* Zabalza was former head of Santander's Latin America unit
* Portela dealt with soaring defaults, executive departures
* Santander Brasil to report first-quarter results Thursday
SAO PAULO, April 24 Banco Santander Brasil SA named Jesús Zabalza as chief executive on Wednesday as investors continue to question the ability of Brazil's largest foreign lender to stem the impact of declining interest rates and a spike in defaults.
Zabalza, 55, replaces Marcial Portela Álvarez, who had been in charge of the main unit of Spain's Banco Santander SA since December 2010. Portela will preside over Santander Brasil's board, the second time he will hold the position in 3 1/2 years, according to a securities filing.
The São Paulo-based lender, which reports first-quarter earnings early on Thursday, has struggled with two years of sub-par economic growth in Brazil that stoked loan delinquencies, as well as with a government campaign to force banks to trim borrowing costs that has weighed on revenue. The stock is down 4.7 percent in the past year.
Spain-born Zabalza is an industrial engineer who was previously a general director of Santander's Latin American commercial division overseeing the bank's units in Argentina, Chile, México, Perú, Puerto Rico and Uruguay.
In the past quarter, investors balked at Portela's strategy of aggressively trimming bad-loan provisions to bolster profits and offset the impact of lower revenue and rising delinquencies. During his stint, Portela, 68, also had to deal with departures of some key lieutenants, such as José Berenguer, who quit as head of retail banking and is now head of JPMorgan Chase & Co's Brazilian unit.
Santander Brasil is forecast to post a 14.2 percent quarter-on-quarter drop in profit excluding one-time items to 1.33 billion reais ($661 million), according to estimates provided by 10 analysts polled by Thomson Reuters. The poll predicts strong loan-book growth, rising nonperforming loans and slightly higher provisions.
Santander Brasil and peers have failed to accurately predict default trends in the past two years, leading them to increase bad-loan provisions. But, unlike rivals, Santander Brasil saw delinquencies rise in the fourth quarter, and forward-looking indicators signaled this trend would continue.