(Adds CFO comments, profitability, loan book growth) SAO PAULO, Aug 2 (Reuters) - Brazil’s biggest lender, Itau Unibanco Holding SA, on Monday reported a jump in second-quarter profits and set a more optimistic outlook for the year amid the country’s gradual economic recovery. Recurring net income, which excludes one-off items, came in at 6.543 billion reais ($1.26 billion), roughly in line with an estimate of 6.424 billion reais compiled by Refinitiv and up 55.6% from a year earlier. As the Brazilian economy has recovered from the pandemic at a faster pace than initially predicted, the bank revised its outlook for loan book growth to 11.5% from 9.5%. The bank also indicated that losses with bad loans are not materializing as anticipated. It cut its forecast for loan-loss provisions to a maximum of 22 billion reais from 24.3 billion reais. Chief Financial Officer Alexsandro Broedel said in a statement that the bank’s performance is in line with Brazil’s economic recovery. Loan-loss provisions plunged 39.6% from a year earlier, to 4.7 billion reais, as borrowers are repaying debts more easily, encouraged by a gradual economic recovery. Vaccination roll-out has allowed local governments to relax lockdowns, following a drop in both cases and death tolls. Asset quality remained mostly level, with the 90-day default ratio stable from the previous quarter at 2.3%. Still, its loan book came in flattish from March, as its corporate loan and credit portfolios outside Brazil fell. Profit was also boosted by fee income. It rose 14.4% from a year earlier, boosted by debit and credit cards, asset management and Brazil’s capital markets boom. Return on equity was at 18.9%, up 0.4 percentage point from the previous quarter. $1 = 5.1747 reais Reporting by Carolina Mandl; Editing by Chris Reese and Dan Grebler Our Standards: The Thomson Reuters Trust Principles.