By Brazil Stock Guide – Itaú Unibanco Holding S.A. (B3: ITUB4; NYSE: ITUB) reported recurring managerial net income of R$12.3 billion in the fourth quarter of 2025, up 13.2% year over year and 3.7% quarter on quarter, marking the highest quarterly profit ever posted by the bank in nominal terms. The result capped a year of structurally stronger profitability, with recurring return on average equity (ROE) reaching 24.4%, placing Itaú among the most profitable large banks globally.
The quarter also sealed a historic year. In full-year 2025, Itaú delivered reported net income of R$45.7 billion and recurring managerial earnings of R$46.8 billion, the largest annual profit in the bank’s history in nominal terms. The performance was supported by disciplined credit expansion, steady growth in recurring revenues and firm control over asset quality, even as Brazil’s interest rate environment remained restrictive.
Quarterly banking income reached R$47.6 billion, rising 7.9% from a year earlier. Managerial net interest income totaled R$31.5 billion, driven mainly by customer-related spreads, which increased 8.6% year on year. Higher average loan volumes, improved funding mix and stronger remuneration of proprietary capital all contributed to the expansion.
The loan book closed December at R$1.49 trillion, growing 6.3% quarter on quarter and 6.0% over 12 months. In Brazil, growth was broad-based. Retail lending rose 3.9% in the quarter, led by credit cards and residential mortgages, while lending to micro, small and mid-sized enterprises expanded 8.8%. Corporate loans grew 4.1%, reflecting a selective risk approach.
In Latin America, the loan portfolio increased 12.2% quarter on quarter in nominal terms, or 4.5% excluding currency effects. Regional growth added to consolidated volumes without pressuring risk indicators, reinforcing the bank’s geographic diversification.
Asset quality indicators remained stable. Non-performing loans above 90 days held steady at 1.9%, both on a consolidated basis and in Brazil. Credit costs totaled R$9.4 billion in the quarter, up 2.8% sequentially, but remained contained at 2.6% of the average loan portfolio, signaling normalization rather than deterioration.
Fee income and insurance results reached R$15.6 billion, up 9.1% from a year earlier, supported by cards, acquiring, asset management and insurance. Insurance, pension and capitalization products continued to increase their share of earnings, strengthening the bank’s mix of predictable, non-interest revenues.
Operating discipline remained evident. Non-interest expenses rose 3.7% year on year, below revenue growth. As a result, the efficiency ratio improved to 38.9%, compared with 40.7% in the fourth quarter of 2024, highlighting continued gains from scale, digitalization and cost control.
The balance sheet also reveals a deliberate decision to accelerate capital distribution to shareholders. In 2025, Itaú combined elevated dividend and interest-on-equity payments totaling R$23.4 billion with the cancellation of R$3 billion in treasury shares. The strategy gradually reduced regulatory capital buffers without undermining liquidity or solvency, reflecting management’s view that capital generation exceeds opportunities for reinvestment at comparable risk-adjusted returns.
The Tier 1 capital ratio ended December at 13.8%, down from the previous year but still comfortably above regulatory requirements. Liquidity indicators remained strong, giving the bank room to operate with leaner capital while preserving resilience.
Looking ahead, Itaú’s 2026 guidance points to loan growth of 5.5% to 9.5%, expansion in customer net interest income of 5.0% to 9.0%, and credit costs between R$38.5 billion and R$43.5 billion. The outlook suggests profitability should remain elevated, even as macroeconomic tailwinds fade.
The fourth-quarter and full-year results mark a structural inflection for Itaú. With record profits, high and stable returns and an explicit choice to return capital, the bank is signaling confidence in the balance sheet and earnings visibility. In the current phase of the cycle, paying shareholders has become the most efficient use of capital — not due to a lack of growth options, but because the franchise generates more capital than it can deploy at similar returns.
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