Bank of America (NYSE:BAC) analyst Jorg Friedemann continued his “buy” rating on giant Brazilian bank Itau Unibanco Holding SA, citing “improving asset quality and efficiency,” in a note to clients.
The largest bank in Brazil as measured by market value, Itau Unibanco Holding SA released their first quarter report which showed an increase in earnings of 24 percent to $1.84 billion over the same quarter last year, excluding charges. Including one-time charges, profits rose to 60 percent.
Most of the gains came from a decline in defaults on loans and the expansion of credit. Default rates fell on average from 5.6 percent to 4.9 percent from the fourth to the first quarter, being defined as payments past due by over 90 days.
The quality of the credit of the bank improved greatly as well, with volume increasing in that segment of the bank.
Itau Unibanco Holding SA is recommended a “Buy” by other analysts as well, being considered the leader among its Brazilian competitors in return-on-equity.
The shares of the bank have fallen by 2.3 percent so far in 2010, although it’s price is expected to increase going forward.
