Financial Data and Key Metrics Changes - The company's earnings for Q4 2023 totaled R$ 9.4 billion, representing a 4% growth from the previous quarter, with a consolidated ROE of 21.2% [9] - The NII grew by 3.3% in the quarter, reaching R$ 23.2 billion, while commissions and fees increased by 4.6% to R$ 13.5 billion [9] - The Tier 1 capital ratio increased by 60 basis points to 15.2% [9] - The consolidated NPL over 90 days decreased by 20 basis points, with a 50 basis point drop in the NPL for individuals [9] Business Line Data and Key Metrics Changes - The large corporate loan portfolio grew by 8.7% for the year, while the total loan portfolio in Brazil increased by 5.7% [4] - The individuals portfolio grew by 1.9% in the quarter and 4.1% for the year, while the SME's portfolio grew by 2.6% in the quarter and 3.5% for the year [9][10] - The Personalite and Uniclass loan books grew by 16% for the year and 5% in the quarter [10] Market Data and Key Metrics Changes - The total portfolio growth in Latin America was 3.1% for the year, with a 5.3% growth excluding FX variation [4] - The risk-adjusted NIM increased from 5.6% to 5.8% in the quarter, with the Brazilian operation's risk-adjusted NIM rising from 5.9% to 6.2% [11] Company Strategy and Development Direction - The company focused on derisking the portfolio and targeting specific client segments, resulting in sound growth in focused segments [10] - The company aims to maintain a ROE above 20% and is committed to digital and cultural transformation to enhance client engagement and operational efficiency [77][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit cycle's evolution, highlighting improvements in credit quality indicators and a stable outlook for NPL formation [9][74] - The guidance for 2024 includes expected loan portfolio growth between 6.5% and 9.5% and NII growth between 4.5% and 7.5% [73] Other Important Information - The efficiency ratio reached its best historical level at 39.9% on a consolidated basis, with core costs growing by only 1.6% in the year, below inflation [72][77] - The company plans to continue investing in technology and new business areas, which contributed to the increase in expenses [72] Q&A Session Summary Question: Guidance on credit portfolio growth and dividends - Management indicated that while there may be a reduction in growth expectations, they are targeting a stable ROE above 20% and will consider dividends based on portfolio growth [13][16] Question: Cost of credit and NPL formation - Management noted that the cost of credit has decreased, and they expect NPL formation to remain below historical levels due to a safer portfolio [21][22] Question: Efficiency and competitive positioning - Management acknowledged the need for continued efficiency improvements and highlighted their competitive position against digital banks [24][25] Question: Impact of recent regulatory changes - Management discussed the limited impact of recent regulatory changes on their funding and capital structure, emphasizing their proactive approach to managing these changes [27] Question: Dividend policy and capital structure - Management confirmed their target for a common equity tier fund of around 12% and indicated that they will adjust dividends based on capital management needs [60][61]
Itau Unibanco S.A.(ITUB) - 2023 Q4 - Earnings Call Transcript