Itaú Unibanco Holding S.A. Announcement to the Market - IFRS - Results for the 2nd Quarter of 2020

BRGAAP

Adjustments and Reclassifications²

BRGAAP

Adjustments and Reclassifications²

Jun/30/2020

Dec/31/2019

Total Assets

2,075,122

(121,113)

1,954,009

1,738,713

(101,232)

1,637,481

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

1,405,789

(29,562)

1,376,227

1,164,753

3,535

1,168,288

(-) Provision for Expected Loss at Amortized Cost⁵

(48,286)

3,755

(44,531)

(38,888)

2,859

(36,029)

Financial Assets at Fair Value Through Other Comprehensive Income ⁴

192,368

(85,975)

106,393

166,676

(89,930)

76,746

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

(3,056)

2,942

(114)

(3,162)

3,076

(86)

Financial Assets at Fair Value Through Profit or Loss ⁴

400,834

(9,684)

391,150

345,677

(22,748)

322,929

Tax Assets⁷

77,316

(7,063)

70,253

56,835

(7,875)

48,960

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

50,156

4,475

54,631

46,822

9,851

56,673

Total Liabilities

1,937,304

(126,228)

1,811,076

1,595,865

(107,849)

1,488,016

Financial Assets at Amortized Cost ^{3 6}

1,559,442

(124,021)

1,435,421

1,265,471

(105,641)

1,159,830

Financial Assets at Fair Value Through Profit or Loss ⁴

89,310

645

89,955

48,008

21

48,029

Provision for Expected Loss (Loan Commitments and Financial Guarantees) ⁵

1,080

3,890

4,970

959

3,181

4,140

Provision for Insurance and Pension Plan 

214,890

1,253

216,143

217,216

1,118

218,334

Provisions

19,897

-

19,897

21,454

-

21,454

Tax Liabilities ⁷

9,286

(4,098)

5,188

13,870

(5,979)

7,891

Other Liabilities

43,399

(3,897)

39,502

28,887

(549)

28,338

Total Stockholders' Equity

137,818

5,115

142,933

142,848

6,617

149,465

Non-controlling Interests

11,461

(209)

11,252

10,861

1,679

12,540

126,357

5,324

4,938

136,925

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

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

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

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

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

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

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

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

Stockholders Equity *

Jun/30/2020

2nd Q/20

 1st Q/20 

 2nd Q/19 

 1st H/20 

 1st H/19 

 BRGAAP - Values Attributable to Controlling Stockholders 

126,357

3,424

3,401

6,815

6,825

13,525

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

1,829

249

(136)

(77)

113

(151)

(b) Adjustment to Fair Value of Financial Assets

(696)

(257)

(126)

(6)

(383)

119

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

437

(1)

(1)

(1)

(2)

(2)

(d) Criteria  for Write-Off of Financial Assets 

1,971

65

(21)

(24)

44

(63)

(e) Financial Lease Operations

124

(32)

(37)

(45)

(69)

(81)

(f) Other adjustments

1,659

(1,725)

379

(135)

(1,346)

(73)

IFRS - Values Attributable to Controlling Stockholders 

131,681

1,723

3,459

6,527

5,182

13,274

IFRS - Values Attributable to Minority Stockholders 

11,252

(3,626)

219

163

(3,407)

319

IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders 

(1,903)

3,678

6,690

1,775

13,593

* 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 due to the impairment of goodwill and intangible assets of Itaú Corpbanca and reversal of the Amortization of Goodwill under BRGAAP.

⁹More details in the Complete Financial Statements for the first half of 2020.

R$ million

2nd Q/20

2nd Q/19

BRGAAP

IFRS

BRGAAP

IFRS

Result - Attributable to Controlling Stockholders

3,424

1,723

(1,701)

6,815

6,527

(288)

Exclusion of the Non-Recurring Events

(782)

(2,085)

(1,303)

(219)

(7)

212

Donation to 'Todos pela Saúde'

(834)

(834)

-

-

-

-

Reclassification of investment in IRB

379

379

-

-

-

-

Impairment of goodwill and intangible assets - Itaú Corpbanca

(19)

(1,452)

(1,433)

-

-

-

Goodwill amortization

(206)

-

206

(151)

-

151

Liability Adequacy Test

-

(76)

(76)

(68)

(7)

61

Other

(102)

(102)

-

-

-

-

Recurring Result - Attributable to Controlling Stockholders

3,808

(398)

6,534

(500)