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Protests in Chile and Colombia affect results of Itaú Unibanco, Latin America's largest bank

Expenses with provisions for credit losses increased 62% in the fourth quarter of 2019

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  • Expenses with provisions for credit losses, write-offs of financial securities and discounts increased 62% in the fourth quarter of 2019 compared to the previous year, to $1.4 billion;
  • Most of which was concentrated in Itaú Corpbanca, Itaú’s business in Chile and Colombia.

The wave of protests that Latin America faced, mainly between October and November last year, affected the results of the largest bank in the region. According to information from Bloomberg published by the newspaper La Republica, in a conference with analysts this Tuesday (11), Itaú Unibanco said that “it registered an increase in the provisions for credit losses in the fourth quarter, while the disturbances that broke out in Chile and in Colombia in October was a blow to economic activity “.

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Expenses with provisions for credit losses, write-offs of financial securities and discounts increased 62% in the fourth quarter of 2019 compared to the previous year, to $1.4 billion, most of which was concentrated in Itaú Corpbanca, Itaú’s business in Chile and Colombia.

The bank said it has reduced the risk of corporate customers in both countries. The group also had higher operating expenses in Chile as a result of social unrest and the closing of branches.

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In addition, there was a worsening in credit quality in Argentina, “after the overwhelming victory of a leftist candidate who disturbed the markets”.

In general, the credit portfolio grew much more in Brazil than in Latin America as a whole, where, according to the Valor Econômico newspaper, the portfolio increased by only 1.9%, reaching BRL 166.3 billion.