SAO PAULO (Reuters) – Brazilian lender Itau Unibanco SA on Thursday posted a 19% jump in recurring net profit, which nevertheless landed slightly below expectations as it raised provisions for bad loans amid soaring interest rates.
Latin America’s largest bank reported a third-quarter recurring net income of 8.08 billion reais ($1.51 billion). Analysts polled by Refinitiv had expected profit of 8.11 billion reais.
High interest rates prompted Itau to hike the provisions it set aside for bad loans by 49.8% to 8.27 billion reais, in line with moves by other Brazilian lenders Bradesco SA and Santander Brasil SA.
Unlike its peers, Itau did not hike its 2022 forecast for loan-loss provisions.
Finance chief Alexsandro Broedel said in a statement the quarterly results reflected “the strength and consistency of our performance over time, in the various lines of business”.
Net interest income (NII) from its customers jumped 33% from a year earlier to reach 23.38 billion reais.
NII it earned from the market, however, fell 73.2% to 516 million reais, it said, citing a bigger retail loan portfolio.
Itau reported a 90-day default ratio of 2.8% at the end of September, rising above the previous quarter’s 2.7% albeit at a much slower pace than its peers.
($1 = 5.3665 reais)
(Reporting by Peter Frontini; Editing by Sarah Morland)
