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Itaú Unibanco reported a “very strong” first quarter of 2026, with managerial net income rising 10% year over year to BRL 12.3 billion. Management said results were weighed by an early dividend payment and calendar effects, while profitability remained high and capital levels stayed strong.
Chief Executive Officer Milton Maluhy Filho said the quarter did not include the additional dividend distribution that typically occurs in the period because BRL 20 billion was paid in the fourth quarter of 2025. Normalizing for that effect, Maluhy said net income would have been BRL 12.7 billion.
Return on equity remained strong. Itaú reported consolidated ROE of 24.8% and ROE in Brazil of 26.4%. Adjusted for an 11.5% capital level, consolidated ROE was 25.8% and Brazil ROE was 27.6%, which Maluhy described as “very strong.”
On capital, the bank ended the quarter with a CET1 ratio of 12.0% and AT1 capital of 1.4%. Management said core capital generation was sufficient to fund capital uses and growth in risk-weighted assets, even after the large dividend distribution in the prior quarter.
Loan growth remained solid. Itaú’s loan portfolio grew 1.2% in the quarter excluding foreign exchange effects and 9% year over year on the same basis. In Brazil, the portfolio expanded 7.8% from a year earlier and 0.3% from the prior quarter.
Management said growth was concentrated in client segments it views as more resilient through credit cycles. Maluhy noted that more than 90% of new card originations come from “target clients,” which are approaching 80% of the existing card portfolio.
Private payroll lending was a key driver, rising 19% in the quarter and 63% year over year. Maluhy said Itaú is the market leader in private payroll loans and is growing with “strong quality,” appropriate pricing and a long-term approach. Government-backed lending also supported SME growth, with that portfolio up 4% sequentially and 52% year over year.
Net interest margin with clients declined to BRL 31.5 billion from BRL 31.7 billion in the fourth quarter. Maluhy attributed the decrease mainly to the early dividend distribution, which reduced margin by BRL 600 million, and fewer business and calendar days in the quarter. Excluding those effects, he said core margin performance remained strong, supported by average balance growth and a favorable product mix.
Market margin was BRL 800 million, despite volatility in local and global markets. The capital index hedge cost remained a headwind, with a negative impact of BRL 700 million in the quarter.
Commissions, fees and insurance results reflected typical first-quarter seasonality. Card issuance declined from the fourth quarter, while current account fees for individuals continued a downward trend as the bank redesigns packages and seeks to increase customer lifetime value.
Insurance was a positive highlight, sustaining strong performance from the previous quarter and growing 17% year over year. Overall services and insurance revenues increased 5.3% from a year earlier.
Management said several revenue lines remain tied to economic activity, including payments, capital markets, cards and investment banking. In response to a question from Goldman Sachs analyst Tito Labarta, Maluhy said the bank remains comfortable with full-year guidance, but services and insurance are more likely to be toward the lower end of the guided range due to weaker activity, particularly in debt capital markets and performance fees in asset management.
Non-interest expenses declined 5% from the fourth quarter and increased nearly 5% year over year. In Brazil, expenses fell 5.6% sequentially and rose 5.2% from a year earlier. Maluhy said the bank continues to target the midpoint of its expense guidance, implying annual growth of 3.5%.
The efficiency ratio in Brazil reached 34.9%, described by Maluhy as a record low and the first time the bank moved below 35%. Adjusting for the early dividend payment effect, he said the ratio would have been 34.4%.
Maluhy devoted a significant portion of the call to credit quality, citing tighter macroeconomic conditions, higher interest rates and broader economic uncertainty.
Short-term delinquency, measured as loans 15 to 90 days past due, increased 10 basis points at the consolidated level and 20 basis points in Brazil. In individuals, the increase was 23 basis points, which Maluhy said was lower than most prior first-quarter seasonal increases. Long-term delinquency remained stable at the consolidated level, while Brazil’s individual portfolios were stable and SMEs rose 10 basis points.
Management said the increase in SME delinquency was expected and partly mechanical, as grace periods on government-backed loans expire. Maluhy said less than 5% of that portfolio remains under a grace period, and that the loans are covered by government guarantees.
By product, Maluhy said over-90-day delinquency in Itaú’s personal loan portfolio was 5.1%, compared with 9.3% for the market. In credit cards, Itaú’s over-90-day NPL ratio was 5.1%, roughly half the market level. Auto loan delinquency was 3.5%, compared with 6.2% in the market, and private payroll lending delinquency was 4.2%, versus 7.1% for the market.
Maluhy said Itaú has not changed its write-off criteria despite regulatory flexibility under Resolution 4966, and continues to apply write-off timelines based on recoverability estimates consistent with its prior approach.
Executives reaffirmed full-year guidance covering profitability, portfolio growth, financial margin and cost of credit. Maluhy told XP analyst Bernardo Guttmann that Itaú avoids giving specific ROE guidance but remains comfortable delivering profitability above 20%.
He acknowledged macroeconomic conditions have worsened since the beginning of the year, citing geopolitical events, oil prices, inflation uncertainty, energy costs, fertilizer prices and slower global growth. Still, he said the bank’s portfolio is built to be resilient and that current delinquency trends support the existing guidance.
In closing remarks, Maluhy said, “Good results do not generate future accommodation,” adding that the bank is focused on discipline, client service, capital allocation and long-term execution amid a challenging macroeconomic and political environment.
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