UPDATE 3-Itaú sets ambitious provision, income goals despite Brazil slump

martes 3 de febrero de 2015 13:18 GYT

(Rewrites throughout with CEO comments, share performance)

By Guillermo Parra-Bernal

SAO PAULO Feb 3 (Reuters) - Itaú Unibanco Holding SA , Brazil's largest bank by market value, plans to increase interest income at a faster pace than rivals and keep loan-loss provisions stable this year, evidence Itaú could boost profit even if the economy contracts.

Interest income may rise between 10 percent and 14 percent this year, faster than projected loan book growth, Itaú executives said on Tuesday - faster than rival Banco Bradesco SA's 6 percent-to-10 percent forecast for the indicator.

Guidance for provisions was left unchanged at between 13 billion reais and 15 billion reais ($4.78 billion and $5.5 billion) from last year. Taking into account the top of that range, provision growth would more than offset loan book growth expectations, a sign of prudence as activity falters, executives said.

The goal for provisions is realistic, even if activity slumped further and the impact of a corruption probe into state-controlled oil producer Petrobras and some contractors fanned defaults, Itaú Chief Executive Officer Roberto Setubal said at an event to discuss fourth-quarter earnings.

Itaú has no plans to book one-time provisions, as it did in the fourth quarter, Setubal said.

"We are prepared for a very challenging scenario," Setubal said.

Rising interest income and lower provisions helped Itaú post record profit in the fourth quarter. Recurring net income, or profit before one-time items, totaled 5.660 billion reais ($2.1 billion), ahead of the 5.367 billion reais forecast in a Reuters poll.   Continuación...