Itau Unibanco S.A.(ITUB) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported quarterly managerial recurring results of BRL10.7 billion, representing a 6% increase quarter over quarter and nearly 20% year over year on a comparable basis [7] - The consolidated return on equity (ROE) was 22.7%, with a ROE in Brazil of 23.8% [7] - The Common Equity Tier I ratio increased to 13.7%, up 60 basis points from the previous period, significantly above the board-approved minimum of 11.5% [8] - The adjusted ROE, considering the minimum capital ratio, would be 24.6% consolidated and 26.4% in Brazil [8] Business Line Data and Key Metrics Changes - The loan portfolio grew by 1.9% quarter over quarter and nearly 10% year over year [9] - The individual loans segment saw a growth of 2.5% quarter over quarter [11] - The SME portfolio grew by 4.1% quarter over quarter, while the Large Corporates segment grew by only 0.7% due to a significant asset leaving the balance sheet [12] - The Latin America portfolio grew by 1.2% quarter over quarter, with an average balance growth of 8.2% [14] - The Financial Margin with Clients increased by BRL1.2 billion quarter over quarter, representing a 4.5% growth [16] Market Data and Key Metrics Changes - The company reported improvements in non-performing loans (NPL) indicators, with a drop of 20 basis points in both Individuals and SMEs for NPL 15-90 [23] - The NPL 90 indicator showed a significant drop of 20 basis points in Individuals and 10 basis points in SMEs [23] Company Strategy and Development Direction - The company aims to maintain a focus on sustainable finance, with a new goal to reach BRL1 trillion in structuring capital markets operations and individual loans by the end of 2030 [48] - Investments in technology and modernization are prioritized, with a focus on improving client experience and operational efficiency [36][38] - The company is transitioning to a unified banking experience for clients, reducing the number of applications and improving service delivery [40][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's ability to navigate challenging cycles while maintaining quality growth [24] - The company is focused on sustainable growth with quality, emphasizing the importance of risk-adjusted returns [70][79] - The management highlighted that the appetite for risk is dynamic and closely monitored, ensuring decisions are made with long-term sustainability in mind [84] Other Important Information - Non-interest expenses grew by 6.1% year over year, primarily due to collective wage agreements [34] - The company has been actively managing its capital structure, with expectations for higher dividends compared to the previous year [64] Q&A Session Summary Question: Inquiry about capital and dividends - Management confirmed that the extraordinary dividend is expected to be larger than last year, with a focus on maintaining a well-capitalized bank [64][62] Question: Impact of AT1 on dividend decisions - Management clarified that there would be no impact on the dividend distribution policy due to AT1 levels [66] Question: Focus on portfolio growth and risk-adjusted returns - Management emphasized that growth is focused on quality and risk-adjusted returns, with consistent expansion across all segments [70][79] Question: Guidance on exchange rate influence - Management indicated that the exchange rate has influenced guidance adjustments, but the focus remains on sustainable growth [82][84] Question: Competitive advantages and industry outlook - Management discussed the importance of expected loss provisioning and proactive management as competitive advantages, positioning the bank favorably in the industry [92][98]