Itaú Unibanco Holding S.A. (NYSE:ITUB) Q4 2023 Earnings Call Transcript
Itaú Unibanco Holding S.A. (NYSE:ITUB) Q4 2023 Earnings Call Transcript February 6, 2024
Itaú Unibanco Holding S.A. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Hello. Good morning, everyone. I am Renato Lulia, Group Head of Investor Relations and Market Intelligence at Itaú Unibanco. Thank you very much for joining our video conference to talk about our earnings for the fourth quarter of 2023, which we are broadcasting directly from our office at Avenida Faria Lima at Sao Paulo. This event will be divided into two parts. In the first part, Mr. Milton Maluhy will explain our performance and earnings for the fourth quarter of 2023 and present the 2024 guidance. Right after we will have a Q&A session. During which analysts and investors can interact directly with us. I'd like to give you some instructions to make the most out of today's meeting. For those who are accessing this via our website, there are three options for audio on the screen, the entire content in Portuguese, the entire content in English or in the original audio.
The first two options will have simultaneous translation. To choose your option, all you have to do is click on the flag on the top left corner of your screen. Questions can also be forward via WhatsApp. To do so, just click on the button on the screen on the website or simply send a message to the number, +55-11-939-591877. The presentation we will make today is available for download on the website screen, and also as usual on our Investor Relations website. I'll now give the floor to Mr. Maluhy who will begin the presentation on earnings. Then I'll come back to you to moderate the Q&A session. Milton, go ahead.
Milton Filho: Good morning, welcome to our fourth quarter of 2023 earnings and the 2024 guidance presentation. I'll go straight to the figures so that I can bring you some more information and then we'll have enough time for the Q&A. Firstly, our earnings in the quarter totaled R$ 9.4 billion, a growth of 4% from the previous quarter. As a result, we delivered a consolidated ROE of 21.2%, with the 10 basis points growth in the quarter. In Brazil, ROE reached 22.2%. Moving on to revenue generation, our NII grew 3.3% in the quarter, reaching R$ 23.2 billion. Commissions in fees and results from insurance operations posted strong growth of 4.6%, reaching R$ 13.5 billion for the quarter. All this with sound credit quality indicators.
The consolidated NPL over 90 days posted a drop of 20 basis points. The NPL for individuals dropped 50 basis points. These are major results that show an evolution in the credit cycle. We've ended the quarter with a Tier 1 capital ratio of 15.2%, an increase of 60 basis points. The individuals portfolio grew 1.9% in the quarter and 4.1% in the same year. The SME's portfolio grew 2.6% in the quarter and 3.5% in the year. The large corporate's portfolio grew 8.7% in the year. Thus, the total growth of the loan portfolio in Brazil was 5.7% in the year. In Latin America, the results were affected by FX. As a result, the total portfolio grew 3.1% in the year and excluding FX variation, growth was 5.3%. It was a year in which we focused on derisking of the portfolio and we've been working more intensively on target clients and reducing the portfolio's exposure to non-target clients.
We posted sound growth in the segments on which we focus. The Personalite and Uniclass loan book grew 16% in the year and 5% in the quarter. In Payroll Loans, we continue to grow in the private and public sectors, both quarter-over-quarter and year-on-year. There was a decrease in the public pension segment as a result of the caps that were put in place on interest rates. Therefore, we stopped serving a population that increasingly demands a social security-based payday due to these adjustments. Another piece of news worth sharing with you is that we had a nominal reduction of R$ 1.9 billion in the renegotiated portfolio, a drop of 4.6% quarter-over-quarter. This shows that our portfolio is good quality with sound credit indicators. It was a great quarter for clients NII, up 3.3%, or R$ 700 million in the fourth quarter of ‘23.
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