Itau Unibanco Holding S.A. - ADR

Strong profitability & capital generation (good): Recurring net income of BRL 12.4bn (+7.8% YoY, +1% QoQ). ROE 24.3% consolidated (25.7% in Brazil); on a CET1-adjusted basis ROE ~25.1% consolidated. Capital remained solid with CET1 = 12.3% (up +30 bps vs March) despite an early dividend/interest-on-capital distribution at year-end and regulatory effects in 1Q.

Loan growth with quality; key drivers (good): Total loan book BRL 1.522tn (+2.7% QoQ, ~+10% YoY). Brazil portfolio grew +2.6% QoQ / +9.6% YoY; large companies +4.4% QoQ / +10% YoY. Micro/SME and payroll/mortgage segments were key: - SME +1.5% QoQ / +11.6% YoY with risk discipline (government-backed programs +7.2% QoQ; originations +47.3%). - Private payroll loans: payroll portfolio +3.5% QoQ / +11.7% YoY; private payroll +14.3% QoQ / +9.1% YoY, with delinquency “fully under control”; shift toward payroll/private payroll from unsecured personal due to repayment priority/pricing. - Mortgages: BRL 152bn (+3.9% QoQ / +13.3% YoY), now slightly above credit cards (~BRL 150bn); cited as a long-term loyalty product with ~BRL 36bn originations (last 12 months) and ~55% market share among private banks.

Margins & NII outlook mechanics—good but volatility explained (surprising nuance): NII with clients BRL 32.6bn (+3.3% QoQ, +5% YoY), including working capital monetization (BRL 3.9bn in working capital during the quarter). Risk-adjusted NIM = 6.2% (up +10 bps QoQ consolidated; 6.7% Brazil). Management explained the client margin staying strong but growing below some guidance expectations due to working-capital/base effects and structured-operations seasonality/wholesale volatility; they expect margin range to remain within guidance band rather than a point outcome.