Itaú Unibanco Holding S.A. - Announcement to the Market - IFRS - Results for the 2nd Quarter of 2019

USA - English

• Brazil - Português

R$ million

BRGAAP

Jun/30/2019

Dec/31/2018

Total Assets

1,678,378

(112,067)

1,566,311

1,649,614

(96,817)

1,552,797

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

1,178,480

(10,790)

1,167,690

1,172,276

(12,837)

1,159,439

(-) Provision for Expected Loss at Amortized Cost ⁵

(31,952)

261

(31,691)

(33,326)

(47)

(33,373)

Financial Assets at Fair Value Through Other Comprehensive Income ⁴

120,153

(66,286)

53,867

105,065

(55,657)

49,408

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

(3,224)

3,138

(86)

(3,441)

3,356

(85)

Financial Assets at Fair Value Through Profit or Loss ⁴

318,080

(36,592)

281,488

315,383

(28,737)

286,646

Tax Assets ⁷

49,012

(8,633)

40,379

50,242

(7,412)

42,830

Investments in Associates and Joint Ventures, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets

47,829

6,835

54,664

43,415

4,517

47,932

Total Liabilities

1,540,126

(117,628)

1,422,498

1,505,490

(103,159)

1,402,331

Financial Assets at Amortized Cost ^{3 6}

1,224,112

(110,254)

1,113,858

1,220,233

(100,499)

1,119,734

Financial Assets at Fair Value Through Profit or Loss ⁴

35,842

102

35,944

27,675

36

27,711

Expected Loss (Loan Commitments and Financial Guarantees) ⁵

1,253

2,830

4,083

1,265

2,527

3,792

Reserves for Insurance and Pension Plan

208,393

1,294

209,687

199,995

1,192

201,187

Provisions

18,164

-

18,164

18,613

-

18,613

Tax Liabilities ⁷

12,764

(7,693)

5,071

10,915

(5,631)

5,284

Other Liabilities

39,597

(3,906)

35,691

26,794

(784)

26,010

Total Stockholders' Equity

138,252

5,561

143,813

144,124

6,342

150,466

Non-controlling Interests

12,515

1,384

13,899

12,367

1,317

13,684

Total Controlling Stockholders' Equity ⁸

125,737

4,177

129,914

131,757

5,025

136,782

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 deffered 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.

 2nd Q/19

 1st Q/19

 2nd Q/18

 1st H/19

 1st H/18

 BRGAAP - Values Attributable to Controlling Stockholders

125,737

6,815

6,710

6,244

13,525

12,524

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

443

(77)

(74)

(459)

(151)

(368)

(b) Adjustment to Fair Value of Financial Assets

(1,881)

(6)

125

(57)

119

(132)

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

441

(1)

(1)

(2)

(2)

(4)

(d) Criteria for Write-Off of Financial Assets

2,153

(24)

(39)

(20)

(63)

25

(e) Financial Lease Operations

284

(45)

(36)

(40)

(81)

(80)

(f) Other adjustments

2,737

(135)

62

74

(73)

164

IFRS - Values Attributable to Controlling Stockholders

129,914

6,527

6,747

5,740

13,274

12,129

IFRS - Values Attributable to Minority Stockholders

13,899

163

156

154

319

322

IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders

143,813

6,690

6,903

5,894

13,593

12,451

* Events net of tax effects

Differences between IFRS and BRGAAP Financial Statements

(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. 2,682/99.⁹

(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 expectative.

(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^th,  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 the first half of 2019.

R$ million

BRGAAP

IFRS

BRGAAP

IFRS

Variation

Result - Attributable to Controlling Stockholders

6,815

6,527

(288)

6,244

5,740

(504)

Exclusion of the Non-Recurring Events

219

7

(212)

138

17

(121)

Goodwill Amortization

151

-

(151)

150

-

(150)

Civil Lawsuits - Economic Plans

-

-

-

7

7

-

Impairment

-

-

-

10

10

-

Liabilities Adequacy Test - LAT

68

7

(61)

(29)

-

29

Recurring Result - Attributable to Controlling Stockholders

7,034

6,534

6,382

5,757