‘American Effect’ pressures Itaú Unibanco’s profit in the 4th quarter

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The largest bank in Latin America reported this Tuesday (7) that its recurring profit from October to December 2022 totaled R$ 7.668 billion. Itaú Unibanco branch façade Disclosure Itaú Unibanco had profits below market projections for the fourth quarter of 2022, pressured by an extra provision for expected losses with defaults – weeks after Americanas filed for judicial recovery. The largest bank in Latin America reported this Tuesday (7) that its recurring profit from October to December totaled BRL 7.668 billion – an increase of 7.1% over the same period in 2021. READ ALSO Americanas removes directors during investigations into breach accounting FROM BRL 20 BILLION TO BRL 43 BILLION: Understand Americanas’ debt The result, however, was below the average estimate of analysts consulted by Refinitiv, of BRL 8.24 billion. In net terms, profit was R$ 7.356 billion, 18% above the same period last year. One of the factors that weighed on the result was the increase in provisions for expected losses with default, which caused the so-called cost of credit to jump by 58.1% year on year, to R$ 9.8 billion. ‘American Effect’ In the report, without naming names, the bank mentioned “impacts arising from an event subsequent to the closing date related to a specific case of a large company that entered into judicial recovery”. Americanas filed for bankruptcy last month, with total debts of more than R$40 billion. Last week, Santander Brasil had released earnings below analysts’ projections for the same reason. A “subsequent event related to a specific case in the large companies segment…had an impact of BRL 1.3 billion”, Itaú said, referring to the cost of credit, adding that this covers 100% of the exposure to the aforementioned case. . G1 Explains: the gap in Lojas Americanas accounts Discounting tax effects, the net impact of this provision on the bottom line of the result was a drop of R$ 719 million in profit. In other words, had it not been for this event, recurring profit would have been in line with projections. The bank’s total loan portfolio, which closed at R$ 1.14 trillion, increased by 11.1% in 12 months.

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