Announcement to the Market - BRGAAP - Results for the 3rd Quarter of 2018

USA - English

• Brazil - Português

BRGAAP

Adjustments and Reclassifications ²

BRGAAP

Adjustments and Reclassifications ²

IFRS

Sep/30/2018

Dec/31/2017

Total Assets

1,613,162

(88,673)

1,524,489

1,503,503

(67,264)

1,436,239

Cash and Cash Equivalents, Compulsory Deposits and Financial Assets At Amortized Cost ^{3 4 6}

1,156,310

(3,864)

1,152,446

1,031,742

28,310

1,060,052

(-) Estimated Loss at Amortized Cost ⁵

(34,278)

(754)

(35,032)

(36,325)

(412)

(36,737)

Financial Assets at Fair Value Through Other Comprehensive Income ⁴

101,963

(53,084)

48,879

103,538

(51,305)

52,233

(-) Expected Loss at Fair Value Through Other Comprehensive Income ⁵

(3,367)

3,281

(86)

(2,892)

2,808

(84)

Financial Assets at Fair Value Through Profit or Loss ⁴

287,413

(28,076)

259,338

308,570

(35,034)

273,536

Tax Assets ⁷

53,780

(6,958)

46,822

59,648

(15,399)

44,249

Investments in Associates and Jointly Controlled Entities, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets

51,341

781

52,122

39,224

3,766

42,990

Total Liabilities

1,474,465

(94,883)

1,379,582

1,364,565

(72,683)

1,291,883

Financial Assets at Amortized Cost ^{3 6}

1,178,680

(89,943)

1,088,737

1,088,090

(63,506)

1,024,584

Financial Assets at Fair Value Through Profit or Loss ⁴

32,063

30

32,093

26,930

281

27,211

Expected Loss (Loan Commitments and Financial Guarantees) ⁵

1,397

2,987

4,384

1,950

2,972

4,922

Provision for Insurance and Pension Plan

193,366

1,090

194,456

180,445

787

181,232

Provisions

18,971

-

18,971

19,736

-

19,736

Tax Liabilities ⁷

10,675

(4,477)

6,198

20,440

(12,604)

7,836

Other Liabilities

39,313

(4,570)

34,743

26,974

(612)

26,362

Total Stockholders' Equity

138,696

6,211

144,907

138,938

5,418

144,356

Non-controlling Interests

13,661

1,367

15,028

12,014

964

12,978

Total Controlling Stockholders' Equity ⁸

125,035

4,844

129,879

126,924

4,454

131,378

¹ BRGAAP represents accounting practices in force in Brazil for financial institutions, according to regulation of the Central Bank of Brazil;

² Resulted from reclassification of assets and liabilities and other effects from the adoption of IFRS;

³ Resulted from the elimination of transactions between parent company and exclusive funds (particularly PGBL and VGBL funds), which are consolidated under IFRS;

⁴ Refer to reclassification of financial assets between measurement categories at fair value and amortized cost;

⁵ Application of criterion for calculation of Expected Loss as set forth by IFRS;

⁶ Difference in accounting, particularly from Foreign Exchange Portfolio, which are now be presented as net effect between Assets and Liabilities;

⁷ Difference in accounting, particularly differed taxes, which are now accounted for as net effect between Assets and Liabilities in each one of the consolidated companies;

⁸ Reconciliation of Controlling Stockholders' Equity is presented in the following table.

Stockholders' Equity *

Result *

Sep/30/2018

3rd Q/18

2nd Q/18

3rd Q/17

jan-sep/18

jan-sep/17

 BRGAAP - Values Attributable to Controlling Stockholders

125,035

6,247

6,244

6,077

18,772

18,143

(a) Expected Loss - Loan and Lease Operations and Other Financial Assets

(316)

189

(459)

(329)

(179)

(516)

(b) Adjustment to Fair Value of Financial Assets

(165)

(129)

(57)

142

(261)

345

(c) Acquisition of Interest in Porto Seguro Itaú Unibanco Participações S.A

444

(2)

(2)

(2)

(6)

(6)

(d) Criteria for Write-Off of Financial Assets

2,256

(17)

(20)

70

8

(39)

(e) Financial Lease Operations

393

(40)

(40)

(34)

(120)

(92)

(f) Other adjustments

2,231

(123)

74

69

40

552

IFRS - Values Attributable to Controlling Stockholders

129,879

6,125

5,740

5,993

18,254

18,387

IFRS - Values Attributable to Minority Stockholders

15,028

206

154

67

528

328

IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders

144,907

6,331

5,894

6,060

18,782

18,715

* Events net of tax effects

(a) In the adoption of IFRS 9, there was a change in the calculation model of incurred loss (IAS 39) to expected loss, considering forward-looking information. On BRGAAP, the concept of Expected Loss is used, pursuant to BACEN Resolution No. 2,682/99⁹

(b) Under IFRS, stocks and quotas classified as permanent investments were measured at fair value and its gains and losses were recorded directly in Result. Additionally, there was a change in the model of classification and measurement of financial assets due to the new categories introduced by IFRS 9

(c) Under IFRS, the effect of accounting at fair value of the acquisition of interest in Porto Seguro Itaú Unibanco Participações S.A. was recognized

(d) Criterion for write-off of financial assets on IFRS considers the recovery behavior

(e) Under IFRS (IAS 17) the financial lease operations are recorded as Fixed Assets,  as a contra-entry of Other Financial Liabilities. Under BRGAAP, as from September 30, 2015, the consideration of these transactions are now recorded in result, in accordance with CMN Resolution No. 3,617/08

(f) Other Adjustments is mainly composed of reversal of Amortizations of Goodwill under  BRGAAP

⁹ More details in the Complete Financial Statements for January to September, 2018

3rd Q/17

BRGAAP

IFRS

Variation

BRGAAP

IFRS

Variation

Result - Attributale to Controlling Stockholders

6,247

6,125

(122)

6,077

5,993

(84)

Exclusion of the Non-Recurring Events

207

1

(206)

177

52

(125)

Goodwill Amortization

206

-

(206)

125

-

(125)

Disposal of IRB shares

-

-

-

(155)

(155)

-

Provisions for Contingencies

-

-

-

70

70

-

Impairment

1

1

-

137

137

-

Recurring Result - Attributable to Controlling Stockholders

6,454

6,126

6,254

6,045