The big banks returned to the octagon for the second quarter earnings season, with a technical knockout from Itaú (ITUB4) about Bradesco (BBDC4). Bradesco's results show a bank struggling to grow and make its credit portfolio profitable, while Itaú successfully defended its belt with control of defaults — showing resilience in a challenging macro scenario. Itaú x Bradesco: highlights from 2Q23 In the first round , the Setúbal, Villela and Moreira Salles bank delivered a net profit of R$8.7 billion in 2Q23, an increase of +14% in the annual comparison. Bradesco reported a profit of R$4.5 billion, a drop of -36% compared to the same period in the previous year. In the second round , profitability measured by ROE (shareholder profitability), Itaú presented a recurring managerial return on average equity.
Bradesco presented a ROE of 11.1 %, -7pp in relation to the 2022 quarter. In the third round , leverage (debt) ofItaú and Bradesco, measured by the financial health of the companies' balance sheets, Itaú presented a Basel level 1 index of 13.6% and Bradesco, 12.9%. Both with good ratios of own capital in relation to third-party capital. Bradesco is unable to impose itself In 2Q23, Itaú had a Brother cell phone list slight increase in the default rate measured by delays above 90 days, reaching 3% in the annual comparison (+0.3pp), but still well below Bradesco's default rate, with 5.9% . Revenue from service provision , a segment with greater profitability and stability inbanks, presented a drop of -1.3% in the annual comparison for Itaú. At Bradesco, the result was more impacted, with a drop of -2.5% . On the negative side for the largest Bank in Latin America, we highlight the revision of the insurance and services revenue guidance in 2023, with growth from 7.5% to 10.5% to 5% to 7% .
In that fight, Bradesco was so punished with punches that we think his left eye was closed. BTG gets in line to get the belt Despite dominating the fight against Bradesco, Itaú does not win a fight against BTG Pactual (BPAC11). BTG is the absolute champion in terms of history and visibility of results and has managed to grow even with the capital market still in slow recovery for the Investment Banking area — the company's investment bank, which is very involved in public offerings of shares and debt issuance. In 1Q23 , BTG showed growth in revenue ( +10% ) and net profit ( +10% ), in addition to a profitability of 21%. For 2Q23 , the market expects revenue +10% and profit +14% compared to 2Q22. The expectation is for share issuance to resume in the second half of the year, and the results of the IB division should be helped by strong growth in mergers and acquisitions (M&A).