Itaú Unibanco Holding S.A. Q2 FY2024 earnings call

Milton mentioned that the bank achieved double-digit managerial recurring results in the second quarter. The loan portfolio showed sound growth, reaching 1.3 trillion reais, with delinquency ratios within acceptable thresholds and lower than pre-pandemic levels. Commission, fees and insurance had a good quarter with 5% growth. Funding through the asset management business was strong, with a 22% year-on-year growth and 34% growth in the first half of 2024 compared to the first half of 2023. The pension funds operation had a 22.8% quarter-on-quarter revenue growth and 61% net inflows growth. Investment banking had strong DCM results with a 27% market share. Credit quality indicators were good, with short-term delinquency indicator in Latin America slightly increased but total delinquency ratio and Brazil's delinquency ratio slightly dropped. Non-interest expenses grew 4.7% quarter-on-quarter in Brazil, but the efficiency ratio continued to fall, with the second quarter's efficiency ratio being the best in the historic time series. Capital was organically grown, ending the quarter with Common Equity Tier 1 of 13.1%.

In the second quarter of 2024, Itaú Unibanco achieved a quarterly managerial recurring result of 10.1 billion reais, a 3.1% growth over the first quarter. The consolidated return on equity was 22.4%, with a quarter-on-quarter growth of 50 basis points, and in Brazil, the ROE was 23.6% with a 100 basis points quarter-on-quarter growth. The loan portfolio reached 1.3 trillion reais. Commission, fees and insurance recorded a 5% high-quality growth. The individual loans segment grew 1.2% quarter-on-quarter, personal loans portfolio grew 2.3%, payroll loans grew 0.8%, vehicle loans grew 3.1%, mortgage portfolio grew 1.6%. SME portfolio grew 2.7% quarter-on-quarter and 12.5% year-on-year, large corporate segment grew 8.6% quarter-on-quarter and 16.3% year-on-year (partly affected by FX). The credit card portfolio in Personnalité and Uniclass segments grew 3.5% quarter-on-quarter and 17.3% year-on-year. 71% of the growth in the personal loans portfolio in 2Q '24 came from Uniclass and Personnalité middle- and high-income segments. Clients' NII grew 7.4% year-on-year, and core clients' NII grew 2.7% quarter-on-quarter. The risk-adjusted NIM continued to improve.

The guidance is annual and naturally reaffirmed. The second quarter 2024 figures proved the growth dynamic, and the management is in line with the commitments made at the beginning of the year. Any change of scenario or vision will be shared with investors in a timely manner.

There are risks such as the impact of Argentina adjustment, interest rate volatility on net interest margin, the impact of IFRS 9 implementation on capital, uncertainty regarding provisions for Americanas, and the impact of macroeconomic and policy changes on business.

Q: What is the perspective for acceleration of the portfolio of natural persons?

A: De-risking is at the end of the process. The bank has opportunities to grow in various businesses and segments with quality and a long-term vision, but growth should be done with care while considering the level of leverage and income commitment of the population.

Q: How do you think about the health of corporates and the economy overall in terms of ability to continue lending at this pace?

A: The growth in the large corporate portfolio has been healthy. The bank is well-capitalized and finds opportunities to grow. The pace of large corporate loan growth might reduce in the coming quarters, but SME loan growth is sustainable with good quality and low delinquency ratio.

Q: How relevant is One Itaú for the bank's medium-term strategy?

A: One Itaú is transformational. The migration pilot has shown good results with a high migration rate. The bank is at an accelerated pace in improving the super app, but there is still a long way to go. There is no immediate impact on P&L from migration, but cross-sell capacity will be measured in the future.

Q: Can you share the composition of treasury results and if it will be a trend in the next quarters?

A: The treasury result in this quarter was atypical. There is no expectation of such a strong result in the next quarters, but the bank will continue to look for opportunities within risk frameworks.

Q: What is the impact of IFRS 9 implementation and potential revision of provisions for Americanas?

A: The impact of IFRS 9 implementation on Itaú Bank is immaterial. Regarding Americanas, there will be a relevant receivable from provisions, but the decision on how to allocate it is yet to be made, and it is an isolated effect for now.