Itau Unibanco Holding S.A. ITUB reported recurring managerial results of R$10.5 billion ($1.83 billion) for the first quarter of 2025, which increased 5% year over year.

Higher revenues and an increase in managerial financial margin supported the results. However, a rise in non-interest expenses acted as a spoilsport.

ITUB’s Revenues & Expenses Increase

Operating revenues were R$46.8 billion ($8.2 billion) in the reported quarter, up 9.4% year over year.

The managerial financial margin increased 18.6% year over year to R$30.4 billion ($5.3 billion). Also, commissions and fees rose 2.9% to R$11.6 billion ($2 billion).

Non-interest expenses totaled R$15.8 billion ($2.8 billion), up 9.8% year over year. Investments in technology drove the increase in expenses.

In the first quarter, the efficiency ratio was 38.1%, down 20 basis points from the year-earlier quarter. A decrease in this ratio indicates increased profitability.

The cost of credit charges rose 10.3% on a year-over-year basis to R$9.6 billion ($1.7 billion).

Itau Unibanco’s Balance Sheet Position: Mixed Bag

As of March 31, 2025, ITUB’s total assets fell 1.9% to R$2.62 trillion ($458.5 billion) from the last reported quarter. Liabilities, including deposits, debentures, securities, borrowings and on-lending, totaled R$2.59 trillion ($453.3 billion), which declined 1.6% on a sequential basis.

As of the same date, Itau Unibanco’s credit portfolio, including private securities and financial guarantees provided, rose 3.7% to R$1.4 trillion ($245 billion) from the prior quarter.

ITUB’s Capital & Profitability Ratios Mixed

As of March 31, 2025, the Common Equity Tier 1 ratio was 12.6%, down from 13% as of March 31, 2024.

Annualized recurring managerial return on average equity was 22.3%, up from 21.9% in the year-earlier quarter.

Our View on Itau Unibanco

ITUB’s first-quarter results were driven by a rise in the managerial financial margin. The declining efficiency ratio indicates an increase in profitability, which is a positive factor. Growth in commissions and fees, and efforts to have a healthy credit portfolio are positives.

Itau Unibanco Holding S.A. Price, Consensus and EPS SurpriseItau Unibanco Holding S.A. Price, Consensus and EPS Surprise

Itau Unibanco Holding S.A. price-consensus-eps-surprise-chart | Itau Unibanco Holding S.A. Quote

Itau Unibanco currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Foreign Banks

HSBC Holdings HSBC reported first-quarter 2025 pre-tax profit of $9.48 billion, which declined 25% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Story Continues

HSBC’s results were affected by a fall in revenues, higher expected credit losses and other credit impairment charges, partially offset by a fall in expenses.

Deutsche Bank DB posted first-quarter 2025 earnings attributable to its shareholders of €1.78 billion ($2.01 billion), up 39.2% year over year.

DB’s results were aided by a rise in revenues and lower expenses. However, higher provision for credit losses was a spoilsport.

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