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Actionable news in ITUB: ITAU UNIBANCO HOLDING S.A. AMERICAN DEPOSITARY SHARES,

UPDATE 3-Lending at Itaú seen returning to profitability soon

(Updates share performance in paragraphs 3-5)

By Guillermo Parra-Bernal

SAO PAULO, Aug 1 (Reuters) - Itaú Unibanco Holding SA's lending segment could turn profitable again in coming months, Chief Executive Officer Cândido Bracher said on Tuesday, a sign Brazil's No. 1 lender has detached itself from the nation's harshest credit market downturn in two decades.

Recurring return on equity for the segment hit 14.5 percent in the second quarter, equaling fundraising costs, Bracher told a conference call to discuss quarterly results. Lending ROE "could possibly" top Itaú's cost of capital in the quarters ahead, he said.

The highest lending ROE in at least three years reflected the success of a focus by Bracher's predecessor Roberto Setubal on loan segments offering less risk of default. The indicator, a gauge of segment profitability, came in at 13.2 percent last quarter and 12.9 percent a year earlier.

"This somewhat shows the de-risking of our lending portfolio and how disciplined we are in the process of disbursing credit," Bracher said.

Preferred shares - Itaú's most widely traded class of...


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