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UPDATE 1-Brazil bank Itau's Q3 profit jumps 35% on lower charges, more lending

(Adds loan book, net interest income and other metrics)

By Carolina Mandl

SAO PAULO, Nov 3 (Reuters) - Brazil's biggest lender Itau Unibanco Holding SA on Wednesday posted a 34.8% jump in its third quarter profit from a year earlier, driven by loans for individuals, lower provisions and higher fee income.

Recurring net income, which excludes one-off items, came in at 6.779 billion reais ($1.22 billion), in line with an estimate compiled by Refinitiv of 6.735 billion reais. Its return on equity, a gauge of profitability, was at 19.7% in the third quarter.

In a statement, Chief Financial Officer Alexsandro Broedel said the bank is on track to deliver a solid performance in 2021 and has put itself on a path to continued growth in 2022.

Itau's loan book rose 5.9% in the quarter and 13.6% year-over-year, mainly helped by car loans, credit cards and mortgages.

The rapid expansion of retail loans alongside higher trading gains resulted in a 15.3% rise in net interest income, to 19.515 billion reais, from a year earlier.

The bank's 90-day loan default ratio rose to 2.6% from 2.3% in the previous quarter. Still, loan loss provisions fell 17.2% year-over-year, to 5.232 billion reais.

Fee income rose 6.4% from a year earlier, even as brokerage XP Inc's results, once incorporated into the fee income line, are no longer consolidated into Itau. It was boosted by credit cards, funds and advisory.

Despite a collective bargaining agreement which secured Brazilian banking sector workers a 11% raise in September, Itau's operating expenses edged up only 1% from a year earlier, well below the double-digit inflation rate in Latin America's biggest economy. ($1 = 5.5525 reais) (Reporting by Carolina Mandl; Editing by Christian Plumb)