Itau Unibanco Holding SA (ADR) (NYSE:ITUB) to lend $2.4 billion to SMEs

Posted In Markets - By David Francis On Monday, November 4th, 2013 With 0 Comments

Itau Unibanco Holding SA (ADR) (NYSE:ITUB) the Brazilian banking and financial group has announced that it will be lending $2.4bn to SMEs. It will be offering these loans to its existing business customers by the end of the year as per it statement. The money will be used by the clients to meet their working capital needs, which rise in this part of the year due to its 13 month payment and rise in the number of temporary workers, which could lead to a cash shortage.

These companies work on the seasonal market, they have to hire temporary workers in a sample and fast manner to meet their demands. For these companies it is easier to make swift decisions if they have fewer workers on their rolls.

Carlos Eduardo Maccariello, Director of enterprise products said,” there is an increased demand for loans in the fourth quarter of the year as the smaller companies need to meet the needs of the market..”

In other news researchers have felt that the company with a market capital of $77.28 and having four independent divisions “Commercial Banking, Itau BBA, Consumer Credit and Corporate and Treasury” can grow faster in the next few years if its commercial banking unit can grow at a faster clip if it uses its credit card division smartly. According to the researchers, the groups present insurance, loans and pension scheme clients are a large pool of customers that the group can tap for its credit card business.

The company’s second most important unit is its Corporate and treasury division, due to the fact that the Brazilian economy is booming to large money being invested into mining and raw material production, this unit is well settled to increase its total earnings which would be on par with the rise of companies in Brazil.

In the last financial year the company paid a dividend of $0.08 dividend per share which works out to a dividend yieldof 0.5%. Apart from getting dividends the shareholders have also been witness to a rise in the share price of 22% in the last 90 days. The share being sol and bough has also increased in the period and on October 22 the shares being traded was nearly 14.2 million as compared to an average of 11.5 million shares changing hands daily.

The Bank has informed its shareholders and the markets that it will be giving out its third trimester results on October 30. Investors would be hoping that the company earns more money per share. In the second trimester the company had posted a rise of 20.1% in the earnings per share as compared to the first trimester.

About the Author

- David Francis earned a bachelor of arts degree in history from the New Orleans University and a master of arts degree in international relations from North Eastern University

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