Brazil's Itau posts in-line quarterly profit, trims fee and insurance outlook

SAO PAULO, Aug. 4 (Reuters) - Brazil's Itau Unibanco posted an 8% rise in second-quarter recurring net profit on Tuesday, broadly matching market expectations, as Latin America's largest private-sector lender expanded lending while keeping bad loans in check.

Recurring net profit totaled 12.41 billion reais ($2.42 billion) in the April-to-June period, close to the 12.53 billion reais forecast by analysts polled by LSEG. Return on equity, a key measure of profitability, rose to 24.3% from 23.3% a year earlier.

Itau lowered its full-year outlook for fee income and insurance results, now forecasting growth of 2% to 5%, down from its previous guidance of 5% to 9%.

The downgrade mainly reflected "greater volatility in the capital markets than projected at the beginning of the year", it said.

Citi analysts said the fee guidance cut was unlikely to materially affect earnings estimates, adding that Itau had delivered another solid quarter.

Itau's total loan portfolio grew about 10% to 1.5 trillion reais, while the 90-day non-performing loan ratio was unchanged at .