Brazil’s biggest private-sector lender Itau Unibanco Holding SA posted a 10.9% gain in third quarter recurring net income, as loan growth and cost control offset higher provisions.

Recurring net income, which excludes one-time items, came in at R$7.165 billion ($1.78 billion) in the third quarter, in line with a Refinitiv analysts’ consensus estimate.

The bank’s loan book picked up pace, rising 4.4% from the previous quarter to R$689 billion, as corporate loans resumed growth.

Both lending and trading gains boosted Itaú’s net interest income, which grew by 9.6% from the same period a year earlier. Return on equity came in stable at 23.5%, the highest among Brazilian banks.

Loans in arrears for more than 90 days stood stable at 2.9%. Still, loan loss provisions grew by 38% from a year earlier. Itaú said that the increase was caused by retail loan book growth in the period.

Itaú showed belt-tightening on the cost side, with a small increase of 1.2% in operating expenses from the same period a year earlier.

To fight back new competitors, mainly financial technology startups, Co-Chairman Roberto Setubal said in September that the bank would step up its emphasis on cost cutting.

Earlier this year, Itau launched a voluntary severance program. The bank said in a statement that 3,500 workers took part, triggering an estimated R$2.4 billion in one-time costs.

Other Brazilian banks such as Banco Bradesco SA and Banco do Brasil SA have also announced measures to slash costs amid tougher competition from online startups.

Original Story: Reuters |Carolina Mandl
Photo: Itaú Site
Edition: Prime Yield