SAO PAULO, Aug 2 (Reuters) - Brazil's biggest lender Itau Unibanco Holding SA on Monday reported a second-quarter profit 55.6% higher than a year earlier, helped by a sharp drop in provisions for pandemic-related bad loans amid a gradual economic recovery.

Recurring net income, which excludes one-off items, came in at 6.543 billion reais, roughly in line with an estimate of 6.424 billion reais compiled by Refinitiv. The bank also announced a more optimistic outlook for loans and loan loss provisions. (Reporting by Carolina Mandl Editing by Chris Reese)