Itaú Unibanco: Is the bank a static target?

Itaú Unibanco had a good crisis. The bank weathered Brazil’s deepest ever recession in spectacular fashion, adopting a defensive posture as credit dynamics deteriorated to minimize defaults.

Although it suffered some large corporate defaults that pushed up provisioning, Itaú Unibanco’s conservative stance to higher-risk individual and small and medium-sized enterprise segments has worked well.

Now, however, the bank may require a strategic repositioning. That is not to say it isn’t still performing well. It is so profitable that it is returning money to shareholders at an unprecedented rate through special dividends and its return on equity was flat on the quarter at a more-than-healthy 20.9%.