July 30, 2019 / 2:09 PM / 3 months ago

UPDATE 1-Brazil's Itau Unibanco loan book to grow at low end of forecast -CFO

(Adds more CEO, CFO comments on voluntary severance program and fee income)

SAO PAULO, July 30 (Reuters) - Brazil’s largest lender, Itau Unibanco Holding SA, sees its loan book growing near the low end of its forecast range in 2019, reflecting the cut in the country’s economic growth estimate, Chief Financial Officer Milton Maluhy told journalists on Tuesday.

At the beginning of the year, Itau said its loan book was likely to grow between 8% and 11% this year.

Itau’s prediction comes as Brazil’s economy has been struggling to rebound and demand for corporate loans has been weak.

The bank’s second-quarter loan book grew by 5.9% from the same period a year earlier, mainly driven by consumer demand for credit cards and auto loans.

Itau also faces a more competitive banking arena, executives said. Partly as a result, fee income growth this year is unlikely to exceed 3.5%, the midpoint of its outlook provided in January, Maluhy said.

Preferred shares in Itau were down 3.1% at 35.88 reais, a four-week low.


Amid rising competition from upstarts such as online lender Banco Inter SA and card processors StoneCo Ltd and PagSeguro Digital Ltd, Itau is cutting costs.

On Monday, the bank launched a voluntary severance program and said it had closed nearly 200 brick-and-mortar branches.

Chief Executive Candido Bracher said up to 200 additional branch closures, focusing on locations where there is overlap or where clients have migrated to online channels, will happen by year end.

Itau’s CEO added that 6,900 employees are eligible for the voluntary severance program, but he did not provide an estimate on how many were likely to take the buyout offer.

On Monday, the bank reported recurring net income of 7.034 billion reais ($1.86 billion), up 10.2% from a year earlier, helped by loans to individuals and trading gains. (Reporting by Carolina Mandl; Editing by Steve Orlofsky)

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