Itaú Unibanco's Strategic Digital and Operational Transformation: A Catalyst for Sustained ROE Growth

Itaú Unibanco’s strategic digital and operational transformation has emerged as a defining force in its sustained return on equity (ROE) growth, outpacing regional peers and reinforcing its position as Brazil’s leading financial institution. By combining disciplined risk management, AI-driven innovation, and agile product development, the bank has not only weathered macroeconomic volatility but also capitalized on it to enhance profitability and capital generation.

Digital Acceleration: A Flywheel of Efficiency and Profitability

The bank’s migration of 60% of its infrastructure to AWS has been a cornerstone of its digital strategy, reducing customer-impacting incidents by 98% and slashing deployment cycles from months to days [1]. This shift has directly contributed to a 30% reduction in customer acquisition costs through AI-driven credit analytics [4], while also enabling the development of platforms like Inteligência Itaú. This AI ecosystem, featuring WhatsApp Pix payments and predictive modeling, has created a self-reinforcing data flywheel that refines 1,300+ AI models and enhances customer engagement [1]. The result? A 23.3% ROE in Q2 2025, up from 20.7% in 2024 [3], driven by a 15.4% increase in financial margin with clients to R$30.3 billion [5].

The bank’s investment in a 17,000-strong technology workforce—including 5,900 AWS-certified engineers and 8,000 generative AI-trained developers—further underscores its commitment to digital innovation [3]. This cultural shift has not only improved operational agility but also positioned Itaú to outperform fintech competitors in customer retention and service personalization.

Risk Discipline: A Shield and a Sword

Itaú’s cautious lending approach, prioritizing quality over quantity, has kept its non-performing loan (NPL) ratio at a sector-leading 1.9% [5]. This risk discipline has allowed the bank to maintain a low cost of risk while expanding its loan book—individual loans grew 8.0% year-over-year in Q2 2025, supported by digital credit card portfolios and segments like Uniclass and Personnalite [1]. The combination of prudent credit policies and AI-driven underwriting has enabled Itaú to scale its loan book without compromising asset quality, a critical factor in sustaining ROE above the industry median of 9.41% [2].

Product Innovation: Expanding Margins and Market Share

Over 18 new digital offerings and 300 customer journeys launched in recent years reflect Itaú’s focus on expanding its value proposition [4]. These initiatives have directly contributed to a 12.7% year-over-year increase in managerial financial margin to R$61.5 billion in H1 2025 [2], alongside a 9% revenue growth to BRL 325.85 billion in 2024 [3]. By leveraging AI to personalize services and streamline operations, Itaú has improved its cost-to-income ratio, a key driver of ROE.

Sustaining the Momentum

Historical ROE data reveals a decade-long trajectory of outperformance, with the bank’s ROE fluctuating between 13.50% and 24.34% [2]. The current 22.15% ROE for Q2 2025 [2] suggests that Itaú’s strategic initiatives are not a short-term anomaly but a structural shift. As Brazil’s financial sector evolves, Itaú’s ability to balance innovation with risk management—while maintaining a low NPL ratio—positions it to continue outperforming peers.

In conclusion, Itaú Unibanco’s digital transformation is not merely a cost-cutting exercise but a holistic strategy to redefine profitability. By embedding AI, cloud infrastructure, and customer-centric innovation into its DNA, the bank has created a virtuous cycle of efficiency, risk resilience, and capital generation. For investors, this represents a compelling case for long-term conviction in a sector where digital agility is the new competitive edge.

Source:
[1] Itaú Unibanco's Q2 2025 Outperformance: A Case for Reaffirming Long-Term Conviction in Brazil’s Leading Bank [https://www.ainvest.com/news/ita-unibanco-q2-2025-outperformance-case-reaffirming-long-term-conviction-brazil-leading-bank-2508/]
[2] ITUB (Itau Unibanco Holding) ROE % [https://www.gurufocus.com/term/roe/ITUB]
[3] Itau (ITUB) Financial Update: Earnings Growth & Digital Transformation [https://www.monexa.ai/blog/itau-itub-financial-update-strong-earnings-growth--ITUB-2025-07-14]
[4] Itaú Unibanco's Strategic Position in Brazil's Evolving Financial Sector [https://www.ainvest.com/news/ita-unibanco-strategic-position-brazil-evolving-financial-sector-2508/]
[5] Itaú Unibanco's Strategic Position in Brazil's Evolving Financial Sector [https://www.ainvest.com/news/ita-unibanco-strategic-position-brazil-evolving-financial-sector-2508/]