Itaú Unibanco Holding S.A.: Announcement to the Market

Comparison between BRGAAP¹ and IFRS

R$ million

BRGAAP

BRGAAP

Sep/30/2020

Dec/31/2019

Total Assets

2,110,120

(111,836)

1,998,284

1,738,713

(101,232)

1,637,481

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

1,452,126

(22,318)

1,429,808

1,164,753

3,535

1,168,288

(-) Provision for Expected Loss at Amortized Cost⁵

(50,208)

3,506

(46,702)

(38,888)

2,859

(36,029)

Financial Assets at Fair Value Through Other Comprehensive Income ⁴

183,882

(90,073)

93,809

166,676

(89,930)

76,746

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

(3,445)

3,327

(118)

(3,162)

3,076

(86)

Financial Assets at Fair Value Through Profit or Loss ⁴

396,328

(4,011)

392,317

345,677

(22,748)

322,929

Tax Assets⁷

79,345

(6,874)

72,471

56,835

(7,875)

48,960

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

52,092

4,607

56,699

46,822

9,851

56,673

Total Liabilities

1,967,754

(117,398)

1,850,356

1,595,865

(107,849)

1,488,016

Financial Assets at Amortized Cost ^{3 6}

1,594,801

(113,812)

1,480,989

1,265,471

(105,641)

1,159,830

Financial Assets at Fair Value Through Profit or Loss ⁴

78,569

449

79,018

48,008

21

48,029

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

1,030

3,651

4,681

959

3,181

4,140

Provision for Insurance and Pension Plan 

215,085

1,253

216,338

217,216

1,118

218,334

Provisions

19,789

(1)

19,788

21,454

-

21,454

Tax Liabilities ⁷

10,894

(4,251)

6,643

13,870

(5,979)

7,891

Other Liabilities

47,586

(4,687)

42,899

28,887

(549)

28,338

Total Stockholders' Equity

142,367

5,562

147,928

142,848

6,617

149,465

Non-controlling Interests

11,808

295

12,103

10,861

1,679

12,540

Total Controlling Stockholders' Equity ⁸

130,559

5,267

135,825

131,987

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 deffered 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. 

3rd Q/20

2nd Q/20

3rd Q/19

 jan-sep/20 

 jan-sep/19 

 BRGAAP - Values Attributable to Controlling Stockholders 

130,559

4,492

3,424

5,576

11,317

19,101

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

1,854

25

249

(240)

138

(391)

(b)Adjustment to Fair Value of Financial Assets

(1,059)

(8)

(257)

(108)

(391)

11

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

436

(1)

(1)

(1)

(3)

(3)

(d)Criteria  for Write-Off of Financial Assets 

1,922

(49)

65

(190)

(5)

(253)

(e)Financial Lease Operations

99

(25)

(32)

(30)

(94)

(111)

(f) Other adjustments

2,015

298

(1,725)

158

(1,048)

85

IFRS - Values Attributable to Controlling Stockholders 

135,825

4,732

1,723

5,165

9,914

18,439

IFRS - Values Attributable to Minority Stockholders 

12,103

367

(3,626)

340

(3,040)

659

IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders 

147,928

5,099

(1,903)

5,505

6,874

19,098

* 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 in the 2nd Q/20 and reversal of the Amortization of Goodwill under BRGAAP.

⁹More details in the Complete Financial Statements for January to September, 2020.

R$ million

3rd Q/20

3rd Q/19

BRGAAP

IFRS

Variation

BRGAAP

IFRS

Variation

Result - Attributable to Controlling Stockholders

4,492

4,732

240

5,576

5,165

(411)

Exclusion of the Non-Recurring Events

(539)

(363)

176

(1,580)

(1,431)

149

Mark to market of collateralized securities

(346)

(346)

-

-

-

-

Goodwill amortization

(169)

-

169

(149)

-

149

Voluntary severance program

-

-

-

(1,431)

(1,431)

-

Other

(24)

(17)

7

-

-

-

Recurring Result - Attributable to Controlling Stockholders

5,030

5,095

65

6,596