.

2023 forecast more difficult

Itaú also released its projections for 2023. The bank expects the loan portfolio to grow between 6% and 9% in the year, compared to an increase of more than 11% in 2022.

Another forecast that draws attention is the cost of credit, an item that is directly impacted by the provision for default. In this case, Itaú expects a value between R$36.5 billion and R$40.5 billion, compared to R$32.3 billion last year.

The financial margin with customers, which represents how much the bank should have in return with financial products, should be between 13.5% and 16.5%, according to Itaú, compared to 27.2% in 2022.

With Reuters