Unassociated Document

IX-

Other financial assets

Itaú Unibanco Holding presents these assets which are in the category of “Loans and receivables” in its consolidated balance sheet initially at its fair value and subsequently at amortized cost using the effective interest rate method.

Interest income is recognized in the consolidated statement of income under Interest and similar income.

X-

Financial liabilities at amortized cost

The financial liabilities that are not classified into fair value through profit or loss are classified into this category and initially recognized at fair value and subsequently measured at amortized cost using the effective interest rate method. Interest expense is presented in consolidated statement of income under “Interest and similar expense”.

The following financial liabilities are presented in the consolidated balance sheet and recognized at amortized cost:

Deposits; (See Note 16);

Securities sold under repurchase agreements (as previously described in item (e) above);

Funds from interbank markets;

Funds from institutional markets;

Liabilities for capitalization plans; and

Other financial liabilities. See Note 19b.

INVESTMENTS IN UNCONSOLIDATED COMPANIES

Unconsolidated companies (The term we use for associates under IAS 28) as those companies in which the investor has significant influence, but does not have control. Significant influence usually is presumed to exist when an interest in voting capital from 20% to 50% is held. Investments in these companies are initially recognized at cost of acquisition and subsequently accounted for following the equity method. Investments in unconsolidated companies include the goodwill identified upon acquisition, net of any cumulative impairment loss.

The share of Itaú Unibanco Holding is profits or losses of its unconsolidated companies after acquisition is recognized in the consolidated statement of income, and its share of the changes in other comprehensive income of its unconsolidated companies after acquisition is recognized in other comprehensive income. The cumulative changes after acquisition are adjusted against the carrying amount of the investment. When the share of Itaú Unibanco Holding of losses of an unconsolidated company is equal or above its interest in the unconsolidated company, including any other receivables, Itaú Unibanco Holding does not recognize additional losses, unless it had incurred any obligations or made payments on behalf of the unconsolidated company.

Unrealized profits on transactions between Itaú Unibanco Holding and its unconsolidated companies are eliminated to the extent of the interest of Itaú Unibanco Holding. Unrealized losses are also eliminated, unless the transaction provides evidences of impairment of the transferred asset. The accounting policies on unconsolidated companies were changed, when necessary, to ensure consistency with the policies adopted by Itaú Unibanco Holding.

If the interest in the unconsolidated company decreases, but Itaú Unibanco Holding retains significant influence, only the proportional amount of the previously recognized amounts in other comprehensive income are reclassified in Income, when appropriate.

Gains and losses from dilution arising from, investments in unconsolidated companies, are recognized in the consolidated statement of income.

LEASE AGREEMENTS (as lessee)

As a lessee, Itaú Unibanco Holding has finance and operating lease agreements.

Itaú Unibanco Holding leases certain fixed assets. Leases of fixed assets, in which Itaú Unibanco substantially holds all risks and rewards incidental to the ownership area classified as finance lease. They are capitalized in the commencement date of the leases at the lower of the fair value of the asset and the present value of the lease future minimum payments.

Each lease installment is allocated part to the liability and part to financial charges, so that a constant rate is obtained over the outstanding debt balance. The corresponding obligations, net of future charges, are included in other financial liabilities. The interest expense is recognized in the consolidated statement of income over the lease term, to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Fixed assets acquired through finance lease are depreciated during the useful life of the asset.

Expenses with respect to transactions entered into by Itaú Unibanco Holding classified as operating leases are recognized in the consolidated statement of income, on a straight-line basis, over the period of the lease.

When an operating lease is terminated before expiration of the lease term, any payment to be made to the lessor as a penalty is recognized an expense in the period when the termination occurs.

FIXED ASSETS

In accordance with IAS 16 – “Property, plant and equipment”, fixed assets are recognized at the cost of acquisition less accumulated depreciation, calculated using the straight-line method and rates based on the estimated useful lives of these assets. Such rates are presented in Note 14.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each year.

Itaú Unibanco Holding reviews its assets in order to identify whether any indications of impairment exists. If such indications are found, long-lived assets, including fixed assets are tested for impairment. In accordance with IAS 36 – “Impairment of assets”, impairment losses are recognized as the difference between the carrying and the recoverable amount of an asset (or group of assets), and recognized in the consolidated statement of income. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and its value in use. For purposes of assessing impairment, assets are grouped at the lowest level for which independent cash flows can be identified (cash-generating units). The assessment can be made at an individual asset level when the fair value less the cost to sell can be determined reliably. We did not have to recognize any impairment loss on fixed assets in the year ended December 31, 2010.

Gains and losses on disposals are recognized in the consolidated statement of income under Other Income.

GOODWILL

In accordance with IFRS 3 (R) – “Business Combination”, goodwill represents the excess of the cost of an acquisition over the fair value of net identifiable assets and liabilities of the acquired entity at the date of acquisition. Goodwill is not amortized, but is tested for impairment annually or when there is any indication of impairment, using an approach that involves the identification of cash-generating units and estimates of fair value less cost to sell and/or value in use.

As defined in IAS 36, a cash-generating unit is the lowest identifiable group of assets that generates cash inflows that are independent of the cash inflows from other assets or groups of assets. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose identified according to operating segment.

IAS 36 determines that an impairment loss shall be recognized for a cash-generating unit if the recoverable amount of the cash-generating unit is less than its carrying amount. The loss shall be allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset. The loss cannot reduce the carrying amount of an asset below the highest of its fair value less costs to sell, and its value in use. The impairment loss of goodwill cannot be reversed. At December 31, 2010, we did not have any goodwill balance in our consolidated financial statements.

Goodwill of unconsolidated companies are reported as part of investment in the consolidated balance sheet under Investments in Unconsolidated Companies, and the impairment test is carried out by comparing the total balance of the investment (including goodwill).

INTANGIBLE ASSETS

Intangible assets are non-physical assets and include software and other assets, and are initially recognized at cost. Intangible assets are recognized when they arise from legal or contractual rights, their cost can be reliably measured, and in the case of intangible assets not arising from separate acquisitions or business combinations, it is probable that future economic benefits may arise from its use.

All intangible assets are intangible assets separately acquired. At December 31, 2010, Itaú Unibanco Holding did not have any internally generated intangible assets.

Intangible assets may have definite or indefinite useful lives. Intangible assets with definite useful lives are amortized using the straight-line method over their estimated useful lives. Intangible assets with indefinite useful lives are not amortized, but annually tested for impairment.

Itaú Unibanco Holding annually assesses its assets in order to identify whether any indications of impairment exist. If such indications are identified, intangible assets are tested for impairment. In accordance with IAS 36, impairment losses are recognized as the difference between the carrying and the recoverable amount of an asset (or group of assets), and recognized in the consolidated statement of income. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and its value in use. For purposes of assessing impairment, assets are grouped into cash-generating units. The assessment can be made at an individual asset level when the fair value less the cost to sell can be determined reliably

Intangible assets, except goodwill, that had impairment losses recognized are reviewed each September 30 each year (the date determined by us to be the date for performing such impairment test) to determine whether reversal of the loss is appropriate. We recognized impairment losses amounting to R$ 21 during the year ended December 31, 2010.

As provided for in IAS 38, Itaú Unibanco Holding chose the cost model to measure its intangible assets after their initial recognition.

ASSETS HELD FOR SALE

Assets held for sale are recognized in the consolidated balance sheet when it is foreclosed or there is intention to sell. The asset is initially recorded at its fair value.

Subsequent reductions in the carrying value of the asset are recorded as a loss due to reductions in fair value less costs to sell, in the consolidated statement of income. In the case of subsequent recoveries in the fair value less costs to sell, the recognized loss can be reversed.

INCOME TAX AND SOCIAL CONTRIBUTION

There are two components of the income tax provision: current and deferred.

Current income tax expense approximates taxes to be paid or recovered for the applicable period. Current assets and liabilities are recorded in the consolidated balance sheet under “Tax assets – Income tax and social contribution credits” and “Tax liabilities – Current” –, respectively.

Deferred income taxes are recognized, using the balance sheet liability method on temporary differences between the tax bases of assets and liabilities and the amounts reported in the financial statements at each year end. Deductible temporary differences tax loss carry-forwards are recognized as an asset. Deferred tax assets are only recognized when it is probable that future taxable income will be available against which these temporary differences can be utilized. Deferred tax assets and liabilities are recognized in the consolidated balance sheet under “Tax Assets – Income tax and social contribution deferred” and ”Tax liabilities – Deferred”, respectively.

Income tax and social contribution expense is recognized in the consolidated statement of income under “Income Tax and Social Contribution”, except when it refers to items directly recognized in the other comprehensive income, such as: taxes on fair value measurement of available-for-sale financial assets, and taxes on cash flow hedges. Deferred taxes of such items are initially recognized in other comprehensive income and subsequently recognized in income together with the recognition of the gain/loss originally deferred.

Changes in tax law and rates are recognized in the consolidated statement of income in the period in which the new rates are substantially enacted. Interest and penalties are recognized in the consolidated statement of income under “General and administrative expenses”.

Income tax and social contribution are calculated at the rates shown below, considering the respective taxable bases, based on the - effective legislation related to each tax, which in the case of the operations in Brazil are for all the reporting periods as follows:

	2010
Income tax		15	%
Additional income tax		10	%
Social contribution		15	%

INSURANCE CONTRACTS AND PRIVATE PENSION

IFRS 4 – “Insurance contracts” defines insurance contract as contracts under which the issuer accepts a significant insurance risk from the counterparty, by agreeing to compensate it if a specified uncertain future event adversely affects it.

Itaú Unibanco Holding, through its subsidiaries, issues contracts to clients that have insurance risks, financial risks or a combination of both. A contract under which Itaú Unibanco Holding accepts significant insurance risks from its clients and agrees to compensate them upon the occurrence of a specified uncertain future event is classified as an insurance contract. The insurance contract may also transfer financial risk, but is accounted for as an insurance contract, should the insurance risk be significant.

Investment contracts are those that transfer significant financial risk. Financial risk is the risk of possible future change in one or more variables, such as interest rate, financial asset price, commodity price, foreign exchange rate, index of prices or rates, credit risk rating or credit index, or other variable.

Investment contracts may be reclassified as insurance contracts after their initial classification should the insurance risk become significant.

Investment contracts with discretionary participation features are financial instruments, but they are treated as insurance contracts, as established by IFRS 4.

Once the contract is classified as an insurance contract, it remains as such until the end of its life, even if the insurance risk is significantly reduced over this period, unless all rights and obligations are extinguished or expired.

Note 29 present a detailed description of all products classified as insurance contracts.

Private pension plans

In accordance with IFRS 4, an insurance contract is one that exposes its issuer to a significant insurance risk. Insurance risk is significant if, and only if, an insurance event could cause an issuer to pay significant additional benefits in any scenario, excluding scenarios that lack commercial substance. Additional benefits refer to amounts that exceed those that would be payable if no insured event occurred.

Contracts that contemplate retirement benefits after an accumulation period (known as PGBL, VGBL and FGB) assure, at the inception date of the contract, the basis for calculating the retirement benefit (mortality table and minimum interest). The contracts specify the annuity rates, and, therefore, the contract transfers the insurance risk to the issuer at inception, and they are classified as insurance contracts.

The payment of additional benefits is considered significant in all scenarios with commercial substance, since survival of the beneficiary may exceed the survival estimates in the actuarial table used to define the benefit agreed in the contract. The option of conversion into a fixed amount payable as annuity is not available and all contracts set give the right to the counterparty to choose a life annuity benefit.

Insurance Premiums

Insurance premiums are recognized over the period of the contracts in proportion to the amount of the insurance coverage. Insurance premiums are recognized as revenue in the consolidated statement of income.

If there is evidence of impairment losses with respect to receivables for insurance premiums, Itaú Unibanco Holding recognizes an impairment charge, as described in Note 2.4f VlII.

Reinsurance

Reinsurance premiums are recognized in income over the same period in which the related insurance premiums are recognized in the statement of income.

In the ordinary course of business, Itaú Unibanco Holding reinsures a portion of the risks underwritten, particularly property and casualty risks that exceed the maximum limits of responsibility that we understand appropriate for each segment and product (after a study which considers size, experience, specificities and the necessary capital to support these limits). These reinsurance agreements allow the recovery of a portion of the losses with the reinsurer, although they do not release the insurer from the main obligation as a direct insurer of the risks contemplated in the reinsurance.

Acquisition costs

Acquisition costs include direct and indirect costs related to the origination of insurance. These costs, except for the commissions paid to brokers and others, are expensed directly in income when incurred. Commissions, on the other hand, are deferred and expensed in proportion to the recognition of the premium revenue, i.e. over the period of the corresponding insurance contract.

Liabilities

Reserves for claims are established based on historical experience, claims in process of payment, estimated amounts of claims incurred but not yet reported, and other factors relevant to the required reserve levels. A provision for premium deficiency is recognized if the estimated amount of premium deficiency exceeds deferred acquisition costs. Expenses related to recognition of liabilities for insurance contracts are recognized in the consolidated statement of income under, “Change in reserves for insurance and private pension”.

Embedded derivatives

In certain cases, IFRS 4 requires that the entity separates the embedded derivatives related to insurance contracts. However, Itaú Unibanco Holding did not identify any derivatives embedded in the insurance contracts in force.

Liability adequacy test

IFRS 4 requires insurance companies to assess the adequacy of its insurance liabilities at each reporting period through a minimum adequacy test. The liability adequacy test for IFRS was conducted by adopting the current actuarial assumptions for future cash flows of all insurance contracts in force on the balance sheet date.

As a result of this test, if the assessment shows that the carrying amount of the insurance liabilities (less related deferred acquisition costs of contracts and related intangible assets) is inadequate in the light of the estimated future cash flows, the entire deficiency shall be recognized in income for the period (after the expensing deferred acquisition costs and intangible assets related to deficit portfolios, in compliance with the accounting policy). In order to perform the adequacy test, insurance contracts are grouped in portfolios that are broadly subject to similar risks and which risks are jointly managed as a single portfolio.

The assumptions used to conduct the liability adequacy test are detailed in Note 29.

CAPITALIZATION PLANS

Itaú Unibanco Holding sells capitalization certificates, in which clients deposit specific amounts, depending on the plan, which are redeemable at the original amount plus interest. Clients enter, during the term of the plan, into raffles of cash prizes.

While for regulatory purposes in Brazil they are regulated by the insurance regulator, these plans do not meet the definition of insurance contract under IFRS 4, and are, classified as a financial liability at amortized cost under IAS 39.

Revenue from capitalization plans is recognized during the period of the contract and measured by the difference between the amount deposited by the client and the amount that Itaú Holding has to reimburse. We recognize as an expense a liability for cash prizes measured actuarially.

EMPLOYEE BENEFITS

Itaú Unibanco Holding is required to make contributions to government social security and labor indemnity plans, in Brazil and in other countries where it operates, which are expensed in the consolidated statement of income under “General and administrative expenses”, when incurred. These contributions totaled R$ 1,415 for the year ended December 31, 2010.

Additionally, Itaú Unibanco Holding also sponsors defined benefit plans and defined contribution plans, accounted for in accordance with IAS 19 – “Employee benefits”.

Pension plans - defined benefit plans

The liability (or asset, as the case may be) recognized in the consolidated balance sheet with respect to defined benefit plans corresponds to the present value of the defined benefit obligations on the date less the fair value of the plan assets. The defined benefit obligation is annually calculated by an independent actuarial company using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated amount of future cash flows of benefit payments based on the Brazilian government securities denominated in reais and with maturity periods similar to the term of the pension plan liabilities.

Actuarial gains and losses are fully recognized in income in the period in which they arise under “General and administrative expenses – Retirement plans and post-employment benefits”.

The following amounts are recognized in the consolidated income statement:

the expected return on plan assets, and gains or losses corresponding to the difference between expected and actual returns;

Actuarial gains and losses that are defined as those that result from differences between the previous actuarial assumptions and what has actually occurred and include the effects of changes in actuarial assumptions;

Current service cost – defined as the increase in the present value of obligations resulting from employee service in the current period;

Interest cost - defined as the increase during the year in the present value of obligations which arises from the passage of time.

In accordance with IAS 19, a curtailment is an event that significantly decreases the years of future service by current employees or that eliminates or reduces, for a significant number of employees, the qualification for benefits for all or part of future services. Settlement is a transaction in which an irrevocable action relieves the employer (or plan) of the primary responsibility for a pension or post-retirement benefit, and therefore eliminates significant risks related to the obligation and to the related assets.

A gain or loss in the curtailment of the plan is the sum of two elements: (a) the recognition in income of deferred past service cost associated with the years of service that no longer will have to be provided, and (b) the change in the projected benefit obligation. If the curtailment causes the reduction of the projected obligation, the result will be a curtailment gain. If the curtailment causes the increase of the projected obligation, the result will be a curtailment loss.

Upon the occurrence of a settlement, a gain or loss will be recognized.

Pension plans - defined contribution

For defined contribution plans, contributions to plans made by Itaú Unibanco Holding are recognized as expense when due.

Other post-employment benefit obligations

Certain companies acquired by Itaú Unibanco Holding over the past few years used to sponsor post-employment healthcare benefit plans, and Itaú Unibanco Holding is committed as per the acquisition contracts to maintain such benefits over specific periods. Such benefits are also accounted for in accordance with the IAS 19, in a manner similar to defined benefit plans.

STOCK BASED COMPENSATION

Stock based compensation is accounted for in accordance with IFRS 2 - “Share-based payment” which requires the entity to measure the value of equity instruments granted, based on their fair value at the option grant date. This cost is recognized during the vesting period for acquisition of the right to exercise the instruments.

The total amount to be expensed is determined by reference to the fair value of the options granted excluding the impact of any service and non-market performance vesting conditions (notably remaining an employee of the entity over a specified time period). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognizes the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

When the options are exercised, the Itau Unibanco Holding generally gives treasury shares to the beneficiaries.

The fair value of stock options is estimated by using option pricing models that take into account the exercise price over the option, the current price, the risk-free interest rate, the expected volatility of the share price on the option life.

All stock based compensation plans established by Itaú Unibanco Holding correspond to plans that can be settled exclusively through the delivery of shares.

FINANCIAL GUARANTEES

In accordance with IAS 39, the issuer of a financial guarantee contract has an obligation and should recognize it initially at its fair value. Subsequently, this obligation should be measured at the amount initially recognized less accumulated amortization and the amount determined pursuant to IAS 37 - “Provisions, contingent liabilities and contingent assets”, whichever is higher.

Itaú Unibanco Holding recognizes the fair value of the guarantees issued in the consolidated balance sheet under “Other liabilities”. Fair value is generally represented by the fee charged to client for issuing the guarantee. This amount is amortized over the life of the guarantee issued and recognized in the consolidated statement of income under “Banking service fees”.

After issuance, if based on the best estimate we conclude that the occurrence of a loss regarding a guarantee issued is probable, and if the loss amount is higher than the initial fair value less cumulative amortization of the guarantee, a provision is recognized for such amount.

CONTINGENT ASSETS AND CONTINGENT LIABILITIES

These are assessed, recognized and disclosed in accordance with IAS 37. Contingent assets and contingent liabilities are rights and obligations arising from past events and which occurrence depends on future events.

Contingent assets are not recognized in the consolidated financial statements, except when Management of Itaú Unibanco Holding understands that its realization is practically certain and, generally corresponds to lawsuits with favorable sentences in final and unappealable judgments and by the withdrawal of lawsuits as a result of a settlement payment having been collected or as a result of an agreement to offsetting with a existing liability.

Contingent liabilities mainly arise from administrative proceedings and lawsuits, inherent in the ordinary course of business, filed by third parties, former employees and governmental bodies, in connection with civil, labor, and tax and social security claims.

These contingencies are assessed based on management’s best estimates, considering the opinion of legal advisors as to probability that an outflow of resources will be required to settle the obligation and as to whether amount of the obligation can be estimated reliably.

Contingencies are classified as:

Probable: in which case a liability is recognized in the consolidated balance sheet under Provisions;

Possible: in which case they are disclosed in the financial statements but no provision is recorded; and

Remote: which are neither provided for nor disclosed.

Contingent liabilities recorded under Provisions and disclosure of possible contingent liabilities are measured through the use of models and criteria which allow its appropriate measurement even if there is uncertainty as to its ultimate timing and amount, and the criteria are detailed in Note 31.

The amount of escrow deposits is updated in accordance with current legislation.

Contingent losses guaranteed by indemnity clauses provided by third parties, such as in business combinations consummated before the transition date are recognized when a claim is asserted, and a receivable is recognized simultaneously subject to its collectability. For business combinations consummated after the transition date, indemnification assets are recognized at the same time and measured on the same basis as the indemnified item, subject to collectability or contractual limitations on the indemnified amount.

CAPITAL

Common and preferred shares (which are considered common shares without voting rights) for accounting purposes, are classified in stockholders’ equity. Additional costs directly attributable to the issuance of new shares are included in stockholders’ equity as a deduction from the proceeds, net of taxes.

TREASURY SHARES

Common and preferred shares repurchased are recorded in stockholders’ equity under “Treasury shares” at their average purchase price.

Treasury shares that are subsequently sold, such as those sold to grantees under our stock option plans, are recorded as a reduction in treasury shares at the average price of treasury stock held at such date.

The difference between the sale price and the average price of the treasury stock is recorded as a reduction or increase in “Additional Paid-in Capital”. The cancellation of treasury shares is recorded as a reduction in treasury shares against Appropriated Reserves, at the average price at the cancellation date.

DIVIDENDS AND INTEREST ON CAPITAL

Pursuant to the Company's bylaws, stockholders are entitled to a mandatory minimum dividend of 25% of net income for the year as determined in accordance with the corporate law. Minimum dividend amounts established in the bylaws are recorded as liabilities at the end of each year. Any other amount above the mandatory minimum dividend is accounted for as liabilities only when approved by the stockholders at a Stockholders' Meeting.

Since January 1, 1996, Brazilian corporations have been permitted to deduct for tax purposes an amount of interest on capital.

Interest on capital is treated for accounting purposes as a dividend, and it is presented as a reduction of stockholders' equity in the consolidated financial statements. The related tax benefit is recorded in the consolidated statement of income.

Dividends have been and continue to be calculated and paid based on the financial statements prepared under BRGAAP and not based on these financial statements.

EARNINGS PER SHARE

Earnings per share are computed by dividing net income attributable to the owners of Itaú Unibanco Holding by the weighted average number of common and preferred shares outstanding for each reporting year. Weighted average shares are computed based on the periods for which the shares were outstanding.

Earnings per share are presented based on the two types of shares issued by Itaú Unibanco Holding. Both types, common and preferred, participate in dividends on substantially the same basis, except that preferred shares are entitled to a priority non-cumulative minimum annual dividend of R$ 0.022 per share. Earnings per share are computed based on the distributed earnings (dividends and interest on capital) and undistributed earnings of Itaú Unibanco Holding after giving effect to the preference indicated above, without regard to whether the earnings will ultimately be fully distributed. Earnings per share amounts have been determined as if all earnings were distributed and computed following the requirements of IAS 33 – “Earnings per share”.

Itaú Unibanco Holding grants stock-based compensation whose dilutive effect is reflected in diluted earnings per share, with the application of the “treasury stock method“. Under the treasury stock method, earnings per share are calculated as if shares under stock-based compensation had been issued and as if the assumed proceeds (consisting of funds to be received upon exercise of the stock options and the amount of compensation cost attributed to future services and not yet recognized) were used to purchase shares of Itaú Unibanco Holding.

REVENUE FROM SERVICES

Itaú Unibanco Holding provides a number of services to its clients, such as investment management, credit card, investment banking and commercial banking. Revenue from these services are usually recognized when the service is provided (commercial and investment banking) or over the life of the contract (investment management and credit cards). The composition of revenue from services is detailed in Note 23.

SEGMENT INFORMATION

IFRS 8 – “Operating Segments” requires that operating segments are disclosed consistently with information provided to the chief operating decision maker, who is the person or group of persons that allocates resources to the segments and assesses their performance. Itaú Unibanco Holding considers that its Board of Executive Officers is the chief operating decision maker.

Itaú Unibanco has four reportable segments: (i) Commercial Bank, (ii) Itaú BBA, (iii) Consumer Credit, and (iv) Corporation and Treasury

Segment information is presented in Note 33.

2.5	TRANSITION TO IFRS

As mentioned in Note 2.1, transition to IFRS presented in these financial statements prepared to comply with Bacen Resolution nº 3,786 was recorded in accordance with IFRS 1 and the transition date chosen was January 1, 2010. As a result, the accounting polices of Itaú Unibanco Holding for these consolidated financial statements were modified on January 1, 2010, with the purpose of complying with IFRS, with respect to the accounting policies applied for BRGAAP purposes.

Changes in accounting policies arising from the transition to IFRS presented in these financial statements prepared to comply with Bacen Resolution nº 3,786 and reconciliation of the effects of this transition are presented below. Itaú Unibanco Holding prepared its opening balance sheet on January 1, 2010 applying the accounting policies, standards and measurement bases described in Note 2.4, and adopted the following exemptions and used all exceptions set forth in IFRS 1,

Summary of the IFRS 1 voluntary exemptions and mandatory exceptions adopted by Management in the preparation of these consolidated financial statements

Business combinations, past acquisition of investments in associates and scope of consolidation

IFRS 1 permits that business combinations and acquisition of investments in associates that were recognized before the transition date or an earlier date are not restated, retrospectively, by applying IFRS 3. This exemption permits companies that are first-time adopters, basically to maintain the accounting treatment adopted in the prior accounting practices, BRGAAP in this case. Itaú Unibanco Holding adopted this exemption through August 1, 2009, and, accordingly, it will apply IFRS 3 or IAS 28, as appropriate to account for business combinations or acquisition of investments in associates occurred after such date.

In accordance with the exemption allowed by IFRS 1, the accounting policies used for initial recognition and subsequent measurement of goodwill generated in the acquisitions before the transition date and through the transition date were maintained as recorded under BRGAAP. Under BR GAAP, goodwill was fully amortized at the moment that business combinations took place. Intangible assets arising from acquisitions prior to the transition date were not recognized under BRGAAP.

IFRS 1 also requires that if Itaú Unibanco Holding had not consolidated a subsidiary acquired under BRGAAP, the carrying amount of assets and liabilities of this acquired subsidiary would have to be adjusted in accordance with IFRS. However, in the case of Itaú Unibanco Holding there were no significant subsidiaries that had not been consolidated in BRGAAP before the transition to IFRS.

Fair value as deemed cost

In accordance with IFRS 1, an entity may, on the transition date to IFRS, measure a fixed asset item at its fair value, and this amount will be considered the deemed cost of this asset, as from such date. Itaú Unibanco Holding did not adopt this exemption of IFRS 1. The cost of fixed assets was determined based on the historical acquisition which was the carrying amount under BRGAAP and adjusted for inflation for the years when Brazil was considered hyperinflationary under IAS 29.

Employee Benefits

Itaú Unibanco Holding adopted this IFRS 1 exemption, under which all actuarial gains and losses accrued to the transition date, related to defined benefit plans sponsored by Itaú Unibanco Holding and its subsidiaries, were recognized in retained earnings.

Cumulative differences on the translation of the balance sheets of subsidiaries and investments in unconsolidated companies

Itaú Unibanco Holding adopted this exemption by which all gains and losses from translation of foreign subsidiaries and investments in unconsolidated companies on the transition date were set to zero. Therefore, the effects of application of IAS 21 in the translation of these subsidiaries and unconsolidated companies with a functional currency other than Real will be applied prospectively and these effects will be recorded in other comprehensive income only from the transition date. The non adoption of this exemption would result in the retrospective application of IAS 21, with the determination of translation differences in accordance with IFRS since the creation or acquisition date of all subsidiaries and investments in unconsolidated companies with a functional currency other than Real, .

Compound financial instruments

IAS 32 – “Financial instruments: presentation” requires that compound financial instruments, as defined by IAS 32, have their components separated and classified as debt instruments and equity instruments. This classification is made based on circumstances, economic substance and specific terms of these instruments on date they are issued. IFRS 1 permits not to bifurcate these two components, if the debt component is no longer outstanding on the transition date. This exemption did not have any impact on Itaú Unibanco Holding.

Assets and liabilities of subsidiaries, unconsolidated companies and joint ventures

IFRS 1 prescribes that there may be situations in which the controlling entity of a group and its subsidiaries adopted IFRS on different dates. The IFRS 1 exemption permitted us to use the financial statements of the subsidiaries that made the transition to IFRS before January 1, 2010. The amounts in the IFRS financial statements of subsidiaries and unconsolidated companies of Itaú Unibanco Holding that had already adopted IFRS before January 1, 2010, were considered on consolidation.

Designation of financial instruments previously recognized

IAS 39 permits an entity to designate financial instruments as financial assets or liabilities at fair value through profit or loss or available-for-sale financial assets on the date of acquisition or issuance of the financial instrument. In accordance with this IFRS 1 exemption, this designation, in the case of initial application of IFRS, may be made on the transition date, even if the instrument has originally been designated in another category. Itaú Unibanco Holding did not adopt this exemption permitted by IFRS 1 and it did not change the designation of financial assets existing on the transition date, keeping the designation existing under BRGAAP on January 1, 2010.

Share-based payment transactions

IFRS 1 encourages, but does not require, that an entity adopts IFRS 2 for employee benefits issued as share-based payments that were granted before 7 November 2002 and also for benefits that were granted after November 7, 2002 and vested before January 1, 2010. On the other hand, if Management decides to apply IFRS 2 retrospectively, it can only do so if the entity has already disclosed the fair value of the relevant share-based instruments, determined on the relevant measurement dates. Itaú Unibanco Holding adopted IFRS 2 for all share-based payments as it has already disclosed the fair value of the relevant instruments.

Insurance contracts

IFRS 1 permits that companies that issue insurance contracts change certain insurance accounting policies on the transition date to IFRS, provided that certain minimum procedures are followed. Itaú Unibanco Holding decided not to change its accounting policies for insurance contracts, Itaú Unibanco Holding has applied the minimum requirements of IFRS 4, including the classification of contracts as insurance contracts or investment contracts (as defined by IAS 39 and IFRS 4) and the minimum liability adequacy tests for insurance contracts, as defined by IFRS 4, and further detailed in item 2.4.n.

Liabilities arising from decommissioning, restoration of assets and similar liabilities

IFRIC 1 - “Changes in Existing Decommissioning, Restoration and Similar Liabilities” requires specific changes in decommissioning, restoration or similar liabilities. An entity that applies IFRS for the first time during the preparation of its financial statements does not need to meet these requirements for changes that occurred before the transition date to IFRS. This exemption did not have any impact on Itaú Unibanco Holding.

Leases

An entity that applies IFRS for the first time may opt for applying the specific transition rules of IFRIC 4 - “Determining Whether an Arrangement Contains a Lease”, and it may determine if there is a lease agreement on the transition date to IFRS based on the facts and circumstances existing on the transition date. The application of IFRIC 4 did not have any impact on Itaú Unibanco Holding on the transition date to IFRS since no contracts that should be accounted for as lease agreements, pursuant to IFRIC 4, have been identified.

Fair value measurement of financial assets and liabilities on the transition date

IFRS 1 determines that an entity should apply the specific requirements of IAS 39 for fair value measurement of financial assets and liabilities on the transition date to IFRS. IAS 39 requires that valuation techniques of financial assets and liabilities at fair value incorporate all factors that a market participant would consider in setting a price when using consistent and accepted economic methodologies for pricing such financial instruments. Additionally, IAS 39 establishes rules for situations in which an entity may recognize an initial gain or loss when purchasing a financial asset or liability ("day one profits"). As a consequence of this requirement, IAS 39 requires that a gain or loss generated in the initial purchase or subsequent changes in the fair value of a financial instrument be recognized only if the fair value calculation methodology included data and quotations directly observable in the market on the fair value valuation date.

IFRS 1 requires that these criteria be mandatory and prospectively applied to transactions with asset or liability financial instruments entered into after October 25, 2002 or prospectively for transactions entered into after January 1, 2004.

Borrowing costs

IFRS permits that the entity that applies IFRS for the first time adopt IAS 23 for borrowing costs related to the qualifying assets for which the capitalization initial date is the same or subsequent to the transition (January 1, 2010), or designate a date prior to the transition date and apply IAS 23 to the borrowing costs related to qualifying assets for which the capitalization initial date is the same or subsequent to that date. Itaú Unibanco Holding did not adopt this exemption

Exception – Derecognition of financial assets and financial liabilities

IFRS 1 requires that an entity that applies IFRS for the first time applies the derecognition standards (asset derecognition, as defined by IAS 39) of financial assets and liabilities prospectively for transactions occurred after January 1, 2004. Accordingly, should Itaú Unibanco Holding have derecognized, pursuant to BRGAAP, a non-derivative financial asset or liability resulting from a transaction occurred before January 1, 2004, it shall not recognize this asset or liability on the transition to IFRS. IFRS 1, however, permits the application of the standards of derecognition of financial assets and liabilities retrospectively, from a date elected by the entity, provided that the information needed to apply such standards had already been obtained at the time of the transaction that gave rise to the derecognition. This exemption did not have any impact on Itaú Unibanco Holding as no significant asset or liability was derecognized under BRGAAP.

Exception - Hedge Accounting

IAS 39 requires the valuation of all derivative financial instruments at fair value, as well as the elimination of deferred gains or losses, recognized (or deferred) as assets or liabilities under GAAP prior to IFRS. Additionally, an entity should not apply hedge accounting (as defined by IAS 39) on its consolidated balance sheet at the transition date if such hedge did not qualify as hedge in accordance with IAS 39. As a result of this requirement, hedge accounting was not applied for IFRS purposes on transition date, to certain hedge relationships that meet the criteria for hedge accounting in BRGAAP, but that do not meet all requirements of IAS 39 as of such date.

Exception - Estimates

IFRS 1 requires that the estimates used by management for IFRS purposes at the transition date to IFRSs are consistent with estimates made as of the same date under prior GAAP, unless there is evidence of errors in the preparation of the estimates in prior GAAP as compared to IFRS. Additionally, should Management obtain information after the transition date to IFRS that impacts estimates that had been made in accordance with BRGAAP, the Management should address this information as an event subsequent to the balance sheet date, and adopt the accounting treatment of IAS 10. IAS 10 is applicable to the opening consolidated balance sheet and for the comparative periods reported in the preparation of the first IFRS financial statement of an entity, if any. Itaú Unibanco Holding considered the estimates used for BRGAAP consistent with the estimates used on the transition date to IFRS and, therefore, there were no changes in estimates due to the existence of information obtained on a date subsequent to the transition that required any adjustment in the estimates for IFRS purposes.

Non-controlling interests

IFRS 1 requires that the entity that applies IFRS for the first time applies certain requirements of IAS 27 prospectively to the transition date. However, these requirements did not have an impact on Itaú Unibanco Holding.

RECONCILIATION BETWEEN BRGAAP AND IFRS APPLICABLE TO CONSOLIDATED STOCKHOLDERS' EQUITY OF ITAÚ UNIBANCO HOLDING AT JANUARY 1, 2010, AND TO THE STOCKHOLDERS' EQUITY AND NET INCOME AT DECEMBER 31,2010

		1/1/2010			12/31/2010			01/01 a 12/31/2010
	Reference	Stockholders’ equity			Stockholders’ equity			Income
In accordance with BRGAAP (stockholders’ equity attributed to the parent company, excluding minority interest)			50,683			60,879			13,323

Adjustments that affect stockholders’ equity between BRGAAP and IFRS			6,833			5,386			(1,615	)
Allowance for loan losses	a		3,443			2,014			(1,430	)
Recognition of total deferred tax assets	b		2,367			1,724			(659	)
Pension and health care plans	c		1,410			-			-
Adjustment to market value of shares	d		970			1,165			-
Acquisition of interest in Porto Seguro Itaú Unibanco Participações S.A.	e		936			896			(40	)
Provision for Itaú Unibanco merger expenses	f		844			-			(844	)
Translation of subsidiaries and unconsolidated companies abroad	g		-			-			256
Provision for dividends payable not declared	h		-			1,307			-
Other adjustments	i		(272	)		(99	)		268
Income tax and social contribution on all IFRS adjustments	j		(2,865	)		(1,621	)		834

In accordance with IFRS – attributable to controlling stockholders			57,516			66,265			11,708
In accordance with IFRS – attributable to minority interest			1,564			1,677			785

In accordance with IFRS – attributable to controlling stockholders and minority interest			59,080			67,942			12,493
Amounts of other comprehensive income under IFRS
Available-for-sale financial assets									170
Cummulative translation adjustment									(256	)
Other									(201	)
Total - Comprehensive income under IFRS									12,206

Adoption of IFRS has not changed the Itaú Unibanco Holding’s actual cash flows and since under BR GAAP we were required already to apply the Brazilian equivalent of IAS 7 there are no significant differences in the statement of cash flows prepared under BR GAAP and the one presented in these financial statements.

Summary of the main differences between BRGAAP and IFRS

Below is presented a description of the main accounting policies applicable to Itaú Unibanco Holding, which differ significantly between BRGAAP and IFRS and are presented in the reconciliations above:

a)	Allowance for loan losses

In BRGAAP, the allowance for loan losses is measure considering an analysis of risk realization of receivables, at an amount considered sufficient to cover possible losses, following the rules established by BACEN. Pursuant to these rules, the allowance is created as from the date loans are granted, based on the client’s risk rating and on a periodic quality evaluation of clients and industries, and not only when default actually occurs. Under BRGAAP, the allowance cannot be less than the minimum required by the regulatory authorities but an additional allowance can be recorded when the minimum provision is not considered sufficient to cover futures losses, according to the Management assessment. As from December 31, 2008, considering the economic scenario and the related uncertainties , the criteria for recognition of an additional allowance for loan losses additional to the minimum regulatory required were revised, including an allowance for risks associated with a more pessimistic scenario. During 2009, there was an improvement in the economic scenario, causing a reduction in the relationship of the allowance for loan losses with respect to the loan portfolio. In 2010, a change in the criteria under BRGAAP was adopted which resulted in a reduction in the allowance for loan losses. The criteria was adopted considering new Basel III guidelines (not yet applicable), which determine that the counter-cyclical effects should be included.

IAS 39 determines that the entity should assess, on each base date, if there is objective evidence that a loan or group of loans is impaired. A loan or group of loans is impaired if there is objective evidence impairment as a consequence of one or more events that occurred after the initial recognition of the loan (loss event) and this event or events impact the future cash flow and it may be reliably estimated.

The amount of the loss is measured as the difference between the carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the original effective interest rate of the loan.

Initially, it is necessary to assess, on an individual basis, if there is an objective evidence of impairment for operations that are individually significant, and individually or collectively significant, for operations that are not individually significant. If there is no objective evidence for an operation individually assessed, be it significant or not, it should be included in a group of operations with similar characteristics and assessed collectively. The operations that are individually assessed and for which a loss has been recorded should not be included in the collective assessment.

The differences between BRGAAP and IFRS resulted in a different amount of allowance for loan losses and, accordingly, an adjustment has been recognized.

b)	Recognition of total deferred tax assets

Under Law No. 11,727/2008, the social contribution (CSLL) rate for private insurance, capitalization companies and financial institutions, was increased from 9% to 15%, for taxable events that occurred after May 1, 2008. As a result of an unconstitutionality lawsuit claiming unconstitutionality of the increase of CSLL rate that was filed on June 26, 2008, by the National Confederation of the Financial System (CONSIF) under BRGAAP, deferred tax assets were recorded only to the amount of the increase in tax liabilities and not considering the increased rate of 15%.

IAS 12 prescribes that deferred taxes should be measured using substantively enacted tax rates. IAS 12 also prescribes that deferred tax assets should be recognized when the generation of future taxable income is probable, allowing the realization of the assets.

As a result Itaú Unibanco Holding recognized in these consolidated financial statements, deferred taxes using the substantively enacted tax rate of 15% of CSLL.

c)	Pension and health care plans

Up to December 31, 2009, Itaú Unibanco Holding did not recognize assets resulting from the difference of the fair value of assets of a plan and actuarial liabilities under BRGAAP. Under BRGAAP, the measurement of plan obligations and plan assets was similar to IFRS. However, differences existed in the criteria for recognizing the funded status when it resulted in a net asset.

Actuarial calculations for certain plans of Itaú Unibanco Holding resulted in net assets, for which an asset is recognized in these financial statements in accordance with IAS 19. As Itaú Unibanco Holding has a en economic benefit available as reductions in future contributions, the asset was recognized as of December 31, 2009, measured taking into consideration the asset ceiling, prescribed by IAS 19 and IFRIC 14.

As from 2010, Itaú Unibanco Holding pursuant to CVM Resolution No. 600/09, recognizes as assets the difference, when positive, between the fair value of plan assets and actuarial plan liabilities. CVM Resolution No. 600/09 is equivalent to IAS 19, and, accordingly, this adjustment is no longer necessary as from such date.

d)	Adjustment to market value of shares

For purposes of BRGAAP, shares classified as “permanent investments” are recorded at historical cost and adjusted only for provision for permanent impairment. Increase in value over its acquisition cost is not recognized.

Under IFRS, Itaú Unibanco Holding classified these shares as available-for-sale financial assets, in accordance with IAS 39, and recorded them at estimated fair value, with gains and losses recognized in other comprehensive income.

e)	Acquisition of interest in unconsolidated company – Porto Seguro Itaú Unibanco Participações S.A (“PSIUPAR”)

Under Brazilian GAAP, there are no specific rules for the recognition of transactions where a controlled subsidiary is exchanged for an unconsolidated company (associate); this kind of transaction is generally recognized at the carrying amount of the ceded transferred subsidiary.

Under IFRS, consideration received (an interest in PSIUPAR acquired on November 30, 2009) in connection with loss of control of a subsidiary is accounted for at fair value of the consideration received.

This difference in the basis of our investment in PSIUPAR is adjusted in the reconciliation.

f)	Provision for Itaú Unibanco merger expenses

As a consequence of the acquisition of Unibanco, a provision to cover expenses related to communication to clients, changes in systems and termination and reallocation of personnel was recognized under BRGAAP, as the amount of the provision could be reasonably estimated.

Under IFRS, this provision did not meet as the transition date the requirements of IAS 19 and IAS 37, which are more restrictive than the requirements under BRGAAP and, accordingly, the provision is reversed at the transition date in these consolidated financial statements. During the year ended December 31, 2010, the provision recorded under BRGAAP was fully utilized.

g)	Translation of foreign subsidiaries and unconsolidated companies

The process adopted by Itaú Unibanco Holding in BRGAAP for the translation of foreign subsidiaries and unconsolidated companies abroad is similar to the requirements of IAS 21, except that the differences arising from the translation process are recorded in the statement of income. Accordingly, under BRGAAP, there is no specific reserve in stockholders’ equity where cumulative gains or losses arising from the translation of foreign subsidiaries and unconsolidated companies are recognized.

b)	Allowance for loan losses

The variations in the Allowance for Loan Losses are shown in the following table:

	12/31/2010
Opening balance		20,245
Net increase for the year		15,548
Write-down		(15,799	)
Closing balance		19,994

The composition of the Allowance for Loan Losses by Sector of our clients is shown in the following table:

By debt sector	12/31/2010
Public sector		16
Industry and commerce		5,658
Services		3,020
Primary sector		318
Other sectors		123
Individuals		10,859
Total provision for impairment		19,994

Itaú Unibanco assesses the objective evidence of the Provision for Impairment in loans and advances on an individual basis for financial assets that are individually significant, and in aggregate for financial assets that are not individually significant (Note 2.4f VIII).

The composition of Allowance for Loan Losses by type of assessment of objective evidence of loss is shown in the following table:

	12/31/2010
Total found in the test on individual items		375
Total found in the test on the aggregate basis		19,619

c)	Lease operations

Below is the analysis of the minimum present value receivable from financial leases by maturity:

	12/31/2010
	Minimum future		Future Financial			Present
	payments		income			value
Current		19,462		(2,047	)		17,415
Up to 1 year		19,462		(2,047	)		17,415
Non-current		29,748		(8,879	)		20,869
Between 1 and 5 years		28,793		(8,693	)		20,100
Over 5 years		955		(186	)		769
Total		49,210		(10,926	)		38,284

NOTE 12 – INVESTMENTS IN UNCONSOLIDATED COMPANIES

a) Composition

	Interest (%) at 12/31/2010				12/31/2010
	Total		Voting		Stockholders’ equity		Net income		Investment		Share of income		Market (c)

Porto Seguro Itaú Unibanco Participações S.A.(a)		42.93		42.93		2,494		343		1,967		107		2,782
Banco BPI S.A. (b)		19.04		19.04		3,584		394		682		75		524
Serasa S.A.		16.14		16.14		1,585		405		256		65		-
Other (c)		-		-		-		-		42		35		-
Total		-		-		-		-		2,947		282		-

(a) For purposes of market value, the quotation of Porto Seguros S.A. shares was taken into account. The investment included the amount of R$ 896 at December 31, 2010 that corresponds to the difference between the share in the net assets of Porto Seguro Itaú Unibanco Participações S.A. and the investment cost.

(b) Banco BPI S.A. is an investee of IPI - Itausa Investimentos Ltda ("IPI"). Itaúsa Export S.A. holds 51.00% of IPI shares, and the remaining 49.00% is held by subsidiaries of Itaú Unibanco Holding. Itau Unibanco holding S.A., in accordance with its accounting policy, conducted an impairment test on its investments in BPI. The recoverable amount was consedered to be the value in use of the investment. In order to measure the value in use, generally accepted methods such as the sustainable ROE model were used to estimate the present value of expected dividends to be received and concluded that it is not necessary to recognize any impairment of this investment.

(c) Includes interest in total and voting capital of the following companies: Bracor Investimentos Imobiliários S.A. (17.72% total and voting capital), Compañia Uruguaya de Medios de Procesamiento S.A. (25.37% total and voting capital); Estrutura Brasileira de Projetos S.A. (11.11% total and voting capital), Latosol Empreendimentos e Participação Ltda (32.11% total and voting capital) and Tecnologia Bancária S.A. (14.86% total capital and 24.81% voting capital).

b)	Other Information

The table below shows the summary of financial information of the investees by the equity method of accounting, on an aggregate basis.

	12/31/2010
Total assets		118,236
Total liabilities		112,409
Total income		16,301
Total expense		(15,039	)

The investees do not have contingent liabilities to which Itaú Unibanco Holding is significantly exposed.

NOTE 13 – LEASE COMMITMENTS – LESSEE

a)	Finance lease

Itaú Unibanco Holding is the lessee in contracts of finance lease of data processing equipment, with the option for purchase or extension, without contingent rental payments or imposed restrictions. The carrying amount of these assets is R$ 210 at December 31, 2010.

The table below shows the total future minimum payments in:

	12/31/2010
Current - Up to 1 year		129
Non-current - From 1 to 5 years		83
Total future minimum payment		212
Unappropriated income		(2	)
Present value		210

b)	Operating lease

Itaú Unibanco Holding leases many properties, for use in its operations, under standard real estate leases that normally can be cancelled at its option and include renewal options and escalations clauses. No lease agreement imposes any restriction on our ability to pay dividends, engage in debt or equity financing transactions, or enter into further lease agreements.

Minimum payments of services provided by third parties and rents according to operating and capital lease agreements which initial and remaining lease terms cannot be cancelled for over one year as of December 31, 2010 are as follows.

	12/31/2010
Current		823
Up to 1 year		823
Non-current		3,311
From 1 to 5 years		2,571
Over 5 years		740
Total future minimum payment		4,134

NOTE 14 – FIXED ASSETS

		Balance at 01/01/2010							Changes											Balance at 12/31/2010
REAL ESTATE IN USE	Annual depreciation rates (%)	Cost		Accumulated depreciation			Net book value		Acquisitions		Disposals			Depreciation expense			Other			Cost		Accumulated depreciation			Net book value

REAL ESTATE IN USE			4,234		(1,908	)		2,326		433		(11	)		(310	)		31			4,475		(2,006	)		2,469
Land	-		959		-			959		90		(3	)		-			(1	)		1,045		-			1,045
Buildings	4		2,198		(1,423	)		775		118		(6	)		(102	)		14			2,321		(1,522	)		799
Improvements	10		1,077		(485	)		592		225		(2	)		(208	)		18			1,109		(484	)		625
OTHER FIXED ASSETS			5,913		(4,061	)		1,852		1,491		(66	)		(856	)		(88	)		6,909		(4,576	)		2,333
Installations	10 to 20		621		(310	)		311		145		-			(191	)		2			770		(503	)		267
Furniture and equipment	10 to 20		768		(380	)		388		275		(3	)		(49	)		(179	)		862		(430	)		432
EDP systems (*)	20 to 50		4,015		(3,064	)		951		954		(60	)		(570	)		130			4,747		(3,342	)		1,405
Other	10 to 20		509		(307	)		202		117		(3	)		(46	)		(41	)		530		(301	)		229
TOTAL FIXED ASSETS			10,147		(5,969	)		4,178		1,924		(77	)		(1,166	)		(57	)		11,384		(6,582	)		4,802

(*) Includes lease contracts, mainly related to data processing equipment, which are accounted for as lease operations. The asset and the liability are recognized in the Consolidated Financial Statements. The asset is depreciated using the straight-line method over the estimated useful life. These contracts amount to R$ 154 at December 31, 2010.

NOTE 15 – INTANGIBLE ASSETS

		01/01/2010							Changes														12/31/2010
INTANGIBLE ASSETS	Annual amortization rates (%)	Cost		Accumulated amortization			Residual value		Purchases		Terminated Agreements			Amortization expense			Impairment			Other			Cost		Accumulated amortization			Residual value

Acquisition of rights to credit payroll	(*)		2,598		(914	)		1,684		182		(70	)		(649	)		(17	)		-			2,431		(1,301	)		1,130
Other intangible assets			2,833		(794	)		2,039		445		(19	)		(374	)		(4	)		27			3,084		(970	)		2,114
Rights for the promotion and offer of financial products and services	(*)		1,404		(16	)		1,388		240		(19	)		(179	)		(4	)		-			1,486		(60	)		1,426
Expenditures on acquisition of software	20		1,173		(716	)		457		205		-			(165	)		-			35			1,327		(795	)		532
Right to manage investment funds	10 to 20		245		(54	)		191		-		-			(29	)		-			(7	)		262		(107	)		155
Other intangible assets	10		11		(8	)		3		-		-			(1	)		-			(1	)		9		(8	)		1
INTANGIBLE ASSETS			5,431		(1,708	)		3,723		627		(89	)		(1,023	)		(21	)		27			5,515		(2,271	)		3,244

(*) The amortization term is based on the agreement term.

NOTE 16 – DEPOSITS

The table below shows the breakdown of Deposits:

	CURRENT		NON CURRENT		12/31/2010
Interest-bearing deposits		114,017		63,134		177,151
Time deposits		53,522		62,894		116,416
Interbank deposits		1,689		240		1,929
Investment deposits		906		-		906
Savings deposits		57,900		-		57,900
Non-interest-bearing deposits		25,537		-		25,537
Demand deposits		25,349		-		25,349
Other deposits		188		-		188
Total		139,554		63,134		202,688

NOTE 17 – FINANCIAL LIABILITIES HELD FOR TRADING

Financial liabilities held for trading are presented in the following table:

	12/31/2010
	CURRENT
Financial liabilities held for trading
Structured notes		1,335
Total		1,335

At December 31, 2010, the amount of changes in Financial Liabilities Held for Trading was R$ (47) above the contractual amount to maturity.

The effect of the credit risk of these instruments is not significant at 12/31/2010.

NOTE 18 – MONEY MARKET, INTERBANK AND INSTITUTIONAL FUNDS

a)	Securities sold under repurchase agreements and Interbank Markets

The table below shows the breakdown of funds:

	12/31/2010
	Current		Non Current		Total
Securities sold under repurchase agreements		122,445		77,212		199,657
Interbank		32,551		30,048		62,599
Mortgage Notes		48		254		302
Real Estate Credit Bills		8,259		477		8,736
Bills of Credit of Agribusiness		2,660		114		2,774
Financial Treasury Bills		-		2,466		2,466
Import and Export Financing		11,815		3,640		15,455
On lending - domestic		9,769		21,920		31,689
Other		-		1,177		1,177

Funding for import and export financing represent credit facilities available for financing of import and export of Brazilian companies, in general denominated in foreign currency. The interest rate for each one of the operations (p.a.) is presented in the table below:

	Brazil	Foreign
Securities sold under repurchase agreements	70% CDI to 15,57%	0,15% to 1,25%
Mortgage Notes	-	2,70% to 7,52%
Real Estate Credit Bills	80% to 100,00% CDI	-
Bills of Credit of Agribusiness	20% to 94% CDI	-
Import and Export Financing	0,40%+LIBOR to 2,94%+LIBOR	0,87% to 12,75%
On lending - domestic	0% to 15%	-

In "Securities sold under repurchase agreements”, we present our liabilities in transactions in which we sold in cash to clients debt securities issued by our consolidated subsidiaries previously held in treasury, and we undertook to repurchase them at any time after the sale up to a repurchase deadline, on which they must be repurchased by us. The repurchase price is computed as the price paid on the sale date plus interest at rates ranging from 70% CDI and 15.57% of CDI rate (Interbank Deposit Certificate). The deadline for repurchase expires in January 2027.

b)	Institutional Markets

The table below presents the breakdown of funds for Institutional Markets:

	12/31/2010
	Current		Non Current		Total
Subordinated debt		979		33,508		34,487
Liabilities for issue of debentures		293		1,091		1,384
Foreign borrowings and securities		2,659		5,983		8,642
Total		3,931		40,582		44,513

	Brazil	Foreign
Subordinated debt	100% IPCA+ 6,95% to IGPM + 7,35%	3,04% to 10%
Liabilities for issue of debentures	101% to 108% CDI	-
Foreign borrowings and securities	1,49% to 9,5%	1,35% to 26,57%

IGPM and IPCA are inflation rates.

NOTE 19 - OTHER ASSETS AND LIABILITIES

a)	Other Assets

	12/31/2010
Financial		40,733
Receivables from credit card issuers		18,062
Insurance and reinsurance operations		3,092
Deposits in guarantee of provision for contingent liabilities (Note 31)		11,025
Deposits for foreign fund raising program		1,874
Negotiation and intermediation of securities		3,079
Receivables from reimbursement of contingent liabilities (Note 31c)		1,784
Receivables from services provided		1,141
Amounts Receivable from FCVS – Salary Variations Compensation Fund		577
Operations without credit granting characteristics		99
Non Financial		5,539
Prepaid expenses		2,014
Retirement Plan Assets (Notes 28b and c)		1,536
Sundry domestic		1,298
Sundry foreign		88
Other		603

b)	Other liabilities

	12/31/2010
Financial		41,012
Payable to merchants for credit card purchases		37,308
Foreign exchange portfolio		320
Negotiation and intermediation of securities		3,099
Financial leases (Note 13a)		210
Funds from consortia participants		75
Non Financial		16,022
Sundry creditors - local		848
Funds in transit		5,130
Provision for sundry payments		2,306
Social and statutory		3,156
Related to insurance operations		753
Liabilities for official agreements and rendering of payment services		735
Provision for Retirement Plan Benefits (Note 28b and d)		228
Personnel provision		1,040
Provision for health insurance		606
Deferred income		307
Other		913

c)	Other Assets and Other Liabilities segregated into Current and Non-Current

	Current		Non-current
Other financial assets		27,347		13,386
Other non financial assets		3,197		2,342
Other financial liabilities		40,904		108
Other non financial liabilities		15,794		228

NOTE 20 – STOCKHOLDERS’ EQUITY

Capital

Capital comprises 4,570,936,219 book-entry shares with no par value, of which 2,289,286,475 are common and 2,281,649,744 are preferred shares without voting rights, preferred shares have tag-along rights, in the event of a change in control, at a price equal to 80% of the amount paid per share paid for the controlling common shares. Capital stock amounts to R$ 45,000, of which R$ 31,547 refers to stockholders domiciled in Brazil and R$ 13,453 refers to stockholders domiciled abroad.

The table below shows the breakdown and change in shares of paid-in capital and reconciliation of balances at the beginning and end of the period:

	Number
	Common		Preferred			Total			Amount
Residents in Brazil		2,286,135,621		918,287,035			3,204,422,656
Residents abroad		3,150,854		1,363,362,709			1,366,513,563
Shares of capital stock at 12/31/2010		2,289,286,475		2,281,649,744			4,570,936,219
Treasury shares at 01/01/2010 (*)		2,202		43,588,307			43,590,509			(1,031	)
Disposals – Stock option plan				(17,022,292	)		(17,022,292	)		403
Treasury shares at 12/31/2010 (*)		2,202		26,566,015			26,568,217			(628	)
Outstanding shares at 12/31/2010		2,289,284,273		2,255,083,729			4,544,368,002

(*) Own shares, purchased based on authorization of the Board of Directors, to be held in Treasury for subsequent cancellation or replacement in the market.

Cost/Market value	Common		Preferred
Treasury shares
Average cost		9.65		23.66
Market value as of 12/31/2010		31.00		39.79

Dividends

Stockholders are entitled to an annual mandatory dividend of not less than 25% of adjusted profit, pursuant to the provisions of the Brazilian Corporate Law. Both types of shares participate equally, after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per share to be paid to preferred shares.

The calculation of the monthly advance of mandatory minimum dividend is based on the share position on the last day of the prior month, taking into consideration that the payment is made on the first business day of the subsequent month, in the amount of R$ 0.012 per share. The value per share was maintained according to resolution adopted at the A/ESM held on April 24, 2009. In the period, R$ 3,176 – R$ 1, 2482 per shares was credited to stockholders. In accordance with IAS 1 and IAS 10, the dividends and interest on capital proposed above the mandatory minimum at 25% of net income, before being approved by stakeholders in a stakeholder’s meeting, are not provided for and total R$ 1,306 – R$ 0.2875 per share.

c)	Additional paid-in capital

Additional paid-in capital corresponds to: (i) the difference between the sell price of treasury shares and the average cost of such shares e (ii) the compensation expenses recognized according to the stock option plan.

d)	Appropriated reserves

	12/31/2010
CAPITAL RESERVES (1)		285
REVENUE RESERVES		16,619
Legal (2)		3,254
Statutory		13,365
Dividends equalization (3)		3,403
Working capital increase (4)		3,963
Increase in capital of investees (5)		5,999
Total Reserves at Subsidiary		16,904

(1)

Refers to amounts received by the company that were not included in the statement of income, since they do not refer to compensation for provision of goods or services by the company;

(2)

Legal Reserve – its purpose is to increase the company’s capital or to absorb losses, but it cannot be distributed as dividends;

(3)

Reserve for Dividends Equalization – its purpose is to guarantee funds for the payment or advances of dividends, including interest on capital, to maintain the flow of the stockholders’ compensation;

(4)

Reserve for Working Capital increase – its purpose is to guarantee funds for the company’s operations;

(5)

Reserve for Increase in Capital of Investees – its purpose is to guarantee the preemptive right in the capital increases of investees;

e)	Unappropriated reserves

Refers to balance of profit remaining after the distribution of dividends and appropriations for statutory reserves in the legal records of Itaú Unibanco Holding.

NOTE 21 – STOCK OPTION PLAN

a)	Purpose and Guidelines of the Plan

The Group has a stock option plan for its executives. These plans aims at involving the management members in the medium and long-term corporate development process, by granting simple stock options or bonus options, personal, not pledged or transferable, which entitle to the subscription of one authorized capital share or, at the discretion of the management, one treasury share which has been acquired for replacement purposes.

Such options may only be granted in years in which there are sufficient profits to enable the distribution of mandatory dividends to stockholders and at a quantity that does not exceed the limit of 0.5% of the total shares held by the stockholders at the base date of the year-end balance sheet. The ITAÚ UNIBANCO HOLDING’s Personnel Committee is responsible for defining the quantity, the proportional counterparty in bonus options, the beneficiaries, the type of option, the life of the option under each series, and the vesting and blackout periods for exercising the options. The executive officers and Board of Directors members of ITAÚ UNIBANCO HOLDING and of its subsidiaries and employees may participate in this program, based on assessment of potential and performance.

ITAÚ UNIBANCO HOLDING settles the benefits under this PLAN by delivering its own shares, which are held in treasury until the effective exercise of the options by the beneficiaries.

b)	Characteristics of the Programs

I – Simple Options

Prior Programs

Before the merger, Itaú and Unibanco had Stock Option Plans (Prior Programs). For eligible beneficiaries of the Program, simple options are granted, dependent upon the individual employee performance. The exercise price is calculated based on the average prices of preferred shares at the BM&FBOVESPA trading sessions over the period of at least one (1) and at the most three (3) months prior to the option issue date; alternatively, subject to the positive or negative adjustment of up to 20%, and restated until the last business day of the month prior to the option exercise date based either on the IGP-M or IPCA, in its absence, based on the index determined by the Committee. Options are no longer granted under this model.

Post-Merger Program

For eligible beneficiaries of the Program, simple options are granted, dependent upon the individual employee performance. The exercise price is calculated based on the average prices of preferred shares at the BM&FBOVESPA trading sessions over the period of at least one (1) and at most (3) months related to the last exercise months to which the options refer. The exercise price is adjusted based on the IGPM or in its absence, based on the index determined by the committee.

The vesting period is from one (1) to seven (7) years, counted from the issue date.

II – Partners Plan

Executives selected to participate in the program may invest a percentage of their bonus to acquire shares or they have the right to receive shares (“Share-Based Instrument”). Title to the shares acquired, as well as the Share-Based Instruments should be held by the executives for a period of 3 to 5 years and they are subject to market fluctuation. At the times they acquire own shares and/or Share-Based Instruments, bonus options are granted in accordance with the classification of executives. Vesting periods of bonus options or Share-Based Instruments is from 1 to 5 years. Share-Based Instruments and bonus options are converted into own shares of ITAÚ UNIBANCO HOLDING in the ratio of one preferred share for each instrument after the respective vesting period, with no payment of exercise price in cash.

The acquisition price of own shares and Share-Based Instruments is established every six months and it is equivalent to the average preferred share quotation at the BM&FBOVESPA trading sessions in the 30 days prior to the determination of said price.

Title to the shares received after the vesting period of the Bonus Options should be held for periods from 5 to 8 years, counted from the own shares acquisition date.

Summary of Changes in the Plan

					Restated		Exercised options				Number of shares
Granting		Vesting period	Exercise		exercise		Exercise price		Market value		Prior balance								To be exercised
NO.	Date	until	deadline		price (R$1)		Weighted average		Weighted average		12/31/2009		Granted		Exercised		Forfeited		At 12/31/2010

Simple Options
09th	3/10/2003	12/31/2007	12/31/2010			-		7.85		38.55		570,500		-		570,500		-		-
09th	5/2/2005	12/31/2007	12/31/2010			-		7.85		38.55		6,187		-		6,187		-		-
16th	9/2/2003	9/2/2008	2/25/2010			-		7.77		36.03		38,263		-		38,263		-		-
10th	2/16/2004	12/31/2008	12/31/2011			12.70		12.15		39.34		1,886,792		-		1,173,850		-		712,942
24th	7/19/2004	1/13/2009	5/5/2010			-		12.58		39.59		29,516		-		29,516		-		-
25th	8/4/2004	1/13/2009	5/5/2010			-		6.76		39.65		329,506		-		329,506		-		-
27th	2/1/2005	2/1/2009	5/5/2010			-		15.76		36.97		206,342		-		206,342		-		-
27th	2/1/2005	5/5/2009	1/31/2011			16.38		-		-		12,650		-		-		-		12,650
30th	7/4/2006	7/4/2009	7/3/2010			-		26.73		32.50		52,710		-		52,710		-		-
33rd	8/30/2006	8/30/2009	8/29/2010			-		29.62		38.45		21,084		-		21,084		-		-
29th	9/19/2005	9/19/2009	9/18/2010			-		20.14		38.33		12,650		-		12,650		-		-
11th	2/21/2005	12/31/2009	12/31/2012			17.88		16.69		39.49		7,082,200		-		4,204,600		-		2,877,600
11th	8/1/2005	12/31/2009	12/31/2012			17.88		-		-		27,500		-		-		-		27,500
11th	8/6/2007	12/31/2009	12/31/2012			17.88		-		-		11,357		-		-		-		11,357
27th	2/1/2005	2/1/2010	1/31/2011			16.38		15.76		36.97		1,068,901		-		999,802		52,710		16,389
34th	3/21/2007	3/21/2010	3/20/2011			34.60		-		-		75,901		-		-		-		75,901
35th	3/22/2007	3/22/2010	3/21/2011			34.56		-		-		29,518		-		-		-		29,518
30th	7/4/2006	7/4/2010	7/3/2011			27.42		-		-		52,710		-		-		-		52,710
33rd	8/30/2006	8/30/2010	8/29/2011			-		29.62		38.45		21,084		-		21,084		-		-
29th	9/19/2005	9/19/2010	9/18/2011			20.78		20.14		38.33		25,300		-		12,650		-		12,650
12th	2/21/2006	12/31/2010	12/31/2013			26.60		25.68		39.83		9,579,384		-		1,554,134		-		8,025,250
12th	8/6/2007	12/31/2010	12/31/2013			26.60		-		-		15,867		-		-		-		15,867
16th	8/10/2009	12/31/2010	12/31/2014			30.25		-		-		874,167		-		-		-		874,167
Total options exercisable								16.67		39.08		22,030,089		-		9,232,878		52,710		12,744,501
34th	3/21/2007	3/21/2011	3/20/2012			34.60		-		-		75,901		-		-		-		75,901
35th	3/22/2007	3/22/2011	3/21/2012			34.56		-		-		29,518		-		-		-		29,518
36th	5/14/2008	5/14/2011	5/13/2012			42.99		-		-		25,301		-		-		-		25,301
30th	7/4/2006	7/4/2011	7/3/2012			27.42		-		-		52,707		-		-		-		52,707
33rd	8/30/2006	8/30/2011	8/29/2012			30.37		-		-		21,083		-		-		-		21,083
13th	2/14/2007	12/31/2011	12/31/2014			33.87		31.99		38.98		10,220,925		-		1,660,200		13,750		8,546,975
13th	8/6/2007	12/31/2011	12/31/2014			33.87		-		-		30,649		-		-		-		30,649
13th	10/28/2009	12/31/2011	12/31/2014			33.87		-		-		45,954		-		-		-		45,954
34th	3/21/2007	3/21/2012	3/20/2013			34.60		-		-		75,901		-		-		-		75,901
35th	3/22/2007	3/22/2012	3/21/2013			34.56		-		-		29,514		-		-		-		29,514
36th	5/14/2008	5/14/2012	5/13/2013			42.99		-		-		25,300		-		-		-		25,300
17th	9/23/2009	9/23/2012	12/31/2014			34.94		-		-		29,551		-		-		-		29,551
14th	2/11/2008	12/31/2012	12/31/2015			39.05		38.12		41.31		11,485,485		-		612,599		26,399		10,846,487
14th	5/5/2008	12/31/2012	12/31/2015			39.05		-		-		20,625		-		-		-		20,625
14th	10/28/2009	12/31/2012	12/31/2015			39.05		-		-		45,954		-		-		-		45,954
36th	5/14/2008	5/14/2013	5/13/2014			42.99		-		-		25,300		-		-		-		25,300
15th	3/3/2009	12/31/2013	12/31/2016			25.54		24.80		40.27		16,829,780		-		1,533,100		229,350		15,067,330
15th	10/28/2009	12/31/2013	12/31/2016			25.54		-		-		45,954		-		-		-		45,954
18th	4/17/2010	12/31/2014	12/31/2017			41.48		-		-		-		6,258,877		-		132,268		6,126,609
18th	5/11/2010	12/31/2014	12/31/2017			41.48		-		-		-		1,290,289		-		83,949		1,206,340
Total options in the vesting period								30.08		39.87		39,115,402		7,549,166		3,805,899		485,716		42,372,953
Total simple options												61,145,491		7,549,166		13,038,777		538,426		55,117,454
Weighted Average Price – Simple Options								20.59		39.31		25.46		41.48				31.92		31.38

Bonus options
01st	9/3/2007	9/3/2010		-		-		-		37.85		342,502		-		340,340		2,162		-
03rd	2/29/2008	9/3/2010		-		-		-		-		33,474		-		-		33,474		-
Total options to be exercised										37.85		375,976		-		340,340		35,636		-
04th	3/3/2008	3/3/2011		-		-		-		-		423,212		-		-		6,725		416,487
05th	9/3/2008	9/3/2011		-		-		-		-		502,189		-		-		11,565		490,624
06th	3/6/2009	3/6/2012		-		-		-		-		769,830		-		-		29,468		740,362
07th	6/19/2009	3/6/2012		-		-		-		-		79,446		-		-		-		79,446
01st	9/3/2007	9/3/2012		-		-		-		-		342,479		-		-		13,298		329,181
03rd	2/29/2008	9/3/2012		-		-		-		-		33,474		-		-		-		33,474
04th	3/3/2008	3/3/2013		-		-		-		-		423,190		-		-		7,260		415,930
08th	8/17/2010	8/16/2013		-		-		-		-		-		384,961		-		8,045		376,916
09th	8/30/2010	8/16/2013		-		-		-		-		-		359,991		-		-		359,991
11th	9/30/2010	8/16/2013		-		-		-		-		-		17,717		-		-		17,717
05th	9/3/2008	9/3/2013		-		-		-		-		502,164		-		-		12,038		490,126
10th	9/30/2010	9/29/2013		-		-		-		-		-		1,940,987		-		-		1,940,987
06th	3/6/2009	3/6/2014		-		-		-		-		769,807		-		-		30,199		739,608
07th	6/19/2009	3/6/2014		-		-		-		-		79,445		-		-		-		79,445
08th	8/17/2010	8/16/2015		-		-		-		-		-		384,920		-		8,044		376,876
09th	8/30/2010	8/16/2015		-		-		-		-		-		359,962		-		-		359,962
11th	9/30/2010	8/16/2015		-		-		-		-		-		17,712		-		-		17,712
10th	9/30/2010	9/29/2015		-		-		-		-		-		1,940,951		-		-		1,940,951
Total options outstanding								-		-		3,925,236		5,407,201		-		126,642		9,205,795
Total bonus options								-		37.85		4,301,212		5,407,201		340,340		162,278		9,205,795

TOTAL SIMPLE/BONUS OPTIONS												65,446,703		12,956,367		13,379,117		700,704		64,323,249

c)	Fair Value and Economic Assumptions for Cost Recognition

ITAÚ UNIBANCO HOLDING recognizes, at the granting date, the fair value of options through the Binomial method for simple options. Economic assumptions used are as follows:

Exercise price: for the option exercise price, the exercise price previously agreed-upon at the option issue is adopted, adjusted by the IGP-M variation;

Price of the Underlying Asset: the share price of Itaú Unibanco Holding (ITUB4) used for calculation is the closing price at BOVESPA on the calculation base date;

Expected dividends the average annual return rate for the last three years of the dividends paid, plus interest on capital of the ITUB4 share;

Risk-free interest rate: the applied risk-free rate is the IGP-M coupon rate at the expiration date of the option plan;

Expected volatility calculated based on the standard deviation from the history of the last 84 monthly returns of closing prices of the ITUB4 share, released by Bovespa, adjusted by the IGP-M variation.

Granting		Vesting	Exercise		Price of the Underlying				Expected			Risk-free interest			Expected
NO.	Date	period	period until		Asset		Fair value		dividends			rate			volatility
Simple Options
18th	4/17/2010	12/31/2014	12/31/2017			38.35		12.22		3.13	%		5.94	%		29.87	%
18th	5/11/2010	12/31/2014	12/31/2017			37.17		11.45		3.13	%		5.98	%		29.94	%

Bonus options (*)
8th	8/17/2010	8/16/2013		-		38.14		34.72		3.13	%		-			-
8th	8/17/2010	8/16/2015		-		38.14		32.62		3.13	%		-			-
9th	8/30/2010	8/16/2013		-		36.48		33.49		3.13	%		-			-
9th	8/30/2010	8/16/2015		-		36.48		31.46		3.13	%		-			-
10th	9/30/2010	9/29/2013		-		40.47		36.85		3.13	%		-			-
10th	9/30/2010	9/29/2015		-		40.47		34.61		3.13	%		-			-
11th	9/30/2010	8/16/2013		-		40.47		36.99		3.13	%		-			-
11th	9/30/2010	8/16/2015		-		40.47		34.74		3.13	%		-			-

(*) Corresponds to free matching shares whose the fair value is calculated based on the fair value of the shares at the date that the award was granted.

d)	Accounting Effects Arising from Options

The exercise of stock options, pursuant to the Plan’s regulation, resulted in the sale of preferred shares held in treasury thus far. The accounting entries related to the plan are recorded during the vesting period, at the deferral of the fair value of options granted with effect on Income, and during the exercise of options, at the amount received from the option exercise price, reflected in Stockholders’ Equity.

The effect of Income for the period from January 1 to December 31, 2010 was R$ 131, as contra-entry to Capital Reserve – Granted Options Recognized.

In the Stockholders’ Equity, the effect was as follows:

Amount received for the sale of shares – exercised options	406
(-) Cost of treasury shares sold	(403	)
Effect on sale (*)	3

(*) Recorded in Additional paid-in capital.

NOTE 22 – INTEREST AND SIMILAR INCOME AND EXPENSES AND NET GAIN (LOSS) FROM FINANCIAL ASSETS AND LIABILITIES

a)	Interest and similar income

	01/01 to 12/31/2010
Central Bank compulsory deposits		4,025
Interbank deposits		824
Securities purchased under agreements to resell		9,940
Financial assets held for trading		7,859
Available-for-sale financial assets		3,085
Held-to-maturity financial assets		456
Loan operations		50,693
Other Financial Assets		1,037
Total		77,919

b)	Interest and similar expenses

	01/01 to 12/31/2010
Securities sold under repurchase agreements		(14,973	)
Deposits		(12,245	)
Financial expense from technical provision for insurance and private pension plans		(3,886	)
Interbank markets		(2,901	)
Institutional markets		(2,683	)
Other financial liabilities		(152	)
Total		(36,840	)

c)	Net gain (loss) from financial assets and liabilities

	01/01 to 12/31/2010
Financial assets and liabilities held for trading including derivatives		2,682
Financial assets designated at fair value through profit or loss		30
Available-for-sale investments		166
Total		2,878

NOTE 23 - BANKING SERVICE FEES

	01/01 to 12/31/2010
Current account services		4,351
Asset Management fees		2,570
Collection commissions		1,076
Fees from credit card services		6,332
Fees for guarantees issued and credit lines		1,422
Brokerage commission		476
Other		877
Total		17,104

NOTE 24 - OTHER INCOME

	01/01 to 12/31/2010
Gains on Sale of Assets held sale, fixed assets and investments in unconsolidated companies		105
Recovery of expenses		178
Discounts		9
Reversal of provisions		604
Other		793
Total		1,689

NOTE 25 – GENERAL AND ADMINISTRATIVE EXPENSES

	01/01 to 12/31/2010
Personnel expenses		(12,935	)
Compensation		(7,953	)
Charges		(2,096	)
Welfare benefits		(1,574	)
Dismissals		(949	)
Retirement plans and post-employment benefits (Note 29)		(129	)
Defined benefit		(1,170	)
Defined contribution		1,041
Training		(234	)
Administrative expenses		(12,362	)
Data processing and telecommunications		(3,271	)
Third-party services		(2,734	)
Installations		(1,281	)
Advertising, promotions and publications		(1,235	)
Rent expenses		(861	)
Transportation		(596	)
Materials		(456	)
Expenses for financial services		(455	)
Security		(451	)
Utilities		(282	)
Travel expenses		(168	)
Other		(572	)
Depreciation		(1,166	)
Amortization		(1,023	)
Insurance acquisition expenses		(1,003	)
Other expenses		(6,218	)
Expenses related to credit cards		(1,697	)
Reimbursement related to acquisitions		(116	)
Losses with third parties’ frauds		(557	)
Loss on sale of assets held for sale and fixed assets		(226	)
Provision for contingent liabilities		(2,573	)
Other		(1,049	)
Total		(34,707	)

NOTE 26 - INCOME TAX AND SOCIAL CONTRIBUTION

Itaú Unibanco Holding and each of its subsidiaries file separate corporate income tax returns for each fiscal year. Income tax in Brazil comprises federal income tax and social contribution on net income, which is a tax income additional to federal income tax.

a)	Composition of expenses for taxes and contributions

The amounts recorded as income tax and social contribution expense in the consolidated financial statements are reconciled to the statutory rates, as follows:

Current income tax and social contribution	01/01 to 12/31/2010
Net income before income tax and social contribution		18,029
Charges (income tax and social contribution) at the rates in effect		(7,212	)
Increase/decrease to income tax and social contribution charges arising from:		1,676
Non taxable share of income of unconsolidated companies, net		113
Non-deductible foreign exchange variation on assets and liabilities abroad		(255	)
Interest on capital		1,496
Dividends, interest on external debt bonds and tax incentives		289
Other		33
Total income tax and social contribution		(5,536	)

b)	Deferred taxes

I - The deferred tax asset balance and its changes are represented as follows:

	01/01/2010		Realization / Reversal			Increase		12/31/2010
Reflected in income		26,459		(9,330	)		8,407		25,536
Related to income tax and social contribution loss carry forwards		3,204		(418	)		212		2,998
Allowance for loan losses		9,264		(4,132	)		5,291		10,423
Adjustment to market value financial assets and derivatives		208		(217	)		31		22
Goodwill on purchase of investments		7,704		(1,870	)		71		5,905
Legal liabilities – tax and social security		1,868		(632	)		77		1,313
Provision for contingent liabilities		2,321		(958	)		1,055		2,418
Civil lawsuits		897		(639	)		780		1,038
Labor claims		843		(119	)		160		884
Tax and social security contributions		477		(130	)		115		462
Other		104		(70	)		-		34
Adjustments of operations carried out in futures settlement market		12		-			35		47
Provision related to health insurance operations		238		-			4		242
Other		1,640		(1,103	)		1,631		2,168
Reflected in stockholders’ equity		83		(46	)		95		132
Adjustment to market value of available-for-sale financial assets		83		(46	)		95		132
Total (*)		26,542		(9,376	)		8,502		25,668

(*) Deferred income tax and social contribution asset and liabilities are recorded in the balance sheet offset by a taxable entity and total R$ 19,918 (R$ 21,519 at January 1, 2010) and R$ 5,374 (R$ 4,963 at January 1, 2010).

II - Provision for Deferred Income Tax and Social Contribution balance and its changes are shown as follows:

	01/01/2010		Realization / Reversal			Increase		12/31/2010
Reflected in income		9,467		(2,437	)		3,373		10,403
Depreciation in excess – lease		7,568		(2,075	)		2,802		8,295
Taxation of results abroad – capital gains		36		-			7		43
Adjustments of operations carried out in futures settlement market		36		(7	)		14		43
Adjustment to market value of securities and derivative financial instruments		131		(131	)		264		264
Restatement of escrow deposits and contingent liabilities		585		(109	)		225		701
Pension plans		564		(21	)		-		543
Other		547		(94	)		61		514
Reflected in stockholders’ equity		519		(9	)		211		721
Adjustment to market value of available-for-sale securities		519		(9	)		211		721
Total (*)		9,986		(2,446	)		3,584		11,124



ASSETS	NOTE	12/31/2010			01/01/2010
Cash and deposits on demand	3		10,172			10,671
Central Bank compulsory deposits	4		85,776			13,869
Interbank deposits	5		14,835			17,799
Securities purchased under agreements to resell	5		88,682			135,820
Financial assets held for trading	6		115,497			55,552
Pledged as collateral			54,400			6,336
Other			61,097			49,216
Financial assets designated at fair value through profit or loss	6b		306			373
Derivatives	7 and 8		7,777			5,589
Available-for-sale Financial Assets	9		44,539			41,302
Pledged as collateral			8,826			3,019
Other			35,713			38,283
Held-to-maturity Financial Assets	10		3,170			2,429
Pledged as collateral			268			124
Other			2,902			2,305
Loan operations, net			275,493			224,818
Loan operations	11		295,487			245,063
(-) Allowance for loan losses			(19,994	)		(20,245	)
Other financial assets	19a		40,733			26,741
Investments in unconsolidated companies	12		2,947			3,180
Fixed assets, net	14		4,802			4,178
Intangible assets, net	15		3,244			3,723
Tax assets			23,891			26,684
Income Tax and Social Contribution - Credits			3,534			4,769
Income Tax and Social Contribution - Deferred	26b		19,918			21,519
Other taxes			439			396
Assets held for sale	35		78			239
Other assets	19a		5,539			5,637
TOTAL ASSETS			727,481			578,604


	NOTE	12/31/2010
Net income			12,493
Available-for-sale investments
Change in fair value			449
(Gains)/losses transferred to income through disposal	9		(166	)
Tax effect	17		(113	)
Cash flow hedge	8
Change in fair value			(40	)
(Gains)/losses transferred to income			12
Tax effect			11
Foreign exchange differences on foreign investments, no tax effect			(256	)
Share of other comprehensive income of unconsolidated companies			(184	)
Total comprehensive income			12,206
Comprehensive income attributable to non-controlling interests			785
Comprehensive income attributable to controlling interests			11,421


	NOTE	01/01 to 12/31/2010
Net income			12,493
Adjustments to net income:			28,397
Granted options recognized			131
Allowance for loan losses			15,548
Change in reserves for insurance and private pension			9,324
Revenue from capitalization plans			(465	)
Depreciation and amortization			2,189
Deferred taxes			1,859
Share of profit of unconsolidated companies			(282	)
(Gain) Loss from available-for-sale securities			(166	)
(Income) loss from sale of assets held sale			139
(Income) loss from sale of fixed assets			7
(Gain) Loss from rescissions of operations of intangible assets			(56	)
Loss from impairment of intangible assets			21
Other			148
CHANGE IN ASSETS AND LIABILITIES			(71,910	)
(Increase) decrease in interbank deposits			3,195
(Increase) decrease in securities purchased under agreements to resell			20,505
(Increase) decrease in compulsory deposits with the Central Bank of Brazil			(71,945	)
(Increase) decrease in financial assets held for trading			(60,023	)
(Increase) decrease in derivatives (assets/liabilities)			(1,849	)
(Increase) decrease in financial assets at fair value			67
(Increase) decrease in loan operations			(66,255	)
(Increase) decrease in other financial assets			(13,993	)
(Increase) decrease in other tax assets			935
(Increase) decrease in other assets			97
(Decrease) increase in deposits			12,165
(Decrease) increase in deposits received under securities repurchase agreements			67,660
(Decrease) Increase in financial liabilities held for trading			672
(Decrease) increase in funds from interbank markets			17,844
(Decrease) Increase in other financial liabilities			13,998
(Decrease) Increase in reserve for insurance and private pension			(382	)
(Decrease) Increase in liabilities for capitalization plans			807
(Decrease) increase in provisions			458
(Decrease) increase in tax liabilities			5,493
(Decrease) increase in other liabilities			1,749
Payment of income tax and social contribution			(3,108	)
NET CASH FROM (USED IN) OPERATING ACTIVITIES			(31,020	)
Interest on capital/dividends received from investments in unconsolidated companies			104
Cash received from sale of available-for-sale securities			17,527
Cash received upon maturity of held-to-maturity securities			286
Cash upon sale of assets held sale			198
Sale of investment in Unibanco Saúde Seguradora S.A.			55
Sale of investment in Unibanco Rodobens Adm. De Consórcios S.A.			41
Sale of investment in Cia. Hipotecária Unibanco Rodobens			12
Cash received on sale of fixed assets	14		70
Cash received on rescission of contracts of intangible assets	15		145
Purchase of available-for-sale securities			(17,629	)
Purchase of held-to-maturity securities			(582	)
Purchase of fixed assets	14		(1,924	)
Purchase of intangible assets	15		(627	)
NET CASH FROM (USED IN) INVESTMENT ACTIVITIES			(2,324	)
Funding from institutional markets			12,953
Redemption in institutional markets			(1,796	)
Change in non-controlling interests			55
Granting of stock options - Exercised Options			406
Dividends and interest on capital paid to non-controlling interests			(373	)
Dividends and interest on capital paid			(4,315	)
NET CASH FROM (USED IN) FINANCING ACTIVITIES			6,930
NET INCREASE (DECREASE) IN CASH AND DEPOSITS ON DEMAND	2.4c and 3		(26,414	)
Cash and cash equivalents at the beginning of year			72,652
Effects of changes in exchange rates on cash and cash equivalents			(629	)
Cash and cash equivalents at the end of year	3		45,609
Additional information on cash flow
Interest received			79,750
Interest paid			40,829
Non-cash transactions
Foreclosed assets			68
Dividends and interest on capital declared and not yet paid			1,447

Subsidiaries	Incorporation country	Activity	Interest in voting capital at 12/31/2010
Banco Dibens S.A.	Brazil	Bank		100.00	%
Banco Fiat S.A.	Brazil	Bank		100.00	%
Banco Itaú Argentina S.A.	Argentina	Bank		100.00	%
Banco Itaú BBA S.A.	Brazil	Bank		99.99	%
Banco Itaú Chile	Chile	Bank		99.99	%
Banco Itaú Europa Luxembourg S.A.	Luxembourg	Bank		99.99	%
Banco Itaú Europa, S.A.	Portugal	Bank		99.99	%
Banco Itaú Paraguay S.A.	Paraguay	Bank		99.99	%
Banco Itaú Uruguay S.A.	Uruguay	Bank		100.00	%
Banco Itaucard S.A.	Brazil	Bank		100.00	%
Banco Itaucred Financiamentos S.A.	Brazil	Bank		100.00	%
Banco Itauleasing S.A.	Brazil	Bank		100.00	%
BIU Participações S.A.	Brazil	Holding of non-financial institutions		66.15	%
Cia. Itaú de Capitalização	Brazil	Capitalization		99.99	%
Dibens Leasing S.A. - Arrendamento Mercantil	Brazil	Lease		100.00	%
Fiat Administradora de Consórcios Ltda.	Brazil	Consortia administrator		99.99	%
Hipercard Banco Múltiplo S.A.	Brazil	Bank		100.00	%
Itaú Administradora de Consórcios Ltda.	Brazil	Consortia administrator		99.99	%
Itaú Ásia Securities Ltd	Hong Kong	Broker		100.00	%
Itau Bank, Ltd.	Cayman Islands	Bank		100.00	%
Itaú Companhia Securitizadora de Créditos Financeiros	Brazil	Securitization company		99.99	%
Itaú Corretora de Valores S.A.	Brazil	Broker		100.00	%
Itaú Distribuidora de Títulos e Valores Mobiliários Ltda.	Brazil	Dealer		100.00	%
Itaú Japan Asset Management Limited	Japan	Asset management		100.00	%
Itaú Middle East Securities Limited	Arab Emirates	Broker		100.00	%
Itaú Seguros S.A.	Brazil	Insurance		100.00	%
Itaú Unibanco S.A.	Brazil	Bank		100.00	%
Itaú USA Securities, INC.	United States	Broker		100.00	%
Itaú Vida e Previdência S.A.	Brazil	Private Pension Plan		100.00	%
Orbitall Serviços e Processamento de Informações Comerciais S.A.	Brazil	Technology services		99.99	%
Redecard S.A.	Brazil	Card administrator		50.02	%
Unibanco Cayman Bank Ltd.	Cayman Islands	Bank		100.00	%
Unibanco Participações Societárias S.A.	Brazil	Holding		100.00	%

Joint venture
Banco Investcred Unibanco S.A.	Brazil	Bank		50.00	%
FAI - Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento	Brazil	Consumer Finance Company		50.00	%
Financeira Itaú CDB S.A. Crédito, Financiamento e Investimento	Brazil	Consumer Finance Company		50.00	%
Luizacred S.A. Soc. Cred. Financiamento Investimento	Brazil	Consumer Finance Company		50.00	%

	12/31/2010
Cash and deposits on demand		10,172
Interbank deposits		7,639
Securities purchased under agreements to resell		27,798
Total		45,609



LIABILITIES AND STOCKHOLDERS’ EQUITY	NOTE	12/31/2010			01/01/2010
Deposits	16		202,688			190,716
Securities sold under repurchase agreements	18a		199,657			131,946
Financial liabilities held for trading	17		1,335			663
Derivatives	7 e 8		5,671			5,332
Interbank market	18a		62,599			44,722
Institutional market	18b		44,513			30,530
Other financial liabilities	19b		41,012			27,027
Reserves for insurance and private pension	29		56,864			47,945
Liabilities for capitalization plans			2,603			2,261
Provisions	31		14,390			13,524
Tax liabilities	31b		12,185			9,781
Income tax and social contribution - Current			1,281			1,265
Income tax and social contribution - Deferred	26b II		5,374			4,963
Other			5,530			3,553
Other liabilities	19b		16,022			15,077
Total liabilities			659,539			519,524
Capital	20a		45,000			45,000
Treasury shares	20a		(628	)		(1,031	)
Additional paid-in capital			490			356
Appropriated reserves	20d		16,904			6,801
Unappropriated reserves			4,005			5,609
Cumulative comprehensive income			494			781
Total stockholders’ equity			66,265			57,516
Non-controlling interests			1,677			1,564
Total stockholders’ equity including non-controlling interests			67,942			59,080
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			727,481			578,604



	NOTE	01/01 to 12/31/2010
Banking product			69,579
Interest and similar income	22a		77,919
Interest and similar expense	22b		(36,840	)
Dividends income			223
Net gain (loss) from financial assets and liabilities	22c		2,878
Foreign exchange results and exchange variation on transactions			1,823
Banking service fees	23		17,104
Income from insurance, private pension and capitalization operations before claim and selling expenses			4,783
Income from insurance and private pension	29		13,642
Change in reserves for insurance and private pension			(9,324	)
Revenue from capitalization plans			465
Other income	24		1,689
Losses on loans and claims			(12,961	)
Expenses for allowance for loan losses	11b		(15,548	)
Recovery of loans previously written-off	11b		4,195
Expenses for claims			(1,608	)
Operating margin			56,618
Other operating income (expenses)			(38,589	)
General and administrative expenses	25		(34,707	)
Tax other than income tax and social contribution			(4,164	)
Share of income of unconsolidated companies	12		282
Net income before income tax and social contribution	26		18,029
Current income tax and social contribution			(3,677	)
Deferred income tax and social contribution			(1,859	)
Net income			12,493
Net income attributable to owners of the parent company	27		11,708
Net income attributable to non-controlling interests			785
EARNINGS PER SHARE – BASIC
Common			2.58
Preferred			2.58
EARNINGS PER SHARE – DILUTED	27
Common			2.57
Preferred			2.57
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC	27
Common			2,289,284,273
Preferred			2,246,784,818
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – DILUTED	27
Common			2,289,284,273
Preferred			2,258,895,252


	Attributed to owners of the parent company
	Capital		Treasury shares			Additional paid-in capital		Appropriated reserves			Unappropriated reserves						Other Comprehensive income
	Capital		Treasury shares			Additional paid-in capital		Appropriated reserves			Unappropriated reserves			Retained earnings			Available for sale			Cumulative translation adjustments			Gains and losses – Hedge Cash flow			Total stockholders’ equity – owners of the parent company			Total stockholders’ equity – non-controlling interests			Total
Balance at 01/01/2010		45,000		(1,031	)		356		6,801			5,609			-			771			-			10			57,516			1,564			59,080
Transactions With Owners		-		403			134		-			-			(3,176	)		-			-			-			(2,639	)		(850	)		(3,489	)
Treasury shares - Granting of stock options – exercised options		-		403			3		-			-			-			-			-			-			406			-			406
Stock option plan - expenses recognized for the year		-		-			131		-			-			-			-			-			-			131			-			131
Acquisition of non-controlling interests		-		-			-		-			-			-			-			-			-			-			(123	)		(123	)
Dividends and Interest on capital (Note 20b)		-		-			-		-			-			(3,176	)		-			-			-			(3,176	)		(727	)		(3,903	)
Other		-		-			-		(4	)		(29	)		-			-			-			-			(33	)		178			145
Total comprehensive income		-		-			-		-			-			11,708			(14	)		(256	)		(17	)		11,421			785			12,206
Net income		-		-			-		-			-			11,708			-			-			-			11,708			785			12,493
Other comprehensive income for the year		-		-			-		-			-			-			(14	)		(256	)		(17	)		(287	)		-			(287	)
Appropriations:
Legal reserve		-		-			-		514			-			(514	)		-			-			-			-			-			-
Unrealized profit reserve		-		-			-		(358	)					358			-			-			-			-			-			-
Statutory reserve		-		-			-		9,951			(1,575	)		(8,376	)		-			-			-			-			-			-
Balance at 12/31/2010		45,000		(628	)		490		16,904			4,005			-			757			(256	)		(7	)		66,265			1,677			67,942

	12/31/2010
Total assets		4,573
Total liabilities		3,780
Total income		1,401
Total expense		(1,283	)

	12/31/2010
Non-interest bearing deposits		4,742
Interest-bearing		81,034
Total		85,776

	12/31/2010
	Cost/ Amortized		Unrealized Income
	Cost		Gain		Loss			Fair Value
Investment funds		1,701		49		(2	)		1,748
Brazilian government securities (1a)		86,636		77		(14	)		86,699
Brazilian external debt bonds (1b)		653		17		(4	)		666
Government securities – abroad (1c)		9,323		38		(8	)		9,353
Argentina		295		6		(8	)		293
United States		8,682		32		-			8,714
Mexico		29		-		-			29
Russia		45		-		-			45
Chile		248		-		-			248
Uruguay		24		-		-			24
Corporate securities (1d)		16,941		152		(62	)		17,031
Shares		3,161		134		(47	)		3,248
Securitized real estate loans		587		9		-			596
Bank deposit certificates		8,932		-		-			8,932
Debentures		2,799		1		-			2,800
Eurobonds and other		1,459		8		(15	)		1,452
Other		3		-		-			3
TOTAL		115,254		333		(90	)		115,497

	12/31/2010
	Cost/ Amortized Cost		Fair Value
Current		58,534		58,705
Without maturity		4,862		4,996
Due within one year		53,672		53,709
Non-current		56,720		56,792
From one to five years		49,392		49,403
From five to ten years		5,134		5,177
After ten years		2,194		2,212
TOTAL		115,254		115,497

	01/01 to 12/31/2010
Designated at Fair Value Through Profit
Gain		31
Loss		(1	)
Total		30

	12/31/2010
	Cost/ Amortized cost		Fair Value
Non Current		297		306
After 10 years		297		306

	Memorandum account Notional amount		Balance sheet account receivable / (received)(payable) / paid			Gains / Losses			Fair value
	12/31/2010		12/31/2010			12/31/2010			12/31/2010
Futures contracts		292,049		5			(60	)		(55	)
Purchase commitments		127,499		(1	)		174			173
Foreign currency		8,128		(1	)		1			-
Interbank market		98,353		-			45			45
Indices		19,288		-			95			95
Securities		1,645		-			-			-
Commodities		84		-			33			33
Other		1		-			-			-
Commitments to sell		164,550		6			(234	)		(228	)
Foreign currency		13,057		6			(20	)		(14	)
Interbank market		113,173		-			(45	)		(45	)
Indices		32,033		-			(127	)		(127	)
Securities		4,230		-			-			-
Commodities		2,048		-			(42	)		(42	)
Other		9		-			-			-
Swap contracts				344			580			924
Asset position		68,839		2,160			777			2,937
Foreign currency		7,330		(292	)		238			(54	)
Interbank market		34,370		1,299			161			1,460
Fixed rate		9,277		326			140			466
Floating rate		865		2			18			20
Indices		16,745		819			218			1,037
Securities		32		3			-			3
Commodities		219		3			2			5
Other		1		-			-			-
Liability position		68,495		(1,816	)		(197	)		(2,013	)
Foreign currency		14,609		(310	)		(17	)		(327	)
Interbank market		19,443		(358	)		138			(220	)
Fixed rate		7,835		(256	)		(133	)		(389	)
Floating rate		3,272		(2	)		(1	)		(3	)
Indices		23,122		(865	)		(181	)		(1,046	)
Securities		29		(1	)		-			(1	)
Commodities		178		(24	)		(3	)		(27	)
Other		7		-			-			-
Option contracts		2,330,950		(570	)		235			(335	)
Purchase commitments – long position		695,908		1,182			(108	)		1,074
Foreign currency		24,905		414			(104	)		310
Interbank market		530,428		468			2			470
Floating rate		314		2			-			2
Indices		138,085		182			(53	)		129
Securities		1,534		86			27			113
Commodities		642		30			20			50
Commitments to sell – long position		526,323		625			53			678
Foreign currency		12,295		339			142			481
Interbank market		404,532		128			(28	)		100
Floating rate		282		-			-			-
Indices		107,034		109			(48	)		61
Securities		1,625		40			(6	)		34
Commodities		555		9			(7	)		2
Purchase commitments – short position		527,731		(1,587	)		342			(1,245	)
Foreign currency		26,547		(802	)		341			(461	)
Interbank market		376,482		(256	)		(7	)		(263	)
Indices		123,221		(449	)		50			(399	)
Securities		864		(49	)		(27	)		(76	)
Commodities		617		(31	)		(15	)		(46	)
Commitments to sell – short position		580,988		(790	)		(52	)		(842	)
Foreign currency		16,715		(451	)		(95	)		(546	)
Interbank market		444,963		(196	)		3			(193	)
Indices		118,333		(71	)		22			(49	)
Securities		825		(58	)		7			(51	)
Commodities		152		(14	)		11			(3	)
Forward contracts		1,445		1,432			(27	)		1,405
Purchases receivable		21		57			29			86
Interbank market		-		36			-			36
Floating rate		21		21			29			50
Purchases payable – Floating rate		-		(21	)		(29	)		(50	)
Sales receivable		1,424		1,397			1			1,398
Indices		4		4			-			4
Securities		1,419		1,392			1			1,393
Commodities		1		1			-			1
Sales deliverable – Floating rate		-		(1	)		(28	)		(29	)

	Memorandum account Notional amount		Balance sheet account receivable/ (received)(payable)/ paid			Gains / Losses			Fair value
	12/31/2010		12/31/2010			12/31/2010			12/31/2010
Credit derivatives		6,701		125			7			132
Asset position		2,902		258			3			261
Foreign currency		53		-			1			1
Fixed rate		2,622		258			(2	)		256
Securities		227		-			4			4
Liability position		3,799		(133	)		4			(129	)
Foreign currency		22		-			(1	)		(1	)
Fixed rate		3,126		(133	)		10			(123	)
Securities		651		-			(5	)		(5	)
Forwards operations		36,958		(522	)		22			(500	)
Asset position		13,832		597			15			612
Foreign currency		13,121		548			8			556
Fixed rate		3		1			-			1
Floating rate		509		8			-			8
Commodities		199		40			7			47
Liability position		23,126		(1,119	)		7			(1,112	)
Foreign currency		22,759		(1,097	)		8			(1,089	)
Interbank market		27		(1	)		-			(1	)
Floating rate		273		(3	)		-			(3	)
Commodities		67		(18	)		(1	)		(19	)
Swap with target flow				-			-			-
Asset position – Interbank market		6		-			-			-
Liability position – Interbank market		6		-			-			-
Target flow of swap		25		-			-			-
Liability position – Foreign currency		25		-			-			-
Other derivative financial instruments		3,755		626			(91	)		535
Asset position		3,395		785			(54	)		731
Foreign currency		259		189			5			194
Fixed rate		698		375			2			377
Floating rate		-		-			(3	)		(3	)
Securities		2,438		221			(58	)		163
Liability position		360		(159	)		(37	)		(196	)
Foreign currency		360		(159	)		(24	)		(183	)
Índices		-		-			(13	)		(13	)
ASSETS				7,061			716			7,777
LIABILITIES				(5,621	)		(50	)		(5,671	)
TOTAL				1,440			666			2,106

Derivative contracts mature as follows (in days):
Clearing	0 – 30		31 - 180		181 - 365		Over 365		12/31/2010
Futures		108,359		64,874		49,747		69,069		292,049
Swaps		5,318		16,169		8,225		36,967		66,679
Options		1,292,156		439,940		506,039		92,815		2,330,950
Forwards		274		1,143		28		-		1,445
Credit derivatives		-		1,011		592		5,098		6,701
Forwards		13,658		13,233		6,051		4,016		36,958
Swaps with target flow		-		-		6		-		6
Target flow of swap		6		16		3		-		25
Other		105		927		405		2,318		3,755

	12/31/2010
	Balance sheet account received paid		Gains / Losses			Fair value		%		0-30			31-90			91-180			181-365			366-720			Over 720
ASSETS
Option premiums		1,807		(55	)		1,752		22.5		213			230			222			405			106			576
BM&F Bovespa		1,426		(121	)		1,305		16.7		746			72			123			287			77			-
Financial institutions		305		59			364		4.7		24			116			90			106			22			6
Companies		76		7			83		1.1		(557	)		42			9			12			7			570
Forwards		1,454		30			1,484		19.1		323			1,071			64			26			-			-
BM&F Bovespa		1,397		1			1,398		18.0		251			1,059			62			26			-			-
Financial institutions		57		29			86		1.1		72			12			2			-			-			-
Swaps - Adjustment receivable		2,160		777			2,937		37.8		286			249			191			655			621			935
BM&F Bovespa		215		56			271		3.5		5			8			14			55			63			126
Financial institutions		322		119			441		5.7		167			44			3			73			21			133
Companies		1,607		596			2,203		28.3		112			193			163			524			536			675
Individuals		16		6			22		0.3		2			4			11			3			1			1
Credit derivatives		258		3			261		3.4		-			22			1			2			1			235
Financial institutions		67		10			77		1.0		-			22			1			1			1			52
Companies		191		(7	)		184		2.4		-			-			-			1			-			183
Forwards		597		15			612		7.8		273			128			96			96			13			6
Financial institutions		150		1			151		1.9		64			39			21			19			4			4
Companies		445		15			460		5.9		209			88			75			77			9			2
Individuals		2		(1	)		1		-		-			1			-			-			-			-
Other		785		(54	)		731		9.4		50			326			-			130			12			213
Financial institutions		783		(59	)		724		9.3		50			326			-			130			5			213
Companies		2		5			7		0.1		-			-			-			-			7			-
Total (*)		7,061		716			7,777		100.0		1,145			2,026			574			1,314			753			1,965
% per maturity term											14.7	%		26.1	%		7.4	%		16.9	%		9.7	%		25.3	%

	12/31/2010
	Balance sheet account payable paid			Gains and Losses			Fair value			%			0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days
LIABILITIES
Futures		5			(60	)		(55	)		0.9			(22	)		(52	)		(12	)		12			16			3
BM&F Bovespa		-			(59	)		(59	)		1.0			(25	)		(50	)		(14	)		11			16			3
Companies		5			(1	)		4			(0.1	)		3			(2	)		2			1			-			-
Option premiums		(2,377	)		290			(2,087	)		36.8			(812	)		(414	)		(231	)		(413	)		(207	)		(10	)
BM&F Bovespa		(1,912	)		235			(1,677	)		29.6			(756	)		(298	)		(108	)		(349	)		(163	)		(3	)
Financial institutions		(390	)		91			(299	)		5.3			(17	)		(93	)		(114	)		(45	)		(27	)		(3	)
Companies		(74	)		(36	)		(110	)		1.9			(39	)		(23	)		(8	)		(19	)		(17	)		(4	)
Individuals		(1	)		-			(1	)		-			-			-			(1	)		-			-			-
Forwards		(22	)		(57	)		(79	)		1.4			(50	)		-			-			-			-			(29	)
Financial institutions		(21	)		(29	)		(50	)		0.9			(50	)		-			-			-			-			-
Companies		(1	)		(28	)		(29	)		0.5			-			-			-			-			-			(29	)
Swaps – difference payable		(1,816	)		(197	)		(2,013	)		35.4			(92	)		(96	)		(139	)		(598	)		(442	)		(646	)
BM&F Bovespa		(321	)		(67	)		(388	)		6.8			(6	)		(9	)		(40	)		(60	)		(112	)		(161	)
Financial institutions		(190	)		(206	)		(396	)		7.0			(14	)		(29	)		(3	)		(149	)		(26	)		(175	)
Companies		(1,249	)		79			(1,170	)		20.6			(70	)		(50	)		(73	)		(364	)		(303	)		(310	)
Individuals		(56	)		(3	)		(59	)		1.0			(2	)		(8	)		(23	)		(25	)		(1	)		-
Credit derivatives		(133	)		4			(129	)		2.3			(7	)		(6	)		(2	)		(3	)		(8	)		(103	)
Financial institutions		(133	)		7			(126	)		2.2			(7	)		(6	)		(2	)		(2	)		(8	)		(101	)
Companies		-			(3	)		(3	)		0.1			-			-			-			(1	)		-			(2	)
Forwards		(1,119	)		7			(1,112	)		19.6			(176	)		(267	)		(205	)		(317	)		(87	)		(60	)
Financial institutions		(624	)		(5	)		(629	)		11.1			(88	)		(201	)		(106	)		(138	)		(46	)		(50	)
Companies		(494	)		12			(482	)		8.5			(88	)		(66	)		(99	)		(179	)		(41	)		(9	)
Individuals		(1	)		-			(1	)		-			-			-			-			-			-			(1	)
Other		(159	)		(37	)		(196	)		3.6			46			(2	)		3			(89	)		(15	)		(139	)
Financial institutions		(153	)		(20	)		(173	)		3.1			-			-			-			(87	)		-			(86	)
Companies		(6	)		(17	)		(23	)		0.5			46			(2	)		3			(2	)		(15	)		(53	)
Total (*)		(5,621	)		(50	)		(5,671	)		100.0			(1,113	)		(837	)		(586	)		(1,408	)		(743	)		(984	)
% per maturity term														19.6	%		14.8	%		10.3	%		24.8	%		13.1	%		17.4	%

	01/01 to 12/31/2010
Swap		13
Forwards		137
Futures		1,415
Options		924
Credit derivatives		87
Other		(274	)
Total		2,302

	Maximum potential of future payments, gross		Before 1 year		From 1 to 3 years		From 3 to 5 years		After 5 years		Fair value at December 31, 2010
By instrument
CDS		3,375		541		1,234		1,184		416		(121	)
TRS		424		416		-		8		-		(8	)
Total by instrument		3,799		957		1,234		1,192		416		(129	)
By risk rating
Investment grade		3,799		957		1,234		1,192		416		(129	)
Total by risk		3,799		957		1,234		1,192		416		(129	)
By reference entity
Private entities		3,799		957		1,234		1,192		416		(129	)
Total by entity		3,799		957		1,234		1,192		416		(129	)

	12/31/2010
	Notional amount of hedge sold			Notional amount of hedge purchased with identical underlying amount		Net position
CDS		(3,375	)		2,902		(473	)
TRS		(424	)		-		(424	)
Total		(3,799	)		2,902		(897	)

Derivatives in relationships of cash flow hedge	Other Gain or (loss) recognized in Other Comprehensive Income in Cash Flow Hedge (effective portion) – in millions of R$			Line Item where the ineffective portion is recognized in the statement of income	Gain or (loss) recognized in Income Statement derivatives (ineffective portion) – in millions of R$ (*)
Futures of interest rate		8		Net Gain (loss) from financial assets and liabilities		1
Interest rate swap		(20	)	Net Gain (loss) from financial assets and liabilities		-

	Derivative instruments					Hedged item
Strategy	Notional amount		Fair value			Carrying amount

Hedge of time deposits and repurchase agreements:		9,092		(10	)		9,117
Hedge of redeemable preferred shares		655		(27	)		655
Hedge of subordinated CDB		350		-			419

	12/31/2010
	Amortized cost
Brazilian government securities		2,764
Brazilian external debt bonds		226
Government securities - abroad		16
Corporate securities (*)		164
Debentures		30
Eurobonds and other		130
Securitized real estate loans		4
Total		3,170

Loans and advances to clients, by type	12/31/2010
Loans and discounted trade receivables		121,398
Financing		76,988
Farming and agribusiness financing		5,425
Real estate financing		16,318
Lease operations		38,284
Credit card operations		34,259
Advance on exchange contracts		2,738
Loans and advances to clients		77
Total loans and advances to clients, gross of provision for impairment		295,487
Provision for impairment		19,994

Total loans and advances to clients, net of provision for impairment		275,493

By business sector of debtor	12/31/2010
Public sector		1,138
Industry and commerce		84,997
Services		60,295
Primary sector		13,933
Other sectors		2,185
Individuals		132,939
Total loans and advances to clients, gross of provision for impairment		295,487

By maturity	12/31/2010
Overdue as from 1 day		12,229
Falling due in up to 3 months		82,609
Falling due in more than 3 months but less than one year		77,354
Falling due after one year		123,295
Total loans and advances to clients, gross of provision for impairment		295,487

By concentration	12/31/2010
Largest debtor		1,620
10 largest debtors		11,313
20 largest debtors		18,313
50 largest debtors		31,831
100 largest debtors		42,949

	Deferred tax assets						Provision for
	Temporary differences		Tax loss/social contribution on loss carry forwards		Total		deferred income tax and social contribution			Net deferred taxes
2011		7,842		774		8,616		(2,101	)		6,515
2012		4,356		1,344		5,700		(2,411	)		3,289
2013		4,187		565		4,752		(2,668	)		2,084
2014		2,269		32		2,301		(1,794	)		507
2015		2,258		27		2,285		(1,157	)		1,128
Over 2015		1,758		256		2,014		(993	)		1,021
Total		22,670		2,998		25,668		(11,124	)		14,544
Present value (*)		19,814		2,647		22,461		(9,522	)		12,939

Net income attributable to owners of the parent company	01/01 to 12/31/2010
Total net income available to preferred equity holders		5,799
Dividend on preferred shares after dilution effects		17
Net income available to preferred equity holders considering preferred shares after the dilution effect		5,816

Total net income available to ordinary equity holders		5,909
Dividend on preferred shares after dilution effects		(17	)
Net income available to ordinary equity holders considering preferred shares after the dilution effect		5,892

Adjusted weighted average of shares
Common shares		2,289,284,273
Preferred shares		2,259,918,602
Preferred shares		2,246,784,818
Incremental shares from stock options granted under our Stock Option Plan		13,133,784

Earnings per share - Diluted – R$
Common shares		2.57
Preferred shares		2.57

Entity		Benefit plan
Fundação Itaubanco		Plano de Aposentadoria Complementar - PAC (1)
		Plano de Benefício Franprev - PBF (1)
		Plano de Benefício 002 - PB002 (1)
		Plano Básico Itaulam - PBI (1)
		Plano Suplementar Itaulam - PSI (2)
		Plano Itaubanco CD (3) (4)
Fundação Bemgeprev		Plano de Aposentadoria Complementar Móvel Vitalícia - ACMV (1)
Funbep Fundo de Pensão Multipatrocinado		Plano de Benefícios Funbep I (1)
		Plano de Benefícios Funbep II (2)
Caixa de Previdência dos Funcionários do Banco Beg - Prebeg		Plano de Benefícios Prebeg (1)
Itaú Fundo Multipatrocinado		Plano BD Itaú (1)
		Plano CD Itaú (2)
Múltipla - Multiempresas de Previdência Complementar		Plano de Aposentadoria Redecard Básico (1)
		Plano de Aposentadoria Redecard Suplementar (2)
Itaubank Sociedade de Previdência Privada		Plano de Aposentadoria Itaubank (3)
UBB-PREV - Previdência Complementar		Plano de Previdência Unibanco (3)
		Plano Básico (1)
		Plano IJMS (1)
Banorte Fundação Manoel Baptista da Silva de Seguridade Social		Plano de Benefícios II (1)

Discount rate (1)		9.72% p.a.
Expected return rate on assets		12.32 % p.a.
Mortality table (2)		AT-2000
Turnover (3)		Itaú Exp. 2003/2004
Future salary growth		7.12 % p.a.
Growth of the pension fund and social security benefits		4.00 % p.a.
Inflation		4.00 % p.a.
Actuarial method		Projected Unit Credit (4)

			% Allocation
Types	At 12/31/2010		12/31/2010			2011 Target
Fixed income securities		9,818		87.43	%	53% to 100	%
Variable income securities		1,005		8.95	%	0% to 25	%
Structured investments		11		0.10	%	0% to 10	%
Foreign investments		4		0.04	%	0% to 3	%
Real estate		368		3.28	%	0% to 4	%
Loans to participants		23		0.20	%	0% to 5	%
Total		11,229		100.00%

	12/31/2010			01/01/2010
1 - Net assets of the plans		11,229			14,817
2 - Actuarial liabilities		(9,871	)		(11,233	)
3- Surplus (1-2)		1,358			3,584
4- Asset Ceiling (*)		(1,114	)		(2,212	)
5 - Net amount recognized in the balance sheet (3-4)		244			1,372
Amount recognized in Assets		367			1,508
Amount recognized in Liabilities		(123	)		(136	)