Itau Unibanco H1 Earnings & Revenues Rise Y/Y, Expenses Up

Core Insights - Itau Unibanco Holding S.A. (ITUB) reported recurring managerial results of R$21.7 billion ($3.94 billion) for the first half of 2025, reflecting an 8% year-over-year increase driven by higher revenues and an increase in managerial financial margin, despite rising non-interest expenses acting as a negative factor [1][10] Financial Performance - Operating revenues for the reported quarter reached R$88.1 billion ($16 billion), marking a 1% year-over-year increase [2] - The managerial financial margin increased by 12.7% year-over-year to R$61.5 billion ($11.2 billion), while commissions and fees declined by 2% year-over-year to R$22.7 billion ($4.1 billion) [2][10] - Non-interest expenses totaled R$32.3 billion ($5.8 billion), up 9.6% year-over-year, primarily due to investments in technology [2][10] Efficiency and Credit Metrics - The efficiency ratio improved to 38.4%, down 10 basis points from the first half of 2024, indicating increased profitability [3] - The cost of credit charges rose by 5.3% year-over-year to R$17.4 billion ($3.1 billion) [3] Balance Sheet Overview - As of June 30, 2025, total assets increased nearly 1% to R$2.87 trillion ($522.8 billion) compared to the previous year [4] - Liabilities, including deposits and borrowings, also rose by 1% to R$2.65 trillion ($483.1 billion) [4] - The credit portfolio, including private securities and financial guarantees, grew by 7% to R$1.4 trillion ($252.3 billion) [5] Capital and Profitability Ratios - The Common Equity Tier 1 ratio remained stable at 13.1% as of June 30, 2025 [6] - The annualized recurring managerial return on average equity was 21%, slightly down from 21.1% in the first half of 2024 [6] Overall Assessment - The first-half results were positively influenced by a rise in the managerial financial margin and a declining efficiency ratio, indicating improved profitability [7] - Growth in the credit portfolio is a positive sign, but the decline in commissions and fees, along with rising expenses, presents ongoing concerns [7]