Brazil Itau CEO sees fast credit portfolio growth

By Terry Wade

SAO PAULO, Brazil (Reuters) - The head of Banco Itau (ITAU4.SA: Quote, Profile, Research, Stock Buzz)(ITU.N: Quote, Profile, Research, Stock Buzz), Brazil's second-largest private sector bank, expects strong credit growth in Latin America's biggest country thanks to improving economic fundamentals and a maturing democracy.

He said presidential elections in October will not rattle the economy, unlike the vote in 2002, and the sluggish economy should gain steam during the next few years regardless of who is elected president.

"I have no worry about the election," said Roberto Setubal, who spoke at the Reuters Latin America summit on Monday.

In 2002, Setubal made a surprising speech at the International Monetary Fund where he correctly forecast that Luiz Inacio Lula da Silva, a former union boss, would win the presidency and implement responsible economic policies.

Since then, local financial markets have soared, inflation has slowed and current account surpluses have swollen.

Investors believe Lula, who is expected to seek a second term, or his main opponent, Sao Paulo Gov. Geraldo Alckmin, would keep austere economic and fiscal policies in place.

"In a democratic regime, people want economic growth, jobs and stability, independent of ideology," Setubal said.

Setubal puts his money where his mouth is -- Itau normally contributes to campaigns by candidates of all political stripes because it "believes in democracy, despite all of its difficulties," he said.  Continued...