BBDO - Itaú Unibanco's Q4 Earnings: Consistent Quarter And Constructive Guidance

2024-02-09 23:55:39 ET

Summary

• Itaú Unibanco's Q4 earnings showcased consistent net profit growth, robust ROE, and controlled delinquencies, although loan portfolio growth remained a challenge.
• The bank announced an extraordinary dividend, raising the payout to 60%, with indications of maintaining this ratio until 2024.
• Guidance for 2024 includes anticipated improvements in credit costs and profitability, supporting expectations of higher dividends and continued growth.
• Itaú Unibanco maintains a premium valuation compared to peers, justified by its leading position in efficiency, loan portfolio size, low delinquency rates, and strong capital resilience.

In my quarterly Itaú Unibanco ( ITUB ) review, I highlighted the main points reported during Q4 earnings. Once again, Latin America's largest private bank demonstrated consistent net profit growth, maintained its increasingly robust return on equity ("ROE"), and showed controlled delinquencies. However, it continued to face challenges in growing its loan portfolio. Nevertheless, the bank announced the distribution of an extraordinary dividend to shareholders, increasing the payout to 60%. Additionally, it indicated that this payout ratio should persist until 2024, a development I consider highly favorable for the investment thesis....

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