REFILE-UPDATE 1-Itau Unibanco hit by Latam political instability
(Corrects typing error in headline)
By Carolina Mandl
SAO PAULO, Nov 5 (Reuters) – Political instability in Latin America has hit Itaú Unibanco Holding SA’s businesses in the region, Chief Executive Officer Candido Bracher said on Tuesday.
Bracher told reporters that Brazil’s largest private-sector lender slowed down the pace of new loan disbursements in Argentina earlier this year, as it foresaw instability steaming from presidential elections.
After the presidential election of Alberto Fernandez, a Peronist, Itaú will consider the disclosure of his future policies to decide on its business strategy in the country.
“We are waiting to see if Itaú will reduce operations in the country or accelerate,” he said. Itaú’s loan book shrunk 10.1% in the 12 months ended in September, totaling 8.8 billion reais ($2.19 billion).
In Chile, the bank was forced to temporarily shut down 9 of its 200 branches in the country amid violent protests over a hike in metro fares have, Chief Financial Officer Milton Maluhy Filho said.
In spite of that, Bracher said the Chilean bank is “evolving well, progressing constantly.” “We are concerned about the protests, but it seems the worst is behind now,” Bracher said.
Itaú controls Chilean lender Itau CorpBanca, since 2016. The bank is a key part of Itaú Unibanco’s internationalization strategy.
The Sao Paulo-based bank posted on Monday a 10.9% gain in third quarter recurring net income, at 7.165 billion reais, as loan growth and cost control offset higher provisions. Preferred shares in Itau were up 3.02% in morning trading, at 37.50 reais.
Latin America operations outside Brazil are still a small part of the Brazilian lender’s business. The region third-quarter profit came in at 359 million reais.
Last week, Banco Santander SA’s regional head for South America Sergio Rial said the bank was keeping its plans to bolster its Argentina consumer finance division. ($1 = 4.0210 reais) (Reporting by Carolina Mandl; editing by Jason Neely and Louise Heavens)
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