EX-99.1 2 ss415070_ex9901.htm ANNOUNCEMENT TO THE MARKET
               
 
 
Announcement to the Market

Disclosure of results for the fourth quarter and from January to December of 2014,
according to
International Financial Reporting Standards – IFRS


 
We present below the differences between our financial statements in BRGAAP1 and in International Financial Reporting Standards - IFRS. We emphasize that the main difference in the result and equity relates to the allowance for loan losses, that uses the concept of incurred loss in IFRS and of expected loss in BRGAAP.

The complete consolidated financial statements under IFRS for period of 2014 are available at our website: www.itau.com.br/investor-relations.

 
Comparison between BRGAAP1 and IFRS
R$ million
Balance Sheet
  
BRGAAP
Adjustments and
Reclassifications2
IFRS
BRGAAP
Adjustments and
Reclassifications2
IFRS
    Dec 31,2014 Dec 31,2013
Total Assets
     1,208,702     (81,499 )   1,127,203     1,105,721     (78,424 )   1,027,297  
Cash and Cash Equivalents Reserve Requirements Interbank Deposits, Securities Under Repurchase Agreements, Financial Assets and Derivatives 3
     610,142     (36,883 )   573,259     550,837     (25,797 )   525,040  
Loan Operations
     451,760     671     452,431     412,235     (533 )   411,702  
(-) Allowance for Loan Losses 4
     (26,948 )   4,556     (22,392 )   (26,371 )   4,136     (22,235 )
Other Financial Assets 5
     96,761     (43,112 )   53,649     94,183     (46,591 )   47,592  
Tax Assets 6
     42,890     (7,647 )   35,243     44,750     (10,008 )   34,742  
Investments in associates and jointly controlled entities, Goodwill, Fixed and Intangible
     34,097     916     35,013     30,087     369     30,456  
Assets, Assets Held for Sale and Other Assets
     -     -     -     -     -     -  
                                       
Current Liabilities and Long Term Liabilities
     1,110,439     (83,853 )   1,026,586     1,022,794     (79,689 )   943,105  
Deposits
     294,773     -     294,773     274,383     -     274,383  
Deposits Received Under Securities Repurchase Agreements 3
     325,013     (36,330 )   288,683     292,179     (25,497 )   266,682  
Financial Liabilities Held for Trading, Derivatives,
     212,826     872     213,698     194,238     969     195,207  
Interbank and Institutional funding
     114,540     (43,048 )   71,492     107,329     (46,055 )   61,274  
Other Financial Liabilities 5
     112,675     113     112,788     102,055     -     102,055  
Reserves for Insurance, Private Pension and Capitalization
     40,765     (78 )   40,687     40,263     (553 )   39,710  
Provisions and Other Liabilities
     9,847     (5,382 )   4,465     12,347     (8,553 )   3,794  
Tax Liabilities 6
     -     -     -     -     -     -  
                                       
Total Stockholders’ Equity
     98,262     2,354     100,617     82,927     1,265     84,192  
Non-controlling interests
     2,415     (1,058 )   1,357     1,903     (934 )   969  
Controlling Stockholders’ Equity 7
     95,848     3,412     99,260     81,024     2,199     83,223  
1 BRGAAP represents the accounting practices adopted in Brazil for financial institutions, according to regulation of the Brazilian Central Bank;
2 Resulted from reclassifications between assets and liabilities and other effects from IFRS adoption;
3 Resulted from the elimination of transactions between the parent company and exclusive funds (mainly PGBL and VGBL fund quotas), which are consolidated under IFRS;
4 Implementation of the criteria for calculating the Allowance for Loan Losses as defined in IFRS;
5 Difference in accounting, mainly for Foreign Exchange Portfolio, which started to be considered as a net effect of Assets and Liabilities;
6 Difference in accounting, mainly for deferred taxes, which are now treated as a net effect of Assets and Liabilities in each of the consolidated companies.
7 Conciliation of Controlling Stockholders’ Equity is presented in the following table.
 
 
Itaú Unibanco Holding S.A.
 
 
 
               
Below, the conciliation of the Result and Equity, and the conceptual description of the major adjustments.
 
Conciliation
R$ million
Adjustments
  
Equity
Result
   
Dec 31,2014
4thQ/14
3rdQ/14
4thQ/13
jan-dec/14
jan-dec/13
BRGAAP - Values Attributable to Controlling Stockholders
     95,848     5,520     5,404     4,646     20,242     15,696  
(a) Allowance for Loan Losses
     2,743     712     364     274     1,006     568  
(b) Adjustment to market value of shares and quotas
     57     -     -     -     -     -  
(c) Acquisition of interest in Porto Seguro Itaú Unibanco Participações S.A.
     475     (4 )   (4 )   (7 )   (15 )   (26 )
(d) Conversion of subsidiaries and unconsolidated companies abroad
     -     -     -     (30 )   -     (6 )
(e) Effective interest rate
     (133 )   24     13     11     64     100  
(f) Other adjustments
     271     93     116     16     257     92  
IFRS - Values Attributable to Controlling Stockholders
     99,260     6,345     5,893     4,910     21,555     16,424  
IFRS - Values Attributable to Minority Stockholders
     1,357     88     91     38     306     98  
IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders
     100,617     6,433     5,984     4,948     21,861     16,522  

Differences between IFRS and BRGAAP Financial Statements
(a) On IFRS(IAS39), loan losses allowances must be made when there is objective evidence that loan operations have suffered a reduction in its value (Incurred Loss). On BRGAAP, the expected loss model is used 8.
(b) On IFRS(IAS39 and 32), stocks and quotas classified as permanents investments were measured at fair value and its gains and losses were recorded directly on Equity, with no impact on the income statement of the period.
(c) On IFRS, the effect of accounting at fair value the acquisition of the participation in Porto Seguro Itaú Unibanco Participações S.A. was recognized.
(d) On the IFRS(IAS21), exchange rate variations of subsidiaries and non consolidated companies abroad, where the functional currency (defined as the currency of the primary economic environment on which each entity operates) differs from the Real, are recorded directly on Equity with no impact on the income statement of the period. On BRGAAP, until 2013 the exchange variation of investments abroad (other than the Functional Currency Dollar) exchange rate variation and hedges of such investments transiting through the income statement. From 2014 these exchange rate variations have been recorded directly in equity, thus there was no more difference in treatment between BRGAAP and IFRS.
(e) On the IFRS(IAS39), the assets and financial liabilities measured at amortized cost are recognized according to the methodology of effective interest rate, which appropriates the revenues and costs directly attributed to the acquisition, issue or disposal for the period of operation. On BRGAAP, the recognition of expenses and revenues from fees occurs at the time of contracting these operations.
(f) Other Adjustments mainly comprise the difference in the eligibility of operations of the Cash Flow Hedge for purposes of IFRS and the reversal of the Goodwill Amortizations pursuant the BRGAAP. 
8 For more details see our Complete Financial Statements from January to December of 2014.  
  
For comparison purposes, we present on the table below the Result and the Recurring Result according to the IFRS and the BRGAAP.
R$ million
Recurring Result
4thQ/14
3rdQ/14
jan-dec/14
jan-dec/13
 
BRGAAP
IFRS
Variation
BRGAAP
IFRS
Variation
BRGAAP
IFRS
Variation
BRGAAP
IFRS
Variation
Result - Attributable to Controlling Stockholders
   5,520     6,345     825     5,404     5,893     489     20,242     21,555     1,313     15,696     16,424     728  
Exclusion of the Non-Recurring Events Net of Tax Effects
   140     (586 )   (726 )   54     15     (38 )   377     (472 )   (849 )   140     140     -  
Realization of Assets and Impairment
   9     4     (5 )   -     -     -     9     4     (5 )   239     239     -  
Goodwill Amortization
   54     -     (54 )   38     -     (38 )   177     -     (177 )   -     -     -  
Program of Payment or Installment
   62     62     -     (37 )   (37 )   -     25     25     -     (508 )   (508 )   -  
IRB - Change in criteria to recognize our investment in IRB Brasil Resseguros S.A.
   -     -     -     -     -     -     -     -     -     (131 )   (131 )   -  
Porto Seguro - Efect of favorable decision on Supreme Court about COFINS incidence
   -     -     -     -     -     -     -     -     -     (272 )   (272 )   -  
Provisions - Civil Lawsuits
   38     38     -     15     15     -     126     126     -     754     754     -  
Cofins / Allowance for losses on tax loss - Porto Seguro
   -     -     -     -     -     -     60     60     -     -     -     -  
Favorable decisions on the thesis enlargment of the calculation basis of PIS/COFINS IRB
   (28 )   (28 )   -     -     -     -     (62 )   (62 )   -     -     -     -  
Allowance for loan losses - Credicard (1)
   -     -     -     37     37     -     37     37     -     -     -     -  
Supplement provision for loan losses (2)
   668     -     (668 )   -     -     -     668     -     (668 )   -     -     -  
Disposal of big risks insurance operation
   (736 )   (736 )   -     -     -     -     (736 )   (736 )   -     -     -     -  
Improving labor claims provisioning model
   74     74     -     -     -     -     74     74     -     -     -     -  
Other
   -     -     -     -     -     -     -     -     -     58     58     -  
Recurring Result - Attributable to Controlling Stockholders
   5,660     5,759     98     5,457     5,908     451     20,619     21,083     464     15,836     16,564     728  
(1) Adjustement of the criteria for the recognition of allowances for loan losses arising from the acquisition of Credicard.
(2) Recognition of an additional allowance to the minimum required by Resolution No. 2,682/99 of the Nacional Monetary Council, in view of a lower economic growth scenario that could affect specific sectors
   
The tables in this report show the figures in millions. Variations and summations, however, are calculated in units.
  
São Paulo, February 3, 2015.
Alfredo Egydio Setubal
Investor Relations Officer
 
Itaú Unibanco Holding S.A.