Itaú Unibanco Holding S.A. (NYSE:ITUB) Q1 2024 Earnings Call Transcript May 7, 2024
Itaú Unibanco Holding S.A. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Renato Lulia: [Interpreted] Hello. Good morning, everyone, and thank you for joining this Video Conference to talk about our Earnings for the First Quarter of 2024. We’re broadcasting directly from our office in Avenida Faria Lima in Sao Paulo. As usual, today’s event will be divided into two parts. First, Milton will take you through our performance and earnings for the first quarter of 2024. And then we will have a Q&A session during which investors and analysts can ask us questions and get into the details with us. Before we get started, I’d like to give you a few pointers to help you make the most of today’s meeting. For those of you who access this via our website, there are three audio options on screen, the entire content in Portuguese, the entire content in English, or just the original audio.
For the first two options, you’ll have simultaneous translation. To choose your preferred option, just click on the flag on the top of your screen. Questions can be submitted via WhatsApp. Just click on the button on the screen on the website or simply send a message to +55-11-939-591877. The presentation we will be making today is available for download on the website screen and as usual, on our investor relations website. I’ll hand over the floor to Milton, who will begin the earnings presentation, and then I’ll be back to moderate the Q&A session. Milton, the floor is yours.
Milton Filho: [Interpreted] Hello everyone, good morning or good afternoon to those who are in a different time zone. Thank you for joining us and welcome to our earnings call for the first quarter of 2024. I’ll begin with a high level presentation outlining the bank’s earnings and providing more detail for certain items. At the end, I’ll also be making a special invitation for our Itau Day, which is just around the corner. So let’s get straight into the figures. Our earnings for the first quarter of 2024 totaled R$9.8 billion, representing growth of 3.9% compared to the previous quarter. Our consolidated recurring return on equity was 21.9%, meaning 70 basis points of growth quarter-over-quarter. It reached 22.7% in Brazil, growing 50 basis points quarter-over-quarter.
This RoE takes into account 13% of common equity Tier 1, which exceeds our capital appetite. This means that we would be posting even higher profitability, if we calculated it with our capital target. The cost of credit dropped nominally in the third consecutive quarter, reaching R$8.8 billion, a 3.9% decrease quarter-over-quarter. Our delinquency indicators remained stable with consolidated NPL over 90 days dropping 10 basis points quarter-over-quarter and the 90 day NPL for individuals falling 20 basis points in the same period. I’ll bring you more details about the cost of credit a bit later. OpEx fell by 6.2% in the quarter to R$14.4 billion in the first quarter of 2024, meaning another record quarter for the consolidated efficiency ratio, which reached 38.3%, a decrease of 200 basis points in the quarter for the consolidated figures and 36.8% in Brazil, a decrease of 130 basis points during the same period.
This is a very sound set of results, with a good overall portfolio quality, strong profitability and above all, high predictability. The individual loans portfolio grew by 2.6% year-on-year but decreased by 0.6% in the first quarter due to the normal seasonality of the credit card portfolio. We posted significant growth of personal loans portfolio and 11.3% for the year, while the payroll loan portfolio was flat, growing 0.1% in the quarter. In vehicle loans we grew 1.7% during the quarter and 5.4% during the year. We also saw flat growth in the mortgage portfolio in the quarter and 3.1% growth in the year.I’ll go into more detail about the individual’s loan portfolio later in the presentation. We saw a 1.9% growth in the SME’s portfolio in the quarter and 10.2% growth year-over-year.
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