EX-99.1 2 tv505794_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Announcement to the Market

 

Disclosure of results for the third quarter and from January to September of 2018, according to International Financial Reporting Standards – IFRS

 

We present below the differences between our financial statements in BRGAAP and in International Financial Reporting Standards - IFRS.

 

As from January 2018, IFRS 9 came into effect, the accounting standard that replaces IAS 39 in the treatment of Financial Instruments. The new standard is structured to encompass the pillars of classification, measurement of financial assets and impairment and was applied retrospectively by Itaú Unibanco Holding.

 

The complete consolidated financial statements under IFRS from January to September 2018 are available at our website: www.itau.com.br/investor-relations.

 

Comparison between BRGAAP1 and IFRS

 

R$ million

Balance Sheet  BRGAAP   Adjustments and
Reclassifications 2		   IFRS   BRGAAP   Adjustments and
Reclassifications 2		   IFRS 
       Sep/30/2018           Dec/31/2017     
Total Assets   1,613,162    (88,673)   1,524,489    1,503,503    (67,264)   1,436,239 
Cash and Cash Equivalents, Compulsory Deposits and Financial Assets At Amortized Cost 3 4 6   1,156,310    (3,864)   1,152,446    1,031,742    28,310    1,060,052 
(-) Estimated Loss at Amortized Cost 5   (34,278)   (754)   (35,032)   (36,325)   (412)   (36,737)
Financial Assets at Fair Value Through Other Comprehensive Income 4   101,963    (53,084)   48,879    103,538    (51,305)   52,233 
(-) Expected Loss at Fair Value Through Other Comprehensive Income 5   (3,367)   3,281    (86)   (2,892)   2,808    (84)
Financial Assets at Fair Value Through Profit or Loss 4   287,413    (28,076)   259,338    308,570    (35,034)   273,536 
Tax Assets 7   53,780    (6,958)   46,822    59,648    (15,399)   44,249 
Investments in Associates and Jointly Controlled Entities, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets   51,341    781    52,122    39,224    3,766    42,990 
                               
Total Liabilities   1,474,465    (94,883)   1,379,582    1,364,565    (72,683)   1,291,883 
Financial Assets at Amortized Cost 3 6   1,178,680    (89,943)   1,088,737    1,088,090    (63,506)   1,024,584 
Financial Assets at Fair Value Through Profit or Loss 4   32,063    30    32,093    26,930    281    27,211 
Expected Loss (Loan Commitments and Financial Guarantees) 5   1,397    2,987    4,384    1,950    2,972    4,922 
Provision for Insurance and Pension Plan   193,366    1,090    194,456    180,445    787    181,232 
Provisions   18,971    -    18,971    19,736    -    19,736 
Tax Liabilities 7   10,675    (4,477)   6,198    20,440    (12,604)   7,836 
Other Liabilities   39,313    (4,570)   34,743    26,974    (612)   26,362 
Total Stockholders’ Equity   138,696    6,211    144,907    138,938    5,418    144,356 
Non-controlling Interests   13,661    1,367    15,028    12,014    964    12,978 
Total Controlling Stockholders’ Equity 8   125,035    4,844    129,879    126,924    4,454    131,378 

 

1BRGAAP represents accounting practices in force in Brazil for financial institutions, according to regulation of the Central Bank of Brazil;
2Resulted from reclassification of assets and liabilities and other effects from the adoption of IFRS;
3Resulted from the elimination of transactions between parent company and exclusive funds (particularly PGBL and VGBL funds), which are consolidated under IFRS;
4Refer to reclassification of financial assets between measurement categories at fair value and amortized cost;
5Application of criterion for calculation of Expected Loss as set forth by IFRS;
6Difference in accounting, particularly from Foreign Exchange Portfolio, which are now be presented as net effect between Assets and Liabilities;
7Difference in accounting, particularly differed taxes, which are now accounted for as net effect between Assets and Liabilities in each one of the consolidated companies;
8Reconciliation of Controlling Stockholders’ Equity is presented in the following table.

 

Itaú Unibanco Holding S.A.

 

 

 

Below is the reconciliation of Results to Stockholders’ Equity, with the conceptual description of major adjustments.

 

Reconciliation

 

R$ million

   Stockholders’
Equity *		   Result * 
   Sep/30/2018   3rd Q/18   2nd Q/18   3rdQ/17   jan-sep/18   jan-sep/17 
BRGAAP - Values Attributable to Controlling Stockholders   125,035    6,247    6,244    6,077    18,772    18,143 
(a) Expected Loss - Loan and Lease Operations and Other Financial Assets   (316)   189    (459)   (329)   (179)   (516)
(b) Adjustment to Fair Value of Financial Assets   (165)   (129)   (57)   142    (261)   345 
(c) Acquisition of Interest in Porto Seguro Itaú Unibanco Participações S.A.   444    (2)   (2)   (2)   (6)   (6)
(d) Criteria for Write-Off of Financial Assets   2,256    (17)   (20)   70    8    (39)
(e) Financial Lease Operations   393    (40)   (40)   (34)   (120)   (92)
(f) Other adjustments   2,231    (123)   74    69    40    552 
IFRS - Values Attributable to Controlling Stockholders   129,879    6,125    5,740    5,993    18,254    18,387 
IFRS - Values Attributable to Minority Stockholders   15,028    206    154    67    528    328 
IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders   144,907    6,331    5,894    6,060    18,782    18,715 

 

*Events net of tax effects

 

Differences between IFRS and BRGAAP Financial Statements

 

(a) In the adoption of IFRS 9, there was a change in the calculation model of incurred loss (IAS 39) to expected loss, considering forward-looking information. On BRGAAP, the concept of Expected Loss is used, pursuant to BACEN Resolution No. 2,682/99.9

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

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

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

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

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

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

 

For comparison purposes, we present on the table below the Result and Recurring Result in IFRS and BRGAAP.

 

R$ million

Recurring Result  3rd Q/18   3rd Q/17 
   BRGAAP   IFRS   Variation   BRGAAP   IFRS   Variation 
Result - Attributale to Controlling Stockholders   6,247    6,125    (122)   6,077    5,993    (84)
Exclusion of the Non-Recurring Events   207    1    (206)   177    52    (125)
Goodwill Amortization   206    -    (206)   125    -    (125)
Disposal of IRB shares   -    -    -    (155)   (155)   - 
Provisions for Contingencies   -    -    -    70    70    - 
Impairment   1    1    -    137    137    - 
Recurring Result - Attributable to Controlling Stockholders   6,454    6,126    (328)   6,254    6,045    (209)

 

The tables in this report show the figures in million. Variations and summations, however, were calculated in units.

 

São Paulo, October 29, 2018.

 

Alexsandro Broedel

Group Executive Finance Director and Investor Relations Officer

 

Itaú Unibanco Holding S.A.