Exhibit 99.1

CONTENTS

Management Discussion & Analysis	03
Executive Summary	05
Income Statement and Balance Sheet Analysis	15
Managerial Financial Margin	16
Loan Portfolio	18
Result from Loan Losses	22
Banking Service Fees, Income from Banking Charges and Result from Insurance, Pension Plan and Premium Bonds	25
Insurance, Pension Plan and Premium Bonds Operations	28
Non-interest Expenses	33
Tax Expenses for ISS, PIS, Cofins and Others	35
Income Tax and Social Contribution on Net Income	35
Other Balance Sheet Information	36
Balance Sheet by Currency	39
Capital Ratios	40
Risk Management	42
Business Analysis	43
Segment Analysis	45
Activities Abroad	50
Additional Information	57
Report of Independent Auditors	63
Complete Financial Statements	65

It should be noted that the managerial financial statements relating to prior periods may have been reclassified for comparison purposes.

The tables in this report show the figures in millions. Variations and totals, however, are calculated in units. Therefore, there may be differences due to rounding.

Future expectations arising from the reading of this analysis should take into consideration the risks and uncertainties that involve any activities and that are outside the control of the companies of the conglomerate (political and economic changes, volatility in interest and foreign exchange rates, technological changes, inflation, financial disintermediation, competitive pressures on products, prices and changes in tax legislation, among others).

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Itaú Unibanco Holding S.A. 04

Management Discussion & Analysis Executive Summary

Itaú Unibanco Holding S.A. (Itaú Unibanco) information and financial indicators are presented below.

Highlights

In R$ millions (except where indicated), end of period	3Q15			2Q15			3Q14			9M15			9M14
Results
Recurring Net Income		6,117			6,134			5,457			18,059			14,959
Net Income		5,945			5,984			5,404			17,662			14,722
Operating Revenues (1)		26,945			25,339			23,305			77,230			66,086
Managerial Financial Margin (2)		17,595			16,235			14,369			49,793			40,450
Shares
Recurring Net Income per share (R$)(3)		1.03			1.02			0.91			3.04			2.49
Net Income per share (R$) (3)		1.00			1.00			0.90			2.98			2.45
Number of Outstanding Shares at the end of period – in thousands (4)		5,950,089			5,994,053			6,023,456			5,950,089			6,023,456
Average price of non-voting share on the last trading day of the period (R$) (4)		26.21			31.15			30.92			26.21			30.92
Book Value per Share (R$)		17.37			16.80			15.07			17.37			15.07
Dividends and Interest on Own Capital net of taxes (5)		1,351			1,205			981			3,875			2,941
Dividends and Interest on Own Capital net of taxes (5)  per share (R$) (*)		0.23			0.20			0.16			0.65			0.49
Market Capitalization (6)		155,952			186,742			186,234			155,952			186,234
Market Capitalization (6) (US$ millions)		39,254			60,181			75,983			39,254			75,983
Performance
Recurring Return on Average Equity – Annualized (7)		24.0	%		24.8	%		24.7	%		24.5	%		23.7	%
Return on Average Equity – Annualized (7)		23.3	%		24.2	%		24.5	%		23.9	%		23.3	%
Recurring Return on Average Assets – Annualized (8)		1.9	%		1.9	%		1.9	%		1.9	%		1.8	%
Return on Average Assets – Annualized (8)		1.9	%		1.9	%		1.9	%		1.9	%		1.8	%
Solvency Ratio - Prudential Conglomerate (BIS Ratio) (9)		16.1	%		17.2	%		16.6	%		16.1	%		16.6	%
Common Equity Tier I		12.3	%		13.2	%		12.1	%		12.3	%		12.1	%
Estimated BIS III (Common Equity Tier I) - Full Implementation of BIS III (10)		12.4	%		12.7	%		11.6	%		12.4	%		11.6	%
Annualized Net Interest Margin of Spread-Sensitive Operations  (11)		10.8	%		10.8	%		10.2	%		10.7	%		10.3	%
Annualized Net Interest Margin with Clients (11)		10.9	%		10.7	%		10.3	%		10.7	%		10.3	%
Annualized Net Interest Margin of Spread-Sensitive Operations after Provision for Credit Risk (11)		6.9	%		7.1	%		7.1	%		6.9	%		6.2	%
Annualized Net Interest Margin with Clients after Provision for Credit Risk (11)		7.4	%		7.4	%		7.6	%		7.3	%		6.6	%
Nonperforming Loans Index (NPL over 90 days)		3.3	%		3.3	%		3.2	%		3.3	%		3.2	%
Nonperforming Loans Index (NPL 15 to 90 days)		3.0	%		3.0	%		2.6	%		3.0	%		2.6	%
Coverage Ratio (Provision for Loan Losses/NPL over 90 days)		214	%		187	%		181	%		214	%		181	%
Efficiency Ratio (ER) (12)		44.2	%		42.9	%		46.0	%		43.5	%		47.2	%
Risk-Adjusted Efficiency Ratio (RAER) (12)		63.1	%		61.8	%		61.8	%		62.5	%		63.4	%
Balance Sheet
Total Assets		1,322,693			1,230,510			1,157,557
Total Loan Portfolio, including Sureties and Endorsements		552,342			531,706			503,345
Loan Portfolio (A)		477,198			457,463			428,832
Sureties, Endorsements and Guarantees		75,143			74,243			74,514
Deposits + Debentures + Securities + Borrowings and Onlending (B) (13)		618,839			562,775			560,207
Loan Portfolio/Funding (A/B)		77.1	%		81.3	%		76.5	%
Stockholders' Equity		103,353			100,711			90,776
Other
Assets Under Administration		749,755			709,111			646,247
Total Number of Employees		91,437			91,968			94,164
Brazil		84,490			85,028			87,132
Abroad		6,947			6,940			7,032
Branches and CSBs – Client Service Branches		5,012			5,003			5,042
ATM – Automated Teller Machines (14)		26,454			26,709			27,960
Indicators
EMBI Brazil Risk		447			302			239			447			239
CDI rate – In the Period (%)		3.4	%		3.1	%		2.7	%		9.6	%		7.8	%
Dollar Exchange Rate – Quotation in R$		3.9729			3.1026			2.4510			3.9729			2.4510
Dollar Exchange Rate – Change in the Period (%)		28.1	%		-3.3	%		11.3	%		49.6	%		4.6	%
Euro Exchange Rate – Quotation in R$		4.4349			3.4603			3.0954			4.4349			3.0954
Euro Exchange Rate – Change in the Period (%)		28.2	%		0.4	%		2.7	%		37.4	%		-4.2	%
IGP-M – In the Period (%)		1.9	%		2.3	%		-0.7	%		6.3	%		1.8	%

(*) The number of outstanding shares was adjusted to reflect the share bonus of 10% granted on June 05, 2014 and July 17, 2015.

Note: (1) Operating Revenues are the sum of Managerial Financial Margin, Banking Service Fees and Income from Banking Charges, Other Operating Income and Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses; (2) Described on pages 15 to 17; (3) Calculated based on the weighted average number of outstanding shares; (4) The number of outstanding shares was adjusted to reflect the share bonus of 10% granted on June 05, 2014 and July 17, 2015; (5) IOC – Interest on Capital. Declared amounts paid/accrued; (6) Total number of outstanding shares (common and non-voting shares) multiplied by the average price of non-voting share on the last trading day in the period; (7) Annualized Return was calculated by dividing Net Income by Average Stockholders’ Equity. The quotient of this division was multiplied by the number of periods in the year to derive the annualized rate. The calculation bases of returns were adjusted by the amount of dividends that has not yet been approved at shareholders’ or Board meetings, proposed after the balance sheet closing date; (8) Return was calculated by dividing Net Income by Average Assets. The quotient of this division was multiplied by the number of periods in the year to derive the annualized rate. (9) Up to the fourth quarter of 2014, this ratio was calculated based on the financial conglomerate; (10) Takes into consideration the use of tax credit; (11) Does not include financial margin with the market. See details on page 17; (12) For further details on the calculation methodology of both Efficiency and Risk-Adjusted Efficiency ratios, please refer to page 34; (13) As described on page 38; (14) Includes ESBs (electronic service branches) and service points at third parties’ establishments.

Itaú Unibanco Holding S.A. 05

Management Discussion & Analysis Executive Summary

Net Income and Recurring Net Income

Our recurring net income totaled R$6,117 million in the third quarter of 2015 as a result of the elimination of non-recurring events, which are presented in the table below, from net income of R$5,945 million for the period.

Non-Recurring Events Net of Tax Effects

In R$ millions	3Q15			2Q15			3Q14			9M15			9M14
Recurring Net Income		6,117			6,134			5,457			18,059			14,959
Non-Recurring Events		(172	)		(150	)		(53	)		(398	)		(237	)
Social Contribution Rate Increase (a)		3,988			-			-			3,988			-
Complementary Provision for Loan Losses (b)		(2,793	)		-			-			(2,793	)		-
Financial Leasing Accounting Change (c )		(520	)		-			-			(520	)		-
Contingencies Provision (d)		(540	)		(86	)		(15	)		(668	)		(88	)
Pension Fund (e)		(130	)		-			-			(130	)		-
Goodwill Amortization (f)		(34	)		(35	)		(38	)		(130	)		(123	)
Program for Settlement or Installment Payment of Taxes (g)		(1	)		14			37			41			37
Impairment (h)		-			(43	)		-			(43	)		-
Criteria Adjustment - Credicard (i)		-			-			(37	)		-			(37	)
Porto Seguro (j)		-			-			-			-			(60	)
IRB (k)		-			-			-			-			33
Other		(143	)		-			-			(143	)		-
Net Income		5,945			5,984			5,404			17,662			14,722

Note: Impacts of the non-recurring events, described above, are net of tax effects – further details are presented in Note 22-K of the Financial Statements.

Non-Recurring Events

(a) Social Contribution Rate Increase: Effect on the balance of the social contribution tax credit resulting from the rate increase from 15% to 20% as established by Provisional Measure No. 675/15 of May 2015 (converted into Law No. 13,169/15 in October 2015).

(b) Complementary Provision for Loan Losses: Complementary provision for loan losses to the minimum required by Resolution No. 2,682/99 of the National Monetary Council mainly due to a more challenging economic environment.

(c) Financial Leasing Accounting Change: Regarding financial leasing contracts related to new Technology Center implementation.

(d) Contingencies Provision: Recognition of provisions for tax and social security lawsuits and losses arising from economic plans that were in effect in Brazil during the 1980's.

(e) Pension Fund: Provision to settle the surplus of the defined contribution pension fund in accordance with the regulation.

(f) Goodwill Amortization: Effect of the goodwill amortization generated by acquisitions made by the Conglomerate.

(g) Program for the Settlement or Installment Payment of Taxes: Effects of our adherence to the Program for the Settlement or Installment Payment of Federal and Municipal Taxes.

(h) Impairment: Adjustment in the carrying amount of assets in order to reflect its fair value.

(i) Criteria Adjustment - Credicard: Criteria adjustment for provisions recognition for loan losses resulting from Credicard acquisition.

(j) Porto Seguro: Effect of the favorable decision, by the Federal Supreme Court (STF), on the legality of the COFINS tax on this type of operation in proportion to our equity in the company, in addition to the provision for losses on tax losses in the first quarter of 2014.

(k) IRB: In 2014, favorable decision effect on the increase of the PIS/ COFINS calculation basis of IRB Brasil Resseguros S.A.

Managerial Income Statement

We apply consolidation criteria for the managerial results that affect only the breakdown of accounts and, therefore, do not affect net income. These effects are shown in the table on the following page ("Accounting and Managerial Statements Reconciliation"). Additionally, we adjusted the tax effects of the hedges of investments abroad - which were originally accounted for as tax expenses (PIS and COFINS) and income tax and social contribution on net income and were reclassified to the financial margin - and the non-recurring events.

Our strategy for the foreign exchange risk management of the capital invested abroad is aimed at mitigating, through financial instruments, the effects resulting from foreign exchange variations and takes into consideration the impact of all tax effects. In the third quarter of 2015, the Brazilian real depreciated 28.1% against the U.S. dollar and 28.2% against the Euro, compared with appreciation of 3.3% and depreciation of 0.4%, respectively, in the previous quarter.

Itaú Unibanco Holding S.A. 06

Management Discussion & Analysis Executive Summary

Accounting and Managerial Income Statements reconciliation for the past two quarters is presented below.

Accounting and Managerial Statements Reconciliation | 3^rd Quarter of 2015

				Non-recurring						Managerial
In R$ millions	Accounting			Events			Tax Effect of Hedge			Reclassifications			Managerial
Operating Revenues		15,265			1,342			10,653			(315	)		26,945
Managerial Financial Margin		5,545			1,342			10,653			55			17,595
Financial Margin with Clients		13,922			1,342			-			55			15,319
Financial Margin with the Market		(8,378	)		-			10,653			-			2,276
Banking Services Fees and Income from Banking Charges		7,681			-			-			(599	)		7,082
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		1,700			-			-			568			2,268
Other Operating Income		177			(1	)		-			(176	)		-
Equity in Earnings of Affiliates and Other Investments		153			-			-			(153	)		-
Non-operating Income		9			1			-			(10	)		-
Result from Loan Losses		(9,262	)		4,629			-			(20	)		(4,653	)
Provision for Loan Losses		(10,357	)		4,629			-			(20	)		(5,747	)
Recovery of Loans Written Off as Losses		1,094			-			-			-			1,094
Retained Claims		(437	)		-			-			-			(437	)
Other Operating Income/(Expenses)		(12,491	)		544			(1,063	)		263			(12,748	)
Non-interest Expenses		(11,764	)		556			-			302			(10,906	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(459	)		(12	)		(1,063	)		(39	)		(1,574	)
Insurance Selling Expenses		(268	)		-			-			-			(268	)
Income before Tax and Profit Sharing		(6,926	)		6,515			9,590			(72	)		9,108
Income Tax and Social Contribution		13,010			(6,343	)		(9,590	)		12			(2,911	)
Profit Sharing		(60	)		-			-			60			-
Minority Interests		(79	)		-			-			-			(79	)
Net Income		5,945			172			-			-			6,117

Accounting and Managerial Statements Reconciliation | 2^nd Quarter of 2015

				Non-recurring						Managerial
In R$ millions	Accounting			Events			Tax Effect of Hedge			Reclassifications			Managerial
Operating Revenues		26,494			98			(889	)		(364	)		25,339
Managerial Financial Margin		17,002			122			(889	)		0			16,235
Financial Margin with Clients		14,552			122			-			0			14,673
Financial Margin with the Market		2,451			-			(889	)		-			1,561
Banking Services Fees and Income from Banking Charges		7,511			-			-			(604	)		6,906
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		1,648			-			-			549			2,198
Other Operating Income		155			(24	)		-			(131	)		-
Equity in Earnings of Affiliates and Other Investments		165			-			-			(165	)		-
Non-operating Income		13			-			-			(13	)		-
Result from Loan Losses		(4,361	)		-			-			(25	)		(4,387	)
Provision for Loan Losses		(5,494	)		-			-			(25	)		(5,520	)
Recovery of Loans Written Off as Losses		1,133			-			-			-			1,133
Retained Claims		(385	)		-			-			-			(385	)
Other Operating Income/(Expenses)		(12,292	)		122			170			307			(11,692	)
Non-interest Expenses		(10,479	)		122			-			377			(9,979	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,545	)		-			170			(70	)		(1,445	)
Insurance Selling Expenses		(268	)		-			-			-			(268	)
Income before Tax and Profit Sharing		9,456			220			(719	)		(83	)		8,875
Income Tax and Social Contribution		(3,321	)		(70	)		719			11			(2,661	)
Profit Sharing		(72	)		-			-			72			-
Minority Interests		(79	)		-			-			-			(79	)
Net Income		5,984			150			-			-			6,134

Itaú Unibanco Holding S.A. 07

Management Discussion & Analysis Executive Summary

We present below the income statement from a standpoint that highlights Operating Revenues, which are composed by the sum of the main accounts in which revenues from banking, insurance, pension plan and premium bonds operations are recorded.

Income Statement | Operating Revenues Perspective

In R$ millions	3Q15			2Q15			change					3Q14			change					9M15			9M14			change
Operating Revenues		26,945			25,339			1,607		6.3	%		23,305			3,640		15.6	%		77,230			66,086			11,144		16.9	%
Managerial Financial Margin		17,595			16,235			1,360		8.4	%		14,369			3,226		22.4	%		49,793			40,450			9,343		23.1	%
Financial Margin with Clients		15,319			14,673			646		4.4	%		13,287			2,033		15.3	%		44,085			37,873			6,212		16.4	%
Financial Margin with the Market		2,276			1,561			714		45.7	%		1,083			1,193		110.2	%		5,708			2,577			3,131		121.5	%
Banking Services Fees and Income from Banking Charges		7,082			6,906			176		2.5	%		6,558			525		8.0	%		20,855			18,952			1,903		10.0	%
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		2,268			2,198			71		3.2	%		2,379			(110	)	-4.6	%		6,582			6,683			(101	)	-1.5	%
Result from Loan Losses		(4,653	)		(4,387	)		(266	)	6.1	%		(3,343	)		(1,310	)	39.2	%		(13,495	)		(9,739	)		(3,756	)	38.6	%
Provision for Loan Losses		(5,747	)		(5,520	)		(227	)	4.1	%		(4,741	)		(1,006	)	21.2	%		(16,782	)		(13,457	)		(3,325	)	24.7	%
Recovery of Loans Written Off as Losses		1,094			1,133			(39	)	-3.4	%		1,397			(303	)	-21.7	%		3,288			3,719			(431	)	-11.6	%
Retained Claims		(437	)		(385	)		(52	)	13.5	%		(559	)		122		-21.8	%		(1,191	)		(1,526	)		335		-22.0	%
Operating Margin		21,855			20,567			1,288		6.3	%		19,403			2,452		12.6	%		62,545			54,822			7,723		14.1	%
Other Operating Income/(Expenses)		(12,748	)		(11,692	)		(1,056	)	9.0	%		(11,292	)		(1,456	)	12.9	%		(36,043	)		(32,805	)		(3,237	)	9.9	%
Non-interest Expenses		(10,906	)		(9,979	)		(927	)	9.3	%		(9,753	)		(1,153	)	11.8	%		(30,767	)		(28,369	)		(2,397	)	8.5	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,574	)		(1,445	)		(129	)	8.9	%		(1,254	)		(319	)	25.5	%		(4,474	)		(3,617	)		(857	)	23.7	%
Insurance Selling Expenses		(268	)		(268	)		0		-0.1	%		(284	)		16		-5.7	%		(802	)		(819	)		17		-2.1	%
Income before Tax and Minority Interests		9,108			8,875			233		2.6	%		8,112			996		12.3	%		26,502			22,016			4,486		20.4	%
Income Tax and Social Contribution		(2,911	)		(2,661	)		(250	)	9.4	%		(2,571	)		(340	)	13.2	%		(8,179	)		(6,832	)		(1,348	)	19.7	%
Minority Interests in Subsidiaries		(79	)		(79	)		0		-0.4	%		(84	)		5		-5.7	%		(264	)		(226	)		(38	)	16.7	%
Recurring Net Income		6,117			6,134			(17	)	-0.3	%		5,457			660		12.1	%		18,059			14,959			3,101		20.7	%

We present below the income statement from the standpoint that highlights the Managerial Financial Margin.

Income Statement | Managerial Financial Margin Perspective

In R$ millions	3Q15			2Q15			change					3Q14			change					9M15			9M14			change
Managerial Financial Margin		17,595			16,235			1,360		8.4	%		14,369			3,226		22.4	%		49,793			40,450			9,343		23.1	%
Financial Margin with Clients		15,319			14,673			646		4.4	%		13,287			2,033		15.3	%		44,085			37,873			6,212		16.4	%
Financial Margin with the Market		2,276			1,561			714		45.7	%		1,083			1,193		110.2	%		5,708			2,577			3,131		121.5	%
Result from Loan Losses		(4,653	)		(4,387	)		(266	)	6.1	%		(3,343	)		(1,310	)	39.2	%		(13,495	)		(9,739	)		(3,756	)	38.6	%
Provision for Loan Losses		(5,747	)		(5,520	)		(227	)	4.1	%		(4,741	)		(1,006	)	21.2	%		(16,782	)		(13,457	)		(3,325	)	24.7	%
Recovery of Loans Written Off as Losses		1,094			1,133			(39	)	-3.4	%		1,397			(303	)	-21.7	%		3,288			3,719			(431	)	-11.6	%
Net Result from Financial Operations		12,942			11,848			1,094		9.2	%		11,026			1,916		17.4	%		36,298			30,711			5,587		18.2	%
Other Operating Income/(Expenses)		(3,835	)		(2,973	)		(861	)	29.0	%		(2,914	)		(920	)	31.6	%		(9,796	)		(8,695	)		(1,101	)	12.7	%
Banking Services Fees and Income from Banking Charges		7,082			6,906			176		2.5	%		6,558			525		8.0	%		20,855			18,952			1,903		10.0	%
Result from Insurance, Pension Plan and Premium Bonds Operations		1,563			1,544			19		1.2	%		1,536			27		1.8	%		4,590			4,339			251		5.8	%
Non-interest Expenses		(10,906	)		(9,979	)		(927	)	9.3	%		(9,753	)		(1,153	)	11.8	%		(30,767	)		(28,369	)		(2,397	)	8.5	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,574	)		(1,445	)		(129	)	8.9	%		(1,254	)		(319	)	25.5	%		(4,474	)		(3,617	)		(857	)	23.7	%
Income before Tax and Minority Interests		9,108			8,875			233		2.6	%		8,112			996		12.3	%		26,502			22,016			4,486		20.4	%
Income Tax and Social Contribution		(2,911	)		(2,661	)		(250	)	9.4	%		(2,571	)		(340	)	13.2	%		(8,179	)		(6,832	)		(1,348	)	19.7	%
Minority Interests in Subsidiaries		(79	)		(79	)		0		-0.4	%		(84	)		5		-5.7	%		(264	)		(226	)		(38	)	16.7	%
Recurring Net Income		6,117			6,134			(17	)	-0.3	%		5,457			660		12.1	%		18,059			14,959			3,101		20.7	%

Itaú Unibanco Holding S.A. 08

Management Discussion & Analysis Executive Summary

Net Income

The recurring net income for the third quarter of 2015 amounted to R$6,117 million, representing a decrease of 0.3% compared to the previous quarter and an increase of 12.1% from the same period of the previous year. The recurring net income per share reached R$1.03, up 1.0% from the previous quarter due to the repurchase of 46,455,020 shares for treasury during the quarter, which reduced the number of outstanding shares.

Compared to the previous quarter, the highlights were the increases of 45.7% in the financial margin with the market, of 4.4% in our margin with clients and of 2.5% in banking service fees and banking charges. These increases were partially offset by the increase of 4.1% in our provision for loan losses and of 9.3% in non-interest expenses, particularly personnel expenses due to the adjustment of salaries and benefits related to the collective negotiation agreement.

In the first nine months of 2015, recurring net income was R$18,059 million, 20.7% higher when compared to the same period of 2014. The increase in net income was mainly due to an increase of 16.9% in operating revenues, partially offset by the increases of 24.7% in the provision for loan losses and of 8.5% in non-interest expenses.

Return on Average Equity

 

The annualized recurring return on average equity reached 24.0% in the third quarter of 2015. Stockholders’ equity reached R$103.3 billion, increasing 2.6% from the previous quarter and 13.9% from the same period of the previous year.

In the third quarter of 2015, the annualized recurring return on average assets reached 1.9%, unchanged when compared to the previous quarter. Annualized recurring return on risk-weighted assets reached 3.2%, also unchanged when compared to the previous quarter.

Operating Revenues

In the third quarter of 2015, operating revenues, representing revenues from banking, insurance, pension plan and premium bond operations, totaled R$26,945 million, 6.3% and 15.6% higher than in the previous quarter and in the same period of the previous year, respectively. The main components of operating revenues and other items of income statement are presented below.

Managerial Financial Margin

The managerial financial margin for the third quarter of 2015 totaled R$17,595 million, R$1,360 million higher when compared to the second quarter of 2015, mainly due to the increases of R$714 million in our financial margin with the market and of R$646 million in our financial margin with clients.

Our managerial financial margin increased R$9,343 million when compared to the first nine months of 2014. This growth is due to increases of R$6,212 million in the financial margin with clients and of R$3,131 million in the financial margin with the market.

Financial Margin of Spread-Sensitive Operations, net of the Provision from Loan Losses

Our financial margin of spread-sensitive operations, net of the provision for loan losses and recovery of loans written off as a losses, increased 14.7% from the third quarter of 2014 and 2.3% when compared to the second quarter of 2015. The ratio of provision for loan losses, net of recovery of loans written off as losses, to the spread-sensitive operations financial margin reached 34.8% this quarter, 120 basis points higher when compared to the previous quarter.

Itaú Unibanco Holding S.A. 09

Management Discussion & Analysis Executive Summary

Result from Loan Losses

 

The result from loan losses grew 6.1% when compared to the previous quarter, totaling R$4,653 million in the third quarter of 2015. This increase was mainly due to an increase of 4.1% (R$227 million) in provision for loan losses and to lower revenues from recovery of loans written off as losses (R$39 million).

In the first nine months of 2015, the result from loan losses reached R$13,495 million, up 38.6% from the same period of the previous year.

Banking Services Fees and Income from Banking Charges

Banking service fees, including income from banking charges, increased R$176 million (2.5%) when compared to the previous quarter, totaling R$7,082 million. When compared to the first nine months of 2014, these revenues increased R$1,903 million (10.0%).

Result from Insurance, Pension Plan and Premium

Bonds

 

In the third quarter of 2015, result from insurance, pension plan and premium bonds from core activities, which consist of mass-market products related to life, property, credit, pension and premium bonds reached R$1,469 million, an increase of R$23 million from the previous quarter and of R$66 million from the third quarter of 2014. The loss ratio from core activities reached 29.6% this quarter.

Non-Interest Expenses

 

Non-interest expenses increased 9.3% in the third quarter of 2015 when compared to the second quarter of 2015. Personnel expenses increased R$662 million, mainly due to the effect of the collective negotiation agreement, whereas administrative expenses increased R$84 million in the third quarter of 2015 from the previous quarter, mainly due to higher data processing and telecommunications expenses.

When compared to the first nine months of 2014, non-interest expenses increased R$2,397 million, up 8.5% from the same period of the previous year. Excluding operations abroad expenses, the increase would have been 6.0% in the period.

Efficiency Ratio and Risk-Adjusted Efficiency Ratio ^(*)

 

(*) Calculation criteria are detailed on page 34.

In the third quarter of 2015, efficiency ratio, according to the criteria that include all expenses except result from loan losses, reached 44.2%, an increase of 130 basis points when compared to the previous quarter, mainly due to the increase in non-interest expenses (9.3%). In the 12-month period, the efficiency ratio reached 44.2%, improving 40 basis points from the previous quarter and 350 basis points from the same period of the previous year.

In the third quarter of 2015, the risk-adjusted efficiency ratio, which also includes the result from loan losses, reached 63.1%, an increase of 130 basis points when compared to the previous quarter, due to the increase in provision for loan losses (4.1%) and the decrease in revenues from recovery of loans written off as losses (3.4%), in addition to the effects previously mentioned. In the 12-month period, the risk-adjusted efficiency ratio reached 62.3%.

Itaú Unibanco Holding S.A. 10

Management Discussion & Analysis Executive Summary

Balance Sheet | Assets

In R$ millions, end of period	3Q15			2Q15			change			3Q14			change
Current and Long-term Assets		1,303,953			1,210,691			7.7	%		1,139,030			14.5	%
Cash and Cash Equivalents		18,138			18,005			0.7	%		16,636			9.0	%
Short-term Interbank Investments		229,677			192,433			19.4	%		217,538			5.6	%
Securities and Derivative Financial Instruments		345,844			334,727			3.3	%		283,108			22.2	%
Interbank and Interbranch Accounts		69,906			64,651			8.1	%		68,044			2.7	%
Loan, Lease and Other Loan Operations		477,198			457,463			4.3	%		428,832			11.3	%
(Allowance for Loan Losses)		(34,193	)		(28,131	)		21.5	%		(25,258	)		35.4	%
Other Assets		197,382			171,543			15.1	%		150,130			31.5	%
Foreign Exchange Portfolio		64,209			65,875			-2.5	%		41,047			56.4	%
Other		133,173			105,669			26.0	%		109,083			22.1	%
Permanent Assets		18,740			19,819			-5.4	%		18,527			1.1	%
Investments		3,732			3,610			3.4	%		3,434			8.7	%
Real Estate in Use		7,244			7,379			-1.8	%		7,412			-2.3	%
Intangible Assets and Goodwill		7,763			8,831			-12.1	%		7,681			1.1	%
Total Assets		1,322,693			1,230,510			7.5	%		1,157,557			14.3	%

At the end of the third quarter of 2015, our assets totaled R$1.32 trillion, a growth of 7.5% (R$92.1 billion) when compared to the previous quarter. The main changes are presented below:

When compared to the previous year, the increase of 14.3% (R$165.1 billion) was mainly due to the increases in securities and derivative financial instruments and loan operations.

Balance Sheet | Liabilities and Equity

In R$ millions, end of period	3Q15		2Q15		change			3Q14		change
Current and Long-Term Liabilities		1,215,583		1,126,530		7.9	%		1,063,139		14.3	%
Deposits		300,729		280,443		7.2	%		280,975		7.0	%
Demand Deposits		57,388		50,540		13.5	%		44,596		28.7	%
Savings Deposits		111,451		113,974		-2.2	%		113,676		-2.0	%
Interbank Deposits		18,370		27,014		-32.0	%		3,642		404.4	%
Time Deposits		113,520		88,914		27.7	%		119,062		-4.7	%
Deposits Received under Securities Repurchase Agreements		317,914		305,300		4.1	%		304,024		4.6	%
Fund from Acceptances and Issue of Securities		59,478		52,175		14.0	%		47,089		26.3	%
Interbank and Interbranch Accounts		11,473		10,448		9.8	%		9,606		19.4	%
Borrowings and Onlendings		104,580		92,138		13.5	%		81,659		28.1	%
Derivative Financial Instruments		42,346		23,912		77.1	%		16,203		161.3	%
Technical Provisions for Insurance, Pension Plans and Premium Bonds		126,136		121,652		3.7	%		112,973		11.7	%
Other Liabilities		252,927		240,461		5.2	%		210,609		20.1	%
Subordinated Debt		65,910		59,228		11.3	%		54,472		21.0	%
Foreign Exchange Portfolio		63,140		66,429		-5.0	%		41,855		50.9	%
Other		123,877		114,804		7.9	%		114,283		8.4	%
Deferred Income		1,908		1,499		27.3	%		1,318		44.8	%
Minority Interest in Subsidiaries		1,849		1,770		4.4	%		2,324		-20.4	%
Stockholders' Equity		103,353		100,711		2.6	%		90,776		13.9	%
Total Liabilities and Equity		1,322,693		1,230,510		7.5	%		1,157,557		14.3	%

The main changes in liabilities at the end of the third quarter of 2015, when compared to the previous quarter, are presented in the chart below:

When compared to the previous quarter, the main changes are as follows:

Itaú Unibanco Holding S.A. 11

Management Discussion & Analysis Executive Summary

Loan Portfolio with Endorsements, Sureties and Private Securities

At the end of the third quarter of 2015, our total loan portfolio (including sureties, endorsements and private securities) reached R$590,674 million, increasing 4.3% when compared to the previous quarter and increasing 10.1% from the same period of the previous year. Excluding the effect of the foreign exchange variation, our loan portfolio would have decreased 1.1% in the quarter and 0.4% in the 12-month period.

In the individuals segment, the highlight in the quarter was the growth of the mortgage loan portfolio (5.5%). In the 12-month period, the highlights were the payroll loan and mortgage loan, which increased 25.4% and 21.5%, respectively, whereas the vehicles portfolio decreased 9.1% in the quarter and 30.9% in the 12-month period.

The companies segment, excluding private securities, increased 3.7% in the quarter and 7.2% in the 12-month period. Corporate loans grew 4.6% from the previous quarter and 9.1% in the 12-month period, whereas the very small, small and middle market companies portfolio increased 1.5% from the second quarter of 2015 and 2.4% in the 12-month period. Excluding the effect of the foreign exchange variation, the corporate portfolio would have decreased 3.7% from the previous quarter and 7.4% in the 12-month period.

The balance of our operations in Latin America grew 22.2% in the quarter and 52.6% in the 12-month period. Excluding the effect of the foreign exchange variation, the growth of this portfolio would have been 3.6% compared to the previous quarter and 10.4% in the 12-month period.

The balance of endorsements and sureties reached R$75,143 million at the end of the third quarter of 2015, with an increase of 1.2% when compared to the previous quarter of 2015 and an increase of 0.8% in the past 12 months, mainly due to changes in the Latin America portfolio, which grew 29.2% from the previous quarter and 45.0% in the 12-month period.

In R$ millions, end of period	3Q15		2Q15		change			4Q14		change			3Q14		change
Individuals		186,128		187,318		-0.6	%		186,212		0.0	%		178,280		4.4	%
Credit Card Loans		55,051		56,247		-2.1	%		59,321		-7.2	%		54,265		1.4	%
Personal Loans		30,256		30,016		0.8	%		28,541		6.0	%		28,690		5.5	%
Payroll Loans (1)		45,695		45,517		0.4	%		40,525		12.8	%		36,436		25.4	%
Vehicle Loans		21,632		23,786		-9.1	%		28,927		-25.2	%		31,323		-30.9	%
Mortgage Loans		33,493		31,753		5.5	%		28,898		15.9	%		27,566		21.5	%
Companies		306,314		295,384		3.7	%		295,366		3.7	%		285,813		7.2	%
Corporate Loans		221,574		211,905		4.6	%		211,241		4.9	%		203,042		9.1	%
Very Small, Small and Middle Market Loans (2)		84,739		83,479		1.5	%		84,125		0.7	%		82,771		2.4	%
Latin America (3)		59,900		49,004		22.2	%		43,942		36.3	%		39,252		52.6	%
Total with Endorsements and Sureties		552,342		531,706		3.9	%		525,519		5.1	%		503,345		9.7	%
Corporate - Private Securities (4)		38,332		34,850		10.0	%		34,175		12.2	%		32,942		16.4	%
Total with Endorsements, Sureties and Private Securities		590,674		566,556		4.3	%		559,694		5.5	%		536,287		10.1	%
Total with Endorsements, Sureties and Private Securities (5) (ex-foreign exchange rate variation)		590,674		597,204		-1.1	%		608,249		-2.9	%		593,261		-0.4	%
Endorsements and Sureties		75,143		74,243		1.2	%		73,759		1.9	%		74,514		0.8	%
Individuals		545		465		17.1	%		552		-1.4	%		531		2.5	%
Corporate		67,331		67,125		0.3	%		66,727		0.9	%		67,677		-0.5	%
Very Small, Small and Middle Market		4,092		4,195		-2.5	%		4,213		-2.9	%		4,117		-0.6	%
Latin America (4)		3,175		2,457		29.2	%		2,267		40.1	%		2,189		45.0	%

(1) Includes operations originated by the institution and acquired operations. (2) Includes Rural Loans to Individuals. (3) Includes Argentina, Chile, Colombia, Paraguay and Uruguay. (4) Includes Debentures, CRI, Commercial Paper and Financial Bills. (5) Calculated based on the conversion of the foreign currency portfolio (U.S. dollar and currencies of Latin America). Note: Mortgage and Rural Loan portfolios from the companies segment are allocated according to the client’s size. For further details, please refer to page 18.

Loan Portfolio – Currency Breakdown

 

On September 30, 2015, R$152.4 billion of our total credit assets was denominated in or indexed to foreign currencies and increased 20.3% in the quarter, mainly due to the depreciation of the Brazilian real against the U.S. dollar and the currencies of other Latin American countries.

NPL Ratio (90 days overdue)

 

At the end of the third quarter of 2015, the NPL ratio for operations overdue for over 90 days (NPL 90) remained stable at 3.3% when compared to the previous quarter. However, in the individuals segment, this ratio grew 50 basis points and in the companies segment, it decreased 20 basis points when compared to the previous quarter.

Itaú Unibanco Holding S.A. 12

Management Discussion & Analysis Executive Summary

2015 Outlook ^(*)

The previously disclosed expectations for 2015 are presented below:

▲ 3% to 7%	Total Loan Portfolio 1
▲ 14.5% to 17.5%	Managerial Financial Margin 2
Between R$15 billion and R$18 billion	Provision for Loan Losses Net of Recovery of Loans Written Off as Losses
▲ 9.5% to 11.5%	Service Fees and Result from Insurance Operations 3
▲ 7.0% to 10.0%	Non-Interest Expenses

(*) Does not include the effect of CorpBanca´s transaction.

(1) Includes endorsements, sureties and private securities;

(2) Includes Financial Margin with Clients and Financial Margin with the Market;

(3) Service Fees (+) Income from Insurance, Pension Plan and Premium Bonds Operations (-) Expenses for Claims (-) Insurance, Pension Plan and Premium Bonds Selling Expenses.

Although the growth plans and projections of results presented above are based on management assumptions and information available in the market to date, these expectations involve inaccuracies and risks that are difficult to anticipate and there may be, therefore, results or consequences that differ from those anticipated. This information is not a guarantee of future performance. The use of these expectations should take into consideration the risks and uncertainties that involve any activities and that are beyond our control. These risks and uncertainties include, but are not limited to, our ability to perceive the dimension of the synergies projected and their timing, political and economic changes, volatility in interest and foreign exchange rates, technological changes, inflation, financial disintermediation, competitive pressures on products, prices and changes in tax legislation, among others.

Itaú Unibanco Holding S.A. 13

 

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Itaú Unibanco Holding S.A. 14

 

Management Discussion & Analysis Income Statement Analysis

Managerial Financial Margin

The managerial financial margin for the third quarter of 2015 totaled R$17,595 million, an increase of R$1,360 million or 8.4% when compared to the previous quarter.

In the first nine months, managerial financial margin totaled R$49,793 million, an increase of R$ 9,343 million, or 23.1%, when compared to the same period of 2014. The main drivers of these changes are presented below:

In R$ millions	3Q15		2Q15		change				9M15		9M14		change
Financial Margin with Clients		15,319		14,673		646	4.4	%		44,085		37,873		6,212	16.4	%
Spread-Sensitive Operations		13,367		13,066		301	2.3	%		39,091		33,986		5,105	15.0	%
Working Capital and Other		1,952		1,607		345	21.5	%		4,993		3,886		1,107	28.5	%
Financial Margin with the Market		2,276		1,561		714	45.7	%		5,708		2,577		3,131	121.5	%
Total		17,595		16,235		1,360	8.4	%		49,793		40,450		9,343	23.1	%

Managerial Financial Margin with Clients

The managerial financial margin with clients consists of revenues generated by the use of financial products by clients, including both account and non-account holders.

As of the third quarter of 2015, we changed the presentation of our financial margin with clients in order to better adapt it to our management model, simplify the items that compose it and consequently facilitate the tracking of its evolution. For clarity purposes, we will divide these operations into two different groups: i) financial margin of spread-sensitive operations and ii) working capital and other. We restated the historical information for better comparison between periods.

In the third quarter of 2015, financial margin with clients totaled R$15,319 million, an increase of 4.4% when compared to the previous quarter, due to the higher margin of spread-sensitive operations and of working capital and other.

Spread-Sensitive Operations

The financial margin of spread-sensitive operations, which includes the results from credit assets, non-credit assets and liabilities, totaled R$13,367 million in the third quarter of 2015, an increase of 2.3%, or R$301 million when compared to the previous period.

In the first nine months of 2015, the financial margin of spread-sensitive operations reached R$39,091 million and increased 15.0%, or R$5,105 million when compared to the same period of the previous year.

Annualized Rate of Spread-Sensitive Operations

In R$ millions	3Q15			2Q15			change
Average Balance		511,977			503,697			8,281	1.6	%
Financial Margin		13,367			13,066			301	2.3	%
Average Rate ( p.a. )		10.8	%		10.8	%			0	bps

Working Capital and Other

The financial margin of working capital and other totaled R$1,952 million in the third quarter of 2015, up 21.5% from the second quarter of 2015, mainly due to the CDI rate increase and to the 4.7% increase in the average balance of working capital and other in the quarter.

Annualized Rate of Working Capital and Other

In R$ millions	3Q15			2Q15			change
Average Balance		69,383			66,295			3,088	4.7	%
Financial Margin		1,952			1,607			345	21.5	%
Average Rate ( p.a. )		11.6	%		10.1	%			150	bps
Average SELIC - Annualized Rate		13.4	%		12.5	%			90	bps

 

Managerial Financial Margin with the Market

The financial margin with the market consists of treasury transactions that include Asset and Liability Management (ALM) and proprietary trading operations.

The financial margin with the market in the third quarter of 2015 totaled R$2,276 million, mainly driven by the management of structural positions in Brazil and abroad.

Financial Margin with the Market

Itaú Unibanco Holding S.A. 16

Management Discussion & Analysis Income Statement Analysis

Managerial Financial Margin with Clients

As a result of the previously mentioned changes, the annualized average rate of managerial financial margin with clients, which excludes the financial margin with the market, reached 10.9% in the third quarter of 2015, an increase of 20 basis points when compared to the previous quarter. Excluding the effect of the foreign exchange variation, this indicator would have reached 11.0%.

The annualized average rate of risk-adjusted financial margin with clients reached 7.4%, stable compared to the previous quarter.

The annualized average rate of spread-sensitive operations reached 10.8%, stable when compared to the previous quarter. Excluding the effect of the foreign exchange variation, this indicator would have reached 10.9%.

The annualized average rate of risk-adjusted financial margin of spread-sensitive operations reached 6.9% in the third quarter of 2015, down 20 basis points from the second quarter of 2015. Excluding the effect of the foreign exchange variation, this indicator would have reached 7.0%.

	3Q15								2Q15								9M15
	Average		Financial			Average			Average		Financial			Average			Average		Financial			Average
In R$ millions, end of period	Balance		Margin			Rate (p.a.)			Balance		Margin			Rate (p.a.)			Balance		Margin			Rate (p.a.)
Spread-Sensitive Operations		511,977		13,367			10.8	%		503,697		13,066			10.8	%		506,377		39,091			10.7	%
Working Capital and Other		69,383		1,952			11.6	%		66,295		1,607			10.1	%		66,384		4,993			10.4	%
Financial Margin with Clients		581,360		15,319			10.9	%		569,992		14,673			10.7	%		572,761		44,085			10.7	%
Provision for Loan Losses				(5,747	)							(5,520	)							(16,782	)
Recovery of Loans Written Off as Losses				1,094								1,133								3,288
Financial Margin of Spread-Sensitive Operations after Provisions for Credit Risk		511,977		8,714			6.9	%		503,697		8,679			7.1	%		506,377		25,597			6.9	%
Financial Margin with Clients after Provisions for Credit Risk		581,360		10,666			7.4	%		569,992		10,287			7.4	%		572,761		30,590			7.3	%

Financial Margin with Clients and Spread-Sensitive Operations before and after Provisions for Credit Risk

 

Composition of the Change in the Financial Margin with Clients

In order to better demonstrate the effect of the changes in our financial margin, we segregated effects from changes in the balance of spread-sensitive operations, mix of products, clients and spreads and working capital and other effects.

In the third quarter of 2015, the 4.4% increase in our financial margin with clients was mainly driven by the positive effect of the mix of products, clients and spreads, by the higher number of calendar days in the quarter, and by the increase in margin with working capital and other, which more than offset the negative effect of the lower volume of spread-sensitive operations when we exclude the effect in the balance of the foreign exchange variation in the quarter.

Financial Margin with Clients Change

 

(*) The effect of foreign exchange variation is excluded from balance.

Itaú Unibanco Holding S.A. 17

Management Discussion & Analysis Income Statement Analysis

Credit Portfolio

Credit Portfolio by Product

In the table below, the loan portfolio is split into two groups: individuals and companies. For a better understanding of the performance of these portfolios, the main product groups of each segment are presented below.

In R$ millions, end of period	3Q15		2Q15		change			4Q14		change			3Q14		change
Individuals		207,257		205,411		0.9	%		201,760		2.7	%		192,023		7.9	%
Credit Card		55,051		56,247		-2.1	%		59,321		-7.2	%		54,265		1.4	%
Personal Loans		29,712		29,551		0.5	%		27,988		6.2	%		28,159		5.5	%
Payroll Loans (1)		45,695		45,517		0.4	%		40,525		12.8	%		36,436		25.4	%
Vehicles		21,632		23,786		-9.1	%		28,927		-25.2	%		31,323		-30.9	%
Mortgage Loans		33,493		31,753		5.5	%		28,898		15.9	%		27,566		21.5	%
Rural Loans		257		256		0.5	%		277		-7.3	%		251		2.5	%
Latin America (2)		21,416		18,302		17.0	%		15,823		35.3	%		14,023		52.7	%
Companies		269,942		252,053		7.1	%		250,000		8.0	%		236,809		14.0	%
Working Capital (3)		117,154		117,190		0.0	%		116,785		0.3	%		110,600		5.9	%
BNDES/Onlending		50,890		50,986		-0.2	%		52,018		-2.2	%		51,035		-0.3	%
Export / Import Financing		41,220		32,313		27.6	%		31,460		31.0	%		28,726		43.5	%
Vehicles		4,715		5,194		-9.2	%		5,573		-15.4	%		5,571		-15.4	%
Mortgage Loans		11,021		10,630		3.7	%		10,336		6.6	%		10,120		8.9	%
Rural Loans		9,634		7,496		28.5	%		7,977		20.8	%		7,718		24.8	%
Latin America (2)		35,309		28,244		25.0	%		25,851		36.6	%		23,040		53.2	%
Total without Endorsements and Sureties		477,198		457,463		4.3	%		451,760		5.6	%		428,832		11.3	%
Endorsements and Sureties		75,143		74,243		1.2	%		73,759		1.9	%		74,514		0.8	%
Total with Endorsements and Sureties		552,342		531,706		3.9	%		525,519		5.1	%		503,345		9.7	%
Corporate Private Securities (4)		38,332		34,850		10.0	%		34,175		12.2	%		32,942		16.4	%
Total Risk		590,674		566,556		4.3	%		559,694		5.5	%		536,287		10.1	%

(1) Includes operations originated by the institution and acquired operations. (2) Includes Argentina, Chile, Colombia, Paraguay and Uruguay; (3) Also includes Overdraft, Receivables, Hot Money, Leasing, and other; (4) Includes Debentures, CRI, Commercial Paper, and Financial Bills.

At the end of the third quarter of 2015, our total loan portfolio (including sureties, endorsements and private securities) amounted to R$590,674 million, an increase of 4.3% when compared to the previous quarter and an increase of 10.1% when compared to the third quarter of 2014.

Individuals portfolio reached R$207,257 million at the end of the third quarter of 2015, an increase of 0.9% when compared to the previous quarter. In this segment, the highlight was the growth of mortgage loans, which increased 5.5%, reaching R$33,493 million and of the individuals portfolios - Latin America, 17.0% up, reaching R$21,416 million compared to the previous quarter. Our vehicle portfolio decreased 9.1% reaching R$21,632 million.

The companies loan portfolio grew 7.1% in the third quarter of 2015, totaling R$269,942 million. The changes in this portfolio were mainly driven by the increases in export/import financing of 27.6%, which reached R$41,220 million, in rural credit of 28.5% to R$9,634 million and in the companies portfolio – Latin America of 25.0%, which reached R$35,309 million.

Excluding the effect of the foreign exchange variation and corporate private securities, the total loan portfolio, without endorsements and sureties, would have decreased 1.8% when compared to the previous quarter and 1.0% in the 12-month period.

Credit Portfolio by Business Sector (including endorsements and sureties)

The changes in the companies loans portfolio, including the Latin America portfolio, are listed below:

In R$ millions, end of period	3Q15		2Q15		change
Public Sector		4,719		6,712		(1,993	)	-29.7	%
Private Sector- Companies		335,598		315,040		20,559		6.5	%
Vehicles and auto parts		22,597		22,081		516		2.3	%
Real Estate		21,310		20,102		1,207		6.0	%
Food and beverage		20,131		19,466		665		3.4	%
Transportation		17,766		17,757		9		0.0	%
Agribusiness and fertilizers		17,219		15,340		1,879		12.2	%
Steel and metallurgy		13,816		13,195		620		4.7	%
Energy and water treatment		12,865		13,526		(662	)	-4.9	%
Sugar and Alcohol		11,290		10,858		432		4.0	%
Banks and other financial institutions		10,753		9,780		973		9.9	%
Petrochemical and chemical		10,164		8,964		1,199		13.4	%
Capital Assets		9,643		9,785		(143	)	-1.5	%
Telecommunications		9,421		9,190		231		2.5	%
Mining		7,948		7,363		585		7.9	%
Construction Material		7,777		7,414		363		4.9	%
Oil and gas		7,176		6,161		1,015		16.5	%
Infrastructure work		7,100		6,608		492		7.4	%
Pharmaceutical and cosmetics		6,973		6,990		(17	)	-0.2	%
Electronic and IT		6,646		6,606		39		0.6	%
Clothing and footwear		5,505		5,413		92		1.7	%
Commerce - Other		17,695		16,738		957		5.7	%
Industry - Other		9,902		8,182		1,719		21.0	%
Services - Other		32,016		27,776		4,241		15.3	%
Other		49,890		45,743		4,146		9.1	%
Total		340,317		321,751		18,566		5.8	%

Itaú Unibanco Holding S.A. 18

Management Discussion & Analysis Income Statement Analysis

Credit Concentration

Our loan, lease and other credit operations, including endorsements and sureties, are spread over our loan portfolio in a way that only 22.5% of the credit risk was concentrated on the 100 largest debtors at the end of the third quarter of 2015. The credit concentration of the 100 largest debtors (group consolidated) is as follows:

In R$ millions, end of period	Risk		% of total credits		% of total Assets
Largest Debtor		5,099		0.9		0.4
10 Largest Debtors		35,257		6.4		2.7
20 Largest Debtors		54,978		10.0		4.2
50 Largest Debtors		92,310		16.7		7.0
100 Largest Debtors		124,462		22.5		9.4

Renegotiated Loan Operations

According to the rules of CMN Resolution No. 2,682/99, balances of all contracts that have had changes to their original contractual terms should be reported as renegotiated loans. To allow a better understanding, we segregate renegotiated loans into those that had changes in the original contractual terms only, but were not overdue or were overdue for less than 30 days, and those that had credits effectively renegotiated, as shown below:

In R$ millions, end of period	Portfolio			LLP			%
Amended Credit Agreements		21,902			(7,068	)		32.3	%
Amended Operations non-overdue		(8,362	)		1,359			16.3	%
Renegotiated Loans Operations		13,541			(5,708	)		42.2	%

Further information in Note 8-d of our financial statements.

On September 30, 2015, the renegotiated loan portfolio reached R$13,541 million, with an increase of R$995 million when compared to the previous quarter, which represents 2.8% of our loan portfolio. At the end of the third quarter of 2015, the ratio of the allowance for loan losses to the renegotiated portfolio reached 42.2%. The following chart presents this change:

 

The renegotiated loan portfolio includes all operations under renegotiation, either overdue or coming from the recovery of loans written off as losses. In the case of write-offs, we recognize a provision for the total amount renegotiated (not generating an immediate result) that is reversed only when there is a strong indication of the recovery of this credit (after payments are received on a regular basis for a few months).

The balance of 90-day non-performing loans (NPL 90) in the renegotiated portfolio reached R$2,452 million, resulting in a 90-day NPL ratio of 18.1%. The allowance for loan losses coverage ratio was 233% on September 30, 2015. The portfolio of over 90-day non-performing loans presented in the report also includes the NPL on renegotiated credits.

Loan Portfolio by Origination Period

The chart below shows the evolution of our loan portfolio, excluding endorsements and sureties, by origination period (vintages).

We maintained our policy of greater selectivity in credit origination, and the volume granted in the quarter increased 50 bps.

Given the profile of the terms of our different credit products, the composition of new contract vintages also showed a similar profile over the past periods. At the end of September 2015, 49.4% of the loan portfolio was composed of vintages of 2015.

Itaú Unibanco Holding S.A. 19

Management Discussion & Analysis Income Statement Analysis

Loan Portfolio Mix Evolution in Brazil (excluding endorsements and sureties)

Our loan portfolio mix presented below highlights its major components and their share in past quarters.

Loan Portfolio Mix - Companies

The proportion of credits to very small, small and middle market companies have decreased when compared to credits to large companies in our loan portfolio mix, which can be seen in the chart below.

 

Loan Portfolio Mix – Individuals

The evolution of our loan portfolio mix for individuals in past periods shows the growth of the payroll loan and mortgage loan portfolios, which currently represent the second and third largest balances in our individuals portfolio. The decrease in the share of vehicle financing is a result of the nominal balance reduction of this portfolio.

 

We present below additional information about Payroll Loans, Mortgage Loans and Vehicle Financing.

Payroll Loans

We operate in the payroll loans market through two different distribution channels: directly through our own distribution network (branches, CSBs and electronic channels) and through Banco Itaú BMG Consignado S.A., a financial institution controlled by us aimed at offering, distributing and marketing payroll loans. This operation started in December 2012 and enables us to expand our business in this segment, based on our values and transparency principles, following our good management practices and policies.

Evolution of the Payroll Loan Portfolio and NPL

At the end of September 2015, total payroll loans reached R$45,695 million, a 25.4% increase (R$9,259 million) in twelve months. The highlights were the portfolio of loans to retirees and pensioners of the INSS and to public servants, which, together, grew 34.2% when compared to the end of September 2014.

Payroll loans originated by the branch network totaled R$16,161 million on September 30, 2015, a 22.8% increase in twelve months, whereas payroll loans originated by other channels reached R$29,533 million, up 26.9% when compared to September 30, 2014.

Evolution of Payroll Loan Portfolio

Our strategy of higher growth in the INSS Beneficiaries segment, combined with the credit policies adopted, allowed the portfolio growth to be followed by a reduction in delinquency levels over the last two years. A slower pace of the portfolio growth drove the recent increase in 90-day NPL.

90-day NPL ratio (Mar -12 = 100) | Total Payroll Loan Portfolio

 

Note: Comparable to the National Financial System information disclosed by the Brazilian Central Bank.

Evolution of the Share of Payroll Loans in Personal Loans

The increase in the payroll loans balance allowed for a higher share of the personal loans, which reached 60.2% in this period from 55.9% in September 2014.

 

Mortgage Loans

Our mortgage loan portfolio reached R$44,514 million at the end of September 2015. Our portfolio grew 5.0% in the quarter and 18.1% in the last 12 months. The individuals portfolio, totaling R$33,493 million at the end of the third quarter of 2015, increased 5.5% from the previous quarter and 21.5% in twelve months. At the end of September 2015, the companies portfolio totaled R$11,021 million, up 3.7% when compared to the previous quarter and a growth of 8.9% in the past twelve months.

Evolution of the Mortgage Portfolio

Itaú Unibanco Holding S.A. 20

Management Discussion & Analysis Income Statement Analysis

In the third quarter of 2015, the volume of new mortgage loan financing for individuals was R$2,868 million, whereas financing to companies amounted to R$974 million, totaling R$3,841 million.

Origination Volume

In R$ millions	3Q15		2Q15		change			3Q14		change
Individuals		2,868		2,725		5.2	%		2,516		14.0	%
Companies		974		1,149		-15.2	%		1,058		-7.9	%
Total		3,841		3,873		-0.8	%		3,574		7.5	%

Source.: ABECIP data.

Our individual mortgage loan portfolio collaterals are under the legal framework of fiduciary lien (alienação fiduciária) and account for 99.2% of the portfolio. Since 2007, we have been using this framework for 100% of our contracts.

Our new financing contracts use the Equal Amortization System, through which decreasing installments lead to faster balance amortization, reducing the loan-to-value ratio (ratio of the amount of the financing to the value of the real estate property) at a faster pace than other amortization systems.

The portfolio loan-to-value (LTV) reached 43.4% at the end of September 2015, an increase of 130 basis points when compared to September 2014.

The average quarterly LTV of the originated vintages reached 57.2%, down 140 basis points from the LTV of vintages originated in the second quarter of 2015 and down 280 basis points from the third quarter of 2014.

Loan–to-value | Vintage and Portfolio

 

In the current period, the 90-day NPL of the vintages originated in March 2015 reached 0.10%, which demonstrates the high quality of the portfolio.

NPL over 90 (%) | Six months after origination

 

Note: Loan portfolio to individuals.

Vehicle Financing

Our portfolio of vehicle financing to individuals totaled R$21,632 million, and to companies reached R$4,715 million, totaling R$26,347 million on September 30, 2015.

This quarter, the average amount of vehicle financing to individuals originated at the branch network, dealerships and car retailers was R$24.8 thousand, with an average 39-month term and average down payment of 43%. The average financing term remained steady over the last quarters.

Average Term and Down Payment - Individuals

 

New loans granted to individuals through our branches, dealerships and car retailers totaled R$2,115 million, whereas new loans granted to companies totaled R$553 million in the third quarter of 2015.

The loan-to-value of the vehicle financing portfolio reached 71.5% at the end of September 2015, continuing the declining trend of the past few quarters.

Loan–to-value | Portfolio ^(*)

 

(*) Loans originated by dealerships and car retailers to individuals and companies.

The 90-day NPL of vintages originated in May 2015 reached 0.26% in September 2015.

NPL over 90 (%) | Four months after origination

 

In this quarter, we received a monthly average of 15 million visits through iCarros, a classified ads website that facilitates the purchase and sale of new and used vehicles.

Itaú Unibanco Holding S.A. 21

Management Discussion & Analysis Income Statement Analysis

Result from Loan Losses

In R$ millions	3Q15			2Q15			change					9M15			9M14			change
Provision for Loan Losses		(5,747	)		(5,520	)		(227	)	4.1	%		(16,782	)		(13,457	)		(3,325	)	24.7	%
Recovery of Loans Written Off as Losses		1,094			1,133			(39	)	-3.4	%		3,288			3,719			(431	)	-11.6	%
Result from Loan Losses		(4,653	)		(4,387	)		(266	)	6.1	%		(13,495	)		(9,739	)		(3,756	)	38.6	%

Result from loan losses (expenses for provision, net of recovery of loans written off as losses) totaled R$4,653 million in the third quarter of 2015, a 6.1% increase from the previous quarter. Provision for loan losses was up 4.1% when compared to the previous quarter, whereas revenues from recovery of loans written off as losses decreased 3.4% from the previous quarter.

In the first nine months of 2015, the result from loan losses totaled R$13,495 million, with an increase of 38.6% from the same period of 2014. This increase was mainly driven by higher provision for loan losses, which totaled R$16,782 million in the period, substantially impacted by increased provisions for economic groups of the corporate segment in 2015. Additionally, income from recovery of loans written off as losses amounted R$3,288 million in the first nine months of 2015, an 11.6% decrease when compared to the same period of the previous year.

Provision for Loan Losses by Segment

Note: Retail Banking includes loan loss provisions expenses of Corporation segment.

In the third quarter of 2015, provision for loan losses totaled R$4,302 million in the Retail segment and R$1,445 million in the Wholesale segment.

This quarter, we recognized a provision in the Wholesale segment lower by R$328 million from the previous quarter, mainly due to higher provisions recognized in the first two quarters of 2015, which were the result of the previously mentioned reinforcement of provisions for economic groups of the corporate segment. In the Retail segment, provisions were higher by R$555 million when compared to the second quarter of 2015.

Provision for Loan Losses and Loan Portfolio

The ratio of provision for loan losses to the loan portfolio reached 4.9% in the third quarter of 2015, an increase of 10 basis points from the previous quarter.

The ratio of the result from loan losses to the loan portfolio reached 4.0% this quarter, 20 basis points higher when compared to the previous quarter.

Result from Loan Losses and Loan Portfolio

 

(*) Average balance of the Loan Portfolio of the two previous quarters.

Allowance for Loan Losses and Loan Portfolio

 

In September 2015, the loan portfolio without endorsements and sureties increased 4.3% from June 2015, totaling R$477,198 million, whereas allowance for loan losses increased 21.5% in the quarter, totaling R$34,193 million in the end of the period. The allowance for loan losses grew mainly due to the recognition of complementary allowance, in the amount of R$4,655 million.

The ratio of the allowance for loan losses without complementary allowance to the loan portfolio balance reached 4.9% on September 30, 2015, a 10 basis point increase in the quarter.

The balance of the complementary allowance includes the provisions recognized for endorsements and sureties, which totaled R$361 million.

Itaú Unibanco Holding S.A. 22

Management Discussion & Analysis Income Statement Analysis

Delinquency Ratios

Nonperforming Loans

(*) Overdue loans are loan operations having at least one installment more than 14 days overdue, irrespective of collateral provided.

The overdue loan portfolio increased 5.7% from the previous quarter and 20.5% from the same period of the previous year.

The coverage ratio, which is the ratio of allowance for loan losses to the total overdue loan portfolio, reached 118% at the end of September 2015, up 1,300 basis points when compared to the same period of the previous year, mainly due to the increase in the allowance for loan losses.

The portfolio of credits overdue for over 90 days increased 6.2% from the previous quarter and 14.6% from the same period of the previous year, whereas the portfolio of credits overdue for over 60 days increased 3.0% and 14.4% in the same comparative periods, respectively.

NPL Ratio (%) | over 90 days

 

The NPL ratio of credits overdue for more than 90 days remained stable at 3.3% in the end of the third quarter of 2015 when compared to the previous quarter, and increased 10 basis points from the same period of 2014.

For individuals, this ratio increased 50 basis points when compared to the previous quarter and 10 basis points when compared to the same period of 2014.

For companies this ratio decreased 20 basis points from the previous period. For large companies, this ratio decreased in the quarter and for very small, small and medium companies there was a slight increase.

Excluding the foreign exchange rate variation effect in the quarter, the NPL 90 of the total portfolio would have increased 10 basis points and for companies this ratio would have decreased 10 basis points.

NPL Ratio (%) | 15 to 90 days

 

Short-term delinquency, measured based on the balance of operations overdue from 15 to 90 days (NPL 15-90) remained stable when compared to the previous quarter. The increase of 10 basis points in the ratio for companies in the quarter was offset by the decrease of 10 basis points in the NPL ratio for individuals. Excluding the foreign exchange rate variation effect in the quarter, the NPL 15-90 of the total portfolio would have increased 10 basis points and for companies would have increased 20 basis points.

In the 12-month period, the NPL 15-90 increased 40 basis points, mainly driven by the increase of 70 basis points in the companies’ ratio, partially offset by the decrease of 10 basis points in the NPL ratio for individuals.

NPL Ratio by Activity Sector

In R$ millions	Credit		NPL Ratio			NPL Ratio
September 30, 2015	Portfolio		15 to 90 days			90 days
Public Sector		3,196		0.0	%		0.0	%
Private Sector		474,003		3.0	%		3.4	%
Companies		262,552		2.1	%		2.0	%
Industry and Commerce		127,456		1.9	%		2.2	%
Services		105,969		2.5	%		1.7	%
Primary Sector		26,346		1.3	%		2.2	%
Other		2,781		0.6	%		0.6	%
Individuals		211,451		4.1	%		5.1	%
Total		477,198		3.0	%		3.3	%

Regarding the NPL by activity sector, the 90-day NPL for industry and commerce was 2.2%, for services was 1.7% and for primary sector was 2.2%. For further information on NPL Ratios by Activity Sector, please refer to the Risk Management Report required by Circular No. 3,678 of the Brazilian Central Bank of October 31, 2013, which is available in our Investor Relations website.

Coverage Ratio | 90 days

 

Note: Coverage ratio is derived from the division of the allowance for loans losses balance by the balance of operations more than 90 days overdue.

The 90-day coverage ratio reached 214% in September 30, 2015, up 2,700 basis points when compared to the previous quarter and up 3,300 basis points from September 2014, mainly due to the increase in complementary allowance of R$4,655 million recognized this quarter.

Itaú Unibanco Holding S.A. 23

Management Discussion & Analysis Income Statement Analysis

Loan Portfolio Risk Level

Our credit risk management is aimed at maintaining the quality of the loan portfolio at levels appropriate for each market segment in which we operate.

We improved the guarantee control system (vehicles, mortgage loans, financial investments, among others) to capture the updated market values for these individual operations. Therefore, operations with guarantees where the updated amount exceeds the debt balance are classified at better risk levels. On the other hand, operations with guarantees where the updated amount is insufficient to mitigate the entire risk are classified at worse risk levels.

On September 30, 2015, the portfolios rated “AA” and “A” accounted for 79.3% of the total loan portfolio.

Total loans rated from "D" and "H" accounted for 8.4% of total loans, 30 basis points higher when compared to the previous quarter.

Loan Portfolio Evolution by Risk Level

 

Note: Does not consider endorsements and sureties.

Loan Portfolio Write-Off

(*) Loan portfolio average balance for the previous two quarters.

Loan portfolio write-off totaled R$4,294 million in the third quarter of 2015, R$395 million lower compared to the previous quarter.

The ratio of written-off operations to the average balance of the loan portfolio reached 0.9%, 10 basis points lower when compared to the previous quarter and to the same period of the previous year.

Recovery of Loans Written off as Losses

In the third quarter of 2015, recovery of loans written off as losses decreased R$39 million, or 3.4%, from the previous quarter.

Itaú Unibanco Holding S.A. 24

Management Discussion & Analysis Income Statement Analysis

Banking Service Fees, Income from Banking Charges and Result from Insurance, Pension Plan and Premium Bonds

In R$ millions	3Q15		2Q15		change					3Q14		change					9M15		9M14		change
Asset Management		760		689		70		10.2	%		688		72		10.4	%		2,111		1,993		118		5.9	%
Current Account Services		1,462		1,368		94		6.8	%		1,217		245		20.2	%		4,235		3,582		653		18.2	%
Credit Operations and Guarantees Provided		824		799		25		3.2	%		781		43		5.5	%		2,424		2,234		189		8.5	%
Collection Services		383		385		(3	)	-0.7	%		387		(4	)	-1.1	%		1,134		1,160		(26	)	-2.3	%
Credit Cards		2,929		2,929		(0	)	0.0	%		2,767		162		5.9	%		8,742		8,050		692		8.6	%
Other		725		735		(10	)	-1.4	%		719		6		0.8	%		2,209		1,933		276		14.3	%
Banking Service Fees and Income from Banking Charges		7,082		6,906		176		2.5	%		6,558		525		8.0	%		20,855		18,952		1,903		10.0	%
Result from Insurance, Pension Plan and Premium Bonds		1,563		1,544		19		1.2	%		1,536		27		1.8	%		4,590		4,339		251		5.8	%
Total		8,645		8,451		195		2.3	%		8,093		552		6.8	%		25,445		23,291		2,154		9.2	%
(-) Result from Other Insurance Activities(*)		95		99		(4	)	-3.9	%		133		(38	)	-28.6	%		278		456		(178	)	-39.1	%
Total excluding Other Insurance Activities(*)		8,551		8,352		199		2.4	%		7,961		590		7.4	%		25,167		22,835		2,332		10.2	%

In the third quarter of 2015, banking service fees, including income from banking charges, amounted R$7,082 million, a 2.5% increase when compared to the previous quarter and an 8.0% increase from the third quarter of 2014.

In the first nine months of 2015, these revenues reached R$20,855 million, a 10.0% increase from the same period of the previous year, mainly driven by higher revenues from credit card and current account services.

These revenues, together with the result from insurance, pension plan and premium bonds, totaled R$8,645 million in the third quarter of 2015, an increase of 2.3% from the previous quarter and 6.8% when compared to the same period of the previous year.

Excluding the result from other insurance activities(*), our revenues reached R$8,551 million in this quarter, 2.4% higher when compared to the second quarter of 2015 and up 7.4% from the same period of the previous year.

(*) Other insurance activities include extended warranty, large risks, health insurance, other products and our stake in IRB.

Asset Management

Asset management revenues totaled R$760 million in the third quarter of 2015, a 10.2% increase from the previous quarter and 10.4% from the third quarter of 2014, mainly driven by the higher volume of consortium and fund management operations.

In the first nine months of 2015, these revenues reached R$2,111 million, a 5.9% increase from the same period of the previous year.

Asset Administration

Fund management fees amounted to R$577 million in the third quarter of 2015, a 10.9% increase from the second quarter of 2015, driven by the higher volume of investment funds and greater number of business days in the period.

Total assets under administration reached R$750 billion in September 2015, with increases of 5.7% from the previous quarter and of 16.0% from the same period of the previous year.

According to the ANBIMA ranking, in September 2015 we were second in the fund management and managed portfolio* ranking, with a 21.0% market share.

* Includes Itaú Unibanco and Intrag.

 

Consortia Administration Fees

Consortia management fees totaled R$183 million in the third quarter of 2015, increasing 8.1% from the second quarter of 2015 mainly driven by the consortia market growth and by campaigns carried out internally. These fees increased 15.3% when compared to the same period of the previous year.

In September 2015, we reached approximately 415 thousand active contracts, with increases of 0.9% from the previous quarter and of 3.1% when compared to September 2014.

In September 2015, the installments receivable reached R$12.2 billion, an increase of 5.1% from June 2015 and of 9.2% from September 2014.

 

Itaú Unibanco Holding S.A. 25

Management Discussion & Analysis Income Statement Analysis

Current Account Services

Revenues from current account services totaled R$1,462 million in the third quarter of 2015, a 6.8% increase from the previous quarter and a 20.2% increase from the third quarter of 2014.

In the first nine months of 2015, these revenues recorded an 18.2% increase when compared to the same period of 2014. These increased revenues from current account services are mainly due to the offering of differentiated products and services aimed at adding more value to the experience of our clients. These products include differentiated current account service packages for individuals and the convenience and versatility of products offered to companies.

Loan Operations and Guarantees Provided

Revenues from loan operations and guarantees provided totaled R$824 million, a 3.2% increase from the previous quarter and a 5.5% increase when compared to the same quarter of the previous year.

In the first nine months of 2015, these revenues increased 8.5% when compared to the same period of the previous year.

In the third quarter of 2015, the ratio of annual revenues from loan operations to the loan portfolio without endorsement and sureties reached 0.4% p.a.

The ratio of annual revenues from guarantees provided to the endorsements and sureties portfolio reached 1.8% p.a.

(*) Loan portfolio average balance from two previous quarters.

Collection Services

Revenues from collection services reached R$383 million in the third quarter of 2015, decreasing 0.7% from the second quarter of 2015. When compared to the same period of the previous year, these revenues decreased 1.1%.

Credit Cards

Credit card revenues amounted to R$2,929 million in the third quarter of 2015, stable when compared to the previous quarter.

These revenues increased 5.9% when compared to the same period of the previous year, mainly impacted by the higher revenues from interchange, MDR (Merchant Discount Rate) and annual fees, and by the increase in the number of POS equipment rented in the period.

In the first nine months of 2015, credit card revenues reached R$8,742 million, an 8.6% increase from the same period of the previous year driven by the same reasons mentioned above.

The proportion of credit card revenues related to card issuance corresponds to 52.8% of total revenues.

Transaction Volume and Card Accounts | Credit and Debit Cards

Through proprietary and partnership operations, we offer a wide range of credit and debit cards to more than 61.2 million current account holders and non-account holders (in number of accounts). In the third quarter of 2015, the volume of transactions amounted to R$82.0 billion, a 5.8% increase from the same period of 2014.

We are the leading player in the Brazilian credit card market, through Itaucard, Hipercard, Hiper, Credicard, joint ventures and commercial agreements with leading companies in sectors such as telecom, vehicles, retail and aviation at the Brazilian market, totaling 35.1 million client accounts, including both account and non-account holders.

In the third quarter of 2015, the volume of credit card transactions amounted to R$61.9 billion, a 4.0% increase from the same period of the previous year.

In the debit card segment, which only includes current account holders, we have 26.1 million accounts. The volume of debit card transactions amounted to R$20.1 billion in the third quarter of 2015, an 11.6% increase from the same period of the previous year.

Itaú Unibanco Holding S.A. 26

Management Discussion & Analysis Income Statement Analysis

Transaction Volume and Card Accounts | Credit and Debit Cards

Note: As of first quarter of 2014, we include Credicard card base.

Acquiring Services

Our merchant acquiring business comprises the process of capturing transactions through the affiliation, management and relationship with commercial establishments through the company REDE.

In the third quarter of 2015, the transaction volume totaled R$93.9 billion, a 0.4% increase from the second quarter of 2015 and a 6.2% increase from the same period of the previous year.

Transaction Volume | Credit and Debit Cards

In the third quarter of 2015, the volume of credit card transactions was R$61.9 billion, representing 65.9% of the total volume of transactions generated by the acquiring services, a 0.1% increase from the second quarter of 2015 and a 6.9% increase when compared to the same period of the previous year.

In addition to the transaction volume mentioned above, we captured and processed more than R$1.3 billion in transactions within our retail partners and Joint Ventures in the third quarter of 2015.

In the third quarter of 2015, the volume of debit card transactions was R$32.1 billion, representing 34.1% of the total transaction volume, a 1.1% increase from the previous quarter and a 4.7% increase from the same period of 2014.

Equipment Base^(*)

At the end of the third quarter of 2015, our base of active installed equipment reached 1,899 thousand units, a growth of 2.2% from the previous quarter and of 11.2% when compared to the third quarter of 2014.

^(*)100% of REDE’s equipment base is able to capture Hiper brand transactions.

Other

In R$ millions	3Q15		2Q15		change
Foreign Exchange Services		22		21		1
Brokerage and Securities Placement		100		96		4
Custody Services and Portfolio Management		77		74		3
Economic and Financial Advisory Services		129		183		(55	)
Other Services		397		361		36
Total		725		735		(10	)

Revenues from economic and financial advisory services decreased due to the lower volume of Investment Banking services in the quarter, mainly offset by the growth of revenues from other services in foreign units.

Banking Service Fees and Income from Banking Charges and Result from Insurance, Pension Plan and Premium Bonds

In the third quarter of 2015, the ratio of total banking service fees and income from banking charges added to the result from insurance, pension plan and premium bonds, divided by these total revenues added to the managerial financial margin, reached 32.9%.

The operational coverage ratio, which represents the extent to which non-interest expenses were covered by the banking service fees and income from banking charges, added to the result from insurance, pension plans and premium bonds, reached 79.3% in this quarter, a decrease of 540 basis points when compared to the previous quarter, mainly due to higher personnel expenses.

(*) Insurance Operations include insurance, pension plan and premium bonds.

Itaú Unibanco Holding S.A. 27

Management Discussion & Analysis Itaú Insurance, Pension Plan and Premium Bonds

Itaú Insurance, Pension Plan and Premium Bonds

The Pro Forma financial statements below were prepared based on Itaú Unibanco’s managerial information and are intended to explain the performance of the insurance-related business.

The disclosure for the results from Itaú Insurance, Pension Plan and Premium Bonds is broken down into Core Activities and Other Activities.

As of the third quarter of 2015, the capital allocation criteria for insurance, pension plan and premium bonds operations, in the managerial model, is based on the BACEN regulatory model, which replaced the SUSEP regulatory model. In order to keep comparability, the information was reprocessed as of the second quarter of 2014.

Sales Cost Model

The practice in Itaú Unibanco is to allocate the selling costs to all of our products and services based on the corresponding utilization of each channel (full allocation method). For that reason, the selling costs related to insurance, pension plan and premium bonds products in our branch network and other electronic or physical distribution channels are recorded in our income statement of the insurance segment. This practice has both accounting and managerial effects.

Pro Forma Recurring Income Statement of Insurance Operations

	3Q15									2Q15									change						3Q14									change
				Core			Other						Core			Other						Core						Core			Other						Core
In R$ millions	Total			Activities			Activities			Total			Activities			Activities			Total			Activities			Total			Activities			Activities			Total			Activities
Earned Premiums		1,445			1,069			377			1,427			1,043			385			1.2	%		2.5	%		1,586			1,015			571			-8.9	%		5.3	%
Revenues from Pension Plan and Premium Bonds		242			242			-			210			210			-			15.4	%		15.4	%		237			237			-			2.1	%		2.1	%
Retained Claims		(437	)		(324	)		(113	)		(385	)		(284	)		(101	)		13.5	%		14.1	%		(559	)		(293	)		(267	)		-21.9	%		10.7	%
Selling Expenses		(268	)		(40	)		(228	)		(268	)		(39	)		(229	)		-0.1	%		1.6	%		(284	)		(50	)		(235	)		-5.7	%		-19.0	%
Result from Insurance, Pension Plan and Premium Bonds		982			946			36			984			929			55			-0.2	%		1.9	%		979			909			70			0.3	%		4.1	%
Managerial Financial Margin		227			189			38			221			191			30			2.7	%		-1.2	%		436			181			255			-47.9	%		4.4	%
Service Fees		438			438			(0	)		409			408			0			7.2	%		7.3	%		430			428			2			1.8	%		2.3	%
Earnings of Affiliates		97			70			28			102			83			19			-4.8	%		-15.8	%		88			75			14			10.3	%		-6.7	%
Non-interest Expenses		(497	)		(454	)		(42	)		(460	)		(425	)		(35	)		8.0	%		6.9	%		(452	)		(383	)		(69	)		10.0	%		18.8	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(84	)		(71	)		(13	)		(83	)		(68	)		(16	)		0.1	%		4.8	%		(95	)		(68	)		(27	)		-12.5	%		3.6	%
Income before Tax and Minority Interests		1,164			1,118			46			1,172			1,118			54			-0.7	%		-0.1	%		1,387			1,142			245			-16.0	%		-2.1	%
Income Tax/Social Contribution and Minority Interests		(432	)		(424	)		(8	)		(418	)		(404	)		(14	)		3.3	%		4.9	%		(510	)		(420	)		(89	)		-15.2	%		0.8	%
Recurring Net Income		732			694			38			754			714			39			-2.9	%		-2.9	%		877			721			155			-16.5	%		-3.8	%
Recurring Return on Allocated Capital		143.5	%		149.8	%		81.4	%		138.6	%		145.5	%		74.5	%		500	bps		430	bps		122.1	%		134.6	%		85.2	%		2,150	bps		1,520	bps
Efficiency Ratio (ER)		29.9	%		28.9	%		47.8	%		28.2	%		27.5	%		39.5	%		170	bps		140	bps		24.6	%		25.1	%		22.0	%		530	bps		380	bps
Combined Ratio		71.6	%		59.8	%		105.1	%		67.5	%		55.9	%		99.0	%		410	bps		390	bps		73.7	%		56.4	%		104.6	%		-210	bps		340	bps

Note: Combined Ratio for insurance activities. Non-interest Expenses comprise Personnel Expenses, Other Administrative Expenses and Other Operating Expenses.

Our core activities consist of mass-market products related to Life, Property, Credit, Pension and Premium Bonds. Other insurance activities correspond to extended warranty, health insurance, our stake in IRB and other.

We continue to concentrate efforts on distribution through our own channels, due to greater agility and efficiency, which positively impact our profitability. Sales of insurance product and premium bonds through bankfone, bankline/internet, ATMs and teller terminals accounted for 45.6% of sales to account holders in the quarter. Sales of premium bonds through these channels increased 11.9% from the previous quarter and accounted for 70.6% of total sales in the period.

Recurring net income from Insurance Operations reached R$732 million in the third quarter of 2015, decreasing 2.9% from the previous quarter and 16.5% from the same period of the previous year.

Recurring net income from core activities was R$694 million in the third quarter of 2015, a decrease of 2.9% from the second quarter of 2015, mainly due to the increase in retained claims from life insurance products and non-interest expenses. When compared to the same period of the previous year, the decrease was 3.8%.

Recurring net income from other insurance activities reached R$38 million in the quarter, down 3.4% from the previous quarter, mainly driven by higher retained claims, and down 75.5% when compared to the same period of the previous year, mainly due to the early termination of the agreement between Itaú Seguros S.A. and Via Varejo regarding extended warranty operations occurred in the third quarter of 2014.

The annualized recurring return of the insurance operations reached 143.5% in the period, an increase of 500 basis points from the previous quarter.

The insurance ratio, which represents the ratio of recurring net income from insurance, pension plan and premium bonds operations to Itaú Unibanco’s recurring net income, reached 12.0%, down 30 basis points from the previous quarter.

Insurance Ratio⁽¹⁾ and ROE | Insurance Operations

 

(1) Insurance Ratio (%) = Recurring net income from Insurance, Pension Plan and Premium Bonds operations / Itaú Unibanco’s recurring net income.

Itaú Unibanco Holding S.A. 28

Management Discussion & Analysis Itaú Insurance, Pension Plan and Premium Bonds

Breakdown of Recurring Net Income | Insurance Operations

In the third quarter of 2015, the ratio of the result of core activities to the recurring net income from Itaú Insurance, Pension Plan and Premium Bonds reached 94.8%.

Balance Sheet | Insurance Operations

The balance sheet of our Insurance Operations is presented below. As at September 30, 2015, total assets amounted to R$127.8 billion, a 3.1% increase from the second quarter of 2015 and a 9.7% increase from the same period of the previous year, mainly due to an increase in securities.

Combined Ratio | Insurance Activities

 

Note: The combined ratio of insurance activities is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes over earned premiums.

The combined ratio, which reflects the operating cost efficiency as a percentage of income from earned premiums, reached 71.6% in the period, an increase of 410 basis points from the previous quarter, mainly driven by the increase in the loss ratio. When compared to the same period of the previous year, this ratio decreased 210 basis points.

Efficiency Ratio

 

The efficiency ratio was 29.9% in the third quarter of 2015, a 170 basis point increase from the previous quarter. Including only our core activities, efficiency ratio reached 28.9% in the period.

Technical provisions, including insurance, pension plan and premium bonds, totaled R$ 126.1 billion in the period a 3.7% increase from the previous quarter and an 11.7% increase from the third quarter of 2014.

	3Q15								2Q15											3Q14
In R$ millions, end of period	Insurance		Pension Plan		Premium Bonds		Total		Insurance		Pension Plan		Premium Bonds		Total		change			Insurance		Pension Plan		Premium Bonds		Total		change
Assets
Current and Long-Term Assets
Securities		4,390		118,637		3,062		126,088		4,642		114,310		3,106		122,058		3.3	%		6,911		100,710		3,099		110,721		13.9	%
Other Assets ¹		1,710		-		-		1,710		1,939		-		-		1,939		-11.8	%		5,812		-		-		5,812		-70.6	%
Total Assets		6,099		118,637		3,062		127,798		6,581		114,310		3,106		123,997		3.1	%		12,723		100,710		3,099		116,532		9.7	%
Liabilities and Equity
Current and Long – Term Liabilities		5,363		118,069		3,041		126,473		5,664		113,444		3,080		122,188		3.5	%		10,939		99,763		3,028		113,729		11.2	%
Technical Provisions – Insurance		5,186		-		-		5,186		5,372		-		-		5,372		-3.4	%		10,460		-		-		10,460		-50.4	%
Technical Provisions – Pension Plans and VGBL		-		117,914		-		117,914		-		113,208		-		113,208		4.2	%		-		99,505		-		99,505		18.5	%
Technical Provisions – Premium Bonds		-		-		3,036		3,036		-		-		3,073		3,073		-1.2	%		-		-		3,008		3,008		0.9	%
Other Liabilities		177		155		6		338		292		236		7		535		-36.9	%		479		258		19		756		-55.4	%
Allocated Tier I Capital		736		568		21		1,325		918		866		26		1,810		-26.8	%		1,784		947		71		2,803		-52.7	%
Total Liabilities and Equity		6,099		118,637		3,062		127,798		6,581		114,310		3,106		123,997		3.1	%		12,723		100,710		3,099		116,532		9.7	%

(1) Other assets include mainly receivables from insurance.

Note: Does not include our 30% stake in Porto Seguro.

Itaú Unibanco Holding S.A. 29

Management Discussion & Analysis Insurance Core Activities

Pro Forma Recurring Income Statement of the Insurance Segment | Core Activities

In R$ millions	3Q15			2Q15			change					3Q14			change
Earned Premiums		1,069			1,043			26		2.5	%		1,015			54		5.3	%
Retained Claims		(316	)		(277	)		(39	)	14.2	%		(272	)		(44	)	16.0	%
Selling Expenses		(39	)		(39	)		(0	)	0.1	%		(49	)		10		-21.0	%
Underwriting Margin		714			728			(14	)	-1.9	%		693			20		2.9	%
Managerial Financial Margin		62			61			1		1.5	%		33			29		87.0	%
Service Fees		103			103			1		0.9	%		124			(21	)	-16.8	%
Earnings of Affiliates		70			83			(13	)	-15.8	%		75			(5	)	-6.7	%
Non-interest Expenses		(243	)		(227	)		(16	)	7.1	%		(209	)		(33	)	15.9	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(42	)		(42	)		(0	)	1.0	%		(42	)		(0	)	0.9	%
Income before Tax and Minority Interests		664			706			(41	)	-5.9	%		675			(10	)	-1.5	%
Income Tax/Social Contribution and Minority Interests		(241	)		(245	)		4		-1.6	%		(237	)		(4	)	1.8	%
Recurring Net Income		423			461			(38	)	-8.2	%		438			(15	)	-3.3	%
Efficiency Ratio (ER)		26.8	%		24.3	%				250	bps		23.7	%				310	bps

Our insurance core activities consist of mass-market products related to life, property and credit. These products are offered in synergy in retail channels - branch network, partnership with retailers, credit card clients, real estate and vehicle financing, personal and payroll loans - and in the wholesale channel. These products have characteristics such as low loss ratio, low volatility in the result and less use of capital, making them strategic and increasingly relevant in the diversification of the conglomerate’s revenues.

Net Income | Insurance Core Activities

In the third quarter of 2015, recurring net income from insurance core activities totaled R$423 million, an 8.2% decrease from the previous quarter, mainly driven by the increase in retained claims and non-interest expenses.

Earned Premiums Breakdown | Insurance Core Activities

In the third quarter of 2015, earned premiums from insurance core activities reached R$1,069 million, a 2.5% increase from the previous quarter. When compared to the third quarter of 2014, the increase was 5.3%, mainly driven by individual life and real estate products.

Considering only our core activities, which include our 30% stake in Porto Seguro, our earned premiums market share of the core insurance total market reached 14.4% in the 2015 year-to-date(*). Considering the technical result of insurance core activities, our market share reached 18.0% in the 2015 year-to-date(*).

Retained Claims Breakdown | Insurance Core Activities

In the third quarter of 2015, retained claims from core insurance activities amounted to R$316 million, up 14.2% from the previous quarter, mainly driven by life products.

Underwriting Margin | Insurance Core Activities

The underwriting margin from our insurance core activities amounted to R$714 million in the third quarter of 2015, a 1.9% decrease from the previous quarter and a 2.9% increase when compared to the third quarter of 2014. In the quarter, the ratio of underwriting margin to earned premiums reached 66.8%, 300 basis points down from the second quarter of 2015.

(*) Most recent data available on September 30, 2015, based on information disclosed by SUSEP.

Itaú Unibanco Holding S.A. 30

Management Discussion & Analysis Insurance Core Activities and Pension Plan

Combined Ratio | Insurance Core Activities

 

Note: The combined ratio is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes over earned premiums.

The combined ratio, which reflects the operating cost efficiency as a percentage of income from earned premiums, reached 59.8%, an increase of 390 basis points from the previous quarter, mainly driven by a higher loss ratio.

The extended combined ratio, which reflects the operating cost efficiency as a percentage of income from earned premiums, the managerial financial margin and banking service fees, reached 51.8% in the third quarter of 2015, 350 basis points up from the previous quarter.

Extended Combined Ratio | Insurance Core Activities

 

Note: The extended combined ratio is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes over the sum of earned premiums, managerial financial margin and banking service fees.

Efficiency Ratio | Insurance Core Activities

 

In the third quarter of 2015, efficiency ratio reached 26.8%, a 250 basis point increase from the previous quarter.

Pro Forma Recurring Income Statement of the Pension Plan Segment

In R$ millions	3Q15			2Q15			change					3Q14			change
Revenues from Pension Plan		91			69			22		32.3	%		88			3		3.0	%
Retained Claims		(8	)		(7	)		(1	)	10.9	%		(20	)		12		-60.6	%
Selling Expenses		(1	)		(1	)		0		-34.2	%		(1	)		0		-3.1	%
Result from Pension Plan		82			60			22		35.9	%		67			15		22.5	%
Managerial Financial Margin		59			67			(8	)	-12.4	%		86			(27	)	-31.4	%
Service Fees		336			307			29		9.5	%		304			31		10.3	%
Non-interest Expenses		(127	)		(107	)		(19	)	18.1	%		(111	)		(16	)	14.7	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(21	)		(19	)		(2	)	13.2	%		(19	)		(2	)	12.2	%
Income before Tax and Minority Interests		329			308			21		6.7	%		328			1		0.3	%
Income Tax/Social Contribution and Minority Interests		(131	)		(118	)		(13	)	11.4	%		(128	)		(3	)	2.2	%
Recurring Net Income		198			191			7		3.7	%		200			(2	)	-1.0	%
Efficiency Ratio (ER)		27.8	%		25.8	%				200	bps		25.2	%				260	bps

Product innovation has played a significant role in the sustainable growth of our pension plan operations for individuals. For companies, we offer specialized advisory services and develop customized solutions. We establish long-term partnerships with our corporate clients, keeping a close relationship with the human resources departments and adopting a communication strategy designed for the financial education of their employees.

The recurring net income of the Pension Plan segment amounted to R$198 million in the third quarter of 2015, a 3.7% increase from the previous quarter, mainly due to higher banking service fees and net pension plan contributions.

When compared to the same period of the previous year, there was a 1.0% decrease, mainly driven by lower managerial financial margin and higher non-interest expenses.

Revenues from Administration Fees

The revenues from administration fees totaled R$336 million in the third quarter of 2015, with increases of 9.5% from the previous quarter and of 10.3% from the third quarter of 2014.

 

Itaú Unibanco Holding S.A. 31

Management Discussion & Analysis Pension Plan and Premium Bonds

Pension Plan Technical Provisions and Redemption Rate

On September 30, 2015, technical provisions for pension plans totaled R$117.9 billion, with increases of 4.2% when compared to June 30, 2015, and of 18.5% from the same period of the previous year.

According to the National Federation of Pension and Life Insurance (FENAPREVI), in August 2015 our market share of total technical provisions was 23.8% whereas the market share in plans for individuals was 24.0%, decreasing 50 and 60 basis points, respectively, when compared to the same period of the previous year.

The redemption rate, which represents the ratio of redemptions to the balance of technical provisions for pension plans, reached 2.7%, an increase of 10 basis points from the previous quarter and an increase of 20 basis points from the third quarter of 2014.

Total and Net Pension Plan Contributions

Total pension plan contributions in the quarter totaled R$5,350 million, increasing 10.3% from the previous quarter, mainly impacted by higher VGBL contributions. Net contributions for the third quarter of 2015 reached R$2,117 million, a 9.9% growth from the second quarter of 2015.

Pro Forma Recurring Income Statement of the Premium Bonds Segment

In R$ millions	3Q15			2Q15			change					3Q14			change
Revenues from Premium Bonds		151			141			10		7.2	%		149			2		1.6	%
Managerial Financial Margin		68			62			5		8.3	%		61			6		10.2	%
Non-interest Expenses		(85	)		(91	)		6		-6.9	%		(63	)		(22	)	35.5	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(8	)		(7	)		(0	)	5.2	%		(8	)		0		-3.1	%
Income before Tax and Minority Interests		125			104			20		19.4	%		139			(15	)	-10.5	%
Income Tax/Social Contribution and Minority Interests		(52	)		(42	)		(10	)	24.5	%		(55	)		4		-6.6	%
Recurring Net Income		73			63			10		16.1	%		84			(11	)	-13.0	%
Efficiency Ratio (ER)		40.5	%		46.6	%				-610	bps		31.0	%				950	bps

The PIC Premium Bonds product is targeted to clients who are interested in competing for prizes. Such product can be purchased through a single payment or monthly payment modality, in accordance with the profile and segment of each client. At the end of the third quarter of 2015, the premium bonds business had 16.8 million certificates issued.

In line with our sustainability principles, we have a partnership with Ayrton Senna Institute, a non-profit organization that works to improve the quality of education at public schools in Brazil. Part of the revenues from the monthly payments for premium bonds certificates is transferred to projects of this Institute.

In the third quarter of 2015, 700 clients received prizes in the aggregate amount of R$13.9 million. Sales of premium bonds to account holders increased 9.4% from the previous quarter. Total sales to account holders grew 34.1% when compared to the previous quarter and 57.8% from the third quarter of 2014.

The Premium Bonds segment’s recurring net income totaled R$73 million in the third quarter of 2015, a 16.1% increase from the previous quarter, mainly influenced by higher load fees and lower non-interest expenses. When compared to the same period of the previous year, the recurring net income decreased 13.0% due to the higher cost allocated to the product, as a result of a review of our allocation costs model.

Our business model helps us to retain the leadership in terms of technical result(*), including the total premium bonds market, with a market share of 28.7% in the year, based on information disclosed by SUSEP.

Premium Bonds Technical Provisions

On September 30, 2015, technical provisions for premium bonds reached R$3,036 million, a decrease of 1.2% from the previous quarter, and an increase of 0.9% when compared to the third quarter of 2014.

 

(*) Most recent data available on September 30, 2015. Technical Result = Net Collection from Cancellation Fees (-) Variation of Provision for Redemption and Deferred Income (+) Income from Raffes (-) Acquisition Costs (+) Revenues from Redemptions of Securities.

Itaú Unibanco Holding S.A. 32

Management Discussion & Analysis Income Statement Analysis

Non-interest Expenses

In R$ millions	3Q15			2Q15			change					3Q14			change					9M15			9M14			change
Personnel Expenses		(5,011	)		(4,349	)		(662	)	15.2	%		(4,352	)		(659	)	15.1	%		(13,874	)		(12,459	)		(1,415	)	11.4	%
Administrative Expenses		(4,350	)		(4,265	)		(84	)	2.0	%		(4,127	)		(223	)	5.4	%		(12,543	)		(11,958	)		(585	)	4.9	%
Operating Expenses		(1,410	)		(1,287	)		(122	)	9.5	%		(1,162	)		(248	)	21.3	%		(3,972	)		(3,613	)		(359	)	9.9	%
Other Tax Expenses (*)		(136	)		(77	)		(58	)	75.0	%		(112	)		(23	)	20.7	%		(378	)		(340	)		(38	)	11.2	%
Total		(10,906	)		(9,979	)		(927	)	9.3	%		(9,753	)		(1,153	)	11.8	%		(30,767	)		(28,369	)		(2,397	)	8.5	%
( - ) Operations Abroad		(1,131	)		(983	)		(148	)	15.0	%		(764	)		(367	)	48.1	%		(3,130	)		(2,286	)		(844	)	36.9	%
Total (ex-operations abroad)		(9,775	)		(8,996	)		(779	)	8.7	%		(8,989	)		(786	)	8.7	%		(27,637	)		(26,083	)		(1,553	)	6.0	%

(*) Does not include ISS, PIS and Cofins.

Non-interest expenses totaled R$10,906 million in the third quarter of 2015, an increase of 9.3% or R$927 million when compared to the second quarter of 2015. This increase was basically driven by a growth of 15.2%, or R$662 million, in personnel expenses, mainly due to the collective labor agreement, of 9.5% in operating expenses and of 2.0% in administrative expenses.

In the first nine months of 2015, non-interest expenses increased 8.5% when compared to the same period of the previous year. Disregarding operations abroad, these expenses would have increased 6.0%.

Personnel Expenses

In R$ millions	3Q15			2Q15			change
Compensation, Charges and Social Benefits		(3,568	)		(2,937	)		(631	)
Profit Sharing (*)		(917	)		(927	)		10
Employee Terminations and Labor Claims		(473	)		(432	)		(42	)
Training		(52	)		(53	)		0
Total		(5,011	)		(4,349	)		(662	)

(*) Includes variable compensation and stock option plans.

Personnel expenses totaled R$5,011 million in the third quarter of 2015, a 15.2% increase compared to the previous period. This increase was primarily driven by higher expenses on compensation, charges and social benefits by 21.5%, or R$631 million, mainly driven by the collective labor agreement, and by the increase of 10.1%, or R$42 million, in terminations and labor claims.

Number of Employees

The total number of employees decreased from 91,968 at the end of the second quarter of 2015 to 91,437 at the end of the third quarter.

 

Note: For companies under the control of Itaú Unibanco, 100% of the total number of employees is considered. No employees are considered for companies not controlled by Itaú Unibanco.

Administrative Expenses

In R$ millions	3Q15			2Q15			change
Third-Party Services		(1,016	)		(976	)		(40	)
Data Processing and Telecommunications		(1,025	)		(1,002	)		(23	)
Facilities		(681	)		(684	)		2
Depreciation and Amortization		(560	)		(565	)		6
Advertising, Promotions and Publications		(266	)		(263	)		(3	)
Security		(176	)		(166	)		(9	)
Financial System Services		(153	)		(143	)		(10	)
Transportation		(100	)		(99	)		(1	)
Materials		(103	)		(115	)		12
Travel		(55	)		(57	)		2
Other		(216	)		(196	)		(20	)
Total		(4,350	)		(4,265	)		(84	)

Administrative expenses totaled R$4,350 million, an increase of 2.0% when compared to the second quarter of 2015. This increase was mainly due to higher expenses on third-party services, concentrated on telemarketing, advisory and consulting services, and to data processing and telecommunication.

Operating Expenses

In R$ millions	3Q15			2Q15			change
Provision for Contingencies		(555	)		(496	)		(59	)
Selling - Credit Cards		(508	)		(452	)		(57	)
Claims		(65	)		(92	)		27
Other		(281	)		(247	)		(33	)
Total		(1,410	)		(1,287	)		(122	)

Operating expenses increased R$122 million in the third quarter of 2015 when compared to the second quarter of 2015, mainly driven by higher provisions for contingencies and selling expenses, related to card commissions.

Other Tax Expenses (*)

Other tax expenses totaled R$136 million in the third quarter of 2015, an increase of R$58 million compared to the second quarter of 2015.

(*) Does not include ISS, PIS or Cofins.

Itaú Unibanco Holding S.A. 33

Management Discussion & Analysis Income Statement Analysis

Efficiency Ratio and Risk-Adjusted Efficiency Ratio

We present the efficiency ratio and the risk-adjusted efficiency ratio, which includes the risk portions associated with banking transactions (result from loan losses).

 

Risk-Adjusted Efficiency Ratio	=	Non-Interest Expenses (Personnel Expenses + Administrative Expenses + Operating Expenses + Other Expenses) + Result from Loan Losses
		(Managerial Financial Margin + Banking Service Fees and Banking Charges + Result of Insurance, Pension Plan and Premium Bonds - Tax Expenses for ISS, PIS, Cofins and Other Taxes)

Efficiency Ratio

In the third quarter of 2015, the efficiency ratio reached 44.2%, an increase of 130 basis points when compared to the second quarter of 2015. This increase was mainly due to the increase in our non-interest expenses. In the 12-month period, the efficiency ratio reached 44.2%, an improvement of 40 basis points from the previous quarter. Compared with the third quarter of 2014, this ratio improved 350 basis points.

Risk-Adjusted Efficiency Ratio

The risk-adjusted efficiency ratio, in the criteria including all expenses and also the result from loan losses, reached 63.1% in the third quarter of 2015, an increase of 130 basis points when compared to the previous quarter, as a result of the increase of 4.1% in provision for loan losses and the decrease of 3.4% in recovery of loans written off as losses.

When compared to the third quarter of 2014, the risk-adjusted efficiency ratio increased 130 basis points mainly due to the increase of 21.2% in provision for loan losses and of 11.8% in our non-interest expenses.

In the 12-month period, the risk-adjusted efficiency ratio reached 62.3%, an improvement of 120 basis points when compared to the third quarter of 2014.

Operating Revenues Distribution

The chart below shows the portions of operating revenues used to cover non-interest expenses and result from loan losses.

 

(*) Net of Tax Expenses for ISS, PIS, Cofins and Other (taxes on revenues), Claims and Insurance Selling Expenses.

Itaú Unibanco Holding S.A. 34

Management Discussion & Analysis Income Statement Analysis

Points of Service

Automated Teller Machines (ATMs) | Brazil and Abroad

At the end of the third quarter of 2015, the number of ATMs totaled 26,454, a decrease of 255 units when compared to the second quarter of 2015. This decrease is a result of the shareholders’ agreement with Tecban and its shareholders, announced on July 18, 2014, which provides for the substitution of part of the external ATMs network for Banco24Horas ATMs.

 

Note: (i) Includes Banco Itaú Argentina and companies in Chile, Uruguay and Paraguay.

(ii) Includes ESBs (Electronic Service Branches) and points of service in third-parties’ establishments.

(iii) Does not include points of sale and ATMs of Banco 24h.

Branches and Client Service Branches (CSB)⁽ⁱ⁾ | Brazil and Abroad

We ended the third quarter of 2015 with 5,012 branches and client service branches (CSBs) in Brazil and abroad.

In Brazil, the movement observed in the number of branches is related to the profile of our customers, which has been increasingly demanding services through digital channels.

 

(i) Points of service include only Client Service Branches (CSBs).

Note: Includes Banco Itaú BBA, Banco Itaú Argentina and companies in Chile, Uruguay and Paraguay.

Our service network covers the entire Brazilian territory and adopts a segmentation strategy including structures, products and services developed to meet the specific needs of our many different clients. Our segments are: Itaú, Itaú Uniclass, Itaú Personnalité and Itaú Private Bank.

Geographical Distribution of Service Network (*)

Number of Branches and Client Service Branches (CSBs)

 

(1) Does not include branches and points of service abroad and Itaú BBA.

Banking Correspondents

Our registered banking correspondents totaled 5,539 at the end of the third quarter of 2015, a 3.4% increase when compared to the same period of the previous year, which demonstrates our commitment with the country’s development as we increase bank penetration.

 

Tax Expenses for ISS, PIS, Cofins and Other

Tax expenses amounted to R$1,574 million in the third quarter of 2015, an increase of 8.9% from the previous quarter and of 25.5% when compared to the same period of 2014.

Income Tax and Social Contribution on Net Income

In the third quarter of 2015, income tax and social contribution on net income (CSLL) expenses totaled R$2,911 million and the effective tax rate reached 32.0% in the quarter. The effective tax rate increase was the result of the increase in the social contribution rate on net income, from 15.0% to 20.0%, as established by Provisional Measure No. 675/15 of May 2015 (converted into Law No. 13,169/15 in October), as from last September.

Itaú Unibanco Holding S.A. 35

Management Discussion & Analysis Balance Sheet

Assets

As at September 30, 2015, total assets amounted to R$1.3 trillion, an increase of 7.5% when compared to the end of the previous quarter and an increase of 14.3% from the previous year.

The breakdown of our assets and details on its main components are presented below:

Total Assets

R$ billions 

Asset Breakdown | September 30, 2015

 

Short-term Interbank Investments and Securities Portfolio

On September 30, 2015, the balance of our short-term interbank investments and securities portfolio, including derivative financial instruments, totaled R$575.5 billion, corresponding to an increase of 9.2% when compared to the previous quarter, mainly due to the increase in short-term interbank investments.

In R$ millions, end of period	3Q15		%			2Q15		%			change			3Q14		%			change
Short-term Interbank Investments		229,677		39.9	%		192,433		36.5	%		19.4	%		217,538		43.5	%		5.6	%
Total Public Securities		127,478		22.2	%		135,411		25.7	%		-5.9	%		111,546		22.3	%		14.3	%
Public Securities - Domestic		115,207		20.0	%		125,015		23.7	%		-7.8	%		99,664		19.9	%		15.6	%
Public Securities - Foreign		12,271		2.1	%		10,397		2.0	%		18.0	%		11,883		2.4	%		3.3	%
Denmark		3,032		0.5	%		3,029		0.6	%		0.1	%		3,649		0.7	%		-16.9	%
United States		2,079		0.4	%		1,209		0.2	%		71.9	%		1,056		0.2	%		96.9	%
Korea		1,625		0.3	%		1,625		0.3	%		0.0	%		2,911		0.6	%		-44.2	%
Paraguay		1,443		0.3	%		1,444		0.3	%		0.0	%		977		0.2	%		47.7	%
Chile		1,403		0.2	%		1,014		0.2	%		38.4	%		1,390		0.3	%		1.0	%
Spain		1,062		0.2	%		307		0.1	%		246.5	%		783		0.2	%		35.7	%
Argentina		680		0.1	%		848		0.2	%		-19.8	%		75		0.0	%		802.5	%
Uruguay		347		0.1	%		363		0.1	%		-4.2	%		309		0.1	%		12.4	%
Other		599		0.1	%		558		0.1	%		7.4	%		732		0.1	%		-18.1	%
Corporate Securities		73,831		12.8	%		72,211		13.7	%		2.2	%		64,184		12.8	%		15.0	%
PGBL/VGBL - Fund Quotas		111,012		19.3	%		106,432		20.2	%		4.3	%		92,882		18.6	%		19.5	%
Derivative Financial Instruments		33,523		5.8	%		20,674		3.9	%		62.2	%		14,496		2.9	%		131.3	%
Total		575,521		100.0	%		527,160		100.0	%		9.2	%		500,646		100.0	%		15.0	%

Evolution of Short-Term Interbank Investments and Securities Portfolio

The breakdown of short-term interbank investments and securities in the past few quarters is presented below:

Securities by Category

Our securities portfolio is classified into three categories: trading, available-for-sale and held-to-maturity. As at September 30, 2015, the securities portfolio totaled R$312,321 million.

 

Itaú Unibanco Holding S.A. 36

Management Discussion & Analysis Balance Sheet

Funding

In R$ millions, end of period	3Q15		2Q15		change			3Q14		change
Demand Deposits		57,388		50,540		13.5	%		44,596		28.7	%
Savings Deposits		111,451		113,974		-2.2	%		113,676		-2.0	%
Time Deposits		113,520		88,914		27.7	%		119,062		-4.7	%
Debentures (Linked to Repurchase Agreements and Third Parties’ Operations)		135,639		134,932		0.5	%		133,200		1.8	%
Funds from Bills (1) and Structured Operations Certificates		33,324		31,018		7.4	%		32,175		3.6	%
(1) Total - Funding from Account Holders and Institutional Clients (*)		451,322		419,380		7.6	%		442,708		1.9	%
Onlending		40,336		42,621		-5.4	%		44,116		-8.6	%
(2) Total – Funding from Clients		491,658		462,001		6.4	%		486,825		1.0	%
Assets Under Administration		749,755		709,111		5.7	%		646,247		16.0	%
Technical Provisions for Insurance, Pension Plan and Premium Bonds		126,136		121,652		3.7	%		112,973		11.7	%
(3) Total – Clients		1,367,549		1,292,763		5.8	%		1,246,044		9.8	%
Interbank deposits		18,370		27,014		-32.0	%		3,642		404.4	%
Funds from Acceptance and Issuance of Securities		26,154		21,156		23.6	%		14,915		75.4	%
Total Funds from Clients + Interbank Deposits		1,412,073		1,340,934		5.3	%		1,264,601		11.7	%
Repurchase Agreements (2)		182,274		170,368		7.0	%		170,824		6.7	%
Borrowings		64,244		49,517		29.7	%		37,543		71.1	%
Foreign Exchange Portfolio		63,140		66,429		-5.0	%		41,855		50.9	%
Subordinated Debt		65,910		59,228		11.3	%		54,472		21.0	%
Collection and Payment of Taxes and Contributions		4,444		4,440		0.1	%		4,938		-10.0	%
Working Capital (3)		86,461		82,661		4.6	%		74,573		15.9	%
Working Capital and Other		466,474		432,644		7.8	%		384,204		21.4	%
Total Funds (Working Capital, Raised and Managed Assets)		1,878,547		1,773,577		5.9	%		1,648,805		13.9	%

(*) Funds from Institutional Clients totaled R$7,666 million, which corresponds to 1.7% of the total raised with Account Holders and Institutional Clients.

(1) Includes funds from Real Estate, Mortgage, Financial, Credit and Similar Notes. (2) Does not include own issued debentures classified as funding. (3) Equity + Non-Controlling Interest – Permanent Assets.

At the end of the third quarter of 2015, total funds from clients, including interbank deposits, amounted to R$1.4 trillion, corresponding to an increase of R$71,139 million when compared to the second quarter of 2015. The main drivers were increases of R$40,645 million in investment funds and managed portfolios, R$24,606 million in time deposits, and R$6,848 million in demand deposits, which were partially offset by the decrease of R$8,644 million in interbank deposits.

Debentures issued by leasing companies of the conglomerate, after being purchased by the bank (the Conglomerate’s parent company), are negotiated with similar characteristics as those of CDBs and other time deposits, although they are classified as deposits received under securities repurchase agreements. Therefore, these deposits are reclassified in the table above as deposits from account holders. At the end of the third quarter of 2015, this type of funding totaled R$135,639 million.

Total funds (working capital, raised and managed assets) amounted to R$1.9 trillion at the end of the third quarter of 2015, an increase of R$104,969 million when compared to the end of the second quarter of 2015, mainly driven by a combination of the increases in funds from clients, repurchase agreements, borrowings and subordinated debt.

In the 12-month period, we highlight the increase of R$147,472 million in funds from clients, including interbank deposits, mainly due to the increase in investment funds and managed portfolios, interbank deposits, technical provisions for insurance, pension plan and premium bonds, and debentures. Total funds (working capital, raised and managed assets) increased R$229,741 million in the 12-month period.

Funds from clients ⁽¹⁾

 

⁽¹⁾ Includes institutional clients in the proportion of each type of product invested by them.

Itaú Unibanco Holding S.A. 37

Management Discussion & Analysis Balance Sheet

Loans to Funding Ratio

In R$ millions, end of period	3Q15			2Q15			change			3Q14			change
Funding from Clients		491,658			462,001			6.4	%		486,825			1.0	%
Funds from Acceptance and Issuance of Securities Abroad		26,154			21,156			23.6	%		14,915			75.4	%
Borrowings		64,244			49,517			29.7	%		37,543			71.1	%
Other (1)		36,783			30,101			22.2	%		20,925			75.8	%
Total (A)		618,839			562,775			10.0	%		560,207			10.5	%
(-) Reserve Required by Brazilian Central Bank		(70,800	)		(67,912	)		4.3	%		(72,115	)		-1.8	%
(-) Cash (Currency) (2)		(18,138	)		(18,005	)		0.7	%		(16,636	)		9.0	%
Total (B)		529,901			476,858			11.1	%		471,456			12.4	%
Loan Portfolio (C) (3)		477,198			457,463			4.3	%		428,832			11.3	%
C/A		77.1	%		81.3	%		-420	bps		76.5	%		60	bps
C/B		90.1	%		95.9	%		-590	bps		91.0	%		-90	bps

(1) Consider installments of subordinated debt that are not included in the Tier II Referential Equity.

(2) Includes cash, bank deposits of institutions without reserve requirements, foreign currency deposits in Brazil, foreign currency deposits abroad, and cash and cash equivalents in foreign currency.

(3) The loan portfolio balance does not include endorsements and sureties.

Lending to funding ratio before the deduction of compulsory deposits and cash equivalents reached 77.1% at the end of the third quarter of 2015 compared to 81.3% at the end of the second quarter of 2015.

Excluding reserve requirements and cash equivalents, this ratio reached 90.1% at the end of the third quarter of 2015 compared to 95.9% at the end of the second quarter of 2015.

Loan to Funding Ratio

(*) Gross funding, ex-deductions of reserve requirements and cash and cash equivalents.

External Funding - Securities ⁽¹⁾

The table below highlights the main securities issued by Itaú Unibanco abroad in effect on September 30, 2015.

In US$ millions

Instrument	Issuer	Balance at Jun 30,15		Issuances		Amortization			Exchange Variation			Balance at Sep 30,15		Issue Date	Maturity Date	Coupon % p.a.
Fixed Rate Notes (2)	Itaú Chile		97										97	7/24/2007	7/24/2017		UF (5) + 3.79	%
Fixed Rate Notes (3)	Itaú Chile		98										98	10/30/2007	10/30/2017		UF(5) + 3.44	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,000										1,000	4/15/2010	4/15/2020		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,000										1,000	9/23/2010	1/22/2021		5.75	%
Medium Term Notes (4)	Itaú Unibanco Holding S.A., Grand Cayman Branch		161							(35	)		126	11/23/2010	11/23/2015		10.50	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		250										250	1/24/2011	1/22/2021		5.75	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		500										500	6/15/2011	12/21/2021		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		550										550	1/24/2012	12/21/2021		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,250										1,250	3/19/2012	3/19/2022		5.65	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,375										1,375	8/6/2012	8/6/2022		5.50	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,870										1,870	11/13/2012	5/13/2023		5.13	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,050										1,050	5/26/2015	5/26/2018		2.85	%
Structured Notes (6)			2,798				(510	)					2,289
Total			11,999		-		(510	)		(35	)		11,454

(1) The balances refer to principal amounts; (2) and (3) Amounts in US$ equivalent on the issuance dates to CHP 46.9 billion and CHP 48.5 billion, respectively; (4) Amounts in US$ equivalent on the issuance dates to R$500 million; (5) Development Financial Unit; (6) 180-day Libor.

On September 30, 2015, funds obtained abroad totaled US$11,454 million, corresponding to a decrease of US$545 million when compared to the second quarter of 2015 (presented in the  “Funding” table in the previous section as Foreign Borrowings through Securities and Subordinated Debt).

Itaú Unibanco Holding S.A. 38

Management Discussion & Analysis Balance Sheet by Currency

We adopted a management policy for foreign exchange risk associated with our asset and liability positions primarily intended to mitigate impacts from fluctuations in foreign exchange rates on consolidated results.

Brazilian tax legislation determines that gains and losses from exchange rate variation on permanent foreign investments must not be included in the tax basis. On the other hand, gains and losses arising from financial instruments used to hedge such asset positions are impacted by tax effects. Therefore, in order not to expose net income to exchange rate variations, a liability position must be built at a higher volume than the hedged assets. The Balance Sheet by Currency shows our assets and liabilities denominated in local and foreign currencies. As at September 30, 2015, the net exchange position was a liability of US$10,078 million.

Assets | September 30, 2015

In R$ millions, end of period	Consolidated			Business in Brazil			Local Currency			Foreign Currency		Business Abroad
Cash and Cash Equivalents		18,138			10,894			5,741			5,153		10,889
Short - Term Interbank Investments		229,677			203,692			203,692			0		26,183
Securities and Derivative Instruments		345,844			273,386			269,588			3,798		110,190
Loans, Leases and Other Loan Operations		443,005			318,434			302,265			16,170		207,752
Loans		477,198			350,147			333,977			16,170		210,233
(Allowance for Loan Losses)		(34,193	)		(31,713	)		(31,713	)		0		(2,481	)
Other Assets		267,288			238,260			207,137			31,123		91,161
Foreign Exchange Portfolio		64,209			52,358			21,679			30,679		66,468
Other		203,079			185,902			185,458			444		24,693
Permanent Assets		18,740			87,245			17,442			69,803		1,298
Total Assets		1,322,693			1,131,911			1,005,864			126,048		447,473
Derivatives — Purchased Positions											384,987
Total Assets After Adjustments (a)											511,034

Liabilities | September 30, 2015

In R$ millions, end of period	Consolidated		Business in Brazil		Local Currency		Foreign Currency			Business Abroad
Deposits		300,729		174,336		173,782		554			130,232
Funds Received under Securities Repurchase Agreements		317,914		294,517		294,517		-			23,397
Funds from Acceptances and Issue of Securities		59,478		70,536		36,077		34,458			24,106
Borrowings and Onlendings		104,580		126,539		40,470		86,069			61,223
Interbank and Interbranch Accounts		11,473		11,002		7,502		3,500			471
Derivative Financial Instruments		42,346		26,837		26,837		-			18,077
Other Liabilities		252,927		195,314		168,465		26,849			119,750
Foreign Exchange Portfolio		63,140		51,283		24,507		26,776			66,473
Other		189,787		144,031		143,958		73			53,276
Technical Provisions of Insurance, Pension Plan
and Premium Bonds		126,136		126,042		126,040		2			94
Deferred Income		1,908		1,589		780		809			320
Minority Interest in Subsidiaries		1,849		1,848		1,848		-			0
Stockholders' Equity of Parent Company		103,353		103,353		103,353		-			69,803
Capital Stock and Reserves		85,691		85,178		85,178		-			69,937
Net Income		17,662		18,174		18,174		-			(134	)
Total Liabilities and Equity		1,322,693		1,131,911		979,670		152,242			447,473
Derivatives – Sold Positions								398,833
Total Liabilities and Equity After Adjustments (b)								551,075
Net Foreign Exchange Sold Position Itaú Unibanco (c = a - b)								(40,040	)
Net Foreign Exchange Sold Position Itaú Unibanco (c) in US$								(10,078	)

Note: Does not include eliminations of operations between local and foreign units.

Assets and liabilities denominated in foreign currencies

We present below the net exchange position, a liability position at a higher volume than the balance of hedged assets, which, when including the tax effects on the net balance of other assets and liabilities denominated in foreign currency, reflects the mitigation of the exposure to foreign exchange variations.

In R$ millions, end of period	3Q15			2Q15			change
Investments Abroad		69,803			57,352			12,451		21.7	%
Net Foreign Exchange Position (Except Investments Abroad)		(109,844	)		(89,344	)		(20,500	)	22.9	%
Total		(40,040	)		(31,991	)		(8,049	)	25.2	%
Total in US$		(10,078	)		(10,311	)		233		-2.3	%

Itaú Unibanco Holding S.A. 39

Management Discussion & Analysis Capital Ratios (BIS)

Solvency Ratios | Prudential Conglomerate and Financial Conglomerate

				Prudential			Financial
In R$ millions, end of period	3Q15			2Q15			3Q14
Stockholders' equity of the parent company		103,353			100,711			90,776
Consolidated stockholders’ equity (BACEN)		108,251			105,888			98,217
Non-voting shares excluded from Tier I		-			-			(963	)
Deductions from core capital ¹		(12,934	)		(8,929	)		(6,114	)
Core Capital		95,318			96,959			91,140
Additional capital		46			49			30
Tier I		95,364			97,008			91,169
Tier II		29,399			29,416			33,555
Referential Equity (Tier I and Tier II)		124,763			126,424			124,724
Required Referential Equity		85,213			81,003			82,659
Risk-weighted Assets (RWA)		774,662			736,393			751,448
Credit Assets Expansion Simulation		359,547			412,919			382,410
Excess Capital		39,550			45,421			42,065
Ratios (%)
Tier I		12.3			13.2			12.1
Tier II		3.8			4.0			4.5
BIS (Referential Equity / Total Risk-weighted Exposure)		16.1			17.2			16.6

¹ As of June 30, 2015, as set forth by Resolution No. 4,277/13, Prudential adjustments will be applied for pricing financial instruments valued at market value, therefore affecting the deductions from Common Equity Tier I by R$336 million.

Itaú Unibanco’s minimum capital requirements are in accordance with the set of rules disclosed by the Brazilian Central Bank, which implement the Basel III global capital requirements in Brazil. These requirements are expressed as ratios of the capital available – demonstrated by the Tier I and Tier II Referential Equity, or Total Capital, to risk-weighted assets.

As of the first quarter of 2015, these ratios are reported in the Prudential Conglomerate, which includes not only the financial institutions in the Financial Conglomerate (in effect through December 2014), but also similar institutions(*).

Referential Equity | Prudential Conglomerate

On September 30, 2015, our Referential Equity reached R$124,763 million, a decrease of R$1,661 million when compared to June 30, 2015, mainly driven by a lower Tier I Capital, which reached R$95,364 million at the end of the third quarter of 2015, R$1,645 million less when compared to June 30, 2015. Tier II Capital remained relatively stable when compared to June 30, 2015, and reached R$29,399 million at the end of the third quarter.

Taking into consideration our current capital base, and if we immediately applied the Basel III rules established by the Brazilian Central Bank in full, our core capital (Common Equity Tier I) would be 12.4% on September 30, 2015, taking into consideration the use of tax credits. This scenario is presented in the following chart.

Estimated Core Capital Ratio (Common Equity Tier I)

 

¹ Includes deductions of Goodwill, Intangible Assets, Tax Credits from Temporary Differences, Pension Fund Assets, Equity Investments in Insurance and similar companies. ² Includes the increase of the multiplier of the market risk, operational risk and certain credit risk accounts. This multiplier, which is at 9.09 nowadays, will be to 12.5 in 2019. ³ Does not include any reversal of the complementary allowance for loan losses.

Solvency Ratios | Prudential Conglomerate

As at September 30, 2015, our BIS ratio reached 16.1%, a decrease of 110 basis points from June 30, 2015. The decrease in the quarter was mainly driven by the increase in tax credits balance. The increase in total risk-weighted assets (RWA) was also impacted by the increase in the loan operations balance due to foreign exchange variation.

Our BIS ratio exceeds the minimum of 11% required by the Brazilian Central Bank and represents an excess capital of R$39.6 billion, allowing for an increase of up to R$359.5 billion in credit assets based on 100% risk-weighting category.

Subordinated Debt and Referential Equity Tier II

September 30, 2015

As at September 30, 2015, the account balance of the subordinated debt reached R$65,910 million, an increase of 11.3% from the previous quarter, mainly due to the depreciation of the Brazilian real against the U.S. dollar, which affected the balance of debts issued in foreign currency.

(*) Similar institutions are consortium managers, payment institutions, companies that acquire operations or directly or indirectly assume credit risk, and investment funds in which the conglomerate substantially retains risks and benefits. (**) According to present rules, we calculated the Referential Equity considering the balance of Subordinated Debt for December 2012.

Itaú Unibanco Holding S.A. 40

Management Discussion & Analysis Capital Ratios (BIS)

Risk Exposure

			Prudential		Financial
In R$ millions, end of period	3Q15		2Q15		3Q14
Credit Risk-weighted Assets (RWACPAD)		728,976		681,622		687,783
FPR at 2%		219		101		70
FPR at 20%		6,873		6,085		3,456
FPR at 35%		9,667		9,050		7,711
FPR at 50%		49,583		42,723		34,347
FPR at 75%		138,755		142,557		141,701
FPR at 85%		151,295		142,034		139,583
FPR at 100%		304,598		275,611		291,638
FPR at 250%		35,744		36,339		33,747
FPR at 300%		17,918		13,362		17,421
FPR up to 1250% ¹		2,400		1,407		6,948
Derivatives – future potential gain and variation of the counterparty credit quality		11,924		12,353		11,160
Operational Risk-weighted Assets (RWAOPAD)		28,623		35,509		36,817
Market Risk-weighted Assets (RWAMPAD)		17,062		19,262		26,848
Gold, foreign currency and operations subject to exchange rate variation (RWACAM)		3,435		7,605		12,244
Operations subject to interest rate variation (RWAJUR)		11,844		9,957		12,636
Operations subject to commodity price variations (RWACOM)		574		573		1,000
Operations subject to stock price variation (RWAACS)		1,209		1,128		968
Total Risk-weighted Exposure (RWA) [RWACPAD+ RWAOPAD+RWAMPAD]		774,662		736,393		751,448

Note: FPR - Weighting Factor.

¹ Includes the application of the “F” factor, as required by Article 29 of Circular No. 3,644/13.

On September 30, 2015, total risk-weighted exposure amounted to R$774,662 million, an increase of R$38,269 million when compared to June 30, 2015, mainly due to the increase of our credit risk-weighted assets (RWA_CPAD), which reached R$728,976 million on September 30, 2015. This variance was mainly driven by the increase in tax credits balance and by the increase in the loan operations balance due to foreign exchange variation.

In the third quarter of 2015, the operational risk-weighted assets (RWA_OPAD) reached R$28,623 million, a decrease of R$6,886 million when compared to June 30, 2015. The RWA_OPAD is calculated every six months, according to Circulars Nos. 3,640, 3,675, and 3,739 of the Brazilian Central Bank.

On September 30, 2015, market risk-weighted assets (RWAM_PAD) totaled R$17,062 million, a decrease of R$2,199 million when compared to June 30, 2015, mainly due to the lower portion required for exposure to gold, foreign currency and operations subject to exchange rate variation (RWA_CAM).

Evolution of the Composition of the Risk-weighted Exposure

 

Credit Risk-weighted Exposure

 

Risk-weighted ROA

 

In the third quarter of 2015, the annualized recurring return on average assets reached 1.9%, stable when compared to the third quarter of 2014.

The annualized recurring return on average risk-weighted assets was 3.2% this quarter, an increase of 30 basis points when compared to the same period of the previous year.

In this period, risk-weighted leverage was 6.2, an increase of 40 basis points when compared to the previous quarter, mainly driven by a higher total risk-weighted exposure (RWA).

Itaú Unibanco Holding S.A. 41

Management Discussion & Analysis Risk Management

Corporate Principles of Risk and Capital Management

We regard risk management as an essential instrument for optimizing the use of resources and selecting the best business opportunities in order to create value to our shareholders.

Risk management encompasses the entire institution and is in line with the guidelines of the Board of Directors and Senior Management, which, through Superior Committees, determine the overall goals, expressed as targets and limits for the risk management business units. Meanwhile, the control and capital management units support Itaú Unibanco’s management by means of monitoring processes and risk and capital analysis.

We adopt a prospective approach regarding capital management, which comprises the following phases: identification and analysis of material risks, capital planning, stress test analysis focused on the impact of severe events on our capitalization level, maintenance of a contingency plan, internal capital adequacy assessment and preparation of periodic management reports.

For further information on the risk and capital management structure, please refer to the Investor Relations website at www.itau.com.br/ investor-relations Corporate Governance >> Risk Management — Pillar 3.

Credit Risk

Our credit risk management is aimed at maintaining the loan portfolio quality at levels consistent with our risk appetite for each market segment in which we operate.

The credit risk control is centralized and carried out by an independent executive area responsible for risk control. The main responsibilities include monitoring and controlling the performance of loan portfolios, and managing the process of development, review and approval of institutional credit risk policies. Our centralized process for approving policies and validating models ensures the synchronization of credit actions.

Operational Risk

Our operational risk management structure is composed of operational risk management and control activities aimed at supporting the organization in decision-making processes, always aiming at the proper identification and evaluation of risks, the creation of value for shareholders, as well as the protection of our assets and image.

Liquidity Risk

Liquidity risk is defined as the possibility that we fail to efficiently meet expected and unexpected, current and future, obligations, including those related to guarantees, without affecting our daily operations and incurring significant losses.

The liquidity risk measurement comprises all financial operations of our companies, as well as possible contingent or unexpected exposures, such as those arising from settlement services, provision of endorsements and sureties and lines of credit raised but not used.

Market Risk

Our market risk is controlled by a department independent from the business units and responsible for carrying out, on a daily basis: (i) risk measurement and assessment, (ii) monitoring of stress scenarios, limits and alerts, (iii) applying, analyzing and testing stress scenarios, (iv) reporting risk results to those accountable for in the business units, in accordance with our governance, (v) monitoring the actions required to adjust positions and/or risk levels to make them feasible, and (vi) supporting the safe launch of new financial products. To this end, Itaú Unibanco has a structured communication and information process that provides feedback for the monitoring of the Superior Committees and compliance with the requirements of Brazilian and foreign regulatory bodies.

VaR of Itaú Unibanco

Our Consolidated VaR is mostly calculated by the “Historical Simulation” approach. This methodology fully reprices the positions using the real historical distribution of assets.

The market risk exposure of the portfolios of Itaú Unibanco and its foreign subsidiaries is presented in the VaR by Risk Factor Group table below, which shows where the higher concentrations of market risk are.

The increase in the total VaR compared to the previous quarter is mainly due to the increase in market volatility and to the changes in positions, which, in the aggregate, changed the correlation effects of the portfolio. The increase in the total VaR in foreign units was also impacted by the foreign exchange rate variations in the period.

VaR by Risk Factor ⁽¹⁾

In R$ millions, at the end of period	3Q15			2Q15
Itaú Unibanco
Brazilian Interest rates		212.9			137.1
Other Foreign Interest rates		122.0			86.5
FX rates		33.3			49.1
Brazilian Inflation Indexes		233.9			145.6
Equities and Commodities		34.1			22.9
Foreign Units
Itaú BBA International (3)		9.1			1.9
Banco Itaú Argentina (2)		9.1			6.4
Banco Itaú Chile (2)		9.5			5.3
Banco Itaú Uruguay (4)		2.8			1.2
Banco Itaú Paraguay (3)		1.9			2.9
Banco Itaú BBA Colombia (2)		1.4			1.4
Diversification Effect		(353.6	)		(235.5	)
Total VaR		316.3			224.8
Maximum VaR in the Quarter		340.7			226.9
Average VaR in the Quarter		214.1			195.9
Minimum VaR in the Quarter		152.3			161.0

(1) Values represented above consider 1 day as time horizon and 99% confidence. (2) VaR calculated by historical simulation approach as of the first quarter of 2015. (3) VaR calculated by the Parametric approach. (4) VaR calculated by historical simulation as of this quarter.

Evolution of Itaú Unibanco’s VaR

 

Capital Sufficiency

Through the Internal Capital Adequacy Assessment Process (ICAAP), we aim to assess the sufficiency of regulatory capital to cover our risks, represented by the regulatory capital for our credit, market and operational risks, as well as the capital required to cover other risks.

Itaú Unibanco Holding S.A. 42

 

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Itaú Unibanco Holding S.A. 44

Management Discussion & Analysis Segment Analysis

Pro Forma Adjustments

Adjustments made to the balance sheet and income statement for the year are based on managerial information from the business units.

The financial statements were adjusted in order to replace the accounting stockholders’ equity with funding at market prices. Subsequently, the financial statements were adjusted to include revenues linked to allocated capital at each segment. The cost of subordinated debt and the respective remuneration at market prices were allocated to segments on a pro rata basis, in accordance with the economic allocated capital.

As of the first quarter of 2015, we changed the presentation of our segments in order to reflect them with the bank’s current organizational structure. We report the following segments: (a) Retail Banking, (b) Wholesale Banking and (d) Activities with the Market + Corporation. Retail Banking include the previous Commercial Banking – Retail and Consumer Credit – Retail segments, with the transfer of the Private Bank and Latam operations to the Wholesale Banking.

The Activities with the Market + Corporation column presents the result from excess capital, excess subordinated debt and the net balance of tax assets and liabilities. It also shows the financial margin with the market, costs of Treasury operations, the equity pickup of companies not linked to each segment and our stake in Porto Seguro.

Allocated Capital

Impacts related to capital allocation are included in the Pro Forma financial statements. To this end, adjustments were made to the financial statements, using a proprietary model.

The economic allocated capital model (EAC) was adopted for the Pro Forma financial statements by segment and, as of 2015, we changed our calculation methodology. In addition to the Tier I allocated capital, the EAC model includes the effects of the calculated expected loan losses, complementary to that required by the Brazilian Central Bank through CMN Circular No. 2,682/99.

Accordingly, the allocated capital considers the following components: credit risk (including expected losses), operational risk, market risk, and insurance underwriting risk.

Based on Tier I capital measure we determined the Return on Allocated Capital, which corresponds to an operational performance ratio consistently adjusted to the required capital needed to support the risks of the financial positions assumed in accordance with our risk appetite.

Income Tax Rate

We adopt the full income tax rate, net of the tax effect of payment of interest on capital, for the Retail Banking, Wholesale Banking and Activities with the Market + Corporation segments. The difference between the income tax amount determined for each segment and the effective income tax amount, as stated in the consolidated financial statements, is stated in the column Activities with the Market + Corporation.

Itaú Unibanco Holding S.A. 45

Management Discussion & Analysis Segment Analysis

The Pro Forma financial statements of the Retail Banking, Wholesale Banking and Activities with the Market + Corporation presented below, are based on managerial information derived from internal models, to more accurately reflect the activities of the business units. As of the first quarter of 2015, we changed our segments presentation and our Economic Allocated Capital calculation methodology.

Pro Forma Balance Sheet by Segment | On September 30, 2015

In R$ millions	Retail Banking			Wholesale Banking			Activities with the Market + Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		812,726			529,413			121,093			1,303,953
Cash and Cash Equivalents		14,901			3,278			-			18,138
Short-term Interbank Investments		266,539			88,536			-			229,677
Securities and Derivative Financial Instruments		186,453			150,831			34,249			345,844
Interbank and Interbranch Accounts		66,158			5,123			-			69,906
Loan, Lease and Other Credit Operations		222,181			255,018			-			477,198
(Allowance for Loan Losses)		(15,811	)		(7,397	)		-			(23,208	)
(Complementary Expected Loss Provisions)		-			-			(10,985	)		(10,985	)
Other Assets		72,306			34,024			97,829			197,382
Foreign Exchange Portfolio		8,145			17,571			44,246			64,209
Others		64,160			16,453			53,583			133,173
Permanent Assets		14,856			2,071			1,813			18,740
Total Assets		827,582			531,484			122,906			1,322,693
Liabilities and Equity
Current and Long-Term Liabilities		790,531			490,423			93,907			1,215,583
Deposits		240,505			177,745			-			300,729
Deposits Received under Securities Repurchase Agreements		261,876			56,059			-			317,914
Funds from Acceptances and Issue of Securities		57,633			34,343			-			59,478
Interbank and Interbranch Accounts		6,539			4,937			-			11,473
Borrowings and Onlendings		10,643			93,937			-			104,580
Derivative Financial Instruments		27			45,350			-			42,346
Other Liabilities		115,254			49,970			93,907			252,927
Foreign Exchange Portfolio		8,338			17,035			43,521			63,140
Others		106,917			32,935			50,386			189,787
Technical Provisions for Insurance, Pension Plans and Premium Bonds		98,053			28,082			-			126,136
Deferred Income		1,469			439			-			1,908
Minority Interest in Subsidiaries		1,761			-			87			1,849
Economic Allocated Capital - Tier I (*)		33,820			40,622			28,911			103,353
Total Liabilities and Equity		827,582			531,484			122,906			1,322,693

(*) The Economic Capital allocated to the Activities with the Market + Corporation column contains all the excess capital of the institution in order to arrive at the accounting net equity.

Pro Forma Income Statement by Segment | 3^rd quarter of 2015

In R$ millions	Retail Banking			Wholesale Banking			Activities with the Market + Corporation			Itaú Unibanco
Operating Revenues		17,619			6,824			2,502			26,945
Managerial Financial Margin		10,220			4,893			2,482			17,595
Financial Margin with Clients		10,220			4,893			206			15,319
Financial Margin with the Market		-			-			2,276			2,276
Banking Service Fees and Income from Banking Charges		5,248			1,824			10			7,082
Result from Insurance, Pension Plans and Premium Bonds Operations before Retained Claims and Selling Expenses		2,151			106			11			2,268
Result from Loan Losses		(3,331	)		(1,358	)		36			(4,653	)
Provision for Loan Losses		(4,338	)		(1,445	)		36			(5,747	)
Recovery of Loans Written Off as Losses		1,007			87			-			1,094
Retained Claims		(425	)		(12	)		-			(437	)
Operating Margin		13,864			5,453			2,538			21,855
Other Operating Income/(Expenses)		(9,299	)		(2,867	)		(582	)		(12,748	)
Non-interest Expenses		(7,956	)		(2,549	)		(401	)		(10,906	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,079	)		(316	)		(179	)		(1,574	)
Insurance Selling Expenses		(264	)		(2	)		(2	)		(268	)
Income before Tax and Minority Interests		4,565			2,586			1,956			9,108
Income Tax and Social Contribution		(1,573	)		(808	)		(530	)		(2,911	)
Minority Interests in Subsidiaries		(75	)		-			(4	)		(79	)
Recurring Net Income		2,917			1,778			1,422			6,117
Recurring Return on Average Allocated Capital		33.6	%		18.0	%		20.4	%		24.0	%
Efficiency Ratio (ER)		50.2	%		39.3	%		17.3	%		44.2	%
Risk-Adjusted Efficiency Ratio (RAER)		71.2	%		60.2	%		15.7	%		63.1	%

Note: Non-interest Expenses considers Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses.

Consolidated figures do not represent the sum of the parts, because there are transactions between the companies that were eliminated only in the Consolidated figures.

Itaú Unibanco Holding S.A. 46

Management Discussion & Analysis Segment Analysis

The Pro Forma financial statements of the Retail Banking, Wholesale Banking and Activities with the Market + Corporation presented below, are based on managerial information derived from internal models, to more accurately reflect the activities of the business units. As of the first quarter of 2015, we changed our segments presentation and our Economic Allocated Capital calculation methodology.

Pro Forma Balance Sheet by Segment | On June 30, 2015

In R$ millions	Retail Banking			Wholesale Banking			Activities with the Market + Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		770,498			485,232			118,998			1,210,691
Cash and Cash Equivalents		15,519			2,489			-			18,005
Short-term Interbank Investments		230,636			82,284			-			192,433
Securities and Derivative Financial Instruments		185,868			138,988			44,479			334,727
Interbank and Interbranch Accounts		61,184			4,738			-			64,651
Loan, Lease and Other Credit Operations		224,574			232,889			-			457,463
(Allowance for Loan Losses)		(14,934	)		(6,867	)		-			(21,801	)
(Complementary Expected Loss Provisions)		-			-			(6,330	)		(6,330	)
Other Assets		67,650			30,712			80,849			171,543
Foreign Exchange Portfolio		8,357			18,027			45,393			65,875
Others		59,293			12,685			35,456			105,669
Permanent Assets		16,162			1,911			1,746			19,819
Total Assets		786,660			487,143			120,744			1,230,510
Liabilities and Equity
Current and Long-Term Liabilities		748,326			448,519			93,722			1,126,530
Deposits		245,839			150,754			-			280,443
Deposits Received under Securities Repurchase Agreements		225,576			86,474			-			305,300
Funds from Acceptances and Issue of Securities		56,010			28,808			-			52,175
Interbank and Interbranch Accounts		6,553			3,898			-			10,448
Borrowings and Onlendings		14,093			78,045			-			92,138
Derivative Financial Instruments		37			25,255			-			23,912
Other Liabilities		104,869			48,981			93,722			240,461
Foreign Exchange Portfolio		8,772			17,922			45,637			66,429
Others		96,097			31,059			48,085			174,033
Technical Provisions for Insurance, Pension Plans and Premium Bonds		95,349			26,303			-			121,652
Deferred Income		1,104			396			-			1,499
Minority Interest in Subsidiaries		1,687			-			83			1,770
Economic Allocated Capital - Tier I (*)		35,543			38,229			26,939			100,711
Total Liabilities and Equity		786,660			487,143			120,744			1,230,510

(*) The Economic Capital allocated to the Activities with the Market + Corporation column contains all the excess capital of the institution in order to arrive at the accounting net equity.

Pro Forma Income Statement by Segment | 2^nd quarter of 2015

In R$ millions	Retail Banking			Wholesale Banking			Activities with the Market + Corporation			Itaú Unibanco
Operating Revenues		17,711			6,008			1,620			25,339
Managerial Financial Margin		10,544			4,116			1,576			16,235
Financial Margin with Clients		10,544			4,116			14			14,673
Financial Margin with the Market		-			-			1,561			1,561
Banking Service Fees and Income from Banking Charges		5,108			1,786			13			6,906
Result from Insurance, Pension Plans and Premium Bonds Operations before Retained Claims and Selling Expenses		2,060			106			32			2,198
Result from Loan Losses		(2,727	)		(1,645	)		(14	)		(4,387	)
Provision for Loan Losses		(3,733	)		(1,773	)		(14	)		(5,520	)
Recovery of Loans Written Off as Losses		1,005			128			-			1,133
Retained Claims		(372	)		(13	)		-			(385	)
Operating Margin		14,612			4,350			1,606			20,567
Other Operating Income/(Expenses)		(8,640	)		(2,607	)		(445	)		(11,692	)
Non-interest Expenses		(7,309	)		(2,314	)		(356	)		(9,979	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,064	)		(292	)		(88	)		(1,445	)
Insurance Selling Expenses		(267	)		(1	)		(1	)		(268	)
Income before Tax and Minority Interests		5,972			1,742			1,161			8,875
Income Tax and Social Contribution		(2,079	)		(471	)		(111	)		(2,661	)
Minority Interests in Subsidiaries		(78	)		-			(2	)		(79	)
Recurring Net Income		3,815			1,271			1,048			6,134
Recurring Return on Average Allocated Capital		42.9	%		13.5	%		16.5	%		24.8	%
Efficiency Ratio (ER)		45.7	%		40.6	%		23.2	%		42.9	%
Risk-Adjusted Efficiency Ratio (RAER)		62.7	%		69.4	%		24.2	%		61.8	%

Note: Non-interest Expenses considers Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses.

Consolidated figures do not represent the sum of the parts, because there are transactions between the companies that were eliminated only in the Consolidated figures.

Itaú Unibanco Holding S.A. 47

Management Discussion & Analysis Segment Analysis

Retail Banking

The revenues from Retail Banking come from the offer of banking products and services to retail and high-income clients and very small and small companies, in addition to financial products and services offered to our non-account holder clients, including vehicle financing and credit cards offered outside the branch network, and Itaú BMG Consignado operations.

In the third quarter of 2015, recurring net income for the segment totaled R$2,917 million, a 23.6% decrease from the previous quarter.

The decrease in the quarter was mainly due to (i) decrease of R$324 million, or 3.1%, in financial margin with clients, to R$10,220 million, (ii) increase of R$605 million, or 16.2%, in provision for loan losses, and (iii) increase of R$647 million, or 8.9%, in non-interest expenses.

With positive effect on the net income, banking service fees and income from banking charges, which amounted to R$5,248 million, increased R$140 million, or 2.7%, when compared to the previous period. Additionally, the result from insurance, pension plan and premium bonds before retained earnings and selling expenses reached R$2,151 million in the current period, an increase of 4.4%, or R$91 million, in the quarter.

The Retail Banking annualized return on allocated capital reached 33.6% in the quarter. The efficiency ratio was 50.2% and the risk-adjusted efficiency ratio reached 71.2%.

Loan Portfolio – Retail Banking

At the end of September 2015, loan portfolio totaled R$222,181 million.

Coverage ratio for NPL over 90 days (without complementary allowance) reached 128% on September 30, 2015, decreasing 300 basis points from June 30, 2015.

Allowance for Loan Losses and Coverage Ratio

Wholesale Banking

The revenues from the Wholesale Banking segment come from: i) activities of Itaú BBA, the unit responsible for commercial operations with large companies and for investment banking services, ii) the result from our units abroad, and iii) products and services offered to middle market companies, high-net worth clients (Private Banking) and institutional clients.

In the third quarter of 2015, operating revenues amounted to R$6,824 million, an increase of 13.6%, or R$816 million from the previous quarter, mainly due to the increase of 18.9% in financial margin and of 2.2% in banking service fees and income from banking charges.

The result from loan losses totaled R$1,358 million in the third quarter of 2015, a decrease of 17.4% mainly due to the reinforcement of provisions in the previous quarter. Non-interest expenses increased 10.1%, or R$235 million, from the second quarter of 2015 and totaled R$2,549 million in the current period.

Therefore, the increase in the Wholesale Banking net income was 39.9% from the previous quarter, reaching R$1,778 million in the third quarter of 2015.

Return on allocated capital reached 18.0% per year. In the third quarter of 2015, the efficiency ratio was 39.3% and the risk-adjusted efficiency ratio reached 60.2%.

Loan Portfolio – Wholesale Banking

As at September 30, 2015, loan portfolio totaled R$255,018 million.

Coverage ratio for NPL over 90 days (without complementary allowance) reached 207% in the end of third quarter of 2015, 2,000 basis points higher than the previous quarter. This increase was basically due to the lower balance of 90 days overdue loans and to the higher allowance for loan losses at the end of September 2015.

Allowance for Loan Losses and Coverage Ratio

Itaú Unibanco Holding S.A. 48

Management Discussion & Analysis Segment Analysis

Middle Market

Aiming at a more specialized service structure, since 2013 part of the medium sized business sub-segment has become part of the Wholesale Banking. This sub-segment serves approximately 30 thousand clients (economic groups) with sales between R$30 million and R$300 million.

Our result is well balanced between earnings from loans and services. Our risk appetite continues to focus on high-rating clients, and 74.7% of loans are granted to B2 and higher ratings.

Our loan portfolio (including sureties and endorsements) increased 3.7% from the second quarter of 2015, basically due to foreign exchange products.

Large Companies

Our clients are around 3,500 large corporate groups and over 190 financial institutions. We offer them a broad portfolio of banking products and services, from cash management to structured operations and transactions in capital markets.

The loan portfolio (including endorsements and sureties) increased 4.6% from the second quarter of 2015, due to transactions in both local currency and foreign currency.

In our loan portfolio, 90,7% of credits are rated “AA”, “A” and “B”, according to criteria set forth in Resolution No. 2,682 of the National Monetary Council.

For derivatives, we maintained our relevant position in CETIP (Clearing House for the Custody and Financial Settlement of Securities). We focused on operations that hedge our clients’ exposures to foreign currencies, interest rates and commodities.

Investment Banking

Fixed Income: from January to September 2015, we took part in operations with debentures, promissory notes and securitization, which totaled R$12.3 billion. In international fixed-income issues, we originated deals of US$941 million with Latin-American companies from January to September 2015, according to Dealogic data^(*).

(*) Includes only transactions in US dollars and local currency above US$50 million.

Mergers and Acquisitions: in the period from January to September 2015, we were leaders in the Thomson Reuters ranking for the number of operations, with a total volume of US$5.6 billion.

Project Finance: for the second consecutive year, we were recognized by LatinFinance as the “Best Infrastructure Bank in Brazil.” Once again, this award places us in a prominent position in relation to other financial institutions.

Wealth Management and Services

Asset Management

In September 2015, we reached R$469.1 billion^(*) in managed assets, accounting for 16.0% of the market. In the last 12 months, the volume of managed assets grew 20.9% in total, and noteworthy were fixed income and money market funds. In addition to a strong local presence, we are present in the world’s major financial centers, with strategically allocated professionals, searching for opportunities and investment solutions appropriate for different customer profiles.

(*)Source: ANBIMA (Brazilian Financial and Capital Markets Association) – September 2015. Considers Itaú Unibanco and Intrag.

Securities Services

With four business lines, the Securities Services area serves both publicly and closely-held companies, pension funds, asset management and international investors, totaling 3,395 clients in 22 countries. We ended September 2015 with a custody market share of 23.2% and a total of R$1,018 billion in assets under custody. Our business lines are:

Local Custody and Fiduciary Administration: we offer custody and accounting services for portfolios, investment, mutual and pension funds, services of fund administration, rebalancing fund services and contracting of service providers. We ended September with R$873 billion under custody, an increase of 10% from the same period of 2014.

International Custody: we offer services of custody and representation to investors from outside Brazil, custody of ADR programs and depositary services for Brazilian Depositary Receipts (BDR) programs. We ended September with R$146 billion under custody, a decrease of 16% from the same period of 2014.

Corporate Solutions: we offer many solutions for capital markets, such as the control of stock option programs, bookkeeping, debentures, settlement and custody of promissory notes and bank credit notes. We also work as guarantee agents in operations of Project Finance, Escrow Accounts, and loan and financing contracts. We are leaders in the bookkeeping of shares, providing services to 222 companies listed on the BM&F Bovespa, representing 61.8% of the total, and we are also the leaders in the bookkeeping of debentures, acting as bookkeeper of 511 issues as of September 2015.

Source: Itaú Unibanco, ANBIMA (Brazilian Financial and Capital Markets Association) and BM&F Bovespa – September 2015.

Private Bank

With a full global wealth management platform, we are market leaders in Brazil and one of the main players in Latin America. Our multidisciplinary team, which comprises private bankers, investment advisers and product experts, serves our clients from our eight offices in Brazil and in our offices located in Zurich, Miami, New York, Santiago, Montevideo, Asuncion and Nassau.

Activities Abroad

Our activities abroad include business with retail clients and large companies, and investment banking activities in eighteen countries outside Brazil.

Additional information is available on the next pages.

Itaú Unibanco Holding S.A. 49

Management Discussion & Analysis Activities Abroad

 

In Argentina, Chile, Paraguay and Uruguay, we serve the retail banking, companies, corporate and treasury segments, with commercial banking as our main focus. In Peru, we have an Itaú BBA representation office and in Colombia we are gradually intensifying our presence through our corporate and investment banking operation. In Mexico, we are in the process of opening a full-service broker-dealer.

In Chile, the merger between Itaú Chile and CorpBanca was approved by the respective shareholders' meetings as well as by the regulatory authorities in Chile, Brazil, Colombia and Panama. As provided in the amendment to the Transaction Agreement dated of June 2nd, 2015, the merger of Itaú Chile with and into CorpBanca shall not occur prior to January 1st,2016, nor later than May 2nd, 2016.

Additionally, we have operations in Europe (Portugal, United Kingdom, Spain, France, Germany and Switzerland), in the United States (Miami and New York), in the Caribbean (Cayman Islands and Bahamas), in the Middle East (Dubai), and in Asia (Hong Kong, Shanghai and Tokyo), mainly serving institutional, investment banking, corporate and private banking clients.

Information about our number of employees abroad and the international service network is presented below:

Employees Abroad

 

International Service Network

 

Itaú Unibanco Holding S.A. 50

Management Discussion & Analysis Activities Abroad

Latin America

Our operations in Latin America are mainly focused on commercial banking, concentrated in the Southern Cone (Argentina, Chile, Paraguay and Uruguay). We also operate in Colombia in investment banking and corporate segments, in Peru, in the corporate segment through a representation office. In Mexico, we are in the process of opening a full-service broker-dealer.

Latin America is a priority for our international expansion due to the geographic and cultural proximity to Brazil. Our purpose is to be recognized as the “Latin American Bank”, becoming a reference in the region for all financial services provided to individuals or companies.

We have expanded our business in the region in a sustainable manner over the past years and our priority now is to gain economies of scale, maintain a strong presence in the local retail markets and strengthen our relationships with local companies.

 

We present the consolidated results for Latin America¹ as well as for its respective countries in constant currency², including the adjustments by local hedging effects³.

Income Statement | Latin America ⁽¹⁾

In R$ millions	3Q15			2Q15 (2)			change
Operating Revenues		1,616			1,577			2.5	%
Financial Margin		1,055			1,050			0.5	%
Banking Service Fees and Income from Banking Charges		520			483			7.7	%
Other Income		41			44			-6.6	%
Result from Loan Losses		(109	)		(151	)		-28.1	%
Retained Claim Losses		(6	)		(10	)		-37.5	%
Other Operating Expenses		(916	)		(882	)		3.9	%
Non-Interest Expenses		(915	)		(881	)		3.8	%
Insurance Selling Expenses		(1	)		(1	)		85.3	%
Income before Tax and Profit Sharing		585			534			9.5	%
Income Tax and Social Contribution		(124	)		(113	)		9.5	%
Profit Sharing		(3	)		(4	)		-38.6	%
Recurring Net Income		458			417			10.0	%
Return on Average Equity - Annualized		15.9	%		15.2	%		70	bps
Return on Average Assets - Annualized		2.1	%		2.0	%		10	bps
Efficiency Ratio		56.9	%		56.3	%		60	bps

Net income for the third quarter of 2015 amounted to R$458 million, a 10.0% increase from the second quarter of this year. The financial margin is in line with the previous quarter and the banking service fees increased 7.7% to R$520 million in the period, mainly due to commissions in the corporate segment in Chile (investment structuring) and commissions from economic and financial advisory services and cards in Argentina.

The result from loan losses decreased 28.1% in the quarter, mainly driven by lower allowances for loan losses in Argentina (due to the reclassification of clients in the companies segment).

Non-interest expenses recorded a 3.8% increase from the second quarter, mainly due to the increase in personnel expenses.

(1) Includes our operations in Argentina, Chile, Paraguay, Uruguay, Colombia and Mexico.

(2) Consists of the elimination of foreign exchange variation, which is obtained by the application of the average foreign exchange rate of September 2015 to all periods analyzed.

(3) Excludes the effects of the investment hedge in 2Q15 and 3Q15

Itaú Unibanco Holding S.A. 51

Management Discussion & Analysis Activities Abroad

Balance Sheet | Latin America ⁽¹⁾

In R$ millions, end of period	3Q15			2Q15 (2)			change
Assets
Current and Long-Term Assets		88,745			83,141			6.7	%
Cash and Cash Equivalents		6,765			6,477			4.4	%
Short-Term Interbank Investments		6,231			5,031			23.8	%
Securities and Derivative Financial Instruments		8,104			8,202			-1.2	%
Interbank and Interbranch Accounts		6,675			6,063			10.1	%
Loan, Lease and Other Credit Operations		56,725			54,953			3.2	%
(Allowance for Loan Losses)		(1,132	)		(1,140	)		-0.7	%
Other Assets		5,377			3,557			51.2	%
Permanent Assets		1,065			1,044			2.1	%
Total Assets		89,810			84,185			6.7	%
Liabilities and Equity
Current and Long-Term Liabilities		78,005			72,913			7.0	%
Deposits		54,461			51,999			4.7	%
Deposits Received under Securities Repurchase Agreements		1,089			802			35.8	%
Funds from Acceptances and Issue of Securities		8,127			7,467			8.8	%
Interbank and Interbranch Accounts		470			431			8.9	%
Borrowings and Onlendings		2,820			3,436			-17.9	%
Derivative Financial Instruments		2,123			1,571			35.1	%
Foreign Exchange Portfolio		2,220			1,735			27.9	%
Other Liabilities		6,603			5,387			22.6	%
Technical Provisions for Insurance, Pension Plans and Premium Bonds		94			84			10.9	%
Deferred Income		6			5			18.9	%
Minority Interests		0			3			-84.2	%
Stockholders´ Equity		11,799			11,264			4.7	%
Total Liabilities and Equity		89,810			84,185			6.7	%

Assets ⁽¹⁾

Our assets totaled R$89.8 billion in September 2015, increasing 6.7% from June 2015 and 18.4% from September 2014. Of these total assets, 56.2% are located in Chile.

Asset

Asset Breakdown

 

Loan Portfolio ⁽¹⁾

The total loan portfolio increased 3.2% when compared to June 2015, to R$56.7 billion. The increase was 10.8% when compared to the same period of the previous year.

Loan Portfolio

Loan Portfolio by Country and Segment │September 2015

Loan Portfolio by Country - Breakdown

 

Individual Loan Portfolio - Breakdown

 

(1) Includes our operations in Argentina, Chile, Paraguay, Uruguay, Colombia and Mexico.

(2) Constant currency for 09/30/15. The elimination of the exchange rate variation impact was obtained by applying the exchange rate of 09/30/15 to all periods.

Itaú Unibanco Holding S.A. 52

Management Discussion & Analysis Activities Abroad

Argentina

Total assets in Argentina reached R$7.2 billion, a 0.8% increase when compared to the previous quarter and a 12.6% increase from September 2014, mainly due to an increase in repurchase agreements. The loan portfolio reached R$4.7 billion, decreasing 0.9% from June 2015 and increasing 2.6% when compared to the same period of 2014. Stockholders’ equity reached R$982.6 million, and net income was R$110 million in the quarter, mainly due to more positive results in treasury operations.

Loan Portfolio | Argentina

Income Statement | Argentina

In R$ millions	3Q15			2Q15			change
Operating Revenues		478			409			16.8	%
Financial Margin		331			278			19.2	%
Banking Service Fees and Income from Banking Charges		142			130			9.1	%
Other Income		5			1			276.6	%
Result from Loan Losses		(18	)		(46	)		-60.8	%
Non-Interest Expenses		(283	)		(268	)		5.6	%
Income before Tax and Profit Sharing		177			95			85.8	%
Income Tax and Social Contribution		(65	)		(37	)		76.7	%
Profit Sharing		(2	)		(2	)		10.6	%
Recurring Net Income		110			57			94.0	%
Return on Average Equity - Annualized		47.3	%		26.8	%		2,050	bps
Return on Average Assets - Annualized		6.1	%		3.2	%		290	bps
Efficiency Ratio		59.2	%		65.4	%		-620	bps

Chile

Our business in Chile is mainly focused on retail and high-income clients, in addition to operations in the companies and corporate segments.

Total assets in Chile amounted to R$50.4 billion in September 2015, increasing 7.1% when compared to the previous quarter and 13.4% from September 2014. The loan portfolio reached R$37.1 billion, increasing 2.8% in the quarter and 7.8% from September 2014, mainly driven by the larger volume of credit cards. Loans to individuals in Chile account for 70.8% of our operations with individuals in Latin America (ex-Brazil), and 67.4% of this portfolio involves mortgage loans. Loans to companies in Chile account for 62.2% of the companies portfolio in Latin America (ex-Brazil). Stockholders’ equity in this period totaled R$6.7 billion, and net income reached R$128 million mainly due to the positive results in treasury operations in the second quarter, which did not occur in the current quarter.

Loan Portfolio | Chile

Income Statement | Chile

In R$ millions	3Q15			2Q15			change
Operating Revenues		503			564			-10.8	%
Financial Margin		353			421			-16.0	%
Banking Service Fees and Income from Banking Charges		121			102			18.1	%
Other Income		28			41			-29.8	%
Result from Loan Losses		(69	)		(73	)		-6.7	%
Retained Claim Losses		(6	)		(10	)		-37.5	%
Other Operating Expenses		(273	)		(275	)		-0.5	%
Non-Interest Expenses		(272	)		(274	)		-0.7	%
Insurance Selling Expenses		(1	)		(1	)		85.3	%
Income before Tax and Profit Sharing		154			205			-24.8	%
Income Tax and Social Contribution		(27	)		(45	)		-41.2	%
Recurring Net Income		128			160			-20.2	%
Return on Average Equity - Annualized		7.7	%		10.0	%		-230	bps
Return on Average Assets - Annualized		1.0	%		1.4	%		-40	bps
Efficiency Ratio		55.0	%		49.5	%		550	bps

(1) Constant currency for 09/30/15. The elimination of the exchange rate variation impact was obtained by applying the exchange rate of 09/30/15 to all periods.

Itaú Unibanco Holding S.A. 53

Management Discussion & Analysis Activities Abroad

Paraguay

Our strategy for the commercial (retail) and companies segments over the past few years resulted in a significant increase in market share. We hold the leading position among banks in Paraguay in terms of results and efficiency ratio (data provided by the Central Bank of Paraguay, September 2015).

Our assets in Paraguay totaled R$13.1 billion, increasing 4.2% in the quarter and 31.2% in the year. The loan portfolio reached R$7.0 billion, increasing 5.0% in the quarter and 18.6% in the year. The loan portfolio growth came from foreign currency lending to the cattle raising sector, and from local currency lending to corporations.

Stockholders’ equity totaled R$1.8 billion, and net income in the quarter was R$131 million, an increase of 2.7% when compared to the previous quarter, mainly driven to the decrease in the allowance for loan losses (due to improvement of client classification).

Loan Portfolio | Paraguay

Income Statement | Paraguay

In R$ millions	3Q15			2Q15			change
Operating Revenues		259			260			-0.6	%
Financial Margin		189			190			-0.4	%
Banking Service Fees and Income from Banking Charges		71			71			0.1	%
Other Income		(1	)		(1	)		-
Result from Loan Losses		(7	)		(15	)		-50.8	%
Non-Interest Expenses		(108	)		(105	)		3.6	%
Income before Tax and Profit Sharing		143			141			1.6	%
Income Tax and Social Contribution		(12	)		(13	)		-9.8	%
Recurring Net Income		131			128			2.7	%
Return on Average Equity - Annualized		31.2	%		33.3	%		-210	bps
Return on Average Assets - Annualized		4.1	%		4.2	%		-10	bps
Efficiency Ratio		41.9	%		40.2	%		170	bps

Uruguay

We are the third largest private bank in Uruguay in terms of loan portfolio (data provided by the Central Bank of Uruguay - BCU, September 2015) and we were recognized as the best bank in Uruguay by Euromoney magazine. We are also the leading player in the credit card segment through our credit card operator OCA.

Our assets totaled R$18.0 billion, increasing 9.6% from June 2015 and 26.2% from September 2014, mainly due to the loan portfolio, which reached R$7.4 billion, an increase of 6.3% when compared to the previous quarter and of 22.3% from September 2014.

Stockholders’ equity totaled R$1.8 billion in September 2015, and net income in the quarter was R$99 million, mainly due to larger gains resulting from an increase in the loan volume.

Loan Portfolio | Uruguay

 

Income Statement | Uruguay

In R$ millions	3Q15			2Q15			change
Operating Revenues		362			331			9.3	%
Financial Margin		176			154			14.0	%
Banking Service Fees and Income from Banking Charges		180			173			4.0	%
Other Income		5			3			73.1	%
Result from Loan Losses		(14	)		(16	)		-12.5	%
Non-Interest Expenses		(228	)		(210	)		8.6	%
Income before Tax and Profit Sharing		119			104			14.2	%
Income Tax and Social Contribution		(19	)		(17	)		14.2	%
Profit Sharing		(1	)		(2	)		-41.6	%
Recurring Net Income		99			85			15.7	%
Return on Average Equity - Annualized		22.7	%		21.4	%		130	bps
Return on Average Assets - Annualized		2.3	%		2.1	%		20	bps
Efficiency Ratio		63.0	%		63.5	%		-50	bps

(1) Constant currency for 09/30/15. The elimination of the exchange rate variation impact was obtained by applying the exchange rate of 09/30/15 to all periods.

Itaú Unibanco Holding S.A. 54

Management Discussion & Analysis Activities Abroad

Colombia

Our presence in Colombia is growing and we aim to be one of the three main investment and wholesale banks over the course of the next years. The sectors evaluated as most attractive, are: Mining, Energy, Oil, Gas, and Infrastructure.

In September 2015, the loan portfolio totaled R$456 million, an increase of 11.1%¹ when compared to June 2015.

Peru

In Peru, we have a representation office and we are considering increasing our activities in corporate and investment banking segments, following the same strategy as in Colombia, in order to take advantage of the strong growth of this country.

Mexico

In October 2014, the Brazilian Central Bank approved the opening of a full service broker and, in November 2014, we received the approval of the local regulatory authority. The operation is expected to start in the second half of 2015.

Itaú BBA International

Our banking activities held under the corporate structure of Itaú BBA International are mainly focused on two business segments:

Corporate & Investment Banking: Headquartered in the United Kingdom and with business platforms in several cities across Europe, we serve the financial needs of companies with global operations, focusing on financing operations and investment relationships among companies in Latin America and Europe. The services offered include structured financing, hedging, trade financing and advisory to both European companies investing in Latin America and Latin American companies investing overseas.

Private Banking: Under the corporate structure of Banco Itaú BBA International, we manage private banking activities in Miami and Switzerland, offering specialized financial products and services to high networth Latin American clients.

The financial information on the Itaú BBA International consolidated operation is presented below:

Balance Sheet | Itaú BBA International

In R$ millions, end of period	3Q15			2Q15 (1)			change
Assets
Current and Long-Term Assets		37,102			36,290			2.2	%
Cash and Cash Equivalents		809			826			-2.1	%
Short-Term Interbank Investments		5,362			4,502			19.1	%
Securities and Derivative Financial Instruments		5,940			5,315			11.8	%
Loan, Lease and Other Credit Operations		19,247			18,990			1.4	%
(Allowance for Loan Losses)		(0	)		(1	)		-42.8	%
Other Assets		5,745			6,657			-13.7	%
Permanent Assets		188			205			-8.1	%
Total Assets		37,290			36,495			2.2	%
Liabilities and Equity
Current and Long-Term Liabilities		33,048			32,286			2.4	%
Deposits		16,129			13,250			21.7	%
Deposits Received under Securities Repurchase Agreements		199			395			-49.7	%
Funds from Acceptances and Issue of Securities		8,267			8,918			-7.3	%
Interbank and Interbranch Accounts		2			2			-33.1	%
Borrowings and Onlendings		903			938			-3.8	%
Derivative Financial Instruments		2,447			1,911			28.1	%
Foreign Exchange Portfolio		-			-			-
Other Liabilities		5,102			6,872			-25.8	%
Deferred Income		74			82			-9.7	%
Stockholders´ Equity		4,168			4,127			1.0	%
Total Liabilities and Equity		37,290			36,495			2.2	%

In September 2015, the consolidated assets of Itaú BBA International totaled R$37.3 billion, an increase of 2.2% when compared to June 2015. The loan portfolio reached R$19.2 billion, increasing 1.4%¹ in the quarter.

(1) Constant currency for 09/30/15. The elimination of the exchange rate variation impact was obtained by applying the exchange rate of 09/30/15 to all periods.

Itaú Unibanco Holding S.A. 55

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Itaú Unibanco Holding S.A. 56

 

Management Discussion & Analysis Ownership Structure

Itaú Unibanco Holding’s capital stock is represented by common shares (ITUB3) and non-voting shares (ITUB4), both traded at the BM&FBOVESPA. The non-voting shares are also traded as depositary receipts at NYSE (New York) and BCBA (Argentina) as ADRs and CEDEARs, respectively.

 

Outstanding Shares | Itaú Unibanco Holding S.A.

In thousands	Common Shares		Non-voting Shares			Total
Number of Shares		3,047,040		3,036,876			6,083,916
Treasury Shares
On 12/31/2014		2.5		53,829			53,831
Purchase of treasury shares		-		82,785			82,785
Exercised options - Granting of stock options		-		(5,872	)		(5,872	)
Disposals - Stock option plan		-		(5,343	)		(5,343	)
Bonus in Shares (10%)		0.3		8,426			8,426
On 09/30/2015 (1)		2.8		133,824			133,827
Total Shares (-) Treasury Shares		3,047,037		2,903,052			5,950,089

(1) The average cost of non-voting treasury shares was R$26.52 and of the common treasury shares was R$7.25. For further information, including information on the “Stock Option Plan”, see note 16 to the financial statements.

The management of our ownership structure aims to optimize capital allocation among the many segments that compose the conglomerate. Itaú Unibanco Holding is controlled by IUPAR, which is jointly controlled by Itaúsa and Cia. E. Johnston. Itaúsa is controlled by the members of the Egydio de Souza Aranha family while Cia. E. Johnston is controlled by the members of the Moreira Salles family.

The organizational chart below summarizes the current ownership structure as of September 30, 2015:

Note: The percentages do not consider treasury stocks .

(1) Besides the treasury stocks, the percentages do not consider the participation of controlling stockholders.

Shares Buyback

In the period from January to September 2015, we acquired⁽¹⁾ 86.7 million non-voting shares in the amount of R$2.5 billion for the average price of R$29.07 per share. The balance of treasury shares reached 133.8 million non-voting shares in September 2015, which is equivalent to 4.6% of the outstanding shares of the same class.

(1) All the amounts were adjusted to reflect the 10% share bonus approved at the Shareholders’ Meeting held on April 29, 2015.

Free Float - Non-voting Shares | on 09/30/2015

 

Itaú Unibanco Holding S.A. 58

Management Discussion & Analysis Stock Market Performance

Stock Market Performance | 3Q15

Our common and non-voting shares were traded on all BM&FBOVESPA´s sessions in the first nine months of 2015. Additionally, our non-voting shares are included in several Stock Exchange indexes in which financial institution shares may be listed.

	(R$)			(R$)			(US$)
	Non-voting Shares			Common Shares			ADRs
	ITUB4			ITUB3			ITUB
Closing Price at 09/30/2015		26.51			24.52			6.62
Maximum price in quarter		32.11			30.71			10.22
Average price in quarter		28.37			26.93			8.05
Minimum price in quarter		24.72			23.81			6.01
Closing Price at 06/30/2015 (1)		31.11			30.19			9.95
Maximum price in 12 months(1)(2)(3)		37.07			32.66			14.74
Average price in 12 months (1)(2)		31.30			28.77			10.63
Minimum price in 12 months(1)(2)(4)		24.72			23.81			6.01
Closing Price at 09/30/2014(1)		30.79			28.57			12.62
Change in 3Q15		-14.8	%		-18.8	%		-33.5	%
Change in the last 12 months		-13.9	%		-14.2	%		-47.5	%
Average daily trading financial volume - in 12 months (million)(2)		489.9			4.0			170.8
Average daily trading financial volume in 3Q15 (million)		480.6			2.1			139.9

(1) Prices adjusted by the June 2015 bonus (10%).

(2) From 10/01/14 to 09/30/15;

(3) Prices on 11/24/14 for non-voting shares, on 04/24/15 for common shares and on 10/14/14 for ADRs;

(4) Prices on 08/24/15 for non-voting shares, on 09/30/15 for common shares and on 09/24/15 for ADRs.

Closing price at the end of each period ⁽¹⁾

 

(1) ITUB4, ITUB3 and ITUB historical information of 2014, 2013 and 2012 was adjusted by the June 2015, June 2014 and March 2013 bonus.

Liquidity of our shares

	3Q15			2Q15			3Q14
BM&FBovespa (ITUB4)
Total Financial Volume Traded in the spot market (in R$ million)		30,760			28,891			25,876
Volume of Transactions (in thousands)		2,302.6			1,612.2			1,525.0
Average volume by transaction (in R$ thousands)		13.4			17.9			17.0
Negotiability Index (1)		5.19	%		4.27	%		3.74	%
NYSE (ADR)
Total Financial Volume Traded (in R$ million)		31,948			31,624			23,422
Volume of Transactions (in thousands)		2,528.5			2,057.5			3,040.4
Average volume by transaction (in R$ thousands)		12.6			15.4			7.7
Total outstanding ADRs (in million)		942.9			895.5			916.3
Ratio of Total Outstanding ADRs to Total Outstanding Non-Voting Shares		32.5	%		30.4	%		30.8	%

(1) The negotiation index represents the percentage of share trading in relation to all shares traded in the spot market on BM&FBovespa. For calculation purposes, it considered the trading in the three last months of each period. Source: Economática.

Market Capitalization vs. Ibovespa Index

On September 30, 2015, our market capitalization was R$156.0 billion, and the compound annual growth rate (CAGR) was 1.3% since 2012. Ibovespa reached 45.1 thousand points in the same period and its CAGR was 10.4% negative. According to information provided by Bloomberg, on September 30, 2015 we were the 2^nd largest company by market capitalization in Brazil and the largest among financial institutions.

Market Indicators

· Price / Earnings¹ – represents the ratio of price to net income per share.

· Price / Book Value ² – represents the ratio of market capitalization to stockholders' equity.

 

(1): Closing price of non-voting share at the period end/Earnings per share. For calculation purposes, the retained earnings of the last 12 months were considered. (2): Closing price of non-voting share at the period-end/Book value per share.

Average Daily Trading Volume (BM&FBovespa + NYSE)

 

Financial trading profile by investor

Foreign investors accounted for 70.2% of the financial volume of Itaú Unibanco shares traded on stock exchanges in the first nine months of 2015.

 

(1) Cooperatives, public companies, limited-liability companies, municipal/state/federal governments, financial entities, churches and charities and/or non-profit organizations, among others.

(2) Includes foreign investors trading on the BM&FBOVESPA, as well those trading on the NYSE.

Dividends and Interest on Capital

Itaú Unibanco remunerates its stockholders by means of monthly and complementary payments of dividends and interest on capital. In the first nine months of 2015, we paid or recognized a provision of R$3.88 billion in dividends and interest on capital, net of taxes.

Dividend Yield (Dividends and Interest on Capital Distributed / Average Price¹) It is the ratio of total dividends/interest on capital distributed to the share price, which indicates the return on investment to the stockholder through profit sharing in each period.

Payout (Net Dividends and Interest on Capital Distributed / Net Income)

 

(1): Average price on the first day of each period.

(2): For calculation purposes, it was considered the total Dividends/Interest on capital distributed the last 12 months of each period.

Itaú Unibanco Holding S.A. 59

Management Discussion & Analysis Stock Market Performance

Market Consensus

Major market analysts periodically issue recommendations on the shares that are the subject matter of their analyses. These recommendations help many investors choose the best option in which to invest their capital.

Based on information provided by Thomson Analytics and Bloomberg on October 15, 2015, we present in the table below a summary of the recommendations on Itaú Unibanco Holding non-voting shares.

	Thomson	Bloomberg
Buy	14	15
Hold	5	7
Sell	2	2
Number of Analysts	21	24

Based on the information provided by Thomson, the average estimated target price for 2015 is R$34.28. According to Bloomberg, the average estimated target price is R$35.52.

Main Market Indexes

The weights of our common and non-voting shares in the BM&FBOVESPA’s indexes of the current portfolios from September to December 2015 are shown in the chart below.

	ITUB3			ITUB4
	Weights			Weights and Ranking 1
Ibovespa (Bovespa Index)		-			10.10	%	1st
IBrX - 50 (Brazil Index 50)		-			9.76	%	2nd
IBrX - 100 (Brazil Index 100)		-			8.56	%	2nd
IBrA (Brazil Broad-Based Index)		0.79	%		8.35	%	2nd
IFNC (Financial Index) 2		1.72	%		18.28	%	1st
IGCT (Corporate Governance Trade Index)		1.00	%		10.63	%	1st
ITAG (Special Tag Along Stock Index)		-			11.58	%	1st
IGCX (Special Corporate Governance Stock Index)		0.61	%		6.43	%	2nd
MLCX (Mid-Large Cap Index)		0.87	%		9.25	%	2nd
ICO2 (Carbon Efficient Index)		-			13.10	%	2nd
ISE (Corporate Sustainability Index) 3		0.54	%		5.76	%	5th

(1) Position of the ITUB4 share when the components of the index are ordered based on their weights.

(2) The weight of the companies’ shares in the index (including all types of shares) cannot exceed 20%.

(3) The weight of one economic sector in the Corporate Sustainability Index (ISE), including all types of shares, cannot exceed 15%.

Net Income per Share¹ and Recurring Net Income per Share¹

 

(1) For calculation purposes, the retained earnings of the last 12 months were considered.

(2) ITUB4, ITUB3 and ITUB historical information of 2014, 2013 and 2012 was adjusted by the June 2015, June 2014 and March 2013 bonus.

Credit Risk Assessment by Rating Agencies

Due to the Moody´s downgrade of Brazil´s sovereign credit rating in August 2015, the rating agency announced the change in the ratings of 14 Brazilian banks, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A. Brazil’s ratings were kept at investment grade.

In September 2015, Standard & Poor’s downgraded Brazil’s ratings and removed it of its investment grade status. As a result, the rating agency also announced reviews of the ratings in global scale of 13 Brazilian financial institutions, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A.

As a consequence of the downgrade of Brazil´s sovereign credit rating announced by Fitch Ratings in October 2015, the rating agency also reviewed the ratings of 17 Brazilian financial institutions, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A. Brazil’s ratings remained with investment grade.

These reviews are related to the sovereign rating and not specifically to the individual conditions of the banks.

To learn more about these ratings, please visit (www.itau.com.br/investor-relations) in Itaú Unibanco > Market Opinion > Ratings.

Non-voting Shares (ITUB4) Appreciation

The chart below shows the simulation of R$100 invested on September 30, 2005 through September 30, 2015, by comparing the amounts with and without the reinvestment of dividends to the performance of Ibovespa and CDI (Interbank Deposit Certificate).

 

Itaú Unibanco Holding S.A. 60

Management Discussion & Analysis Stock Market Performance

Subsequent Corporate Event

Acquisition of ConectCar shares – On October 21, 2015, Rede entered into an Agreement for the Purchase and Sale of Shares and Other Covenants, by which it agreed to acquire 50% of the capital stock of ConectCar Soluções de Mobilidade Eletrônica S.A., by paying R$170 million to Odebrecht Transport S.A. The remaining 50% of ConectCar’s capital stock will be held by Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A.

ConectCar is a company operating in the payment arrangement business and provides services intermediating the automatic payment of tolls, fuel and parking fees. It is currently ranked number two among the largest sector companies. Rede and the Ultra group will share the control of ConectCar.

Corporate Event

Merger of Itaú Chile with CorpBanca – The merger was approved on September 4, 2015, by the Superintendency of Banks and Financial Institutions (SBIF), which is the proper regulatory authority in Chile. With the authorization of SBIF, in addition to the other regulatory approvals obtained in Brazil, Colombia and Panama, the merger was authorized by all the proper authorities.

The bank resulting from the merger will be called Itaú CorpBanca, which will operate under the “Itaú” brand and will be controlled by Itaú Unibanco, with a 33.58% stake in Itaú CorpBanca’s capital.

The merger in Chile is expected to take place between January 1 and May 2, 2016.

Market Relations

We held 21 of the 22 Apimec meetings (Association of Capital Market Investments Analysts and Professionals) scheduled for this year in Brazil, with the attendance of 2,713 participants, strengthening our relationship with shareholders, analysts and investors of the capital markets. The last Apimec meeting of the year will be held on December 15 in Fortaleza.

2015 Latin America Executive Team Rankings – promoted by Institutional Investor magazine, based on a survey with market analysts and investors, awards the best CEOs, CFOs, and Investor Relations professionals and programs in Latin America. This year we were recognized in nine out of eleven categories, as follows:

· Best Investor Relations in the buy-side and sell-side;

· Best CEO in the buy-side and sell-side;

· Best CFO in the buy-side;

· Best Investor Relations Professional: 1^st place in the buy-side and sell-side and 2^nd place in the buy-side;

· Best Investor Relations Meetings.

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Itaú Unibanco Holding S.A. 62

 

(A free translation of the original in Portuguese)

Report of independent auditors on supplementary information

To the Board of Directors and Stockholders

Itaú Unibanco Holding S.A.

Introduction

In connection with our review of the financial statements of Itaú Unibanco Holding S.A. (Bank) and Itaú Unibanco Holding S A. and its subsidiary companies (Consolidated) as of September 30, 2015, on which we issued a report without exceptions dated October, 30, 2015, we performed a review of the accounting information contained in the supplementary information included in the Management Discussion and Analysis Report of Itaú Unibanco Holding S.A. and its subsidiaries for the three month period ended September 30, 2015.

Scope of the review

We conducted our review in accordance with Brazilian standards issued by the Federal Accountancy Council. Our review mainly comprised: (a) inquiry of, and discussion with, management responsible for the accounting, financial and operational areas of the Bank and its subsidiaries with regard to the main criteria adopted for the preparation of the accounting information presented in the supplementary information and (b) review of the significant information and of the subsequent events which have, or could have, significant effects on the financial position and the operations of the Bank and its subsidiaries. The supplementary information included in the Management Discussion and Analysis Report is presented to permit additional analysis. Notwithstanding, this information should not be considered an integral part of the financial statements.

Conclusion

Based on our review, we are not aware of any material modifications that should be made to the accounting information contained in this supplementary information, in order for it to be adequately presented, in all material respects, in relation to the financial statements at September 30, 2015, taken as a whole, prepared in accordance with the accounting practices adopted in Brazil applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).

Sao Paulo, October 30, 2015

PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5	Washington Luiz Pereira Cavalcanti Contador CRC 1SP172940/O-6

PricewaterhouseCoopers, Av. Francisco Matarazzo 1400, Torre Torino, São Paulo, SP, Brasil 05001-903, Caixa Postal 61005 T: (11) 3674-2000, F: (11) 3674-2000, www.pwc.com/br

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Itaú Unibanco Holding S.A. 64

 

MANAGEMENT REPORT – January to September 2015

To our Stockholders:

We present the Management Report and the Financial Statements of Itaú Unibanco Holding S.A. (Itaú Unibanco) and its subsidiaries for the period from January to September 2015, in accordance with the regulations established by the Brazilian Corporate Law, the National Monetary Council (CMN), the Central Bank of Brazil (BACEN), the Brazilian Securities and Exchange Commission (CVM), the Superintendence of Private Insurance (SUSEP), National Council of Private Insurance (CNSP) and the National Superintendence of Supplementary Pensions (PREVIC).

The information included in this material is available on the Investor Relations’ website of Itaú Unibanco: (www.itau.com.br/investor-relations > Financial Information) and on the websites of the CVM, the Securities and Exchange Commission (SEC) and the Buenos Aires Stock Exchange (BCBA). Our results may also be accessed on mobile devices and tablets, and through our “Itaú RI” (APP) application.

1) OVERVIEW

	September/15		September/14
Total Assets (R$ billion)		1,322.7		1,157.6
Total Loan Portfolio  (including Sureties, Endorsements and Guarantees) (R$ billion)		552.3		503.3
Stockholders' Equity (R$ billion)		103.4		90.8
Net Income - January to September (R$ billion)		17.7		14.7
Branches and CSB – Client Service Branches (units)		5,012		5,042
ATM – Automated Teller Machines (units)		26,454		27,960
Employees		91,437		94,164
Activities Abroad  (1)		18 countries

(1) Excludes Brazil.

2) ECONOMIC ENVIRONMENT

2.1) International Context (ex- Latam)

The U.S. economy continues showing improvement in the labor market. The unemployment rate fell to 5.1% in September 2015 from 5.7% at the end of last year. This favorable change followed a moderate growth in GDP, which expanded by 2.5% in the first three quarters of the year as compared to the same period of the previous year.

Eurozone GDP grew by 1.4% in the first half of 2015, compared to the same period of the previous year. China, however, decelerated to 6.9% in the first three quarters of this year, when compared to 7.3% achieved in 2014. This moderate growth in China has affected the expansion of emerging countries, including those of Latin America.

2.2) Latam Context (ex- Brazil)

In Latin America, commodities-exporting countries continue growing less in relation to the previous decade. Lower prices of commodities negatively affect investment, confidence and domestic income. Mexico has not fully benefited from the U.S. recovery, and falling oil prices have hindered the implementation of a reform in the energy sector. Due to the currencies’ depreciation, inflation has been high in almost all countries. The central banks of Chile, Colombia and Peru are increasing monetary policy rates, despite low growth. The slowdown in economic activity and tax revenues related to lower commodities prices are also forcing governments to cut spending.

Although the region’s economic environment is unfavorable, economic fundamentals gave rise to differences between countries. Accordingly, slowdown in Chile, Colombia, Peru and Mexico has been smoother in relation to other Latin American countries.

2.3) Domestic Context

In the domestic scenario, GDP slowed in the second quarter, posting a 1.7% drop as compared to the previous quarter. Unemployment rate rose to 7.6% in September 2015 from 4.9% in September 2014. Inflation in the twelve-month period ended in September was 9.5%. The Central Bank increased the interest rate to 14.25% in July 2015 and kept it unchanged in the September’s and October’s meetings.

The primary deficit accumulated over twelve months reached 0.4% of GDP in September 2015, compared to a surplus of 0.6% of GDP in relation to the same period of last year. The current account deficit decreased due to the more depreciated exchange rate and a reduction of economic activity. Deficit in external accounts fell to 4.2% of GDP in the twelve-month period ended in September 2015 from 4.4% in 2014.

The exchange rate dropped approximately 50% in the three first quarters of this year, closing at R$3.97/US$ at the end of September 2015. The Central Bank maintained the foreign exchange swap stock at about US$110 billion in September 2015. Brazil has international reserves of approximately US$370 billion.

3) OUR HIGHLIGHTS

3.1) Corporate Events

Repurchase of shares – From January to September 2015, we acquired^(a) 86.7 million preferred shares of our own issue, in the total amount of R$2.5 billion, at the average price of R$29.07 per share.

The balance of treasury shares reached 133.8 million preferred shares in September 2015, equivalent to 4.6% of outstanding shares of the same class (free float).

(a) All amounts were adjusted at the 10% bonus shares approved at the Stockholders’ Meeting held on April 29, 2015.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 66

Merger of Banco Itaú Chile and CorpBanca – The merger was approved on September 4, 2015, by the Superintendence of Banks and Financial Institutions (SBIF), the proper regulatory authority in Chile. Considering this SBIF’s authorization, and other regulatory approvals obtained in Brazil, Colombia and Panama, the merger was authorized by all of the proper authorities.

The bank resulting from the merger will be named Itaú CorpBanca, will operate under the “Itaú” brand and will be controlled by Itaú Unibanco through a 33.58% ownership interest in its capital.

The merger in Chile will occur between January 1^st and May 2, 2016.

3.2) Technology

Digital Channels – Our Digital Channels make services and products available for clients through web and mobile platforms. These channels accounted for 66% of total bank transactions, representing 6.6 billion transactions between January and September 2015, with a 21% growth from the same period of the previous year. A highlight is the mobile channel, which in this period grew by 47% in the share of transactions, accounting for 16% of the bank’s total transactions.

Per month, over 40% of our individual account holders’ access digital channels, whereas this figure exceeds 60% for companies. In August 2015, we increased the options for digital channels access with the launch of the Itaú Pagcontas application, thus innovating and making payment of accounts easier.

Strengthening our initiative of being a “digital bank”, Digital Branches were created to offer clients a new model of relationship with the bank, as we understand that the consumption of our products and use of our channels goes beyond traditional banking hours, thus providing a new bank to a new customer. In September 2015, we had approximately 805 thousand digital clients.

“Cubo” – In September 2015, Itaú Unibanco made official the opening of “Cubo”, jointly with Redpoint e.ventures. This non-profit initiative consists in a large development center for technological entrepreneurship. With coworking spaces, education and networking activities, the purpose is to contribute on a structured basis to expand innovative and transforming initiatives.

3.3) Subsequent Event

Acquisition of ConectCar shares – On October 21, 2015, Rede entered into an Agreement for the Purchase and Sale of Shares and Other Covenants, by which it agreed to acquire 50% of the capital stock of ConectCar Soluções de Mobilidade Eletrônica S.A., by paying R$170 million to Odebrecht Transport S.A. The remaining 50% of ConectCar’s capital stock will be held by Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A. ConectCar is a company operating in the payment arrangement business, and provides services intermediating the automatic payment of tolls, fuel and parking fees. It is currently ranked number two among the largest sector companies. Rede and the Ultra group will share the control of ConectCar.

4. OUR PERFORMANCE

4.1) Returns

			%		bps
ROE / ROA	Jan to Sep/15		Jan to Sep/14		Change
Recurring return on average equity - annualized		24.5		23.7		80
Return on average equity - annualized		23.9		23.3		60
Recurring return on average assets - annualized		1.9		1.8		10
Return on average assets - annualized		1.9		1.8		10

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 67

4.2) Income

				R$ billion			%
Statement of Income for the Period	Jan to Sep/2015			Jan to Sep/2014			Change (1)
Income from financial operations before loan and lease losses		32.7			39.3			(16.8	)
Expenses for allowance for loan losses		(21.3	)		(13.5	)		58.0
Income from recovery of credits written off as loss		3.3			3.7			(11.6	)
Banking service fees and income from bank charges		22.6			20.4			11.0
Result from insurance, pension plan and capitalization operations		3.0			2.8			4.9
Personnel, other administrative and operating expenses		(32.1	)		(28.8	)		11.7
Tax expenses		(3.6	)		(3.9	)		(8.4	)
Equity in earnings of affiliates and other operating revenues (2)		1.1			0.8			42.6
Income tax and social contribution, Non-controlling interests and Profit sharing – Management Members		12.0			(6.2	)		(294.0	)
Net income		17.7			14.7			20.0
Recurring net income(3)		18.1			15.0			20.7
Dividends and interest on capital (net of taxes)		3.9			2.9			31.8

(1) Change is calculated based on actual figures in units.

(2) Equity in earnings of affiliates, jointly controlled entities and other investments, Other operating revenues and Non-operating income.

(3) Excludes the non-recurring effects of each period.

The following contributed to the increase in net income from January to September 2015:

Banking service fees and income from bank charges: a 11.0% growth compared to the same period of 2014, particularly due to the increased income from credit cards, arising mainly from annual fees and other services, and current account services, due to higher income from service packages, funds management, loan operations and guarantees provided.

Income from insurance, pension plan and capitalization operations: a 4.9% growth in relation to the same period of 2014, influenced by lower expenses on claims in the period – for additional information, see item 4.5. Itaú Insurance, Pension Plan and Capitalization.

Expenses for allowance for loan and lease losses a 58.0% increase from the same period of the previous year, due to the recognition of a complementary provision for loan losses to the minimum required by CMN Resolution No. 2.682/99 in the amount of R$2,793 million^(b), mainly due to a lower economic growth scenario.

Personnel, and other administrative and operating expenses: an 11.7% increase from the same period of the previous year, driven by higher personnel expenses, due to greater expenses on compensation and social benefits, and by higher operating expenses, due to the recognition of tax, social security of R$560 million^(b), and also civil provisions.

Income from financial operations before loan losses, income tax and social contribution, and tax expenses: the decrease in income from financial operations before loan losses is mainly due to the tax effects of hedging foreign investments, which are recorded under Income Tax, Social Contribution on Net Income (CSLL) and Tax expenses. If we had reclassified this result, the financial margin would have reached R$48.2 billion, a 19.2% increase from the same period of the previous year. This same reclassification to Income Tax and Social Contribution on Net Income line would have brought this figure to a R$1.9 billion expense, with a 72.6% decrease from the same period of the previous year; if we brought this reclassification to the Tax Expenses line we would have recorded a R$4.8 billion expense, a 20.7% increase from the same period of the previous year.

Income from financial operations before loan losses was negatively impacted by R$520 million^(b) due to the reclassification of the financial lease agreement related to the implementation of the Technology Center, intangible and fixed assets, and advances to suppliers.

Increase in the Social Security Rate – In October 2015 Law No. 13,169/15 became effective, which increased the social contribution on net income (CSLL) banks and financial institutions from 15% to 20%, starting from 1 September 2015 to 31 December 2018. The impact on results arising from the revaluation of tax credit from social contribution due to the increase in the tax rate was positive by R$3,988 million^(b) in the period.

Efficiency ratio: Improvement of 370 basis points, reaching 43.5% from January to September 2015, from 47.2% in the same period of 2014.

(b) Non-recurring effects, net of tax effects. For additional information on non-recurring effects see Note 22 k) to the Complete Financial Statements.

The ratio between revenues ⁽¹⁾ and expenses ⁽²⁾ was 79.7% in the period from January to September 2015.

(1) Revenues: Bank service fees, income from bank charges and results of insurance, pension plan and capitalization operations.

(2) Expenses: personnel expenses, and other administrative and operating expenses.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 68

3.3) Asset Data

			R$ billion		%
Balance Sheet	Sep 30, 2015		Sep 30, 2014		Change (1)
Total assets		1,322.7		1,157.6		14.3
Loan portfolio with endorsements and sureties		552.3		503.3		9.7
Free, raised and managed own assets		1,878.5		1,648.8		13.9
Subordinated debt		65.9		54.5		21.0
Stockholders’ equity		103.4		90.8		13.9
Referential equity (PR) - prudential conglomerate (2)		124.8		124.7		0.0

(1) Change is calculated based on actual figures.

(2) On September 30,2014, the criteria to calculate the PR was the financial conglomerate and on September 30,2015, the criteria to calculate the PR was the prudential conglomerate.

4.3.1) Assets

Total consolidated assets reached R$1.3 trillion at the end of September 2015, a 14.3% growth from the same period of the previous year, mainly driven by an increase in securities and derivative financial instruments and loan operations.

The diversification of our business is reflected in the changing composition of our loan portfolio in the last few years, focusing on origination in lower risk segments with increased guarantees.

Loan Portfolio

At September 30, 2015, the balance of the loan portfolio, including endorsements and sureties, reached R$552.3 billion, a 9.7% increase from September 2014, mainly driven by increased payroll loans, mortgage loans, the corporate and Latin America portfolios.

If we also include the credit risks of the private securities modality, this increase would reach 10.1%. Excluding the effects of foreign exchange variation, our loan portfolio, including private securities, would have decreased 0.4% from the same period of the previous year.

At September 30, 2015 and 2014, the breakdown of the portfolio, including endorsements and sureties, is as follows:

 

			R$ billion		%
Credit Portfolio	Sep 30, 2015		Sep 30, 2014		Change
Total with endorsements and sureties		552.3		503.3		9.7
Corporate – Private securities		38.3		32.9		16.4
Total with endorsements, sureties and private securities		590.7		536.3		10.1
Total with endorsements, sureties and private securities (former exchange rate variation)		590.7		593.3		-0.4

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 69

Brazil – Individuals

  Credit Card (Itaucard, Hipercard, Credicard and partnerships)

We are leaders in the credit card segment in Brazil in terms of transaction volume^(c).

At September 30, 2015, the balance of credit card portfolio was R$55.1 billion, a 1.4% increase from the same period of the previous year.

From January to September 2015, the transacted amount in credit cards reached R$182.8 billion, which represented a 6.9% increase from the same period of 2014.

In the debit card segment, which includes account holders only, we have a base of 26.1 million accounts. Transacted volume reached R$59.4 billion from January to September 2015, a 13.8% growth from the same period of the previous year.

(c) Source: Itaú Unibanco and ABECS (Brazilian Association of Credit Card Companies and Services) –2Q15.

  Payroll loans

We are leaders in payroll loans among Brazilian private banks.

The loan portfolio balance reached R$45.7 billion, (R$16.2 billion in our branch network and R$29.5 billion in other trading channels), a 25.4% increase from September 30, 2014, representing 8.3% of the bank’s total loans.

Noteworthy are the portfolios of retirees and pensioners from the INSS, and employees from the public sector, which increased 34.2% overall since the end of September 2014.

  Personal Credit

In September 2015, the balance of the personal loan portfolio reached R$30.3 billion, up 5.5% from the same period of the previous year.

  Mortgage loans

We are leaders, among private banks, in mortgage loans to individuals with the use of savings funds (SBPE - the Brazilian Savings and Loans system)^(d).

Our offer is made through a network of branches, development companies, and real estate agents. Mortgage loans reached R$33.5 billion, a 21.5% increase in 12 months, and accounted for the third largest balance in our loan portfolio for individuals as of September 2015.

The ratio of the loan amount to the value of the financed asset was approximately 43.4% from January to September 2015.

From January to September 2015, we carried out approximately 26.3 thousand financing operations to borrowers, in the amount of R$8.1 billion. For entrepreneurs, the volume of financing operations contracted generated 15.1 thousand new units, in the amount of R$2.7 billion.

In the period, we had the first issue of a fully digital mortgage loan agreement, in which clients themselves provide the documentation and monitored all contracting phases on the Internet. This tool is available for accountholders, providing more agility and convenience in the monitoring of the whole contracting process.

(d) Source: Itaú Unibanco and ABECIP (Brazilian Association of Mortgage Loans and Savings Companies) – September 2015.

  Vehicles

The balance of the vehicles financing portfolio reached R$21.6 billion, a 30.9% decrease from the same period of the previous year. Between January and September 2015, new vehicle financing contracts reached R$6.6 billion, with an average term of 39 months, and half of the transactions were carried out with maximum terms of up to 36 months.

The ratio of the loan amount to the average asset value of the portfolio was 71.5% in September 2015 continuing the downward trend of the recent quarters.

Brazil - Companies

  Large Companies

At September 30, 2015, the balance of the loan portfolio reached R$221.6 billion, a 9.1% increase from the same period of the previous year. In derivatives, we maintained our outstanding position in CETIP. The focus was on operations hedging the exposures to foreign currencies, interest rates and commodities with clients.

In September 2015, we were granted the “Infrastructure Bank” award for Brazil, organized by LatinFinance, and the “Best Investment Bank in LatAm” award, organized by The Banker. Additionally, in October 2015, we won “The Most Admired Companies in Brazil in 2015” award in the Investment Bank Sector and Corporate Bank Sector categories, organized by Carta Capital magazine.

  Very small, small and medium-market companies

At September 30, 2015 the balance of the loan portfolio reached R$84.7 billion, a 2.4% increase from the same period of the previous year.

We kept the focus on reviewing and streamlining our product offering to very small, small and medium-market companies. As an example, the “Conta Certa” (right account), besides having more services, enables clients to customize the number of payment forms, wire and electronic transfers (DOCs and TEDs), custody of cheques, among others, in accordance with their needs.

  Latin America

Our loan portfolio in Latin America reached R$59.9 billion, posting a 52.6% increase from September 2014. Excluding the foreign exchange effect of the respective local currencies against the Real, the growth of the loan portfolio was 10.4% in the period. The individuals segment posted a 52.1% increase (10.2% ex-foreign exchange rate variation), and noteworthy is the growth of 50.2% (8.1% ex-foreign exchange rate variation) in Chile’s portfolio, from the same period of the previous year.

The loan portfolio for the companies segment increased by 52.9% (10.6% ex-foreign exchange rate variation), and noteworthy is the growth of portfolios in Chile and Uruguay, which increased by 46.9% (5.6% ex-foreign exchange rate variation) and 76.1% (27.5% ex-foreign exchange rate variation), respectively.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 70

Default

Our policy for mitigating risk on credit granting, started in 2011, resulted in the improvement of the default rate, mainly impacted by the change in the credit profile of our portfolio.

· Total default rate (NPL over 90 days) reached 3.3% at September 30, 2015, up by 10 bps from September 30, 2014.

· In the individuals portfolio, the default rate reached 5.1% at the end of September 2015, increasing 10 bps from the same period of the previous year, and

· In the companies portfolio, the default rate reached 2.0% at the end of September 2015, increasing 20 bps from the same period of the previous year.

 

In September 2015, the balance of the allowance for loan losses increased 35.4% from September 2014, reaching R$34.2 billion, with R$11.0 billion of supplementary allowance in relation to the minimum requirements of the Central Bank.

The coverage ratio of the portfolio past due for over 90 days reached 214% in September 2015, a 3,300 bps growth from the same period of the previous year.

4.3.2) Funding

Total free, raised and managed own assets amounted to R$1.9 trillion at September 30, 2015, up 13.9% from the same period of the previous year.

As compared to September 2014, we recorded a 6.7% increase in demand deposits added to savings deposits. At September 30, 2015, the loan portfolio to funding ratio reached 77.1%.

4.3.3) Capital Strength

In order to ensure our strength and capital availability to support business growth, regulatory capital levels were kept above requirements to cover the risks, as evidenced by the Basel ratio and Common Equity Tier I and Tier II (see Risk Management – Pillar 3 report on our website: (www.itau.com.br/investor-relations > Corporate Governance).

At the end of September 2015, the Basel ratio reached 16.1%, of which 12.3% was Tier I Capital and 3.8% of Tier II Capital, mainly composed of shares, quotas, reserves and retained earnings, and subordinated debt. These indicators evidence our effective capacity to absorb losses.

Our subordinated debt, which is part of our regulatory capital Tier II, reached R$29.1 billion at September 30, 2015.

4.3.3.1) Credit Risk Ratings by Rating Agencies

Due to the Moody´s downgrade of Brazil´s sovereign credit rating in August 2015, the rating agency announced changes in the ratings of 14 Brazilian banks, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A. Brazil’s ratings remained at investment grade.

In September 2015, Standard & Poor’s downgraded Brazil’s ratings and removed it of its investment grade status. As a result, the rating agency also announced reviews of the ratings on the global scale of 13 Brazilian financial institutions, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A.

As a consequence of the downgrade of Brazil´s sovereign credit rating announced by Fitch Ratings in October 2015, the rating agency also reviewed the ratings of 17 Brazilian financial institutions, including Itaú Unibanco S.A. and Itaú Unibanco Holding S.A. Brazil’s ratings remained at investment grade.

These reviews are related to the sovereign ratings and are not specific to the individual conditions of the banks.

To learn more about these ratings, please visit (www.itau.com.br/investor-relations > Itaú Unibanco > Market Opinion > Ratings).

4.4) Services

We are constantly seeking to implement and focus on the offer of new products and services that add value to our clients and diversify our sources of income, allowing the growth of our non-financial income arising mainly from banking service fees, income from bank charges and from insurance, pension plan and capitalization operations.

Asset Management

In September 2015, we reached R$469.1 billion^(e) in assets under management, according to the ANBIMA management ranking, accounting for 16.0% of the market. We posted a 20.9% growth compared to the same period of the previous year, and particurlaly noteworthy were fixed income and Interbank Deposit (DI) referenced funds. In addition to the strong performance in the domestic market, we are present in the main global financial centers, with strategically allocated professionals searching for investment opportunities and solutions adequate to different clients' profiles.

In July 2015, Kinea Investimentos completed a new fundraising for the Kinea Rendimentos fund amounting to R$397.8 million. As a result of this new funding, in September 2015 the fund’s net equity totaled R$1.1 billion.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 71

Accordingly, in September 2015 consolidated assets under Kinea’s management reached R$6.8 billion.

In July 2015, our pension plan funds were ranked number one in three of the categories in the survey organized by Você S.A. magazine which disclosed the most successful financial investments in 2015. Our funds were recognized in “ten largest funds by net equity", "the 10 best highest-risk funds”, and “the 10 largest fixed income funds” categories. This ranking was prepared based on a study carried out by FGV.

(e) Source: ANBIMA Management Ranking – September 2015. Considers Itaú Unibanco and Intrag.

Custody and Bookkeeping Services

In the custody market, we hold R$1,0 trillion in assets, according to the ANBIMA management ranking in September 2015, which represents a 5.4% increase as compared to the same period of the previous year^(f).

We provided services to 222 companies listed on BM&F Bovespa, accounting for 61.8% of the bookkeeping market. In debenture bookkeeping, we operated as the bookkeeper of 511 issues until September 2015, accounting for 52.9% of the market^(f).

(f) Source: Itaú Unibanco, ANBIMA and BM&F Bovespa (September 2015).

Private Banking

With a full global wealth management platform, we are market leaders in Brazil and one of the main players in Latin America. Our multidisciplinary team, which comprises private bankers, investment advisers and product experts, serves clients from offices in eight cities in Brazil and also our foreign offices located in Zurich, Miami, New York, Santiago, Montevideo, Asuncion, and Nassau.

We were acknowledged in the period by the main publications in the private banking market: “Best Private Bank in Brazil”, organized by PWM/The Banker magazine, and “Outstanding Global Private Bank – Latin America” by Private Banker International. These awards are granted according to the outcome of assessments conducted by major Wealth Management market companies and take into account client relationship, portfolio management, asset allocation, offering, risk control and business strategy.

Consortium (Vehicles and Properties)

In September 2015, the balance of installments receivable reached R$12.2 billion, a 9.2% increase when compared to September 2014.

We reached approximately 415 thousand agreements in force in the same period, a 3.1% increase when compared to September 2014.

Consortia management fees reached R$505.6 million from January to September 2015.

Investment Banking

From January to September 2015, we highlight our Mergers and Acquisitions operation in Brazil, which provided financial advisory services on 37 transactions, totaling US$5.6 billion, and topped the Thomson Reuters ranking.

In fixed income, we took part in debentures, promissory notes and securitization transactions, which totaled R$12.3 billion in the period from January to September 2015. In international issues of fixed income of Latin American companies, we acted as the joint bookrunners of offerings with a total volume of US$ 941 million in the period, according to Dealogic data ^(*).

To serve international clients, we rely on units in Argentina, Chile, Colombia, Arab Emirates, the United States, Hong Kong, Japan, Mexico, United Kingdom and Peru, with a representative office in the latter.

(*) Includes only transactions in US dollars and local currency above US$50 million.

 Electronic Payment Means  

From January to September 2015, we reached 2,966.8 million debit and credit cards transactions, a 6.3% increase from the same period of the previous year.

The volume transacted on credit cards was R$182.6 billion from January to September 2015. This amount accounts for 65.5% of total transactions arising from acquiring business, and a 10.5% increase from the same period in the previous year.

The volume captured in debit cards was R$96.0 billion and represented 34.5% of the volume transacted from January to September 2015, up 7.5% as compared to the same period of 2014.

We ended the period with 1.9 million equipment items installed, an 11.2% growth compared to the previous year.

In August 2015, REDE was elected the best company in the Specialized Services sector in the Valor 1000 2015 yearly edition organized by Valor Econômico magazine. This award is granted based on accounting and financial analysis criteria.

4.5) Itaú insurance, pension plan and capitalization

Insurance^(g)

We continue to concentrate distribution efforts on our own channels, by giving priority to sales through more efficient channels that generate positive impacts on our profitability.

Net income posted a 7.9% decrease from January to September 2015 from the same period of the previous year, as a result of the early termination of the agreement between Itaú Seguros S.A. and Via Varejo in the third quarter of 2014. Result from the core insurance activities recorded a 5.5% increase from January to September 2015 from the same period of 2014. Earned premiums posted a 5.9% decrease from the January to September 2014, reaching R$4.3 billion. Retained claims reached R$ 1.2 billion from January to September 2015, down 21.6% when compared to the same period of 2014. The drop in earned premiums and retained claims were impacted by the sale of the Large Risks portfolio.

Loss ratio was 27.3% from January to September 2015, a 550 bps reduction from the same period of the prior year. The combined ratio was 69.1% in the period, a 400 bps reduction from the previous year. Technical provisions for insurance reached R$5.2 billion at September 30, 2015.

Sales through bank phone, bankline/internet, ATM and bank-teller terminals accounted for 42.9% of total new insurance policies from January to September 2015. Sales of insurance policies through bankline, deemed as one of the bank’s digital channels, increased 40.6% from January to September 2015 from the same period of 2014.

(g) Excluding our interest in Porto Seguro.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 72

Pension Plan

The gross total funding from pension plans totaled R$14.7 billion from January to September 2015, a 14.5% growth from the same period of the previous year. Funding from individual pension plans reached R$13.2 billion in the period.

Revenues from management fees increased 10.7% compared to the period of January to September 2014, reaching R$ 933 million. Technical provisions were up 18.5% from the same period of the previous year, totaling R$117.9 billion at the end of September 2015, mainly driven by increased provisions for VGBL products.

In August 2015, according to the National Federation of Private Pension Funds and Life Insurance (FENAPREVI), our market share of total technical provisions^(h) was 23.8%, whereas the individual plans accounted for 24.0%.

(h) Source: FENAPREVI – August 2015.

Capitalization

In capitalization, we reached 16.8 million certificates in force at September 30, 2015, posting an 11.2% increase from the same period of the previous year. The technical provisions for capitalization reached R$3.0 billion at September 30, 2015, and collections of capitalization certificates reached R$2.0 billion from January to September 2015, recording a 13.5% increase from the same period of the previous year.

Sales of capitalization certificates to account holders from January to September 2015 increased by 5.6%.

We remained leaders in terms of technical result⁽ⁱ⁾, taking into account the total capitalization market, with a 28.7% market share in January to September 2015, according to SUSEP.

(i) Source: SUSEP (September 2015). Technical Result = Net revenue from capitalization certificates (+) Results from raffles (-) Acquisition costs (+) Revenue from redemption of certificates.

4.6) Stock Market

Market value – at September 30, 2015, we were ranked the second largest company in Brazil based on market value (R$156.0 billion), and the first among financial institutions, according to Bloomberg ranking.

Volume of transactions - the daily average volume of transactions of our shares on BM&FBOVESPA from January to September 2015 was 30.8 thousand per session, 30.6% higher than in the same period of last year, with an average volume of R$15.4 thousand per transaction. Comparatively, Ibovespa’s daily average volume of transactions increased 10.2% and the average volume per transaction was R$7.3 thousand. On NYSE, the daily average volume of transactions of ITUB was 36.9 thousand per session, 0.8% higher than the total from January to September 2014, with an average volume of R$13.5 thousand per transaction.

 

Stockholders’ Compensation

Dividends and interest on capital: we remunerate our stockholders with monthly and supplementary payments of dividends and interest on capital. From January to September 2015, we paid or provided for R$3.88 billion in dividends and interest on capital, net of taxes.

Return on investment: at September 30, 2015^(j), the return on investment in terms of dividends/interest on capital to stockholders was 3.84% of the share price at October 1, 2014, net of taxes.

(j) Includes the total dividends/interest on capital distributed in the 12-month period.

Presence in Market Indexes

In early September 2015, BMF&FBOVESPA disclosed the composition of stock portfolios that make up market indexes, effective for the period from September to December 2015.

In the table below, we point out the presence in the following indexes:

Portfolios from September to December 2015

Indexes	Itaú Unibanco Presence % (1)		Ranking
Ibovespa		10.1	1st
IBrX50 - Brazil 50 Index		9.8	2nd
IFNC - BM&FBOVESPA Financials Index (2)		20.0	1st
ISE – Corporate Sustainability Index(3)		6.3	4rd
IGCX - Special Corporate Governance Stock Index		7.0	2nd

(1) The sum of all classes of shares of each company included in the indexes has been considered.

(2) The participation of companies’ shares in the index (considering all classes of shares) cannot exceed 20%.

(3) All companies with shares traded on BM&FBovespa are eligible to make up the portfolio, provided they meet the criteria required to make up the index.

Relations with the market

We held 21 out of the 22 presentations of APIMEC (Association of Capital Market Analysts and Investment Professionals) scheduled for this year in Brazil, attended by 2,713 participants, thus strengthening our relationship with stockholders, analysts and investors of the capital markets. The last APIMEC meeting of 2015 will be held in December 15 in Fortaleza.

2015 Latin America Executive Team Rankings – organized by Institutional Investor magazine, this award is granted to the best CEOs, CFOs, Investor Relations professionals and Investor Relations programs in Latin America, elected based on a survey with market analysts and investors. This year, we were acknowledged in 9 out of 11 categories:

· Best Investor Relations by the buy-side and sell-side;

· Best CEO by the buy-side and sell-side;

· Best CFO by the buy-side;

· Best Investor Relations Professional: 1^st place by the buy-side and sell-side and 2^nd place by the buy-side; and

· Best Investor Relations meetings.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 73

The table below shows the main market indicators at September 30, 2015:

			R$		%
Shares	Sep 30, 2015		Sep 30, 2014		Change
Recurring net income per share(1)		3.04		2.49		22.1
Net income per share(1)		2.98		2.45		21.6
Book value per share(1)		17.37		15.07		15.3
Number of outstanding shares (in millions)(2)(3)		5,950.1		6,023.5		(1.2	)
Dividends/Interest on capital, net per share		0.6581		0.5459		20.6
Price of preferred share (ITUB4)(4)		26.21		30.92		(15.2	)
Price of common share (ITUB3)(4)		24.19		28.51		(15.1	)
Price of preferred share (PN)(3)(4)/Net income per share (annualized)		6.60		9.46		(30.2	)
Price of preferred share (PN)(3)(4)/Stockholders’ equity per share		1.51		2.05		(26.3	)
Market value (in billions) (5)(6)		156.0		186.2		(16.2	)

(1) Calculated based on the weighted average of the number of shares;

(2) Adjusted by bonus carried out on July 17, 2015;

(3) For better comparability, outstanding shares in the period of September 30, 2014 were adjusted by the bonus shares.

(4) Based on the average quotation on the last day of the period;

(5) Calculated based on the average quotation of preferred shares on the last day of the period (quotation of average PN multiplied by the number of outstanding shares at the end of the period);

(6) Considering the closing quotation of common and preferred (ON and PN) shares multiplied by total outstanding shares of each type of shares, the market value reached R$151.7 billion on September 30, 2015 and R$178.7 billion on September 30, 2014, resulting in a variation of 15.1%.

5) PEOPLE

We had 91,437 people at the end of September 2015, including approximately 6,947 employees in foreign units. The employees’ fixed compensation plus charges and benefits totaled R$9.9 billion from January to September 2015, with a 16.7% increase from the same period of the previous year.

On October 26, 2015, the 2015/2016 collective labor agreement was approved on Union’s General Meeting, resulting in a 10.0% increase to the banking sector’s employees’ salaries, in addition to other benefits.

“Dream Companies for the Young” – We were the only bank included in the ranking of 10 dream companies for the Brazilian young in 2015. In its 14th edition, this survey, conducted by Cia de Talentos in partnership with Nextview People had the participation of 67,896 Brazilian young people aged between 17 and 26.

“2015 Best Companies to Work For” – In August 2015, we were elected for the seventh consecutive time, one of the Best Companies to Work For, according to Época magazine, in partnership with the consulting company Great Place to Work. This study is aimed at showing appreciation for companies that have the best people management practices. For this edition 1,454 companies enrolled, representing over one million employees throughout Brazil. Época magazine conducted a survey with employees and the HR area of participating companies to elect the 135 classified in the ranking.

6) SUSTENTABILITY

Dow Jones Sustainability World Index (DJSI) - We were selected for the 16th consecutive year to make up the DJSI, the main sustainability index in the world, in its 2015/2016 edition. We are the only Latin American bank to take part in this index since its creation. In this edition.

we achieved the best score in the banking sector in the criteria “Anti-Crime Policies/Actions”, “Financial Stability and Systemic Risk”, “Financial Inclusion" and “Social Reporting”.

In addition, Itaú Unibanco was also selected for the Dow Jones Sustainability Emerging Markets Index portfolio. The participation in the Dow Jones index reflects Itaú Unibanco’s long-term commitment to ethical business conduct, transparency, legal compliance, corporate governance and the creation of added value for employees, clients, stockholders and society.

The Most Sustainable Company – In September 2015, we were recognized as the Most Sustainable Company of the Year at the Época 360° Awards, organized by Época Negócios magazine, which assesses the sustainable performance management of companies in Brazil. Also in September 2015, we were one of the highlights among the companies recognized at Euromoney Awards, one of the most important awards in Europe, organized by Euromoney magazine, as a role model for corporate and social responsibility (CSR) in Latin America.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 74

7) AWARDS AND RECOGNITION

From January to September 2015, we received significant recognition that contributed to strengthen our reputation. Below is the list of awards received by the bank in the period:

Global 2000 (Forbes Magazine)	In May 2015, the Global 2000 ranking, which convenes the 2,000 most valuable companies in the world, according to the Forbes magazine, listed us as the largest company in Brazil and the 42nd largest in the world. Among regional banks, we are mentioned as the 5th largest one. In its 13th edition, this survey assesses revenue, profit, assets and market value to list the most valuable stock exchange listed companies.
Melhores e Maiores da Exame (Exame Best and Largest) (Exame Magazine )	In July 2015, we were ranked first among the 200 largest corporate groups in Brazil. This survey also ranks us as the largest bank in terms of equity in Brazil and Latin America. With over 40 years of tradition, this is considered one of the most comprehensive and respected rankings on business environment.
Prêmio Inovação Brasil 2015 (2015 Brazil Innovation Award) (Valor Econômico Newspaper)	In July 2015, we were elected the most innovative company in Brazil in the “Financial Services” segment. We were also in the 9th position in the general study, which had the participation of 130 Brazilian companies with revenues exceeding R$ 750 million and interest of private capital of at least 5%. This ranking was prepared together with Strategy & consulting firm, which has published surveys on the topic for over ten years.
Época Negócios 360º (Época Business 360º) (Época Negócios Magazine )	In August 2015, we were the greatest winner of the 4th edition of the Época Negócios 360º yearbook. We were elected company of the year and also granted the top award in the Banking sector category. This guide is carried out in partnership with Fundação Dom Cabral, which conducted a complete assessment of the largest companies in Brazil, considering financial performance, corporate governance, human resources practices, innovation, vision of future and social, environmental and responsibility dimensions.
Valor 1000 (Valor Econômico Newspaper )	We assumed the leadership in the following rankings of the Yearly Edition: “20 largest companies in net equity”, “20 largest companies in net income” and “20 companies with the best operating income without equity in earnings” in August 2015. In its 15th edition, the Anuário Valor 1000 (Valor 1000 Yearly Edition) shows the ranking of the 1,000 largest companies by net revenue, based on the IFRS balance sheet for the previous year.
Prêmio CONAREC (CONAREC Award) (National Congress of Company-Client Relationships)	In August 2015, we were the winners in the Banks category of the CONAREC (National Congress of Company- Client Relationship) award, which acknowledges the best customer service operation centers, technology vendors and sector's professionals.
Marcas Mais (More Brands) (O Estado de S. Paulo Newspaper and Troiano Branding)	In September 2015, we were ranked 1st among banks in the Marcas Mais study, a new publication of the Estado de São Paulo newspaper in partnership with Troiano Branding. The survey, which was responded by 2,500 interviewees, conducts an in-depth assessment of consumers' engagement with brands.

8) REGULATION

8.1) INDEPENDENT AUDITORS – CVM Instruction No. 381

Procedures adopted by the Company

The policy adopted by us, including our subsidiaries and parent company, to engage non-audit related services from our independent auditors is based on the applicable regulations and internationally accepted principles that preserve the auditor’s independence. These principles include the following: (a) an auditor cannot audit his or her own work, (b) an auditor cannot act in a management role for companies where he or she provides external audit services; and (c) an auditor cannot promote the interests of their client. During the period from January to September 2015, the independent auditors and related parties did not provide non-audit related services in excess of 5% of total external audit fees. According to CVM Instruction No. 381, we list below the engaged services and related dates:

· January 21, February 11, March 23 and May 26 – acquisition of research and technical materials;

· September 9 – advisory on internal processes and usual market practices for middle market operations; and

· September 23 – review of Tax Accounting Bookkeeping.

Independent Auditors’ Justification - PricewaterhouseCoopers

The provision of the above described non-audit related professional services does not affect the independence or the objectivity of the external audit of Itaú Unibanco, parent and its subsidiary/affiliated companies. The policy adopted for providing non-audit related services to Itaú Unibanco is based on principles that preserve the independence of Independent Auditors, all of which were considered in the provision of the referred services, including the approval by the Audit Committee.

8.2) BACEN – Circular nº 3,068/01

We hereby represent that we have the financial capacity and the intention to hold to maturity securities classified under the line item “held-to-maturity securities” in the balance sheet, in the amount of R$42.4 billion, corresponding to 12.3% of total securities and derivative financial instruments held in September 2015.

8.3) International Financial Reporting Standards (IFRS)

We disclosed the consolidated financial statements in accordance with the international financial reporting standards (IFRS) at the same date of this publication, pursuant to CVM/SEP Circular Letter No. 01/13. The complete financial statements are available on the Investor Relations website of Itaú Unibanco (www.itau.com.br/investor-relations > Financial Information).

9) ACKNOWLEDGEMENTS

We thank our employees for their determination and skills which have been essential to reaching consistent and differentiated results, and our stockholders and clients for their trust.

(Approved at the Board of Directors' Meeting of October 30, 2015).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 75

ITAÚ UNIBANCO HOLDING S.A.
BOARD OF DIRECTORS	EXECUTIVE BOARD
Chairman	Chief Executive Officer
Pedro Moreira Salles	Roberto Egydio Setubal
	Chief Executive Officer
Vice-Chairmen	Candido Botelho Bracher
Alfredo Egydio Arruda Villela Filho	Márcio de Andrade Schettini
Roberto Egydio Setubal	Marco Ambrogio Crespi Bonomi
	Executive Vice-Presidents
Members	Claudia Politanski
Alfredo Egydio Setubal	Eduardo Mazzilli de Vassimon
Candido Botelho Bracher
Demosthenes Madureira de Pinho Neto
Fábio Colletti Barbosa
Gustavo Jorge Laboissière Loyola
Henri Penchas	Executive Directors
Nildemar Secches	Alexsandro Broedel Lopes
Pedro Luiz Bodin de Moraes	Leila Cristiane Barboza Braga de Melo
Ricardo Villela Marino	Paulo Sergio Miron
AUDIT COMMITTEE
Chairman	Directors
Geraldo Travaglia Filho	Adriano Cabral Volpini
	Álvaro Felipe Rizzi Rodrigues
	Cláudio José Coutinho Arromatte
Members	Eduardo Hiroyuki Miyaki
Antonio Francisco de Lima Neto	Emerson Macedo Bortoloto
Diego Fresco Gutierrez	José Virgilio Vita Neto
Luiz Alberto Fiore	Marcelo Kopel (*)
Maria Helena dos Santos Fernandes de Santana	Matias Granata
Sergio Darcy da Silva Alves	Rodrigo Luis Rosa Couto
	Wagner Bettini Sanches
FISCAL COUNCIL
President
Iran Siqueira Lima	(*) Investor Relations Director.
Members
Alberto Sozin Furuguem
Luiz Alberto de Castro Falleiros
Accountant
Reginaldo José Camilo
CRC-1SP – 114.497/O-9

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 76

ITAÚ UNIBANCO S.A.
Chief Executive Officer	Directors (continued)
Candido Botelho Bracher	Fernando Julião de Souza Amaral
Márcio de Andrade Schettini	Fernando Mattar Beyruti
Marco Ambrogio Crespi Bonomi	Flávio Delfino Júnior
	Francisco Vieira Cordeiro Neto
	Gabriel Amado de Moura
Executive Vice-Presidents	Gilberto Frussa
	Gustavo Trovisco Lopes
Alberto Fernandes	Henrique Pinto Echenique
Caio Ibrahim David	Ilan Goldfajn
Claudia Politanski	João Antonio Dantas Bezerra Leite
Eduardo Mazzilli de Vassimon	João Carlos de Gênova
Jean-Marc Robert Nogueira Baptista Etlin	Jorge Luiz Viegas Ramalho
Ricardo Villela Marino	José Félix Valencia Ríos
	José Virgilio Vita Neto
	Laila Regina de Oliveira Pena de Antonio
Executive Directors	Leon Gottlieb
Alexsandro Broedel Lopes	Lineu Carlos Ferraz de Andrade
Álvaro de Alvarenga Freire Pimentel	Livia Martines Chanes (*)
André Luis Texeira Rodrigues	Luís Eduardo Gross Siqueira Cunha
André Sapoznik	Luís Tadeu Mantovani Sassi
Carlos Eduardo Monico	Luiz Felipe Monteiro Arcuri Trevisan
Christian George Egan	Luiz Fernando Butori Reis Santos
Fernando Barçante Tostes Malta	Luiz Severiano Ribeiro
Fernando Marsella Chacon Ruiz	Marcello Siniscalchi
Flávio Augusto Aguiar de Souza	Marcelo Kopel
Gustavo Adolfo Funcia Murgel	Marcelo Luis Orticelli
João Marcos Pequeno de Biase	Marcio Luis Domingues da Silva
Leila Cristiane Barboza Braga de Melo	Marco Antonio Sudano
Luís Antonio Rodrigues	Marcos Antônio Vaz de Magalhães
Luís Fernando Staub	Marcos Vanderlei Belini Ferreira
Luiz Eduardo Loureiro Veloso	Mário Lúcio Gurgel Pires
Milton Maluhy Filho	Matias Granata
Ricardo Ribeiro Mandacaru Guerra	Messias dos Santos Esteves
	Osvaldo José Dal Fabbro
	Paulo Meirelles de Oliveira Santos
	Pedro Barros Barreto Fernandes
Directors	Pedro Constantino Campos Donati Jorge
Adilso Martins de Lima	Renata Helena de Oliveira Tubini
Adriano Cabral Volpini	Ricardo Lima Soares
Adriano Maciel Pedroti	Ricardo Nuno Delgado Gonçalves
Alberto Zoffmann do Espirito Santo	Ricardo Orlando
Alexandre Enrico Silva Figliolino	Ricardo Urquijo Lazcano
Álvaro Felipe Rizzi Rodrigues	Roberto Fernando Vicente
André Carvalho Whyte Gailey	Rodrigo Luís Rosa Couto
André Ferrari	Rodrigo Rodrigues Baia
André Henrique Caldeira Daré	Rogério Carvalho Braga
Andréa Matteucci Pinotti Cordeiro	Rooney Silva
Antonio Carlos Barbosa Ortiz	Sergio Guillinet Fajerman
Atilio Luiz Magila Albiero Junior	Thales Ferreira Silva
Carlos Eduardo de Castro	Thiago Luiz Charnet Ellero
Carlos Henrique Donegá Aidar	Vanessa Lopes Reisner
Carlos Orestes Vanzo	Wagner Bettini Sanches
Cesar Ming Pereira da Silva
Cesar Padovan
Cícero Marcus de Araújo
Cintia Carbonieri Araújo
Claudio César Sanches
Cláudio José Coutinho Arromatte
Cristiane Magalhães Teixeira Portella
Cristiano Rogério Cagne
Cristina Cestari
Edilson Pereira Jardim
Eduardo Cardoso Armonia
Eduardo Corsetti
Elaine Cristina Zanatta Rodrigues Vasquinho
Emerson Savi Junqueira
Fabiana Pascon Bastos
Fabiano Meira Dourado Nunes
Fernando Della Torre Chagas

(*) Elected at the ESM of August 10, 2015 , approved by the BACEN of October 01, 2015.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 77

BANCO ITAÚ BBA S.A.

BOARD OF DIRECTORS

Chairman

Candido Botelho Bracher

Vice-Chairmen

Alberto Fernandes

Jean-Marc Robert Nogueira Baptista Etlin

Members

Álvaro de Alvarenga Freire Pimentel

Christian George Egan

Roderick Sinclair Greenlees

Directors

Alexsandro Broedel Lopes

André Carvalho Whyte Gailey

Carlos Henrique Donegá Aidar

Cristiano Rogério Cagne

Flávio Delfino Júnior

Gabriel Amado de Moura

Gilberto Frussa

João Carlos de Gênova

Marco Antônio Sudano

Rodrigo Luís Rosa Couto

Vanessa Lopes Reisner

ITAÚ  SEGUROS S.A.

Chief Executive Officer

Luiz Eduardo Loureiro Veloso

Directors

Adriano Cabral Volpini

Alexsandro Broedel Lopes

Carlos Henrique Donegá Aidar

Cláudio José Coutinho Arromatte

Fernando Barçante Tostes Malta

Henrique Pinto Echenique

Leon Gottlieb

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 78

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

Assets	Note	09/30/2015			09/30/2014
Current assets			905,752,621			827,995,802
Cash and cash equivalents			18,138,383			16,636,451
Interbank investments	4b and 6		228,980,575			216,905,467
Money market			194,766,725			195,872,456
Money market – Assets Guaranteeing Technical Provisions - SUSEP	11b		3,329,381			3,201,679
Interbank deposits			30,884,469			17,831,332
Securities and derivative financial instruments	4c, 4d and 7		225,047,491			194,265,642
Own portfolio			40,988,823			67,113,637
Subject to repurchase commitments			36,991,153			6,607,449
Pledged in guarantee			5,260,425			1,919,870
Securities under resale agreements with free movement			2,660			5
Deposited with the Central Bank			3,254,033			8,610,933
Derivative financial instruments			21,900,743			9,774,231
Assets guaranteeing technical provisions - PGBL / VGBL fund quotas	11b		111,011,735			92,882,121
Assets guaranteeing technical provisions – other securities	11b		5,637,919			7,357,396
Interbank accounts			69,202,577			67,238,809
Pending settlement			3,873,849			3,686,824
Central Bank deposits			65,263,185			63,503,942
National Housing System (SFH)			2,308			3,355
Correspondents			63,235			44,688
Interbranch accounts			169,472			129,532
Loan, lease and other credit operations	8		238,045,614			222,524,994
Operations with credit granting characteristics	4e		254,710,132			237,018,174
(Allowance for loan losses)	4f		(16,664,518	)		(14,493,180	)
Other receivables			123,874,665			106,373,056
Foreign exchange portfolio	9		59,725,713			38,881,807
Income receivable			2,289,610			1,839,702
Transactions with credit card issuers	4e		23,392,701			20,776,147
Receivables from insurance and reinsurance operations	4m I and 11b		1,266,287			5,155,752
Negotiation and intermediation of securities			10,890,975			2,969,108
Sundry	13a		26,309,379			36,750,540
Other assets	4g		2,293,844			3,921,851
Assets held for sale			465,313			216,137
(Valuation allowance)			(79,067	)		(66,468	)
Unearned premiums of reinsurance	4m I		12,701			805,645
Prepaid expenses	4g and 13b		1,894,897			2,966,537
Long-term receivables			398,200,025			311,034,233
Interbank investments	4b and 6		696,883			632,822
Money market			-			17,648
Interbank deposits			696,883			615,174
Securities and derivative financial instruments	4c, 4d and 7		120,796,270			88,842,229
Own portfolio			76,020,008			65,550,527
Subject to repurchase commitments			23,610,814			12,765,007
Pledged in guarantee			1,877,218			706,993
Deposited with the Central Bank			2,282,907			-
Derivative financial instruments			11,622,310			4,721,306
Assets guaranteeing technical provisions – other securities	11b		5,383,013			5,098,396
Interbank accounts - National Housing System (SFH)			534,297			675,448
Loan, lease and other credit operations	8		204,959,530			181,048,821
Operations with credit granting characteristics	4e		222,488,362			191,813,485
(Allowance for loan losses)	4f		(17,528,832	)		(10,764,664	)
Other receivables			70,129,631			38,576,333
Foreign exchange portfolio	9		4,483,204			2,165,487
Receivables from insurance and reinsurance operations	4m I and 11b		223,718			-
Sundry	13a		65,422,709			36,410,846
Other assets	4g		1,083,414			1,258,580
Unearned premiums of reinsurance	4m I		520			263,450
Prepaid expenses	4g and 13b		1,082,894			995,130
Permanent assets			18,739,982			18,527,003
Investments	4h, 15a Il and III		3,732,317			3,433,501
Investments in affiliates and jointly controlled entities			3,293,598			3,021,699
Other investments			647,657			623,750
(Allowance for losses)			(208,938	)		(211,948	)
Real estate in use	4i and 15b l		7,244,169			7,412,469
Real estate in use			4,164,326			4,375,114
Other fixed assets			11,843,152			11,346,054
(Accumulated depreciation)			(8,763,309	)		(8,308,699	)
Goodwill	4j and 15b ll		243,688			202,079
Intangible assets	4k and 15b lll		7,519,808			7,478,954
Acquisition of rights to credit payroll			1,048,577			1,119,118
Other intangible assets			9,656,696			8,592,090
(Accumulated amortization)			(3,185,465	)		(2,232,254	)
Total assets			1,322,692,628			1,157,557,038

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 79

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

Liabilities	Note	09/30/2015			09/30/2014
Current liabilities			727,695,951			633,233,111
Deposits	4b and 10b		244,856,389			221,399,017
Demand deposits			57,387,934			44,595,760
Savings deposits			111,450,931			113,675,506
Interbank deposits			18,138,194			3,348,044
Time deposits			57,879,330			59,779,707
Deposits received under securities repurchase agreements	4b and 10c		183,869,184			175,377,954
Own portfolio			71,545,487			46,489,511
Third-party portfolio			106,241,668			126,381,794
Free portfolio			6,082,029			2,506,649
Funds from acceptances and issuance of securities	4b and 10d		28,610,201			26,692,108
Real estate, mortgage, credit and similar notes			21,136,509			21,518,708
Foreign borrowings through securities			6,483,574			3,997,176
Structured Operations Certificates			990,118			1,176,224
Interbank accounts			5,397,419			4,873,869
Pending settlement			3,574,322			3,323,552
Correspondents			1,823,097			1,550,317
Interbranch accounts			6,075,888			4,732,287
Third-party funds in transit			6,040,231			4,691,663
Internal transfer of funds			35,657			40,624
Borrowings and onlending	4b and 10e		58,196,244			40,669,794
Borrowings			43,409,067			23,727,036
Onlending			14,787,177			16,942,758
Derivative financial instruments	4d and 7g		23,916,153			8,527,510
Technical provision for insurance, pension plan and capitalization	4m II and 11a		7,909,334			12,566,971
Other liabilities			168,865,139			138,393,601
Collection and payment of taxes and contributions			4,444,275			4,938,280
Foreign exchange portfolio	9		59,055,431			39,633,913
Social and statutory	16b II		4,412,029			3,395,185
Tax and social security contributions	4n, 4o and 14c		7,607,780			9,406,287
Negotiation and intermediation of securities			14,818,292			5,908,519
Credit card operations	4e		51,197,223			50,146,703
Subordinated debt	10f		8,794,065			3,611,886
Sundry	13c		18,536,044			21,352,828
Long-term liabilities			487,886,760			429,906,176
Deposits	4b and 10b		55,872,272			59,576,077
Interbank deposits			231,619			293,741
Time deposits			55,640,653			59,282,336
Deposits received under securities repurchase agreements	4b and 10c		134,044,436			128,646,111
Own portfolio			107,178,461			105,966,841
Free portfolio			26,865,975			22,679,270
Funds from acceptances and issuance of securities	4b and 10d		30,867,649			20,397,315
Real estate, mortgage, credit and similar notes			8,368,559			8,579,134
Foreign borrowings through securities			19,670,667			10,917,546
Structured Operations Certificates			2,828,423			900,635
Borrowings and onlending	4b and 10e		46,384,169			40,989,534
Borrowings			20,835,284			13,816,127
Onlending			25,548,885			27,173,407
Derivative financial instruments	4d and 7g		18,429,852			7,675,518
Technical provision for insurance, pension plan and capitalization	4m II and 11a		118,226,464			100,405,834
Other liabilities			84,061,918			72,215,787
Foreign exchange portfolio	9		4,084,216			2,221,144
Tax and social security contributions	4n, 4o and 14c		7,892,740			6,144,443
Subordinated debt	10f		57,116,109			50,859,757
Sundry	13c		14,968,853			12,990,443
Deferred income	4p		1,908,464			1,318,110
Non-controlling interests	16f		1,848,568			2,323,619
Stockholders' equity	16		103,352,885			90,776,022
Capital			85,148,000			75,000,000
Capital reserves			1,412,963			892,700
Revenue reserves			20,936,355			17,059,971
Asset valuation adjustment	4c, 4d and 16e		(595,377	)		(831,221	)
(Treasury shares)			(3,549,056	)		(1,345,428	)
Total liabilities and stockholders' equity			1,322,692,628			1,157,557,038

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 80

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Income (Note 2a)

(In thousands of Reais)

	Note	01/01 to 09/30/2015			01/01 to 09/30/2014
Income from financial operations			125,893,997			89,531,953
Loan, lease and other credit operations			59,174,926			49,002,881
Securities and derivative financial instruments			52,966,104			26,753,011
Financial income from insurance, pension plan and capitalization operations	11c		9,300,527			7,321,206
Foreign exchange operations			287,664			1,658,775
Compulsory deposits			4,164,776			4,796,080
Expenses of financial operations			(93,204,032	)		(50,228,735	)
Money market			(53,817,480	)		(38,445,717	)
Financial expenses on technical provisions for insurance, pension plan and capitalization	11c		(8,648,573	)		(6,662,524	)
Borrowings and onlending			(30,737,979	)		(5,120,494	)
Income from financial operations before loan and losses			32,689,965			39,303,218
Result of allowance for loan losses	8d I		(18,042,979	)		(9,782,359	)
Expenses for allowance for loan losses			(21,330,552	)		(13,501,190	)
Income from recovery of credits written off as loss			3,287,573			3,718,831
Gross income from financial operations			14,646,986			29,520,859
Other operating revenues (expenses)			(8,992,066	)		(8,605,061	)
Banking service fees	13d		15,375,985			14,013,472
Income from bank charges	13e		7,237,429			6,364,869
Result from insurance, pension plan and capitalization operations	11c		2,982,589			2,843,605
Personnel expenses	13f		(13,877,403	)		(12,240,669	)
Other administrative expenses	13g		(12,397,888	)		(11,957,663	)
Tax expenses	4o and 14a II		(3,570,140	)		(3,898,329	)
Equity in earnings of affiliates, jointly controlled entities and other investments	15a II and lll		452,056			393,256
Other operating revenues	13h		657,200			428,962
Other operating expenses	13i		(5,851,894	)		(4,552,564	)
Operating income			5,654,920			20,915,798
Non-operating income	2c		31,136			(22,331	)
Income before taxes on income and profit sharing			5,686,056			20,893,467
Income tax and social contribution	4o and 14a I		12,407,068			(5,763,437	)
Due on operations for the period			(7,839,976	)		(6,743,082	)
Related to temporary differences			20,247,044			979,645
Profit sharing – Management Members - Statutory - Law No. 6,404 of 12/15/1976			(167,303	)		(187,305	)
Non-controlling interests	16f		(263,988	)		(221,007	)
Net income			17,661,833			14,721,718
Weighted average of the number of outstanding shares	16a		5,936,744,661			6,013,831,770
Net income per share – R$			2.98			2.45
Book value per share - R$ (outstanding at 09/30)			17.37			15.07
Supplementary information
Exclusion of nonrecurring effects	2a and 22k		397,582			237,016
Net income without nonrecurring effects			18,059,415			14,958,734
Net income per share – R$			3.04			2.49

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 81

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Cash Flows

(In thousands of Reais)

	Note	01/01 to 09/30/2015			01/01 to 09/30/2014
Adjusted net income			32,271,005			38,279,244
Net income			17,661,833			14,721,718
Adjustments to net income:			14,609,172			23,557,526
Granted options recognized and share-based payment – variable compensation			55,103			156,125
Adjustment to market value of securities and derivative financial instruments (assets / liabilities)	7h		1,169,501			(368,946	)
Effects of changes in exchange rates on cash and cash equivalents			(10,549,886	)		1,712,205
Allowance for loan losses			21,330,552			13,501,190
Interest and foreign exchange expense from operations with subordinated debt			15,323,265			4,736,883
Financial expenses on technical provisions for pension plan and capitalization			8,648,573			6,662,524
Depreciation and amortization	15b		1,946,764			1,997,838
Interest expense from provision for contingent and legal liabilities	12b		1,160,849			746,183
Provision for contingent and legal liabilities	12b		2,728,434			2,646,882
Interest income from escrow deposits	12b		(192,257	)		(310,212	)
Deferred taxes (excluding hedge tax effects)			(4,700,339	)		(979,645	)
Equity in earnings of affiliates, jointly controlled entities and other investments	15a lll		(452,056	)		(393,256	)
Interest and foreign exchange income from available-for-sale securities			(15,347,318	)		(5,393,641	)
Interest and foreign exchange income from held-to-maturity securities			(7,749,112	)		(1,943,138	)
(Gain) loss from sale of available-for-sale financial assets	7i		1,189,908			416,429
(Gain) loss from sale of investments			46,627			11,537
(Gain) loss from sale of foreclosed assets			21,539			22,889
(Gain) loss from sale of fixed assets			5,253			30,270
Non-controlling interests			263,988			221,007
Other			(290,216	)		84,402
Change in assets and liabilities			(41,744,305	)		(35,604,908	)
(Increase) decrease in assets			(68,050,455	)		(65,711,239	)
Interbank investments			(14,133,478	)		(64,392,163	)
Securities and derivative financial instruments (assets / liabilities)			(3,524,502	)		21,281,546
Compulsory deposits with the Central Bank of Brazil			(2,156,871	)		13,506,339
Interbank and interbranch accounts (assets / liabilities)			2,273,260			1,038,500
Loan, lease and other credit operations			(39,819,037	)		(31,288,998	)
Other receivables and other assets			(9,540,079	)		(5,814,087	)
Foreign exchange portfolio and negotiation and intermediation of securities (assets / liabilities)			(1,149,748	)		(42,376	)
(Decrease) increase in liabilities			26,306,150			30,106,331
Deposits			5,955,413			6,591,632
Deposits received under securities repurchase agreements			(7,099,487	)		11,844,888
Funds for issuance of securities			11,728,146			833,033
Borrowings and onlending			15,803,945			5,006,026
Credit card operations (assets / liabilities)			(6,511,983	)		(2,243,689	)
Technical provision for insurance, pension plan and capitalization			4,705,051			4,172,912
Collection and payment of taxes and contributions			4,218,266			4,733,300
Other liabilities			2,545,938			5,574,653
Deferred income			485,747			192,656
Payment of income tax and social contribution			(5,524,886	)		(6,599,080	)
Net cash provided by (used in) operating activities			(9,473,300	)		2,674,336
Interest on capital / dividends received from affiliated companies			188,661			242,820
Funds received from sale of available-for-sale securities			9,296,787			55,983,719
Funds received from redemption of held-to-maturity securities			2,456,786			1,888,190
Disposal of assets not for own use			75,034			20,013
Disposal of investments			73,840			202,107
Cash and cash equivalents net assets and liabilities due from BMG Seguradora acquisition	2c		-			(87,166	)
Sale of fixed assets			82,032			17,091
Termination of intangible asset agreements			54,878			190,103
Purchase of available-for-sale securities			(8,772,673	)		(41,580,718	)
Purchase of held-to-maturity securities			(2,680,755	)		(9,549,184	)
Purchase of investments			(125,263	)		(189,071	)
Purchase of fixed assets	15b		(903,825	)		(2,223,430	)
Purchase of intangible assets	15b		(766,682	)		(1,010,450	)
Net cash provided by (used in) invesment activities			(1,021,180	)		3,904,024
Increase in subordinated debt			-			193,936
Decrease in subordinated debt			(3,982,026	)		(6,098,238	)
Change in Non-controlling interests	16f		(772,763	)		208,267
Granting of stock options			344,099			465,237
Purchase of treasury shares			(2,520,077	)		-
Dividends and interest on capital paid to Non-controlling interests			(57,384	)		(9,110	)
Dividends and interest on capital paid			(6,740,481	)		(6,072,419	)
Net cash provided by (used in) financing activities			(13,728,632	)		(11,312,327	)
Net increase (decrease) in cash and cash equivalents			(24,223,112	)		(4,733,967	)
Cash and cash equivalents at the beginning of the period			87,831,981			45,802,194
Effects of changes in exchange rates on cash and cash equivalents			10,549,886			(1,712,205	)
Cash and cash equivalents at the end of the period	4a and 5		74,158,755			39,356,022

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 82

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Added Value

(In thousands of Reais)

	Note	01/01 to 09/30/2015					01/01 to 09/30/2014
Income			134,135,357					104,696,738
Financial operations			125,893,997					89,531,953
Banking services			22,613,414					20,378,341
Result from insurance, pension plan and capitalization operations			2,982,589					2,843,605
Result of loan losses	8d		(18,042,979	)				(9,782,359	)
Other			688,336					1,725,198
Expenses			(99,055,926	)				(54,781,299	)
Financial operations			(93,204,032	)				(50,228,735	)
Other			(5,851,894	)				(4,552,564	)
Inputs purchased from third parties			(9,937,760	)				(9,527,883	)
Materials, energy and others	13g		(304,826	)				(252,710	)
Third-party services	13g		(2,885,284	)				(2,957,080	)
Other			(6,747,650	)				(6,318,093	)
Data processing and telecommunications	13g		(2,950,252	)				(2,896,008	)
Advertising, promotions and publication	13g		(745,497	)				(707,936	)
Installations			(1,048,447	)				(937,199	)
Transportation	13g		(299,500	)				(319,235	)
Security	13g		(506,780	)				(466,502	)
Travel expenses	13g		(158,715	)				(144,187	)
Other			(1,038,459	)				(847,026	)
Gross added value			25,141,671					40,387,556
Depreciation and amortization	13g		(1,499,321	)				(1,538,808	)
Net added value produced by the company			23,642,350					38,848,748
Added value received from transfer	15a lll		452,056					393,256
Total added value to be distributed			24,094,406					39,242,004
Distribution of added value			24,094,406					39,242,004
Personnel			12,605,090		52.3	%		11,096,702		28.3	%
Compensation			9,909,670		41.1	%		8,906,157		22.7	%
Benefits			2,111,991		8.8	%		1,675,915		4.3	%
FGTS – government severance pay fund			583,429		2.4	%		514,630		1.3	%
Taxes, fees and contributions			(7,397,312	)	-30.7	%		12,311,605		31.4	%
Federal			(8,214,285	)	-34.1	%		11,533,382		29.4	%
State			18,850		0.1	%		66,354		0.2	%
Municipal			798,123		3.3	%		711,869		1.8	%
Return on third parties’ assets - Rent			960,807		4.0	%		890,972		2.3	%
Return on own assets			17,925,821		74.4	%		14,942,725		38.1	%
Dividends and interest on capital			4,374,881		18.2	%		3,207,823		8.2	%
Retained earnings (loss) for the period			13,286,952		55.1	%		11,513,895		29.3	%
Minority interest in retained earnings			263,988		1.1	%		221,007		0.6	%

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 83

ITAÚ UNIBANCO HOLDING S.A.

Balance Sheet

(In thousands of Reais)

Assets	Note	09/30/2015			09/30/2014
Current assets			7,574,378			17,069,345
Cash and cash equivalents			217,710			104,902
Interbank investments	4b and 6		5,917,092			3,409,121
Money market			30,264			52,694
Interbank deposits			5,886,828			3,356,427
Securities and derivative financial instruments	4c, 4d and 7		15,709			12,487,433
Own portfolio			859			12,487,433
Pledged in guarantee			4,195			-
Derivative Financial Instruments			10,655			-
Other receivables			1,419,869			1,064,208
Income receivable	15a I		189,901			869,423
Sundry	13a		1,229,968			194,785
Other assets – prepaid expenses	4g		3,998			3,681
Long-term receivables			70,892,596			37,712,701
Interbank investiments – interbank deposits	4b and 6		70,030,255			37,337,265
Other receivables - sundry	13a		862,341			375,436
Permanent assets			75,843,398			63,646,204
Investments - Investments in subsidiaries	15a I		75,843,358			63,646,129
Real estate in use	4i		40			75
Total assets			154,310,372			118,428,250
Liabilities
Current liabilities			3,426,360			1,595,426
Funds from acceptance and issuance of securities	4b and 10d		559,948			18,667
Other liabilities			2,866,412			1,576,759
Social and statutory	16b II		1,733,513			905,908
Tax and social security contributions	4n, 4o and 14c		625,212			360,382
Subordinated debt	10f		441,252			272,292
Sundry			66,435			38,177
Long-term liabilities			42,863,789			19,562,870
Deposits - Interbank deposits	4b and 10b		7,554,921			-
Funds from acceptance and issuance of securities	4b and 10d		4,170,475			500,000
Derivative Financial Instruments	4d		81,155			-
Other liabilities			31,057,238			19,062,870
Tax and social security contributions	4n, 4o and 14c		11,725			1,106
Subordinated debt	10f		30,872,596			19,041,851
Sundry			172,917			19,913
Stockholders' equity	16		108,020,223			97,269,954
Capital			85,148,000			75,000,000
Capital reserves			1,412,963			892,700
Revenue reserves			26,086,533			23,415,789
Asset valuation adjustment	4c and 4d		(1,078,217	)		(693,107	)
(Treasury shares)			(3,549,056	)		(1,345,428	)
Total liabilities and stockholders' equity			154,310,372			118,428,250

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 84

ITAÚ UNIBANCO HOLDING S.A.

Statement of Income

(In thousands of Reais)

	Note	01/01 to 09/30/2015			01/01 to 09/30/2014
Income from financial operations			4,346,298			3,263,238
Securities and derivative financial instruments			4,346,298			3,263,238
Expenses of financial operations			(1,450,077	)		(807,855	)
Money market			(1,450,077	)		(807,855	)
Gross income from financial operations			2,896,221			2,455,383
Other operating revenues (expenses)			13,104,320			10,007,259
Personnel expenses			(108,798	)		(187,787	)
Other administrative expenses			(31,535	)		(26,091	)
Tax expenses	14a II		(179,994	)		(200,783	)
Equity in earnings of subsidiaries	15a I		13,501,407			10,476,999
Other operating revenues (expenses)			(76,760	)		(55,079	)
Operating income			16,000,541			12,462,642
Non-operating income			21,555			23,758
Income before taxes on income and profit sharing			16,022,096			12,486,400
Income tax and social contribution	4o		287,484			(97,428	)
Due on operations for the period			(142,980	)		(150,064	)
Related to temporary differences			430,464			52,636
Profit sharing – Management Members - Statutory - Law No. 6,404 of 12/15/1976			8,034			(6,830	)
Net income			16,317,614			12,382,142
Weighted average of the number of outstanding shares	16a		5,936,744,661			6,013,831,770
Net income per share – R$			2.75			2.06
Book value per share - R$ (outstanding at 09/30)			18.15			15.43
Supplementary information
Exclusion of nonrecurring effects	2a and 22k		397,582			237,016
Net income without nonrecurring effects			16,715,196			12,619,158
Net income per share – R$			2.82			2.10

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 85

ITAÚ UNIBANCO HOLDING S.A.

Statement of Changes in Stockholders’ Equity (Note 16)

(In thousands of Reais)

	Capital		Capital reserves			Revenue reserves			Asset valuation adjustment			Retained earnings			(Treasury shares)			Total
Balance at 01/01/2014		60,000,000		870,456			31,748,411			(1,534,691	)		-			(1,854,432	)		89,229,744
Reserve Capitalization - ESM 04/23/2014		15,000,000		-			(15,000,000	)		-			-			-			-
Granting of stock options		-		(133,881	)		90,114			-			-			509,004			465,237
Granting of options recognized		-		156,125			-			-			-			-			156,125
Payment of interest on capital on 02/28/2014 – declared after 12/31/2013 - R$ 0.5236 per share		-		-			(2,597,055	)		-			-			-			(2,597,055	)
Asset valuation adjustments:
Change in adjustment to market value		-		-			-			805,172			-			-			805,172
Remeasurements in liabilities of post-employment benefits		-		-			-			36,412			-			-			36,412
Net income		-		-			-			-			12,382,142			-			12,382,142
Appropriations:
Legal reserve		-		-			619,107			-			(619,107	)		-			-
Statutory reserves		-		-			8,555,212			-			(8,555,212	)		-			-
Dividends and interest on capital		-		-			-			-			(3,207,823	)		-			(3,207,823	)
Balance at 09/30/2014		75,000,000		892,700			23,415,789			(693,107	)		-			(1,345,428	)		97,269,954
Changes in the period		15,000,000		22,244			(8,332,622	)		841,584			-			509,004			8,040,210
Balance at 01/01/2015		75,000,000		1,315,744			27,224,331			(322,359	)		-			(1,327,880	)		101,889,836
Reserve Capitalization - ESM 04/29/2015		10,148,000		-			(10,148,000	)		-			-			-			-
Purchase of treasury shares		-		-			-			-			-			(2,520,077	)		(2,520,077	)
Granting of stock options		-		42,116			3,082			-			-			298,901			344,099
Granting of options recognized		-		1,378			-			-			-			-			1,378
Share-based payment – variable compensation		-		53,725			-			-			-			-			53,725
Payment of interest on capital on 02/26/2015 – declared after 12/31/2014 - R$ 0.5380 per share		-		-			(2,935,613	)		-			-			-			(2,935,613	)
Asset valuation adjustments:
Change in adjustment to market value		-		-			-			(718,050	)		-			-			(718,050	)
Remeasurements in liabilities of post-employment benefits		-		-			-			(37,808	)		-			-			(37,808	)
Net income		-		-			-			-			16,317,614			-			16,317,614
Appropriations:
Legal reserve		-		-			815,881			-			(815,881	)		-			-
Statutory reserves		-		-			11,126,852			-			(11,126,852	)		-			-
Dividends and interest on capital		-		-			-			-			(4,374,881	)		-			(4,374,881	)
Balance at 09/30/2015		85,148,000		1,412,963			26,086,533			(1,078,217	)		-			(3,549,056	)		108,020,223
Changes in the period		10,148,000		97,219			(1,137,798	)		(755,858	)		-			(2,221,176	)		6,130,387

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 86

ITAÚ UNIBANCO HOLDING S.A.

Statement of Cash Flows

(In thousands of Reais)

	Note	01/01 to 09/30/2015			01/01 to 09/30/2014
Adjusted net income			14,195,640			3,716,674
Net income			16,317,614			12,382,142
Adjustments to net income:			(2,121,974	)		(8,665,468	)
Granted options recognized and share-based payment – variable compensation			55,103			156,125
Interest and foreign exchange expense from operations with subordinated debt			11,689,764			1,672,030
Deferred taxes			(430,464	)		(52,636	)
Equity in earnings of subsidiaries	15a I		(13,501,407	)		(10,476,999	)
Amortization of goodwill			43,308			43,308
Effects of changes in exchange rates on cash and cash equivalents			21,700			(7,346	)
Other			22			50
Change in assets and liabilities			(564,509	)		530,408
(Increase) decrease in other receivables and other assets			(442,043	)		233,708
(Decrease) increase in other liabilities			(79,356	)		296,700
Payment of income tax and social contribution			(43,110	)		-
Net cash provided by (used in) operating activities			13,631,131			4,247,082
Interest on capital / dividends received			5,911,546			6,447,485
(Increase) decrease in interbank investments			(32,744,560	)		(2,560,776	)
(Increase) decrease in securities and derivative financial instruments (assets / liabilities)			13,609,973			(544,851	)
(Purchase) sale of investments			89,740			(1,117,744	)
(Purchase) sale of intangible assets			-			(23	)
Net cash provided by (used in) investment activities			(13,133,301	)		2,224,091
Increase (decrease) in deposits			7,554,921			(106,540	)
Decrease in subordinated debt			(1,306,667	)		(807,834	)
(Increase) decrease in funds for issuance of securities			4,224,881			13,125
Granting of stock options			344,099			465,237
Purchase of treasury shares			(2,520,077	)		-
Dividends and interest on capital paid			(6,740,481	)		(6,072,419	)
Net cash provided by (used in) financing activities			1,556,676			(6,508,431	)
Net increase (decrease) in cash and cash equivalents			2,054,506			(37,258	)
Cash and cash equivalents at the beginning of the period			144,772			252,881
Effects of changes in exchange rates on cash and cash equivalents			(21,700	)		7,346
Cash and cash equivalents at the end of the period	4a and 5		2,177,578			222,969

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 87

ITAÚ UNIBANCO HOLDING S.A.

Statement of Added Value

(In thousands of Reais)

	Note	01/01 to 09/30/2015			01/01 to 09/30/2014
Income			4,945,057			3,342,785
Financial operations			4,346,298			3,263,238
Other			598,759			79,547
Expenses of financial operations			(1,497,832	)		(839,943	)
Financial operations			(1,450,077	)		(807,855	)
Other			(47,755	)		(32,088	)
Inputs purchased from third parties			(31,198	)		(25,727	)
Third-party services			(22,519	)		(15,066	)
Advertising, promotions and publication			(1,080	)		(1,120	)
Expenses for financial system services			(3,743	)		(3,335	)
Insurance			-			(6	)
Other			(3,856	)		(6,200	)
Gross added value			3,416,027			2,477,115
Deprecitation and amortization			(43,332	)		(43,358	)
Net added value produced by the company			3,372,695			2,433,757
Added value received from transfer	15a I		13,501,407			10,476,999
Total added value to be distributed			16,874,102			12,910,756
Distribution of added value			16,874,102			12,910,756
Personnel			93,414			191,724
Compensation			92,129			190,553
Benefits			1,045			950
FGTS – government severance pay fund			240			221
Taxes, fees and contributions			462,737			336,526
Federal			462,701			336,491
Municipal			36			35
Return on third parties’ assets - rent			337			364
Return on own assets			16,317,614			12,382,142
Dividends and interest on capital			4,374,881			3,207,823
Retained earnings (loss) for the period			11,942,733			9,174,319

The accompanying notes are an integral part of these financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 88

ITAÚ UNIBANCO HOLDING S.A.

Notes to the Financial Statements

Exercise from January 1 to September 30, 2015 and 2014

(In thousands of Reais)

Note 1 - Operations

Itaú Unibanco Holding S.A. (ITAÚ UNIBANCO HOLDING) is a publicly-held company which, together with its subsidiaries and affiliated companies, operates in Brazil and abroad, with all types of banking activities, through its commercial, investment, real estate loan, finance and investment credit, and lease portfolios, including foreign exchange operations, and other complementary activities, with emphasis on Insurance, Private Pension Plans, Capitalization, Securities Brokerage and Administration of Credit Cards, Consortia, Investment Funds and Managed Portfolios.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 89

Note 2 – Presentation of the financial statements

a) Presentation of the financial statements

The financial statements of ITAÚ UNIBANCO HOLDING and of its subsidiaries (ITAÚ UNIBANCO HOLDING CONSOLIDATED) have been prepared in accordance with accounting principles established by the Brazilian Corporate Law, including the amendments introduced by Laws No. 11,638, of December 28, 2007, and No. 11,941, of May 27, 2009, in conformity, when applicable, with instructions issued by the Central Bank of Brazil (BACEN), the National Monetary Council (CMN), the Brazilian Securities and Exchange Commission (CVM), the Superintendence of Private Insurance (SUSEP), the National Council of Private Insurance (CNSP) and the National Superintendence of Supplementary Pension – (PREVIC), which include the use of estimates necessary to calculate accounting provisions and valuation of financial assets.

In order to enable the analysis of the net income, the heading “Net income without nonrecurring effects” is presented below the Consolidated Statement of Income, and this effect is highlighted in a heading called “Exclusion of nonrecurring effects” (Note 22k).

As set forth in the sole paragraph of article 7 of BACEN Circular No. 3,068, of November 8, 2001, securities classified as trading securities (Note 4c) are presented in the Balance Sheet under Current Assets regardless of their maturity dates.

Lease Operations are presented, at present value, in the Balance Sheet, and the related income and expenses, which represent the financial result of these operations, are presented, grouped together, under loan, lease and other loan operations in the Statement of Income. Advances on exchange contracts are reclassified from Other Liabilities – Foreign exchange portfolio to Loan Operations. The foreign exchange result is presented on an adjusted basis, with the reclassification of expenses and income, in order to represent exclusively the impact of variations and differences of rates on the balance sheet accounts denominated in foreign currencies.

b) Consolidation

As set forth in paragraph 1, article 2, of BACEN Circular Letter No. 2,804, of February 11, 1998, the financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED comprise the consolidation of its foreign branches and subsidiaries.

Intercompany transactions and intercompany balances and intercompany results have been eliminated on consolidation. The investment funds in which ITAÚ UNIBANCO HOLDING CONSOLIDATED companies are the main beneficiaries or holders of principal obligations are consolidated. The investments in these fund portfolios are classified by type of transaction and were distributed by type of security, in the same categories in which these securities had been originally allocated. The effects of the foreign exchange variation on investments abroad are classified in the heading Securities and Derivative Financial Instruments in the Statement of Income and for subsidiaries which functional currency is equal to that of the parent company and in Asset Valuation Adjustment for subsidiaries which functional currency is different from that of the parent company (Note 4s).

The difference of Net Income and Stockholders’ Equity between ITAÚ UNIBANCO HOLDING and ITAÚ UNIBANCO HOLDING CONSOLIDATED (Note 16d) results from the adoption of different criteria for the amortization of goodwill originated on the purchase of investment, from the recording of transactions with minority stockholders where there is no change of control (Note 4q) and in the record of exchange variation on investments abroad and hedge of these investments which functional currency is different from that of the parent company, net of the respective deferred tax assets.

In ITAÚ UNIBANCO HOLDING, the goodwill recorded in subsidiaries, mainly originated from the ITAÚ and UNIBANCO merger and acquisition by minority stockholders of REDE, is being amortized based on the expected future profitability and appraisal reports, or upon realization of the investment, according to the rules and guidance of CMN and BACEN.

In ITAÚ UNIBANCO HOLDING CONSOLIDATED, from January 1, 2010, the goodwill originated from the purchase of investments is no longer fully amortized in the consolidated financial statements (Note 4j). By December 31, 2009, goodwill generated had been fully amortized in the periods investments were made.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 90

The consolidated financial statements comprise ITAÚ UNIBANCO HOLDING and its direct and indirect subsidiaries. We present below the main companies which together represent over 95% of total consolidated assets:

		Country of		Interest in voting capital at						Interest in total capital at
		Incorporation	Activity	09/30/2015			09/30/2014			09/30/2015			09/30/2014
Banco Itaú Argentina S.A.		Argentina	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaú BBA S.A.		Brazil	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Chile		Chile	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú BMG Consignado S.A	(Note 2c)	Brazil	Financial institution		60.00	%		60.00	%		60.00	%		60.00	%
Banco Itaú Paraguay S.A.		Paraguay	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaú Suisse S.A.		Switzerland	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaú Uruguay S.A.		Uruguay	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaucard S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itauleasing S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Cia. Itaú de Capitalização		Brazil	Capitalization		100.00	%		100.00	%		100.00	%		100.00	%
Dibens Leasing S.A. - Arrendamento Mercantil		Brazil	Leasing		100.00	%		100.00	%		100.00	%		100.00	%
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		Brazil	Consumer Finance Credit		50.00	%		50.00	%		50.00	%		50.00	%
Hipercard Banco Múltiplo S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau Bank, Ltd.		Cayman Islands	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau BBA Colombia S.A. Corporación Financiera		Colombia	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau BBA International plc		United Kingdom	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú BBA USA Securities Inc.		United States	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú BMG Seguradora S.A.	(Note 2c)	Brazil	Insurance		60.00	%		60.00	%		60.00	%		60.00	%
Itaú Corretora de Valores S.A.		Brazil	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Seguros S.A.		Brazil	Insurance		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Unibanco Financeira S.A. - Crédito, Financiamento e Investimento	(1)	Brazil	Consumer Finance Credit		-			100.00	%		-			100.00	%
Itaú Unibanco S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Vida e Previdência  S.A.		Brazil	Pension Plan		100.00	%		100.00	%		100.00	%		100.00	%
Luizacred S.A. Soc. Cred. Financiamento Investimento		Brazil	Consumer Finance Credit		50.00	%		50.00	%		50.00	%		50.00	%
Redecard S.A. - REDE		Brazil	Acquirer		100.00	%		100.00	%		100.00	%		100.00	%

(1) Company merged in 01/31/2015 into Itaú Unibanco S.A. and Itaú BBA Participações S.A.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 91

c) Business development

Association agreement with Banco BMG S.A.

On July 9, 2012, ITAÚ UNIBANCO HOLDING entered into an Association Agreement with Banco BMG S.A. ("BMG"), aiming at the offering, distribution and commercialization of payroll debit loans through the incorporation of a financial institution, the Banco Itaú BMG Consignado S.A. (“Itaú BMG Consignado”). After obtaining the previous approval required for starting operations, issued by the Administrative Council for Economic Defense (CADE) on October 17, 2012, the final documents were signed on December 13, 2012 and Banco BMG has been a stockholder of Itaú BMG Consignado since January 7, 2013. The completion of the operation was subject to the approval of the Central Bank of Brazil, which was obtained on April 18, 2013.

As a result of this transaction stockholders’ equity attributed to non-controlling stockholders increased by R$ 303,177 at the base date of 2013.

On April 29, 2014, an agreement was entered into to establish the combination of payroll loan business of BMG and Itaú BMG Consignado, which was concentrated in Itaú BMG Consignado. In reciprocity for this business combination, on July 25, 2014, a capital increase of Itaú BMG Consignado was carried out, fully subscribed and paid in by BMG in the amount of R$ 181,086. The possibility of this combination was already set forth in the investment agreement of December 13, 2012, which governs the association. After this capital increase, ITAÚ UNIBANCO HOLDING will hold a sixty per cent (60.0%) interest in the total and voting capital of Itaú BMG Consignado and BMG will hold the remaining forty per cent (40.0%).

Accordingly, as from July 25, 2014 and throughout the period of the Association, Itaú BMG Consignado is the exclusive vehicle of BMG and its controlling shareholders for the offer, in the Brazilian territory, of payroll loans, provided that certain exceptions are observed for a maximum period of six (6) months counted from the date on which the capital of Itaú BMG Consignado is increased.

This transaction had no significant accounting effects on the results of ITAÚ UNIBANCO HOLDING, which continued to consolidate Itaú BMG Consignado in its financial statements.

Credicard

On May 14, 2013, Itaú Unibanco Holding, signed with Banco Citibank, a Share and Quotas Purchase Agreement for the acquisition of Banco Credicard and Credicard Promotora de Vendas, including “Credicard” brand, for the amount of R$ 2,948,410 (monetarily adjusted). The completion of this transaction was pending approval by the Central Bank of Brazil, which was obtained on December 12, 2013 and settled on December 20, 2013.

Banco Credicard and Credicard Promotora de Vendas are the entities responsible for the supply and distribution of financial products and services under the “Credicard” brand, principally personal loans and credit cards. In view of this transaction, ITAÚ UNIBANCO HOLDING consolidated Banco Credicard and Credicard Promotora de Vendas in the consolidated financial statements from December, 2013 to August 31, 2014. Banco Credicard merged with Banco Itaucard S.A. on August 31,2014.

The allocation of the difference between the amount paid and the allocation of net assets at fair value led to the recognition of goodwill based on expected future profitability, in the amount of R$ 1,863 million, and other intangible assets.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 92

BMG Seguradora S.A.

On June 25, 2013, ITAÚ UNIBANCO HOLDING, through Banco Itaú BMG Consignado S.A. (“Itaú BMG Consignado”), which is an entity indirectly controlled by ITAÚ UNIBANCO HOLDING signed a Share Purchase Agreement with controlling shareholders of Banco BMG S.A. (“Sellers”) whereby Itaú BMG Consignado agreed to acquire 99.996% of the shares issued by BMG Seguradora S.A.

BMG Seguradora generated R$ 62.6 million in retained premiums during 2012 and, from January to May 2013, a retained premiums’ volume of R$ 42.4 million, 77.0% higher than the volume generated during the same period of 2012.

BMG Seguradora signed exclusivity agreements with Banco BMG S.A and with the Itaú BMG Consignado for the purpose of distributing insurance products to be offered jointly with the products distributed by these financial institutions.

The approval by the Central Bank of Brazil was obtained on December 19, 2013 and the transaction was settled on January 27, 2014 in the amount of R$ 88,1 million. This acquisition has not had any significant accounting impact on the results of ITAÚ UNIBANCO HOLDING, which has consolidated the transaction in its financial statements since January, 2014.

As a result of the study of Purchase Price Allocation - PPA, the allocation of difference between the amount paid and the share in net assets at fair value, resulted in the recognition of a goodwill due to expected future profitability in the amount of R$ 22.7 million.

Citibank N.A. Uruguay Branch

On June 28, 2013, ITAU UNIBANCO HOLDING, through its subsidiary Banco Itaú Uruguay S.A. (“BIU”) executed a binding agreement with Citibank N.A. Uruguay Branch (“Citi”) establishing the rules for the acquisition by BIU of the retail business conducted by Citi in Uruguay.

As a result of this transaction, BIU assumed a portfolio of more than 15,000 clients in Uruguay related to the retail business (bank accounts, saving and term deposits). The acquired assets include mainly the credit card operations conducted by Citi in Uruguay under the Visa, Mastercard and Diners brand, which in 2012 represented slightly more than 6.0% of the Uruguayan market share.

Approval was obtained from applicable regulatory authorities on December 10, 2013.

The allocation of the difference between the amount paid and the allocation of assets and liabilities related to the operation, net at fair value, led to the recognition of goodwill based on expected future profitability and other intangible assets.

Partnership with Fiat

On August 20, 2013, ITAÚ UNIBANCO HOLDING announced that it renewed for another 10 years, by means of its subsidiary Itaú Unibanco S.A., the commercial cooperation agreement entered into with Fiat Group Automobiles S.p.A. and Fiat Automóveis S.A. (“Fiat”). This agreement sets forth: (i) exclusive financing offer in promotional campaigns held by car maker Fiat for the sale of new automobiles; and (ii) the exclusive use of Fiat brand in vehicle-financing related activities.

The amount involved in the transaction is not material for ITAÚ UNIBANCO HOLDING and, therefore, will not cause any material accounting effect in its results.

Itaú CorpBanca

On January 29, 2014, ITAÚ UNIBANCO HOLDING, together with its subsidiary Banco Itaú Chile S.A. (“BIC”) entered into an agreement (Transaction Agreement) with CorpBanca (“CorpBanca”) and its controlling stockholders (“Corp Group”) establishing the terms and conditions to merge the operations of BIC and CorpBanca Chile in Chile and in the other jurisdictions in which CorpBanca operates.

The operation will be realized by means of (i) capital increase of BIC in the amount of US$ 652 million to be carried out by ITAÚ UNIBANCO HOLDING or one of its subsidiaries, (ii) merger of BIC into CorpBanca, with the cancellation of BIC shares and the issuance of new shares, at the estimated rate of 85,420.07 shares of CorpBanca for each 1 share of BIC, to be approved at the stockholders' meeting of CorpBanca upon the affirmative vote of two thirds (2/3) of shares issued by CorpBanca, so that the interests in the bank resulting from the merger (to be named “Itaú CorpBanca”) are 33.58% for ITAÚ UNIBANCO HOLDING and 33.13% for Corp Group, and (iii) subsequent integration of Itaú BBA Colombia S.A. into the operations of Itaú CorpBanca or its subsidiaries.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 93

Itaú CorpBanca will be controlled by ITAÚ UNIBANCO HOLDING, which will enter into a stockholders’ agreement with Corp Group when the operation is concluded. This agreement will entitle ITAU UNIBANCO HOLDING and Corp Group to appoint members for the Board of Directors of Itaú CorpBanca in accordance to their interests in capital stock, and this group of stockholders will have the privilege of electing the majority of members of the Board of Directors, and ITAÚ UNIBANCO HOLDING will be entitled to elect the majority of these members. The chairman of the Boards of Directors of Itaú CorpBanca and its subsidiaries will be appointed by Corp Group, and their vice-chairman by ITAÚ UNIBANCO HOLDING. The executives of Itaú CorpBanca and its subsidiaries will be proposed by ITAÚ UNIBANCO HOLDING and ratified by the Board of Directors of Itaú CorpBanca. The stockholders’ agreement will also set forth that Corp Group will be entitled to approve, together with ITAÚ UNIBANCO HOLDING, certain strategic matters of Itaú CorpBanca, and it will include provisions on the transfer of shares between ITAU UNIBANCO HOLDING and Corp Group, and also to third parties.

Approvals for the merger were obtained from CorpBanca and BIC shareholders, and from all proper regulatory authorities in Chile, Brazil, Colombia and Panama.

It is estimated that this operation will not have significant accounting effects on the results of ITAÚ UNIBANCO HOLDING, which will consolidate Itaú CorpBanca in its financial statements.

Major Risk Insurance Operation

 ITAÚ UNIBANCO HOLDING, whereby its subsidiary Itaú Unibanco S.A., signed on July 4th, 2014 a “Share Purchase Agreement” with ACE Ina International Holdings, Ltd. (“ACE”) whereby Itaú Unibanco and some of its subsidiaries have undertaken to sell their total stakes in Itaú Seguros Soluções Corporativas S.A. (“ISSC”).

ISSC had the ITAÚ UNIBANCO HOLDING’s major risk insurance operations, the clients of which were middle market and large corporations with policies representing high insured values. This operation was approved by the Administrative Council for Economic Defense (CADE) on September 15, 2014 and by SUSEP on October 09, 2014.

Based on pro-forma data for December 31, 2013, the major risk insurance operation comprises the following: net equity value of R$ 364 million, assets of R$ 5.8 billion and technical reserves of R$ 4.6 billion.

After certain conditions established in the agreement are fulfilled, ACE paid R$ 1.515 billion to ITAÚ UNIBANCO HOLDING and its subsidiaries. The transfer of these shares and the financial settlement of the operation were carried out on October 31, 2014.

The operation produced an accounting effect, before tax, of R$ 1.1 billion on fourth quarter ITAÚ UNIBANCO HOLDING's results.

The sale of this operation reflects ITAÚ UNIBANCO HOLDING’s strategy of commercializing the mass-market insurance products typically related to retail banking.

Tecnologia Bancária S.A. (TECBAN) – New Shareholders’ Agreement

The subsidiaries of ITAÚ UNIBANCO HOLDING, in conjunction with other financial institutions, on July 17, 2014 signed a new Shareholders Agreement of TecBan that will revoke and substitute the current shareholders agreement as soon as it comes into effect.

In addition to the usual provisions in shareholders agreements such as rules on governance and the transfer of shares, the Shareholders Agreement provides that within approximately 4 (four) years as from the date it comes into effect, the Parties shall have substituted part of their external network of Automatic Teller Machines (“ATM”) for Banco24Horas Network ATMs, which are and shall continue to being managed by TecBan. As a general rule, the external ATM network can be considered those ATMs located outside the branch banking environment or where access is not restricted, exclusive or controlled such as for example such equipment installed in shopping centers, gasoline service stations, supermarkets etc.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 94

In line with the worldwide tendency towards best practice in the industry, the Parties constituting Brazil’s leading retail banks will consolidate their external ATM networks on the Banco24Horas Network terminals, generating increased efficiency, greater quality and capillarity of customer service. It should also be pointed out that in addition to the Parties, approximately 40 (forty) other banks are clients of TecBan. Consequently, this growth in the Banco24Horas Network will also significantly benefit these institutions and their respective customers.

The operation was approved by the Administrative Council for Economic Defense (CADE) on October 22, 2014, with no restrictions. The effective date of sale and settlement was November 14, 2014.

This operation had no significant accounting effects on the results of ITAÚ UNIBANCO HOLDING.

Maxi Pago

In September, 2014 ITAU UNIBANCO HOLDING, through its subsidiary Rede (Redecard S.A.), entered into a share purchase agreement with the controlling parties of MaxiPago Serviços de Internet S.A., a payments gateway company featuring network interconnection for mobile electronic payments.

Approval was obtained from the Central Bank on December 15, 2014, and preconditions were fulfilled on January 8, 2015. This agreement provides for the acquisition of 35,261 common shares of MaxiPago, which represents 75% of total stock and voting capital.

The allocation of the difference between the amount paid and the allocation of net assets at fair value resulted in the recognition of goodwill due to expected future profitability in the amount of R$ 10.5 million.

MCC Securities and MCC Corredora de Bolsa

In July 2011 ITAÚ UNIBANCO HOLDING, through its subsidiary in Chile, entered into a share purchase agreement with MCC Inversiones Globales (MCC Inversiones) and MCC Beneficial Owners (Chilean Individuals), by which it agreed to gradually acquire the total shares of MCC Secutires.

In June 2012 ITAÚ UNIBANCO HOLDING, through its subsidiary in Chile, entered into a share purchase agreement with MCC Inversiones Globales (MCC Inversiones) and MCC Beneficial Owners (Chilean Individuals), by which it agreed to gradually acquire the total shares of MCC Corredora de Bolsa.

In August 2014, the aforementioned parties entered into a new agreement for acquiring in advance the remaining shares of MCC Securities and MCC Corredora de Bolsa for amounts US$ 32.7 million and US$ 6.7 million respectively.

Accordingly, with this operation ITAÚ UNIBANCO HOLDING validates its relevant share in the Chilean private banking market, as it now fully consolidates MCC Securities and MCC Corredora de Bolsa in its financial statements beginning in August 2014.

Via Varejo

On October 1, 2014 ITAU UNIBANCO HOLDING informed that, in view of the early termination by Via Varejo of the operating agreements for the offer of extended warranty insurance in the “Ponto Frio” and “Casas Bahia” stores, its subsidiary Itaú Seguros S.A. received from Via Varejo the cash amount of R$ 584 million, mainly related to the refund of amounts disbursed pursuant to these agreements, duly restated.

This operation had no significant effects on the results of ITAU UNIBANCO HOLDING.

MasterCard Brasil Soluções de Pagamento Ltda.

In March 2015 Itaú Unibanco S.A., entered into an agreement with MasterCard Brasil Soluções de Pagamento Ltda. (“MasterCard”) to create an alliance in the payment solutions market in Brazil (“Strategic Alliance”).

Itaú Unibanco’s purposes with the creation of the Strategic Alliance are (a) to focus on the expansion of its issue and acquisition business, particularly related to the new payment solutions network, (b) to have access to new payment solutions technologies, (c) to obtain significant scale and efficiency gains, and (d) to benefit from MasterCard’s expertise in the management of payment solution brands.

The effectiveness of the Strategic Alliance is subject to the satisfaction of certain conditions precedent and approval by proper regulatory authorities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 95

Note 3 – Requirements of capital and fixed asset limits

a) Basel and fixed asset ratios

Represented below are the main indicators at September 30, 2015, according to present regulation which defines the Prudential Consolidated as the calculation basis:

	Consolidated
	Prudential (1)
Referential equity (2)		124,762,890
Basel ratio		16.1	%
Tier I		12.3	%
Common Equity		12.3	%
Additional Capital		0.0	%
Tier II		3.8	%
Fixed assets ratio		29.7	%
Excess capital in relation to fixed assets		25,301,685

(1) Consolidated financial statements including financial companies and the like. As from the base date January 2015, in accordance with Circular 4.278, this is the calculation consolidated basis;

(2) According to CMN Resolutions No. 4,192, of March 1, 2013, No. 4,278, of October 31, 2013 and No. 4,311, of February 20, 2014, CMN defines Regulatory Capital, for the purpose of operational limit calculation, as the sum of two tiers, Tiers I and II, in which Tier I is comprised of Common Equity Tier 1 and Additional Tier 1 Capital. The calculation is composed of items that are an integral part of the Stockholders’ Equity plus prudential adjustments and deductions, in addition to eligible instruments, particularly subordinated debt.

Management considers the current Basel ratio (16.1%, based on Prudential consolidated, of which 12.3% of Common Equity and Tier I and 3.8% of Tier II) to be adequate, taking into account that exceeds by 5.1 percent the minimum required by the authorities (11.0%).

In 2015, the Financial System Consolidated has no longer been calculated for capital effects, in compliance with the standards in force, and it has been replaced by Prudential Consolidated.

CMN Resolution No. 4,192, of March 1, 2013, as amended, address the Referential Equity calculation methodology, and CMN Resolution No. 4,193, of March 1, 2013, as amended, address the minimum requirements for Referential Equity, Tier I, and Common Equity Tier I, and introduces the Additional Common Equity Tier 1. ITAÚ UNIBANCO HOLDING CONSOLIDATED opted for using the Standardized Approach to calculate credit and market risk-weighted assets, and the Alternative Standardized Approach to calculate operational risk-weighted assets, based on the regulation in force accordingly.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 96

The referential equity used for the calculation of ratios and the risk-weighted assets at September 30, 2015, are as follows:

	Consolidated Prudential
Stockholders' equity ITAÚ UNIBANCO HOLDING S.A. (consolidated)		103,352,885
Non-controlling interests		910,599
Changes in ownership interest in a subsidiary from capital transaction		3,987,684
Consolidated stockholders’ equity (BACEN)		108,251,168
Common Equity deductions (1)		(12,933,605	)
Common Equity Tier I		95,317,563
Additional Tier I deductions		46,298
Additional Tier I Capital		46,298
Tier I (Common Equity + Additional Capital)		95,363,861
Instruments eligible to comprise Tier II		29,353,581
Tier II deductions		45,448
Tier II		29,399,029
Regulatory Capital (Tier I + Tier II)		124,762,890
Risk-weighted assets		774,661,531
Risk-weighted assets of credit risk (RWACPAD)		728,976,178		94.1	%
a) Per weighting factor (FPR):
FPR at 2%		218,920		0.0	%
FPR at 20%		6,872,999		0.9	%
FPR at 35%		9,666,552		1.2	%
FPR at 50%		49,582,971		6.4	%
FPR at 75%		138,754,582		17.9	%
FPR at 85%		151,295,278		19.5	%
FPR at 100%		304,598,360		39.3	%
FPR at 250%		35,744,086		4.6	%
FPR at 300%		17,918,492		2.3	%
FPR at 1250% (2)		2,399,528		0.3	%
Derivatives – Future potential gain and Variation of the counterparty credit quality Minimum Required Regulatory Capital		11,924,410		1.5	%
b) Per type:
Securities		54,555,873		7.0	%
Loan operations - retail		111,978,876		14.5	%
Loan operations – non-retail		240,199,786		31.0	%
Joint obligations - retail		258,622		0.0	%
Joint obligations – non-retail		64,930,004		8.4	%
Loan commitments - retail		26,497,376		3.4	%
Loan commitments – non-retail		16,222,607		2.1	%
Other exposures		214,333,034		27.7	%
Risk-weighted assets of operational risk (RWAOPAD)		28,622,953		3.7	%
Retail		7,470,420		1.0	%
Commercial		16,490,550		2.1	%
Corporate finance		1,379,791		0.2	%
Negotiation and sales		(4,927,254	)	-0.6	%
Payments and settlements		3,074,061		0.4	%
Financial agent services		2,872,911		0.4	%
Asset management		2,144,545		0.3	%
Retail brokerage		117,929		0.0	%
Business plans		-		0.0	%
Risk-weighted assets of market risk:		17,062,400		2.2	%
Gold, foreign currency and operations subject to foreign exchange variation (RWACAM)		3,435,018		0.4	%
Operations subject to interest rate variation		11,844,064		1.5	%
Fixed rate denominated in Real (RWAJUR1)		2,934,345		0.4	%
Foreign currency coupon (RWAJUR2)		5,651,964		0.7	%
Price index coupon (RWAJUR3)		3,257,755		0.4	%
Interest rate coupon (RWAJUR4)		-		0.0	%
Operations subject to commodity price variation (RWACOM)		573,836		0.1	%
Operations subject to stock price variation (RWAACS)		1,209,482		0.2	%
RWA		774,661,531		100.0	%
Minimum Required Regulatory Capital		85,212,768
Excess capital in relation to Minimum Required Regulatory Capital		39,550,122		46.4	%
Ratio (%)		16.1	%
Regulatory Capital calculated for covering the interest rate risk of operations not classified into the trading portfolio (RBAN)		1,210,815

(1) As from June 30, 2015, Resolution No. 4.277/13 establishes the application of prudential adjustments related to pricing of financial instruments evaluated by market value, impacting deductions of capital by R$ 336 million.

(2) Considers the application of "F" factor required by article 29 of Circular No. 3.644/13.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 97

During this period, the effects of the changes in legislation and balances were as follows:

Changes in the Basel Ratio	Referential equity			Weighted exposure			Effect
Ratio at 12/31/2014 - Operating Consolidated		129,790,456			768,074,569			16.9	%
Change - prudential consolidated (*)		570,344			(17,234,271	)		0.5	%
Net income for the period		16,877,817			-			2.3	%
Interest on capital and dividends		(7,310,494	)		-			-1.0	%
Benefits to employees - CVM Resolution No. 695, December 13, 2012		(37,808	)		-			0.0	%
Granting of options recognized		1,378			-			0.0	%
Granting of stock options – exercised options in the period		344,099			-			0.1	%
Asset valuation adjustment		(718,051	)		-			-0.1	%
Deductions in referential equity		(8,409,452	)		-			-1.1	%
Purchase of treasury shares		(2,520,077	)					-0.3	%
Subordinated debt and redeemable preferred shares		(4,193,368	)		-			-0.6	%
Other changes in referential equity		368,046			-			0.1	%
Changes in risk exposure		-			23,821,233			-0.5	%
Ratio at 09/30/2015 - Prudential Consolidated		124,762,890			774,661,531			16.1	%

(*) Effect due to the change of the consolidated for calculation.

b) Capital for insurance activity

The CNSP - National Council of Private Insurance changed on July 15, 2015, the requirements for calculation of insurance regulatory capital with the enactment of CNSP Resolution No.321 (which revoked Resolutions CNSP No. 316 of September 25, 2014, No. 317 of December 12, 2014, No.228 of December 6, 2010, No.280 of January 30, 2013, and No.283 of January 30, 2013, No.284 of January 30, 2013). This regulation establishes the rules for the regulatory capital required for authorization and operation of insurance, private pension and capitalization companies. The regulations that establish the rules for the calculation of capital arising from credit, underwriting, operational and market risks.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 98

Note 4 – Summary of the main accounting practices

a) Cash and cash equivalents - For the purpose of the Consolidated Statement of Cash Flows, this item includes cash and current accounts in banks (considered in the heading cash and cash equivalents), interbank deposits and securities purchased under agreements to resell – funded positions that have original maturities of up to 90 days.

b) Interbank investments, remunerated restricted credits – Brazilian Central Bank, remunerated deposits, deposits received under securities repurchase agreements, funds from acceptance and issuance of securities, borrowings and onlending, subordinated debt and other receivables and payables – Transactions subject to monetary correction and foreign exchange variation and operations with fixed charges are recorded at present value, net of the transaction costs incurred, calculated “pro rata die” based on the effective rate of transactions, according to CVM Resolution No. 649 of December 16, 2010.

c) Securities - Recorded at cost of acquisition restated by the index and/or effective interest rate and presented in the Balance Sheet, according to BACEN Circular No. 3,068, of November 8, 2001. Securities are classified into the following categories:

· Trading securities – acquired to be actively and frequently traded, and adjusted to market value, with a contra-entry to the results for the period;

· Available-for-sale securities – securities that can be negotiated but are not acquired to be actively and frequently traded. They are adjusted to their market value with a contra-entry to an account disclosed in stockholders’ equity;

· Held-to-maturity securities – securities, except for non-redeemable shares, for which the bank has the financial condition and intends or is required to hold them in the portfolio up to their maturity, are recorded at cost of acquisition, or market value, whenever these are transferred from another category. The securities are adjusted using the accrual method through their maturity date, not being adjusted to market value.

Gains and losses on available-for-sale securities, when realized, are recognized at the trade date in the statement of income, with a contra-entry to a specific stockholders’ equity account.

Decreases in the market value of available-for-sale and held-to-maturity securities below their related costs, resulting from non-temporary reasons, are recorded in results as realized losses.

d) Derivative financial instruments - these are classified on the date of their acquisition, according to management's intention of using them either as a hedge or not, according to BACEN Circular No. 3,082, of January 30, 2002. Transactions involving financial instruments, carried out upon the client’s request, for their own account, or which do not comply with the hedging criteria (mainly derivatives used to manage the overall risk exposure), are stated at market value, including realized and unrealized gains and losses, which are recorded directly in the statement of income.

The derivatives that are used for protection against risk exposure or to modify the characteristics of financial assets and liabilities, which have changes in market value highly associated with those of the items being protected at the beginning and throughout the duration of the contract, and which are found effective to reduce the risk related to the exposure being protected, are classified as a hedge, in accordance with their nature:

· Market Risk Hedge – financial assets and liabilities, as well as their related financial instruments, are accounted for at their market value plus realized and unrealized gains and losses, which are recorded directly in the statement of income.

· Cash Flow Hedge - the effective amount of the hedge of financial assets and liabilities, as well as their related financial instruments, are accounted for at their market value plus realized and unrealized gains and losses, net of tax effects, when applicable, and recorded in a specific account in stockholders’ equity. The ineffective portion of the hedge is recorded directly in the statement of income.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 99

· Net Investment Hedge in Foreign Operations - It is accounted for similarly to a cash flow hedge, i.e., the portion of gains or losses on the hedging instrument that is determined to be an effective hedge is recognized in stockholders’ equity, and reclassified to income for the period in the case of a disposal of the foreign operation. The ineffective portion is recognized in income for the period.

e) Loan, lease and other credit operations (operations with credit granting characteristics) – These transactions are recorded at present value and calculated “pro rata die” based on the variation of the contracted index and interest rate, and are recorded on the accrual basis until the 60th day overdue in financial companies, according to the estimate of receipt. After the 60th day, income is recognized upon the effective receipt of installments. Credit card operations include receivables arising from the purchases made by cardholders. The funds related to these amounts are recorded in Other Liabilities – Credit Card Operations, which also include funds arising from other credits related to transactions with credit card issuers.

f) Allowance for loan losses - the balance of the allowance for loan losses was recorded based on a credit risk analysis, at an amount considered sufficient to cover loan losses according to the rules determined by CMN Resolution No. 2,682 of December 21, 1999, among which are:

· Provisions are recorded from the date loans are granted, based on the client’s risk rating and on the periodic quality evaluation of clients and industries, and not only in the event of default;

· Taking into account default exclusively, the write-off as losses occur after 360 days of credits have matured or after 540 days for operations that mature after a period of 36 months.

g) Other assets - these assets are mainly comprised of assets held for sale relating to real estate available for sale, own real estate not in use and real estate received as payment in kind, which are adjusted to market value through the set-up of a provision, according to current regulations, reinsurance unearned premiums (Note 4m I); and prepaid expenses, corresponding to disbursements, the benefit of which will occur in future periods.

As from January 1, 2015, Itaú Unibanco adopts the option provided for in Circular No. 3,693/13, which establishes accounting procedures for the compensation of local correspondents in connection with credit origination.These compensation amounts for local correspondents in connection with transactions originated as from January 1, 2017 will be fully recorded as expenses for the period.

h) Investments – investments in subsidiary and affiliated companies are accounted for under the equity method. The consolidated financial statements of foreign branches and subsidiaries are adapted to comply with Brazilian accounting practices and converted into Reais. Other investments are recorded at cost and adjusted to market value by setting up a provision in accordance with current standards.

i) Fixed assets - these assets are stated at cost of acquisition or construction, less accumulated depreciation, and are adjusted to market value until December 31, 2007, when applicable, for insurance, pension plan and capitalization operations the adjustments to market value are supported by appraisal reports. They correspond to rights related to tangible assets intended for maintenance of the company’s operations or exercised for such purpose, including assets arising from transactions that transfer to the company their benefits, risks and controls. The consideration of lease contracts started to be recorded in income in accordance with CMN Resolution No. 3,617 / 08, as of September 30, 2015, as determined by the Central Bank.

j) Goodwill – corresponds to the amount paid in excess for the purchase of investments and is amortized based on expected future profitability or as realized. It is annually tested for impairment.

k) Intangible assets – correspond to rights acquired whose subjects are intangible assets intended for maintenance of the company or which are exercised for such purpose, according to the CMN Resolution No. 3,642, of November 26, 2008. They are composed of (i) the goodwill amount paid on acquisition of the company, transferred to intangible assets in view of the transfer of the adquirer’s equity by the acquired, as set forth by Law No. 9,532/97, to be amortized based on the period defined in appraisal reports; (ii) use rights and rights acquired to credit payrolls and partnership agreements, amortized over the terms of the contracts or to the extent that the economic benefits flow to the company and (iii) software and customer portfolios, amortized over a term varying from five to ten years.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 100

l) Impairment of assets – a loss is recognized when there is clear evidence that assets are stated at a non-recoverable value. This procedure is adopted semiannually.

m) Insurance, pension plan and capitalization operations - insurance premiums, accepted coinsurances and selling expenses are accounted by issuing an insurance policy or in accordance with the insurance effectiveness term, through the recognition and reversal of the provision for unearned premiums and deferred selling expenses. Interest arising from fractioning of insurance premiums is accounted for as incurred. Revenues from social security contributions, gross revenue from premium bonds and respective technical provisions are recognized upon receipt.

I - Credits from operations and other assets related to insurance and reinsurance operations:

· Insurance premiums receivable - Refer to installments of insurance premiums receivable, current and past due, in accordance with insurance policies issued;

· Reinsurance recoverable amounts – Refer to claims paid to the insured party while recovery of these paid amounts is pending from Reinsurer, installments of unsettled claims and incurred but not reported claims - Reinsurance (IBNR), classified in assets in accordance with the criteria established by CNSP Resolution No. 321, of July 15, 2015, as amended by CNSP Resolution No. 319, of December 12, 2014, and SUSEP Circular No. 517, of July 30, 2015;

· Reinsurance unearned premiums – Recognized to determine the portion of reinsurance unearned premiums, calculated “pro rata die”, and for risks of policies not issued computed based on estimates, based on the actuarial technical study and in compliance with the criteria established by CNSP current legislation as amended by CNSP Resolution No. 319, of December 12, 2014, and SUSEP Circular No. 517, of July 30, 2015.

II - The technical provisions of insurance, pension plan and capitalization are recognized according to the technical notes approved by SUSEP and criteria established by current legislation.

II.I- Insurance and pension plan:

· Provision for unearned premiums – it is recognized, based on insurance premiums, for the coverage of amounts payable related to claims and expenses to be incurred, throughout the terms to be elapsed, in connection with the risks assumed at the calculation base date. The calculation is performed on the level of policies or endorsement of agreements in force, under the pro rata-die criterion. The provision includes an estimate for effective and not issued risks (PPNG-RVNE).

· Provision for unsettled claims – it is recognized for the coverage of amounts payable related to lump-sum payments and income overdue of claims reported up to the calculation base date, but not paid yet. The provision covers administrative and legal claims, gross of accepted coinsurance operations and reinsurance operations and net of ceded coinsurance operations. The provision should include, whenever required, IBNER (claims incurred but not sufficiently reported) for the aggregate development of claims reported but not paid, which amounts may be changed throughout the process up to the final settlement.

· Provision for claims incurred and not reported - IBNR – it is recognized for the coverage of expected unsettled amounts related to claims incurred but not reported up to the calculation base date, gross of accepted coinsurance operations and reinsurance operations, and net of ceded coinsurance operations.

· Mathematical provisions for benefits to be granted - recognized for the coverage of commitments assumed to participants or policyholders, based on the assumptions set forth in the contract, while the event that gave rise to the benefit and/or indemnity has not occurred. The provision is calculated in accordance with the methodology approved in the actuarial technical note of the product.

· Mathematical provisions for granted benefits - it is recognized after the event triggering the benefit occurs, for coverage of the commitments assumed with the participants or insured, based on the assumptions established in the agreement. The provision is calculated in accordance with methodologies approved in the technical actuarial note of the product.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 101

· Provision for financial surplus – it is recognized to ensure the amounts intended for distribution of financial surplus, in accordance with regulation in force, in the event it is stated in the agreement. Corresponds to the financial income exceeding the minimum return guaranteed in the product.

· Supplemental Coverage Provision – recognized whenever technical provisions are found to be insufficient, as determined by the Liability Adequacy Test, in accordance with the provisions specified in regulation in force.

· Provision for redemptions and other amounts to regularize – it comprises the amounts related to redemptions to regularize, returns of premiums or funds, portability requested but, for any reason, not yet transferred to the insurance company or open private pension entity beneficiary, and premiums received but not quoted.

· Provision for related expenses - It is recognized for the coverage of expected amounts related to expenses with benefits and indemnities, due to events incurred and to be incurred.

II.II - Capitalization:

· Mathematical provision for capitalization – recognized until the event triggering the benefit occurs, and comprises the portion of the amounts collected for capitalization. It includes monetary restatement and interest, as from the beginning of the validity date.

· Provision for redemption – recognized as from the date of the event triggering the redemption of the certificate and/or the event triggering the distribution of the bonus until the date of the financial settlement or the date the evidence of payment of the obligation is received

· Provision for raffles unrealized – comprises the portion of the amounts collected for raffles for each certificate, which raffles have been funded, but that, at the recognition date, have not yet been realized.

· Provision for raffles payable – recognized as from the date the raffle is drawn until the date of the financial settlement or the date the evidence of payment of the obligation is received, or in conformity with other cases provided by law.

· Supplementary provision for raffles– recognized to supplement the Provision for raffles unrealized, and is used for coverage of possible insufficient amounts related to the expected amount of raffles to be drawn.

· Provision for administrative expenses- recognized for the coverage of expected amounts related to the administrative expenses for the capitalization plans.

n) Contingent assets and liabilities and legal liabilities – tax and social security - assessed, recognized and disclosed according to the provisions set forth in CMN Resolution No. 3,823 of December 16, 2009, and BACEN Circular Letter No. 3,429 of February 11, 2010.

I - Contingent assets and liabilities

Refer to potential rights and obligations arising from past events, the occurrence of which is dependent upon future events.

· Contingent assets - not recognized, except upon evidence ensuring a high reliability level of realization, usually represented by claims awarded a final and unappealable judgment and confirmation of the recoverability of the claim through receipt of amounts or offset against another liability;

· Contingent liabilities - basically arise from administrative proceedings and lawsuits, inherent in the normal course of business, filed by third parties, former employees and governmental bodies, in connection with civil, labor, tax and social security lawsuits and other risks. These contingencies are calculated based on conservative practices, being usually recorded based on the opinion of legal advisors and considering the probability that financial resources shall be required for settling the obligation, the amount of which may be estimated with sufficient certainty. Contingencies are classified either as probable, for which provisions are recognized; possible, which are disclosed but not recognized; and remote, for which recognition or disclosure are not required. Any contingent amounts are measured through the use of models and criteria which allow their adequate measurement, in spite of the uncertainty of their term and amounts.

Escrow deposits are restated in accordance with the current legislation.

Contingencies guaranteed by indemnity clauses in privatization processes and with liquidity are only recognized upon judicial notification with simultaneous recognition of receivables, without any effect on results.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 102

II - Legal liabilities – tax and social security

Represented by amounts payable related to tax liabilities, the legality or constitutionality of which are subject to judicial defense, recognized in the full amount under discussion.

Liabilities and related escrow deposits are adjusted in accordance with the current legislation.

o) Taxes - these provisions are calculated according to current legislation at the rates shown below, using the related calculation bases.

Income tax	15.00	%
Additional income tax	10.00	%
Social contribution (1)	20.00	%
PIS (2)	0.65	%
COFINS (2)	4.00	%
ISS up to	5.00	%

(1) On October 06, 2015, Law No. 13,169, a conversion of Provisional Measure No. 675, which increased the Social Contribution tax rate from 15% to 20% until December 31, 2018, for financial institutions, insurance companies and credit card management companies. For the other companies, the tax rate remains at 9%.

(2) For non-financial subsidiaries that fall into the non-cumulative calculation system, the PIS rate is 1.65% and COFINS rate is 7.60%.

On May 14, 2014, Law No. 12,973 was enacted to change the federal tax legislation about IRPJ, CSLL, PIS and COFINS, which effects started on 01/01/2015, since ITAÚ UNIBANCO HOLDING did not exercise the option of advancing the effects pursuant to articles 75 and 96. Among other matters, said Law provides for:

· the revocation of the Transition Tax Regime – RTT, established by Law No. 11,638/07, amended by Law No. 11,941, of May 27, 2009;

· taxation of legal entities domiciled in Brazil, in connection with the equity increase arising from the interest in profit earned abroad by subsidiaries and affiliates and profit earned by individuals resident in Brazil by means of a legal entity controlled abroad.

Said law has not had significant accounting effects on the consolidated financial statements of ITAÚ UNIBANCO HOLDING.

p) Deferred income – this refers to: (i) unexpired interest received in advance that is recognized in income as earned, and (ii) the negative goodwill on acquisition of investments arising from expected future losses, which has not been absorbed in the consolidation process.

q) Transactions with Non-controlling interests - Changes in ownership interest in a subsidiary, which do not result in loss of control, are accounted for as capital transactions and any difference between the amount paid and the amount corresponding to non-controlling is recognized directly in consolidated stockholders' equity.

r) Post-employments benefits

Pension plans - defined benefit plans

The liability (or asset, as the case may be) recognized in the consolidated balance sheet with respect to the defined benefit plan corresponds to the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets. The defined benefit obligation is annually calculated by an independent actuarial consulting company using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated amount of future cash flows of benefit payments based on the Brazilian treasury long term securities denominated in Reais and with maturity periods similar to the term of the pension plan liabilities.

The following amounts are recognized in the consolidated statement of income:

· current service cost is defined as the increase in the present value of obligations resulting from employee service in the current period;

· interest on the net amount of assets (liabilities) of defined benefit plans is the change, during the period, in the net amount recognized in assets and liabilities, due to the time elapsed, which comprises the interest income on plan assets, interest expense on the obligations of the defined benefit plan and interest on the asset ceiling effects.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 103

Actuarial gains and losses arise from the non-realization of the actuarial assumptions established in the latest actuarial evaluation as compared to those effectively carried out, as well as the effects from changes in such assumptions. Gains and losses are fully recognized in equity valuation adjustments.

Pension plans - defined contribution

For defined contribution plans, contributions to plans made by ITAÚ UNIBANCO HOLDING CONSOLIDATED, through pension plan funds, are recognized as an expense when due.

Other post-employment benefit obligations

Certain companies that merged into ITAÚ UNIBANCO HOLDING CONSOLIDATED over the past few years were sponsors of post-employment healthcare benefit plans. ITAÚ UNIBANCO HOLDING CONSOLIDATED is contractually committed to maintaining such benefits over specific periods, as well as in relation to the benefits granted due to a judicial ruling.

Similarly to the defined benefit pension plans, these obligations are assessed annually by independent and qualified actuaries, and the costs expected from these benefits are accrued during the length of service. Gains and losses arising from adjustments and changes in actuarial assumptions are debited from or credited to stockholders’ equity in equity asset valuation adjustment in the period in which they occur.

s) Foreign currency translation

I- Functional and presentation currency

The financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED are presented in Reais, which is its functional and presentation currency. For each subsidiary and investment in associates and joint ventures, ITAÚ UNIBANCO HOLDING CONSOLIDATED defined the functional currency, as provided for in CVM deliberation CVM Nº 640/10.

The assets and liabilities of subsidiaries with a functional currency other than the Brazilian real are translated as follows:

· assets and liabilities are translated at the closing rate at the balance sheet date;

· income and expenses are translated at monthly average exchange rates;

· exchange differences arising from currency translation are recorded in CTA - Cumulative Translation Adjustments.

II - Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of income as part of securities and derivative financial instruments.

In the case of monetary assets classified as available-for-sale, the exchange differences resulting from a change in the amortized cost of the instrument are recognized in the income statement, while those resulting from other changes in the carrying amount, except impairment losses, are recognized in cumulative translation adjustments until derecognition or impairment.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 104

Note 5 - Cash and cash equivalents

For purposes of Statement of Cash Flows, cash and cash equivalents of ITAÚ UNIBANCO HOLDING CONSOLIDATED are composed of the following:

	09/30/2015		09/30/2014
Cash and cash equivalents		18,138,383		16,636,451
Interbank deposits		22,190,407		9,663,586
Securities purchased under agreements to resell – Funded position		33,829,965		13,055,985
Total		74,158,755		39,356,022

In ITAÚ UNIBANCO HOLDING it is composed of the following:

	09/30/2015		09/30/2014
Cash and cash equivalents		217,710		104,902
Interbank deposits		1,929,604		65,373
Securities purchased under agreements to resell – Funded position		30,264		52,694
Total		2,177,578		222,969

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 105

Note 6 - Interbank investments

	09/30/2015												09/30/2014
	0 - 30		31 - 180		181 - 365		Over 365		Total		%		Total		%
Money market		86,561,062		108,205,663		-		-		194,766,725		84.8		195,890,104		90.0
Funded position (*)		43,991,380		22,675,285		-		-		66,666,665		29.0		42,343,406		19.4
Financed position		41,739,840		52,364,336		-		-		94,104,176		41.0		128,397,885		59.0
With free movement		3,954,582		52,364,336		-		-		56,318,918		24.5		12,512,501		5.7
Without free movement		37,785,258		-		-		-		37,785,258		16.5		115,885,384		53.3
Short position		829,842		33,166,042		-		-		33,995,884		14.8		25,148,813		11.6
Money market – Assets Guaranteeing Technical Provisions - SUSEP		3,329,381		-		-		-		3,329,381		1.4		3,201,679		1.5
Interbank deposits		22,277,016		5,468,456		3,138,997		696,883		31,581,352		13.8		18,446,506		8.5
Total		112,167,459		113,674,119		3,138,997		696,883		229,677,458		100.0		217,538,289
% per maturity term		48.8		49.5		1.4		0.3		100.0
Total – 09/30/2014		159,727,148		48,349,646		8,828,673		632,822		217,538,289
% per maturity term		73.4		22.2		4.1		0.3

(*) Includes R$ 13,164,579 (R$ 6,482,186 at 09/30/2014) related to money market with free movement, in which securities are restricted to guarantee transactions at the BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (Securities, Commodities and Futures Exchange) and the Central Bank of Brazil (BACEN).

In ITAÚ UNIBANCO HOLDING the portfolio is composed of Money market – Funded position falling due in up to 30 days amounting to R$ 30,264 (R$ 52,694 at 09/30/2014), Interbank deposits with maturity of 0 to 30 days (R$ 40,280 at 09/30/2014), with maturity of 31 to 180 days to R$ 2,448,715 (R$ 25,093 at 09/30/2014), with maturity of 181 to 365 days amounting to R$ 3,438,113 (R$ 3,291,054 at 09/30/2014) and over 365 days amounting to R$ 70,030,255 (R$ 37,337,265 at 09/30/2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 106

Note 7 – Securities and derivative financial instruments (assets and liabilities)

See below the composition by Securities and Derivatives type, maturity and portfolio already adjusted to their respective market values.

a) Summary per maturity

	09/30/2015																																09/30/2014
				Adjustment to market value reflected in:
	Cost			Results			Stockholders’ equity			Market value			%		0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days			Market value
Government securities - domestic		119,248,409			(1,048,882	)		(2,992,447	)		115,207,080			33.3		9,600,504			6,985			3,103,828			5,292,371			8,882,061			88,321,331			99,663,593
Financial treasury bills		12,992,318			336			(56	)		12,992,598			3.8		-			-			-			1,979,023			2,114,337			8,899,238			21,861,115
National treasury bills		25,545,529			(143,535	)		(51,236	)		25,350,758			7.3		9,588,106			-			3,074,053			1,737,904			1,212,796			9,737,899			15,798,339
National treasury notes		41,673,887			(717,629	)		(1,028,364	)		39,927,894			11.5		5,089			5,863			8,798			1,274,255			2,088,004			36,545,885			39,962,863
National treasury/securitization		242,143			(323	)		(18,948	)		222,872			0.1		6			1,122			83			1,583			537			219,541			259,180
Brazilian external debt bonds		38,794,532			(187,731	)		(1,893,843	)		36,712,958			10.6		7,303			-			20,894			299,606			3,466,387			32,918,768			21,782,096
Government securities - abroad		12,289,724			33,637			(52,356	)		12,271,005			3.5		1,190,467			905,418			2,133,386			3,779,080			2,678,063			1,584,591			11,882,595
Germany		-			-			-			-			0.0		-			-			-			-			-			-			165,956
Argentina		639,489			40,931			-			680,420			0.2		128,791			208,601			161,225			38,811			122,911			20,081			75,390
Belgium		148,881			(5,999	)		-			142,882			0.0		-			-			-			-			142,882			-			155,522
Chile		1,399,790			(57	)		3,370			1,403,103			0.4		545,230			2,105			845,722			1,001			8,077			968			1,389,503
Colombia		88,263			(396	)		-			87,867			0.0		16			-			81			4,014			865			82,891			139,772
Korea		1,625,388			-			(1	)		1,625,387			0.5		-			-			455,220			521,012			649,155			-			2,911,379
Denmark		3,031,628			-			(1	)		3,031,627			0.9		-			483,834			-			1,579,517			968,276			-			3,649,323
Spain		1,061,980			-			-			1,061,980			0.3		-			-			306,616			755,364			-			-			782,808
United States		2,072,001			16			6,654			2,078,671			0.6		-			-			87,411			626,194			259,847			1,105,219			1,055,743
France		199,994			-			2,753			202,747			0.1		-			-			-			-			-			202,747			128,851
Netherlands		146,293			-			1,052			147,345			0.0		-			-			-			-			123,972			23,373			129,741
Mexico		8,566			(185	)		-			8,381			0.0		-			-			-			922			1,090			6,369			1,087
Paraguay		1,500,425			-			(57,426	)		1,442,999			0.4		461,677			200,680			226,607			196,884			312,136			45,015			977,204
Peru		1,045			(59	)		-			986			0.0		-			-			-			-			-			986			-
Uruguay		355,728			(612	)		(7,675	)		347,441			0.1		54,753			10,198			50,504			55,361			79,916			96,709			309,200
Other		10,253			(2	)		(1,082	)		9,169			0.0		-			-			-			-			8,936			233			11,116
Corporate securities		74,059,873			(48,105	)		(180,880	)		73,830,888			21.3		5,813,259			3,531,223			2,896,720			5,798,472			11,173,698			44,617,516			64,184,025
Shares		2,272,063			(6,250	)		16,945			2,282,758			0.7		2,282,758			-			-			-			-			-			2,912,511
Rural product note		1,121,607			-			(34,524	)		1,087,083			0.3		36,512			285,413			63,012			154,729			276,203			271,214			1,404,444
Bank deposit certificates		1,560,346			396			2,597			1,563,339			0.5		388,663			151,489			702,908			317,612			2,184			483			808,137
Securitized real estate loans		18,248,015			-			(194,062	)		18,053,953			5.2		343,042			2,987			-			370,850			27,024			17,310,050			14,678,312
Fund quotas		974,764			(94,717	)		13,739			893,786			0.3		893,786			-			-			-			-			-			1,028,986
Credit rights		39,627			-			-			39,627			0.0		39,627			-			-			-			-			-			139,684
Fixed income		479,730			(54,608	)		(6	)		425,116			0.1		425,116			-			-			-			-			-			647,281
Variable income		455,407			(40,109	)		13,745			429,043			0.1		429,043			-			-			-			-			-			242,021
Debentures		24,573,216			85,957			117,307			24,776,480			7.2		58,596			844,657			999,184			794,101			1,571,957			20,507,985			21,321,626
Eurobonds and others		12,005,949			(33,121	)		(56,228	)		11,916,600			3.4		311,743			1,387,586			624,159			1,022,024			3,407,310			5,163,778			7,004,063
Financial bills		11,938,545			(1	)		(45,549	)		11,892,995			3.4		1,222,833			439,896			250,157			3,023,799			5,742,613			1,213,697			13,173,311
Promissory notes		959,473			-			742			960,215			0.3		267,975			390,398			223,371			78,471			-			-			1,475,465
Other		405,895			(369	)		(1,847	)		403,679			0.1		7,351			28,797			33,929			36,886			146,407			150,309			377,170
PGBL / VGBL fund quotas (1)		111,011,735			-			-			111,011,735			32.1		111,011,735			-			-			-			-			-			92,882,121
Subtotal - securities		316,609,741			(1,063,350	)		(3,225,683	)		312,320,708			90.3		127,615,965			4,443,626			8,133,934			14,869,923			22,733,822			134,523,438			268,612,334
Trading securities		182,894,060			(1,063,350	)		-			181,830,710			52.6		124,201,826			731,780			3,671,860			5,141,944			6,684,160			41,399,140			161,378,062
Available-for-sale securities		91,309,507			-			(3,225,683	)		88,083,824			25.5		3,071,092			3,708,859			4,462,074			9,357,129			14,725,773			52,758,897			75,367,034
Held-to-maturity securities (2)		42,406,174			-			-			42,406,174			12.3		343,047			2,987			-			370,850			1,323,889			40,365,401			31,867,238
Derivative financial instruments		25,201,153			8,321,900			-			33,523,053			9.7		4,869,881			7,546,897			7,050,330			2,433,635			3,671,224			7,951,086			14,495,537
Total securities and derivative financial instruments (assets)		341,810,894			7,258,550			(3,225,683	)		345,843,761			100.0		132,485,846			11,990,523			15,184,264			17,303,558			26,405,046			142,474,524			283,107,871
Derivative financial instruments (liabilities)		(33,981,352	)		(8,364,653	)		-			(42,346,005	)		100.0		(5,953,380	)		(8,628,079	)		(5,808,502	)		(3,526,192	)		(4,126,805	)		(14,303,047	)		(16,203,028	)

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to long-term liabilities in Pension Plan Technical Provisions account, as determined by SUSEP.

(2) Unrecorded negative adjustment to market value in the amount of R$ 2,875,521 (R$ 858,979 at 09/30/2014), according to Note 7e.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 107

b) Summary by portfolio

	09/30/2015
			Restricted to								Derivative		Assets guaranteeing
	Own portfolio		Repurchase agreements		Free portfolio		Pledged guarantees (*)		Central Bank		Financial instruments		technical provisions (Note 11b)		Total
Government securities - domestic		41,093,238		59,387,053		-		3,242,745		5,536,940		-		5,947,104		115,207,080
Financial treasury bills		2,887,192		6,566,784		-		3,031,980		-		-		506,642		12,992,598
National treasury bills		8,576,333		16,503,345		-		-		-		-		271,080		25,350,758
National treasury notes		17,013,173		12,151,111		-		57,288		5,536,940		-		5,169,382		39,927,894
National treasury / Securitization		222,872		-		-		-		-		-		-		222,872
Brazilian external debt bonds		12,393,668		24,165,813		-		153,477		-		-		-		36,712,958
Government securities - abroad		7,654,439		990,116		2,660		3,623,212		-		-		578		12,271,005
Argentina		181,019		307,522		-		191,879		-		-		-		680,420
Belgium		142,882		-		-		-		-		-		-		142,882
Chile		1,387,449		-		-		15,076		-		-		578		1,403,103
Colombia		85,207		-		2,660		-		-		-		-		87,867
Korea		489,634		-		-		1,135,753		-		-		-		1,625,387
Denmark		1,248,172		-		-		1,783,455		-		-		-		3,031,627
Spain		847,349		-		-		214,631		-		-		-		1,061,980
United States		1,492,945		318,645		-		267,081		-		-		-		2,078,671
France		202,747		-		-		-		-		-		-		202,747
Netherlands		147,345		-		-		-		-		-		-		147,345
Mexico		8,381		-		-		-		-		-		-		8,381
Paraguay		1,071,453		363,949		-		7,597		-		-		-		1,442,999
Peru		986		-		-		-		-		-		-		986
Uruguay		339,701		-		-		7,740		-		-		-		347,441
Other		9,169		-		-		-		-		-		-		9,169
Corporate securities		68,261,154		224,798		-		271,686		-		-		5,073,250		73,830,888
Shares		2,271,933		-		-		10,825		-		-		-		2,282,758
Rural product note		1,087,083		-		-		-		-		-		-		1,087,083
Bank deposit certificates		1,241,967		224,798		-		11,158		-		-		85,416		1,563,339
Securitized real estate loans		18,053,953		-		-		-		-		-		-		18,053,953
Fund quotas		788,141		-		-		528		-		-		105,117		893,786
Credit rights		12,818		-		-		-		-		-		26,809		39,627
Fixed income		346,280		-		-		528		-		-		78,308		425,116
Variable income		429,043		-		-		-		-		-		-		429,043
Debentures		23,636,804		-		-		249,175		-		-		890,501		24,776,480
Eurobonds and other		11,916,600		-		-		-		-		-		-		11,916,600
Financial bills		7,900,779		-		-		-		-		-		3,992,216		11,892,995
Promissory notes		960,215		-		-		-		-		-		-		960,215
Other		403,679		-		-		-		-		-		-		403,679
PGBL / VGBL fund quotas		-		-		-		-		-		-		111,011,735		111,011,735
Subtotal - securities		117,008,831		60,601,967		2,660		7,137,643		5,536,940		-		122,032,667		312,320,708
Trading securities		23,365,999		35,419,752		2,660		2,971,635		3,254,033		-		116,816,631		181,830,710
Available-for-sale securities		62,723,896		16,553,480		-		4,166,003		2,282,907		-		2,357,538		88,083,824
Held-to-maturity securities		30,918,936		8,628,735		-		5		-		-		2,858,498		42,406,174
Derivative financial instruments		-		-		-		-		-		33,523,053		-		33,523,053
Total securities and derivative financial instruments (assets)		117,008,831		60,601,967		2,660		7,137,643		5,536,940		33,523,053		122,032,667		345,843,761
Total securities and derivative financial instruments (assets) – 09/30/2014		132,664,164		19,372,456		5		2,626,863		8,610,933		14,495,537		105,337,913		283,107,871

(*) Represent securities deposited with Contingent Liabilities (Note 12b), Stock Exchanges and the Clearing House for the Custody and Financial Settlement of Securities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 108

c) Trading securities

See below the composition of the portfolio of trading securities by type, stated at cost and market value and by maturity term.

	09/30/2015																					09/30/2014
	Cost		Adjustment to market value (in results)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
Government securities - domestic		60,580,549		(1,048,882	)		59,531,667		32.8		9,600,502		6,839		3,103,706		3,860,486		4,722,688		38,237,446		56,073,245
Financial treasury bills		10,704,248		336			10,704,584		5.9		-		-		-		652,382		1,626,067		8,426,135		21,088,288
National treasury bills		17,433,774		(143,535	)		17,290,239		9.5		9,588,106		-		3,074,053		1,737,904		1,085,157		1,805,019		6,271,536
National treasury notes		27,389,260		(717,629	)		26,671,631		14.7		5,087		5,717		8,676		1,169,011		1,757,243		23,725,897		26,954,807
National treasury / Securitization		4,155		(323	)		3,832		0.0		6		1,122		83		1,583		537		501		6,609
Brazilian external debt bonds		5,049,112		(187,731	)		4,861,381		2.7		7,303		-		20,894		299,606		253,684		4,279,894		1,752,005
Government securities - abroad		1,417,163		33,637			1,450,800		0.7		517,809		218,008		260,402		43,747		292,606		118,228		1,067,611
Germany		-		-			-		0.0		-		-		-		-		-		-		165,956
Argentina		639,489		40,931			680,420		0.4		128,791		208,601		161,225		38,811		122,911		20,081		75,362
Belgium		148,881		(5,999	)		142,882		0.1		-		-		-		-		142,882		-		102,683
Chile		1,025		(57	)		968		0.0		-		-		-		-		-		968		77,936
Colombia		88,263		(396	)		87,867		0.0		16		-		81		4,014		865		82,891		139,772
United States		87,395		16			87,411		0.0		-		-		87,411		-		-		-		413,517
Mexico		8,566		(185	)		8,381		0.0		-		-		-		922		1,090		6,369		1,087
Paraguay		363,949		-			363,949		0.2		363,949		-		-		-		-		-		38,436
Peru		1,045		(59	)		986		0.0		-		-		-		-		-		986		-
Uruguay		78,538		(612	)		77,926		0.0		25,053		9,407		11,685		-		24,858		6,923		51,977
Other		12		(2	)		10		0.0		-		-		-		-		-		10		885
Corporate securities		9,884,613		(48,105	)		9,836,508		5.4		3,071,780		506,933		307,752		1,237,711		1,668,866		3,043,466		11,355,085
Shares		1,805,782		(6,250	)		1,799,532		1.0		1,799,532		-		-		-		-		-		2,144,075
Bank deposit certificates		114,085		396			114,481		0.1		2,736		77,149		29,753		2,176		2,184		483		96,759
Securitized real estate loans		-		-			-		0.0		-		-		-		-		-		-		3,320
Fund quotas		748,659		(94,717	)		653,942		0.3		653,942		-		-		-		-		-		861,183
Credit rights		30,278		-			30,278		0.0		30,278		-		-		-		-		-		68,207
Fixed income		303,059		(54,608	)		248,451		0.1		248,451		-		-		-		-		-		593,944
Variable income		415,322		(40,109	)		375,213		0.2		375,213		-		-		-		-		-		199,032
Debentures		1,439,454		85,957			1,525,411		0.8		22,358		52,977		-		20,494		14,126		1,415,456		1,195,567
Eurobonds and other		1,249,388		(33,121	)		1,216,267		0.7		3,639		65,073		33,808		77,543		632,431		403,773		1,430,534
Financial bills		4,516,819		(1	)		4,516,818		2.5		589,573		311,734		244,191		1,137,498		1,020,125		1,213,697		5,617,043
Others		10,426		(369	)		10,057		0.0		-		-		-		-		-		10,057		6,604
PGBL / VGBL fund quotas		111,011,735		-			111,011,735		61.1		111,011,735		-		-		-		-		-		92,882,121
Total		182,894,060		(1,063,350	)		181,830,710		100.0		124,201,826		731,780		3,671,860		5,141,944		6,684,160		41,399,140		161,378,062
% per maturity term											68.3		0.4		2.0		2.8		3.7		22.8
Total – 09/30/2014		161,707,343		(329,281	)		161,378,062		100.0		97,004,038		242,585		9,467,305		14,192,608		8,168,959		32,302,567
% per maturity term											60.0		0.2		5.9		8.8		5.1		20.0

At September 30, 2015, ITAÚ UNIBANCO HOLDING’s portfolio is composed Fund quotas fixed income R$ 4,202 without maturity (R$ 12,487,433 of 09/30/2014 portfolio is composed of Corporate Securities – Bank deposit certificates with maturity over 720 days.).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 109

d) Available-for-sale securities

See below the composition of the portfolio of available-for-sale securities by type, stated at cost and market value and by maturity term.

	09/30/2015																					09/30/2014
	Cost		Adjustments to market value (in  stockholders' equity)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
Government securities - domestic		32,253,743		(2,992,447	)		29,261,296		33.3		2		146		122		1,431,885		2,862,508		24,966,633		23,788,204
Financial treasury bills		2,288,070		(56	)		2,288,014		2.6		-		-		-		1,326,641		488,270		473,103		772,827
National treasury bills		922,069		(51,236	)		870,833		1.0		-		-		-		-		-		870,833		3,119,370
National treasury notes		10,150,050		(1,028,364	)		9,121,686		10.4		2		146		122		105,244		219,109		8,797,063		9,148,254
National treasury / Securitization		237,988		(18,948	)		219,040		0.3		-		-		-		-		-		219,040		252,571
Brazilian external debt bonds		18,655,566		(1,893,843	)		16,761,723		19.0		-		-		-		-		2,155,129		14,606,594		10,495,182
Government securities - abroad		10,857,709		(52,356	)		10,805,353		12.2		672,658		687,410		1,872,984		3,735,333		2,385,457		1,451,511		10,791,674
Argentina		-		-			-		0.0		-		-		-		-		-		-		28
Belgium		-		-			-		0.0		-		-		-		-		-		-		52,839
Chile		1,398,765		3,370			1,402,135		1.6		545,230		2,105		845,722		1,001		8,077		-		1,311,567
Korea		1,625,388		(1	)		1,625,387		1.9		-		-		455,220		521,012		649,155		-		2,911,379
Denmark		3,031,628		(1	)		3,031,627		3.4		-		483,834		-		1,579,517		968,276		-		3,649,323
Spain		1,061,980		-			1,061,980		1.2		-		-		306,616		755,364		-		-		782,808
United States		1,984,606		6,654			1,991,260		2.3		-		-		-		626,194		259,847		1,105,219		642,226
France		199,994		2,753			202,747		0.2		-		-		-		-		-		202,747		128,851
Netherlands		146,293		1,052			147,345		0.1		-		-		-		-		123,972		23,373		129,741
Italy		-		-			-		0.0		-		-		-		-		-		-		-
Paraguay		1,136,476		(57,426	)		1,079,050		1.2		97,728		200,680		226,607		196,884		312,136		45,015		938,768
Uruguay		262,358		(7,675	)		254,683		0.3		29,700		791		38,819		55,361		55,058		74,954		233,926
Other		10,221		(1,082	)		9,139		0.0		-		-		-		-		8,936		203		10,218
Corporate securities		48,198,055		(180,880	)		48,017,175		54.5		2,398,432		3,021,303		2,588,968		4,189,911		9,477,808		26,340,753		40,787,156
Shares		466,281		16,945			483,226		0.6		483,226		-		-		-		-		-		768,436
Rural product note		1,121,607		(34,524	)		1,087,083		1.2		36,512		285,413		63,012		154,729		276,203		271,214		1,404,444
Bank deposit certificate		1,446,256		2,597			1,448,853		1.6		385,922		74,340		673,155		315,436		-		-		711,375
Securitized real estate loans		2,277,970		(194,062	)		2,083,908		2.4		-		-		-		-		-		2,083,908		2,644,015
Fund quotas		226,105		13,739			239,844		0.3		239,844		-		-		-		-		-		167,803
Credit rights		9,349		-			9,349		0.0		9,349		-		-		-		-		-		71,477
Fixed income		176,671		(6	)		176,665		0.2		176,665		-		-		-		-		-		53,337
Variable income		40,085		13,745			53,830		0.1		53,830		-		-		-		-		-		42,989
Debentures		23,133,762		117,307			23,251,069		26.4		36,238		791,680		999,184		773,607		1,557,831		19,092,529		20,126,059
Eurobonds and other		10,749,406		(56,228	)		10,693,178		12.1		308,104		1,322,513		590,351		944,481		2,774,879		4,752,850		5,572,759
Financial bills		7,421,726		(45,549	)		7,376,177		8.4		633,260		128,162		5,966		1,886,301		4,722,488		-		7,556,268
Promissory notes		959,473		742			960,215		1.1		267,975		390,398		223,371		78,471		-		-		1,475,465
Other		395,469		(1,847	)		393,622		0.4		7,351		28,797		33,929		36,886		146,407		140,252		360,532
Total		91,309,507		(3,225,683	)		88,083,824		100.0		3,071,092		3,708,859		4,462,074		9,357,129		14,725,773		52,758,897		75,367,034
% per maturity term											3.5		4.2		5.1		10.6		16.7		59.9
Total – 09/30/2014		75,741,994		(374,960	)		75,367,034		100.0		3,536,537		4,605,451		5,765,471		8,104,890		8,937,853		44,416,832
% per maturity term											4.7		6.1		7.6		10.8		11.9		58.9

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 110

e) Held-to-maturity securities

See below the composition of the portfolio of held-to-maturity securities by type, stated at cost and by maturity term. Included in the carrying value at September 30, 2015, not considered in results, is an impairment loss of R$ 749,021 (R$ 660,316 at 09/30/2014) relating to the market adjustment of the reclassified securities. Securities classified under this type, if stated at market value, would present a negative adjustment of R$ 2,875,521 (would present a positive R$ 858,979 at 09/30/2014).

	09/30/2015																09/30/2014
	Carrying value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Carrying value
Government securities - domestic (*)		26,414,117		62.4		-		-		-		-		1,296,865		25,117,252		19,802,144
National treasury bills		7,189,686		17.0		-		-		-		-		127,639		7,062,047		6,407,433
National treasury notes		4,134,577		9.8		-		-		-		-		111,652		4,022,925		3,859,802
Brazilian external debt bonds		15,089,854		35.6		-		-		-		-		1,057,574		14,032,280		9,534,909
Government securities - abroad		14,852		0.0		-		-		-		-		-		14,852		23,310
Uruguay		14,832		0.0		-		-		-		-		-		14,832		23,297
Other		20		0.0		-		-		-		-		-		20		13
Corporate securities		15,977,205		37.6		343,047		2,987		-		370,850		27,024		15,233,297		12,041,784
Bank deposit certificate		5		0.0		5		-		-		-		-		-		3
Securitized real estate loans		15,970,045		37.6		343,042		2,987		-		370,850		27,024		15,226,142		12,030,977
Eurobonds and other		7,155		0.0		-		-		-		-		-		7,155		770
Other		-		0.0		-		-		-		-		-		-		10,034
Total		42,406,174		100.0		343,047		2,987		-		370,850		1,323,889		40,365,401		31,867,238
% per maturity term						0.8		0.0		-		0.9		3.1		95.2
Total – 09/30/2014		31,867,238		100.0		43,845		171,203		99,265		786,687		1,067,762		29,698,476
% per maturity term						0.1		0.5		0.3		2.5		3.4		93.2

(*) Includes investments of Itaú Vida e Previdência S.A. in the amount of R$ 2,467,238 (R$ 2,319,022 at 09/30/2014).

f) Reclassification of securities (article 5 of BACEN Circular No. 3,068, of 11/08/2001)

Management sets forth guidelines to classify securities. The classification of the current portfolio of securities, as well as the securities purchased in the period, is periodically and systematically evaluated based on such guidelines.

As set forth in Article 5 of BACEN Circular No. 3,068, of November 8, 2001, the revaluation regarding the classification of securities can only be made upon preparation of trial balances for six-month periods. In addition, the transfer from “held-to-maturity” to the other categories can only occur in view of an isolated, unusual, nonrecurring and unexpected event, which has occurred after the classification date.

No reclassifications or changes to the existing guidelines have been made in the period.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 111

g) Derivative financial instruments

The globalization of the markets in recent years has resulted in a high level of sophistication in the financial products used. As a result of this process, there has been an increasing demand for derivative financial instruments to manage market risks, mainly arising from fluctuations in interest and exchange rates, commodities and other asset prices. Accordingly, ITAU UNIBANCO HOLDING and its subsidiaries operate in the derivative markets for meeting the growing needs of their clients, as well as carrying out their risk management policy. Such policy is based on the use of derivative instruments to minimize the risks resulting from commercial and financial operations.

The derivative financial instruments’ business with clients is carried out after the approval of credit limits. The process of limit approval takes into consideration potential stress scenarios.

Knowing the client, the sector in which it operates and its risk appetite profile, in addition to providing information on the risks involved in the transaction and the negotiated conditions, ensures transparency in the relationship between the parties and the supply of a product that better meets the needs of the client.

The derivative transactions carried out by ITAÚ UNIBANCO HOLDING and its subsidiaries with clients are neutralized in order to eliminate market risks.

The derivative contracts traded by the institution with clients in Brazil are swap, forward, option and futures contracts, which are registered at the BM&FBOVESPA or at the CETIP S.A. OTC Clearing House (CETIP). Overseas transactions are carried out with futures, forwards (onshore), options and swaps with registration mainly in the Chicago, New York and London Exchanges. It should be emphasized that there are over-the-counter operations, but their risks are low as compared to the institutions’ total. Noteworthy is also the fact that there are no structured operations based on subprime assets and all operations are based on risk factors traded at stock exchanges.

The main risk factors of the derivatives, assumed at September 30, 2015, were related to the foreign exchange rate, interest rate, commodities, U.S. dollar coupon, Reference Rate coupon, Libor and variable income. The management of these and other market risk factors is supported by sophisticated statistical and deterministic models. Based on this management model, the institution, with the use of transactions involving derivatives, has been able to optimize the risk-return ratios, even under highly volatile situations.

Most derivatives included in the institution’s portfolio are traded at stock exchanges. The prices disclosed by stock exchanges are used for these derivatives, except in cases in which the low representativeness of price due to liquidity of a specific contract is identified. Derivatives typically valued like this are futures contracts. Likewise, there are other instruments whose quotations (fair prices) are directly disclosed by independent institutions and which are valued based on this direct information. A great part of the Brazilian government securities, highly-liquid international (public and private) securities and shares fit into this situation.

For derivatives whose prices are not directly disclosed by stock exchanges, fair prices are obtained by pricing models which use market information, deducted based on prices disclosed for higher liquidity assets. Interest and market volatility curves which provide entry data for the models are extracted from those prices. Over- the-counter derivatives, forward contracts and securities without much liquidity are in this situation.

The total value of margins pledged in guarantee was R$ 7,560,240 (R$ 1,958,117 at September 30, 2014) and was basically composed of government securities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 112

I - Derivatives by index

	Memorandum account / Notional amount				Balance sheet account receivable / (received) (payable) paid			Adjustment to market value (in results / stockholders' equity)			Market value
	09/30/2015		09/30/2014		09/30/2015			09/30/2015			09/30/2015			09/30/2014
Futures contracts		605,270,163		343,545,480		(362,121	)		247,619			(114,502	)		(119,908	)
Purchase commitments		148,856,773		111,986,533		(494,076	)		292,300			(201,776	)		(30,984	)
Commodities		326,011		159,446		42			-			42			(234	)
Indexes		73,311,559		46,555,346		(605,212	)		4,097			(601,115	)		(165,591	)
Interbank market		31,800,007		42,244,353		269,137			(712	)		268,425			69,468
Foreign currency		38,020,237		18,449,035		(158,049	)		288,915			130,866			65,373
Securities		5,398,959		4,569,823		6			-			6			-
Other		-		8,530		-			-			-			-
Commitments to sell		456,413,390		231,558,947		131,955			(44,681	)		87,274			(88,924	)
Commodities		163,693		196,457		15			-			15			(11	)
Indexes		87,043,795		20,618,036		591,387			(2,222	)		589,165			58,113
Interbank market		233,920,879		73,942,774		(531,197	)		308			(530,889	)		(145,401	)
Foreign currency		131,667,035		131,719,797		72,132			(42,767	)		29,365			(1,684	)
Securities		3,604,526		5,074,756		(97	)		-			(97	)		59
Other		13,462		7,127		(285	)		-			(285	)		-
Swap contracts						(9,814,695	)		(1,301	)		(9,815,996	)		(3,443,616	)
Asset position		322,832,805		243,608,221		5,944,642			2,262,018			8,206,660			4,220,330
Indexes		131,102,113		86,583,044		(289,843	)		1,033,401			743,558			783,259
Interbank market		61,331,980		67,421,625		71,238			1,282,904			1,354,142			748,501
Foreign currency		22,576,390		11,488,382		4,850,174			(1,615,196	)		3,234,978			1,052,375
Fixed rates		98,366,243		74,654,285		889,183			1,523,939			2,413,122			1,455,068
Floating rate		9,420,445		3,440,628		423,166			37,055			460,221			177,885
Securities		25,447		14,338		-			-			-			3,119
Other		10,187		5,919		724			(85	)		639			123
Liability position		332,647,500		247,595,177		(15,759,337	)		(2,263,319	)		(18,022,656	)		(7,663,946	)
Commodities		23,079		24,341		-			-			-			(155	)
Indexes		93,527,481		66,224,234		(2,024,987	)		(643,382	)		(2,668,369	)		(2,715,796	)
Interbank market		36,637,324		48,620,955		377,731			(1,990,690	)		(1,612,959	)		(565,875	)
Foreign currency		45,155,456		24,962,502		(8,561,493	)		1,144,857			(7,416,636	)		(1,502,319	)
Fixed rates		144,288,558		101,899,953		(4,776,721	)		(234,496	)		(5,011,217	)		(2,693,935	)
Floating rate		12,775,887		5,523,091		(728,126	)		(546,562	)		(1,274,688	)		(134,081	)
Securities		84,258		94,457		(45,740	)		6,953			(38,787	)		(37,404	)
Other		155,457		245,644		(1	)		1			-			(14,381	)
Option contracts		418,258,659		674,725,526		(80,422	)		(370,256	)		(450,678	)		741,047
Purchase commitments - long position		87,872,994		139,951,286		2,433,306			4,603,434			7,036,740			2,004,702
Commodities		781,859		571,569		29,556			(9,602	)		19,954			17,492
Indexes		27,631,469		75,260,730		93,344			1,042			94,386			80,291
Interbank market		1,335,125		12,059,722		5,230			16,342			21,572			49,393
Foreign currency		52,174,027		48,205,710		2,199,130			4,316,542			6,515,672			1,540,719
Fixed rates		4,966		-		-			15			15			-
Floating rate		-		7,598		-			-			-			-
Securities		5,844,506		3,779,803		98,128			274,670			372,798			307,180
Other		101,042		66,154		7,918			4,425			12,343			9,627
Commitments to sell - long position		119,551,393		166,225,143		1,571,992			191,135			1,763,127			2,328,364
Commodities		545,847		401,255		18,763			19,328			38,091			10,026
Indexes		36,691,046		95,275,077		165,476			51,263			216,739			493,693
Interbank market		8,322,118		18,582,069		11,216			(8,052	)		3,164			22,802
Foreign currency		65,652,787		44,931,277		1,050,705			(809,682	)		241,023			444,739
Fixed rates		164,518		93,910		6,858			177			7,035			3,702
Floating rate		-		233,163		-			-			-			311
Securities		8,125,495		6,687,608		318,603			935,803			1,254,406			1,352,469
Other		49,582		20,784		371			2,298			2,669			622
Purchase commitments - short position		90,923,740		121,472,911		(2,232,016	)		(4,826,307	)		(7,058,323	)		(2,176,548	)
Commodities		846,406		402,981		(24,610	)		13,382			(11,228	)		(12,516	)
Indexes		29,373,645		70,471,870		(143,436	)		(11,481	)		(154,917	)		(137,815	)
Interbank market		3,001,821		7,277,019		(13,484	)		(38,494	)		(51,978	)		(37,181	)
Foreign currency		52,460,853		40,165,341		(1,984,977	)		(4,613,492	)		(6,598,469	)		(1,736,570	)
Fixed rates		114,062		61,177		-			(277	)		(277	)		(658	)
Securities		5,025,911		3,033,271		(57,591	)		(171,520	)		(229,111	)		(242,181	)
Other		101,042		61,252		(7,918	)		(4,425	)		(12,343	)		(9,627	)
Commitments to sell - short position		119,910,532		247,076,186		(1,853,704	)		(338,518	)		(2,192,222	)		(1,415,471	)
Commodities		307,015		285,387		(19,320	)		(36,229	)		(55,549	)		(16,213	)
Indexes		47,642,183		181,887,139		(275,077	)		(141,737	)		(416,814	)		(490,935	)
Interbank market		3,931,756		18,642,499		(3,660	)		1,434			(2,226	)		(20,767	)
Foreign currency		60,363,667		42,008,995		(1,239,021	)		757,463			(481,558	)		(600,182	)
Fixed rates		20,262		1,226		(666	)		(140	)		(806	)		(70	)
Floating rate		-		-		-			-			-			36
Securities		7,596,067		4,230,156		(315,589	)		(917,011	)		(1,232,600	)		(286,718	)
Other		49,582		20,784		(371	)		(2,298	)		(2,669	)		(622	)
Forward contracts		32,738,619		33,072,709		2,081,678			(4,142	)		2,077,536			1,565,305
Purchases receivable		1,056,552		9,440,206		1,054,203			2,377			1,056,580			1,358,984
Commodities		-		91,353		-			-			-			13,726
Foreign currency		-		8,433,703		-			-			-			428,373
Fixed rates		915,143		199,558		913,529			1,386			914,915			199,324
Floating rate		141,321		703,723		140,586			989			141,575			705,695
Securities		88		11,869		88			2			90			11,866
Purchases payable		-		1,882,475		(1,054,203	)		-			(1,054,203	)		(967,874	)
Commodities		-		81,803		-			-			-			(3,176	)
Foreign currency		-		1,800,672		-			-			-			(59,679	)
Fixed rates		-		-		(913,529	)		-			(913,529	)		(199,324	)
Floating rate		-		-		(140,586	)		-			(140,586	)		(705,695	)
Securities		-		-		(88	)		-			(88	)		-
Sales receivable		30,040,087		8,526,015		3,047,913			22,066			3,069,979			2,650,246
Commodities		65		161,571		64			-			64			23,737
Indexes		258		428		252			1			253			420
Interbank market		26,915,505		1,757,606		-			19,790			19,790			1,663
Foreign currency		-		4,066,928		-			-			-			119,768
Fixed rates		684,789		556,521		677,006			-			677,006			555,556
Floating rate		291,422		448,331		289,230			-			289,230			445,725
Securities		2,148,048		1,534,630		2,081,361			2,275			2,083,636			1,503,377
Sales deliverable		1,641,980		13,224,013		(966,235	)		(28,585	)		(994,820	)		(1,476,051	)
Commodities		-		16,817		-			-			-			(42	)
Interbank market		1,641,980		3,246,518		-			(17,624	)		(17,624	)		(198	)
Foreign currency		-		9,960,678		-			-			-			(474,239	)
Fixed rates		-		-		(677,005	)		(8,465	)		(685,470	)		(555,555	)
Floating rate		-		-		(289,230	)		(2,496	)		(291,726	)		(445,725	)
Securities		-		-		-			-			-			(292	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 113

	Memorandum account / Notional amount				Balance sheet account receivable / (received) (payable) / paid			Adjustments to market value (in results / stockholders' equity)			Market value
	09/30/2015		09/30/2014		09/30/2015			09/30/2015			09/30/2015			09/30/2014
Credit derivatives		12,884,725		9,485,172		42,533			(297,037	)		(254,504	)		(3,037	)
Asset position		4,620,316		4,257,057		329,390			312,362			641,752			214,550
Foreign currency		3,549,109		4,485		325,760			263,042			588,802			75
Fixed rate		79,459		3,211,056		3,000			3,736			6,736			190,069
Securities		794,871		782,699		393			40,716			41,109			18,350
Other		196,877		258,817		237			4,868			5,105			6,056
Liability position		8,264,409		5,228,115		(286,857	)		(609,399	)		(896,256	)		(217,587	)
Foreign currency		3,879,537		-		(243,539	)		(310,171	)		(553,710	)		-
Fixed rate		1,489,838		3,686,304		(44,076	)		(47,286	)		(91,362	)		(184,002	)
Securities		2,705,817		1,508,036		733			(241,616	)		(240,883	)		(32,931	)
Other		189,217		33,775		25			(10,326	)		(10,301	)		(654	)
Forwards operations		161,147,716		71,908,639		(512,534	)		25,199			(487,335	)		(643,543	)
Asset position		76,667,782		31,287,715		5,447,117			(80,445	)		5,366,672			861,793
Commodities		228,941		-		53,534			(13,053	)		40,481			-
Indexes		24,446		-		699			-			699			-
Foreign currency		76,275,299		31,257,690		5,390,884			(67,392	)		5,323,492			861,104
Securities		139,096		30,025		2,000			-			2,000			689
Liability position		84,479,934		40,620,924		(5,959,651	)		105,644			(5,854,007	)		(1,505,336	)
Commodities		92,201		-		(16,062	)		748			(15,314	)		-
Indexes		42,416		8,992		(4,129	)		-			(4,129	)		(40	)
Foreign currency		84,232,967		40,611,932		(5,935,339	)		104,896			(5,830,443	)		(1,505,296	)
Securities		112,350		-		(4,121	)		-			(4,121	)		-
Swap with target flow		1,736,944		1,650,717		(553,352	)		24,327			(529,025	)		(175,775	)
Asset position - Interbank market		591,796		754,246		-			-			-			-
Liability position		1,145,148		896,471		(553,352	)		24,327			(529,025	)		(175,775	)
Interbank market		-		52,480		-			-			-			(490	)
Foreign currency		1,145,148		843,991		(553,352	)		24,327			(529,025	)		(175,285	)
Target flow of swap - asset position - foreign currency		1,135,288		907,293		262,147			84,538			346,685			74,092
Other derivative financial instruments		18,773,091		10,410,826		156,567			248,300			404,867			297,944
Asset position		17,483,111		8,707,270		5,110,443			924,415			6,034,858			782,476
Foreign currency		11,298,771		4,536,277		4,797,299			569,877			5,367,176			463,322
Fixed rate		2,135,297		972,239		79,469			71,611			151,080			42,395
Securities		3,790,817		3,156,524		233,769			271,940			505,709			276,202
Other		258,226		42,230		(94	)		10,987			10,893			557
Liability position		1,289,980		1,703,556		(4,953,876	)		(676,115	)		(5,629,991	)		(484,532	)
Foreign currency		291,648		237,699		(4,889,541	)		(646,412	)		(5,535,953	)		(451,691	)
Securities		870,465		1,217,948		(64,213	)		(26,059	)		(90,272	)		(28,361	)
Other		127,867		247,909		(122	)		(3,644	)		(3,766	)		(4,480	)
				Asset		25,201,153			8,321,900			33,523,053			14,495,537
				Liability		(33,981,352	)		(8,364,653	)		(42,346,005	)		(16,203,028	)
				TOTAL		(8,780,199	)		(42,753	)		(8,822,952	)		(1,707,491	)
Derivative contracts mature as follows (in days):
Memorandum account / notional amount	0 - 30		31 - 180		181 - 365			Over 365			09/30/2015			09/30/2014
Futures		132,983,581		221,059,760		55,392,386			195,834,436			605,270,163			343,545,480
Swaps		8,273,816		45,528,655		42,509,195			220,576,497			316,888,163			240,584,601
Options		167,158,746		176,582,816		49,623,694			24,893,403			418,258,659			674,725,526
Forwards (onshore)		3,868,753		13,215,790		10,014,090			5,639,986			32,738,619			33,072,709
Credit derivatives		-		1,315,313		773,910			10,795,502			12,884,725			9,485,172
Forwards (offshore)		48,816,837		80,030,554		21,940,601			10,359,724			161,147,716			71,908,639
Swaps with target flow		-		5,196		-			586,600			591,796			754,246
Target flow of swap		-		9,575		-			1,125,713			1,135,288			907,293
Other derivative financial instruments		30,113		5,994,186		672,842			12,075,950			18,773,091			10,410,826

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 114

II - Derivatives by counterparty

See below the composition of the Derivative Financial Instruments portfolio (assets and liabilities) by type of instrument, stated at cost, market value, and maturity term.

	09/30/2015																					09/30/2014
	Cost		Adjustments to market value (in results / stockholders' equity)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
Asset
Swaps - adjustment receivable		5,944,642		2,262,018			8,206,660		24.6		48,174		75,577		1,041,558		305,094		2,219,324		4,516,933		4,220,330
BM&FBOVESPA		337,844		189,151			526,995		1.6		1,194		2,720		23,895		63,489		109,227		326,470		103,390
Companies		4,457,946		764,181			5,222,127		15.6		39,576		33,288		136,973		128,711		1,373,057		3,510,522		2,619,556
Financial institutions		1,139,633		1,092,337			2,231,970		6.7		5,913		35,640		873,446		112,106		565,104		639,761		1,154,525
Individuals		9,219		216,349			225,568		0.7		1,491		3,929		7,244		788		171,936		40,180		342,859
Option premiums		4,005,298		4,794,569			8,799,867		26.2		1,617,106		1,430,623		3,305,925		1,080,011		504,031		862,171		4,333,066
BM&FBOVESPA		1,947,333		2,135,723			4,083,056		12.2		873,625		736,388		2,191,577		248,296		25,035		8,135		2,025,999
Companies		461,488		1,322,259			1,783,747		5.3		133,288		114,837		330,094		259,002		345,416		601,110		343,488
Financial institutions		1,592,462		1,331,290			2,923,752		8.7		610,006		579,011		783,316		564,913		133,580		252,926		1,963,469
Individuals		4,015		5,297			9,312		0.0		187		387		938		7,800		-		-		110
Forwards (onshore)		4,102,116		24,443			4,126,559		12.3		2,215,537		1,139,516		747,167		18,061		6,257		21		4,009,230
BM&FBOVESPA		2,081,678		22,067			2,103,745		6.3		192,723		1,139,516		747,167		18,061		6,257		21		1,505,390
Companies		346,507		964			347,471		1.0		347,471		-		-		-		-		-		1,821,604
Financial institutions		1,673,931		1,412			1,675,343		5.0		1,675,343		-		-		-		-		-		680,888
Individuals		-		-			-		0.0		-		-		-		-		-		-		1,348
Credit derivatives - Financial institutions		329,390		312,362			641,752		1.9		-		7,290		678		3,754		3,631		626,399		214,550
Forwards (offshore)		5,447,117		(80,445	)		5,366,672		16.0		984,712		863,054		1,794,379		977,175		325,530		421,822		861,793
BM&FBOVESPA		1,718		-			1,718		0.0		1,485		-		233		-		-		-		-
Companies		2,418,451		(84,863	)		2,333,588		7.0		424,286		402,763		475,656		566,629		215,227		249,027		134,064
Financial institutions		3,021,484		3,953			3,025,437		9.0		558,704		456,635		1,317,446		409,554		110,303		172,795		726,780
Individuals		5,464		465			5,929		0.0		237		3,656		1,044		992		-		-		949
Target flow of swap - Companies		262,147		84,538			346,685		1.0		-		2,674		-		-		344,011		-		74,092
Other derivative financial instruments		5,110,443		924,415			6,034,858		18.0		4,352		4,028,163		160,623		49,540		268,440		1,523,740		782,476
Companies		293,583		317,335			610,918		1.8		4,352		19,104		27,091		32,275		228,040		300,056		292,804
Financial institutions		4,816,860		607,080			5,423,940		16.2		-		4,009,059		133,532		17,265		40,400		1,223,684		489,672
Total		25,201,153		8,321,900			33,523,053		100.0		4,869,881		7,546,897		7,050,330		2,433,635		3,671,224		7,951,086		14,495,537
% per maturity term											14.5		22.5		21.0		7.3		11.0		23.7
Total - 09/30/2014		12,375,463		2,120,074			14,495,537		100.0		3,281,115		2,073,845		1,891,086		2,528,185		792,330		3,928,976
% per maturity term											22.6		14.3		13.0		17.4		5.5		27.1

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 115

	09/30/2015																													09/30/2014
	Cost			Adjustments to market value (in results / stockholders' equity)			Market value			%		0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days			Market value
Liabilities
Futures - BM&FBOVESPA		(362,121	)		247,619			(114,502	)		0.3		268,186			(4,261	)		(113,910	)		(14,063	)		(49,372	)		(201,082	)		(119,908	)
Swaps - difference payable		(15,759,337	)		(2,263,319	)		(18,022,656	)		42.7		(948,207	)		(1,232,599	)		(926,916	)		(1,432,490	)		(2,585,648	)		(10,896,796	)		(7,663,946	)
BM&FBOVESPA		(835,192	)		(634,324	)		(1,469,516	)		3.6		(162,214	)		(109,355	)		(81,338	)		(163,615	)		(296,078	)		(656,916	)		(375,890	)
Companies		(7,929,854	)		224,512			(7,705,342	)		18.2		(636,898	)		(1,050,968	)		(731,016	)		(732,728	)		(1,388,950	)		(3,164,782	)		(3,003,887	)
Financial institutions		(1,586,138	)		(1,787,996	)		(3,374,134	)		8.0		(141,834	)		(62,089	)		(78,728	)		(437,880	)		(428,293	)		(2,225,310	)		(1,179,168	)
Individuals		(5,408,153	)		(65,511	)		(5,473,664	)		12.9		(7,261	)		(10,187	)		(35,834	)		(98,267	)		(472,327	)		(4,849,788	)		(3,105,001	)
Option premiums		(4,085,720	)		(5,164,825	)		(9,250,545	)		21.8		(1,900,057	)		(1,772,438	)		(2,984,648	)		(1,197,117	)		(668,171	)		(728,114	)		(3,592,019	)
BM&FBOVESPA		(1,542,609	)		(2,356,023	)		(3,898,632	)		9.2		(991,532	)		(912,741	)		(1,585,832	)		(383,514	)		(14,959	)		(10,054	)		(1,132,422	)
Companies		(232,650	)		(463,209	)		(695,859	)		1.6		(41,416	)		(33,347	)		(155,399	)		(116,091	)		(163,949	)		(185,657	)		(306,767	)
Financial institutions		(2,302,499	)		(2,345,500	)		(4,647,999	)		11.0		(867,109	)		(825,557	)		(1,241,989	)		(693,591	)		(489,165	)		(530,588	)		(2,151,202	)
Individuals		(7,962	)		(93	)		(8,055	)		-		-			(793	)		(1,428	)		(3,921	)		(98	)		(1,815	)		(1,628	)
Forwards (onshore)		(2,020,438	)		(28,585	)		(2,049,023	)		4.8		(2,049,023	)		-			-			-			-			-			(2,443,925	)
BM&FBOVESPA		-			(17,625	)		(17,625	)		-		(17,625	)		-			-			-			-			-			(198	)
Companies		(360,457	)		(2,041	)		(362,498	)		0.9		(362,498	)		-			-			-			-			-			(1,816,615	)
Financial institutions		(1,659,981	)		(8,919	)		(1,668,900	)		3.9		(1,668,900	)		-			-			-			-			-			(627,112	)
Credit derivatives		(286,857	)		(609,399	)		(896,256	)		2.1		-			(4,614	)		(30,423	)		(21,390	)		(70,523	)		(769,306	)		(217,587	)
Companies		-			-			-			-		-			-			-			-			-			-			(11,802	)
Financial institutions		(286,857	)		(609,399	)		(896,256	)		2.1		-			(4,614	)		(30,423	)		(21,390	)		(70,523	)		(769,306	)		(205,785	)
Forwards (offshore)		(5,959,651	)		105,644			(5,854,007	)		13.8		(1,323,940	)		(1,470,739	)		(1,615,250	)		(835,347	)		(416,858	)		(191,873	)		(1,505,336	)
BM&FBOVESPA		(1,668	)		-			(1,668	)		-		(1,335	)		-			(333	)		-			-			-			-
Companies		(3,593,993	)		84,956			(3,509,037	)		8.3		(700,239	)		(918,400	)		(819,705	)		(595,478	)		(293,304	)		(181,911	)		(190,782	)
Financial institutions		(2,349,299	)		20,354			(2,328,945	)		5.5		(621,117	)		(547,907	)		(786,573	)		(239,832	)		(123,554	)		(9,962	)		(1,310,153	)
Individuals		(14,691	)		334			(14,357	)		-		(1,249	)		(4,432	)		(8,639	)		(37	)		-			-			(4,401	)
Swaps with target flow - Companies		(553,352	)		24,327			(529,025	)		1.2		-			(4,530	)		-			-			(326,302	)		(198,193	)		(175,775	)
Other derivative financial instruments		(4,953,876	)		(676,115	)		(5,629,991	)		13.3		(339	)		(4,138,898	)		(137,355	)		(25,785	)		(9,931	)		(1,317,683	)		(484,532	)
Companies		(142,824	)		(673,282	)		(816,106	)		1.9		(339	)		(556	)		(3,940	)		(10,135	)		(9,931	)		(791,205	)		(173,521	)
Financial institutions		(4,811,052	)		(2,833	)		(4,813,885	)		11.4		-			(4,138,342	)		(133,415	)		(15,650	)		-			(526,478	)		(311,011	)
Total		(33,981,352	)		(8,364,653	)		(42,346,005	)		100.0		(5,953,380	)		(8,628,079	)		(5,808,502	)		(3,526,192	)		(4,126,805	)		(14,303,047	)		(16,203,028	)
% per maturity term													14.1			20.4			13.7			8.3			9.7			33.8
Total - 09/30/2014		(14,516,452	)		(1,686,576	)		(16,203,028	)		100.0		(2,748,281	)		(2,206,878	)		(1,710,262	)		(1,862,089	)		(1,169,852	)		(6,505,666	)
% per maturity term													17.0			13.6			10.6			11.5			7.2			40.2

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 116

III - Derivatives by notional amount

See below the composition of the Derivative Financial Instruments portfolio by type of instrument, stated at their notional amounts, per trading location (organized or over-the-counter market) and counterparties.

	09/30/2015
	Futures		Swaps		Options		Forwards (onshore)		Credit derivatives		Forwards (offshore)		Swap with  target flow		Target flow of swap		Other derivative financial  instruments
BM&FBOVESPA		442,148,184		29,201,231		222,065,928		30,706,324		-		-		-		-		-
Over-the-counter market		163,121,979		287,686,932		196,192,731		2,032,295		12,884,725		161,147,716		591,796		1,135,288		18,773,091
Financial institutions		158,210,956		146,481,123		171,670,070		1,683,893		12,884,725		122,066,184		-		-		9,827,196
Companies		4,911,023		71,696,048		24,143,907		348,402		-		38,818,239		591,796		1,135,288		8,945,895
Individuals		-		69,509,761		378,754		-		-		263,293		-		-		-
Total		605,270,163		316,888,163		418,258,659		32,738,619		12,884,725		161,147,716		591,796		1,135,288		18,773,091
Total – 09/30/2014		343,545,480		240,584,601		674,725,526		33,072,709		9,485,172		71,908,639		754,246		907,293		10,410,826

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 117

IV - Credit derivatives

See below the composition of the Credit Derivatives (assets and liabilities) portfolio stated at notional amount, and their effect on calculation of Required Referential Equity.

	09/30/2015								09/30/2014
	Notional amount of credit protection sold			Notional amount of credit protection purchased with identical underlying amount		Net position			Notional amount of credit protection sold			Notional amount of credit protection purchased with identical underlying amount		Net position
Credit swaps		(9,050,140	)		3,834,585		(5,215,555	)		(6,152,362	)		1,791,298		(4,361,064	)
Total return rate swaps		-			-		-			(1,541,510	)		-		(1,541,510	)
Total		(9,050,140	)		3,834,585		(5,215,555	)		(7,693,872	)		1,791,298		(5,902,574	)

The effect on the referential equity (Note 3) was R$ 461,255 (R$ 291,881 at 09/30/2014).

During the period, there was no occurrence of a credit event as defined in the agreements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 118

V - Accounting hedge

The effectiveness computed for the hedge portfolio was in conformity with the provisions of BACEN Circular No. 3,082 of January 30, 2002, and the following accounting hedge structures are established:

I) Cash flow -the purpose of this hedge of ITAÚ UNIBANCO HOLDING CONSOLIDATED is to hedge cash flows of interest receipt and payment (CDB / Redeemable Preferred Shares / Syndicated Loans / Assets Transactions) and exposures to future exchange rate (anticipated transactions and unrecognized firm commitments) related to its variable interest rate risk (CDI / LIBOR), and foreign exchange rate risk, making the cash flow constant (fixed rate) and regardless of the variations of DI Cetip Over and LIBOR and foreign exchange rate.

	09/30/2015							09/30/2014
	Hedge Instrument					Hedge assets		Hedge Instruments					Hedge assets
Strategies	Nominal value		Adjustment to market value (*)			Book value		Nominal value		Adjustment to market value (*)			Book value
Hedge of deposits and securities purchased under agreements to resell		73,576,405		3,289,857			79,409,372		56,003,471		402,842			56,044,809
Hedge of preferred shares		-		-			-		963,419		50,854			963,419
Hedge of syndicated loan		8,343,090		(134,562	)		8,343,090		-		-			-
Hedge of highly probable forecast transactions		1,446,136		12,891			1,446,136		75,302		(6,319	)		76,760
Hedge of assets transactions		7,405,168		(247,064	)		7,634,128		-		-			-
Total		90,770,799		2,921,122			96,832,726		57,042,192		447,377			57,084,988

(*) Recorded in Stockholders’ Equity under heading Asset Valuation Adjustments.

The gains or losses related to the accounting hedge of cash flows that we expect to recognize in Results in the following 12 months amount to R$ 582,569 (R$ (201,818) at September 30, 2014).

To hedge future cash flows of highly probable forecast transactions, arising from futures contracts in foreign currency, against the exposure to future interest rate, ITAÚ UNIBANCO HOLDING CONSOLIDATED negotiated DDI Futures contracts on BM&FBOVESPA and NDF (Non Deliverable Forward) contracts traded in the over-the-counter market. During the second quarter of 2015, part of the flow of these agreements was realized, and , accordingly, Asset Valuation Adjustment was reclassified and included in the deemed cost of assets related to Hedge of Highly Probable Forecast Transaction.

To hedge future cash flows of futures receipts and payments against exposure to variable interest rate (CDI / LIBOR), ITAÚ UNIBANCO HOLDING CONSOLIDATED negotiated DI futures contracts on BM&FBOVESPA, interest rate swap and Futures Euro-Dollar on Chicago Stock Exchange.

II) Market risk – The hedging strategy against market risk of ITAÚ UNIBANCO HOLDING CONSOLIDATED consists of hedging the exposure to variation in market risk, in interest receipt, which are attributable to changes in interest rates related to recognized assets and liabilities.

	09/30/2015
	Hedge instrument				Hedge assets
Strategies	Nominal value		Adjustment to market value (*)		Nominal value		Adjustment to market value (*)
Hedge of loans		4,166,687		103,482		4,166,687		100,124
Hedge of structured funding		794,580		395		794,580		510
Total		4,961,267		103,877		4,961,267		100,634

	09/30/2014
	Hedge instrument					Hedge assets
Strategies	Nominal value		Adjustment to market value (*)			Nominal value		Adjustment to market value (*)
Hedge of loans		2,206,986		48,093			2,206,986		64,182
Hedge of structured funding		490,200		(439	)		490,200		460
Total		2,697,186		47,654			2,697,186		64,642

(*) Recorded under heading Results from Securities and Derivative Financial Instruments.

To hedge the variation in market risk in interest receipt, ITAÚ UNIBANCO HOLDING uses interest rate swap contracts. Hedge assets and liabilities are related to fixed-rate expressed in unidad de fomento (CLF) and denominated in euros and U.S. dolar, issued by subsidiaries in Chile and London, respectively and with maturities between 2016 and 2030.

Receipts (payments) of interest flows are expected to occur and will affect the statement of income in monthly periods.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 119

III) Hedge of net investment in foreign operations – ITAÚ UNIBANCO HOLDING CONSOLIDATED strategy of net investments in foreign operations consist of a hedge of the exposure in foreign currency arising from the functional currency of foreign operations, compared to the functional currency of the head office.

	09/30/2015							09/30/2014
	Hedge instrument					Hedge assets		Hedge instrument				Hedge assets
Strategies	Nominal value		Adjustment to market value (*)			Nominal value		Nominal value		Adjustment to market value (*)		Nominal value
Hedge of net investment in foreign operations (*)		23,005,988		(6,653,873	)		13,356,871		13,696,902		72,920		8,217,977
Total		23,005,988		(6,653,873	)		13,356,871		13,696,902		72,920		8,217,977

(*) Recorded in Stockholders’ Equity under heading Asset Valuation Adjustments.

To hedge the changes of future cash flows of exchange variation of net investments in foreign operations, ITAÚ UNIBANCO HOLDING CONSOLIDATED uses DDI Futures contracts traded on BM&FBOVESPA, Financial Assets and Forward contracts or NDF contracts entered into by our subsidiaries abroad.

Receipts (payments) of interest flows are expected to occur and will affect the statement of income upon the total or partial disposal of investments.

IV) We present below the maturity terms of cash flow hedge and market risk hedge strategies:

09/30/2015																	09/30/2014
Maturity term	Hedge of highly probable anticipated transaction / firm commitments		Hedge of deposits and securities purchased under agreements to resell		Hedge of loans		Hedge of structured funding		Hedge of net investment in foreign operations		Hedge of syndicated loan		Hedge of assets transactions		Total		Total
2014		-		-		-		-		-		-		-		-		16,095,926
2015		-		873,871		-		-		23,005,988		-		-		23,879,859		14,942,178
2016		1,446,136		14,401,168		354,939		794,580		-		-		-		16,996,823		9,050,790
2017		-		27,444,489		288,388		-		-		8,343,090		4,627,345		40,703,312		14,049,522
2018		-		23,956,692		518,480		-		-		-		2,777,823		27,252,995		17,422,023
2019		-		5,464,210		913,767		-		-		-		-		6,377,977		603,731
2020		-		859,705		91,161		-		-		-		-		950,866		34,641
2021		-		576,270		-		-		-		-		-		576,270		24,379
2022		-		-		212,344		-		-		-		-		212,344		166,781
2023		-		-		204,505		-		-		-		-		204,505		158,707
2025		-		-		52,430		-		-		-		-		52,430		39,621
2027		-		-		190,261		-		-		-		-		190,261		141,926
2028		-		-		578,981		-		-		-		-		578,981		430,000
2029		-		-		466,345		-		-		-		-		466,345		276,055
2030		-		-		295,086		-		-		-		-		295,086		-
Total		1,446,136		73,576,405		4,166,687		794,580		23,005,988		8,343,090		7,405,168		118,738,054		73,436,280

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 120

h) Changes in adjustment to unrealized ^(*) market value for the period

	01/01 to 09/30/2015			01/01 to 09/30/2014
Opening balance		489,912			(2,016,483	)
Adjustments with impact on:
Results		(1,169,501	)		368,946
Trading securities		(759,325	)		501,865
Derivative financial instruments		(410,176	)		(132,919	)
Stockholders’ equity		(7,384,948	)		1,846,237
Available-for-sale		(2,697,196	)		1,558,630
Accounting hedge – derivative financial instruments		(4,687,752	)		287,607
Futures		(4,621,878	)		258,595
Swap		(65,874	)		29,012
Closing balance		(8,064,537	)		198,700
Adjustment to market value		(8,064,537	)		198,700
Trading securities		(1,063,350	)		(329,281	)
Available-for-sale securities		(3,225,683	)		(374,960	)
Derivative financial instruments		(3,775,504	)		902,941
Trading securities		(42,753	)		382,644
Accounting hedge		(3,732,751	)		520,297
Futures		(3,732,751	)		469,443
Swap		-			50,854

(*) The term unrealized in the context of Circular nº. 3.068 of 11/08/2001, of the Central Bank means not converted into cash.

i) Realized gain of securities portfolio and derivatives financial instruments and foreign exchange variation on investments abroad

	01/01 to 09/30/2015			01/01 to 09/30/2014
Gain (loss) – trading securities		(2,496,498	)		238,027
Gain (loss) – available-for-sale securities		(1,189,908	)		(416,429	)
Gain (loss) – derivatives		3,336,240			304,421
Gain (loss) – foreign exchange variation on investments abroad		20,852,984			1,302,865
Total		20,502,818			1,428,884

During the periods ended September 30, 2015 and September 30, 2014, ITAÚ UNIBANCO HOLDING did not recognize impairment losses for Held-to-Maturity Financial Assets.

During the period ended September 30, 2015, ITAÚ UNIBANCO HOLDING recognized R$ 1,369,700 as impairment losses for Available-for-Sale Financial Assets, recorded in the statement of income in the line "Net gain (loss) from investment securities and derivatives".

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 121

j) Sensitivity analysis (trading and banking portfolios)

In compliance with CVM Instruction No. 475, ITAÚ UNIBANCO HOLDING CONSOLIDATED carried out a sensitivity analysis by market risk factors considered relevant to which it was exposed. The biggest losses arising, by risk factor, in each scenario, were stated with impact on result, net of tax effects, by providing a vision of the ITAÚ UNIBANCO HOLDING CONSOLIDATED exposure under exceptional scenarios.

The sensitivity analyses of the non-trading and the trading portfolio shown in this report are an evaluation of a static position of the portfolio exposure and, therefore, do not consider the management’s quick response capacity (treasury and control areas), which triggers risk mitigating measures, whenever a situation of high loss or risk is identified by minimizing the sensitivity towards significant losses. In addition, the study's sole purpose is to disclose the exposure to risks and the respective protective actions, taking into account the fair value of financial instruments, irrespective of the accounting practices adopted by the ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Trading portfolio	Exposures	09/30/2015 (*)
		Scenarios
Risk factors	Risk of variation in:	I			II			III
Interest Rate	Fixed Income Interest Rates in reais		(202	)		(88,318	)		(171,510	)
Foreign Exchange Linked	Foreign Exchange Linked Interest Rates		60			(9,206	)		(17,938	)
Foreign Exchange Rates	Prices of Foreign Currencies		603			(115,661	)		(182,396	)
Price Index Linked	Interest of Inflation coupon		(82	)		(10,926	)		(14,331	)
TR	TR Linked Interest Rates		(0	)		(6	)		(13	)
Equities	Prices of Equities		(162	)		11,695			2,273
Total			217			(212,422	)		(383,915	)

(*) Amounts net of tax effects.

Trading and Banking portfolios	Exposures	09/30/2015 (*)
		Scenarios
Risk factors	Risk of variation in:	I			II			III
Interest Rate	Fixed Income Interest Rates in reais		(3,285	)		(1,250,039	)		(2,392,285	)
Foreign Exchange Linked	Foreign Exchange Linked Interest Rates		294			(28,258	)		(52,881	)
Foreign Exchange Rates	Prices of Foreign Currencies		1,823			(144,062	)		(234,917	)
Price Index Linked	Interest of Inflation coupon		(1,031	)		(193,732	)		(390,824	)
TR	TR Linked Interest Rates		859			(293,191	)		(670,099	)
Equities	Prices of Equities		2,688			(53,923	)		(128,812	)
Total			1,348			(1,963,205	)		(3,869,818	)

(*) Amounts net of tax effects.

The following scenarios are used to measure the sensitivity:

· Scenario I: Shocks of 1 base point in interest rates and associated indexes, and 1 percentage point in currency and share prices;

· Scenario II: Shocks of 25 percent in interest fixed rates, currency coupon, inflation, interest rate indexes and currency and share prices, both for growth and fall, considering the largest resulting losses per risk factor;

· Scenario III: Shocks of 50 percent in interest fixed rates, currency coupon, inflation, interest rate indexes and currency and share prices, both for growth and fall, considering the largest resulting losses per risk factor.

Derivative financial instruments engaged by ITAÚ UNIBANCO HOLDING CONSOLIDATED are shown in the item Derivative financial instruments in this note.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 122

Note 8 - Loan, lease and other credit operations

a) Composition of the portfolio with credit granting characteristics

I – By type of operations and risk level

	09/30/2015																				09/30/2014
Risk levels	AA		A		B		C		D		E		F		G		H		Total		Total
Loan operations		239,502,998		80,516,218		35,948,123		14,657,082		12,677,682		3,802,547		2,706,777		3,809,634		9,951,667		403,572,728		354,437,878
Loans and discounted trade receivables		91,859,644		70,314,357		27,785,716		10,499,136		9,092,838		2,982,261		2,437,749		3,402,359		8,577,379		226,951,439		194,879,684
Financing		87,269,546		8,582,774		6,030,279		2,778,362		3,258,932		656,246		223,697		212,435		1,272,340		110,284,611		106,477,038
Farming and agribusiness financing		7,971,064		938,362		637,154		191,610		59,728		56,137		3,411		1,941		31,258		9,890,665		7,956,832
Real estate financing		52,402,744		680,725		1,494,974		1,187,974		266,184		107,903		41,920		192,899		70,690		56,446,013		45,124,324
Lease operations		3,141,739		747,191		631,232		264,087		107,492		49,566		24,892		29,044		104,740		5,099,983		7,093,819
Credit card operations		-		47,617,696		4,791,699		1,829,553		818,959		643,172		632,662		595,819		3,007,518		59,937,078		57,672,783
Advance on exchange contracts (1)		2,494,587		491,513		258,451		214,140		83,918		46,442		-		2,723		100,808		3,692,582		3,616,270
Other sundry receivables (2)		960,517		2,971,652		1,125		12,450		4,121		9,225		5,762		2,628		928,643		4,896,123		6,010,909
Total operations with credit granting characteristics		246,099,841		132,344,270		41,630,630		16,977,312		13,692,172		4,550,952		3,370,093		4,439,848		14,093,376		477,198,494		428,831,659
Endorsements and sureties (3)																				75,143,222		74,513,600
Total with endorsements and sureties		246,099,841		132,344,270		41,630,630		16,977,312		13,692,172		4,550,952		3,370,093		4,439,848		14,093,376		552,341,716		503,345,259
Total – 09/30/2014		216,075,618		128,747,178		36,182,911		15,582,038		8,230,978		5,261,772		3,013,231		3,669,082		12,068,851		428,831,659

(1) Includes Advances on exchange contracts and Income receivable from advances granted, reclassified from Liabilities – Foreign exchange portfolio / Other receivables (Note 2a);

(2) Includes Securities and credits receivable, Debtors for purchase of assets and Endorsements and sureties paid;

(3) Recorded in Memorandum Accounts.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 123

II – By maturity and risk level

	09/30/2015																													09/30/2014
	AA		A			B			C			D			E			F			G			H			Total			Total
	Overdue Operations (1) (2)
Falling due installments		-		-			2,559,108			2,281,225			1,715,333			1,408,499			1,083,053			1,163,650			3,700,504			13,911,372			12,976,226
01 to 30		-		-			167,883			124,435			139,861			68,106			52,708			53,579			182,228			788,800			673,946
31 to 60		-		-			130,561			97,271			66,743			44,879			38,559			41,466			144,071			563,550			573,626
61 to 90		-		-			132,728			101,763			71,826			48,312			41,179			44,874			160,971			601,653			580,653
91 to 180		-		-			278,090			267,976			191,492			128,282			109,412			121,953			417,015			1,514,220			1,646,080
181 to 365		-		-			370,797			435,349			306,033			238,441			191,597			353,733			714,903			2,610,853			2,809,297
Over 365		-		-			1,479,049			1,254,431			939,378			880,479			649,598			548,045			2,081,316			7,832,296			6,692,624
Overdue installments		-		-			898,502			972,092			1,062,967			1,039,019			1,203,753			2,415,232			7,415,744			15,007,309			11,019,855
01 to 14		-		-			7,611			62,437			33,805			24,301			29,437			23,397			73,212			254,200			238,037
15 to 30		-		-			871,460			171,381			114,176			86,984			65,990			66,525			236,194			1,612,710			1,304,522
31 to 60		-		-			19,431			706,752			251,317			140,621			171,430			1,173,636			262,105			2,725,292			1,441,296
61 to 90		-		-			-			19,464			622,965			124,322			162,195			116,612			396,685			1,442,243			1,132,915
91 to 180		-		-			-			12,058			40,704			648,248			743,241			1,004,679			1,595,212			4,044,142			3,013,351
181 to 365		-		-			-			-			-			14,543			31,460			30,383			4,791,144			4,867,530			3,807,661
Over 365		-		-			-			-			-			-			-			-			61,192			61,192			82,073
Subtotal		-		-			3,457,610			3,253,317			2,778,300			2,447,518			2,286,806			3,578,882			11,116,248			28,918,681			23,996,081
Specific allowance		-		-			(34,576	)		(97,599	)		(277,830	)		(734,255	)		(1,143,403	)		(2,505,220	)		(11,116,248	)		(15,909,131	)		(13,116,826	)
Subtotal - 09/30/2014		-		-			2,879,067			3,012,491			2,181,182			2,164,719			1,842,121			2,358,116			9,558,385			23,996,081
		Non-overdue operations
Falling due installments		245,644,195		131,325,785			37,720,498			13,570,958			10,834,862			2,067,898			1,056,139			840,977			2,938,915			446,000,227			403,062,667
01 to 30		16,683,019		30,365,479			5,899,450			4,008,426			3,982,809			460,172			124,069			122,161			384,881			62,030,466			56,004,769
31 to 60		17,683,939		13,389,426			3,891,514			980,587			493,841			75,326			45,302			33,561			164,729			36,758,225			32,301,926
61 to 90		10,762,116		9,164,112			2,733,285			699,123			267,265			63,657			36,721			26,830			352,748			24,105,857			25,031,456
91 to 180		24,283,900		16,025,447			5,209,894			1,212,267			662,973			155,119			78,166			57,951			332,141			48,017,858			47,150,474
181 to 365		33,888,664		17,080,768			5,741,507			1,852,252			1,111,520			209,769			146,582			100,949			299,744			60,431,755			57,453,181
Over 365		142,342,557		45,300,553			14,244,848			4,818,303			4,316,454			1,103,855			625,299			499,525			1,404,672			214,656,066			185,120,861
Overdue up to 14 days		455,646		1,018,485			452,522			153,037			79,010			35,536			27,148			19,989			38,213			2,279,586			1,772,911
Subtotal		246,099,841		132,344,270			38,173,020			13,723,995			10,913,872			2,103,434			1,083,287			860,966			2,977,128			448,279,813			404,835,578
Generic allowance		-		(661,720	)		(381,730	)		(411,720	)		(1,091,387	)		(631,030	)		(541,644	)		(602,676	)		(2,977,128	)		(7,299,035	)		(6,924,051	)
Subtotal - 09/30/2014		216,075,618		128,747,178			33,303,844			12,569,547			6,049,796			3,097,053			1,171,110			1,310,966			2,510,466			404,835,578
Grand total		246,099,841		132,344,270			41,630,630			16,977,312			13,692,172			4,550,952			3,370,093			4,439,848			14,093,376			477,198,494			428,831,659
Existing allowance		-		(661,720	)		(416,306	)		(509,319	)		(6,152,970	)		(4,550,497	)		(3,369,756	)		(4,439,406	)		(14,093,376	)		(34,193,350	)		(25,257,844	)
Minimum allowance required		-		(661,720	)		(416,306	)		(509,319	)		(1,369,217	)		(1,365,285	)		(1,685,047	)		(3,107,896	)		(14,093,376	)		(23,208,166	)		(20,040,877	)
Additional allowance (3)		-		-			-			-			(4,783,753	)		(3,185,212	)		(1,684,709	)		(1,331,510	)		-			(10,985,184	)		(5,216,967	)
Grand total - 09/30/2014		216,075,618		128,747,178			36,182,911			15,582,038			8,230,978			5,261,772			3,013,231			3,669,082			12,068,851			428,831,659
Existing allowance		-		(643,736	)		(361,829	)		(1,284,525	)		(2,490,867	)		(2,630,360	)		(2,108,960	)		(3,668,716	)		(12,068,851	)		(25,257,844	)
Minimum allowance required		-		(643,736	)		(361,829	)		(467,461	)		(845,495	)		(1,578,532	)		(1,506,615	)		(2,568,358	)		(12,068,851	)		(20,040,877	)
Additional allowance (3)		-		-			-			(817,064	)		(1,645,372	)		(1,051,828	)		(602,345	)		(1,100,358	)		-			(5,216,967	)

(1) Operations with overdue installments for more than 14 days or under control of administrators or in bankruptcy processcompanies.

(2) The balance of non-accrual operations amounts to R$ 18,909,551 (R$ 16,528,645 at 09/30/2014).

(3) Allocated to each level of risk in order to explain the additional volume.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 124

III – By business sector

	09/30/2015		%			09/30/2014		%
Public Sector		3,195,853		0.7	%		4,085,238		1.0	%
Energy		133,342		0.0	%		51,778		0.0	%
Petrochemical and chemical		2,797,432		0.6	%		3,804,408		0.9	%
Sundry		265,079		0.1	%		229,052		0.1	%
Private sector		474,002,641		99.3	%		424,746,421		99.0	%
Companies		262,552,081		55.0	%		229,218,537		53.5	%
Sugar and alcohol		10,534,030		2.2	%		9,358,534		2.2	%
Agribusiness and fertilizers		15,373,744		3.2	%		13,323,708		3.1	%
Food and beverage		12,123,542		2.5	%		11,242,553		2.6	%
Banks and other financial institutions		6,362,785		1.3	%		5,078,911		1.2	%
Capital assets		7,293,930		1.5	%		8,746,566		2.0	%
Pulp and paper		3,329,386		0.7	%		3,203,091		0.7	%
Publishing and printing		1,029,471		0.2	%		1,017,642		0.2	%
Electronic and IT		4,155,525		0.9	%		4,390,820		1.0	%
Packaging		2,838,627		0.6	%		2,223,301		0.5	%
Energy and sewage		7,180,694		1.5	%		6,946,563		1.6	%
Education		1,371,067		0.3	%		1,171,283		0.3	%
Pharmaceuticals and cosmetics		4,287,370		0.9	%		4,247,934		1.0	%
Real estate agents		19,779,427		4.1	%		17,533,341		4.1	%
Entertainment and tourism		3,970,668		0.8	%		3,624,229		0.8	%
Wood and furniture		3,026,801		0.6	%		2,980,412		0.7	%
Construction material		6,029,016		1.3	%		5,166,270		1.2	%
Steel and metallurgy		11,502,222		2.4	%		8,738,310		2.0	%
Media		1,143,135		0.2	%		1,401,902		0.3	%
Mining		5,207,508		1.1	%		3,690,334		0.9	%
Infrastructure work		4,869,187		1.0	%		4,749,229		1.1	%
Oil and gas (*)		5,565,821		1.2	%		4,223,387		1.0	%
Petrochemical and chemical		7,707,545		1.6	%		6,262,651		1.5	%
Health care		2,064,969		0.4	%		1,732,497		0.4	%
Insurance and reinsurance and pension plans		2,161		0.0	%		2,501		0.0	%
Telecommucations		1,149,985		0.2	%		1,385,094		0.3	%
Third sector		3,830,423		0.8	%		2,589,723		0.6	%
Trading		1,881,820		0.4	%		1,787,312		0.4	%
Transportation		15,654,909		3.3	%		16,930,985		3.9	%
Domestic appliances		2,098,021		0.4	%		2,396,834		0.6	%
Vehicles and autoparts		16,517,590		3.5	%		14,147,785		3.3	%
Clothing and shoes		5,044,411		1.1	%		4,889,557		1.1	%
Commerce - sundry		15,060,096		3.2	%		13,002,210		3.0	%
Industry - sundry		9,439,114		2.0	%		6,439,205		1.5	%
Sundry services		28,904,388		6.1	%		21,970,796		5.1	%
Sundry		16,222,693		3.4	%		12,623,067		2.9	%
Individuals		211,450,560		44.3	%		195,527,884		45.5	%
Credit cards		59,052,887		12.4	%		56,806,599		13.1	%
Real estate financing		44,226,725		9.3	%		34,249,500		8.0	%
Consumer loans / overdraft		83,720,985		17.5	%		70,320,493		16.4	%
Vehicles		24,449,963		5.1	%		34,151,292		8.0	%
Grand total		477,198,494		100.0	%		428,831,659		100.0	%

(*) Comprises trade of fuel.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 125

b) Credit concentration

	09/30/2015				09/30/2014
Loan, lease and other credit operations (*)	Risk		% of total		Risk		% of total
Largest debtor		5,098,984		0.9		5,127,903		1.0
10 largest debtors		35,256,855		6.4		31,241,556		6.2
20 largest debtors		54,978,146		10.0		51,163,961		10.2
50 largest debtors		92,309,860		16.7		84,618,403		16.8
100 largest debtors		124,462,018		22.5		114,083,431		22.7

(*) The amounts include endorsements and sureties.

	09/30/2015				09/30/2014
Loan, lease and other credit operations and securities of companies and financial institutions (*)	Risk		% of total		Risk		% of total
Largest debtor		8,014,203		1.2		5,379,457		0.9
10 largest debtors		52,285,015		7.9		39,202,910		6.7
20 largest debtors		83,504,571		12.7		65,772,231		11.3
50 largest debtors		138,993,478		21.1		113,885,124		19.6
100 largest debtors		184,121,038		27.9		152,506,792		26.2

(*) The amounts include endorsements and sureties.

c) Changes in allowance for loan losses

	01/01 to 09/30/2015			01/01 to 09/30/2014
Opening balance		(26,947,986	)		(26,371,185	)
Net increase for the period		(21,330,552	)		(13,501,190	)
Required by Resolution No. 2,682/99		(16,675,629	)		(13,501,190	)
Additional (4)		(4,654,923	)		-
Transfer of financial assets		1,027,897			-
Write-Off		13,057,291			14,614,531
Closing balance (1)		(34,193,350	)		(25,257,844	)
Required by Resolution No. 2,682/99		(23,208,166	)		(20,040,877	)
Specific allowance (2)		(15,909,131	)		(13,116,826	)
Generic allowance (3)		(7,299,035	)		(6,924,051	)
Additional allowance (4)		(10,985,184	)		(5,216,967	)

(1) The allowance for loan losses related to the lease portfolio amounts to: R$ (181,223) (R$ (402,817) at September 30, 2014).

(2) Operations with overdue installments for more than 14 days or under responsibility of administrators or in bankruptcy process companies.

(3) For operations not covered in the previous item due to the classification of the client or operation.

(4) Refers to the provision in excess of the minimum required percentage by CMN Resolution No. 2,682 of December 21, 1999.

At September 30, 2015, the balance of the allowance in relation to the loan portfolio is equivalent to 7,2% (5.9% at September 30, 2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 126

d) Recovery and renegotiation of credits

I - Composition of the result of allowance for loan losses

	01/01 to 09/30/2015			01/01 to 09/30/2014
Expenses for allowance for loan losses		(21,330,552	)		(13,501,190	)
Income from recovery of credits written off as loss		3,287,573			3,718,831
Result of allowance for loan losses (*)		(18,042,979	)		(9,782,359	)

(*) The amounts related to the lease portfolio from 01/01 to 09/30/2015 are: Expenses for allowance for loan losses R$ (96,710) (R$ (183,571) from 01/01 to 09/30/2014) and Income from recovery of credits written off as loss R$ 102,042 (R$ 172,460 from 01/01 to 09/30/2014).

II - Renegotiated loan operations

	09/30/2015									09/30/2014
	Portfolio (1)			Allowance for Loan Losses			%			Portfolio (1)			Allowance for Loan Losses			%
Amended Credit Agreements		21,902,414			(7,067,587	)		32.3	%		17,378,538			(6,905,576	)		39.7	%
(-) Amended Operations non-overdue (2)		(8,361,567	)		1,359,279			16.3	%		(5,157,394	)		1,033,515			20.0	%
Renegotiated loan operations		13,540,847			(5,708,308	)		42.2	%		12,221,144			(5,872,061	)		48.0	%

(1) The amounts related to reagreed loans the lease portfolio are R$ 120,395 (R$ 327,915 at September 30, 2014).

(2) Resulting from non-overdue transations or with a delay of less than 30 days, reflex of changes in the original contractual terms.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 127

e) Restricted operations on assets

See below the information related to the restricted operations on assets, in accordance with CMN Resolution No. 2,921, of January 17, 2002.

	09/30/2015										01/01 to 09/30/2015			09/30/2014		01/01 to 09/30/2014
	0 - 30		31 - 180		181 - 365		Over 365 days		Total		Income (expenses)			Total		Income (expenses)
Restricted operations on assets
Loan operations		-		-		8,005		291,059		299,064		97,239			266,915		20,967
Liabilities - restricted operations on assets
Foreign borrowings through securities		1,449		193		-		246,772		248,414		(89,766	)		266,892		(20,940	)
Net revenue from restricted operations												7,473					27

At September 30, 2015, and September 30, 2014 there were no balances in default.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 128

f) Operations of sale or transfers and acquisitions of financial assets

I - Credit assignments (transfers of receivables) carried out through December 2011 were recorded in accordance with current regulation together with income recognition at the time of the assignment, regardless of the risks and benefits being retained or not.

In compliance with CMN Resolution No. 3,809, of October 28, 2009, the amount of operations assigned with joint obligation, at September 30, 2015 where the entity significantly retained the related risks and benefits is R$ 182,672 (R$ 239,365 at 09/30/2014), composed of real estate financing of R$ 169,407 (R$ 224,132 at 09/30/2014) and farming financing of R$ 13,265 (R$ 15,233 at 09/30/2014).

II- Beginning January 2012, as provided for by CMN Resolution No. 3,533, of January 31, 2008 and supplementary regulation, accounting records take into consideration the retention or non-retention of risks and benefits on sale or transfers of financial assets.

ITAÚ UNIBANCO HOLDING CONSOLIDATED carried out operations for sale or transfer of financial assets in which there was retention of credit risks of financial assets transferred. Therefore, such credits continue to be recorded as credit operations totaling R$ 5,591,079 at September 30, 2015. The operations are composed of: real estate financing in which the amount recorded as assets R$ 2,765,237 and a fair value of R$ 2,745,410 and the amount recorded as liabilities in the line Other sundry liabilities of R$ 2,763,798 and a fair value of R$ 2,743,971 and working capital operations, which amount recorded in assets is R$ 2,825,842 with fair value of R$ 2,825,842, and the amount recorded in liabilities under Other Liabilities – Sundry of R$ 2,825,782 with fair value of R$ 2,825,782.

Sales or transfers of financial assets without risk and benefit retention totaling R$ 697,960 with effect on results of R$ 19,386, net of Allowance for Loan Losses.

On June 30, 2015, the transfer of financial assets with no retention of risks and benefits between related company, related of operations for recovery expectation is considered by Management as remote, was carried out. The portfolio in the amount of R$ 1,080,021, fully provided for, was carried out for R$ 52,124, in accordance with the appraisal report. The operation did not give rise to any impact in the consolidated result.

Acquisitions of loan portfolios with the retention of assignor’s risks carried out as from January 2012 to September 30, 2015 total R$ 3,932,042, and the total amount of acquired portfolios is R$ 3,931,549, at September 30, 2015.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 129

Note 9 - Foreign exchange portfolio

	09/30/2015			09/30/2014
Assets  - other receivables		64,208,917			41,047,294
Exchange purchase pending settlement – foreign currency		37,985,320			23,638,255
Exchange sale rights – local currency		26,611,717			18,187,660
(Advances received) – local currency		(388,120	)		(778,621	)
Liabilities – other liabilities (Note 2a)		63,139,647			41,855,057
Exchange sales pending settlement – foreign currency		26,198,800			17,927,875
Liabilities from purchase of foreign currency – local currency		36,714,757			23,790,259
Other		226,090			136,923
Memorandum accounts		1,678,399			1,164,345
Outstanding import credits – foreign currency		1,489,596			1,147,175
Confirmed export credits – foreign currency		188,803			17,170

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 130

Note 10 – Funding and borrowings and onlending

a) Summary

	09/30/2015												09/30/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Deposits		189,580,257		38,354,309		16,921,823		55,872,272		300,728,661		35.4		280,975,094		36.5
Deposits received under securities repurchase agreements		150,648,926		15,768,713		17,451,545		134,044,436		317,913,620		37.5		304,024,065		39.5
Funds from acceptance and issuance of securities		3,140,253		16,988,606		8,481,342		30,867,649		59,477,850		7.0		47,089,423		6.1
Borrowings and onlending		6,135,022		23,859,210		28,202,012		46,384,169		104,580,413		12.3		81,659,328		10.7
Subordinated debt (*)		421,421		6,154,971		2,217,673		57,116,109		65,910,174		7.8		55,435,105		7.2
Total		349,925,879		101,125,809		73,274,395		324,284,635		848,610,718				769,183,015
% per maturity term		41.2		11.9		8.6		38.3
Total – 09/30/2014		333,336,743		76,121,821		59,255,657		300,468,794		769,183,015
% per maturity term		43.3		9.9		7.7		39.1

(*) At 09/30/2014 includes R$ 963,462 of Redeemable Preferred Shares classified under Non-controlling interests in Balance Sheet.

b) Deposits

	09/30/2015												09/30/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Demand deposits		57,387,934		-		-		-		57,387,934		19.1		44,595,760		15.8
Savings accounts		111,450,931		-		-		-		111,450,931		37.1		113,675,506		40.5
Interbank		3,011,672		12,028,200		3,098,322		231,619		18,369,813		6.1		3,641,785		1.3
Time deposits		17,729,720		26,326,109		13,823,501		55,640,653		113,519,983		37.7		119,062,043		42.4
Total		189,580,257		38,354,309		16,921,823		55,872,272		300,728,661				280,975,094
% per maturity term		63.0		12.8		5.6		18.6
Total – 09/30/2014		175,618,287		34,080,626		11,700,104		59,576,077		280,975,094
% per maturity term		62.5		12.1		4.2		21.2

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 131

c) Deposits received under securities repurchase agreements

	09/30/2015												09/30/2014
	0 - 30		31 - 180		181 - 365		Over 365 days		Total		%		Total		%
Own portfolio		44,244,215		11,761,566		15,539,706		107,178,461		178,723,948		56.2		152,456,352		50.1
Government securities		34,691,125		199,631		-		3,472		34,894,228		11.0		7,523,563		2.5
Own issue		1,561,443		11,363,285		15,539,706		107,174,989		135,639,423		42.7		133,200,402		43.8
Foreign		7,991,647		198,650		-		-		8,190,297		2.6		11,732,387		3.9
Third-party portfolio		106,241,668		-		-		-		106,241,668		33.4		126,381,794		41.6
Free portfolio		163,043		4,007,147		1,911,839		26,865,975		32,948,004		10.4		25,185,919		8.3
Total		150,648,926		15,768,713		17,451,545		134,044,436		317,913,620				304,024,065
% per maturity term		47.3		5.0		5.5		42.2
Total – 09/30/2014		148,557,676		12,130,248		14,690,030		128,646,111		304,024,065
% per maturity term		48.9		4.0		4.8		42.3

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 132

d) Funds from acceptance and issuance of securities

	09/30/2015												09/30/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Funds from bills:		2,772,781		12,880,488		5,483,240		8,368,559		29,505,068		49.6		30,097,842		63.9
Financial		269,678		1,695,709		2,348,321		2,569,853		6,883,561		11.6		12,692,562		27.0
Off real estate loans		1,682,393		8,364,133		933,661		1,435,553		12,415,740		20.8		10,218,488		21.6
Bill of credit related to agribusiness		812,938		2,810,982		2,185,523		4,240,762		10,050,205		16.9		7,044,170		15.0
Mortgage notes		7,772		9,664		15,735		122,391		155,562		0.3		142,622		0.3
Foreign securities		145,905		3,590,320		2,747,349		19,670,667		26,154,241		44.0		14,914,722		31.7
Non-trade related – issued abroad		145,905		3,590,320		2,747,349		19,670,667		26,154,241		44.0		14,914,722		31.7
Brazil risk note programme		1,666		827,346		821,844		5,980,676		7,631,532		12.8		3,349,076		7.1
Structure note issued		100,766		1,235,939		773,388		6,136,940		8,247,033		13.9		5,622,602		11.9
Bonds		28,315		107,503		133,475		7,278,984		7,548,277		12.7		3,511,917		7.5
Fixed rate notes		12,976		1,244,879		945,728		-		2,203,583		3.7		1,531,234		3.3
Eurobonds		2,182		3,957		1,314		93,687		101,140		0.2		658,943		1.4
Other		-		170,696		71,600		180,380		422,676		0.7		240,950		0.5
Structured Operations Certificates (*)		221,567		517,798		250,753		2,828,423		3,818,541		6.4		2,076,859		4.4
Total		3,140,253		16,988,606		8,481,342		30,867,649		59,477,850				47,089,423
% per maturity term		5.3		28.6		14.3		51.9
Total – 09/30/2014		2,631,943		13,491,674		10,568,491		20,397,315		47,089,423
% per maturity term		5.6		28.7		22.4		43.3

(*) As of September 30, 2015, the market value of the funding from Structured Operations Certificates issued is R$ 4,261,196 (R$ 2,371,960 of September 30,2014) according to BACEN Circular Letter No. 3,623.

ITAÚ UNIBANCO HOLDING’s portfolio is composed of Brazil Risk Note Programme with maturities of 31 days to 180 days (R$ 18,667at 09/30/2014), of 181 to 365 days R$ 559,948 and over 365 days in the amount of R$ 4,170,475 (R$ 500,000 at 09/30/2014), totaling R$ 4,730,423 (R$ 518,667 at 09/30/2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 133

e) Borrowings and onlending

	09/30/2015												09/30/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Borrowings		4,312,201		18,328,482		20,768,384		20,835,284		64,244,351		61.4		37,543,163		46.0
Domestic		1,004,428		78,929		83,080		57,178		1,223,615		1.2		843,831		1.0
Foreign (*)		3,307,773		18,249,553		20,685,304		20,778,106		63,020,736		60.2		36,699,332		45.0
Onlending		1,822,821		5,530,728		7,433,628		25,548,885		40,336,062		38.6		44,116,165		54.0
Domestic – official institutions		1,822,807		5,530,728		7,433,623		25,546,502		40,333,660		38.6		44,113,686		54.0
BNDES		315,500		2,750,093		3,496,884		9,044,672		15,607,149		14.9		16,891,641		20.7
FINAME		1,503,776		2,692,109		3,834,996		15,976,267		24,007,148		23.0		26,673,608		32.7
Other		3,531		88,526		101,743		525,563		719,363		0.7		548,437		0.7
Foreign		14		-		5		2,383		2,402		0.0		2,479		0.0
Total		6,135,022		23,859,210		28,202,012		46,384,169		104,580,413				81,659,328
% per maturity term		5.9		22.8		27.0		44.3
Total – 09/30/2014		4,284,261		15,863,740		20,521,793		40,989,534		81,659,328
% per maturity term		5.2		19.4		25.2		50.2

(*) Foreign borrowings are basically represented by foreign exchange transactions related to export pre-financing and import financing.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 134

f) Subordinated debt

	09/30/2015															09/30/2014
	0-30		31-180		181-365		Over 365 days			Total			%			Total			%
CDB		-		5,414,828		-		1,968,324			7,383,152			11.2			9,178,420			16.6
Financial treasury bills		295,389		407,083		2,200,356		23,761,756			26,664,584			40.5			25,593,574			46.2
Euronotes		113,581		327,672		-		30,961,882			31,403,135			47.6			19,372,258			34.9
Bonds		12,451		5,388		17,317		513,434			548,590			0.8			385,506			0.7
(-) Transaction costs incurred (Note 4b)		-		-		-		(89,287	)		(89,287	)		(0.1	)		(58,115	)		(0.1	)
Total Other Liabilities		421,421		6,154,971		2,217,673		57,116,109			65,910,174						54,471,643
Redeemable preferred shares		-		-		-		-			-			-			963,462			1.7
Grand total (*)		421,421		6,154,971		2,217,673		57,116,109			65,910,174						55,435,105
% per maturity term		0.6		9.3		3.4		86.7
Total – 09/30/2014		2,244,576		555,533		1,775,239		50,859,757			55,435,105
% per maturity term		4.0		1.0		3.3		91.7

(*) According to current legislation, the accounting balance of subordinated debt as of September 2015 was used for the calculation of referential equity as of December, 2012, considering instruments approved after the closing date to compose Tier II, totaling R$ 53,920,747.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 135

Description
Name of security / currency	Principal amount (original currency)		Issue	Maturity	Return p.a.	Account balance
Subordinated CDB - BRL
		50,000	2010	2015	113% of CDI		93,166
		465,835	2006	2016	100% of CDI + 0.7% (*)		1,192,999
		2,719,268	2010	2016	110% to 114% of CDI		5,064,384
		122,500			IPCA + 7.21% to 7.33%		257,278
		366,830	2010	2017	IPCA + 7.21% to 7.33%		775,325
					Total		7,383,152
Subordinated financial bills - BRL		365,000	2010	2016	100% of CDI + 1.35% a 1.36%		371,067
		1,874,000			112% to 112.5% of CDI		1,905,083
		30,000			IPCA + 7%		56,893
		206,000	2010	2017	IPCA + 6.95% to 7.2%		302,001
		3,223,500	2011	2017	108% to 112% of CDI		3,433,053
		352,400			IPCA + 6.15% to 7.8%		555,223
		138,000			IGPM + 6.55% to 7.6%		227,224
		3,650,000			100% of CDI + 1.29% to 1.52%		3,803,044
		500,000	2012	2017	100% of CDI + 1.12%		524,329
		42,000	2011	2018	IGPM + 7%		56,918
		30,000			IPCA + 7.53% to 7.7%		42,645
		460,645	2012	2018	IPCA + 4.4% to 6.58%		663,359
		3,782,100			100% of CDI + 1.01% to 1.32%		3,960,154
		6,373,127			108% to 113% of CDI		7,050,830
		112,000			9.95% to 11.95%		154,060
		2,000	2011	2019	109% to 109.7% of CDI		2,999
		12,000	2012	2019	11.96%		18,062
		100,500			IPCA + 4,7% a 6,3%		142,418
		1,000			110% of CDI		1,472
		20,000	2012	2020	IPCA + 6% to 6.17%		31,368
		1,000			111% of CDI		1,477
		6,000	2011	2021	109.25% to 110.5% of CDI		9,230
		2,306,500	2012	2022	IPCA + 5.15% to 5.83%		3,328,152
		20,000			IGPM + 4.63%		23,522
					Total		26,664,584
Subordinated euronotes - USD
		1,000,000	2010	2020	6.2%		4,077,713
		1,000,000	2010	2021	5.75%		3,996,738
		750,000	2011	2021	5,75% a 6,2%		3,084,293
		550,000	2012	2021	6.2%		2,185,095
		2,625,000	2012	2022	5,5% a 5,65%		10,394,731
		1,870,000	2012	2023	5.13%		7,575,278
					Total		31,313,848
Subordinated bonds - CLP		41,528,200	2008	2033	3.5% to 4.5%		257,081
		47,831,440	2014	2034	3.8%		291,509
					Total		548,590
Total							65,910,174

(*) Subordinated CDBs may be redeemed as from November 2011.

ITAÚ UNIBANCO HOLDING’s portfolio is composed of Subordinated Euronotes with maturity of up to 30 days in the amount of R$ 113,580 (R$ 69,649 at 09/30/2014), with maturities of 31 to 180 days in the amount of R$ 327,672 (R$ 202,643 09/30/2014) and over 365 days in the amount of R$ 30,872,596 (R$ 19,041,851 at 09/30/2014), totaling R$ 31,313,848 (R$ 19,314,143 at 09/30/2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 136

Note 11 - Insurance, pension plan and capitalization operations

a) Composition of the technical provisions

	Insurance				Pension plan				Capitalization				Total
	09/30/2015		09/30/2014		09/30/2015		09/30/2014		09/30/2015		09/30/2014		09/30/2015		09/30/2014
Unearned premiums		3,372,795		5,702,740		14,124		11,315		-		-		3,386,919		5,714,055
Mathematical provision of benefits to be granted and benefits granted		22,235		18,997		116,475,084		97,925,202		-		-		116,497,319		97,944,199
Redemptions and Other Unsettled Amounts		22,163		20,334		209,317		162,666		-		-		231,480		183,000
Financial surplus		1,309		1,385		539,827		522,511		-		-		541,136		523,896
Unsettled claims		721,842		3,252,892		15,781		15,677		-		-		737,623		3,268,569
Claims / events incurred but not reported (IBNR)		475,651		912,548		19,590		13,017		-		-		495,241		925,565
Administrative and Related Expenses		40,083		174,956		77,252		49,795		12,955		23,420		130,290		248,171
Mathematics for Capitalization and Redemptions		-		-		-		-		2,995,011		2,955,009		2,995,011		2,955,009
Raffles Payable and To Be Held		-		-		-		-		24,574		24,724		24,574		24,724
Complementary Raffles		-		-		-		-		2,720		4,504		2,720		4,504
Other provisions(1)		530,390		376,184		562,798		804,324		297		605		1,093,485		1,181,113
Total (2)		5,186,468		10,460,036		117,913,773		99,504,507		3,035,557		3,008,262		126,135,798		112,972,805

(1) It considers mostly the Supplemental Coverage Provision, regulated by SUSEP Circular No. 517, of July 30, 2015.

(2) This table covers the amendments established by Susep Circular No. 517, of July 30, 2015, also for comparison purposes.

The total of Technical Provisions represents the amount of obligations after the Liability Adequacy Test is carried out.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 137

b) Assets guaranteeing technical provisions - SUSEP

	Insurance				Pension plan						Capitalization				Total
	09/30/2015		09/30/2014		09/30/2015			09/30/2014			09/30/2015		09/30/2014		09/30/2015			09/30/2014
Interbank investments – money market		1,104,272		1,551,654		1,071,041			774,313			1,154,068		875,712		3,329,381			3,201,679
Securities and derivative financial instruments		5,852,324		3,743,078		114,133,025			99,290,111			2,047,318		2,304,724		122,032,667			105,337,913
PGBL / VGBL fund quotas (1)		-		-		111,011,735			92,882,121			-		-		111,011,735			92,882,121
Government securities - domestic		-		-		77,823,857			61,181,842			-		-		77,823,857			61,181,842
National treasury bills		-		-		26,239,184			31,546,684			-		-		26,239,184			31,546,684
National treasury notes		-		-		23,176,685			14,286,834			-		-		23,176,685			14,286,834
Financial treasury bills		-		-		28,407,988			15,348,324			-		-		28,407,988			15,348,324
Corporate securities		-		-		32,584,539			31,201,339			-		-		32,584,539			31,201,339
Bank deposit certificates		-		-		2,430,792			3,932,941			-		-		2,430,792			3,932,941
Debentures		-		-		3,282,048			3,333,601			-		-		3,282,048			3,333,601
Shares		-		-		430,309			695,059			-		-		430,309			695,059
Credit note		-		-		-			257,796			-		-		-			257,796
Financial treasury bills		-		-		26,376,926			22,937,277			-		-		26,376,926			22,937,277
Securitized real estate loans		-		-		-			196			-		-		-			196
Others		-		-		64,464			44,469			-		-		64,464			44,469
PGBL / VGBL fund quotas		-		-		402,292			258,044			-		-		402,292			258,044
Derivative financial instruments		-		-		306,140			71,044			-		-		306,140			71,044
Loans for shares		-		-		326,472			330,624			-		-		326,472			330,624
Accounts receivable / (payable)		-		-		(431,565	)		(160,772	)		-		-		(431,565	)		(160,772	)
Other assets		5,852,324		3,743,078		3,121,290			6,407,990			2,047,318		2,304,724		11,020,932			12,455,792
Government		4,264,477		1,643,878		1,444,182			4,293,529			239,021		93,542		5,947,680			6,030,949
Private		1,587,847		2,099,200		1,677,108			2,114,461			1,808,297		2,211,182		5,073,252			6,424,843
Receivables from insurance and reinsurance operations (2)		1,709,732		5,811,562		-			-			-		-		1,709,732			5,811,562
Credit rights		787,778		1,343,710		-			-			-		-		787,778			1,343,710
Commercial – extended guarantee		871,727		1,478,872		-			-			-		-		871,727			1,478,872
Reinsurance		50,227		2,988,980		-			-			-		-		50,227			2,988,980
Total		8,666,328		11,106,294		115,204,066			100,064,424			3,201,386		3,180,436		127,071,780			114,351,154

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to lliabilities in Pension plan technical provisions account.

(2) Recorded under Other receivables and Other assets.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 138

c) Financial and operating income

	Insurance																		Pension plan																		Capitalization						Total
	01/01 to 09/30/2015									01/01 to 09/30/2014									01/01 to 09/30/2015									01/01 to 09/30/2014									01/01 to			01/01 to			01/01 to			01/01 to
	Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			09/30/2015			09/30/2014			09/30/2015			09/30/2014
Financial income from insurance, pension plan and capitalization operations		261,995			-			261,995			332,358			-			332,358			233,734			-			233,734			227,181			-			227,181			156,225			99,143			651,954			658,682
Financial income		298,479			-			298,479			548,326			-			548,326			8,691,729			-			8,691,729			6,546,975			-			6,546,975			310,319			225,905			9,300,527			7,321,206
Financial expenses		(36,484	)		-			(36,484	)		(215,968	)		-			(215,968	)		(8,457,995	)		-			(8,457,995	)		(6,319,794	)		-			(6,319,794	)		(154,094	)		(126,762	)		(8,648,573	)		(6,662,524	)
Operating income from insurance, pension plan and capitalization operations		2,359,644			(29,605	)		2,330,039			2,897,686			(664,904	)		2,232,782			216,467			(1,293	)		215,174			172,657			373			173,030			437,376			437,793			2,982,589			2,843,605
Premiums and contributions		3,769,489			(50,784	)		3,718,705			5,957,898			(966,904	)		4,990,994			12,645,739			(4,676	)		12,641,063			11,311,019			(3,630	)		11,307,389			1,958,544			1,750,527			18,318,312			18,048,910
Changes in technical provisions		639,949			5,116			645,065			(390,342	)		12,191			(378,151	)		(12,406,012	)		-			(12,406,012	)		(11,114,262	)		-			(11,114,262	)		570			7,012			(11,760,377	)		(11,485,401	)
Expenses for claims, benefits, redemptions and raffles		(1,201,160	)		10,525			(1,190,635	)		(1,767,402	)		241,860			(1,525,542	)		(17,890	)		1,750			(16,140	)		(19,520	)		339			(19,181	)		(1,527,092	)		(1,345,215	)		(2,733,867	)		(2,889,938	)
Selling expenses		(802,537	)		5,538			(796,999	)		(864,189	)		47,949			(816,240	)		(3,543	)		-			(3,543	)		(2,873	)		-			(2,873	)		(1,347	)		-			(801,889	)		(819,113	)
Other operating revenues and expenses		(46,097	)		-			(46,097	)		(38,279	)		-			(38,279	)		(1,827	)		1,633			(194	)		(1,707	)		3,664			1,957			6,701			25,469			(39,590	)		(10,853	)
Total result from insurance, pension plan and capitalization operations		2,621,639			(29,605	)		2,592,034			3,230,044			(664,904	)		2,565,140			450,201			(1,293	)		448,908			399,838			373			400,211			593,601			536,936			3,634,543			3,502,287

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 139

Note 12 – Contingent assets and liabilities and legal liabilities – tax and social security

In the ordinary course of its businesses, ITAÚ UNIBANCO HOLDING CONSOLIDATED is involved in contingencies that may be classified as follows:

a) Contingent Assets: there are no contingent assets recorded.

b) Provisions and contingencies: The criteria to quantify contingencies are adequate in relation to the specific characteristics of civil, labor and tax lawsuits portfolios, as well as other risks.

- Civil lawsuits:

Collective lawsuits (related to claims of a similar nature and with individual amounts not considered significant): contingencies are determined on a monthly basis and the expected amount of losses is accrued according to statistical references that take into account the type of lawsuit and the characteristics of the court (Small Claims Court or Regular Court).

Individual lawsuits (related to claims with unusual characteristics or involving significant amounts): calculation is carried out on a periodical basis, as from the calculation of the claimed amount which, in turn, is estimated based on de jure or de facto characteristics related to that lawsuit. The amounts considered as probable losses are recorded as provisions.

Contingencies usually arise from revision of contracts and compensation for property damage and pain and suffering; most of these lawsuits are filed in the Small Claims Court and are therefore limited to 40 minimum monthly wages. ITAÚ UNIBANCO HOLDING is also party to specific lawsuits over the charging of understated inflation adjustment to savings accounts in connection with economic plans.

From 1986 to 1994, the Brazilian federal government implemented several consecutive monetary stabilization plans (MSP) to combat hyperinflation. In order to implement these plans, the Brazilian federal government enacted several laws based on its power to regulate the monetary and financial systems, as granted by the Brazilian federal constitution.

Savings account holders at the time these MSPs were implemented challenged the constitutionality of the laws in connection with such plans, claiming, from the banks in which they held savings accounts, additional interest amounts based on the inflation rates applied to the deposit accounts according to the MSPs.

We are defendants in numerous standardized lawsuits filed by individuals in respect of the MSP, and we record provisions for such claims upon service of process for a claim. In addition, we are defendants in class actions, similar to the lawsuits by individuals, filed by either (i) consumer protection associations or (ii) the Public Prosecution Office on behalf of savings account holders. Holders of savings accounts may claim any amount due based on such a decision. We record provisions when individual plaintiffs apply to enforce such decisions, using the same criteria adopted to determine provisions for individual lawsuits.

The Federal Supreme Court (STF) has issued some decisions favorable to savings account holders, but has not issued a final ruling with respect to the constitutionality of the MSPs as applicable to savings accounts. In relation to a similar dispute with respect to the constitutionality of the MSPs as applicable to time deposits and other private agreements, the STF has decided that the bills were constitutional. As a response to this discrepancy, the National Confederation of the Financial System (CONSIF) an association of Brazilian financial institutions, filed a special proceeding with the STF (Action against the violation of a constitutional fundamental right - “ADPF” No. 165), in which the Central Bank filed an amicus brief, arguing that savings account holders did not incur actual damages and that the MSPs as applicable to savings accounts were in accordance with the federal constitution. Accordingly, the STF suspended the ruling of all appeals involving this matter until it pronounces a final decision. In addition, the Superior Court of Justice (STJ), responsible for decisions about federal legislation, should come forward with a position on several aspects that will directly determine the amount due, should the STF sentence be contrary to the constitutionality of MSPs.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 140

The most important rulings will address the following issues: (i) the accrual of compensatory interest on the amount due to the plaintiff, in filings that carry no specific claim to such interest; (ii) the initial date of default interest, in regard to class actions; and (iii) the possibility of compensating the negative difference arising in the month of the MSP implementation, between the interests actually paid on saving accounts and the inflation rate of the same period, with the positive difference arising in the months subsequent to the MSP implementation, between the interests actually paid on saving accounts and the inflation rate of the same period. The STJ also ruled that the term for filing class actions expired 5 years from the date of the MSP implementation. As a consequence, a number of class actions were dismissed by the Judiciary as a result of such ruling.

No amount is recorded as provision in relation to Civil lawsuits which likelihood of loss is considered possible, which total estimated risk is R$ 2,394,446 (R$ 1,826,261 at September 30, 2014) and the main nature of which refers to claims form compensation or collections, the individual amounts of which are not significant.

- Labor claims

Collective lawsuits (related to claims considered similar and which each individual amount is not considered significant): The expected amount of loss is determined and accrued monthly according to the statistical share pricing model and is reassessed taking into account court rulings. These are adjusted to the amounts deposited as guarantee for their execution when realized.

Individual lawsuits (related to claims with unusual characteristics or involving significant amounts): determined from time to time, based on the amount claimed and the likelihood of loss, which, in turn, is estimated according to the “de facto” and “de jure” characteristics related to such lawsuit. The amounts of losses which likelihood of loss is considered probable are accrued.

Contingencies are related to lawsuits in which alleged labor rights based on labor legislation specific to the related profession, such as overtime, salary equalization, reinstatement, transfer allowance, pension plan supplement and other, are discussed.

No amount is recorded as provision in relation to labor claims which likelihood of loss is considered possible, and which total estimated risk is R$ 765,096 (R$ 360,041 at 09/30/2014).

- Other Risks

These are quantified and accrued mainly based on the evaluation of rural credit transactions with joint liability and FCVS (salary variations compensation fund) credits assigned to Banco Nacional.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 141

The table below shows the changes in the respective provisions for contingent liabilities and the respective escrow deposits balances:

	01/01 to 09/30/2015												01/01 to 09/30/2014
	Civil			Labor			Other			Total			Total
Opening balance		4,643,356			5,597,552			158,831			10,399,739			9,888,019
(-) Contingencies guaranteed by indemnity clauses (Note 4n I)		(132,284	)		(1,028,517	)		-			(1,160,801	)		(945,077	)
Subtotal		4,511,072			4,569,035			158,831			9,238,938			8,942,942
Monetary restatement/charges		249,510			416,980			-			666,490			338,230
Changes in the period reflected in results (Notes 13f and 13i)		1,299,447			1,057,154			17,241			2,373,842			2,087,176
Increase (*)		2,029,182			1,184,154			18,705			3,232,041			2,742,981
Reversal		(729,735	)		(127,000	)		(1,464	)		(858,199	)		(655,805	)
Payment		(1,131,392	)		(1,290,375	)		-			(2,421,767	)		(2,113,279	)
Subtotal		4,928,637			4,752,794			176,072			9,857,503			9,255,069
(+) Contingencies guaranteed by indemnity clauses (Note 4n I)		232,218			1,216,807			-			1,449,025			903,063
Closing balance (Note 13c)		5,160,855			5,969,601			176,072			11,306,528			10,158,132
Closing balance at 09/30/2014 (Note 13c)		4,624,168			5,295,694			238,270			10,158,132
Escrow deposits at 09/30/2015 (Note 13a)		1,968,831			2,291,208			-			4,260,039
Escrow deposits at 09/30/2014 (Note 13a)		2,055,029			2,402,848			-			4,457,877

(*) Civil provisions include the provision for economic plans amounting to R$ 181,368 (R$ 146,273 from January 1 to September 30, 2014) (Note 22k).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 142

- Tax and social security lawsuits

Contingencies are equivalent to the principal amount of taxes involved in tax, administrative or judicial challenges, subject to tax assessment notices, plus interest and, when applicable, fines and charges. The amount is accrued when it involves legal obligation, regardless of the likelihood of loss, that is, a favorable outcome to the institution is dependent upon the recognition of the unconstitutionality of the applicable law in force. In other cases, the Bank recognizes a provision whenever the likelihood of loss is probable.

The table below shows the changes in the provisions and respective escrow deposits for Tax and Social Security lawsuits balances:

	01/01 to 09/30/2015									01/01 to 09/30/2014
Provisions	Legal obligation			Contingencies			Total			Total
Opening balance		3,703,721			2,923,211			6,626,932			8,973,897
Reclassification of Contingent Liabilities (*)		314,641			(314,641	)		-			-
(-) Contingencies guaranteed by indemnity clauses (Note 4n II)		-			(60,646	)		(60,646	)		(57,028	)
Subtotal		4,018,362			2,547,924			6,566,286			8,916,869
Monetary restatement / charges		197,830			296,529			494,359			407,953
Changes in the period reflected in results		32,859			321,733			354,592			559,706
Increase		32,859			828,947			861,806			913,068
Reversal		-			(507,214	)		(507,214	)		(353,362	)
Payment		(91,361	)		(40,540	)		(131,901	)		(3,638,488	)
Subtotal		4,157,690			3,125,646			7,283,336			6,246,040
(+) Contingencies guaranteed by indemnity clauses (Note 4n II)		-			63,510			63,510			59,792
Closing balance (Notes 13c and 14c)		4,157,690			3,189,156			7,346,846			6,305,832
Closing balance at 09/30/2014 (Notes 13c and 14c)		3,646,532			2,659,300			6,305,832

(*) At June 30, 2015, lawsuits from Contingent Liabilities were reclassified to Legal Liabilities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 143

	01/01 to 09/30/2015									01/01 to 09/30/2014
Escrow deposits	Legal obligation			Contingencies			Total			Total
Opening balance		4,324,134			412,301			4,736,435			5,658,098
Reclassification of Deposits (*)		342,742			(342,742	)		-			-
Appropriation of income		145,474			46,783			192,257			310,212
Changes in the period		(143,730	)		305,671			161,941			(1,294,708	)
Deposited		16,720			306,098			322,818			215,545
Withdrawals		(68,059	)		(427	)		(68,486	)		(31,894	)
Reversals to income		(92,391	)		-			(92,391	)		(1,478,359	)
Closing balance		4,668,620			422,013			5,090,633			4,673,602
Relocated to assets pledged in guarantee of contingencies (Note 12d)		-			(117	)		(117	)		-
Closing balance after relocated (Note 13a)		4,668,620			421,896			5,090,516			4,673,602
Closing balance at 09/30/2014 (Note 13a)		4,267,532			406,070			4,673,602

(*) At June 30, 2015, lawsuits from Contingent Liabilities were reclassified to Legal Liabilities. Accordingly, the same treatment was applied to guarantees.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 144

Main discussions related to the provisions recognized for Tax and Social Securities Lawsuits are described as follows:

· CSLL – Isonomy – R$ 1,073,638: as the law increased the CSLL rate for financial and insurance companies to 15%, we discuss the lack of constitutional support for this measure and, due to the principle of isonomy, we defend the levy at the regular rate of 9%. The corresponding escrow deposit balance totals R$ 1,056,919;

· INSS – Prevention Accident Factor (FAP) – R$ 834,013: it challenges the legality of FAP and inconsistent procedures applied by the INSS upon its calculation. The corresponding escrow deposit balance totals R$ 101,173;

· PIS and COFINS – Calculation basis – R$ 604,205: we defend the levy of contributions on revenue, understood as the revenue from sales of assets and services. The corresponding escrow deposit balance totals R$ 528,438;

· IRPJ and CSLL – Taxation of profits earned abroad – R$ 548,541: we discuss the calculation basis for levy of these taxes on profits earned abroad and the non-applicability of Regulatory Instruction SRF No. 213-02 in which it exceeds the suitability of the legal text. The corresponding escrow deposit balance totals R$ 512,735.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 145

Off-balance sheet contingencies - The amounts involved in the main tax and social security lawsuits with likelihood of loss possible, which total an estimated risk of R$ 14,863,039, are described below:

· INSS – Non-compensatory amounts – R$ 4,134,423: we defend the non-taxation of these amounts, mainly profit sharing, stock option, transportation vouchers and sole bonus;

· IRPJ and CSLL – Goodwill – Deduction – R$ 2,785,718: deductibility of goodwill on acquisition of investments with future expected profitability, and R$ 598,319 of this amount is guaranteed in company purchase agreements;

· IRPJ, CSLL, PIS and COFINS – Request for offset dismissed – R$ 1,358,673: cases in which the liquidity and the offset credit certainty are discussed;

· IRPJ and CSLL – Interest on capital – R$ 1,274,468: we defend the deductibility of interest on capital declared to stockholders based on the Brazilian long-term interest rate (TJLP) on the stockholders’ equity for the year and for prior years;

· ISS – Banking Institutions – R$ 812,725: these are banking operations, of which revenue may not be interpreted as price per service rendered and/or arises from activities not listed under Supplementary Law No. 116/03 or Law No. 406/68.

c) Receivables - reimbursement of contingencies

The receivables balance arising from reimbursements of contingencies totals R$ 1,124,205 (R$ 707,911 at 09/30/2014) (Note 13a), basically represented by the guarantee in the Banco Banerj S.A. privatization process occurred in 1997, in which the State of Rio de Janeiro created a fund to guarantee the equity recomposition of civil, labor and tax contingencies.

d) Assets pledged as contingencies

Assets pledged in guarantee for contingencies are related to liability contingencies and restricted or deposited as presented below:

	09/30/2015		09/30/2014
Securities (basically financial treasury bills – Note 7b)		807,768		725,720
Deposits in guarantee (Note 13a)		4,359,188		4,146,284

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 146

Escrow deposits are generally required to be made with the court in connection with lawsuits in Brazil and they are held by the court until a decision is made by the relevant court. In case of a decision against ITAÚ UNIBANCO HOLDING CONSOLIDATED, the deposited amount is released from escrow and transferred to the counterparty in the lawsuit. In case of a decision in favor of ITAÚ UNIBANCO HOLDING CONSOLIDATED, the deposited amount is released at the full deposited and updates amount.

In general, provisions related to lawsuits of ITAÚ UNIBANCO HOLDING CONSOLIDATED are long term, considering the time required for the termination of these lawsuits in the Brazilian judicial system, reason why estimate for specific year in which these lawsuits will be terminated have not been disclosed.

According to the opinion of its legal advisors, ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries are not involved in any other administrative or judicial proceedings that may significantly impact the results of their operations. The combined evaluation of all existing provisions for all contingent liabilities and legal obligations, which are recognized based on statistical models for claims involving small amounts and on individual evaluation by internal and external legal advisors of other cases, showed that the accrued amounts are sufficient, as provided for by CMN Resolution No. 3,823, of December 16, 2009, and BACEN Circular Letter No. 3,429, of February 11, 2010.

e) Program for Cash or Installment Payment of Taxes

ITAÚ UNIBANCO HOLDING and its subsidiaries adhered to the Program for Cash or Installment Payment of Taxes, substantially related to the Federal area, established by Law No. 13,097, of January 19, 2015 and Law No. 13,043/2014. The program included debits managed by the Federal Reserve Service of Brazil and was established in accordance with the main article as follows:

· Refis of Capital Gain Earned in the Merger of Shares from Nova Bolsa - Law 13,097/15 article 145 – Arising from capital gain earned until December 31, 2008 due to the sale of shares resulting from the conversion of equity securities from nonprofit associations.

The net effect of the program in the result was R$ 27,309, and it is reflected in Other Operating Income, Income Tax and Social Contribution.

f) Program for Cash Settlement or Installment Payment of Municipal Taxes

ITAÚ UNIBANCO HOLDING and its subsidiaries adhered to the Program for Cash or Installment Payment of Taxes, substantially related to the municipal area, established by Law No. 16,097 of December 29, 2014. This program included debits managed by the Finance and Economic Development Secretariat of the Municipality of São Paulo and was established in accordance with the main article as follows:

· Installment Payment Incentive Program (PPI) (Article 1) - it introduces the program intended to regularize the debts referred to in this act, arising from tax and non-tax credits, whether assessed or not, including those registered as overdue tax debts, whether filed or to be filed, in view of any taxable events occurred up to December 31, 2013.

The net effect of this program in income was R$ 13,362, and it is reflected in Other Operating Income, Income Tax and Social Contribution.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 147

Note 13 - Breakdown of accounts

a) Other sundry receivables

	09/30/2015			09/30/2014
Deferred tax assets (Note 14b I)		59,457,395			39,021,517
Social contribution for offset (Note 14b I)		645,254			645,272
Taxes and contributions for offset		5,142,299			3,946,355
Escrow deposits for legal liabilities and tax and social security contingencies (Notes 12b and 12d)		9,449,704			8,819,886
Escrow deposits for legal liabilities – civil and labor (Note 12b)		4,260,039			4,457,877
Escrow deposits for foreign fund raising program		1,091,394			473,038
Receivables from reimbursement of contingent liabilities (Note 12c)		1,124,205			707,911
Receivables from reimbursement of contingent liabilities		2,270,922			1,478,533
(Allowance for loan losses)		(1,146,716	)		(770,622	)
Rights receivable from financial assets sold or transferred		-			5,382,993
Sundry domestic debtors		1,081,367			1,710,167
Premiums from loan operations		1,895,113			2,101,713
Sundry foreign debtors		2,467,160			1,947,050
Retirement plan assets (Note 19)		2,329,092			2,435,102
Recoverable payments		140,013			36,398
Salary advances		234,362			220,765
Amounts receivable from related companies		42,110			41,536
Operations without credit granting characteristics		1,914,571			258,965
Securities and credits receivable		2,227,115			731,728
(Allowance for loan losses)		(312,544	)		(472,763	)
Other		458,010			954,841
Total		91,732,088			73,161,386

In ITAÚ UNIBANCO HOLDING, Other Sundry Receivables is mainly composed of Taxes and Contributions for Offset of R$ 916,221 (R$ 466,654 at 09/30/2014) and Deferred Tax Assets of R$ 449,257 (R$ 75,925 at 09/30/2014) (Note 14b I).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 148

b) Prepaid expenses

	09/30/2015		09/30/2014
Commissions (*)		2,155,343		3,137,032
Related to vehicle financing		162,968		327,716
Related to insurance and pension plan		803,395		1,514,049
Restricted to commissions / partnership agreements		111,373		195,788
Related to Payroll Loans		923,463		939,404
Other		154,144		160,075
Advertising		235,966		204,767
Other		586,482		619,868
Total		2,977,791		3,961,667

(*) In the third quarter of 2015, the impact on income from commissions from local correspondents, as described in Note 4g, was R$ 132,889.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 149

c) Other sundry liabilities

	09/30/2015		09/30/2014
Provisions for contingent liabilities (Note 12b)		14,495,684		12,817,432
Provisions for sundry payments		2,109,884		2,255,175
Personnel provision		2,134,270		1,992,410
Sundry creditors - local		1,759,222		1,547,671
Sundry creditors - foreign		2,775,136		2,410,741
Liabilities for official agreements and rendering of payment services		835,439		813,921
Related to insurance operations		200,654		1,397,594
Liabilities for purchase of assets and rights		661		4,383
Creditors of funds to be released		1,315,104		1,409,063
Funds from consortia participants		39,730		31,739
Provision for Retirement Plan Benefits (Note 19)		531,201		779,988
Provision for health insurance (1)		705,669		675,294
Expenses for lease interests (2)		-		293,140
Liabilities from transactions related to credit assignments (Note 8f)		5,589,580		3,905,896
Liabilities from sales operations or transfer of financial assets		37,789		3,325,764
Other		974,874		683,060
Total		33,504,897		34,343,271

(1) Provision set up to cover possible future deficits up to the total discontinuance of the portfolio, arising from the difference of adjustments to monthly installments, authorized annually by the regulatory body, and the actual variation of hospital costs that affect the compensation of claims (Note 13i).

(2) Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 150

d) Banking service fees

	01/01 to 09/30/2015		01/01 to 09/30/2014
Asset management		3,050,317		2,825,760
Funds management fees		2,544,670		2,371,260
Consortia management fee Consortia management fee		505,647		454,500
Current account services		588,624		571,908
Credit cards		7,160,255		6,534,655
Relationship with stores		7,119,951		6,463,853
Credit card processing		40,304		70,802
Sureties and credits granted		1,676,117		1,442,061
Loan operations		730,596		618,201
Guarantees provided		945,521		823,860
Receipt services		1,133,782		1,159,972
Collection fees		925,181		960,454
Collection services		208,601		199,518
Other		1,766,890		1,479,116
Custody services and management of portfolio		217,337		207,850
Economic and financial advisory		472,358		428,399
Foreign exchange services		64,762		62,294
Other services		1,012,433		780,573
Total		15,375,985		14,013,472

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 151

e) Income from bank charges

	01/01 to 09/30/2015		01/01 to 09/30/2014
Loan operations / registration		747,455		822,750
Credit cards – annual fees and other services		2,416,794		2,136,868
Deposit account		87,902		86,646
Transfer of funds		145,026		135,270
Income from securities brokerage		281,034		293,746
Service package fees		3,559,218		2,889,589
Total		7,237,429		6,364,869

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 152

f) Personnel expenses

	01/01 to 09/30/2015			01/01 to 09/30/2014
Compensation		(6,051,899	)		(5,233,430	)
Charges		(1,913,308	)		(1,729,741	)
Welfare benefits (Note 19)		(1,972,289	)		(1,548,705	)
Training		(139,702	)		(127,210	)
Labor claims and termination of employees (Note 12b)		(1,300,997	)		(1,237,961	)
Stock Option Plan		(178,357	)		(145,286	)
Total		(11,556,552	)		(10,022,333	)
Employees’ profit sharing		(2,320,851	)		(2,218,336	)
Total including employees’ profit sharing		(13,877,403	)		(12,240,669	)

g) Other administrative expenses

	01/01 to 09/30/2015			01/01 to 09/30/2014
Data processing and telecommunications		(2,950,252	)		(2,896,008	)
Depreciation and amortization		(1,499,321	)		(1,538,808	)
Installations		(2,009,254	)		(1,828,171	)
Third-party services		(2,885,284	)		(2,957,080	)
Financial system services		(430,597	)		(397,879	)
Advertising, promotions and publication		(745,497	)		(707,936	)
Transportation		(299,500	)		(319,235	)
Materials		(304,826	)		(252,710	)
Security		(506,780	)		(466,502	)
Travel expenses		(158,715	)		(144,187	)
Other		(607,862	)		(449,147	)
Total		(12,397,888	)		(11,957,663	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 153

h) Other operating revenue

	01/01 to 09/30/2015		01/01 to 09/30/2014
Reversal of operating provisions		147,928		9,504
Recovery of charges and expenses		47,214		38,568
Program for Settlement or Installment Payment of Federal (Note 12e)		122,067		187,155
Other		339,991		193,735
Total		657,200		428,962

i) Other operating expenses

	01/01 to 09/30/2015			01/01 to 09/30/2014
Provision for contingencies (Note 12b)		(1,925,840	)		(1,331,195	)
Civil lawsuits		(1,299,447	)		(1,099,611	)
Tax and social security contributions		(609,152	)		(216,549	)
Other		(17,241	)		(15,035	)
Selling - credit cards		(2,275,829	)		(1,729,965	)
Claims		(218,770	)		(257,360	)
Provision for health insurance (Note 13c)		(21,078	)		(20,365	)
Refund of interbank costs		(207,152	)		(180,714	)
Other		(1,203,225	)		(1,032,965	)
Total		(5,851,894	)		(4,552,564	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 154

Note 14 - Taxes

a) Composition of expenses for taxes and contributions

I -  Statement of calculation with income tax and social contribution:

Due on operations for the period	01/01 to 09/30/2015			01/01 to 09/30/2014
Income before income tax and social contribution		5,686,056			20,893,467
Charges (income tax and social contribution) at the rates in effect (Note 4o)		(2,306,264	)		(8,357,387	)
Increase/decrease to income tax and social contribution charges arising from:
Investments in affiliates and jointly controlled entities		150,304			70,826
Foreign exchange variation on investments abroad		8,499,092			487,366
Interest on capital		1,814,605			1,313,583
Corporate reorganizations (Note 2c)		473,587			478,989
Dividends and interest on external debt bonds		183,917			220,663
Other nondeductible expenses net of non taxable income (*)		(16,655,217	)		(957,122	)
Income tax and social contribution expenses		(7,839,976	)		(6,743,082	)
Related to temporary differences
Increase (reversal) for the period		15,553,798			1,943,413
Increase (reversal) of prior periods		704,993			(963,768	)
Increase in the social contribution tax rate (Note 14b IV)		3,988,253			-
(Expenses)/Income from deferred taxes		20,247,044			979,645
Total income tax and social contribution expenses		12,407,068			(5,763,437	)

(*) Includes temporary (additions) and exclusions.

II - Composition of tax expenses:

	01/01 to 09/30/2015			01/01 to 09/30/2014
PIS and COFINS		(2,387,060	)		(2,873,798	)
ISS		(705,195	)		(646,861	)
Other		(477,885	)		(377,670	)
Total (Note 4o)		(3,570,140	)		(3,898,329	)

In ITAÚ UNIBANCO HOLDING tax expenses amount to R$ 179,754 (R$ 200,783 at 09/30/2014) and are mainly composed of PIS and COFINS.

III- Tax effects on foreign exchange management of investments abroad

In order to minimize the effects on income in connection with the foreign exchange variation on investments abroad, net of respective tax effects, ITAÚ UNIBANCO HOLDING CONSOLIDATED carries out derivative transactions in foreign currency (hedge), as mentioned in Note 22b.

Results of these transactions are considered in the calculation base of income tax and social contribution, according to their nature, while the foreign exchange variation on investments abroad is not included therein, pursuant to tax legislation in force.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 155

b) Deferred taxes

I - The deferred tax asset balance and its changes, segregated based on its origin and disbursements incurred, are represented as follows:

	Provisions				Deferred Tax Assets
	09/30/2014		09/30/2015		12/31/2014		Realization / Reversal			Increase		09/30/2015		09/30/2014
Reflected in income and expense accounts						34,999,143		(7,158,053	)		27,961,133		55,802,223		35,876,443
Related to income tax and social contribution loss carryforwards						5,364,024		(713,010	)		5,057,291		9,708,305		6,930,504
Related to disbursed provisions						19,542,545		(3,303,452	)		14,033,024		30,272,117		18,629,258
Allowance for loan losses						18,087,004		(2,758,906	)		6,497,181		21,825,279		17,016,440
Adjustment to market value of securities and derivative financial instruments (assets/liabilities)						195,583		(195,583	)		7,384,874		7,384,874		237,419
Allowance for real estate						264,711		(91,026	)		36,859		210,544		286,009
Goodwill on purchase of investments						901,179		(253,561	)		-		647,618		1,011,278
Other						94,068		(4,376	)		114,110		203,802		78,112
Related to non-disbursed provisions (*)		27,279,236		37,149,798		10,092,574		(3,141,591	)		8,870,818		15,821,801		10,316,681
Related to the operation		22,062,269		26,164,614		7,560,470		(3,141,591	)		6,459,589		10,878,468		8,229,894
Provision for contingent liabilities		10,662,598		12,116,926		4,299,579		(938,898	)		1,823,663		5,184,344		4,063,534
Civil lawsuits		4,429,314		4,851,175		1,817,990		(463,232	)		788,845		2,143,603		1,810,716
Labor claims		3,745,661		4,129,934		1,460,030		(245,839	)		479,415		1,693,606		1,407,596
Tax and social security contributions		2,441,100		3,106,612		1,010,522		(229,827	)		554,333		1,335,028		827,390
Other		46,523		29,205		11,037		-			1,070		12,107		17,832
Adjustments of operations carried out in futures settlement market		1,045,823		4,593,162		3,196		(24,965	)		1,933,919		1,912,150		415,680
Legal obligation - tax and social security contributions		2,332,856		1,510,776		392,510		(150,305	)		215,927		458,132		1,163,713
Provision related to health insurance operations		675,294		705,669		273,827		-			43,722		317,549		270,118
Other non-deductible provisions		7,345,698		7,238,081		2,591,358		(2,027,423	)		2,442,358		3,006,293		2,316,849
Related to provisions exceeding the minimum required not disbursed – allowance for loan losses		5,216,967		10,985,184		2,532,104		-			2,411,229		4,943,333		2,086,787
Reflected in stockholders’ equity accounts						3,082,986		(531,867	)		1,104,053		3,655,172		3,145,074
Corporate reorganizations (Note 2c)		7,863,667		6,001,170		2,513,984		(473,586	)		-		2,040,398		2,673,647
Adjustment to market value of available-for-sale securities		1,178,572		3,588,387		569,002		(58,281	)		1,104,053		1,614,774		471,427
Total		36,321,475		46,739,355		38,082,129		(7,689,920	)		29,065,186		59,457,395		39,021,517
Social contribution for offset arising from Option established in article 8 of Provisional Measure No. 2,158-35 of August 24, 2001						644,891		-			363		645,254		645,272

(*) From a financial point of view, rather than recording the provision of R$ 37,149,798 (R$ 27,279,236 at 09/30/2014) and deferred tax assets of R$ 15,821,801 (R$ 10,316,681 at 09/30/2014), only the net provisions of the corresponding tax effects should be considered, which would reduce the total deferred tax assets from R$ 59,457,395 (R$ 39,021,517 at 09/30/2014) to R$ 43,635,594 (R$ 28,704,836 at 09/30/2014).

At ITAÚ UNIBANCO HOLDING, the deferred tax assets totaled R$ 449,257 (R$ 75,925 at 09/30/2014) and are basically represented by legal liabilities – tax and social security of R$ 362,881 (R$ 50,067 at 09/30/2014), social contribution loss carryforwards of R$ 12,631 (R$ 21,822 at 09/30/2014), which expected realization is dependent upon the progress of the lawsuit, provision administrative of R$ 2,329 (R$ 3,933 at 09/30/2014) Adjustment to market value of securities and derivative financial instruments R$ 64,578.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 156

II -  Provision for Deferred Income Tax and Social Contribution balance and its changes are shown as follows:

	12/31/2014		Realization / Reversal			Increase		09/30/2015		09/30/2014
Reflected in income and expense accounts		4,056,830		(1,108,394	)		673,739		3,622,175		5,188,739
Depreciation in excess – leasing		2,507,980		(938,640	)		-		1,569,340		2,915,810
Restatement of escrow deposits and contingent liabilities		986,004		(146,933	)		268,244		1,107,315		1,174,011
Provision for pension plan benefits		336,799		(15,100	)		54,580		376,279		365,183
Adjustment to market value of securities and derivative financial instruments		5,621		(5,621	)		85,102		85,102		23,655
Adjustments of operations carried out in future settlement market		5,907		(914	)		222,422		227,415		364,037
Taxation of results abroad – capital gains		164,651		-			33,582		198,233		142,312
Other		49,868		(1,186	)		9,809		58,491		203,731
Reflected in stockholders’ equity accounts		937,308		(52,278	)		995,665		1,880,695		559,829
Adjustment to market value of available-for-sale securities		122,170		(42,094	)		-		80,076		64,209
Cash flow hedge		373,592		-			995,665		1,369,257		158,610
Provision for pension plan benefits (*)		441,546		(10,184	)		-		431,362		337,010
Total		4,994,138		(1,160,672	)		1,669,404		5,502,870		5,748,568

(*) Reflected in stockholders' equity, pursuant to CVM Resolution nº 695/12 (Note 19).

At ITAÚ UNIBANCO HOLDING, the provision for deferred income tax and social contribution totals R$ 4,926 (R$ 3,788 at 09/30/2014), mainly represented by restatement of escrow deposits and contingent liabilities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 157

III - The estimate of realization and present value of deferred tax assets and social contribution for offset, arising from Provisional Measure No. 2,158-35 of August 24, 2001 and from the Provision for Deferred Income Tax and Social Contribution existing at September 30, 2015, in accordance with the expected generation of future taxable income, based on the history of profitability and technical feasibility studies, are:

	Deferred tax assets																				Provision for deferred
	Temporary differences		%			Tax loss/social contribution loss carryforwards		%			Total		%			Social contribution for offset		%			income tax and social contribution			%			Net deferred taxes		%
2015		7,689,262		15	%		364,275		4	%		8,053,537		14	%		-		0	%		(771,234	)		14	%		7,282,303		13	%
2016		11,184,910		22	%		315,772		3	%		11,500,682		19	%		61,257		9	%		(938,022	)		17	%		10,623,917		19	%
2017		8,266,239		17	%		260,012		3	%		8,526,251		14	%		6,561		1	%		(1,294,549	)		24	%		7,238,263		13	%
2018		7,840,163		16	%		1,628,327		17	%		9,468,490		16	%		82,664		13	%		(430,670	)		8	%		9,120,484		17	%
2019		7,971,599		16	%		3,391,276		35	%		11,362,875		19	%		494,772		77	%		(431,762	)		8	%		11,425,885		21	%
after 2019		6,796,917		14	%		3,748,643		38	%		10,545,560		18	%		-		0	%		(1,636,633	)		29	%		8,908,927		17	%
Total		49,749,090		100	%		9,708,305		100	%		59,457,395		100	%		645,254		100	%		(5,502,870	)		100	%		54,599,779		100	%
Present value (*)		42,868,298					9,131,879					52,000,177					552,537					(4,726,124	)					47,826,590

(*) The average funding rate, net of tax effects, was used to determine the present value.

The projections of future taxable income include estimates related to macroeconomic variables, exchange rates, interest rates, volume of financial operations and services fees and others which can vary in relation to actual data and amounts.

Net income in the financial statements is not directly related to taxable income for income tax and social contribution, due to differences existing between accounting criteria and tax legislation, besides corporate aspects. Accordingly, we recommend that the trend of the realization of deferred tax assets arising from temporary differences, income tax and social contribution loss carry forwards are not used as an indication of future net income.

IV- Considering the temporary effects of Law 13,169/15, which increase the Social Contribution tax rate to 20% until December 31, 2018, tax credits were accounted for based on their expected realization. The effect on result was R$ 3,988,253.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 158

c) Tax and social security contributions

	09/30/2015		09/30/2014
Taxes and contributions on income payable		4,057,176		4,673,951
Taxes and contributions payable		1,782,784		1,481,679
Provision for deferred income tax and social contribution (Note 14b II)		5,502,870		5,748,568
Legal liabilities – tax and social security (Note 12b)		4,157,690		3,646,532
Total		15,500,520		15,550,730

At ITAÚ UNIBANCO HOLDING, the balance of Tax and Social Security Contributions totals R$ 636,937 (R$ 361,488 at 09/30/2014) and is mainly comprised of Taxes and contributions on income payable of R$ 620,286 (R$ 356,593 at 09/30/2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 159

d) Taxes paid or provided for and withheld from third parties

The amount of taxes paid or provided for is mainly from those levied on income, revenue and payroll. In relation to the amounts withheld and collected from third parties, the company takes into consideration the interest on capital and on the service provision, in addition to that levied on financial operation.

	09/30/2015		09/30/2014
Taxes paid or provided for		14,231,607		13,531,618
Taxes withheld and collected from third parties		10,253,510		8,468,256
Total		24,485,117		21,999,874

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 160

Note 15 – Permanent Assets

a) Investment

I - Change of investments - ITAÚ UNIBANCO HOLDING

	Balance at 12/31/2014												Changes																												Equity in
	Book value																		Equity in earnings of subisidiaries																						earnings of
Companies	Stockholders' equity		Adjustments under investor criteria (1)			Unrealized results			Goodwill		Balance at 12/31/2014		Amortization of goodwill			Dividends / interest on capital paid/provided for (2)			Earnings/ (loss)			Changes in exchange rates		Adjustments under investor criteria (1)			Unrealized results		Total		Adjustments in marketable securities of subsidiaries and other			Corporate Events (3)			Balance at 09/30/2015		Balance at 09/30/2014		subsidiaries from 01/01 to 09/30/2014
Domestic		61,095,712		27,405			(495,139	)		24,287		60,652,265		(4,752	)		(3,090,648	)		10,887,241			-		(14,861	)		92,207		10,964,587		(817,895	)		(399,428	)		67,304,129		58,173,842		9,935,230
Itaú Unibanco S.A.		49,772,836		6,470			(437,129	)		24,287		49,366,464		(4,752	)		-			6,872,227			-		1,891			81,922		6,956,040		(822,484	)		-			55,495,268		48,747,328		6,899,894
Banco Itaú BBA S.A.		5,685,182		23,400			(57,048	)		-		5,651,534		-			(642,340	)		618,841			-		(16,719	)		9,323		611,445		8,092			-			5,628,731		5,524,526		560,844
Banco Itaucard S.A. (4)		2,609,183		(4,228	)		(962	)		-		2,603,993		-			(2,264,953	)		2,582,231			-		(180	)		962		2,583,013		(1,560	)		-			2,920,493		1,794,388		2,281,477
Itaú Corretora de Valores S. A. (4)		1,268,626		1,763			-			-		1,270,389		-			(183,351	)		700,854			-		147			-		701,001		(1,917	)		-			1,786,122		1,161,016		185,307
Itaú-BBA Participações S.A.		1,759,868		-			-			-		1,759,868		-			-			113,084			-		-			-		113,084		(25	)		(399,424	)		1,473,503		946,486		7,702
Itau Seguros S.A.		16		-			-			-		16		-			(4	)		4			-		-			-		4		(1	)		(3	)		12		17		3
Itaú Administração Previdenciária Ltda.		1		-			-			-		1		-			-			-			-		-			-		-		-			(1	)		-		1		-
Itaú Seguros Soluções Corporativas S.A. (5)		-		-			-			-		-		-			-			-			-		-			-		-		-			-			-		80		3
Itau Soluções Previd, Ltda. (6)		-		-			-			-		-		-			-			-			-		-			-		-		-			-			-		-		-
																														-
Foreign		5,806,993		-			-			102,817		5,909,810		(38,556	)		(181,499	)		280,170			2,256,650		-			-		2,536,820		2,966			309,688			8,539,229		5,472,287		541,769
Banco Itau Chile S.A. (7)		-		-			-			-		-		51,841			(64,944	)		129,524			643,381		-			-		772,905		1,355			3,674,317			4,435,474		-		-
BICSA Holdings LTD (7)		-		-			-			-		-		4,711			-			57,139			451,509		-			-		508,648		(6	)		1,556,368			2,069,721		-		-
Banco Itaú Uruguay S.A.		893,805		-			-			9,424		903,229		(3,534	)		-			337,337			256,426		-			-		593,763		(5,708	)		-			1,487,750		879,133		119,792
OCA S.A.		229,168		-			-			2,504		231,672		(1,030	)		(67,773	)		109,385			61,227		-			-		170,612		-			-			333,481		193,239		46,790
Itaú Chile Holdings, INC. (8)		4,618,931		-			-			90,483		4,709,414		(90,483	)		-			(355,624	)		833,744		-			-		478,120		7,325			(4,896,245	)		208,131		4,342,933		373,223
ACO Ltda.		3,505		-			-			42		3,547		(16	)		-			279			862		-			-		1,141		-			-			4,672		3,123		(189	)
OCA Casa Financiera S.A. (9)		61,584		-			-			364		61,948		(45	)		(48,782	)		2,130			9,501		-			-		11,631		-			(24,752	)		-		53,859		2,153
Grand total		66,902,705		27,405			(495,139	)		127,104		66,562,075		(43,308	)		(3,272,147	)		11,167,411			2,256,650		(14,861	)		92,207		13,501,407		(814,929	)		(89,740	)		75,843,358		63,646,129		10,476,999

(1) Adjustment arising from the standardization of the investee’s financial statements according to the investor’s accounting policies;

(2) Dividends approved and not paid are recorded as Dividends receivable.

(3) Corporate Events arising from acquisitions, spin-offs, merges, takeovers, and increases or decreases of capital.

(4) The investment and the equity in earnings reflect the different interest in preferred shares, profit sharing and dividends.

(5) Investment sold on October 31, 2014 to ACE Seguradora S.A.

(6) Company merged on August 31, 2014 by Itaú Administração Previdenciária Ltda.

(7) Company entrance on July 31, 2015.

(8) Em 17 de julho de 2015, após aprovação das autoridades regulatórias competentes, ocorreu a dissolução da subsidiária Itaú Chile Holdings (ICH). Com isso, os investimentos detidos pela ICH foram transferidos ao ITAÚ UNIBANCO HOLDING. A operação produziu um efeito contábil de R$ (251) milhões.

(9) Company liquidated on March 30, 2015.

			Stockholders’		Net income			Number of shares/quotas owned by ITAÚ UNIBANCO HOLDING						Equity share in		Equity share in
Companies	Capital		equity		for the period			Common		Preferred		Quotas		voting capital (%)		capital (%)
Domestic
Itaú Unibanco S.A.		40,325,563		55,872,681		6,872,228			2,124,156,731		2,057,245,497		-		100.00		100.00
Banco Itaú BBA S.A.		3,574,844		5,676,457		618,841			4,474,436		4,474,436		-		100.00		100.00
Banco Itaucard S.A. (4)		15,564,076		19,702,588		2,855,703			3,596,744,163		1,277,933,118		-		1.51		2.04
Itaú Corretora de Valores S. A. (4)		1,212,887		3,094,293		775,736			-		811,503		-		-		1.94
Itaú-BBA Participações S.A.		1,328,562		1,473,503		113,084			548,954		1,097,907		-		100.00		100.00
Itau Seguros S.A.		3,767,415		4,980,296		1,565,648			450		1		-		0.00		0.00
Itaú Administração Previdenciária Ltda.		59,251		109,145		18,065			-		-		1,299		0.00		0.00
Foreign
Banco Itau Chile S.A. (7)		1,964,044		4,383,636		129,524			1,433,689		-		-		100.00		100.00
BICSA Holdings LTD (7)		1,314,477		2,065,010		57,158			-		-		330,860,746		100.00		100.00
Banco Itaú Uruguay S.A.		610,830		1,481,860		337,337			4,465,133,954		-		-		100.00		100.00
OCA S.A.		20,550		331,689		109,385			1,502,176,740		-		-		100.00		100.00
Itaú Chile Holdings, INC.		566,711		208,131		(355,624	)		100		-		-		100.00		100.00
ACO Ltda.		18		4,680		281			-				131		99.24		99.24

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 161

II - Composition of investments

a) The table below shows the major investments of ITAÚ UNIBANCO HOLDING CONSOLIDATED:

	% participation at 09/30/2015						09/30/2015
	Total			Voting			Stockholders’ equity		Net income		Investment		Equity in earnings
Domestic												3,291,539		444,740
BSF Holding S.A (1)		49.00	%		49.00	%		1,460,561		346,130		1,034,520		169,604
IRB-Brasil Resseguros S.A. (2) (3)		15.01	%		15.01	%		2,959,909		346,330		437,116		51,944
Porto Seguro Itaú Unibanco Participações S.A.(2)(3)		42.93	%		42.93	%		3,983,877		496,710		1,710,413		213,254
Others (4a) (5)												109,490		9,938
Foreign (6a)												2,059		459
Total												3,293,598		445,199

	% participation at 09/30/2014						09/30/2014
	Total			Voting			Stockholders’ equity		Net income		Investment		Equity in earnings
Domestic												3,020,446		370,427
BSF Holding S.A.(1)		49.00	%		49.00	%		1,110,259		291,111		942,143		142,645
IRB-Brasil Resseguros S.A. (2) (3)		15.01	%		15.01	%		2,827,384		567,610		417,219		85,058
Porto Seguro Itaú Unibanco Participações S.A.(2) (3)		42.93	%		42.93	%		3,658,628		292,572		1,568,463		125,610
Others (4b) (5)												92,621		17,114
Foreign												1,253		(161	)
Others (6b)												1,253		(161	)
Total												3,021,699		370,266

(1) Includes goodwill in the amount of R$ 318,845 at 09/30/2015 (R$ 398,116 at 09/30/2014);

(2) For the purpose of accounting for participation in earnings, the position at 08/31/2015 and 08/31/2014, as provided for in Circular Letter nº 1,963 of August 23, 1991, from BACEN;

(3) Adjustments resulting from standardization of the financial statements of the investee to the financial policies of invetidora;

(4) a) At 09/30/2015, includes Kinea Private Equity, Olímpia Promoção e Serviços S.A. and Tecnologia Bancária S.A. b) At 09/30/2014 includes Latosol Empreendimentos e Participações LTDA, Olímpia Promoção e Serviços S.A. and Tecnologia Bancária S.A.

(5) Includes equity in earnings not arising from net income.

(6) a) At 09/30/2015, includes Compãnia Uruguaya de Medios de Processamiento and Rias Redbanc S.A. b) At 09/30/2014, includes Compãnia Uruguaya de Medios de Processamiento, Rias Redbanc S.A. and Rosefield Finance Ltda.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 162

III) Other investments

	09/30/2015			09/30/2014
Other investments		647,657			623,750
Shares and quotas		51,469			89,745
Investments through tax incentives		201,625			204,684
Equity securities		16,093			14,756
Other		378,470			314,565
(Allowance for loan losses)		(208,938	)		(211,948	)
Total		438,719			411,802
Equity - Other investments		6,857			22,990

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 163

b) Fixed assets, goodwill and intangible assets

I) Fixed assets

	Real Estate in Use (2) (3)						Other Fixed Assets (3)
Real estate in use (1)	Land			Buildings			Improvements			Installations			Furniture and equipment			EDP Systems			Other (communication, security and transportation)			Total
Annual depreciation rates					4%			10%			10 a 20%			10 a 20%			20 a 50%			10 a 20%
Cost
Balance at 12/31/2014		942,571			3,578,226			1,510,346			1,116,719			1,789,039			6,336,816			773,153			16,046,870
Acquisitions		-			44,654			169,710			62,775			201,565			370,066			55,055			903,825
Disposals		(6,460	)		(13,800	)		(114,677	)		182,461			(52,231	)		(412,836	)		(3,383	)		(420,926	)
Exchange variation		3,681			49,027			94,802			10,552			34,421			79,488			7,789			279,760
Other (4)		(37	)		(433,536	)		2,283			410,658			(365,054	)		(417,649	)		1,284			(802,051	)
Balance at 09/30/2015		939,755			3,224,571			1,662,464			1,783,165			1,607,740			5,955,885			833,898			16,007,478
Depreciation
Balance at 12/31/2014		-			(1,695,460	)		(753,421	)		(519,761	)		(503,692	)		(4,534,893	)		(478,822	)		(8,486,049	)
Depreciation expenses		-			(54,323	)		(195,598	)		(94,457	)		(68,504	)		(632,580	)		(58,768	)		(1,104,230	)
Disposals		-			9,377			107,703			(183,062	)		3,138			393,970			2,515			333,641
Exchange variation		-			(10,292	)		(44,999	)		(3,113	)		(21,407	)		(64,949	)		(4,737	)		(149,497	)
Other (4)		-			17,615			(462	)		(4,740	)		9,562			620,563			288			642,826
Balance at 09/30/2015		-			(1,733,083	)		(886,777	)		(805,133	)		(580,903	)		(4,217,889	)		(539,524	)		(8,763,309	)
Impairment
Balance at 12/31/2014		-			-			-			-			-			-			-			-
Additions / assumptions		-			-			-			-			-			-			-			-
Reversals		-			-			-			-			-			-			-			-
Balance at 09/30/2015		-			-			-			-			-			-			-			-
Book value
Balance at 09/30/2015		939,755			1,491,488			775,687			978,032			1,026,837			1,737,996			294,374			7,244,169
Balance at 09/30/2014		939,264			1,752,680			701,551			590,878			1,156,915			1,972,883			298,298			7,412,469

(1) The contractual commitments for the purchase of the fixed assets totaled R$ 60,186 achievable by 2016.

(2) Includes amounts pledged in guarantee of voluntary deposits (Note 12d).

(3) Includes the amount of R$ 4,459 (R$ 3,255 at 09/30/2014) related to attached real estate; fixed assets under construction in the amount of R$ 849,286 (R$ 1,981,794 at 09/30/2014) consisting of R$ 201,583 (R$ 1,225,423 at 09/30/2014) in real estate in use; R$ 20,239 (R$ 16,882 at 09/30/2014) in improvements, and R$ 627,464 (R$ 739,489 at 09/30/2014) in equipment.

(4) Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 164

II) Goodwill

				Changes
	Amortization period	Balance at 12/31/2014		Acquisitions		Amortization expenses			Impairment		Disposals (*)			Exchange variation		Balance at 09/30/2015		Balance at 09/30/2014
Goodwill (Notes 2b and 4j)	10 years		203,919		10,506		(4,534	)		-		(12,133	)		45,930		243,688		202,079

(*) Goodwill transferred to Intangible resulting from the merger of Itaú Unibanco Financeira (Note 2c).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 165

III) Intangible assets

				Other intangible assets
Intangible (1)	Rights for acquisition of payroll (2)			Association for the promotion and offer of financial products and services			Acquisition of software			Development of software			Goodwill on Acquisition (Note 4k)			Other Intangible Assets			Total
Annual amortization rates		20%			8%			20%			20%			20%			10% a 20%
Cost
Balance at 12/31/2014		1,066,922			1,561,377			1,891,898			2,836,712			1,483,340			2,122,547			10,962,796
Acquisitions		45,284			4,279			327,919			375,658			15,167			2			768,309
Disposals		(50,212	)		(102,026	)		(106,874	)		(1,511	)		(3,602	)		(445	)		(264,670	)
Exchange variation		-			8,374			150,738			-			8,471			192,789			360,372
Other (3)		(8,385	)		2,772			7,621			-			311,121			(1,416,861	)		(1,103,732	)
Balance at 09/30/2015		1,053,609			1,474,776			2,271,302			3,210,859			1,814,497			898,032			10,723,075
Amortization
Balance at 12/31/2014		(555,311	)		(330,524	)		(887,177	)		(111,981	)		(106,044	)		(305,685	)		(2,296,722	)
Amortization expenses (4)		(157,042	)		(108,300	)		(267,613	)		(88,236	)		(184,028	)		(32,781	)		(838,000	)
Disposals		50,190			51,052			106,874			-			-			445			208,561
Exchange variation		-			(3,445	)		(76,780	)		-			(2,191	)		(157,201	)		(239,617	)
Other (3)		-			-			1,208			(1,528	)		(3,093	)		3,533			120
Balance at 09/30/2015		(662,163	)		(391,217	)		(1,123,488	)		(201,745	)		(295,356	)		(491,689	)		(3,165,658	)
Impairment (5)
Balance at 12/31/2014		(18,251	)		(1,792	)		-			(13,733	)		-			-			(33,776	)
Additions / assumptions		-			-			-			(3,833	)		-			-			(3,833	)
Disposals		-			-			-			-			-			-			-
Balance at 09/30/2015		(18,251	)		(1,792	)		-			(17,566	)		-			-			(37,609	)
Book value
Balance at 09/30/2015		373,195			1,081,767			1,147,814			2,991,548			1,519,141			406,343			7,519,808
Balance at 09/30/2014		517,837			1,295,974			986,421			2,562,351			1,727,310			389,061			7,478,954

(1) The contractual commitments for purchase of the new intangible assets totaled R$ 356,205 achievable by 2016.

(2) Represents the recording of amounts paid for acquisition of rights to provide services of payment of salaries, proceeds, retirement and pension benefits and similar benefits.

(3) Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

(4) Amortization expenses of the rights for acquisition of payrolls and associations are disclosed in the expenses on financial operations.

(5) Pursuant to BACEN Resolution No. 3,566, of May 29, 2001 (Note 13i).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 166

Note 16 – Stockholders' equity

a) Shares

The Extraordinary Stockholders’ Meeting held on April 29, 2015 approved the increase of subscribed and paid-up capital by R$ 10,148,000, with the capitalization of the amounts recorded in Revenue Reserve – Statutory Reserve, with a 10% bonus shares. Bonus shares started being traded on July 17,2015 and the process was approved by the Central Bank on June 25,2015. Accordingly, capital stock was increased by 553,083,268 shares.

Capital comprises 6,083,915,949 book-entry shares with no par value, of which 3,047,040,198 are common and 3,036,875,751 are preferred shares without voting rights, but with tag-along rights, in the event of the public offer of common shares, at a price equal to 80% of the amount paid per share with voting rights in the controlling stake, as well as a dividend at least equal to that of the common shares. Capital stock amounts to R$ 85,148,000 (R$ 75,000,000 at 09/30/2014), of which R$ 58,078,778 (R$ 51,605,389 at 09/30/2014) refers to stockholders domiciled in the country and R$ 27,069,222 (R$ 23,394,611 at 09/30/2014) refers to stockholders domiciled abroad.

The table below shows the change in shares of capital stock and treasury shares during the period:

	Number
	Common		Preferred			Total			Amount
Residents in Brazil at 12/31/2014		2,758,685,730		1,043,799,342			3,802,485,072
Residents abroad at 12/31/2014		11,350,814		1,716,996,795			1,728,347,609
Shares of capital stock at 12/31/2014		2,770,036,544		2,760,796,137			5,530,832,681
Bonus Shares - ESM of 04/29/2015 - Carried out at 06/25/2015		277,003,654		276,079,614			553,083,268
Shares of capital stock at 09/30/2015		3,047,040,198		3,036,875,751			6,083,915,949
Residents in Brazil at 09/30/2015		3,033,922,357		1,115,868,649			4,149,791,006
Residents abroad at 09/30/2015		13,117,841		1,921,007,102			1,934,124,943
Treasury shares at 12/31/2014		2,541		53,828,551			53,831,092			(1,327,880	)
Purchase of treasury shares		-		82,784,800			82,784,800			(2,520,077	)
Exercised – granting of stock options		-		(5,872,441	)		(5,872,441	)		3,647
Disposals – stock option plan		-		(5,342,874	)		(5,342,874	)		295,254
Bonus Shares - ESM of 04/29/2015		254		8,425,914			8,426,168			-
Treasury shares at 09/30/2015 (1)		2,795		133,823,950			133,826,745			(3,549,056	)
Outstanding shares at 09/30/2015		3,047,037,403		2,903,051,801			5,950,089,204
Outstanding shares at 09/30/2014 (2)		3,047,037,403		2,976,419,057			6,023,456,460

(1) Own shares, purchased based on authorization of the Board of Directors, to be held in Treasury for subsequent cancellation or replacement in the market.

(2) For better comparability, outstanding shares for the period ending September 30, 2014 were adjusted for the bonus of June 25, 2015.

We detail below of the cost of shares purchased in the period, as well the average cost of treasury shares and their market price (in Brazilian reais per share) at 09/30/2015:

Cost / Market value	Common		Preferred
Minimum		-		24.96
Weighted average		-		29.07
Maximum		-		31.86
Treasury shares
Average cost		7.25		26.52
Market value		24.52		26.51

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 167

b) Dividends

Stockholders are entitled to a mandatory dividend of not less than 25% of annual net income, which is adjusted according to the rules set forth in Brazilian Corporate Law. Both types of shares participate equally, after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per share non-cumulative to be paid to preferred shares.

The calculation of the monthly advance of mandatory minimum dividend is based on the share position on the last day of the prior month, taking into consideration that the payment is made on the first business day of the subsequent month, in the amount of R$ 0.015 per share.

I - Calculation

Net income - ITAÚ UNIBANCO HOLDING	16,317,614
Adjustments:
(-) Legal reserve	(815,881	)
Dividend calculation basis	15,501,733
Mandatory dividend	3,875,433
Dividend – paid / provided for	3,875,433		25.0	%

II – Payments / provision of interest on capital and dividends

	Gross		WTS			Net
Paid / Prepaid		2,733,988		(310,510	)		2,423,478
Dividends - 8 monthly installments of R$ 0.015 per share paid in February to September 2015		663,923		-			663,923
Interest on capital - R$ 0.3460 per share, paid on 08/25/2015		2,070,065		(310,510	)		1,759,555
Declared (recorded in other liabilities – Social and Statutory)		1,640,893		(188,938	)		1,451,955
Dividends - 1 monthly installment of R$ 0.015 per share paid on 10/01/2015		89,422		-			89,422
Dividends declared - R$ 0.0491 per share		291,888		-			291,888
Interest on capital - R$ 0.2117 per share, to be declared		1,259,583		(188,938	)		1,070,645
Total from 01/01 to 09/30/2015 - R$ 0.6581 net per share		4,374,881		(499,448	)		3,875,433
Total from 01/01 to 09/30/2014 - R$ 0.5459 net per share		3,207,823		(267,065	)		2,940,758

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 168

c) Capital and revenue reserves - ITAÚ UNIBANCO HOLDING

	09/30/2015		09/30/2014
Capital reserves		1,412,963		892,700
Premium on subscription of shares		283,512		283,512
Granted options recognized – Law No. 11,638, Share-based instruments and Share-based payment		1,128,346		608,084
Reserves from tax incentives and restatement of equity securities and other		1,105		1,104
Revenue reserves		26,086,533		23,415,789
Legal		6,656,531		5,590,179
Statutory:		19,430,002		17,825,610
Dividends equalization (1)		7,883,055		6,100,661
Working capital increase (2)		5,120,913		5,190,525
Increase in capital of investees (3)		6,426,034		6,534,424

(1) Reserve for Dividends Equalization – its purpose is to guarantee funds for the payment of advances of dividends, including interest on capital, to maintain the flow of the stockholders’ compensation.

(2) Reserve for Working Capital Increase – its purpose is to guarantee funds for the company’s operations.

(3) Reserve for Increase in Capital of Investees – its purpose is to guarantee the preferred subscription right in the capital increases of investees.

d) Conciliation of net income and stockholders’ equity (Note 2b)

	Net income						Stockholders’ equity
	01/01 to 09/30/2015			01/01 to 09/30/2014			09/30/2015			09/30/2014
ITAÚ UNIBANCO HOLDING		16,317,614			12,382,142			108,020,223			97,269,954
Amortization of goodwill		463,966			792,676			(706,566	)		(1,303,912	)
Corporate reorganizations (Note 2c)		1,392,902			1,408,786			(3,960,772	)		(5,190,020	)
Conversion adjustments of foreign investments (Note 4s)		(512,649	)		138,114			-			-
Foreign exchange variation of investments		(3,952,218	)		301,268			-			-
Hedge of net investments in foreign operations		5,824,762			(72,920	)		-			-
Tax effects – hedge of net investments in foreign operations		(2,385,193	)		(90,234	)		-			-
ITAÚ UNIBANCO HOLDING CONSOLIDATED		17,661,833			14,721,718			103,352,885			90,776,022

e) Asset valuation adjustments - ITAÚ UNIBANCO HOLDING CONSOLIDADO

	09/30/2015			09/30/2014
Available-for-sale securities		(2,315,438	)		(604,199	)
Hedge cash flow		1,451,309			253,039
Remeasurements in liabilities of post-employment benefits		(214,088	)		(341,947	)
Foreign exchange variation on investments / Net Investment Hedge in Foreign Operations		482,840			(138,114	)
Asset valuation adjustments		(595,377	)		(831,221	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 169

f) Non-controlling interests

	Stockholders’ equity				Net Income
	09/30/2015		09/30/2014		01/01 to 09/30/2015			01/01 to 09/30/2014
Itau Bank, Ltd. (*)		-		963,462		-			-
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		534,568		434,093		(97,884	)		(79,986	)
Banco Itaú BMG Consignado S.A. (Note 2c)		910,568		539,006		(96,235	)		(62,445	)
Luizacred S.A. Soc. Cred. Financiamento Investimento		295,777		283,590		(59,872	)		(65,003	)
IGA Participações S.A.		57,756		52,610		(4,520	)		(1,616	)
Investimentos Bemge S.A.		23,496		21,751		(1,349	)		(1,013	)
Banco Investcred Unibanco S.A.		18,933		19,926		925			(839	)
Others		7,470		9,181		(5,053	)		(10,105	)
Total		1,848,568		2,323,619		(263,988	)		(221,007	)

(*) Represented by Preferred Shares issued on December 31, 2002 and redeemed on March 31, 2015 by Itau Bank Ltd., in the amount of US$ 393,072 thousand, with dividends calculated based on LIBOR plus 1.25% p.a., payable on a monthly basis.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 170

g) Share-based payment

ITAÚ UNIBANCO HOLDING and its subsidiaries have share-based payment programs aimed at involving its management members and employees in the medium and long-term corporate development process.

These payments are only made in years in which there are sufficient profits to enable the distribution of mandatory dividends, in order to limit the maximum dilution to which stockholders are subject, and at a quantity that does not exceed the limit of 0.5% of the total shares held by the controlling and minority stockholders at the balance sheet date.

These programs are settled by the delivery of ITUB4 treasury shares to stockholders.

From January 1 to September 30, 2015, the accounting effect of the share-based payment in income was R$ (597,954) (R$ (254,464) from January 1 to September 30, 2014).

I – Stock Option Plan (Simple Options)

ITAÚ UNIBANCO HOLDING has a Stock Option Plan (“Simple Options”) aimed at involving management members and employees in the medium and long-term corporate development program of ITAÚ UNIBANCO HOLDING and its subsidiaries, offering them the opportunity to take part in the appreciation that their work and dedication bring to the shares.

In addition to the grants provided under the Plan, ITAÚ UNIBANCO HOLDING also maintains control over the rights and obligations in connection with the options granted under the plans assumed at the Extraordinary Stockholders’ Meetings held on April 24, 2009 and April 19, 2013 related to the Unibanco – União de Bancos Brasileiros S.A., Unibanco Holdings S.A. and Redecard S.A. stock option plans, respectively. The exchange of shares for ITUB4 did not have relevant financial impact accordingly.

Simple options have the following characteristics:

a) Exercise price: calculated based on the average prices of shares in the three (3) months of the year prior to the grant date. The prices determined will be restated until the last business day of the month prior to the option exercise date based on IGP-M or, in its absence, on the index to be internally determined, and they should be paid within a period equal to that in force for settlement of operations on BM&FBOVESPA.

b) Vesting period: determined upon the issue, from one (1) to seven (7) years, counted from the grant date. The vesting period is normally determined at five (5) years.

c) Fair value and economic assumptions for cost recognition: the fair value of Simple Options is calculated on the grant date based on the Binominal model. Economic assumptions used are as follows:

(i) Exercise price: exercise price previously agreed upon the option issue, adjusted by the IGP-M variation;

(ii) Price of the underlying asset (ITUB4 shares): closing price on BM&FBOVESPA on the calculation base date.

(iii) Expected dividends: the average annual return rate for the last three (3) years of dividends paid plus interest on capital of the ITUB4 share;

(iv) Risk-free interest rate: IGP-M coupon rate at the expiration date of the Simple Option.

(v) Expected volatility: calculated based on the standard deviation from the history of the last 84 monthly returns of the ITUB4 share closing prices, disclosed by BM&FBOVESPA, adjusted by the IGP-M variation.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 171

	Simple options
	Quantity			Weighted average Exercise price		Weighted average Market value
Opening balance at 12/31/2014		55,162,112			32.43
Options exercisable at the end of the period		28,872,290			32.15
Options outstanding not exercisable		26,289,822			32.73
Options:
Granted		-			-
Canceled / Forfeited (*)		(415,335	)		34.36
Exercised		(150,058	)		24.31		37.68
Closing balance at 09/30/2015		54,596,719			34.39
Options exercisable at the end of the period		28,673,986			34.12
Options outstanding not exercisable		25,922,733			24.70
Range of exercise prices
Granting 2008-2009					25,23 - 38,58
Granting 2010-2012					23,88 - 40,98
Weighted average of the remaining contractual life (in years)		2.19

(*) Refers to non-exercise due to the beneficiary’s option.

	Simple options
	Quantity			Weighted average Exercise price		Weighted average Market value
Opening balance at 12/31/2013		71,848,530			29.86
Options exercisable at the end of the period		36,008,273			27.65
Options outstanding not exercisable		35,840,257			32.95
Options:
Granted		-			-
Canceled / Forfeited (*)		(412,028	)		33.37
Exercised		(12,809,687	)		26.79		33.09
Closing balance at 09/30/2014		58,626,815			31.85
Options exercisable at the end of the period		23,497,758			28.98
Options outstanding not exercisable		35,129,057			33.76
Range of exercise prices
Granting 2006-2009					23,45 - 39,87
Granting 2010-2012					23,88 - 38,10
Weighted average of the remaining contractual life (in years)		3.09

(*) Refers to non-exercise due to the beneficiary’s option.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 172

ll – Partner Plan

The employees and management members of ITAÚ UNIBANCO HOLDING and its subsidiaries may be selected to participate in the program that invests a percentage of their bonus to acquire ITUB4 shares and share-based instruments; accordingly, the ownership of these shares should be held by the beneficiaries for a period from three (3) to five (5) years, counted from the initial investment, and are thus subject to market price variation. After complying with the suspension conditions set forth in the program, beneficiaries will be entitled to receive ITUB4 as consideration, in accordance with the numbers of shares provided for in the program regulation.

The acquisition price of own shares and Share-Based Instruments is established every six months and is equivalent to the average of the ITUB4 quotation in the 30 days prior to the determination of the acquisition price.

The fair value of the ITUB4 as consideration is the market price at the grant date, less expected dividends.

The weighted average of the fair value of the ITUB4 as consideration was estimated at R$ 29.22 per share at September 30, 2015 (R$ 26.87 per share at September 30, 2014).

Law No. 12,973/14, which adjusted tax legislation to the international accounting standards and terminated the Transition Tax Regime (RTT), set up a new legal framework for payments made in shares. We made changes to the Partner Plan, and adjusted its tax effects, to conform with this new legislation.

Changes in the Partner Program

	Quantity
Balance at 12/31/2014		26,734,428
New granted		10,402,541
Cancelled		(551,642	)
Exercised		(5,722,383	)
Balance at 09/30/2015		30,862,944
Weighted average of remaining contractual life (years)		2.28

	Quantity
Balance at 12/31/2013		20,187,002
New granted		8,214,181
Cancelled		(1,708,695	)
Exercised		(3,848,444	)
Balance at 09/30/2014		22,844,044
Weighted average of remaining contractual life (years)		2.30

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 173

III- Variable Compensation

The policy established in compliance with CMN Resolution No. 3,921/10 sets forth that fifty percent (50%) of the management’s variable compensation should be paid in cash and fifty percent (50%) should be paid in shares for a period of three (3) years. Shares are delivered on a deferred basis, of which one-third (1/3) per year, subject to the executive’s remaining with the institution. The deferred unpaid portions may be reversed proportionally to the significant reduction of the recurring income realized or the negative income for the period.

The fair value of the ITUB4 share is the market price at its grant date.

The weighted average of the fair value of ITUB4 shares was estimated at R$ 31.24 per share at September 30, 2015 (R$ 25.33 per share at September 30, 2014).

Change in variable compensation in shares	2015
	Quantity
Balance at 12/31/2014		11,259,967
New		8,019,703
Delivered		(4,388,338	)
Cancelled		(313,465	)
Balance at 09/30/2015		14,577,867

Change in variable compensation in shares	2014
	Quantity
Balance at 12/31/2013		5,524,663
New		7,583,912
Delivered		(1,940,527	)
Cancelled		(181,028	)
Balance at 09/30/2014		10,987,020

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 174

Note 17 – Related parties

a) Transactions between related parties are disclosed in compliance with CVM Resolution n° 642, of October 7, 2010, and CMN Resolution n° 3,750 of June 30, 2009. These transactions are carried out at amounts, terms and average rates in accordance with normal market practices during the period, as well as under reciprocal conditions.

Transactions between companies included in consolidation were eliminated from the consolidated financial statements and the lack of risk is taken into consideration.

The unconsolidated related parties are the following:

· Itaú Unibanco Participações S.A. (IUPAR), the Companhia E.Johnston de Participações S.A. (shareholder of IUPAR) and ITAÚSA, direct and indirect shareholders of ITAÚ UNIBANCO HOLDING;

· The non-financial subsidiaries of ITAÚSA, specially: Itautec S.A., Duratex S.A., Elekeiroz S.A., ITH Zux Cayman Company Ltd and Itaúsa Empreendimentos S.A.;

· Fundação Itaú Unibanco - Previdência Complementar, FUNBEP – Fundo de Pensão Multipatrocinado, Fundação Bemgeprev, UBB Prev - Previdência Complementar, and Fundação Banorte Manuel Baptista da Silva de Seguridade Social, closed-end supplementary pension entities that administer retirement plans sponsored by ITAÚ UNIBANCO HOLDING and / or its subsidiaries;

· Fundação Itaú Social, Instituto Itaú Cultural, Instituto Unibanco, Instituto Assistencial Pedro Di Perna, Instituto Unibanco de Cinema and Associação Itaú Viver Mais, entities sponsored by ITAÚ UNIBANCO and subsidiaries to act in their respective areas of interest, as described in Notes 22e and 22j; and

· Investments in Porto Seguro Itaú Unibanco Participações S.A. and BSF Holding S.A.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 175

The transactions with these related parties are basically characterized by:

	ITAÚ UNIBANCO HOLDING													ITAÚ UNIBANCO HOLDING CONSOLIDATED
		Assets / (liabilities)						Revenue / (expense)							Assets / (liabilities)						Revenue / (expense)
	Annual rate	09/30/2015			09/30/2014			01/01 to 09/30/2015			01/01 to 09/30/2014			Annual rate	09/30/2015			09/30/2014			01/01 to 09/30/2015			01/01 to 09/30/2014
Interbank investments			68,391,052			40,746,386			3,684,158			2,768,189		-		-			-			-			-
Itaú Unibanco S.A.	14.15% pre fixed or 100% of Selic		39,972,577			33,346,212			2,963,323			2,439,631		-		-			-			-			-
Agência Grand Cayman	5,83% to 6.36% pre fixed		11,026,508			7,400,174			398,440			328,558		-		-			-			-			-
Itaú Unibanco S.A. Nassau Branch	2,96% to 10.75% pre fixed		17,391,966			-			322,395			-		-		-			-			-			-
Securities and derivative financial instruments			-			12,487,433			409,817			477,336		-		-			-			-			-
Agência Grand Cayman			-			12,487,433			409,817			477,336		-		-			-			-			-
Deposits			(7,554,315	)		-			(218,536	)		(2,274	)	-		-			-			-			-
Itaú Unibanco S.A.			-			-			-			(2,274	)	-		-			-			-			-
Itaú Unibanco S.A. Nassau Branch			(7,554,315	)		-			(218,536	)		-		-		-			-			-			-
Securities sold under repurchase agreements			-			(30,381	)		-			(638	)	-		(143,986	)		(172,306	)		(18,539	)		(8,650	)
Duratex S.A.			-			-			-			-		99% a 101,5% do CDI		(37,228	)		(90,915	)		(7,900	)		(8,021	)
Elekeiroz S.A.			-			-			-			-		99% a 100% do CDI		(18,303	)		-			(315	)		-
Itautec S.A.			-			-			-			-		100% do CDI		(1,686	)		(1,507	)		(148	)		(131	)
Itaúsa Empreendimentos S.A.			-			-			-			-		99,5% a 100,5% do CDI		(63,087	)		(71,168	)		(8,036	)		-
Olimpia Promoção e Serviços S.A.			-			-			-			-		100% da Selic		(11,179	)		(8,716	)		(858	)		(498	)
Others			-			(30,381	)		-			(638	)	-		(12,503	)		-			(1,282	)		-
Amounts receivable from (payable to) related companies / Banking service fees (expenses)			(404	)		(262	)		(2,869	)		(2,542	)	-		(133,008	)		(116,160	)		7,580			6,366
Itaú Unibanco S.A.			(8	)		-			-			-		-		-			-			-			-
Itaú Corretora de Valores S. A.			(396	)		(262	)		(2,869	)		(2,542	)	-		-			-			-			-
Itaúsa Investimentos Itaú S.A.			-			-			-			-		-		-			149			1,706			1,203
Itaúsa Empreendimentos S.A.			-			-			-			-		-		-			-			(5,033	)		-
Olimpia Promoção e Serviços S.A.			-			-			-			-		-		(2,448	)		-			(20,873	)		-
Fundação Itaú Unibanco - Previdência Complementar			-			-			-			-		-		(121,649	)		(14,638	)		28,075			25,706
FUNBEP - Fundo de Pensão Multipatrocinado			-			-			-			-		-		276			277			3,897			3,781
Fundação BEMGEPREV			-			-			-			-		-		-			24			-			465
Fundação Banorte Manuel Baptista da Silva de Seguridade Social			-			-			-			-		-		-			(99,729	)		-			217
Others			-			-			-			-		-		(9,187	)		(2,243	)		(192	)		(25,006	)
Rent revenues (expenses)			-			-			(186	)		(187	)	-		-			-			(43,695	)		(39,435	)
Itaúsa Investimentos Itaú S.A.			-			-			-			(13	)	-		-			-			(1,277	)		(1,186	)
Itaú Seguros S.A.			-			-			(142	)		(133	)	-		-			-			-			-
Fundação Itaú Unibanco - Previdência Complementar			-			-			-			-		-		-			-			(29,592	)		(28,306	)
FUNBEP - Fundo de Pensão Multipatrocinado			-			-			-			-		-		-			-			(9,423	)		(9,943	)
Others			-			-			(44	)		(41	)	-		-			-			(3,403	)		-
Donation expenses			-			-			-			-		-		-			-			(62,880	)		(56,300	)
Instituto Itaú Cultural			-			-			-			-		-		-			-			(62,000	)		(55,500	)
Associação Itaú Viver Mais			-			-			-			-		-		-			-			(880	)		(800	)
Data processing expenses			-			-			-			(26	)	-		-			-			-			(205,198	)
Itautec S.A.			-			-			-			(26	)	-		-			-			-			(205,198	)

In addition to the aforementioned operations, ITAÚ UNIBANCO HOLDING and non-consolidated related parties, as an integral part of the Agreement for apportionment of common costs of Itaú Unibanco, recorded in Other Administrative Expenses in the amount of R$ (3,081) (R$ (4,220) from 01/01 to 09/30/2014) in view of the use of the common structure.

In accordance with the rules in effect, the financial institutions cannot grant loans or advances to the following:

a) any individual or company that control the Institution or any entity under common control with the institution, or any officer, director, fiscal council member or direct relative of such individuals;

b) any entity controlled by the Institution; or

c) any entity of which the bank directly or indirectly holds at least 10% of capital stock.

Therefore, no loans or advances are made to any subsidiaries, executive officers, Board of Directors members or their relatives.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 176

b) Compensation of management key personnel

The fees attributed in the period to ITAÚ UNIBANCO HOLDING CONSOLIDATED management members are as follows:

	01/01 to 09/30/2015		01/01 to 09/30/2014
Compensation		359,307		268,381
Board of Directors		15,905		11,870
Management members		343,402		256,511
Profit sharing		167,304		187,305
Board of Directors		365		7,225
Management members		166,939		180,080
Contributions to pension plans		7,385		4,991
Board of Directors		51		3
Management members		7,334		4,988
Stock option plan – Management members		166,306		134,774
Total		700,301		595,451

Information related to the granting of the share-based payment, benefits to employees and post-employment is detailed in Notes 16g II and 19, respectively.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 177

Note 18 - Market value

The financial statements are prepared in accordance with accounting principles which assume the normal continuity of the operations of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

The book value of each financial instrument, whether included or not in the balance sheet (comprises investments in affiliates and other investments), when compared to the value that might be obtained in an active market, or in the absence of such market, using the net present value of future cash flows adjusted based on the current market interest, is approximately equal to the market value, or does not have a market quotation available, except for the instruments in the table below:

									Effects (1)
	Book value				Market				Results						Stockholders’ equity
	09/30/2015		09/30/2014		09/30/2015		09/30/2014		09/30/2015			09/30/2014			09/30/2015			09/30/2014
Interbank deposits		31,581,352		18,446,506		31,581,414		18,447,312		62			806			62			806
Securities and derivative financial instruments		345,843,761		283,107,871		342,968,240		283,966,850		(6,850,225	)		(176,297	)		(2,875,521	)		858,979
Adjustment of available-for-sale securities										(3,225,683	)		(374,960	)		-			-
Adjustment of held-to-maturity securities										(3,624,542	)		198,663			(2,875,521	)		858,979
Loan, lease and other credit operations		443,005,144		403,573,815		442,383,875		404,591,289		(621,269	)		1,017,474			(621,269	)		1,017,474
Investments
BM&FBOVESPA		14,610		14,610		121,456		122,661		106,846			108,051			106,846			108,051
Porto Seguro Itaú Unibanco Participações S.A. (2)		1,710,413		1,568,463		2,958,604		2,792,490		1,248,191			1,224,027			1,248,191			1,224,027
Itaú Seguros Soluções Corporativas S.A. (Note 2c)		-		363,890		-		1,515,000		-			1,151,110			-			1,151,110
Fundings and borrowings (3)		255,611,997		207,336,414		256,676,116		207,919,469		(1,064,119	)		(583,055	)		(1,064,119	)		(583,055	)
Subordinated debt (Note 10f)		65,910,174		55,435,105		63,277,354		55,827,902		2,632,820			(392,797	)		2,632,820			(392,797	)
Treasury shares		3,549,056		1,345,428		3,547,741		1,861,597		-			-			(1,315	)		516,169

(1) This does not consider the corresponding tax effects.

(2) Parent company of Porto Seguro S.A.

(3) Funding is represented by interbank and time deposits, funds from acceptance and issuance of securities and borrowings.

Fair value is a measurement based, whenever possible, on information observable in the market. It is the price estimated at which a non-mandatory transaction to sell an asset or to transfer a liability would occur between market players, on the measurement date, under current market conditions. It does not represent unrealized results of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 178

To obtain the market values for these financial instruments, the following criteria were adopted:

· Interbank investments were determined based on their nominal amounts, monetarily restated to maturity dates and discounted to present value using future market interest rates and swap market rates for fixed-rate securities and using market interest rates for fixed-rate securities, achieved at the closing of BM&FBOVESPA at the balance sheet date, for floating-rate securities;

· Securities and derivative financial instruments, according to the rules established by Circulars No. 3,068 and 3,082 of November 8, 2001 and January 30, 2002, respectively, issued by BACEN, are recorded at their market value, except for those classified as Held to Maturity. Government securities allocated in this category have their market value calculated based on the rates obtained in the market, and validated through the comparison with information provided by the National Association of Financial Market Institutions (ANBIMA). Private securities included in this category have their market value calculated using a criterion similar to the one adopted for Investments in Interbank Deposits, as described above;

· Loans with maturities over 90 days, when available, were calculated based on the net present value of future cash flows discounted at market interest rates effective on the balance sheet date;

· Investments - in companies BM&FBOVESPA and Porto Seguro at the share value in stock exchanges.

· Time and interbank deposits and funds from acceptance and issuance of securities and foreign borrowings through securities, when available, were calculated based on their present value determined by future cash flows discounted at market rates obtained at the closing of BM&FBOVESPA on the balance sheet date;

· Subordinated debt, based on the net present value of future fixed or floating cash flows in foreign currency, net of the market interest rates effective on the balance sheet date and considering the credit risk of the issuer. The floating cash flows are estimated from the interest curves of the indexation market places;

· Treasury shares are valued according to the average quotation available on the last trading day of the month or, if this is not available, according to the most recent quotation on prior trading days, published in the daily bulletin of each Stock Exchange.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 179

Note 19 – Post-Employments Benefits

Pursuant to CVM Resolution No. 695, dated December 13, 2012, we present the policies adopted by ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries regarding benefits to employees, as well as the accounting procedures adopted.

The total amounts recognized in Income for the Period and Stockholders’ Equity – Asset valuation adjustment were as follows:

Total amounts recognized in Income for the period

	Defined benefit						Defined contribution						Other benefits						Total
	01/01 to 09/30/2015			01/01 to 09/30/2014			01/01 to 09/30/2015			01/01 to 09/30/2014			01/01 to 09/30/2015			01/01 to 09/30/2014			01/01 to 09/30/2015			01/01 to 09/30/2014
Cost of current service		(50,928	)		(52,944	)		-			-			-			-			(50,928	)		(52,944	)
Net interest		(4,495	)		(24,042	)		164,102			147,023			(12,743	)		(10,713	)		146,864			112,268
Aportes and contribution (*)		-			-			(336,992	)		(93,192	)		-			-			(336,992	)		(93,192	)
Benefits paid		-			-			-			-			10,697			6,499			10,697			6,499
Remeasurements		-			-			-			-			-			30			-			30
Total Amounts Recognized		55,423			76,986			(172,890	)		53,831			(2,046	)		(4,184	)		(230,359	)		(27,339	)

(*) In 2015, includes a provision to settle the surplus of social security fund, in the amount of R$ 236,266. In the period, contributions to the defined contributions plan, including PGBL, totaled R$ 145,789 (R$ 128,239 from January 1st to September 30, 2014), of which R$ 100,726 (R$ 93,192 from January 1st to September 30, 2014) arising from social security funds.

Total amounts recognized in Stockholders’ Equity – Asset valuation adjustment

	Defined benefit						Defined contribution						Other benefits						Total
	09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014
At the beginning of the period		(75,206	)		(354,467	)		(220,808	)		(285,565	)		(8,436	)		6,744			(304,450	)		(633,288	)
Effects on asset ceiling		18,455			14,361			(5,430	)		13,899			-			-			13,025			28,260
Remeasurements		4,210			2,827			22,019			26,678			-			(25	)		26,229			29,480
Total Amounts Recognized		(52,541	)		(337,279	)		(204,219	)		(244,988	)		(8,436	)		6,719			(265,196	)		(575,548	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 180

a) Retirement plans

ITAÚ UNIBANCO HOLDING CONSOLIDATED and some of its subsidiaries sponsor defined benefit and variable contribution plans, whose basic purpose is to grant benefits that, in general, provide a life annuity benefit, and may be converted into survivorship annuities, according to the plan's regulation. They also sponsor defined contribution plans, the benefit of which is calculated based on the accumulated balance at the eligibility date, according to the plan's regulation, which does not require actuarial calculation, except as described in Note 19c.

Employees hired up to July 31, 2002, whom came from Itaú, and until February 27, 2009, whom came from Unibanco, are beneficiaries of the above-mentioned plans. With regards the employees hired after these dates, they have the option to voluntarily participate in a variable contribution plan (PGBL), managed by Itaú Vida e Previdência S.A..

Supplementary plans are managed by closed-end private pension entities with independent legal structures, as detailed below:

Entity	Benefit plan
Fundação Itaubanco - Previdência Complementar	Supplementary retirement plan – PAC (1)
	Franprev benefit plan - PBF (1)
	002 benefit plan - PB002 (1)
	Itaulam basic plan - PBI (1)
	Itaulam Supplementary Plan - PSI (2) Itaubanco Defined Contribution Plan (3)
	Itaubank Retirement Plan (3) Itaú Defined Benefit Plan (1) Itaú Defined Contribution Plan (2) Unibanco Pension Plan (3) Prebeg benefit plan (1) UBB PREV defined benefit plan (1) Benefit Plan II (1) Supplementary Retirement Plan – Flexible Premium Annuity (ACMV) (1) REDECARD Basic Retirement Plan (1) REDECARD Supplementary Retirement Plan (2)
Funbep Fundo de Pensão Multipatrocinado	Funbep I Benefit Plan (1)
	Funbep II Benefit Plan (2)
Múltipla - Multiempresas de Previdência Complementar	REDECARD Supplementary Plan (3)

(1) Defined benefit plan;

(2) Variable contribution plan;

(3) Defined contribution plan.

b) Governance

The closed-end private pension entities (EFPC) and benefit plans they manage are regulated in conformity with the related specific legislation. The EFPC are managed by the Executive Board, Advisory Council and Fiscal Council, with some members appointed by the sponsors and others appointed as representatives of active and other participants, pursuant to the respective Entity’s bylaws. The main purpose of the EFPC is to pay benefits to eligible participants, pursuant to the Plan Regulation, maintaining the plans assets invested separately and independently from ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 181

c) Defined benefit plan

I - Main assumptions used in actuarial valuation of Retirement Plans

	09/30/2015	09/30/2014
Discount rate (1)	10.24% p.a.	9.72% p.a.
Mortality table (2)	AT-2000	AT-2000
Turnover (3)	Itaú Experience 2008/2010	Itaú Experience 2008/2010
Future salary growth	7.12 % p.a.	7.12% p.a.
Growth of the pension fund and social security benefits	4.00 % p.a.	4.00% p.a.
Inflation	4.00 % p.a.	4.00% p.a.
Actuarial method (4)	Projected Unit Credit	Projected Unit Credit

(1) The adoption of this assumption is based on interest rates obtained from the actual interest curve in IPCA, for medium-term liabilities of retirement plans sponsored by ITAÚ UNIBANCO HOLDING CONSOLIDATED. At 12/31/2014 was adopted a consistent with the economic scenario at the balance sheet date rate, considering the volatility of the interest markets and the models adopted.

(2) The mortality tables adopted correspond to those disclosed by SOA – Society of Actuaries, the North-American Entity which corresponds to IBA – Brazilian Institute of Actuarial Science, which reflects a 10% increase in the probabilities of survival compared to the respective basic tables.

The life expectancy in years per the AT-2000 mortality table for participants of 55 years of age is 27 and 31 years for men and women, respectively.

(3) The turnover assumption is based on the effective experience of ITAÚ UNIBANCO HOLDING CONSOLIDATED, resulting in the average of 2.4% p.a. based on the 2008/2010 experience.

(4) Using the Projected Unit Credit, the mathematical reserve is determined by the current projected benefit amount multiplied by the ratio between the length of service in the company at the assessment date and the length of service that will be reached at the date when the benefit is granted. The cost is determined taking into account the current projected benefit amount distributed over the years that each participant is employed.

Biometric/demographic assumptions adopted are consistent with the group of participants of each benefit plan, pursuant to the studies carried out by an independent external actuarial consulting company.

The main differences between the assumptions above and those adopted upon determination of the actuarial liability of defined benefit plans, for purposes of recording in the balance sheet of the closed-end private pension entities (EFPCs) that manage them, are the discount rate and the actuarial method. Regarding the discount rate assumption, EFPCs adopt a rate adherent to the flow of receipts/payments, in accordance with the study conducted by an independent, external consulting company. Regarding the actuarial method, the aggregate method is adopted, by which the mathematical reserve is defined based on the difference between the present value of the projected benefit and the present value of future contributions, subject to the methodology defined in the respective actuarial technical note.

II- Risk Exposure

Due to its defined benefit plans, ITAÚ UNIBANCO HOLDING CONSOLIDATED is exposed to a number of risks, the most significant ones are:

- Volatility of assets

The actuarial liability is calculated by adopting a discount rate defined based on the income from securities issued by the Brazilian treasury (government securities). If the actual income from plan investments is lower than expected, this may give rise to a deficit. The plans have a significant percentage of fixed-income securities pegged to the plan commitments, aiming at minimizing volatility and the short and medium-term risk.

- Changes in investment income

A decrease in income from public securities will imply a decrease in discount rate and, therefore, will increase the plan actuarial liability. The effect will be partially offset by the recognition of these securities at market value.

- Inflation risk

Most of plan benefits are pegged to the inflation rates, and a higher inflation will lead to higher obligations. The effect will also be partially offset because a significant portion of the plan assets is pegged to government securities restated by the inflation rate.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 182

- Life expectancy

Most of the plan obligations are to provide life benefits and therefore a increase in life expectancy will result in increased plan liabilities.

III –Management of defined benefit plan assets

The general purpose of managing EFPC funds is to search for a long-term balance between assets and obligations with payment of retirement benefits, by exceeding the actuarial targets (discount rate plus benefit adjustment index, established in the plan regulations).

Regarding the assets guaranteeing the actuarial liability reserves, management should ensure the payment capacity of retirement benefits in the long-term by avoiding the risk of mismatching assets and liabilities in each pension plan.

At September 30, 2015 and 2014 the allocation of plan assets and the allocation target for 2015, by type of asset, are as follows:

	Fair value				% Allocation
Types	09/30/2015		09/30/2014		09/30/2015			09/30/2014			2015 Target
Fixed income securities		12,773,727		11,701,095		91.95	%		91.08	%	53% a 100%
Variable income securities		560,647		604,590		4.04	%		4.71	%	0% a 20%
Structured investments		23,981		22,210		0.17	%		0.17	%	0% a 10%
Real estate		469,828		492,055		3.38	%		3.83	%	0% a 7%
Loans to participants		64,482		27,506		0.46	%		0.21	%	0% a 5%
Total		13,892,665		12,847,456		100.00	%		100.00	%

The defined benefit plan assets include shares of ITAÚ UNIBANCO HOLDING CONSOLIDATED, its main parent company (ITAÚSA) and of subsidiaries of the latter, with a fair value of R$ 477,133 (R$ 523,259 at 09/30/2014), and real estate rented to Group companies, with a fair value of R$ 440,186 (R$ 459,649 at 09/30/2014).

Fair value - the fair value of the plan assets is adjusted up to the report date, as follows:

Fixed-Income Securities and Structured Investments – accounted for at market value, considering the average trading price on the calculation date, net realizable value obtained upon the technical addition of pricing, considering, at least, the payment terms and maturity, credit risk and the indexing unit.

Variable income securities – accounted for at market value, being so understood the share average quotation at the last day of the month or at the closest date on the stock exchange on which the share has posted the highest liquidity rate.

Real Estate – stated at acquisition or construction cost, adjusted to market value upon reappraisals made in 2012, supported by technical appraisal reports. Depreciation is calculated under the straight line method, considering the useful life of the real estate.

Loans to participants – adjusted up to the report date, in compliance with the respective agreements.

Fund Allocation Target - the fund allocation target is based on Investment Policies that are currently revised and approved by the Advisory Council of each EFPC, considering a five-year period, which establishes guidelines for investing funds guaranteeing Actuarial Liability and for classifying securities.

IV- Net amount recognized in the balance sheet

Following is the calculation of the net amount recognized in the balance sheet, corresponding to the defined benefit plan:

	09/30/2015			09/30/2014
1 - Net assets of the plans		13,892,665			12,847,456
2 - Actuarial liabilities		(12,015,026	)		(11,869,504	)
3- Surplus (1-2)		1,877,639			977,952
4- Asset restriction (*)		(1,965,464	)		(1,349,499	)
5 - Net amount recognized in the balance sheet (3-4)		(87,825	)		(371,547	)
Amount recognized in Assets (Note 13a)		270,737			254,202
Amount recognized in Liabilities (Note 13c)		(358,562	)		(625,749	)

(*) Corresponds to the excess of the present value of the available economic benefit, in conformity with item 64 of CVM Resolution nº 695.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 183

V- Change in the net amount recognized in the balance sheet:

	09/30/2015
	Plan net assets			Actuarial liabilities			Surplus			Asset Ceiling			Recognized amount
Value at beginning of the period		13,437,757			(11,694,678	)		1,743,079			(1,847,316	)		(104,237	)
Cost of current service		-			(50,928	)		(50,928	)		-			(50,928	)
Net interest (1)		1,000,845			(863,806	)		137,039			(141,534	)		(4,495	)
Benefits paid		(617,792	)		617,792			-			-			-
Contributions of sponsor		49,170			-			49,170			-			49,170
Contributions of participants		10,009			-			10,009			-			10,009
Effects on asset ceiling		-			-			-			18,455			18,455
Remeasurements (2) (3)		12,676			(23,406	)		(10,730	)		4,931			(5,799	)
Value at end of the period		13,892,665			(12,015,026	)		1,877,639			(1,965,464	)		(87,825	)

	09/30/2014
	Plan net assets			Actuarial liabilities			Surplus			Asset Ceiling			Recognized amount
Value at beginning of the period		12,512,070			(11,576,853	)		935,217			(1,292,637	)		(357,420	)
Cost of current service		-			(52,944	)		(52,944	)		-			(52,944	)
Net interest (1)		883,474			(814,846	)		68,628			(92,670	)		(24,042	)
Benefits paid		(575,176	)		575,176			-			-			-
Contributions of sponsor		45,671			-			45,671			-			45,671
Contributions of participants		9,588			-			9,588			-			9,588
Effects on asset ceiling		-			-			-			14,361			14,361
Remeasurements (2) (3)		(28,171	)		(37	)		(28,208	)		21,447			(6,761	)
Value at end of the period		12,847,456			(11,869,504	)		977,952			(1,349,499	)		(371,547	)

(1) Corresponds to the amount calculated on 01/01/2015 based on the beginning amount (Net Assets, Actuarial Liabilities and Restriction of Assets), taking into account the estimated amount of payments/ receipts of benefits/ contributions, multiplied by the discount rate of 10.24% p.a..(On 01/01/2014 the rate used was 9.72% a.a.).

(2) Remeasurements recorded in net assets and asset ceiling correspond to the income earned above/below the expected return rate.

(3) The actual return on assets amounted to R$ 1,013,521 (R$ 855,303) at September 30, 2014).

During the period, contributions made totaled R$ 49,170 (R$ 45,671 from January 1 to September 30, 2014). The contribution rate increases based on the beneficiary’s salary.

In 2015, the expected contribution to retirement plans sponsored by ITAÚ UNIBANCO HOLDING CONSOLIDATED is R$ 58,566.

The estimate for payment of benefits for the next 10 years is as follows:

Period	Estimated payment
2015		845,132
2016		867,539
2017		889,038
2018		915,188
2019		942,362
2020 a 2024		4,812,447

VI- Sensitivity of defined benefit obligation

The impact, due to the change in the assumption – discount rate by 0.5%, which would be recognized in Actuarial liabilities of the plans, as well as in Stockholders’ Equity – Asset valuation adjustment of the sponsor (before taxes) would amount to:

	Effect in actuarial liabilities of the plans						Effect which would be recognized in Stockholders’ Equity (*)
Change in Assumption	Value			Percentage of actuarial liabilities			Value
- Decrease by 0.5%		667,851			5.73	%		(314,667	)
- Increase by 0.5%		(578,228	)		(5.22	%)		331,546

(*) Net of effects of asset ceiling.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 184

d) Defined contribution plans

The defined contribution plans have pension funds set up by the portion of sponsors’ contributions not included in the participant’s accounts balance and by the loss of eligibility to a plan benefit, as well as by resources from the migration from the defined benefit plans. The fund will be used for future contributions to the individual participants' accounts, according to the rules of the respective benefit plan regulation.

I - Change in the net amount recognized in the balance sheet:

	09/30/2015									09/30/2014
	Pension Plan Fund			Asset Ceiling			Recognized Amount			Pension Plan Fund			Asset Ceiling			Recognized Amount
Amount - beginning of the period		2,438,272			(223,616	)		2,214,656			2,361,025			(274,533	)		2,086,492
Net interest		179,438			(15,336	)		164,102			166,993			(19,970	)		147,023
Contribution (Note 19)		(336,992	)		-			(336,992	)		(93,192	)		-			(93,192	)
Effects on asset ceiling		-			(5,430	)		(5,430	)		-			13,899			13,899
Remeasurements		9,866			12,153			22,019			26,086			592			26,678
Amount - end of the period (Note 13a)		2,290,584			(232,229	)		2,058,355			2,460,912			(280,012	)		2,180,900

e) Other post-employment benefits

ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries do not offer other post-employment benefits, except in those cases arising from obligations under acquisition agreements signed by ITAÚ UNIBANCO HOLDING CONSOLIDATED, as well as in relation to the benefits granted due to a judicial sentence, in accordance with the terms and conditions established, in which health plans are totally or partially sponsored for specific groups of former workers and beneficiaries.

Based on the reported prepared by an independent actuary, the changes in obligations for these other projected benefits and the amounts recognized in the balance sheet, under liabilities, of ITAÚ UNIBANCO HOLDING are as follows:

I - Change in the net amount recognized in the balance sheet:

	09/30/2015			09/30/2014
At the beginning of the period		(170,593	)		(146,818	)
Cost of interest		(12,743	)		(10,713	)
Inclusion of Credicard		-			(3,207	)
Benefits paid		10,697			6,499
At the end of the period (Note 13c)		(172,639	)		(154,239	)

The estimate for payment of benefits for the next 10 years is as follows:

Period	Estimated payment
2015		9,344
2016		10,034
2017		10,743
2018		11,473
2019		12,174
2020 a 2024		73,039

II - Sensitivity Analyses - Cost of Healthcare

For calculation of benefits obligations projected beyond the assumptions used for the defined benefit plans (Note 19c l), the 9.72% p.a. increase in medical costs assumption is adopted.

Assumptions for rates related to medical assistance costs have a significant impact on the amounts recognized in income. A change of one percentage point in the medical assistance cost rates would have the effects as follows:

	Recognition	1% increase		1% decrease
Service cost and cost of interest	Income		2,174		(1,815	)
Present value of obligation	Asset valuation adjustment		21,234		(17,723	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 185

Note 20 – Information on foreign subsidiaries

	Foreign branches (1)						Latin America consolidated (2)						Itaú Europe consolidated (3)						Cayman consolidated (4)						Other foreign companies (5)						Foreign consolidated (6)
	09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014			09/30/2015			09/30/2014
Assets
Current assets and long-term receivables
Cash and cash equivalents		3,567,796			3,679,491			6,764,668			3,719,004			808,962			792,358			31,937,167			472,497			2,038,418			621,637			10,889,395			8,460,475
Interbank investments		32,741,384			17,643,026			6,230,781			2,491,020			5,361,948			4,116,796			3,861,860			17,099,200			-			255,063			26,182,604			13,414,329
Securities		77,813,976			43,212,580			8,104,168			5,298,103			5,939,665			2,912,513			19,192,907			12,949,533			334,175			38,248			110,189,766			63,585,773
Loan, lease and other credit operations		132,851,933			85,869,861			55,592,838			36,294,040			19,246,462			10,218,570			178,400			112,713			1,668			840			207,752,082			132,422,493
Foreign exchange portfolio		60,386,953			39,341,445			2,195,111			857,756			4,415,005			3,051,881			-			5,558			-			-			66,467,908			42,939,171
Other assets		12,051,033			4,414,612			9,857,149			5,701,312			1,330,029			261,681			1,483,868			609,218			239,950			5,520,659			24,692,666			15,770,905
Permanent assets
Investments		117			-			9,861			6,708			19,599			7,476			245,307			154,079			881,737			538,579			29,899			14,383
Fixed and intangible assets		19,836			15,015			1,055,484			700,380			168,313			145,720			52			194			24,868			17,088			1,268,553			878,395
Total		319,433,028			194,176,030			89,810,060			55,068,323			37,289,983			21,506,995			56,899,561			31,402,992			3,520,816			6,992,114			447,472,873			277,485,924
Liabilities
Current and long-term liabilities
Deposits		97,278,552			67,397,377			54,461,072			34,650,374			16,128,596			8,455,069			1,530,333			1,045,041			-			766,967			130,231,558			95,386,990
Demand deposits		51,468,799			11,429,622			15,818,413			9,872,216			10,529,004			6,316,414			1,474,317			777,995			-			766,967			44,986,009			28,338,703
Savings deposits		-			-			11,159,882			6,356,192			-			-			-			-			-			-			11,159,882			6,356,192
Interbank deposits		16,396,862			16,397,855			300,544			130,833			4,104,785			1,404,762			56,016			267,046			-			-			16,623,594			3,883,837
Time deposits		29,412,891			39,569,900			27,182,233			18,291,133			1,494,807			733,893			-			-			-			-			57,462,073			56,808,258
Deposits received under securities repurchase agreements		22,608,874			12,734,655			1,088,806			326,632			198,650			-			17,279,470			10,348,501			-			661,887			23,397,045			11,834,944
Funds from acceptance and issuance of securities		7,404,665			2,053,138			8,126,514			3,895,489			8,266,999			5,568,047			388,125			1,465,340			-			-			24,106,220			12,951,633
Borrowings		57,500,043			31,887,422			2,819,542			2,872,769			902,974			622,431			6			6,420			-			-			61,222,564			35,389,043
Derivative financial instruments		13,813,406			4,126,509			2,122,993			1,151,267			2,447,396			777,703			143,747			466,694			-			-			18,077,466			6,112,083
Foreign exchange portfolio		60,374,349			39,461,720			2,219,708			852,892			4,408,600			2,946,468			-			5,647			-			-			66,473,496			42,949,258
Other liabilities		39,902,905			22,678,823			7,166,066			3,867,163			695,161			592,782			6,171,472			2,361,599			254,378			3,407,255			53,841,201			31,862,060
Deferred income		237,082			186,963			6,330			2,528			73,894			37,921			-			-			2,274			1,460			319,579			228,873
Non-controlling interests		-			-			406			255			-			1			-			963,462			-			-			407			963,717
Stockholders’ equity
Capital and reserves		21,925,523			12,616,388			11,011,523			6,652,425			3,859,564			2,281,032			30,833,088			14,733,338			3,372,010			2,192,441			69,937,050			37,827,140
Net income for the period		(1,612,371	)		1,033,035			787,100			796,529			308,149			225,541			553,320			6,950			(107,846	)		(37,896	)		(133,713	)		1,980,183
Total		319,433,028			194,176,030			89,810,060			55,068,323			37,289,983			21,506,995			56,899,561			31,402,992			3,520,816			6,992,114			447,472,873			277,485,924
Statement of Income
Income from financial operations		1,971,978			3,112,883			4,627,569			3,418,995			634,889			444,583			413,646			190,381			7,929			(7,986	)		7,413,225			6,879,042
Expenses of financial operations		(2,418,902	)		(1,655,999	)		(1,686,657	)		(1,433,732	)		(172,165	)		(120,755	)		300,813			(87,631	)		(4,344	)		(3,031	)		(3,767,080	)		(3,063,322	)
Result of loan losses		(869,517	)		(312,540	)		(331,768	)		(267,558	)		8,884			5,610			(44,777	)		0			(383	)		(222	)		(1,237,561	)		(574,710	)
Gross income from financial operations		(1,316,441	)		1,144,344			2,609,144			1,717,705			471,608			329,438			669,682			102,750			3,202			(11,239	)		2,408,584			3,241,010
Other operating revenues (expenses)		(295,380	)		(109,870	)		(965,806	)		(709,551	)		(100,834	)		(82,222	)		(116,363	)		(95,800	)		(104,153	)		(15,859	)		(1,613,802	)		(1,013,644	)
Operating income		(1,611,821	)		1,034,474			1,643,338			1,008,154			370,774			247,216			553,319			6,950			(100,951	)		(27,098	)		794,782			2,227,366
Non-operating income		(120	)		-			9,875			8,585			-			(121	)		-			-			2,187			1,777			9,754			8,597
Income before taxes on income and profit sharing		(1,611,941	)		1,034,474			1,653,213			1,016,739			370,774			247,095			553,319			6,950			(98,764	)		(25,321	)		804,536			2,235,963
Income tax		(430	)		(1,439	)		(855,232	)		(207,698	)		(49,066	)		(5,309	)		1			-			(5,568	)		(12,575	)		(910,296	)		(227,022	)
Statutory participation in income		-			-			(10,847	)		(12,481	)		(13,559	)		(16,245	)		-			-			(3,514	)		-			(27,919	)		(28,726	)
Non-controlling interests		-			-			(34	)		(31	)		-			-			-			-			-			-			(34	)		(32	)
Net income (loss)		(1,612,371	)		1,033,035			787,100			796,529			308,149			225,541			553,320			6,950			(107,846	)		(37,896	)		(133,713	)		1,980,183

(1) Itaú Unibanco S.A. - Agências Grand Cayman, New York, Tokyo and Nassau Branch, ITAÚ UNIBANCO HOLDING S.A - Agência Grand Cayman.

(2) Banco Itaú Argentina S.A, Itaú Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, Itrust Servicios Inmobiliarios S.A.C.I, Itaú Valores S.A., Itaú Chile Holdings Inc., BICSA Holdings LTD., Banco Itaú Chile S.A., Itaú Chile Inversiones, Servicios Y Administración S.A., Itaú BBA Corredor de Bolsa Limitada, Itaú Chile Corredora de Seguros Ltda., Itaú Chile Administradora General de Fondos S.A., Recuperadora de Créditos Ltda, Itaú Chile Compañia de Seguros de Vida S.A., ACO Ltda., Banco Itaú Uruguay S.A., OCA S.A., Unión Capital AFAP S.A., Banco Itau Paraguay,Itaú BBA México S.A (new company name of Tarjetas Unisoluciones S. A. de Capital Variable), Proserv - Promociones Y Servicios S.A. de C. V., MCC Asesorias Limitada (Note 2c), MCC Securities INC. (Note 2c), MCC Corredora de Bolsa (Note 2c) and Itaú BBA Colômbia; only at 09/30/2014, Fundo ETF IPSA, Oca Casa Financeira S.A., Itaú BBA SAS; only at 09/30/2015, Itau BBA Mexico Casa de Bolsa S.A. de C.V.

(3) IPI - Itaúsa Portugal Investimentos, SGPS Lda. (49%), Itaúsa Europa - Investimentos, SGPS, Lda., Itaúsa Portugal - SGPS S.A.,Itau BBA International (Cayman) Ltd., Itaú Europa Luxemburgo S.A, Banco Itaú International, Itaú Bank & Trust Bahamas Ltd., Itaú International Securities Inc., Itaú Bahamas Directors Ltd., Itaú Bahamas Nominees Ltd., Banco Itau Suisse S.A. and Itau BBA International plc.

(4) Itau Bank Ltd., ITB Holding Ltd., Jasper International Investment LLC, Itaú Bank & Trust Cayman Ltd., Uni-Investments Inter. Corp., Itaú Cayman Directors Ltd., UBT Finance S.A., Itaú Cayman Nominees Ltd., BIE Cayman Ltd.; only at 09/30/2014, Rosefield Finance Ltd. (50%).

(5) Afinco Americas Madeira, SGPS Soc. Unipessoal Ltda., IPI - Itaúsa Portugal Investimentos, SGPS Lda. (51%), Banco Del Paraná S.A.,Topaz Holding Ltd., Itaú USA Inc., Itaú BBA USA Securities Inc., Itaú International Investment LLC, Mundostar S.A., Karen International Ltd., Nevada Woods S.A., Albarus S.A., Garnet Corporation, Itau Global Asset Management, Itaú Asia Securities Ltd., Itaú Middle East Limited, Itaú USA Asset Management Inc., Itau BBA UK Securities Limited, Itaú Japan Asset Management Ltd., Itaú UK Asset Management Limited, Itaú Singapore Securities Pte. Ltd; only at 09/30/2014, Itaú Asia Limited.

(6) Foreign consolidated information presents balances net of consolidation eliminations.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 186

Note 21 – Risk and capital management

Risk management is considered by ITAÚ UNIBANCO HOLDING CONSOLIDATED an essential tool for optimizing the use of resources and selecting the best business opportunities, in order to maximize shareholder value.

At ITAÚ UNIBANCO HOLDING CONSOLIDATED, risk and capital management is the process in which:

· The existing and potential risks in ITAÚ UNIBANCO HOLDING CONSOLIDATED’s operations are identified and measured;

· Norms, procedures and methodologies for risk management and control consistent with the Board of Directors’ guidelines and ITAÚ UNIBANCO HOLDING CONSOLIDATED’s strategies are approved;

· The ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risk portfolio is managed considering the best risk-return ratio.

The purpose of risk identification is to map the risk events of internal and external nature that may affect the strategies of support and business units and the fulfillment of their objectives, with a possible impact on ITAÚ UNIBANCO HOLDING CONSOLIDATED’s income, capital, liquidity and reputation.

Risk management processes are spread throughout the whole institution, aligned with the guidelines of the Board of Directors and Executives that, through panels, define the global objectives that are measured as goals and limits to the risk management units. Control and capital management units, in turn, support the ITAÚ UNIBANCO HOLDING CONSOLIDATED’s management by monitoring and analyzing risk and capital.

In compliance with CMN Resolution No. 3,988, BACEN Circular No. 3,547 and BACEN Circular Letter No. 3,565, ITAÚ UNIBANCO HOLDING CONSOLIDATED implemented its capital management structure and its Internal Capital Adequacy Assessment Process (ICAAP), having submitted its last ICAAP report to BACEN in April 2015, related to the December 2014 reporting date.

ITAÚ UNIBANCO HOLDING CONSOLIDATED adopts a prospective approach to its capital management, which comprises the following phases:

· Identification and analysis of material risks to which ITAÚ UNIBANCO HOLDING CONSOLIDATED is or could be exposed and assessment of capital requirements to cover material risks;

· Capital planning considering the strategic guidelines, economic environment and the guidelines of the Board of Directors;

· Stress test exercises, aimed at analyzing the impact of serious events on the capitalization level of ITAÚ UNIBANCO HOLDING CONSOLIDATED;

· Maintenance of a capital contingency plan for cases in which the capital sources turn out to be unfeasible or insufficient;

· Internal capital adequacy assessment, which consists of comparing the Regulatory Capital with the required capital, according to internal evaluation, to cover any risks incurred;

· Preparation of periodic management reports on capital adequacy for top management and the Board of Directors.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s organizational structure of risk management is in conformity with regulations in force in Brazil and abroad and in line with the best market practices. The Market, Credit, Liquidity, Operational and Underwriting risks control is performed in a centralized way by an independent unit, aiming at assuring that ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risks are being managed in accordance with established risk appetite policies, norms and procedures. This independent structure is also responsible for centralizing ITAÚ UNIBANCO HOLDING’s capital management. The purpose of centralizing control is to provide the Executives and the Board of Directors with an overview of ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risk exposure, as well as a prospective view on the adequacy of its capital so as to optimize and speed up corporate decision-making.

ITAÚ UNIBANCO HOLDING CONSOLIDATED manages proprietary IT systems to fully meet the applicable rules on capital reserve, and also for risk measurement, in compliance with the models issued by the regulatory models in force. It also coordinates actions to check for adherence to qualitative and quantitative requirements established by the relevant authorities for compliance with the minimum mandatory capital requirement and risk monitoring.

Further information on risk management can be found on the website www.itau.com.br/relacoes-com-investidores, under section Corporate Governance / Risk Management – Pillar 3, which is not part of the financial statements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 187

I – Market risk

Market risk is the possibility of losses arising from variations in the market values of positions held by a financial institution, including the risk of transactions subject to the variations in foreign exchange and interest rates, equities, of price indexes and commodity prices among other indexes on these risk factors.

Market risk management is the process through which the ITAÚ UNIBANCO HOLDING CONSOLIDATED plans, monitors and controls the risks of variations in financial instruments market values due to market changes, aimed at optimizing the risk-return ratio, by using an appropriate structure, alerts, models and adequate tools for management limits.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s Market Risk Management Policy is in line with the principles of Resolution No. 3,464, issued by the National Monetary Council (CMN) (as amended), being a set of principles that drive the ITAÚ UNIBANCO HOLDING CONSOLIDATED strategy towards control and management of market risk of all business units and legal entities.

The document that details the guidelines set out by the corporate guidelines on market risk control, which is not part of the financial statements, can be read on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report – Market Risk.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s market risk management strategy is aimed at balancing corporate business goals, taking into account, among other things:

· Political, economic and market conditions;

· The market risk profile of the portfolio and ITAÚ UNIBANCO HOLDING CONSOLIDATED;

· Expertise within the group to support operations in specific markets.

The process for managing market risk of ITAÚ UNIBANCO HOLDING occurs within the governance and hierarchy of corporate bodies and limits approved specifically for this purpose, sensitizing different levels and classes of market risk. This market risk framework includes limits that involve the monitoring of aggregate risk indicators (at the portfolio level) and extends its coverage to more granular levels (the individual desk level) with specific limits aiming to improve the process of risk monitoring and understanding and also to prevent risk concentration. These limits are dimensioned considering the projected results of the balance sheet, size of equity, liquidity, complexity and volatility of the market and risk appetite of the institution. Limits are monitored and controlled daily and excesses are reported and discussed in the corresponding corporate bodies. Additionally, daily risk reports used by the business and control areas are issued to the executives. The process of setting these limits levels and breach reporting follows the governance approved by our financial conglomerate’s internal policies.

The structure of limits and alerts follows the Board of Directors' guidelines and is approved by panels. This structure of limits and alerts enhances effectiveness, and the control coverage is reviewed at least annually.

The purpose of market risk control of ITAÚ UNIBANCO HOLDING structure is:

· Providing visibility and assurance to all executive levels that the assumption of market risks is in line with ITAÚ UNIBANCO HOLDING CONSOLIDATED and the risk-return objective;

· Promoting a disciplined and educated discussion on the global risk profile and its evolution over time;

· Increasing transparency on the way the business seeks to optimize results;

· Providing early warning mechanisms in order to make the effective risk management easier, without jeopardizing the business purposes; and

· Monitoring and avoiding risk concentration.

The market risk control and management process is submitted to periodic reviews aimed at keeping it aligned with the best market practices and adhering to the continuous improvement of processes at ITAÚ UNIBANCO HOLDING CONSOLIDATED.

The control of market risk is carried out by an area independent from the business units, and is responsible for carrying out daily measurement, assessment, monitoring of stress scenarios, limits and alerts, applying stress scenarios, analysis and testing, reporting risk results to those accountable for in the business units, in accordance with the governance established and monitoring the actions required adjust positions and/or risk level to make them feasible. In addition, the area provides support to launch new financial products. For this purpose, ITAÚ UNIBANCO HOLDING CONSOLIDATED relies on a structured communication and information flow, aiming at providing feedback for the follow-up of the corporate bodies, and compliance with the regulatory bodies in Brazil and regulatory agents abroad.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 188

ITAÚ UNIBANCO HOLDING CONSOLIDATED hedges transactions with clients and proprietary positions, including its foreign investments, in order to mitigate risk arising from fluctuations in relevant market risk factors and maintaining the classification the transactions into the current exposure limits. Derivatives are commonly used for these hedging activities. When these transactions are classified as hedges for accounting purposes, specific supporting documentation is provided, including ongoing follow-up of hedge effectiveness (retrospective and prospective) and other changes in the accounting process. The accounting and managerial hedging procedures are governed by the institutional polices of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Hedge accounting is treated in detail in the financial statement notes.

The market risk structure categorizes transactions as part of either the banking portfolio or the trading portfolio, in accordance with general criteria established by CMN Resolution No. 3.464 and BACEN Circular No. 3.354.

The trading portfolio consists of all transactions involving financial instruments and goods, including derivatives, which are carried out with the intention of trading.

The banking portfolio is basically characterized by transactions from the banking business, and transactions related to the management of the balance sheet of the institution. It has the no-intention of resale and medium- and long-term time horizons as general guidelines.

Exposures to market risks inherent in the many different financial instruments, including derivatives, are broken down into a number of risk factors, primary market components for pricing. The main risk factors measured by ITAÚ UNIBANCO HOLDING CONSOLIDATED are as follows:

· Interest rates: the risk of losses from transactions subject to interest rates variations;

· Foreign exchange-linked interest rate: the risk of losses arising from positions in transactions which are subject to a foreign exchange-linked interest rate;

· Foreign exchange rates: the risk of losses from positions subject to foreign exchange rate variation;

· Price index-linked: the risk of losses from transactions subject to the variations in the price of index-linked interest rates;

· Variable income: risk of loss subject to variation in prices of shares and commodities;

The National Monetary Council (CMN) establishes the segregation of exposure to market risk at least in the following categories: interest rate, exchange rate, shares and commodities. Inflation rates are addressed as a group of risk factors and received the same treatment as the other risk factors, such as interest rates, exchange rates, etc., and follow the structure of risk and limits governance adopted by ITAÚ UNIBANCO HOLDING CONSOLIDATED to manage market risk.

The market risk analyses are conducted based on the following metrics:

· Value at risk (VaR): statistical measure that estimates the expected maximum potential economic loss under normal market conditions, considering a certain time horizon and confidence level;

· Losses in stress scenarios: simulation technique to assess the behavior of assets and liabilities and derivatives of a portfolio when several risk factors are taken to extreme market situations (based on prospective and historical scenarios);

· Stop loss: metrics which purpose is to review positions, should losses accumulated in a certain period reach a certain amount;

· Concentration: cumulative exposure of a certain financial instrument or risk factor, calculated at market value (“MtM – Mark to Market”);

· Stressed VaR: statistical metric arising from VaR calculation, which purpose is to capture higher risk in simulations for the current portfolio, considering returns that can be seen in historical scenarios of extreme volatility.

In addition to the aforementioned risk measures, sensitivity and loss control measures are also analyzed. They comprise:

· Mismatching analysis (GAPS): graphic representation by risk factor of cash flows expressed at market value, allocated at the maturity dates;

· Sensitivity (DV01- Delta Variation): impact on the market value of cash flows, when submitted to an one annual basis point increase in the current interest rates or index rate;

· Sensitivity to several risk factors (Greeks): partial derivatives of an option portfolio in relation to the prices of underlying assets, implied volatilities, interest rates and time.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 189

ITAÚ UNIBANCO HOLDING CONSOLIDATED uses proprietary systems to measure the consolidated market risk. The processing of these systems principally takes place in São Paulo, in an access-controlled environment, being highly available, which has data safekeeping and recovery processes, and counts on such an infrastructure to ensure the continuity of business in contingency (disaster recovery) situations.

ITAÚ UNIBANCO HOLDING CONSOLIDATED, maintaining its conservative management and portfolio diversification, continued with its policy of operating within low limits in relation to its capital during the period.

At September 30, 2015, ITAÚ UNIBANCO HOLDING CONSOLIDATED recorded total VaR (Historical Simulation) of R$ 316.3 million (R$ 205 million at September 30, 2014 Total VaR Parametric).

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 190

II – Credit risk

Credit risk is the possibility of losses arising from the breach by the borrower, issuer or counterparty of the respective agreed-upon financial obligations, the devaluation of loan agreement due to downgrading of the borrower’s, the issuer’s, the counterparty’s risk rating, the reduction in gains or compensation, the advantages given upon posterior renegotiation and the recovery costs.

The credit risk management of ITAÚ UNIBANCO HOLDING CONSOLIDATED’s is the primary responsibility of all business units and aims to keep the quality of loan portfolios in levels consistent with the institution’s risk appetite for each market segment in which it operates.

ITAÚ UNIBANCO HOLDING CONSOLIDATED establishes its credit policy based on internal factors, such as the client rating criteria and portfolio development analysis, the registered default levels, the incurred return rates, and the allocated economic capital; and external factors, related to the economic environment in Brazil and abroad, including market share, interest rates, market default indicators, inflation, and consumption increase/decrease.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s centralized process for making decisions and establishing a credit policy guarantees the synchrony of credit actions.

To protect the institution against losses arising from loan operations, ITAÚ UNIBANCO HOLDING CONSOLIDATED considers all aspects that determine the client’s credit risk to define a provision level that is adequate with the risk incurred in each operation. For each operation, the assessment and rating of the client or economic group, the operation rating, and the possible existence of past-due amounts are taken into account and the volume of the regulatory provision is determined.

In line with the principles of CMN Resolution No. 3,721 of April 30, 2009, ITAÚ UNIBANCO HOLDING CONSOLIDATED has a structure for and institutional norm on credit risk management, approved by its Board of Directors, applicable to the companies and subsidiaries in Brazil and abroad.

The document that outlines the guidelines set out by this internal policy on credit risk control, which is not part of the financial statements, can be read on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report – Credit Risk.

III – Operational risk

For ITAÚ UNIBANCO HOLDING CONSOLIDATED operational risk is defined as the possibility of losses from failure of, insufficient or inadequate internal processes, people and systems, or from external events impacting the realization of strategic, tactical or operational objectives. It includes the legal risk, associated with the inadequacy or deficiency in agreements signed by the institution, as well as sanctions for failing to meet legal provisions and compensation for damages to third parties arising from activities performed by ITAÚ UNIBANCO HOLDING CONSOLIDATED.

The management structure seeks to identify, prioritize and manage any operational risks identified, and to monitor and report management activities, with the aim of ensuring the quality of the control environment in compliance with internal guidelines and regulations in force.

The managers of executive areas use corporate methodologies that are built and made available by the internal control, compliance and operational risk area.

Within the governance of the management process there are specific forums to address operational risk, internal control and compliance where periodically there are consolidated reports on risk monitoring, controls, action plans and operational losses presented to the executives of the business areas.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 191

A summarized version of such policy, which is not part of the financial statements, is available on the website www.itau.com.br/relacoes-com-investidores in the section Corporate Governance, Rules and Policies, Public Access Report – Operational risk.

IV – Liquidity risk

Liquidity risk is defined as the institution’s possibility of not being able to efficiently meet its expected and unexpected obligations, both current and future, including those arising from the pledged guarantees, without affecting its daily operations and without incurring significant losses.

Liquidity risk control is carried out by an area independent from the business areas, and which is responsible for defining the constitution of a reserve, proposing assumptions for behavior of cash flow, identifying, assessing, monitoring, controlling and reporting, on a daily basis, the exposure to liquidity risks in different time horizons, proposing limits for liquidity risk and monitoring the established limits consistent with the risk appetite of the institution, informing on possible noncompliance, considering the liquidity risks individually in countries where ITAÚ UNIBANCO HOLDING CONSOLIDATED operates, simulating the behavior of cash flow under stress conditions, assessing and reporting risks inherent in new products and transactions in a timely fashion, and reporting information required by regulatory bodies. Every activity is subject to analysis by independent areas of validation, internal controls and audit.

The measurement of liquidity risk covers all financial transactions of ITAÚ UNIBANCO HOLDING CONSOLIDATED companies, as well as possible contingent or unexpected exposures, such as those arising from settlement services, pledge of endorsements and sureties and credit facilities contracted and not used.

The document that expresses the guidelines set forth by the internal policy on liquidity risk, that is not part of the financial statements, may be viewed on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report - Liquidity Risk.

V - Insurance, Pension Plan and Capitalization Risks

The products that make up the portfolios of ITAÚ UNIBANCO HOLDING’s insurance companies are related to the life insurance and elementary, pension plan and capitalization lines. Therefore, we understand that the major risks inherent in these products are as follows:

· Subscription risk is the possibility of losses arising from operations of insurance, pension plan and capitalization that go against the organization’s expectations, directly or indirectly associated with the technical and actuarial bases adopted to calculate premiums, contributions and provisions;

· Market risk is the possibility of incurring losses due to fluctuations in the market values of assets and liabilities comprising the actuarial technical reserves;

· Credit risk is the possibility of a certain debtor failing to meet any obligations in connection with the settlement of operations involving the trade of financial assets or reinsurance;

· Operational risk is the possibility of incurring losses arising from the failure, deficiency or inadequacy or internal processes, personnel and systems, or external events impacting the achievement of strategic, tactical or operational purposes of the insurance, pension plan and capitalization operations;

· Liquidity risk in insurance operations is the possibility of the institution’s failure to timely meet its obligations with insured and beneficiaries in view of lack of liquidity of the assets comprising the actuarial technical reserves.

The management process of insurance, pension plan and capitalization risks is based on responsibilities defined and communicated between the control and business areas, assuring independence between them.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 192

Note 22 –Supplementary information

a) Insurance policy - ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries, despite the low risk exposure due to a physical non-concentration of their assets, have the policy to guarantee their valuables and assets at amounts considered sufficient to cover possible claims.

b) Foreign currency – The balances in Reais linked to the foreign currencies were:

	09/30/2015			09/30/2014
Permanent foreign investments		69,803,337			39,807,323
Net amount of other assets and liabilities indexed to foreign currency, including derivatives		(109,843,600	)		(58,860,918	)
Net foreign exchange position		(40,040,263	)		(19,053,595	)

The net foreign exchange position, considering the tax effects on the net balance of other assets and liabilities indexed to foreign currencies, reflects the low exposure to exchange variations.

c) Investment funds and managed portfolios - ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiaries, manages the following types of funds: privatization, fixed income, shares, open portfolio shares, investment clubs, customer portfolios and group portfolios, domestic and foreign, classified in memorandum accounts, distributed as follows:

	Amount				Amount (*)				Number of funds
	09/30/2015		09/30/2014		09/30/2015		09/30/2014		09/30/2015		09/30/2014
Investment funds		563,826,812		466,352,425		563,826,812		466,352,425		2,235		2,235
Fixed income		531,930,650		427,859,281		531,930,650		427,859,281		1,864		1,847
Shares		31,896,162		38,493,144		31,896,162		38,493,144		371		388
Managed portfolios		260,146,208		260,058,566		185,928,566		179,894,590		16,023		15,130
Customers		139,244,591		128,814,721		101,970,993		83,350,619		15,958		15,064
Itaú Group		120,901,617		131,243,845		83,957,573		96,543,971		65		66
Total		823,973,020		726,410,991		749,755,378		646,247,015		18,258		17,365

(*) It refers to the distribution after elimination of double-counting of managed portfolios in investment funds.

d) Consortia funds

	09/30/2015		09/30/2014
Monthly estimate of installments receivable from participants		160,605		138,890
Group liabilities by installments		12,155,213		11,134,196
Participants – assets to be delivered		10,782,117		10,190,034
Funds available for participants		1,525,560		1,237,890
(In units)
Number of managed groups		773		838
Number of current participants		414,639		402,103
Number of assets to be delivered to participants		193,420		218,774

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 193

e) Fundação Itaú Social - ITAÚ UNIBANCO HOLDING and its subsidiaries are the main sponsors of Fundação Itaú Social, the objectives of which are: 1) managing the “Itaú Social Program”, which aims at coordinating the organization’s role in projects of interest to the community by supporting or developing social, scientific and cultural projects, mainly in the elementary education and health areas; 2) supporting projects or initiatives in progress, supported or sponsored by entities qualified to work in the ”Programa Itaú Social” (Itaú Social Program).

During the period from January 1 to September 30, 2015 and 2014 the consolidated companies made no donations and the Foundation’s social net assets totaled R$ 2,498,166 (R$ 2,807,552 at September 30, 2014). The income arising from its investments will be used to achieve the Foundation’s social purposes.

f) Instituto Itaú Cultural – IIC - ITAÚ UNIBANCO HOLDING and its subsidiaries are supporters of Instituto Itaú Cultural - IIC, an entity formed to grant incentives, promote and preserve Brazil’s cultural heritage. During the period, the consolidated companies donated the amount of R$ 62,000 (R$ 55,500 from January 1 to September 30, 2014).

g) Instituto Unibanco - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco, an entity whose objective is to support projects on social assistance, particularly education, culture, promotion of integration to labor market, and environmental protection, directly and/or supplementary, through the civil society’s institutions.

h) Instituto Unibanco de Cinema - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco de Cinema, an entity whose objective is (i) the fostering of culture in general; and (ii) providing access of low-income population to cinematography, videography and similar productions, for which it shall maintain movie theaters owned or managed by itself, and theaters to screen films, videos, video-laser discs and other related activities, as well as to screen and divulge films of great importance, especially those produced in Brazil.

i) Associação Itaú Viver Mais - ITAÚ UNIBANCO HOLDING and is subsidiaries sponsor Associação Itaú Viver Mais, an entity whose objective is the provision of social services for the welfare of beneficiaries, in the way and conditions established by its Internal Rules, and according to the funds available. These services may include, among others, the promotion of cultural, educational, sports, entertainment and health care activities. During the period from January 1 to September 30, 2015, the consolidated companies have made donations to Associação Itaú Viver Mais in the amount of R$ 880 (R$ 800 from January 1 to September 30, 2014).

j) Instituto Assistencial Pedro di Perna - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Assistencial Pedro di Perna, an entity whose objective is to provide social services, stimulate sport activities, and promote recreation, aimed at the welfare of its members, in the way and conditions established by its Internal Rules, and according to the funds available.

k) Exclusions of nonrecurring effects net of tax effects – ITAÚ UNIBANCO HOLDING and ITAÚ UNIBANCO

	01/01 to 09/30/2015			01/01 to 09/30/2014
Increase in the social contribution tax rate (Note 14b IV)		3,988,253			-
Complementary allowance for loan losses (*)		(2,793,110	)		-
Provision for contingencies – Tax and social security (Notes 12b and 15a I)		(559,748	)		-
Change in the Accounting Treatment of Financial Lease (Note 4i)		(519,999	)		-
Social security fund (Note 19)		(129,946	)		-
Goodwill on acquisition (Note 15b ll)		(129,895	)		(123,328	)
Civil Lawsuits - Economic Plans		(108,261	)		(87,764	)
Realization of assets and Impairment		(42,916	)		-
Program for Cash or Installment Payment of Taxes (Notes 12e and 12f)		40,671			36,853
COFINS / Provision for loss carryforwards - Porto Seguro (Note 15a II)		-			(59,515	)
Favorable decision on thesis of broadening the PIS / COFINS calculation base from IRB (Note 15a II)		-			33,451
Allowance for loan losses - Credicard		-			(36,713	)
Others		(142,631	)		-
Total		(397,582	)		(237,016	)

(*) Recognition of a provision supplementary to the minimum required by Resolution No. 2,682/99 of the National Monetary Council.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 194

l) Agreements for offset and settlement of liabilities in the scope of the National Financial System – Offset agreements were entered into in the scope of derivative contracts, as well as agreements for offset and settlement of receivables and payables pursuant to CMN Resolution No. 3,263, of February 24, 2005, which purpose is to enable the offsetting of credits and debits maintained with the same counterparty, and in which the maturity dates of receivables and payables can be advanced to the date an event of default by one of the parties occurs or in case of the bankruptcy of the debtor.

m) Subsequent events

On October 21, 2015, ITAÚ UNIBANCO HOLDING, through its subsidiary Redecard S.A. (Rede), entered into a share purchase and sale commitment with Odebrecht Transport S.A. for acquisition of 50% of capital of ConectCar Soluções de Mobilidade Eletrônica S.A. (ConectCar) for the amount of R$ 170 million.

ConectCar is an institution engaged in own payment arrangements, and a provider of intermediation services for automatic payment of tolls, fuels and parking lots, ranked as the second largest company in the sector, currently operating in 12 States and in the Federal District. It was organized in 2012 as a result of the partnership between Odebrecht Transport S.A. and Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A., which currently holds the remaining 50% of ConectCar’s capital.

Governance will be shared with the Ultra group, and the effective acquisition and financial settlement will occur after the fulfillment of certain contractual conditions and obtainment of the required regulatory and government authorizations.

The transaction will not have significant accounting effect in Itaú Unibanco’s results.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 195

Report on review of interim financial statements

To the Board of Directors and Stockholders

Itaú Unibanco Holding S.A.

Introduction

We have reviewed the accompanying interim financial statements of Itaú Unibanco Holding S.A., which comprise the balance sheet as at September 30, 2015 and the related statements of income, changes in stockholders equity’s and cash flows for the nine-month period then ended, as well as the accompanying consolidated interim financial statements of Itaú Unibanco Holding S.A. and its subsidiaries (“Consolidated”), which comprise the consolidated balance sheet as at September 30, 2015 and the related consolidated statements of income and cash flows for the nine-month period then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation and fair presentation of the parent company and consolidated interim financial statements in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN). Our responsibility is to express a conclusion on these interim financial statements based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Review Engagements (ISRE 2410- Review of Interim Financial Information Performed by the Independent Auditor of the Entity). A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the parent and consolidated interim financial statements

Based on our review, nothing has come to our attention that causes us to believe that the parent company and the consolidated interim financial statements referred to above do not present fairly, in all material respects, the financial position of Itaú Unibanco Holding S.A. and Itaú Unibanco Holding S.A. and its subsidiaries as at September 30, 2015 and the parent financial performance and cash flows, as well as the consolidated financial performance and the consolidated cash flows, for the nine-month period then ended, in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank.

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 196

Other matters

Statement of value added

We also have reviewed the interim statements of value added of Itaú Unibanco Holding S.A. and Itaú Unibanco Holding S.A. and its subsidiaries for the nine-month period ended September 30, 2015, presented as supplementary information. These statements have been submitted to the same review procedures described in the second paragraph above and, based on our review, nothing has come to our attention that causes us to believe that these statements are not prepared consistently, in all material respects, with the interim financial statements taken as a whole.

São Paulo, October 30, 2015

PricewaterhouseCoopers

Auditores Independentes

CRC 2SP000160/O-5

Washington Luiz Pereira Cavalcanti

Contador CRC 1SP172940/O-6

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 197

ITAÚ UNIBANCO HOLDING S.A.

CNPJ. 60.872.504/0001-23 Listed Company NIRE. 35300010230

OPINION OF THE FISCAL COUNCIL

The members of the Fiscal Council of ITAÚ UNIBANCO HOLDING S.A., after having examined the financial statements for the period from January to September 2015 and verified the accuracy of all items examined, and in view of the unqualified opinion of PricewaterhouseCoopers Auditores Independentes, understand that these documents adequately reflect the company’s capital structure, financial position and the activities conducted during the period.

São Paulo (SP), October 30, 2015.

IRAN SIQUEIRA LIMA

President

ALBERTO SOZIN FURUGUEM	LUIZ ALBERTO DE CASTRO FALLEIROS
Member	Member

Itaú Unibanco Holding S.A. – Complete Financial Statements – September 30, 2015 198