SAO PAULO, Nov 2 (Reuters) - The loan exposure of Brazil's two largest private-sector banks to former billionaire Eike Batista's debt-laden Grupo EBX is falling, UBS Securities said in a report, signaling that the risk of additional bad loan provisions or significant writedowns is declining.

Collateral put forth by Batista and EBX, a mining, energy and logistics conglomerate, is proving enough to reduce the probability of losses at Itaú Unibanco Holding SA and Banco Bradesco SA, London-based strategist Philip Finch said in a client note.

A 3.5 billion reais ($1.5 billion) wave of takeover activity targeting some of Grupo EBX's main companies is also helping to reduce bank exposure risk to EBX, UBS said.

"We do not expect higher provisions on coming quarters while guarantees could reduce potential losses," Finch wrote in the note, which was released late on Friday. Even after Bancpo Santander Brasil SA's exposure to Grupo EBX rose by the end of June, "we think earnings risk for these banks is limited."

The banks that financed the rise of Batista, who just 18 months ago was the world's seventh-richest man, led the struggling group's debt refinancing efforts and were able to limit potential losses, as opposed to bondholders who could be left with very little.

Itaú and peers refinanced maturing debt and stretched out debt repayments for some EBX companies with the condition of getting more collateral in the form of assets and additional stock, a source with knowledge of the situation told Reuters in July.

The note comes a few days after OGX Petróleo e Gás Participações SA, the oil producer that for years was Batista's and Grupo EBX's flagship company, filed for creditor protection in a Brazilian court. The decision fanned concerns among investors over the financial health of Batista-controlled companies, the combined or crossed loan exposure of local listed lenders to companies in Grupo EBX and the risk of additional provisioning.

Calls to media officials at Rio de Janeiro-based Grupo EBX for comment were not immediately answered.

According to estimates by Finch and his team, combined loan exposure by Itaú, Bradesco and Santander Brasil to OGX, Eneva SA , which was formerly known as MPX Energia SA and now has E.ON SE as its largest shareholder, LLX Logística SA, shipbuilder OSX Brasil SA and CCX Carvão da Colômbia SA, fell to 1.93 billion reais at the end of June, from 2.27 billion reais in March.

Still, the number may be underestimated due to the difficulty of knowing how much of that exposure is collateralized. Investors have for months balked at Grupo EBX's complex structure, its appetite for debt and, in the case of banks, the existence of guarantees and undrawn, committed credit lines.