MILAN, Dec 2 (Reuters) - UniCredit (CRDI.MI) is in the process of selecting a loan recovery firm to service a 1 billion euro ($1.1 billion) portfolio of so-called unlikely-to-pay (UTP) loans, a person close to the matter said. UniCredit, which is Italy"s only bank deemed by regulators of global systemic relevance, declined to comment.UTP borrowers are not yet in default and the loans could be recovered by restoring them to health. The recovery process, however, is more complex than for defaulted loans and requires specific skills on the part of debt servicing companies. UniCredit is sending out teasers to the sector"s main players as well smaller peers specialising in UTP loans, the source said, mentioning debt servicing firms doValue (DOVA.MI), Intrum (INTRUM.ST), Gardant, Prelios and Aurora Recovery Capital.The average loan size is of 20 million euros, having increased after two portfolios which the bank was initially considering awarding separately were unified, the person said. Like other Italian lenders, UniCredit in recent years has been steadily reducing its impaired loan burden, which accounted for 4.5% of total loans at the end of September, or 20.7 billion euros ($23 billion). Of these just over 13 billion euros were UTP loans. UniCredit, led since April by CEO Andrea Orcel, is due to unveil a new business plan on Dec. 9. ($1 = 0.8826 euros)