UPDATE 2-Brazil Unibanco profit up 27.5 pct on loan growth

(Adds details on other banks, mortgage lending, comments)

By Todd Benson

SAO PAULO, May 8 (Reuters) - Brazilian bank Unibanco (UBB.N: Quote, Profile, Research, Stock Buzz)(UBBR11.SA: Quote, Profile, Research, Stock Buzz) said on Thursday its profit jumped 27.5 percent in the first quarter, lifted by strong growth in its loan portfolio.

Net income rose to 741 million reais (438.5 million), compared with 581 million reais a year ago and 827 million reais in the fourth quarter, when its earnings were boosted by the sale of its stakes in the Sao Paulo stock exchange and the BM&F commodities and futures exchange.

Like other banks in Brazil, Unibanco has benefited from increasing demand for consumer credit, which has been expanding at a steady pace as the economy grows at a healthy clip and as domestic interest rates remain near historic lows.

Unibanco's larger domestic rivals, Bradesco (BBDC4.SA: Quote, Profile, Research, Stock Buzz) (BBD.N: Quote, Profile, Research, Stock Buzz) and Itau (ITAU4.SA: Quote, Profile, Research, Stock Buzz)(ITU.N: Quote, Profile, Research, Stock Buzz), also posted big profits in the last week thanks to the credit boom. Bradesco's first-quarter earnings jumped 23 percent to 2.1 billion reais and Itau's rose 7.5 percent to 2.04 billion reais.

Unibanco's credit portfolio expanded 40.7 percent in the first quarter from a year ago and 7.7 percent from the previous quarter, to 66.15 billion reais. The bank's vehicle loan portfolio led that growth, soaring 94.6 percent from the first quarter of 2007.

All banks in Brazil have been aggressively increasing lending for automobile purchases over the last year as car and truck sales surge to one record high after another, fueled by a fast-growing economy and relatively low interest rates.

For now, Unibanco expects its overall credit portfolio to expand by 25 percent this year. But the better-than-expected growth in the first quarter may prompt the bank to raise its forecast later in the year, said Geraldo Travaglia, the bank's corporate vice president.