ITAÚ UNIBANCO - MATERIAL FACT: PROJECTIONS 2024

Rhea-AI Summary

Itaú Unibanco Holding S.A. has released its projections for the year 2024, including growth on a comparable basis for the total credit portfolio, financial margin with clients, and the market. The company also provided guidance on cost of credit, commissions and fees, non-interest expenses, and effective tax rate. These projections are based on management's current outlook and are dependent on market conditions and economic performance.

Positive

• Itaú Unibanco is projecting growth between 6.5% and 9.5% for its total credit portfolio in 2024.
• The company expects growth between 4.5% and 7.5% in the financial margin with clients and between 5.5% and 8.5% in the financial margin with the market.
• Projections also include a cost of credit between R$33.5 bn and R$36.5 bn, and growth between 5.0% and 8.0% in commissions and fees and results from insurance operations.
• Non-interest expenses are expected to grow between 4.0% and 7.0%, and the effective tax rate is projected to be between 29.5% and 31.5%.
• The company considers a cost of capital of approximately 13.75% p.y. for business management purposes.

Negative

• None.

Financial Analyst

The projections released by Itaú Unibanco outline anticipated growth in key financial areas such as the total credit portfolio, financial margins and commissions and fees, which are critical for assessing the company's future revenue streams and profitability. When analyzing the projected growth in the total credit portfolio, it's important to consider the potential increase in market share and the ability to maintain loan quality amidst expansion. The anticipated growth in financial margins with clients suggests an expectation of improved lending profitability, possibly due to higher interest rates or better client segmentation. The cost of credit projection, which includes loan losses and impairment, is a significant indicator of the company's risk management effectiveness and expected credit environment.

From an investor's perspective, the guidance on non-interest expenses, which are expected to grow slower than inflation, signals a focus on efficiency and cost control. The effective tax rate projection provides insight into the fiscal planning and potential impact on net income. Additionally, the mention of a cost of capital at 13.75% p.y. is pivotal as it benchmarks the return Itaú Unibanco aims to generate on its investments. If the actual performance aligns with or exceeds these projections, it could lead to a positive investor sentiment and potential stock price appreciation.

Economist

Itaú Unibanco's projections must be contextualized within the broader economic landscape of Brazil and international markets. The forecasted growth rates hinge on macroeconomic factors such as interest rates, inflation and economic growth, all of which influence consumer and business lending behavior. The projected growth rates in financial margins and credit portfolio suggest optimism about economic stability and expanding credit demand. However, these projections are subject to inherent uncertainties, including changes in economic policies, currency fluctuations and geopolitical events that could affect market conditions.

It is also crucial to consider the competitive landscape in the Brazilian banking sector, which may impact Itaú Unibanco's ability to achieve its projections. The bank's performance relative to its peers can offer insights into its competitive position and strategic initiatives. Monitoring the actual performance against these projections will be essential for understanding the bank's adaptability to changing economic conditions and the effectiveness of its strategic decisions.

Market Research Analyst

Itaú Unibanco's projections provide valuable insights for stakeholders regarding the bank's strategic priorities and market expectations. The projected growth in commissions and fees, for example, may indicate a strategy focused on diversifying revenue streams beyond traditional interest income. This could involve expanding digital banking services, insurance and asset management offerings. The emphasis on controlling non-interest expenses below inflation demonstrates a commitment to operational efficiency, which is a key factor for maintaining competitiveness in the financial services industry.

Furthermore, the projections serve as a benchmark for investors to gauge the bank's performance over the coming year. Stakeholders will likely monitor the achievement of these projections closely, as deviations could signal changes in the bank's operational efficiency or market position. It will be important for analysts to track industry trends, regulatory changes and consumer behavior that could influence the bank's ability to meet its goals, providing a more comprehensive view of its potential for growth.

SÃO PAULO, Feb. 5, 2024 /PRNewswire/ -- Itaú Unibanco Holding S.A. ("Itaú Unibanco" or "Company"), in compliance with the provisions in Article 157, paragraph 4 of Law No. 6,404/76 and in Resolution No. 44/21 of the Brazilian Securities and Exchange Commission (CVM), informs its stockholders and the market in general that it released as of this date its projections for the year 2024 in accordance with item 3 ("Projections") of the Reference Form.

2024 Guidance	Consolidated	Growth on a comparable basis4
Total credit portfolio¹	growth between 6.5% and 9.5%
Financial margin with clients	growth between 4.5% and 7.5%	growth between 5.5% and 8.5%
Financial margin with the market	between R$3.0 bn and R$5.0 bn
Cost of credit²	between R$33.5 bn and R$36.5 bn
Commissions and fees and results from insurance operations³	growth between 5.0% and 8.0%	growth between 5.5% and 8.5%
Non interest expenses5	growth between 4.0% and 7.0%	growth between 5.0% and 8.0%
Effective tax rate	between 29.5% and 31.5%
(1) Includes financial guarantees provided and corporate securities; (2) Composed of results from loan losses, impairment and discounts granted; (3) Commissions and fees (+) income from insurance, pension plan and premium bonds operations (-) expenses for claims (-) insurance, pension plan and premium bonds selling expenses; (4) Considers pro forma adjustments in 2023 of the sale of Banco Itaú Argentina; (5) Core expenses below inflation.

It is worth mentioning that the Company considers, for business management purposes, a cost of capital of approximately 13.75% p.y.

Information on outlooks for the business, projections and operational and financial goals are solely forecasts, based on management's current outlook in relation to the future of Itaú Unibanco. These expectations are highly dependent on market conditions, general economic performance of the country, of the sector and the international markets. Therefore, our effective results and performance may differ from those forecasted in this prospective information.

Renato Lulia Jacob 

Group Head of Investor Relations and Market Intelligence

 

Contacto:
Phone: (11) 5019-8880 / 8881
E-mail: imprensa@itau-unibanco.com.br

View original content:https://www.prnewswire.com/news-releases/itau-unibanco---material-fact-projections-2024-302053833.html

SOURCE Itaú Unibanco Holding S.A.

FAQ

What are Itaú Unibanco's projections for the year 2024?

Itaú Unibanco is projecting growth between 6.5% and 9.5% for its total credit portfolio in 2024, along with growth in financial margin with clients and the market, cost of credit, commissions and fees, non-interest expenses, and effective tax rate.

What is the expected growth in the financial margin with clients?

Itaú Unibanco expects growth between 4.5% and 7.5% in the financial margin with clients for 2024.

What is the projected cost of credit for Itaú Unibanco in 2024?

The cost of credit for Itaú Unibanco is projected to be between R$33.5 bn and R$36.5 bn in 2024.

What is the expected range for non-interest expenses in 2024?

Non-interest expenses are expected to grow between 4.0% and 7.0% in 2024 for Itaú Unibanco.

What is the projected effective tax rate for Itaú Unibanco in 2024?

The effective tax rate is projected to be between 29.5% and 31.5% for Itaú Unibanco in 2024.