Analyst Note
| Michael Miller |No-moat-rated Itau Unibanco posted decent first-quarter results, with recurring net income of BRL 6.4 billion, up 63.6% year over year. However, recurring net income is still 12.3% lower than BRL 7.3 billion in the fourth quarter of 2019, before the coronavirus pandemic. The first-quarter results equate to a return on average equity of 18.5%, which can be attributed to a sequential improvement in net interest income, higher loan balances, lower credit costs, and controlled operating expenses. We do not plan to change our $4.30 per ADR fair value estimate for the firm.