6-K 1 bsbrdfbrgaap1q16_6k.htm DF BRGAAP 1Q16 bsbrdfbrgaap1q16_6k.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of April, 2016
Commission File Number: 001-34476
 
BANCO SANTANDER (BRASIL) S.A.
(Exact name of registrant as specified in its charter)
 
Avenida Presidente Juscelino Kubitschek, 2041 and 2235
Bloco A – Vila Olimpia
São Paulo, SP 04543-011
Federative Republic of Brazil

 

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ___X___ Form 40-F _______

 Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): 

Yes _______ No ___X____

 Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): 

Yes _______ No ___X____

 Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: 

Yes _______ No ___X____

 If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  N/A

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

SUMMARY OF FINANCIAL STATEMENTS

  
       

SUMMARY

Pages

       

Independent Auditors' Report

1

Performance Review 

3

Financial Statements

  

Balance Sheets

13

Income Statements

17

Statements of Changes in Stockholders' Equity - Bank

18

Statements of Changes in Stockholders' Equity - Consolidated

19

Statements of Cash Flows

20

Statements of Value Added

21

Notes to the Financial Statements

  

Note

1

. General Information

22

Note

2

. Presentation of Financial Statements

22

Note

3

. Significant Accounting Practices

23

Note

4

. Cash and Cash Equivalents

29

Note

5

. Interbank Investments

30

Note

6

. Securities and Derivatives Financial Instruments

31

Note

7

. Interbank Accounts

50

Note

8

. Loan Portfolio and Allowance for Loan Losses

50

Note

9

. Foreign Exchange Portfolio

54

Note

10

. Trading Account

54

Note

11

. Tax Credits

55

Note

12

. Other Receivables - Other

56

Note

13

. Non-Current Assets Held for Sale

57

Note

14

. Dependence Information and Foreign Subsidiary

57

Note

15

. Investments in Affiliates and Subsidiaries

58

Note

16

. Fixed Assets

63

Note

17

. Intangibles

63

Note

18

. Money Market Funding and Borrowings and Onlendings

64

Note

19

. Tax and Social Security

67

Note

20

. Subordinated Debts

68

Note

21

. Debt Instruments Eligible to Compose Capital

68

Note

22

. Other Payables - Other

69

Note

23

. Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security

69

Note

24

. Stockholders’ Equity

72

Note

25

. Operational Ratios

73

Note

26

. Related Parties

74

Note

27

. Income from Services Rendered and Banking Fees

80

Note

28

. Personnel Expenses

80

Note

29

. Other Administrative Expenses

80

Note

30

. Tax Expenses

81

Note

31

. Other Operating Income

81

Note

32

. Other Operating Expenses

81

Note

33

. Non-Operating Result

81

Note

34

. Income Tax and Social Contribution

82

Note

35

. Employee Benefit Plans - Post-Employment Benefits

82

Note

36

. Risk Management Structure

92

Note

37

. Corporate Restructuring

98

Note

38

. Other Information

99

Executive’s Report of Financial Statements

100

Executive’s Report of Independent Auditors' Report

101


 

 

 

 

 

Independent auditor's report

 

 

To the Board of Directors and Stockholders

Banco Santander (Brasil) S.A.

 

 

 

Introduction

 

We have reviewed the interim consolidated balance sheet of Banco Santander (Brasil) S.A. ("Bank") as at March 31, 2016, and the related statements of income, changes in equity and cash flows for the three-month period then ended, as well as the interim consolidated balance sheet of Banco Santander (Brasil) S.A. and its subsidiaries ("Consolidated") as at March 31, 2016, and the related consolidated statements of income, changes in equity and cash flows for the three-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 these 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 Reviews of Interim Financial Information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information 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

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements referred to above have not been prepared, in all material respects, the financial position of Banco Santander (Brasil) S.A., and Banco Santander (Brasil) S.A. and its subsidiaries as at March 31, 2016, their financial performance and cash flows for the three-month period then ended, as well as their consolidated financial performance and cash flows for the three-month period then ended, in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).

 

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

 

 

1

 

 


 

Banco Santander (Brasil) S.A.

 

 

Other Matters

 

Statements of value added

 

We have also reviewed the parent company and consolidated statements of value added for the three-month period ended March 31, 2016, prepared under the responsibility of the Management, whose presentation is required by Brazilian Corporate Law by publicly-held companies. These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the interim financial statements taken as a whole.

 

Review of the prior-year information

 

The interim financial statements mentioned in the first paragraph include, for comparative purposes, financial information related to the statements of income, changes in equity, cash flows and the statements of value added for the three-month period ended at March 31, 2015, obtained from the financial statements of that quarter, and the balance sheets as at December 31, 2015, obtained from the financial statements as at December 31, 2015. The review of these interim financial statements for the three-month period ended at March 31, 2015, and the audit opinion of the financial statements for the year ended at December 31, 2015 were conducted under the responsibility of the other independent auditors, who issued an unqualified review and audit opinion reports dated April 27, 2015 and January 26, 2016, respectively.

 

 

 

 

São Paulo, April 26, 2016   

 

 

 

 

 

PricewaterhouseCoopers                                                                         

Auditores Independentes                                                                       

CRC 2SP000160/O-5

 

 

 

 

Edison Arisa Pereira

Accountant CRC 1SP127241/O-0

 

 

2

 

 

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

PERFORMANCE REVIEW

  

 

 

 

 

 

 

 

 

 

 

 

                                 

Dear Stockholders:

                                 

We present herein the Performance Review to Individual and Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Bank) related to the period ended March 31, 2016, prepared in accordance with accounting practices set by Brazilian Corporate Law, the standards of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and document template provided in the Accounting National Financial System Institutions (Cosif) and the Exchange Comission (CVM), that does not conflict with the rules of Bacen.

                                 

The consolidated financial statements in accordance with the International Accounting Standards Board (IASB) for the period ended March 31, 2016, will be released within the statutory period, at the website www.santander.com.br/ri.

                                 

1) Macroeconomic Environment

                                 

In the first quarter of 2016, when compared with the last three months of 2015, there was an appreciation of the real against the dollar, that the real is currently fluctuating near BRL3.60/USD. Despite this movement, the economy is still in sharp contraction and should not show significant improvement until the end of the year, imposing a challenging economic context for banking activity in Brazil. The labor market, as a result, continues in process of deterioration and precarization, which can be verified by the rapid rise of the unemployment rate. The aforementioned economic shrinkage has not been smoothed by fiscal and monetary policies in the beginning of the year. Public accounts have been suffering the effects of lower tax revenues due to economic recession, so the adjustment measures adopted so far shall not be reversed in the short term. Meanwhile, the Central Bank is likely to have little room to stimulate the economy with monetary policy – the interest rate is flat at 14.25% – since the inflation measured by the 12-month IPCA (Brazilian Consumer Price Index) is still high.

                                 

In this environment, the loan portfolio grew 5.3% in February 2016 compared to the same month last year, representing a significant slowdown compared to the growth rate of 6.7% observed in December 2015. This trend can be observed in both earmarked credit, whose growth fell to 8.2% a year, and non-earmarked credit, which increased only 2.6% between February 2015 and February 2016. The portfolio of public banks is also growing at a slower pace compared to the past, but still growing substantially more than the one of private banks (9.3% in twelve months, whereas private banks expanded by only 0.5%). Conservatism in the concession bid by banks, caution in the credit taken by consumers and high interest rates are factors that should keep this credit downtrend over the upcoming months.

                                 

2) Performance

                                 

2.1) Net Income

                                 

2.1.1) Corporate Net Income

                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED INCOME STATEMENTS
(R$Millions)

 

 

 

3M16

 

3M15

 

annual changes %

 

4Q15

 

quarter
changes %

Financial Income

      

21,096.1

 

19,238.0

 

9.66

  

20,172.2

 

4.58

Financial Expenses

      

(12,577.6)

  

(18,608.1)

  

32.41

  

(16,804.5)

  

-25.15

Gross Profit From Financial Operations

      

8,518.5

 

629.9

 

1,252.36

  

3,367.7

 

152.95

Other Operating (Expenses) Income

      

(3,708.6)

  

(3,501.0)

  

-5.93

  

(2,052.5)

  

80.69

                                 

Operating Income

      

4,809.9

 

(2,871.1)

  

267.53

  

1,315.2

 

265.72

                                 

Non-Operating Income

      

25.4

 

78.3

 

-67.56

  

(322.4)

  

-107.88

                                 

Income Before Taxes on Income and Profit Sharing

  

4,835.3

 

(2,792.8)

  

273.13

  

10,278.2

 

-52.96

                                 

Income Tax and Social Contribution

      

(3,302.1)

  

3,799.8

 

186.90

  

681.9

 

-584.25

Profit Sharing

      

(318.4)

  

(263.7)

  

-20.74

  

(467.2)

  

-31.85

Minority Interest

      

(2.1)

  

(59.5)

  

96.47

  

(4,742.3)

  

-99.96

                           

,

  

,

NET INCOME

 

 

1,212.7

 

683.8

 

77.35

 

1,167.2

 

3.90

                                 

The net income of Banco Santander presented in the first quarter an increase of 77.4% compared to the same period of 2015. Excluding amortization expense of goodwill(1) of R$447.4 million in the first quarter of 2016 and R$949.1 in the same period of 2015, the consolidated net income is R$1,660.1 million in 2016 and R$1,632.9 million in 2015.

                                 

The total of general expenses, including personnel expenses, others administrative expenses and profit sharing expenses, excluding the effects of goodwill amortization reduced 11.6% in March 2016, compared with the same period of 2015, while personnel and profit sharing expenses increased 14.5% and other administrative expenses increased 1.6% YoY both.

                                 

(1) Goodwill Amortization - On July 2015 the Bank revised the amortization curve rate of the acquisition goodwill of Banco Real to suit originally established curve for the term, extension and proportion. The goodwill amortization will be concluded in 2017 (originally was 2016).

                                 

Revenues and Expenses of financial income where impacted by the depreciation of the exchange rate(2) and the economy slowdown, compared to the first quarter of 2015. The consolidate result with loans and leasing operations, which includes interest income, exchange rate changes, recovery of loans previously written off and others, reduced 48.7% YoY. Additionally, the lines of Income Tax and Social Contribution where also affected by the exchange rate(2).

                                 

(2) Hedge of the foreign investments - The Bank operate a branch in the Cayman Islands and Santander EFC which used primarily for sourcing funds in the international banking and capital markets to provide credit lines for us, which are extended to our customers for working capital and trade-related financings.

                                 

To protect the exposures exchange rate variations, the Bank uses derivative. Under Brazilian income tax rules, the gains or losses resulting from the impact of appreciation or devaluation for the real in foreign investments is nontaxable to PIS/COFINS/IR/CSLL, while gains or losses from derivatives used as hedges are taxable. The purpose of these derivatives is to protect the after-tax results.

                                 

The different tax treatment of such exchange differences results in volatility in earnings (loss) and operating the Tax Expense accounts (PIS/COFINS) and income taxes (IR/CSLL). Exchange rate variations recorded from foreign investments the first quarter of 2016 resulted in a loss of R$3,786 million. On the other hand, contracts for derivatives contracted to cover these positions generated a loss in Gains and Losses on Financial Assets of R$7,220 million. The tax effect of these derivatives impacted the Tax Expenses line generating a tax gain of R$3,434 million, composed by R$336 million of PIS/COFINS and R$3,098 million IR/CSLL.

                                 

The operating result for the quarter ended March 31, 2016, is affected by this amount which, if desconsidered, would be R$1,712 million in march 2016 and R$1,337 in march 2015.

                                 

 

3

 

2.2) Assets and Liabilities

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

CONSOLIDATED BALANCE SHEETS
(R$Millions)

 

 

 

Mar/16

 

Mar/15

 

annual changes %

 

Dec/15

 

quarter
changes %

Current and Long-Term Assets

          

655,329.3

  

596,215.8

  

9.91

  

663,804.5

  

-1.28

Permanent Assets

          

13,420.3

  

16,074.8

  

-16.51

  

13,645.3

  

-1.65

TOTAL ASSETS

          

668,749.6

  

612,290.6

  

9.22

  

677,449.8

  

-1.28

                                 

Current and Long-Term Liabilities

        

608,359.9

  

553,030.2

  

10.00

  

620,289.1

  

-1.92

Deferred Income

          

409.1

  

408.1

  

0.25

  

385.5

  

6.12

Minority Interest

            

1,927.7

  

1,449.4

  

33.00

  

1,956.1

  

-1.45

                                 

Stockholders' Equity

          

58,052.9

  

57,402.9

  

1.13

  

54,819.1

  

5.90

                                 

TOTAL LIABILITIES

 

 

 

 

 

668,749.6

 

612,290.6

 

9.22

 

677,449.8

 

-1.28

                                 

The total assets presented an increase of 9.2% YoY, and they are mainly represented by: R$248,270.8 million of loan portfolio, R$151,377.1 million of securities and derivative financial instruments, R$51,481.2 million of interbank investments and R$57,100.8 million of interbank accounts. In March 2015 amounts: R$258,236.0 million, R$131,493.4 million, R$48,732.2 million, R$34,291.4 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

FUNDING BY CUSTOMERS
(R$Millions)

 

 

 

 

 

Mar/16

 

Mar/15

 

annual changes %

 

Dec/15

 

quarter
changes %

Demand Deposits

      

14,491

  

15,255

  

-5.01

  

15,698

  

-7.69

Saving Deposits

      

34,964

  

37,569

  

-6.93

  

35,985

  

-2.84

Time Deposits

     

85,048

  

84,008

  

1.24

  

86,528

  

-1.71

Debentures/LCI/LCA¹

      

86,486

  

79,731

  

8.47

  

90,226

  

-4.15

Treasury Bills (Letras Financeiras)2

      

62,152

  

44,159

  

40.75

  

59,499

  

4.46

                                 

Total Funding

 

 

 

 

 

283,141

 

260,722

 

8.60

 

287,936

 

-1.67

1. Debentures repurchase agreement, Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA).

2. Includes Certificates of Structured Operations.

                                 

The total of funding resources increased 1.7%, compared with December, 2015. The highlight was the growth of 4.5% on Treasury Bills

                                 

 

 

4

 

2.3) Loan Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

MANAGEMENT DISCLOSURE OF LOAN PORTFOLIO BY SEGMENT
(R$Million)

 

 

 

Mar/16

 

Mar/15

 

annual changes %

 

Dec/15

 

quarter
changes %

Individuals 1

      

85,593

 

79,819

 

7.23

  

84,805

 

0.93

Consumer Finance (Vehicles and Other Assets)

      

32,708

 

36,178

 

-9.59

  

33,931

 

-3.60

Small and Medium-sized Entities

      

33,837

 

35,831

 

-5.57

  

31,572

 

7.17

Large-sized Entity

      

96,133

 

106,316

 

-9.58

  

110,680

 

-13.14

Total Loan portfolio (gross)

      

248,271

 

258,144

 

-3.82

  

260,988

 

-4.87

                                 

Allowance for Loan Losses

      

(16,396)

  

(14,078)

  

16.46

  

(16,832)

  

-2.59

                                 

Total Loan portfolio (net)

 

 

 

231,875

 

244,066

 

-4.99

 

244,156

 

-5.03

1. Including the loans to individual in the consumer finance segment, the individual portfolio reached R$114,956 on March 31, 2016 and R$117,139 on March 31, 2015.

                                 

On March 31, 2016, the loan portfolio (gorss) presented a reduce of 3.8% compared to March 2015 and 4.9% compared to December 2015, Individuals segment showed a growth in both periods, being 7.2% YoY and 0.9% compared to December, 2015.

                                 

Delinquency

                                 

The delinquency ratio non-performing loans more than 90 days reached 3.3% of the loan portfolio, showing an increase of 0.3 p.p. in twelve months and 0.2 p.p. in three months.

                                 

Allowance for loan losses represents 6.6% of the loan portfolio in March 2016, 6.5 in December 2015 and 5.5% in March 2015.

                                 

The allowance for loan losses, net of revenues with recovery of loans previously written off in the period ended March 31, 2016 is R$2,013.0 million and R$2,403.0 million in 2015, YoY. The expense reduced 16.2%, this growth occurred mainly due to the impact of the reinforcement of provisions for economic groups in the large company segment occurred in 2015.

                                 

2.4) Stockholders’ Equity

                                 

In March 2016, Banco Santander consolidated stockholders’ equity presented an increase of 1.1% YoY and 5.9% compared to December, 2015.

                                 

The variance of stockholders' equity compared to December, 2015 is due, mainly, of the adjustment of equity evaluation in the amount of R$2,043 million, mainly, securities and derivative instruments offset by net profit of R$1,212.7 million.

                                 

In 2016, 6,578,600 Units were acquired, 5,316,647 Units paid as Bonus and Long-Term Incentive Plan – Local. The balance accumulated of treasury shares on March 31, 2016, amounting to 27,218,759 Units (12/31/2015 – 25,956,806 Units) equivalent to R$133 million (12/31/2015 – R$375 million). The minimum, weighted average and maximum cost per Unit of the total number of treasury shares is, respectively, R$11.01, R$14.28 and R$18.51. In 2016 was not acquired ADRs and the balance accumulated of ADRs acquired and held in treasury amounting 13,137,665 ADRs, in the current amount of R$289 million (12/31/2015 - R$317 million). The minimum, weighted average and maximum cost per ADR of the total number of treasury shares is, respectively, US$4.37, US$6.17 and US$10.21. The market value of these shares on March 31, 2016 was R$16.95 per Unit and US$4.65 per ADR. In the period ended on March 31, 2016, due to the Optimization Plan PR, were also recorded interest in the amount of R$107.

                                 

In the first quarter 2016 where payd Intercalary Dividends, as shown bellow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS AND INTEREST ON CAPITAL
(R$Millions)

 

 

 

 

 

 

 

Mar/16

 

Dec/15

Interest on capital

                  

0.0

  

1,400.0

Interim Dividends

                  

0.0

  

3,050.0

Intercalary Dividends

                  

0.0

  

1,750.0

Total

 

 

 

 

 

 

 

 

 

0.0

 

6,200.0

                                 

2.5) Basel Index

                                 

Financial institutions are required by BACEN to maintain Regulatory Capital (PR), Tier I and Principal Capital consistent with their risk activities, higher to the minimum requirement of the Regulatory Capital Requirement, represented by the sum of the partial credit risk, market risk and operational risk.

                                 

As established by CMN Resolution 4,193/2013 requirement for PR is 11% until December 31, 2015, from January 2016 the requirement is to 9.875% plus 0.625% of conservation of capital, totaling 10.5% until December 2016, for the Tier I is 6% and the Main Capital is 4.5%.

         

I

As a continuation the adoption of the rules established by CMN Resolution 4,192/2013, as of January 2015, came into force the Prudential Conglomerate, defined by CMN Resolution 4,280/2013, starting up a new period of comparison.

         

Index is calculated on a consolidated basis, as shown below:

         

 

BASEL INDEX %

 

 

 

 

 

 

 

Mar/16

 

Dec/15

Basel Index - consolidated

 

16,4

 

15.7

'(1) As a continuation the adoption of the rules established by Resolution 4,192/2013, as of January 2015, came into force the Prudential Conglomerate, defined by Resolution 4,280/2013, starting up a new period of comparison.

 

5

 

                                 

2.6) Main Subsidiaries

                                 

The table below presents the balances of total assets, net assets, net income and credit operations for the period ended March 31, 2016 the principal subsidiaries of Banco Santander portfolio:

                                 

SUBSIDIARIES
(R$Millions)

 

 

 

Total Assets

 

Stockholders' Equity

 

Net Income

 

Loan Portfolio (1)

Santander Leasing S.A. Arrendamento Mercantil

      

88,048.9

  

5,586.7

  

78.5

 

2,085.9

Aymoré Crédito, Financiamento e Investimento S.A.

      

30,000.0

  

1,321.2

  

(79.9)

  

25,077.9

Santander Brasil, Establecimiento Financiero de Credito, S.A.

      

3,516.2

  

3,180.5

  

11.6

 

1,603.5

Banco Bonsucesso S.A.

      

5,779.4

  

601.9

  

(7.6)

  

5,179.9

Getnet Adquirência e Serviços para Meios de Pagamento S.A.

      

1,775.7

  

1,456.7

  

73.1

 

0.0

Santander Corretora de Câmbio e Valores Mobiliários S.A

 

 

 

1,200.4

 

495.1

 

9.2

 

0.5

(1) Includes Leasing portfolio and other credits.

                                 

3) Other Significant Events

                                 

3.1) Corporate Restructuring

                                 

We implemented various social movements in order to reorganize the operations and activities of entities according to the business plan of the Banco Santander:

                                 

a) Agreement on the Acquisition, of part of the Financial Operation of PSA Group in Brazil and a Consequent Creation of a Joint Venture

                                 

On 24 July 2015, Aymoré CFI and Banco Santander, in furtherance of the partnership entered into between Banque PSA Finance (“Banque PSA”) and Santander Consumer Finance for the joint operation of the vehicle financing business related to PSA brands (Peugeot, Citroën and DS) in Europe, on this date Banco Santander entered into binding agreements for the formation of a financial cooperation in Brazil with Banque PSA to locally offer a range of financial and insurance products to consumers and distributors of the PSA brands. The main vehicle of the financial cooperation shall be Banco PSA Finance Brasil S.A., which shall be held in the proportion of fifty per cent (50%) by Aymoré CFI, and fifty per cent (50%) by Banque PSA. The acquisition shall be carried out for the proportional book value on the closing date. The transaction also contemplates the acquisition, by subsidiaries of Banco Santander, of hundred per cent (100%) of PSA Finance Arrendamento Mercantil S.A. which purchase price shall be equivalent to seventy four per cent (74%) of its book value on the closing date, and, of fifty per cent (50%) of PSA Corretora de Seguros e Serviços Ltda., which purchase price shall be equivalent to the proportional book value on the closing date. The closing of the transaction shall be subject to the fulfillment of certain conditions precedent usual in similar transactions, including obtaining the applicable regulatory and anti-trust approvals.

                                 

b) Investment in the Company Super Pagamentos e Administração de Meios Eletrônicos LTDA. (“Super”)

                                 

On October 3, 2014, Aymoré CFI signed an investment agreement ("Agreement") with a view to make an investment in Super, which shall result in the subscription and payment of new shares issued by Super, representing 50% of its total and voting capital.

                                 

The closing of the operation held on December 12, 2014 and was subject to completion of certain conditions precedent set forth in the Agreement, including the prior approval of the Central Bank (obtained on December 2, 2014). Aymoré CFI subscribed and paid share capital of Super in R$31,128, through the issuance of 20 million new common shares.

                                 

On January 4, 2016, Aymoré CFI informed the owners of the shares representing the remaining 50% of Super´s total voting capital its decision to exercise the call option for the acquisition of such shares, for a value of approximately R$113 million. The transaction was concluded on March 10, 2016.

c) Investment Agreement between Banco Santander and Banco Bonsucesso S.A. (Banco Bonsucesso)

                                 

On July 30, 2014 Banco Santander, through its controlled company Aymore CFI, and Banco Bonsucesso entered into an Investment Agreement whereby agreed to form an association in payroll credit card loan segment and payroll loans (Banco Bonsucesso Consignado).

                                 

On February 10, 2015, with the approval of the Central Bank, the transaction was concluded and Santander Brasil, through Aymoré CFI, became the controlling shareholder of Banco Bonsucesso Consignado, holding 60% of the share capital of the entity. Banco Bonsucesso owns the remaining portion of its share capital (40%).

                                 

Banco Bonsucesso Consignado became the exclusive vehicle of Banco Bonsucesso and its subsidiaries for the offer of payroll loans in Brazil. Banco Santander will continue to originate payroll loan transactions independently through its own channels.

                                 

d) Sale of Santander Securities Services Brasil Distribuidora de Títulos e Valores Mobiliários S.A. (current corporate name of CRV Distribuidora de Títulos e Valores Mobiliários S.A.)

                                 

On June 19, 2014, preliminary documents were executed containing the main terms and conditions related to the sale of the operation of qualified custody business, currently performed by Banco Santander, and all of the shares issued by Santander Securities Services Brasil DTVM S.A.

                                 

The transaction is carried out within the context of a global alliance between Banco Santander, S.A. and a group headed by Warburg Pincus LLC related to the qualified custody activity in Spain, Brazil and Mexico.

                                 

On August 31, 2015 the sales transaction of the qualified custody business, with the sale of all shares of Santander Securities Services Brasil DTVM S.A. to Santander Securities Services Brasil Participações S.A., indirectly controlled by Banco Santander, S.A., was concluded at the amount of R$859 million, according to was informed to the market on June 19, 2014.

                                 

The transaction generated a gain of R$751 milions before taxes recorded in the Non-Operating Income item.

                                 

e) Merger of Getnet Tecnologia em Captura e Processamento de Transações H.U.A.H. S.A. (Getnet) by Getnet Adquirencia e Serviços para Meios de Pagamento S.A. (current corporate name of Santander Getnet)

                                 

On July 31, 2014, the acquisition of Getnet, announced on April 4, 2014, was concluded.

                                 

In the EGM´s of August 31, 2014, the shareholders of the companies approved the merger of the Getnet into Getnet Adquirencia e Serviços para Meios de Pagamento S.A. under the terms of the Merger Protocol of Getnet into Getnet Adquirencia e Serviços para Meios de Pagamento S.A. (Protocol) dated as of August 29, 2014.

 
 

6

 

According to the Protocol, Getnet Adquirencia e Serviços para Meios de Pagamento S.A. received the book value of all assets, rights and obligations of Getnet totaling R$42,895, which was extinguished and succeeded by Getnet Adquirencia e Serviços para Meios de Pagamento S.A. in all their rights and obligations (merger). Considering that all the shares issued by Getnet were held by Getnet Adquirencia e Serviços para Meios de Pagamento S.A., no increase of the capital of Getnet Adquirencia e Serviços para Meios de Pagamento S.A. following the approval of the merger was made, and the net assets of Getnet was registered in Getnet Adquirencia e Serviços para Meios de Pagamento S.A. in return of the investment account.

                                 

The implementation of the merger represents an important step in the simplification, integration and consolidation of capture and processing activities of Santander Group acquiring business in Brazil. The new structure will provide a higher flexibility to manage business with a new and more complete commercial approach and an increase on operational leverage with gains of scale.

 

7

 

The Merger was made based on the Balance sheet of July 31, 2014, especially prepared for purposes of the merger and any variations occurred between August 1, 2014 to August 31, 2014 were appropriated by Getnet Adquirencia e Serviços para Meios de Pagamento S.A.

                                 

Summarized Balance Sheet at July 31, 2014

                                 

Current Assets and Long-Term Assets

  

272,491

     

Liabilities

  

396,205

Cash

         

21,720

     

Derivative Financial Instruments

      

4,574

Other Receivables

      

247,388

     

Borrowings

         

169,702

Other Assets

          

3,383

     

Other Payables

      

221,929

Permanent Assets

      

166,609

     

Stockholders' Equity

      

42,895

Investments

          

6,129

                   

Fixed Assets

          

99,674

                   

Intangibles

          

60,806

                   

Total

          

439,100

     

Total

          

439,100

                                 
                                 

f) Acquisition by iZettle do Brasil Meios de Pagamento S.A. (iZettle do Brasil)

                                 

On July 18, 2014, Banco Santander acquired 50% of the total corporate capital of iZettle Brasil, through a capital contribution to the company in the amount of R$17 million. On July 31, 2014, Banco Santander contributed the entirety of its stake in iZettle Brasil to the capital of SGS Getnet.

                                 

The iZettle Brasil operates in the payment market, with the development and distribution of products and payment solutions. This partnership was made in the context of a global agreement in December 2012 between Banco Santander, S.A (Spain) and iZettle Sweden in order to create a joint and coordinated effort in markets where the Santander Group operates, among them: Spain, Brazil, the UK and Mexico.

                                 

g) New Shareholders' Agreement of TecBan

                                 

In July 17, 2014, the country’s leading retail banks, including Banco Santander through one of its subsidiaries, had executed a new Shareholders’ Agreement of TecBan (“New Shareholders’ Agreement”). The New Shareholders’ Agreement establishes that, within approximately four years ahead its effective date, the Shareholders shall have replaced part of their own external-access Automated Teller Machines (“ATMs”) with Rede Banco24Horas ATMs, which are and will continue to be managed by TecBan. Thus increasing efficiency and providing more capillarity of services to the customer base. It is also expect a reduction in the costs and expenses related to the maintenance of ATMs.

                                 

h) Others Corporate Movements

                                 

We also performed the following corporate actions:

                                 

• On April 30th, 2015, it was formalized the merger and consequent extinction of the company Go Pay by Getnet.

                                 

• On April 30, 2015 it was formalized the merger and the consequent extinction of the companies KM Locanet Ltda. and Ideia Produções e Design Ltda. by Webmotors S.A.

                                 

• On March 23, 2015, Santander Participações S.A. sold all of its interest in the Special Purpose Companies Gestamp Eólica Serra de Santana S.A., Gestamp Eólica Paraíso S.A., Gestamp Eólica Lanchinha S.A., Gestamp Eólica Seridó S.A. e Gestamp Eólica Lagoa Nova S.A. to ICG do Brazil S.A., a company indirectly controlled by Santander Spain, in the total amount of R$120 million.

                                 

• On March 23, 2015, Santander Participações S.A. sold its entire stake in Santos Energy Participações S.A. to Inversiones Global Capital, S.A., a company indirectly controlled by Santander Spain, in the total amount of R$127 million.

                                 

• On December 10, 2014 the acquisition by Webmotors S.A., of quotas representing 100% of the capital stock of Virtual Motors Páginas Eletrônicas Ltda. – ME was concluded.

                                 

4) Strategy

                                
                                 

Santander Brasil is a universal bank focusing on retail services. The Bank is certain that the only way to grow in a recurring and sustainable manner is to provide excellent services that increase the level of satisfaction and attract more customers, who become more engaged. To accomplish this, the priority is to be a simple, personal and fair bank. The strategy is based on a long-term outlook, focusing on the efficient execution of the following priorities:

                                 

• Increase customer preference and engagement with targeted products and services that are simple, modern and efficient, which, through a multi-channel platform, seek to maximize the satisfaction of customers.

                                 

• Improve recurrence and sustainability by growing business with more diversified revenue, seeking a balance between credit, funding and services. At the same time, maintaining efficient cost management and rigorous control over risks.

 

 

8

 

• Be disciplined with capital and liquidity to conserve strength, adapt to regulatory changes and take advantage of opportunities for growth.

                                 

• Increase productivity through an intense agenda of productive transformation that allows the Bank to offer a complete portfolio of services.

                                 

The strategy prioritizes selective growth, close and long-lasting relations with the shareholders, and alignment with the country’s social and economic development agenda. The Bank is currently undergoing a commercial transformation agenda focused on customer satisfaction, which includes modernizing, simplifying and improving the supply of products, services and processes.

                                 

In the first quarter of 2016, the highlight is the following advances:

                                 

• Expanded the segment "Santander Negócios & Empresas" to companies with annual incomes up to R$200 million (previously R$80 million), making available more assertive tools and an adequate offer to the different customer profiles;

                                 

• Acquired 100% of "ContaSuper", a digital platform of pays and transfers, that meets the demands and creates new forms of use for all customer profiles;

                                 

• Inaugurated a new office model, which transforms the customer experience through interaction with digital channels, presents intuitive flow management and differentiated spaces with equipment to simplify processes;

                                 

• In line with the multichannel strategy, launched a digital channel customer care for Van Gogh and “Empresas 1” segments, with specialized care, by phone and e-mail, in extended hours;

                                 

• Santander is the bank with the lowest rate of client claims among our main competitors in the Brazilian Central Bank Ranking, as results of the improvements we are implementing in its services.

                                 

5) Rating Agencies

        
                                 

Banco Santander is rated by international ratings agencies and the ratings assigned reflect many factors including management quality, operating performance and financial strength, as well as other factors related to the financial sector and economic environment in which the Bank is inserted. The table below presents the ratings assigned by the main rating agencies.

 

6) Corporate Governance

                                 

The Board of Directors approved, in a meeting held on January 26, 2016, the election of Messrs. Marino Alexandre Calheiros Aguiar and Mario Roberto Opice Leão to compose the Company's Board of Directors, to the position of Officer without specific designation for a complementary term of office, which shall be valid until the officers elected in the first Board of Directors’ Meeting after the 2017 Ordinary Shareholders’ Meeting take office.

                                 

The Board of Directors approved in a meeting held on January 26, 2016: (i) the Company’s financial statements for fiscal year ended December 31, 2015; (ii) the tax credit technical study, according to Rule No. 3,171/02 of Central Bank of Brazil (BACEN); and (iii) the publishing of the Standardized Financial Statements referred to fiscal year ended December 31, 2015.

                                 

The Board of Directors approved in a meeting held on February 26, 2016: (i) the Company´s Financial Statements by standard under International Accounting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and interpretations of the IFRS Interpretations Committee (IFRS), referred to the fiscal year ended on December 31, 2015; and (ii) the Ombudsman Office Report regarding the second semester of 2015 and the corrective measures taken due to the complaints received, in order to comply with Resolution No. 4,433, of July 23, 2015, of the National Monetary Council.

                                 

The Board of Directors approved in a meeting held on March 18, 2016, the hiring by Santander of the company PricewaterhouseCoopers Auditores Independentes, enrolled with Corporate Taxpayer Registry (CNPJ) under No. 61.562.112/0001-20, and under Local Accounting Council Registry (CRC) No. 2SP000160/O-5 and registered with the Securities Commission (CVM) under declaratory act No. 5.038 of September 8th, 1998, with headquarters at Av. Francisco Matarazzo, No. 1400, 9th, 10th and 13th to 17th floor, Torre Torino, Água Branca, São Paulo/SP, to act as independent audit company of Santander and of the companies part of Santander Conglomerate in Brazil, for 2016, 2017 and 2018 fiscal years, in replacement of Deloitte Touche Tohmatsu Auditores Independentes.

                                 

The Board of Directors approved in a meeting held on March 22, 2016: (i) the election of the Company’s Audit Committee members, for a one (1) year term, which shall be postponed until the investiture of the members that shall be elected on the First Board of Directors’ meeting to be held after the Ordinary General Meeting of 2017, as follows: René Luiz Grande, reappointed as Coordinator; Luiz Carlos Nannini, as technical qualified member; and Elidie Palma Bifano, as member; and (ii) ratified (a) the current composition of the Nomination, Governance and Compliance Committee, as follows: Jesús Maria Zabalza Lotina, as Coordinator; Celso Clemente Giacometti and Marília Artimonte Rocca; and (b) the current composition of the Sustainability and Society Committee, as follows: Jesús Maria Zabalza Lotina, as Coordinator; José Luciano Duarte Penido, Gilberto Mifano and Viviane Senna Lalli.

                                 

7) Risk Management

                                 

7.1) Corporate Governance of the Risk Function

                                 

The structure of the Banco Santander Risk Committee is defined in accordance with the standards of prudent management and customer focus, while respecting local legal and regulatory environment. Its main responsibilities are:

                                 

• To integrate and adapt the Bank's risk culture to the local environment, as well as risk management strategy, level of risk tolerance and the risk appetite, approved by Executive Comittee and Board of Directors;

                                 

• To evaluate and approve credit and market proposals and credit limits of clients and portfolios;

 

9

 

• To authorize the use of local management tools and risk models and being informed about the result of its internal validation;

                                 

• Keep informed, assess and monitor the observations and recommendations that may be made by the supervisory authorities in the fulfillment of their duties.

                                 

The organizational structure of the Executive Vice President of Credit and Market Risk, which is independent from commercial areas, is composed of a nucleon responsible for the management of credit risk, market risk and operational risk.

                                 

A specific department has the mission to consolidate the portfolios and respective risks, supporting senior management with an integrated information. In addition, it is also responsible for attending the regulators, internal and external auditors, as well as the Santander Group headquarter in Spain.
The Bank has a core called Risk Architecture, which includes a set of transverse functions of all risk factors necessary for the construction of an advanced management model. Included in this structure the areas of methodology (development, parameterization models that reach all areas of risk), Governance, Policy and Risk Culture, Capital, Stress Test and Risk MI, responsible for the generation, exploitation and dissemination of information beyond the project information systems.

                                 

Further details of the structure, methodologies and control system related to risk management is described in the report available on the website www.santander.com.br.

 

7.2) Structure of Capital Management

                                 

The goal is to achieve an efficient capital structure, meeting the regulatory requirements and contributing to reach the goals regarding the classification of rating branches. The capital management including securitization, sale of assets, raising capital through shares issues, subordinated debt and hybrid instruments.

                                 

Risk management seeks to optimize value creation in the Banco Santander and the different business units. To this end, capital management, Return on Risk Adjusted Capital (RORAC) and the creation of data values for each business unit are generated. The Banco Santander uses a measurement model of economic capital in order to ensure it has enough capital available to support the risks of economic activity in different scenarios, with solvency levels agreed by the Group.

                                 

Projections of economic and regulatory capital are made based on financial projections (Balance Sheet, Income Statements, etc.) and macroeconomic scenarios estimated by the economic research service of the Financial Management area. The economic capital models are essentially designed to generate risk-sensitive estimates with two goals in mind: more precision in risk management and allocation of economic capital to various units of Banco Santander.

                                 

7.3) Credit Risk

        
                                 

The Credit Risk Management aims to supply subsidies to the definition of strategies, according to the risk appetite, in addition to setting limits, spanning the analysis of exposure and trends as well as the effectiveness of credit policy. The objective is to keep a risk profile and an appropriate minimum profitability that compensates the estimated default, both the client and the portfolio as defined the Executive Committee and Management Board. Additionally, it is responsible for the control and monitoring systems used in the management of credit risks and market These systems and processes are applied in the identification, measurement, control and reduction of exposure to credit risk in individual operations or those grouped together by similarity.

                                 

Risk Management specializes in the characteristics of the customers, as well as the process of risk management is segregated between individual customers (with monitoring of dedicated analysts) and customers with similar characteristics (standardized).

                                 

7.4) Market Risk

       
                                 

Market risk is exposure to risk factors including interest rates, exchange rates, commodities prices, stock market prices and other values, according to the type of product, the volume of operations, terms and conditions of the agreement and underlying volatility. Market risk management includes practices of measuring and monitoring the use of limits that are pre-set by internal committees, of the value at risk of the portfolios, of sensitivity to fluctuating interest rates, of exposure to foreign exchange rates, of liquidity gaps, among other practices which the control and monitoring of the risks which might affect the position of Banco Santander portfolios in the different markets in which the Bank operates.

                                 

Banco Santander Brasil operates in accordance with the global policies aligned with the objectives in Brazil in accordance with the risk appetite of the Bank. For this purpose, it has developed its own model of Risk Management, as follows:

                                 

• Functional independence;

 

10

 

• Executive capacity sustained by knowledge and customer proximity;

                                 

• Global scope (different types of risk);

                                 

• Collective decisions that evaluate all possible scenarios and not compromise the results of individual decisions, including Brazil Executive Risk Committee, which sets limits and approves the transactions and the Executive Committee of Assets and Liabilities, which is responsible for the management of capital and structural risks, which includes country risk, liquidity and interest rates;

                                 

• Management and optimization of the risk / return; and

                                 

• Advanced methodologies for risk management, such as Value at Risk (VaR) (historical simulation of 521 days, with a confidence level of 99% and a time horizon of one day), scenarios, sensitivity of net interest income, asset value and sensitivity contingency plan.

                                 

The structure of Market Risk is part of the Vice President of Credit Risk and Market, which implements the policies of risk, taking into account local and global corporate settings.

                                 

7.5) Environmental and Social Risk

                                 

Social and environmental risk management for the wholesale banking customers is accomplished through a management system for customers who have credit limits or credit risk above R$1 million, which considers aspects such as contaminated land, deforestation, working conditions and other social and environmental points of attention in which there is possibility of penalties. A specialized team, with background in Biology, Geology, Health and Safety Engineering and Chemical Engineering, monitors the environmental practices of our wholesale clients. The financial analysis team studies the potential damage and impacts that adverse social and environmental situations may cause to the financial condition of customers and their guarantees. The analysis focuses on preserving capital and market reputation, and the dissemination of this practice is achieved by constant training of both commercial and risk areas on the application of social and environmental risk standards in the credit approval process for corporate client.

                                 

The Bank's Social and Environmental Risk Policy is included under the Social and Environmental Responsibility Policy of the Bank, in accordance with Resolution 4,327 of Bacen.

                                 

7.6) Operational Risk Management, Internal Controls, Sarbanes-Oxley Act and Internal Audit

                                 

The local corporative area, Non-Financial Risks, is responsible for implementing the Operational Risks and Internal Controls management of Santander Bank (Brazil) S.A. It is subordinated to Executive Vice-President of Risks and count with people, structure, standards, methodologies and tools for ensuring adequacy of the management and control model.

                                 

Acts in preventing the operational risk and supports for the continued strengthening of the internal control system, attending the requirements of regulatory agencies, New Basel Agreement – BIS II and Sarbanes Oxley requirements and resolutions of the National Monetary Council. This model also follows the guidelines established by the Santander Spain based on COSO-Committee of Sponsoring Organizations of the Treadway Commission-Internal Control – Integrated Framework 2013.

                                 

The management plays an active part, aligned with the mission of the areas, recognizing, participating and sharing responsibility for: the continuous improvements of the operational and technological risk management culture and structure; improvements in the internal control environment, in order to ensure compliance with the established objectives and goals and also the security and quality of the products and services provided.

                                 

Banco Santander’s Board of Directors opted to adopt the Alternative Standardized Approach (ASA) to calculate the installment of Required Notional Equity related to operational risk.

                                 

The 2015 review of the effectiveness of internal controls in the Banco Santander companies, in accordance with section 404 of the Sarbanes-Oxley Act, was concluded on April 25, 2016 and found no evidence of any of significant deficiencies or material weaknesses.

                                 

Additional information on the management models can be found in the annual and social reports at www.santander.com.br/ri.

                                 

Internal Audit reports directly to the Board of Directors, whose activities are supervised by the Audit Committee.

                                 

Internal Audit’s objective is to supervise the compliance, efficiency and effectiveness of internal control systems, as well as the reliability and quality of accounting information. Thus, all Banco Santander’s companies, business units, departments and core services are under its scope of application. The Internal Audit has quality certificate issued by the Institute of Internal Auditors (IIA).

                                 

The Audit Committee and the Board of Directors were informed on Internal Audit’s works to be done during the year 2016, according to its annual plan.

                                 

The Audit Committee favorably reviewed the annual work plan of the Internal Audit and recommended approvalapproved of the activity report for the year 2016.

                                 

In order to perform its duties and reduce coverage risks inherent to Conglomerate's activities, the Internal Audit area has internally-developed tools updated whenever necessary.

                                 

Among these tools, it is worth mentioning the risk matrix, for it is used as a planning tool, prioritizing each unit’s risk level, based on, among others, its inherent risks, audit’s last rating, level of compliance with recommendations and size.
In addition, at least annually, the work programs are reviewed. These documents describe the audit tests to be performed, so that the requirements are enforced.

                                 

Throughout the three months of 2016, internal control procedures and controls on information systems pertaining to units under analysis were assessed according to the work plan for 2016, taking into account their design and operating effectiveness.

                                 

11

 

8) People

                                 

When we talk about the growth and development of Banco Santander, a force stands out: the People. Having a motivated and dedicated employees is a decisive factor in making the Bank in the best bank for customers and the best company for professionals.

                                 

Professionals are the strongest link between the Bank and customers and so, day after day, Banco Santander enhances their management practices because knows only with engaged professional, motivated, well trained and with full professional development, the Bank will manage to get more and better customers, satisfied , proud to do business with us and the Santander brand.

                                 

The daily performance of the Santander Brasil with customers, employees, shareholders and society is guided by the purpose of the Bank to contribute to people and businesses to prosper and the way you act.

                                 

The Bank has a talented and dedicated team of about 50,000 employees only in Brazil. The Bank seeks professionals who identify with the Corporate Culture, to be a Simple Bank (with uncomplicated and easy services to operate), Personal (with solutions and channels that meet costumers needs and preferences) and Fair (promoting business and relationships that are good for customers, shareholders and employees). In addition to identifying with the culture, our professionals act in their day to day aligned to it.

                                 

9) Sustainable Development

                                 

Sustainability is a strategic part of business, in Santander. It is a commitment that seeks results for business and society in a simple, personal and fair way and which is concretized through a strategy based in three pillars: Social and Financial Inclusion, Education and Social and Environmental Business and Management. Among the first quarter highlights are: I) the Santander Microcredit, currently the largest productive and oriented microcredit operation among private banks in Brazil, offering credit and financial advice to low-income microentrepreneurs and since 2002, it disbursed approximately R$ 3.3 billion for more than 350,000 customers; II) the second edition of Empreendedorismo Sustentável Awards, that which forms part of the Amazônia 2020 Program of Santander Universities, with the main aim to support North of Brazil federal universities, promoting universities internationalization, encouraging the development of scientific research, the sustainable entrepreneurship and the technology transfer; III) Since 2013, Santander Financiamentos finances photovoltaic systems (direct conversion of solar energy into electric energy), it has established 79 partnerships with suppliers of renewable energy solution and, in 2015, generated a business turnover of R$ 9.9 million. In the first quarter of 2016, the partnerships number increased to 108 and the business turnover was R$ 4.0 million; IV) In the “Agro Sustentável” program, Santander currently increased 803 customers and 177 employers and outsourced firms were trained in relation to CAR (Environmental Rural Register) and 211 customers agreed to participate in the agreement with Coopercitrus (Cooperative); V) the Annual Report 2015 publication, which brings together economic, social, environmental and governance information about Santander Brasil, and follows the Global Reporting Initiative (GRI) - G4 version, in "comprehensive" model of report.  

                                 

10) Other Information

                                 

It is part of Banco Santander´s policy to restrict the services provided by the independent auditors, so as to preserve the auditor’s independence and objectivity, in accordance with Brazilian and international standards, which provides the necessity of approval of any services by the Audit Committee of the Bank.

In compliance with CVM Instruction 381/2003, we hereby inform that in the period ended in March 2016, there have not been any contract for non-audit services from PricewaterhouseCoopers, which cumulatively represent more than 5% of the related overall audit fee consideration.

                                 

In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls to ensure its independence, including the review of work performed, including any services other than external audit. This evaluation is based on the applicable regulations and accepted principles that preserve the independence of the auditor: (i) the auditor should not audit their own work; (ii) the auditor should not perform management functions; and (iii) the auditor should not promote the interests of his client. Acceptance and professional services not related to external audit for the period ended December 31, 2015 did not affect the independence and objectivity in the conduct of external audit examinations of the Banco Santander and other Group entities, since the principles above were observed.

                                 

The Board of Directors
The Executive

                                 

(Approved at the Meeting of the Board of April 26, 2016).

***

 

12

 

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

BALANCE SHEETS

   
 
           

Bank

      

Consolidated

 

 

Note

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

                     

Current Assets

 

 

 

412,472,171

 

412,689,314

 

423,947,726

 

426,064,803

Cash

 

4

 

5,269,985

 

5,231,627

 

5,463,167

 

6,863,856

Interbank Investments

 

5

 

68,668,219

 

74,010,064

 

51,295,739

 

55,443,206

Money Market Investments

 

 

 

31,754,010

 

31,837,273

 

31,838,359

 

31,990,143

Interbank Deposits

 

 

 

19,519,381

 

20,342,010

 

2,062,552

 

1,622,282

Foreign Currency Investments

 

 

 

17,394,828

 

21,830,781

 

17,394,828

 

21,830,781

Securities and Derivative Financial

 

 

 

 

 

 

 

 

 

 

Instruments

 

6

 

66,785,300

 

50,644,888

 

70,373,978

 

55,477,103

Own Portfolio

 

 

 

14,195,339

 

15,371,552

 

12,162,520

 

12,960,963

Subject to Repurchase Commitments

 

 

 

43,124,717

 

26,353,218

 

43,129,930

 

26,355,623

Derivative Financial Instruments

 

 

 

4,888,923

 

6,939,495

 

7,336,303

 

11,931,802

Linked to Central Bank of Brazil

 

 

 

584,319

 

537,278

 

584,319

 

537,278

Privatization Certificates

 

 

 

822

 

819

 

822

 

819

Linked to Guarantees

 

 

 

3,991,180

 

1,442,526

 

7,160,084

 

3,690,618

Interbank Accounts

 

7

 

56,617,854

 

54,869,025

 

56,933,017

 

55,135,620

Payments and Receipts Pending Settlement

 

 

 

1,355,622

 

1,778

 

1,355,622

 

1,778

Restricted Deposits:

 

 

 

55,241,423

 

54,831,669

 

55,556,586

 

55,098,264

Central Bank Deposits

 

 

 

55,239,909

 

54,829,213

 

55,555,072

 

55,095,808

National Housing System

 

 

 

1,514

 

2,456

 

1,514

 

2,456

Correspondents

 

 

 

20,809

 

35,578

 

20,809

 

35,578

Lending Operations

 

8

 

73,345,592

 

83,380,887

 

92,334,853

 

102,557,195

Public Sector

 

 

 

4,515

 

56,406

 

4,960

 

56,406

Private Sector

 

 

 

77,016,661

 

86,512,527

 

96,489,272

 

106,176,703

Lending Operations Assignment

 

 

 

2,850

 

204

 

2,850

 

204

(Allowance for Loan Losses)

 

8.f

 

(3,678,434)

 

(3,188,250)

 

(4,162,229)

 

(3,676,118)

Leasing Operations

 

8

 

9

 

1

 

1,509,015

 

1,585,580

Public Sector

 

 

 

-

 

-

 

15

 

131

Private Sector

 

 

 

15

 

6

 

1,532,623

 

1,610,498

(Allowance for Lease Losses)

 

8.f

 

(6)

 

(5)

 

(23,623)

 

(25,049)

Other Receivables

 

 

 

140,640,925

 

143,631,937

 

144,214,918

 

147,398,541

Credits for Guarantees Honored

 

 

 

722

 

844

 

722

 

844

Foreign Exchange Portfolio

 

9

 

96,189,949

 

94,642,636

 

96,189,949

 

94,642,636

Income Receivable

 

 

 

683,501

 

745,898

 

579,690

 

601,763

Trading Account

 

10

 

2,369,897

 

1,587,363

 

2,820,181

 

1,697,899

Tax Credits

 

11

 

8,515,236

 

8,063,063

 

9,152,740

 

8,786,456

Others

 

12

 

33,161,413

 

38,919,702

 

35,789,073

 

42,030,853

(Allowance for Other Receivables Losses)

 

8.f

 

(279,793)

 

(327,569)

 

(317,437)

 

(361,910)

Other Assets

 

 

 

1,144,287

 

920,885

 

1,823,039

 

1,603,702

Non-Current Assets Held for Sale

 

13

 

-

 

-

 

487,386

 

487,386

Other Assets

 

 

 

726,620

 

721,710

 

728,635

 

723,830

(Allowance for Valuation)

 

 

 

(74,691)

 

(73,736)

 

(74,691)

 

(73,748)

Prepaid Expenses

 

 

 

492,358

 

272,911

 

681,709

 

466,234

 

13

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Assets

 

 

 

298,151,774

 

286,568,316

 

231,381,549

 

237,739,651

Interbank Investments

 

5

 

15,025,169

 

13,497,719

 

185,500

 

366,922

Interbank Deposits

 

 

 

15,025,169

 

13,497,719

 

185,500

 

366,922

Securities and Derivative Financial

 

 

 

 

 

 

 

 

 

 

Instruments

 

6

 

156,191,785

 

146,319,775

 

81,003,166

 

87,414,879

Own Portfolio

 

 

 

37,226,907

 

26,292,498

 

17,909,349

 

23,350,447

Subject to Repurchase Commitments

 

 

 

96,376,972

 

91,063,021

 

39,367,719

 

32,605,138

Derivative Financial Instruments

 

 

 

9,664,605

 

13,237,376

 

9,719,456

 

14,078,407

Linked to Central Bank of Brazil

 

 

 

6,128,111

 

5,679,037

 

6,128,111

 

5,679,037

Privatization Certificates

 

 

 

2,327

 

2,387

 

2,327

 

2,387

Linked to Guarantees

 

 

 

6,792,863

 

10,045,456

 

7,876,204

 

11,699,463

Interbank Accounts

 

7

 

167,818

 

167,818

 

167,818

 

167,818

Restricted Deposits:

 

 

 

167,818

 

167,818

 

167,818

 

167,818

National Housing System

 

 

 

167,818

 

167,818

 

167,818

 

167,818

Lending Operations

 

8

 

88,068,610

 

85,225,495

 

104,293,998

 

101,762,256

Public Sector

 

 

 

103,907

 

62,014

 

103,907

 

62,014

Private Sector

 

 

 

98,592,560

 

96,773,748

 

115,442,315

 

113,895,402

Lending Operations Related to Assignment

 

 

 

177,945

 

196,634

 

177,945

 

196,634

(Allowance for Loan Losses)

 

8.f

 

(10,805,802)

 

(11,806,901)

 

(11,430,169)

 

(12,391,794)

Leasing Operations

 

8

 

3

 

14

 

1,377,453

 

1,374,449

Private Sector

 

 

 

9

 

20

 

1,412,822

 

1,412,834

(Allowance for Lease Losses)

 

8.f

 

(6)

 

(6)

 

(35,369)

 

(38,385)

Other Receivables

 

 

 

37,822,611

 

40,692,028

 

43,244,810

 

45,753,072

Receivables for Guarantees Honored

 

 

 

41,353

 

26,851

 

41,353

 

26,851

Foreign Exchange Portfolio

 

9

 

2,114,598

 

1,764,903

 

2,114,598

 

1,764,903

Income Receivable

 

 

 

246,416

 

216,852

 

246,885

 

216,852

Tax Credits

 

11

 

18,938,687

 

23,067,813

 

20,932,121

 

25,201,969

Others

 

12

 

16,843,242

 

15,886,443

 

20,337,235

 

18,881,467

(Allowance for Other Receivables Losses)

 

8.f

 

(361,685)

 

(270,834)

 

(427,382)

 

(338,970)

Other Assets

 

 

 

875,778

 

665,467

 

1,108,804

 

900,255

Temporary Assets

 

 

 

101,801

 

101,801

 

101,809

 

101,809

(Allowance for Losses)

 

 

 

(1,765)

 

(1,765)

 

(1,773)

 

(1,773)

Prepaid Expenses

 

 

 

775,742

 

565,431

 

1,008,768

 

800,219

 

 

 

 

 

 

 

 

 

 

 

Permanent Assets

 

 

 

27,806,421

 

29,030,820

 

13,420,327

 

13,645,283

Investments

 

 

 

16,322,581

 

17,170,957

 

164,356

 

67,560

Investments in Affiliates and Subsidiaries:

 

15

 

16,304,098

 

17,152,711

 

148,690

 

51,747

Domestic

 

 

 

13,123,614

 

13,843,934

 

148,690

 

51,747

Foreign

 

 

 

3,180,484

 

3,308,777

 

-

 

-

Other Investments

 

 

 

51,683

 

51,446

 

57,542

 

57,295

(Allowance for Losses)

 

 

 

(33,200)

 

(33,200)

 

(41,876)

 

(41,482)

Fixed Assets

 

16

 

6,378,300

 

6,466,313

 

6,914,785

 

6,986,250

Real Estate

 

 

 

2,549,732

 

2,541,302

 

2,656,861

 

2,648,353

Others

 

 

 

10,693,001

 

10,566,480

 

11,911,798

 

11,723,760

(Accumulated Depreciation)

 

 

 

(6,864,433)

 

(6,641,469)

 

(7,653,874)

 

(7,385,863)

Intangibles

 

17

 

5,105,540

 

5,393,550

 

6,341,186

 

6,591,473

Goodwill

 

 

 

26,120,037

 

26,120,037

 

27,490,243

 

27,490,243

Intangible Assets

 

 

 

7,496,880

 

7,321,258

 

7,960,016

 

7,750,690

(Accumulated Amortization)

 

 

 

(28,511,377)

 

(28,047,745)

 

(29,109,073)

 

(28,649,460)

Total Assets

 

 

 

738,430,366

 

728,288,450

 

668,749,602

 

677,449,737

 

14

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

502,492,786

 

474,842,549

 

427,773,974

 

418,097,819

Deposits

 

18.a

 

153,674,333

 

152,344,715

 

92,460,603

 

95,684,682

Demand Deposits

 

 

 

14,524,141

 

15,775,566

 

14,491,110

 

15,698,171

Savings Deposits

 

 

 

34,963,784

 

35,984,837

 

34,963,784

 

35,984,837

Interbank Deposits

 

 

 

63,134,077

 

59,608,550

 

2,121,171

 

3,132,439

Time Deposits

 

 

 

41,052,331

 

40,975,762

 

40,884,538

 

40,869,235

Money Market Funding

 

18.b

 

127,850,343

 

99,365,655

 

105,012,797

 

86,627,754

Own Portfolio

 

 

 

111,939,764

 

85,673,417

 

94,102,213

 

72,935,516

Third Parties

 

 

 

10,672,366

 

10,827,806

 

5,672,371

 

10,827,806

Linked to Trading Portfolio Operations

 

 

 

5,238,213

 

2,864,432

 

5,238,213

 

2,864,432

Funds from Acceptance and Issuance of

 

 

 

 

 

 

 

 

 

 

Securities

 

18.c

 

49,497,676

 

44,201,390

 

52,361,740

 

46,814,955

Exchange Acceptances

 

 

 

-

 

-

 

505,000

 

504,578

Real Estate Credit Notes, Mortgage Notes,

 

 

 

 

 

 

 

 

 

 

Credit and Similar Notes

 

 

 

42,322,115

 

34,941,349

 

44,681,179

 

37,050,336

Securities Issued Abroad

 

 

 

6,290,780

 

8,478,381

 

6,290,780

 

8,478,381

Funding by Structured Operations Certificates

 

884,781

 

781,660

 

884,781

 

781,660

Interbank Accounts

 

7

 

1,275,944

 

14,405

 

1,275,944

 

14,405

Receipts and Payments Pending Settlement

 

 

 

1,200,960

 

-

 

1,200,960

 

-

Correspondents

 

 

 

74,984

 

14,405

 

74,984

 

14,405

Interbranch Accounts

 

 

 

2,396,840

 

3,817,511

 

2,396,884

 

3,817,555

Third-Party Funds in Transit

 

 

 

2,396,512

 

3,817,117

 

2,396,512

 

3,817,117

Internal Transfers of Assets

 

 

 

328

 

394

 

372

 

438

Borrowings

 

18.e

 

30,131,730

 

33,378,891

 

28,742,671

 

33,453,687

Local Borrowings - Other Institutions

 

 

 

2,096

 

4,333

 

72,239

 

78,917

Foreign Borrowings

 

 

 

30,129,634

 

33,374,558

 

28,670,432

 

33,374,770

Domestic Onlendings - Official Institutions

18.e

 

5,189,526

 

5,137,083

 

5,189,526

 

5,137,083

National Treasury

 

 

 

216

 

105

 

216

 

105

National Economic and Social Development

 

 

 

 

 

 

 

 

 

 

Bank (BNDES)

 

 

 

2,292,486

 

2,351,174

 

2,292,486

 

2,351,174

Federal Savings and Loan Bank (CEF)

 

 

 

104,811

 

4,373

 

104,811

 

4,373

National Equipment Financing Authority (FINAME)

 

2,616,398

 

2,564,993

 

2,616,398

 

2,564,993

Other Institutions

 

 

 

175,615

 

216,438

 

175,615

 

216,438

Derivative Financial Instruments

 

6

 

5,660,424

 

6,759,506

 

7,976,125

 

11,604,277

Derivative Financial Instruments

 

 

 

5,660,424

 

6,759,506

 

7,976,125

 

11,604,277

Other Payables

 

 

 

126,815,970

 

129,823,393

 

132,357,684

 

134,943,421

Collected Taxes and Other

 

 

 

1,629,142

 

137,250

 

1,648,867

 

156,399

Foreign Exchange Portfolio

 

9

 

85,655,648

 

84,694,924

 

85,655,648

 

84,694,924

Social and Statutory

 

 

 

196,024

 

2,974,963

 

241,998

 

3,038,619

Tax and Social Security

 

19

 

2,589,496

 

2,120,847

 

3,048,350

 

2,724,378

Trading Account

 

10

 

1,116,660

 

2,340,787

 

1,758,797

 

2,544,961

Subordinated Debt

 

20

 

7,947,343

 

7,685,328

 

7,947,343

 

7,685,328

Debt Instruments Eligible to Compose Capital

 

21

 

120,336

 

218,009

 

120,336

 

218,009

Others

 

22

 

27,561,321

 

29,651,285

 

31,936,345

 

33,880,803

15

 

 

Long-Term Liabilities

 

 

 

177,491,793

 

198,260,440

 

180,585,966

 

202,191,249

Deposits

 

18.a

 

46,913,297

 

48,758,538

 

44,486,781

 

46,201,330

Interbank Deposits

 

 

 

2,058,431

 

2,301,113

 

323,326

 

542,833

Time Deposits

 

 

 

44,854,866

 

46,457,425

 

44,163,455

 

45,658,497

Money Market Funding

 

18.b

 

43,689,657

 

48,333,077

 

43,689,657

 

48,332,677

Own Portfolio

 

 

 

27,253,238

 

31,282,876

 

27,253,238

 

31,282,476

Linked to Trading Portfolio Operations

 

 

 

16,436,419

 

17,050,201

 

16,436,419

 

17,050,201

Funds from Acceptance and Issuance of

 

 

 

 

 

 

 

 

 

 

Securities

 

18.c

 

42,915,417

 

51,224,195

 

44,501,096

 

53,033,159

Exchange Acceptances

 

 

 

-

 

-

 

462,765

 

479,684

Real Estate Credit Notes, Mortgage Notes,

 

 

 

 

 

 

 

 

 

 

Credit and Similar Notes

 

 

 

42,748,811

 

46,226,988

 

43,871,725

 

47,556,268

Securities Issued Abroad

 

 

 

152,050

 

4,993,915

 

152,050

 

4,993,915

Funding by Structured Operations Certificates

 

14,556

 

3,292

 

14,556

 

3,292

Borrowings

 

18.e

 

3,384,289

 

3,308,742

 

3,384,289

 

3,308,742

Foreign Borrowings

 

 

 

3,384,289

 

3,308,742

 

3,384,289

 

3,308,742

Domestic Onlendings - Official Institutions

18.e

 

10,892,690

 

11,125,808

 

10,892,690

 

11,125,808

National Treasury

 

 

 

209

 

313

 

209

 

313

National Economic and Social Development

 

 

 

 

 

 

 

 

 

 

Bank (BNDES)

 

 

 

5,607,832

 

5,534,930

 

5,607,832

 

5,534,930

Federal Savings and Loan Bank (CEF)

 

 

 

722

 

103,906

 

722

 

103,906

National Equipment Financing Authority (FINAME)

 

5,276,039

 

5,479,554

 

5,276,039

 

5,479,554

Other Institutions

 

 

 

7,888

 

7,105

 

7,888

 

7,105

Derivative Financial Instruments

 

6

 

6,062,818

 

10,271,926

 

6,320,445

 

11,278,682

Derivative Financial Instruments

 

 

 

6,062,818

 

10,271,926

 

6,320,445

 

11,278,682

Other Payables

 

 

 

23,633,625

 

25,238,154

 

27,311,008

 

28,910,851

Foreign Exchange Portfolio

 

9

 

2,896,261

 

4,635,141

 

2,896,261

 

4,635,141

Tax and Social Security

 

19

 

5,688,338

 

4,868,560

 

8,656,821

 

7,819,728

Negotiation and Intermediation of Securities

 

10

 

59,868

 

57,560

 

59,868

 

57,560

Subordinated Debts

 

20

 

431,194

 

411,976

 

431,194

 

411,976

Debt Instruments Eligible to Compose Capital

 

21

 

8,880,968

 

9,744,136

 

8,880,968

 

9,744,136

Others

 

22

 

5,676,996

 

5,520,781

 

6,385,896

 

6,242,310

 

 

 

 

 

 

 

 

 

 

 

Deferred Income

 

 

 

389,724

 

364,172

 

409,058

 

385,466

Deferred Income

 

 

 

389,724

 

364,172

 

409,058

 

385,466

 

 

 

 

 

 

 

 

 

 

 

Non Controlling Interest

 

 

 

-

 

-

 

1,927,682

 

1,956,130

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

24

 

58,056,063

 

54,821,289

 

58,052,922

 

54,819,073

Capital:

 

 

 

57,000,000

 

57,000,000

 

57,000,000

 

57,000,000

Brazilian Residents

 

 

 

4,808,186

 

4,808,186

 

4,808,186

 

4,808,186

Foreign Residents

 

 

 

52,191,814

 

52,191,814

 

52,191,814

 

52,191,814

Capital Reserves

 

 

 

414,865

 

433,473

 

417,321

 

436,389

Profit Reserves

 

 

 

2,752,744

 

2,752,744

 

2,752,744

 

2,775,120

Adjustment to Fair Value

 

 

 

(2,916,838)

 

(4,940,975)

 

(2,924,509)

 

(4,968,483)

Retained Earnings

 

 

 

1,227,722

 

-

 

1,229,796

 

-

(-) Treasury Shares

      

(422,430)

 

(423,953)

 

(422,430)

 

(423,953)

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity

 

 

 

58,056,063

 

54,821,289

 

59,980,604

 

56,775,203

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

 

738,430,366

 

728,288,450

 

668,749,602

 

677,449,737

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

            

 

16

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

INCOME STATEMENTS

   
 
         

Bank

      

Consolidated

     

01/01 to

  

01/01 to

  

01/01 to

  

01/01 to

 

Note

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

                   

Financial Income

 

 

22,063,154

 

19,315,783

 

21,096,073

 

19,238,014

Lending Operations

 

 

6,003,175

 

14,019,388

 

8,057,802

 

15,795,898

Leasing Operations

 

 

-

 

-

 

111,939

 

123,682

Securities Transactions

6.a

 

8,776,790

 

8,988,703

 

5,807,989

 

7,024,162

Derivatives Transactions

 

 

1,721,381

 

(3,085,798)

 

1,531,966

 

(3,104,908)

Foreign Exchange Operations

 

 

3,958,205

 

(1,336,885)

 

3,973,338

 

(1,336,885)

Operations of Sale or Transfer of Financial Assets

 

 

25

 

10,811

 

1,105

 

10,903

Compulsory Deposits

 

 

1,603,578

 

719,564

 

1,611,934

 

725,162

 

 

 

 

 

 

 

 

 

 

Financial Expenses

 

 

(14,358,699)

 

(19,580,248)

 

(12,577,596)

 

(18,608,140)

Funding Operations Market

18.d

 

(15,342,803)

 

(12,392,830)

 

(13,126,809)

 

(11,070,072)

Borrowings and Onlendings Operations

 

 

3,259,195

 

(4,618,411)

 

3,165,956

 

(4,678,273)

Leasing Operations

 

 

(23)

 

(22)

 

-

 

-

Allowance for Loan Losses

8.f

 

(2,275,068)

 

(2,568,985)

 

(2,616,743)

 

(2,859,795)

 

 

 

 

 

 

 

 

 

 

Gross Profit From Financial Operations

 

 

7,704,455

 

(264,465)

 

8,518,477

 

629,874

 

 

 

 

 

 

 

 

 

 

Other Operating (Expenses) Income

 

 

(3,233,124)

 

(2,836,946)

 

(3,708,628)

 

(3,500,954)

Income from Services Rendered

27

 

2,067,815

 

1,818,961

 

2,337,877

 

2,144,589

Income from Banking Fees

27

 

614,860

 

545,579

 

752,597

 

683,199

Personnel Expenses

28

 

(1,642,321)

 

(1,446,261)

 

(1,813,462)

 

(1,597,349)

Other Administrative Expenses

29

 

(2,369,030)

 

(2,901,873)

 

(2,725,857)

 

(3,191,178)

Tax Expenses

30

 

(990,498)

 

(276,155)

 

(1,152,630)

 

(416,050)

Investments in Affiliates and Subsidiaries

15

 

131,703

 

552,441

 

299

 

629

Other Operating Income

31

 

865,368

 

1,138,881

 

1,114,029

 

1,008,900

Other Operating Expenses

32

 

(1,911,021)

 

(2,268,519)

 

(2,221,481)

 

(2,133,694)

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

4,471,331

 

(3,101,411)

 

4,809,849

 

(2,871,080)

 

 

 

 

 

 

 

 

 

 

Non-Operating Income

33

 

25,871

 

52,080

 

25,392

 

78,268

 

 

 

 

 

 

 

 

 

 

Income Before Taxes on Income and Profit Sharing

 

4,497,202

 

(3,049,331)

 

4,835,241

 

(2,792,812)

 

 

 

 

 

 

 

 

 

 

Income Tax and Social Contribution

34

 

(2,971,151)

 

3,971,691

 

(3,302,067)

 

3,799,824

Provision for Income Tax

 

 

(416,790)

 

(8,031)

 

(563,413)

 

(205,999)

Provision for Social Contribution Tax

 

 

(444,462)

 

7,567

 

(550,641)

 

(105,079)

Deferred Tax Credits

 

 

(2,109,899)

 

3,972,155

 

(2,188,013)

 

4,110,902

 

 

 

 

 

 

 

 

 

 

Profit Sharing

 

 

(298,329)

 

(242,909)

 

(318,360)

 

(263,738)

 

 

 

 

 

 

 

 

 

 

Non Controlling Interest

 

 

-

 

-

 

(2,074)

 

(59,514)

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

1,227,722

 

679,451

 

1,212,740

 

683,760

 

 

 

 

 

 

 

 

 

 

Number of Shares (Thousands)

24.a

 

7,520,123

 

7,546,294

 

 

 

 

Net Income per Thousand Shares (R$)

 

 

163.26

 

90.04

 

 

 

 

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

            

 

17

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - BANK

   

In thousands of Brazilian Real - R$, unless otherwise stated

 
                                           
             

Profit Reserves

  

Adjustment to Fair Value

          

                 

Reserve for

          

Others

            
         

Capital

  

Legal

 

Dividend

  

Own

  

Affiliates and

  

Adjustment

  

Retained

  

(-)Treasury

    

 

Note

 

Capital

 

Reserves

 

Reserve

 

Equalization

 

Position

 

Subsidiaries

 

to Fair Value

 

Earnings

 

Shares

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of December 31, 2014

 

 

57,000,000

 

548.164

 

1.489.139

 

615,066

 

117,875

 

(118,161)

 

(1,881,352)

 

-

 

(445,501)

 

57,325,230

Treasury Shares

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(11,357)

 

(11,357)

Result of Treasury Shares

24.d

 

-

 

(4,415)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(4,415)

Reservations for Share - Based Payment

 

 

-

 

173,457

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

173,457

Adjustment to Fair Value - Securities

                                         

and Derivative Financial Instruments

 

 

-

 

-

 

-

 

-

 

(583,555)

 

(23,269)

 

-

 

-

 

-

 

(606,824)

Restructuring of Capital

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(12)

 

(12)

Net Income

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

679,451

 

-

 

679,451

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends

24.b

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(150,000)

 

-

 

(150,000)

Balances as of March 31, 2015

 

 

57,000,000

 

717,206

 

1,489,139

 

615,066

 

(465,680)

 

(141,430)

 

(1,881,352)

 

529,451

 

(456,870)

 

57,405,530

                                           

Balances as of December 31, 2015

 

 

57,000,000

 

433,473

 

1,838,374

 

914,370

 

(3,657,416)

 

(141,913)

 

(1,141,646)

 

-

 

(423,953)

 

54,821,289

Employee Benefit Plan

 

 

-

 

-

 

-

 

-

 

-

 

-

 

995

 

-

 

-

 

995

Treasury Shares

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1.535

 

1,535

Result of Treasury Shares

24.d

 

-

 

 (6,298)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

( 6,298)

Reservations for Share - Based Payment

 

 

-

 

(12,310)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(12,310)

Adjustment to Fair Value - Securities

                                         

and Derivative Financial Instruments

 

 

-

 

-

 

-

 

-

 

1,889,404

 

133,738

 

-

 

-

 

-

 

2,023,142

Restructuring of Capital

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 (12)

 

(12)

Net Income

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,227,722

 

-

 

1,227,722

Balances as of March 31, 2016

 

 

57,000,000

 

414,865

 

1,838,374

 

914,370

 

(1,768,012)

 

(8,175)

 

(1,140,651)

 

(1,227,722)

 

(422,430)

 

58,056,063

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

 

18

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - CONSOLIDATED

   

In thousands of Brazilian Real - R$, unless otherwise stated

 
                                                   
             

Profit Reserves

  

Adjustment to Fair Value

          

 

 

                 

Reserve for

          

Others

                  

Total

         

Capital

  

Legal

 

Dividend

  

Own

  

Affiliates and

  

Adjustment

  

Retained

  

(-)Treasury

  

Stockholders'

  

Minority

  

Stockholders'

 

Note

 

Capital

 

Reserves

 

Reserve

 

Equalization

 

Position

 

Subsidiaries

 

to Fair Value

 

Earnings

 

Shares

 

Equity

 

Interest

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Balances as of December 31, 2014

 

 

57.000.000

 

548,641

 

1,489,139

 

608,434

 

119,485

 

(118,161)

 

(1,881,352)

 

-

 

(445,501)

 

57,320,685

 

1,141,420

 

58,462,105

Treasury Shares

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(11,357)

 

(11,357)

 

-

 

(11,357)

Result of Treasury Shares

24.d

 

-

 

(4,415)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(4,415)

 

-

 

(4,415)

Reservations for Share - Based Payment

 

 

-

 

174,929

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

174,929

 

-

 

174,929

Adjustment to Fair Value - Securities and

                                                  

Derivative Financial Instruments

 

 

-

 

-

 

-

 

-

 

(583,555)

 

(23,269)

 

-

 

-

 

-

 

(606,824)

 

-

 

(606,824)

Restructuring of Capital

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(12)

 

(12)

 

-

 

(12)

Net Income

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

683,760

 

-

 

683,760

 

-

 

683,760

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends

24.b

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(150,000)

 

-

 

(150,000)

 

-

 

(150,000)

Reserve for Dividend Equalization

24.c

 

-

 

-

 

-

 

6,632

 

(28,279)

 

-

 

-

 

17,761

 

-

 

(3,886)

 

-

 

(3,886)

Non Controlling Interest Results

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

59,514

 

59,514

Others

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

248,477

 

248,477

Balances as of March 31, 2015

 

 

57,000,000

 

719,155

 

1,489,139

 

615,066

 

(492,349)

 

(141,430)

 

(1,881,352)

 

551,521

 

(456,870)

 

57,402,880

 

1,449,411

 

58,852,291

                                                   

Balances as of December 31, 2015

 

 

57,000,000

 

436,389

 

1,838,374

 

936,746

 

(3,684,924)

 

(141,913)

 

(1,141,646)

 

-

 

(423,953)

 

54,819,073

 

1,956,130

 

56,775,203

Employee Benefit Plan

 

 

-

 

-

 

-

 

-

 

-

 

-

 

995

 

-

 

-

 

995

 

-

 

995

Treasury Shares

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,535

 

1,535

 

-

 

1,535

Result of Treasury Shares

24.d

 

-

 

(6,298)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(6,298)

 

-

 

(6,298)

Reservations for Share - Based Payment

 

 

-

 

(12,770)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(12,770)

 

-

 

(12,770)

Adjustment to Fair Value - Securities and

                                                  

Derivative Financial Instruments

 

 

-

 

-

 

-

 

-

 

1,889,404

 

133,738

 

-

 

-

 

-

 

2,023,142

 

-

 

2,023,142

Restructuring of Capital

24.d

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(12)

 

(12)

 

-

 

(12)

Net Income

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,212,740

 

-

 

1,212,740

 

-

 

1,212,740

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reserve for Dividend Equalization

24.c

 

-

 

-

 

-

 

(22,376)

 

19,837

 

-

 

-

 

17,056

 

-

 

14,517

 

-

 

14,517

Non Controlling Interest Results

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(2,074

 

(2,074)

Others

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(26,374

 

(26,374)

Balances as of March 31, 2016

 

 

57,000,000

 

417,321

 

1,838,374

 

914,370

 

(1,775,683)

 

(8,175)

 

(1,140,651)

 

1,229,796

 

(422,430)

 

58,052,922

 

1,927,682

 

59,980,604

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

 

19

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

   

In thousands of Brazilian Real - R$, unless otherwise stated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

Note

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Operational Activities

 

 

 

 

 

 

 

 

 

Net Income

 

 

1.227.722

 

679.451

 

1.212.740

 

683.760

Adjustment to Net Income

 

 

7.281.063

 

(1.252.114)

 

7.878.242

 

(486.373)

Allowance for Loan Losses

8.f

 

2.275.068

 

2.568.985

 

2.616.743

 

2.859.795

Provision for Legal Proceedings and Administrative
and Legal Obligations

 

 

638.289

 

687.050

 

746.120

 

770.603

Deferred Tax Credits

 

 

2.358.300

 

(4.253.324)

 

2.475.831

 

(4.450.914)

Equity in Affiliates and Subsidiaries

15

 

(131.703)

 

(552.441)

 

(299)

 

(629)

Depreciation and Amortization

29

 

773.268

 

1.397.619

 

868.411

 

1.481.764

Recognition (Reversal) Allowance for Other Assets
Losses

33

 

984

 

(198)

 

1.011

 

(326)

Result on Sale of Other Assets

33

 

(9.850)

 

(3.666)

 

(9.954)

 

(3.832)

Result on Impairment of Assets

32

 

-

 

-

 

-

 

1.475

Result on Sale of Investments

33

 

-

 

(34.404)

 

778

 

(60.057)

Monetary Adjustment of Escrow Deposits

31

 

(134.361)

 

(79.618)

 

(192.166)

 

(120.729)

Recoverable Taxes

31

 

(53.041)

 

(59.844)

 

(70.761)

 

(89.786)

Effects of Changes in Foreign Exchange Rates on Cash
and Cash Equivalents

 

 

1.410.253

 

(836.461)

 

1.426.195

 

(869.322)

Others

 

 

153.856

 

(85.812)

 

16.333

 

(4.415)

Changes on Assets and Liabilities

 

 

(5.078.915)

 

(5.735.455)

 

(5.826.707)

 

(6.348.208)

Decrease (Increase) in Interbank Investments

 

 

(2.277.010)

 

(11.705.654)

 

(1.831.038)

 

(9.828.369)

Decrease (Increase) in Securities and Derivative
Financial Instruments

 

 

(27.839.368)

 

7.907.967

 

(13.386.966)

 

6.779.425

Decrease (Increase) in Lending and Leasing Operations

 

 

4.852.824

 

(16.397.711)

 

5.070.197

 

(17.760.027)

Decrease (Increase) in Deposits on Central Bank of Brazil

 

(410.696)

 

(2.547.993)

 

(459.264)

 

(2.565.967)

Decrease (Increase) in Other Receivables

 

 

2.330.547

 

7.733.367

 

2.091.213

 

9.185.776

Decrease (Increase) in Other Assets

 

 

(429.758)

 

(152.891)

 

(424.024)

 

(85.521)

Net Change on Other Interbank and Interbranch Accounts

 

(1.497.265)

 

(799.751)

 

(1.497.265)

 

(799.753)

Increase (Decrease) in Deposits

 

 

(515.623)

 

9.504.135

 

(4.938.628)

 

(3.946.405)

Increase (Decrease) in Money Market Funding

 

 

23.841.268

 

(4.372.620)

 

13.742.023

 

6.749.658

Increase (Decrease) in Borrowings

 

 

(3.352.289)

 

5.269.870

 

(4.816.144)

 

5.203.555

Increase (Decrease) in Other Liabilities

 

 

192.903

 

(170.426)

 

847.110

 

890.445

Increase (Decrease) in Change in Deferred Income

 

 

25.552

 

(3.748)

 

23.592

 

(830)

Tax Paid

 

 

-

 

-

 

(247.513)

 

(170.195)

Net Cash Provided by (Used in) Operational Activities

 

3.429.870

 

(6.308.118)

 

3.264.275

 

(6.150.821)

Investing Activities

 

 

 

 

 

 

 

 

 

Acquisition of Investment

 

 

(471)

 

(149.227)

 

(114.259)

 

(227)

Acquisition of Fixed Assets

 

 

(147.759)

 

(62.594)

 

(269.046)

 

(92.332)

Acquisition of Intangible Assets

 

 

(330.704)

 

(117.520)

 

(349.535)

 

(231.566)

Net Cash Received on Sale/Reduction of Investments

 

 

234

 

-

 

234

 

-

Acquisition of Subsidiary, Unless Net Cash on
Acquisition

15

 

-

 

-

 

-

 

443

Proceeds from Assets not in Use

 

 

52.446

 

7.399

 

52.926

 

-

Proceeds from Property for Own Use

 

 

6.282

 

3.922

 

51.736

 

5.846

Proceeds from Non-Current Assets Held for Sale

 

 

-

 

-

 

-

 

281.369

Dividends and Interest on Capital Received

 

 

987.811

 

491.218

 

-

 

783

Net Cash Provided by (Used in) Investing Activities

 

 

567.839

 

173.198

 

(627.944)

 

(35.684)

Financing Activities

 

 

 

 

 

 

 

 

 

Acquisition of Own Share

24.d

 

1.523

 

(11.369)

 

1.523

 

(11.369)

Issuance of Long - Term Emissions

 

 

11.474.437

 

22.243.338

 

11.823.037

 

22.856.907

Long - Term Payments

 

 

(17.041.686)

 

(17.275.477)

 

(17.479.812)

 

(18.007.387)

Debt Instruments Eligible to Compose Capital - Payments

 

 

(287.961)

 

(137.958)

 

(287.961)

 

(137.958)

Dividends and Interest on Capital Paid

 

 

(2.786.816)

 

(808.912)

 

(2.799.091)

 

(814.012)

Increase (Decrease) on Non Controlling Interest

 

 

-

 

-

 

(28.448)

 

307.991

Net Cash Provided by (Used in) Financing Activities

 

 

(8.640.503)

 

4.009.622

 

(8.770.752)

 

4.194.172

Exchange Differences on Cash and Cash Equivalents

 

 

(1.410.253)

 

836.461

 

(1.426.195)

 

869.322

Decrease in Cash and Cash Equivalents

 

 

(6.053.047)

 

(1.288.837)

 

(7.560.616)

 

(1.123.011)

Cash and Cash Equivalents at the Beginning of Period

4

 

31.348.083

 

23.412.024

 

33.133.182

 

23.401.733

Cash and Cash Equivalents at the End of Period

4

 

25.295.036

 

22.123.187

 

25.572.566

 

22.278.722

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

 

 

 

 

 

 

 

 

 

 

20

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

STATEMENTS OF VALUE ADDED

   

In thousands of Brazilian Real - R$, unless otherwise stated


 
 
                 

Bank

          

Consolidated

     

01/01 to

      

01/01 to

01/01 to

  

01/01 to

 

Note

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

                                   

Financial Income

 

 

22,063,154

 

 

 

19,315,783

 

 

 

21,096,073

 

 

 

19,238,014

 

 

Income from Services Rendered and Banking Fees

27

 

2,682,675

 

 

 

2,364,540

 

 

 

3,090,474

 

 

 

2,827,788

 

 

Allowance for Loans Losses

8.f

 

(2,275,068)

 

 

 

(2,568,985)

 

 

 

(2,616,743)

 

 

 

(2,859,795)

 

 

Other Income and Expenses

 

 

(1,019,782)

 

 

 

2,894,597

 

 

 

(1,082,060)

 

 

 

3,065,851

 

 

Financial Expenses

 

 

(12,083,631)

 

 

 

(17,011,263)

 

 

 

(9,960,853)

 

 

 

(15,748,345)

 

 

Third-party Input

 

 

(1,429,859)

 

 

 

(1,332,892)

 

 

 

(1,678,519)

 

 

 

(1,528,329)

 

 

Materials, Energy and Others

 

 

(77,542)

 

 

 

(65,889)

 

 

 

(80,293)

 

 

 

(67,923)

 

 

Third-Party Services

29

 

(443,187)

 

 

 

(465,660)

 

 

 

(542,737)

 

 

 

(533,542)

 

 

Impairment of Assets

32

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,475)

 

 

Others

 

 

(909,130)

 

 

 

(801,343)

 

 

 

(1,055,489)

 

 

 

(925,389)

 

 

Gross Added Value

 

 

7,937,489

 

 

 

3,661,780

 

 

 

8,848,372

 

 

 

4,995,184

 

 

Retentions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

29

 

(773,268)

 

 

 

(1,397,619)

 

 

 

(868,411)

 

 

 

(1,481,764)

 

 

Added Value Produced Net

 

 

7,164,221

 

 

 

2,264,161

 

 

 

7,979,961

 

 

 

3,513,420

 

 

Added Value Received from Transfer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Affiliates and Subsidiaries

15

 

131,703

 

 

 

552,441

 

 

 

299

 

 

 

629

 

 

Added Value to Distribute

 

 

7,295,924

 

 

 

2,816,602

 

 

 

7,980,260

 

 

 

3,514,049

 

 

Added Value Distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee

 

 

1,717,392

 

23.4%

 

1,480,388

 

52.5%

 

1,882,987

 

23.7%

 

1,631,166

 

46.4%

Compensation

28

 

935,344

 

 

 

808,603

 

 

 

1,039,656

 

 

 

903,001

 

 

Benefits

28

 

339,567

 

 

 

288,989

 

 

 

368,055

 

 

 

313,160

 

 

Government Severance Indemnity Funds for Employees - FGTS

 

73,007

 

 

 

72,816

 

 

 

81,748

 

 

 

80,414

 

 

Others

 

 

369,474

 

 

 

309,980

 

 

 

393,528

 

 

 

334,591

 

 

Taxes and Contributions

 

 

4,184,907

 

57.5%

 

485,401

 

17.3%

 

4,703,532

 

58.9%

 

957,049

 

27.2%

Federal

 

 

4,069,412

 

 

 

386,098

 

 

 

4,569,230

 

 

 

839,481

 

 

State

 

 

194

 

 

 

201

 

 

 

263

 

 

 

363

 

 

Municipal

 

 

115,301

 

 

 

99,102

 

 

 

134,039

 

 

 

117,205

 

 

Compensation of Third-Party Capital - Rental

29

 

165,903

 

2.3%

 

171,362

 

6.1%

 

178,927

 

2.2%

 

182,560

 

5.2%

Remuneration of Interest on Capital

 

 

1,227,722

 

16.8%

 

679,451

 

24.1%

 

1,214,814

 

15.2%

 

743,274

 

21.2%

Dividends

24.b

 

-

 

 

 

150,000

 

 

 

-

 

 

 

150,000

 

 

Profit Reinvestment

 

 

1,227,722

 

 

 

529,451

 

 

 

1,212,740

 

 

 

533,760

 

 

Participation Results of Non-Controlling Shareholders 

 

 

-

 

 

 

-

 

 

 

2,074

 

 

 

59,514

 

 

Total

 

 

7,295,924

 

100.0%

 

2,816,602

 

100.0%

 

7,980,260

 

100.0%

 

3,514,049

 

100.0%

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

 

21

 

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

   

In thousands of Brazilian Real - R$, unless otherwise stated

 
                             

1. General Information

                             

Banco Santander (Brasil) S.A. (Banco Santander or Bank), directly and indirectly controlled by Banco Santander, S.A., based in Spain (Banco Santander Spain), is the lead institution of the Financial and Prudencial Group (Conglomerate Santander) before the Central Bank of Brazil (Bacen), established as a corporation, with headquarters at Avenida Presidente Juscelino Kubitschek, 2041 and 2235 - A Block - Vila Olímpia - São Paulo - SP. Banco Santander operates as a multiple service bank, conducting its operations by means of portfolios such as commercial, investment, lending and financing, mortgage lending, leasing, credit card operations and foreign exchange. Through its subsidiaries, the Bank also operates in the leasing, buying club management and securities, insurance brokerage operations, capitalization and pension plan. The Bank's activities are conducted within the context of a group of institutions that operate on an integrated basis in the financial and capital markets.

                             

2. Presentation of Financial Statements

                             

Banco Santander's financial statements, which include its foreign branches (Bank) and the consolidated financial statements (Consolidated) have been prepared in accordance with accounting practices, established by Brazilian Corporate Law, in conjunction with standards set forth by the National Monetary Council (CMN), the Bacen, and the standard chart of Accounts for Financial Institutions (COSIF) and the Brazilian Securities and Exchange Commission (CVM), which do not conflict with the rules issued by Bacen and show all relevant information concerned to the financial statements, which are consistent with those used by Management in its management. The consolidated financial statements include the Bank and its affiliates and subsidiaries listed in Note 15, the Special Purpose - Brazil Foreign Diversified Payment Right's Finance Company (Brazil Foreign) and investment funds, where the Santander Group companies are the main beneficiaries or holders the main obligations. The portfolios of these investment funds are classified by type of operation and are distributed in the same categories that were originally allocated.

                             

The Brazil Foreign was dissolved on April, 27th, 2015 in accordance with Certificate of Dissolution issued by Registrar of Companies from Cayman Islands on January, 29th, 2015.

                             

Funds Consolidated Investments

                             

Ÿ Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior (Santander FI Amazonas);

                             

Ÿ Santander Fundo de Investimento Diamantina Multimercado Crédito Privado de Investimento no Exterior (Santander FI Diamantina);

                             

Ÿ Santander Fundo de Investimento Guarujá Multimercado Crédito Privado de Investimento no Exterior (Santander FI Guarujá);

                             

Ÿ Santander Fundo de Investimento Unix Multimercado Crédito Privado (Santander FI Unix);

                             

Ÿ Santander Fundo de Investimento Capitalization Renda Fixa (Santander FI Capitalization);

                             

Ÿ Santander Fundo de Investimento SBAC Referenciado DI Crédito Privado (Santander FI SBAC);

                             

Ÿ Santander FIC FI Contract I Referenciado DI (Santander FIC FI Contract);

                             

Ÿ Santander Paraty QIF PLC (Santander Paraty);

                             

Ÿ Santander Fundo de Investimento Financial Curto Prazo (Santander FI Financial);

                             

Ÿ Venda de Veículos Fundo de Investimento em Direitos Creditórios (Venda de Veículos FIDC); (1) and

                             

Ÿ Fundo de Investimento em Direitos Creditórios RCI Brasil I - Financiamento de Veículos (FI Direitos Creditórios RCI
Brasil I) (2).

 

 

                          

(1) The carmaker Renault (not belonging to the Conglomerate Santander) sell its duplicates (receivables related to vehicles invoiced to dealers the automaker) to the Fund. This Fund buys only duplicates from Renault carmaker). In turn, the Companhia de Crédito, Financiamento e Investimento RCI Brasil (CFI RCI Brasil) owns 100% of its subordinated quotas. The Fund has began to be consolidated since May, 2015.

                             

(2) The Company CFI RCI Brasil (company belonging to the Conglomerate Santander) sell its product portfolio "floorplan" to the Fund, and holds 100% of its subordinated quotas. This Fund buys exclusively credit operations from CFI RCI Brasil. The Fund has began to be consolidated since June, 2015.

                             

In preparing the consolidated financial statements equity in subsidiaries, significant balances receivable and payable, and revenues and expenses arising from transactions between domestic branches, foreign branches and subsidiaries, and unrealized profits between these entities have been eliminated, and non-controlling interests are stated separately in stockholders’ equity and in the income statements. The balance sheet and income statement components of jointly-controlled subsidiaries have been consolidated proportionaly to the equity interest held in the subsidiary.

                             

Leasing operations have been reclassified, in order to reflect its financial position in conformity with the financial method of accounting.

                             

The preparation of financial statements requires Management estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of provision contingent liabilities and the reported amounts of revenues and expenses for the reporting periods. Since Management’s judgment involves making estimates concerning the probability of future events, actual amounts could differ from those estimates.

 


22

 

 

The Financial Statements of the year ended on March 31, 2016 were approved by Board of Directors at the meeting held on April 26, 2016.

                             

These interim consolidated financial statements based on international accounting standards issued by the International Accounting Standards Board (IASB) for the period ended March 31, 2016 were be disclosed legal deadline, at the website www.santander.com.br/ri.

                             

3. Significant Accounting Practices

                             

a) Results of Operations

                             

Determined on the accrual basis of accounting and includes income, charges, inflation adjustment and exchange rate changes earned or incurred through the balance sheet date, on a daily pro rata basis.

                             

b) Functional Currency

                             

Functional Currency and Presentation Currency

                             

The financial statements are presented in Brazilian real (R$), which is the functional and presentation currency of Banco Santander.

                             

Assets and liabilities of foreign branch and subsidiary are translated as follows:

                             

Ÿ Assets and liabilities are translated at the exchange rate on the balance sheet date; and

                             

Ÿ Revenues and expenses are translated at the monthly average exchange rates.

                             

c) Current and Long-Term Assets and Liabilities

                             

Stated at their realizable or settlement amounts and include income, charges, inflation adjustments or changes in exchange rates earned and/or incurred through the end of the reporting period, calculated on a daily pro rata basis, when applicable, the effect of adjustments to write down the cost of assets to their fair or realizable values.

                             

Receivables and payables up to 12 months are classified in current assets and liabilities, respectively. Trading securities that, regardless of their maturity, are classified in short-term, in conformity with Bacen Letter 3,068/2001.

                             

d) Cash and Cash Equivalents

                             

For purposes of the statements of cash flows, cash and cash equivalents correspond to the balances of cash and interbank investments immediately convertible into cash or with original maturity equal to ninety days or less.

 

e) Interbank Investments and Credits Related to Bacen

                             

Stated at their realizable or settlement amounts and include income, charges, inflation adjustments or changes in exchange rates earned or incurred through the end of the reporting period, calculated on a daily pro rata basis.

                             

e.1) Repurchase Agreement and Reverse Repurchase Agreement

                             

Repurchase Agreement (Repo)

                             

The bank’s own fixed income securities employed in a repurchasing agreement are highlighted in specific accounts of the asset (linked securities), on transaction date, by the updated accounting average, by type and maturity of the security. The difference between the repurchase value and the sale is the expense of the operation.

                             

The Bank also employs third-party securities to perform sales transactions with repurchase agreements.

                             

Reverse Repurchase Agreement (Reverse Repo)

                             

The difference between the resale value and the purchase is recognized as the income of the operation. The securities acquired as collateral in a reverse repurchase agreement are also highlighted in specific accounts of the asset.

                             

Repurchasing Performed With Free Movement Agreements

                             

For “reverse repo and sale” operations, when Bank assumes the short position selling the securities on the open market, the liability created is measured at its fair value.

                             

f) Securities

 

Securities are stated and classified into the following categories:

                             

I - Trading securities;

    
                             

II - Available-for-sale securities; and

    
                             

III - Held-to-maturity securities.

    


23

 

 

Trading securities include securities purchased for the purpose of being actively and frequently traded while held-to-maturity securities include those for which the Bank has intention and financial capacity to hold to maturity. Available-for-sale securities include those which cannot be classified in categories I (trading) and III (held-to-maturity). Securities classified into categories I and II are stated at acquisition cost plus income earned through the balance sheet date, calculated on a daily pro rata basis, and adjusted to fair value, with gains or losses on such adjustment being recorded against:

                             

(1) The corresponding income or expense account, net of tax effects, in profit or losses for the period, when relating to securities classified into the trading category; and

                             

(2) A separate account in stockholders’ equity,net of taxes effects, when related to securities classified into the available-for-sale category. The adjustments to fair value recorded on sale of these securities are transferred to income for the period.

                             

Securities classified into the held-to-maturity category are stated at acquisition cost plus income earned through the balance sheet, calculated on a daily pro rata basis.

                             

Any permanent losses recorded on the realizable value of securities classified into available-for-sale and held-to-maturity are recognized in the income of the period.

                             

g) Derivatives Financial Instruments

      
                             

Derivatives are classified according to Management's intent to use them for hedging purposes or not. Transactions made at customers' request, on own account, or that do not qualify as hedge accounting, especially derivatives used to manage the global risk exposure, are reported at fair value, with realized and unrealized gains and losses recorded in income for the period.

                             

Derivative financial instruments designated as part of a framework of protection against risks ("hedge") can be classified as:

                             

I - Fair value hedge; and

  
                             

II - Cash flow hedge.

  
                             

Derivatives designated as hedge and the respective hedged items are adjusted to fair value, considering the following:

                             

(1) For those classified in category I, the increase or decrease is recorded in income or expense for the period, net of tax effects; and

                             

(2) For those classified in category II, the increase or decrease is recorded in a separate caption in stockholders’ equity, net of tax effects.

 

Some hybrid financial instruments contain both a derivative financial instrument and a non-derivative asset or liability. In these cases, the derivative financial instrument represents an embedded derivative. Embedded derivatives are recorded separately from the host contracts they are related to.

                             

h) Minimum Requirements in the Process of Valuation Financial Instruments (Securities and Derivatives  Financial Instruments)

                             

The CMN Resolution 4,277 issued on October 31, 2013 (entered into force on June 30, 2015) provides for minimum requirements to be observed in the pricing process of financial instruments measured at fair value and on the adoption of prudential adjustments by financial institutions. The financial instruments mentioned in the Resolution include:

                             

a) Securities classified as "trading" and "available for sale", according to the Central Bank Letter 3,068; of November 8, 2001;

                             

b) Derivatives Financial Instruments, according to the Central Bank Letter 3,082; of January 30, 2002; and

                             

c) Other financial instruments at fair value, regardless of their classification in the trading portfolio, established in CMN Resolution 3,464 of June 26, 2007.

                             

According to this resolution, the Bank has established procedures to assess the need for adjustments in the value of financial instruments mentioned above, watching the prudential criteria, relevance and reliability. This review includes, among other factors, the credit risk spread in the market value of the registration of these instruments.

                             

i) Loan Portfolio and Allowance for Losses

      
                             

The loan portfolio includes lending operations, leasing operations, advances on exchange contracts and other loans with credit characteristics. It is stated at present value, considering the indexes, interest rates and charges agreed, calculated "pro rata" days until the balance sheet date. For lending operations overdue 60 days from the recognition of revenue only occur when its actually received.

                             

Normally, the Bank writes off loans as losses when they have overdue for 360 days. In the case of long-term credit operations (over 3 years) are written off when they complete 540 days late. Credit operations dropped to injury is recorded in a memorandum account for a minimum of five years and while not exhausted all procedures for collection.

                             

The credit assignments without risk retention result in lower financial assets involved in the transaction, which are now kept in a memorandum account.The result of the assignment of credit is fully recognized when theyre realized.



24

 

 

Since January 2012, as determined by CMN Resolution 3,533/2008 and Resolution 3,895/2010, all credit assignments with risk retention will have their results recognized by the remaining terms of operations, and financial assets subject to the assignment shall remain registered as lending operations and the amount received as obligations for sale operations or transfer of financial assets. The credit assignments made ​​by December 2011 were accounted for in accordance with current regulations with the recognition of income at the time of divestiture, independent of the retention of the risk.

                             

Allowances for loan losses are recognized based on analysis of outstanding lending operations (past-due and current), past experience, future expectations, specific portfolio risks, and Management risk assessment policy for recognizing allowances, including those required by CMN and Central Bank of Brazil standards.

                             

j) Non-Current Assets Held for Sale and Other Assets

                             

Non-current assets held for sale includes the carrying amount of individual items, disposal groups, or items forming part of a business unit earmarked for disposal (“discontinued operations”), whose sale in their present condition is highly probable and is expected to occur within one year.

                             

Other assets refer mainly to assets not for own use, consisting basically of properties and vehicles received as payment in kind.

                             

Non-current assets held for sale and assets not for own use are generally recorded at the lower of fair value less costs to sell and their carrying amount at the date of classification in this category, and are not depreciated.

                             

k) Prepaid Expenses

                             

Funds used in advance payments, whose benefits will be derived or services will be provided in future years, are allocated to profit or loss over the term of the related agreements.

                             

k.1) Commissions Paid to Banking Correspondents

                             

In accordance with CMN Resolution 4,294 and Central Bank Latter 3,693 issued in December 2013, from January 2015 the commissions paid to intermediate agents as a result of the origination of new credit operations are limited to maximum percentages of: (i) 6% of the value of new operation originated and (ii) 3% of the value of portability object operation.

                             

Such commissions must be fully recognized as expenses when it is incurred.

                             

The Central Bank Latter 3,738 issued on December 2014 has allowed the possibility of staggered implementation of the aforementioned accounting procedure, as follows:

                             

a) 2015: Fully recognize as an expense the value of 1/3 of the commission paid, the difference being recognized as an asset and allocated to income for the period of 36 months or the term of the contract, whichever is lower;

                             

b) 2016: Fully recognize as an expense the value of 2/3 of the commission paid, the difference being recognized as an asset and allocated to income for the period of 36 months or the term of the contract, whichever is lower; and

                             

c) 2017: Recognize the full amount of commission paid as an expense.

                             

The Bank is using this prerogative.

                             

In accordance with Central Bank Latter 3,722 issued on October 2014, the accounting procedures previously described should be applied prospectively from January 2015, without impacting the records of commissions paid until December 2014.

                             

From January 2020, provided there is recognized in assets of the entity unamortized balance of sales commission paid to the correspondent, this amount must be fully written off against income (expense).

                             

l) Permanent Assets

                             

Stated at acquisition cost, are tested for impairment annually or more frequently or circumstances indicate that assets may be impaired, and valued considering the following aspects:

                             

l.1) Investments

                             

Adjustments to investments in affiliates and subsidiaries are measured under the equity method of accounting and recorded as investments in affiliates and subsidiaries. Other investments are stated at cost, reduced to fair value, when applicable.

                             

l.2) Fixed Assets

                             

Depreciation of fixed assets is determined under the straight-line method at the following annual rates: buildings - 4%, facilities, furniture, equipment in use, security systems and communications - 10%, data processing systems and vehicles - 20%, and leasehold improvements - 10% or through the maturity of the rental contracts.

         

l.3) Intangible Assets

                             

Goodwill on acquisition of subsidiaries is amortized over 10 years, based on expected future earnings and is tested for impairment annually or more frequently if conditions or circumstances indicate that the asset may be impaired.

                             

On July 2015 the Bank revised the goodwill amortization rate related to Banco Real´s acquisition, this measure aims to suit original amortization rate on a new term, extension and proportion. The amortization of this goodwill will be completed in 2017 (originally 2016).

                             


25

 

Exclusivity contracts for provision of banking services are accouted the payments related to the commercial partnership contracts with the private and public sectors to assure exclusivity for banking services of payroll credit processing and payroll loans, maintenance of collection portfolio, supplier payment services and other banking services, are allocated to income over the term of the respective agreements.

                             

Software aquisition and development expenses are amortized over a maximum of 5 years.

                             

m) Technical Reserves Related the Activities to Pensions and Capitalization

                             

Technical reserves are recognized and calculated in accordance with the provisions and criteria established in the National Council of Private Insurance (CNSP) and Superintendence of Private Insurance (Susep).

                             

Technical Reserves to Pensions

                             

Technical provisions are recognized in accordance with the criteria below:

        
                             

• Provision for Unearned Premiums (PPNG)

                             

The PPNG consists of the portions of the premiums net of ceded coinsurance, corresponding to the periods of risks after policy conditions, calculated "pro rata" day as Circulating Susep 517/2015 in the period between the issue and the beginning of the calculation of the provision is made considering the duration equal to the duration of the risk.

                             

• Provision for Unearned Premiums-Current Risks but not Issued (PPNG-RVNE)

                             

The PPNG-RVNE aims to estimate the share of unearned premiums relating to the risk already taken but that still do not have their insurance policies issued. This provision is estimated based on historical emissions behavior in arrears, according to Actuarial Technical Note (NTA).

                             

• Mathematical Provisions for Benefits Granted and Granted (PMBaC and PMBC)

                             

The PMBaC are formed from the contributions collected through the financial regime of capitalization. The PMBC represent obligations in the form of continued income plans, being constituted by actuarial calculation for traditional types of plans.

                             

• Provisions for Unsettled Claims (PSL)

                             

The PSL is recognized based on notices received by Evidence Previdência S.A. (Evidence), related the single payments and accrued rent, of the claims reported until the base date of calculation, including coinsurance accepted, gross of reinsurance and net of coinsurance ceded. The output of the provision due to payment, is characterized upon the financial settlement, of the receipt of the compensation payment receipt, annuity or losing income, or as other cases provided by law.

                             

• PSL Lawsuit

                             

Is constituted for all notices of claims in the lawsuit, based on the probability of loss and classified as probable, possible and remote.

                             

The claims in the lawsuit are reviewed individually by the Legal Department to be sorted among these odds of loss, being updated whenever there is need.

                             

In the PSL still monetary restatement and deals with legal fees of collapsing, as indexer and interest of 1% percent a month.

                             

• Provision for Claims Incurred But not Reported (IBNR)

                             

The IBNR should be made to cover claims incurred but not yet reported until the base date of calculation. For purposes of description of the methodology, we have adopted the term "claim" to set all claims and benefits of security risk plans. The Evidence does not have enough database to prepare its own methodology in this way is used technical procedures defined in Susep Circular 517/2015.

                             

• Provision of Related Expenses (PDR)

                             

The PDR is constituted for the coverage of expected values relating to expenses related to claims. For structured plans in the financial scheme of simple sharing and allocation of capital, the provision covers the cost, alcoves and alcoves, not related to the settlement of claims or benefits, on the basis of claims incurred, warned or not.

                             

• Provision of Financial Surplus (PEF)

                             

The PEF covers the financial surplus values provisioned, to be used in accordance with the rules of the plan. This provision is calculated considering the return on investments held versus the guaranteed profitability in each plan.

                             

• Provision for Redemptions and/or Other Amounts to Regulate (PVR)

                             

Covers the values relating to redemption to regulate, the returns of contributions or awards or the requested portability issues and that for whatever reason, have not yet been made.

                             

• Provision of Supplementary Coverage (PCC)

                             

The PCC shall be constituted when failure is observed in the technical provisions resulting from the Test of Adequacy of Liabilities (TAP).

                             

 

26

 

Technical Provisions for Capitalization

 

Technical provisions are recognized in accordance with the criteria below:

                             

Ÿ Technical provisions mathematical for redemption results from accumulation of percentages applicable on payments made, capitalized with the interest rate provided for in the plan and update through the basic remuneration rate of savings account-Basic Reference Rate (TR);

                             

Ÿ Provision for redemption of anticipated titles is constituted from the cancellation for non-payment or redemption request, based on the value of the mathematical provision of rescue formed at the time of cancellation of the title and the provision for redemption of the matured bonds is formed after the end of the title;

                             

Ÿ Provision for raffles to be held is made based on a percentage of pay portion and aims to cover draws the titles will compete, but that have not yet been carried out and the provision of raffles payable consists of titles drawn, but which have not yet been paid; and

                             

Ÿ Administrative provision aims to reflect the present value of future expenses of savings bonds whose duration extends from the date of its constitution.

                             

n) Employees Benefit Plans

                             

Post-employment benefit plans include the commitments of the Bank: (i) addition to the benefits of public pension plan; and (ii) medical assistance in case of retirement, permanent disability or death for that employees, and their direct beneficiaries.

                             

Defined Contribution Plans

                             

Defined benefit plans is the post-employment benefit plan which the Bank, and its subsidiaries, as the sponsoring entity pays fixed contributions into a pension fund, not having a legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all benefits relating to services provided in the current and in previous periods.

                             

The contributions made in this connection are recognized under personnel expenses in the income statement.

                             

Defined Benefit Plans

                             

Defined benefit plan is the post-employment benefit plan which is not a defined contribution plan and is shown in Note 35. For this type of plan, the sponsoring entity's obligation is to provide the agreed benefits with employees, assuming the potential actuarial risk that benefits will cost more than expected.

                             

Since January 2013, Banco Santander apply CPC 33 (R1) that provides substantially the full recognition of liabilities when on account actuarial losses (actuarial deficit) recognized will not occur, in contrast to the equity (other valuation adjustments).

                             

Main Definitions

                             

- The present value of the defined benefit obligation is the present value of expected future payments required to settle the obligation resulting from employee service in the current and past periods, without deducting any plan assets.

                             

- Deficit or surplus is: (a) the present value of the defined benefit obligation, less (b) the fair value of plan assets.

                             

- The sponsoring entity may recognize the plan's assets in the balance sheet when they meet the following characteristics: (i) the assets of the fund are sufficient to meet all employee benefit plan or a sponsor obligations; or (ii) the assets are returned to the sponsoring entity in order to reimburse it for employee benefits already paid.

                             

- Actuarial gains and losses are changes in present value of defined benefit obligation resulting from: (a) adjustments by experience (the effects of differences between the actuarial assumptions adopted and what has actually occurred); and (b) effects of changes in actuarial assumptions.

                             

- Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the current period.

                             

-The past service cost is the change in present value of defined benefit obligation for employee service in prior periods resulting from a change in the plan or reductions in the number of employees covered.

                             

Post-employment benefits are recognized in income in the lines of other operating expenses - actuarial losses - retirement plans (Note 32) and personnel expenses.

                             

The defined benefit plans are recorded based on an actuarial study, conducted annually by an external consultarit, specialized consulting and approved by management at the end of each year to be effective for the subsequent period.

                             


27

 

o) Share Based Compensation

                             

The Bank has compensation plans with long-term conditions for acquisition. The main conditions for acquisition are: (1) conditions of service, provided that the participant remains employed during the period of the Plan to acquire a position to exercise their rights; (2) performance conditions, the amount of investment in Certificates of Deposit Shares (Units) exercisable by the participants will be determined according to the result of measurement of a performance parameter of the Bank: Total Shareholder Return (TSR) may be reduced, if not achieved the goals of reducing Return on Risk-Adjusted Capital (RORAC), comparison between realized and budgeted in each year, as determined by the Board of Directors and (3) market conditions, since some parameters are constrained to the value of the shares of the Bank. The Bank measures the fair value of the services rendered by reference to the fair value of the equity instruments granted at the grant date, taking into account market conditions for each plan at the estimated fair value.

                             

Settlement in Share

                             

The fair value of services is measured by reference to the fair value of the equity instruments granted at the grant date, taking into account market conditions for each plan at the estimated fair value. In order to recognize the staff costs in contrast with the capital reserves during the period covered, as the services are received, it is considered the treatment of conditions of service and the amount recognized for services received over the period of assessment based on the best estimate for the number of equity instruments expected to vest.

Settlement in Cash

                             

For share-based payments settled in cash (in the form of share valuation), the services provided are measured and the corresponding liabilities incurred in the fair value valuation of the shares at grant date and until the liability is settled, the fair value of liability is revalued at the end of each reporting period and the date of settlement, with any changes in fair value recognized in the income. In order to recognize the staff costs in contrast with the provisions in "wages payable" throughout the term, reflecting the period in which services are received, the total liability is based on the best estimate of the amount of right of recovery of shares that will be acquired at the end of the period of validity and recognizes the value of the services received during the period of validity based on the best available estimate. Periodically, analysis is performed of the estimated number of stock appreciation rights to be acquired at the end of the grace period.

                             

p) Funding, Notes Issued and Other Liabilities

                             

Financial liabilities instruments are recognized initially at fair value, consided as the transaction price. They are subsequently measured at amortized cost with expenses recognized as a financial cost (Note 18.d).

                             

Among the liabilities initial recognition methods of, it is important to emphasize those compound financial instruments which are classified as such due to the fact that the instrument contain both a debt instrument (liability), and an embedded equity component (derivative).

                             

The recognition of a compound instrument consists of a combination of (i) a main instrument, which is recognized as an entity’s genuine liability (debt) and (ii) an equity net component (derivative convertible into ordinary shares).

                             

In accordance to the COSIF, the hybrid capital instruments and debt representing obligations financial institutions and should be recorded in specific accounts of the valued liabilities adjusted according for the effect of exchange rate variation, when denominated in currency foreign.All the remunerations related to these instruments, such as interest and exchange variation (difference between the functional currency and the currency in which the instrument was called) shall be accounted expenses in the period in compliance the accrual basis method.

                             

In relation the stockholders' equity component,your registration occurs at the initial moment on grounds of their fair value, if different from zero.

                             

The relevant details of these issued instruments composed nature are described in Note 21.

                             

q) Provisions, Contingent Assets and Liabilities and Legal Obligations

                             

Banco Santander and its subsidiaries are involved in judicial and administrative proceedings related to tax, labor and civil, in the normal course of their activities.

                             

The judicial and administrative proceedings are recognized in the accounts based on the nature, complexity and history of actions and beliefs of the internal and external legal advisors.

                             

Provisions are made when the risk of loss of judicial or administrative action is assessed as probable and the amounts involved can be measured with sufficient accuracy, based on best available information. The provisions include legal obligations, judicial and administrative proceedings related to tax and social security obligations, whose object is to challenge their legality or constitutionality, regardless of the assessment that the probability of success,the amounts are fully recognized in the financial statements. They are fully or partially reversed when the obligations cease to exist or are reduced.

                             

Contingent liabilities are possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more future events that are not totally under the control of the consolidated entities. Under accounting rules, contingent liabilities classified as possible losses are not recognized, but disclosed in the notes to the financial statements (Note 23.h).

                             



28

 

 


 

Contingent assets are not recognized, except when there are guarantees or favorable judicial decisions, about which features no longer fit, characterizing the gain as practically certain. Assets with probable success, if any, are only disclosed in the financial statements.

                             

r) Social Integration Program (PIS) and Contribution for the Financing of Social Security (Cofins)

                             

The PIS (0.65%) and Cofins (4.00%) are calculated under gross revenue and expenses. Financial institutions may deduct financial expenses in the establishment of this base. PIS and Cofins expenses are recorded in tax expenses.

                           

s) Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)

                             

IRPJ is calculated at the rate of 15% plus a surtax of 10% applied on income, after adjustments determined by tax legislation. The Social Contribution Tax on Net Profit (CSLL) is calculated at the rate of 20% to financial institutions, insurance companies and capitalization (15% until August/2015) and 9% for other companies, levied on profit, after adjustments required by tax legislation. The CSLL rate applicable to financial institutions, insurance companies and capitalization was raised from 15% to 20% for the period between September,1st 2015 and December, 31 2018, in the terms of the current law 13,169/2015 (result of the conversion into law of Provisory Measure 675/2015).

                             

The Tax credits and deferred liabilities are computed, basically, on certain temporary differences between book value and tax, tax losses, adjustments to fair value of securities note and derivative financial instruments. The recognition of tax credits and deferred liabilities are made by rates applicable in the period which is estimated the realization of the assets or the settlement of the liabilities.

                             

In accordance with the current regulation, the tax credits are recognized to the extent that it is probable recovery in base to the generation of future taxable income. The expected realization of the tax credits Note 11.b is based on the projections of future earnings supported by a technical study.

                             

t) Reduction of Impairment Assets

                             

The financial and non-financial assets are measured at the end of each reporting period in order to identify evidence of impairment in its carrying value. If there is any indication, the entity shall estimate the recoverable amount of the asset and that loss shall be recognized immediately in the income statement. The recoverable amount of an asset is defined as the highest amount between its fair value net of selling expenses and its value in use.

                             

u) Deferred Income

                             

Refers to income received before the maturity of the underlying obligation and include non-refundable income, primarily related to guarantees and sureties given and credit card annual fees. The allocation to income is made ​​in accordance with the terms of the agreements.

                             

v) Non-Controlling Interest - Consolidated Stockholders' Equity

                             

The non-controlling interests (minority interests) are reported in a separate shareholders' equity of the parent entity for purpose of presentation of the consolidated financial statements.

                             

4. Cash and Cash Equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Bank

 

 

 

 

 

  

 

  

03/31/2016

  

12/31/2015

  

03/31/2015

  

12/31/2014

Cash

 

 

 

 

 

 

 

5,269,985

 

5,231,627

 

4,739,787

 

4,697,744

Interbank Investments

 

 

 

 

 

20,025,051

 

26,116,456

 

17,383,400

 

18,714,280

Money Market Investments

 

 

 

 

 

2,431,955

 

3,993,155

 

7,964,005

 

6,260,149

Interbank Deposits

 

 

 

 

 

198,268

 

292,520

 

184,977

 

998,397

Foreign Currency Investments

 

 

 

 

 

17,394,828

 

21,830,781

 

9,234,418

 

11,455,734

Total

 

 

 

 

 

 

 

25,295,036

 

31,348,083

 

22,123,187

 

23,412,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Consolidated

 

 

 

 

 

  

 

  

03/31/2016

  

12/31/2015

  

03/31/2015

  

12/31/2014

Cash

 

 

 

 

 

 

 

5,463,167

 

6,863,856

 

4,964,236

 

5,074,698

Interbank Investments

 

 

 

 

 

20,109,399

 

26,269,326

 

17,314,486

 

18,327,035

Money Market Investments

 

 

 

 

 

2,516,303

 

4,146,025

 

7,964,005

 

6,260,149

Interbank Deposits

 

 

 

 

 

198,268

 

292,520

 

184,977

 

998,397

Foreign Currency Investments

 

 

 

 

 

17,394,828

 

21,830,781

 

9,165,504

 

11,068,489

Total

 

 

 

 

 

 

 

25,572,566

 

33,133,182

 

22,278,722

 

23,401,733

                             

 



29

 

 

 

5. Interbank Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to

  

From 3 to

  

Over

        

 

 

 

 

 

 

3 Months

 

12 Months

 

12 Months

 

Total

 

Total

Money Market Investments

 

 

 

20,365,620

 

11,388,390

 

-

 

31,754,010

 

31,837,273

Own Portfolio

 

 

 

 

 

1,007,354

 

-

 

-

 

1,007,354

 

517,536

Treasury Bills - LFT

 

 

 

34,136

 

-

 

-

 

34,136

 

-

National Treasury Bills - LTN

 

 

 

621,218

 

-

 

-

 

621,218

 

87,459

National Treasury Notes - NTN

 

 

 

352,000

 

-

 

-

 

352,000

 

430,077

Third-party Portfolio

 

 

 

5,623,154

 

4,386,238

 

-

 

10,009,392

 

11,185,515

National Treasury Bills - LTN

 

 

 

2,532,264

 

1,403,579

 

-

 

3,935,843

 

3,935,100

National Treasury Notes - NTN

 

 

 

3,090,890

 

2,982,659

 

-

 

6,073,549

 

7,250,415

Sold Position

 

 

 

 

 

13,735,112

 

7,002,152

 

-

 

20,737,264

 

20,134,222

National Treasury Bills - LTN

 

 

 

6,987,038

 

2,812,755

 

-

 

9,799,793

 

9,548,665

National Treasury Notes - NTN

 

 

 

6,748,074

 

4,189,397

 

-

 

10,937,471

 

10,585,557

Interbank Deposits

 

 

 

4,554,183

 

14,965,198

 

15,025,169

 

34,544,550

 

33,839,729

Foreign Currency Investments

 

 

 

17,394,828

 

-

 

-

 

17,394,828

 

21,830,781

Total

 

 

 

 

 

42,314,631

 

26,353,588

 

15,025,169

 

83,693,388

 

87,507,783

Current

 

 

 

 

 

 

 

 

 

 

 

68,668,219

 

74,010,064

Long-term

 

 

 

 

 

 

 

 

 

 

 

15,025,169

 

13,497,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to

  

From 3 to

  

Over

        

 

 

 

 

 

 

3 Months

 

12 Months

 

12 Months

 

Total

 

Total

Money Market Investments

 

 

 

20,449,969

 

11,388,390

 

-

 

31,838,359

 

31,990,143

Own Portfolio

 

 

 

 

 

3,591,701

 

2,499,988

 

-

 

6,091,699 

 

670,406

Treasury Bills - LFT

 

 

 

48,486

 

-

 

-

 

48,486

 

22,802

National Treasury Bills - LTN

 

 

 

621,218

 

-

 

-

 

621,218

 

217,527

National Treasury Notes - NTN

 

 

 

2,921,997

 

2,499,988

 

-

 

5,421,995

 

430,077

Third-party Portfolio

 

 

 

3,123,156

 

1,886,240

 

-

 

5,009,396

 

11,185,515

National Treasury Bills - LTN

 

 

 

2,532,264

 

1,403,579

 

-

 

3,935,843

 

3,935,100

National Treasury Notes - NTN

 

 

 

590,892

 

482,661

 

-

 

1,073,553

 

7,250,415

Sold Position

 

 

 

 

 

13,735,112

 

7,002,152

 

-

 

20,737,264

 

20,134,222

National Treasury Bills - LTN

 

 

 

6,987,038

 

2,812,755

 

-

 

9,799,793

 

9,548,665

National Treasury Notes - NTN

 

 

 

6,748,074

 

4,189,397

 

-

 

10,937,471

 

10,585,557

Interbank Deposits

 

 

 

264,740

 

1,797,812

 

185,500

 

2,248,052

 

1,989,204

Foreign Currency Investments

 

 

 

17,394,828

 

-

 

-

 

17,394,828

 

21,830,781

Total

 

 

 

 

 

38,109,537

 

13,186,202

 

185,500

 

51,481,239

 

55,810,128

Current

 

 

 

 

 

 

 

 

 

 

 

51,295,739

 

55,443,206

Long-term

 

 

 

 

 

 

 

 

 

 

 

185,500

 

366,922

                             

 

30

 

6. Securities and Derivatives Financial Instruments

                             

a) Securities

                             

I) By Category

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

       

Cost

 

Effect of Adjustment to
Fair Value on:

  

Carrying

 

Carrying

 

 

 

 

 

 

Amortized

 

Income

 

Equity

 

Amount

 

Amount

Trading Securities

 

 

 

43,168,676

 

259,402

 

-

 

43,428,078

 

27,442,387

Government Securities

 

 

 

39,585,788

 

260,523

 

-

 

39,846,311

 

23,925,508

Private Securities

 

 

 

 

3,582,888

 

(1,121)

 

-

 

3,581,767

 

3,516,879

Available-for-Sale Securities

 

 

 

158,441,026

 

73,751

 

(2,012,445)

 

156,502,332

 

140,087,886

Government Securities

 

 

 

63,289,254

 

874

 

(1,632,114)

 

61,658,014

 

58,013,126

Private Securities

 

 

 

 

95,151,772

 

72,877

 

(380,331)

 

94,844,318

 

82,074,760

Held-to-Maturity Securities

 

 

 

8,493,147

 

-

 

-

 

8,493,147

 

9,257,519

Government Securities

 

 

 

8,493,147

 

-

 

-

 

8,493,147

 

9,257,519

Total Securities

 

 

 

 

 

210,102,849

 

333,153

 

(2,012,445)

 

208,423,557

 

176,787,792

Derivatives (Assets)

 

 

 

26,867,789

 

(12,389,645)

 

75,384

 

14,553,528

 

20,176,871

Total Securities and Derivatives

 

 

 

236,970,638

 

(12,056,492)

 

(1,937,061)

 

222,977,085

 

196,964,663

Current

 

 

 

 

 

 

 

 

 

 

 

66,785,300

 

50,644,888

Long-term

 

 

 

 

 

 

 

 

 

 

 

156,191,785

 

146,319,775

Derivatives (Liabilities)

 

 

 

(12,788,769)

 

1,142,571

 

(77,044)

 

(11,723,242)

 

(17,031,432)

Current

 

 

 

 

 

 

 

 

 

 

 

(5,660,424)

 

(6,759,506)

Long-term

 

 

 

 

 

 

 

 

 

 

 

(6,062,818)

 

(10,271,926)

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Cost

 

Effect of Adjustment to
Fair Value on:

  

Carrying

 

Carrying

 

 

 

 

 

 

Amortized

 

Income

 

Equity

 

Amount

 

Amount

Trading Securities

 

 

 

43,477,903

 

173,522

 

-

 

43,651,425

 

27,227,796

Government Securities

 

 

 

42,751,505

 

174,584

 

-

 

42,926,089

 

26,472,010

Private Securities

 

 

 

 

726,398

 

(1,062)

 

-

 

725,336

 

755,786

Available-for-Sale Securities

 

 

 

84,181,028

 

73,751

 

(2,077,966)

 

82,176,813

 

80,396,458

Government Securities

 

 

 

66,828,088

 

874

 

(1,711,912)

 

65,117,050

 

61,649,908

Private Securities

 

 

 

 

17,352,940

 

72,877

 

(366,054)

 

17,059,763

 

18,746,550

Held-to-Maturity Securities

 

 

 

8,493,147

 

-

 

-

 

8,493,147

 

9,257,519

Government Securities

 

 

 

8,493,147

 

-

 

-

 

8,493,147

 

9,257,519

Total Securities

 

 

 

 

 

136,152,078

 

247,273

 

(2,077,966)

 

134,321,385

 

116,881,773

Derivatives (Assets)

 

 

 

32,471,119

 

(15,490,744)

 

75,384

 

17,055,759

 

26,010,209

Total Securities and Derivatives

 

 

 

168,623,197

 

(15,243,471)

 

(2,002,582)

 

151,377,144

 

142,891,982

Current

 

 

 

 

 

 

 

 

 

 

 

70,373,978

 

55,477,103

Long-term

 

 

 

 

 

 

 

 

 

 

 

81,003,166

 

87,414,879

Derivatives (Liabilities)

 

 

 

(17,824,331)

 

3,608,103

 

(80,342)

 

(14,296,570)

 

(22,882,959)

Current

 

 

 

 

 

 

 

 

 

 

 

(7,976,125)

 

(11,604,277)

Long-term

 

 

 

 

 

 

 

 

 

 

 

(6,320,445)

 

(11,278,682)

31

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

   

In thousands of Brazilian Real - R$, unless otherwise stated

 

II) Trading Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

 

 

 

 

03/31/2016

 

12/31/2015

             

Adjustment

              

Adjustment

        
         

Cost

 

to Fair Value -

  

Carrying

  

Carrying

  

Cost

 

to Fair Value -

  

Carrying

  

Carrying

Trading Securities

 

 

Amortized

 

Income

 

Amount

 

Amount

 

Amortized

 

Income

 

Amount

 

Amount

Government Securities

39,585,788

 

260,523

 

39,846,311

 

23,925,508

 

42,751,505

 

174,584

 

42,926,089

 

26,472,010

Treasury Bills - LFT

 

 

2,384,069

 

(1,839)

 

2,382,230

 

1,713,535

 

3,726,214

 

(1,957)

 

3,724,257

 

2,737,197

National Treasury Bills - LTN

14,626,761

 

62,916

 

14,689,677

 

6,427,586

 

14,880,322

 

70,661

 

14,950,983

 

6,605,092

National Treasury Notes - NTN A

221,894

 

(925)

 

220,969

 

225,792

 

221,894

 

(925)

 

220,969

 

225,792

National Treasury Notes - NTN B

16,418,987

 

70,625

 

16,489,612

 

12,238,392

 

16,783,115

 

43,585

 

16,826,700

 

12,534,049

National Treasury Notes - NTN C

50,630

 

273

 

50,903

 

49,831

 

1,256,513

 

(66,253)

 

1,190,260

 

1,099,508

National Treasury Notes - NTN F

5,563,473

 

121,493

 

5,684,966

 

3,137,876

 

5,563,473

 

121,493

 

5,684,966

 

3,137,876

Agricultural Debt Securities - TDA

134,657

 

(398)

 

134,259

 

130,534

 

134,657

 

(398)

 

134,259

 

130,534

Debentures

 

 

46,821

 

1,406

 

48,227

 

-

 

46,821

 

1,406

 

48,227

 

-

Brazilian Foreign Debt Notes

138,496

 

6,972

 

145,468

 

1,962

 

138,496

 

6,972

 

145,468

 

1,962

Private Securities

 

 

3,582,888

 

(1,121)

 

3,581,767

 

3,516,879

 

726,398

 

(1,062)

 

725,336

 

755,786

Shares

 

 

1,717

 

(428)

 

1,289

 

7,865

 

83,498

 

(421)

 

83,077

 

106,084

Receivables Investment Fund - FIDC (1)

5,674

 

233

 

5,907

 

7,429

 

5,674

 

233

 

5,907

 

7,429

Investment Fund Shares in Participation - FIP

-

 

-

 

-

 

-

 

24,786

 

-

 

24,786

 

31,328

Investment Fund Shares

46,999

 

(1,090)

 

45,909

 

2,908

 

415,350

 

(1,090)

 

414,260

 

325,126

Investment Fund Real Estate

-

 

-

 

-

 

-

 

592

 

-

 

592

 

578

Debentures

 

 

3,527,478

 

961

 

3,528,439

 

3,498,449

 

89,145

 

961

 

90,106

 

168,264

Financial Bills - LF

 

 

-

 

-

 

-

 

-

 

101,760

 

52

 

101,812

 

114,786

Certificates of Real Estate Receivables - CRI

1,020

 

(797)

 

223

 

228

 

1,092

 

(797)

 

295

 

301

Bank Deposits Certificates - CDB

-

 

-

 

-

 

-

 

4,501

 

-

 

4,501

 

1,890

Total

 

 

43,168,676

 

259,402

 

43,428,078

 

27,442,387

 

43,477,903

 

173,522

 

43,651,425

 

27,227,796

                                       

 

32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                         

03/31/2016

Trading Securities

 

 

Without

 

Up to

 

From 3 to

 

From 1 to

 

Over

 

  

by Maturity

Maturity

 

3 Months

 

12 Months

 

3 Years

 

3 Years

 

Total

Government Securities

-

 

9,562,290

 

9,724,183

 

6,541,027

 

14,018,811

 

39,846,311

Treasury Bills - LFT

 

 

-

 

-

 

45,771

 

317,278

 

2,019,181

 

2,382,230

National Treasury Bills - LTN

 

 

-

 

9,533,397

 

1,763,956

 

2,759,007

 

633,317

 

14,689,677

National Treasury Notes - NTN A

 

 

-

 

1,723

 

-

 

-

 

219,246

 

220,969

National Treasury Notes - NTN B

 

 

-

 

7,706

 

6,864,583

 

2,864,716

 

6,752,607

 

16,489,612

National Treasury Notes - NTN C

 

 

-

 

13

 

207

 

49,167

 

1,516

 

50,903

National Treasury Notes - NTN F

 

 

-

 

-

 

1,016,187

 

490,896

 

4,177,883

 

5,684,966

Agricultural Debt Securities - TDA

 

 

-

 

19,344

 

32,287

 

56,536

 

26,092

 

134,259

Debentures

 

 

-

 

107

 

1,178

 

3,427

 

43,515

 

48,227

Brazilian Foreign Debt Securities

 

 

-

 

-

 

14

 

-

 

145,454

 

145,468

Private Securities

 

 

47,198

 

1,099

 

1,197

 

15,980

 

3,516,293

 

3,581,767

Shares

 

 

1,289

 

-

 

-

 

-

 

-

 

1,289

Receivables Investment Fund - FIDC (1)

 

 

-

 

-

 

-

 

5,907

 

-

 

5,907

Investment Fund Shares

 

 

45,909

 

-

 

-

 

-

 

-

 

45,909

Debentures

 

 

-

 

1,099

 

1,197

 

9,850

 

3,516,293

 

3,528,439

Certificates of Real Estate Receivables - CRI

 

 

-

 

-

 

-

 

223

 

-

 

223

Total

 

 

47,198

 

9,563,389

 

9,725,380

 

6,557,007

 

17,535,104

 

43,428,078

                           

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                         

03/31/2016

Trading Securities

 

 

Without

 

Up to

 

From 3 to

 

From 1 to

 

Over

 

 

by Maturity

 

 

Maturity

 

3 Months

 

12 Months

 

3 Years

 

3 Years

 

Total

Government Securities

 

 

-

 

9,566,573

 

9,817,900

 

7,018,305

 

16,523,311

 

42,926,089

Treasury Bills - LFT

 

 

-

 

-

 

119,715

 

794,556

 

2,809,986

 

3,724,257

National Treasury Bills - LTN

 

 

-

 

9,533,397

 

1,763,956

 

2,759,007

 

894,623

 

14,950,983

National Treasury Notes - NTN A

 

 

-

 

1,723

 

-

 

-

 

219,246

 

220,969

National Treasury Notes - NTN B

 

 

-

 

8,948

 

6,866,707

 

2,864,716

 

7,086,329

 

16,826,700

National Treasury Notes - NTN C

 

 

-

 

3,054

 

17,856

 

49,167

 

1,120,183

 

1,190,260

National Treasury Notes - NTN F

 

 

-

 

-

 

1,016,187

 

490,896

 

4,177,883

 

5,684,966

Agricultural Debt Securities - TDA

 

 

-

 

19,344

 

32,287

 

56,536

 

26,092

 

134,259

Debentures

 

 

-

 

107

 

1,178

 

3,427

 

43,515

 

48,227

Brazilian Foreign Debt Notes

 

 

-

 

-

 

14

 

-

 

145,454

 

145,468

Private Securities

 

 

494,572

 

40,945

 

73,813

 

16,271

 

99,735

 

725,336

Shares

 

 

83,077

 

-

 

-

 

-

 

-

 

83,077

Receivables Investment Fund - FIDC (1)

 

 

-

 

-

 

-

 

5,907

 

-

 

5,907

Investment Fund Shares in Participation - FIP

 

 

-

 

-

 

-

 

-

 

24,786

 

24,786

Investment Fund Shares

 

 

410,016

 

4,244

 

-

 

-

 

-

 

414,260

Investment Fund Real Estate

 

 

592

 

-

 

-

 

-

 

-

 

592

Debentures

 

 

-

 

4,110

 

1,197

 

9,850

 

74,949

 

90,106

Financial Bills - LF

 

 

-

 

31,935

 

69,877

 

-

 

-

 

101,812

Certificates of Real Estate Receivables - CRI

 

 

-

 

72

 

-

 

223

 

-

 

295

Bank Deposits Certificates - CDB

 

 

887

 

584

 

2,739

 

291

 

-

 

4,501

Total

 

 

494,572

 

9,607,518

 

9,891,713

 

7,034,576

 

16,623,046

 

43,651,425

                           

 

34

 

III) Available-for-Sale Securities

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

         

Adjustment to Market Reflected in:

        
     

Cost

     

Fair Value -

  

Carrying

  

Carrying

Available-for-Sale Securities

 

 

Amortized

 

Result

  

Equity

 

Amount

 

Amount

Government Securities

 

 

63,289,254

 

874

 

(1,632,114)

 

61,658,014

 

58,013,126

Treasury Certificates - CFT

 

 

535

 

-

 

175

 

710

 

650

Securitized Credit

 

 

2,830

 

-

 

320

 

3,150

 

3,206

Treasury Bills - LFT

 

 

11,801,121

 

-

 

(7,890)

 

11,793,231

 

11,432,222

National Treasury Bills - LTN

 

 

26,238,493

 

-

 

(343,762)

 

25,894,731

 

24,172,709

National Treasury Notes - NTN A

 

 

1,304,845

 

-

 

(50,836)

 

1,254,009

 

1,329,024

National Treasury Notes - NTN B

 

 

5,996,066

 

-

 

(321,609)

 

5,674,457

 

5,096,646

National Treasury Notes - NTN C (2)

 

 

1,424,637

 

-

 

(85,281)

 

1,339,356

 

1,248,664

National Treasury Notes - NTN F (2) (6)

 

 

12,356,775

 

-

 

(842,650)

 

11,514,125

 

10,687,322

Securities Issued Abroad - Spain

 

 

2,504,258

 

-

 

(8,287)

 

2,495,971

 

2,438,200

Debentures (3)

 

 

1,659,694

 

874

 

27,706

 

1,688,274

 

1,604,483

Private Securities

 

 

95,151,772

 

72,877

 

(380,331)

 

94,844,318

 

82,074,760

Shares

 

 

444,684

 

-

 

(1,403)

 

443,281

 

760,362

Receivables Investment Fund - FIDC (1)

 

 

145,362

 

4,229

 

-

 

149,591

 

223,001

Investment Fund Shares in Participation - FIP (7)

 

612,457

 

48,443

 

-

 

660,900

 

612,081

Investment Fund Shares

 

 

554,366

 

15,940

 

-

 

570,306

 

554,363

Debentures (4)

 

 

87,162,724

 

4,265

 

(172,131)

 

86,994,858

 

73,039,930

Eurobonds

 

 

385,007

 

-

 

(205,548)

 

179,459

 

212,910

Promissory Notes - NP (5)

 

 

4,129,542

 

-

 

64,900

 

4,194,442

 

4,944,704

Real Estate Credit Notes - CCI

 

 

-

 

-

 

-

 

-

 

14,972

Financial Bills - LF

 

 

1,159,454

 

-

 

(5,452)

 

1,154,002

 

1,220,822

Certificates of Real Estate Receivables - CRI

 

 

558,176

 

-

 

(60,697)

 

497,479

 

491,615

Total

 

 

158,441,026

 

73,751

 

(2,012,445)

 

156,502,332

 

140,087,886

                       

 

35

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

         

Adjustment to Market Reflected in:

        
     

Cost

     

Fair Value -

  

Carrying

  

Carrying

Available-for-Sale Securities

 

 

Amortized

 

Result

  

Equity

 

Amount

 

Amount

Government Securities

 

 

66,828,088

 

874

 

(1,711,912)

 

65,117,050

 

61,649,908

Treasury Certificates - CFT

 

 

535

 

-

 

175

 

710

 

650

Securitized Credit

 

 

2,830

 

-

 

320

 

3,150

 

3,206

Treasury Bills - LFT

 

 

12,226,077

 

-

 

(8,010)

 

12,218,067

 

11,876,143

National Treasury Bills - LTN

 

 

26,904,996

 

-

 

(351,398)

 

26,553,598

 

25,048,673

National Treasury Notes - NTN A

 

 

1,304,845

 

-

 

(50,836)

 

1,254,009

 

1,328,863

National Treasury Notes - NTN B

 

 

5,996,066

 

-

 

(321,609)

 

5,674,457

 

5,096,646

National Treasury Notes - NTN C (2)

 

 

1,424,637

 

-

 

(85,281)

 

1,339,356

 

1,248,664

National Treasury Notes - NTN F (2) (6)

 

 

14,804,150

 

-

 

(914,692)

 

13,889,458

 

13,004,380

Securities Issued Abroad - Spain

 

 

2,504,258

 

-

 

(8,287)

 

2,495,971

 

2,438,200

Debentures (3)

 

 

1,659,694

 

874

 

27,706

 

1,688,274

 

1,604,483

Private Securities

 

 

17,352,940

 

72,877

 

(366,054)

 

17,059,763

 

18,746,550

Shares

 

 

764,646

 

-

 

17,550

 

782,196

 

793,557

Receivables Investment Fund - FIDC (1)

 

 

145,362

 

4,229

 

-

 

149,591

 

230,310

Investment Fund Shares in Participation - FIP (7)

 

619,422

 

48,443

 

-

 

667,865

 

626,426

Investment Fund Shares

 

 

151,864

 

15,940

 

-

 

167,804

 

195,846

Real Estate Fund Shares

 

 

64,983

 

-

 

(5,191)

 

59,792

 

56,204

Debentures (4)

 

 

9,141,704

 

4,265

 

(172,131)

 

8,973,838

 

9,683,147

Eurobonds

 

 

385,007

 

-

 

(205,548)

 

179,459

 

212,910

Promissory Notes - NP (5)

 

 

4,129,542

 

-

 

64,900

 

4,194,442

 

4,944,704

Real Estate Credit Notes - CCI

 

 

-

 

-

 

-

 

-

 

14,972

Financial Bills - LF

 

 

1,392,209

 

-

 

(4,937)

 

1,387,272

 

1,446,465

Certificates of Real Estate Receivables - CRI

 

 

558,176

 

-

 

(60,697)

 

497,479

 

491,615

Certificates of Bank Deposit - CDB

 

 

25

 

-

 

-

 

25

 

50,394

Total

 

 

84,181,028

 

73,751

 

(2,077,966)

 

82,176,813

 

80,396,458

                       

 

36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

Available-for-Sale Securities

 

 

Without

 

Up to

 

From 3 to

 

From 1 to

 

Over

 

 

by Maturity

 

 

Maturity

 

3 Months

 

12 Months

 

3 Years

 

3 Years

 

Total

Government Securities

 

 

-

 

1,616,369

 

10,436,667

 

18,181,500

 

31,423,478

 

61,658,014

Treasury Certificates - CFT

 

 

-

 

-

 

-

 

-

 

710

 

710

Securitized Credit

 

 

-

 

202

 

621

 

1,424

 

903

 

3,150

Treasury Bills - LFT

 

 

-

 

-

 

-

 

76,451

 

11,716,780

 

11,793,231

National Treasury Bills - LTN

 

 

-

 

-

 

8,093,087

 

17,801,644

 

-

 

25,894,731

National Treasury Notes - NTN A

 

 

-

 

10,116

 

-

 

-

 

1,243,893

 

1,254,009

National Treasury Notes - NTN B

 

 

-

 

2,640

 

14,960

 

-

 

5,656,857

 

5,674,457

National Treasury Notes - NTN C (2)

 

 

-

 

-

 

7,285

 

-

 

1,332,071

 

1,339,356

National Treasury Notes - NTN F (2) (6)

 

 

-

 

-

 

1,094,913

 

239,603

 

10,179,609

 

11,514,125

Securities Issued Abroad - Spain

 

 

-

 

1,319,853

 

1,176,118

 

-

 

-

 

2,495,971

Debentures (3)

 

 

-

 

283,558

 

49,683

 

62,378

 

1,292,655

 

1,688,274

Private Securities

 

 

748,248

 

987,033

 

4,589,958

 

25,827,329

 

62,691,750

 

94,844,318

Shares

 

 

28,351

 

-

 

-

 

414,930

 

-

 

443,281

Receivables Investment Fund - FIDC (1)

 

 

149,591

 

-

 

-

 

-

 

-

 

149,591

Investment Fund Shares in Participation - FIP (7)

 

 

-

 

-

 

-

 

-

 

660,900

 

660,900

Investment Fund Shares

 

 

570,306

 

-

 

-

 

-

 

-

 

570,306

Debentures (4)

 

 

-

 

482,289

 

1,601,488

 

23,636,313

 

61,274,768

 

86,994,858

Eurobonds

 

 

-

 

4,032

 

-

 

-

 

175,427

 

179,459

Promissory Notes - NP (5)

 

 

-

 

493,388

 

2,068,027

 

1,300,952

 

332,075

 

4,194,442

Financial Bills - LF

 

 

-

 

-

 

749,885

 

404,117

 

-

 

1,154,002

Certificates of Real Estate Receivables - CRI

 

 

-

 

7,324

 

170,558

 

71,017

 

248,580

 

497,479

Total

 

 

748,248

 

2,603,402

 

15,026,625

 

44,008,829

 

94,115,228

 

156,502,332

                           

 

37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

Available-for-Sale Securities

 

 

Without

 

Up to

 

From 3 to

 

From 1 to

 

Over

 

 

by Maturity

 

 

Maturity

 

3 Months

 

12 Months

 

3 Years

 

3 Years

 

Total

Government Securities

 

 

-

 

1,616,369

 

11,602,611

 

18,648,345

 

33,249,725

 

65,117,050

Treasury Certificates - CFT

 

 

-

 

-

 

-

 

-

 

710

 

710

Securitized Credit

 

 

-

 

202

 

621

 

1,424

 

903

 

3,150

Treasury Bills - LFT

 

 

-

 

-

 

-

 

151,409

 

12,066,658

 

12,218,067

National Treasury Bills - LTN

  

 

-

 

-

 

8,361,471

 

18,085,251

 

106,876

 

26,553,598

National Treasury Notes - NTN A

 

 

-

 

10,116

 

-

 

-

 

1,243,893

 

1,254,009

National Treasury Notes - NTN B

 

 

-

 

2,640

 

14,960

 

-

 

5,656,857

 

5,674,457

National Treasury Notes - NTN C (2)

 

 

-

 

-

 

7,285

 

-

 

1,332,071

 

1,339,356

National Treasury Notes - NTN F (2) (6)

 

 

-

 

-

 

1,992,473

 

347,883

 

11,549,102

 

13,889,458

Securities Issued Abroad - Spain

 

 

-

 

1,319,853

 

1,176,118

 

-

 

-

 

2,495,971

Debentures (3)

 

 

-

 

283,558

 

49,683

 

62,378

 

1,292,655

 

1,688,274

Private Securities

 

 

438,734

 

987,032

 

4,651,480

 

4,129,408

 

6,853,109

 

17,059,763

Shares

 

 

61,547

 

-

 

-

 

414,930

 

305,719

 

782,196

Receivables Investment Fund - FIDC (1)

 

 

149,591

 

-

 

-

 

-

 

-

 

149,591

Investment Fund Shares in Participation - FIP (7)

 

 

-

 

-

 

-

 

6,965

 

660,900

 

667,865

Investment Fund Shares

 

 

167,804

 

-

 

-

 

-

 

-

 

167,804

Real Estate Fund Shares

 

 

59,792

 

-

 

-

 

-

 

-

 

59,792

Debentures (4)

 

 

-

 

482,288

 

1,601,488

 

1,759,654

 

5,130,408

 

8,973,838

Eurobonds

 

 

-

 

4,032

 

-

 

-

 

175,427

 

179,459

Promissory Notes - NP (5)

 

 

-

 

493,388

 

2,068,027

 

1,300,952

 

332,075

 

4,194,442

Financial Bills - LF

 

 

-

 

-

 

811,407

 

575,865

 

-

 

1,387,272

Certificates of Real Estate Receivables - CRI

 

 

-

 

7,324

 

170,558

 

71,017

 

248,580

 

497,479

Certificates of Bank Deposit - CDB

 

 

-

 

-

 

-

 

25

 

-

 

25

Total

 

 

438,734

 

2,603,401

 

16,254,091

 

22,777,753

 

40,102,834

 

82,176,813

                           

(1) Receivables Investment Fund (FIDC) shares are calculated based on the value of the receivables and other financial assets in the respective portfolios, less respective provisions that take into consideration aspects related to the debtors, their guarantors and the corresponding transaction’s characteristics, according to accounting standards and practices for evaluating credits.

                           

(2) In the firts quarter of 2016 there was the value to R$3,606 (2015 - R$3,253) result, net of tax in the Consolidated income from the sale of NTN-C and NTN-F part to the market (Note 24.e).

                           

(3) Issued by mixed capital company.

                           

(4) Includes R$415,369 (12/31/2015 - R$503,415) of hedge objects market risks (Note 6.b.V.a).

 

38

 

 

(5) Includes R$ 243,904 (12/31/2015 - R$381,641) of hedge objects market risks (Note 6.b.V.a) and R$619,469 of hedge objects cash flow hedge (Nota 6.b.v.b).

 

(6) On March 31, 2016, the amount of 2,102,743 Notes National Treasury (NTN-F), with maturity on January 1, 2025 are bound by the obligation assumed by Banco Santander to hedging of unamortized reserves Plan V of the Social Security Fund (Banesprev).

                                 

(7) Investments in Quotas of Investment Fund - FIP mainly corresponds to investments in assets in the electricity and technology segments, which is consistent with the established rules and accounting practices.

                                 

IV) Held-to-Maturity Securities

                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/Consolidated

                               

03/31/2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Maturity

     

 

  

Cost

  

 

 

 

 

 

 

 

    
           

Amortized /Accouting

  

Up to

  

From 3 to

 

From 3 to

 

Over

   

Held-to-Maturity Securities (1)

    

03/31/2016

  

12/31/2015

  

3 Months

 

12 Months

 

5 Years

 

3 Years

 

Total

Government Securities

 

 

8,493,147

 

9,257,519

 

56,250

 

33,774

 

821,685

 

7,581,438

 

8,493,147

National Treasury Notes - NTN A

 

 

3,283,386

 

3,559,308

 

25,586

 

-

 

-

 

3,257,800

 

3,283,386

Brazilian Foreign Debt Bonds (2)

 

 

5,209,761

 

5,698,211

 

30,664

 

33,774

 

821,685

 

4,323,638

 

5,209,761

Total

 

 

 

8,493,147

 

9,257,519

 

56,250

 

33,774

 

821,685

 

7,581,438

 

8,493,147

(1) The fair value of held to maturity securities is R$8,908,409 (12/31/2015 - R$9,257,519).

                                 

(2) Includes the amount of R$832,686 (31/12/2015 - R$866,554) of cash flow object hedge (Note 6.b.V.b).

                                 

In January 2014, Bank made an issue of bonds eligible to compose the capital of Level I and Level II Reference Equity (RE), amounting to USD2.5 billion (equivalent to R$ 6 billion) (Note 21). In order to mitigate the risk of interest rates in US dollars, was made the purchase of assets indexed in this currency: NTN-A and Eurobonds issued by the federal government of Brazil and BNDES (acquired via foreign branche Grand Cayman Branch). Initially, these securities were classified as "available for sale" and at December 31, 2015 were reclassified to "held to maturity".

                                 

Given the provisions of Article 5 of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity securities classified as held-to-maturity.

                                 

The market value of securities is computed based on the average quotation on organized markets and their estimated cash flows, discounted to present value using the applicable interest rate curves, representative of market conditions at the end of swing.

                                 

 

39

 

V) Financial Income - Securities Transactions

 

 

 

 

 

 

        

 

 

 

 

 

Bank

 

 

 

Consolidated

     

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Income From Fixed-Income Securities

 

 

6,730,375

 

6,823,753

 

4,699,068

 

5,618,858

Income From Interbank Investments

 

 

2,026,183

 

2,165,020

 

1,042,306

 

1,325,657

Income From Variable-Income Securities

 

 

(45,845)

 

(10,558)

 

(23,039)

 

54,809

Financial Income of Pension and Capitalization

 

 

 

 

 

 

46,062

 

31,478

Others (1)

 

 

66,077

 

10,488

 

43,592

 

(6,640)

Total

 

 

8,776,790

 

8,988,703

 

5,807,989

 

7,024,162

                   

(1) Corresponds mainly to income from investment funds and participations.

 

40

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

   

In thousands of Brazilian Real - R$, unless otherwise stated

 

b) Derivatives Financial Instruments

                           

I) Derivatives Recorded in Memorandum and Balance Sheets

                           

 

 

 

 

 

 

 

 

 

Bank

             

03/31/2016

          

12/31/2015

 

 

 

 

 

 

 

Trading

 

 

 

 

 

Trading

 

 

 

Notional

 

Cost

 

Fair Value

 

Notional

 

Cost

 

Fair Value

Swap

 

 

 

 

13,192,361

 

2,010,498

 

 

 

19,258,839

 

3,101,501

Asset

 

 

160,460,304

 

26,206,088

 

26,730,522

 

245,461,855

 

38,126,434

 

38,852,905

CDI (Interbank Deposit Rates)

 

45,801,382

 

18,566,979

 

20,425,201

 

38,673,202

 

6,955,903

 

9,233,799

Fixed Interest Rate - Real

 

83,345,457

 

-

 

-

 

131,559,811

 

-

 

-

Indexed to Price and Interest Rates

 

13,232,234

 

6,472,032

 

4,982,340

 

15,491,510

 

8,449,407

 

6,421,311

Foreign Currency

 

 

18,078,625

 

1,164,705

 

1,344,693

 

59,725,687

 

22,709,479

 

23,207,542

Others

 

 

2,606

 

2,372

 

(21,712)

 

11,645

 

11,645

 

(9,747)

Liabilities

 

 

147,267,943

 

(13,013,727)

 

(24,720,024)

 

226,203,016

 

(18,867,595)

 

(35,751,404)

CDI (Interbank Deposit Rates)

 

27,234,403

 

-

 

-

 

31,717,299

 

-

 

-

Fixed Interest Rate - Real

 

96,359,184

 

(13,013,727)

 

(24,720,024)

 

150,427,406

 

(18,867,595)

 

(35,751,404)

Indexed to Price and Interest Rates

 

6,760,202

 

-

 

-

 

7,042,103

 

-

 

-

Foreign Currency

 

 

16,913,920

 

-

 

-

 

37,016,208

 

-

 

-

Others

 

 

234

 

-

 

-

 

-

 

-

 

-

Options

 

 

122,075,854

 

(40,244)

 

(91,238)

 

90,948,495

 

(15,877)

 

20,417

Purchased Position

 

66,323,145

 

325,856

 

402,095

 

45,423,462

 

405,013

 

814,423

Call Option - US Dollar

 

4,335,516

 

154,370

 

185,688

 

5,018,650

 

225,226

 

604,629

Put Option - US Dollar

 

2,395,603

 

70,702

 

108,329

 

2,735,626

 

58,884

 

31,521

Call Option - Other

 

17,816,300

 

58,022

 

52,496

 

13,803,789

 

77,341

 

167,851

Interbank Market

 

 

17,321,104

 

3,892

 

860

 

13,114,822

 

18,736

 

93,435

Others (1)

 

 

495,196

 

54,130

 

51,636

 

688,967

 

58,605

 

74,416

Put Option - Other

 

41,775,726

 

42,762

 

55,582

 

23,865,397

 

43,562

 

10,422

Interbank Market

 

 

41,287,014

 

28,514

 

22,729

 

23,350,994

 

27,761

 

4,558

Others (1)

 

 

488,712

 

14,248

 

32,853

 

514,403

 

15,801

 

5,864

Sold Position

 

 

55,752,709

 

(366,100)

 

(493,333)

 

45,525,033

 

(420,890)

 

(794,006)

Call Option - US Dollar

 

2,822,936

 

(120,360)

 

(219,704)

 

3,331,244

 

(184,273)

 

(535,702)

Put Option - US Dollar

 

3,568,026

 

(135,065)

 

(177,008)

 

4,402,203

 

(125,172)

 

(73,815)

Call Option - Other

 

11,308,393

 

(58,529)

 

(68,874)

 

14,515,876

 

(72,923)

 

(179,402)

Interbank Market

 

 

10,787,108

 

(13,961)

 

(29,493)

 

13,730,262

 

(21,932)

 

(112,707)

Others (1)

 

 

521,285

 

(44,568)

 

(39,381)

 

785,614

 

(50,991)

 

(66,695)

Put Option - Other

 

38,053,354

 

(52,146)

 

(27,747)

 

23,275,710

 

(38,522)

 

(5,087)

Interbank Market

 

 

37,926,473

 

(39,085)

 

(22,502)

 

23,218,228

 

(26,315)

 

(1,615)

Others (1)

 

 

126,881

 

(13,061)

 

(5,245)

 

57,482

 

(12,207)

 

(3,472)

Futures Contracts

 

164,774,117

 

-

 

-

 

183,592,248

 

-

 

-

Purchased Position

 

35,282,562

 

-

 

-

 

41,136,899

 

-

 

-

Exchange Coupon (DDI)

 

6,663,222

 

-

 

-

 

4,274,347

 

-

 

-

Interest Rates (DI1 and DIA)

 

19,436,682

 

-

 

-

 

22,721,816

 

-

 

-

Foreign Currency

 

 

6,073,080

 

-

 

-

 

11,710,935

 

-

 

-

Indexes (2)

 

 

486,910

 

-

 

-

 

566,378

 

-

 

-

Treasury Bonds/Notes

 

688,644

 

-

 

-

 

-

 

-

 

-

Average Rate of Repo Operations (OC1)

 

1,934,024

 

-

 

-

 

1,863,423

 

-

 

-

Sold Position

 

 

129,491,555

 

-

 

-

 

142,455,349

 

-

 

-

Exchange Coupon (DDI)

 

72,546,705

 

-

 

-

 

58,499,504

 

-

 

-

Interest Rates (DI1 and DIA)

 

34,648,687

 

-

 

-

 

20,304,192

 

-

 

-

Foreign Currency

 

 

11,149,763

 

-

 

-

 

35,463,589

 

-

 

-

Indexes (2)

 

 

694,353

 

-

 

-

 

483,599

 

-

 

-

Treasury Bonds/Notes

 

457,297

 

-

 

-

 

49,164

 

-

 

-

Average Rate of Repo Operations (OC1)

 

9,994,750

 

-

 

-

 

27,655,301

 

-

 

-

41

 

 

 

 

 

 

 

 

 

 

Bank

           

03/31/2016

          

12/31/2015

 

 

 

 

 

 

Trading

 

 

 

 

 

Trading

 

 

Notional

 

Cost

 

Fair Value

 

Notional

 

Cost

 

Fair Value

Forward Contracts and Others

 

52,000,744

 

1,072,766

 

1,134,004

 

51,047,964

 

1,019,191

 

921,676

Purchased Commitment

 

22,169,801

 

335,845

 

452,483

 

21,570,405

 

2,914,197

 

2,690,632

Currencies

 

21,590,175

 

335,773

 

453,194

 

21,570,405

 

2,914,197

 

2,690,632

Others

 

579,626

 

72

 

(711)

 

-

 

-

 

-

Sell Commitment

 

29,830,943

 

736,921

 

681,521

 

29,477,559

 

(1,895,006)

 

(1,768,956)

Currencies

 

29,015,165

 

736,993

 

672,828

 

29,140,219

 

(1,895,006)

 

(1,754,301)

Others

 

815,778

 

(72)

 

8,693

 

337,340

 

-

 

(14,655)

                         

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

           

03/31/2016

          

12/31/2015

 

 

 

 

 

 

Trading

 

 

 

 

 

Trading

 

 

Notional

 

Cost

 

Fair Value

 

Notional

 

Cost

 

Fair Value

Swap

 

 

 

13,913,785

 

1,982,492

 

 

 

19,767,937

 

3,158,175

Asset

 

240,870,452

 

31,743,590

 

32,178,546

 

321,353,805

 

43,700,717

 

44,411,308

CDI (Interbank Deposit Rates)

 

52,679,547

 

24,196,347

 

26,042,937

 

44,696,063

 

12,695,478

 

15,008,061

Fixed Interest Rate - Real

 

155,524,352

 

-

 

-

 

200,528,046

 

-

 

-

Indexed to Price and Interest Rates

 

13,296,234

 

6,536,032

 

4,982,340

 

15,491,510

 

8,561,407

 

6,421,311

Foreign Currency

 

19,367,713

 

1,008,838

 

1,174,981

 

60,626,541

 

22,432,187

 

22,991,683

Others

 

2,606

 

2,373

 

(21,712)

 

11,645

 

11,645

 

(9,747)

Liabilities

 

226,956,667

 

(17,829,805)

 

(30,196,054)

 

301,585,868

 

(23,932,780)

 

(41,253,133)

CDI (Interbank Deposit Rates)

 

28,483,200

 

-

 

-

 

32,000,585

 

-

 

-

Fixed Interest Rate - Real

 

173,354,157

 

(17,829,805)

 

(30,196,054)

 

224,460,826

 

(23,932,780)

 

(41,253,133)

Indexed to Price and Interest Rates

 

6,760,202

 

-

 

-

 

6,930,103

 

-

 

-

Foreign Currency

 

18,358,875

 

-

 

-

 

38,194,354

 

-

 

-

Others

 

233

 

-

 

-

 

-

 

-

 

-

Options

 

124,876,783

 

(49,966)

 

(49,557)

 

91,877,353

 

(32,566)

 

97,707

Purchased Position

 

67,636,450

 

345,106

 

470,864

 

46,024,648

 

357,644

 

862,972

Call Option - US Dollar

 

4,335,516

 

154,370

 

185,689

 

5,018,650

 

225,226

 

604,629

Put Option - US Dollar

 

2,395,603

 

70,702

 

108,329

 

2,735,626

 

58,884

 

31,521

Call Option - Other

 

18,625,147

 

80,050

 

102,403

 

14,106,701

 

31,405

 

142,121

Interbank Market

 

17,321,103

 

3,892

 

860

 

13,114,822

 

-

 

74,699

Others (1)

 

1,304,044

 

76,158

 

101,543

 

991,879

 

31,405

 

67,422

Put Option - Other

 

42,280,184

 

39,984

 

74,443

 

24,163,671

 

42,129

 

84,701

Interbank Market

 

41,287,014

 

28,514

 

51,636

 

23,350,994

 

27,761

 

4,558

Others (1)

 

993,170

 

11,470

 

22,807

 

812,677

 

14,368

 

80,143

Sold Position

 

57,240,333

 

(395,072)

 

(520,421)

 

45,852,705

 

(390,210)

 

(765,265)

Call Option - US Dollar

 

2,822,936

 

(120,360)

 

(219,704)

 

3,331,244

 

(184,273)

 

(535,702)

Put Option - US Dollar

 

3,568,026

 

(135,065)

 

(177,008)

 

4,402,203

 

(125,172)

 

(73,815)

Call Option - Other

 

12,026,634

 

(71,111)

 

(59,603)

 

14,567,407

 

(41,848)

 

(121,217)

Interbank Market

 

10,787,108

 

(13,961)

 

(29,493)

 

13,730,262

 

(21,932)

 

(112,707)

Others (1)

 

1,239,526

 

(57,150)

 

(30,110)

 

837,145

 

(19,916)

 

(8,510)

Put Option - Other

 

38,822,737

 

(68,536)

 

(64,106)

 

23,551,851

 

(38,917)

 

(34,531)

Interbank Market

 

37,926,473

 

(39,085)

 

(22,502)

 

23,218,228

 

(26,315)

 

(1,615)

Others (1)

 

896,264

 

(29,451)

 

(41,604)

 

333,623

 

(12,602)

 

(32,916)

Futures Contracts

 

165,521,373

 

-

 

-

 

184,191,203

 

-

 

-

Purchased Position

 

35,368,483

 

-

 

-

 

41,186,338

 

-

 

-

Exchange Coupon (DDI)

 

6,663,222

 

-

 

-

 

4,274,347

 

-

 

-

Interest Rates (DI1 and DIA)

 

19,471,173

 

-

 

-

 

22,760,484

 

-

 

-

Foreign Currency

 

6,073,080

 

-

 

-

 

11,710,935

 

-

 

-

Indexes (2)

 

538,340

 

-

 

-

 

577,149

 

-

 

-

Treasury Bonds/Notes

 

688,644

 

-

 

-

 

-

 

-

 

-

Average Rate of Repo Operations (OC1)

 

1,934,024

 

-

 

-

 

1,863,423

 

-

 

-

42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

               

03/31/2016

          

12/31/2015

 

 

 

 

 

 

 

 

Trading

 

 

 

 

 

Trading

 

 

 

 

Notional

 

Cost

 

Fair Value

 

Notional

 

Cost

 

Fair Value

Sold Position

 

 

 

130,152,890

 

-

 

-

 

143,004,865

 

-

 

-

Exchange Coupon (DDI)

 

72,546,705

 

-

 

-

 

58,499,504

 

-

 

-

Interest Rates (DI1 and DIA)

 

34,806,128

 

-

 

-

 

20,836,314

 

-

 

-

Foreign Currency

 

 

 

11,149,763

 

-

 

-

 

35,463,589

 

-

 

-

Indexes (2)

 

 

 

1,198,247

 

-

 

-

 

500,993

 

-

 

-

Treasury Bonds/Notes

 

457,297

 

-

 

-

 

49,164

 

-

 

-

Average Rate of Repo Operations (OC1)

 

9,994,750

 

-

 

-

 

27,655,301

 

-

 

-

Forward Contracts and Others

 

52,006,614

 

1,038,924

 

1,168,420

 

51,058,023

 

1,005,428

 

935,988

Purchased Commitment

 

22,169,801

 

341,706

 

458,831

 

21,577,414

 

2,917,270

 

2,693,587

Currencies

 

 

 

21,590,175

 

341,634

 

459,542

 

21,577,414

 

2,917,270

 

2,693,587

Others

 

 

 

579,626

 

72

 

(711)

 

-

 

-

 

-

Sell Commitment

 

 

29,836,813

 

697,218

 

709,589

 

29,480,609

 

(1,911,842)

 

(1,757,599)

Currencies

 

 

 

29,015,165

 

730,157

 

665,992

 

29,140,219

 

(1,898,297)

 

(1,757,592)

Others

 

 

 

821,648

 

(32,939)

 

43,597

 

340,390

 

(13,545)

 

(7)

                             

(1) Includes share options and indexes.

                        
                             

(2) Includes Bovespa and S&P indexes.

                        
                             

II) Derivatives Financial Instruments by Counterparty

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                           

Notional

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

               

Related

 

Financial

       

 

 

 

 

 

 

Customers

 

Parties

 

Institutions (1)

 

Total

 

Total

Swap

 

 

 

 

 

88,663,031

 

15,578,080

 

56,219,193

 

160,460,304

 

245,461,855

Options

 

 

 

 

 

4,162,569

 

2,276,627

 

115,636,658

 

122,075,854

 

90,948,495

Futures Contracts

 

 

 

 

 

-

 

-

 

164,774,117

 

164,774,117

 

183,592,248

Forward Contracts and Others

 

 

 

32,679,375

 

14,021,048

 

5,300,321

 

52,000,744

 

51,047,964

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                           

Notional

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

               

Related

 

Financial

       

 

 

 

 

 

 

Customers

 

Parties

 

Institutions (1)

 

Total

 

Total

Swap

 

 

 

 

 

88,663,031

 

90,336,018

 

61,871,403

 

240,870,452

 

321,353,805

Options

 

 

 

 

 

4,328,186

 

2,276,627

 

118,271,970

 

124,876,783

 

91,877,353

Futures Contracts

 

 

 

 

 

-

 

-

 

165,521,373

 

165,521,373

 

184,191,203

Forward Contracts and Others

 

 

 

32,679,375

 

14,021,048

 

5,306,191

 

52,006,614

 

51,058,023

                             

(1) Includes trades with the BM&FBovespa - Bolsa de Valores, Mercadorias e Futuros (BM&Fbovespa) and other securities and commodities exchanges.

                             

III) Derivatives Financial Instruments by Maturity

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                           

Notional

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to

 

From 3 to

 

Over

       

 

 

 

 

 

 

3 Months

 

12 Months

 

12 Months

 

Total

 

Total

Swap

 

 

 

 

 

9,371,711

 

29,328,397

 

121,760,196

 

160,460,304

 

245,461,855

Options

 

 

 

 

 

27,653,377

 

92,828,269

 

1,594,208

 

122,075,854

 

90,948,495

Futures Contracts

 

 

 

 

 

55,205,647

 

80,525,845

 

29,042,625

 

164,774,117

 

183,592,248

Forward Contracts and Others

 

 

 

26,456,170

 

20,311,584

 

5,232,990

 

52,000,744

 

51,047,964

43

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                     

Notional

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

     

Up to

 

From 3 to

 

Over

       

 

 

 

3 Months

 

12 Months

 

12 Months

 

Total

 

Total

Swap

 

 

10,338,528

 

34,401,451

 

196,130,473

 

240,870,452

 

321,353,805

Options

 

 

28,993,306

 

93,992,331

 

1,891,146

 

124,876,783

 

91,877,353

Futures Contracts

 

 

55,397,007

 

81,046,070

 

29,078,296

 

165,521,373

 

184,191,203

Forward Contracts and Others

 

 

26,459,220

 

20,314,404

 

5,232,990

 

52,006,614

 

51,058,023

                       

IV) Derivatives Financial Instruments by Trade Market

 

 

 

 

 

 

 

 

 

 

 

 

                     

Bank

                     

Notional

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

 

 

Exchange (1)

 

Cetip (2)

 

Over the Counter (3)

 

Total

 

Total

Swap

 

 

85,144,726

 

74,505,196

 

810,382

 

160,460,304

 

245,461,855

Options

 

 

117,333,813

 

4,342,041

 

400,000

 

122,075,854

 

90,948,495

Futures Contracts

 

 

164,774,117

 

-

 

-

 

164,774,117

 

183,592,248

Forward Contracts and Others

 

 

-

 

38,965,901

 

13,034,843

 

52,000,744

 

51,047,964

                       

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                     

Notional

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

 

 

Exchange (1)

 

Cetip (2)

 

Over the Counter (3)

 

Total

 

Total

Swap

 

 

117,721,851

 

122,209,348

 

939,253

 

240,870,452

 

321,353,805

Options

 

 

120,134,742

 

4,342,041

 

400,000

 

124,876,783

 

91,877,353

Futures Contracts

 

 

165,521,373

 

-

 

-

 

165,521,373

 

184,191,203

Forward Contracts and Others

 

 

-

 

38,971,771

 

13,034,843

 

52,006,614

 

51,058,023

                       

(1) Includes amount traded with the BM&FBovespa and other securities and commodities exchanges.

                       

(2) Includes amount traded on other clearinghouses.

                       

(3) Composed of operations that are included in registration chambers, according to the regulation of the Bacen.

                       

44

 

V) Derivatives Used as Hedge Instruments

                           

Derivatives used as hedge by index are as follows:

                           

a) Market Risk Hedge

                           

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

12/31/2015

         

Adjustment

          

Adjustment

    

 

 

 

Cost

 

to Fair Value

 

Fair Value

 

Cost

 

to Fair Value

 

Fair Value

Hedge Instruments

                        

Swap Contracts

  

 

(221,783)

 

(75,455)

 

(297,238)

 

238,955

 

(60,579)

 

178,376

Asset

 

 

5,655,441

 

12,295

 

5,667,736

 

6,717,115

 

23,482

 

6,740,597

CDI (Interbank Deposit Rates) (1) (2) (5)

 

1,622,075

 

559

 

1,622,634

 

1,778,699

 

4,376

 

1,783,075

Fixed Interest Rate - Real (2)

 

299,174

 

(10)

 

299,164

 

3,522,475

 

27,184

 

3,549,659

Indexed to Foreign Currency - Fixed
Interest - US Dollar (5)

 

89,510

 

217

 

89,727

 

93,682

 

790

 

94,472

Indexed to Foreign Currency - USD/BRL
US Dollar (5)

 

3,562,417

 

11,071

 

3,573,488

 

675,929

 

(10,904)

 

665,025

Indexed to Foreign Currency - Libor -
US Dollar (2) (4) (5)

 

12,606

 

241

 

12,847

 

610,661

 

1,962

 

612,623

Indexed to Foreign Currency - Fixed
Interest - YEN (3)

 

69,659

 

217

 

69,876

 

35,669

 

74

 

35,743

Liabilities

 

 

(5,877,224)

 

(87,750)

 

(5,964,974)

 

(6,478,160)

 

(84,061)

 

(6,562,221)

Indexed to Foreign Currency -
US Dollar (1)

 

(826,228)

 

(21,952)

 

(848,180)

 

(585,659)

 

(15,134)

 

(600,793)

Indexed to Price and Interest Rates
Interest (2)

 

(611,024)

 

(20,589)

 

(631,613)

 

(800,174)

 

(30,982)

 

(831,156)

CDI (Interbank Deposit Rates) (3) (4)

 

(3,443,944)

 

(16,448)

 

(3,460,392)

 

(3,267,140)

 

(12,298)

 

(3,279,438)

Indexed to Foreign Currency - Libor -
US Dollar (4) (3)

 

(75,785)

 

(309)

 

(76,094)

 

(41,452)

 

(61)

 

(41,513)

Fixed Interest Rate - Real (5)

 

 

(920,243)

 

(28,452)

 

(948,695)

 

(1,783,735)

 

(25,586)

 

(1,809,321)

Hedge Object

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset

 

 

2,103,258

 

103,813

 

2,207,071

 

2,471,649

 

102,993

 

2,574,642

Lending Operation

 

 

1,464,542

 

83,256

 

1,547,798

 

1,602,492

 

87,094

 

1,689,586

Indexed to Foreign Currency - US Dollar

 

664,848

 

34,044

 

698,892

 

730,904

 

35,338

 

766,242

Indexed Indices of Prices and Interest

 

794,733

 

49,303

 

844,036

 

863,781

 

52,984

 

916,765

Fixed Interest Rate - Real

 

 

4,961

 

(91)

 

4,870

 

7,807

 

(1,228)

 

6,579

Available-for-Sale Securities

 

 

638,716

 

20,557

 

659,273

 

869,157

 

15,899

 

885,056

Debentures

 

 

405,035

 

10,334

 

415,369

 

492,837

 

10,578

 

503,415

Promissory Notes - PN

 

 

233,681

 

10,223

 

243,904

 

376,320

 

5,321

 

381,641

Liabilities

 

 

(3,606,717)

 

17,275

 

(3,589,442)

 

(3,512,568)

 

(8,383)

 

(3,520,951)

Foreign Borrowings

 

 

(3,572,030)

 

17,139

 

(3,554,891)

 

(3,476,825)

 

(8,342)

 

(3,485,167)

Indexed to Foreign Currency - US Dollar

 

 

(3,572,030)

 

17,139

 

(3,554,891)

 

(3,476,825)

 

(8,342)

 

(3,485,167)

Securities Issued Abroad

 

 

(34,687)

 

136

 

(34,551)

 

(35,743)

 

(41)

 

(35,784)

Eurobonds

 

 

(34,687)

 

136

 

(34,551)

 

(35,743)

 

(41)

 

(35,784)

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

12/31/2015

         

Adjustment

          

Adjustment

    

 

 

 

Cost

 

to Fair Value

 

Fair Value

 

Cost

 

to Fair Value

 

Fair Value

Hedge Instruments

                        

Swap Contracts

  

 

(283,119)

 

(81,253)

 

(364,372)

 

153,812

 

(66,990)

 

86,822

Asset

 

 

5,976,340

 

40,718

 

6,017,058

 

7,072,924

 

57,829

 

7,130,753

CDI (Interbank Deposit Rates) (1) (2) (5)

 

1,622,075

 

559

 

1,622,634

 

1,778,699

 

4,376

 

1,783,075

Fixed Interest Rate - Real (2)

 

299,174

 

(10)

 

299,164

 

3,522,475

 

27,184

 

3,549,659

Indexed to Foreign Currency - Fixed
Interest - US Dollar (5)

 

89,510

 

217

 

89,727

 

93,682

 

790

 

94,472

Indexed to Foreign Currency - USD/BRL
US Dollar (5)

 

3,562,417

 

11,071

 

3,573,488

 

675,929

 

(10,904)

 

665,025

Indexed to Foreign Currency - Libor -
US Dollar (2) (4) (5)

 

12,606

 

241

 

12,847

 

610,661

 

1,962

 

612,623

Indexed to Foreign Currency - Euro (5)

 

320,899

 

28,423

 

349,322

 

355,809

 

34,347

 

390,156

Indexed to Foreign Currency - Fixed
Interest - YEN (3)

 

69,659

 

217

 

69,876

 

35,669

 

74

 

35,743

Liabilities

 

 

(6,259,459)

 

(121,971)

 

(6,381,430)

 

(6,919,112)

 

(124,819)

 

(7,043,931)

Indexed to Foreign Currency -
US Dollar (1) (5)

 

(1,208,463)

 

(56,173)

 

(1,264,636)

 

(1,026,611)

 

(55,892)

 

(1,082,503)

Indexed to Price and Interest Rates
Interest (2)

 

(611,024)

 

(20,589)

 

(631,613)

 

(800,174)

 

(30,982)

 

(831,156)

CDI (Interbank Deposit Rates) (3) (4)

 

(3,443,944)

 

(16,448)

 

(3,460,392)

 

(3,267,140)

 

(12,298)

 

(3,279,438)

Indexed to Foreign Currency - Libor -
US Dollar (4) (3)

 

(75,785)

 

(309)

 

(76,094)

 

(41,452)

 

(61)

 

(41,513)

Fixed Interest Rate - Real (5)

 

 

(920,243)

 

(28,452)

 

(948,695)

 

(1,783,735)

 

(25,586)

 

(1,809,321)

Hedge Object

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset

 

 

2,565,549

 

110,253

 

2,675,802

 

2,993,780

 

110,003

 

3,103,783

Lending Operation

 

 

1,926,833

 

89,696

 

2,016,529

 

2,124,623

 

94,104

 

2,218,727

Indexed to Foreign Currency - US Dollar

 

1,127,139

 

40,484

 

1,167,623

 

1,253,035

 

42,348

 

1,295,383

Indexed Indices of Prices and Interest

 

 

794,733

 

49,303

 

844,036

 

863,781

 

52,984

 

916,765

Fixed Interest Rate - Real

 

 

4,961

 

(91)

 

4,870

 

7,807

 

(1,228)

 

6,579

Available-for-Sale Securities

 

 

638,716

 

20,557

 

659,273

 

869,157

 

15,899

 

885,056

Debentures

 

 

405,035

 

10,334

 

415,369

 

492,837

 

10,578

 

503,415

Promissory Notes - PN

 

233,681

 

10,223

 

243,904

 

376,320

 

5,321

 

381,641

Liabilities

 

 

(3,606,717)

 

17,275

 

(3,589,442)

 

(3,512,568)

 

(8,383)

 

(3,520,951)

Foreign Borrowings

 

(3,572,030)

 

17,139

 

(3,554,891)

 

(3,476,825)

 

(8,342)

 

(3,485,167)

Indexed to Foreign Currency - US Dollar

 

 

(3,572,030)

 

17,139

 

(3,554,891)

 

(3,476,825)

 

(8,342)

 

(3,485,167)

Securities Issued Abroad

 

 

(34,687)

 

136

 

(34,551)

 

(35,743)

 

(41)

 

(35,784)

Eurobonds

 

 

(34,687)

 

136

 

(34,551)

 

(35,743)

 

(41)

 

(35,784)

                           

(1) Instruments whose hedge object are loan operations indexed in foreign currency - dollar with market value R$698,892 (12/31/2015 - R$766,242) Bank and R$1,167,623 (12/31/2015 - R$1,295,383) Consolidated and bonds and securities represented by debentures with fair value R$54,638 (12/31/2015 - R$59,615) Bank and Consolidated.

                           

(2) Instruments whose hedge objects are indexed loans in price indices and interest amounting R$844,036 (12/31/2015 - R$916,765) and securities represented by debentures with a market value R$360,731 (12/31/2015 - R$443,800) Bank and Consolidated.

                           

(3) Instruments whose hedge objects are obligations for securities abroad - eurobonds with fair value R$34,551 (12/31/2015 - R$35,784) Bank and Consolidated.

                           

(4) Instruments whose hedge objects are lending operations indexed pre fixed interest - Real with a market value of R$4,870 (12/31/2015 - R$6,579) Bank and Consolidated.

                           

(5) Instruments asset whose hedge objects are obligations for foreign borrowings indexed in foreign currency - US Dollar with fair value R$3,554,891 (12/31/2015 - R$3,485,167) and instrumenst liabilities whose hedge objects are securities represented by promissory notes indexed to fixed interest rates - Real with market value of R$243,904 (12/31/2015 - R$381,641) Bank and Consolidated.

                           

The effectiveness of these operations were in accordance with the Bacen rule 3,082/2002.

        
                           

46

 

b) Cash Flow Hedge

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

12/31/2015

           

Adjustment

          

Adjustment

    

 

 

 

 

Cost

 

to Fair Value

 

Fair Value

 

Cost

 

to Fair Value

 

Fair Value

Hedge Instruments

                        

Swap Contracts

 

 

 

75,920

 

(1,660)

 

74,260

 

(1,046,782)

 

(29,749)

 

(1,076,531)

Asset

 

 

 

4,105,818

 

147,684

 

4,253,502

 

7,274,825

 

121,414

 

7,396,239

Indexed to Foreign Currency -
Swiss Franc (1)

 

1,153,312

 

733

 

1,154,045

 

1,237,987

 

6,998

 

1,244,985

Indexed to Foreign Currency - Chile (2)

 

281,561

 

212

 

281,773

 

301,285

 

1,622

 

302,907

Indexed to Interest Rate - Real (3)

 

-

 

-

 

-

 

3,746,785

 

(13,670)

 

3,733,115

Indexed to Foreign Currency - Fixed
Interest - US Dollar (4) (7)

 

2,670,945

 

146,739

 

2,817,684

 

1,988,768

 

126,464

 

2,115,232

Liabilities

 

 

 

(4,029,898)

 

(149,344)

 

(4,179,242)

 

(8,321,607)

 

(151,163)

 

(8,472,770)

Indexed to Foreign Currency - Fixed
Interest - US Dollar (1) (2) (3) (4)

 

(1,492,794)

 

(868)

 

(1,493,662)

 

(6,580,306)

 

(17,767)

 

(6,598,073)

Fixed Interest Rate - Real (4)

 

 

 

(135,238)

 

(639)

 

(135,877)

 

(22,855)

 

(20)

 

(22,875)

CDI (Interbank Deposit Rates) (7)

 

 

 

(757,042)

 

(5,452)

 

(762,494)

 

-

 

-

 

-

Indexed to Foreign Currency - Fixed
Interest Euro (4)

 

(1,644,824)

 

(142,385)

 

(1,787,209)

 

(1,718,446)

 

(133,376)

 

(1,851,822)

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

12/31/2015

           

Adjustment

          

Adjustment

    

 

 

 

 

Cost

 

to Fair Value

 

Fair Value

 

Cost

 

to Fair Value

 

Fair Value

Hedge Instruments

                        

Swap Contracts

 

 

 

27,164

 

(4,958)

 

22,206

 

(1,115,948)

 

(35,494)

 

(1,151,442)

Asset

 

 

 

4,504,376

 

172,392

 

4,676,768

 

7,779,309

 

151,811

 

7,931,120

Indexed to Foreign Currency -
Swiss Franc (1)

 

1,153,312

 

733

 

1,154,045

 

1,237,987

 

6,998

 

1,244,985

Indexed to Foreign Currency - Chile (2)

 

281,561

 

212

 

281,773

 

301,285

 

1,622

 

302,907

Indexed to Interest Rate - Real (3)

 

-

 

-

 

-

 

3,746,785

 

(13,670)

 

3,733,115

Indexed to Foreign Currency -
Pre Dolar (4) (5) (7)

 

2,703,279

 

147,395

 

2,850,674

 

2,042,940

 

127,632

 

2,170,572

Indexed to Foreign Currency - Pre Euro (5)

366,224

 

24,052

 

390,276

 

450,312

 

29,229

 

479,541

Liabilities

 

 

 

(4,477,212)

 

(177,350)

 

(4,654,562)

 

(8,895,257)

 

(187,305)

 

(9,082,562)

Indexed to Foreign Currency -
Pre Dolar (1) (2) (3) (4)

 

(1,492,794)

 

(868)

 

(1,493,662)

 

(6,580,306)

 

(17,767)

 

(6,598,073)

Indexed to Interest Rate - Real (4)

 

(135,238)

 

(639)

 

(135,877)

 

(22,855)

 

(20)

 

(22,875)

CDI (Interbank Deposit Rates) (7)

 

 

 

(757,042)

 

(5,452)

 

(762,494)

 

-

 

-

 

-

Indexed to Foreign Currency - Pre Euro (4)

 

 

 

(1,644,824)

 

(142,385)

 

(1,787,209)

 

(1,718,446)

 

(133,376)

 

(1,851,822)

Indexed to Foreign Currency - Dolar (5)

 

(411,202)

 

(27,092)

 

(438,294)

 

(509,960)

 

(34,379)

 

(544,339)

Indexed to Foreign Currency - Real (5)

 

(36,112)

 

(914)

 

(37,026)

 

(63,690)

 

(1,763)

 

(65,453)

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

Notional

 

Notional

Hedge Instruments

                        

Future Contracts

 

 

 

 

 

 

 

 

 

47,857,367

 

72,798,063

Foreign Currency - Dollar (6)

 

 

 

 

 

 

 

 

 

47,857,367

 

72,798,063

 

47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

Bank

      

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Hedge Object - Cost

                        

Asset

 

 

 

 

 

 

 

32,673,185

 

37,217,417

 

33,268,906

 

37,251,860

Lending Operations

 

 

 

 

 

 

 

 

 

 

 

 

Import and Export Credit and Financing

 

 

 

 

 

31,221,030

 

35,743,885

 

31,221,030

 

35,743,885

Lending Operations

 

 

 

 

 

-

 

606,978

 

595,721

 

641,421

Securities

              

 

 

 

 

 

 

 

Available-for-Sale Securities - Promissory Notes - NP

 

 

 

619,469

 

-

 

619,469

 

-

Held to Maturity - Securities Foreign Debt Bonds

 

 

 

832,686

 

866,554

 

832,686

 

866,554

Liabilities

 

 

 

 

 

 

 

(703,664)

 

(1,995,118)

 

(703,664)

 

(1,995,118)

Eurobonds

 

 

 

 

 

 

 

(703,664)

 

(1,995,118)

 

(703,664)

 

(1,995,118)

                             

(1) Operations due April 12, 2016 (12/31/2015 - operations due April 12, 2016), whose object of "hedging" transactions are eurobonds.

                             

(2) Operation due April 13, 2016 (12/31/2015 - operation due April 13, 2016), whose object of "hedge" is an operation of eurobonds.

                             

(3) In Dezember 31, 2015 operations due March 18, 2016, whose object of "hedge" is an operation of eurobonds.

                             

(4) Operation due April 1, 2021 (12/31/2015 - operation due March 18, 2016 and April 1, 2021) which hedge objects its securities operation represented by title Brazilian External Debt Bonds and a credit operation.

                             

(5) Operations maturing between August, 2016 and June, 2021 (12/31/2015 - maturing between August, 2016 and June, 2021), whose objects "hedge"contracts are loans from lending institutions.

                             

(6) Operations maturing between April, 2016 to December, 2025 (12/31/2015 - operation maturing between January, 2016 to December, 2024) and the updated value of the instruments of R$31,188,283 (12/31/2015 - R$35,743,844 ), whose object of "hedge" are the loans - loan agreements and credit export and import.

                             

(7) Operations maturing between August 3, 2016 and March 17, 2017, whose objects "hedge" ist securities operation by title Promissory Notes - NP.

                             

In the Bank and Consolidated, between July and September 2014 operations were contracted to hedge accounting of cash flow with the object of hedge bank deposit certificates (CDB). In October, 2014 this structure was discontinued. The effect of marking to market the future contracts net of tax effects that was recognized in income in the first quarter of 2016 and that was highlighted in equity corresponds to a credit of R$904.

                             

In the Bank and Consolidated, the effect of marking to market of contracts swap and future corresponds to a debt of R$19,005 (12/31/2015 - R$345,373) and is recorded in equity, net of tax effects.

                             

The effectiveness of these operations were in accordance with the Bacen rule 3,082/2002 and no ineffective portions were found in the period to be accounted for.

                             

VI) Derivatives Pledged as Guarantee

                             

The guarantee margin transactions traded on the BM&FBovespa derivative financial instruments themselves and others is composed of government securities.

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Financial Treasury Bill - LFT

 

 

 

 

 

116,168

 

110,490

 

828,438

 

330,605

National Treasury Bill - LTN

 

 

 

 

 

7,506,814

 

8,757,097

 

7,506,814

 

8,757,097

National Treasury Notes - NTN

 

 

 

 

 

812,508

 

757,969

 

812,508

 

757,969

Total

 

 

 

 

 

 

 

8,435,490

 

9,625,556

 

9,147,760

 

9,845,671

                             

VII) Derivatives Recorded in Assets and Liabilities

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap Differentials Receivable (1)

 

 

 

 

 

10,177,423

 

16,334,414

 

12,573,051

 

22,101,593

Option Premiums to Exercise

 

 

 

 

 

402,095

 

814,423

 

470,864

 

862,972

Forward Contracts and Others

 

 

 

 

 

3,974,010

 

3,028,034

 

4,011,844

 

3,045,644

Total

 

 

 

 

 

 

 

14,553,528

 

20,176,871

 

17,055,759

 

26,010,209

Liabilities

                            

Swap Differentials Payable (1)

 

 

 

 

 

8,389,903

 

14,131,068

 

10,932,725

 

20,008,038

Option Premiums Launched

 

 

 

 

 

493,333

 

794,006

 

520,421

 

765,265

Forward Contracts and Others

 

 

 

 

 

2,840,006

 

2,106,358

 

2,843,424

 

2,109,656

Total

 

 

 

 

 

 

 

11,723,242

 

17,031,432

 

14,296,570

 

22,882,959

                             

(1) At Dezember 31, 2015, includes swaption operations.

                             

48

 

c) Financial Instruments - Sensitivity Analysis

                             

The risk management is focused on portfolios and risk factors pursuant to Bacen’s regulations and good international practices.

                             

The new rules of Basel III, disclosed on March 1, 2013; and in October, 2013 was the publication of new rules and revise launched in March 2013. The Implementation of the new rules follow a schedule in phase; thus allowing the application of the rules gradually until 2019. The new rules have been applied in October 2013 and remainder of January 1, 2014 .

                             

Financial instruments are segregated into trading and banking portfolios, as in the management of market risk exposure, according to the best market practices and the transaction classification and capital management criteria of the Basileia New Standardized Approach of Bacen. The trading portfolio consists of all transactions with financial instruments and products, including derivatives, held for trading, and the banking portfolio consists of core business transactions arising from the different Banco Santander business lines and their possible hedges. Accordingly, based on the nature of Banco Santander’s activities, the sensitivity analysis was presented for trading and banking portfolios.

                             

Banco Santander performs the sensitivity analysis of the financial instruments in accordance with requirements of CVM Instruction 475/2008, considering the market information and scenarios that would adversely affect the positions of the Bank.

                             

The table below summarizes the stress amounts generated by Banco Santander’s corporate systems, related to the trading and banking portfolio, for each one of the portfolio scenarios as of March 31, 2016.

                     

Trading Portfolio

Risk Factor

 

 

 

Description

 

 

 

 

 

Scenario 1

 

Scenario 2

 

Scenario 3

Interest Rate - Real

 

Exposures subject to Changes in Interest
Fixed Rate

 

(7,012)

 

(262,665)

 

(525,330)

Coupon Interest Rate

 

Exposures subject to Changes in Coupon
Rate of Interes Rate

 

(4,924)

 

(80,559)

 

(161,119)

Coupon - US Dollar

 

Exposures subject to Changes in Coupon
US Dollar Rate

 

(330)

 

(5,339)

 

(10,678)

Coupon - Other Currencies

 

Exposures subject to Changes in Coupon
Foreign Currency Rate

 

(24)

 

(10,932)

 

(21,865)

Foreign Currency

 

 

 

Exposures subject to Foreign Exchange

 

(4,183)

 

(104,587)

 

(209,175)

Eurobond/Treasury/Global

 

Exposures subject to Changes in Interest
Rate Negotiated Roles in International
Market

 

(2,174)

 

(20,208)

 

(40,417)

Inflation

 

 

 

Exposures subject to Change in Coupon
Rates of Price Indexes

 

(9,182)

 

(159,242)

 

(318,484)

Shares and Indexes

 

Exposures subject to Change in Shares Price

 

(472)

 

(11,799)

 

(23,598)

Others

 

 

 

Exposures not Meeting the Previous Settings

 

(15,124)

 

(605)

 

(1,210)

Total (1)

 

 

 

 

 

 

 

 

 

(43,425)

 

(655,936)

 

(1,311,876)

                             

(1) Amounts net of taxes.

                        
                             

Scenario 1: a shock of +10 base points on the interest curves and 1% to price changes (currency and share).

                             

Scenario 2: a shock of +25% and -25% in all risk factors, are considered the greatest losses per risk factor.

                             

Scenario 3: a shock of +50% and -50% in all risk factors, are considered the greatest losses per risk factor.

                             

Banking Portfolio

Risk Factor

 

 

 

Description

 

 

 

 

 

Scenario 1

 

Scenario 2

 

Scenario 3

Interest Rate - Real

 

Exposures subject to Changes in Interest
Fixed Rate

 

(104,765)

 

(3,189,462)

 

(6,032,225)

TR and Long-Term Interest Rate - (TJLP)

Exposures subject to Change in Exchange
TR and TJLP

 

(14,952)

 

(444,283)

 

(775,898)

Inflation

 

 

 

Exposures subject to Change in Coupon
Rates of Price Indexes

 

(1,029)

 

(15,558)

 

(29,301)

Coupon - US Dollar

 

Exposures subject to Changes in Coupon
US Dollar Rate

 

(493)

 

(59,559)

 

(103,692)

Coupon - Other Currencies

 

Exposures subject to Changes in Coupon
Foreign Currency Rate

 

(13,389)

 

(110,166)

 

(222,843)

Interest Rate Markets International

 

Exposures subject to Changes in Interest
Rate Negotiated Roles in International
Market

 

(5,903)

 

(154,249)

 

(287,681)

Foreign Currency

 

 

 

Exposures subject to Foreign Exchange

 

(1,091)

 

(27,266)

 

(54,532)

Total (1)

 

 

 

 

 

 

 

 

 

(141,622)

 

(4,000,543)

 

(7,506,172)

                             

(1) Amounts net of taxes.

                             

Scenario 1: a shock of +10 base points on the interest curves and 1% to price changes (currency).

                             

Scenario 2: a shock of +25% and -25% in all risk factors, are considered the greatest losses per risk factor.

                             

Scenario 3: a shock of +50% and -50% in all risk factors, are considered the greatest losses per risk factor.

                             

 

49

 

7. Interbank Accounts

  
                             

The amount of interbank accounts are composed of restricted deposits with the Bacen to meet compulsory obligations for demand deposits, savings deposits and time deposits, and payments and receipts pending settlement, represented by checks and other documents sent to clearinghouses (assets and liabilities position).

                             

8. Loan Portfolio and Allowance for Loan Losses

                             

a) Loan Portfolio

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Lending Operations

 

 

 

175,898,438

 

183,601,533

 

212,221,249

 

220,387,363

Loans and Discounted Receivables

 

 

 

94,496,486

 

99,603,331

 

100,830,576

 

105,216,623

Financing

 

 

 

37,674,246

 

41,028,183

 

67,662,967

 

72,200,721

Rural, Agricultural and Industrial Financing

 

 

 

6,353,622

 

6,064,652

 

6,353,622

 

6,064,652

Real Estate Financing

 

 

 

 

 

37,132,362

 

36,649,633

 

37,132,362

 

36,649,633

Securities Financing

 

 

 

 

 

60,927

 

58,896

 

60,927

 

58,896

Lending Operations Related to Assignment

 

 

 

180,795

 

196,838

 

180,795

 

196,838

Leasing Operations

 

 

 

 

 

24

 

26

 

2,945,460

 

3,023,463

Advances on Foreign Exchange Contracts (1) (Note 9)

 

4,520,641

 

4,552,495

 

4,520,641

 

4,552,495

Other Receivables (2)

 

 

 

 

 

26,351,528

 

30,826,630

 

28,673,114

 

33,119,414

Total

 

 

206,770,631

 

218,980,684

 

248,360,464

 

261,082,735

Current

 

 

105,174,245

 

116,270,117

 

127,878,714

 

139,493,848

Long-term

 

 

101,596,386

 

102,710,567

 

120,481,750

 

121,588,887

                             

(1) Advance on foreign exchange contracts are classified as a reduction of other obligations.

                             

(2) Comprise receivables for guarantees honored other receivables - others (granted to borrowers to purchase securities, assets, notes and receivable - Note 12) and income receivable on foreign exchange contracts (Note 9).

 

Sale or Transfer Operations of Financial Assets

                             

According to Resolution CMN 3,533/2008 updated with later norms, the lending operations with substantial retention of risks and benefits, started from January 1, 2012 to remain registered in the loan portfolio. For lending operations made ​​until December 31, 2011, regardless of the retention or transfer of substantial risks and benefits, financial assets were written off from the record of the original operation and the result recorded in the transfer to the appropriate result.

 

(i) With Substantial Transfer of Risks and Benefits

 

During the first quarter of 2016, operations were carried out credit assignment without recourse in the amount of R$22,911 (2015 - R$1,025,526) Bank and Consolidated and were recorded substantially in loans and discounted securities, classified as H risk level.

 

(ii) With Substantial Retention of Risks and Benefits

                             

On September, 2015 the Bank made assignment of receivables with recourse related to the Funded Participation operations (Export) in the amount of R$201,706 with maturity on April, 2019. On March 31, 2016 the present value of the divested operations is R$180,795 ( 12/31/2015 - R$196,631).

                             

On March 2013, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$47,485. On March 31, 2016, the present value of the divested operations is R$0 (12/31/2015 - R$207) (Note 26.e).

                             

On December 2011, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$688,821, which fall due until October 2041. On March 31, 2016, the present value of the divested operations is R$190,960 (12/31/2015 - R$202,114).

                             

The assignment operation was carried out with recourse clause, provided the buyback is compulsory in the following situations:

                             

- Contracts in default for a period exceeding 90 consecutive days;

                             

- Contracts subject to renegotiation;

                             

- Contracts subject to portability in accordance with CMN Resolution 3,401/2006; and

                             

- Contracts subject to intervention.

                             

The compulsory repurchase price will be calculated by unpaid balance of the loan due date at the time of its repurchase.

                             

From the date of transfer cash flows from operations will be paid directly to the assignee entity.

                             

 

50

 

b) Loan Portfolio by Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

Bank

      

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Overdue

 

 

 

 

 

 

 

12,055,393

 

8,950,031

 

12,873,495

 

9,704,502

Due to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Up to 3 Months

 

 

 

 

 

 

 

60,758,922

 

68,809,115

 

69,167,387

 

77,747,183

From 3 to 12 Months

 

 

 

 

 

 

44,415,323

 

47,461,002

 

58,711,327

 

61,746,665

Over 12 Months

 

 

 

 

 

 

 

89,540,993

 

93,760,536

 

107,608,255

 

111,884,385

Total

 

 

 

 

 

 

 

206,770,631

 

218,980,684

 

248,360,464

 

261,082,735

                             

c) Lease Portfolio Operations

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Gross Investment in Leasing Operations

 

 

 

 

 

28

 

30

 

3,518,801

 

3,608,045

Lease Receivables

 

 

 

 

 

16

 

17

 

2,311,460

 

2,341,921

Unrealized Residual Values (1)

 

 

 

 

 

12

 

13

 

1,207,341

 

1,266,124

Unearned Income on Lease

 

 

 

 

 

(14)

 

(15)

 

(2,288,976)

 

(2,316,861)

Offsetting Residual Values

 

 

 

 

 

(12)

 

(13)

 

(1,207,341)

 

(1,266,124)

Leased Assets

 

 

 

 

 

70,341

 

71,196

 

7,812,837

 

7,930,428

Accumulated Depreciation

 

 

 

 

 

(70,341)

 

(71,196)

 

(4,278,521)

 

(4,314,034)

Excess Depreciation

 

 

 

 

 

28,282

 

28,754

 

1,881,730

 

1,941,186

Losses on Unamortized Lease

 

 

 

 

 

-

 

-

 

212,792

 

198,044

Advances for Guaranteed Residual Value

 

 

 

 

 

(28,260)

 

(28,730)

 

(2,708,886)

 

(2,761,002)

Other Assets

 

 

 

 

 

 

 

-

 

-

 

3,024

 

3,781

Total of Lease Portfolio at Present Value

 

 

 

24

 

26

 

2,945,460

 

3,023,463

                             

(1) Guaranteed residual value of lease agreements, net of advances.

                             

Leasing unrealized financial income (lease income to appropriate related to minimum payments to receive) is R$4 (12/31/2015 - R$4) Bank and R$573,341 (12/31/2015 - R$584,582) Consolidated.

                             

On March 31, 2016 and December 31,2015, there were no individually material agreements or commitments for lease contracts.

                             

Report per Lease Portfolio Maturity of Gross Investment

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Overdue

 

 

 

 

 

 

 

8

 

5

 

29,899

 

34,430

Due to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Up to 1 Year

 

 

 

 

 

 

 

17

 

17

 

1,686,073

 

1,735,087

From 1 to 5 Years

 

 

 

 

 

3

 

8

 

1,792,408

 

1,829,120

Over 5 Years

 

 

 

 

 

 

 

-

 

-

 

10,421

 

9,408

Total

 

 

 

 

 

 

 

28

 

30

 

3,518,801

 

3,608,045

                             

Report per Lease Portfolio Maturity at Present Value

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Overdue

 

 

 

 

 

 

 

6

 

4

 

22,871

 

31,250

Due to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Up to 1 Year

 

 

 

 

 

 

 

16

 

16

 

1,579,780

 

1,621,055

From 1 to 5 Years

 

 

 

 

 

2

 

6

 

1,337,464

 

1,365,893

Over 5 Years

 

 

 

 

 

 

 

-

 

-

 

5,345

 

5,265

Total

 

 

 

 

24

 

26

 

2,945,460

 

3,023,463

                             

 

51

 

 

d) Loan Portfolio by Business Sector

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Private Sector

 

 

 

 

 

 

 

206,662,209

 

218,862,264

 

248,251,598

 

260,963,648

Industry

 

 

 

 

 

 

 

61,992,137

 

69,411,282

 

63,254,762

 

70,804,585

Commercial

 

 

 

 

 

 

 

23,760,919

 

24,983,818

 

26,494,809

 

28,223,339

Financial Institutions

 

 

 

 

 

2,402,270

 

2,278,592

 

2,408,629

 

2,285,315

Services and Other (1)

 

 

 

 

 

35,530,385

 

39,207,497

 

38,356,516

 

41,964,420

Individuals

 

 

 

 

 

 

 

80,479,562

 

80,533,024

 

114,956,129

 

114,773,641

Credit Cards

 

 

 

 

 

 

 

18,187,046

 

19,133,657

 

18,187,046

 

19,133,657

Mortgage Loans

 

 

 

 

 

 

 

26,527,324

 

25,931,863

 

26,527,324

 

25,931,863

Payroll Loans

 

 

 

 

 

 

 

10,357,230

 

10,313,617

 

15,537,111

 

14,656,085

Financing and Vehicles Lease

 

 

 

 

 

2,262,783

 

2,463,824

 

29,543,387

 

30,314,531

Others (2)

 

 

 

 

 

 

 

23,145,179

 

22,690,063

 

25,161,261

 

24,737,505

Agricultural

 

 

 

 

 

 

 

2,496,936

 

2,448,051

 

2,780,753

 

2,912,348

Public Sector

 

 

 

 

 

 

 

108,422

 

118,420

 

108,866

 

119,087

Federal

 

 

 

 

 

 

 

-

 

4,373

 

-

 

4,373

State

 

 

 

 

 

 

 

70,457

 

82,428

 

70,886

 

82,964

Municipal

 

 

 

 

 

 

 

37,965

 

31,619

 

37,980

 

31,750

Total

 

 

 

 

 

 

 

206,770,631

 

218,980,684

 

248,360,464

 

261,082,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes the activities of mortgage companies - business plan, transportation services, health, personal and others.

        
                             

(2) Includes personal loans, overdraft among others.

                             

e) Classification of Loan Portfolio and Respective Allowance for Loan Losses by Risk Level

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                           

03/31/2016

   

Minimum Allowance

  

 

 

 

 

Loan Portfolio

  

 

 

 

 

Allowance

Risk Level

 

Required (%)

 

Current

 

Past Due (1)

 

Total (3)

 

Required

 

Additional (2)

 

Total

AA

 

-

 

82,305,144

 

-

 

82,305,144

 

-

 

-

 

-

A

 

0.5%

 

73,210,872

 

-

 

73,210,872

 

366,055

 

268,418

 

634,473

B

 

1%

 

13,835,319

 

1,612,285

 

15,447,604

 

154,476

 

264,118

 

418,594

C

 

3%

 

9,227,132

 

2,453,159

 

11,680,291

 

350,409

 

777,293

 

1,127,702

D

 

10%

 

5,319,037

 

2,145,650

 

7,464,687

 

746,469

 

726,493

 

1,472,962

E

 

30%

 

3,362,866

 

1,699,825

 

5,062,691

 

1,518,807

 

-

 

1,518,807

F

 

50%

 

1,002,621

 

1,158,839

 

2,161,460

 

1,080,730

 

-

 

1,080,730

G

 

70%

 

698,236

 

908,992

 

1,607,228

 

1,125,060

 

-

 

1,125,060

H

 

100%

 

2,577,786

 

5,169,612

 

7,747,398

 

7,747,398

 

-

 

7,747,398

Total

 

 

 

191,539,013

 

15,148,362

 

206,687,375

 

13,089,404

 

2,036,322

 

15,125,726

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                           

12/31/2015

   

Minimum Allowance

  

 

 

 

 

Loan Portfolio

  

 

 

 

 

Allowance

Risk Level

 

Required (%)

 

Current

 

Past Due (1)

 

Total (3)

 

Required

 

Additional (2)

 

Total

AA

 

-

 

92,900,935

 

-

 

92,900,935

 

-

 

-

 

-

A

 

0.5%

 

75,092,017

 

-

 

75,092,017

 

375,460

 

275,777

 

651,237

B

 

1%

 

13,307,782

 

1,141,351

 

14,449,133

 

144,491

 

246,136

 

390,627

C

 

3%

 

8,543,221

 

2,370,428

 

10,913,649

 

327,410

 

708,080

 

1,035,490

D

 

10%

 

5,742,592

 

2,376,036

 

8,118,628

 

811,863

 

701,023

 

1,512,886

E

 

30%

 

1,518,582

 

3,607,332

 

5,125,914

 

1,537,774

 

-

 

1,537,774

F

 

50%

 

1,505,097

 

1,235,998

 

2,741,095

 

1,370,548

 

-

 

1,370,548

G

 

70%

 

641,647

 

882,406

 

1,524,053

 

1,066,837

 

-

 

1,066,837

H

 

100%

 

2,779,290

 

5,248,876

 

8,028,166

 

8,028,166

 

-

 

8,028,166

Total

 

 

 

202,031,163

 

16,862,427

 

218,893,590

 

13,662,549

 

1,931,016

 

15,593,565

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                           

03/31/2016

   

Minimum Allowance

  

 

 

 

 

Loan Portfolio

  

 

 

 

 

Allowance

Risk Level

 

Required (%)

 

Current

 

Past Due (1)

 

Total (3)

 

Required

 

Additional (2)

 

Total

AA

 

-

 

93,750,855

 

-

 

93,750,855

 

-

 

-

 

-

A

 

0.5%

 

96,003,755

 

-

 

96,003,755

 

480,021

 

298,442

 

778,463

B

 

1%

 

16,101,129

 

2,867,782

 

18,968,911

 

189,689

 

264,118

 

453,807

C

 

3%

 

10,086,059

 

3,619,131

 

13,705,190

 

411,156

 

777,293

 

1,188,449

D

 

10%

 

5,426,223

 

2,541,546

 

7,967,769

 

796,777

 

729,846

 

1,526,623

E

 

30%

 

3,417,046

 

1,904,511

 

5,321,557

 

1,596,467

 

-

 

1,596,467

F

 

50%

 

1,023,411

 

1,331,439

 

2,354,850

 

1,177,425

 

-

 

1,177,425

G

 

70%

 

710,124

 

1,032,895

 

1,743,019

 

1,220,113

 

-

 

1,220,113

H

 

100%

 

2,618,694

 

5,836,168

 

8,454,862

 

8,454,862

 

-

 

8,454,862

Total

 

 

 

229,137,296

 

19,133,472

 

248,270,768

 

14,326,510

 

2,069,699

 

16,396,209

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                           

12/31/2015

   

Minimum Allowance

  

 

 

 

 

Loan Portfolio

  

 

 

 

 

Allowance

Risk Level

 

Required (%)

 

Current

 

Past Due (1)

 

Total (3)

 

Required

 

Additional (2)

 

Total

AA

 

-

 

104,292,741

 

-

 

104,292,741

 

-

 

-

 

-

A

 

0.5%

 

98,552,525

 

-

 

98,552,525

 

492,765

 

305,782

 

798,547

B

 

1%

 

15,480,989

 

2,339,538

 

17,820,527

 

178,205

 

246,136

 

424,341

C

 

3%

 

9,548,811

 

3,374,325

 

12,923,136

 

387,694

 

708,080

 

1,095,774

D

 

10%

 

5,972,894

 

2,750,043

 

8,722,937

 

872,294

 

702,279

 

1,574,573

E

 

30%

 

1,552,423

 

3,839,656

 

5,392,079

 

1,617,624

 

-

 

1,617,624

F

 

50%

 

1,523,346

 

1,402,487

 

2,925,833

 

1,462,916

 

-

 

1,462,916

G

 

70%

 

651,083

 

1,016,922

 

1,668,005

 

1,167,603

 

-

 

1,167,603

H

 

100%

 

2,820,000

 

5,870,848

 

8,690,848

 

8,690,848

 

-

 

8,690,848

Total

 

 

 

240,394,812

 

20,593,819

 

260,988,631

 

14,869,949

 

1,962,277

 

16,832,226

                             

(1) Includes current and past-due operations.

                             

(2) The additional allowance is recognized based mainly on the expected realization of the loan portfolio, in addition to the current regulatory requirements.

                             

(3) The total loan portfolio includes the amount of R$83,256 (12/31/2015 - R$87,094) Bank and R$89,696 (12/31/2015 - R$94,104) Consolidated, related to the adjustment to fair value of loans that are hedged, registered under the article 5 Circular Letter 3,624 of Bacen of 26 December, 2013 and which are not contemplated in footnote levels of risk (Note 6.b.V.a).

                             

f) Changes in Allowance for Loan Losses

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

               

01/01 to

 

01/01 to

  

01/01 to

 

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Balance at Beginning

 

 

 

 

 

15,593,565

 

13,539,025

 

16,832,226

 

14,581,964

Allowances Recognized

 

 

 

 

 

2,275,068

 

2,568,985

 

2,616,743

 

2,859,795

Write-offs

 

 

 

 

 

 

 

(2,742,907)

 

(3,182,900)

 

(3,052,760)

 

(3,363,388)

Balance at End (1)

 

 

 

 

 

 

15,125,726

 

12,925,110

 

16,396,209

 

14,078,371

Current

 

 

 

 

 

 

 

3,958,233

 

4,471,357

 

4,503,289

 

4,997,067

Long-term

 

 

 

 

 

 

 

11,167,493

 

8,453,753

 

11,892,920

 

9,081,304

Recoveries Credits (2)

 

 

 

 

 

567,444

 

417,873

 

603,786

 

456,527

                             

(1) Includes R$12 (03/31/2015 - R$23) Bank and R$58,992 (03/31/2015 - R$65,022) Consolidated provision recorded for the leasing portfolio.

                             

(2) It is recorded as financial income in the items: lending operations and leasing operations. Includes results of assignment without recourse, related to the prior operations written off, as losses amounting the value to R$42,204 (2015 - R$51,468) Bank and Consolidated.

                             

g) Renegotiated Credits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

Bank

      

Consolidated

               

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Renegotiated Credits

 

 

 

 

 

12,879,327

 

12,655,907

 

12,946,034

 

12,720,615

Allowance for Loan Losses

 

 

 

 

 

(7,211,893)

 

(7,049,119)

 

(7,233,716)

 

(7,065,760)

Percentage of Coverage on Renegotiated Credits

 

 

 

56.0%

 

55.7%

 

55.9%

 

55.5%

                             

53

 

h) Loan Portfolio Concentration

                   

 

 

 

 

 

 

 

 

 

Consolidated

Loan Portfolio and Credit Guarantees (1), Securities (2)

  

03/31/2016

 

12/31/2015

and Derivatives Financial Instruments (3)

 

 

Risk

 

%

 

Risk

 

%

Biggest Debtor

 

 

7,349,447

 

2.2%

 

8,013,400

 

2.3%

10 Biggest

 

 

33,709,775

 

10.3%

 

38,590,250

 

11.0%

20 Biggest

 

 

47,231,748

 

14.4%

 

54,852,488

 

15.7%

50 Biggest

 

 

71,896,880

 

21.9%

 

82,548,719

 

23.6%

100 Biggest

 

 

94,850,681

 

28.8%

 

106,546,440

 

30.4%

                   

(1) Includes portions of loans to release the business plan.

                   

(2) Refers to debentures, promissory notes and certificates of real estate receivables - CRI.

                   

(3) Refers to credit of derivatives risk.

                   

9. Foreign Exchange Portfolio

                   

 

 

 

 

 

 

 

 

 

 

                 

Bank/Consolidated

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

Assets

                  

Rights to Foreign Exchange Sold

 

 

 

 

 

 

67,851,723

 

67,518,760

Exchange Purchased Pending Settlement

 

 

 

 

 

 

30,927,203

 

28,933,498

Advances in Local Currency

 

 

 

 

 

 

(606,875)

 

(184,119)

Income Receivable from Advances and Importing Financing (Note 8.a)

 

 

 

 

 

82,082

 

92,177

Currency and Documents Term Foreign Currency

 

 

 

 

 

 

50,414

 

47,223

Total

 

 

 

 

 

 

98,304,547

 

96,407,539

Current

 

 

 

 

 

 

96,189,949

 

94,642,636

Long-term

 

 

 

 

 

 

2,114,598

 

1,764,903

Liabilities

                  

Exchange Sold Pending Settlement

 

 

 

 

 

 

62,896,463

 

67,416,998

Foreign Exchange Purchased

 

 

 

 

 

 

30,176,022

 

26,465,492

Advances on Foreign Exchange Contracts (Note 8.a)

 

 

 

 

 

 

(4,520,641)

 

(4,552,495)

Others

 

 

 

 

 

 

65

 

70

Total

 

 

 

 

 

 

88,551,909

 

89,330,065

Current

 

 

 

 

 

 

85,655,648

 

84,694,924

Long-term

 

 

 

 

 

 

2,896,261

 

4,635,141

Memorandum Accounts

                 

Open Import Credits

 

 

 

 

 

 

654,181

 

774,383

Confirmed Export Credits

 

 

 

 

 

 

292,924

 

356,824

                   

10. Trading Account

                   

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Assets

 

 

 

 

 

 

 

 

 

Financial Assets and Pending Settlement Transactions

 

 

1,770,307

 

209,087

 

1,829,755

 

242,612

Clearinghouse Transactions

 

 

121

 

-

 

152,740

 

742

Debtors Pending Settlement

 

 

-

 

4,166

 

238,217

 

80,435

Stock Exchanges - Guarantee Deposits

 

 

15,967

 

402,323

 

15,967

 

402,323

Others (1)

 

 

583,502

 

971,787

 

583,502

 

971,787

Total

 

 

2,369,897

 

1,587,363

 

2,820,181

 

1,697,899

Current

 

 

2,369,897

 

1,587,363

 

2,820,181

 

1,697,899

Liabilities

                  

Financial Assets and Pending Settlement Transactions

 

 

1,086,192

 

2,316,183

 

1,087,836

 

2,316,252

Creditors Pending Settlement

 

 

6,813

 

7,656

 

454,102

 

112,945

Creditors for Loan of Shares

 

 

61,250

 

58,942

 

247,932

 

152,114

Clearinghouse Transactions

 

 

-

 

13,078

 

3,401

 

16,439

Records and Settlement

 

 

3,032

 

2,488

 

4,689

 

3,305

Acquisition and Subscription of Securities Arising Release

 

-

 

-

 

1,274

 

1,274

Others

 

 

19,241

 

-

 

19,431

 

192

Total

 

 

1,176,528

 

2,398,347

 

1,818,665

 

2,602,521

Current

 

 

1,116,660

 

2,340,787

 

1,758,797

 

2,544,961

Long-term

 

 

59,868

 

57,560

 

59,868

 

57,560

 

 

 

 

 

 

 

 

 

 

(1) Refers to guarantee the deposits made in derivative transactions with customers in the market.

                   

 

 

 

54

 

11. Tax Credits

                   

a) Nature and Origin of Recorded Tax Credits

                   

 

 

 

 

 

 

 

 

 

Bank

 

 

 

12/31/2015

 

Recognition

 

Realization

 

03/31/2016

Allowance for Loan Losses

 

 

11,129,702

 

1,197,338

 

(998,115)

 

11,328,925

Reserve for Legal and Administrative Proceedings - Civil

 

 

777,079

 

108,001

 

(30,555)

 

854,525

Reserve for Tax Risks and Legal Obligations

 

 

1,627,384

 

51,144

 

(112,650)

 

1,565,878

Reserve for Legal and Administrative Proceedings - Labor

 

875,489

 

59,773

 

(86,858)

 

848,404

Adjustment to Fair Value of Trading Securities and Derivatives (1)

 

9,913,918

 

1,343,190

 

(3,899,310)

 

7,357,798

Adjustment to Fair Value of Available-for-sale Securities
and Cash Flow Hedge (1)

 

 

2,486,103

 

-

 

(1,293,737)

 

1,192,366

Accrual for Pension Plan (2)

 

 

874,253

 

-

 

(27,547)

 

846,706

Profit Sharing, Bonuses and Personnel Gratuities

 

 

373,329

 

134,248

 

(381,171)

 

126,406

Other Temporary Provisions (3)

 

 

2,432,406

 

259,296

 

-

 

2,691,702

Total Tax Credits on Temporary Differences

 

 

30,489,663

 

3,152,990

 

(6,829,943)

 

26,812,710

Social Contribution Tax - Executive Act 2,158/2001

 

 

641,213

 

-

 

-

 

641,213

Balance of Recorded Tax Credits

 

 

31,130,876

 

3,152,990

 

(6,829,943)

 

27,453,923

Current

 

 

8,063,063

 

 

 

 

 

8,515,236

Long-term

 

 

23,067,813

 

 

 

 

 

18,938,687

                   

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

12/31/2015

 

Recognition

 

Realization

 

03/31/2016

Allowance for Loan Losses

 

 

12,013,011

 

1,464,192

 

(1,154,256)

 

12,322,947

Reserve for Legal and Administrative Proceedings - Civil

 

 

847,544

 

110,357

 

(33,965)

 

923,936

Reserve for Tax Risks and Legal Obligations

 

 

2,500,587

 

83,366

 

(117,386)

 

2,466,567

Reserve for Legal and Administrative Proceedings - Labor

 

909,010

 

62,257

 

(88,210)

 

883,057

Adjustment to Fair Value of Trading Securities and Derivatives (1)

 

10,006,970

 

1,366,470

 

(3,948,570)

 

7,424,870

Adjustment to Fair Value of Available-for-sale Securities
and Cash Flow Hedge (1)

 

 

2,609,682

 

-

 

(1,379,379)

 

1,230,303

Accrual for Pension Plan (2)

 

 

874,347

 

42

 

(27,637)

 

846,752

Profit Sharing, Bonuses and Personnel Gratuities

 

 

399,358

 

141,195

 

(405,718)

 

134,835

Other Temporary Provisions (3)

 

 

2,635,520

 

269,098

 

(34,975)

 

2,869,643

Total Tax Credits on Temporary Differences

 

 

32,796,029

 

3,496,977

 

(7,190,096)

 

29,102,910

Tax Loss Carryforwards

 

 

537,037

 

9,699

 

(220,144)

 

326,592

Social Contribution Tax - Executive Act 2,158/2001

 

 

655,359

 

-

 

-

 

655,359

Balance of Recorded Tax Credits

 

 

33,988,425

 

3,506,676

 

(7,410,240)

 

30,084,861

Current

 

 

8,786,456

 

 

 

 

 

9,152,740

Long-term

 

 

25,201,969

 

 

 

 

 

20,932,121

                   

(1) Includes tax credits IRPJ, CSLL, PIS and Cofins.

                  
                   

(2) Includes tax credits IRPJ and CSLL, adjustments on plan benefits to employees as mentioned Note 3.n.

        
                   

(3) Composed mainly by administrative provisions nature, collective agreements and escrow deposits.

        
                   

Banco Santander has tax credits not activated in the amount of R$989,689 (12/31/2015 - R$1,340,072) and R$1,232,479 (12/31/2015 - R$1,438,349) Consolidated.

                   

As established by CMN Resolution 3,059 /2002 , with the changes introduced by CMN Resolution 4,441 /2015 , Santander Brasil presented the reasons and rationales to support the accounting of deferred tax assets on its financial statements. On February 22, 2016 , the request for maintenance and the procedures for registration of the Bank's tax credit was approved by the Bacen.

                   

 

55

 


b) Expected Realization of Recorded Tax Credits

                         

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

               

Temporary Differences

      

Total

Year

 

 

 

IRPJ

 

CSLL

 

PIS/Cofins

 

CSLL 18%

 

Recorded

2016

 

 

 

3,569,610

 

2,810,173

 

215,298

 

-

 

6,595,081

2017

 

 

 

4,165,854

 

3,254,744

 

260,022

 

-

 

7,680,620

2018

 

 

 

4,158,400

 

3,173,011

 

113,728

 

-

 

7,445,139

2019

 

 

 

1,142,393

 

736,078

 

132,256

 

113,059

 

2,123,786

2020

 

 

 

1,114,674

 

726,886

 

130,885

 

115,461

 

2,087,906

2021 to 2023

 

 

 

413,549

 

243,357

 

6,105

 

412,693

 

1,075,704

2024 to 2025

 

 

 

221,945

 

175,552

 

-

 

-

 

397,497

2026

 

 

 

30,349

 

17,841

 

-

 

-

 

48,190

Total

 

 

 

14,816,774

 

11,137,642

 

858,294

 

641,213

 

27,453,923

                         

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

 

Temporary Differences

  

Tax Loss

      

Total

Year

 

IRPJ

 

CSLL

 

PIS/Cofins

 

Carryforwards

 

CSLL 18%

 

Recorded

2016

 

3,790,194

 

2,984,707

 

218,340

 

56,280

 

14,146

 

7,063,667

2017

 

4,513,474

 

3,530,301

 

264,078

 

48,440

 

-

 

8,356,293

2018

 

4,771,122

 

3,626,835

 

115,324

 

36,962

 

-

 

8,550,243

2019

 

1,211,889

 

778,368

 

133,033

 

83,463

 

113,059

 

2,319,812

2020

 

1,143,773

 

742,684

 

131,662

 

39,858

 

115,461

 

2,173,438

2021 to 2023

 

431,710

 

253,205

 

6,299

 

59,331

 

412,693

 

1,163,238

2024 to 2025

 

228,416

 

179,304

 

-

 

2,258

 

-

 

409,978

2026

 

30,350

 

17,842

 

-

 

-

 

-

 

48,192

Total

 

16,120,928

 

12,113,246

 

868,736

 

326,592

 

655,359

 

30,084,861

                         

Due to differences between accounting, tax and corporate, expected realization of tax credits should not be taken as indicative of future net income.

                         

c) Present Value of Tax Credits

                         

The present value of recorded tax credits is R$23,095,707 (12/31/2015 - R$25,698,102) Bank and R$25,313,031 (12/31/2015 - R$27,995,682) Consolidated, the present value was calculated taking into account the expected realization of temporary differences, tax losses carryforwards, negative CSLL bases, Social Contribution tax at the rate of 18% (Provisional Act 2,158/2001) and the average funding rate, projected for the corresponding periods.

                         

12. Other Receivables - Others

                         

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Notes and Credits Receivable (Note 8.a)

 

 

 

 

 

 

 

 

 

 

 

 

Credit Cards

 

 

 

 

 

13,800,766

 

14,912,110

 

13,848,612

 

14,945,844

Receivables (1)

 

 

 

 

 

12,146,723

 

15,547,177

 

14,419,735

 

17,805,112

Rural Product (CPR)

 

 

 

 

 

190,051

 

175,258

 

190,051

 

175,258

Escrow Deposits for

 

 

 

 

 

 

 

 

 

 

 

 

Tax Claims

 

 

 

 

 

4,772,907

 

4,654,395

 

6,835,530

 

6,618,394

Labor Claims

 

 

 

 

 

1,638,018

 

1,619,546

 

1,691,489

 

1,672,187

Others

 

 

 

 

 

991,597

 

950,784

 

1,346,584

 

1,336,112

Contract Guarantees - Former Controlling Stockholders (Note 23.i)

 

712,429

 

702,758

 

800,649

 

789,973

Recoverable Taxes

 

 

 

 

 

2,602,360

 

2,281,218

 

3,080,475

 

2,831,148

Receivables - Buyer Services

 

 

 

 

 

10,903,704

 

11,788,451

 

10,903,704

 

11,788,451

Reimbursable Payments

 

 

 

 

 

141,175

 

157,099

 

147,948

 

163,820

Salary Advances/Others

 

 

 

 

 

183,780

 

70,033

 

228,195

 

99,794

Debtors for Purchase of Assets (Note 8.a)

 

 

 

89,831

 

72,213

 

90,559

 

73,328

Receivable from Affiliates (Note 26.e)

 

 

 

 

 

774,191

 

756,216

 

769,824

 

753,767

Others

 

 

 

 

 

1,057,123

 

1,118,887

 

1,772,953

 

1,859,132

Total

 

 

 

 

 

50,004,655

 

54,806,145

 

56,126,308

 

60,912,320

Current

 

 

 

 

 

33,161,413

 

38,919,702

 

35,789,073

 

42,030,853

Long-term

 

 

 

 

 

16,843,242

 

15,886,443

 

20,337,235

 

18,881,467

(1) It consists of operations with credit assignment characteristics substantially composed of "Confirming" operations with companies subject to credit risk and analysis of loan losses by segment in accordance with the bank risk policies.

56

 

13. Non-Current Assets Held for Sale

                   

On September 30, 2014 based on the sale plan, investments in Wind Energy entities were transferred for this heading (Note 15), whose current condition is highly likely; as approved by the Directors of Banco Santander, in compliance with required by CPC 31. On March 23, 2015, Santander Participações S.A. (Santander Participações) sold its entire stake in Santos Energy Participações S.A. (Santos Energia) to Inversiones Global Capital, S.A., a company indirectly controlled by Santander Spain, in the total amount of R$127,012. On the same date, Santander Participações sold all of its interest in the Special Purpose Companies Gestamp Eólica Serra de Santana S.A., Gestamp Eólica Paraíso S.A., Gestamp Eólica Lanchinha S.A., Gestamp Eólica Seridó S.A. and Gestamp Eólica Lagoa Nova S.A. to ICG do Brazil S.A., a company indirectly controlled by Santander Spain, in the total amount of R$120,000 (Note 37.d). On March 31, 2016, the total of non-current assets held for sale is R$488,583 (12/31/2015 - R$488,583) and the values of liabilities directly associated with non-current assets held for sale are R$1,197 (12/31/2015 - R$1,197).

                   

14. Dependence Information and Foreign Subsidiary

                   

Branch:

                   

The Grand Cayman Agency is a branch of Banco Santander, and is not a legal company incorporated separately. Its operates in the Cayman Islands under the Category "B" banking license. In the normal course of business, the branch has significant transactions with the parent and its affiliates. All transactions are made and recorded under the direction of Head Office in which the branch is economically dependent.

                   

The Grand Cayman branch is licensed by the Law of Banks and Trust Companies, or "Law of Banks and Trust Companies" as a Bank of Category "B" and is duly registered as a Foreign Company by the Officer Societies Registration in Grand Cayman in the Cayman Islands. The branch therefore is duly authorized to perform banking business in the Cayman Islands and are currently involved in the funding business in the banking market and the international capital to provide credit lines to us, which are then extended to our customers for financing working capital and foreign trade. Its also receives foreign currency deposits of corporate clients and individuals and grants credit to brazilian and foreign clients, mainly to support trade with Brazil.

                   

Subsidiary:

                   

Banco Santander has a independent subsidiary in Spain, Santander Brasil, Establecimiento Financiero de Credito, S.A. (Santander Brasil EFC), to complement the foreign trade strategy for corporate clients - large brazilian companies and their operations abroad - and offer products and financial services through an offshore entity that is not established in a jurisdiction with favored taxation.

                   

The summarized financial position of dependency and foreign subsidiary, converted at the exchange rate prevailing at balance sheet date in the financial statements include:

 

 

 

 

 

 

 

 

 

 

     

Grand Cayman Branch

     

Santander Brasil EFC

     

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Assets

 

 

84,914,844

 

98,673,203

 

3,516,113

 

4,368,077

Current and Long-term Assets

 

 

84,914,829

 

98,673,182

 

3,515,770

 

4,367,630

Cash

 

 

546,044

 

462,232

 

164,026

 

1,622,751

Interbank Investments

 

 

14,088,543

 

18,918,580

 

1,459,404

 

-

Securities and Derivatives Financial Instruments

 

 

35,083,235

 

38,475,623

 

102,077

 

789,572

Lending Operations (1)

 

 

27,071,834

 

32,655,152

 

1,593,283

 

1,713,434

Foreign Exchange Portfolio

 

 

7,097,082

 

6,428,499

 

-

 

-

Others

 

 

1,028,091

 

1,733,096

 

196,980

 

241,873

Permanent Assets

 

 

15

 

21

 

343

 

447

Liabilities

 

 

84,914,844

 

98,673,203

 

3,516,113

 

4,368,077

Current and Long-term Liabilities

 

 

46,976,068

 

56,293,137

 

316,505

 

1,038,284

Deposits and Money Market Funding

 

 

10,468,882

 

10,074,180

 

38,512

 

-

Funds from Acceptance and Issuance of Securities (3)

 

 

5,805,304

 

12,981,206

 

-

 

-

Borrowings (2)

 

 

21,222,550

 

23,744,735

 

-

 

-

Foreign Exchange Portfolio

 

 

7,300,899

 

6,467,055

 

-

 

-

Others

 

 

2,178,433

 

3,025,961

 

277,993

 

1,038,284

Deferred Income

 

 

303

 

491

 

19,158

 

20,997

Stockholders' Equity

 

 

37,938,473

 

42,379,575

 

3,180,450

 

3,308,796

     

 

 

 

 

 

 

 

     

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Result

 

 

376,296

 

112,344

 

11,627

 

12,267

                   

(1) Refers mainly to export financing operations.

                   

(2) Borrowings abroad regarding financing lines to exports and imports and other lines of credit.

 

(3) The variation mainly refers to liquidations of eurobonds during the first quarter 2016.

 

57

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

   

In thousands of Brazilian Real - R$, unless otherwise stated

 

15. Investments in Affiliates and Subsidiaries

                       

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

       

Quantity of Shares or Quotas Owned

        
       

Directly or Indirectly (in Thousands)

      

Direct

         

Common Shares

  

Preferred

  

Direct

  

and Indirect

Investments

 

 

Activity

 

and Quotas

 

Shares

 

Participation

 

Participation

Controlled by Banco Santander

                     

Santander Leasing S.A. Arrendamento Mercantil (Santander Leasing) (15)

  

 

Leasing

 

11,043,798

 

-

 

78.57%

 

99.99%

Santander Brasil Administradora de Consórcio Ltda. (Santander Brasil Consórcio)

 

Buying Club

 

95,349

 

-

 

100.00%

 

100.00%

Banco Bandepe S.A. (Banco Bandepe)

 

 

Bank

 

2,184

 

-

 

100.00%

 

100.00%

Banco RCI Brasil S.A. (Current Corporate Name of Companhia de Arrendamento
Mercantil RCI Brasil (RCI Brasil Leasing)) (10) (16)

 

Bank

 

81

 

81

 

39.89%

 

39.89%

Aymoré Crédito, Financiamento e Investimento S.A. (Aymoré CFI)

 

 

Financial

 

287,706,670

 

-

 

100.00%

 

100.00%

Santander Corretora de Câmbio e Valores Mobiliários S.A. (Santander CCVM)

 

 

Broker

 

14,067,673

 

14,067,673

 

99.99%

 

100.00%

Santander Microcrédito Assessoria Financeira S.A (Santander Microcrédito)

 

 

Microcredit

 

43,129,918

 

-

 

100.00%

 

100.00%

Santander Brasil Advisory Services S.A. (Santander Brasil Advisory)

 

 

Other Activities

 

1,323

 

-

 

96.52%

 

96.52%

Santander Participações

 

 

Holding

 

4,597

 

-

 

100.00%

 

100.00%

Getnet Adquirencia e Serviços para Meios de Pagamento S.A. (Getnet S.A.) (7) (9)

 

Other Activities

 

61,565

 

-

 

88.50%

 

88.50%

Sancap Investimentos e Participações S.A. (Sancap) (13)

 

 

Holding

 

12,728,211

 

-

 

100.00%

 

100.00%

Santander S.A. Serviços Técnicos, Administrativos e de Corretagem
de Seguros (Santander Serviços)

 

Insurance Broker

 

174,360,451

 

-

 

60.65%

 

60.65%

Mantiq Investimentos Ltda. (Mantiq)

 

 

Other Activities

 

4,800

 

-

 

100.00%

 

100.00%

Santander Brasil EFC

 

 

Financial

 

75

 

-

 

100.00%

 

100.00%

Atual Companhia Securitizadora de Créditos Financeiros (11)

 

 

Securitization

 

-

 

-

 

100.00%

 

100.00%

58

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

       

Quantity of Shares or Quotas Owned

        
       

Directly or Indirectly (in Thousands)

      

Direct

         

Common Shares

  

Preferred

  

Direct

  

and Indirect

Investments

    

Activity

  

and Quotas

  

Shares

  

Participation

  

Participation

Controlled by Aymoré CFI (4)

 

 

 

 

 

 

 

 

 

 

 

Super Pagamentos e Administração de Meios Eletrônicos S.A. (Super) (4)

 

 

Other Activities

 

40,000

 

-

 

-

 

100.00%

Banco Bonsucesso Consignado S.A. (Banco Bonsucesso Consignado)

 

 

Bank

 

210,000

 

-

 

-

 

60.00%

Controlled by Sancap

                      

Santander Capitalização S.A. (Santander Capitalização)

 

 

Capitalization

 

64,615

 

-

 

-

 

100.00%

Evidence (3)

 

 

Private Pension

 

12,591,172

 

-

 

-

 

100.00%

Controlled by Santander Serviços

      

 

 

 

 

 

 

 

 

Webcasas S.A.

 

 

Other Activities

 

24,500

 

-

 

-

 

100.00%

Controlled by Webmotors S.A. (2) (6)

                      

Virtual Motors Páginas Eletrônicas Ltda. - ME (Virtual Motors)

    

Other Activities

 

1

 

-

 

-

 

100.00%

Jointly Controlled Companies by Banco Santander

 

 

 

 

 

 

 

 

 

 

 

Cibrasec Companhia Brasileira de Securitização (Cibrasec) (1)

 

 

Securitization

 

9

 

-

 

13.64%

 

13.64%

Norchem Participações e Consultoria S.A. (Norchem Participações)

 

 

Other Activities

 

950

 

-

 

50.00%

 

50.00%

Estruturadora Brasileira de Projetos S.A. - EBP (EBP) (1)

 

 

Other Activities

 

3,859

 

2,953

 

11.11%

 

11.11%

Campo Grande Empreendimentos

 

 

Other Activities

 

255

 

-

 

25.32%

 

25.32%

Jointly Controlled Companies by Santander Serviços

 

 

 

 

 

 

 

 

 

 

 

Webmotors S.A. (2) (6)

 

 

Other Activities

 

366,182,676

 

-

 

-

 

70.00%

TecBan - Tecnologia Bancária S.A. (TecBan)

 

 

Other Activities

 

743,944

 

-

 

-

 

19.81%

Controlled by Getnet S.A (7) (9)

                    

Auttar HUT Processamento de Dados Ltda. (Auttar HUT)

 

 

Other Activities

 

3,865

 

-

 

-

 

100.00%

Integry Tecnologia e Serviços A.H.U Ltda. (Integry Tecnologia)

 

 

Other Activities

 

1,276

 

-

 

-

 

100.00%

Toque Fale Serviços de Telemarketing Ltda. (Toque Fale)

 

 

Other Activities

 

6,050

 

-

 

-

 

100.00%

Izettle do Brasil S.A.

 

 

Other Activities

 

5,300

 

-

 

-

 

50.00%

Controlled by TecBan

                     

Tbnet Comércio Locação e Administração Ltda. (Tbnet) (11)

 

 

Other Activities

 

75,504

 

-

 

-

 

100.00%

Controlled by Tebnet

                      

Tbforte Segurança e Transporte de Valores Ltda. (Tbfort) (17)

 

 

Other Activities

 

70,820

 

-

 

-

 

100.00%

Controlled by Banco Bonsucesso Consignado

                     

BPV Promotora de Vendas e Cobrança Ltda.

 

 

Other Activities

 

6,950

 

-

 

-

 

100.00%

Bonsucesso Tecnologia Ltda. (Current Corporate Name of BSI Informática Ltda.) (12)

 

Other Activities

 

450

 

-

 

-

 

100.00%

Affiliate

                      

Norchem Holdings e Negócios S.A. (Norchem Holdings)

 

 

Other Activities

 

1,679

 

-

 

21.75%

 

21.75%

 

59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

Adjusted

  

Net Income (Loss)

                
     

Stockholders'

 

Adjusted

 

Investments Value

      

Equity Accounting Results

     

Equity

  

01/01 to

          

01/01 to

  

01/01 to

 

 

 

03/31/2016

 

03/31/2016

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

03/31/2015

Controlled by Banco Santander

                         

Santander Leasing (15)

 

 

5,586,706

 

78,523

 

4,389,701

 

4,269,099

 

61,699

 

151,412

Santander Brasil Consórcio

 

 

111,804

 

5,988

 

111,804

 

169,816

 

5,988

 

4,310

Banco Bandepe

 

 

2,971,810

 

49,520

 

2,971,810

 

3,195,872

 

49,520

 

74,488

Banco RCI Brasil S.A. (Current Corporate Name of RCI Brasil Leasing) (10)(16)

 

 

1,312,165

 

(39,225)

 

523,435

 

-

 

(15,648)

 

-

Aymoré CFI

 

 

1,321,204

 

(79,943)

 

1,321,186

 

1,801,193

 

(79,960)

 

147,755

CFI RCI Brasil (16)

 

 

-

 

-

 

-

 

539,083

 

-

 

23,943

Santander Securities Services Brasil DTVM S.A. (8)

 

 

-

 

-

 

-

 

-

 

-

 

30,387

Santander CCVM

 

 

495,067

 

9,154

 

495,067

 

485,913

 

9,154

 

31,265

Santander Microcrédito

 

 

18,900

 

66

 

18,900

 

23,834

 

66

 

355

Santander Brasil Advisory

 

 

14,787

 

308

 

14,273

 

13,976

 

297

 

324

Santander Participações

 

 

1,383,776

 

(16,740)

 

1,383,776

 

1,398,518

 

(16,740)

 

10,610

Getnet S.A. (7) (9)

 

 

1,456,683

 

73,101

 

1,131,696

 

1,178,586

 

25,960

 

33,045

Sancap (13)

 

 

429,340

 

32,666

 

296,219

 

336,013

 

32,666

 

7,483

Santander Serviços

 

 

661,138

 

56,013

 

397,513

 

363,989

 

33,524

 

24,845

Mantiq

 

 

7,798

 

2,467

 

7,798

 

7,596

 

2,467

 

837

Santander Brasil EFC

 

 

3,180,450

 

11,627

 

3,180,450

 

3,308,796

 

11,627

 

12,267

Controlled by Aymoré CFI (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

Super (4)

 

 

27,355

 

(1,972)

 

-

 

-

 

-

 

-

Banco Bonsucesso Consignado

   

601,929

 

(7,558)

 

-

 

-

 

-

 

-

Controlled by Sancap

 

 

 

 

 

 

 

 

 

 

 

 

 

Santander Capitalização

 

 

68,506

 

22,234

 

-

 

-

 

-

 

-

Evidence (3)

 

 

256,671

 

38,197

 

-

 

-

 

-

 

-

Controlled by Santander Serviços

 

 

 

 

 

 

 

 

 

 

 

 

 

Webcasas S.A.

 

 

22,391

 

416

 

-

 

-

 

-

 

-

 

60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

Adjusted

  

Net Income (Loss)

                
     

Stockholders'

 

Adjusted

 

Investments Value

      

Equity Accounting Results

     

Equity

  

01/01 to

          

01/01 to

  

01/01 to

 

 

 

03/31/2016

 

03/31/2016

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

03/31/2015

Controlled by Webmotors S.A. (2) (6)

                          

Virtual Motors

 

 

476

 

(223)

 

-

 

-

 

-

 

-

Jointly Controlled Companies by Banco Santander

 

 

 

 

 

 

 

 

 

 

 

 

 

Cibrasec (1)

 

 

74,091

 

(765) 

 

10,103

 

10,325

 

(104)

 

13

Norchem Participações

 

 

48,308

 

978

 

24,154

 

23,665

 

489

 

438

EBP (1)

 

 

55,085

 

(5,186)

 

6,121

 

6,697

 

(576)

 

(1,644)

Jointly Controlled Companies by Santander Serviços

 

 

 

 

 

 

 

 

 

 

 

 

 

Webmotors S.A. (2) (6)

 

 

250,834

 

7,799

 

-

 

-

 

-

 

-

TecBan

 

 

395,240

 

20,166

 

-

 

-

 

-

 

-

Controlled by Getnet S.A. (7) (9)

 

 

 

 

 

 

 

 

 

 

 

 

 

Auttar HUT

 

 

10,989

 

495

 

-

 

-

 

-

 

-

Integry Tecnologia

 

 

(135)

 

(37)

 

-

 

-

 

-

 

-

Toque Fale

 

 

1,077

 

106

 

-

 

-

 

-

 

-

Izetlle do Brasil S.A.

 

 

(6,650)

 

(1,113)

 

-

 

-

 

-

 

-

Controlled by TecBan

                         

Tbnet (11)

 

 

42,145

 

(6,777)

 

-

 

-

 

-

 

-

Controlled by Tebnet

                          

Tbforte (17)

 

 

39,511

 

(6,981)

 

-

 

-

 

-

 

-

Controlled by Banco Bonsucesso Consignado

 

 

 

 

 

 

 

 

 

 

 

 

 

BPV Promotora de Vendas e Cobrança Ltda.

 

 

8,808

 

(1,445)

 

-

 

-

 

-

 

-

Bonsucesso Tecnologia Ltda. (Current Corporate Name of BSI Informática Ltda.) (12)

 

 

12,340

 

2,305

 

-

 

-

 

-

 

-

Affiliate

                          

Norchem Holdings

 

 

91,046

 

1,376

 

19,803

 

19,503

 

299

 

308

Others

 

 

-

 

-

 

289

 

237

 

10,975

 

-

Total Bank

 

 

 

 

 

 

16,304,098

 

17,152,711

 

131,703

 

552,441

Affiliate

                          

Norchem Holdings

 

 

91,046

 

1,376

 

19,803

 

19,503

 

299

 

308

Others (14)

 

 

-

 

-

 

128,887

 

32,244

 

-

 

321

Total Consolidated

 

 

 

 

 

 

148,690

 

51,747

 

299

 

629

 

61

 

(1) Although the participations was less than 20%, the Bank exercises control over the entity together with other major stockholders' through a stockholders' agreement where no business decision can be taken by a single shareholder.

                                         

(2) Although participation exceeds 50%, in accordance with the shareholders' agreement, the control is shared by Santander Serviços and Carsales.com. Investments PTY LTD (Carsales).

                                         

(3) On January, 29th, 2015 was approved by Susep the transfer of Fund Portfolio Guarantee Benefit (FPGB) of Zurich Santander Brasil Seguros e Previdência S.A. to Evidence. On February, 2nd, 2015 the assets and reserves of the said Portfolio were transferred to be managed by Evidence (Note 22). At the Extraordinary Shareholders' Meeting held on December, 23rd, 2015 was approved the increase in share capital by Sancap in the amount of R$65,000 from the current R$185,000 to R$250,000 through the issue of 3,653,145,728 new shares, from 8,938,026,072 stocks to 12,591,171,800 all common shares with no par value.

                                         

(4) On January 4, 2016, Aymoré CFI informed the owners of the shares representing the remaining 50% of Super´s total voting capital its decision to exercise the call option for the acquisition of such shares, for a value of approximately R$113 million. The transaction was concluded on March 10, 2016 (Note 37.b).

                                         

(5)The capital of the Company is R$100.00 composed of one hundred (100) common shares with no par value.

                                         

(6) The Idea Produções e Design Ltda - ME and KM Locanet Ltda - ME (Compre Auto) merged into Webmotors S.A. on April 30, 2015 (Note 37.d).

                                         

(7) Go Pay Comércio e Serviços e Tecnologia da Informação Ltda. merged into Getnet S.A. on April 30, 2015 (Note 37.d).

                                         

(8) Investment sold in August, 2015 (Note 37.d).

                                         

(9) Because the end of its duration term, Pos Movil was dissolved as published note in the Diário Oficial De La Republica de Chile on August, 21, 2015.

                                         

(10) At the ESM held on July, 21st, 2015 was approved the Company's transformation into a Multiple Bank, with investment portfolios, leasing and credit, financing and investment and also the change of company name of Companhia de Arrendamento Mercantil RCI Brasil to Banco RCI Brasil S.A. This process was approved by the Central Bank of Brazil on October, 28th, 2015.

                                         

(11) In Partnership Meeting held on October, 5th, 2015 was approved the increase in the share capital in the amount of R$26,231 from the current R$11,156 to R$37,387 through the issue of 26,231 thousand of quotes, in the nominal value of R$1.00 (one Real) each one, whose increase was paid on the same date in currency of the country. In Partnership Meeting held on February, 2016 was approved the increase in the share capital in the amount of R$30,787 from the current R$30,387 to R$68,174 through the issue of 30,787 thousand of quotes, in the nominal value of R$1.00 (one Real) each one, whose increase was paid on the same date in currency of the country.

                                         

(12) In Partnership Meeting held on October August, 6th, 2015 was approved the change of company name of BSI Informática Ltda. to Bonsucesso Tecnologia Ltda.

                                         

(13) The EGM of December 23, 2015 was approved an increase in capital of R$65,000 and the capital from the current R$135,089 to R$200,089, through the issuance of 1,477,036,526 new common shares, from 11,251,174,951 shares to 12,728,211,477 common shares, the new shares were fully subscribed and paid in local currency by the Banco Santander.

                                         

(14) Includes the net value of the goodwill of R$30,425 (12/31/2015 - R$31,988) refered to the conclusion of the Purchase Price Allocation (PPA) on the acquisition of Bonsucesso by Aymoré CFI and R$98,207 refered to the goodwill on the acquisition of the shares representing the remaining 50% of the voting share capital of Super (Note 37.b).

                                         

15) The Banco Santander repurchased 1,639 minority shares as the sale agreement of purchase and sale shares on March, 2016.

                                         

(16) The EGM of January 29, 2016 approved the merger of RCI Brasil pelo Banco RCI Brasil S.A., under "Private Instrument of Protocol and Justification of Merger of Companhia de Crédito, Financiamento e Investimento RCI Brasil pelo Banco RCI Brasil S.A." celebrated on the same date. The merger resulted in the increase of the capital of Banco RCI Brasil S.A. in the amount of R$537,073 through the issuance of 160 thousand new registered shares (39 thousand common shares and 121 thousand preferred shares), increasing the capital of R$448,152 to R$985,225. The 243 thousand shares of capital stock of the Banco RCI Brasil S.A. held by RCI Brasil and the new shares issued attributed to its current shareholders in proportion to their current share. With this process the interest previously held by RCI Brasil went to Banco Santander.

                                         

(17) At a Shareholders Meeting held in January 2016, was approved the capital increase in the amount of R$38,940, from the current R$7,817 to R$46,757, with the issuance of 38,940 thousand new shares with a nominal value of R$1, 00 (one Real) each, whose increase was paid on the same date in the currency of the country. At a Shareholders Meeting in February 2016 approved the capital increase of R$15,963, from the current R$46,757 to R$62,720 through the issuance of 15,963 thousand new shares with a nominal value of R$1.00 (one Real) each, whose increase was paid on the same date in the currency of the country. At a Shareholders meeting in March 2016, it was approved the capital increase of R$8,100, from the current R$62,720 to R$70,820 through the issuance of 8,100 thousand new shares with a nominal value of R$1.00 (one real) each, whose increase was paid on the same date in the currency of the country.

 

62

 

                             

16. Fixed Assets

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                       

03/31/2016

  

12/31/2015

 

 

 

 

 

 

 

 

Cost

 

Depreciation

 

Net

 

Net

Real Estate

 

 

 

 

 

2,549,732

 

(595,578)

 

1,954,154

 

1,953,964

Land

 

 

 

 

 

663,830

 

-

 

663,830

 

664,289

Buildings

 

 

 

 

 

1,885,902

 

(595,578)

 

1,290,324

 

1,289,675

Others Fixed Assets

 

 

 

 

 

10,693,001

 

(6,268,855)

 

4,424,146

 

4,512,349

Installations, Furniture and Equipment

 

2,826,849

 

(1,387,343)

 

1,439,506

 

1,395,153

Data Processing Equipment

 

 

 

 

 

3,148,144

 

(2,264,105)

 

884,039

 

912,654

Leasehold Improvements

 

 

 

 

 

3,602,217

 

(1,945,244)

 

1,656,973

 

1,723,530

Security and Communication Equipment

 

706,118

 

(411,003)

 

295,115

 

273,954

Others

 

 

 

 

 

409,673

 

(261,160)

 

148,513

 

207,058

Total

 

 

 

 

 

13,242,733

 

(6,864,433)

 

6,378,300

 

6,466,313

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                       

03/31/2016

  

12/31/2015

 

 

 

 

 

 

 

 

Cost

 

Depreciation

 

Net

 

Net

Real Estate

 

 

 

 

 

2,656,861

 

(605,347)

 

2,051,514

 

2,052,547

Land

 

 

 

 

 

697,120

 

-

 

697,120

 

697,579

Buildings

 

 

 

 

 

1,959,741

 

(605,347)

 

1,354,394

 

1,354,968

Others Fixed Assets

 

 

 

 

 

11,911,798

 

(7,048,527)

 

4,863,271

 

4,933,703

Installations, Furniture and Equipment

 

 

 

2,998,776

 

(1,447,091)

 

1,551,685

 

1,505,780

Data Processing Equipment

 

 

 

 

 

3,481,385

 

(2,431,895)

 

1,049,490

 

1,053,017

Leasehold Improvements

 

 

 

 

 

3,665,519

 

(1,979,514)

 

1,686,005

 

1,753,658

Security and Communication Equipment

 

 

 

1,326,340

 

(923,413)

 

402,927

 

361,247

Others

 

 

 

 

 

439,778

 

(266,614)

 

173,164

 

260,001

Total

 

 

 

 

 

14,568,659

 

(7,653,874)

 

6,914,785

 

6,986,250

                             

17. Intangibles

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

                       

03/31/2016

  

12/31/2015

 

 

 

 

 

 

 

 

Cost

 

Amortization

 

Net

 

Net

Goodwill on Acquired Companies

 

 

 

26,120,037

 

(23,535,068)

 

2,584,969

 

2,990,567

Other Intangible Assets

 

 

 

 

 

7,496,880

 

(4,976,309)

 

2,520,571

 

2,402,983

Acquisition and Development of Software

 

 

 

4,988,270

 

(3,463,762)

 

1,524,508

 

1,299,918

Exclusivity Contracts for Provision of Banking Services

 

2,361,541

 

(1,438,097)

 

923,444

 

966,759

Others

 

 

 

 

 

147,069

 

(74,450)

 

72,619

 

136,306

Total

 

 

 

 

 

33,616,917

 

(28,511,377)

 

5,105,540

 

5,393,550

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

                       

03/31/2016

  

12/31/2015

 

 

 

 

 

 

 

 

Cost

 

Amortization

 

Net

 

Net

Goodwill on Acquired Companies

 

 

 

27,490,243

 

(23,865,607)

 

3,624,636

 

4,012,214

Other Intangible Assets

 

 

 

 

 

7,960,016

 

(5,243,466)

 

2,716,550

 

2,579,259

Acquisition and Development of Software

 

 

 

5,433,199

 

(3,720,148)

 

1,713,051

 

1,470,427

Exclusivity Contracts for Provision of Banking Services

 

2,361,541

 

(1,438,097)

 

923,444

 

966,759

Others

 

 

 

 

 

165,276

 

(85,221)

 

80,055

 

142,073

Total

 

 

 

 

 

35,450,259

 

(29,109,073)

 

6,341,186

 

6,591,473

                             

Goodwill is measured annually, or whenever there is any indication that the asset may be impaired. We record our goodwill according to our operating segments.

                             

Value in use is used as the base to evaluate goodwill with the impairment test. For this purpose, we estimate cash flow for a period of 5 years.We prepare cash flows considering several factors, including: (i) macro-economic projections, such as interest rates, inflation and exchange rates, among others, (ii) the performance and growth estimates of the Brazilian financial system, (iii) increased costs, returns, synergies and investment plans, (iv) the behavior of customers, and (v) the growth rate and long-term adjustments to cash flows. These estimates rely on assumptions regarding the likelihood of future events, and changing certain factors could result in differing outcomes. The estimate of cash flows is based on assessment valuations prepared by independent research company, annually, which is reviewed and approved by the Executive Board.

                             

Based on the assumptions described above, has not identified any impairment of goodwill.

                             

 

63

 

18. Money Market Funding and Borrowings and Onlendings

                             

a) Deposits

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

       

Without

  

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

Maturity

 

Months

 

12 Months

 

Months

 

Total

 

Total

Demand Deposits

 

14,524,141

 

-

 

-

 

-

 

14,524,141

 

15,775,566

Savings Deposits

 

34,963,784

 

-

 

-

 

-

 

34,963,784

 

35,984,837

Interbank Deposits

 

-

 

19,034,960

 

44,099,117

 

2,058,431

 

65,192,508

 

61,909,663

Time Deposits

 

98,494

 

25,175,701

 

15,778,136

 

44,854,866

 

85,907,197

 

87,433,187

Total

 

49,586,419

 

44,210,661

 

59,877,253

 

46,913,297

 

200,587,630

 

201,103,253

Current

 

 

 

 

 

 

 

 

 

153,674,333

 

152,344,715

Long-term

 

 

 

 

 

 

 

 

 

46,913,297

 

48,758,538

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

       

Without

  

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

Maturity

 

Months

 

12 Months

 

Months

 

Total

 

Total

Demand Deposits

 

14,491,110

 

-

 

-

 

-

 

14,491,110

 

15,698,171

Savings Deposits

 

34,963,784

 

-

 

-

 

-

 

34,963,784

 

35,984,837

Interbank Deposits

 

-

 

165,760

 

1,955,411

 

323,326

 

2,444,497

 

3,675,272

Time Deposits

 

98,494

 

25,175,701

 

15,610,343

 

44,163,455

 

85,047,993

 

86,527,732

Total

 

49,553,388

 

25,341,461

 

17,565,754

 

44,486,781

 

136,947,384

 

141,886,012

Current

 

 

 

 

 

 

 

 

 

92,460,603

 

95,684,682

Long-term

 

 

 

 

 

 

 

 

 

44,486,781

 

46,201,330

                             

b) Money Market Funding

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Own Portfolio

 

 

 

88,330,334

 

28,609,425

 

27,253,238

 

144,192,997

 

116,956,293

Government Securities

 

 

 

81,418,860

 

23,507

 

-

 

81,442,367

 

48,842,324

Others

 

 

 

6,911,474

 

28,585,918

 

27,253,238

 

62,750,630

 

68,113,969

Third Parties

 

 

 

5,672,371

 

-

 

-

 

5,672,371

 

10,827,806

Linked to Trading Portfolio Operations

 

-

 

5,238,213

 

16,436,419

 

21,674,632

 

19,914,633

Total

 

 

 

94,002,705

 

33,847,638

 

43,689,657

 

171,540,000

 

147,698,732

Current

 

 

 

 

 

 

 

 

 

127,850,343

 

99,365,655

Long-term

 

 

 

 

 

 

 

 

 

43,689,657

 

48,333,077

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Own Portfolio

 

 

 

68,975,368

 

25,126,845

 

27,253,238

 

121,355,451

 

104,217,992

Government Securities

 

 

 

62,145,888

 

23,507

 

-

 

62,169,395

 

39,884,611

Debt Securities in Issue

 

 

 

6,732,425

 

19,652,914

 

27,122,545

 

53,507,884

 

58,978,887

Others

 

 

 

97,055

 

5,450,424

 

130,693

 

5,678,172

 

5,354,494

Third Parties

 

 

 

5,672,371

 

-

 

-

 

5,672,371

 

10,827,806

Linked to Trading Portfolio Operations

 

-

 

5,238,213

 

16,436,419

 

21,674,632

 

19,914,633

Total

 

 

 

74,647,739

 

30,365,058

 

43,689,657

 

148,702,454

 

134,960,431

Current

 

 

 

 

 

 

 

 

 

105,012,797

 

86,627,754

Long-term

 

 

 

 

 

 

 

 

 

43,689,657

 

48,332,677

                             

 

64

 

c) Funds from Acceptance and Issuance of Securities

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Real Estate Credit Notes, Mortgage Notes,
Credit and Similar Notes

 

14,296,175

 

28,025,940

 

42,748,811

 

85,070,926

 

81,168,337

Real Estate Credit Notes - LCI (1)

 

8,344,116

 

15,167,802

 

1,270,884

 

24,782,802

 

23,795,322

Agribusiness Credit Notes - LCA (2)

 

1,003,673

 

1,489,661

 

23,496

 

2,516,830

 

2,096,616

Treasury Bills (3)

 

 

 

4,948,386

 

11,368,477

 

41,454,431

 

57,771,294

 

55,276,399

Securities Issued Abroad

 

 

 

1,173,230

 

5,117,550

 

152,050

 

6,442,830

 

13,472,296

Eurobonds

 

 

 

1,173,230

 

5,117,550

 

152,050

 

6,442,830

 

13,472,296

Funding by Structured Operations Certificates

 

246,972

 

637,809

 

14,556

 

899,337

 

784,952

Total

 

 

 

15,716,377

 

33,781,299

 

42,915,417

 

92,413,093

 

95,425,585

Current

 

 

 

 

 

 

 

 

 

49,497,676

 

44,201,390

Long-term

 

 

 

 

 

 

 

 

 

42,915,417

 

51,224,195

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Exchange Acceptances

 

 

 

102,820

 

402,180

 

462,765

 

967,765

 

984,262

Real Estate Credit Notes, Mortgage Notes,

                   

Credit and Similar Notes

 

15,244,980

 

29,436,199

 

43,871,725

 

88,552,904

 

84,606,604

Real Estate Credit Notes - LCI (1)

 

8,344,116

 

15,168,575

 

1,270,884

 

24,783,575

 

23,796,209

Agribusiness Credit Notes - LCA (2)

 

1,003,673

 

1,489,661

 

23,496

 

2,516,830

 

2,096,616

Treasury Bills (3)

 

 

 

5,897,191

 

12,777,963

 

42,577,345

 

61,252,499

 

58,713,779

Securities Issued Abroad

 

 

 

1,173,230

 

5,117,550

 

152,050

 

6,442,830

 

13,472,296

Eurobonds

 

 

 

1,173,230

 

5,117,550

 

152,050

 

6,442,830

 

13,472,296

Funding by Structured Operations Certificates

 

246,972

 

637,809

 

14,556

 

899,337

 

784,952

Total

 

 

 

16,768,002

 

35,593,738

 

44,501,096

 

96,862,836

 

99,848,114

Current

 

 

 

 

 

 

 

 

 

52,361,740

 

46,814,955

Long-term

 

 

 

 

 

 

 

 

 

44,501,096

 

53,033,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Real Estate Credit Notes are fixed income securities are by mortgages and mortgage-backed securities or liens on property. On March 31, 2016, has maturities between 2016 to 2020 (12/31/2015 - maturities between 2016 to 2020).

                             

(2) Agribusiness credit notes are fixed income securities which resources are allocated to the promotion of agribusiness, indexed between 90.0% to 98.0% of CDI. On March 31, 2016, has maturities between 2016 to 2018 (12/31/2015 - maturities between 2016 to 2018).

                             

(3) The main features of the Treasury Bills are the minimum period of two years, minimum notional of R$300 and permission for early redemption of only 5% of the issued amount. On March 31, 2016, has maturities between 2016 to 2025 (12/31/2015 - maturities between 2016 to 2025).

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/Consolidated

                       

03/31/2016

  

12/31/2015

Eurobonds

 

Issuance

 

Maturity

 

Currency

 

Interest Rate (p.a)

 

Total

 

Total

Eurobonds

 

February and
September-12

 

February-17

 

US$

 

4.6%

 

4,538,370

 

5,025,982

Eurobonds (1)

 

April-12

 

April-16

 

CHF

 

3.3%

 

575,447

 

603,889

Eurobonds (1)

 

April-12

 

April-16

 

CLP

 

4.6%

 

128,217

 

135,388

Eurobonds (1)

 

September-14

 

September-16

 

JPY

 

1.8%

 

34,687

 

35,743

Eurobonds

 

December-15

 

July-16

 

US$

 

2.7%

 

178,968

 

195,254

Eurobonds

 

December-15

 

June-16

 

EUR

 

1.0%

 

162,579

 

170,053

Eurobonds

 

January and June-11

 

January-16

 

US$

 

4.3%

 

-

 

3,268,431

Eurobonds (1)

 

March and May-13

  

March-16

  

R$

 

8.0%

 

-

 

1,255,841

Eurobonds

 

June-15

 

January-16

 

US$

 

1.1%

 

-

 

173,487

Eurobonds

 

July-15

 

January-16

 

US$

 

1.1%

 

-

 

839,956

Eurobonds

 

August-15

 

February-16

 

US$

 

1.2%

 

-

 

510,082

Eurobonds

 

August-15

 

February-16

 

US$

 

1.1%

 

-

 

291,345

Others

 

 

 

 

 

 

 

 

 

824,562

 

966,845

Total

 

 

 

 

 

 

 

 

 

 

6,442,830

 

13,472,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes R$703,664 (12/31/2015 - R$1,995,118) in cash flow hedge operations, being R$575,447 (12/31/2015 - R$603,889) indexed on foreign currency - Swiss Franc, R$128,217 (12/31/2015 - R$135,388) in Chilean Peso and December 31, 2015 amount of R$1,255,841 indexed in Real (Note 6.b.V.b); and R$34,687 (12/31/2015 - R$35,743) for market risk hedge operations indexed to foreing currency - YEN (Note 6.b.V.a).

                             
 

65

 

d) Money Market Funding Expenses

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

               

01/01 to

  

01/01 to

  

01/01 to

  

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Time Deposits (1)

 

 

 

 

 

1,237,053

 

4,051,951

 

1,211,019

 

4,046,365

Savings Deposits

 

 

 

 

 

675,387

 

645,442

 

675,387

 

645,442

Interbank Deposits

 

 

 

 

 

1,974,182

 

588,537

 

109,117

 

92,597

Money Market Funding

 

 

 

 

 

5,942,354

 

4,286,673

 

5,430,285

 

3,304,548

Upgrade and Provisions Interest and Pension Plans and Capitalization

 

-

 

-

 

31,721

 

27,904

Others (2)

 

 

 

 

 

5,513,827

 

2,820,227

 

5,669,280

 

2,953,216

Total

 

 

 

 

 

15,342,803

 

12,392,830

 

13,126,809

 

11,070,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Bank and Consolidate, includes the record of interest in the amount of R$129,391 (2015 - R$121,975) related to the issuance of the Debt Instrument Eligible Tier II Capital (Note 21).

                             

(2) Includes, mainly, expense funds from acceptance and issuance of securities.

                             

e) Borrowings and Onlendings

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Domestic Borrowings

 

 

 

 

 

-

 

2,096

 

-

 

2,096

 

4,333

Foreign Borrowings

 

 

 

12,349,458

 

17,780,176

 

3,384,289

 

33,513,923

 

36,683,300

Import and Export Financing Lines

 

10,640,500

 

17,780,176

 

3,384,289

 

31,804,965

 

35,792,969

Other Credit Lines

 

 

 

1,708,958

 

-

 

-

 

1,708,958

 

890,331

Domestic Onlendings

 

 

 

1,769,695

 

3,419,831

 

10,892,690

 

16,082,216

 

16,262,891

Total

 

 

 

14,119,153

 

21,202,103

 

14,276,979

 

49,598,235

 

52,950,524

Current

 

 

 

 

 

 

 

 

 

35,321,256

 

38,515,974

Long-term

 

 

 

 

 

 

 

 

 

14,276,979

 

14,434,550

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

           

Up to 3

  

From 3 to

  

Over 12

        

 

 

 

 

 

 

Months

 

12 Months

 

Months

 

Total

 

Total

Domestic Borrowings

 

 

 

 

 

-

 

72,239

 

-

 

72,239

 

78,917

Foreign Borrowings

 

 

 

10,890,054

 

17,780,378

 

3,384,289

 

32,054,721

 

36,683,512

Import and Export Financing Lines

 

9,181,096

 

17,780,378

 

3,384,289

 

30,345,763

 

35,793,181

Other Credit Lines

 

 

 

1,708,958

 

-

 

-

 

1,708,958

 

890,331

Domestic Onlendings

 

 

 

1,769,695

 

3,419,831

 

10,892,690

 

16,082,216

 

16,262,891

Total

 

 

 

12,659,749

 

21,272,448

 

14,276,979

 

48,209,176

 

53,025,320

Current

 

 

 

 

 

 

 

 

 

33,932,197

 

38,590,770

Long-term

 

 

 

 

 

 

 

 

 

14,276,979

 

14,434,550

                             

Bank and Consolidated, export and import financing lines are funds raised from foreign banks, for use in commercial foreign exchange transactions, related to the discounting of export bills and export and import pre-financing, falling due through 2019 (12/31/2015 - through 2019) and subject to financial charges corresponding to exchange rate changes plus interest ranging from 0.5% p.a. to 22.3% p.a. (12/31/2015 - 0.3% p.a. to 7.4% p.a.).

               

Domestic onlendings - official institutions are subject to financial charges corresponding to the TJLP, exchange variation of the currency basket of the Banco Nacional de Desenvolvimento Econômico e Social (BNDES), or US dollar exchange variation, plus interest rate in accordance with the operating policies of the BNDES System.

                     

 

66

 

19. Tax and Social Security

                             

Tax and social security payables comprise taxes payable and amounts being challenged in the courts.

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Provision for Tax Risks and Legal Obligations (Note 23.b)

 

4,567,655

 

4,475,644

 

7,105,999

 

6,973,763

Reserve for Tax Contingencies - Responsibility of
Former Controlling (Note 23.i)

 

708,414

 

698,622

 

796,634

 

785,837

Deferred Tax Liabilities

 

1,337,061

 

1,092,959

 

1,875,534

 

1,642,819

Provision for Taxes and Contributions on Income

 

1,004,279

 

-

 

1,163,439

 

104,667

Taxes Payable

 

 

 

 

 

660,425

 

722,182

 

763,565

 

1,037,020

Total

 

 

 

 

 

8,277,834

 

6,989,407

 

11,705,171

 

10,544,106

Current

 

 

 

 

 

2,589,496

 

2,120,847

 

3,048,350

 

2,724,378

Long-term

 

 

 

 

 

5,688,338

 

4,868,560

 

8,656,821

 

7,819,728

                             

a) Nature and Origin of Deferred Tax Liabilities

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

12/31/2015

 

Recognition

 

Realization

 

03/31/2016

Adjustment to Fair Value of Trading Securities and Derivatives (1)

 

999,137

 

-

 

-

 

999,137

Adjustment to Fair Value of Available-for-Sale
Securities and Cash Flow Hedge (1)

 

61,270

 

269,018

 

-

 

330,288

Excess Depreciation of Leased Assets

 

7,188

 

-

 

(127)

 

7,061

Others

 

 

 

 

 

25,364

 

-

 

(24,789)

 

575

Total

 

 

 

 

 

1,092,959

 

269,018

 

(24,916)

 

1,337,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Consolidated

 

 

 

 

 

 

 

 

12/31/2015

 

Recognition

 

Realization

 

12/31/2016

Adjustment to Fair Value of Trading Securities and Derivatives (1)

 

1,057,929

 

1,548

 

(43,152)

 

1,016,325

Adjustment to Fair Value of Available-for-Sale
Securities and Cash Flow Hedge (1)

 

65,740

 

281,079

 

(10)

 

346,809

Excess Depreciation of Leased Assets

 

485,278

 

-

 

(14,874)

 

470,404

Others

 

 

 

 

 

33,872

 

34,744

 

(26,620)

 

41,996

Total

 

 

 

 

 

1,642,819

 

317,371

 

(84,656)

 

1,875,534

                             

(1) Includes tax credits IRPJ, CSLL, PIS and Cofins.

                             

b) Expected Realization of Deferred Tax Liabilities

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

               

Temporary Differences

    

Year

 

 

 

 

 

 

 

IRPJ

 

CSLL

 

PIS/Cofins

 

Total

2016

 

 

 

 

 

215,890

 

171,160

 

41,707

 

428,757

2017

 

 

 

 

 

287,535

 

228,099

 

55,610

 

571,244

2018

 

 

 

 

 

99,629

 

77,820

 

18,975

 

196,424

2019

 

 

 

 

 

35,263

 

20,805

 

6,764

 

62,832

2020

 

 

 

 

 

34,674

 

20,805

 

6,764

 

62,243

2021 to 2023

 

 

 

 

 

8,669

 

5,201

 

1,691

 

15,561

Total

 

 

 

 

 

681,660

 

523,890

 

131,511

 

1,337,061

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

               

Temporary Differences

    

Year

 

 

 

 

 

 

 

IRPJ

 

CSLL

 

PIS/Cofins

 

Total

2016

 

 

 

 

 

345,460

 

183,356

 

42,359

 

571,175

2017

 

 

 

 

 

377,793

 

232,099

 

56,478

 

666,370

2018

 

 

 

 

 

160,793

 

79,235

 

19,214

 

259,242

2019

 

 

 

 

 

95,027

 

21,188

 

6,792

 

123,007

2020

 

 

 

 

 

94,330

 

21,146

 

6,792

 

122,268

2021 to 2023

 

 

 

 

 

126,487

 

5,287

 

1,698

 

133,472

Total

 

 

 

 

 

1,199,890

 

542,311

 

133,333

 

1,875,534

                             

 

67

 

20. Subordinated Debts

                             

Consist of securities issued according to Bacen. Rules, which are used as Tier II Regulatory Capital for calculating operating limits, according to the proportion defined by CMN Resolution 4,192 of March 1, 2013, and the amendments introduced by Resolution 4,278 of October 31, 2013.

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

Subordinated Deposit
Certificates

 

Issuance

 

Maturity (1)

 

Amount (Million)

 

Interest Rate (p.a.)

 

Total

 

Total

Subordinated Deposit Certificates

 

June-06

 

July-16

 

R$ 1.500

 

105.0% CDI

 

4,339,727

 

4,196,347

Subordinated Deposit Certificates

 

October-06

 

September-16

 

R$ 850

 

104.5% CDI

 

2,343,866

 

2,266,789

Subordinated Deposit Certificates

 

July-06 to October-06

 

July-16 and July-18

 

R$ 447

 

104.5% CDI

 

1,272,345

 

1,230,505

Subordinated Deposit Certificates

 

May-08

 

May-15 to May-18

 

R$ 283

 

CDI (2)

 

88,049

 

114,467

Subordinated Deposit Certificates

 

May-08 to June-08

 

May-15 to June-18

 

R$ 268

 

IPCA (3)

 

334,550

 

289,196

Total

 

 

 

 

 

 

 

 

 

 

8,378,537

 

8,097,304

Current

 

 

 

 

 

 

 

 

 

7,947,343

 

7,685,328

Long Term

 

 

 

 

 

 

 

 

 

431,194

 

411,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Subordinated deposit certificates issued with yield paid at the end of the term together with the principal.

                             

(2) Indexed between 100% and 112% of CDI.

                             

(3) Indexed to the IPCA plus interest of 8.3% p.a. to 8.4% p.a.

 

21. Debt Instruments Eligible to Compose Capital

                             

Details of the balance of Debt Instruments Eligible to Compose Capital for the issuance of equity instruments to compose the Tier I and Tier II of Regulatory Capital due to the Capital Optimization Plan, are as follows:

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

Debt Instruments Eligible to
Compose Capital

 

Issuance

 

Maturity

 

Amount (Million)

 

Interest Rate (p.a.) (3)

 

Total

 

Total

Tier I (1)

 

January - 14

 

No Maturity (Perpetual)

 

R$ 3.000

 

7.375%

 

4,506,837

 

4,944,625

Tier II (2)

 

January - 14

 

January - 24

 

R$ 3.000

 

6.000%

 

4,494,467

 

5,017,520

Total

 

 

 

 

 

 

 

 

 

9,001,304

 

9,962,145

Current

 

 

 

 

 

 

 

 

 

120,336

 

218,009

Long-term

 

 

 

 

 

 

 

 

 

8,880,968

 

9,744,136

                             

(1) Interest rate paid quarterly from April 29, 2014.

                             

(2) Interest rate paid semiannually from July 29, 2014.

                             

(3) The effective interest rate, considering the Taxes (IR) made ​​by the issuer, is 8.676% and 7.059% for instruments Tier I and Tier II, respectively.

                             

 

68

 

 

 

22. Other Payables - Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

Bank

      

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Provision Technical for Pension and Capitalization Operations

 

-

 

-

 

1,637,665

 

1,606,820

Payables for Credit Cards

 

19,921,890

 

21,161,942

 

19,921,894

 

21,161,945

Provision for Legal and Administrative Proceedings -
Labor and Civil (Note 23.b)

 

4,432,438

 

4,261,045

 

4,692,707

 

4,514,269

Employee Benefit Plans (Note 35)

 

2,536,658

 

2,696,653

 

2,536,792

 

2,696,653

Payables for Acquisition of Assets and Rights

 

21,962

 

21,521

 

21,962

 

21,521

Reserve for Legal and Administrative Proceedings -Responsibility of
Former Controlling Stockholders (Note 23.i)

 

4,015

 

4,136

 

4,015

 

4,136

Accrued Liabilities

 

 

 

 

 

 

 

 

Personnel Expenses

 

1,063,489

 

1,545,400

 

1,170,499

 

1,676,134

Administrative Expenses

 

237,663

 

242,810

 

267,181

 

263,383

Others Payments

 

63,910

 

62,414

 

154,623

 

159,425

Creditors for Unreleased Funds

 

548,489

 

573,869

 

548,489

 

573,869

Provision of Payment Services

 

297,512

 

357,001

 

297,512

 

357,001

Suppliers

 

351,692

 

318,148

 

864,449

 

847,439

Others (2)

 

3,758,599

 

3,927,127

 

6,204,453

 

6,240,518

Total

 

 

 

 

 

33,238,317

 

35,172,066

 

38,322,241

 

40,123,113

Current

 

 

 

 

 

27,561,321

 

29,651,285

 

31,936,345

 

33,880,803

Long-term

 

 

 

 

 

5,676,996

 

5,520,781

 

6,385,896

 

6,242,310

                             

(1) At the consolidated, includes the obligation concerning the transfer of the FGB's Portfolio from Zurich Santander Brasil Seguros e Previdência S.A. for Evidence, the assets and reserves of that portfolio now being managed by Evidence from February 2, 2015 (Note 15).

                             

23. Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security

                             

a) Contingent Assets

                             

Bank and Consolidated, on March 31, 2016 and December 31, 2015, no contingent assets were accounted (Note 3.q).

                             

b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature

                             

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

 

 

 

 

 

 

 

 

03/31/2016

 

12/31/2015

 

03/31/2016

 

12/31/2015

Reserve for Tax Contingencies and Legal Obligations (Note 19)

 

4,567,655

 

4,475,644

 

7,105,999

 

6,973,763

Accrual for Legal and Administrative Proceedings -
Labor and Civil (Note 22)

 

4,432,438

 

4,261,045

 

4,692,707

 

4,514,269

Labor

 

2,413,761

 

2,422,387

 

2,502,924

 

2,505,553

Civil

 

2,018,677

 

1,838,658

 

2,189,783

 

2,008,716

Total

 

 

 

 

 

9,000,093

 

8,736,689

 

11,798,706

 

11,488,032

                             

c) Change in Accrual for Judicial and Administrative Proceedings and Legal Obligations

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

               

01/01 to

          

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

03/31/2015

 

 

Tax

 

Labor

 

Civil

 

Tax

 

Labor

 

Civil

Balance at Beginning

4,475,644

 

2,422,387

 

1,838,658

 

11,383,052

 

1,914,476

 

1,612,518

Recognition Net of Reversal (1)

 

(1,833)

 

168,152

 

245,980

 

1,808

 

223,975

 

118,036

Inflation Adjustment

 

114,933

 

69,439

 

41,618

 

249,275

 

57,121

 

36,835

Write-offs Due to Payment

 

(21,089)

 

(247,709)

 

(107,579)

 

(2,283)

 

(232,321)

 

(141,867)

Others

 

-

 

1,492

 

-

 

-

 

-

 

-

Balance at End

 

4,567,655

 

2,413,761

 

2,018,677

 

11,631,852

 

1,963,251

 

1,625,522

Escrow Deposits -
Other Receivables

 

1,725,932

 

317,546

 

373,673

 

992,068

 

362,090

 

127,676

Escrow Deposits - Securities

 

26,902

 

6,149

 

7,637

 

26,901

 

20,705

 

6,831

Total Escrow Deposits

 

1,752,834

 

323,695

 

381,310

 

1,018,969

 

382,795

 

134,507

 

69

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

               

01/01 to

          

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

03/31/2015

 

Tax

 

Labor

 

Civil

 

Tax

 

Labor

 

Civil

Balance at Beginning

 

6,973,763

 

2,505,553

 

2,008,716

 

14,205,897

 

1,984,590

 

1,776,857

Recognition Net of Reversal (1)

 

(1,377)

 

180,791

 

269,938

 

(10,520)

 

239,267

 

138,086

Inflation Adjustment

 

178,702

 

72,088

 

46,478

 

302,864

 

59,392

 

41,514

Write-offs Due to Payment

 

(47,175)

 

(256,975)

 

135,348

 

(1,126)

 

(238,223)

 

(173,937)

Others

 

2,586

 

1,467

 

(1)

 

-

 

-

 

-

Balance at End

 

7,105,999

 

2,502,924

 

2,189,783

 

14,497,115

 

2,045,026

 

1,782,520

Escrow Deposits -
Other Receivables

3,083,491

 

323,189

 

389,660

 

2,352,529

 

366,970

 

132,002

Escrow Deposits - Securities

 

28,305

 

6,149

 

7,658

 

28,129

 

20,705

 

6,831

Total Escrow Deposits

 

3,111,796

 

329,338

 

397,318

 

2,380,658

 

387,675

 

138,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Tax risks include the constitutions of tax provisions related to judicial and administrative proceedings and legal obligations, recorded tax expenses, other operating income and other operating expenses IR and CSLL.

 

d) Provisions for Contingent Civil, Labor, tax and Social Security

                             

Banco Santander and its subsidiaries are involved in litigation and administrative tax, labor and civil proceedings arising in the normal course of its activities.

                             

The provisions were constituted based on the nature, complexity and history of actions and evaluation loss of company stock businesses based on the opinions of internal and external legal advisors. The Santander has the policy to accrue the full amount of lawsuits whose loss valuation is probable. The legal obligation statutory tax and social security were fully recognized in the financial statements.

                             

Management understands that the provisions recorded are sufficient to meet legal obligations and losses from lawsuits and administrative proceedings as follows:

                             

e) Lawsuits and Administrative Tax and Social Security

                             

The main lawsuits related to tax legal obligations, recorded in the line "Tax Liabilities - Current", fully registered as obligation, are described below:

                             

PIS and Cofins - R$1,564,056 Bank and R$3,093,967 Consolidated (12/31/2015 - R$1,530,261 Bank and R$3,026,674 Consolidated): Banco Santander and its companies filed lawsuits seeking to invalidate the provisions of Law 9,718/1998, pursuant to which PIS and Cofins taxes must be levied on all revenues of legal entities. Prior to the enactment of such provisions, which have been overruled by "Superior Tribunal Federal" - "STF" "Supreme Court" decisions for nonfinancial institutions, PIS and Cofins were levied only on revenues from services and sale of goods. On April 23, 2015, Supreme Court decision was published admitting the extraordinary resort interposed by the Union related to PIS and denying the proceed for the extraordinary resort interposed by Public Ministry concerning to the Cofins,in this case, been exclusively applicable to Banco Santander suit. On May 28, 2015 in Supreme Court’s plenary session, the inadmissibility of extraordinary resort related to Cofins was confirmed in a unanimous decision, that denied the provision of Special Resort interposed by Public Ministry. With this decision, the Cofins plea is decided, prevailing the Fourth Area Federal Regional Court’s judgment, from August 2007, propitiousness for Banco Santander. On Agust 19, 2015, the declaration of embargoes presented by Public Ministry were rejected unanimously at the plenary session of the Supreme Court. According to the legal advisor’s evaluation, the appreciation of Ban’s Resolution is very far for happen to change the decision’s content, handed down by the Supreme Court’s plenary. There are still pending of final judgment by the Supreme Court the Banco Santander PIS chargeability, as well as the PIS and Cofins chargeability’s from other controlled subsidiaries. In 2015, based on STF's decision, Banco Santander recorded the reversal of provisions made to cover the legal liabilities related to Cofins, amounting R$7,950 million (R$4,770 million, after tax effects).

                             

Increase in CSLL Tax Rate - R$324,588 Bank and R$889,339 Consolidated (12/31/2015 - R$317,963 Bank and R$883,234 Consolidated): the Bank Santander and its subsidiaries are discussing the increase in the CSLL tax rate, from 9% to 15%, established by Executive Act 413/2008, subsequently converted into Law 11,727/2008, as from April 2008. Judicial proceedings are pending of judgment.

                             

Banco Santander and its subsidiaries are parties to judicial and administrative proceedings related to tax and social security matters, which are classified based on the opinion of legal counsel as probable loss risk.

                             

The main topics discussed in these lawsuits are:

                             

CSLL - Equal Tax Treatment - R$0 Bank and R$52,749 Consolidated (12/31/2015 - R$0 Bank and R$52,268 Consolidated): its subsidiaries filed a lawsuit challenging the application of an increased CSLL rate of 18% for financial companies, applicable until 1998, compared to the CSLL rate of 8% for non-financial companies on the basis of the constitutional principle of equal tax treatment.

                             

Tax on Services for Financial Institutions (ISS) - R$784,482 Bank and R$800,715 Consolidated (12/31/2015 - R$739,004 Bank and R$755,440 Consolidated): the Banco Santander and its subsidiaries filed lawsuits, in administrative and judicial proceedings, some municipalities collection of ISS on certain revenues derived from transactions not usually classified as services.

                             

Social Security Contribution (INSS) - R$497,079 Bank and R$516,437 Consolidated (12/31/2015 - R$507,836 Bank and R$527,111 Consolidated): Banco Santander and its subsidiaries are involved in administrative and judicial proceedings regarding the collection of income tax on social security and education allowance contributions over several funds that, according to the evaluation of legal advisors, do not have nature of salary.

                             

Provisional Contribution on Financial Transactions (CPMF) on Customer Operations - R$665,590 Bank and Consolidated (12/31/2015 - R$657,750 Bank and Consolidated): in May 2003, the Federal Revenue Service issued a tax assessment against Santander Distribuidora de Títulos e Valores Mobiliários Ltda. (Santander DTVM) and another tax assessment against Banco Santander Brasil S.A. The tax assessments refer to the collection of CPMF tax on transactions conducted by Santander DTVM in the cash management of its customers’ funds and clearing services provided by Banco to Santander DTVM in 2000, 2001 and the first two months of 2002. Based on the risk assessment of legal counsel, the tax treatment was accurate. Santander DTVM had a favorable decision at the Board of Tax Appeals (CARF). Banco Santander had a unfavorable decision and was considered responsible for the collection of the CPMF tax. Both decisions were appealed by the respective losing party to the highest jurisdiction of CARF. In June 2015 , BanK and DTVM had obtained a non favorable decision at CARF. On July 3rd , 2015 Bank and Produban Serviços de Informática S.A. (actual Santander DTVM company name) filed lawsuit aiming to cancel both tax charges on March 31, 2016 amounting R$1,334 million. Based on the evaluation of legal advisors, were consisted provision to the probable loss.

                             

f) Lawsuits and Administrative Proceedings of Labor

                             

These are lawsuits brought by labor Unions, Associations, Public Prosecutors and former employees claiming labor rights they believe are due, especially payment for overtime and other labor rights, including retirement benefit lawsuits.

                             

For claims considered to be similar and usual, provisions are recognized based on the history of payments and successes. Claims that do not fit the previous criteria are accrued according to individual assessment performed, and provisions are based on the probable realization, the law and jurisprudence according to the assessment of success made by legal counsel.

                             

g) Lawsuits and Administrative Proceedings of Civil

                             

These contingencies are generally caused by: (1) Action with a request for revision of contractual terms and conditions or requests for monetary adjustments, including supposed effects of the implementation of various government economic plans, (2) action deriving of financing agreements, (3) execution action; and (4) action indemnity by loss and damage. For civil actions considered common and similar in nature, provisions are recorded based on the average of cases closed. Claims that do not fit the previous criteria are accrued according to individual assessment performed, and provisions are based on the probable realization, the law and jurisprudence according to the assessment of success made by legal counsel.

                             

The main processes classified as risk of loss likely are described below:

                             

Lawsuits for Indemnity - seeking indemnity for property damage and/or emotional distress, regarding the consumer relationship on matters related to credit cards, consumer credit, bank accounts, collection and loans and other operations. In the civil lawsuits considered to be similar and usual, provisions are recorded based on the average of cases closed. Civil lawsuits that do not fit into the previous criterion are accrued according to the individual assessment made, and provisions are recognized based on the status of each lawsuit, law, and previous court decisions, according to the likely risk of payment, and the risk assessment made by the legal counsel.

                             

Economic Plans - efforts to recover actions with collective the deficient inflation adjustments in savings accounts arising from the Economic Plans (Bresser, Verão, Collor I and II). These refer to the lawsuits filed by savings account holders disputing the interest credited by the Banco Santander under such plans as the account holders considered that such legal amendments infringed on the rights acquired with regard to the application of the inflation indexes. Provisions are recorded based on the average of cases closed.

                             

Civil lawsuits that do not fit into the previous criterion are accrued according to the individual assessment made, and provisions are recognized based on the status of each lawsuit, law, and previous court decisions, according to likely risk of payment, and classification of the legal counsel. The Banco Santander is also a party in public class action suits on the same issue filed by consumer rights organizations, Public Prosecutor’s Offices and Public Defender’s Offices. In these cases, the provision is made only after the final unappealable sentence is handed down on the lawsuits, based on the individual execution orders. The STF decided against the bank’s. The STJ is still analyzing the subject and has already ordered the suspension of all the procedures except those that were not already decided in trial courts and those who have a final decision. However, the assessment of this question is paralyzed in the Supreme Court for lack of quorum, considering that some of his ministers declared themselves unable to judge the matter, and therefore is likely to judgment remains paralyzed for several years yet. There are decisions favorable to banks at the STF with regard to the economic phenomenon similar to that of savings accounts, as in the case of monetary restatement of time deposits - CDB and agreements (present value table).

                             

Moreover, there are precedents at the Supreme Court regarding the constitutionality of the norms that changed Brazil’s monetary standard. On April 14, 2010, the STJ was recently decided that the deadline for the filing of civil lawsuits that argue the government's purge of five years, but this decision has not been handed down on the lawsuits yet. Thus, with this decision, a majority stake, as was proposed after the period of five years is likely to be rejected, reducing the values involved. Still, the STF decided that the deadline for individual savers to qualify in the public civil litigations, also is five years, counted from the final judgment of their sentence. Banco Santander believes in the success of the arguments defended in these courts based on their content and the sound legal basis.

                             

70

 

 

h) Civil, Labor, Tax, and Security Social Liabilities Contingent Classified as Possible Loss Risk

                             

Refer to judicial and administrative proceedings involving tax, labor and civil matters assessed by legal counsels, as possible losses, which were not accounted for.

                             

The shares tax classification with possible loss, totaling R$14,827 million, main processes being:

                             

Credit Losses - Bank and its subsidiaries challenged the tax assessments issued by the Federal Revenue Services chalenging the deduction for credit losses because they fail to meet the relevant requirements under applicable law. As of March 31, 2016 the amount related to this challenge is approximately R$732 million.

                             

INSS on Profits or Results (PLR) - Bank and the subsidiaries are involved in several legal and administrative proceedings against the tax authorities in connection with the taxation for social security purposes of certain items which are not considered to be employee remuneration. As of March 31, 2016 the amounts related to these proceedings totaled approximately R$2,776 million.

                             

IRPJ and CSLL - Capital Gain - the Brazilian Federal Revenue Service issued infraction notices against Zurich Santander Brasil Seguros e Previdência S.A., successor company of ABN AMRO Brasil Dois Participações S.A. (AAB Dois Par), charging income Tax and Social Contribution to related to 2005 tax, claiming that capital gain in sales shares of Real Seguros S.A and Real Vida Previdência S.A. by AAB Dois Par should be taxed an rate of 34% instead 15%. The assessment was contested administratively based on understanding tax treatment adopted at the transaction was in compliance and capital gain tax paid was in complaince with the legislation. We had a partial favorable the decision on CARF, that disregard the fine and interest on this fine. Currently awaiting the assessment of a Amendment of Judgment by Zurich and the judgment of the Extraordinary Appeal filed by the Federal Government . The Banco Santander is responsible for any adverse outcome in this process as former controlling of Zurich Santander Brasil Seguros e Previdência S.A. As of March, 31, 2016 the amount related to this proceeding is approximately R$266 million.

                             

Goodwill Amortization of Banco Real - The Brazilian Federal Revenue issued infraction notices against the Bank to require the income tax and social payments, including late charges, for the base period of 2009. The Tax Authorities considered that the goodwill related to acquisition of Banco Real, amortized for accounting purposes prior to the merger, could not be deduced by Banco Santander for tax purposes. The infraction notices was contested. On July 14, 2015, the Police Judging RFB decided favorably to Banco Santander, fully canceling the tax debt. This decision will craft appealed before the CARF. On March 31, 2016, the figure was R$1,188 million.

                             

Goodwill Amortization of Banco Sudameris - The Tax Authorities have issued infraction notices to require the income tax and social contribution payments, including late charges, relating to tax deduction of amortization of goodwill from the acquisition of Banco Sudameris, related to the period of 2007 to 2012. Banco Santander timely presented their appeals, which are pending. On March 31, 2016, the figure was R$528 million.

                             

The labor claims with classification of possible loss totaled R$92 million, excluding the process below:

                             

Semiannual Bonus or PLR - a labor lawsuit relating to the payment of a semiannual bonus or, alternatively, profit sharing, to retired employees from the former Banco do Estado de São Paulo S.A. - Banespa, that had been hired up to May 22, 1975, filed as Banespa’s Retirees Association. This lawsuit was dismissed against the Bank by the Superior Labor Court. The STF rejected the extraordinary appeal of the Bank by a monocratic decision maintaining the earlier condemnation. Santander brought Regimental Appeal which awaits decision by the STF. The Regimental Appeal is an internal appeal filed in the STF itself, in order to refer the monocratic decision to a group of five ministers. The 1st Class of the Supreme Court upheld the appeal by the Bank and denied the Afabesp. The materials of the extraordinary appeal of the Bank now proceed to the Supreme Court for decision on overall impact and judgment. The amount related to this claim is not disclosed due to the current stage of the lawsuit and the possible impact such disclosure may have on the progress of the claim.

                             

The liabilities related to civil lawsuits with possible loss totaled R$802 million.

                             

i) Other Lawsuits Under the Responsibility of Former Controlling Stockholders

                             

Refer to actions of tax, labor and civil, in the amounts of R$708,414, R$719 and R$3,296 (12/31/2015 - R$698,622, R$890 and R$3,246) Bank and R$796,634, R$719 and R$3,296 (12/31/2015 - R$785,837, R$890 and R$3,246) Consolidated, respectively, recorded in other liabilities - tax and social security contributions (Note 19) and other liabilities - others (Note 22) the responsibility of the former controlling Banks and acquired companies. Based on contracts signed, these actions have guaranteed reimbursement for part of former controllers, whose respective duties were recorded in other receivables - others (Note 12).

                             

71

 
 

24. Stockholders’ Equity

                             

a) Capital

                             

According to the by-laws, Banco Santander's capital stock may be increased up to the limit of its authorized capital, regardless of statutory reform, by resolution of the Board of Directors and through the issuance of up to 9,090,909,090 (nine billion, ninety million, nine hundred and nine thousand and ninety) shares, subject to the established legal limits on the number of preferred shares. Any capital increase that exceeds this limit will require shareholders` approval.

                             

The capital stock, fully subscribed and paid, is divided into registered book-entry shares with no par value.

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares in Thousands

 

 

 

 

 

 

 

 

03/31/2016

 

 

 

 

 

12/31/2015

 

 

 

 

Common

 

Preferred

 

Total

 

Common

 

Preferred

 

Total

Brazilian Residents

 

75,685

 

100,655

 

176,340

 

56,305

 

81,279

 

137,584

Foreign Residents

 

3,775,286

 

3,611,457

 

7,386,743

 

3,794,666

 

3,630,833

 

7,425,499

Total

 

3,850,971

 

3,712,112

 

7,563,083

 

3,850,971

 

3,712,112

 

7,563,083

(-) Treasury Shares

 

(21,480)

 

(21,480)

 

(42,960)

 

(20,218)

 

(20,218)

 

(40,436)

Total Outstanding

 

3,829,491

 

3,690,632

 

7,520,123

 

3,830,753

 

3,691,894

 

7,522,647

                             

b) Dividends and Interest on Capital

                             

According to the Bank’s bylaws, shareholders are entitled to a minimum dividend equivalent to 25% of net income for the year, adjusted according to legislation. Preferred shares are nonvoting and nonconvertible, but have the same rights and advantages granted to common shares, in addition to priority in the payment of dividends at a rate that is 10% higher than those paid on common shares, and in the capital reimbursement, without premium, in the event of liquidation of the Bank.

                             

Dividend payments have been and will continue to be calculated and paid in accordance with Brazilian Corporate Law.

                             

Prior to the Annual Shareholders Meeting, the Board of Directors may resolve on the declaration and payment of dividends on earnings based on (i) balance sheets or earning reserves shown in the last balance sheet; or (ii) balance sheets issued in the period shorter than 6 months, provided that the total dividends paid in each half of the fiscal year shall not exceed the amount of capital reserves. These dividends are fully attributed to the mandatory dividend.

                             

In the first quarter 2016 there were no highlights of dividends and interest on equity.

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2015

          

In Thousands

 

Brazilian Real per Thousand Shares/Units

 

 

 

 

 

of Brazilian Real

 

Common

 

Preferred

 

Units

Intermediate Dividends (1) (2)

 

 

 

 

 

 

 

150,000

 

18.9474

 

20.8421

 

39.7895

Total

 

 

 

 

 

150,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Established by the Board of Directors in March 2015.

                             

(2) The amount of the intercalary dividends were fully attributed to mandatory dividends for the year 2015 and were paid from August 28, 2015, without any compensation to the restatement.

                             

c) Reserves

                             

Net income, after deductions and statutory provisions, will be allocated as follows:

                             

Legal Reserve

                             

According to Brazilian corporate law, 5% to the legal reserve, until it reaches 20% of the share capital. This reserve is intended to ensure the integrity of capital and can only be used to offset losses or increase capital.

                             

Capital Reserve

                             

The Bank´s capital reserve consists of: goodwill reserve for subscription of shares and other capital reserves, and can only be used to absorb losses that exceed retained earnings and profit reserves, redemption, reimbursement or acquisition of shares of our own issue; capital increase, or payment of dividends to preferred shares under certain circumstances.

                             

Reserve for Equalization Dividend

                             

After the allocation of dividends, the remaining balance if any, may, upon proposal of the Executive Board and approved by the Board of Directors, be allocated to reserve for equalization of dividends, which will be limited to 50% of the share capital. This reserve aims to ensure funds for the payment of dividends, including as interest on own capital, or any interim payment to maintain the flow of shareholders remuneration.

                             

d) Treasury Shares

                             

In the meeting held on November 3, 2015, the Bank’s Board of Directors approved, in continuation of the buyback program that expired on November 3, 2015, the buyback program of its Units and ADRs, by the Bank or its agency in Cayman, to be held in treasury or subsequently sold.

                             

The Buyback Program will cover the acquisition up to 39,391,314 Units, representing 39,391,314 common shares and 39,391,314 preferred shares, or the ADRs, which, on October 31, 2015, corresponded to approximately 1.04% of the Bank’s share capital. On September 30, 2015, the Bank held 393,913,149 common shares and 421,717,564 preferred shares being traded.

                             

The Buyback has the purpose to (1) maximize the value creation to shareholders by means of an efficient capital structure management; and (2) enable the payment of officers, management level employees and others Bank’s employees and companies under its control, according to the Long Term Incentive Plans.

                             

The term of the Buyback Program is 365 days counted from November 4, 2015, and will expire on November 4, 2016.

                             

In 2016, 6,578,600 Units were acquired, 5,316,647 Units paid as Bonus and Long-Term Incentive Plan - Local treasury shares. The balance accumulated of treasury shares on March 31, 2016, amounting to 27,218,759 Units (12/31/2015 - 25,956,806 Units) equivalent to R$133,318 (12/31/2015 - R$375,337). The minimum, weighted average and maximum cost per Unit of the total number of treasury shares is, respectively, R$11.01, R$14.28 and R$18.51. In 2016, was not acquired ADRs and the balance accumulated of ADRs held in treasury amounting 13,137,665 ADRs, in the current amount of R$289,005 (12/31/2015 - R$317,094). The minimum, weighted average and maximum cost per ADR of the total number of treasury shares is, respectively, US$4.37, US$5.52 and US$10.21. The market value of these shares on March 31, 2016 was R$16.95 per Unit and US$4.65 per ADR. In the period ended March 31, 2016, due to the Optimization Plan PR, were registered amount of R$107 (31/12/2015 - R$95). At the ESM held on December, 14th, 2015 was approved the cancellation of 37,757,908 treasury shares in the amount of R$268,573 totaling on March 31, 2016 R$422,430 (12/31/2015 – R$423,953) of treasury shares.

                             

Additionally, in the first quarter of 2016, treasury shares were traded, that resulted in a loss of R$6,298 (2015 - R$4,415) recorded directly in equity in capital reserves.

                             

 

72

 

e) Consolidated Stockholders’ Equity - Unrealized Results

                             

The consolidated stockholders’ equity is reduced mainly to unrealized results of R$3,141 (12/31/2015 - R$2,216). In the first quarter of 2016, were realized results in the amounting of R$14,982 (2015 - R$4,309), includes values refered to trading with third parties NTN-C and part of NTN-F, related to the sale made ​​by Banco Santander to Santander Leasing (Note 6. a III) recorded previously as unrealized results (2012 - R$514,532). 

                             

25. Operational Ratios

            
                             

In July 2008 came into force the rules on regulatory capital measurement by the Standardized Approach of Basel II. On 2013 was issued a set of Resolutions and Circulars, aligned with the recommendations of the Basel Committee on Banking Supervision. These rules were repealed by CMN Resolution 4,192 and 4,193 which took effect from October 2013, establishing the model for calculating the minimum Regulatory Capital requirements, Tier I and Common Equity Tier I. These Resolutions states that the composition of the Regulatory Capital is done through equity, subordinated debt and hybrid capital instruments.

                             

As established by CMN Resolution 4,193/2013 requirement for PR is 11% until December 31, 2015, from January 2016 the requirement is to 9.875% plus 0.625% of conservation of capital, totaling 10.5% until December 2016, for the Tier I is 6% and the Main Capital is 4.5%.

                             

As a continuation the adoption of the rules established by CMN Resolution 4,192/2013, as of January 2015, came into force the Prudential Conglomerate, defined by CMN Resolution 4,280/2013, starting up a new period of comparison.

                             

Index is calculated on a consolidated basis, as shown below:

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016 (1)

 

12/31/2015 (1)

Tier I Regulatory Capital

 

 

 

 

 

 

 

 

 

54,004,747

 

52,976,575

Principal Capital

 

 

 

 

 

 

 

 

 

49,497,910

 

48,031,704

Supplementary Capital

 

 

 

 

 

 

 

 

 

4,506,837

 

4,944,870

Tier II Regulatory Capital

 

 

 

 

 

 

 

 

 

4,666,944

 

5,182,065

Regulatory Capital (Tier I and II)

 

 

 

 

 

 

 

58,671,691

 

58,158,640

Required Regulatory Capital

 

 

 

 

 

35,264,815

 

40,683,466

Portion of Credit Risk (3)

 

 

 

 

 

 

 

 

 

30,566,221

 

36,508,169

Market Risk Portions (4)

 

 

 

 

 

 

 

 

 

3,041,642

 

2,300,969

Operational Risk Portion

 

 

 

 

 

 

 

 

 

1,656,952

 

1,874,328

Basel I Ratio

 

 

 

 

 

 

 

 

 

15.1

 

14.3

Basel Principal Capital

 

 

 

 

 

13.9

 

13.0

Basel

 

 

 

 

 

 

 

 

 

 

 

16.4

 

15.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts calculated based on the consolidated information provided by the Consolidated Prudencial.

                             

(2) To calculate the capital allocation for credit risk were considered modifications and inclusions of Bacen Circular 3,714 of August 20, 2014, which amending Bacen Circular 3,644 of March 4, 2013.

                             

(3) Includes portions for market risk exposures subject to variations in rates of foreign currency coupons (PJUR2), price indexes (PJUR3) and interest rate (PJUR1/PJUR4), the price of commodities (PCOM), the price of shares classified as trading portfolios (PACS), and portions for gold exposure and foreign currency transactions subject to foreign exchange (PCAM).

                             

Banco Santander, quarterly discloses Pillar III information relating to risk management, Regulatory Capital and Required Regulatory Capital. A report with further details of the structure and methodology will be disclosed at the website www.ri.santander.com.br/ri.

                             

Financial institutions are required to maintain investments in permanent assets compatible with adjusted regulatory capital. Funds invested in permanent assets, calculated on a consolidated basis, are limited to 50% of adjusted regulatory capital, as per prevailing regulation. Banco Santander classifies for said index.

73

 

26. Related Parties

                             

a) Key Management Personnel Compensation

                             

The Board of Directors' meeting held on March 22, 2016 approved, in accordance with the favorable opinion of the Compensation and Appointment Committee, the global compensation proposal for managers (Board of Directors and Executive Officers) for the 2016 financial year, in the overall amount of R$300,000, covering fixed, variable and equity-based compensation and other benefits. The proposal were approved by the Ordinary General Meeting (OGM) held on April 29, 2016.

                             

a.1) Long Term Benefits

                             

The Bank, likewise Banco Santander Spain and other companies controlled by Santander Group, develops long-term compensation programs tied to the performance of the market price of its shares, based ond the achievement of certain goals (Note 35.f).

                             

a.2) Short Term Benefits

                             

The table below shows the salary of Board of Directors and Executive Board:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

01/01 to

  

01/01 to

 

 

 

 

 

 

 

 

 

 

 

 

03/31/2016

 

03/31/2015

Fixed Compensation

 

 

 

 

 

 

 

 

 

20,558

 

15,780

Variable Compensation

 

 

 

 

 

 

 

 

 

28,041

 

32,170

Others

 

 

 

 

 

 

 

 

 

4,844

 

3,947

Total Short-Term Benefits

 

 

 

 

 

 

 

 

 

53,443

 

51,897

Shares Based Payments

 

 

 

 

 

 

 

 

 

-

 

6,707

Total Long-Term Benefits

 

 

 

 

 

 

 

 

 

-

 

6,707

Total (1)

 

 

 

 

 

 

 

 

 

53,443

 

58,604

                             

(1) Refers to the amount paid by Banco Santander to their Managers for positions they hold at Banco Santander and other companies in the Conglomerate Santander.

                             

Additionally, in the first quarter of 2016, charges collected on management compensation amounted to R$7,294 (2015 - R$8,041).

                             

b) Contract Termination

                             

The termination of the employment relationship of managers for non-fulfillment of obligations or voluntarily by the employee does give right to any financial compensation.

                             

c) Lending Operations

                             

The current law prevents the Bank to grant loans or advances to:

 

I - officers, members of the Board of Directors and Audit Committee as well as their spouses and relatives up to the second degree;

 

II - individuals or legal entities that holds more than 10% of Banco Santander´s share capital;

 

III - legal entities in which Banco Santander holds more than 10% of its share capital;

 

IV - legal entities in which any of the officers, members of the Board of Directors and Audit Committee, as well as their spouses or relatives up to the second degree, hold more than 10% of the share capital.

 

d) Ownership Interest

                             

The table below shows the direct interest (common and preferred shares):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares in Thousands

       

03/31/2016

                   

Preferred

 

Total

           

Common Shares

  

Preferred

 

Shares

  

Total

 

Shares

Stockholders'

 

Common Shares

 

(%)

 

Shares

 

(%)

 

Shares

 

(%)

Sterrebeeck B.V.(1)

 

1,809,583

 

47.0%

 

1,733,644

 

46.7%

 

3,543,227

 

46.9%

Grupo Empresarial Santander,
S.L. (GES) (1)

1,107,673

 

28.8%

 

1,019,645

 

27.5%

 

2,127,318

 

28.1%

Banco Santander, S.A. (1)

 

518,207

 

13.5%

 

519,089

 

14.0%

 

1,037,296

 

13.7%

Santander Insurance Holding,
S.L. (SIH) (1)

 

3,758

 

0.1%

 

179

 

0.0%

 

3,937

 

0.1%

Qatar Holding, LLC (Qatar
Holding)

 

207,812

 

5.4%

 

207,812

 

5.6%

 

415,624

 

5.5%

Employees

 

3,570

 

0.1%

 

3,588

 

0.1%

 

7,158

 

0.1%

Members of the Board of Directors

(*)

 

(*)

 

(*)

 

(*)

 

(*)

 

(*)

Members of the Executive Board

(*)

 

(*)

 

(*)

 

(*)

 

(*)

 

(*)

Others

 

178,888

 

4.6%

 

206,675

 

5.6%

 

385,563

 

5.1%

Total Outstanding

 

3,829,491

 

99.5%

 

3,690,632

 

99.5%

 

7,520,123

 

99.5%

Treasury Shares

 

21,480

 

0.5%

 

21,480

 

0.5%

 

42,960

 

0.5%

Total

 

3,850,971

 

100.0%

 

3,712,112

 

100.0%

 

7,563,083

 

100.0%

Free Float (2)

 

390,270

 

10.1%

 

418,075

 

11.3%

 

808,345

 

10.7%

 

74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares in Thousands

       

12/31/2015

                   

Preferred

 

Total

           

Common Shares

  

Preferred

 

Shares

  

Total

 

Shares

Stockholders'

Common Shares

 

(%)

 

Shares

 

(%)

 

Shares

 

(%)

Sterrebeeck B.V. (1)

 

1,809,583

 

47.0%

 

1,733,644

 

46.7%

 

3,543,227

 

46.9%

GES (1)

1,107,673

 

28.8%

 

1,019,645

 

27.5%

 

2,127,318

 

28.1%

Banco Santander, S.A. (1)

 

518,207

 

13.5%

 

519,089

 

14.0%

 

1,037,296

 

13.7%

SIH (1)

 

3,758

 

0.1%

 

179

 

0.0%

 

3,937

 

0.1%

Qatar Holding

 

 

 

207,812

 

5.4%

 

207,812

 

5.6%

 

415,624

 

5.5%

Employees

 

3,066

 

0.1%

 

3,088

 

0.1%

 

6,154

 

0.1%

Members of the Board of Directors

(*)

 

(*)

 

(*)

 

(*)

 

(*)

 

(*)

Members of the Executive Board

(*)

 

(*)

 

(*)

 

(*)

 

(*)

 

(*)

Others

 

180,654

 

4.6%

 

208,437

 

5.6%

 

389,091

 

5.1%

Total Outstanding

 

3,830,753

 

99.5%

 

3,691,894

 

99.5%

 

7,522,647

 

99.5%

Treasury Shares

 

 

 

20,218

 

0.5%

 

20,218

 

0.5%

 

40,436

 

0.5%

Total

 

3,850,971

 

100.0%

 

3,712,112

 

100.0%

 

7,563,083

 

100.0%

Free Float (2)

 

 

 

391,532

 

10.2%

 

419,337

 

11.3%

 

810,869

 

10.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Companies of the Santander Spain Group.

                             

(2) Composed of Employees, Qatar Holding and Others.

                             

(*) None of the members of the Board of Directors and the Executive Board holds 1.0% or more of any class of shares.

                             

e) Related-Party Transactions

 

Santander has a Policy for Related Party Transactions approved by the Board of Directors, which aims to ensure that all transactions typified by the policy to take effect in view of the interests of Banco Santander and its shareholders. The policy defines the power to approve certain transactions by the Board of Directors. The planned rules also apply to all employees and officers of Banco Santander and its subsidiaries.

                             

Operations and charges for services with related parties are carried out in the ordinary course of business and under reciprocal conditions, including interest rates, terms and guarantees, and do not entail greater risk than the normal collection or have other disadvantages.

                             

The main transactions and balance are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

               

Assets

  

Income

  

Assets

  

Income

               

(Liabilities)

 

(Expenses)

 

(Liabilities)

 

(Expenses)

                   

01/01 to

      

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

03/31/2016

 

12/31/2015

 

03/31/2015

Cash

 

 

 

 

231,672

 

-

 

245,412

 

-

Banco Santander Espanha (2)

 

 

 

 

 

229,804

 

-

 

243,943

 

-

Banco Santander (México), S.A. (4)

 

 

 

53

 

-

 

65

 

-

Banco Santander Totta, S.A. (4)

 

 

 

 

 

1,774

 

-

 

1,303

 

-

Others

 

 

 

 

 

41

 

-

 

101

 

-

Interbank Investments

 

 

 

 

 

49,176,966

 

1,008,145

 

52,550,064

 

760,809

Aymoré CFI (3)

 

 

 

 

 

26,684,349

 

813,626

 

26,952,013

 

705,096

Banco Santander Espanha (1) (2)

 

 

 

 

16,733,468

 

10,213

 

20,699,539

 

3,048

CFI RCI Brasil (5)

 

 

 

 

 

-

 

-

 

923,412

 

41,409

Banco RCI Brasil S.A. (Atual Denominação Social da RCI Brasil Leasing) (5)

956,459

 

33,047

 

-

 

-

Banco Bonsucesso Consignado (1) (3)

 

 

 

4,802,690

 

151,259

 

3,975,100

 

11,256

Securities

 

 

 

 

 

81,462,364

 

2,210,994

 

66,689,757

 

1,403,165

Santander Leasing (3)

 

 

 

 

 

81,462,364

 

2,210,994

 

66,689,757

 

1,403,165

Derivatives Financial Instruments - Net

 

 

 

(730,417)

 

(222,062)

 

(724,100)

 

(14,637)

Santander Benelux, S.A., N.V. (Santander Benelux) (4)

 

-

 

-

 

-

 

31,727

Banco Bandepe (3)

 

 

 

 

 

-

 

-

 

-

 

63

Real Fundo de Investimento Multimercado Santillana Crédito Privado
(Fundo de Investimento Santillana)(4)

(380,428)

 

(18,406)

 

(379,239)

 

(43,043)

Abbey National Treasury Services Plc (Abbey NationalTreasury)(4)

 

(126,227)

 

14,927

 

(156,976)

 

(66,331)

Banco Santander Espanha (2)

 

 

 

 

 

(530,951)

 

(24,914)

 

(178,841)

 

(63,716)

Santander FI Amazonas (3)

 

 

 

 

 

93,481

 

239,730

 

(44,814)

 

398

Santander Paraty (3)

 

 

 

 

 

159,573

 

(7,269)

 

2,804

 

-

Santander FI Diamantina (3)

 

 

 

 

 

54,135

 

17,994

 

32,966

 

126,265

 

75

 

Loan Operations

 

-

 

1,216

 

207

 

370

Cibrasec (5)

 

-

 

1,216

 

207

 

370

Dividends and Bonuses Receivables

 

114,541

 

7

 

152,389

 

270,364

Aymoré CFI (3)

 

-

 

-

 

107,926

 

50,000

Santander Leasing (3)

 

-

 

-

 

-

 

200,364

CFI RCI Brasil (5)

 

-

 

-

 

7,480

 

-

Banco RCI Brasil S.A. (Atual Denominação Social da RCI Brasil Leasing) (5)

14,202

 

-

 

-

 

-

Santander Participações (3)

 

-

 

-

 

795

 

-

Sancap (3)

 

100,000

 

-

 

35,832

 

-

Santander CCVM (3)

 

-

 

-

 

-

 

20,000

Others

 

339

 

7

 

356

 

-

Trading Account

 

480,742

 

487

 

831,967

 

116

Abbey National Treasury (4)

 

127,604

 

106

 

135,165

 

7

Banco Santander Espanha (2)

 

353,138

 

381

 

696,802

 

109

Foreign Exchange Portfolio - Net

 

192,236

 

36,602

 

142,919

 

(110,302)

Banco Santander Espanha (2)

 

192,236

 

36,602

 

142,919

 

(113,161)

Santander Benelux (4)

 

-

 

-

 

-

 

2,859

Receivables from Affiliates

 

774,191

 

617,004

 

756,216

 

584,559

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

756,415

 

354,004

 

738,006

 

329,327

Zurich Santander Brasil Seguros S.A. (6)

 

-

 

63,660

 

-

 

78,997

Santander Capitalização S.A. (3)

 

17,607

 

53,196

 

18,024

 

45,321

Aymoré CFI (3)

 

-

 

111,757

 

-

 

97,456

Santander CCVM (3)

 

-

 

21,462

 

-

 

17,778

Santander Leasing (3)

 

-

 

1,526

 

-

 

4,074

Santander Brasil Asset (6)

 

-

 

-

 

-

 

1,243

Santander Serviços (3)

 

-

 

4,762

 

-

 

1,795

Santander Microcrédito (3)

 

-

 

1,588

 

-

 

1,859

Santander Brasil Consórcio (3)

 

-

 

689

 

-

 

2,821

Santander Participações (3)

 

-

 

1,450

 

-

 

839

Others

 

169

 

2,910

 

186

 

3,049

Non-Operating Result

 

-

 

-

 

-

 

34,404

Capital Riesgo Global (9)

 

-

 

-

 

-

 

34,404

Other Receivables - Others

 

5,614

 

14,289

 

13,052

 

5,618

Banco Santander Espanha (2)

 

4,592

 

1,540

 

12,468

 

-

Santander Capitalização S.A. (3)

 

754

 

1,801

 

326

 

921

Santander Paraty (3)

 

-

 

-

 

-

 

1,853

Banco Santander International (4)

 

-

 

8,938

 

-

 

-

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

-

 

-

 

-

 

702

Others

 

 

 

 

 

268

 

2,010

 

258

 

2,142

 

76

 

Deposits

 

 

(65,554,345)

 

(1,952,799)

 

(61,414,166)

 

(579,694)

Santander Leasing (3)

 

 

(59,648,700)

 

(1,730,749)

 

(54,773,424)

 

(456,806)

Banco Santander Espanha (2)

 

 

(1,554)

 

-

 

(1,360)

 

-

Aymoré CFI (3)

 

 

(2,694,753)

 

(112,517)

 

(3,149,573)

 

(42,303)

Banco Bandepe (3)

 

 

(980,000)

 

(42,777)

 

(1,320,479)

 

(30,633)

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

(88,301)

 

-

 

(95,537)

 

-

Zurich Santander Brasil Seguros S.A. (6)

 

(21,490)

 

-

 

(23,878)

 

-

Santander Brasil Gestão de Recursos Ltda. (6)

 

(83,764)

 

(2,980)

 

(30,990)

 

(1,625)

Sancap (3)

 

 

(16,255)

 

(320)

 

(8,014)

 

(73)

Santander Brasil Asset (6)

 

 

(13,592)

 

(440)

 

(12,360)

 

(488)

Webmotors S.A. (7)

 

 

(220,760)

 

(6,954)

 

(217,534)

 

(5,276)

Fundo de Investimento Santillana (4)

 

(636,484)

 

(20,093)

 

(616,399)

 

(23,358)

Isban Brasil S.A. (4)

 

 

(32,953)

 

(987)

 

(43,842)

 

(425)

Produban Serviços de Informática S.A. (4)

 

(3,646)

 

(528)

 

(29,993)

 

(185)

CFI RCI Brasil (5)

 

 

-

 

-

 

(31,656)

 

-

Banco RCI Brasil S.A. (Current Corporate Name of RCI Brasil Leasing) (5)

 

(67,351)

 

(3,125)

 

(6,140)

 

(32)

Santander Microcrédito (3)

 

 

(7,821)

 

(417)

 

(10,425)

 

(206)

Santander Participações (3)

 

 

(597,719)

 

(18,907)

 

(582,370)

 

(277)

Santander Securities Services Brasil DTVM S.A. (3) (10)

 

(106,586)

 

(4,714)

 

(147,627)

 

(13,064)

Santander Brasil Consórcio (3)

 

 

(66,594)

 

(2,206)

 

(67,831)

 

(1,097)

Santander Paraty (3)

 

 

(70,185)

 

-

 

(74,765)

 

-

Santander Capitalização S.A. (3)

 

(3,091)

 

-

 

(8,024)

 

-

Santander CCVM (3)

 

 

(58,528)

 

(2,436)

 

(76,689)

 

(2,324)

Santander FI SBAC (3)

 

 

(16,129)

 

-

 

(15,726)

 

-

Webcasas S.A. (3)

 

 

(20,718)

 

(655)

 

(20,224)

 

-

Others

 

 

(97,371)

 

(1,994)

 

(49,306)

 

(1,522)

Repurchase Commitments

 

 

(23,161,355)

 

(522,160)

 

(12,780,319)

 

(1,010,632)

Fundo de Investimento Santillana (4)

 

(323,810)

 

(9,783)

 

-

 

-

Getnet S.A. (3)

 

 

(89,718)

 

(3,838)

 

(104,485)

 

-

Santander FI Amazonas (3)

 

 

(251,838)

 

(5,465)

 

(176,971)

 

(1,552)

Santander FI Financial (3)

 

 

(8,914,352)

 

(281,015)

 

(8,634,290)

 

(215,186)

Santander Leasing (3)

 

 

(13,459,855)

 

(216,725)

 

(3,664,176)

 

(758,569)

Banco Bandepe (3)

 

 

(51,872)

 

(1,699)

 

(54,239)

 

(417)

Santander CCVM (3)

 

 

(7,500)

 

(307)

 

(9,055)

 

(628)

Santander FI SBAC (3)

 

 

(161)

 

(944)

 

(22,858)

 

(194)

Santander Brasil Gestão de Recursos Ltda. (6)

 

-

 

(128)

 

(41,192)

 

(1,873)

Santander Securities Services Brasil Participações S.A. (6)

 

-

 

-

 

-

 

(24,185)

Santander FI Diamantina (3)

 

 

(62,249)

 

(1,922)

 

(60,300)

 

(1,209)

Super (3)

 

 

-

 

(255)

 

(11,928)

 

-

Others

 

 

-

 

(79)

 

(825)

 

(6,819)

Borrowings and Onlendings

 

 

(1,626,286)

 

-

 

(239,538)

 

-

Banco Santander Espanha (2)

 

 

(148,951)

 

-

 

(217,677)

 

-

Santander Brasil EFC (3)

 

 

(1,459,044)

 

-

 

-

 

-

Banco Santander S.A. (Uruguay) (4)

 

(17,943)

 

-

 

(20,533)

 

-

Santander Trade Services, Ltd. (4)

 

(348)

 

-

 

(1,328)

 

-

Dividends and Bonuses Payables

 

-

 

-

 

(2,488,913)

 

-

Banco Santander Espanha (2)

 

 

-

 

-

 

(385,067)

 

-

Sterrebeeck B.V. (2)

 

 

-

 

-

 

(1,313,926)

 

-

GES (4)

 

 

-

 

-

 

(788,118)

 

-

SIH (4)

 

 

-

 

-

 

(1,398)

 

-

Banco Madesant - Sociedade Unipessoal, S.A.(Banco Madesant) (4)

 

-

 

-

 

(404)

 

-

Payables from Affiliates

 

 

(36,168)

 

(94,438)

 

(8,631)

 

(91,443)

Produban Servicios Informáticos Generales, S.L. (Produban Servicios) (4)

 

(6,981)

 

-

 

-

 

(4,404)

Isban Brasil S.A. (4)

 

 

(492)

 

(26,812)

 

-

 

(22,097)

Produban Serviços de Informática S.A. (4)

 

(15,474)

 

(45,511)

 

-

 

(35,703)

Konecta Brazil Outsourcing Ltda.(4)

 

-

 

-

 

-

 

(9,035)

Ingenieria de Software Bancário, S.L. (Ingeniería) (4)

 

(7,412)

 

(1)

 

-

 

(4,948)

Santander Microcrédito (3)

 

 

(3,233)

 

(8,974)

 

(6,903)

 

(8,612)

Getnet S.A. (3)

 

 

(1,220)

 

(4,054)

 

(753)

 

(1,064)

Santander Securities Services Brasil DTVM S.A. (3) (10)

 

(1,179)

 

(8,149)

 

(899)

 

-

Others

 

 

(177)

 

(937)

 

(76)

 

(5,580)

 

77

 

Debt Instruments Eligible to Compose Capital

 

(8,516,040)

 

(107,966)

 

(9,435,823)

 

(104,166)

Banco Santander Espanha (2) (8)

 

(8,516,040)

 

(107,966)

 

(9,435,823)

 

(104,166)

Donations

 

-

 

(3,100)

 

-

 

(7,170)

Fundação Sudameris

 

-

 

(3,100)

 

-

 

(6,000)

Fundação Santander

 

-

 

-

 

-

 

(1,170)

Other Payables - Others

 

(60,339)

 

(335,962)

 

(68,944)

 

(276,333)

Banco Santander Espanha (2)

 

-

 

(976)

 

-

 

(10,576)

Isban Brasil S.A. (4)

 

-

 

(76,884)

 

-

 

(69,520)

TecBan (7)

 

-

 

(51,072)

 

-

 

(40,497)

Ingeniería (4)

 

-

 

(16,992)

 

-

 

(9,022)

Produban Serviços de Informática S.A. (4)

 

-

 

(14,629)

 

-

 

(13,970)

Produban Servicios (4)

 

-

 

(7,375)

 

-

 

(332)

Aquanima Brasil Ltda. (4)

 

-

 

(6,019)

 

-

 

(5,644)

Getnet S.A. (3)

 

(57,561)

 

(160,716)

 

(66,367)

 

(126,371)

Santander Securities Services Brasil DTVM S.A. (3) (10)

 

(2,778)

 

(280)

 

(2,577)

 

-

Others

 

-

 

(1,019)

 

-

 

(401)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

   

Assets

  

Income

  

Assets

  

Income

   

(Liabilities)

 

(Expenses)

 

(Liabilities)

 

(Expenses)

       

01/01 to

      

01/01 to

 

 

03/31/2016

 

03/31/2016

 

12/31/2015

 

03/31/2015

Cash

 

395,698

 

-

 

1,868,163

 

-

Banco Santander Espanha (2)

 

393,830

 

-

 

1,866,694

 

-

Banco Santander (México), S.A. (4)

 

53

 

-

 

65

 

-

Banco Santander Totta, S.A. (4)

 

1,774

 

-

 

1,303

 

-

Others

 

41

 

-

 

101

 

-

Interbank Investments

 

16,733,468

 

10,213

 

20,699,539

 

3,048

Banco Santander Espanha (1) (2)

 

16,733,468

 

10,213

 

20,699,539

 

3,048

Derivatives Financial Instruments - Net

 

(1,200,650)

 

(92.742)

 

(944,627)

 

(175,203)

Santander Benelux (4)

 

-

 

-

 

-

 

31,727

Fundo de Investimento Santillana (4)

 

(380,428)

 

(18,406)

 

(379,239)

 

(43,043)

Abbey National Treasury (4)

 

(126,227)

 

14,927

 

(156,976)

 

(66,331)

Banco Santander Espanha (2)

 

(693,995)

 

(89,263)

 

(408,412)

 

(97,556)

Trading Account

 

480,742

 

116,795

 

831,967

 

(86,717)

Banco Santander Espanha (2)

 

353,138

 

116,689

 

696,802

 

(86,724)

Abbey National Treasury (4)

 

127,604

 

106

 

135,165

 

7

Foreign Exchange Portfolio - Net

 

192,236

 

36,602

 

142,919

 

(110,302)

Banco Santander Espanha (2)

 

192,236

 

36,602

 

142,919

 

(113,161)

Santander Benelux (4)

 

-

 

-

 

-

 

2,859

Receivables from Affiliates

 

769,824

 

464,499

 

753,767

 

457,058

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

769,655

 

386,725

 

753,581

 

365,299

Zurich Santander Brasil Seguros S.A. (6)

 

-

 

76,957

 

-

 

89,708

Santander Brasil Asset (6)

 

-

 

-

 

-

 

1,243

Others

 

169

 

817

 

186

 

808

Non-Operating Result

 

-

 

-

 

-

 

34,404

Capital Riesgo Global (9)

 

-

 

-

 

-

 

34,404

Other Receivables - Others

 

194,450

 

12,187

 

247,744

 

1,303

Banco Santander Espanha (2)

 

194,450

 

1,540

 

247,744

 

-

Banco Santander International (4)

 

-

 

8,938

 

-

 

-

Others

 

-

 

1,709

 

-

 

1,303

Non - Current Assets Held for Sale (Note 13)

 

487,386

 

-

 

487,386

 

-

BW Guirapá I S.A.

 

487,386

 

-

 

487,386

 

-

 

78

 

 

Deposits

 

 

(1,017,086)

 

(30,454)

 

(857,383)

 

(27,362)

Banco Santander Espanha (2)

 

 

(1,554)

 

-

 

(1,360)

 

-

Zurich Santander Brasil Seguros S.A. (6)

 

(21,490)

 

-

 

(23,878)

 

-

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

(88,301)

 

-

 

(95,537)

 

-

Isban Brasil S.A. (4)

 

 

(32,953)

 

(987)

 

(43,842)

 

(425)

Produban Serviços de Informática S.A. (4)

 

(3,646)

 

(528)

 

(29,993)

 

(185)

Santander Brasil Gestão de Recursos Ltda. (6)

 

(83,764)

 

(2,980)

 

(30,990)

 

(1,625)

Fundo de Investimento Santillana (4)

 

(636,484)

 

(20,093)

 

(616,399)

 

(23,358)

Santander Brasil Asset (6)

 

 

(13,592)

 

(440)

 

(12,360)

 

(488)

Santander Securities Services Brasil DTVM S.A. (3) (10)

 

(106,586)

 

(4,714)

 

-

 

-

Santander Securities Services Brasil Participações S.A. (6)

 

(26,071)

 

(628)

 

-

 

-

Others

 

 

(2,645)

 

(84)

 

(3,024)

 

(1,281)

Repurchase Commitments

 

 

(323,810)

 

(9,914)

 

(42,017)

 

(28,003)

Produban Serviços de Informática S.A. (4)

 

-

 

-

 

-

 

(678)

Isban Brasil S.A. (4)

 

 

-

 

-

 

-

 

(1,165)

Santander Brasil Gestão de Recursos Ltda. (6)

 

-

 

(128)

 

(41,192)

 

(1,873)

SAM Brasil Participações S.A. (6)

 

-

 

(3)

 

(825)

 

(59)

Santander Securities Services Brasil Participações S.A. (6)

 

-

 

-

 

-

 

(24,185)

Fundo de Investimento Santillana (4)

 

(323,810)

 

(9,783)

 

-

 

-

Universia Brasil, S.A. (4)

 

 

-

 

-

 

-

 

(43)

Borrowings and Onlendings

 

 

(167,242)

 

-

 

(239,538)

 

-

Banco Santander Espanha (2)

 

 

(148,951)

 

-

 

(217,677)

 

-

Santander Trade Services, Ltd. (4)

 

(348)

 

-

 

(1,328)

 

-

Banco Santander S.A. (Uruguay) (4)

 

(17,943)

 

-

 

(20,533)

 

-

Dividends and Bonuses Payables

 

-

 

-

 

(2,488,509)

 

-

Sterrebeeck B.V. (2)

 

 

-

 

-

 

(1,313,926)

 

-

GES (4)

 

 

-

 

-

 

(788,118)

 

-

SIH (4)

 

 

-

 

-

 

(1,398)

 

-

Banco Santander Espanha (2)

 

 

-

 

-

 

(385,067)

 

-

Payables from Affiliates

 

 

(31,755)

 

(83,307)

 

(443)

 

(83,204)

Produban Servicios (4)

 

 

(6,981)

 

(575)

 

-

 

(4,528)

Isban Brasil S.A. (4)

 

 

(539)

 

(27,713)

 

(375)

 

(24,598)

Produban Serviços de Informática S.A. (4)

 

(15,474)

 

(45,514)

 

-

 

(37,395)

Ingeniería (4)

 

 

(7,412)

 

(1)

 

-

 

(6,083)

Konecta Brazil Outsourcing Ltda. (4)

 

-

 

-

 

-

 

(9,035)

Santander Securities Services Brasil DTVM S.A. (3) (10)

 

(1,179)

 

(8,149)

 

-

 

-

Others

 

 

(170)

 

(1,355)

 

(68)

 

(1,565)

Debt Instruments Eligible to Compose Capital

 

(8,516,040)

 

(107,966)

 

(9,435,823)

 

(104,166)

Banco Santander Espanha (2) (8)

 

(8,516,040)

 

(107,966)

 

(9,435,823)

 

(104,166)

Donations

 

 

-

 

(4,770)

 

-

 

(9,930)

Santander Cultural

 

 

-

 

(670)

 

-

 

(2,760)

Fundação Sudameris

 

 

-

 

(3,100)

 

-

 

(6,000)

Fundação Santander

 

 

-

 

(1,000)

 

-

 

(1,170)

Other Payables - Other

 

 

(15,784)

 

(127,341)

 

(16,589)

 

(116,367)

Banco Santander Espanha (2)

 

 

-

 

(979)

 

-

 

(10,576)

Isban Brasil S.A. (4)

 

 

-

 

(80,308)

 

-

 

(73,072)

Produban Serviços de Informática S.A. (4)

 

-

 

(14,960)

 

-

 

(14,281)

Ingeniería (4)

 

 

-

 

(17,080)

 

-

 

(8,216)

Produban Servicios (4)

 

 

-

 

(7,375)

 

-

 

(332)

Aquanima Brasil Ltda. (4)

 

 

-

 

(6,019)

 

-

 

(5,644)

Zurich Santander Brasil Seguros e Previdência S.A. (6)

 

(13,006)

 

-

 

(13,969)

 

(3,845)

Others

 

 

(2,778)

 

(620)

 

(2,620)

 

(401)

                       

(1) On March 31, 2016, refers to investments in foreign currency (overnight) with maturity on April 1, 2016 and interest rates of 0.17% p.a. (12/31/2015 - with maturity on January 4, 2016 and interest rates of 0.17% p.a.) maintained by the Bank's Santander Brasil and its Grand Cayman Branch.

                       

(2) Controller - Banco Santander is indirectly controlled by Banco Santander Spain (Note 1 and 26.d), through its subsidiary GES and Sterrebeeck B.V.

                       

(3) Controlled - Banco Santander.

                       

(4) Controlled - Banco Santander Spain.

                       

(5) Jointly Controlled - Banco Santander.

                       

(6) Associated Company - Banco Santander Spain.

                       

(7) Jointly Controlled - Santander Serviços.

                       

(8) Refers to the portion acquired by the Parent Due to Regulatory Capital Otimization Planheld in the first half of 2014.

                       

(9) Indirectly Controlled - Banco Santander Spain.

                       

(10) On August 31, 2015 it was sold all shares of Santander Securities Services Brasil DTVM S.A. to Santander Securities Services Brasil Participações S.A., indirectly controlled by Banco Santander, S.A. (Note 15 and 37.c).

 

79

 

                   

27. Income from Services Rendered and Banking Fees

         

 

        

 

 

 

 

 

Bank

 

 

 

Consolidated

     

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Asset Management

 

 

241,430

 

221,772

 

248,244

 

259,904

Checking Account Services

 

 

494,485

 

396,804

 

578,803

 

465,741

Lending Operations and Income from Guarantees Provided

 

266,994

 

241,751

 

337,867

 

327,744

Lending Operations

 

 

131,696

 

121,816

 

202,569

 

207,809

Income Garantees Provided

 

 

135,298

 

119,935

 

135,298

 

119,935

Insurance Fees

 

 

471,526

 

449,492

 

484,965

 

471,551

Cards (Debit and Credit) and Acquiring Services

 

 

776,242

 

695,780

 

891,129

 

803,224

Collection

 

 

279,136

 

233,188

 

279,136

 

233,188

Brokerage, Custody and Placement of Securities

 

 

110,742

 

98,380

 

143,278

 

139,627

Others

 

 

42,120

 

27,373

 

127,052

 

126,809

Total

 

 

2,682,675

 

2,364,540

 

3,090,474

 

2,827,788

                   

28. Personnel Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

     

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Compensation

 

 

935,344

 

808,603

 

1,039,656

 

903,001

Charges

 

 

343,440

 

323,809

 

379,627

 

354,207

Benefits

 

 

339,567

 

288,989

 

368,055

 

313,160

Training

 

 

13,262

 

15,842

 

15,302

 

17,836

Others

 

 

10,708

 

9,018

 

10,822

 

9,145

Total

 

 

1,642,321

 

1,446,261

 

1,813,462

 

1,597,349

                   

29. Other Administrative Expenses

         

 

        

 

 

 

 

 

Bank

 

 

 

Consolidated

     

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Depreciation and Amortization (1)

 

 

773,268

 

1,397,619

 

868,411

 

1,481,764

Outsourced and Specialized Services

 

 

443,187

 

465,660

 

542,737

 

533,542

Communications

 

 

107,763

 

110,081

 

122,413

 

119,320

Data Processing

 

 

356,934

 

317,100

 

384,631

 

331,826

Advertising, Promotions and Publicity

 

 

49,289

 

42,615

 

62,402

 

55,879

Rentals

 

 

165,903

 

171,362

 

178,927

 

182,560

Transportation and Travel

 

 

47,234

 

35,340

 

59,337

 

45,156

Financial System Services

 

 

45,560

 

38,277

 

60,524

 

52,607

Security and Money Transport

 

 

162,236

 

150,825

 

177,011

 

161,772

Asset Maintenance and Upkeep

 

 

54,663

 

50,276

 

62,691

 

57,958

Water, Electricity and Gas

 

 

60,938

 

48,992

 

62,651

 

49,994

Materials

 

 

16,604

 

16,897

 

17,642

 

17,929

Others

 

 

85,451

 

56,829

 

126,480

 

100,871

Total

 

 

2,369,030

 

2,901,873

 

2,725,857

 

3,191,178

 

 

 

 

 

 

 

 

 

 

(1) Includes goodwill amortization of R$444,391 (2015 - R$947,990) Bank and R$447,415 (2015 - R$949,150) Consolidated, held on time, length and proportion of the projected results which are subject to annual verification (Note 17).

                   
 

80

 

30. Tax Expenses

           

 

        

 

 

 

 

 

 

Bank

 

 

 

Consolidated

       

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Cofins (Contribution for Social Security Financing) (1)

 

672,039

 

(64,952)

 

756,381

 

5,178

ISS (Tax on Services)

 

99,902

 

84,271

 

118,103

 

101,912

PIS/Pasep (Tax on Revenue) (1)

 

109,206

 

(10,555)

 

129,759

 

8,539

Others (2)

 

109,351

 

267,391

 

148,387

 

300,421

Total

 

990,498

 

276,155

 

1,152,630

 

416,050

                     

(1) Includes the constitution of deferred taxes assets PIS and Cofins on adjustment to market value of securities and derivative financial instruments.

                     

(2) Includes provisions updates for PIS and Cofins of Law 9,718/1998.

                     

31. Other Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

 

Consolidated

       

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Net Income Insurance and Pension and Capitalization

 

-

 

-

 

70,397

 

59,904

Tax (Note 23.c)

 

-

 

-

 

-

 

41,315

Monetary Adjustment of Escrow Deposits

 

134,361

 

79,618

 

192,166

 

120,729

Recoverable Taxes (2)

 

53,041

 

59,844

 

70,761

 

89,786

Recovery of Charges and Expenses

 

348,687

 

249,604

 

276,054

 

177,188

Monetary Variation

 

246,810

 

205,617

 

246,864

 

205,707

Others

 

82,469

 

544,198

 

257,787

 

314,271

Total

 

865,368

 

1,138,881

 

1,114,029

 

1,008,900

                     

32. Other Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

       

 

 

Bank

 

 

 

Consolidated

       

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Operating Provisions

 

 

 

 

 

 

 

 

Tax (Note 23.c)

 

6,310

 

9,851

 

9,425

 

-

Labor (Note 23.c)

 

168,152

 

223,975

 

180,791

 

239,267

Civil (Note 23.c)

 

245,980

 

118,036

 

269,938

 

138,086

Credit Cards

 

487,616

 

460,906

 

334,859

 

339,296

Actuarial Losses - Pension Plan (Note 35.a)

 

67,890

 

75,062

 

67,900

 

75,070

Monetary Losses

 

1,426

 

13,467

 

1,580

 

13,752

Legal Fees and Costs

 

22,357

 

23,692

 

26,410

 

28,847

Serasa and SPC (Credit Reporting Agency)

 

26,665

 

22,661

 

28,816

 

25,216

Brokerage Fees

 

18,647

 

21,128

 

18,803

 

21,235

Commissions

 

11,976

 

26,214

 

107,841

 

79,800

Impairment

 

-

 

-

 

-

 

1,475

Others (1)

 

854,002

 

1,273,527

 

1,175,118

 

1,171,650

Total

 

1,911,021

 

2,268,519

 

2,221,481

 

2,133,694

                     

(1) Includes, mainly, inflation adjustment of provisions for legal and administrative proceedings and legal obligations, provisions for the guarantee fund benefits and other provisions.

                     

33. Non-Operating Result

                     

 

 

 

 

 

 

Bank

 

 

 

Consolidated

       

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Result of Investments (1)

 

-

 

34,404

 

(778)

 

60,057

Result on Sale of Other Assets

 

9,850

 

3,666

 

9,954

 

3,832

Reversal (Recognition) of Allowance for Losses on Other Assets

 

(984)

 

198

 

(1,011)

 

326

Expense on Assets Not in Use

 

(3,606)

 

(1,370)

 

(4,755)

 

(2,216)

Gains (Losses) of Capital

 

(336)

 

1,559

 

396

 

1,306

Other Income (Expenses) (2)

 

20,947

 

13,623

 

21,586

 

14,963

Total

 

25,871

 

52,080

 

25,392

 

78,268

                     

(1) In 2015, include the amount of R$34,503 Bank and R$60,203 Consolidated, includes profit on disposal of assets Non-Current Held for Sale (Note 13).

                     

 

81

 

34. Income Tax and Social Contribution

 

         

 

 

Bank

 

 

 

Consolidated

         

01/01 to

 

01/01 to

 

01/01 to

 

01/01 to

 

 

 

 

 

03/31/2016

 

03/31/2015

 

03/31/2016

 

03/31/2015

Income Before Taxes on Income and Profit Sharing

 

4,497,202

 

(3,049,331)

 

4,835,241

 

(2,792,812)

Profit Sharing (1)

 

 

(298,329)

 

(242,909)

 

(318,360)

 

(263,738)

Interest on Capital

 

 

-

 

-

 

-

 

(20)

Unrealized Results

 

 

-

 

-

 

19,836

 

(35)

Income Before Taxes

 

4,198,873

 

(3,292,240)

 

4,536,717

 

(3,056,605)

Total Income and Social Contribution Tax at the Rates
of 25% and 20%, (2014 - 25% and 15%) Respectively (4)

 

(1,889,493)

 

1,316,896

 

(2,041,523)

 

1,222,642

Equity in Subsidiaries (2)

 

59,214

 

112,762

 

135

 

251

Nondeductible Expenses, Net of Non-Taxable Income

 

46,622

 

16,269

 

69,745

 

44,009

Exchange Variation - Foreign Branches

 

(1,740,862)

 

2,539,684

 

(1,740,862)

 

2,539,684

Income and Social Contribution Taxes on Temporary Differences and
Tax Losses from Previous Exercises

 

405,552

 

(1,885)

 

261,554

 

2,194

Effects of Change in Rate of CSLL (3)

 

-

 

-

 

22,836

 

8,217

Other Adjustments Social Contribution Taxes 5% (4)

 

(34,069)

 

-

 

(47,337)

 

-

Other Adjustments, Including Profits Provided Abroad

 

181,885

 

(12,035)

 

173,385

 

(17,173)

Income and Social Contribution Taxes

 

(2,971,151)

 

3,971,691

 

(3,302,067)

 

3,799,824

 

 

 

 

 

 

 

 

 

 

 

 

(1) The basis of calculation is the net income, after IR and CSLL.

                       

(2) As a result of equity in subsidiaries are not included interest on capital received and receivable.

                       

(3) Effect of rate differences for the other non-financial companies, which the social contribution tax rate is 9%.

                       

(4) Temporary rate increase of CSLL from September 2015 to December 2018 (Note 3.s).

 

Fiscal Hedge Grand Cayman Branch and the Subsidiary Santander Brasil EFC

                       

Banco Santander operate a branch in the Cayman Islands and a subsidiary called Santander Brazil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” (independent subsidiary in Spain) which are used mainly to raise funds in the capital and financial markets, providing credit lines that are extended to customers for trade-related financings and working capital (Note 14).

                       

To protect the exposures to forein exchange rate variations, the Bank uses derivatives. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or devaluation of the local currency (real) in foreign investments are nontaxable to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives are to protect the after-tax results.

                       

The different tax treatment of such foreign exchange rate differences results in a volatility on the operational earnings or losses and on the gross revenue tax expense (PIS/Cofins) and income taxes (IR/CSLL). Exchange rate variations arising from foreign investments recorded for the acumulated of period ended on March 31, 2016 an accumulated loss of R$3,786 million. On the other hand, the derivatives contracted to cover these positions generated a gain in "Derivatives Transaction" of R$7,220 million. The tax effect of these derivatives impacted the Tax Expenses line generating a tax loss of R$3,434 million represented by R$336 million of PIS/Cofins and R$3,098 million IR/CSLL.

                       

35. Employee Benefit Plans - Post-Employment Benefits

                       

a) Supplemental Pension Plan

                       

Banco Santander and its subsidiaries sponsor the closed pension entities for the purpose of granting pensions and supplementary pensions granted by the Social Security, as defined in the basic regulations of each plan.

                       

I) Banesprev

                       

Plan I: defined benefit plan fully defrayed by Banco Santander, covers employees hired after May 22, 1975 called Participants Recipients, and those hired until May 22, 1975 called Participants Aggregates, who are also entitled to death benefits. Plan is closed to new entrants since March 28, 2005.

                       

Plan II: defined benefit plan, constituted from July 27, 1994, effective of the new text of the Statute and Regulations of the Basic Plan II, Plan I participants who chose the new plan began to contribute to the rate of 44.9% stipulated by the actuary for funding each year, introduced in April 2012 extraordinary cost to the sponsor and participants, as agreed with the PREVIC - Superintendence of Pension Funds, due to deficit in the plan. Plan is closed to new entrants since June 3, 2005.

                       

Plan V: defined benefit plan fully defrayed by Banco Santander, covers employees hired until May 22, 1975, closed and paid off.

                       

Supplemental Pension Plan Pré 75: defined benefit plan was created in view of the privatization of Banespa and is managed by Banesprev and offered only to employees hired before May 22, 1975, this Plan effective January 1, 2000. Plan is closed to new entrants since April 28, 2000.

 

82

 

 

Plan III: variable contribution plan, for employees hired after May 22,1975, previously served by the Plans I and II. Under this plan contributions are made by the sponsor and the participants. The benefits are in the form of defined contribution during the period of contribution and defined benefit during the receipt of benefit, if paid as monthly income for life. Plan is closed to new entrants since September 1, 2005.

 

Plan IV: variable contribution plan, designed for employees hired as of November 27, 2000, in which the sponsor only contributes to the risk benefits and administrative expenses. In this plan the benefit is set in the form of defined contribution during the period of contribution and defined benefit during the receipt of benefits in the form of monthly income for life, in whole or in part of the benefit. The risk benefits of the plan are in defined benefit. Plan is closed to new entrants since July 23, 2010.

                             

Three plans (DCA, DAB and CACIBAN) of additional retirement and former employees associated pension, arising from the process of acquisition of the former Banco Meridional, established under the defined benefit plan. The plans are closed to new participants.

                             

II) Sanprev - Santander Associação de Previdência (Sanprev)

                             

Plan I: defined benefit plan, established on September 27, 1979, covering employees enrolled in the plan sponsor and is in process of extinction since June 30, 1996.

 

Plan II: plan that provides insurance risk, pension supplement temporary, disability retirement annuity and the supplemental death and sickness allowance and birth, including employees enrolled in the plan sponsor and is funded solely by sponsors through monthly contributions, as indicated by the actuary. Plan is closed to new entrants since March 10, 2010.

 

Plan III: variable contribution plan covering employees of the sponsors who made ​​the choice to contribute, by contributing freely chosen by participants from 2% of salary contribution. That the benefit plan is a defined contribution during the contribution and defined benefit during the receipt of the benefit, being in the form of monthly income for life, in whole or in part of the benefit. Plan is closed to new entrants since March 10, 2010.

 

III) Bandeprev - Bandepe Previdência Social (Bandeprev)

                             

Defined benefit plan, sponsored by Banco Bandepe and Banco Santander, managed by Bandeprev. The plans are divided into basic plan and special retirement supplement plan, with different eligibility requirements, contributions and benefits by subgroups of participants. The plans are closed to new entrants since 1999 for Banco Bandepe’s employees and for others since 2011.

 

IV) Other Plans

                             

SantanderPrevi - Sociedade de Previdência Privada (SantanderPrevi): It´s a closed pension entity, which aims at setting up and implementation of benefit plans pension character, complementary to the general welfare, in the form of actual legislation. Have a plan designed in the form of defined contribution, with contributions made by sponsors and participants and It has 10 cases of lifetime income with benefits arising from the previous plan.

                             

Fundação América do Sul de Assistência e Seguridade Social (Fasass): Closed Pension entity that administered social security benefits in three planes, two on a Defined Benefit and a variable contribution, whose process of withdrawal of sponsorship, approved by Supplementary Pension Plan Secretariat (SPC), actual PREVIC, were implemented in July 2009. On June 8, 2015, through Official Letter 1504/CGTR/DITEC/PREVIC, it was approved the closure of Benefits Plans I, II and III, and the closure of the authorization for the Fasass's operation, as closed pension fund. On November, 10th, 2015 this entity was extinct, with the low of their national registry of legal entities.

                             

Determination of Liabilities (Assets) Net Actuarial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

Bank

                           

03/31/2016

                       

Santander-

    

 

 

 

 

 

 

 

 

Banesprev (1)

 

Sanprev

 

previ (1)

 

Bandeprev

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

 

 

 

 

(15,853,880)

 

(371,542)

 

(3,377)

 

(1,097,263)

Fair Value of Plan Assets

 

 

 

 

 

13,776,984

 

695,021

 

3,938

 

1,416,380

 

 

 

 

 

 

 

 

(2,076,896)

 

323,479

 

561

 

319,117

Being:

                            

Superavit

 

 

 

 

 

 

 

136,666

 

323,479

 

561

 

319,117

Deficit

 

 

 

 

 

 

 

(2,213,561)

 

-

 

-

 

-

Amount not Recognized as Assets

 

 

 

 

 

 

 

136,666

 

323,479

 

561

 

319,117

Net Actuarial Asset on December 31, 2015

 

 

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on December 31, 2015 (Note 22)

 

 

 

 

(2,213,561)

 

-

 

-

 

-

Payments Made (1)

 

 

 

 

 

236,632

 

-

 

-

 

118

Revenues (Expenses) Recorded (Note 32)

 

 

 

 

(67,255)

 

(517)

 

-

 

(118)

Net Actuarial Asset on March 31, 2016

 

 

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on March 31, 2016 (Note 22)

 

 

 

 

(2,044,184)

 

(517)

 

-

 

-

Other Equity Valuation Adjustments

 

 

 

 

(1,903,040)

 

(10,989)

 

487

 

(672)

Actual Return on Plan Assets

 

 

 

 

 

1,150,251

 

118,029

 

490

 

104,068

 

83

 

 

 

 

 

 

 

 

 

 

 

                 

Bank

                 

03/31/2015

             

Other

   

 

 

 

Banesprev (1)

 

Sanprev

 

Plans (1)

 

Bandeprev

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

 

(15,852,069)

 

(357,428)

 

(351,785)

 

(1,125,036)

Fair Value of Plan Assets

 

 

13,652,363

 

615,896

 

3,885

 

1,415,776

 

 

 

(2,199,706)

 

258,468

 

(347,900)

 

290,740

Being:

                  

Superavit

 

 

151,075

 

258,468

 

504

 

290,740

Deficit

 

 

(2,350,781)

 

-

 

(348,404)

 

-

Amount not Recognized as Assets

 

 

151,075

 

258,468

 

504

 

290,182

Net Actuarial Asset on December 31, 2014

 

 

-

 

-

 

-

 

557

Net Actuarial Liability on December 31, 2014 (Note 22)

 

 

(2,350,781)

 

-

 

(348,404)

 

-

Payments Made

 

 

52,583

 

-

 

11,333

 

124

Revenues (Expenses) Recorded (Note 32)

 

 

(65,377)

 

(640)

 

(8,929)

 

(116)

Net Actuarial Asset on March 31, 2015

 

 

-

 

-

 

-

 

565

Net Actuarial Liability on March 31, 2015 (Note 22)

 

 

(2,363,575)

 

(640)

 

(346,000)

 

-

Other Equity Valuation Adjustments

 

 

(2,087,293)

 

(10,989)

 

(271,516)

 

(678)

Actual Return on Plan Assets

 

 

1,504,221

 

125,441

 

1,145

 

219,171

 

 

 

 

 

 

 

 

 

 

                 

Consolidated

                 

03/31/2016

             

Santander-

    

 

 

 

Banesprev (1)

 

Sanprev

 

previ (1)

 

Bandeprev

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

 

(16,053,213)

 

(371,885)

 

(3,377)

 

(1,097,263)

Fair Value of Plan Assets

 

 

14,159,443

 

695,523

 

3,938

 

1,416,380

 

 

 

(1,893,770)

 

323,638

 

561

 

319,117

Being:

                  

Superavit

 

 

319,791

 

323,638

 

561

 

319,117

Deficit

 

 

(2,213,561)

 

-

 

-

 

-

Value Unrecognized as Asset

 

319,791

 

323,638

 

561

 

319,117

Net Actuarial Asset on December 31, 2015

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on December 31, 2015 (Note 22)

 

 

(2,213,561)

 

-

 

-

 

-

Payments Made (1)

 

 

236,638

 

-

 

-

 

118

Revenues (Expenses) Recorded (Note 32)

 

 

(67,260)

 

(522)

 

-

 

(118)

Net Actuarial Asset on March 31, 2016

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on March 31, 2016 (Note 22)

 

 

(2,044,183)

 

(522)

 

-

 

-

Other Equity Valuation Adjustments

 

 

(1,903,040)

 

(10,989)

 

487

 

(672)

Actual Return on Plan Assets

 

 

1,170,637

 

117,923

 

490

 

104,068

 

 

 

 

 

 

 

 

 

 

                 

Consolidated

                 

03/31/2015

             

Other

   

 

 

 

Banesprev (1)

 

Sanprev

 

Plans (1)

 

Bandeprev

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

 

(16,056,522)

 

(358,008)

 

(351,785)

 

(1,125,036)

Fair Value of Plan Assets

 

 

14,030,718

 

616,651

 

3,885

 

1,415,776

 

 

 

(2,025,804)

 

258,643

 

(347,900)

 

290,740

Being:

                  

Superavit

 

 

324,976

 

258,643

 

504

 

290,740

Deficit

 

 

(2,350,781)

 

-

 

(348,404)

 

-

Value Unrecognized as Asset

 

324,976

 

258,643

 

504

 

290,182

Net Actuarial Asset on December 31, 2014

 

 

-

 

-

 

-

 

557

Net Actuarial Liability on December 31, 2014 (Note 22)

 

 

(2,350,781)

 

-

 

(348,404)

 

-

Payments Made

 

 

52,584

 

-

 

11,333

 

124

Revenues (Expenses) Recorded (Note 32)

 

 

(65,379)

 

(646)

 

(8,929)

 

(116)

Net Actuarial Asset on March 31, 2015

 

 

-

 

-

 

-

 

565

Net Actuarial Liability on March 31, 2015 (Note 22)

 

 

(2,363,576)

 

(646)

 

(346,000)

 

-

Other Equity Valuation Adjustments

 

 

(2,087,293)

 

(10,989)

 

(271,516)

 

(678)

Actual Return on Plan Assets

 

 

1,548,667

 

125,455

 

1,145

 

219,171

                   

(1) In the first quarter of 2016, as expected, has been concluded the transfer process to Banesprev, of care boxes, supplementary retirement and pension plan of former staff members arising from the process of acquisition of the former Banco Meridional, established under the defined benefit plan. In the contributions made line the increasing the amount of contribution/payments had the extraordinary event the contribution of R$171.6 million.

 

84

 

                     

Opening of gains (losses) actuarial from experience, financial assumptions and demographic hypotheses in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

                     

 

 

 

 

 

 

 

 

 

 

Bank

                   

12/31/2015

               

Santander-

    

 

 

 

 

Banesprev (1)

 

Sanprev

 

previ (1)

 

Bandeprev

Experience Plan

 

(1,157,703)

 

(53,232)

 

(357)

 

(75,419)

Changes in Financial Assumptions

 

1,868,488

 

40,029

 

271

 

117,864

Gain (Loss) Actuarial - Obligation

 

710,785

 

(13,203)

 

(86)

 

42,445

Return on Investment, Return Unlike Implied Discount Rate

 

(284,131)

 

52,458

 

89

 

(45,454)

Chance in Irrecoverble Surplus

 

30,937

 

(36,737)

 

(2)

 

2,931

                     

 

 

 

 

 

 

 

 

 

 

Bank

                   

12/31/2014

               

Other

   

 

 

 

 

Banesprev (1)

 

Sanprev

 

Plans (1)

 

Bandeprev

Experience Plan

 

(479,188)

 

(29,737)

 

(22,326)

 

(44,825)

Changes in Financial Assumptions

 

(427,500)

 

(8,656)

 

(6,151)

 

(27,606)

Gain (Loss) Actuarial - Obligation

 

(906,688)

 

(38,393)

 

(28,477)

 

(72,431)

Return on Investment, Return Unlike Implied Discount Rate

 

88,630

 

67,506

 

822

 

78,755

                     

 

 

 

 

 

 

 

 

 

 

Consolidated

                   

12/31/2015

               

Santander-

    

 

 

 

 

Banesprev (1)

 

Sanprev

 

previ (1)

 

Bandeprev

Experience Plan

 

(1,170,825)

 

(53,078)

 

(357)

 

(75,419)

Changes in Financial Assumptions

 

1,890,846

 

40,064

 

271

 

117,864

Gain (Loss) Actuarial - Obligation

 

720,021

 

(13,014)

 

(86)

 

42,445

Return on Investment, Return Unlike Implied Discount Rate

 

(304,174)

 

52,286

 

89

 

(45,454)

Chance in Irrecoverble Surplus

 

40,737

 

(36,737)

 

(2)

 

2,931

                     

 

 

 

 

 

 

 

 

 

 

Consolidated

                   

12/31/2014

               

Other

   

 

 

 

 

Banesprev (1)

 

Sanprev

 

Plans (1)

 

Bandeprev

Experience Plan

 

(483,869)

 

(29,596)

 

(22,326)

 

(44,825)

Changes in Financial Assumptions

 

(432,968)

 

(8,677)

 

(6,151)

 

(27,606)

Gain (Loss) Actuarial - Obligation

 

(916,837)

 

(38,273)

 

(28,477)

 

(72,431)

Return on Investment, Return Unlike Implied Discount Rate

 

94,649

 

67,438

 

822

 

78,755

                     

(1) In the first quarter of 2016, as expected, has been concluded the transfer process to Banesprev, of care boxes, supplementary retirement and pension plan of former staff members arising from the process of acquisition of the former Banco Meridional, established under the defined benefit plan.

                     

 

85

 

The following table shows the duration of the actuarial liabilities of the plans sponsored by Banco Santander in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

               

 

 

 

 

 

 

 

Duration (in Years)

 

 

 

 

 

12/31/2015

 

12/31/2014

Banesprev

          

Plan I

 

 

11.44

 

11.45

Plan II

 

 

10.71

 

11.27

Plan III

 

 

8.33

 

8.60

Plan IV

 

 

16.38

 

17.34

Plan V

 

 

8.66

 

8.92

Pré-75

 

 

9.27

 

9.64

Meridional

 

 

6.62

 

6.65

Sanprev

 

 

 

 

 

Plan I

 

 

6.62

 

6.68

Plan II

 

 

15.85

 

16.75

Plan III

 

 

9.03

 

9.30

Sanprev

 

 

 

 

 

Plan Básico

 

 

9.03

 

9.48

Plan Especial I

 

 

6.86

 

6.94

Plan Especial II

 

 

6.75

 

6.80

SantanderPrevi

 

 

 

 

 

SantanderPrevi

 

 

6.95

 

7.15

               

a.1) Defined Contribution Plan

               

Among the plans administered by the Closed Pension Fund Entities linked to Santander, the Retirement Plan of SantanderPrevi is the only structured as Defined Contribution and open to new members, with contributions shared between sponsors and plan participants. The appropriate values by the sponsorss in the first quarter of 2016 was R$20,722 (2015 - R$17,189) Bank and R$21,648 (2015 - R$17,717) Consolidated.

               

b) Health and Dental Care Plan

               

Cabesp - Caixa Beneficente dos Funcionários do Banco do Estado de São Paulo: entity that covers health and dental care expenses of employees hired until Banespa privatization in 2000.

               

HolandaPrevi’s Retirees (current corporate name of Santanderprevi): for the health care plan Retirement has lifelong nature and is a closed group. In shutdown the employee should have completed 10 years of employment with Banco Real and 55 years of age. In this case it was offered continuity of health care plan where the employee bears 70% of the monthly and Bank subsidizes 30%. This rule lasted until December, 2002 and after this period that the employee was off like status Retired Holandaprevi, bears 100% of the monthly health plan.

               

Former Employees of Banco Real (Retiree by Circulares): it granting entitlement to healthcare former employee of Banco Real, with lifetime benefit was granted in the same condition the active employee, in this case, with the same coverage and plan design.

               

Eligible only to plans basic and standard first apartment, opting for apartment he takes the difference between the plans more co-participation in the basic plan. Not allowed new additions of dependents. It has subsidizes of 90% of the plan.

               

Bandeprev’s Retirees: health care plan retirees of Bandeprev’s pension plan beneficiaries is a lifetime benefit, for which Banco Santander is responsible for defraying 50% of the benefits of employees retired until November 27, 1998. For who retired after this date, the subsidy is 30%.

               

Officer with Lifetime Benefits (Lifetime Officers): lifetime health care benefit granted to only a small closed group of former directors coming from the Banco Sudameris Brasil S.A., being 100% funded by the Bank.

               

Life Insurance for Banco Real Retirees (Life Insurance): granted for Retirees Circulars: indemnity in case of Natural Death, Disease Disability, Accidental Death. The subsidy is 45.28% of the value. This benefit is also granted to retirees Foundation Sudameris where cost is 100% of the retired. It closed group.

               

Free Clinic: health care plan (free clinic) is offered for life to retirees who have contributed to the Foundation Sudameris for at least 25 years and has difference in default if the user chooses apartment. The plan is only offered in standard ward where the cost is 100% of the Foundation Sudameris.

               

Additionally, it is assured to retired employees, since they meet to certain legal requirements and full pays their respective contributions, the right to be maintaining as a beneficiary of the Banco Santander health plan, in the same conditions for healthcare coverage, taken place during their employment contract. Banco Santander provisions related to this retired employees are accrued using actuarial calculations based in the present value of the current cost.

 

86

 

                   

 

 

 

 

 

 

 

 

 

Bank

         

03/31/2016

      

03/31/2015

 

 

 

Cabesp

 

Other Plans

 

Cabesp

 

Other Plans

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

(5,347,007)

 

(483,092)

 

(5,339,422)

 

(530,146)

Fair Value of Plan Assets

 

5,463,960

 

-

 

4,723,031

 

-

 

 

116,953

 

(483,092)

 

(616,391)

 

(530,146)

Being:

                  

Superavit

 

 

116,953

 

-

 

-

 

-

Deficit

 

 

-

 

(483,092)

 

(616,391)

 

(530,146)

Value Unrecognized as Asset

 

116,953

 

-

 

-

 

-

Net Actuarial Asset on December 31, 2015 and 2014

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on December 31, 2015 and 2014 (Note 22)

 

 

-

 

(483,092)

 

(616,391)

 

(530,146)

Payments Made

 

11,879

 

7,275

 

11,679

 

8,745

Revenues (Expenses) Recorded

 

(13,936)

 

(14,083)

 

(18,717)

 

(14,298)

Net Actuarial Asset on March 31, 2016 and 2015

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on March 31, 2016 and 2015 (Note 22)

 

 

(2,057)

 

(489,900)

 

(623,429)

 

(535,699)

Other Equity Valuation Adjustments

 

 

21,658

 

(44,588)

 

(617,685)

 

(124,699)

Actual Return on Plan Assets

 

 

1,071,664

 

-

 

661,871

 

-

                   

 

 

 

 

 

 

 

 

 

Consolidated

         

03/31/2016

      

03/31/2015

 

 

 

Cabesp

 

Other Plans

 

Cabesp

 

Other Plans

Conciliation of Assets and Liabilities

 

 

 

 

 

 

 

 

Present Value of Actuarial Obligations

 

(5,551,642)

 

(483,092)

 

(5,547,375)

 

(530,146)

Fair Value of Plan Assets

 

5,673,071

 

-

 

4,906,978

 

-

 

 

121,429

 

(483,092)

 

(640,397)

 

(530,146)

Being:

                  

Superavit

 

 

121,429

 

-

 

-

 

-

Deficit

 

 

-

 

(483,092)

 

(640,397)

 

(530,146)

Value Unrecognized as Asset

 

121,429

 

-

 

-

 

-

Net Actuarial Asset on December 31, 2015 and 2014

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on December 31, 2015 and 2014 (Note 22)

 

 

-

 

(483,092)

 

(640,397)

 

(530,146)

Payments Made

 

12,127

 

7,275

 

11,949

 

8,745

Revenues (Expenses) Recorded

 

(14,314)

 

(14,083)

 

(19,504)

 

(14,298)

Net Actuarial Asset on March 31, 2016 and 2015

 

 

-

 

-

 

-

 

-

Net Actuarial Liability on March 31, 2016 and 2015 (Note 22)

 

 

(2,187)

 

(489,900)

 

(647,952)

 

(535,699)

Other Equity Valuation Adjustments

 

 

27,008

 

(44,588)

 

(638,511)

 

(124,699)

Actual Return on Plan Assets

 

 

1,110,492

 

-

 

684,214

 

-

                   

Opening of gains (losses) actuarial from experience, financial assumptions and demographic hypotheses in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

                   

 

 

 

 

 

 

 

 

 

Bank

         

12/31/2015

      

12/31/2014

 

 

 

Cabesp

 

Other Plans

 

Cabesp

 

Others Plans

Experience Plan

 

(439,599)

 

18,461

 

(86,284)

 

3,644

Changes in Financial Assumptions

 

633,225

 

61,650

 

(174,696)

 

(17,990)

Gain (Loss) Actuarial - Obligation

 

193,626

 

80,111

 

(260,980)

 

(14,346)

Return on Investment, Return Unlike Implied Discount Rate

562,670

 

-

 

184,478

 

-

Chance in Irrecoverble Surplus

 

(116,953)

 

-

 

-

 

-

                   

 

 

 

 

 

 

 

 

 

Consolidated

         

12/31/2015

      

12/31/2014

 

 

 

Cabesp

 

Other Plans

 

Cabesp

 

Others Plans

Experience Plan

 

(452,011)

 

18,461

 

(84,112)

 

3,644

Changes in Financial Assumptions

 

657,204

 

61,650

 

(181,397)

 

(17,990)

Gain (Loss) Actuarial - Obligation

 

205,193

 

80,111

 

(265,509)

 

(14,346)

Return on Investment, Return Unlike Implied Discount Rate

581,755

 

-

 

187,841

 

-

Chance in Irrecoverble Surplus

 

(121,429)

 

-

 

-

 

-

                   

 

87

 

The following table shows the duration of the actuarial liabilities of the plans sponsored by Banco Santander in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

                     

 

 

 

 

 

 

 

 

 

 

Duration (in Years)

Plans

 

 

 

 

 

12/31/2015

 

12/31/2014

Cabesp

 

 

 

 

 

12.84

 

13.97

Law 9,656 /1998

 

 

 

 

 

27.69

 

28.69

Bandepe

 

 

 

 

 

12.68

 

14.51

Free Clinic

 

 

 

 

 

10.90

 

11.72

Lifelong Directors

 

 

 

 

 

8.90

 

9.81

Circular (1)

 

 

 

 

 

13.16 and 9.94

 

13.66 and 10.88

Life Insurance

 

 

 

 

 

8.14

 

8.78

 

 

 

 

 

 

 

 

 

 

 

(1) The duration 13.16 (12/31/2014 - 13.66) refers to the plan of Former Employees of Banco ABN Amro and 9.94 (12/31/2014 - 10.88) to the plane of Former Employees of Banco Real.

                     

c) Management of Plan Assets

                     

The main categories of assets as a percentage of total assets of the plan are as follows in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

                     

 

 

 

 

 

 

 

 

 

 

Bank/

Consolidated

 

 

 

 

 

 

 

 

12/31/2015

 

12/31/2014

Equity Instruments

 

 

 

 

 

0.5%

 

3.0%

Debt Instruments

 

 

 

 

 

98.5%

 

93.9%

Real Estate

 

 

 

 

 

0.3%

 

0.3%

Others

 

 

 

 

 

0.7%

 

2.7%

                     

d) Actuarial Assumptions Adopted in Calculations

                     

 

 

 

 

 

 

 

 

 

 

Bank/

Consolidated

 

 

 

 

 

 

12/31/2015

 

 

 

12/31/2014

       

Pension

  

Health

  

Pension

  

Health

Nominal Discount Rate for Actuarial Obligation

 

12.3%

 

12.0%

 

10.9%

 

11.0%

Rate Calculation of Interest Under Assets to the Next Year

 

12.3%

 

12.0%

 

10.9%

 

11.0%

Estimated Long-term Inflation Rate

 

4.5%

 

4.5%

 

4.5%

 

4.5%

Estimated Salary Increase Rate

 

5.0%

 

5.0%

 

5.0%

 

5.0%

Boards of Mortality

 

AT2000

 

AT2000

 

AT2000

 

AT2000

                     

e) Sensitivity Analysis

                     

The assumptions about the rates related to the cost of medical care have a significant effect on the amounts recognized in income. The change of one percentage point in the rate of health care cost would have the following effects in December 31, 2015 and 2014, valid to March 31, 2016 and 2015:

 

 

 

 

 

 

 

 

 

 

 

                   

Sensibility

 

 

 

12/31/2015

  

 

 

12/31/2014

 

(+) 1.0%

 

(-) 1.0%

 

(+) 1.0%

 

(-) 1.0%

Effect on Current Service Cost and Interest on the Actuarial Liabilities

 

88,469

 

(150,372)

 

90,431

 

(31,406)

Effect on the Present Value of Obligations

 

719,789

 

(615,320)

 

797,418

 

(673,468)

                     

f) Share-Based Compensation

                     

Banco Santander has long-terms compensation plans linked to the market price of the shares. The members of the Executive Board of Banco Santander are eligible for these plans, besides the members selected by the Board of Directors and informed to the Human Resources, which selection may fall according to the seniority of the group. For the Board of Directors members in order to be eligible, it is necessary to exercise Executive Board functions.

                     

f.1) Local Program

                     

The Local Program Banco Santander is divided into two types of independent plans: (i) share purchase plans and (ii) Delivery Plans actions.

                     

The Extraordinary Shareholders’ Meeting of Banco Santander held on February 3, 2010 approved the Share-Based Compensation Program - Units of Banco Santander (Local Plan), consisting of two independent plans: Stock Option Plan for Share Deposit Certificates - Units (SOP) and Long-Term Incentive Plan - Investment in Share Deposit Certificates - Units (PSP).

                     

On October 25, 2011, Banco Santander held the Extraordinary Shareholders’ Meeting, which approved the grant of the Incentive Plan Long Term (SOP 2014) - Investment in Certificates of Deposit Shares (Units) to certain directors and Management-level employees of the Bank and companies under its control.

 

88

 
 

On 29 April, 2013, Banco Santander held an Extraordinary General Meeting, which approved the grant of the Banco Santander’s share-based compensation program - Stock Option Plan for Share Deposit Certificates - Units (SOP 2013) and the Long-Term Incentive Plan - Investment in Share Deposit Certificates (PSP 2013).

               

(i) Share Purchase Plans

               

The purchasing action plans consist of the Option Plans of Purchase Share Deposit Certificates - Units (SOP).

               

The characteristic of each plan are:

              
               

SOP Plan: it is a three-year Stock Option Plan by which new shares in Banco Santander are issued, as a manner of retaining the officers’ commitment to long-term results. The period for exercising the options starts on June 30, 2012 and is two years longer than the vesting period. The volume equivalent to 1/3 of the Units resulting from the exercise of options cannot be sold by the participant during a period of one year from the exercise date each Unit.

               

Long-Term Incentive Plan - SOP 2014: it is a 3 year Stock Option Plan. The period for exercising comprises from June 30, 2014 until June 30, 2016. The number of Units exercisable by the participants will be determined according to the result of the determination of a performance parameter of the Bank: Total Shareholder Return (TSR) and may be reduced if failure to achieve the goals of reducing the Return on Risk Adjusted Capital (RORAC), comparison made between realized and budgeted in each year, as determined by the Board of Directors. Additionally, it is necessary that the participant remains in the Bank during the term of the Plan to acquire a position to exercise the corresponding Units.

               

Plan Long Term Incentive - SOP 2013: it is a stock option plan with 3 years of duration. The period for exercising comprises from June 30, 2016 until June 30, 2018. The number of Units exercisable by the participants will be determined according to the result of measurement of a performance parameter of the Bank: Total Shareholder Return (TSR) and can be reduced, if not achieved the goals of reducing weighted Return on Assets by Risk (RoRWA), comparison between realized and budgeted in each year, as determined by the Board of Directors. Additionally, it is necessary that the participant remains in the Bank during the term of the Plan to acquire a position to exercise the corresponding Units.

               

(ii) Stock Delivery Plans

               

The stock delivery plans consist of the Long Term Incentive Plan - Investment in Share Deposit Certificates - Units (PSP).

               

PSP Plan: Compensation Plan based on shares, with cycles of 3 years, promoting a commitment of executives with the long-term results. The Plan has as its object the payment of variable compensation by the Bank to Participants under the Variable Compensation and (i) 50% (fifty percent) consist of the delivery "Units", where which can not be sold during the term of 1 (one) year from the date of exercise and (ii) 50% (fifty percent) will be paid in cash, which may be used freely by the Participants (Variable Compensation), after deductions of all taxes, charges and withholdings.

               

Long-Term Incentive Plan - PSP 2013: Compensation Plan based on shares with cycles of 3 years, promoting a commitment of executives with the long-term results. The Plan has as its object the payment of variable compensation by the Bank to Participants under the Variable Compensation 100% (one hundred percent) consist of the delivery "Units".

               

Fair Value and Plans Performance Parameters

               

For accounting of the Local Program plans, an independent consultant promoted simulations based on Monte Carlo methodology's, as presented the performance parameters used to calculate the shares to be granted. Such parameters are associated with their respective probabilities of occurrence, which are updated at the close of each period.

 

 

 

 

 

 

 

 

   

PSP 2013
SOP 2013

 

Plano SOP, PI12 - PSP, PI13 - PSP,

PI14 - PSP(1)

  

SOP 2014 (2)

TSR Position

 

 

 

 

% of Shares Exercisable

1°

 

 

100%

 

50%

 

100%

2°

 

 

75%

 

35%

 

75%

3°

 

 

50%

 

25%

 

50%

4°

 

 

0%

 

0%

 

25%

 

 

 

 

 

 

 

 

(1) Associated with the TSR, the remaining 50% of the shares subject to exercise refer to the realization of Net Income vs. Budgeted Profit.

               

(2) The percentage of shares determined at the position of TSR is subject to a penalty according to the implementation of the Return on Risk Adjusted Capital (RORAC).

               

 

89

 

For measurement of the fair value of the options in the plans based the following premises:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

PSP - 2013

  

Pl14 - PSP

 

PI13 - PSP

 

PI12 - PSP

Method of Assessment

 

 

 

 

 

Binomial

 

Binomial

 

Binomial

 

Binomial

Volatility

 

 

 

 

 

40.00%

 

57.37%

 

57.37%

 

57.37%

Probability of Occurrence

 

 

 

 

 

60.27%

 

37.59%

 

26.97%

 

43.11%

Risk-Free Rate

 

 

 

 

 

11.80%

 

10.50%

 

10.50%

 

11.18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOP 2013

 

SOP 2014

 

Plans SOP

Method of Assessment

 

 

 

 

 

 

 

Black&Scholes

 

Black&Scholes

 

Binomial

Volatility

 

 

 

 

 

40.00%

 

40.00%

 

57.37%

Rate of Dividends

 

 

 

 

 

 

 

3.00%

 

3.00%

 

5.43%

Vesting Period

 

 

 

 

 

 

 

3 Years

 

3 Years

  

3 Years

Average Exercise Time

 

 

 

 

 

 

 

5 Years

 

5 Years

 

3.72 Years

Risk-Free Rate

 

 

 

 

 

 

 

11.80%

 

10.50%

 

11.18%

Probability of Occurrence

 

 

 

 

 

 

 

60.27%

 

71.26%

 

43.11%

Fair Value for Shares

 

 

 

 

 

 

 

R$5.96

 

R$6.45

 

R$7.19

                             

The average value of shares SANB11 (Shares of the Bank in BM&FBovespa) on March 31, 2016 is R$14.85 (12/31/2015 - R$16.05).

 

In the first quarter of 2016, daily pro-rata expenses amounting of the R$14,654 (2015 - R$3,121) Bank and R$14,934 (2015 - R$3,174) Consolidated, relating to the plan of Purchase Option Certificate of Deposit Shares - Units (SOP) and expenses of R$9,787 (2015 - R$1,835) Bank and R$10,080 (2015 - R$1,915) Consolidated, relating to plan for the Long-Term Incentive - Investment Certificate of Deposit Shares - Units (PSP). Expenses related to the SOP plans and PSP are recognized in respect of stockholders' equity and other obligations, respectively.

                             

 

 

 

 

 

 

 

 

 

 

 

 

Date of

 

Date of Expiry

       

Number of

      

Concession

  

Employees

  

Commencement

  

of Exercise

 

 

 

 

Units

 

Exercise Price

 

Year

 

Group

 

Exercise Period

 

Period

Balance Plans on 31/dec/2014

 

13,830,464

 

 

 

 

 

 

 

 

 

 

Cancelled Options (SOP 2013)

 

(748,408)

 

14.43

 

2013

 

Executives

 

05/02/2013

 

06/30/2018

Cancelled Options (PSP 2013)

 

(117,453)

 

 

 

2013

 

Executives

 

08/13/2013

 

06/30/2016

Cancelled Options (SOP Delivery
2014)

(52,500)

 

14.31

 

2011

 

Executives

 

10/26/2011

 

06/30/2016

Exercised Options (SOP Delivery
2014)

(248,499)

 

 

 

2011

 

Executives

 

10/26/2011

 

06/30/2016

Balance Plans on 31/dec/2015

 

12,663,604

 

 

 

 

 

 

 

 

 

 

Cancelled Options (SOP 2013)

 

(311,299)

 

14.43

 

2013

 

Executives

 

05/02/2013

 

06/30/2018

Cancelled Options (PSP 2013)

 

(13,511)

 

 

 

2013

 

Executives

 

08/13/2013

 

06/30/2016

Exercised Options (SOP Delivery
2014)

(3,943)

 

14.31

 

2011

 

Executives

 

10/26/2011

 

06/30/2016

Balance Plans on 31/mar/2015

 

12,334,851

 

 

 

 

 

 

 

 

 

 

SOP Delivery 2014

 

723,483

 

14.31

 

2011

 

Executives

 

10/26/2011

 

06/30/2016

SOP 2013

 

9,178,918

 

14.43

 

2013

 

Executives

 

2/5/2013

 

06/30/2018

PSP 2013

 

2,432,450

 

 

 

2013

 

Executives

 

08/13/2013

 

06/30/2016

Total

 

 

12,334,851

 

 

 

 

 

 

 

 

 

 

                             

f.2) Global Program

                             

Long-term Incentive Policy

 

In 2014, it was released a share delivery plan called Long Term Incentive Global Grant 2014 - ILP CRDIV. This plan is subject to achievement of performance indicator Total Shareholder Return (TSR) of the Santander Group, comparing the evolution of the Group in this indicator for the main global competitors and the settlement will be in the World Group Santander shares.

                             

Global Plan Fair Value

                             

The plan assumes that the beneficiaries will not leave Banco Santander during the term of each plan.The fair value of the 50% linked to Banco Santander’s relative TSR position was calculated, on the grant date, on the basis of the report provided by external valuators whose assessment was carried out using a Monte Carlo valuation model, performing 10 thousands simulations to determine the TSR of each of the companies in the Benchmark Group, taking into account the variables set forth below. The results (each of which represents the delivery of a number of shares) are classified in decreasing order by calculating the weighted average and discounting the amount at the risk-free interest rate.

90

 

 
                           

 

 

 

 

 

 

Pl10

 

Pl11

Pl12

 

Pl13

 

Pl14

Expected Volatility (*)

 

 

 

15.67%

 

19.31%

42.36%

 

49.64%

 

51.35%

Annual Dividend Yield Based on Last Five Years

3.24%

 

3.47%

4.88%

 

6.33%

 

6.06%

Risk-free Interest Rate (Treasury Bond Yield -Zero Coupon)

 

 

 

 

 

 

 

Over the Period of the Plan

 

 

 

4.50%

 

4.84%

2.04%

 

3.33%

 

4.07%

                           

(*) Calculated on the basis of historical volatility over the corresponding period (two or three years).

                           

In view of the high correlation between TSR and EPS, it can be considered (in a high percentage of cases) feasible to extrapolate that the TSR value is also valid for EPS. Therefore, it was initially determined that the fair value of the portion of the plans linked to the Bank’s relative EPS position, of the remaining 50% of the options granted, was the same as that of the 50% corresponding to the TSR. This valuation is reviewed and adjusted on a yearly basis, since its refers to a non-market condition.

                           

Global Plan CRD-IV:

 

 

 

 

 

 

 

 

 

2 Years

 

3 Years

 

4 Years

Future Income Dividend

 

 

 

 

 

 

 

11.1%

 

10.8%

9.5%

Expected Volatility

 

 

 

 

 

 

 

32.7%

 

34.7%

36.9%

Volatility Comparator

 

 

 

 

 

 

 

12% -52%

 

16% - 56%

16% - 52%

Risk-Free Interest Rate

 

 

 

 

 

 

 

1.7%

 

2.1%

2.5%

Correlation

 

 

 

 

 

 

 

0.55

 

0.55

0.55

                           

The indicator will be used to measure the achievement of targets will be the comparison of the Total Shareholder Return (TSR) of the Santander Group with the RTA of fifteen (15) leading the Group's global competitors.

                           

The indicator is calculated in two stages: initially for program verification (2015) and a second time in the annual payment of each installment (2015, 2016 and 2017).

                           

Each executive has a target in dollars. If the indicators are reached, the target will be converted to Group's shares awarded in installments in the years 2016, 2017 and 2018, with sale restriction of one (1) year after each delivery.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           

Number of Shares

        

Date of Commencement of the Period

  

Date of Expiry of Period

 

Granted
Year

Employees

Funcionários

  

Balance Plans on December 31, 2015

 

-

 

2014

Executives

Executivos

 

 

 

Balance Plans on March 31, 2016

 

1,613,057

 

 

 

 

 

 

 

                           

In the first quarter of 2016, pro-rata expenses were not registered, in the same perido of 2015 were registred in the amount of R$3,281 Bank and R$3,334 Consolidated, related to the costs of the cycles mentioned, for the totaling of the Global Program.

                           

Plans do not cause dilution of the capital of the Bank, since they are paid in shares of Banco Santander Spain.

                           

f.3) Referenced Variable Remuneration in Shares

                           

Banco Santander Spain's General Shareholders Meeting, held on June 11, 2010, approved the new policy relating to executive compensation through the payment plan referenced in variable remuneration shares to the Group companies, including Banco Santander. This new policy, with adjustments applicable to Banco Santander, was approved by the Nominating Committee and Remuneration and the Board of Directors on February 2, 2011.

                           

The plan's objectives are: (i) to align the compensation program with the principles of the “Financial Stability Board” (FSB) agreed upon at the G20; (ii) to align Banco Santander’s interests with those of the plan’s participants (to achieve the sustainable and recurring growth and profitability of Banco Santander’s businesses and to recognize the participants’ contributions); (iii) to allow the retention of participants; and (iv) to improve Banco Santander’s performance and defend the interests of shareholders through a long-term commitment.

                           

The purpose of the plan is the cash or shares payment, as shown below, owed by Banco Santander to the plan’s participants pursuant to the bank’s compensation policy, based on the future performance of the bank’s shares.

                           

The payment of share-based variable remuneration is with in the limits of the overall management compensation approved by Banco Santander's General Ordinary Meeting.

                           

The total number of shares on which the compensation plan is based will be settled in three installments and equally allocated to each of the three years following the reference year.

                           

On December 21, 2011, the Board of Directors approved the proposed new incentive plan (deferred) for payment of the variable remuneration of directors and certain employees, which was the subject to resolution of the ordinary general meeting February 7, 2012.

                           

On December 19, 2012, the Board of Directors approved the proposed new incentive plan (deferred) for payment of the variable remuneration of directors and certain employees, which will be subject to resolution of the Extraordinary General Meeting on February 15, 2013.

                           

On April 24, 2013, the Board of Directors approved the proposed new incentive plan (deferred) for payment of the variable remuneration of directors and certain employees, which was approved in Extraordinary General Meeting of June 3, 2013.

                           

This proposal includes certain requirements for deferred payment of part of the future variable compensation due to its managers and other employees, given the financial basis for sustainable long-term adjustments in future payments due to the risks assumed and fluctuations in cost of capital.

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The variable compensation plan Banco Santander has been assessed and became divided into two programs: (i) Collective Identified and (ii) Collective undentified.

                             

i) Collective Identified - Participants of the Executive Committee, Statutory Officers and other executives who take significant risks in the Bank and are responsible for the control areas. The variable remuneration of executives, a part is deferred into shares, paid 100% in Units SANB11. In the first quarter of 2016, we recorded revenues in the amount of R$5,765 (2015 – expenses in the amount of R$891) Bank and R$5,897 (2015 - expenses in the amount of R$1,689) Consolidated, regarding the provision of the plan. 

 

ii) Collective Unidentified - managerial employees and other employees of the organization that will be benefited from the deferral plan. The deferred amount will be paid 100% cash, indexed to 100% of CDI. In the first quarter of 2016, there were recorded revenues of R$3,821 (2015 - expenses in the amount of R$2,692) in the Bank and R$4,159 (2015 - expenses in the amount of R$2,720) in the Consolidated.

                             

36. Risk Management Structure

                             

Banco Santander in Brazil follows the model of the Banco Santander Spain, which is based on a prudent risk management and the definition of risk appetite on the part of senior management in view of the local regulator and international good practices, aiming to protect the capital and ensuring the profitability of business. The Bank is exposed to the following main risks in its operations:

                             

- Credit risk and exposure to loss in the case of total or partial default by customers or counterparties in the fulfillment of their financial obligations to the Banco Santander. Credit risk management seeks to establish strategies, besides setting limits, including the analysis of exposure and trends and the effectiveness of credit policies. The aim is to maintain a risk profile and adequate minimum profitability which compensates for the estimated default risk of customers and portfolios, as established by the Executive Committee.

                             

- Market risk is exposure to risk factors including interest rates, exchange rates, commodities prices, stock market prices and other values, according to the type of product, the volume of operations, terms and conditions of the agreement and underlying volatility. Market risk management includes practices of measuring and monitoring the use of limits that are pre-set by internal committees, of the value at risk of the portfolios, of sensitivity to fluctuating interest rates, of exposure to foreign exchange rates, of liquidity gaps, among other practices which the control and monitoring of the risks which might affect the position of Banco Santander portfolios in the different markets in which the Bank operates.

                             

- Operational risk is the possibility of incurring losses arising from failure, deficiency or inadequacy of internal processes, people and systems or from external events, excluded strategic risk and reputational risk. This definition includes the legal risk associated with inadequacy or deficiency in contracts, as well as penalties due to noncompliance with legal regulations and compensation for damages to third parties arising from activities performed by the institution. The management and control of operational risks aims to strength the business environment internal control factors and so to enhance the making decision process and fulfill the requirements from Regulators, Basel Capital Accord and Sarbanes-Oxley. The model also follows the guidelines established by Banco Santander Spain which is based on the COSO - Committee of Sponsoring Organizations of the Treadway Commission - Enterprise Risk Management - Integrated Framework.

                             

- Compliance risk is the legal risk or regulatory sanctions, financial loss, or damages to the Bank reputation as a result of failure to comply with laws, regulations, codes of conduct and good banking practice. Compliance risk management has a proactive focus on this risk,policies,implementation of process, including monitoring, training, and appropriate communication of rules and laws to be applied to each businesses area of the Banco Santander.

                             

The Compliance Risk is also associated with Money Laundering and the Terrorism Financing problems.

                             

The inherent risk of Money Laundering is associated with the possibility of the Bank be used by your costumers for Money Laundering through the hiring of products, services and realization of common or structured transactions involving funds earned from illicit businesses in Brazil and abroad, such as drug trafficking, public corruption, tax evasion and others.

                             

In the case of Terrorism Financing, the risk is related to the performance of transactions or in support of individuals and companies listed on international lists published by the FATF - Financial Action Task Force on Money Laundering, UN, European Union, among others, or funds of those people who identify themselves as supporters of extremist groups and for this reason, perform contributions, donations and work in a structured way in order to financially assist the terrorism.

                             

As a Financial Institution that recognizes the threats and issues involving money laundering and terrorism financing, as well as the effects these practices have on our society and financial market, Banco Santander (Brasil) S.A. maintains a legal and regulatory compliance program which seeks the prevention and combat of these illegal activities.

                             

- Reputational Risk - risk of damage in perception of the Bank by the public, customers, investors or any other interested party.

                             

Risk management at Banco Santander is based on the following principles:

                             

- Independence of the risk function in relation to business. The responsible for the Bank's Risk Division reports directly to the Executive Committee and the Council;

                             

- Involvement of Senior Management in decision-making;

                             

- Consensus for decision making on credit operations between the areas of Risk and Business.

                             

- Collegiate decision-making, including the branch network, with the aim of encouraging diversity of opinion and avoid assigning individual decisions;

                             

- The use of statistical tools for estimating default including internal rating, credit scoring and behavior scoring, RORAC (Return on Risk Adjusted Capital), VaR (Value at Risk), economic capital, scenario assessment, among others;

                             

- Global approach, including the integrated treatment of risk factors in the business departments and the use of the concept of economic capital as a consistent metric for risk undertaken and for assessing management; and



92

 

 

- Definition of policies and procedures, which constitute the basic Corporate Risk Policy, which governs the activities and processes of risk.

                             

Maintaining a risk profile is medium-low, and low volatility through:

                             

- This is done by diversifying the portfolio, limiting the concentrations of customers, groups, sectors, products or geographic regions;

                             

- Maintenance reducing the complexity level of market operations; and

                             

- Careful monitoring of risks to prevent possible deterioration of the portfolios.

                             

Corporate Governance of the Risk Function

                             

The structure of the Risk Committees of Banco Santander is defined according corporate standards, and the weekly meetings, has the following responsibilities:

                             

- Ensure that local policies are implemented and followed in accordance with corporate standards;

                             

- To authorize the use of local management tools and risk models and to be familiar with the result of their internal validation;

                             

- Ensure that the activities of Banco Santander are being performed according to the tier of risk tolerance previously approved by the Banco Santander Spain;

                             

- To be aware of, assess and adhere to any timely observations and recommendations that come to be made by the supervisory authorities in the fulfillment of their duties; and

                             

- To resolve transactions that are not within the delegated scope to the other tiers of the administration and to determine the limits of pre-classification global limits of risk in favor of economic groups or in relation to the exposure by risk type.

                             

The Executive Risk Committee has delegated part of its assignments to the Risk Committees, which are structured by business category, type and sector risk. The risk function of the Banco Santander is executed by the Executive Vice-Presidency of Risk, which is independent from the business areas, and reports directly to the Chairman of the Banco Santander being fundamental to have an independent vision and control risk.

                             

The governance model is structured as a decision vision, focusing on the review and approval of proposals and credit limits, as well as a full control view of risks.

                             

Credit Risk Management

                             

The role of the credit and market risk department is to develop policies and strategies for credit risk management in accordance with the risk appetite determined by the Executive Committee.

                             

Besides, it is responsible for the control and monitoring system used in risks management. These systems and processes are applied in the identification, measurement, control and reduction of exposure to credit risk in individual operations or those grouped together by similarity.

                             

The specialization of the risk function is based on the type of client and the process of risk management, making a distinction between two segments: individualized customers and standardized (standardized management).

                             

- Customers under individual management: customers from the wholesale sector, financial institutions and certain companies. Risk management is executed by an assigned risk assessor. The customer is placed in a portfolio by a risk assessor who draws up the analyses, forwards the same to the committee and monitors the progress of the customer; and

                             

- Customers under standardized management: individuals and companies not classified as individualized customers. The management of these risks is based on automated decision-making and internal risk assessment models, backed up by business regulations and teams of expert analysts to deal with exceptions.

                             

Collection of documentation and information necessary to complete the analysis of the risk involved in credit operations, the identification of the borrower, counterparty, the risk involved in the operations, the classification of the degree of risk in different categories, the granting of credit, periodic assessments risk tiers; It`s procedures are applied by the Bank to determine the volumes of guarantees and provisions necessary for the credit operations are conducted in accordance with current regulations and safety due. Policies, systems and procedures used are reassessed annually to ensure they are consistent with the needs of risk management and the current market scenarios.

                             

The credit risk profile undertaken by Banco is characterized by the diversification of customers and the large volume of retail operations. Macroeconomic factors, market conditions, sector and geographic concentration, customer profiles and economic outlook are also assessed.

                             

Structure of Capital Management

                             

The implemented capital management model has an adequate and well defined structure and the actions taken are planned and effective, allowing a safe control and an efficient use of the capital.

                             

The established structure has a segregation of duties by specialized area, as follows:

                             

i) Risk Area – responsible for identifying, modeling and controlling of the risks;

                             

ii) Capital Area – responsible for the control, the assessment and the reports of the capital consumption; and

                             

iii) Financial Management Area - responsible for the planning and the capital management.

                             

All the processes, calculations and models involved in capital management are audited and validated internally, having the results reported to the Management.

                             

As the structure of risk management, it is based on three basic principles:

 

93

 

1. Segregation of Duties: A proper management and control of Capital requires a clear allocation of responsibilities among the different duties and areas involved in both local and corporate levels, as well as the coordination and cooperation among them to achieve the unit and the Group's objectives.

                             

2. Organizational Structure: The local organizational structure involved in Capital management should be consistent with the corporate structure, without prejudice to the application of the proportionality principle.

                             

3. Decisions by Collegiate Bodies: The establishment of collegiate bodies in the Capital Area ensures the contrast of opinions, preventing decisions taken individually, in local or corporate level.

 

Santander Brasil has a director responsible for capital management, appointed by the Board of Directors. Furthermore, we have an institutional policy of capital management that serves as a guideline for the calculation, management, control and reporting of the Capital, fulfilling all the defined requirements for a capital management structure established in the Resolution CMN 3,988/2011.

                             

a) Rating Models

                             

The Banco Santander employs its own internal rating models to measure the credit quality of a customer or a transaction. Each rating is related to the probability of default or non-payment, established using the bank´s past experience, except for certain portfolios classified as low default portfolios. The ratings are used in the approval process and monitoring of risk.

                             

The Global rating tools are applied to those segments of sovereign risk, financial institutions and global wholesale customers (GCB), with centralized management in the Bank. These tools generate the rating of each client, which is obtained from an automatic module or quantitative, based on balance sheet ratios or macroeconomic variables, supplemented by the judgment of the analyst.

                             

In the case of private companies and institutions portfolio, was defined a methodology to develop a single rating for each country, based on the same modules as the previous ratings: quantitative or automatic (in this case analyzing the credit behavior of a sample of clients in relation their financial statements), or qualitative review by an analyst and final adjustments.

                             

The ratings assigned to customers are reviewed periodically, incorporating the new financial information and experience developed in the banking relationship. The frequency of revisions is high in the case of customers who reach certain tiers in automatic warning systems and customers classified as special monitoring. Their own rating tools are reviewed for qualifications awarded by them are progressively cleared.

                             

For customers with standardized management of both companies as natural persons, there are scoring tools that automatically assign a score to the proposed transactions.

                             

These systems are complemented loan approval with performance rating models, which allow for greater predictability of risk assumed and are used for preventive activities and trading.

                             

b) Credit Risk Cycle

                             

Banco Santander holds a global view of the bank's credit portfolio throughout the various phases of the risk cycle, with a tier of detail sufficient enough to be able to assess current risks and eventual shifts. This mapping is monitored by the Board of Directors and the Executive Committee, which establish the risk policies and procedures, the limits and delegation of powers, in addition to approving and supervising operations in the sector.

                             

The management process consists of identifying, measuring, assessing, controlling, negotiating and deciding upon the risks incurred in the bank´s operations. This cycle is made up of three distinct phases:

                             

- Pre-sale: includes processes of planning, target setting, calculation of the Banco Santander´s risk appetite, approval of new products, risk analysis and the credit rating process and limit setting;

 

- Sale: this is the decision-making phase for pre-classified and specific transactions; and

                             

- Post-sale: includes processes of risk monitoring, measurement and control, and recovery process management.

                             

Risk Planning and Limits

                             

This process identifies the bank´s interest, evaluating business proposals and risk position. In the global risk limit plan, a previously agreed document is defined to integrate the management of the balance sheet and the inherent risks.

 

The limits are based on two basic structures: customers/sectors and products.

                             

In individualized risks, the most basic tier is the customer for which are set individual limits (pre-classification).

                             

For large economic groups is used a pre-classification model based on a system of measurement and monitoring of economic capital. For the corporate segment, we use a pre-classification model simplified to customers that meet certain requirements (knowledge, rating, etc.).

 

In the case of risks with customers with similar characteristics, risk limits are designed by credit management programs (PGC), a document agreed upon by the business areas and risks and approved by the Risk Committee or its Committees Delegates, which contains the expected results of the business in terms of risk and return, beyond the limits that are subject to the respective activity and risk management.

                             

Risk Analysis

                             

Risk analysis is a pre-requisite for the approval of loans to customers and consists of examining the ability of the counterparty´s to meet its contractual commitments to Banco Santander, which includes analysis of the customer´s credit quality, its risk operations, its solvency, the sustainability of its business, and the expected return taking the risk undertaken into account.

                             

This risk analysis is done at least annually and may be revised more frequently if the risk profile of the client request (due warning systemas visits centralized or manager or credit analyst) or if there are specific operation outside the previous classification.

94

 

Transaction Decision-Making

                             

The purpose of the transaction decision-making process is to analyze and to adopt solutions for the same, taking into consideration the risk appetite and any important factors for counterbalancing risk and return.

                             

Banco Santander uses, among others, the RORAC methodology for the analysis and pricing in the decision-making process on transactions and business.

                             

Risk Monitoring and Control

                             

In addition to the functions carried out by the Internal Audit Area, the Executive Vice-Presidency for Risk has its own risk monitoring area for the control of credit quality, formed by a teams with specific resources and responsibilities.

                             

This monitoring area is based on an ongoing process of observation, which ensures the early detection of any events that might arise in the development of risk, the transactions, the customers and their environment, so that preventive action may be taken. This monitoring area is specialized by customer segment.

 

For this, we designed a system called "Special Surveillance Firms" (FEVE, initials in Spanish) that distinguishes four categories based on the level of concern raised by the circumstances observed (extinguish, secure, reduce and monitor). Inclusion of a company in FEVE System does not mean that a default has occurred, but it is advisable to adopt a specific policy with it, allocating a responsible and setting the deadline for implementation of the policy. Customers classified in FEVE are reviewed at least every six months or every quarter in the case of customers most severe categories. The classification of a company in FEVE derives from the actual monitoring, the review conducted by the internal audit manager responsible for the decision of the company or the triggering of the automatic warning system.

                             

In relation to standardized customer risk, the key indicators are monitored in order to detect any variations in the performance of the credit portfolio, with respect to the forecasts made in the credit management programs.

                             

c) Risk Control

                             

Its function is to obtain a global view of the Banco Santander´s credit portfolio throughout the various phases of the risk cycle, with a tier of detail sufficient enough to be able to assess the current circumstances and eventual shifts.

                             

Changes to the bank´s risk exposure are controlled in an ongoing and systematic manner. The impacts of these changes in certain future situations, both those of an exogenous nature and those arising from strategic decisions are assessed with the aim of establishing measures that place the profile and the amount of the credit portfolio within the parameters established by Executive Committee.

                             

d) Provisions

                             

Banco Santander determines provisions in accordance with the current legislation of the Bacen, in accordance with CMN Resolutions 2,682/1999, 2,697/2000 and Bacen 2,899/2000, which classifies credit transactions by rating and determines the minimum percentage of provision required (Note 8.e).

                             

e) Regulatory Capital

                             

The capital management of Banco Santander is performed for both regulatory capital and for economic capital. The management of regulatory capital is based on the analysis of "ratios" of capital, using criteria defined by the Central Bank. Banco Santander presents an active capital management including securitizations, sale of assets and portfolios, emissions of preferred shares and hybrid instrument. The evaluation model of economic capital is to ensure the availability of capital to support all risks of their economic activity in the various business units, in different scenarios, with the solvency levels agreed by the Banco Santander.

                             

f) Credit Recovery

                             

The Recovery business area is responsible for managing the non-performing portfolio. The area has the role to define, implement and monitor strategies and performances related to the delinquent customer portfolios, seeking to ensure maximum efficiency in the recovery and considering all legal requirements.

                             

The area uses statistical tools to study the behavior of customers by drawing more assertive strategies for recovery. One of the tools used is the behavioral score used to study the performance of different groups, seeking recovery of business, cost reduction and achieve pre-established goals. Customers most likely to pay are classified as low-risk customers with low probability of payment are classified as high risk, determining the intensity of the charge.

                             

The performances of the collection channels are defined by the "Map of Responsibility", a document that uses the time of default versus the risk of value, and other characteristics used to compose the definition of strategies.

                             

Daily contacts central route of service, inclusion in the credit protection agencies, sending collection letters, and contacts through the network of agencies are tools used for credit recovery, combined with these actions, the Bank use some specific charges according to the public as detailed below:

                             

• Internal teams specialized in restructuring and credit recovery with direct management of delinquent customers with overdue more than 60 days and higher values;

                             

• Specialized external offices to collect, report and assess high-risk customers. These offices are commissioned according to pre-established percentages applied to the amounts recovered.

                             

After exhausting all collection features execute sales of non-performing loans portfolio. These sales of loan portfolios held periodically through an auction process, pricing the portfolio fairly and with less impact to the Bank.

95

 

g) Social and Environmental Risk

                             

The inclusion of social and environmental aspects into the business strategy is one of Santander Brazil working premises. The set of practices on this topic follows its own agenda within three strategic axles:

                             

(i) Social and Financial Inclusion;

                             

(ii) Education; and

                             

(iii) Social and Environmental Businesses and Management.

                             

Santander’s view on the topic is based on the society and the market need to evolve towards better social and environmental practices, fostering an economy that is dynamic, inclusive and environmentally balances. Under this perspective, sustainability in Santander is translated into risk management and the positive agenda, connected promoting customers’ businesses and developing bank activities.

                             

Santander Brazil is prepare for a collaborative process of construction, sharing of experiences and results with its peers, main stakeholders and with Brazilian Central Bank. This movement will make the National Financial System more solid and robust, therefore better prepared for a new global economic scenario and its challenges.

                             

The Bank sustainability governance model has the purpose of ensuring the strategic alignment, supporting the topic continuous development inside the Bank and managing risks related to this topic.

                             

The main global reach body of this structure is the Global Sustainability Committee of Santander Group, comprised of Global CEO and senior management members who ensure the sustainability integration into the business model through the definition of strategic plans and sustainability policies of the Bank.

                             

In Brazil the application of these guidelines in Corporate Governance in performed in two instances: the Sustainability and Society Committee, connected to the Board of Directors and led by the Bank CEO and has three independent members, and the Sustainability Board, connected to the Vice-Presidency of Communication, Marketing, Institutional Relations and Sustainability.

                             

In order to be the best commercial bank and gain the trust of the main stakeholders, employees, customers, shareholders and society, it is also indispensable to have a solid risk culture, in which the principles are merged into Santander risks culture that is translated into a priority that supports business development from the promotion of sustainability.

                             

• Responsibility: everybody is responsible for risk management.

                             

• Resilience: the Bank must have the necessary resilience (prudence and flexibility) to ensure sustainability in different scenarios.

                             

• Challenge: The Bank must question itself daily on everything its employees done and ask itself if that is the best way to manage risks.

                             

• Simplicity: when the Bank talk about risks, it talks about simplicity and clarity.

                             

• Guidance to the customer: all of risk management must be customer-oriented.

                             

To Santander, the Social and Environmental Risks associated with the responsible granting of credit and proper management of the impacts caused by the organization activities. Likewise, it is understood that social and environmental risk is transversal to other risks and should be managed effectively and systematically. The non-compliance with this approach may result on potential direct and indirect consequences such as reduction of cash flow, loss of assets, image risk, public health risk, loss of natural ecosystems, among others.

                             

Governance of Social and Environmental Responsibility Policy

                             

The PRSA establishes the core elements of governance for the proper treatment of environmental issues: the appointment of a Director responsible for the compliance with the policy, monitoring of the policy by a Committee appointed by the Board of Directors and the establishment of a process that encourages continuous improvement and promotes adherence to check the guidelines established in the PRSA.

                             

A set of instruments, information flows and decision stages will be implemented in 2016 to promote the practices related to this governance and ensure compliance with the PRSA. Their main goals are:

                             

• Ensure the engagement of senior management in decision-making involving social and environmental aspects deemed as critical (high level of exposure to social and environmental risk, according to proportionality and relevance);

                             

• Reinforce the complementary role between the two decision stages of the PRSA, Risks Management Unit (UGR) and the appointed responsible executive;

                             

• Ensure the flow of relevant information between the interface areas with the PRSA topics;

                             

• Define roles and responsibilities regarding monitoring, analysis and continuous improvement of actions.

                             

PRSA governance does not replace the governance established in the areas, but rather complements it. Thus, especially regarding information and decision flows, additional measures related to social and environmental diligence in credit and investment processes will be provided. For such cases, in addition to the criteria already in force for analysis of social and environmental risk, others are being implemented to capture possible risks that were not identified, in order to mitigate the preventively.

                             

Social and Environmental Risk Policy

                             

The Social and Environmental Risk Policy of Banco Santander is inserted under the Social and Environmental Responsibility Policy (PRSA) of the institution, in line with the new CMN Resolution 4,327/2014.

                             

This policy is applied to the Wholesale Banking segment and, in addition to credit granting, provides analysis of environmental issues in accepting clients. The Environmental Risk area examines the social and environmental management of the client, checking items such as contaminated areas, deforestation, labor violations and other problems for which there is a risk of application of penalties.

 

96

 


Organization Activities Impacts Management

                             

With regard to environmental management, with about 50,000 employees the activity of Santander Brazil generates significant consumption of resources such as energy, water and paper. In all its dimensions, the Bank adopts eco-efficiency strategies to minimize environmental impacts and financial costs.

                             

Among the highlights of 2015 is the opening of the pilot branch of Santander new service model. In the project, requirements related to environmental self-sufficiency of the unit, such as photovoltaic energy solutions and rainwater harvesting solutions, have been inserted and which will be integrated to the unit in 2016.

                             

In 2015, the policy of the Environmental Management System was reformulated and approved contemplating these material aspects of the organization. A new strategy and a new governance were implemented, ensuring the involvement of senior management in decision making concerning environmental issues. New goals were also defined.

                             

The New Environmental Management Policy of Santander's main guidelines:

                             

• Meeting legal requirements and other applicable;

                             

• Promoting measures aimed at the energy and water efficiency, use of renewable energies in order to make the best use of natural resources, conserving them;

                             

• Promoting the proper management of waste, including electronic waste; and

                             

• Contributing to combat climate change through better measurement, report and reduction practices of their emissions of greenhouse gases, using national and internationally recognized standards.

                             

Energy

                             

Santander Brazil has a global target to reduce the energy consumption by 9% until 2017, since 2015. The following reduction actions are scheduled for 2016: changing conventional lamps for LED technology and installation of more efficient air-conditioning equipment in branches and with less greenhouse gas emissions.

                             

Water

                             

Water is a critical topic for the operations of any company. In Santander we adopt practices to reduce consumption so that the operation can be more efficient, avoiding wastes. In addition to that, we encourage our customers and employees to adopt efficiency solutions in their daily lives.

                             

Waste

                             

The Bank manages the waste generated in its administrative units sending them to recycling. Organic and non-recyclable waste are sent to a licensed landfill. In Santander Tower, organic waste is dehydrated, reducing its volume by 75%.

                             

Greenhouse Gas Emissions

                             

The climate change topic is strategic for Banco Santander, since it affects its operations and customers.

                             

In its own activity, Santander guides its greenhouse gases emissions management according to the global target of reducing emissions by 9% until 2017, in comparison to 2015. The monitoring of this target is performed by Huella Ambiental, an eco-efficiency global indicator of Santander Group.

                             

Since 2008, Santander prepares its emissions inventory through the Greenhouse Gas Protocol (GHG Protocol Brazil) system, which has top certification. The bank also compensates its greenhouse gases emissions through the purchase of carbon credits from certified projects, and participates on the Carbon Disclosure Project (CDP), in which it has a leadership position, being among the 10 best ranked companies in Brazil.

                             

Reduction commitments and targets were publicly undertaken in the Global Compact. The Bank encourages the society to reduce and compensate its emissions through the Program Reduza e Compense CO2 (Reduce and Compensate CO2), an online platform with reduction tips that allows people to calculate and compensate their emissions by purchasing carbon credits.

                             

Social and Environmental Management of Suppliers

                             

Between the main suppliers of Santander, we highlight companies of the security, transport of valuables, technology and Call Center sectors. These suppliers are supported in the Bank contracts by social and environmental liability provisions aligned with the Global Compact - initiative of the United Nations Organization (UN) to adopt practices worldwide accepted on topics such as human rights, labor relations, environment and combat to corruption, which is a signatory since 2007.

                             

In addition to the approval process, in which suppliers are evaluated on technical, administrative, legal and environmental aspects, the Bank also has a Supplier Qualification Index (IQF) which is applied to critical suppliers.

                             

Financial Education

                             

The Bank has specific financial education initiatives to employees, customers, shareholders and society, with the purpose of increasing our stakeholders knowledge on Bank products, so that they can make safe decisions. These actions also contribute to improve our customer portfolio, and comply with the National Strategy of Financial Education.

                             

In 2016, Santander Brazil published in its Annual Report the commitment to train 30 Bank employees as multipliers so that they can perform lectures and education activities and/or financial guidance to companies and universities that are customers.

                             

 


97

 

Transparency

                             

We published the Annual Report, which brings together economic, social, environmental and governance information about Santander Brasil, occurring between January 1 and December 31, 2014 each year. The material follows the Global Reporting Initiative (GRI) - G4 version, in "comprehensive" model of report. In addition to the GRI, it presents the guidelines established by the Brazilian Association of Listed Companies (Abrasca), the standard AA1000SES (AA1000SES Stakeholder Engagement) and from 2014, it began to incorporate some guidelines of the first integrated reporting framework established by the IIRC (International Integrated Reporting Council). This report 'the publication' goes through assurance process issued by an independent audit.

                             

h) Other Information

                             

(i) The management of regulatory capital is based on the analysis of the adequacy of capital through the basel index using the criteria defined by the Central Bank. The goal is to achieve efficient capital structure considering capital costs, regulatory requirements, goals of rating and return to investors.

                             

(ii) In operations involving the sale or transfer of financial assets, the conditions and characteristics of the same are analyzed for the appropriate assessment and classification with regard to risk management and retention of profit.

                             

(iii) Further details of the credit risk management structure may be found in the report available on the site www.santander.com.br/ri.

                             

37. Corporate Restructuring

                             

We implemented several social movements in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander.

                             

a) Agreement on the Acquisition, of part of the Financial Operation of PSA Group in Brazil and a Consequent Creation of a Joint Venture

                             

On 24 July 2015, Aymoré CFI and Banco Santander, in furtherance of the partnership entered into between Banque PSA Finance (“Banque PSA”) and Santander Consumer Finance for the joint operation of the vehicle financing business related to PSA brands (Peugeot, Citroën and DS) in Europe, on this date Banco Santander entered into binding agreements for the formation of a financial cooperation in Brazil with Banque PSA to locally offer a range of financial and insurance products to consumers and distributors of the PSA brands. The main vehicle of the financial cooperation shall be Banco PSA Finance Brasil S.A., which shall be held in the proportion of fifty per cent (50%) by Aymoré CFI, and fifty per cent (50%) by Banque PSA. The acquisition shall be carried out for the proportional book value on the closing date. The transaction also contemplates the acquisition, by subsidiaries of Banco Santander, of hundred per cent (100%) of PSA Finance Arrendamento Mercantil S.A. which purchase price shall be equivalent to seventy four per cent (74%) of its book value on the closing date, and, of fifty per cent (50%) of PSA Corretora de Seguros e Serviços Ltda., which purchase price shall be equivalent to the proportional book value on the closing date. The closing of the transaction will be subject to the fulfillment of certain conditions precedent usual in similar transactions, including obtaining the applicable regulatory and anti-trust approvals.

                             

b) Investment in Super Pagamentos e Administração de Meios Eletrônicos Ltda. (“Super”)

                             

On October 3, 2014, Aymoré CFI signed an investment agreement ("Agreement") with a view to make an investment in Super, which shall result in the subscription and payment of new shares issued by Super, representing 50% of its total and voting capital.

                             

The closing of the operation held on December 12, 2014 and was subject to completion of certain conditions precedent set forth in the Agreement, including the prior approval of the Central Bank (obtained on December 2, 2014). Aymoré CFI subscribed and paid share capital of Super in R$31,128, through the issuance of 20 million new common shares.

                             

On January 4, 2016, Aymoré CFI informed the owners of the shares representing the remaining 50% of Super´s total voting capital its decision to exercise the call option for the acquisition of such shares, for a value of approximately R$113 million. The transaction was concluded on March 10, 2016.

 

c) Sale of Santander Securities Services Brasil DTVM S.A.

                             

On June 19, 2014, preliminary documents were executed containing the main terms and conditions related to the sale of the operation of qualified custody business, currently performed by Banco Santander, and all of the shares issued by Santander Securities Services Brasil DTVM S.A.

                             

On August 31, 2015 the sales transaction of the qualified custody business, with the sale of all shares of Santander Securities Services Brasil DTVM S.A. to Santander Securities Services Brasil Participações S.A., indirectly controlled by Banco Santander, S.A., was concluded at the amount of R$859 million.

                             

The transaction generated a gain of R$750,550 before taxes recorded in the Non-Operating Income item.

                             

The operation fits into the context of a global negotiation of the custody business, which involves, in addition to Brazil, the qualified custodian activity in Spain and Mexico.

98

 

 

d) Other Corporate Movements 

                             

We also performed the following corporate actions:

                             

• On April 30, 2015 it was formalized the merger and the consequent extinction of the companies KM Locanet Ltda. - ME (Compreauto) and Ideia Produções by Webmotors S.A. (Note 15).

                             

On April 30, 2015, it was formalized the merger and consequent extinction of the company Go Pay by Getnet S.A., being the net assets in the amount of R$291 transferred from GoPay to Getnet S.A., dated as of March 31, 2015 (Note 15).

                             

• On March 23, 2015, Santander Participações sold its entire stake in Santos Energy to Inversiones Global Capital, S.A., a company indirectly controlled by Santander Spain, in the total amount of R$127,012 (Note 13).

                             

• On March 23, 2015, Santander Participações S.A. sold all of its interest in the Special Purpose Companies Gestamp Eólica Serra de Santana S.A., Gestamp Eólica Paraíso S.A., Gestamp Eólica Lanchinha S.A., Gestamp Eólica Seridó S.A. e Gestamp Eólica Lagoa Nova S.A. to ICG do Brazil S.A., a company indirectly controlled by Santander Spain, in the total amount of R$ 120,000 (Note 13).

                             

38. Other Information

                             

a) The co-obligations and risks on guarantees provided on behalf of customers, recorded in off balance accounts, amounted to R$36,737,556 (12/31/2015 - R$39,899,151) Bank and R$37,197,530 (12/31/2015 - R$40,408,776) Consolidated.

                             

b) The total amount of Santander Conglomerate investment funds and assets under management is R$2,417,815 (12/31/2015 - R$2,542,286) and the total amount of investment funds and assets managed is R$136,377,214 (12/31/2015 - R$130,345,248) recorded as off balance accounts.

                             

c) The insurance contracted in effect on March 31, 2016, the global bank, fires, vehicles and other, have coverage amount of R$1,003,306 (12/31/2015 - R$998,255) Bank and R$1,009,801 (12/31/2015 - R$1,004,750) Consolidaded and global bank, was hired insurance with coverage amount of R$296,999 (12/31/2015 - R$296,999) Bank and Consolidated, may be used alone or together, provided they do not exceed the contracted amount.

                             

d) Restricted operations were as follows:

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank/Consolidated

               

Assets

  

Income

 

Assets

  

Income

             

 

(Liabilities)

 

(Expenses)

 

(Liabilities)

 

(Expenses)

                   

01/01 to

      

01/01 to

 

 

 

 

 

 

 

 

03/31/2016

 

03/31/2016

 

12/31/2015

 

03/31/2015

Restricted Operations on Assets

 

 

 

 

 

 

 

 

 

 

Lending Operations

 

 

 

 

 

-

 

170

 

10,156

 

306

Liabilities Restricted Operations on Assets

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

-

 

(170)

 

(10,156)

 

(306)

Net Income

 

 

 

 

 

 

 

-

 

 

 

-

                             

e) Obligation Offset and Settlement Agreements - CMN Resolution 3,263/2005 - Banco Santander has an obligation offset and settlement agreement within the ambit of National Financial Institutions (SFN), entered into with individuals and legal entities which may or may not be members of SFN, resulting in improved assurance of financial settlement, with the parties with which it has this type of agreement. These agreements establish that payment obligations with Banco Santander, arising from loans and derivative transactions, in case of default of the counterparty, will be offset against payment obligations of Banco Santander with the counterparty.

                             

f) Other Obligations - Banco Santander rents properties, mainly used for branches, based on a standard contract which may be cancelled at its own criterion and includes the right to opt for renewals and adjustment clauses, classified as operating lease. Total future minimum payments of non-cancelable operating leases as of March 31, 2016 is R$3,097,880, of which R$629,318 up to 1 year, R$1,835,580 from 1 year to up to 5 years and R$632,982 after 5 years. Additionally, Banco Santander has contracts for a matures indeterminate, totaling R$638 monthly rent corresponding to the contracts with this feature. Payment of operating leases recognized as expenses in the firts quarter of 2016, were valued at R$161,218 (2015 - R$169,856).

                             

Monthly rental contracts will be adjusted on an annual basis, as per prevailing legislation, at Market General Price Index (IGPM) variation. The lessee is entitled to unilaterally rescind the agreement, at any time, accordance with contractual clauses and legislation.

                             

g) In the context of the merger transaction of Getnet Tecnologia em Captura e Processamento de Transações H.U.A.H. S.A. (Getnet H.U.A.H. S.A.) into Getnet Adquirencia e Serviços para Meios de Pagamento S.A. (Getnet S.A.), Banco Santander has granted to members of the Getnet H.U.A.H. S.A. a put option whose purpose all shares of Getnet H.U.A.H. S.A. held by them, equivalent to 11.5% of the total capital of the company. Considering the conditions for the exercise of the put option, was not registered any corresponding obligation.

                             

h) In the context of the operation, were granted between Banco Santander e Banco Bonsucesso S.A. (Banco Bonsucesso) the institutions a put option (Banco Bonsucesso right of sale) and purchase (Banco Santander right to acquire), relating to all shares issued by the Banco Bonsucesso held by them, representing to 40.0% of the total capital of the company. Considering the conditions for the exercise of the put option, no corresponding obligation was not recorded.

                             

****

 

 
 
 
 

99

 

 

 

(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

 

   

Officers´ Stament on the Financial Statements

 

In order to comply with article 25, § 1, item V, of the Brazilian Securities an Exchange Commission (CVM) Instruction nº 480, of December 7, 2009, members of the Executive Board of Banco Santander (Brasil) S.A. (Banco Santander or Company) declare that discussed, reviewed and agreed with the opinions expressed in the Banco Santander's Independent Auditors´ Report for the Financial Statements prepared in accordance with BRGAAP criteria for the period ended March 31, 2016 and the documents that compose them, as follows: Performance Review, balance sheet, income statement, statement of changes in equity, cash flows statement, statement of added value and explanatory notes, which were prepared in accordance with the accounting practices adopted in Brazil, according to the Brazilian Corporations Law, the rules of the National Monetary Council (CMN), the Central Bank of Brazil, in accordance with the Accounting Plan of National Financial System Institutions (COSIF) and other regulations and legislation applicable. These financial statements and the documents that compose them were the subject of unqualified opinions by the Independent Auditors and the Company´s Audit Committee.  

                                 

Members of Banco Santander´s Executive Board on March 31, 2016:

                                 

CEO

Sergio Agapito Lires Rial

                        
                                 

Senior Vice-President Executive Officers

Conrado Engel

                          

José de Paiva Ferreira

                        
                                 

Vice-President Executive Officer and Investor Relations Officer

            

Angel Santodomingo Martell

                    
                                 

Vice-President Executive Officers

                    

Antonio Pardo de Santayana Montes

                   

Carlos Rey de Vicente

                        

Jean Pierre Dupui

                       

João Guilherme de Andrade So Consiglio

                    

Juan Sebastian Moreno Blanco

                   

Manoel Marcos Madureira

                        

Vanessa de Souza Lobato Barbosa

                    
                                 

Executive Officers

                        

Jose Alberto Zamorano Hernandez

                    

José Roberto Machado Filho

                    

Maria Eugênia Andrade Lopez Santos

                    
                                 

Officers Without Designation

                    

Alexandre Grossmann Zancani

                    

Amancio Acúrcio Gouveia

                        

Ana Paula Nader Alfaya

                        

André de Carvalho Novaes

                        

Cassio Schmitt

                        

Cassius Schymura

                        

Ede Ilson Viani

                          

Felipe Pires Guerra de Carvalho

                    

Flávio Tavares Valadão

                        

Gilberto Duarte de Abreu Filho

                    

Jamil Habibe Hannouche

                        

Javier Rodriguez de Colmenares Alvarez

                    

Luiz Felipe Taunay Ferreira

                        

Luis Guilherme Mattos de Oliem Bittencourt

                    

Luiz Masagão Ribeiro Filho

                        

Mara Regina Lima Alves Garcia

                   

Marcelo Malanga

                        

Marcelo Zerbinatti

                       

Marcio Aurelio de Nobrega

                        

Marino Alexandre Calheiros Aguiar

                   

Mário Adolfo Libert Westphalen

                    

Mario Roberto Opice Leão

                       

Mauro Cavalcanti de Albuquerque

                    

Mauro Siequeroli

                        

Nilton Sergio Silveira Carvalho

                    

Rafael Bello Noya

                        

Ramón Sanchez Díez

                        

Reginaldo Antonio Ribeiro

                        

Roberto de Oliveira Campos Neto

                   

Robson de Souza Rezende

                        

Ronaldo Wagner Rondinelli

                        

Sérgio Gonçalves

                        

Thomas Gregor Ilg

                        

Ulisses Gomes Guimarães

                        

 

 

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(Free Translation into English from the Original Previously Issued in Portuguese)

 

 

 

BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES

 

   

Officers´ Statement on Independent Auditors' Report

 

                                 

In order to comply with article 25, § 1, item V, of the Brazilian Securities an Exchange Commission (CVM) Instruction nº 480, of December 7, 2009, members of the Executive Board of Banco Santander (Brasil) S.A. (Banco Santander or Company) declare that discussed, reviewed and agreed with the opinions expressed in the Banco Santander's Independent Auditors´ Report for the Financial Statements prepared in accordance with BRGAAP criteria for the period ended March 31, 2016 and the documents that compose them, as follows: Performance Review, balance sheet, income statement, statement of changes in equity, cash flows statement, statement of added value and explanatory notes, which were prepared in accordance with the accounting practices adopted in Brazil, according to the Brazilian Corporations Law, the rules of the National Monetary Council (CMN), the Central Bank of Brazil, in accordance with the Accounting Plan of National Financial System Institutions (COSIF) and other regulations and legislation applicable. These financial statements and the documents that compose them were the subject of unqualified opinions by the Independent Auditors and the Company´s Audit Committee.

                                 

Members of Banco Santander´s Executive Board on March 31, 2016:

                                 

CEO

Sergio Agapito Lires Rial

                        
                                 

Senior Vice-President Executive Officers

Conrado Engel

                          

José de Paiva Ferreira

                        
                                 

Vice-President Executive Officer and Investor Relations Officer

            

Angel Santodomingo Martell

                    
                                 

Vice-President Executive Officers

                    

Antonio Pardo de Santayana Montes

                   

Carlos Rey de Vicente

                        

Jean Pierre Dupui

                       

João Guilherme de Andrade So Consiglio

                    

Juan Sebastian Moreno Blanco

                   

Manoel Marcos Madureira

                        

Vanessa de Souza Lobato Barbosa

                    
                                 

Executive Officers

                        

Jose Alberto Zamorano Hernandez

                    

José Roberto Machado Filho

                    

Maria Eugênia Andrade Lopez Santos

                    
                                 

Officers Without Designation

                    

Alexandre Grossmann Zancani

                    

Amancio Acúrcio Gouveia

                        

Ana Paula Nader Alfaya

                        

André de Carvalho Novaes

                        

Cassio Schmitt

                        

Cassius Schymura

                        

Ede Ilson Viani

                          

Felipe Pires Guerra de Carvalho

                    

Flávio Tavares Valadão

                        

Gilberto Duarte de Abreu Filho

                    

Jamil Habibe Hannouche

                        

Javier Rodriguez de Colmenares Alvarez

                    

Luiz Felipe Taunay Ferreira

                        

Luis Guilherme Mattos de Oliem Bittencourt

                    

Luiz Masagão Ribeiro Filho

                        

Mara Regina Lima Alves Garcia

                   

Marcelo Malanga

                        

Marcelo Zerbinatti

                       

Marcio Aurelio de Nobrega

                        

Marino Alexandre Calheiros Aguiar

                   

Mário Adolfo Libert Westphalen

                    

Mario Roberto Opice Leão

                       

Mauro Cavalcanti de Albuquerque

                    

Mauro Siequeroli

                        

Nilton Sergio Silveira Carvalho

                    

Rafael Bello Noya

                        

Ramón Sanchez Díez

                        

Reginaldo Antonio Ribeiro

                        

Roberto de Oliveira Campos Neto

                   

Robson de Souza Rezende

                        

Ronaldo Wagner Rondinelli

                        

Sérgio Gonçalves

                        

Thomas Gregor Ilg

                        

Ulisses Gomes Guimarães

                        

 

 

 
 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: April 27, 2016
 
Banco Santander (Brasil) S.A.
By:
/S/ Amancio Acurcio Gouveia 
 
Amancio Acurcio Gouveia
Officer Without Specific Designation
 
 
By:
/S/ Carlos Rey de Vicenti 
 
Carlos Rey de Vicenti
Vice - President Executive Officer
 

 

 

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