Itau Unibanco (NYSE:ITUB) reported recurring net income of BRL 12.4 billion for the second quarter of 2026, up 7.8% from a year earlier and 1% from the prior quarter, as loan growth, client net interest income and expense discipline supported profitability.
Chief Executive Officer Milton Maluhy Filho said consolidated return on equity reached 24.3%, while ROE in Brazil was 25.7%. On a basis adjusted to a 11.5% Common Equity Tier 1 capital ratio, consolidated ROE would have been 25.1% and Brazil ROE 26.7%, according to the company.
Loan portfolio expands across key segments
Total loans reached BRL 1.522 trillion, rising 2.7% quarter over quarter and nearly 10% year over year. In Brazil, the portfolio increased 2.6% from the first quarter and 9.6% from a year earlier. Lending to large companies grew 4.4% sequentially and 10% annually.
Micro, small and medium-sized business lending increased 1.5% during the quarter and 11.6% from a year earlier. The government-backed portion of that portfolio grew 7.2% sequentially, while originations rose 47.3%.
Payroll lending remained a major growth driver. The overall payroll loan book rose 3.5% in the quarter and 11.7% year over year, while private payroll loans expanded 14.3% sequentially and 90.1% annually. Maluhy said the bank has prioritized private payroll products over traditional unsecured personal lending for eligible formally employed customers because of pricing and repayment-priority advantages.
Mortgage lending rose 3.9% from the first quarter and 13.3% from a year earlier to BRL 152 billion, surpassing the bank’s credit card portfolio. Maluhy said Itaú originated BRL 36 billion in mortgages over the past 12 months and held a 55% market share among private banks.
During the question-and-answer session, Maluhy said the bank expects loan growth to remain above the midpoint of its guidance range, although portfolio expansion could moderate somewhat in coming quarters. He also noted that the exit of the Colombia operation in July removes approximately BRL 10 billion of loans from the portfolio.
Client NII rises as risk-adjusted margins improve
Net interest income with clients totaled BRL 32.6 billion, increasing 3.3% from the first quarter and 5% from the prior-year period. Core client NII increased BRL 800 million, or 2.9%, sequentially, with average volumes contributing positively and product mix broadly neutral for margins.
Risk-adjusted net interest margin reached 6.2% on a consolidated basis, up 10 basis points sequentially. In Brazil, risk-adjusted NIM increased to 6.7% from 6.6% in the first quarter.
Maluhy said asset margins have been growing in line with loan volumes, while results from liabilities, working capital and structured transactions can introduce more volatility. He said the bank’s longer-term hedging approach means changes in interest rates do not pass through automatically to margins.
NII with the market was BRL 900 million despite volatile local and global financial markets and the cost associated with the bank’s capital index hedge ratio.
Credit quality remains stable, though SME indicator may rise
Maluhy described credit quality as consistent, with Brazil’s consolidated 15-to-90-day nonperforming loan indicator stable from the prior quarter. Delinquency in the individual portfolio also remained around 3.0%.
The SME indicator increased modestly as grace periods on government-backed programs began to expire. Management expects the measure to rise by another 10 basis points next quarter to roughly 2.1%, before stabilizing at that level over subsequent quarters. Maluhy characterized the movement as mechanical rather than a sign of deterioration in the portfolio.
Cost of credit remained at 2.7% of the portfolio, a level the bank said has been stable since the first quarter of 2025. Credit costs totaled BRL 10.1 billion in the second quarter.
The Desenrola renegotiation program affected 371,000 customers and BRL 1.1 billion in loans at the bank. Management said the program’s impact was immaterial, adding BRL 60 million to quarterly credit costs and 2 basis points to delinquency. Itaú said it held a 12% market share in the program.
While expressing confidence in Itaú’s own credit indicators, Maluhy cautioned that the broader environment requires care because household indebtedness remains elevated, interest rates are restrictive and credit has expanded across the market.
Expenses contained; fee and insurance outlook reduced
Non-interest expenses in Brazil increased 3.1% year over year, while commercial and administrative expenses declined 0.5%. The efficiency ratio was 35.5% in Brazil and 37.4% on a consolidated basis during the quarter.
Chief Financial Officer Gabriel Amado de Moura said technology investments, including artificial intelligence initiatives, are expected to support further scalability and efficiency, even as some technology spending rises. Management also cited ongoing efforts to adapt the branch network and operating model to changing customer behavior.
The bank maintained its guidance for loan growth, client NII, market NII, credit costs and non-interest expenses. However, it reduced its full-year outlook for commissions, fees and insurance results to growth of 2% to 5%, from a prior forecast of 5% to 9%.
Maluhy said the revision reflects slower economic activity and moderation in areas including card-related revenues, while emphasizing that the implied bottom-line outlook remains effectively unchanged if the effective tax rate is at the lower end of the bank’s range.
“We are growing and growing with discipline,” Maluhy said in response to a question on competition. He said the bank would rather forgo market share than pursue lending or other business at returns below its cost of capital.
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.
