UPDATE 1-Itaú Unibanco takes major step in CEO succession plan

Thu Feb 21, 2013 1:20pm EST

* Setubal to relinquish bank CEO role under new plans

* Board wants CEOs to retire at 62 instead of 60

* Itaú eliminates one key post in management shuffle

By Aluísio Alves

SAO PAULO, Feb 21 (Reuters) - Itaú Unibanco Holding SA , Brazil's largest private-sector lender, said Roberto Egydio Setubal agreed to step down as chief executive next year when he reaches the mandatory retirement age of 60.

Setubal will then assume the presidency of the group's holding company for two years, according to a company email sent to Reuters. Itaú Unibanco Holding's board will ask shareholders to approve lifting the retirement age for future CEOs of the commercial bank, Itaú Unibanco SA, to 62 at a meeting on April 19.

The changes are aimed at allowing Setubal to oversee a smooth transition at the helm of the bank he has presided over since 1994. He is a member of one of the families controlling Itaú Unibanco - the other two families include the Villelas and the Moreira Salles.

Itaú, as the commercial bank is branded, faces weak growth in loan disbursements, a focus on less-risky types of credit that charge lower interest rates, and a rapid compression in banking spreads. Setubal said earlier this month that slowing a decline in margins was the bank's biggest challenge.

The bank also said Marcos Lisboa, the senior vice president in charge of insurance and internal controls, would step down. Other executives will take over units under his responsibility, effectively reducing the number of senior vice presidents to nine from 10.

Marcio Schettini, currently the senior vice president for card transactions, will oversee insurance as well as auto and mortgage lending. Chief Financial Officer Caio Ibrahim David was promoted to senior vice president under the changes, the statement added.

Recently, Setubal named Eduardo Vassimon as senior vice president for risk and compliance, replacing Sergio Werlang. Vassimon, who left Itaú in 2008 to pursue other interests, will be in charge of risk modeling and compliance in all areas of Brazil's largest private-sector lender.

A source told Reuters at the time that the dismissal of Werlang as senior vice president for finance, risk and compliance was probably linked to an internal view that the division was responsible for massive credit-related losses in some segments last year. Following his dismissal, Itaú separated the finance unit, led by CFO David, from risk and compliance.

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