Brazil's Itaú bank obtained record profits of 8.474 billion Brazilian reais (US$ 4.8 billion) last year, an increase of 96.6% over 2006. This information was disclosed this Tuesday, February 12, by the bank.
With the result, Itaú has become the Brazilian bank with the largest profit in the last 20 years, overtaking Bradesco bank, which posted profit of R$ 8.01 billion (US$ 4.5 billion) in 2007.
The bank's result is also the 10th largest among Brazilian open capital companies, losing only to those in previous years by Petrobras and Companhia Vale do Rio Doce, according to figures compiled by consultancy company Economática.
The average return over net assets, which measures the institution's profitability, was 32.1% last year. Consolidated net assets reached almost 29 billion reais (US$ 16.5 billion), an increase of 22.9% over December 2006. Consolidated assets reached 294.876 billion reais (US$ 167.5 billion), 40.6% over the result for December 2006.
The bank's total loan portfolio grew 36.2% and reached 127.6 billion reais (US$ 72.5 billion). Itaú informs that it may continue expanding credit despite the more volatile environment. According to the institution, its capital structure has guaranteed growth without the need for new investment.
The bank's preferred shares (without voting rights) appreciated 20% last year and the institution's market capitalization reached 110.888 billion reais (US$ 62.9 billion). At the end of 2007, Itaú had over 65,000 employees.
The Brazilian Bradesco bank informed at the end of January that the organization had posted net income of 8.01 billion Brazilian reais (US$ 4.5 billion) in 2007, an increase of 58.5% in comparison with 2006.
According to consultancy company Economática, this was, at the time, the best result obtained by a Brazilian bank with open capital in the last 20 years, exceeding the 6.313 billion reais profit (US$ 3.5 billion at current exchange rates) by the state-owned Bank of Brazil in 2006.
Bradesco's market capitalization rose to almost 110 billion reais (US$ 61.4 billion), an increase of 29.1% over December 2006. The value of assets reached 341.184 billion reais (US$ 190.5 billion) in the last month of 2007, growth of 28.5% in comparison with the same month in the previous year.
The bank's total loan portfolio reached 161.407 billion reais (US$ 90.1 billion), 38.9% more than in 2006, being 59.277 billion reais (US$ 33.1 billion) in operations with individuals and 102.130 billion reais (US$ 57 billion) in operations with corporate clients. Bradesco's stockholder's equity ended the year with net assets of 30.357 billion reais (US$ 17 million), an increase of 23.2% over 2006.
Remuneration to stockholders, in the period, totaled 2.823 billion reais (US$ 1.6 billion), or 35.2% of the net income of 2007. Investment in infrastructure, information technology and telecommunications reached 2.1 billion Brazilian reais (US$ 1.2 billion), 273 million reais (US$ 152 million) more than in 2006.
Bradesco is the largest private bank in Brazil, with 3,160 branches, 11,500 points of express services and almost 26,000 of its own automatic teller machines.