Itau sees 2022 mortgage e-book slowdown, provisions up


A person is mirrored in an Itau department window in Rio de Janeiro, Brazil April 29, 2019. REUTERS/Sergio Moraes

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SAO PAULO, Feb 10 (Reuters) – Brazil’s largest private-sector lender Itau Unibanco Holding SA (ITUB4.SA) stated on Thursday 2022 is more likely to be a 12 months of decrease mortgage e-book development and better loan-loss provisions, amid Brazil’s difficult financial outlook.

The financial institution, nonetheless, stated it would doubtless preserve its return on fairness, a gauge of profitability, round 20%.

Its mortgage e-book is more likely to develop between 9% and 12%, under its enlargement final 12 months, the financial institution stated. Nonetheless, its internet curiosity revenue with shoppers ought to develop at a sooner tempo, between 20.5% and 23.5%.

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As customers and corporations really feel the burden of little or no financial development this 12 months, loan-loss provisions are more likely to stand as much as 9 billion reais above final 12 months. Money put aside for unhealthy loans is more likely to be between 25 billion reais and 29 billion reais, the financial institution stated.

Itau additionally sees Brazil’s inflation pushing up its working prices, that are anticipated to rise between 3.5% and 6.5%. Final 12 months, the lender was in a position to tame double digit inflation, with its bills rising simply 2%.

Regardless of fiercer competitors amongst banks and fintechs, Itau expects its payment revenue to go up between 3.5% and 6.5%.

“Our outlook for 2022 elements in our preserving on a restoration

path and the great outcomes achieved in 2021,” Chief Govt Milton Maluhy stated in an announcement.


Itau posted on Thursday a higher-than-expected fourth quarter revenue, primarily pushed by sturdy beneficial properties in client lending and in its insurance coverage unit.

Recurring internet revenue, which excludes one-off objects, rose 32.9% from a 12 months earlier to 7.159 billion reais ($1.36 billion), above a consensus estimate of 6.828 billion reais compiled by Refinitiv.

The financial institution’s 90-day mortgage default ratio was roughly in keeping with the third quarter, at 2.5%.

Its internet curiosity revenue rose 20.6% from a 12 months earlier, to 21.2 billion reais.

($1 = 5.2496 reais)

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Reporting by Carolina Mandl
Modifying by Chris Reese and Lincoln Feast.

Our Requirements: The Thomson Reuters Belief Rules.

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