Itau Unibanco (NYSE:ITUB) used its fourth-quarter 2025 earnings call to review full-year performance, outline priorities tied to a multi-year transformation program, and issue 2026 guidance while also flagging reporting reclassifications that will affect line-item comparability going forward.
Strategic priorities and transformation progress
Management reiterated five pillars it said have guided the bank’s recent execution: client centricity, an embedded risk management culture, disciplined capital allocation, modernization of technology and data architecture, and strategic cost management focused on efficiency rather than “cost for cost’s sake.”
In retail, management said it migrated 15 million clients to the Super App, reporting an NPS of 80 for that experience. The bank also pointed to product and feature launches such as Pix on WhatsApp (supported by AI), Piggy Bank/Cofrinhos, limit transfers, and collateralized cards. In insurance, the bank said recurring results rose 130% from 2021 to date, including a 130% increase in recurring results in 2025 versus earlier levels discussed in its multi-year narrative.
Across stakeholder metrics, the bank reported an employee eNPS of 83 and said consolidated NPS reached an all-time high in 2025, including record levels in the middle- and high-income segments.
Fourth-quarter profitability, growth, and efficiency
The bank reported fourth-quarter net income of BRL 12.3 billion, up 3.7% from the prior quarter and 13.2% year-over-year. Consolidated ROE was 24.4% and ROE in Brazil was 26.0%. Adjusted to an 11.5% capital level (which management described as its current capital appetite), consolidated profitability was 25.4% and Brazil was 27.3%.
Loans ended the quarter at BRL 1,490.8 billion, with growth of 6.3% versus September 2025 and 6.0% versus December 2024. Excluding foreign exchange effects, management said quarterly growth would have been 4.5% and annual growth 7.3%.
Net interest margin (NIM) with clients grew 1.5% quarter-over-quarter and 8.6% year-over-year. Services and insurance totaled BRL 15.6 billion, up 5.9% from the prior quarter and 9.1% year-over-year. The efficiency ratio reached what management called a record level: 38.9% consolidated and 36.9% in Brazil.
Portfolio mix, margins, and fee businesses
Management emphasized the seasonality of fourth-quarter retail credit, noting card portfolio growth of 8% in the quarter. The bank said the “transactor” portfolio grew 4.3% and the finance portfolio 1.6% quarter-over-quarter. Payroll loans grew 4%, led by private payroll loans, which rose 27.5% in the quarter and 36% year-over-year; management said that performance helped it regain market leadership in private payroll loans in Brazil.
Mortgage lending was another focus area. The bank said it reached roughly BRL 142 billion in mortgage balances, the largest among private banks, and surpassed 50% market share in mortgage origination, with more than BRL 33 billion originated in 2025. Management said origination grew 9% year-over-year and the portfolio expanded 12.8% over the period.
In SMEs, management cited strong quarterly growth, with middle-market companies up 12% and small companies up 6.4%. Government facilities grew 10% in the quarter.
Despite growth, management noted modest quarterly compression in annualized NIM, attributing it to mix—specifically stronger growth in lower-risk products such as transactor balances, mortgage lending, and private payroll loans. NIM slipped to 8.9% from 9.0% (and risk-adjusted NIM to 6.1% from 6.2%), with a similar move in Brazil.
On fees, management highlighted:
- Payments and collections: up 5% quarter-over-quarter, with transacted volume of BRL 301 billion (up 16.8% in the quarter and 22.8% year-over-year).
- Asset management: up 14.2% in the quarter, supported by performance fees; the bank reported BRL 4.1 trillion in assets under management and administration and record 2025 net inflows of BRL 156 billion (up 49%).
- Advisory and brokerage: up 17.1% quarter-over-quarter, though down year-over-year against what it called a record 2024 comparison.
- Insurance, pension plans, and premium bonds: up 1.9% quarter-over-quarter and 17% year-over-year, with earned premiums up 13% year-over-year.
Credit quality, costs, and capital returns
Management described asset quality as “well controlled” and pointed to a specific, “well-known and widely reported” corporate case that temporarily lifted short-term delinquency in September before being removed from the balance sheet via sale and restructuring by year-end. It said that event drove the spike and subsequent decline in the indicator, and that without it, delinquency would have been flat.
The bank said individual delinquency in Brazil reached the “lowest in our history.” For SMEs, it noted a slight rise tied to government-backed products with grace periods and said it expects normalization as those grace periods end, adding that the portfolios are well collateralized and delinquencies should not meaningfully impact losses.
Credit costs were BRL 9.4 billion in the quarter, which management said equated to 2.6% of the portfolio and was stable on a ratio basis. Expenses were described as disciplined: costs in Brazil rose 0.5% quarter-over-quarter, while full-year non-interest expenses increased 7.5%, in line with the midpoint of guidance.
On capital and shareholder returns, the bank reported a CET1 ratio of 12.3% as of December 2025 and noted regulatory events in early 2026 that would consume part of its capital surplus, which it said was considered in the decision to execute an early distribution of additional dividends at the end of 2025. It said it distributed BRL 33.7 billion in 2025, including BRL 9.7 billion in paid and provisioned interest on own capital and BRL 24 billion in additional dividends and interest on own capital, for a 72% payout ratio.
2026 guidance, reporting changes, and management commentary
The bank issued 2026 guidance using macro assumptions that included GDP growth of 1.9%, a year-end Selic rate of 12.75% with expected cuts beginning in March, inflation (IPCA) converging toward 4%, unemployment rising slightly to 5.4%–5.7%, and an exchange rate of BRL 5.47–BRL 5.50.
2026 guidance ranges were:
- Total credit portfolio growth: 5.5%–9.5% (Brazil: 6.5%–10.5%).
- NII with clients: 5%–9% growth.
- Market NII: BRL 2.5 billion–BRL 5.5 billion.
- Cost of credit: BRL 38.5 billion–BRL 43.5 billion.
- Commissions, fees, and insurance: 5%–9% growth.
- Non-interest expenses: 1.5%–5.5% growth (management noted the midpoint is below projected inflation and referenced banking inflation pressures).
- Effective tax rate: 29.5%–32.5%.
Management also detailed reclassifications to align disclosure with how it said the bank manages the business, stressing that the bottom line remains unchanged. Examples included moving card-related expenses from non-interest expenses into commissions and fees, and reclassifying items related to Rede between NII with clients and fees. It also said discounts on debts up to 90 days overdue would move from NII with clients to cost of credit. In addition, the bank said Avenue will be consolidated into its P&L lines from 2026 onward, after being accounted for using the equity method through 2025.
In Q&A, executives said they did not see reasons to deviate from profitability levels implied by 2026 guidance, but emphasized focusing on spread over the cost of capital rather than a static ROE target. Management said it uses a 50 basis point buffer above its 11.5% capital appetite for dividend decisions and noted rating agencies as a key constraint when considering leverage.
On loan growth, management characterized 2026 guidance as “realistic” given election-year uncertainties, and said the bank would adjust as new information emerges, citing prior-year guidance updates. It said it does not expect material changes in delinquency indicators in 2026, while noting seasonal first-quarter patterns and the ongoing normalization of government program grace-period effects in SMEs.
About Itau Unibanco (NYSE:ITUB)
Itaú Unibanco SA (NYSE: ITUB) is a Brazilian banking and financial services conglomerate headquartered in São Paulo. The company was formed by the merger of Banco Itaú and Unibanco in 2008 and is one of the largest private-sector banks in Brazil and among the leading banks in Latin America. Itaú Unibanco is publicly listed in Brazil and maintains an international listing on the New York Stock Exchange.
The bank offers a full range of financial products and services across retail, commercial and wholesale banking.
