Itau Unibanco (ITUB4.SA) on Monday beat profit expectations and substantially raised its loan growth forecast for this year even as it boosted provisioning for bad credits, reflecting higher Brazilian interest rates.
Brazil’s largest lender said second-quarter recurring net profit rose 17.4% from the previous year to 7.67 billion reais ($1.50 billion), beating analyst expectations of 7.48 billion reais, as compiled by Refinitiv.
The bank also said its loan book is likely to grow between 15.5% and 17.5% this year, above a previous estimate of 9%-12%.
Its 2022 cost of credit, which is mainly composed of cash set aside for loans likely to default, is now seen in the range of 28 billion-31 billion reais, up from the previous forecast of between 25 billion and 29 billion reais.
In the three months ending June 30, Itau’s loan-loss provisions reached 7.81 billion reais, up 61.7% from last year, while its loan book rose 19.3% on a year-on-year basis to 1.08 trillion reais.
By Peter Frontini via Reuters