Itaú Unibanco Holding S.A. (ITUB) Cash Flow Statement

Net income has steadily risen from $9.8B in 2024Q1 to $12.3B in 2026Q2, indicating robust earnings retention. However, operating cash flow swung from -$35.9B in 2024Q3 to $75.7B in 2025Q3, reflecting the bank's role in intermediating large trading and investment flows. This suggests that while core earnings are stable, the cash flow statement is heavily influenced by balance sheet movements, and capital generation is better assessed through retained earnings and regulatory capital ratios.

The bank's investment securities activity is substantial, with purchases and sales often exceeding $50B quarterly. In 2026Q2, purchases were $13.4B and sales $56.5B, resulting in a net cash inflow of $43.1B, suggesting the bank is reducing its securities holdings, possibly to fund loan growth or manage duration. This active management may reflect a response to interest rate expectations, but the volatility in these flows makes it difficult to discern a clear trend, warranting close monitoring of the securities portfolio's size and composition.

The bank's loan book appears to be expanding, given the consistent high level of provisions (averaging $8B per quarter) and the need for funding. However, deposit flows are not directly visible in the cash flow statement, but the net sales of investment securities and occasional issuance of long-term debt indicate that loan growth may be outpacing core deposit growth. This could pressure the bank's liquidity position and net interest margin if funding costs rise, though the bank's strong franchise in low-cost deposits may mitigate this risk.

Capital returns have been consistent, with dividends and buybacks totaling roughly $5B in 2026Q2, against net income of $12.3B. This suggests a payout ratio of about 40%, leaving ample room for reinvestment. However, the volatility in quarterly distributions (e.g., $20.5B dividends in 2025Q4) may reflect special dividends or timing, but overall, the bank's capital generation appears sufficient to support its shareholder return policy. The potential change in JCP tax treatment could affect the efficiency of these returns, but current levels seem sustainable.

The cash flow statement does not break out deposit flows, but the bank's ability to maintain a net interest margin of 0.7% in 2026Q2, despite a volatile rate environment, implies that its deposit base is sticky and low-cost. The high proportion of non-interest-bearing deposits, as indicated by the bank's business model, likely supports this. However, the lack of direct data on deposit flows means that any shift in customer behavior would only be visible through changes in funding costs or balance sheet composition, which investors should monitor.