Stronger lending, lower provisions boost Q2 profits at Itaú

Brazilian banking giant Itaú Unibanco, posted a net profit rise of 3.4% year-on-year in the second quarter on the back of stronger lending and lower loan loss provisions.

Net income totaled 6.38bn reais (US$1.7bn), up from 6.17bn reais in the year ago period, the bank said in a results report.

The loan portfolio stood at 623bn reais at the end of June, up 6.61% from a year ago. Loans for individuals expanded 8.7% while loans to companies contracted 3%.

Provisions for bad loans declined 13.7% to 4.27bn reais and the non-performing loan ratio improved to 2.8% at end-June from 3.1% a year earlier.

"In spite of lowering expectations for economic growth for 2018, credit demand remains healthy. In the first half of 2018, we granted 28% more loans to individuals and 20% more loans to very small, small and middle-market companies compared to the same period of 2017. These new vintages have lower delinquency rates, thus keeping the positive trend for credit quality of our portfolio," said CEO Candido Bracher in a press release.