However, the bank stated that it would likely keep its return on equity (a measure of profitability) at around 20%.

The bank stated that its loan book will likely grow between 9 and 12 percent, which is below the expansion of last year. However, the bank said that its net interest income should rise at a faster rate, between 20.5% to 23.5%.

Lender-loss provisions will likely rise by 9 billion reais to meet the increased economic pressures on consumers and businesses this year. According to the bank, cash set aside for bad loans will likely be between 25 billion and 29 billion reais.

Itau sees Brazil's inflation as pushing up its operating expenses, which are expected rise between 3.5% to 6.5%. The lender was able last year to control double-digit inflation while its expenses grew only 2%.

Itau anticipates that its fee income will rise between 3.5% to 6.5% despite fierce competition from banks and fintechs.

"Our outlook for 2022 factors into our keeping on a recovering

"path and the positive results achieved in 2021," Milton Maluhy, Chief Executive, stated in a statement.

QUARTERLY PERFORMANCE

Itau reported Thursday a stronger-than-expected fourth quarter profit. This was mainly due to strong gains in consumer lending as well as in its insurance unit.

Recurring net income, which excludes some one-off items and rose 32.9% over a year ago to 7.159 billion Brazilian reais ($1.36billion), higher than the consensus estimate of 6.828 Billion reais, compiled by Refinitiv.

The 90-day default rate for loans by the bank was 2.5%, which was approximately in line with that of the third quarter.

Its net interest income increased by 20.6% compared to a year ago, to 21.2 billion Brazilian reais.

($1 = 5.2496 reais)