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CEO: Itaú sees credit recovery in 2018 in retail, SME lending

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CEO: Itaú sees credit recovery in 2018 in retail, SME lending

Itaú Unibanco Holding SA sees credit growth in Brazil's retail and small and medium-size enterprise segment in 2018 and is not planning any new bank acquisitions during the year, Valor Econômico reported, citing comments made by Candido Bracher, the São Paulo-based lender's CEO.

Despite Itaú posting higher profit for the fourth quarter of 2017 compared to a year earlier, the executive said last year challenged the banking group with falling interest rates, credit still in recovery and lower volumes than expected, Bracher said in a conference call with investors.

However, Itaú expects credit growth to recover to more sustainable levels in 2018 amid an economic improvement in Brazil, especially within lending to individuals and SMEs, according to a report by Folha de S.Paulo, also citing Bracher.

Still, the banking group foresees less loan portfolio growth from big companies as it expects that segment to have a slower recovery. "They have a different dynamic, they have the capital market at their disposal, which was active in 2017 and continues in 2018," the CEO reportedly said.

In 2018, the company expects its total credit portfolio to expand between 4.0% and 7.0%. Itaú's total credit portfolio, including financial guarantees provided and corporate securities, shrank to 593.71 billion Brazilian reais at the end of 2017 from 598.43 billion reais a year earlier.

Bracher ruled out any expansion through acquisitions in 2018, noting that a "great amount of resources" were already used in the purchase of Citibank's Brazilian retail business.

As of Feb. 5, US$1 was equivalent to 3.24 Brazilian reais.