Brazil's Itau sees loan book growth slowing, unveils dividends after in-line Q4

Adds details of Itau's projections and earnings in paragraphs 3, 5 and 7, additional announcements in paragraph 9 and analysts in comments in paragraphs 4 and 10-11

SAO PAULO, Feb 5 (Reuters) - Brazilian bank Itau Unibanco ITUB4.SA expects its total loan book growth to slow this year, it said on Wednesday, as it posted as-expected quarterly profit growth and announced 15 billion reais ($2.59 billion) in extraordinary dividends.

Latin America's largest private lender by total assets said it expects its total credit portfolio to grow between 4.5% and 8.5% in 2025, after its portfolio size leaped by 15.5% last year.

Net interest income from clients, which measures the difference between what it earns on loans and pays out on deposits, should grow between 7.5% and 11.5% in 2025, the lender said, accelerating from a 7.1% increase last year.

UBS BB analyst Thiago Batista calculated that Itau's guidance, which include others estimates such as provisions and service revenues, indicate 2025 earnings of 45 billion reais at the midpoint, below the 46 billion reais expected by the market.

Itau did not give further details on what it based its projections. An analyst call with its management is scheduled for early Thursday local time.

Itau posted a net recurring profit of 10.88 billion reais ($1.88 billion) for the quarter ended in December, up nearly 16% year-on-year and in line with an estimate of 10.89 billion reais from analysts polled by LSEG.

Its return on equity, a gauge of profitability, stood at 22.1% in the quarter, up from 21.1% a year earlier, but down from 22.7% in the third quarter. The 90-day default ratio fell 0.4 percentage points from a year earlier to 2.4%.

Earlier on Wednesday, Itau's rival Santander Brasil SANB11.SA kicked-off earnings season for Brazilian largest banks, sending its shares 6% higher.

In addition to the dividends, Itau also announced on Wednesday further 3 billion reais payout to shareholders through a share buyback and the cancellation of shares, as well as an issuance of a share bonus for every 10 owned by shareholders.

JPMorgan analysts led by Yuri Fernandes said Itau's guidance and dividends came shy of expectations, with earnings mostly in-line.

"We expect a lackluster reaction tomorrow as expectations were high post Santander Brasil results," they wrote in a note to clients.

($1 = 5.7973 reais)