Itau Unibanco SA  posted a 19% jump in recurring net profit, which nevertheless landed slightly below expectations as it raised provisions for bad loans amid soaring interest rates.

Latin America’s largest bank reported a third-quarter recurring net income of 8.08 billion reais. Analysts polled by Refinitiv had expected profit of 8.11 billion reais.

High interest rates prompted Itau to hike the provisions it set aside for bad loans by 49.8% to 8.27 billion reais, in line with moves by other Brazilian lenders Bradesco SA and Santander Brasil SA .

Unlike its peers, Itau did not hike its 2022 forecast for loan-loss provisions.

Finance chief Alexsandro Broedel said in a statement the quarterly results reflected “the strength and consistency of our performance over time, in the various lines of business”.

Net interest income (NII) from its customers jumped 33% from a year earlier to reach 23.38 billion reais.

NII it earned from the market, however, fell 73.2% to 516 million reais, it said, citing a bigger retail loan portfolio.

Itau reported a 90-day default ratio of 2.8% at the end of September, rising above the previous quarter’s 2.7% albeit at a much slower pace than its peers.

Original story: Reuters | Peter Frontini 
Photo: Itaú website
Edition: Prime Yield