Itau to Boost Europe Operations as Credit Book Increases 24%

Itau Unibanco Holding SA’s wholesale arm expects to increase its European credit portfolio in 2012, extending a 24 percent jump in lending this year as companies from the region invest in Latin America.

“We are expanding the business,” Renato Lulia-Jacob, head of corporate banking for North America, Europe and Asia, said in an interview at Itau’s London headquarters. “We’re bringing more and more people to this office and we’re hiring more people at some other subsidiaries in Europe.”

Itau’s European credit portfolio increased to 4.1 billion euros ($2.3 billion) at the end of September from 3.3 billion euros a year earlier and includes some Latin American assets, such as trade-finance contracts, he said Nov. 18. Lulia-Jacob said he expects lending next year to exceed that total.

Credit to European companies may expand as firms seek stakes in Latin American oil, gas and infrastructure projects, according to projections by Sao Paulo-based Itau, Brazil’s biggest bank by market value.

ArcelorMittal, the world’s biggest steelmaker, will bid for a port concession in the state of Rio de Janeiro with Usinas Siderurgicas de Minas Gerais SA and logistics company Multiterminais, the Luxembourg-based ArcelorMittal said last week. Repsol YPF SA, Spain’s biggest oil company, plans to invest 28 billion euros from 2010 to 2014 to develop oil fields in Venezuela, Bolivia and Algeria.

Latin America’s economy is expected to outpace Europe next year, with expansion of 4.5 percent for the continent as a whole and 3.8 percent in Brazil, according to Bloomberg data. The euro zone is forecast to increase 0.7, Bloomberg data show

Team Expansion

Itau boosted its corporate-banking team in Europe to 145 people at the end of September from 137 the year earlier, Lulia-Jacob said. Most were hired for London, with some in Frankfurt and Paris, he said.

“This market is important to us and we have been doing very well in the region,” Lulia-Jacob said. “If we had more business coming in, we’d be ready to increase the structure and cope with that.”

Itau may consider acquisitions in Europe, he said. “It’s our duty to have our ears and eyes open to whatever happens in the market and analyze whatever comes up to our table,” Lulia-Jacob said.

Parent company Itau Unibanco Holding said total lending increased 23 percent in the third quarter to 382.2 billion reais ($211.5 billion) from a year earlier, according to a regulatory filing on Nov. 1. The bank maintained its outlook for credit expansion of 16 percent to 20 percent this year. Itau’s shares have lost 24 percent this year, compared with an 18 percent decline for the country’s benchmark Bovespa index.

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