Itaú Falls 20.37% in One Day as Investors Await Brazilian Third-Quarter Results
Key Facts
American depositary receipts of Banco Itaú Unibanco fell 20.37% on October 26 to $7.70, according to the bank’s investor relations page. The move followed Brazil’s presidential runoff, in which Luiz Inácio Lula da Silva won a fourth term over Flávio Bolsonaro. Available closing data do not establish that the shares fell 20% since the election: they closed at $9.70 on October 20 and 21, $9.49 on October 22 and $9.67 on October 23. The bank’s official blackout-period calendar lists November 3 as the date for announcing third-quarter results. The results will come days after the election, with attention focused on the bank’s operating figures amid market volatility and public debt concerns.
Lula won 51.79% of valid votes, compared with Bolsonaro’s 48.21%, a margin of 4.4 million votes, according to election results reported by Reuters via UOL. Bolsonaro led in the first round, held on October 4, with 47.03% against Lula’s 45.16%, before the result reversed in the runoff. Voter abstention was 19.21% in the second round, compared with 21.08% in the first. Reuters quoted a political analyst as saying that street mobilization and social media networks helped revive Lula’s campaign during the three weeks between the rounds. The president-elect faces a Congress in which the PL party and its allies could control more than 280 seats in the Chamber of Deputies and as many as 50 seats in the Senate, putting policy passage before a legislative challenge.
The election coincides with fiscal concerns: the government forecast Brazil’s economy would grow 2.3% in 2027, while public debt exceeded 82% of gross domestic product through October. Macquarie analysts said in a commentary carried by Axios that investors may move from expectations of fiscal discipline associated with Bolsonaro to a bet that market discipline will limit fiscal slippage over the next four years. In the October 26 session, Itaú shares recorded the daily decline listed on the investor relations page, after available daily data showed a close of $9.67 on October 23. This short series does not allow the move to be attributed to the election alone. The available facts also do not identify a single cause for the share decline.
Second-quarter results provide a baseline for comparing the bank’s upcoming performance. Itaú reported recurring managerial earnings of 12.407 billion Brazilian reais, up 1.0% from the first quarter and 7.8% from the same period in 2025. Annualized recurring return on average equity was 24.3%, compared with 24.8% in the first quarter and 23.3% a year earlier. The gross loan portfolio reached 1.522 trillion Brazilian reais, up 2.7% quarter on quarter and 9.6% year on year, while the ratio of loans overdue by more than 90 days held steady at 1.9%. The bank said net financial income from clients grew 3.3% during the quarter, driven by loan portfolio expansion and the effect of calendar days.
In its guidance, the bank lowered its forecast for growth in commissions and fees and insurance results in 2026 to a range of 2.0% to 5.0%. Itaú attributed the adjustment in part to capital market volatility exceeding its expectations at the start of the year. Non-interest expenses were 16.7 billion Brazilian reais in the second quarter, up 3.3% from the previous quarter, with the bank saying the increase was linked to seasonal factors. The November announcement will allow investors to compare new results with these indicators and published forecasts, alongside tracking credit and profitability. The open results page presents the second-quarter 2026 package, while the bank’s official calendar sets November 3 as the release date for third-quarter results.
The near-term economic calendar includes the September monthly PNAD survey on October 30, followed by the Central Bank’s Focus report on November 3 at 11:30. The unemployment rate was 5.4% in the second quarter, down 0.7 percentage points, according to the Brazilian Institute of Geography and Statistics. The quarterly PNAD release for July through September is scheduled for November 18. The Focus report presents market expectations for Brazil’s economy and is usually released every Monday; it is not a forecast issued by the Central Bank itself. These dates fall around Itaú’s announcement, while the institute’s schedule does not provide an unemployment-rate forecast for the October 30 release.