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(Adds comments on capital inflows to Brazil, paragraph 4)
SAO PAULO, Oct 1 (Reuters) - Brazil's credit markets will continue to sag as economic growth stagnates, with weak loan book growth trends extending well into next year, a senior executive at Itaú Unibanco Holding SA, the nation's largest bank by market value, said on Wednesday.
Even as Brazil's economy expands little, non-performing loan indicators will begin to stabilize at Itaú in coming quarters after repeated declines, Chief Risk Officer Eduardo Vassimon said at the sidelines of an event in São Paulo. Itaú's 90-day default ratio, a benchmark for loan delinquencies in Brazil, fell to 3.4 percent of outstanding loans in the second quarter, the eighth consecutive quarterly decline in the indicator.
The central bank forecasts bank lending in Brazil to grow about 12 percent this year, the slowest pace of expansion in credit in Latin America's largest economy in at least 10 years.
Brazilian banks are prepared for the expected unwinding of monetary stimulus in the United States and other developed economies, which could include an increase in borrowing costs that could curb capital inflows into Brazil, Vassimon said. (Reporting by Aluísio Alves; Writing by Guillermo Parra-Bernal; Editing by Dan Grebler)