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Itau Unibanco Holding SA ADR ITUB Stock Quote

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Morningstar‘s Stock Analysis ITUB

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Itaú Should Benefit From Rising Interest Rates, but Uncertainty in Brazil’s Economy Still a Concern

Michael Miller Equity Analyst

Business Strategy and Outlook

| Michael Miller |

The challenge for Itaú Unibanco will be to navigate an increasingly volatile Brazilian economy and uncertain political environment, which has been hit by the dual shocks of the pandemic and rapidly rising inflation, which exceeded 12% in April 2022. In response, the Brazilian central bank has rapidly increased interest rates, taking the SELIC rate from 2% at the start of 2021 to 13.25% by June 2022. The bank benefits from rising interest rates, as Brazil's central bank attempts to fight inflation, but there is risk that economic fallout from rapidly increasing rates could lead to lower loan growth and higher credit losses for the bank.

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Company Profile ITUB

Business Description

Itaú Unibanco is the largest privately held bank in Brazil, the result of the 2008 merger between Banco Itaú and Unibanco. In addition to Brazil, the bank has significant operations in Chile, Colombia, Argentina, Uruguay, and Paraguay. Its commercial and consumer loans account for 36% of the bank’s total loans each, while foreign loans now account for 28% of the bank’s portfolio. Itaú also operates the fifth-largest insurer in Brazil and is the second-largest asset manager in the country, giving it broad reach over the Brazilian financial system.

Contact
Praca Alfredo Egydio de Souza Aranha, 6th Floor, 100-Torre Conceicao
Sao Paulo, SP, 4344902, Brazil
T +55 1127943547
Industry Banks - Regional
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 99,913

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