Itaú Unibanco posts Q1 profit increase
Brazil's banking giant Itaú Unibanco Holding reported a nearly 20% increase in net profit for the first quarter, as the first signs of the country's economic recovery reduced its nonperforming loan rate, allowing for a decrease in expenses with provisions.
The bank said that its profit was 6.17bn reais (US$1.96bn) for the period, up from 5.16bn reais a year earlier.
Itaú Unibanco ended Q1 with a credit portfolio of 587bn reais, down 7% from the year-ago period. For this year, Itaú expects an expansion of up to 4% of its loan portfolio versus 2016.
Total assets were valued at 1.41tn reais, up from 1.39tn.
The bank reduced expenses with provisions due to the improvement of its nonperforming loan rate. Provisions totaled 5.39bn reais in Q1, down from 7.82bn a year earlier.
The lender's nonperforming loan rate – covering loans that were more than 90 days overdue – was 3.4%, down from 3.5% in the year-ago period. When compared with the prior quarter, the rate remained flat.
After two years in deep recession, the country's economy has shown signs of a tepid improvement in 2017.
Finance minister Henrique Meirelles told Globo News TV late Tuesday that the country's gross domestic product expanded at a projected rate of up to 0.8% in Q1 compared with the last quarter of 2016. Meirelles classified the economic recovery as "strong" and said that companies need to be prepared to increase their inventories and investments.
The bank's financial-service revenue increased 7% in the period to 7.8bn reais.
Itaú's recurring net profit, which does not account for amortization and extraordinary provisions, totaled 6.05bn reais in the first quarter, up from 5.18bn a year earlier.
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