Brazilian Itaú Unibanco hit by the turmoil of Argentina and Chile

(Add comments and analyst context, update shares) By Carolina Mandl SAO PAULO, Nov. 5 (Reuters) - Political instability in Argentina and Chile is affecting Itaú Unibanco Holding SA's business beyond its local Brazilian market, chief executive Cándido Bracher said Tuesday. Bracher told reporters that Itaú, Brazil's largest private sector lender, slowed the pace of new loan disbursements in Argentina earlier this year, as it foresaw the instability stemming from the presidential elections there last month. After the victory of the Peronist Alberto Fernández, who shook investors, Itaú plans to weigh his policies carefully once he is in office to decide on his business strategy. We are waiting to decide whether Itaú will reduce operations in the country or accelerate, Bracher said. Itaú's loan portfolio in Argentina decreased 10.1% in the 12 months ended September, totaling 8.8 billion reais ($ 2.19 billion). In Chile, the bank was forced to temporarily close nine of its 200 branches amid violent protests over a series of problems related to income inequality, said CFO Milton Maluhy Filho. Despite that, Bracher said, the Chilean bank is evolving well, constantly making progress. We are worried about the protests, but it seems that the worst is over, Bracher said. On Monday, Chile's new finance minister, Ignacio Briones, reduced the country's economic growth estimate for 2019 from 2% to 2.2% from 2.6%. Itaú has controlled Itau CorpBanca, the fourth largest commercial bank in Chile, since 2016. Latin American operations outside Brazil remain a small part of the lender's business, but Bracher has repeatedly said that the bank aims to be more international. Its third quarter earnings for the region reached 359 million reais, 3.5% less. The Sao Paulo-based bank on Monday posted a 10.9% gain in recurring net income for the third quarter, to 7.165 million reais, as loan growth and cost controls offset the higher provisions. Preferred shares in Itaú rose 1.5% in morning operations, to 37 reais. The results benefited from an acceleration in loan growth and better commission revenues, which offset higher provisions and lower insurance revenues, Goldman Sachs analysts said in a note to customers. Last week, the regional head of Banco Santander SA for South America, Sergio Rial, said the bank maintained its plans to strengthen its consumer finance division in Argentina. ($ 1 = 4.0210 reais) (Report by Carolina Mandl; edition of Louise Heavens and Steve Orlofsky) This story has not been edited by The Times of India and is automatically generated from a syndicated feed to which we subscribe. (This story has not been edited by timesofindia.com and is automatically generated from a syndicated feed to which we subscribe.)

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