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Brazil's Itaú posts biggest quarterly profit as revenue soars

SAO PAULO, Feb 4 (Reuters) - Itaú Unibanco Holding SA , Brazil's largest bank by market value, reported on Tuesday record profit in the fourth quarter that came in way above expectations, as revenue soared and declining defaults led to a sharp reduction in bad loan provisions.

Recurring net income at São Paulo-based lender soared to 4.680 billion reais ($1.95 billion), the highest quarterly-ever profit, according to a securities filing. A Thomson Reuters poll of seven analysts predicted recurring profit, or profit excluding one-time items, of 4.144 billion reais.

Return on equity, or a gauge of profitability that measures how well a bank spends shareholder money, jumped to 23.9 percent in the fourth quarter, the biggest reading for the inidcator in three years. The poll expected ROE, as the indicator is known, of 21 percent.