UPDATE 2-Brazilian bank Itau to sell Argentine business to Banco Macro

(Adds details on Itau's Argentine operations in paragraphs 4, 7-8)

SAO PAULO, Aug 24 (Reuters) - Brazilian bank Itau Unibanco has signed a binding agreement to sell its business in Argentina to Banco Macro for about 250 million reais ($51.47 million).

Itau, Latin America's largest bank, said in a securities filing it expects the sale to have a non-recurring negative impact of 1.2 billion reais on its results, which will be recognized once the deal is completed.

The Brazilian bank had said in June it was in preliminary talks with Macro for the sale of its Argentine operations, a move that comes as the neighboring country grapples with a severe economic crisis.

Itau's operations in Argentina are moderately sized in terms of personnel and branches, but its loan portfolio in the country is relatively small when compared with other markets such as Chile and Colombia.

The bank said on Thursday that after the transaction is completed it will continue serving corporate clients, both local and regional, and individuals in the wealth and private banking segments in Argentina through its foreign subsidiaries.

"It will also submit a request, pending approval by regulators in Argentina and Brazil, to open a representative office in Argentina to carry out the activities allowed by its license and other conditions of the deal," Itau added.

Itau's loan book in Argentina totaled 9.1 billion reais, according to Itau's latest quarterly report, just over 4% of its international book but less than 0.8% its total 1.15 trillion-real portfolio.

Itau Unibanco has roughly 1,500 employees in Argentina, more than Paraguay and Uruguay but less than in Chile and Colombia. It has 71 branches in Argentina, roughly the same as in Colombia but significantly below the 179 in Chile. ($1 = 4.8574 reais) (Reporting by Gabriel Araujo; Editing by Kylie Madry and Jane Merriman)