Itau Unibanco Banco Holding SA

Brazilian assets rallied sharply after first-round election results showed Flávio Bolsonaro advancing to an Oct. 25 run-off against incumbent President Luiz Inácio Lula da Silva with a stronger-than-expected showing. Speculators on prediction market platform Kalshi now give Bolsonaro a more than 80% chance of winning the presidency, up from about 60% before Sunday's first round, while on Polymarket his odds jumped to 85% from 63%. Bolsonaro secured more than 47% of the votes and beat Lula's first round total by nearly 2 percentage points, despite pre-election polls that widely expected him to trail the incumbent in that initial tally. The iShares MSCI Brazil ETF was up more than 12% on Monday, U.S.-listed shares of Itau Unibanco gained 15%, Banco Bradesco surged 19%, and Brazil's local Bovespa index was up 8%. Investors broadly see Bolsonaro as more favorable to markets, as the candidate is promising greater fiscal discipline, with Brazil's deficit-to-GDP ratio at almost 10% in June.

Itau Unibanco Holding SA reported second-quarter 2026 recurring net income of 12.4 billion reais, up 7.8% year over year, with a consolidated return on equity of 24.3%. The loan portfolio reached 1.522 trillion reais, growing 2.7% quarter over quarter and nearly 10% year over year, while net interest income with clients rose 3.3% quarter over quarter to 32.6 billion reais. The bank's CET1 ratio strengthened to 12.3%, up 30 basis points from March, and the efficiency ratio improved to 35.5% in Brazil. However, Itau revised its full-year guidance for commissions, fees, and insurance results growth down to a range of 2% to 5% from the previous 5% to 9%, citing moderation in economic activity and weaker credit card-related fees. CEO Milton Maluhy Filho highlighted disciplined capital allocation and noted that the bank is willing to cede market share in segments where competitors are growing irrationally.