6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July 2012

Commission File Number: 001-15276

Itaú Unibanco Holding S.A.

(Exact name of registrant as specified in its charter)

Itaú Unibanco Holding S.A.

(Translation of Registrant’s Name into English)

Praça Alfredo Egydio de Souza Aranha, 100-Torre Itaúsa

04344-902 São Paulo, SP, Brazil

(Address of principal executive offices)

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

Form 20-F:   x      Form 40-F:   o

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

Yes:   o      No:   x

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

Yes:   o      No:   x

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

Yes:   o      No:   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____________. 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Itaú Unibanco Holding S.A.
		(Registrant)
Date:  July 25, 2012	By:	/s/ Alfredo Egydio Setubal
		Name:	Alfredo Egydio Setubal
		Title:	Investor Relations Officer
	By:	/s/ Caio Ibrahim David
		Name:	Caio Ibrahim David
		Title:	Chief Financial Officer

EX-99.1

	financial
	report
	June 30, 2012
	Itaú Unibanco Holding S.A.
	Management Discussion &
	Analysis and Complete Financial
	Statements

Contents

Management Discussion & Analysis	3
Executive Summary	5
Analysis of Net Income	15
Managerial Financial Margin	16
Banking Service Fees and Income from Banking Charges	19
Result from Loan Losses	20
Non-interest Expenses	22
Tax Expenses for ISS, PIS, Cofins and Others	24
Income Tax and Social Contribution on Net Income	24
Balance Sheet	26
Balance Sheet by Currency	31
Risk Management	32
Capital Ratios	33
Ownership Structure	35
Analysis of Segments	39
Commercial Bank	44
Consumer Credit	45
Itaú BBA	46
Insurance, Pension Plans and Capitalization	47
Activities Abroad	55
Report of Independent Auditors	61
Complete Financial Statements	63

It should be noted that the financial statements relating to prior periods have been reclassified for comparison purposes (further details are presented in Note 22-I of the Financial Statements).

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

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

	management
	discussion &
	analysis
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012

(This page was left in blank intentionally)

Management Discussion & Analysis Itaú Unibanco Holding S.A. 4

Executive Summary

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

Highlights	R$ million (except where indicated)
	2nd Q/12			1st Q/12			2nd Q/11			1st H/12			1st H/11
Statement of Income
Recurring Net Income		3,585			3,544			3,317			7,129			6,955
Net Income		3,304			3,426			3,603			6,730			7,133
Operating Revenues (1)		20,268			19,914			18,147			40,183			35,821
Managerial Financial Margin (2)		13,469			13,307			11,921			26,776			23,635
Shares (R$)
Recurring Net Income per share (3)		0.79			0.78			0.73			1.58			1.53
Net Income per share (3)		0.73			0.76			0.79			1.49			1.57
Number of Outstanding Shares – in thousands		4,517,639			4,520,103			4,534,669			4,517,639			4,534,669
Average price of non-voting share on the last trading day of the period		28.05			35.00			36.36			28.05			36.36
Book Value per share		16.74			16.04			14.57			16.74			14.57
Dividends/JCP net of taxes (4)		788			657			687			1,445			1,370
Dividends/JCP net of taxes (4) per share		0.17			0.15			0.15			0.32			0.30
Market Capitalization (5)		126,720			158,204			164,881			126,720			164,881
Market Capitalization (5) (US$ Million)		62,692			86,825			107,646			62,692			107,646
Performance Ratios (%)
Recurring Return on Average Equity – Annualized (6)		19.4	%		20.0	%		20.4	%		19.7	%		21.9	%
Return on Average Equity – Annualized (6)		17.9	%		19.3	%		22.2	%		18.6	%		22.4	%
Recurring Return on Average Assets – Annualized (7)		1.6	%		1.6	%		1.7	%		1.6	%		1.8	%
Return on Average Assets – Annualized (7)		1.5	%		1.6	%		1.8	%		1.5	%		1.8	%
Solvency Ratio (BIS Ratio) - Economic Financial-Consolidated		16.9	%		16.1	%		16.1	%		16.9	%		16.1	%
Annualized Credit Margin		13.4	%		13.5	%		12.8	%		13.4	%		12.8	%
Annualized Net Interest Margin with Clients (8)		10.9	%		11.2	%		11.6	%		11.0	%		11.5	%
Annualized Net Interest Margin with Credit after Provision for Credit Risk (8)		7.5	%		7.4	%		7.6	%		7.4	%		7.9	%
Nonperforming Loans Index (NPL over 90 days)		5.2	%		5.1	%		4.5	%		5.2	%		4.5	%
Coverage Ratio (Provision for Loan and Lease Losses/NPL over 90 days)		147	%		148	%		166	%		147	%		166	%
Efficiency Ratio (ER) (9)		45.0	%		44.5	%		47.8	%		44.8	%		47.6	%
Risk Adjusted Efficiency Ratio (RAER) (9)		73.0	%		72.6	%		71.8	%		72.8	%		70.3	%
Balance Sheet		Jun 30, 12			Mar 31, 12			Jun 30, 11
Total Assets		888,809			896,842			793,679
Total Loan Portfolio, including Sureties, Endorsements and Guarantees		413,399			400,519			360,107
Loan Operations (A)		356,789			347,369			316,964
Sureties, Endorsements and Guarantees		56,611			53,150			43,144
Deposits + Debentures + Securities + Borrowings and Onlending (B) (10)		464,565			457,699			413,601
Loan Operations/Funding (A/B)		76.8	%		75.9	%		76.6	%
Stockholders' Equity		75,636			72,484			66,083
Relevant Data
Assets Under Administration		422,623			423,205			379,392
Employees (Individuals)		99,017			102,694			107,546
Employees in Brazil (Individuals)		92,517			96,294			101,531
Employees Abroad (Individuals)		6,500			6,400			6,015
Number of Points of Service		32,795			32,974			34,478
Branches (Units)		4,105			4,081			3,992
CSB – Client Service Branches (Units)		901			899			943
ATM – Automated Teller Machines (Units) (11)		27,789			27,994			29,543

Macroeconomic | Indicators

	2nd Q/12			1st Q/12			2nd Q/11			1st H/12			1st H/11
EMBI Brazil Risk		213			176			147			213			147
CDI – In the Period (%)		2.1	%		2.5	%		2.8	%		4.6	%		5.5	%
Dollar Exchange Rate – Quotation in R$		2.0213			1.8221			1.5611			2.0213			1.5611
Dollar Exchange Rate – Variation in the Period (%)		10.9	%		-2.9	%		-4.2	%		29.5	%		-13.3	%
Euro Exchange Rate – Quotation in R$		2.5606			2.4300			2.2667			2.5606			2.2667
Euro Exchange Rate – Variation in the Period (%)		5.4	%		-0.2	%		-2.0	%		13.0	%		2.8	%
IGP-M – In the Period (%)		2.6	%		0.6	%		0.7	%		3.2	%		3.1	%

(1) Operating Revenues are the sum of Managerial Financial Margin, Banking Service Fees and Income from Banking Charges, Other Operating Income and Result from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses, Equity in Earnings of Affiliates and Non-Operating Income; (2) Described on page 16; (3) Calculated based on the weighted average number of outstanding shares; (4) JCP – Interest on Own Capital. Recognized and declared amounts paid; (5) Total number of outstanding shares (common and non-voting shares) multiplied by the average price of the non-voting share on the last trading day in the period; (6) Annualized Return was calculated by dividing Net Income by the Average Stockholders’ Equity. The quotient was multiplied by the number of periods of the year to derive the annualized rate. The basis of calculations of the returns were adjusted by the amount of dividends which has not yet been approved in stockholder’s meetings or by the Board of Director’s, proposed after the balance sheet closing date; (7) Annualized Return was computed by dividing Net Income by Average Assets. The quotient of this division was multiplied by the number of periods of the year to derive the annualized rate. (8) It does not include Margin with Market. See details on page 17; (9) For more details on the calculation methodology of both Efficiency and Risk Adjusted Efficiency ratios, please see page 23; (10) As described on page 30; (11) It includes ESBs (electronic service branches) and service points in third-parties’ establishments.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 5

Executive Summary

Net Income and Recurring Net Income

Our recurring net income totaled R$3,585 million in the second quarter of 2012. This amount was adjusted by the impact of non-recurring events, which are presented in the table below, resulting in net income of R$3,304 million in the period.

Non-Recurring Events Net of Tax Effects	R$ million
	2nd Q/12			1st Q/12			2nd Q/11			1st H/12			1st H/11
Recurring Net Income		3,585			3,544			3,317			7,129			6,955
Non-recurring events		(281	)		(118	)		286			(399	)		178
Program for Settlement or Installment Payment of Federal Taxes- Law No.11,941/09 (a)		-			-			509			-			509
Sale of Total Interest in Banco Português de Investimento (b)		(205	)		-			-			(205	)		-
Market Value Adjustment – BPI (c)		(45	)		(55	)		(156	)		(101	)		(156	)
Provision for Contingencies – Economic Plans (d)		(31	)		(63	)		(67	)		(93	)		(175	)
Net Income		3,304			3,426			3,603			6,730			7,133

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

Non-Recurring Events in the First Half of 2012 and 2011

(a) Program for the Settlement or Installment Payment of Federal Taxes - Law No. 11,941/09

Additional effects of the adherence of Itaú Unibanco Holding and its subsidiaries to the Program for the Settlement or Installment Payment of Federal Taxes in 2009. This program includes the debts managed by the Federal Revenue Service of Brazil and by the General Attorney’s Office of the National Treasury.

(b) Total Interest Sale in Banco Português de Investimento

On April 20, 2012, Itaú Unibanco sold its interest of 18.87% in Banco Português de Investimento to the La Caixa group and received approximately €93 million. This transaction negatively impacted our net income in R$205 million, net of taxes, and positively impacted our stockholder’s equity in R$106 million.

(c) Adjustment to Market Value – BPI Investment

Effect of the adjustment of the investment held in Banco Português de Investimento based on the share price in the second quarter (before the sale of our interest).

(d) Provision for Contingencies – Economic Plans

Provision for losses arising from economic plans that were in effect in Brazil in the 1980's.

Managerial Statement of Income

The following tables are based on the Managerial Statement of Income, which arises from reclassifications made in the audited accounting statement of income. The tax effects of hedges of investments abroad, which were originally included in tax expenses (PIS and COFINS) and income tax and social contribution on net income, were reclassified to the financial margin. Additionally, non-recurring events were also adjusted.

Our strategy for the exchange risk management of capital invested abroad is intended to avoid impacts from foreign exchange variations on net income. For this purpose, the foreign exchange risk is neutralized and the investments are remunerated in Brazilian reais through the use of derivative financial instruments. Our strategy to hedge investments abroad also considers the impact of all related tax effects. It should be noted that, in the second quarter of 2012, the real depreciated 10.9% in relation to the U.S. dollar and 5.4% in relation to the Euro, compared with an appreciation of 2.9% and 0.2%, respectively, in the previous quarter.

Changes in the Composition of Operating Revenues

In the first quarter of 2012, we improved the criteria for accounting for discounts granted in the renegotiation of credits that had already been written off as losses. These discounts, which previously reduced Operating Revenues (affecting the Managerial Financial Margin), are now classified in the Income from the recovery of credits written off as losses account. In the first half of 2011, the discounts granted in renegotiations totaled R$287 million and, if they had been reclassified to recovery of credits, they would have improved the efficiency ratio by 40 basis points.

Other highlights / subsequent events

(a) Purchase of 49% of Banco CSF S.A. (“Banco Carrefour”)

Itaú Unibanco indirectly purchased shares that represent 49% of the capital of Banco CSF S.A. (“Banco Carrefour”). The transaction of R$816 million, which was approved by the Brazilian Central Bank, resulted in goodwill of R$583 million to be amortized over 10 years. This interest was recognized using the equity method.

(b) Creation of a New Entity with Banco BMG S.A.— Payroll Loans

On July 10, we announced the creation of a New Entity with BMG for the establishment of Banco Itaú BMG Consignado S.A., aiming at the distribution and sale of payroll loans. We will hold a 70% interest in the initial capital of R$1 billion and BMG will hold the remaining 30%. The New Entity will be entitled to finance 70% of the credits arising from BMG’s distribution channels and we agreed to provide up to R$300 million a month to BMG, subject to limits and conditions, for a period of five years, for BMG’s own payroll credit operations. With this association, we expect to become the leading private bank in this segment, taking into consideration, in addition to our operations, New Entity’s portfolio which, according to our expectations, will amount to R$12 billion within two years.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 6

Executive Summary

The reconciliations between the Accounting and Managerial Statements of Income of the last two quarters are presented below.

Reconciliation between the Accounting and Managerial Statements | 2^nd Quarter of 2012

	R$ million
	Itaú Unibanco
				Non-recurring			Tax Effect of
	Accounting			Effects			Hedge			Managerial
Operating Revenues		18,303			379			1,586			20,268
Managerial Financial Margin		11,883			-			1,586			13,469
Financial Margin with Clients		12,340			-			-			12,340
Financial Margin with Market		(457	)		-			1,586			1,129
Banking Service Fees and Income from Banking Charges		5,078			-			-			5,078
Results from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses		1,466			-			-			1,466
Other Operating Income		84			-			-			84
Equity in Earnings of Affiliates and Other Investments		82			69			-			151
Non-operating Income		(291	)		310			-			19
Loan and Retained Claim Losses Net of Recovery		(5,374	)		-			-			(5,374	)
Expenses for Allowance for Loan and Lease Losses		(5,988	)		-			-			(5,988	)
Income from Recovery of Loans Written Off as Losses		1,126			-			-			1,126
Retained Claims		(511	)		-			-			(511	)
Other Operating Income/(Expenses)		(9,582	)		46			(170	)		(9,705	)
Non-interest Expenses		(8,457	)		46			-			(8,411	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(879	)		-			(170	)		(1,050	)
Selling Expenses from Insurance		(245	)		-			-			(245	)
Income before Tax and Profit Sharing		3,347			426			1,416			5,189
Income Tax and Social Contribution		215			(145	)		(1,416	)		(1,345	)
Profit Sharing		(52	)		-			-			(52	)
Minority Interests		(207	)		-			-			(207	)
Net Income		3,304			281			-			3,585

Reconciliation between the Accounting and Managerial Statements | 1^st Quarter of 2012

	R$ million
	Itaú Unibanco
				Non-recurring			Tax Effect of
	Accounting			Effects			Hedge			Managerial
Operating Revenues		20,325			83			(495	)		19,914
Managerial Financial Margin		13,801			-			(495	)		13,307
Financial Margin with Clients		12,352			-			-			12,352
Financial Margin with Market		1,449			-			(495	)		954
Banking Service Fees and Income from Banking Charges		5,003			-			-			5,003
Results from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses		1,461			-			-			1,461
Other Operating Income		57			-			-			57
Equity in Earnings of Affiliates and Other Investments		(2	)		83			-			81
Non-operating Income		4			-			-			4
Loan and Retained Claim Losses Net of Recovery		(5,304	)		-			-			(5,304	)
Expenses for Allowance for Loan and Lease Losses		(6,031	)		-			-			(6,031	)
Income from Recovery of Loans Written Off as Losses		1,192			-			-			1,192
Retained Claims		(465	)		-			-			(465	)
Other Operating Income/(Expenses)		(9,592	)		95			56			(9,440	)
Non-interest Expenses		(8,248	)		95			-			(8,153	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,097	)		-			56			(1,041	)
Selling Expenses from Insurance		(246	)		-			-			(246	)
Income before Tax and Profit Sharing		5,430			179			(439	)		5,170
Income Tax and Social Contribution		(1,786	)		(61	)		439			(1,408	)
Profit Sharing		(28	)		-			-			(28	)
Minority Interests		(191	)		-			-			(191	)
Net Income		3,426			118			-			3,544

Management Discussion & Analysis Itaú Unibanco Holding S.A. 7

Executive Summary

We present below a perspective of the income statement highlighting the Operating Revenues, which is composed of the sum of revenues from banking, insurance, pension plans and capitalization operations.

Statement of Income | Operating Revenues Perspective

	R$ million
																Variation
																2nd Q/12 -					2nd Q/12 -					1st H/12 -
	2nd Q/12			1st Q/12			2nd Q/11			1st H/12			1st H/11			1st Q/12					2nd Q/11					1st H/11
Operating Revenues		20,268			19,914			18,147			40,183			35,821			354		1.8	%		2,121		11.7	%		4,361		12.2	%
Managerial Financial Margin		13,469			13,307			11,921			26,776			23,635			163		1.2	%		1,548		13.0	%		3,141		13.3	%
Financial Margin with Clients		12,340			12,352			11,231			24,692			22,010			(12)		-0.1	%		1,108		9.9	%		2,682		12.2	%
Financial Margin with Market		1,129			954			690			2,084			1,625			175		18.4	%		439		63.7	%		459		28.3	%
Banking Service Fees and Income from Banking Charges		5,078			5,003			4,672			10,082			9,140			75		1.5	%		406		8.7	%		942		10.3	%
Result from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses		1,466			1,461			1,279			2,927			2,503			5		0.3	%		187		14.6	%		424		16.9	%
Other Operating Income		84			57			95			141			223			27		46.6	%		(11)		-11.3	%		(81	)	-36.5	%
Equity in Earnings of Affiliates and Other Investments		151			81			96			233			193			70		85.8	%		56		58.3	%		40		20.5	%
Non-operating Income		19			4			84			24			127			15		-			(65	)	-			(104	)	-
Loan and Retained Claim Losses Net of Recovery		(5,374	)		(5,304	)		(4,118	)		(10,678	)		(7,693	)		(70	)	1.3	%		(1,256	)	30.5	%		(2,985	)	38.8	%
Expenses for Allowance for Loan and Lease Losses		(5,988	)		(6,031	)		(5,107	)		(12,020	)		(9,487	)		43		-0.7	%		(881	)	17.3	%		(2,533	)	26.7	%
Income from Recovery of Loans Written Off as Losses		1,126			1,192			1,393			2,318			2,600			(66	)	-5.6	%		(266	)	-19.1	%		(281	)	-10.8	%
Retained Claims		(511	)		(465	)		(403	)		(976	)		(805	)		(47	)	10.1	%		(108	)	26.8	%		(171	)	21.2	%
Operating Margin		14,895			14,610			14,029			29,505			28,129			284		1.9	%		865		6.2	%		1,376		4.9	%
Other Operating Income/(Expenses)		(9,705	)		(9,440	)		(9,192	)		(19,146	)		(18,058	)		(265	)	2.8	%		(513	)	5.6	%		(1,088	)	6.0	%
Non-interest Expenses		(8,411	)		(8,153	)		(7,971	)		(16,564	)		(15,657	)		(258	)	3.2	%		(440	)	5.5	%		(908	)	5.8	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,050	)		(1,041	)		(983	)		(2,091	)		(1,918	)		(9)		0.8	%		(67	)	6.8	%		(173	)	9.0	%
Selling Expenses From Insurance		(245	)		(246	)		(238	)		(491	)		(484	)		2		-0.6	%		(6)		2.6	%		(7)		1.5	%
Income before Tax and Profit Sharing		5,189			5,170			4,837			10,359			10,071			19		0.4	%		352		7.3	%		288		2.9	%
Income Tax and Social Contribution		(1,345	)		(1,408	)		(1,256	)		(2,753	)		(2,648	)		63		-4.4	%		(90	)	7.1	%		(105	)	4.0	%
Profit Sharing		(52	)		(28	)		(71	)		(80	)		(107	)		(24	)	87.4	%		19		-27.3	%		27		-25.2	%
Minority Interests in Subsidiaries		(207	)		(191	)		(193	)		(397	)		(361	)		(16)		8.5	%		(13)		6.9	%		(36	)	10.0	%
Recurring Net Income		3,585			3,544			3,317			7,129			6,955			41		1.2	%		268		8.1	%		174		2.5	%

We present below a perspective of the income statement highlighting the Managerial Financial Margin.

Statement of Income | Managerial Financial Margin Perspective

	R$ million
																Variation
																2nd Q/12 -					2nd Q/12 -					1st H/12 -
	2nd Q/12			1st Q/12			2nd Q/11			1st H/12			1st H/11			1st Q/12					2nd Q/11					1st H/11
Managerial Financial Margin		13,469			13,307			11,921			26,776			23,635			163		1.2	%		1,548		13.0	%		3,141		13.3	%
Financial Margin with Clients		12,340			12,352			11,231			24,692			22,010			(12)		-0.1	%		1,108		9.9	%		2,682		12.2	%
Financial Margin with Market		1,129			954			690			2,084			1,625			175		18.4	%		439		63.7	%		459		28.3	%
Results from Loan and Lease Losses		(4,862	)		(4,839	)		(3,715	)		(9,701	)		(6,888	)		(23	)	0.5	%		(1,148	)	30.9	%		(2,814	)	40.9	%
Expenses for Allowance for Loan and Lease Losses		(5,988	)		(6,031	)		(5,107	)		(12,020	)		(9,487	)		43		-0.7	%		(881	)	17.3	%		(2,533	)	26.7	%
Income from Recovery of Loans Written Off as Losses		1,126			1,192			1,393			2,318			2,600			(66	)	-5.6	%		(266	)	-19.1	%		(281	)	-10.8	%
Net Result from Financial Operations		8,607			8,468			8,207			17,074			16,748			139		1.6	%		400		4.9	%		327		2.0	%
Other Operating Income/(Expenses)		(3,437	)		(3,302	)		(3,454	)		(6,739	)		(6,804	)		(135	)	4.1	%		17		-0.5	%		65		-1.0	%
Banking Service Fees and Income from Banking Charges		5,078			5,003			4,672			10,082			9,140			75		1.5	%		406		8.7	%		942		10.3	%
Result from Insurance, Pension Plans and Capitalization Operations		710			750			637			1,460			1,214			(40	)	-5.4	%		73		11.4	%		246		20.2	%
Non-interest Expenses		(8,411	)		(8,153	)		(7,971	)		(16,564	)		(15,657	)		(258	)	3.2	%		(440	)	5.5	%		(908	)	5.8	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,050	)		(1,041	)		(983	)		(2,091	)		(1,918	)		(9)		0.8	%		(67	)	6.8	%		(173	)	9.0	%
Equity in Earnings of Affiliates and Other Investments		151			81			96			233			193			70		85.8	%		56		58.3	%		40		20.5	%
Other Operating Income		84			57			95			141			223			27		46.6	%		(11)		-11.3	%		(81	)	-36.5	%
Operating Income		5,170			5,166			4,753			10,335			9,943			4		0.1	%		417		8.8	%		392		3.9	%
Non-operating Income		19			4			84			24			127			15		-			(65	)	-			(104	)	-
Income before Tax and Profit Sharing		5,189			5,170			4,837			10,359			10,071			19		0.4	%		352		7.3	%		288		2.9	%
Income Tax and Social Contribution		(1,345	)		(1,408	)		(1,256	)		(2,753	)		(2,648	)		63		-4.4	%		(90	)	7.1	%		(105	)	4.0	%
Profit Sharing		(52	)		(28	)		(71	)		(80	)		(107	)		(24	)	87.4	%		19		-27.3	%		27		-25.2	%
Minority Interests in Subsidiaries		(207	)		(191	)		(193	)		(397	)		(361	)		(16)		8.5	%		(13)		6.9	%		(36	)	10.0	%
Recurring Net Income		3,585			3,544			3,317			7,129			6,955			41		1.2	%		268		8.1	%		174		2.5	%

Management Discussion & Analysis Itaú Unibanco Holding S.A. 8

Executive Summary

Net Income

The recurring net income for the second quarter of 2012 amounted to R$3, 585 million, representing an increase of 1.2% in relation to the previous quarter. Our operating revenues grew 1.8% in the period, affected by the growth in the financial margin with the market, whereas our non-interest expenses showed a seasonal increase of 3.2% compared to the first quarter of 2012. The expenses for provisions for loan losses remained stable, with a slight drop of 0.7% in relation to the previous quarter.

In the first half of 2012, recurring net income totaled R$7,129 million, an increase of 2.5% in relation to the same period of 2011, despite the increase of 26.7% in the expenses for provisions for loan losses.

Annualized Return on Average Equity

The annualized recurring return on average equity reached 19.4% in the second quarter of 2012. On June 30, 2012, stockholders’ equity totaled R$75.6 billion, a 14.5% increase from the same period of the previous year.

Net Income per Share and Recurring Net Income per Share

In the second quarter of 2012, recurring net income per share totaled R$0.79 in the quarter, R$0.01 higher than in the previous quarter. Net income per share totaled R$0.73, dropping 3.6% from the previous quarter, affected by the effects of the sale of our investment in Banco Português de Investimento.

Operating Revenues

In the second quarter of 2012, operating revenues, which represent revenues from banking operations and insurance, pension plan and capitalization operations, totaled R$20,268 million, growing 1.8% from the previous quarter and 11.7% from the same period of the previous year. The main components of operating revenues and other items of results are presented below.

Managerial Financial Margin

The managerial financial margin for the second quarter of 2012 totaled R$13,469 million, an increase of R$163 million in relation to the first quarter of 2012. The managerial financial margin with clients totaled R$12,340 million, stable in relation to the previous period, despite of having been affected by the reduction in the annualized Brazilian benchmark rate (SELIC), which reached 8.5% at the end of the quarter and caused a R$210 million impact on financial margin in this quarter. The financial margin with the market amounted to R$1,129 million, an increase of R$175 million from the previous quarter.

In relation to the first half of 2011, our managerial financial margin increased 13.3% as a result of the increase of 12.2% in the financial margin with clients and of 28.3% in the financial margin with the market. The reduction in the annualized Brazilian benchmark rate (SELIC), impacted R$541 million on the margin of this half when compared to the first half of 2011.

Banking Services Fees and Income from Banking Charges

Management Discussion & Analysis Itaú Unibanco Holding S.A. 9

Executive Summary

In the second quarter of 2012, banking service fees, including income from banking charges, increased 1.5% from the first quarter of 2012, totaling R$5,078 million. This growth was, mainly due to increased revenues from current account services and from asset management, however impacted negatively by the reduction of Orbitall revenues (around R$80 million lower than usual) entity sold in the quarter.

Result from Loan Losses, Net of Recovery

The result from loan losses, net of recovery, was practically stable in relation to the previous quarter, with a slight increase of 0.5%, totaling R$4,862 million in the quarter. The expenses for provisions for loan losses decreased R$43 million in the quarter (a drop of 0.7%) to R$5,988, but they were offset by a reduction of R$66 million in the income from recovery of credits previously written off as losses, which totaled R$1,126 million.

As presented on page 6, since the beginning of 2012, the discounts granted in the recovery of credits written off as losses are no longer deducted from the financial margin and started to deduct the income from the recovery of these credits. In the first half of 2011, these discounts amounted to R$287 million. If the effects of this change were disregarded, the income from the recovery of credits written off as losses for the first half of 2012 would have remained practically unchanged in relation to the income for the first half of 2011.

Non-Interest Expenses

In the second quarter of 2012, non-interest expenses increased R$258 million in relation to the previous quarter (3.2%), totaling R$8,411 million in the quarter. Personnel expenses grew 1.3% due to the increase in expenses with employee terminations and labor claims mainly related to the effects of the restructuring process carried out at Itaú Unibanco. If this increase in expenses with employee terminations were disregarded, personnel expenses would have dropped by 0.9%. Administrative expenses increased R$231 million (6.7%) in the quarter, mainly due to seasonal factors and higher marketing expenses in the quarter, in addition to the standardization of accounting criteria for depreciation between group companies. When compared to the first half of 2011, expenses grew 5.8% as a result of the effects of the completion of the integration of Itaú and Unibanco and the dissemination of practices related to the efficiency project which accounts for the strong performance in the control of our expenses. Disregarding expenses increased in the semester due to terminations and its corresponding labor claims, total non-interest expenses would have remained normally unchanged in the year to date.

Efficiency Ratio (E.R.) and Risk-Adjusted Efficiency Ratio (R.A.E.R) ^(*)

(*) The criteria for calculating the ratios are detailed on page 23

In the second quarter of 2012, the efficiency ratio reached 45.0%, an increase of 50 basis points from the first quarter. In the year to June, the efficiency ratio reached 44.8%, a decrease of 280 basis points from the same period of the previous year. This was a result of the 12.2% increase in operating revenues in relation to an increase of 5.8% in non-interest expenses.

The risk-adjusted efficiency ratio for the second quarter of 2012 was 73.0%, an increase of 40 basis points from the first quarter of 2012, due to the same factors that impacted the efficiency ratio, partially offset by the increase in loan losses and claims net of recovery.

Unrealized Gains

Unrealized gains grew 40.5% from the previous quarter and totaled R$5,796 million at the end of the second quarter of 2012. The main effects arise from the higher market value of our securities and credit portfolios. The balance of the unrealized gains from our available for sale portfolio reached R$1,517 million in June, 2012.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 10

Executive Summary

Balance Sheet | Assets

													R$ million
										Variation
										Jun 30,12 -			Jun 30,12 -
	Jun 30,12			Mar 31,12			Jun 30,11			Mar 31,12			Jun 30,11
Current and Long-term Assets		875,964			885,032			782,732			-1.0	%		11.9	%
Cash and Cash Equivalents		13,614			10,551			15,186			29.0	%		-10.3	%
Short-term Interbank Investments		119,934			144,399			98,445			-16.9	%		21.8	%
Securities and Derivative Financial Instruments		214,369			201,616			180,733			6.3	%		18.6	%
Interbank and Interbranch Accounts		77,937			80,017			96,245			-2.6	%		-19.0	%
Loan, Lease and Other Loan Operations		356,789			347,369			316,964			2.7	%		12.6	%
(Allowance for Loan Losses)		(27,056	)		(25,951	)		(23,775	)		4.3	%		13.8	%
Other Assets		120,377			127,032			98,934			-5.2	%		21.7	%
Foreign Exchange Portfolio		36,584			49,092			24,869			-25.5	%		47.1	%
Other		83,793			77,939			74,065			7.5	%		13.1	%
Permanent Assets		12,845			11,809			10,947			8.8	%		17.3	%
Investments		3,265			2,634			2,974			24.0	%		9.8	%
Fixed and Operating Lease Assets		5,277			5,156			4,781			2.3	%		10.4	%
Intangible Assets and Goodwill		4,303			4,019			3,191			7.1	%		34.8	%
TOTAL ASSETS		888,809			896,842			793,679			-0.9	%		12.0	%

On June 30, 2012, our total assets amounted to R$888.8 billion, corresponding to a decrease of 0.9% when compared to the end of the previous quarter and an increase of 12.0% in relation to the same period of the previous year. We highlight the drop of 16.9% in short-term interbank investments in this quarter, explained by the reduction in deposits received under securities repurchase agreements, and the reduction of 25.5% in our foreign exchange portfolio, which was mainly impacted by the reduction of spot and forward exchange instruments, with an equivalent reduction in our liabilities. These drops were partially offset by increases of 2.7% in our credit operations (without endorsements and sureties), which totaled R$356.8 billion, and of 6.3% in our securities and derivative financial instruments portfolio.

In summary, the reduction of R$8.0 billion in our assets in the second quarter was a result of the reductions of R$24.5 billion in short-term interbank investments and of R$12.5 billion in the foreign exchange portfolio, which were partially offset by the increases of R$12.8 billion in securities and derivative financial instruments and of R$9.4 billion in the credit portfolio.

Balance Sheet | Liabilities and Equity

										R$ million
							Variation
							Jun 30,12 -			Jun 30,12 -
	Jun 30,12		Mar 31,12		Jun 30,11		Mar 31,12			Jun 30,11
Current and Long-term Liabilities		810,535		821,611		724,006		-1.3	%		12.0	%
Deposits		234,975		231,345		208,914		1.6	%		12.5	%
Demand Deposits		31,361		26,903		24,463		16.6	%		28.2	%
Savings Deposits		73,056		68,488		60,008		6.7	%		21.7	%
Interbank Deposits		9,686		8,569		2,802		13.0	%		245.6	%
Time Deposits		120,872		127,385		121,641		-5.1	%		-0.6	%
Deposits Received under Securities Repurchase Agreements		195,100		212,668		197,864		-8.3	%		-1.4	%
Fund from Acceptances and Issue of Securities		54,296		49,336		32,297		10.1	%		68.1	%
Interbank and Interbranch Accounts		8,100		9,331		8,519		-13.2	%		-4.9	%
Borrowings and Onlendings		55,579		52,074		52,947		6.7	%		5.0	%
Derivative Financial Instruments		9,215		7,623		6,887		20.9	%		33.8	%
Technical Provisions for Insurance, Pension Plans and Capitalization		82,553		77,830		66,703		6.1	%		23.8	%
Other Liabilities		170,717		181,405		149,875		-5.9	%		13.9	%
Subordinated Debt		42,948		44,984		37,210		-4.5	%		15.4	%
Foreign Exchange Portfolio		36,775		49,364		25,458		-25.5	%		44.5	%
Other		90,994		87,056		87,206		4.5	%		4.3	%
Deferred Income		821		843		829		-2.6	%		-0.9	%
Minority Interest in Subsidiaries		1,817		1,904		2,762		-4.6	%		-34.2	%
Stockholders' Equity		75,636		72,484		66,083		4.3	%		14.5	%
TOTAL LIABILITIES AND EQUITY		888,809		896,842		793,679		-0.9	%		12.0	%

Our stockholders’ equity grew 4.3% in the first quarter of 2012 and reached R$75,636 million. Liabilities dropped in the second quarter of this year due to the decrease of 8.3% in deposits received under securities repurchase agreements and reduction of 25.5% in the foreign exchange portfolio, which were offset by increases of 1.6% in deposits and of 6.1% in technical provisions for insurance, pension plan and capitalization. Year-on-year, stockholders’ equity showed a growth of 14.5%, deposits grew 12.5%, technical provisions for insurance, pension plan and capitalization increased 23.8% and the foreign exchange portfolio was up 44.5%.

In summary, the decrease in liabilities and equity in the second quarter is a result of the decreases of R$17.6 billion in deposits received under securities repurchase agreements and of R$12.6 billion in the foreign exchange portfolio which were partially offset by the increase of R$3.6 billion in deposits and of R$4.7 billion in the technical provisions for insurance, pension plan and capitalization.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 11

Executive Summary

Credit Portfolio with Endorsements and Sureties

The credit portfolio, including endorsements and sureties, amounted to R$413,399 million on June 30, 2012, growing 3.2% quarter-on-quarter, and 14.8% from the same period of the previous year.

In the individuals segment, the highlights were the mortgage loan and payroll loan (part of personal loan) portfolios, which increased 7.8% and 5.1% in the quarter, respectively. In the 12-month period, these products increased 43.3% and 30.0%, respectively.

The companies segment grew 4.3% in the quarter and 15.6% in the 12-month period. The corporate portfolio increased 5.8% in the quarter and 22.1% in the last 12 months, whereas the very small, small and middle market companies portfolio grew 1.9% from the first quarter of 2012 and 6.3% in the last 12 months, driven by the growth of the mid-sized companies portfolio.

Our operations in Latin America continue to grow consistently. In the first quarter of 2012, this portfolio grew 14.8% and totaled R$24,923 million. Year-on-year, the growth reached 60.8%.

The balance of endorsements and sureties totaled R$56,611 million on June 30, 2012, representing an increase of 6.5% in the quarter and of 31.2% in the last 12 months, mainly due to the higher volume of transactions with large companies, which grew 6.3% from March 31, 2012 and 30.8% in relation to June 30, 2011.

															R$ million
									Variation
									Jun/12 –			Jun/12 –			Jun/12 –
	Jun 30,12		Mar 31,12		Dec 31,11		Jun 30,11		Mar/12			Dec/11			Jun/11
Individuals – Brazil		147,331		147,570		147,573		135,942		-0.2	%		-0.2	%		8.4	%
Credit Card		36,777		36,574		38,961		34,555		0.6	%		-5.6	%		6.4	%
Personal Loans		38,243		37,351		35,069		30,262		2.4	%		9.1	%		26.4	%
Vehicles		56,575		59,054		60,093		60,141		-4.2	%		-5.9	%		-5.9	%
Mortgage Loans (*)		15,736		14,591		13,450		10,984		7.8	%		17.0	%		43.3	%
Companies (**) – Brazil		241,145		231,232		228,761		208,668		4.3	%		5.4	%		15.6	%
Corporate		149,487		141,253		138,384		122,453		5.8	%		8.0	%		22.1	%
Very Small, Small and Middle Market (***)		91,658		89,979		90,378		86,215		1.9	%		1.4	%		6.3	%
Argentina/Chile/Uruguay/Paraguay		24,923		21,717		20,678		15,497		14.8	%		20.5	%		60.8	%
Total with Endorsements and Sureties		413,399		400,519		397,012		360,107		3.2	%		4.1	%		14.8	%
Total Retail – Brazil (****)		238,989		237,549		237,950		222,157		0.6	%		0.4	%		7.6	%
Total Retail – Brazil (ex-Vehicles)		182,414		178,495		177,857		162,016		2.2	%		2.6	%		12.6	%
Endorsements and Sureties		56,611		53,150		51,530		43,144		6.5	%		9.9	%		31.2	%
Individuals		214		212		267		237		1.0	%		-19.8	%		-9.7	%
Corporate		51,170		48,123		46,630		39,113		6.3	%		9.7	%		30.8	%
Very Small, Small and Middle Market		3,662		3,409		3,214		2,969		7.4	%		13.9	%		23.3	%
Argentina/Chile/Uruguay/Paraguay		1,565		1,405		1,419		825		11.4	%		10.3	%		89.8	%

(*) The table does not include co-obligation in mortgage loan assignments made in 4Q11 in the amount of R$463.6 million. (**) In 2Q12, we reclassified part of corporate clients registered in the NY branch to the very small, small and middle market companies and, for comparison purposes, we reprocessed their history. (***) Includes Rural Loans to Individuals. (****) Includes Individuals and Very Small, Small and Middle Market companies. Note: the acquired payroll loans portfolio is considered a corporate risk. Mortgage and Rural Loans portfolios from the businesses segment are allocated according to the client’s size. For more details, see page 27. If the effect of the foreign exchange variation on the corporate portfolio is disregarded, the growth of this portfolio would be 2.8% in 2Q12 and 14.5% in the last 12 months and in our total credit portfolio, the growth would be 1.4% in 2Q12 and 10.4% in the last 12 months.

Credit Portfolio – Currency Disclosure

On June 30, 2012, R$75.5 billion of our total credit assets were denominated in, or indexed to, foreign currencies. With the depreciation of the Brazilian real in relation to these currencies, in particularly to the U.S. dollar, in relation to which it depreciated 10.9%, the total balance of loan operations in foreign currencies grew 14.4% in the second quarter of 2012.

NPL Ratio (overdue 90 days)

The NPL ratio for operations more than 90 days overdue (NPL-90), was practically unchanged in the quarter, representing 5.2% of our credit portfolio at the end of the second quarter of 2012. This indicator increased 10 basis points as compared to the ratio of the previous quarter and 70 basis points from June, 2011.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 12

Executive Summary

2012 Expectations

The table below presents our current expectations related to 2012:

	Expectation
Credit
Total Credit Portfolio (without vehicles for individuals)	Growth from 13% to 15%
Vehicle Portfolio for Individuals	Decreasing to
	R$ 50 billion - R$ 52 billion
Expenses for Provision for Loan Losses	3rd/Q12: From R$ 6.0 billion to R$ 6.5 billion
	4th/Q12: From R$ 5.7 billion to R$ 6.2 billion
Banking Service Fees and Result of Insurance, Pension Plan and Capitalization *	Growth of 10% to 12%
Non-Interest Expenses	Growth of 3.5% to 6.5%
Efficiency Ratio	Improvement of 200 to 300 basis points

(*) Banking Service Fees (+) Income from Insurance, Pension Plan and Capitalization Operations (-) Expenses for Claims (-) Selling Expenses with Insurance, Pension Plan and Capitalization.

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

Management Discussion & Analysis Itaú Unibanco Holding S.A. 13

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Management Discussion & Analysis Itaú Unibanco Holding S.A. 14

	analysis of net income
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012
	Management Discussion & Analysis

Analysis of Net Income

Managerial Financial Margin

Our managerial financial margin totaled R$13,469 million in the second quarter of 2012. This amount represents an increase of R$163 million in relation to the first quarter of 2012. With respect to the first half of 2012, the managerial financial margin grew 13.3% from the same period of 2011.

The main drivers of this variation are presented below:

																	R$ million
									Variation
									2nd Q/12 –					1st H/12 –
	2nd Q/12		1st Q/12		1st H/12		1st H/11		1st Q/12					1st H/11
Financial Margin with Clients		12,340		12,352		24,692		22,010		(12	)	-0.1	%		2,682			12.2	%
Interest Rate-Sensitive		1,191		1,474		2,665		3,716		(284	)	-19.2	%		(1,051	)		-28.3	%
Spread-Sensitive		11,149		10,878		22,028		18,294		271		2.5	%		3,733			20.4	%
Financial Margin with Market		1,129		954		2,084		1,625		175		18.4	%		459			28.3	%
Total		13,469		13,307		26,776		23,635		163		1.2	%		3,141			13.3	%

Financial Margin with Clients

The managerial financial margin with clients arises from the use of financial products by our clients, including both account holders and non-account holders.

In the second quarter of 2012, the financial margin with clients totaled R$12,340 million, corresponding to a 10 basis point decrease from the previous period, impacted by the reduction of the annualized Brazilian benchmark rate (SELIC), which was set at 8.5% per year at the end of the first half of 2012. For a better understanding of the financial margin, we divided the operations into two different groups: financial margin of operations that are sensitive to interest rate variations, and financial margin of operations that are sensitive to spreads.

Interest Rate-Sensitive Operations

The financial margin of operations that are sensitive to interest rates totaled R$1,191 million in the quarter, which corresponds to a drop of 19.2% from the previous quarter, mainly impacted by the reduction of average SELIC rate for the period, which reduced our financial margin sensitive to interest rates by R$ 210 million in this quarter from the previous quarter by R$ 541 million this half compared to the first half of last year.

The detailed evolution of these margins is shown on the next page of this report.

Annualized Rate of Interest Rate-Sensitive Operations

										R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 – 1st Q/12
Average Balance		67,842			70,134			(2,292	)		-3.3	%
Financial Margin		1,191			1,474			(284	)		-19.2	%
Annualized Rate		7.0	%		8.4	%					-140	bps

Spread-Sensitive Operations

The financial margin of spread-sensitive operations amounted to R$11,149 million in the period, corresponding to a 2.5%, or R$271 million increase from the previous quarter. The credit spread decreased 10 basis points in the quarter, whereas the spread of the other interest-bearing assets considered in this analysis was stable from the previous quarter. The combined spread of spread-sensitive operations decreased 10 basis points to 11.6% in the second quarter of 2012.

Annualized Rate of Spread-Sensitive Operations

									R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 – 1st Q/12
Average Balance		383,690			371,136			12,553		3.4	%
Financial Margin		11,149			10,878			271		2.5	%
Annualized Rate		11.6	%		11.7	%				-10	bps

Managerial Financial Margin with Market

The financial margin with the market basically arises from treasury transactions that include asset and liability management (ALM) and proprietary portfolio management. In this quarter, the financial margin with the market totaled R$1,129 million, an increase of R$175 million from the previous quarter. This variation was mainly due to the higher results from structural positions.

In the second quarter of 2012, we sold 11 million shares of BM&FBovespa, generating an income of R$100 million, reflected in our financial margin with the market. In the first quarter of 2012, we sold 15 million shares of BM&FBovespa, generating an income of R$136 million.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 16

Analysis of Net Income

Managerial Financial Margin with Clients

As a result of the changes described in the prior page, the Net Interest Margin – NIM, which is the annualized rate of the managerial financial margin with clients and does not consider the financial margin with the market, reached 10.9% in the second quarter of 2012. Taking into consideration the effect of the criteria for accounting for discounts granted in renegotiations of credits that had already been written off as losses adopted, in the first quarter of 2012, the NIM rate for the second quarter of 2011 would have been 10 basis points higher.

Also, taking into consideration the financial margin with clients after the expenses for provision for loan losses, net of the recovery of credits that had previously been written off as losses, the risk adjusted NIM reached 6.6%.

																						R$ million
	2nd Q/12								1st Q/12								1st H/12
						Average								Average								Average
	Average			Financial		Rate			Average			Financial		Rate			Average			Financial		Rate
	Balance			Margin		(p.y.)			Balance			Margin		(p.y.)			Balance			Margin		(p.y.)
Demand Deposits + Floatings		40,688								37,953								39,666
(-) Compulsory Deposits		(13,141	)							(11,742	)							(12,567	)
Contingent Liabilities (-) Deposits in guarantee of Contingent Liabilities		944								1,130								1,046
Tax and Social Security obligations (-) Deposits in guarantee		15,079								15,226								15,267
Working Capital (Equity + Minority Interests - Permanent Assets - Capital Allocated to Treasury - Cash Equivalents Abroad)		43,532								46,070								44,339
(-) Tax Credits		(30,337	)							(28,850	)							(29,684	)
Interest Rate-Sensitive Operations in Brazil		56,765			1,184		8.3	%		59,786			1,468		9.8	%		58,068			2,651		9.2	%
Interest Rate-Sensitive Operations Abroad		11,077			7		0.3	%		10,347			6		0.3	%		10,986			13		0.3	%
Interest Rate Sensitive Margin with Clients (A)		67,842			1,191		7.0	%		70,134			1,474		8.4	%		69,054			2,665		7.7	%

	Average			Financial			Spread			Average			Financial			Spread			Average			Financial			Spread
	Balance			Margin			(p.y.)			Balance			Margin			(p.y.)			Balance			Margin			(p.y.)
Cash and Cash Equivalents + Interbank Deposits + Securities (*)		52,294									50,024									53,399
Interbank and Interbranch Accounts (**)		4,725									3,311									3,963
Spread-Sensitive Margin with Clients – Other Assets		57,019			179			1.3	%		53,335			174			1.3	%		57,362			353			1.2	%
Loans, Leasing and Other Credits		353,186									343,833									348,672
(Allowance for Loan Losses)		(26,515	)								(26,031	)								(26,319	)
Spread-Sensitive Margin with Clients – Credit (B)		326,671			10,971			13.4	%		317,801			10,704			13.5	%		322,353			21,674			13.4	%
Spread-Sensitive Margin with Clients (C)		383,690			11,149			11.6	%		371,136			10,878			11.7	%		379,715			22,028			11.6	%
Net Interest Margin with Clients (D = A+C)		451,532			12,340			10.9	%		441,270			12,352			11.2	%		448,769			24,692			11.0	%
Provision for Loan and Lease Losses (E)					(5,988	)								(6,031	)								(12,020	)
Recovery of Credits Written Off as Losses (F)					1,126									1,192									2,318
Net Interest Margin with Credit after Provision for Credit Risk (G = B+E+F)		326,671			6,108			7.5	%		317,801			5,865			7.4	%		322,353			11,973			7.4	%
Net Interest Margin after Provision for Credit Risk (H = D+E+F)		451,532			7,478			6.6	%		441,270			7,513			6.8	%		448,769			14,991			6.7	%

(*) Cash and Cash Equivalents + Interbank Deposits + Securities (-) Interbank Deposits related to Repurchase Liability (-) Derivative financial instruments (-) Assets Guaranteeing PGBL/VGBL Technical Provisions (-) Operations Sensitive to Variations in Interest Rate; (**) Net of compulsory deposits (Central Bank).

Net Interest Margin with Clients and Net Interest Margin of Credit before and after Provision for Credit Risk

Management Discussion & Analysis Itaú Unibanco Holding S.A. 17

Analysis of Net Income

Complementary Aspects in Analysis of Financial Margin with Clients

Evolution of the Loan Portfolio Mix (excluding endorsements and sureties)

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

Loan Portfolio Mix – Companies

The mix of our credit portfolio to companies at June 30, 2012 in relation to 2011, shows a reduction in the proportion of the very small and small market companies compared to that of middle market and large companies.

Loan Portfolio Mix – Individuals

The evolution of our credit portfolio mix for individuals in the same period shows the growth of the mortgage loan and payroll loan portfolios. The decreased share of the vehicle portfolio in our mix is a result of greater selectivity in loans originated since the second half of 2011, and the maturity of this portfolio.

Loan Portfolio by Origination Period

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

In this quarter, despite the greater selectivity in origination of vehicle financing and personal loans, we noted that the volume of originations for the other types of loans remained practically unchanged. Additionally, given the profile of the terms of our different credit products, the composition of new contract vintages also showed a similar profile over the last periods. On June 30, 2012, 43.7% of the credit portfolio was composed of vintages from 2012, 30.0% from 2011, 16.0% from 2010, 4.8% from 2009 and 5.5% from previous years.

We see, therefore, that the operations originated until 2010, corresponding mostly to vehicle and mortgage loans that have longer average maturity terms, already represent a smaller portion of the portfolio. The credits granted since the second half of 2011, which have a better risk profile, already represent 61.5% of our credit portfolio.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 18

Analysis of Net Income

Banking Service Fees and Income from Banking Charges and Result from Insurance, Pension Plans and Capitalization

																	R$ million
									Variation
	2ndQ/12		1stQ/12		1stH/12		1stH/11		2nd Q/12 - 1 stQ/12					1 stH/12 - 1stH/11
Asset Management		741		707		1,447		1,275		34		4.9	%		173			13.5	%
Current Account Services		807		750		1,557		1,207		57		7.6	%		350			29.0	%
Credit Operations and Guarantees Provided		656		687		1,343		1,572		(31	)	-4.5	%		(229	)		-14.6	%
Collection Services		355		345		700		631		10		2.9	%		69			11.0	%
Credit Cards		2,029		2,031		4,059		3,496		(2	)	-0.1	%		563			16.1	%
Data processing service fees from Orbitall		34		115		149		190		(81	)	-70.4	%		(41	)		-21.6	%
Other		491		484		975		959		7		1.4	%		16			1.7	%
Banking Service Fees and Income from Banking Charges		5,078		5,003		10,082		9,140		75		1.5	%		942			10.3	%
Result from Insurance, Pension Plans and Capitalization(*)		710		750		1,460		1,214		(40	)	-5.4	%		246			20.2	%
Total		5,788		5,754		11,542		10,354		35		0.6	%		1,188			11.5	%

(*) Income from insurance, pension plan and capitalization operations (-) Expenses for claims (-) Selling expenses with insurance, pension plan and capitalization.

In the second quarter of 2012, banking service fees, including income from banking charges, amounted to R$5,078 million, an increase of 1.5% in relation to the previous quarter. In the year to June, these service fees showed a growth of 10.3% in relation to the first half of 2011. Additionally, if the revenues from the processing services rendered by Orbitall, which was sold in May 2012, were disregarded, service fees would have increased 3.2% and 11.0% when compared to the first quarter of 2012 and the first half of 2011, respectively.

Taking into consideration the result of insurance, pension plans and capitalization operations, the balance totaled R$5,788 million, with a 0.6% increase from the previous quarter.

Asset Management

Asset management revenues totaled R$741 million in the second quarter of 2012, an increase of 4.9% from the first quarter of 2012 due to the higher number of working days in the period when compared to the previous quarter. In the year to June, these revenues showed a growth of 13.5% in relation to the first half of 2011. The volume of assets under our management totaled R$422.6 billion in June 2012, remaining practically unchanged in relation to the previous quarter.

Current Account Services

Revenues from current account services totaled R$807 million in the second quarter of the year, representing a 7.6% growth quarter-on-quarter, mainly influenced by the readjustment of current account charges in March 2012.

Credit Operations and Guarantees Provided

Revenues from credit operations and guarantees provided totaled R$656 million in the second quarter, a decrease of 4.5% from the previous quarter. These changes were influenced by the decrease in new vehicle financing and leasing transactions.

Collection Services

Revenues from collection services reached R$355 million, which represented a 2.9% increase in relation to the first quarter of 2012, mainly influenced by higher revenues from collections. In the year to June, these revenues showed a growth of 11.0% in relation to the first half of 2011.

Credit Cards

Credit card revenues amounted to R$2,029 million in the second quarter of 2012, remaining practically unchanged in relation to the previous period. In this quarter, we saw a reduction in revenues from credit card processing in the amount of R$81 million as a result of the disposal of Orbitall. In the year to June, credit card revenues showed a growth of 16.1% in relation to the first half of 2011.

Other					R$ million
	2ndQ/12 1		stQ/12		Variation
Foreign Exchange Services		25		24		2
Brokerage and Securities Placement		90		97		(7	)
Custody Services and Management of Portfolio		55		58		(4	)
Economic and Financial Advisory Services		125		95		30
Other Services		196		210		(14	)
Total		491		484		7

Revenues from economic and financial advisory services increased R$30 million, influenced by the higher volume of investment banking services.

Result from Insurance, Pension Plans and Capitalization

The result from insurance, pension plans and capitalization operations totaled R$710 million in the second quarter of 2012, a decrease of 5.4% million when compared to the first quarter of 2012. This decrease was mainly influenced by higher expenses with claims in the Life and Corporate Solutions lines. In the year to June, these revenues showed a growth of 20.2% in relation to the first half of 2011.

Banking Service Fees and Income from Banking Charges and Result from Insurance, Pension Plans and Capitalization

In the second quarter of 2012, the proportion of total banking service fees and income from banking charges, plus the result from insurance, pension plans and capitalization operations divided by total operating revenues – which includes, in addition to these revenues,, the managerial financial margin and other operating revenues – reached 28.6%. This ratio has fluctuated between 28.0% and 30.0% over the past few quarters, mainly due to the consistent performance of banking service fees and banking charges. The chart below presents the quarterly historical data of banking service fees, including the result from insurance, pension plans and capitalization operations and their relation with our operating revenues.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 19

Analysis of Net Income

Results from Loan Losses

																					R$ million
													Variation
													2nd Q/12 -					1stH/12 -
	2nd Q/12			1st Q/12			1st H/12			1st H/11			1st Q/12					1stH/11
Expenses for Provision for Loan and Lease Losses		(5,988	)		(6,031	)		(12,020	)		(9,487	)		43		-0.7	%		(2,533	)		26.7	%
Income from Recovery of Loans Written Off as Losses		1,126			1,192			2,318			2,600			(66	)	-5.6	%		(281	)		-10.8	%
Result from Loan and Lease Losses		(4,862	)		(4,839	)		(9,701	)		(6,888	)		(23	)	0.5	%		(2,814	)		40.9	%

The result from loan and lease losses, net of recovery, was practically stable in relation to the previous quarter, with a slight increase of 0.5%, totaling R$4,862 million in the quarter. The expenses for provisions for loan losses decreased R$43 million in the quarter (a drop of 0.7%) to R$5,988 million, but they were offset by a reduction of R$66 million of income from the recovery of credits that had previously been written off as losses, which totaled R$1,126 million. This provision level is mainly attributed to the high default levels of the vehicle, personal loan (mainly installment payment plans and overdraft accounts) and small and middle market company portfolios. In the renegotiations of credits that have already been written off as losses, we make provisions to cover 100% of the balance not received as cash; so as not to generate any result until a strong indication of the recovery of this credit is obtained.

As presented on page 6, since the beginning of 2012, the discounts granted in the recovery of credits written off as losses are no longer deducted from the financial margin and started to be deducted from the income from the recovery of these credits. In the first half of 2011, these discounts amounted to R$287 million. If the effect of this change were disregarded, the income from the recovery of credits written off as losses for the first half of 2012 would have remained practically unchanged in relation to the income for the first half of 2011.

Allowance for Loan Losses and Credit Portfolio

In June 2012, the balance of the credit portfolio without endorsements and sureties increased R$9,420 million (2.7%) in relation to March 2012, amounting to R$356,789 million, whereas the balance of the allowance for loan and lease losses grew R$1,105 million (4.3%) to reach R$27,056 million.

The complementary allowance for loan losses, in addition to the minimum required by Resolution No. 2,682/99 of the National Monetary Council (CMN), remained stable, at R$5,058 million, at the end of the second quarter of 2012.

Expenses for Provision for Loan Losses and Loan Portfolio

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

The ratio of expenses for provision for loan losses to the credit portfolio reached 1.7% in the second quarter of 2012, remaining stable in relation to the previous quarter.

Non–Performing Loans

Delinquency ratios and Non Performing Loans

							R$ million
	Jun 30,12			Mar 31,12			Jun 30,11
Non-performing Loans – 60 days (a)		22,424			21,471			17,374
Non-performing Loans – 90 days (b)		18,442			17,558			14,360
Credit Portfolio (c)		356,789			347,369			316,964
NPL Ratio [(a)/(c)] x 100 over 60 days		6.3	%		6.2	%		5.5	%
NPL Ratio [(b)/(c)] x 100 over 90 days		5.2	%		5.1	%		4.5	%
Coverage:
Non-performing Loans – 60 days		121	%		121	%		137	%
Non-performing Loans – 90 days		147	%		148	%		166	%

(a) Loans overdue for more than 60 days and that do not accrue revenues.

(b) Loans overdue for more than 90 days.

(c) Endorsements and sureties not included

Overdue Loans

The overdue credit portfolio grew 1.4% in the second quarter, whereas the balance of the allowance for loan and lease losses increased, as mentioned above, 4.3% in the same period.

							R$ million
	Jun 30,12			Mar 31,12			Jun 30,11
Overdue Loans		32,359			31,911			26,415
Allowance for Loan and Lease Losses		(27,056	)		(25,951	)		(23,775	)
Coverage		(5,303	)		(5,960	)		(2,640	)

Note: overdue loans are loan operations having at least one installment more than 14 days overdue, irrespective of collateral provided.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 20

Analysis of the Net Income

NPL Ratio | 90 days

The NPL ratio for operations more than 90 days overdue (NPL 90) was practically unchanged in the quarter and represented 5.2% of our credit portfolio in the second quarter of 2012. This indicator increased 10 basis points as compared to the ratio of the previous quarter and 70 basis points from June 2011.

NPL Ratio | 15 to 90 days

Short-term delinquency, measured based on the balance of operations overdue from 15 to 90 days, decreased by 30 basis points in the second quarter of 2012. The reduction was due to the decrease of 40 basis points for individuals and of 10 basis points for companies.

Coverage | 90 days

Note: The coverage ratio is derived from the division of the allowance for loans and lease losses balance by the balance of operations more than 90 days overdue. Until September 2010 the coverage ratio considered an additional countercyclical allowance.

The 90-day coverage ratio was practically stable in the quarter and reached 147% in June, impacted by the growth of 5.0% in the portfolio of credits overdue for more than 90 days followed by the growth of 4.3% in the balance of the allowance for loan losses, which reached R$27,056 million in June.

Credit Portfolio Write-Offs

Write offs from the credit portfolio totaled R$4,884 million in the second quarter of 2012, a decrease of R$968 million from the previous period and an increase of R$1,312 million from the second quarter of 2011. The ratio of written off operations to the average balance of the credit portfolio reached 1.4% in the second quarter of 2012, a decrease of 30 basis points when compared to the previous quarter and an increase of 20 basis points in relation to the same period of the previous year.

(1) Average balance of the two previous quarters.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 21

Analysis of the Net Income

Non-interest Expenses R$ million

													Variation
	2nd Q/12			1st Q/12			1st H/12			1st H/11			2ndQ/12 - 1st Q/12					1st H/12 - 1stH/11
Personnel Expenses		(3,438	)		(3,392	)		(6,830	)		(6,578	)		(46	)	1.4	%		(252	)	3.8	%
Administrative Expenses		(3,659	)		(3,428	)		(7,087	)		(6,682	)		(231	)	6.7	%		(405	)	6.1	%
Operating Expenses		(1,181	)		(1,234	)		(2,415	)		(2,235	)		53		-4.3	%		(180	)	8.1	%
Other Tax Expenses (*)		(133	)		(99	)		(232	)		(162	)		(33	)	33.3	%		(71	)	43.6	%
Total		(8,411	)		(8,153	)		(16,564	)		(15,657	)		(258	)	3.2	%		(908	)	5.8	%

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

In the second quarter of 2012, non-interest expenses totaled R$8,411 million, an increase of 3.2% in relation to the previous quarter. This growth was mainly due to the increase of R$231 million in administrative expenses and of R$46 million in personnel expenses. When compared to the first half of 2011, expenses grew 5.8% as a result of the effects of the completion of the integration of Itaú and Unibanco and the dissemination of the practices related to the efficiency project, which accounts for the strong performance in the control of our expenses.

Personnel Expenses

R$ million

	2nd Q/12			1st Q/12			Variation
Compensation		(1,422	)		(1,466	)		44
Charges		(522	)		(519	)		(3	)
Social Benefits		(335	)		(345	)		10
Training		(68	)		(55	)		(13	)
Profit Sharing (*)		(645	)		(635	)		(11	)
Employee Terminations and Labor Claims		(446	)		(373	)		(73	)
Total		(3,438	)		(3,392	)		(46	)

^(*) Includes variable compensation and stock option plans

Personnel expenses totaled R$3,438 million in the second quarter, representing an increase of 1.4% from the previous period, as a result of the increase in expenses with employee terminations and labor claims due to the effects of the restructuring processes carried out at Itaú Unibanco. If the increase of R$73 million in expenses with employee terminations and labor claims was disregarded, personnel expenses would have dropped 0.9% in relation to the first quarter of 2012. Additionally, if compared to the expenses of the first half of 2011 and if the expenses with employee terminations and labor claims were disregarded, personnel expenses would have increased by only R$1.0 million. Our volume of expenses with employee terminations and labor claims was R$ 254 million higher than the three-month average after the association between Itaú and Unibanco and the end of 2011 (R$192 million).

Number of Employees

The number of employees went from 102,694 in March 2012 to 99,017 in June 2012, primarily due to the sale of Orbitall, which reduced our number of employees by 1,228, but also due to the effects of the ongoing restructuring of the consumer credit area.

Obs: For companies under the control of Itaú Unibanco, 100% of the number of employees is considered. No employee is considered for companies that are not under Itaú Unibanco’s control.

Administrative Expenses

R$ million

	2nd Q/12			1st Q/12			Variation
Advertising, Promotions and Publications		(259	)		(188	)		(71	)
Depreciation and Amortization		(437	)		(377	)		(60	)
Third-Party Services		(823	)		(777	)		(46	)
Facilities		(588	)		(554	)		(34	)
Financial System Services		(129	)		(111	)		(18	)
Travel		(51	)		(39	)		(13	)
Data Processing and Telecommunications		(881	)		(871	)		(10	)
Other		(134	)		(132	)		(2	)
Security		(130	)		(133	)		2
Transportation		(125	)		(131	)		5
Materials		(101	)		(116	)		15
Total		(3,659	)		(3,428	)		(231	)

Administrative expenses increased 6.7% from the previous quarter, driven by a R$71 million increase in expenses with advertising, promotions and publications (influenced by the institutional campaigns “Vamos Jogar Bola” (“Let’s Play Soccer”) and “Redução da Taxa de Juros” (“Decrease in Interest Rates”), and by the increase in depreciation and amortization expenses of R$60 million (due to the standardization of accounting practices for depreciation between companies of the conglomerate). The increase in expenses with outsourced services of R$46 million, arising from the restructuring of the consumer credit area, also contributed to this change.

Operating Expenses R$ million

	2nd Q/12			1st Q/12			Variation
Provision for contingencies		(300	)		(382	)		82
Selling - Credit Cards		(410	)		(350	)		(60	)
Claims		(150	)		(165	)		16
Other		(321	)		(336	)		15
Total		(1,181	)		(1,234	)		53

In the second quarter, operating expenses decreased 4.3% from the previous quarter, mainly due to the decrease in the provision for contingencies of R$82 million, partially offset by the increase in credit card selling expenses of R$60 million, due to higher rewards program expenses.

Other Tax Expenses

In the second quarter of 2012, other tax expenses increased 33.3% from the previous quarter and 43.6% from the first half of 2011, mainly due to the levy of IOF on Foreign Exchange Operations and Exchange Rate Exposure that totaled R$54 million in the second quarter and R$78 million in the first half, affecting our efficiency rate by 20 basis points in the first half of 2012.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 22

Analysis of the Net Income

Efficiency Ratio and Risk-Adjusted Efficiency Ratio

We present the efficiency ratio and the risk-adjusted efficiency ratio, which includes the risk portions associated with banking transactions (result of the provision for loan losses) and insurance and pension plans transactions (claims).

Risk Ajusted Efficiency Ratio		Non-Interest Expenses (Personnel Expenses + Administrative Expenses + Operating Expenses + Other Tax Expenses) +Insurance Selling Expenses + Result from Loan Losses + Retained Claims
	=
		(Managerial Financial Margin + Banking Service Fees and Banking Charges + Operating Result of Insurance, Capitalization and Pension Plans before Retained Claims and Insurance Selling Expenses + Other Operating Income + Equity in Earnings of Affiliates and Other Investments + Nonoperating Income - Tax Expenses for ISS, PIS, Cofins and Other Taxes)

Efficiency Ratio

In the second quarter, the efficiency ratio reached 45.0%, a 50 basis point increase from the first quarter of 2012. The variation was due to a seasonal increase in non-interest expenses (3.2% from the previous quarter) higher than the increase in our operating revenues, which is composed of banking service fees and banking charges, managerial financial margin and the result of insurance, pension plans and capitalization transactions before claims and selling expenses (1.2% in the same period).

In the year to June, the efficiency ratio reached 44.8%, a decrease of 280 basis points from the same period of the previous year.

This improvement was a result of the 12.2% increase in operating revenues against an increase of 5.8% in non-interest expenses.

Risk-Adjusted Efficiency Ratio

The risk-adjusted efficiency ratio for the second quarter of 2012 was 73.0%, an increase of 40 basis points from the first quarter of 2012, due to the increase in the expenses with the provision for loan losses and to the same factors that impacted the efficiency ratio. In the 12-month period ended June 30, 2012, the risk-adjusted efficiency ratio reached 71.0%.

Usage of Operating Revenues

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

(*) Net of Tax Expenses for ISS, PIS and Cofins and Other.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 23

Analysis of the Net Income

Points of Service

At the end of the second quarter of 2012, our network comprised 5,006 branches and client service branches (CSB) in Brazil and abroad. The number of ATMs in the period totaled approximately 28 thousand, representing a 0.7% decrease from the previous quarter.

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

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

Automated Teller Machines (ATMs) | Brazil and Abroad

Note:	(i) Includes Banco Itaú Argentina and Chile, Uruguay and Paraguay companies.
	(ii) Includes ESBs (electronic service branches) and service points in third-party establishments.
	(iii) Does not include points of sale and ATMs of Banco 24h.

Tax Expenses for ISS, PIS, Cofins and Other

Tax expenses amounted to R$1,050 million in the second quarter of 2012, an increase of 0.8% from the previous quarter.

Income Tax and Social Contribution on Net Income

In the second quarter of 2012, Income Tax and Social Contribution on Net Income (CSLL) expense totaled R$1,345 million, a 4.4% decrease from the previous quarter.

The CSLL expense continues not to reflect the rate increase from 9% to 15% as the tax credits recorded are sufficient to offset this effect. Furthermore, a Direct Unconstitutionality Action filed by the National Confederation of the Financial System (CONSIF) in this regard is yet to be decided.

On June 30, 2012 the balance of the unrecorded remaining tax credit as a result of the CSLL rate increase totaled R$745 million.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 24

	balance sheet,
	balance sheet by
	currency,
	risk management
	and ownership
	structure
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012 Management Discussion & Analysis

Balance Sheet

Assets

On June 30, 2012, total assets amounted to R$888.8 billion, a decrease of 0.9% from the end of the previous quarter and an increase of 12.0% from the same period of the previous year. The breakdown of our assets and the details on their main components are presented below:

Total Assets

Assets Breakdown | June 30, 2012

Short-term Interbank Investments and Securities Portfolio

On June 30, 2012, the balance of our short-term interbank investments and securities portfolio, including derivative financial instruments, totaled R$334,303 million, corresponding to a 3.4% drop in relation to the previous quarter. The mix of short-term interbank investments and securities portfolio changed in the quarter, mainly due to the reduction in short-term interbank investments by R$24.5 billion and the increase in corporate securities by R$7.4 billion.

R$ million

																Variation
	Jun 30, 12		%			Mar 31, 12		%			Jun 30, 11		%			Jun/12 - Mar/12			Jun/12 - Jun/11
Short-term Interbank Investments		119,934		35.9	%		144,399		41.7	%		98,445		35.3	%		-16.9	%		21.8	%
Total Public Securities		96,545		28.9	%		95,518		27.6	%		87,778		31.4	%		1.1	%		10.0	%
Government Securities – Domestic		89,646		26.8	%		88,487		25.6	%		80,377		28.8	%		1.3	%		11.5	%
Government Securities – Foreign		6,899		2.1	%		7,031		2.0	%		7,401		2.7	%		-1.9	%		-6.8	%
Chile		2,238		0.7	%		1,663		0.5	%		645		0.2	%		34.6	%		246.9	%
Korea		1,672		0.5	%		1,640		0.5	%		295		0.1	%		2.0	%		466.8	%
Denmark		1,446		0.4	%		1,790		0.5	%		3,270		1.2	%		-19.2	%		-55.8	%
United States		510		0.2	%		831		0.2	%		1,137		0.4	%		-38.7	%		-55.2	%
Uruguay		329		0.1	%		189		0.1	%		404		0.1	%		74.1	%		-18.5	%
Paraguay		240		0.1	%		329		0.1	%		387		0.1	%		-27.1	%		-38.0	%
Colombia		143		0.0	%		1		0.0	%		0		0.0	%		0.0	%		0.0	%
Mexico		140		0.0	%		359		0.1	%		244		0.1	%		-60.9	%		-42.5	%
Argentina		104		0.0	%		170		0.0	%		206		0.1	%		-38.9	%		-49.6	%
Spain		0		0.0	%		0		0.0	%		782		0.3	%		0.0	%		-100.0	%
Other		76		0.0	%		59		0.0	%		31		0.0	%		30.3	%		148.2	%
Corporate Securities		40,140		12.0	%		34,838		10.1	%		31,409		11.3	%		15.2	%		27.8	%
PGBL/VGBL Fund Quotas		65,606		19.6	%		61,638		17.8	%		51,124		18.3	%		6.4	%		28.3	%
Derivative Financial Instruments		12,079		3.6	%		9,623		2.8	%		10,423		3.7	%		25.5	%		15.9	%
Total		334,303		100.0	%		346,015		100.0	%		279,178		100.0	%		-3.4	%		19.7	%

Evolution of Short-term Interbank Investments and Securities Portfolio

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

Management Discussion & Analysis Itaú Unibanco Holding S.A. 26

Balance Sheet

Short-term Interbank Investments and Securities Portfolio by maturity ^(*)

Our securities and derivative financial instruments are presented below in accordance with their maturity period, allowing us to see our positions by maturity date:

^(*) It does not consider the balance of the PGBL and VGBL plan securities portfolio.

Securities by Categories

Our securities portfolio is classified into three categories: trading, available-for-sale and held-to-maturity. On June 30, 2012, the securities portfolio totaled R$202,290 million and trading securities accounted for 69.3% of it. The breakdown of the securities portfolio is presented in the chart below:

Credit Portfolio

Credit Portfolio by Product

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

R$ million

									Variation
	Jun 30, 12		Mar 31, 12		Dec 31, 11		Mar 31, 11		Jun/12 – Mar/12			Jun/12 – Dec/11			Jun/12 – Jun/11
Individuals		155,172		154,434		154,001		141,150		0.5	%		0.8	%		9.9	%
Vehicles		56,575		59,054		60,093		60,141		-4.2	%		-5.9	%		-5.9	%
Credit Card		36,777		36,574		38,961		34,555		0.6	%		-5.6	%		6.4	%
Personal Loans		28,236		27,816		25,960		22,493		1.5	%		8.8	%		25.5	%
Own Payroll Loans		9,794		9,323		8,842		7,532		5.1	%		10.8	%		30.0	%
Mortgage Loans (*)		15,736		14,591		13,450		10,984		7.8	%		17.0	%		43.3	%
Rural Loans		278		274		287		257		1.1	%		-3.4	%		7.9	%
Argentina/Chile/Uruguay/Paraguay		7,778		6,802		6,408		5,187		14.3	%		21.4	%		49.9	%
Companies		201,616		192,934		191,482		175,814		4.5	%		5.3	%		14.7	%
Working Capital (**)		105,532		100,961		101,196		95,167		4.5	%		4.3	%		10.9	%
BNDES/Onlending		38,737		37,669		38,023		36,087		2.8	%		1.9	%		7.3	%
Export / Import Financing		20,998		19,615		18,318		13,741		7.1	%		14.6	%		52.8	%
Vehicles		7,183		7,663		8,077		8,789		-6.3	%		-11.1	%		-18.3	%
Acquired Payroll Loans		1,883		1,732		1,265		1,591		8.8	%		48.9	%		18.3	%
Mortgage Loans		7,004		6,612		6,100		5,659		5.9	%		14.8	%		23.8	%
Rural Loans		4,699		5,173		5,651		5,293		-9.2	%		-16.9	%		-11.2	%
Argentina/Chile/Uruguay/Paraguay		15,580		13,509		12,852		9,485		15.3	%		21.2	%		64.3	%
Total without Endorsements and Sureties		356,789		347,369		345,483		316,964		2.7	%		3.3	%		12.6	%
Endorsements and sureties		56,611		53,150		51,530		43,144		6.5	%		9.9	%		31.2	%
Total with Endorsements and Sureties		413,399		400,519		397,012		360,107		3.2	%		4.1	%		14.8	%
Private Securities (***)		19,339		17,067		15,220		15,598		13.3	%		27.1	%		24.0	%
Adjusted Total Risk		432,738		417,586		412,233		375,705		3.6	%		5.0	%		15.2	%

(*) Does not consider co-obligation in mortgage loan assignment in the amount of R$463.6 million. If it was considered, this portfolio would have reached R$16,200 million;

(**) Also includes Revolving, Receivables, Hot Money, Leasing, and other; (***) Includes Debentures, CRI and Commercial Paper.

The portfolio of credits to individuals grew 0.5% from the end of the first quarter of 2012 to reach R$155,172 million on June 30, 2012. This growth is primarily attributable to the following increases: 7.8% in mortgage loans, amounting to R$15,736 million; 5.1% in the own payroll loan portfolio, amounting to R$9,794 million and 14.3% in our operations in the Southern Cone, amounting to R$7,778 million. On the other hand, our vehicle portfolio dropped 4.2% to R$56,575 million.

The portfolio of credit to companies grew 4.5% in the quarter to R$201,616 million. The changes in this portfolio were driven by the increase in export/import financing of 7.1% to R$20,998 million, mortgage loans, of 5.9%, to R$7,004 million, and our operations in the Southern Cone, of 15.3%, to R$15,580 million, offsetting the reductions seen in vehicle and rural credit portfolios.

Taking into account our fixed income private securities portfolio and the balance of sureties and endorsements, the adjusted balance of our overall credit portfolio amounted to R$432,738 million, a growth of 3.6% from March 31, 2012.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 27

Balance Sheet

Credit Portfolio by Risk Level

On June 30, 2012, the share of credits rated “AA” to “C” in the total portfolio was 91.0%, which indicates a 60 basis points increase compared to the previous quarter.

Evolution of Loan Portfolio by Risk Level

Credit Portfolio by Business Sector (includes endorsements and sureties)

The changes in the portfolio of credit to companies are listed below:

R$ million					Variation
					Jun/12 –
Business Sector	Jun/12		Mar/12		Mar/12
Sugar and alcohol		8,570		7,899		671		8.5	%
Agribusiness and fertilizers		13,415		12,757		659		5.2	%
Food and beverage		13,962		13,222		741		5.6	%
Banks and other financial institutions		9,189		8,979		210		2.3	%
Capital assets		8,634		8,426		207		2.5	%
Pulp and paper		2,971		2,862		109		3.8	%
Electronic and IT		6,467		6,335		132		2.1	%
Energy and sewage		10,077		10,006		71		0.7	%
Pharmaceuticals and cosmetics		6,257		6,168		89		1.4	%
Real estate agents		13,963		13,415		548		4.1	%
Entertainment and tourism		3,721		3,607		114		3.2	%
Construction material		5,745		5,544		201		3.6	%
Steel and metallurgy		10,920		10,279		641		6.2	%
Mining		4,209		3,767		442		11.7	%
Infrastructure work		7,012		6,910		102		1.5	%
Oil and gas		4,257		4,151		106		2.6	%
Petrochemical and chemical		7,457		7,671		(214	)	-2.8	%
Clothing and footwear		5,394		5,431		(36	)	-0.7	%
Transportation		17,964		17,801		163		0.9	%
Vehicles and autoparts		19,018		18,751		267		1.4	%
Sundry		73,752		66,546		7,206		10.8	%
Total		252,957		240,529		12,427		5.2	%

Credit Concentration

Our loan, lease and other credit operations, including endorsements and sureties, are diversified in our credit portfolio. Around 20.5% of the credit risk was concentrated in the 100 largest debtors at the end of June 2012. The credit concentration of the 100 largest debtors is as follows:

R$ thousand	Jun/12
			% of
Loan, lease and other credit operations	Risk		Total
Largest debtor		4,070		1.0
10 largest debtors		25,280		6.1
20 largest debtors		40,950		9.9
50 largest debtors		64,414		15.6
100 largest debtors		84,541		20.5

Operations under Renegotiation

Our portfolio of credits under renegotiation, including extended, modified and deferred repayments, amounted to R$18,450 million at the end of the second quarter, which represents 5.2% of the total credit portfolio. At the end of the second quarter of 2012, the ratio of the allowance for loan losses to the renegotiated portfolio was 41.5% in the period, a decrease of 40 basis points from the previous quarter. The following chart presents the changes in the past few quarters:

The portfolio of operations under renegotiation includes both renegotiated operations from the portfolio that had already been written off as losses and overdue and renegotiated operations, provided that at least one of their installments had been paid. At the time of the renegotiation of credits that had already been written off as losses, we recognize a provision for the total amount renegotiated, which is reversed only when there is a strong indication of the recovery of this credit, thus not generating an immediate result. This result is observable after payments are received on a regular basis for a few months.

The coverage ratio of the allowance for loan losses to 90-day Non-Performing Loans (NPL) in the renegotiated portfolio was 126% on June 30, 2012, and the 90-day NPL index was 32.9%, a decrease of 10 basis points from the first quarter of 2012.

Other and Permanent Assets

In the second quarter of 2012, “other assets” decreased 5.2% and reached R$120,377 million, which is equivalent to 13.5% of our total assets. This item basically comprises “foreign exchange portfolio” (see Note 9 to the financial statements), “tax credits”, “taxes and contributions for offset” and “escrow deposits”.

Our permanent assets, in the amount of R$12,845 million, are represented by “non-consolidated Investments in Brazil and abroad”, “fixed assets” and “deferred charges”. This quarter, this account represented 1.4% of total assets and increased 8.8% in relation to the previous quarter, mainly due to the recording of our investment in Banco CSF (Banco Carrefour) amounting to R$816 million.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 28

Balance Sheet

Funding R$ million

							Variation
							Jun 30,12 -			Jun 30, 12 -
	Jun 30, 12		Mar 31, 12		Jun 30, 11		Mar 31,12			Jun 30,11
Demand Deposits		31,361		26,903		24,463		16.6	%		28.2	%
Savings Deposits		73,056		68,488		60,008		6.7	%		21.7	%
Time Deposits		120,872		127,385		121,641		-5.1	%		-0.6	%
Debentures (Linked to Repurchase Agreements and Third Parties’ Operations)		115,724		110,480		103,222		4.7	%		12.1	%
Funds from Bills (1)		38,757		37,318		19,519		3.9	%		98.6	%
(1) Total - Funding from Account Holders and Institutional Clients (*)		379,770		370,574		328,853		2.5	%		15.5	%
Onlending		34,694		34,932		34,277		-0.7	%		1.2	%
(2) Total – Funding from Clients		414,464		405,505		363,130		2.2	%		14.1	%
Assets Under Administration		422,623		423,205		379,392		-0.1	%		11.4	%
Technical Provisions for Insurance, Pension Plans and Capitalization		82,553		77,830		66,703		6.1	%		23.8	%
(3) Total – Clients		919,641		906,540		809,225		1.4	%		13.6	%
Interbank deposits		9,686		8,569		2,802		13.0	%		245.6	%
Funds from Acceptance and Issuance of Securities Abroad		12,973		10,953		11,736		18.4	%		10.5	%
Total Funds from Clients + Interbank Deposits		942,300		926,062		823,763		1.8	%		14.4	%
Repurchase Agreements (2)		81,941		103,253		95,684		-20.6	%		-14.4	%
Borrowings		20,885		17,142		18,670		21.8	%		11.9	%
Foreign Exchange Portfolio		36,775		49,364		25,458		-25.5	%		44.5	%
Subordinated Debt		42,948		44,984		37,210		-4.5	%		15.4	%
Collection and payment of Taxes and Contributions		4,238		5,837		9,385		-27.4	%		-54.8	%
Free Assets (3)		64,608		62,579		57,897		3.2	%		11.6	%
Free Assets and Other		251,395		283,159		244,306		-11.2	%		2.9	%
Total Funds (Free, Raised and Managed Assets)		1,193,695		1,209,221		1,068,068		-1.3	%		11.8	%

⁽¹⁾ Includes funds from Real Estate, Mortgage, Financial, Credit and Similar Notes; ⁽²⁾ It does not include own debentures., classified as funding; ⁽³⁾ Stockholders’ Equity + Minority Interests - Permanent Assets.

^(*) In June 2012, funds from Institutional Clients totaled R$25,365 million, which corresponds to 6.7% of the total raised with clients.

On June 30, 2012, total funds from clients, including interbank deposits, amounted to R$942,300 million, corresponding to an increase of R$16,238 million from the first quarter of 2012. The main drivers were increases of R$4,458 million in demand deposits, of R$4,568 million in savings deposits, of R$4,724 million in technical provisions for insurance, pension plans and capitalization and of R$5,244 million in debentures.

Under Brazilian legislation, debentures issued by our leasing company are classified as deposits received under securities repurchase agreements. Since upon their acquisition by the bank, which is the conglomerate’s leading institution, the debentures are traded with the same characteristics as those of CDBs and other time deposits and, therefore, they are included in total deposits from account holders. In the first quarter of 2012, this type of funding totaled R$113,159 million, including institutional clients.

Total funds (free, raised and managed assets) amounted to approximately R$1.2 trillion on June 30, 2012, a decrease of R$15,525 million when compared to March 2012, mainly driven by the reduction in repurchase agreements and foreign exchange portfolio.

Year-on-year, we highlight the increase of R$118,537 million in funds obtained from clients, together with interbank deposits and foreign borrowings through securities, mainly due to the increase in investment funds and managed portfolios, funds from notes and technical provisions for insurance, pension plans and capitalization. Total funds (free, raised and managed assets) grew R$125,628 million.

Funds from clients ⁽¹⁾

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

Management Discussion & Analysis Itaú Unibanco Holding S.A. 29

Balance Sheet

Ratio between Credit Portfolio and Funding

R$ million

										Variation
										Jun 30,12 -			Jun 30, 12 -
	Jun 30, 12			Mar 31, 12			Jun 30, 11			Mar 31,12			Jun 30,11
Funding from Clients + Account Holders		414,464			405,505			363,130			2.2	%		14.1	%
Funds from Acceptance and Issuance of Securities Abroad		12,973			10,953			11,736			18.4	%		10.5	%
Borrowings		20,885			17,142			18,670			21.8	%		11.9	%
Other (1)		16,242			24,099			20,066			-32.6	%		-19.1	%
Total (A)		464,565			457,699			413,601			1.5	%		12.3	%
(-) Reserve Required by BACEN		(86,936	)		(88,104	)		(94,011	)		-1.3	%		-7.5	%
(-) Cash (Currency) (2)		(13,614	)		(10,551	)		(15,186	)		29.0	%		-10.3	%
Total (B)		364,014			359,044			304,405			1.4	%		19.6	%
Loan Portfolio (C) (3)		356,789			347,369			316,964			2.7	%		12.6	%
C/A		76.8	%		75.9	%		76.6	%		90	bps		20	bps
C/B		98.0	%		96.7	%		104.1	%		130	bps		-610	bps

⁽¹⁾ These comprise installments of subordinated debts that are not included in the Tier II Referential Equity.

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

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

The ratio of the credit portfolio to funding before the deduction of compulsory deposits and cash and cash equivalents reached 76.8% in June 2012 compared to 75.9% in March 2012. If we take into consideration the compulsory deposits and cash and cash equivalents, this ratio reached 98.0% in June 2012 versus 96.7% in March 2012.

As of May 22, 2012, part of the funds that were previously intended for compulsory deposits started to be used in vehicle and small commercial vehicle financing and leasing operations due to the change in the criteria for the remuneration on compulsory deposits determined by Circular No. 3,569/11 and Circular No. 3,576/12 of the Central Bank of Brazil.

Ratio between Loan Portfolio and Funding

(*) Gross funding, disregarding the deductions of compulsory deposits and cash and cash equivalents.

External Funding ⁽¹⁾

The table below highlights the main issuances of Itaú Unibanco abroad in effect on June 30, 2012.

US$ million

		Balance at							Exchange			Balance at				Maturity
Instrument	Issuer	Mar 31,12		Issuances		Amortization			Variation			Jun 30,12		Issue Date		Date		Coupon %p.y.
Fixed Rate Notes(2)	Itaú Chile		97										97		07/24/2007		07/24/2017		UF(7) + 3.79	%
Fixed Rate Notes(3)	Itaú Chile		98										98		10/30/2007		10/30/2017		UF(7) + 3.44	%
Floating Rate Notes	Itaubank		393										393		12/31/2002		03/30/2015		Libor (8) + 1.25	%
Floating Rate Notes(4)	IBBA International		80				(6	)		(4	)		70		12/22/2005		12/22/2015		Euribor(9) + 0.55	%
Medium Term Notes(5)	IBBA Nassau		212				(212	)					-		05/30/2007		05/30/2012		9.21	%
Medium Term Notes	Banco Itaú Holding Cayman		1,000										1,000		04/15/2010		04/15/2020		6.20	%
Medium Term Notes	Banco Itaú Holding Cayman		1,000										1,000		09/23/2010		01/22/2021		5.75	%
Medium Term Notes(6)	Banco Itaú Holding Cayman		274							(27	)		247		11/23/2010		11/23/2015		10.50	%
Medium Term Notes	Banco Itaú Holding Cayman		250										250		01/24/2011		01/22/2021		5.75	%
Medium Term Notes	Banco Itaú Holding Cayman		500										500		06/15/2011		12/21/2021		6.20	%
Medium Term Notes	Banco Itaú Holding Cayman		550										550		01/24/2012		12/21/2021		6.20	%
Medium Term Notes	Banco Itaú Holding Cayman		1,250										1,250		03/19/2012		03/19/2022		5.65	%
Other Notes(10)			3,894		747								4,641
Total			9,599		747		(219	)		(31	)		10,096

(1) The balances refer to principal amounts; (2) and (3) Amounts in US$ equivalent on the issuance dates to CHP 46.9 billion and CHP 48.5 billion, respectively; (4) Amounts in US$ equivalent on the issuance dates to 55 million; (5) and (6) Amounts in US$ equivalent on the date to R$387 million and R$500 million, respectively; (7) Development Financial Unit; (8) 180-day Libor; (9) 90-day Euribor; (10) Structured Notes.

On June 30, 2012, funds obtained abroad totaled US$10,096 million, an increase of US$497 million from the previous quarter (presented in the “Funding” table in the previous section as Foreign Borrowings through Securities and Subordinated Debt).

Management Discussion & Analysis Itaú Unibanco Holding S.A. 30

Balance Sheet by Currency ^(*)

We adopt a management policy for foreign exchange risk associated with our asset and liability positions that is primarily intended to prevent impacts on consolidated results from fluctuations in foreign exchange rate parities.

Brazilian tax legislation determines that gains and losses from exchange rate variations on permanent foreign investments must not be included in the tax basis. On the other hand, gains and losses arising from financial instruments used to hedge such asset positions are impacted by tax effects. Therefore, in order not to expose net income to foreign exchange rate variations, a liability position must be built at a higher volume than the hedged assets.

The Balance Sheet by Currency shows our assets and liabilities denominated in local and foreign currencies. On June 30, 2012, the net foreign exchange position was a liability of US$5,565 million.

Assets | Jun30, 2012

				Business in Brazil								R$ million
										Foreign		Business
	Consolidated			Total			Local Currency			Currency		Abroad
Cash and Cash Equivalents		13,614			8,885			6,083			2,802		5,960
Short - Term Interbank Deposits		119,934			111,383			105,731			5,652		14,221
Securities		214,369			188,550			188,321			230		57,869
Loan, Lease and Other Loan Operations		329,733			273,248			260,253			12,995		62,930
Loans		356,789			299,348			286,353			12,995		63,885
(Allowance for Loan Losses)		(27,056	)		(26,100	)		(26,100	)		-		(956	)
Other Assets		198,314			170,822			157,779			13,043		39,438
Foreign Exchange Portfolio		36,584			15,693			4,396			11,297		32,280
Other		161,730			155,128			153,383			1,746		7,158
Permanent Assets		12,845			29,910			12,048			17,862		797
Total Assets		888,809			782,798			730,214			52,584		181,215
Derivatives - Purchased Positions											75,671
Total Assets After Adjustments (a)											128,255

Liabilities and Equity | Jun30, 2012

			Business in Brazil							R$ million
							Foreign			Business
	Consolidated		Total		Local Currency		Currency			Abroad
Deposits		234,975		171,048		170,781		267			71,295
Funds Received under Securities Repurchase		195,100		187,179		187,179		-			7,921
Funds from Acceptances and Issue of Securities		54,296		72,177		41,097		31,080			12,217
Borrowings and On Lendings		55,579		43,227		34,948		8,278			19,098
Interbank and Interbranch Accounts		8,100		7,907		5,929		1,978			193
Derivative Financial Instruments		9,215		7,499		7,499		-			2,896
Other Liabilities		170,717		133,845		123,191		10,653			48,822
Foreign Exchange Portfolio		36,775		15,859		5,797		10,062			32,305
Other		133,942		117,985		117,394		591			16,517
Technical Provisions of Insurance, Pension Plans and Capitalization		82,553		82,522		81,184		1,338			31
Deferred Income		821		740		491		249			81
Minority Interest in Subsidiaries		1,817		1,018		1,018		-			799
Stockholders' Equity of Parent Company		75,636		75,636		75,636		-			17,862
Capital Stock and Reserves		68,906		68,906		68,906		-			17,248
Net Income		6,730		6,730		6,730		-			614
Total Liabilities and Equity		888,809		782,798		728,954		53,844			181,215
Derivatives - Sold Positions								85,660
Total Liabilities and Equity After Adjustments (b)								139,504
Net Foreign Exchange Position Itaú Unibanco (c = a - b)								(11,249	)
Net Foreign Exchange Position Itaú Unibanco (c) in US$								(5,565	)

(*) It does not consider eliminations of operations between local and foreign business units.

Assets and liabilities denominated in foreign currencies

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

							R$ million
	Balance Sheet						Variation
	Jun-12			Mar-12			jun 12 - mar 12
Investments Abroad		17,862			21,783			(3,921	)	-18.0	%
Net Foreign Exchange Position (Except Investments Abroad)		(29,111	)		(37,498	)		8,387		-22.4	%
Total		(11,249	)		(15,714	)		4,466		-28.4	%
Total in US$		(5,565	)		(9,670	)		4,105		-42.4	%

Management Discussion & Analysis Itaú Unibanco Holding S.A. 31

Risk Management

Risk Management

Itaú Unibanco regards risk management an essential instrument for optimizing the use of resources and selecting the best business opportunities in order to create value to its stockholders.

The risk management processes permeate the entire institution and has the full involvement of the Board of Directors and the Senior Management, which, through Committees and Commissions Superiors, determines the overall objectives, expressed as targets and limits to the risk management business units. The control units, in turn, support the bank’s management by means of monitoring procedures and risk analysis.

For additional information about risk management structure, we recommend you consult the Investor relations web site at www.itau-unibanco.com.br/ri >> Corporate Governance >> Risk Management Risk Circular 3,477.

Credit Risk

Our credit risk management aims at creating value to its stockholders managing the risk-adjusted return and maintaining the credit portfolio quality at levels appropriate to each market segment in which we operate.

The credit risk control is centralized, carried out by an independent executive area responsible for preparation of corporate guidelines for credit risk control, evaluation of credit policies and new products, establishment of the governance of model development, including its validation, calculation and monitoring of the referential equity, calculation of the parameters of the portfolio’s risk and return as well as its monitoring, and determination of rules and follow up of allowance for loan losses. Itaú Unibanco’s centralized process for validating and approving credit policies and models ensures the timing of credit actions and the optimization of business opportunities.

The loan portfolio, including sureties and endorsements, amounted to R$ 413,399 million on June 30, 2012, growing 3.2% compared to the balance of the first quarter of 2012. The balance of the allowance for loan and lease losses reached R$ 27,056 million.

Operational Risk

Our operational risk management structure in the whole organization establishes procedures for identifying, assessing, mitigating, monitoring and reporting operational risks, as well as the roles and responsibilities of the bodies that participate in this structure.

Liquidity Risk

The liquidity risk management aims at using the best practices in order to ensure sufficient liquidity to withstand potential outflows in times of market stress scenario, as well as to ensure the compatibility between funding and terms and liquidity of assets. We have a structure dedicated to improve monitoring, control and analyses by applying models of statistical and economic/financial forecasts of the variables that impact cash flows and the level of local and foreign currency reserve.

The ratio of credit portfolio to funding before deducting compulsory deposits and cash equivalents reached 76.8% in June, 2012, compared to 75.9% in March, 2012.

Market Risk

Our strategy is aimed at balancing corporate business goals, taking into account the political, economic and market conditions, market risk portfolio of the institution and expertise to operate in specific markets. The market risk control is based on a comprehensive and complementary use of methodologies as well as quantitative tools to estimate, monitor and manage risks, in line with best market practices.

VaR of Itaú Unibanco

The table showing the Consolidated Global VaR provides an analysis of the exposure to market risk faced by the portfolios of Itaú Unibanco and its foreign subsidiaries, and also demonstrates where there are higher concentrations of market risk. In this quarter we maintained our conservative management and portfolio diversification, keeping our policy of operating within lower limits in relation to our capital.

Aiming to improve the quality of the market risk quantitative information, Itau Unibanco has grouped the risk factors presented at the VaR Table for this quarter. The institution’s market risk exposure is not impacted by this format, which may be verified by the absence of changes in the totals of the Global VaR tables. The figures presented in this publication, which concern both current and previous years, already reflect the new disposition of grouped risk factors.

The recent changes related to the basic interest rate and savings account led to fluctuations in futures market interest rate structure, increasing the volatility of financial markets and increasing global VaR of the Itaú Unibanco’s portfolio this quarter.

VaR by Risk Factor				R$ million
	Jun 30, 12			Mar 31, 12
Itaú Unibanco
Interest rate		190.8			101.4
Foreign exchange linked interest rate		24.8			20.7
Foreign exchange		17.0			20.1
Prices index linked interest rate		229.6			27.0
Equities		17.7			23.0
Itaú Unibanco Foreign Units
Banco Itaú BBA International		1.6			1.8
Banco Itaú Argentina		2.4			2.5
Banco Itaú Chile		6.1			9.2
Banco Itaú Uruguay		1.7			1.2
Banco Itaú Paraguay		0.2			0.3
Diversification effect		(90.3	)		(64.7	)
Global VaR		401.5			142.5
Maximum VaR		601.4			181.7
Average VaR		401.2			154.3
Minimum VaR		118.0			135.1

Adjusted for tax effects. VaR refers to the maximum potential loss for a day, with 99% confidence level. Volatilities and correlations are estimated based on a methodology that confers higher weight to the most recent information.

Evolution of Itaú Unibanco's Value at Risk

Capital Adequacy

Itaú Unibanco maintains proper levels of Referential Equity in relation to the Required Referential Equity, which is a regulatory minimum requirement. We compare, on a systematic basis, this minimum requirement with our internal estimates of required economic capital and we concluded that it is, in aggregate, sufficient to cover the risks incurred, including those that are not directly covered in the Required Referential Equity.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 32

Capital Ratios (BIS)

Solvency Ratios | Economic-Financial Consolidated

										R$ million
										Variation
										Jun/12 -			Jun/12 -
	Jun 30,12			Mar 31,12			Jun 30,11			Mar/12			Jun/11
Stockholder´s Equity of Parent Company		75,636			72,484			63,731			3,151			11,905
(-) Intangible		(4,210	)		(3,810	)		(2,891	)		(400	)		(1,319	)
(=) Tangible Equity (A)		71,426			67,538			60,840			3,888			10,586
(=)Adjusted Risk-weighted Exposure (B)		606,149			568,693			524,654			37,456			81,495
Ratios (%)
BIS (Referential Equity / Total exposure weighted by risk)		16.9			16.1			16.1			80	bps		80	bps
Tier I		12.4			12.5			12.8			-10	bps		-40	bps
Tangible Capital (A) / ((B) (-) Intangible asset not eliminated in the weighting)		11.9			11.8			12.1			10	bps		-20	bps

On June 30, 2012, stockholders' equity of the parent company totaled R$75,636 million, an increase of R$3,151 million in relation to March 31, 2012.

The BIS ratio reached 16.9%, up 80 basis points from March 31, 2012, mainly due to the approval, by the Central Bank of Brazil, for subordinated debts amounting to R$6,095 million to compose the Tier II of the Referential Equity.

If we took into consideration the other issuances that are pending approval of the Central Bank of Brazil, amounting to R$1,777 million, our BIS ratio would have reached 17.2% (effect of 30 basis points).

The breakdown of the BIS ratio, including the Tangible Equity Ratio(*) is presented below.

Solvency Ratios

^(*) The Tangible Common Equity – TCE is defined internationally as equity less intangible assets, goodwill and preferred shares. In Brazil, preferred shares essentially fulfill the role of capital and, therefore, were not excluded. We point out that the tax credits were not excluded for this calculation and, therefore, do not represent the concept of core capital introduced by the Basel Pillar III.

Note: The Basel ratio of the financial system consolidated (another criterion used by the Central Bank of Brazil) reached 16.6% on June 30, 2012. The difference between the Basel ratios of the financial conglomerate and the economic-financial consolidated (CONEF) arises from the inclusion of non-financial subsidiary companies of its economic-financial consolidated, the funds of which, when necessary, may be distributed to financial companies, through the payment of dividends/JCP (interest on own capital) or corporate reorganization.

Referential Equity | Economic-Financial Consolidated

													R$ million
													Variation
													jun/12 –		jun/12 –
	Jun 30,12				Mar 31,12				Jun 30,11				mar/12		jun/11
Referential Equity Tier I		75,267	73.4	%		72,860	77.6	%		67,327	79.5	%		2,407		7,939
Referential Equity Tier II (*)		27,252	26.6	%		21,092	22.4	%		17,390	20.5	%		6,161		9,862
Referential Equity		102,519				93,951				84,717				8,568		17,802

^(*) Considers the Preferred shares with clause of redemption and the exclusion of borrowing instruments issued by financial institutions and adjustment to market value— securities and derivatives.

On June 30, 2012, our Referential Equity reached R$102,519 million, an increase of R$8,568 million when compared to March 31, 2012, mainly due to the approval, by the Central Bank of Brazil, for subordinated debts amounting to R$6,095 million to compose the Tier II of the Referential Equity. When compared to the same period of the previous year, the Referential Equity increased R$17,802 million.

The ratio between Tier I and Referential Equity reached 73.4%, a reduction of 420 basis points when compared to March 31, 2012 due to the increase of 29.2% in the Tier II Referential Equity in relation to the growth of 3.3% in the Tier I Referential Equity in the second quarter of 2012.

Subordinated Debt and Referential Equity Tier II | Jun 30, 2012													R$ million
	Maturities
	< 1 year		1 - 2 years		2 - 3 years		3 - 4 years		4 - 5 years		> 5 years		Total
CDB		5,202		3,222		1,657		4,368		1,349		-		15,799
Financial Treasury Bills		-		-		-		-		7,428		6,539		13,967
Euronotes		-		-		-		-		-		9,216		9,216
Eurobonds		-		-		-		-		-		-		-
Subordinated Debt		5,202		3,222		1,657		4,368		8,777		15,755		38,983
Subject to approval - Central Bank of Brazil (*) and Other		-		-		-		213		1		3,751		3,965
Subordinated Debt - Total		5,202		3,222		1,657		4,581		8,778		19,507		42,948
(*) Subordinated debt that does not make up the Tier II Referential Equity.
Subordinated Debt (part of Referential Equity Tier II)		-		644		663		2,621		7,022		15,755		26,705

Management Discussion & Analysis Itaú Unibanco Holding S.A. 33

Capital Ratios (BIS)

Exposure by Risk

							R$ million
							Variation
							Jun/12 -			Jun/12 -
	Jun 30,12		Mar 31,12		Jun 30,11		Mar/12			Jun/11
Exposure weighted by credit risk (EPR)		545,796		526,233		481,289		19,563			64,507
Portion required for credit risk coverage (PEPR = 0.11x(EPR))		60,038		57,886		52,942		2,152			7,096
FPR at 20%		437		355		379		82			58
FPR at 35%		184		175		10		9			174
FPR at 50%		4,759		4,598		3,841		161			917
FPR at 75%		13,166		13,585		14,126		(419	)		(960	)
FPR at 100%		37,722		35,996		33,197		1,726			4,526
FPR at 150%		1,616		1,427		-		189			1,616
FPR at 300%		1,846		1,438		1,085		409			762
Derivatives – potential future gain		308		313		304		(5	)		4
Portion required for operational risk coverage (POPR)		4,394		4,394		3,435		-			959
Portion required for market risk coverage		2,244		2,051		1,335		193			909
Operations subject to interest rate variation (PJUR)		2,064		1,828		1,143		236			921
Operations subject to commodity price variation (PCOM)		102		112		130		(11	)		(28	)
Operations subject to stock price variation (PACS)		79		111		62		(32	)		17
Total exposure weighted by risk (Risk Weight Assets - RWA) [EPR + (1/0.11x(Operational Risk+Market Risk)]		606,149		584,827		524,654		21,322			81,495

The total exposure weighted by risk amounted to R$606,149 million on June 30, 2012. The growth of R$21,322 million in relation to March 31, 2012 is mainly due to the increase of R$2,152 million in the portion required for credit risk coverage, influenced by the increase in the volume of non-retail credit operations. In addition to this change, the portion required for market risk coverage also grew R$193 million, mainly influenced by the implementation of calculation systems of the Central Bank of Brazil (Circular No. 3,568/BACEN).

In accordance with the Circular Letters No. 3,383 and No. 3,476 of the Central Bank of Brazil, the portion required to cover operational risk is recalculated every six months. In June 2012, this portion reached R$4,394 million.

Evolution of the composition of the risk weighted exposure

Composition of the portion to cover credit risk (PEPR = 0.11x(EPR))

ROA - Risk Adjusted

										2 ndQ/12 x			2 ndQ/12 x
	2ndQ/12			1stQ/12			2ndQ/11			1stQ/12			2 ndQ/11
ROA - Return on Assets (A)		1.6	%		1.6	%		1.7	%		0	bps		-10	bps
Return on Average Risk Weight Assets / Average Assets (B)		66.7	%		66.0	%		65.9	%		70	bps		80	bps
ROA Risk Adjusted (A/B)		2.4	%		2.5	%		2.6	%		-10	bps		-20	bps

In the second quarter of 2012, the annualized recurring return on average assets reached 1.6%, practically unchanged in relation to the previous quarter.

The relationship between the exposure weighted by credit, operational and market risks and the average total assets reached 66.7% in the second quarter of 2012 compared to 66.0% in the previous period, an increase of 70 basis points.

As a consequence, the risk-adjusted ROA, which considers the return and total weighted assets that require capital allocation, was 2.4% in the second quarter of 2012, representing a decrease of 10 basis points from the first quarter of 2012.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 34

Ownership Structure

The management of our ownership structure is mainly intended to optimize the capital allocation to the various segments comprising the conglomerate.

The average acquisition cost of treasury shares, as well as the activity of options granted to conglomerate executives under the Stock Option Plan, are set out in Note 16-f of the Complete Financial Statements.

The table below shows the number of shares of capital stock and treasury shares as of June 30, 2012, the average cost of the 53 million shares in Treasury was R$ 28.99 per share:

Number of Shares | Itaú Unibanco Holding S.A.

					In thousands
	Common Shares		Non-Voting Shares		Total
Balance of Shartes		2,289,286		2,281,650		4,570,936
Treasury Shares		2		53,295		53,297
Total Shares (-) Treasury		2,289,284		2,228,355		4,517,639

The organization chart below summarizes the current ownership structure on June 30, 2012:

Management Discussion & Analysis Itaú Unibanco Holding S.A. 35

Performance in the Stock Market

Performance in the Stock Market | 2^nd Q/12

Our voting and non-voting shares were traded on all BM&FBOVESPA’s sessions in 2012. Additionally, our non-voting shares are included in all stock exchange indexes where financial institution shares may be listed.

	(R$)			(R$)			(US$)
	Non-
	Voting			Common
	Shares			Shares			ADRs
	ITUB4			ITUB3			ITUB
Closing Price at 06/30/2012		28.29			25.41			13.92
Maximum price in quarter*		35.58			30.93			19.50
Average price in quarter		29.70			26.48			15.16
Minimum price in quarter**		26.73			24.30			12.84
Closing Price at 03/31/2012		34.93			30.30			19.19
Maximum price in the last 12 months		38.94			33.30			23.85
Average price in the last 12 months		32.00			27.68			18.04
Minimum price in the last 12 months		25.15			21.51			12.84
Closing Price at 06/30/2011		36.45			30.72			23.55
Change in the last 12 months		-22.4	%		-17.3	%		-40.9	%
Change in 2nd Q/12		-19.0	%		-16.1	%		-27.5	%
Average daily trading financial volume - last 12 months (million)		295			6			274
Average daily trading financial volume in 2nd Q/12 (million)		316			6			245

* prices on 04/02/12 for non-voting shares, 04/03/12 for common shares and ADRs.

** prices on 05/17/12 for non-voting shares , 06/28/12 for common shares and ADRs.

Price / Earnings *

(*) Closing price at the period-ended / Earnings per share

Price / Book Value *

(*) Closing price at the period-ended / Book Value per share

Annoucements to the Market | 2^nd Q/12

On May 31, 2012, we filed the Reference Form for 2011 with the Brazilian Securities and Exchange Commission (CVM).

The Form is an important source of financial information, risk management and management information, among other.

The document is available on the Investor Relations website: www.itau-unibanco.com/ir  >  Financial Statements  >  CVM Instructions 480/481.

Market Capitalization ^(*) vs. Ibovespa Index

As of June 30, 2012, our market capitalization was R$126,720 million. When compared to second quarter of 2002, our market capitalization grew the equivalent to 7.4 times, whereas the Ibovespa grew 4.9 times.

According to the information provided by Bloomberg, as of June 30, 2012, we were the 15^th largest bank in the ranking of banks by world market capitalization.

^(*) Average price of non-voting shares (the most liquid) at the last trading day of the period x total shares outstanding.

Market Consensus

Main market analysts periodically issue their recommendations on shares subject to their analysis. These recommendations help a number of investors to select the best option in which to invest.

Based on information provided by Bloomberg and Thomson Analytics, on July 17, we reproduce in the table below the recommendations on Itaú Unibanco Holding’s non-voting shares.

	Thomson		Bloomberg
Buy		9		15
Hold		5		6
Sell		2		2
Number of Analysts		16		23

Based on Bloomberg data, the average target price estimated for the end of 2012 is R$39.85. If we consider the closing price on June 30, there is a potential growth of 40.1% in the share price for the period, based on this third party analysis. Thomson does not publish the target price indicated by the analysts available.

Repurchase of Treasury Shares

Since November 2004, Itaú Unibanco has been disclosing, on a monthly basis, on its Investor Relations website, its transactions with its own shares. The voluntary disclosure on these transactions strengthens Itaú Unibanco’s commitment with the adoption of Corporate Governance best practices in its business.

In May 2012, we purchased 3,500,000 non-voting shares at the average price of R$28.30, totaling approximately R$99.1 million.To learn more, please visit: www.itau-unibanco.com/ir > Corporate Governance > Acquisition of Own Shares.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 36

Market Relations

Continuing the Apimec 2012 meeting cycle around Brazil, until July of 2012, we held 13 of the 22 meetings scheduled for the year, eight of which in events of Expo Money, a financial education-oriented fair. To date, 3,190 people participated in our Apimec meetings.

We also participated in all eight Expo Money fairs carried out in Brazil through June 2012. During these events, professionals from the Investor Relations area, Itaú Corretora and experts in investment products were available to talk to stockholders, investors and other stakeholders.

Apimec meetings scheduled to the third quarter as as follows:

APIMEC Meetings | 3rdQ 2012
Brasília*	Aug-17
Uberlândia	Aug-20
Campo Grande	Aug-23
Santos	Sep-04
Manaus	Sep-11
São Paulo	Sep-25

* To be held at Expo Money fair

Tender Public Offer (OPA) Redecard

In the first quarter, we announced to the market our intention to acquire the shares of non-controlling stockholders of Redecard S.A. (“Redecard”) and cancel its registry as a publicly-held company. Among other reasons, the Tender Offer arises from the view that the market in which Redecard operates is going through significant regulatory, competitive and technology changes, making that the business currently conducted by Redecard become more effective if it is conducted together with the financial operations and services performed by the bank. The draft of the Tender Offer, the two appraisal reports on Redecard shares, prepared by the specialized companies N M Rothschild & Sons (Brazil) Ltda. and Banco de Investimentos Credit Suisse (Brazil) S.A., and the two Fairness Opinions prepared by BR Partners Assessoria Financeira Ltda. and Citigroup Global Markets Inc., are available at the CVM website and at the investor relation session of Redecard session of Redecard website.

The Tender Offer is subject to (i) the approval of regulatory bodies; (ii) market conditions and (iii) terms of the draft of the call notice, especially section 3.7 – “Tender Offer Conditions", as provided on Redecard’s Investor Relations website on July 18, 2012 and filed with the CVM.

Ratings

In June, the ratings agency Moody’s disclosed the revision of Brazilian banks’ ratings based on a new global methodology. The new Itaú Unibanco’s and Itaú BBA’s ratings are one level above Brazil’s sovereign rating.

The ratings assigned to Itaú by the main ratings agencies are presented below:

Non–voting Shares (PN - ITUB4) Appreciation

The chart below shows the evolution of R$100 invested on June 30, 2002 through June 30, 2012, by comparing our stock prices, with and without reinvestment of dividends, to the performance of Ibovespa and CDI (Interbank Deposit Certificate). With an average growth of 21% p.y., our non-voting shares with dividends reinvested appreciated above Ibovespa and CDI.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 37

Awards

Sustainable Bank of the Year in the Americas: We were awarded by the British newspaper Financial Times and the IFC, the financial branch of the World Bank, as the sustainable bank of the year in the Americas, one of the most important awards in the world related to Sustainability, for the fourth consecutive year. In 2012, 181 institutions from 67 countries competed for this award.

World's Best Banks 2012: We were elected the Best Bank of Brazil and Paraguay, according to Global Finance magazine. The vncedores are chosen through research analysts, consultants and executives of financial institutions.

Agência Estado (AE) Projections Highlight: Itaú Asset Management received the Basic Top award and Itaú Unibanco received the Overall Top and Basic Top awards. The award, which is granted to the ten top ranked in the AE Projections Ranking, assesses the institutions whose projections for Brazil’s main economic indicators are the closest to real results.

Top Gestão of Valor Econômico magazine: Itaú Asset Management was considered the best asset manager in the year for variable income. The award, which is granted based on the analysis of Standard & Poor’s, selects the best managers in the Brazilian investment fund industry.

Partnership with Ideal Invest

Itaú Unibanco entered into an association agreement with Ideal Invest to increase the offering of student loans in Brazil. Ideal Invest is the manager of Pravaler, the largest private student loan program in Brazil.

The association, which is subject to the approval of regulatory bodies and the compliance with certain conditions to be completed, will provide Itaú Unibanco with an interest of 20% to 30% in the capital of Ideal Invest. Ideal Invest will be the manager of the student loan portfolios of both institutions.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 38

	analysis of segments
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012 Management Discussion & Analysis

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Management Discussion & Analysis Itaú Unibanco Holding S.A. 40

Analysis of Segments

Pro Forma Adjustments

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

The Activities with the Market + Corporation column presents the result from excess of capital, excess of subordinated debt and the net balance of tax assets and liabilities. It also shows the financial margin on market transactions, costs of Treasury operations, equity in the earnings of companies that are not linked to any segment, as well as those adjustments relating to minority shareholdings in subsidiaries and our interest in Porto Seguro.

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

In this quarter, the remaining balances of the credit card portfolio of current account holders from Unibanco, that were still classified in Consumer Credit, were reclassified to the Commercial Banking segment. For comparison purposes, credits related to March 31, 2012, and their corresponding provisions in the net amount of R$ 10.7 billion were also reclassified. These reclassifications did not affect the results.

As described on page 6 of this report, as from the first quarter of 2012, the criterion for accounting for discounts granted in renegotiations of credits that had already been written off as losses was improved. Theses discounts, which previously reduced the financial margin, started to be directly deducted from credit recovery income. In the first quarter, these discounts had not been segmented by channel and remained in the corporation accounts. Discounts are now reclassified to the proper segments, without changes in the respective net income, since this only represented a change between lines.

Allocated Capital

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

As from January 2011, the economic allocated capital model (EAC) was adopted for the Pro Forma financial statements by segment, which now considers, in addition to allocated capital Tier I, the allocated capital Tier II (Subordinated Debt) and the effects of the calculation of expected credit losses, in addition to that required by the Brazilian Central Bank Circular No. 2,682/99 of the CMN.

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

Based on this measure of capital, we determined the Risk Adjusted Return on Capital (RAROC), which corresponds to an operational performance ratio consistently adjusted to the required capital needed to support the risks assumed.

Income Tax Rate

As from the first quarter of 2011, we began to consider the full income tax rate, net of the tax effect of the payment of interest on own capital, for the Commercial Bank, Consumer Credit, Itaú BBA and Activities with the Market. The difference between the amount of income tax determined by segment and the amount of the effective income tax, as indicated in the consolidated financial statement, is allocated to the Activities with the Market + Corporation segment column.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 41

Analysis of Segments

The pro forma financial statements of the Commercial Bank, Consumer Credit, Itaú BBA and Activities with the Market + Corporation, presented below, are based on managerial information derived from internal models, so as to more accurately reflect the activities of the business units.

Pro Forma Balance Sheet by Segment | On June 30, 2012													R$ million
										Activities with
	Commercial			Consumer						the Market +
	Bank			Credit			Itaú BBA			Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		643,972			90,749			206,729			63,773			875,964
Cash and Cash Equivalents		11,951			-			1,663			-			13,614
Short-term Interbank Investments		167,015			-			23,724			3,911			119,934
Short-term Interbank Deposits in the Market		136,266			-			566			3,911			119,934
Short-term Interbank Deposits in Intercompany (*)		30,749			-			23,158			-			-
Securities and Derivative Financial Instruments		166,682			-			63,449			18,731			214,369
Interbank and Interbranch Accounts		73,316			-			4,685			-			77,937
Loan, Lease and Other Credit Operations		162,833			89,470			102,180			2,306			356,789
(Allowance for Loan Losses)		(14,330	)		(6,672	)		(987	)		(9	)		(21,998	)
(Complementary Expected Loss Provisions)		-			-			-			(5,058	)		(5,058	)
Other Assets		76,504			7,951			12,013			43,893			120,377
Foreign Exchange Portfolio		23,877			-			10,906			19,725			36,584
Others		52,627			7,951			1,107			24,168			83,793
Permanent Assets		7,764			1,710			1,030			2,341			12,845
Total Assets		651,736			92,459			207,759			66,114			888,809
Liabilities and Equity
Current and Long-Term Liabilities		620,172			81,554			195,036			43,060			810,535
Deposits		198,320			24			72,923			15,303			234,975
Deposits from Clients		182,924			24			42,174			15,303			234,975
Intercompany deposits (*)		15,395			-			30,749			-			-
Deposits Received under Securities Repurchase Agreements		118,476			57,936			53,077			(7,718	)		195,100
Securities Repurchase Agreements in the Market		110,713			57,936			40,297			(7,718	)		195,100
Securities Repurchase Agreements - Intercompany (*)		7,763			-			12,780			-			-
Funds from Acceptances and Issue of Securities		75,282			-			6,536			-			54,296
Interbank and Interbranch Accounts		5,043			21			3,101			-			8,100
Borrowings and Onlendings		23,446			3,371			30,124			-			55,579
Derivative Financial Instruments		4,461			-			7,887			-			9,215
Other Liabilities		112,591			20,201			21,388			35,474			170,717
Foreign Exchange Portfolio		24,219			-			10,756			19,725			36,775
Subordinated Debt and Other		88,372			20,201			10,633			15,749			133,942
Technical Provisions for Insurance, Pension Plans and Capitalization		82,553			-			-			-			82,553
Deferred Income		674			-			147			-			821
Minority Interest in Subsidiaries		-			-			-			1,817			1,817
Economic Allocated Capital - Tier I (**)		30,890			10,905			12,576			21,237			75,636
Total Liabilities and Equity		651,736			92,459			207,759			66,114			888,809

(*) The Intercompany operations were eliminated in the Consolidated.

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

Pro Forma Income Statement by Segment | 2nd Quarter of 2012													R$ million
										Activities with
	Commercial			Consumer						the Market +
	Bank			Credit			Itaú BBA			Corporation			Itaú Unibanco
Operating Revenues		13,024			3,605			1,930			1,721			20,268
Managerial Financial Margin		8,382			2,146			1,395			1,537			13,469
Banking Service Fees and Income from Banking Charges		2,991			1,450			555			88			5,078
Result from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses		1,449			7			10			0			1,466
Other Operating Income		125			4			(30	)		-			84
Equity in earnings of affiliates and Other investments		56			-			0			95			151
Non-operating Income		22			(2	)		(0	)		-			19
Loan and Retained Claims/ Losses net of Recovery		(3,888	)		(1,356	)		(212	)		82			(5,374	)
Expenses for Allowance for Loan Losses		(4,235	)		(1,545	)		(221	)		13			(5,988	)
Income from Recovery of Credits Written Off as Losses		858			190			9			69			1,126
Retained Claims		(511	)		-			-			-			(511	)
Operating Margin		9,136			2,249			1,718			1,803			14,895
Other Operating Income/(Expenses)		(6,860	)		(1,901	)		(811	)		(138	)		(9,705	)
Non-interest Expenses		(5,975	)		(1,659	)		(715	)		(67	)		(8,411	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(640	)		(242	)		(96	)		(72	)		(1,050	)
Selling Expenses From Insurance		(245	)		-			-			-			(245	)
Income before Tax and Profit Sharing		2,276			348			907			1,664			5,189
Income Tax and Social Contribution		(655	)		(46	)		(277	)		(367	)		(1,345	)
Profit Sharing		(22	)		(1	)		(27	)		(1	)		(52	)
Minority Interests in Subsidiaries		-			-			-			(214	)		(207	)
Recurring Net Income		1,599			301			604			1,082			3,585
(RAROC) – Return on Average Tier I Allocated Capital		20.3	%		10.5	%		20.7	%		22.4	%		19.4	%
Efficiency Ratio (ER)		50.2	%		49.3	%		39.0	%		4.0	%		45.0	%

Note: Non-interest Expenses item is made up of Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses.

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

Management Discussion & Analysis Itaú Unibanco Holding S.A. 42

Analysis of Segments

The pro forma financial statements of the Commercial Bank, Consumer Credit, Itaú BBA and Activities with the Market + Corporation, presented below, are based on managerial information derived from internal models, so as to more accurately reflect the activities of the business units.

Pro Forma Balance Sheet by Segment | On March 31, 2011													R$ million
										Activities with
	Commercial			Consumer						the Market +
	Bank			Credit			Itaú BBA			Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		647,679			90,020			183,176			86,759			885,032
Cash and Cash Equivalents		10,117			-			435			-			10,551
Short-term Interbank Investments		185,854			-			23,158			3,741			144,399
Short-term Interbank Deposits in the Market		155,105			-			(0	)		3,741			144,399
Short-term Interbank Deposits in Intercompany (*)		30,749			-			23,158			-			-
Securities and Derivative Financial Instruments		155,219			0			45,866			33,664			201,616
Interbank and Interbranch Accounts		74,582			4			5,449			-			80,017
Loan, Lease and Other Credit Operations		158,846			88,837			97,081			2,606			347,369
(Allowance for Loan Losses)		(14,216	)		(5,934	)		(730	)		(13	)		(20,893	)
(Complementary Expected Loss Provisions)		-			-			-			(5,058	)		(5,058	)
Other Assets		77,278			7,113			11,917			51,820			127,032
Foreign Exchange Portfolio		28,472			-			11,041			29,028			49,092
Others		48,806			7,113			876			22,792			77,939
Permanent Assets		7,356			1,669			1,084			1,700			11,809
Total Assets		655,035			91,689			184,260			88,459			896,842
Liabilities and Equity
Current and Long-Term Liabilities		622,177			79,681			173,367			68,986			821,611
Deposits		197,893			16			65,907			16,244			231,345
Deposits from Clients		182,497			16			35,158			16,244			231,345
Intercompany deposits (*)		15,395			-			30,749			-			-
Deposits Received under Securities Repurchase Agreements		121,382			59,239			45,116			9,666			212,668
Securities Repurchase Agreements in the Market		113,619			59,239			32,335			9,666			212,668
Securities Repurchase Agreements - Intercompany (*)		7,763			-			12,780			-			-
Funds from Acceptances and Issue of Securities		69,454			-			5,744			-			49,336
Interbank and Interbranch Accounts		6,722			18			2,608			-			9,331
Borrowings and Onlendings		21,142			3,310			28,881			-			52,074
Derivative Financial Instruments		5,310			-			6,321			-			7,623
Other Liabilities		122,444			17,098			18,791			43,076			181,405
Foreign Exchange Portfolio		28,724			-			11,060			29,028			49,364
Subordinated Debt and Other		93,720			17,098			7,731			14,048			132,041
Technical Provisions for Insurance, Pension Plans and Capitalization		77,830			-			-			-			77,830
Deferred Income		698			-			145			-			843
Minority Interest in Subsidiaries		-			-			-			1,904			1,904
Economic Allocated Capital - Tier I (**)		32,159			12,008			10,748			17,569			72,484
Total Liabilities and Equity		655,035			91,689			184,260			88,459			896,842

(*) The Intercompany operations were eliminated in the Consolidated.

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

Pro Forma Income Statement by Segment | 1st Quarter of 2011													R$ million
										Activities with
	Commercial			Consumer						the Market +
	Bank			Credit			Itaú BBA			Corporation			Itaú Unibanco
Operating Revenues		13,219			3,496			1,893			1,327			19,914
Managerial Financial Margin		8,632			2,100			1,357			1,215			13,307
Banking Service Fees and Income from Banking Charges		2,960			1,405			562			85			5,003
Result from Insurance, Pension Plans and Capitalization Operations Before Retained Claims and Selling Expenses		1,468			(12	)		5			0			1,461
Other Operating Income		99			11			(39	)		-			57
Equity in earnings of affiliates and Other investments		52			-			3			26			81
Non-operating Income		7			(8	)		5			0			4
Loan and Retained Claims/ Losses net of Recovery		(4,044	)		(1,299	)		(26	)		65			(5,304	)
Expenses for Allowance for Loan Losses		(4,366	)		(1,531	)		(79	)		(55	)		(6,031	)
Income from Recovery of Credits Written Off as Losses		787			232			53			120			1,192
Retained Claims		(465	)		-			-			-			(465	)
Operating Margin		9,175			2,197			1,867			1,393			14,610
Other Operating Income/(Expenses)		(6,771	)		(1,749	)		(785	)		(128	)		(9,440	)
Non-interest Expenses		(5,851	)		(1,521	)		(688	)		(86	)		(8,153	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(673	)		(229	)		(97	)		(42	)		(1,041	)
Selling Expenses From Insurance		(246	)		-			-			-			(246	)
Income before Tax and Profit Sharing		2,404			447			1,082			1,265			5,170
Income Tax and Social Contribution		(751	)		(86	)		(361	)		(211	)		(1,408	)
Profit Sharing		(26	)		(5	)		5			(1	)		(28	)
Minority Interests in Subsidiaries		-			-			-			(219	)		(191	)
Recurring Net Income		1,627			357			727			834			3,544
(RAROC) – Return on Average Tier I Allocated Capital		21.4	%		13.2	%		27.5	%		17.4	%		20.0	%
Efficiency Ratio (ER)		48.6	%		46.5	%		38.3	%		6.7	%		44.5	%

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

Management Discussion & Analysis Itaú Unibanco Holding S.A. 43

Analysis of Segments

Commercial Bank

The results from the Commercial Banking segment arise from the offer of banking products and services to a diversified client base, including individuals and companies. The segment includes retail clients, high income clients, high net-worth clients (private banking) and very small, small and middle market companies.

In the second quarter of 2012, the segment’s operating revenues decreased 1.5% from the previous quarter. The decreases of 2.9% in the financial margin and of 1.3% in the result of insurance, pension plans and capitalization operations were partially offset by the increase of 1.0% in banking service fees and income from banking charges and the increase of 26.3% in other operating income. Meanwhile, non-interest expenses grew 2.1% and loan and retained claim losses dropped 3.8%. These changes, among other things, generated a decrease of 1.7% in the recurring net income, of R$1.599 million, of the Commercial Bank segment when compared to the first quarter of 2012.

The credit portfolio totaled R$162,833 million at the end of the second quarter of 2012, increasing 18.5% when compared to the same period of the previous year. In the second quarter of 2012, the Commercial Bank segment’s return on allocated capital reached 20.3% a year and the efficiency ratio was 50.2%.

Some additional Commercial Bank Highlights:

Branch Network ^(*) | Individuals

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

Our products are available through our branch network and the “30 Horas” electronic channels and include: current accounts, investments, credit cards, personal loans, insurance, mortgage, vehicle financing and other banking products.

In the first six months of the year, we opened 39 branches and, at the end of the quarter, our branch network in Brazil comprised 4,714 points of service, including regular branches and Client Service Branches (CSB).

Retail Points of Service in Brazil ^(*)

(*) Does not include branches and CSBs abroad and Itaú BBA.

Geographical Distribution of Service Network ^(*)

Number of Branches and Client Service Branches (CSB)

Credit Portfolio

At the end of the first quarter of 2012, the credit portfolio of the individuals segment totaled R$74,837 million, an increase of 3.5% from the previous quarter.

In the quarter ended June 30, 2012, the credit portfolio of the companies segment, composed of very small, small and middle market companies with sales of up to R$150 million, grew 1.6% from the first quarter of 2012 and 5.7% from June 2011, to reach R$87,996 million.

Mortgage Loans

At the end of the second quarter of 2012, the mortgage loans portfolio, including securitized loans, amounted to R$23,204 million, with a growth of 6.9% and 56.0% in the quarter when compared to March 2012 and June 2011 respectively. The individuals portfolio, totaling R$16,199 million at the end of the second quarter, increased 7.4% when compared to the previous quarter and 74.6% in relation to the same period of the previous year, thus keeping the blistering pace of expansion that has characterized the real estate market in the past quarters. At the end of June 2012, the companies portfolio totaled R$7,004 million.

In the second quarter of 2012, the volume of new mortgage loan financing contracts for individuals was R$1,891 million, whereas financing to companies added up to R$1,420 million, totaling R$3,311 million in the period, corresponding to a growth of 17.7% when compared to the same period of the previous year.

Origination Volume

					R$ million
	2ndQ/12		1stQ/12		2ndQ/11
Individuals		1,891		1,798		1,947
Companies		1,420		1,016		2,645
Total		3,311		2,814		4,591

Management Discussion & Analysis Itaú Unibanco Holding S.A. 44

Analysis of Segments

Asset Management ^(*)

The Asset Management department, with more than R$322 billion in managed assets and 15.4% of the market share*, continues to focus on clients, increasingly expanding its product family. In addition to the strong local presence, the department is expanding internationally with professionals who are strategically allocated, searching for investment opportunities and solutions that are appropriate for global clients.

Asset Administration

We administer Privatization, Fixed Income and Equity Funds, Investment Clubs and Client Portfolios both in Brazil and abroad.

At the end of the first quarter of 2012, assets under administration totaled R$422.6 billion, stable when compared to the previous quarter and up 11.4% when compared to the same period of 2011.

According to ANBIMA, in May 2012 we ranked second in the global ranking of fund management and managed portfolios, with a 19.7% market share.

Solutions for Capital Markets

We offer several financial solutions for Capital Markets, including: fiduciary administration of investment funds, custody (funds, ADRs, Promissory Notes and bank credit notes), representation for non-resident investors and asset bookkeeping. We also act as guarantee agent in operations of Project Finance, Escrow Accounts, Loan and Financing Contracts and as a Depositary under Brazilian Depositary Receipts (BDR) programs.

We are leaders in custody services, with a 25.3% market share(*) and a total of R$879.6 billion in assets under custody (increase of 14% from the same period of 2011). Our domestic custody totaled R$659.6 billion and our international custody added up to R$219.9 billion at the end of May. We are leaders in the bookkeeping of debentures issued in 2012 and shares, providing services to 234 companies listed at the BM&F Bovespa (63.2% of the total). In May 2012, we reached R$2.8 trillion in assets under services.

In 2011, we were elected by the Global Custodian magazine the Best Custody Service Provider in Brazil for domestic (4^th consecutive time) and international (3^rd consecutive time) clients. In 2012, we were also recognized by the Global Finance magazine as the Best Custody Service Provider in Brazil for international clients.

(*) Source: ANBIMA (Brazilian Financial and Capital Markets Association) - May/2012

Consumer Credit

The results of the Consumer Credit segment arise from financial products and services offered to our non-account holder clients. In the second quarter of 2012, the segment recorded a recurring net income of R$301 million, a decrease of 15.5% when compared to the previous period. The return on allocated capital was 10.5% a year, and the efficiency ratio reached 49.3% in the period. As of June 30, 2012, the credit portfolio totaled R$89,470 million.

Vehicle Financing

The vehicle financing portfolio to individuals amounted to R$56,575 million at the end of the second quarter of 2012. New vehicle financing and leasing transactions totaled R$5,094 million, a decrease of 36.5% from the second quarter of 2011. Considering the vehicle portfolio, our market share was 31.4% at the end of May 2012.

Market, Default Levels and Selectivity

In accordance with Fenabrave (automotive vehicles distribution national federation) data, the market for new vehicles decreased 5.8% from the same quarter of 2011, which is equivalent to 81,400 units. The performance of the vehicle financing and leasing market decreased 14.7%, totaling R$24,277 million of new financing contracts. The drop in the volume of vehicle financing is due to the increase in default levels in the sector, related to vintages contracted in the second half of 2010 and first half of 2011, which led to higher down payments and reduced terms in the granted financing.

Average Term and Down payment (Itaú Unibanco)

The NPL over 90 days of Itaú Unibanco, measured by vintages four months after the origination, reached 1.5%, its maximum level, in April 2011. The negative performance led to a stricter selectivity in the origination since the second half of 2011. The approval rate has decreased and the profile of the vehicle financing risk also changed, with higher concentration of contracts rated A and B, of lower risk. The new criteria for vehicle financing led to a decrease in the default levels in the most recent credit origination periods. The chart below shows that, in April 2012, based on vintages originated in December 2011, 8 months after the peak of default rate levels, the NPL over 90 days of our portfolio decreased 120 basis points, reaching 0.3%, less than half of the default level of this market, not including Itaú Unibanco.

NPL over 90 | 4 months after vehicle financing grant

Source: data from Fenabrave (automotive vehicles distribution national federation) and Brazilian Central Bank

Management Discussion & Analysis Itaú Unibanco Holding S.A. 45

Analysis of Segments

Cards and Partnerships ^(*)

Through proprietary and partnership operations, we offer a wide range of credit and debit cards to more than 59.0 million current and non-current account holders (in number of accounts). In the second quarter of 2012, the volume of transactions amounted to R$54,873 million, an increase of 14.8% from the same period of the previous year.

Credit Cards

We are the leading player in the Brazilian credit card market. Through Itaucard, Hipercard, Joint Ventures, and commercial agreements with major retailers in the Brazilian market, we have reached 34.7 million client accounts, including both current and non-current account holders.

In this quarter, we continued to reduce the number of partnerships to concentrate on business of larger scale, following the efficiency gain target of the conglomerate. At the same time, we started to apply a more conservative financing policy in order to maintain the credit quality of our card portfolio. In the second quarter of 2012, the volume of credit card transactions amounted to R$42,743 million, which corresponds to an increase of 14.4% from the same period of the previous year.

* Personal Loan and Consumer Credit products are not taken into consideration; For demonstration purposes, the volumes and results presented here include the portion corresponding to current account holders, although these clients are segmented in the Pro Forma Statement of Income under the Commercial Banking segment As from the second quarter of 2012, we started to include the card base of Banco CSF S.A. (“Banco Carrefour”), which was indirectly acquired on May 31, 2012.

Debit Cards

In the debit card segment, which includes only current account holders, we have 24.2 million accounts. The volume of debit card transactions amounted to R$12,130 million in the second quarter of 2012, an increase of 16.3% from the same period of 2011.

Itaú BBA

The Itaú BBA segment is responsible for banking transactions with large companies and for investment banking services. Itaú BBA’s net income totaled R$604 million in the second quarter of 2012, a decrease of 16.9% when compared to the previous quarter, mainly explained by the results from loan losses. The return on allocated capital reached 20.7% per year.

The managerial financial margin totaled R$1,395 million in the second quarter, remaining practically stable when compared to the previous quarter. Banking service fees and income from banking charges added up to R$555 million, a decrease of 1.3% when compared to the previous quarter. The credit portfolio (with endorsements and sureties), in Brazil, increased 5.8% from the first quarter of 2012 and 22.1% when compared to the same period of the previous year, to R$149.5 billion. This year-on-year increase is basically due to Itaú BBA’s commercial effort to strengthen customer relationships, in particular (i) foreign trade financing, which grew 57.7% (if we exclude the effect of foreign exchange variation, the increase would be 21.8%), and (ii) sureties and endorsements portfolio, which increased 30.8%.

We continue to distinguish ourselves for the excellent level of quality of the loan portfolio, in which 96.5% of the credits attributed “AA”, “A” and “B” risk ratings in accordance with the criteria set forth in the Brazilian Monetary Council Resolution No. 2,682.

In investment banking, we highlight:

Domestic Fixed Income Offerings: 1^st place in the ANBIMA distribution ranking for the participation in debenture, promissory note and securitization transactions, which totaled R$9.5 billion, corresponding to a 29.6% market share.

International Fixed Income Offerings: 1^st place in the BondRadar ranking for Issues of Brazilian Companies of June 2012. Additionally, we ranked 3^rd in the Dealogic ranking for Fixed Income Issues in Latin America, with an 8.6% market share, between January and June 2012.

Mergers and Acquisitions: We provided financial advisory services for 32 transactions, closing the first half of 2012 at the top of the Thomson Reuters ranking in volume of operations, which totaled US$14.5 billion.

Equity Offerings: We were 2^nd in the ANBIMA Origination ranking of May 2012, with a volume of operations of R$1.2 billion.

In the corporate banking area, we highlight the following Itaú BBA operations:

Derivatives: Itaú BBA maintained its leading position in CETIP (clearing house for the custody and financial settlement of securities) in over-the-counter derivative operations with companies. We focused on operations that hedge the exposures to foreign currencies, interest rates and commodities with clients. The volume of operations contracted in the first half of 2012 was 43.4% higher than in the first half of the previous year.

Project Finance: Itaú BBA was contracted to provide structuring and/or advisory services for 52 projects in the first half of 2012 with total estimated investments in the infrastructure, energy and oil and gas industries of over R$60 billion.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 46

	insurance, life and pension plans & capitalization
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012 Management Discussion & Analysis

Insurance, Life and Pension Plans & Capitalization

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

The numbers presented in this chapter are part of the Commercial Bank segment and do not include the results of the association with Porto Seguro, which were included in the Activities with the Market Corporation segment.

Pro Forma of Insurance, Life and Pension Plans and Capitalization Income Statement

							R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 - 1st Q/12
Earned Premiums (a)		1,311			1,314			(3	)	-0.2	%
Result of Pension Plans and Capitalization (b)		149			158			(8	)	-5.1	%
Retained Claims (c)		(506	)		(462	)		(44	)	9.5	%
Selling Expenses (d)		(364	)		(353	)		(11	)	3.0	%
Other Operating Income/(Expenses) of Insurance Operations (e)		(10	)		(17	)		7		-39.3	%
Underwriting Margin (f=a+c+d+e)		432			482			(51	)	-10.5	%
Result from Insurance, Pension Plans and Capitalization (g=b+f)		581			640			(59	)	-9.2	%
Managerial Financial Margin		290			325			(36	)	-10.9	%
Banking Service Fees and Income From Banking Charges		207			191			16		8.6	%
Non-interest Expenses		(309	)		(274	)		(35	)	12.8	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(55	)		(79	)		25		-31.1	%
Other Operating Income		3			(1	)		4		-
Operating Income		718			802			(85	)	-10.5	%
Non-operating Income		10			11			(1	)	-5.7	%
Income Before Income Tax and Social Contribution		728			813			(85	)	-10.5	%
Income Tax/Social Contribution		(259	)		(304	)		45		-14.9	%
Profit Sharing		(1	)		(1	)		0		-37.3	%
Recurring Net Income		469			508			(40	)	-7.8	%
(RAROC) — Return on Average Tier I Allocated Capital		36.1	%		40.4	%				-430 bps
Efficiency Ratio (ER)		35.8	%		33.8	%				200 bps

Note: Retained Claims are different from Consolidated Retained Claims, because they do not consider the operations of the activities abroad.

The Underwriting Margin refers to Insurance and Life and Pension Plans.

Non-interest Expenses comprise Personnel Expenses, Administrative Expenses, Tax Expenses, and Other Operating Expenses.

Recurring Net Income and Insurance Ratio

Insurance Ratio (%) = Insurance, Life and Pension Plans and Capitalization segment’s recurring net income/ Itaú Unibanco’s recurring net income

In the second quarter of 2012, the Insurance, Life and Pension Plans and Capitalization segment’s recurring net income totaled R$469 million, a reduction of 7.8% from the previous quarter. When compared to the same period of the previous year, this recurring net income increased 12.8%. The return on allocated capital reached 36.1% in the period, a decrease of 430 basis points from the previous quarter.

When compared to the previous quarter, the main factor that impacted net income was the decrease in the underwriting margin, mainly influenced by higher expenses with retained claims in the period.

The insurance ratio (which does not consider the 30% interest in Porto Seguro) represents the share of recurring net income from Insurance, Life and Pension Plans and Capitalization in Itaú Unibanco Holding’s recurring net income.

In the second quarter of 2012, the insurance ratio reached 13.0%, decreasing 130 basis points from the previous quarter.

Composition of Recurring Net Income of Insurance, Life and Pension Plans and Capitalization

In this quarter, the Life and Pension Plans subsegment increased its share in the composition of the recurring net income by 360 basis points in relation to the previous quarter.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 48

Insurance, Life and Pension Plans & Capitalization

Efficiency Ratio

In the second quarter, the efficiency ratio was 35.8%, corresponding to a 200 basis point increase from the previous period, mainly as a result of increased selling expenses and non-interest expenses, because of seasonal factors.

The risk-adjusted efficiency ratio adds to the formula the impacts of risk portions associated with Insurance and Life and Pension Plans (claims). In the second quarter, the index was 62.3%, an increase of 440 basis points from the first quarter of 2012.

(*) Net of Tax Expenses for ISS, PIS and Cofins and Other.

(**) Does not include Equity in Earnings of Affiliates and Other Investments and Non-operating Income.

Pro Forma Insurance, Pension Plans and Capitalization Balance Sheet

The Balance Sheet of the Insurance, Pension Plans and Capitalization segments is presented below. On June 30, 2012, total assets amounted to R$93.7 billion, increasing approximately R$5.0 billion from the first quarter of 2012. Technical provisions added up to R$82.5 billion, a 6.1% increase from the previous quarter, mainly due to the increase in the technical provisions of the VGBL product. We note that these numbers do not include the operations of the activities abroad and the 30% interest in Porto Seguro.

																	R$ million
																	Variation
																	Jun 30, 12 -
	Jun 30, 12								Mar 31, 12								Mar 31, 12
			Life and								Life and
	Insurance		Pension Plans		Capitalization		Total		Insurance		Pension Plans		Capitalization		Total		Total
Assets
Current and Long-Term Assets		12,352		77,666		3,259		93,207		10,729		73,034		3,234		88,243		4,964		5.6	%
Cash and Cash Equivalents		163		18		3		184		70		19		2		91		93		102.2	%
Securities		3,688		76,719		3,186		83,583		4,094		72,193		3,157		79,441		4,142		5.2	%
Other Assets (mainly
Other Assets (mainly receivables from insurance)		8,501		928		71		9,439		6,565		822		74		8,711		728		8.4	%
Permanent Assets		391		81		38		503		392		81		38		503		(0	)	-0.1	%
Total Assets		12,743		77,747		3,297		93,709		11,121		73,115		3,272		88,746		4,963		5.6	%
Liabilities and Equity
Current and Long – Term Liabilities		11,593		73,783		3,092		88,391		9,972		69,399		3,073		83,683		4,708		5.6	%
Technical Provisions – Insurance		7,311		982		-		8,293		5,531		904		-		7,707		587		7.6	%
Technical Provisions – Pension Plans and VGBL		516		70,841		-		71,357		526		66,714		-		67,240		4,117		6.1	%
Technical Provisions – Capitalization		-		-		2,894		2,872		-		-		2,871		2,856		16		0.6	%
Other Liabilities		3,767		1,960		198		5,868		3,915		1,782		202		5,880		(11	)	-0.2	%
Allocated Tier I Capital		1,150		3,963		205		5,319		1,148		3,716		199		5,064		255		5.0	%
Total Liabilities and Equity		12,743		77,747		3,297		93,709		11,121		73,115		3,272		88,746		4,963		5.6	%

Note: The Insurance, Pension Plans and Capitalization Technical Provisions are different from the Consolidated Technical Provisions, because they do not consider the operations of the activities abroad and the 30% interest in Porto Seguro.

The Consolidated does not represent the sum of the parties because there are transactions between companies that were eliminated.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 49

Insurance

The numbers presented in this chapter are part of the Commercial Bank segment and do not include the results of the association with Porto Seguro, which were included in the Activities with the Market Corporation segment.

Pro Forma Insurance Recurring Income Statement

										R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 - 1 st Q/12
Earned Premiums (a)		1,087			1,074			13			1.2	%
Retained Claims (b)		(411	)		(372	)		(39	)		10.4	%
Selling Expenses (c)		(335	)		(335	)		0			0.0	%
Other Operating Income/(Expenses) of Insurance Operations (d)		(18	)		(19	)		1			-2.8	%
Underwriting Margin (e=a+b+c+d)		324			349			(25	)		-7.2	%
Result from Insurance		324			349			(25	)		-7.2	%
Managerial Financial Margin		88			118			(30	)		-25.4	%
Non-interest Expenses		(186	)		(168	)		(18	)		11.0	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(23	)		(48	)		25			-52.6	%
Other Operating Income		3			(2	)		5			-
Operating Income		205			249			(43	)		-17.4	%
Non-operating Income		7			7			(1	)		-7.2	%
Income Before Income Tax and Social Contribution		212			256			(44	)		-17.1	%
Income Tax/Social Contribution		(77	)		(97	)		20			-20.1	%
Profit Sharing		(1	)		(1	)		0			-37.3	%
Recurring Net Income		134			158			(24	)		-15.2	%
(RAROC) — Return on Average Tier I Allocated Capital		46.5	%		52.9	%					-640 bps
Efficiency Ratio (ER)		46.7	%		45.7	%					100 bps

We carry significant business with large industrial and commercial clients. Our Corporate Solutions department provides dedicated services and specific products for the civil construction, chemicals and petrochemicals, energy generation, infrastructure, transportation, aviation and other industries. For individuals, and small and middle market companies, our focus is to simplify the product portfolio and use electronic policies to better meet clients’ needs with products that are straightforward and easy to understand.

The customer relationship management department has implemented a number of projects, tailoring specific products to each client’s profile, which enables the more efficient use of different relationship channels. This department also seeks to continuously improve its operational efficiency by managing costs, investing in new technologies and optimizing processes.

Products to be highlighted in the companies segment include Group Life and Corporate Solutions.

In the companies segment, the highlight was the diversification of the personal accidents product portfolio for very small companies with sales taking place through the proposal for account opening in the bancassurance channels together with the other banking products. In addition to the basic coverage, we also offer an IT support service.

Our products were recognized in the 9th Brazil Insurer Award in the “Best Performance” and “Sales Leader” categories.

In the individuals segment, the highlights were the products in the Life and Extended Warranty lines.

In relation to the accumulated total from January to May 2012, our market share reached 13.4%, based on information disclosed by SUSEP (Superintendency of Private Insurance, which regulates all insurance lines, except for Health Insurance, which is regulated by ANS, the National Health Agency) and insurance premiums reached R$3,118 million, considering our 30% interest in Porto Seguro.

In this quarter, the Insurance segment’s recurring net income reached R$134 million, a 15.2% decrease from the previous quarter driven by the decrease in the underwriting margin, which was mainly influenced by the increased retained claims in the Life and Corporate Solutions lines, in addition to an increase in non-interest expenses.

Earned Premiums

In the second quarter of 2012, earned premiums added up to R$1,087 million in the Insurance subsegment, a 1.2% increase when compared to the previous quarter as a result of the good performance of the extended warranty and property risk products. Earned premiums in the Life and Pension Plan subsegment added up to R$233 million, a 4.2% decrease when compared to the previous quarter.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 50

Insurance

Composition of Earned Premiums

Note: the charts do not include the Itauseg Saúde company and does include Life product of Itaú Vida e Previdência S.A.

Combined Ratio and Underwriting Margin

Note: The combined ratio is the sum of the following ratios: retained claims/ earned premiums, selling expenses/ earned premiums and administrative expenses and other operating income and expenses /earned premiums.

The underwriting margin is the sum of: earned premiums, retained claims, selling expenses and other operating income (expenses) of insurance operations.

Note: the charts do not include the Itauseg Saúde company and does include Life of Itaú Vida e Previdência S.A.

The consolidated underwriting margin (which includes Insurance and Life of Itaú Vida e Previdência S.A.) amounted to R$436 million in the second quarter of 2012, a decrease of 10.0% when compared to the previous quarter. If the health insurance line (in process of discontinuation) is disregarded, the underwriting margin totaled R$447 million. The ratio of underwriting margin to earned premiums reached 34.8%, a 300 basis point decrease from the previous period.

The combined ratio, which reflects the efficiency of the operating expenses in relation to income from earned premiums was 83.4%, a 220 basis point increase from the previous quarter, mainly influenced by higher expenses with claims in the quarter.

Composition of Retained Claims

Note: the charts do not include the Itauseg Saúde company and include Life product of Itaú Vida e Previdência S.A.

Insurance Technical Provisions

On June 30, 2012, insurance technical provisions totaled R$8,293 million, an increase of 7.6% from the previous quarter and of 11.0% from the same period of the previous year.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 51

Life and Pension Plans

Pro Forma Life and Pension Plans Recurring Income Statement

							R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 - 1st Q/12
Earned Premiums (a)		233			243			(10	)	-4.2	%
Result of Pension Plans (b)		12			27			(15	)	-55.4	%
Retained Claims (c)		(96	)		(90	)		(6	)	6.8	%
Selling Expenses (d)		(23	)		(16	)		(7	)	44.8	%
Other Operating Income/(Expenses) of Insurance Operations (e)		(2	)		(2	)		0		-
Underwriting Margin (f=a+c+d+e)		112			135			(23	)	-17.1	%
Result from Insurance, Pension Plans (g=b+f)		124			162			(38	)	-23.4	%
Managerial Financial Margin		167			160			7		4.3	%
Banking Service Fees and Income From Banking Charges		208			191			16		8.5	%
Non-interest Expenses		(74	)		(68	)		(6	)	9.2	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(25	)		(24	)		(1	)	2.5	%
Other Operating Income		(1	)		(0	)		(1	)	-
Operating Income		398			421			(23	)	-5.3	%
Non-operating Income		1			1			(0	)	-
Income Before Income Tax and Social Contribution		399			422			(23	)	-5.4	%
Income Tax/Social Contribution		(136	)		(154	)		18		-11.6	%
Recurring Net Income		263			268			(5	)	-1.8	%
(RAROC) — Return on Average Tier I Allocated Capital		27.4	%		29.5	%				-200	bps
Efficiency Ratio (ER)		16.7	%		14.4	%				230	bps

Product innovation has played a significant role in the sustainable growth of our pension plans operation. For individuals, multimarket and multi-strategy products are to be highlighted, as they allow for the investment of funds on a long-term basis, seeking the best short-term investment strategies. In pension plans for companies, we offer specialized advisory services and develop customized solutions for each company. We establish long-term partnerships with our corporate clients, keeping a close relationship with the human resources departments and adopting a communication strategy designed for the financial education of their employees.

The Life and Pension Plans subsegment’s recurring net income totaled R$263 million, a 1.8% decrease from the previous quarter, primarily impacted by the decrease in the result from pension plans operation and the increase in non-interest expenses in relation to the previous quarter.

Evolution of Contributions and Net Contributions

Total contributions to pension plans reached R$4,874 million, growing 26.7% when compared to the previous quarter. In relation to the same period of the previous year, contributions increased 55.4%, chiefly on account of the 65.7% growth in contributions to the VGBL product. Net contributions, which comprise total contributions less redemptions and external portabilities, increased 25.0% from the previous quarter.

Taking into consideration net contributions from January to May (according to data provided by SUSEP), our market share reached 28.3% in the period.

Pension Plans Technical Provisions and Administration Fees

Pension plans technical provisions totaled R$71,357 million on June 30, 2012, representing an increase of 6.1% and of 26.4% when compared to the previous quarter and the same period of the previous year, respectively.

Revenues from administration fees totaled R$207.3 million in the second quarter of 2012, an 8.4% increase from the previous quarter and a 31.4% increase from the same period of 2011.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 52

Capitalization

Pro Forma Capitalization Recurring Income Statement

							R$ million
							Variation
	2nd Q/12			1st Q/12			2nd Q/12 - 1st Q/12
Result of Capitalization (a)		138			131			7		5.5	%
Selling Expenses (b)		(6	)		(3	)		(4	)	-
Result from Capitalization Operations (c=a+b)		131			128			3		2.6	%
Managerial Financial Margin		34			47			(12	)	-26.7	%
Non-interest Expenses		(50	)		(36	)		(14	)	37.4	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(7	)		(7	)		0		-2.6	%
Other Operating Income		2			1			1		-
Operating Income		111			132			(21	)	-15.7	%
Non-operating Income		3			3			0		0.2	%
Income Before Income Tax and Social Contribution		114			135			(21	)	-15.3	%
Income Tax/Social Contribution		(44	)		(53	)		9		-16.3	%
Recurring Net Income		70			82			(12	)	-14.7	%
(RAROC) — Return on Average Tier I Allocated Capital		138.0	%		161.0	%				-2.300	bps
Efficiency Ratio (ER)		33.6	%		22.7	%				1.090	bps

The Capitalization Certificate (PIC) product is targeted at clients that like to compete for prizes. It can be purchased through a single or monthly payment, in accordance with the profile and segment of each client.

The product was remodeled in mid 2011 and increased the chances of rewarding its clients. Now, the product is effective for shorter terms, more clients win and prizes are higher. The product was also launched for companies as “PIC Empresas”.

In the period between January and May 2012, 1,864 clients received raffles in the aggregate amount of R$15.9 million.

The capitalization segment’s net income reached R$70 million, a 14.7% decrease from the first quarter of 2012, mainly due to the drop in the managerial financial margin and the increase in non-interest expenses in the period.

Result of Capitalization

Note: The result of capitalization is net of expenses for prizes.

Capitalization Technical Provisions

On June 30, 2012, capitalization technical provisions reached R$2,872 million, representing a 0.6% growth from the first quarter of 2012 and a 3.8% increase when compared to the same period of the previous year.

Análise Gerencial da Operação Itaú Unibanco Holding S.A. 53

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Management Discussion & Analysis Itaú Unibanco Holding S.A. 54

	activities
	abroad
	Itaú Unibanco Holding S.A.
	2nd quarter of 2012 Management Discussion & Analysis

Activities Abroad

International Presence

Our operations are mainly carried out in Brazil, though our broad international presence confirms our regional-global objectives and enables us to provide high-quality service to our local clients and to Brazilians operating abroad.

We are present in 19 countries besides Brazil. In Latin America, we have operations in Argentina, Chile, Paraguay and Uruguay, focusing on commercial banking activities, both for individuals and companies, and in Mexico, in the credit card segment. We also have a representation office in Peru and, in April 2012, we were authorized by the regulatory authorities in Colombia to incorporate Itaú BBA Colombia S.A – Corporación Financiera. This company was incorporated in July 2012 with the opening amount of approximately US$100 million. The activities are expected to start in the last quarter of this year after the operating license is obtained from the local regulatory authority and an additional capitalization of approximately US$100 million is made.

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

Selected information on our international operations (including results, assets and liabilities in our foreign branches) is presented below:

Highlights

Statement of Income

					R$ million (except where indicated)
	2nd Q/12		1st Q/12		2nd Q/11		2nd Q/12 – 1st Q/12			2nd Q/12 – 2nd Q/11
Recurring Net Income		545		533		596		2.3	%		-8.6	%
Operating Revenues		1,403		1,147		1,024		22.4	%		37.0	%
Financial Margin		1,041		803		705		29.5	%		47.6	%

Balance Sheet

	Jun 30,12		Mar 31,12		Jun 30,11		Jun/12 – Mar/12			Jun/12 – Jun/11
Total Assets		181,215		183,019		133,274		-1.0	%		36.0	%
Loans, Leases and Other Credit Operations		63,885		61,377		45,876		4.1	%		39.3	%
Deposits		71,295		60,245		42,750		18.3	%		66.8	%
Stockholders' Equity		17,862		24,964		21,336		-28.4	%		-16.3	%

Relevant Data

	Jun 30,12		Mar 31,12		Jun 30,11		Jun/12 – Mar/12			Jun/12 – Jun/11
Employees (Individuals)		6,500		6,400		6,015		1.6	%		8.1	%
Number of Points of Service (Units)		824		796		729		3.5	%		13.0	%
Branches (*)		251		245		224		2.4	%		12.1	%
Client Service Branches		31		31		31		0.0	%		0.0	%
Automated Teller Machines		542		520		474		4.2	%		14.3	%

(*) Does not include Itaú BBA.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 56

Activities Abroad

Latin America

Our operations in Latin America arise from investments of Itaú and Unibanco and went through a process of expansion in a sustainable way, with strong ties to their local markets. In Uruguay we are currently the second largest private bank in terms of deposits. In Paraguay, we won the World's Best Bank Awards from the Global Finance magazine, and, since this award started to be granted, we have been the most frequent winner. In Chile, we are focused on the high-income client base and our target is to have a 25% share in this segment within the next two years. As part of this target, this quarter, we completed the purchase of 50% of Munita, Cruzat & Claro (MCC) Stock Exchange Broker, one of Chile’s leading equity managers. Below are some of the highlights of our operations in the region:

Latin America Statement of Income

	R$ million
	Argentina						Chile						Paraguay						Uruguay
	2nd Q/12			1st Q/12			2nd Q/12			1st Q/12			2nd Q/12			1st Q/12			2nd Q/12			1st Q/12
Operating Revenues		139			127			181			211			111			84			191			115
Financial Margin		95			86			114			156			80			61			112			47
Banking Service Fees and Income from Banking Charges		43			41			46			44			32			24			78			67
Result from Insurance, Pension Plans and Capitalization Operations
Before Retained Claims and Selling Expenses		-			-			13			5			-			-			-			-
Other Operating Income		1			1			7			4			(0	)		0			0			0
Non-operating Income		0			0			1			1			(0	)		(1	)		0			0
Loan and Retained Claim Losses net of Recovery		(8	)		(8	)		(37	)		(25	)		(6	)		7			(3	)		12
Operating Margin		131			119			144			186			105			91			188			127
Other Operating Expenses		(120	)		(107	)		(126	)		(112	)		(47	)		(42	)		(89	)		(79	)
Non-interest Expenses		(120	)		(107	)		(125	)		(112	)		(47	)		(42	)		(89	)		(79	)
Selling Expenses from Insurance		-			-			(1	)		(0	)		-			-			-			-
Income before Tax and Profit Sharing		10			12			18			73			58			49			99			48
Income Tax and Social Contribution		(6	)		(7	)		(5	)		(15	)		(6	)		(3	)		(15	)		(12	)
Recurring Net Income		4			5			13			59			52			46			84			36
Return on Average Equity – Annualized		4.0	%		6.3	%		2.5	%		12.0	%		38.6	%		38.0	%		74.7	%		36.8	%
Return on Average Assets – Annualized		0.4	%		0.5	%		0.3	%		1.4	%		5.1	%		4.8	%		6.3	%		3.0	%
Efficiency Ratio		86.9	%		84.0	%		69.9	%		53.3	%		41.9	%		49.7	%		46.6	%		68.6	%

The result of our main operations in Latin America increased R$8 million in this quarter in relation to the first quarter of the year. The increase in the financial margin in Uruguay and Paraguay was mainly due to the positive impact of the foreign exchange variation related to the hedge structure of each country and to the increase in the credit portfolio. In Chile, the decrease was mainly in the result of derivatives. The increase in the provision for loan losses in Uruguay was a consequence of the new regulation for the classification and recognition issued by the local Central Bank, which resulted in a reversal of the provision in the first quarter of 2012. In Chile, the increase in the provisions was in line with the increase in the credit portfolio. The increase in non-interest expenses was mainly due to larger expenses with promotional events. The results of Argentina remained in line with the previous quarter.

Service Network

To support services to our portfolio of more than 1.3 million clients, we have a network of 278 branches and client service branches (CSBs). Noteworthy in the quarter is OCA, our credit card operation that is a market leader in Uruguay, which in line with its expansion plan to increase its operations in the countryside, entered into a partnership with Ta-Ta supermarket chain. This partnership already has eight points of service, five of which implemented in this quarter, what brought OCA to a total of 28 points of service. Also in Uruguay, we have another 22 branches and 1 CSB of Banco Itaú Uruguay, totaling 51 branches/points of service in that country. In Latin America, we are also present in Argentina with 81 branches, in Chile, with 90 branches, and in Paraguay, with 26 branches.

Service Network | Geographical Distribution

Employees

The number of employees in our major units in Latin America grew from 5,740 in March 2012 to 5,811 in June 2012 and they are regionally distributed according to the chart below:

Management Discussion & Analysis Itaú Unibanco Holding S.A. 57

Activities Abroad

Latin America Balance Sheet

	R$ million
	Argentina						Chile						Paraguay						Uruguay
	Jun 30,12			Mar 31,12			Jun 30,12			Mar 31,12			Jun 30,12			Mar 31,12			Jun 30,12			Mar 31,12
Assets
Current and Long-term Assets		3,893			3,443			20,914			17,850			4,207			3,843			5,672			4,993
Cash and Cash Equivalents		174			174			867			441			573			413			1,019			892
Short-term Interbank Investments		281			236			362			27			34			64			795			873
Securities and Derivative Financial Instruments		125			155			3,387			2,872			265			329			547			444
Interbank and Interbranch Accounts		487			427			355			670			579			515			910			701
Loans, Lease and Other Credit Operations		2,738			2,358			15,599			13,458			2,617			2,400			2,406			2,103
(Allowance for Loan Losses)		(59	)		(49	)		(278	)		(240	)		(54	)		(49	)		(98	)		(93	)
Other Assets		147			143			621			623			194			169			92			73
Foreign Exchange Portfolio		40			49			281			283			128			111			5			2
Other		107			94			340			340			66			59			87			71
Permanent Assets		110			103			332			295			30			31			27			26
Total Assets		4,003			3,546			21,247			18,145			4,237			3,874			5,699			5,019
Liabilities and Equity
Current and Long-term Liabilities		3,533			3,244			19,064			16,188			3,658			3,373			5,204			4,603
Deposits		2,978			2,764			14,022			11,767			2,969			2,749			4,488			3,953
Deposits Received under Securities Repurchase Agreements		84			34			122			137			-			-			-			-
Fund from Acceptances and Issue of Securities		52			-			1,637			1,527			-			-			-			-
Interbank and Interbranch Accounts		-			-			21			10			96			77			75			66
Borrowings and Onlendings		113			96			1,687			1,327			332			308			29			25
Derivative Financial Instruments		1			1			226			200			25			-			1			2
Foreign Exchange Portfolio		40			49			279			282			132			111			5			2
Other Liabilities		265			301			1,038			912			105			127			605			555
Technical Provisions for Insurance, Pension Plans and Capitalization		-			-			31			27			-			-			-			-
Deferred Income		-			-			4			5			1			0			3			4
Minority Interest in Subsidiaries		9			8			0			0			-			-			-			-
Stockholders' Equity		461			294			2,179			1,952			578			501			492			412
Total Liabilities and Equity		4,003			3,546			21,247			18,145			4,237			3,874			5,699			5,019

Assets

As of June 30, 2012, our assets in the main operations in Latin America reached R$35.2 billion, an increase of 15.0% (or 8.4%, excluding the effect of the foreign exchange variation) in relation to March 31, 2012. The increase in assets of 17.1% (or 8.5%, excluding the effect of the foreign exchange variation) in Chile was noteworthy. It was mainly due to the increase in loan operations and short-term interbank investments and securities.

Assets Breakdown

Credit Portfolio

The credit portfolio increased 14.9% (or 7.8%, excluding the effect of the foreign exchange variation) from the previous quarter, amounting R$23.4 billion. This increase is mainly explained by the growth of 15.9% (or 7.5% without exchange rate effect) of the credit portfolio in Chile due to the increase in personal, student, foreign trade and mortgage loans. In Uruguay, loans increased 14.5% (or 14.4% without exchange rate effect), due to the companies’ segment resumption of growth. In Argentina and Paraguay, the credit increase of 16.1% and 9.0% (or 8.3% and 3.7% without exchange rate effect, respectively) derived from the increase in personal loans and credit cards.

Credit Portfolio | Geographical Distribution

(*) Current Currency for jun/12.

Note: The exchange rate effect was calculated using the Jun/12 closing rate and applying it to all periods being compared.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 58

Activities Abroad

Europe, Caribbean Islands and Miami

Our banking activities under Banco Itaú BBA International S.A.’s legal structure are carried out throughout Europe (Portugal, United Kingdom, Switzerland and Luxembourg) and outside Europe (Miami, the Cayman Islands and The Bahamas) and are mainly dedicated to two business lines:

-     Corporate & Investment Banking: We meet the financial needs of companies with international presence and operations, with a focus on operations related to financing and investment relations between companies in Latin America and Europe. The many types of services we offer include the origination of structured financing and risk coverage operations, export financing and advisory for European companies investing in Latin America and Latin American companies that are in the process of internationalization.

-     Private Banking: We develop our activities in Luxembourg, Miami, The Bahamas and Switzerland, where we offer a wide and specialized range of financial and asset management services for high net-worth clients, including negotiation and management of securities and other financial instruments, trusts and investment companies on behalf of clients. As part of our strategy, we are reducing our activities in Luxembourg, and the private banking operations currently carried out in that country will be gradually transferred either to Switzerland or Miami.

Information on our operations consolidated in Banco Itaú BBA International is presented below:

Itaú BBA International Statement of Income

	R$ million
	Itaú BBA International
	2nd Q/12			1st Q/12
Operating Revenues		115			87
Financial Margin		36			27
Banking Service Fees and Income from Banking Charges		54			51
Other Operating Income		3			2
Equity in Earnings of Affiliates and Other Investments		18			7
Non-operating Income		4			0
Loan and Retained Claim Losses net of Recovery		1			0
Operating Margin		116			87
Other Operating Expenses		(83	)		(73	)
Income before Tax and Profit Sharing		33			15
Income Tax and Social Contribution		(2	)		(7	)
Profit Sharing		1			(2	)
Recurring Net Income		33			6
Return on Average Equity – Annualized		9.6	%		1.9	%
Return on Average Assets – Annualized		0.9	%		0.2	%
Efficiency Ratio		72.0	%		83.3	%

The recurring net income for the quarter amounted to R$33 million, representing an increase of R$27 million from the previous quarter. This growth is due to the positive impact of the fluctuations in trading portfolios on the financial margin of the second quarter. Additionally, there was a better result from investments in affiliated companies when compared to the previous quarter. There was also an increase in administrative expenses of the Private Banking segment.

Itaú BBA International Balance Sheet				R$ million
	Itaú BBA International
	Jun 30,12			Mar 31,12
Assets
Current and Long-term Assets		15,989			13,790
Cash and Cash Equivalents		329			250
Short-term Interbank Investments		2,990			2,108
Securities and Derivative Financial Instruments		1,679			1,585
Interbank and Interbranch Accounts		-			-
Loans, Lease and Other Credit Operations		7,736			7,246
(Allowance for Loan Losses)		(12	)		(12	)
Other Assets		3,267			2,613
Foreign Exchange Portfolio		2,955			2,311
Other		311			301
Permanent Assets		188			282
Total Assets		16,177			14,072
Liabilities and Equity
Current and Long-term Liabilities		14,746			12,718
Deposits		6,128			5,399
Fund from Acceptances and Issue of Securities		4,071			3,435
Interbank and Interbranch Accounts		1			2
Borrowings and Onlendings		590			560
Derivative Financial Instruments		600			539
Foreign Exchange Portfolio		2,956			2,312
Other Liabilities		399			471
Deferred Income		19			22
Stockholders' Equity		1,413			1,331
Total Liabilities and Equity		16,177			14,072

On June 30, 2012, the consolidated assets of Banco Itaú BBA International totaled R$16.2 billion, an increase of 15.0% from the previous quarter. Noteworthy is the increase in interbank investments and the credit portfolio of Private clients. On the other hand, there was a decrease in the credit portfolio in the Corporate segment. In Liabilities, there was an increase in deposits – especially for Private clients - as well as in the volume of issues of structured notes.

Assets under Administration Private Banking

Assets under administration from our activities in the private banking segment reached R$28.8 billion, an increase of 18.1% from the first quarter of 2012. Not taking into consideration the effect of the depreciation of the Brazilian real against the U.S. dollar in the period, assets under administration increased 7% in the second quarter, mainly due to the inflow of new assets.

Products and services for Foreign Institutional Clients

We also provide our international institutional clients with a broad range of products and services, such as asset management, custody, alternative investment products, equities, fixed-income, and other treasury products. Our clients are served by professionals based in New York, London, Hong Kong, Tokyo and Dubai, as well as by our specialized product teams in Latin America.

Note: The exchange rate effect was calculated using the Jun/12 closing rate and applying it to all periods being compared.

Management Discussion & Analysis Itaú Unibanco Holding S.A. 59

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Management Discussion & Analysis Itaú Unibanco Holding S.A. 60

(A free translation of the original in Portuguese)

Report of independent auditors on

supplementary information

To the Board of Directors and Stockholders

Itaú Unibanco Holding S.A.

Introduction

In connection with our audit of the financial statements of Itaú Unibanco Holding S.A. (Bank) and Itaú Unibanco Holding S.A. and its subsidiary companies (Consolidated) as of June 30, 2012, on which we issued an unqualified opinion dated July 23, 2012, we performed a review of the accounting information contained in the supplementary information included in the Management Discussion and Analysis Report of Itaú Unibanco Holding S.A. and its subsidiaries for the six-month period ended June 30, 2012.

Scope of the Review

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

Conclusion

Based on our review, we are not aware of any material modifications that should be made to the accounting information contained in this supplementary information, in order for it to be adequately presented, in all material respects, in relation to the financial statements as of June 30, 2012, taken as a whole, prepared in accordance with the accounting practices adopted in Brazil applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).

São Paulo, July 23, 2012

/s/  PricewaterhouseCoopers	/s/ Paulo Sergio Miron
PricewaterhouseCoopers	Paulo Sergio Miron
Auditores Independentes	Contador CRC 1SP173647/O-5
CRC 2SP000160/O-5

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

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Management Discussion & Analysis Itaú Unibanco Holding S.A. 62

	Complete
	financial
	statements
	Itaú Unibanco Holding S.A.
	June 30, 2012

MANAGEMENT REPORT – 1ST HALF OF 2012

To our Stockholders

We present the Management Report and the Financial Statements of Itaú Unibanco Holding S.A. (Itaú Unibanco) and its subsidiaries for the first half of 2012, in accordance with the regulations established by the Brazilian Corporate Law, the National Monetary Council (CMN), the Central Bank of Brazil (Bacen), the Brazilian Securities and Exchange Commission (CVM), the Superintendency of Private Insurance (Susep) and the National Council of Private Insurance (CNSP).

1) Highlights

1.1) Subsequent Event

Association with Banco BMG - On July 10 we announced to the market that we entered into an Association Agreement with Banco BMG S.A. (“BMG”), with respect to the offering, distribution and commercialization of payroll debit loans throughout Brazil. This Association will be structured as a new business through a new financial institution to be named Banco Itaú BMG Consignado S.A. (“Association”), in which we will hold a controlling stake of 70% of the total voting capital and BMG will hold the remaining 30%. The Association’s capital stock shall be R$ 1 billion, to be subscribed by the shareholders in the aforementioned proportion.

The payroll advance loans carried out through branches for our clients will continue operating independently from the Association. In the chart below we present the corporate structure and the contract flow for Payroll Debit Loans of Association, as well as the related Funding Agreement:

We will provide, from now and for the term of 5 years, part of the funds for BMG’s Payroll Debit Loans operation in the monthly amount of up to R$ 300 million.

We also inform that we have the intention to consummate the Association within 90 days, subject to the compliance with certain precedent conditions, the execution of the final agreements and the appropriate regulatory approvals. The Association is not expected to have significant accounting effects on this year results.

1.2) Corporate Events

Redecard – Tender Public Offer (OPA) - The completion of the OPA is conditioned on (i) acceptance or (ii) express agreement with the voluntary delisting by more than 2/3 of the Company’s free float, thus understood as shares comprising the free float of the Company held by stockholders that have expressly agreed to the delisting of the Company or have qualified for the OPA auction, pursuant to article 16, II of CVM Instruction No.361/02.

The OPA launch is subject to: (i) regulatory approval, (ii) market conditions; and (iii) the terms stated in the Notice, in particular section 3.7 – “OPA Conditions”,posted on Redecard’s investor relations website on June 22, 2012 and filed with CVM.

Sale of BPI – In April 2012, as authorized by Banco de Portugal, we carried out the sale operation of our full interest in Banco BPI (18.87% in capital) to La Caixa Group, BPI’s largest stockholder. Over the twenty years of association, Itaú Unibanco has enjoyed an excellent relationship with the management of the La Caixa Group. As a result of this operation, there was a positive impact of approximately R$ 106 million in the consolidated stockholders’ equity and a negative non-recurring impact of R$ 205 million in net income for the first half of 2012.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 64

Acquisition of Banco Carrefour – On May 31, after authorization by the Central Bank of Brazil, we indirectly acquired shares representing 49% of the capital of Banco CSF S.A. (“Banco Carrefour”) responsible for the offer and distribution, on an exclusive basis, of financial, insurance and pension plan products and services in the distribution channels operated under the “Carrefour” brand in Brazil. The transaction of R$ 816 million resulted in goodwill of R$ 583 million, to be amortized over 10 years. This interest was accounted under the equity method. The Corporate Governance process has already been structured and is ongoing with nine internal committees, held on a monthly and quarterly basis to discuss topics related to Credit and Risk, Operations and IT, Human Resources, Finance and Taxes, Ombudsman and Quality, Compliance and Audit, Marketing and Sales, Fraud Prevention and Innovation/Products. So far, the Committees have identified synergies related to Client Service, Credit and Costs.

Completion of sale of Orbitall – Announced in December 2011, we completed the sale of the Orbitall card processor to Stefanini Group in May 2012. The final outcome of this transaction will tend to be neutral, considering the established contractual conditions.

Repurchase of shares – In May 2012 we acquired 3,500,000 preferred shares of own issue in the total amount of R$ 99.1 million at the average price of R$ 28.30 per share. The current repurchase program establishes a repurchase limit of up to 56,700,000 preferred shares and 9,000,000 common shares.

1.3) Other Highlights

Sustainable Bank of the Year in Americas - The British newspaper Financial Times and IFC (International Finance Corporation), the financial institution of the World Bank, elected Itaú as the Sustainable Bank of the Year – Americas, in the Financial Times/International Financial Corporation (FT/IFC) Sustainable Finance Awards. This is the fourth year in a row we are granted this award, one of the most important in the world in Sustainability. In 2012, 181 institutions of 67 countries competed for this award.

Interactivity – In less than one year, Itaú Unibanco’s page on Facebook reached over two million fans. We are the bank with the largest number of fans in the whole world and this is the first time a brand of the financial sector has reached this level of engagement.

Market Value in Stock Exchange – On June 30, 2012, we ranked were the 15^th largest bank of the world under the market value criterion (R$ 126.7 billion), according to the Bloomberg ranking, despite of the Real depreciation, since the ranking is calculated in US dollars.

Moody’s Ratings – In June, Moody’s ratings agency disseminated the revaluation of the risk ratings for Brazilian banks based on a new global methodology, and the ratings assigned to Itaú Unibanco Holding were: Foreign Currency (Long Term/Short Term) - Baa1/P-2; Local Currency (Long Term/Short Term) - Baa1/P-2; Issuer (Long Term) - Aaa.br; Issuer (Short Term) - BR-1; Senior Debt in Foreign Currency (Long Term) - Baa1; and Subordinated Debt in Foreign Currency (Long Term) - Baa2.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 65

2) Economic Environment

Recent concerns regarding the elections in Greece and banking problems in Spain have brought new waves of pessimism to the markets. The economy in the USA and China do not offer optimism to counterbalance the European problems. After months of positive surprises, hopes of returning to the high growth in the past have faded. We reduced our forecast for China’s GDP growth in 2012 from 8.0% to 7.8%. As uncertainty remains, financial conditions are worsening, recession in the Euro zone is worsening and tax adjustment becomes more problematic.

The Brazilian economy has recovered slower than expected. In view of the weak GDP data for the first quarter and the deterioration in the foreign scenario, we revised our growth projection in 2012 from 3.1% to approximately 2%. The stimuli of the economic policy implemented should lead to a reinvigoration of activity over the year, but probably less intense than expected.

The slow growth in Brazil and in the world reduces the risk of higher inflation in the next few quarters. In addition, microeconomic measures adopted by the government (tax incentives and managed prices) have pushed certain prices down. We reduced our projection for IPCA in 2012 from 5.2% to 4.9% when we absorbed the impact of the IPI (federal VAT) cut for vehicles announced at the end of May. The measure is expected to remain in force through August 31, but we believe it will be extended to at least the end of 2013.

With increased uncertainties about the foreign scenario and its possible impact on the domestic activity, the Central Bank of Brazil continued with the process to reduce the Selic rate in the first half of 2012. At the end of the first half, the annual basic interest rate was 8.5%, as compared to 11.0% at the end of 2011, before the reduction cycle. In addition to the relaxation of monetary policy, the government has used other instruments to boost economy, such as tax reduction for certain industries and credit incentive measures to stimulate credit.

Exchange rates depreciated over the first half of 2012 and is close to R$ 2.05. The increased aversion to risk and the decrease in prices of commodities contributed to this depreciation. The Central Bank of Brazil has also intervened in the foreign exchange market. After months purchasing dollars in the futures and spot markets, the monetary authority started selling foreign exchange swaps, aiming at limiting the devaluation of the real. From May to the end of June, the Central Bank of Brazil sold US$ 16.9 billion of the aforementioned derivative. International reserves reached US$ 374 billion at the end of the first half of 2012, above the US$352 billion recorded in December 2011.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 66

3) Information and Indicators

The table below shows our main information and indicators. The complete financial statements and the Management’s Discussion & Analysis Report, which present further details on the results for the period, are available on the Itaú Unibanco website: www.itau-unibanco.com/ir, section Financial Information, option Financial Statements, click in BRGAAP and choose 2012.

	Jan to Jun/12			Jan to Jun/11			Change (%)			2nd Q/12			1st Q/12			Change (%)
Statement of Income for the Period – R$ billion (1)
Gross income from financial operations		25.7			24.3			5.7	%		11.9			13.8			-13.9	%
Expenses for allowance for loan losses		(12.0	)		(9.5	)		26.7	%		(6.0	)		(6.0	)		0.0	%
Income from recovery of credits written off as loss		2.3			2.6			-10.8	%		1.1			1.2			-5.6	%
Income from services, income from bank charges, and income from insurance, pension plan and capitalization		11.5			10.4			11.5	%		5.8			5.8			0.0	%
Personnel, administrative and other operating expenses		(15.9	)		(15.2	)		4.6	%		(7.9	)		(8.0	)		-0.9	%
Tax expenses		(2.2	)		(2.2	)		2.3	%		(1.0	)		(1.2	)		-15.4	%
Income tax and social contribution		(1.8	)		(3.3	)		-46.4	%		0.1			(1.8	)		-103.8	%
Recurring net income		7.1			7.0			2.5	%		3.6			3.5			1.2	%
Net income		6.7			7.1			-5.6	%		3.3			3.4			-3.5	%
Total dividends and interest on capital (net of taxes)		1.4			1.4			5.4	%		0.8			0.7			19.9	%
Shares – R$
Recurring net income per share (2)		1.58			1.53			3.1	%		0.79			0.78			1.1	%
Net income per share (2)		1.49			1.57			-5.1	%		0.73			0.76			-3.6	%
Book value per share (2)		16.74			14.57			14.9	%		16.74			16.04			4.4	%
Number of outstanding shares – In thousands		4,517,639			4,534,669			-0.4	%		4,517,639			4,520,103			-0.1	%
Dividends and interest on capital per share (net of taxes)		0.3198			0.3020			5.9	%		0.1744			0.1454			19.9	%
Price of preferred share (PN) (3)		28.05			36.36			-22.9	%		28.05			35.00			-19.9	%
Price of preferred share (PN)/Net income		9.4			11.6			-18.7	%		9.4			11.5			-18.4	%
Price of preferred share (PN)/Stockholders’ equity		1.7			2.5			-32.9	%		1.7			2.2			-23.2	%
Market capitalization – R$ billion (4)(5)		126.7			164.9			-23.1	%		126.7			158.2			-19.9	%

										Change (%)
	Jun 30 2012			Dec 31 2011 (6)			Jun 30 2011			Dec 31 to Jun 30/12			Jun 30/11 to Jun 30/12
Balance Sheet - R$ billion
Total assets		888.8			851.3			793.7			4.4	%		12.0	%
Loan portfolio with endorsements and sureties		413.4			397.0			360.1			4.1	%		14.8	%
Free, raised and managed own assets		1,193.7			1,144.5			1,068.1			4.3	%		11.8	%
Subordinated debt		42.9			39.0			37.2			10.2	%		15.4	%
Stockholders’ equity		75.6			71.3			66.1			6.0	%		14.5	%
Referential equity (Financial Conglomerate)		102.0			92.6			83.0			10.1	%		22.8	%
Performance Indices
Recurring return on average equity – annualized		19.7	%		22.3	%		21.9	%		-2.6	p.p		-2.2	p.p
Return on average equity – annualized		18.6	%		22.3	%		22.4	%		-3.7	p.p		-3.8	p.p
Return on average assets - annualized		1.5	%		1.8	%		1.8	%		-0.3	p.p		-0.3	p.p
Recurring return on average assets - annualized		1.6	%		1.8	%		1.8	%		-0.2	p.p		-0.2	p.p
Efficiency ratio (7)		44.8	%		47.3	%		47.6	%		-2.5	p.p		-2.8	p.p
Basel ratio (financial conglomerate)		16.6	%		16.0	%		15.8	%		0.6	p.p		0.8	p.p
Fixed assets ratio (financial conglomerate)		40.2	%		48.6	%		48.6	%		-8.4	p.p		-8.4	p.p
Significant Data
Employees of Conglomerate		99,017			104,542			107,546			-5.3	%		-7.9	%
Employees Brazil		92,517			98,258			101,531			-5.8	%		-8.9	%
Employees Abroad		6,500			6,284			6,015			3.4	%		8.1	%
Number of service centers		32,795			33,753			34,478			-2.8	%		-4.9	%
Number of branches (units)		4,105			4,072			3,992			0.8	%		2.8	%
Number of service centers (units)		901			912			943			-1.2	%		-4.5	%
Number of ATMs (units)		27,789			28,769			29,543			-3.4	%		-5.9	%

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

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

(3) Calculated based on the average quotation of preferred shares on the last day of the period;

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

(5) R$ 121.2 billion considering the closing quotation of common and preferred (ON and PN shares) multiplied by total outstanding shares of each type of shares;

(6) The performance indices refers to January 1, 2011 to December 31, 2011.

(7) Calculated based on international criteria defined in the Management’s Discussion & Analysis Report.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 67

4) Performance

4.1) Income

Net income for the first half of 2012 amounted to R$ 6.7 billion, with annualized return of 18.6% on average equity (22.4% in the same period of the previous year). Recurring net income was R$ 7.1 billion, with annualized return of 19.7%. The increase of 5.7% in income from financial operations and 10.3% in income from services and bank charges as compared to the first half of 2011, added to the control over personnel and administrative expenses, contributed to net income.

The efficiency ratio reached 44.8% in the first half of 2012, as compared to 47.6% achieved in the same period of 2011. The reduction of 2.8 percentage points is the result of the efforts of our Efficiency Project started in 2010, aiming at reaching a 41% target at the end of 2013. In this context, expenses not related to interest posted an increase of 5.8% in the first half of 2012 in relation to the first half of 2011.

4.2) Assets

Total consolidated assets reached R$ 888.8 billion and consolidated stockholders’ equity totaled R$ 75.6 billion at June 30, 2012, with growth of 12.0% and 14.5% in the last 12 months, respectively, and 4.4% and 6.0% in the half.

The diversification of our business is reflected in the composition of our funding and loan portfolio, reducing risks to specific segments, which may be more impacted by the volatility in economy, as follows:

Loan Portfolio and Default

At June 30, 2012, the balance of loan portfolio, including endorsements and sureties, reached R$ 413.4 billion, an increase of 4.1% and 14.8% as compared to December 31 and June 30, 2011, respectively.

Individuals Segment – In Brazil, our loan portfolio to individuals reached R$ 147.3 billion at June 30, 2012, 0.2% lower than that posted at December 31, 2011. Highlights:

· Mortgage loan reached R$ 15.7 billion, a growth of 17.0% as compared to the end of December 2011. The offer of mortgage loan is promoted by the network of branches, development companies and real estate agencies, as well as partnerships with Lopes (LPS Brasil – Consultoria de Imóveis S.A.) and Coelho da Fonseca Empreendimentos Ltda., among other.

· Personal loans and payroll loans posted growth of 9.1%, and 10.8% respectively, when compared to December 31, 2011.

· We are leaders in the vehicle financing segment and credit card, with balances of R$ 56.6 billion and R$ 36.8 billion, respectively, at June 30, 2012.

Our loan portfolio for Mercosur operations (Argentina, Chile, Uruguay, and Paraguay) posted a growth of 21.4% as compared to December 31, 2011, reaching a balance of R$ 7.8 billion.

Corporate Segment – In Brazil, our portfolio of credit to companies reached R$ 241.1 billion at June 30, 2012, posting a growth of 5.4% in relation to December 31, 2010, as follows:

· The loan portfolio and joint obligations of Itaú BBA reached the amount of R$ 149.5 billion, a 8.0% increase as compared to December 2011.

· The very small, small and middle market company segment, which serves companies with annual revenue of up to 150 million, posted a balance for its loan portfolio, including endorsements and sureties, of R$ 91.7 billion at June 30, 2012, a 1.4% increase as compared to December 31, 2011.

In Chile, Argentina, Uruguay and Paraguay, loan operations to companies amounted to R$ 17.1 billion at June 30, 2012, a 20.1% growth when compared to December 31, 2011.

Default - Total default rate, considering the balance of transactions overdue for over 90 days reached 5.2% at June 30, 2012, posting an increase of 0.3 percentage point as compared to December 2011. The default rate of the portfolio of credit to individuals reached 7.3% and 3.5% for portfolio of credit to companies at the end of June 2012. However, if we analyze the default rate for 15 to 90 days, there was a decrease between March and June 2012: in Individuals from 7.9% to 7.5%, in Companies from 2.3% to 2.2% and, in total, from 4.8% to 4.5%.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 68

4.3) Funding

Free, raised and managed assets totaled R$ 1.2 trillion at June 30, 2012, an 11.8 % growth as compared to June 30, 2011. Of this total, 42.3% refer to investment funds, managed portfolios and technical provisions for insurance, pension plan and capitalization, 31.8% to deposits, debentures, and funds from bills, and 25.9% to own assets and other funding.

The increase in funding (net of Compulsory deposits and Cash equivalents) enabled the improved Loan portfolio and funding ratio, reaching 98.0% at June 30, 2012.

At June 30, 2012, the balance of managed assets was R$ 422.6 billion, an 11.4% increase as compared to the same period of the previous year.

Real Estate Credit Bills (LCI) – Funding operations through issues of LCIs increased 49.5% in the first half of 2012 as compared to the same period of the previous year.

4.4) Capital Strength

Basel ratio was 16.6% at the end of June 2012, showing the strength of our capital basis. In July 2012, we carried out a funding operation with the record amount of US$ 340 million with the International Finance Corporation (IFC) together with other seven international banks. The funds will be used to finance small and medium-market companies in the Northern and Northeastern regions of Brazil. The term of this funding is from 2 to 5 years, in different tranches; this is an unprecedented operation and the most relevant one in terms of volume raised by a Latin American institution with a multilateral body.

5) Business

Commercial Bank - At the end of June 2012, we had 5,006 bank points of service, including regular branches and service centers (Postos de Atendimento Bancário - PAB) distributed in Brazil and abroad, a growth of 113 branches in the one-year period.

Our loan portfolio, including endorsement and surety operations, reached the balance of R$ 413.4 billion at June 30, 2012, with an addition of 14.8% as compared to the same period of the previous year. In the individuals segment, noteworthy in the semester was the growth in mortgage and personal loan portfolios, whereas in the company segment the highlight was the growth in the corporate portfolio. Our balance of endorsements and sureties totaled R$ 56.6 billion at June 30, 2012.

We kept the focus of Itaú Personnalité on gaining market share in investments and pension plan for the high income segment, and on continuing to expand the exclusive branch network, as we opened 11 new points in the first half of 2012, which, added to the 27 points opened in 2011, represent a 20% increase in the last 18 months.

We consolidated the expansion of Itaú Uniclass service to 100% of retail network, and now we are serving clients with dedicated managers, exclusive tellers in major branches, higher credit limits, investments advisory and management services over the phone.

We boosted our investments in client service. Currently, there is R$ 450 million in projects that change the whole interface, add functionalities and improve the client’s experience of use in the relationship with Itaú. New products and services were made available to clients, such as Itautrade in 30 Horas, in which the client may trade shares in the Internet Banking; sending token codes via sms and the application for generation of token code in smartphones, making the use of remote channels easier; offering current account monthly statements by e-mail, reducing the printing volume and forwarding by mail; having a new platform for client service center, improving the quality of services and reducing the need for multiple phone calls to the bank; implementing voice recognition software in service centers, in which the client speaks the option chosen, in addition to investments in mobility, in which the bank make solutions available to individuals and companies.

In the Private Bank segment, we are the largest bank in Latin America and remain the leader in the Brazilian market, with over 25% of market share, according to the Brazilian Financial and Capital Markets Association (ANBIMA), by providing services to over 5,300 economic groups.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 69

In the Assets under Administration segment, in which Privatization Funds, Fixed Income, Equities Funds, Investment Clubs and Clients’ and the Group’s Portfolios are managed in Brazil and abroad, we reached R$ 422.6 billion in managed assets, with 19.7% market share and we rank 2^nd in the global administration ranking, according to ANBIMA (Brazilian Financial and Capital Markets Association).

We are leaders in the provision of custody services and bookkeeping of shares. We have a total of R$ 879.6 billion in assets under custody, which represents 25.3% market share, according to ANBIMA, and we provide bookkeeping of shares services to 63.2% of total companies listed in the BM&FBovespa.

Kinea - Kinea is among the largest real estate fund managers in Brazil, with total managed assets of R$ 2.6 billion in June 2012.

Insurance, Life, Pension Plan and Capitalization –The operations in these businesses in terms of volume of revenue for premiums, social security contributions and capitalization certificates reached R$ 11.8 billion in the first half of 2012 and the technical provisions totaled R$ 82.5 billion at the end of June 2012, including foreign operations. Our market share, including 30% of capital of the Porto Seguro Group, reached 13.4% in accumulated from January to May 2012, in accordance with information made available by Susep (which regulates all insurance lines, except for health insurance, which is regulated by ANS (Supplementary Healthcare Agency).

In this half, total funding of private pension plans reached R$ 8,720 million, an increase of 45.8% as compared to the same period of the previous year, mainly influenced by the 54.5% increase in funding from VGBL product. Net funding, which represents total funding less redemptions and external portability, posted a 82.3% increase as compared to the first half of 2011.

Porto Seguro - Noteworthy is that Itaú Unibanco holds 30% of capital of the insurance company Porto Seguro, the leading company in residence and automobile insurance segment in Brazil. We have an operating agreement with the insurance company Porto Seguro to offer and distribute, on an exclusive basis, residence and automobile insurance products to clients in our network in Brazil and Uruguay. From January to May 2012, Porto Seguro held 26.0% and 28.2% market share in retained premiums in automobile and residence insurance, respectively (source: Susep – Superintendency of Private Insurance).

Consumer Credit – We are leaders in the consumer credit segment in Brazil, by means of Itaucard, Hipercard, and partnerships, offering a diversified range of products to accountholders and non-accountholder clients, originated in proprietary channels and through partnerships with companies that have outstanding performance in the markets they are engaged. In the first half of 2012, the transacted amount reached R$ 81.7 billion, a 14.3% increase in relation to the same period of 2011.

Redecard, company controlled by Itaú Unibanco holds interest, recorded net income of R$ 769.3 million in the first half of 2012, with a 27.4% increase as compared to the same period of 2011.

Itaú BBA – In the investment banking area, we highlight as follows:

· Fixed income - in the period from January to May 2012, we took part in operations of debentures, promissory notes and securitization, that totaled R$ 9.5 billion: In the ANBIMA ranking of distribution of fixed income from January to May 2012, we reached the 1^st place in volume, with 29.6% market share. In international issues of fixed income, we acted as the joint bookrunner of offerings, with a total volume of US$ 15.8 billion, reaching the 1^st place in the ranking of issues by Brazilian companies in June 2012, of BondRadar. We also achieved the 3rd position in the ranking of issues of Fixed Income in Latin America, with 8.6% market share, according to the ranking from January to June 2012 disseminated by Dealogic.

· Mergers and Acquisitions – we provide financial advisory on 32 transactions in the first half of 2012 and achieved the leadership of the Thomson Reuters ranking in volume of operations, accumulating the amount of US$ 14.5 billion.

· Capital markets – we reached the 2^nd position in the Origination ranking of ANBIMA of May 2012, with volume of operations of R$ 1.2 billion.

· Itaú Corretora – In the first half of 2012, we were ranked fifth among the brokerage companies, with a 5.3% market volume. In Futures Market, we ended the half with 8.7% market share, with 63 million of traded contracts, ranked 5th among the brokerage companies.

We highlight the following operations in the Wholesale banking activity of Itaú BBA:

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 70

· Derivatives – Itaú BBA maintained its leadership in CETIP (Clearing House for the Custody and Financial Settlement of Securities) in over-the-counter derivative operations with companies. The focus was on operations hedging the exposures to foreign currencies, interest rates and commodities with clients. The volume of contracted operations in the first half of 2012 was 43.4% higher than in the same period of prior year.

· Project Finance – we closed the first half of 2012 with 52 projects in which the bank was contracted to work on the structuring and/or advisory in the same period. Total investments involved in the projects analyzed for a number of sectors, such as oil and gas, energy, industrial, mining, logistics and sanitation, exceeded R$ 60 billion.

Activities Abroad – In addition to Brazil, we acted in regions such as: Latin America, Europe, North America, Middle East and Asia. In the half, these businesses posted recurring net income of R$ 1,077.2 million, with total assets of R$ 181.2 billion at June 30, 2012.

6) People

We had the support of 99.0 thousand employees at the end of June, of which 6.5 thousand were abroad. The employee’s fixed compensation plus charges and benefits totaled R$ 4.5 billion for the half year. Welfare benefits granted to employees and their dependants totaled R$ 679.1 million. In addition, approximately R$ 123.4 million were invested in education, training and development programs.

To keep the commitment of assuring excellence to meet the business requirements in the first half of 2012, we continued with the talent hiring programs, such as for trainees and internship. In line with the inclusion commitment, we closed the first half with over 4.1 thousand employees in the Program for Inclusion of People with Disabilities and over 1.7 thousand apprentices.

In a pioneer event, we received university students in our facilities to talk about business, career and relevant topics for the attendees. Our Chief Executive Officer and Chairman of the Board were in attendance at the Opening Ceremony and the Vice-Presidents, Executive Directors and Superintendents conducted the Experience Talks, Workshops, Panels and Lectures.

7) Sustainability and Corporate Governance

Strengthening our commitment to the transparency and communication with the market in the first half of 2012, we took part in 15 conferences and road shows in Brazil and abroad, which contributed to strengthen our relationship with stockholders, analysts and investors in the Brazilian and international markets.

We held 13 of the 22 meetings scheduled for the 2012 Apimec Cycle for all regions of Brazil. With an innovative language, the presentation of these meetings involves economic aspects of the country and the main information of our institution, such as financial performance, business areas and outlook for the sector.

In May 2012, the new guides on the responsible use of money arrived in our branches: “Consumir e Poupar” (to consume and save), “Use bem o seu dinheiro”(use your money responsibly) and “Saia do vermelho” (get out of the red). The guides address the topic of financial education in a simple and informal language and its purpose is to support people to have a healthier relationship with money. In addition to the guides, in 2012 we launched the children’s book “A Árvore dos Sonhos" (the dream tree), a recreational instrument used by parents and educators to introduce the topic to children. The purpose is to awake the curiosity of children about the choices involving money and fulfillment of dreams.

8) Social and cultural investments

Social and cultural investments are aimed at anticipating changes, improving learning experiences and focusing on projects and initiatives that lead to transformation in society.

Aware of our responsibility, only in the first half of 2012 we invested R$ 84.3 million in education, culture and sports actions. Among them, noteworthy are those related to education and culture, with R$ 43.8 million, in addition to the celebration of 25 years of Itaú Cultural.

More details about the main initiatives in the first half:

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 71

· The “Jovem do Futuro" (Youth with a Future) Program of Instituto Unibanco: In May, the Institute signed with the Government of the State of Ceará, the Ministry of Education (MEC), the technical cooperation instrument to implement in that State the “Jovem do Futuro” program, developed and validated by Instituto Unibanco, which is an integral part of “Ensino Médio Inovador” (innovative high school) program, of the Federal government. The purpose is to qualify the High School management and to help Ceará to come closer to the Basic Education Development Interest (IDEB) 6, which is the federal government’s goal for 2022. The 100 schools in Ceará included in the Project will receive funds, technical support and close supervision, in addition to qualification to transform investments in school achievements, such as improvement in school performance and increase in the pass rate.

· Itaú Cultural: By the end of June 2012, over 120 thousand people visited Itaú Cultural. The Institute’s website had over 5.9 million hits. In the same period, partnerships with TVs and radio stations led to the execution of 190 and 2,007 agreements for the broadcasting of programs, respectively. The first annual exhibition, “Convite à Viagem” (invitation to travel) was visited by over 58 thousand people. By the end of June 2012, 130 national and international events were held and 8 new products were launched, including catalogs, magazines and books, of which 7.6 thousand were distributed to institutions and researchers in Brazil and abroad. By June, the Auditório Ibirapuera was visited by over 80 thousand people, where 83 shows were held.

· Investments of Itaú Cultural from January to May 2012 over R$ 28.9 million were invested in projects and cultural initiatives, of which R$ 10.9 million (38%) under article 26 of the Rouanet Law.

9) Awards and Recognition

· World’s Best Sub-Custodian Banks 2012 – We were chosen by Global Finance magazine, one of the global most respected publications in Economy and Finance, as the Best Bank in the provision of custody services in Brazil and Uruguay.

· Customer Excellence Awards – We were granted the “Nice Customer Excellence” award as a benchmark in Call Center. With this achievement, we are three-time champions in Planning – we also won in 2009 and 2011 – and are first-time winners in Quality.

· World’s Best Banks 2012 – We were chosen as the Best Bank in Brazil and Paraguay, according to the Global Finance magazine. The winners are chosen in a survey with analysts, executives and consultants of financial institutions.

· The Best Companies to Start a Career – We were chosen as one of the best companies to start a career. Sponsored by Você S/A Guide, the award assesses the work environment and the practices and policies for people management focused on the young audience.

· Highlight AE Projeções – Itaú Asset Management was one of the awarded institutions in Top Basic and Itaú Unibanco won Top General and Top Basic. The award, granted to the first ten positions in the AE Projeções Ranking, identifies the institutions which projections for the key economic indicators in Brazil are the closest to reality.

· Safest Emerging Market Banks in Latin America – We were the best ranked Brazilian bank. The acknowledgment is the result of a survey conducted by Global Finance magazine, in which the 10 Safest Banks of Emerging Markets in Latin America are classified.

· Top Management of Valor Econômico - Itaú Asset Management was granted the award because it was the best asset manager in capital markets of the year. Developed based on the Standard & Poor’s analysis, the award selects the best managers of the Brazilian investment funds industry.

· World Business and Development Awards (International Chamber of Commerce) – We won in the special “Brazil” category. This award acknowledges private sector’s contributions to the millennium goals (targets defined by the UN to reduce poverty, promote gender equality, health, and fight against child mortality, AIDS and other diseases).

· Efinance – We were awarded in five categories: Internet Banking, E-commerce, Social Network, Corporate Mobile and Safety. Itaú BBA was the winner in three categories: Workflow, Risk Analysis Tools and Product Redesign. Sponsored by the Executivos Financeiros magazine, the Efinance award acknowledges the most innovative solutions, implementations and applications in the IT and Telecom areas of financial institutions.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 72

· Ethical Corporation Awards – We were granted the award in the Sustainability Commercialized category. Sponsored by Ethical Corporation since 2010, the award acknowledges corporate responsibility practices.

· Insurer 2012 - Itaú Seguros was awarded in the categories “Best Global Development in Private Pension” and “Best Performance” in lines “Warranties”, “Life Group”, “Extended Warranty” and “Agricultural Risks” and won in the category “Sales Market Leader”, in lines “Liabilities”, “General Risks”, “Accident” and “Extended Warranty”. The Brazil Insurer Award acknowledges the best performances of large and middle-sized groups, insurance companies, private pension, capitalization and local reinsurers, in addition to sales market leaders in all segments.

· Best Brazilian Trade Bank in Trade Finance – granted in Awards of Excellence 2012 by Trade Finance magazine.

· Best Investment Bank in Brazil – granted by Euromoney Awards for Excellence 2012.

10) Independent Auditors – CVM Instruction No. 381

Procedures adopted by the Company

The policy adopted by Itaú Unibanco Holding S.A., its subsidiaries and parent company, to engage non-audit related services from our independent auditors is based on the applicable regulations and internationally accepted principles that preserve the auditor’s independence. These principles include the following: (a) an auditor cannot audit his or her own work, (b) an auditor cannot function in the role of management in companies where he or she provides external audit services; and (c) an auditor cannot promote the interests of its client.

During the period from January to June 2012, the independent auditors and related parties did not provide non-audit related services in excess of 5% of total external audit fees.

According to CVM Instruction No. 381, we list below the engaged services and related dates:

· January 24, 2012 – vulnerability analysis and application intrusion tests on the internet perimeter.

· February 17, 2012 – review of aspects related to the business continuity program.

· February 23 and March 29, 2012 – acquisition of technical material;

· February 28, 2012 – consulting services for obtaining GIPS (Global Investment Performance Standards) certification;

· March 6 and June 12, 2012 – attendance at courses open to the public, related to finance and accounting.

· April 27, 2012 – consulting services in the authorization request to the regulatory body for opening a subsidiary.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 73

Summary of the Independent Auditors’ justification - PricewaterhouseCoopers

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

11) Circular No. 3,068/01 – BACEN

Itaú Unibanco hereby represents to have the financial capacity and the intention to hold to maturity securities classified under the line “held-to-maturity securities” in the balance sheet, in the amount of R$ 3.1 billion, corresponding to only 1.5% of total securities held.

Acknowledgements

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

(Approved at the Board of Directors' Meeting of July 23, 2012).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 74

ITAÚ UNIBANCO HOLDING S.A.
BOARD OF DIRECTORS	EXECUTIVE BOARD
Chairman	Chief Executive Officer
PEDRO MOREIRA SALLES	ROBERTO EGYDIO SETUBAL
Vice-Chairmen	Executive Vice-Presidents
ALFREDO EGYDIO ARRUDA VILLELA FILHO	ALFREDO EGYDIO SETUBAL (*)
ROBERTO EGYDIO SETUBAL	CANDIDO BOTELHO BRACHER
Members	Executive Directors
ALFREDO EGYDIO SETUBAL	CAIO IBRAHIM DAVID
CANDIDO BOTELHO BRACHER	CLAUDIA POLITANSKI
DEMONSTHENES MADUREIRA DE PINHO NETO	MARCOS DE BARROS LISBOA
GUSTAVO JORGE LABOISSIÈRE LOYOLA	RICARDO BALDIN
HENRI PENCHAS	SÉRGIO RIBEIRO DA COSTA WERLANG
ISRAEL VAINBOIM
NILDEMAR SECCHES
PEDRO LUIZ BODIN DE MORAES	Directors
RICARDO VILLELA MARINO	ALEXSANDRO BROEDEL LOPES
	ANA TEREZA DE LIMA E SILVA PRANDINI
AUDIT COMMITTEE	EDUARDO HIROYUKI MIYAKI
President	EMERSON MACEDO BORTOLOTO
GUSTAVO JORGE LABOISSIÈRE LOYOLA	RODRIGO LUÍS ROSA COUTO
	ROGÉRIO PAULO CALDERÓN PERES
Members
ALKIMAR RIBEIRO MOURA	(*) Investor Relations Director
EDUARDO AUGUSTO DE ALMEIDA GUIMARÃES
GUY ALMEIDA ANDRADE
LUIZ ALBERTO FIORE
FISCAL COUNCIL
President
IRAN SIQUEIRA LIMA
Members
ALBERTO SOZIN FURUGUEM	Accountant
LUIZ ALBERTO DE CASTRO FALLEIROS	CARLOS ANDRÉ HERMESINDO DA SILVA
	CRC - 1SP281528/O-1

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 75

ITAÚ UNIBANCO S.A.
Chief Executive Officer and General Manager	Directors (continued)
ROBERTO EGYDIO SETUBAL	FERNANDO JOSÉ COSTA TELES
	FLAVIO AUGUSTO AGUIAR DE SOUZA
Executive Vice-Presidents	FRANCISCO VIEIRA CORDEIRO NETO
ALEXANDRE DE BARROS	GUILHERME MARTINS VASCONCELOS
ALFREDO EGYDIO SETUBAL	HENRIQUE PINTO ECHENIQUE
JOSÉ CASTRO ARAÚJO RUDGE	HENRIQUE RUTHER
JOSÉ ROBERTO HAYM	IBRAHIM JOSÉ JAMHOUR
LUÍS OTAVIO MATIAS	JEAN MARTIN SIGRIST JÚNIOR
MÁRCIO DE ANDRADE SCHETTINI	JOÃO ANTONIO DANTAS BEZERRA LEITE
MARCO AMBROGIO CRESPI BONOMI	JOÃO LUIZ DE MEDEIROS
MARCOS DE BARROS LISBOA	JORGE LUIZ VIEGAS RAMALHO
RICARDO VILLELA MARINO	JOSÉ VIRGILIO VITA NETO
SÉRGIO RIBEIRO DA COSTA WERLANG	LEILA CRISTIANE BARBOZA BRAGA DE MELO
	LUÍS EDUARDO GROSS SIQUEIRA CUNHA
Executive Directors	LUIS TADEU MANTOVANI SASSI
ANDRÉ SAPOZNIK	LUIZ ANTONIO NOGUEIRA DE FRANÇA
CAIO IBRAHIM DAVID	LUIZ EDUARDO LOUREIRO VELOSO
CARLOS EDUARDO MONICO	LUIZ FERNANDO BUTORI REIS SANTOS
CELSO SCARAMUZZA	LUIZ SEVERIANO RIBEIRO
CLAUDIA POLITANSKI	MARCELO BOOCK
FERNANDO MARSELLA CHACON RUIZ	MARCELO DA COSTA LOURENÇO
GUSTAVO ADOLFO FUNCIA MURGEL	MARCELO LUIS ORTICELLI
LUIS ANTONIO RODRIGUES	MARCO ANTONIO SUDANO
OSVALDO DO NASCIMENTO	MARCOS ANTÔNIO VAZ DE MAGALHÃES
	MARCOS AUGUSTO CAETANO DA SILVA FILHO
Directors	MARCOS SILVA MASSUKADO
ADILSO MARTINS DE LIMA	MARCOS VANDERLEI BELINI FERREIRA
ADRIANO BRITO DA COSTA LIMA	MARIA IRENE GARCETE DE GAVILAN
ADRIANO CABRAL VOLPINI	MARIO LUIZ AMABILE
ALBERTO FERNANDES	MESSIAS DOS SANTOS ESTEVES
ALEXANDRE JADALLAH AOUDE	MILTON MALUHY FILHO
ALEXSANDRO BROEDEL LOPES	NATACHA LITVINOV
ANA CARLA ABRÃO COSTA	OSVALDO JOSÉ DAL FABBRO
ANA TEREZA DE LIMA E SILVA PRANDINI	PAULO EIKIEVICIUS CORCHAKI
ANDRÉA MATTEUCCI PINOTTI CORDEIRO	PAULO MEIRELLES DE OLIVEIRA SANTOS
CARLOS EDUARDO DE CASTRO	RENATA HELENA DE OLIVEIRA TUBINI
CARLOS EDUARDO MACCARIELLO	RENÊ MARCELO GONÇALVES
CARLOS HENRIQUE DONEGÁ AIDAR	RICARDO LIMA SOARES
CARLOS ORESTES VANZO	RICARDO ORLANDO
CESAR PADOVAN	RICARDO RIBEIRO MANDACARU GUERRA
CÍCERO MARCUS DE ARAÚJO	RICARDO URQUIJO LAZCANO
CINTIA CARBONIERI ARAÚJO	ROBERTO FERNANDO VICENTE
CLAUDIO CÉSAR SANCHES	ROBERTO MASSARU NISHIKAWA
CLAUDIO JOSÉ COUTINHO ARROMATTE	RODRIGO LUIS ROSA CUTO
COSMO FALCO	ROGERIO CARVALHO BRAGA
CRISTIANE MAGALHÃES TEIXEIRA PORTELLA	ROGÉRIO PAULO CALDERÓN PERES
CRISTINA CESTARI SPADA	ROMILDO GONÇALVES VALENTE
DANIEL LUIZ GLEIZER	ROONEY SILVA
EDILSON PEREIRA JARDIM	SERGIO GUILLINET FAJERMAN
ERNESTO ANTUNES DE CARVALHO	SERGIO SOUZA FERNANDES JÚNIOR
FABIO DI PACE MENEZES	VILMAR LIMA CARREIRO
FERNANDO DELLA TORRE CHAGAS	WAGNER BETTINI SANCHES

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 76

BANCO ITAÚ BBA S.A.
BOARD OF DIRECTORS	Directors
	ADRIANO LIMA BORGES
Chairman	ALBERTO ZOFFMANN DO ESPÍRITO SANTO
ROBERTO EGYDIO SETUBAL	ALEXANDRE ENRICO SILVA FIGLIOLINO
	ÁLVARO DE ALVARENGA FREIRE PIMENTEL
Vice-Chairmen	ANDRÉ CARVALHO WHYTE GAILEY
ALFREDO EGYDIO SETUBAL	ANDRÉ DEL BEL CURY
FERNÃO CARLOS BOTELHO BRACHER	ANDRÉ FERRARI
	ANTONIO JOSÉ CALHEIROS RIBEIRO FERREIRA
Members	ANTONIO SANCHEZ JUNIOR
ALFREDO EGYDIO SETUBAL	EDUARDO CARDOSO ARMONIA
ANTONIO CARLOS BARBOSA DE OLIVEIRA	EDUARDO CORSETTI
CANDIDO BOTELHO BRACHER	EMERSON SAVI JUNQUEIRA
EDUARDO MAZZILLI DE VASSIMON	FABIO MASSASHI OKUMURA
HENRI PENCHAS	FERNANDO HENRIQUE MEIRA DE CASTRO
JOÃO DIONÍSIO FILGUEIRA BARRETO AMOÊDO	FLÁVIO DELFINO JUNIOR
SÉRGIO RIBEIRO DA COSTA WERLANG	GILBERTO FRUSSA
	GUSTAVO HENRIQUE PENHA TAVARES
EXECUTIVE BOARD	HENRIQUE RUTHER
Chief Executive Officer	ILAN GOLDFAJN
CANDIDO BOTELHO BRACHER	JOÃO CARLOS DE GÊNOVA
	JOÃO MARCOS PEQUENO DE BIASE
Managing Vice-Presidents	JORGE BEDRAN JETTAR
ALBERTO FERNANDES	JOSÉ AUGUSTO DURAND
DANIEL LUIZ GLEIZER	LILIAN SALA PULZATTO KIEFER
JEAN-MARC ROBERT NOGUEIRA BAPTISTA ETLIN	LUIZ FELIPE MONTEIRO ARCURI TREVISAN
RODOLFO HENRIQUE FISCHER	MARCELLO PECCININI DE CHIARO
	MARCELO ARIEL ROSENHEK
Executive Directors	MARCELO DA COSTA LOURENÇO
ALEXANDRE JADALLAH AOUDE	MARCO ANTONIO SUDANO
ANDRÉ LUÍS TEIXEIRA RODRIGUES	MARCOS AUGUSTO CAETANO DA SILVA FILHO
ELAINE CRISTINA ZANATTA RODRIGUES VASQUINHO	MÁRIO LÚCIO GURGEL PIRES
FERNANDO FONTES IUNES	MÁRIO LUÍS BRUGNETTI
MARCELO TREVISAN MARANGON	PAULO DE PAULA ABREU
MILTON MALUHY FILHO	RODERICK SINCLAIR GREENLEES
	SOLANGE PAIVA VIEIRA
BANCO ITAUCRED FINANCIAMENTOS S.A.	ITAÚ  SEGUROS S.A.
Chief Executive Officer	Chief Executive Officer
LUÍS OTÁVIO MATIAS	ROBERTO EGYDIO SETUBAL
Executive Vice-President	Superintendent Director
MÁRCIO DE ANDRADE SCHETTINI	MARCOS DE BARROS LISBOA
Directors	Executive Directors
ADRIANO CABRAL VOLPINI	ANDRÉ HORTA RUTOWITSCH
ALEXSANDRO BROEDEL LOPES (*)	ANTONIO EDUARDO MÁRQUEZ DE FIGUEIREDO TRINDADE
ANA TEREZA DE LIMA E SILVA PRANDINI	JOSÉ CASTRO ARAÚJO RUDGE
CLÁUDIO JOSÉ COUTINHO ARROMATTE
EVANIR COUTINHO USSIER	Directors
FÁBIO MASSASHI OKUMURA	ADRIANO CABRAL VOLPINI (*)
FERNANDO JOSÉ COSTA TELES	ANA TEREZA DE LIMA E SILVA PRANDINI (*)
HENRIQUE PINTO ECHENIQUE (*)	ALEXSANDRO BROEDEL LOPES (**)
LUÍS FERNANDO STAUB	HENRIQUE PINTO ECHENIQUE (**)
MARCOS ANTÔNIO VAZ DE MAGALHÃES	MARIO LUIZ AMABILI (**)
MARCOS VANDERLEI BELINI FERREIRA	NORBERTO GIL FERREIRA CAMARGO
MARIO LUIZ AMABILE (*)
	(*) Elected at EGM on April 12, 2012. Awaiting Susep approval.
(*) Directors elected on June 1, 2012 and approved by Bacen on July 11, 2012.	(**) Elected at EGM on May 31, 2012. Awaiting Susep approval.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 77

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

ASSETS	NOTE		6/30/2012			6/30/2011
CURRENT ASSETS				643,309,891			591,380,516
CASH AND CASH EQUIVALENTS				13,614,277			15,185,816
INTERBANK INVESTMENTS		4b and 6		117,292,323			97,992,589
Money market				92,407,375			80,082,541
Money market – Assets Guaranteeing Technical Provisions - SUSEP		11b		2,645,336			3,018,248
Interbank deposits				22,239,612			14,891,800
SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS		4c, 4d and 7		163,563,986			145,615,959
Own portfolio				40,546,951			33,247,887
Subject to repurchase commitments				25,687,209			37,384,358
Pledged in guarantee				5,584,165			5,452,745
Securities under resale agreements with free movement				44,996			4,155,787
Deposited with the Central Bank				13,027,061			2,171,856
Derivative financial instruments				6,952,500			6,753,124
Assets guaranteeing technical provisions - PGBL/VGBL fund quotas		11b		65,605,935			51,123,685
Assets guaranteeing technical provisions – other securities		11b		6,115,169			5,326,517
INTERBANK ACCOUNTS				77,174,249			95,554,586
Pending settlement				3,200,634			3,662,129
Central Bank deposits				73,909,113			91,838,986
National Housing System (SFH)				1,555			1,386
Correspondents				28,980			52,085
Interbank onlending				33,967			-
INTERBRANCH ACCOUNTS				47,859			59,469
LOAN, LEASE AND OTHER CREDIT OPERATIONS		8		188,575,590			168,613,770
Operations with credit granting characteristics		4e		203,917,072			182,805,437
(Allowance for loan losses)		4f		(15,341,482	)		(14,191,667	)
OTHER RECEIVABLES				79,535,686			65,167,881
Foreign exchange portfolio		9		34,315,265			23,584,207
Income receivable				1,261,722			1,120,697
Transactions with credit card issuers		4e		15,636,707			13,964,728
Receivables from insurance and reinsurance operations		4mI and 11b		4,045,159			3,502,312
Negotiation and intermediation of securities				4,198,406			2,830,083
Sundry		13a		20,078,427			20,165,854
OTHER ASSETS		4g		3,505,921			3,190,446
Assets held for sale				133,402			126,392
(Valuation allowance)				(40,516	)		(57,144	)
Unearned premiums of reinsurance		4mI		637,088			512,059
Prepaid expenses		4g and 13b		2,775,947			2,609,139
LONG-TERM RECEIVABLES				232,653,614			191,351,644
INTERBANK INVESTMENTS		4b and 6		2,641,609			452,721
Money market				-			7,837
Money market – Assets Guaranteeing Technical Provisions - SUSEP		11b		-			56,886
Interbank deposits				2,641,609			387,998
SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS		4c, 4d and 7		50,805,255			35,116,986
Own portfolio				29,139,700			22,160,677
Subject to repurchase commitments				10,485,833			3,896,090
Pledged in guarantee				1,719,585			1,733,712
Deposited with the Central Bank				-			-
Derivative financial instruments				5,126,257			3,669,567
Assets guaranteeing technical provisions – other securities		11b		4,333,880			3,656,940
INTERBANK ACCOUNTS - National Housing System (SFH)				714,434			630,767
LOAN, LEASE AND OTHER CREDIT OPERATIONS		8		141,156,927			124,575,264
Operations with credit granting characteristics		4e		152,871,532			134,158,172
(Allowance for loan losses)		4f		(11,714,605	)		(9,582,908	)
OTHER RECEIVABLES				35,828,547			29,075,511
Foreign exchange portfolio		9		2,268,598			1,285,289
Sundry		13a		33,559,949			27,790,222
OTHER ASSETS – Prepaid expenses		4g and 13b		1,506,842			1,500,395
PERMANENT ASSETS				12,845,152			10,947,101
INVESTMENTS		4h and 15a Il		3,265,426			2,974,371
Investments in affiliates				2,346,074			1,858,411
Other investments				1,127,251			1,301,373
(Allowance for losses)				(207,899	)		(185,413	)
REAL ESTATE IN USE		4i and 15b		5,276,734			4,781,365
Real estate in use				3,301,536			3,250,273
Other fixed assets				9,034,114			8,224,260
(Accumulated depreciation)				(7,058,916	)		(6,693,168	)
GOODWILL		4j and 15b		93,025			67,617
INTANGIBLE ASSETS		4k and 15b		4,209,967			3,123,748
Acquisition of rights to credit payroll				1,711,874			2,388,708
Other intangible assets				4,462,382			2,986,021
(Accumulated amortization)				(1,964,289	)		(2,250,981	)
TOTAL ASSETS				888,808,657			793,679,261

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 78

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

LIABILITIES	NOTE		6/30/2012			6/30/2011
CURRENT LIABILITIES				439,571,265			422,446,320
DEPOSITS		4b and 10b		160,411,745			146,885,096
Demand deposits				31,360,997			24,463,040
Savings deposits				73,055,957			60,008,457
Interbank deposits				9,472,936			2,478,203
Time deposits				46,521,855			59,935,396
DEPOSITS RECEIVED UNDER SECURITIES REPURCHASE AGREEMENTS		4b and 10c		88,522,786			109,051,417
Own portfolio				59,493,557			66,678,601
Third-party portfolio				28,497,554			37,625,123
Free portfolio				531,675			4,747,693
FUNDS FROM ACCEPTANCES AND ISSUANCE OF SECURITIES		4b and 10d		27,479,537			17,297,060
Real estate, mortgage, credit and similar notes				20,808,186			11,415,215
Debentures				1,033,025			28,764
Foreign borrowings through securities				5,638,326			5,853,081
INTERBANK ACCOUNTS				3,988,519			4,362,618
Pending settlement				2,847,529			3,349,747
Correspondents				1,140,990			1,012,871
INTERBRANCH ACCOUNTS				4,111,483			4,156,136
Third-party funds in transit				4,091,404			4,142,518
Internal transfer of funds				20,079			13,618
BORROWINGS AND ONLENDING		4b and 10e		30,871,523			26,726,437
Borrowings				17,956,645			16,140,001
Onlending				12,914,878			10,586,436
DERIVATIVE FINANCIAL INSTRUMENTS		4d and 7h		5,044,468			4,293,789
TECHNICAL PROVISION FOR INSURANCE, PENSION PLAN AND CAPITALIZATION		4m II and 11a		11,187,089			10,007,878
OTHER LIABILITIES				107,954,115			99,665,889
Collection and payment of taxes and contributions				4,238,039			9,385,463
Foreign exchange portfolio		9		34,490,288			24,176,802
Social and statutory		16b II		2,549,962			2,750,679
Tax and social security contributions		4n, 4o and 14c		7,361,699			6,597,730
Negotiation and intermediation of securities				7,082,783			3,422,761
Credit card operations		4e		37,179,747			32,120,531
Subordinated debt		10f		5,342,689			9,150,889
Sundry		13c		9,708,908			12,061,034
LONG-TERM LIABILITIES				370,963,534			301,559,674
DEPOSITS		4b and 10b		74,563,375			62,029,119
Interbank deposits				212,738			323,987
Time deposits				74,350,637			61,705,132
DEPOSITS RECEIVED UNDER SECURITIES REPURCHASE AGREEMENTS		4b and 10c		106,577,030			88,812,400
Own portfolio				89,707,941			77,181,975
Free portfolio				16,869,089			11,630,425
FUNDS FROM ACCEPTANCES AND ISSUANCE OF SECURITIES		4b and 10d		26,816,038			14,999,696
Real estate, mortgage, credit and similar notes				17,948,981			8,103,847
Debentures				1,532,128			1,012,948
Foreign borrowings through securities				7,334,929			5,882,901
BORROWINGS AND ONLENDING		4b and 10e		24,707,419			26,220,511
Borrowings				2,928,137			2,529,933
Onlending				21,779,282			23,690,578
DERIVATIVE FINANCIAL INSTRUMENTS		4d and 7h		4,170,748			2,593,652
TECHNICAL PROVISION FOR INSURANCE, PENSION PLAN AND CAPITALIZATION		4n II and 11a		71,366,354			56,695,083
OTHER LIABILITIES				62,762,570			50,209,213
Foreign exchange portfolio		9		2,284,890			1,281,625
Tax and social security contributions		4n, 4o and 14c		12,820,500			12,688,013
Subordinated debt		10f		37,605,196			28,059,604
Sundry		13c		10,051,984			8,179,971
DEFERRED INCOME		4p		820,973			828,714
MINORITY INTEREST IN SUBSIDIARIES		16e		1,817,298			2,761,757
STOCKHOLDERS’ EQUITY		16		75,635,587			66,082,796
Capital				45,000,000			45,000,000
Capital reserves				775,402			619,298
Revenue reserves				30,869,058			21,543,542
Asset valuation adjustment		4c, 4d and 7d		536,004			(32,044	)
(Treasury shares)				(1,544,877	)		(1,048,000	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				888,808,657			793,679,261

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 79

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Income (Note 2a)

(In thousands of Reais)

			01/01 to			01/01 to
	NOTE		6/30/2012			6/30/2011
INCOME FROM FINANCIAL OPERATIONS				52,120,137			45,809,941
Loan, lease and other credit operations				31,154,455			27,955,714
Securities and derivative financial instruments				13,255,278			10,694,696
Financial income from insurance, pension plan and capitalization operations		11c		3,333,457			2,595,447
Foreign exchange operations				1,009,685			117,777
Compulsory deposits				3,367,262			4,446,307
EXPENSES OF FINANCIAL OPERATIONS				(26,435,883	)		(21,521,862	)
Money market				(22,534,611	)		(18,650,894	)
Financial expenses on technical provisions for pension plan and capitalization		11c		(2,972,443	)		(2,314,834	)
Borrowings and onlending				(928,829	)		(556,134	)
INCOME FROM FINANCIAL OPERATIONS BEFORE LOAN LOSSES				25,684,254			24,288,079
RESULT OF ALLOWANCE FOR LOAN LOSSES		8d I		(9,701,469	)		(6,887,565	)
Expenses for allowance for loan losses				(12,019,821	)		(9,487,170	)
Income from recovery of credits written off as loss				2,318,352			2,599,605
GROSS INCOME FROM FINANCIAL OPERATIONS				15,982,785			17,400,514
OTHER OPERATING REVENUES (EXPENSES)				(6,918,586	)		(7,386,471	)
Banking service fees		13d		7,205,738			6,661,579
Asset management				1,447,472			1,274,773
Current account services				336,128			332,429
Credit cards				3,157,884			2,877,966
Sureties and credits granted				776,264			835,835
Receipt services				700,067			630,931
Other				787,923			709,645
Income from bank charges		13e		2,875,994			2,478,117
Result from insurance, pension plan and capitalization operations		11c		1,460,025			1,214,338
Personnel expenses		13f		(6,830,138	)		(6,578,061	)
Other administrative expenses		13g		(7,087,371	)		(6,682,373	)
Tax expenses		4o and 14a II		(2,208,531	)		(2,159,626	)
Equity in earnings of affiliates and other investments		15a lll		80,353			(43,069	)
Other operating revenues		13h		141,384			222,777
Other operating expenses		13i		(2,556,040	)		(2,500,153	)
OPERATING INCOME				9,064,199			10,014,043
NON-OPERATING INCOME				(286,770	)		127,492
INCOME BEFORE TAXES ON INCOME AND PROFIT SHARING				8,777,429			10,141,535
INCOME TAX AND SOCIAL CONTRIBUTION		4o and 14a I		(1,570,570	)		(2,541,931	)
Due on operations for the period				(4,752,348	)		(3,878,915	)
Related to temporary differences				3,181,778			1,336,984
PROFIT SHARING – Management members - Statutory - Law No. 6,404 of 12/15/1976				(79,701	)		(106,524	)
MINORITY INTEREST IN SUBSIDIARIES		16e		(397,303	)		(360,572	)
NET INCOME				6,729,855			7,132,508
WEIGHTED AVERAGE OF THE NUMBER OF OUTSTANDING SHARES				4,517,940,710			4,543,679,632
NET INCOME PER SHARE – R$				1.49			1.57
BOOK VALUE PER SHARE - R$ (OUTSTANDING AT 06/30)				16.74			14.57
EXCLUSION OF NONRECURRING EFFECTS		2a and 22k		398,834			(177,819	)
NET INCOME WITHOUT NONRECURRING EFFECTS				7,128,689			6,954,689
NET INCOME PER SHARE – R$				1.58			1.53

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 80

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Cash Flows

(In thousands of Reais)

	NOTE		01/01 to 06/30/2012			01/01 to 06/30/2011
ADJUSTED NET INCOME				20,480,650			20,344,855
Net income				6,729,855			7,132,508
Adjustments to net income:				13,750,795			13,212,347
Granted options recognized				98,980			80,112
Adjustment to market value of securities and derivative financial instruments (assets/liabilities)		7i		598,852			463,741
Effects of changes in exchange rates on cash and cash equivalents				(381,359	)		227,963
Allowance for loan losses				12,019,821			9,487,170
Interest and foreign exchange expense from operations with subordinated debt				2,350,733			1,556,948
Interest expense from operations with debentures				80,595			64,498
Financial expenses on technical provisions for pension plan and capitalization				2,972,443			2,314,834
Depreciation and amortization		15b		1,104,790			1,067,762
Adjustment to legal liabilities – tax and social security				291,925			340,121
Adjustment to provision for contingent liabilities				12,444			54,552
Deferred taxes				(3,181,778	)		(1,336,984	)
Equity in earnings of affiliates and other investments		15a lll		(80,353	)		43,069
Interest and foreign exchange income from available-for-sale securities				(2,562,829	)		(852,769	)
Interest and foreign exchange income from held-to-maturity securities				(239,590	)		(184,035	)
(Gain) loss from sale of available-for-sale financial assets		7f		593,878			(225,537	)
(Gain) loss from sale of investments				(238,050	)		(198,420	)
(Gain) loss from sale of foreclosed assets				(12,428	)		1,369
(Gain) loss from sale of fixed assets				2,732			(51,614	)
(Gain) loss from rescission of operations of intangible assets				604			(802	)
Minority interest				397,303			360,572
Other				(77,918	)		(203	)
CHANGE IN ASSETS AND LIABILITIES				9,319,286			(31,720,525	)
(Increase) decrease in Assets				4,738,949			(59,750,971	)
Interbank investments				10,273,116			(27,563,898	)
Securities and derivative financial instruments				(11,207,278	)		2,442,177
Compulsory deposits with the Central Bank of Brazil				24,143,441			(6,062,516	)
Interbank and interbranch accounts (assets/liabilities)				894,475			1,191,916
Loan, lease and other credit operations				(22,068,253	)		(29,660,640	)
Other receivables and other assets				135,060			(817,422	)
Foreign exchange portfolio and negotiation and intermediation of securities (assets/liabilities)				2,568,388			719,412
(Decrease) increase in Liabilities				4,580,337			28,030,446
Deposits				(7,661,302	)		6,226,157
Deposits received under securities repurchase agreements				6,281,279			(1,792,536	)
Funds for issuance of securities				1,212,004			7,047,419
Borrowings and onlending				(1,023,118	)		5,608,983
Credit card operations (assets/liabilities)				(1,226,314	)		(658,106	)
Technical provision for insurance, pension plan and capitalization				5,286,935			4,387,059
Collection and payment of taxes and contributions				3,382,064			8,691,105
Other liabilities				2,862,460			625,674
Deferred income				(15,238	)		62,849
Payment of income tax and social contribution				(4,518,433	)		(2,168,158	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES				29,799,936			(11,375,670	)
Interest on capital / dividends received from affiliated companies				7,245			15,466
Funds received from sale of available-for-sale securities				10,229,791			21,746,775
Funds received from redemption of held-to-maturity securities				229,247			335,516
Disposal of assets not for own use				58,578			69,476
Disposal of investments				382,560			284,316
Sale of fixed assets				202,350			113,630
Termination of intangible asset agreements				63			5,623
Purchase of available-for-sale securities				(20,948,188	)		(16,645,181	)
Purchase of held-to-maturity securities				(706	)		(123,000	)
Purchase of investments				(852,519	)		(10,868	)
Purchase of fixed assets		15b		(875,635	)		(704,774	)
Purchase of intangible assets		15b		(802,991	)		(732,543	)
NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES				(12,370,205	)		4,354,436
Increase in subordinated debt				10,705,640			6,223,825
Decrease in subordinated debt				(9,082,972	)		(4,400,151	)
Increase in debentures				1,500,000			-
Decrease in debentures				(54,238	)		(406,879	)
Change in minority interest		16e		(321,231	)		(1,111,559	)
Granting of stock options				193,673			154,669
Purchase of treasury shares				(99,045	)		(557,991	)
Dividends and interest on capital paid				(3,546,663	)		(3,040,750	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES				(704,836	)		(3,138,836	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				16,724,895			(10,160,070	)
Cash and cash equivalents at the beginning of the period				37,616,895			39,014,268
Effects of changes in exchange rates on cash and cash equivalents				381,359			(227,963	)
Cash and cash equivalents at the end of the period		4a and 5		54,723,149			28,626,235

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 81

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Added Value

(In thousands of Reais)

	NOTE		01/01 to 06/30/2012					01/01 to 06/30/2011
INCOME				53,815,039					49,626,679
Financial operations				52,120,137					45,809,941
Banking services				10,081,732					9,139,696
Result from insurance, pension plan and capitalization operations				1,460,025					1,214,338
Result of loan losses		8d		(9,701,469	)				(6,887,565	)
Other				(145,386	)				350,269
EXPENSES				(28,991,923	)				(24,022,015	)
Financial operations				(26,435,883	)				(21,521,862	)
Other				(2,556,040	)				(2,500,153	)
INPUTS PURCHASED FROM THIRD PARTIES				(5,797,493	)				(5,553,400	)
Materials, energy and others		13g		(216,792	)				(219,011	)
Third-party services		13g		(1,599,339	)				(1,525,930	)
Other				(3,981,362	)				(3,808,459	)
Data processing and telecommunications		13g		(1,752,703	)				(1,737,794	)
Advertising, promotions and publication		13g		(447,204	)				(436,949	)
Installations				(666,163	)				(573,641	)
Transportation		13g		(255,693	)				(282,752	)
Security		13g		(263,198	)				(240,169	)
Travel expenses		13g		(90,210	)				(86,492	)
Other				(506,191	)				(450,662	)
GROSS ADDED VALUE				19,025,623					20,051,264
DEPRECIATION AND AMORTIZATION		13g		(814,093	)				(682,146	)
NET ADDED VALUE PRODUCED BY THE COMPANY				18,211,530					19,369,118
ADDED VALUE RECEIVED FROM TRANSFER		15a lll		80,353					(43,069	)
TOTAL ADDED VALUE TO BE DISTRIBUTED				18,291,883					19,326,049
DISTRIBUTION OF ADDED VALUE				18,291,883					19,326,049
Personnel				6,117,490		33.4	%		5,933,794		30.7	%
Compensation				4,943,932		27.0	%		4,744,765		24.6	%
Benefits				802,519		4.4	%		879,191		4.5	%
FGTS – government severance pay fund				371,039		2.0	%		309,838		1.6	%
Taxes, fees and contributions				4,571,450		25.0	%		5,452,348		28.2	%
Federal				4,200,622		23.0	%		5,095,981		26.4	%
State				17,814		0.1	%		980		0.0	%
Municipal				353,014		1.9	%		355,387		1.8	%
Return on third parties’ assets - Rent				475,785		2.6	%		446,827		2.3	%
Return on own assets				7,127,158		39.0	%		7,493,080		38.8	%
Dividends and interest on capital				1,461,984		8.0	%		1,554,351		8.0	%
Retained earnings (loss) for the period				5,267,871		28.8	%		5,578,157		28.9	%
Minority interest in retained earnings				397,303		2.2	%		360,572		1.9	%

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 82

ITAÚ UNIBANCO HOLDING S.A.

Balance Sheet

(In thousands of Reais)

	NOTE		30/06/2012			30/06/2011
ASSETS
CURRENT ASSETS				29,267,786			1,238,759
CASH AND CASH EQUIVALENTS				15,834			4,938
INTERBANK INVESTMENTS		4b and 6		24,768,805			22,341
Money market				34,940			22,341
Interbank deposits				24,733,865			-
SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS		4c, 4d and 7		3,696,017			6,147
Own portfolio				3,696,017			670
Pledged in guarantee				-			5,477
OTHER RECEIVABLES				780,001			1,199,118
Income receivable		15a I		101			425,266
Sundry		13a		779,900			773,852
OTHER ASSETS – Prepaid expenses		4g		7,129			6,215
LONG-TERM RECEIVABLES				14,621,339			30,851,238
INTERBANK INVESTMENTS – Interbank deposits		4b and 6		14,363,400			30,522,153
SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS		4c, 4d and 7		-			6,740
Own portfolio				-			14
Pledged in guarantee				-			6,726
OTHER RECEIVABLES - Sundry		13a		257,939			322,345
PERMANENT ASSETS				54,714,522			53,488,409
INVESTMENTS				54,714,311			53,488,132
Investments in subsidiaries		4h and 15a I		54,714,311			53,487,725
Other				-			407
REAL ESTATE IN USE		4i		211			277
TOTAL ASSETS				98,603,647			85,578,406
LIABILITIES
CURRENT LIABILITIES				6,613,619			1,679,198
DEPOSITS - Interbank deposits		4b and 10b		5,056,765			-
FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES		4b and 10d		5,542			5,542
OTHER LIABILITIES				1,551,312			1,673,656
Social and statutory		16b II		1,229,436			1,360,398
Tax and social security contributions		4n, 4o and 14c		57,487			102,243
Subordinated debt		10f		133,211			71,334
Sundry		13c		131,178			139,681
LONG-TERM LIABILITIES				10,576,442			9,413,050
DEPOSITS - Interbank deposits		4b and 10b		-			4,012,223
FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES		4b and 10d		500,000			500,000
OTHER LIABILITIES				10,076,442			4,900,827
Tax and social security contributions		4n, 4o and 14c		905,716			636,664
Subordinated debt		10f		9,154,404			4,252,638
Sundry		13c		16,322			11,525
STOCKHOLDERS’ EQUITY		16		81,413,586			74,486,158
Capital				45,000,000			45,000,000
Capital reserves				775,402			619,298
Revenue reserves				36,647,057			29,946,904
Asset valuation adjustment		4c, 4d and 7d		536,004			(32,044	)
(Treasury shares)				(1,544,877	)		(1,048,000	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				98,603,647			85,578,406

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 83

ITAÚ UNIBANCO HOLDING S.A.

Statement of Income

(In thousands of Reais)

	NOTE		01/01 to 30/06/2012			01/01 to 30/06/2011
INCOME FROM FINANCIAL OPERATIONS				1,562,645			1,005,165
Securities and derivative financial instruments				1,562,645			1,005,165
EXPENSES OF FINANCIAL OPERATIONS				(474,269	)		(325,642	)
Money market				(474,269	)		(325,642	)
GROSS INCOME FROM FINANCIAL OPERATIONS				1,088,376			679,523
OTHER OPERATING REVENUES (EXPENSES)				3,893,168			4,494,682
Personnel expenses				(101,945	)		(92,716	)
Other administrative expenses				(19,234	)		(23,293	)
Tax expenses		14a II		(109,036	)		(131,241	)
Equity in earnings of subsidiaries		15a I		4,159,228			4,754,970
Other operating revenues (expenses)				(35,845	)		(13,038	)
OPERATING INCOME				4,981,544			5,174,205
NON-OPERATING INCOME				13,287			9,116
INCOME BEFORE TAXES ON INCOME AND PROFIT SHARING				4,994,831			5,183,321
INCOME TAX AND SOCIAL CONTRIBUTION		4p		479,019			588,034
Due on operations for the period				34,934			4,413
Related to temporary differences				444,085			583,621
PROFIT SHARING – Management members - Statutory - Law No. 6,404 of 12/15/1976				(1,814	)		(1,730	)
NET INCOME				5,472,036			5,769,625
WEIGHTED AVERAGE OF THE NUMBER OF OUTSTANDING SHARES				4,517,940,710			4,543,679,632
NET INCOME PER SHARE – R$				1.21			1.27
BOOK VALUE PER SHARE - R$ (OUTSTANDING AT 06/30)				18.02			16.43
EXCLUSION OF NONRECURRING EFFECTS		2a and 22k		398,834			(177,819	)
NET INCOME WITHOUT NONRECURRING EFFECTS				5,870,870			5,591,806
NET INCOME PER SHARE – R$				1.30			1.23

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 84

ITAÚ UNIBANCO HOLDING S.A.

Statement of Changes in Stockholders’ Equity (Note 16)

(In thousands of Reais)

	Capital		Capital reserves			Revenue reserves			Asset valuation adjustment (Note 7d)			Retained earnings			(Treasury shares)			Total
BALANCES AT 01/01/2011		45,000,000		594,734			25,661,505			17,128			-			(628,577	)		70,644,790
Purchase of treasury shares		-		-			-			-			-			(557,991	)		(557,991	)
Granting of stock options – exercised options		-		(55,548	)		71,649			-			-			138,568			154,669
Granting of options recognized		-		80,112			-			-			-			-			80,112
Change in adjustment to market value		-		-			-			(49,172	)		-			-			(49,172	)
Addition to interest on capital paid on 03/17/2011 - Year 2010		-		-			(1,524	)		-			-			-			(1,524	)
Net income		-		-			-			-			5,769,625			-			5,769,625
Appropriations:
Legal reserve		-		-			288,481			-			(288,481	)		-			-
Statutory reserves		-		-			3,926,793			-			(3,926,793	)		-			-
Dividends and interest on capital		-		-			-			-			(1,554,351	)		-			(1,554,351	)
BALANCES AT 06/30/2011		45,000,000		619,298			29,946,904			(32,044	)		-			(1,048,000	)		74,486,158
CHANGES IN THE PERIOD		-		24,564			4,285,399			(49,172	)		-			(419,423	)		3,841,368
BALANCES AT 01/01/2012		45,000,000		763,413			34,422,444			(139,142	)		-			(1,663,562	)		78,383,153
Purchase of treasury shares		-		-			-			-			-			(99,045	)		(99,045	)
Granting of stock options – exercised options		-		(86,991	)		62,934			-			-			217,730			193,673
Granting of options recognized		-		98,980			-			-			-			-			98,980
Change in adjustment to market value		-		-			-			675,146			-			-			675,146
Addition to interest on capital paid on 03/13/2012 - Year 2011		-		-			(1,450	)		-			-			-			(1,450	)
Payment of interest on capital on 03/13/2012 – Declared after 12/31/2011		-		-			(1,846,923	)		-			-			-			(1,846,923	)
Net income		-		-			-			-			5,472,036			-			5,472,036
Appropriations:		-		-			-			-			-			-			-
Legal reserve		-		-			273,602			-			(273,602	)		-			-
Statutory reserves		-		-			3,565,770			-			(3,565,770	)		-			-
Dividends and interest on capital		-		-			170,680			-			(1,632,664	)		-			(1,461,984	)
BALANCES AT 06/30/2012		45,000,000		775,402			36,647,057			536,004			-			(1,544,877	)		81,413,586
CHANGES IN THE PERIOD		-		11,989			2,224,613			675,146			-			118,685			3,030,433

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 85

ITAÚ UNIBANCO HOLDING S.A.

Statement of Cash Flows

(In thousands of Reais)

	NOTE		01/01 to 06/30/2012			01/01 to 06/30/2011
ADJUSTED NET INCOME				1,647,467			418,680
Net income				5,472,036			5,769,625
Adjustments to net income:				(3,824,569	)		(5,350,945	)
Granting of options recognized				98,980			80,112
Interest and foreign exchange expense from operations with subordinated debt				652,922			(122,123	)
Deferred taxes				(444,085	)		(583,621	)
Equity in earnings of subsidiaries		15a I		(4,159,228	)		(4,754,970	)
Amortization of goodwill				28,873			28,873
Effects of changes in exchange rates on cash and cash equivalents				(2,063	)		734
Other				32			50
CHANGE IN ASSETS AND LIABILITIES				507,253			556,519
(Increase) decrease in other receivables and other assets				65,264			222,595
Increase (decrease) in other liabilities				441,989			333,924
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES				2,154,720			975,199
Interest on capital/Dividends received				8,359,753			12,999,560
(Increase) decrease in interbank investments				(7,454,915	)		(16,345,311	)
(Increase) decrease in securities and derivative financial instruments (assets/liabilities)				(3,682,386	)		23,733
(Purchase) sale of investments				-			3,862,494
(Purchase) sale of fixed assets				-			(19	)
NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES				(2,777,548	)		540,457
Increase (decrease) in deposits				224,321			668,215
Increase in subordinated debt				3,638,340			1,170,825
Decrease in subordinated debt				(201,096	)		(77,510	)
Granting of stock options				193,673			154,669
Purchase of treasury shares				(99,045	)		(557,991	)
Dividends and interest on capital paid				(3,546,663	)		(3,040,750	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES				209,530			(1,682,542	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(413,298	)		(166,886	)
Cash and cash equivalents at the beginning of the period				462,009			194,899
Effects of changes in exchange rates on cash and cash equivalents				2,063			(734	)
Cash and cash equivalents at the end of the period		4a and 5		50,774			27,279

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 86

ITAÚ UNIBANCO HOLDING S.A.

Statement of Added Value

(In thousands of Reais)

	NOTE		01/01 to 06/30/2012			01/01 to 06/30/2011
INCOME				2,019,464			1,592,183
Financial operations				1,562,645			1,005,165
Other				456,819			587,018
EXPENSES				(474,269	)		(325,642	)
Financial operations				(474,269	)		(325,642	)
INPUTS PURCHASED FROM THIRD PARTIES				(19,010	)		(23,052	)
Third-party services				(8,272	)		(10,052	)
Advertising, promotions and publication				(1,363	)		(228	)
Expenses for financial system services				(2,094	)		(2,956	)
Insurance				(2,209	)		(3,135	)
Other				(5,072	)		(6,681	)
GROSS ADDED VALUE				1,526,185			1,243,489
DEPRECIATION AND AMORTIZATION				(38	)		(47	)
NET ADDED VALUE PRODUCED BY THE COMPANY				1,526,147			1,243,442
ADDED VALUE RECEIVED FROM TRANSFER		15a l		4,159,228			4,754,970
TOTAL ADDED VALUE TO BE DISTRIBUTED				5,685,375			5,998,412
DISTRIBUTION OF ADDED VALUE				5,685,375			5,998,412
Personnel				101,998			92,423
Compensation				100,753			90,443
Benefits				967			1,230
FGTS – government severance pay fund				278			750
Taxes, fees and contributions				111,155			136,170
Federal				111,141			136,146
Municipal				14			24
Return on third parties’ assets - Rent				186			194
Return on own assets				5,472,036			5,769,625
Dividends and interest on capital				1,461,984			1,554,351
Retained earnings (loss) for the period				4,010,052			4,215,274

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 87

ITAÚ UNIBANCO HOLDING S.A.

NOTES TO THE FINANCIAL STATEMENTS

FROM JANUARY 1 TO JUNE 30, 2012 AND 2011

(In thousands of Reais)

NOTE 1 - OPERATIONS

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 88

NOTE 2 – PRESENTATION OF THE FINANCIAL STATEMENTS

a) Presentation of the Financial Statements

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

On April 23, 2012 the Central Bank of Brazil approved the Agreement for Purchase and Sale of Shares entered into on April 14, 2011 by ITAÚ UNIBANCO HOLDING and Carrefour Comércio e Indústria Ltda (Carrefou Brasil) in order to acquire 49% of BSF Holding S.A. ( Banco Carrefour”), for the amount of R$ 816,255 million, giving rise to a goodwill of R$ 583,081, with the transfer of shares on May 31, 2012.

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

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

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

b) Consolidation

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

Intercompany transactions and balances and results have been eliminated on consolidation. The investments held by consolidated companies in Exclusive Investment Funds are consolidated. The investments in these fund portfolios are classified by type of transaction and were distributed by type of security, in the same categories in which these securities had been originally allocated. The effects of the Foreign exchange variation on investments abroad are classified in the heading Securities and Derivative Financial Instruments in the Statement of Income.

The difference of Net Income and Stockholders’ Equity between ITAÚ UNIBANCO HOLDING and ITAÚ UNIBANCO HOLDING CONSOLIDATED (Note 16d) results from the adoption of different criteria for the amortization of goodwill originated on purchase of investments, net of the respective deferred tax assets.

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 89

In ITAÚ UNIBANCO HOLDING CONSOLIDATED, from January 1, 2010, the goodwill originated from the purchase of investments is no longer fully amortized in the consolidated financial statements (Note 4j). By 12/31/2009, goodwill generated had been fully amortized in the periods investments were made.

The consolidated financial statements comprise ITAÚ UNIBANCO HOLDING and its direct and indirect subsidiaries, among which we highlight:

		Incorporation		Interest in voting capital at						Interest in voting capital at
		country	Activity	6/30/2012			6/30/2011			6/30/2012			6/30/2011
Banco Dibens S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Fiat S.A.		Brazil	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Argentina S.A.		Argentina	Financial institution		100.00	%		100.00	%		99.99	%		99.99	%
Banco Itaú BBA S.A.		Brazil	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Chile		Chile	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Europa Luxembourg S.A.		Luxembourg	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú BBA International, S.A.	(1)	Portugal	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Paraguay S.A.		Paraguay	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú Uruguay S.A.		Uruguay	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaucard S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaucred Financiamentos S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itauleasing S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
BIU Participações S.A.		Brazil	Holding company		66.15	%		66.15	%		66.15	%		66.15	%
Cia. Itaú de Capitalização		Brazil	Capitalization		99.99	%		99.99	%		99.99	%		99.99	%
Dibens Leasing S.A. - Arrendamento Mercantil		Brazil	Leasing		100.00	%		100.00	%		100.00	%		100.00	%
Fiat Administradora de Consórcios Ltda.		Brazil	Consortia administrator		99.99	%		99.99	%		99.99	%		99.99	%
Hipercard Banco Múltiplo S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Administradora de Consórcios Ltda.		Brazil	Consortia administrator		99.99	%		99.99	%		99.99	%		99.99	%
Itaú Ásia Securities Ltd		Hong Kong	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itau Bank, Ltd.	(2)	Cayman Islands	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Companhia Securitizadora de Créditos Financeiros		Brazil	Securitization		99.96	%		99.99	%		99.96	%		99.99	%
Itaú Corretora de Valores S.A.		Brazil	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Distribuidora de Títulos e Valores Mobiliários Ltda.		Brazil	Dealer		100.00	%		100.00	%		99.99	%		99.99	%
Itaú Japan Asset Management Limited		Japan	Asset management		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Middle East Limited		Arab Emirates	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Seguros S.A.		Brazil	Insurance		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Unibanco S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú USA, INC.		United States	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Vida e Previdência  S.A.		Brazil	Pension plan		100.00	%		100.00	%		100.00	%		100.00	%
Itaú Unibanco Serviços e Processamento de Informações Comerciais S.A.	(3)	Brazil	Technology services		100.00	%		99.99	%		100.00	%		99.99	%
Redecard S.A.	(4)	Brazil	Acquirer		50.00	%		50.01	%		50.00	%		50.01	%
Unibanco Cayman Bank Ltd.		Cayman Islands	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Unibanco Participações Societárias S.A. (Nota 16e)		Brazil	Holding company		100.00	%		100.00	%		100.00	%		51.00	%
Joint ventures
Banco Investcred Unibanco S.A.		Brazil	Financial institution		50.00	%		50.00	%		50.00	%		50.00	%
FAI - Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento		Brazil	Consumer finance credit		50.00	%		50.00	%		50.00	%		50.00	%
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		Brazil	Consumer finance credit		50.00	%		50.00	%		50.00	%		50.00	%
Luizacred S.A. Soc. Cred. Financiamento Investimento		Brazil	Consumer finance credit		50.00	%		50.00	%		50.00	%		50.00	%

(1) New company name of Banco Itaú Europa S.A.;

(2) Does not include Redeemable Preferred Shares (Note 10f);

(3) New company name of Orbitall Serviços e Processamento de Informações Comerciais S.A.

(4) Fully consolidated company whose share capital is 50% plus 17 shares.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 90

NOTE 3 – REQUIREMENTS OF CAPITAL AND FIXED ASSET LIMITS

a) Basel and Fixed Asset Ratios

The main indicators at June 30, 2012, according to present regulation, are as follows:

	Financial			Economic-financial
	conglomerate  (1)			consolidated (2)
Referential equity (3)		101,953,520			102,518,730
Basel ratio		16.6	%		16.9	%
Tier I		12.1	%		12.4	%
Tier II		4.5	%		4.5	%
Fixed assets ratio (4)		40.2	%		14.3	%
Excess capital in relation to fixed assets		9,997,362			36,610,183

(1) Consolidated financial statements including financial companies only;

(2) Consolidated financial statements comprising all direct and indirect subsidiary companies, including insurance, pension plan, capitalization companies and other non-financial companies, as provided for in CMN Resolution No. 2,723 of June 1, 2000, amended by CMN Resolution No. 2,743, of June 28, 2000;

(3) The CMN, through Resolution No. 3,444, of February 28, 2007, determined the Referential Equity (PR), for purposes of calculating operating limits, as being the sum of both Tier I and Tier II levels, following the international experience, each of them comprising items from stockholders' equity, as well as subordinated debt and hybrid capital and debt instruments;

(4) The difference between the fixed asset ratio of the financial conglomerate and the economic-financial consolidated arises from the inclusion of non-financial subsidiary companies, which provide high liquidity and low level of fixed asset ratio, with a consequent decrease in the fixed asset ratio of the economic-financial consolidated amounts, enabling, when necessary, the distribution of funds to the financial companies.

Issues of subordinated debt, in the amount of R$ 1,777,300 as of June 30, 2012, are pending approval in order to be included in the Tier II. Should we consider these issues, the Basel ratios would be affected by 0.3%.

Management considers the current Basel ratio (16.6%, based on Financial conglomerate) to be adequate, taking into account the following:

a) It exceeds by 5.6 percent the minimum required by the authorities (11.0%); and

b) In view of the realizable values of assets (Note 18), the additional provision (exceeding the minimum required) (Note 8c) and unrecorded deferred tax assets (Note 14b IV), the ratio would increase to 17.6%.

CMN Resolution No. 3,490, of August 29, 2007, provides for the criteria for computation of the Required Referential Equity (PRE). For calculation of the risk portions, the procedures of Circular No. 3,360, of September 12, 2007 for credit risk, of Circulars Nos. 3,361, 3,362, 3,363, 3,364, 3,366 and 3,368, of September 12, 2007, 3,388, of June 4, 2008, and 3,389, of June 25, 2008, 3,498, of June 28, 2010 and 3,568, of December 21, 2011, and Circular Letters Nos. 3,309 and 3,310, of April 15, 2008 for market risk, and Circulars Nos. 3,383, of April 30, 2008 and 3,476, of December 28, 2009 and Circular Letters Nos. 3,315 and 3,316, of April 30, 2008, for operational risk were followed. For the operational risk portion, ITAÚ UNIBANCO HOLDING opted for the use of the Alternative Standardized Approach.

Circular No. 3,568, of December 21, 2011, changes the provisions of Circulars Nos. 3,361, of September 12, 2007, 3,388, of June 4, 2008, 3,389, of June 25, 2008, 3,478 of December 24, 2009 and 3,498, of June 28, 2010, which set forth the procedures for calculation of the portion related to market risk. The new calculation method will be adopted gradually from January 1, 2012, taking into account that it shall be fully employed from December 31, 2012. Should the new rules already be applicable, the ratios would be reduced by about 0.3%.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 91

The Referential Equity used for calculation of ratios and composition of risk exposures at June 30, 2012, are as follows:

	Financial conglomerate					Economic-financial consolidated
Stockholders' Equity ITAÚ UNIBANCO HOLDING S.A. (Consolidated)		75,635,587					75,635,587
Minority interest in subsidiaries		1,251,037					1,817,300
Consolidated stockholders’ equity (BACEN)		76,886,624					77,452,887
Deferred tax assets excluded from Tier I		(592,670	)				(593,224	)
Deferred permanent assets excluded from Tier I		(257,584	)				(258,083	)
Adjustments to market value – securities and derivative financial instruments excluded from Tier I		(536,004	)				(536,510	)
Preferred shares with clause of redemption excluded from Tier I		(798,525	)				(798,525	)
Tier I		74,701,841					75,266,545
Subordinated debt		26,705,485					26,705,485
Preferred shares with clause of redemption		319,410					319,410
Adjustments to market value -securities and derivative financial instruments		536,004					536,510
Tier II		27,560,899					27,561,405
Tier I + Tier II		102,262,740					102,827,950
Exclusions:
Funding instruments issued by financial institutions		(309,220	)				(309,220	)
Referential equity		101,953,520					102,518,730
Risk exposure:
Exposure weighted by credit risk (EPR)		556,627,327					545,795,964
Portion required for credit risk coverage (PEPR)		61,229,006		90.8	%		60,037,556		90.0	%
a) Per weighting factor (FPR):
FPR at 20%		298,604		0.4	%		436,950		0.7	%
FPR at 35%		184,122		0.3	%		184,117		0.3	%
FPR at 50%		3,779,884		5.6	%		4,758,618		7.1	%
FPR at 75%		13,562,506		20.1	%		13,165,803		19.7	%
FPR at 100%		39,748,017		59.0	%		37,722,116		56.6	%
FPR at 150%		1,618,839		2.4	%		1,615,665		2.4	%
FPR at 300%		1,732,452		2.6	%		1,846,404		2.8	%
Derivatives – potential future gain		304,582		0.5	%		307,883		0.5	%
b) Per type:
Securities		3,234,051		4.8	%		3,296,062		4.9	%
Loan operations - Retail		10,799,131		16.0	%		10,525,518		15.8	%
Loan operations – Non-retail		22,217,261		33.0	%		22,230,173		33.3	%
Joint obligations - Retail		42,859		0.1	%		42,859		0.1	%
Joint obligations – Non-Retail		6,179,911		9.2	%		6,145,955		9.2	%
Loan commitments - Retail		2,720,516		4.0	%		2,597,427		3.9	%
Loan commitments – Non-retail		1,790,448		2.7	%		1,790,866		2.7	%
Other exposures		14,244,829		21.1	%		13,408,696		20.1	%
Portion required for operational risk coverage (POPR)		3,963,038		5.9	%		4,394,343		6.6	%
Retail		607,295		0.9	%		607,295		0.9	%
Commercial		958,143		1.4	%		958,143		1.4	%
Corporate finance		88,434		0.1	%		88,434		0.1	%
Negotiation and sales		1,690,686		2.5	%		1,690,686		2.5	%
Payments and settlements		272,089		0.4	%		272,089		0.4	%
Financial agent services		138,567		0.2	%		138,567		0.2	%
Asset management		192,292		0.3	%		192,292		0.3	%
Retail brokerage		15,532		0.0	%		15,532		0.0	%
Business plans		-		0.0	%		-		0.0	%
Conef additional		-		0.0	%		431,305		0.6	%
Portion required for market risk coverage:		2,210,423		3.3	%		2,244,455		3.4	%
Gold, foreign currency and operations subject to foreign exchange variation (PCAM)		-		0.0	%		-		0.0	%
Operations subject to interest rate variation (PJUR)		2,029,520		3.0	%		2,063,552		3.1	%
Fixed rate denominated in Real (PJUR1)		505,608		0.8	%		505,854		0.8	%
Foreign currency coupon (PJUR2)		932,948		1.4	%		941,041		1.4	%
Price index coupon (PJUR3)		425,394		0.6	%		451,087		0.7	%
Interest rate coupon (PJUR 4)		165,570		0.2	%		165,570		0.2	%
Operations subject to commodity price variation (PCOM)		101,718		0.2	%		101,718		0.2	%
Operations subject to stock price variation (PACS)		79,185		0.1	%		79,185		0.1	%
Required Referential Equity		67,402,467		100.0	%		66,676,354		100.0	%
Excess capital in relation to Required Referential Equity		34,551,053		51.3	%		35,842,376		53.8	%
Total exposure weighted by risk [EPR + (1/0.11 X (POPR + PCAM + PJUR + PCOM + PACS)		612,749,704					606,148,670
Ratio (%)		16.6					16.9
Referential equity calculated for covering the interest rate risk of operations not classified into the trading portfolio (RBAN)		6,169,452					6,748,801

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 92

During this period, the effects of the changes in legislation and balances were as follows:

	Financial conglomerate									Economic-financial consolidated
Changes in the Basel Ratio	Referential equity			Weighted exposure			Effect			Referential equity			Weighted exposure			Effect
Ratio at 12/31/2011		92,560,637			579,338,319			16.0	%		93,111,393			568,693,094			16.4	%
Net income for the period		6,713,873			-			1.2	%		7,127,159			-			1.2	%
Interest on capital and dividends		(1,463,434	)		-			-0.3	%		(1,463,434	)		-			-0.3	%
Granting of options recognized		98,980			-			0.0	%		98,980			-			0.0	%
Granting of stock options – exercised options in the period		193,673			-			0.0	%		193,673			-			0.0	%
Asset valuation adjustment		675,146			-			0.1	%		675,146			-			0.1	%
Subordinated debt and redeemable preferred shares		5,321,835			-			1.0	%		5,321,835			-			1.0	%
Treasury shares		(99,045	)		-			0.0	%		(99,045	)		-			0.0	%
Deferred assets excluded from Tier I of referential equity		(36,710	)		(36,710	)		0.0	%		(37,331	)		(37,331	)		0.0	%
Other changes in referential equity		(2,011,435	)		-			-0.4	%		(2,409,646	)		-			-0.4	%
Changes in risk exposure		-			33,448,095			-1.0	%		-			37,492,907			-1.1	%
Ratio at 06/30/2012		101,953,520			612,749,704			16.6	%		102,518,730			606,148,670			16.9	%

b) Capital for Insurance Activity

CNSP – Conselho Nacional de Seguros Privados (National Consel of Private Insurance), following the worldwide trend towards the strengthening of the insurance market, published Resolution No. 227 of December 6, 2010 (which revoked Resolutions No. 178 of December 28, 2007, and No. 200 of December 16, 2008), and Circular No. 411 of December 22, 2010. The regulations provide for the rules on regulatory capital required for authorization and operation of insurance and pension plan companies and rules for the allocation of capital from subscription risk for several insurance lines. In January 2011, CNSP Resolution No. 228 of December 6, 2010 came into effect, providing for the criteria for establishment of additional capital based on the credit risk of the supervised companies.

The individual adjusted stockholders’ equity of ITAÚ UNIBANCO HOLDING companies exclusively engaged in insurance and pension plan activities is higher than the required regulatory capital. The insurance companies of ITAÚ UNIBANCO HOLDING have capital exceeding the minimum regulatory by R$ 1,464,541 (R$ 1,917,737 at June 30, 2011) in Itaú Seguros S.A. and R$ 659,663 (R$ 1,285,059 at June 30, 2011) in Itaú Vida e Previdência S.A.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 93

NOTE 4 – SUMMARY OF THE MAIN ACCOUNTING PRACTICES

a) Cash and cash equivalents - For purposes of Consolidated Statement of Cash Flows, this item includes cash and current accounts in banks (considered in the heading cash and cash equivalents), interbank deposits and securities purchased under agreements to resell – funded position that have original maturities of up to 90 days or less.

b) Interbank investments, remunerated restricted credits – Brazilian Central Bank, remunerated deposits, deposits received under securities repurchase agreements, funds from acceptance and issuance of securities, borrowings and onlending, subordinated debt and other receivables and payables – Transactions subject to monetary correction and foreign exchange variation and operations with fixed charges are recorded at present value, net of the transaction costs incurred, calculated “pro rata die” based on the effective rate of transactions, according to CVM Resolution No. 649 of December 16, 2010.

c) Securities - Recorded at cost of acquisition restated by the index and/or effective interest rate and presented in the Balance Sheet, according to BACEN Circular No. 3,068, of November 8, 2001. Securities are classified into the following categories:

· Trading securities – acquired to be actively and frequently traded, and adjusted to market value, with a contra-entry to the results for the period;

· Available-for-sale securities – securities that can be negotiated but are not acquired to be actively and frequently traded. They are adjusted to their market value with a contra-entry to an account disclosed in stockholders’ equity;

· Held-to-maturity securities – securities, except for non-redeemable shares, for which the bank has the financial condition and intends or is required to hold them in the portfolio up to their maturity, are recorded at cost of acquisition, or market value, whenever these are transferred from another category. The securities are adjusted using the accrual method through their maturity date, not being adjusted to market value.

Gains and losses on available-for-sale securities, when realized, are recognized at the trading date in the statement of income, with a contra-entry to a specific stockholders’ equity account.

Decreases in the market value of available-for-sale and held-to-maturity securities below their related costs, resulting from non-temporary reasons, are recorded in results as realized losses.

d) Derivative financial instruments - these are classified on the date of their acquisition, according to management's intention of using them either as a hedge or not, according to BACEN Circular No. 3,082, of January 30, 2002. Transactions involving financial instruments, carried out upon the client’s request, for their own account, or which do not comply with the hedging criteria (mainly derivatives used to manage the overall risk exposure), are stated at market value, including realized and unrealized gains and losses, which are recorded directly in the statement of income.

The derivatives used for protection against risk exposure or to modify the characteristics of financial assets and liabilities, which have changes in market value highly associated with those of the items being protected at the beginning and throughout the duration of the contract, and which are found effective to reduce the risk related to the exposure being protected, are classified as a hedge, in accordance with their nature:

· Market Risk Hedge – financial assets and liabilities, as well as their related financial instruments, are accounted for at their market value plus realized and unrealized gains and losses, which are recorded directly in the statement of income.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 94

· Cash Flow Hedge - the effective amount of the hedge of financial assets and liabilities, as well as their related financial instruments, are accounted for at their market value plus realized and unrealized gains and losses, net of tax effects, when applicable, and recorded in a specific account in stockholders’ equity. The ineffective portion of the hedge is recorded directly in the statement of income.

e) Loan, Lease and Other Credit Operations (Operations with Credit Granting Characteristics) – These transactions are recorded at present value and calculated “pro rata die” based on the variation of the contracted index and interest rate, and are recorded on the accrual basis until the 60th day overdue in financial companies, according to the estimate of receipt. After the 60th day, income is recognized upon the effective receipt of installments. Credit card operations include receivables arising from the purchases made by cardholders. The funds related to these amounts are recorded in Other Liabilities – Credit Card Operations, which also include funds arising from other credits related to transactions with credit card issuers.

f) Allowance for loan losses - the balance of the allowance for loan losses was recorded based on a credit risk analysis, at an amount considered sufficient to cover loan losses according to the rules determined by CMN Resolution No. 2,682 of December 21, 1999, among which are:

· Provisions are recorded from the date loans are granted, based on the client’s risk rating and on the periodic quality evaluation of clients and industries, and not only in the event of default;

· Based exclusively on delinquency, write-offs of credit operations against loss may be carried out 360 days after the due date of the credit or 540 days for operations that mature after a period of 36 months.

g) Other assets - these assets are mainly comprised of assets held for sale relating to real estate available for sale, own real estate not in use and real estate received as payment in kind, which are adjusted to market value through the set-up of a provision, according to current regulations, reinsurance unearned premiums (Note 4m I); and prepaid expenses, corresponding to disbursements, the benefit of which will occur in future periods.

h) Investments – investments in subsidiary and affiliated companies are accounted for under the equity method. The consolidated financial statements of foreign branches and subsidiaries are adapted to comply with Brazilian accounting practices and converted into Reais. Other investments are recorded at cost and adjusted to market value by setting up a provision in accordance with current standards.

i) Fixed assets - These assets are stated at cost of acquisition or construction, less accumulated depreciation, adjusted to market value until December 31, 2007, when applicable. For insurance, pension plan and capitalization operations, property and equipment are adjusted to market value supported by appraisal reports. They correspond to rights related to tangible assets intended for maintenance of the company’s operations or exercised for such purpose, including assets arising from transactions that transfer to the company their benefits, risks and controls. The items acquired through Lease contracts are recorded according to CVM Resolution No. 554, of November 12, 2008, as contra-entry to Lease obligations. Depreciation is calculated using the straight-line method, based on monetarily restated cost.

j) Goodwill – corresponds to the amount paid in excess for the purchase of investments and is amortized based on expected future profitability or as realized. It is annually tested for impairment.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 95

k) Intangible assets – correspond to rights acquired whose subjects are intangible assets intended for maintenance of the company or which are exercised for such purpose, according to the CMN Resolution No. 3,642, of November 26, 2008. They are composed of rights acquired to credit payrolls and partnership agreements, amortized over the agreement terms, and software and customer portfolios, amortized over a term varying from five to ten years.

l) Impairment of assets – a loss is recognized when there is clear evidence that assets are stated at a non-recoverable value. This procedure is adopted semiannually.

m) Insurance, pension plan and capitalization operations - Insurance premiums, acceptance coinsurance and selling expenses are accounted for in accordance with the insurance effectiveness term, through the recognition and reversal of the provision for unearned premiums and deferred selling expenses. Interest arising from fractioning of insurance premiums is accounted for as incurred. Revenues from social security contributions, gross revenue from capitalization certificates and respective technical provisions are recognized upon receipt.

I - Credits from operations and other assets related to insurance and reinsurance operations:

· Insurance premiums receivable - Refer to installments of insurance premiums receivable, current and past due, in accordance with insurance policies issued;

· Reinsurance recoverable amounts – Refer to claims paid to the insured party pending recovery from Reinsurer, installments of unsettled claims and incurred but not reported claims - Reinsurance (IBNR), classified in assets in accordance with the criteria established by CNSP Resolution No. 162, of December 26, 2006, as amended by CNSP Resolution No. 195, of December 16, 2008, and SUSEP Circular No. 379, of December 19, 2008;

· Reinsurance unearned premiums – Recognized to determine the portion of reinsurance unearned premiums, calculated “pro rata die”, and for risks of policies not issued computed based on estimates, based on the actuarial technical study and in compliance with the criteria established by CNSP Resolution No. 162, of December 26, 2006, as amended by CNSP Resolution No. 195, of December 16, 2008, and SUSEP Circular No. 379, of December 19, 2008.

II - Technical provisions of insurance, pension plan and capitalization – technical provisions are recognized according to the technical notes approved by SUSEP and criteria established by CNSP Resolution No. 162 of December 26, 2006 and the subsequent amendments.

II.I- Insurance:

· Provision for Unearned Premiums – recognized based on premiums issued, calculated “pro rata die”, and represents the portion of premium corresponding to the policy period not yet elapsed; Provision for Unearned Premiums for Risks in Force but Not Yet Issued is recognized based on technical actuarial note, and has the objective of estimating a portion of unearned premiums related to risks assumed by insurance companies and that are in issue process;

· Provision for Premium Deficiency – recognized according to the Technical Actuarial Note if a premium deficiency is found;

· Provision for unsettled claims - recognized based on claims of loss in an amount sufficient to cover future commitments. To determine the value of accrued claims under awaiting judicial decision, the experts and legal advisors appointed assessments based on the insured amounts and technical regulations, taking into consideration the likelihood of unfavorable outcome to the insurance company.

· Provision for claims incurred but not reported (IBNR) – recognized for the estimated amount of claims occurred for risks assumed in the portfolio but not reported.

· Other provisions – recognized based on the technical provision for extension of warranty in the extended warranty line, and the calculation is made over the period from the date the insurance contract becomes effective and the risk initial coverage date, the amount to be recognized being equal to the retained commercial premium.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 96

II.II - Pension Plan and Individual life with living benefits - The mathematical provisions represent amounts of obligations assumed as insurance for living benefits, retirement plans, disability, pension and annuity, and are calculated according to the method of accounting provided for in the contract.

· Mathematical provisions for benefits to be granted and benefits granted – correspond to commitments assumed with participants, but for which benefits are not yet due, and to those receiving the benefits, respectively;

· Provision for insufficient contribution – recognized in case of insufficient premiums or contributions;

· Provision for unexpired risks – recognized to include the estimate of outstanding risks which have not expired;

· Provision for events incurred but not reported (IBNR) – recognized based on the expected amounts of events occurred but not reported;

· Provision for financial surplus – recognized by the difference between the contributions adjusted daily by the Investment Portfolio and the accumulated fund set up;

· Other provisions - basically refer to the provision for administrative expenses recognized according to the Actuarial Technical Note to cover expenses arising from the payment of benefits provided for in the plan, in view of the events occurred and to be occurred. It also includes the heading redemptions and/or other unsettled amounts that refer to amounts not yet paid through the balance sheet date.

II.III - Capitalization:

· Mathematical provision for redemptions – represents capitalization certificates received to be redeemed;

· Provision for Raffles – Comprises Provision for raffles unrealized and payable. The unrealized provision for raffles is calculated according to the methodology established in the Technical Actuarial Note. The provision for raffles payable relates to certificates winners in raffles and not paid yet.

· Other provisions – Comprises Provision for raffle contingencies and administrative provision. The provision for raffle contingencies is recognized according to the methodology established in the Technical Actuarial Note to cover the provision for raffles in the event of insufficient funds and also for distribution of bonus. The administrative provision is recognized to cover administrative expenses of the plan, and it is calculated under the method described in the Technical Actuarial Note.

n) Contingent assets and liabilities and legal liabilities – tax and social security - assessed, recognized and disclosed according to the provisions set forth in CMN Resolution No. 3,823 of December 16, 2009, and BACEN Circular Letter No. 3,429 of February 11, 2010.

I - Contingent assets and liabilities

Refer to potential rights and obligations arising from past events, the occurrence of which is dependent upon future events.

· Contingent assets - not recognized, except upon evidence ensuring a high reliability level of realization, usually represented by claims awarded a final and unappealable judgment and confirmation of the recoverability of the claim through receipt of amounts or offset against another liability;

· Contingent liabilities - basically arise from administrative proceedings and lawsuits, inherent in the normal course of business, filed by third parties, former employees and governmental bodies, in connection with civil, labor, tax and social security lawsuits and other risks. These contingencies are calculated based on conservative practices, being usually recorded based on the opinion of legal advisors and considering the probability that financial resources shall be required for settling the obligation, the amount of which may be estimated with sufficient certainty. Contingencies are classified either as probable, for which provisions are recognized; possible, which are disclosed but not recognized; and remote, for which recognition or disclosure are not required. Any contingent amounts are measured through the use of models and criteria which allow their adequate measurement, in spite of the uncertainty of their term and amounts.

Escrow deposits are restated in accordance with the current legislation.

Contingencies guaranteed by indemnity clauses in privatization processes and with liquidity are only recognized upon judicial notification with simultaneous recognition of receivables, without any effect on results.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 97

II - Legal liabilities – tax and social security

Represented by amounts payable related to tax liabilities, the legality or constitutionality of which are subject to judicial defense, recognized at the full amount under discussion.

Liabilities and related escrow deposits are adjusted in accordance with the current legislation.

p) Taxes - these provisions are calculated according to current legislation at the rates shown below, using the related calculation bases.

Income tax	15.00	%
Additional income tax	10.00	%
Social contribution (1)	15.00	%
PIS (2)	0.65	%
COFINS (2)	4.00	%
ISS up to	5.00	%

(1)	For ITAÚ UNIBANCO HOLDING and its financial subsidiaries and equivalent companies, the rate corresponds to 15%. For non-financial and pension plan subsidiaries, the rate is 9%.
(2)	For non-financial subsidiaries that fall into the non-cumulative calculation system, the PIS rate is 1.65% and COFINS rate is 7.6%.

The changes introduced by Laws No. 11,638 and No. 11,941 (articles 37 and 38), which modified the criterion for recognizing revenues, costs and expenses, computed to determine the net income for the year, did not produce effects for purposes of determining the taxable income of companies that opt for the Transition Tax Regime (RTT), so for tax purposes the rules effective on December 31, 2007 were followed. The tax effect arising from the adoption of such rules is recorded, for accounting purposes, in the corresponding deferred assets and liabilities.

p) Deferred income – this refers to: (i) unexpired interest received in advance that is recognized in income as earned, and (ii) the negative goodwill on acquisition of investments arising from expected future losses, which has not been absorbed in the consolidation process.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 98

NOTE 5 - CASH AND CASH EQUIVALENTS

For purposes of Statement of Cash Flows, cash and cash equivalents of ITAÚ UNIBANCO HOLDING CONSOLIDATED are composed of the following:

	6/30/2011		6/30/2012
Cash and cash equivalents		13,614,277		15,185,816
Interbank deposits		14,122,597		2,657,416
Securities purchased under agreements to resell – Funded position		26,986,275		10,783,003
TOTAL		54,723,149		28,626,235

In ITAÚ UNIBANCO HOLDING it is composed of the following:

	6/30/2012		6/30/2011
Cash and cash equivalents		15,834		4,938
Securities purchased under agreements to resell – Funded position		34,940		22,341
TOTAL		50,774		27,279

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 99

NOTE 6 - INTERBANK INVESTMENTS

	6/30/2011												6/30/2012
	0 - 30		31 - 180		181 - 365		Over 365		Total		%		Total		%
Money market		57,345,525		35,061,845		5		-		92,407,375		77.1		80,090,378		81.4
Funded position (*)		33,001,327		14,193,430		5		-		47,194,762		39.4		30,166,970		30.7
Financed position		23,573,492		5,003,246		-		-		28,576,738		23.8		40,336,066		41.0
With free movement		3,690,272		5,003,213		-		-		8,693,485		7.2		29,995,045		30.5
Without free movement		19,883,220		33		-		-		19,883,253		16.6		10,341,021		10.5
Short position		770,706		15,865,169		-		-		16,635,875		13.9		9,587,342		9.7
Money market – Assets Guaranteeing Technical Provisions - SUSEP		2,518,120		127,216		-		-		2,645,336		2.2		3,075,134		3.1
Interbank deposits		15,423,243		3,649,506		3,166,863		2,641,609		24,881,221		20.7		15,279,798		15.5
TOTAL		75,286,888		38,838,567		3,166,868		2,641,609		119,933,932				98,445,310
% per maturity term		62.8		32.4		2.6		2.2
TOTAL – 06/30/2011		46,511,093		49,518,955		1,962,541		452,721		98,445,310
% per maturity term		47.2		50.3		2.0		0.5

(*) Includes R$ 11,432,176 (R$ 12,142,686 at 06/30/2011) related to money market with free movement, in which securities are basically restricted to guarantee transactions at the BM&FBovespa S.A. - Bolsa de Valores, Mercadorias e Futuros (Securities, Commodities and Futures Exchange) and the Central Bank of Brazil (BACEN).

In ITAÚ UNIBANCO HOLDING the portfolio is composed of Money market – Funded position falling due in up to 30 days amounting to R$ 34,940 (R$ 22,341 at 06/30/2011) and Interbank deposits with maturity of 31 to 180 days amounting to R$ 24,147,862, 181 to 365 days amounting to R$ 586,004, and over 365 days amounting to R$ 14,363,400 (R$ 30,522,153 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 100

NOTE 7 – SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS AND LIABILITIES)  

See below the composition by Securities and Derivatives type, maturity and portfolio already adjusted to their respective market values.

a) Summary per maturity                        

	6/30/2011																																6/30/2012
				Provision for adjustment to market value reflected in:
	Cost			Results			Stockholders’ equity			Market value			%		0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days			Market value
GOVERNMENT SECURITIES - DOMESTIC		88,318,808			407,731			919,470			89,646,009			41.9		9,564,695			2,257,247			96,792			6,228,726			10,779,673			60,718,876			80,377,071
Financial Treasury Bills		29,918,791			41,496			2,318			29,962,605			14.0		-			1,045,970			-			521,482			6,296,069			22,099,084			31,287,805
National Treasury Bills		18,449,566			113,486			(71	)		18,562,981			8.7		9,261,216			-			78,899			2,199,043			3,121,428			3,902,395			21,235,087
National Treasury Notes		27,884,137			199,993			556,282			28,640,412			13.4		5,604			1,171,551			15,698			3,351,347			1,323,893			22,772,319			22,068,963
National Treasury/Securitization		273,492			718			5,393			279,603			0.1		151			2,379			1,230			2,950			2,909			269,984			298,140
Brazilian External Debt Bonds		11,706,746			52,038			355,445			12,114,229			5.7		212,326			37,051			965			153,904			34,889			11,675,094			5,418,730
Investments in non-exclusive funds		85,398			-			-			85,398			0.0		85,398			-			-			-			-			-			66,497
Other		678			-			103			781			0.0		-			296			-			-			485			-			1,849
GOVERNMENT SECURITIES - ABROAD		6,904,826			15,916			(22,161	)		6,898,581			3.2		1,011,775			784,893			653,827			3,509,206			189,944			748,936			7,400,586
Argentina		102,545			1,466			-			104,011			0.0		-			15,369			21,952			53,774			9,254			3,662			206,460
Central Bank		129			(8	)		-			121			0.0		-			-			-			-			-			121			24,631
National Treasury		102,416			1,474			-			103,890			0.0		-			15,369			21,952			53,774			9,254			3,541			181,829
Denmark		1,445,772			-			-			1,445,772			0.7		-			-			-			1,445,772			-			-			3,269,608
Spain		-			-			-			-			-		-			-			-			-			-			-			781,531
Korea		1,671,953			-			-			1,671,953			0.8		-			-			-			1,671,953			-			-			294,972
Chile		2,237,956			576			(481	)		2,238,051			1.0		780,947			756,496			592,768			43,773			18,367			45,700			645,109
Paraguay		261,825			-			(21,564	)		240,261			0.1		94,288			-			19,788			61,574			22,872			41,739			387,216
Uruguay		329,952			(66	)		(746	)		329,140			0.2		21,684			10,525			18,309			147,051			98,577			32,994			403,906
United States		498,033			11,480			(12	)		509,501			0.2		113,149			2,295			1,010			84,412			-			308,635			1,136,697
Mexico		138,496			1,942			-			140,438			0.1		-			-			-			-			4			140,434			244,353
Colombia		142,668			506			-			143,174			0.10		-			-			-			-			-			143,174			-
Other		75,626			12			642			76,280			0.0		1,707			208			-			897			40,870			32,598			30,734
CORPORATE SECURITIES		39,534,297			(13,619	)		619,281			40,139,959			18.7		5,463,386			949,447			2,240,557			3,157,207			6,485,051			21,844,311			31,408,912
Eurobonds and others		6,473,646			(10,725	)		12,380			6,475,301			3.0		598,344			62,139			778,360			860,074			255,957			3,920,427			5,610,117
Bank deposit certificates		660,794			-			(274	)		660,520			0.2		23,607			62,534			77,952			329,023			-			167,404			3,293,758
Shares		2,491,928			(52,444	)		(16,209	)		2,423,275			1.1		2,423,275			-			-			-			-			-			3,107,529
Debentures		11,362,188			5,632			151,844			11,519,664			5.4		2,610			566,633			9,981			741,724			2,224,542			7,974,174			8,069,718
Promissory notes		1,234,978			-			297			1,235,275			0.5		-			40,545			1,194,730			-			-			-			672,757
Fund quotas		2,329,000			42,398			4,081			2,375,479			1.2		2,371,281			-			-			-			-			4,198			1,917,230
Fixed income		1,170,124			16,864			(23	)		1,186,965			0.6		1,182,767			-			-			-			-			4,198			812,928
Credit rights		992,460			-			-			992,460			0.5		992,460			-			-			-			-			-			866,154
Variable income		166,416			25,534			4,104			196,054			0.1		196,054			-			-			-			-			-			238,148
Securitized real estate loans		8,267,665			1,555			449,687			8,718,907			4.1		33,373			211,587			115,203			284,013			893,390			7,181,341			7,841,344
Financial bills		5,933,883			(35	)		(222	)		5,933,626			2.8		-			-			-			675,372			3,083,648			2,174,606			896,459
Other		780,215			-			17,697			797,912			0.4		10,896			6,009			64,331			267,001			27,514			422,161			-
PGBL/VGBL FUND QUOTAS (1)		65,605,935			-			-			65,605,935			30.6		65,605,935			-			-			-			-			-			51,123,685
SUBTOTAL - SECURITIES		200,363,866			410,028			1,516,590			202,290,484			94.4		81,645,791			3,991,587			2,991,176			12,895,139			17,454,668			83,312,123			170,310,254
Trading securities		139,772,941			410,028			-			140,182,969			65.4		75,993,249			2,046,077			448,049			6,607,801			10,318,200			44,769,593			129,387,108
Available-for-sale securities		57,474,905			-			1,516,590			58,991,495			27.5		5,652,038			1,913,858			2,541,676			6,168,629			7,058,263			35,657,031			37,781,671
Held-to-maturity securities (2)		3,116,020			-			-			3,116,020			1.5		504			31,652			1,451			118,709			78,205			2,885,499			3,141,475
DERIVATIVE FINANCIAL INSTRUMENTS		10,409,336			1,669,421			-			12,078,757			5.6		1,964,703			2,457,206			820,611			1,709,980			1,349,378			3,776,879			10,422,691
TOTAL SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS)		210,773,202			2,079,449			1,516,590			214,369,241			100.0		83,610,494			6,448,793			3,811,787			14,605,119			18,804,046			87,089,002			180,732,945
																39.0	%		3.0	%		1.8	%		6.8	%		8.8	%		40.6	%
DERIVATIVE FINANCIAL INSTRUMENTS (LIABILITIES)		(7,109,139	)		(2,082,010	)		(24,067	)		(9,215,216	)		100.0		(1,511,923	)		(966,743	)		(394,434	)		(2,171,368	)		(1,210,152	)		(2,960,596	)		(6,887,441	)

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to long-term liabilities in Pension Plan Technical Provisions account, as determined by SUSEP.

(2) Unrecorded positive adjustment to market value in the amount of R$ 960,522 (R$ 565,693 at 06/30/2011), according to Note 7e.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 101

b) Summary by portfolio

	6/30/2012
			Restricted to								Derivative		Assets guaranteeing technical
	Own portfolio		Repurchase agreements		Pledging of guarantees (*)		Free portfolio		Central Bank		financial instruments		provisions (Note 11b)		Total
GOVERNMENT SECURITIES - DOMESTIC		32,265,549		34,117,839		4,890,951		44,996		13,027,061		-		5,299,613		89,646,009
Financial Treasury Bills		6,662,621		7,888,140		4,232,172		-		10,499,262		-		680,410		29,962,605
National Treasury Bills		11,636,422		6,753,709		25,839		44,996		-		-		102,015		18,562,981
National Treasury Notes		7,123,770		13,838,715		632,940		-		2,527,799		-		4,517,188		28,640,412
National Treasury/Securitization		279,603		-		-		-		-		-		-		279,603
Brazilian External Debt Bonds		6,476,954		5,637,275		-		-		-		-		-		12,114,229
Investments in non-exclusive funds		85,398		-		-		-		-		-		-		85,398
Other		781		-		-		-		-		-		-		781
GOVERNMENT SECURITIES - ABROAD		4,742,769		91,378		2,050,818		-		-		-		13,616		6,898,581
Argentina		19,554		84,457		-		-		-		-		-		104,011
Central Bank		121		-		-		-		-		-		-		121
National Treasury		19,433		84,457		-		-		-		-		-		103,890
Denmark		486,711		-		959,061		-		-		-		-		1,445,772
Korea		667,028		-		1,004,925		-		-		-		-		1,671,953
Chile		2,216,558		6,921		956		-		-		-		13,616		2,238,051
Paraguay		240,261		-		-		-		-		-		-		240,261
Uruguay		328,379		-		761		-		-		-		-		329,140
United States		425,089		-		84,412		-		-		-		-		509,501
Mexico		140,438		-		-		-		-		-		-		140,438
France		143,174		-		-		-		-		-		-		143,174
Other		75,577		-		703		-		-		-		-		76,280
CORPORATE SECURITIES		32,678,333		1,963,825		361,981		-		-		-		5,135,820		40,139,959
Eurobonds and other		4,626,826		1,848,475		-		-		-		-		-		6,475,301
Bank deposit certificates		192,367		115,345		11,342		-		-		-		341,466		660,520
Shares		2,422,214		5		1,056		-		-		-		-		2,423,275
Debentures		10,087,575		-		347,486		-		-		-		1,084,603		11,519,664
Promissory notes		982,560		-		-		-		-		-		252,715		1,235,275
Fund quotas		1,737,019		-		2,097		-		-		-		636,363		2,375,479
Fixed income		624,545		-		2,097		-		-		-		560,323		1,186,965
Credit rights		916,420		-		-		-		-		-		76,040		992,460
Variable income		196,054		-		-		-		-		-		-		196,054
Securitized real estate loans		8,705,662		-		-		-		-		-		13,245		8,718,907
Financial bills		3,126,198		-		-		-		-		-		2,807,428		5,933,626
Other		797,912		-		-		-		-		-		-		797,912
PGBL/VGBL FUND QUOTAS		-		-		-		-		-		-		65,605,935		65,605,935
SUBTOTAL - SECURITIES		69,686,651		36,173,042		7,303,750		44,996		13,027,061		-		76,054,984		202,290,484
Trading securities		27,944,173		24,421,157		3,437,518		44,996		12,667,000		-		71,668,125		140,182,969
Available-for-sale securities		41,580,811		11,708,427		3,845,132		-		360,061		-		1,497,064		58,991,495
Held-to-maturity securities		161,667		43,458		21,100		-		-		-		2,889,795		3,116,020
DERIVATIVE FINANCIAL INSTRUMENTS		-		-		-		-		-		12,078,757		-		12,078,757
TOTAL SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS)		69,686,651		36,173,042		7,303,750		44,996		13,027,061		12,078,757		76,054,984		214,369,241
TOTAL SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS) – 06/30/2011		55,408,564		41,280,448		7,186,457		4,155,787.00		2,171,856		10,422,691		60,107,142		180,732,945

(*) Represent securities deposited with Contingent Liabilities (Note 12b), Stock Exchanges and the Clearing House for the Custody and Financial Settlement of Securities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 102

c) Trading securities

See below the composition of the portfolio of trading securities by type, stated at cost and market value and by maturity term.

	6/30/2012																					6/30/2011
			Adjustment to
	Cost		market value (in results)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
GOVERNMENT SECURITIES - DOMESTIC		64,185,022		407,731			64,592,753		46.1		8,040,099		1,882,817		95,540		5,495,830		8,568,008		40,510,459		67,571,654
Financial Treasury Bills		26,636,080		41,495			26,677,575		19.0		-		703,273		-		393,285		4,158,051		21,422,966		27,193,228
National Treasury Bills		16,927,984		113,486			17,041,470		12.2		7,739,705		-		78,899		2,199,043		3,121,428		3,902,395		21,237,052
National Treasury Notes		19,134,796		199,994			19,334,790		13.8		5,568		1,171,157		15,411		2,862,881		1,254,064		14,025,709		17,161,648
National Treasury/Securitization		16,674		718			17,392		0.0		124		2,379		1,230		2,950		2,909		7,800		41,105
Brazilian External Debt Bonds		1,384,090		52,038			1,436,128		1.0		209,304		6,008		-		37,671		31,556		1,151,589		1,872,124
Investments in non-exclusive funds		85,398		-			85,398		0.1		85,398		-		-		-		-		-		66,497
Other		-		-			-		-		-		-		-		-		-		-		-
GOVERNMENT SECURITIES - ABROAD		856,668		15,916			872,584		0.6		65,599		80,850		40,480		68,154		14,844		602,657		1,508,831
Argentina		102,545		1,466			104,011		0.1		-		15,368		21,952		53,774		9,254		3,663		206,460
Central Bank		130		(8	)		122		0.0		-		-		-		-		-		122		24,631
National Treasury		102,415		1,474			103,889		0.1		-		15,368		21,952		53,774		9,254		3,541		181,829
Chile		127,929		576			128,505		0.1		60,890		53,107		14,457		51		-		-		65,939
Uruguay		35,723		(66	)		35,657		0.0		3,503		10,075		3,061		13,432		5,586		-		15,399
United States		300,255		11,480			311,735		0.2		-		2,295		1,010		-		-		308,430		1,121,583
Mexico		138,496		1,942			140,438		0.1		-		-		-		-		4		140,434		92,392
Colombia		142,668		506			143,174		0.1		-		-		-		-		-		143,174		-
Other		9,052		12			9,064		0.0		1,206		5		-		897		-		6,956		7,058
CORPORATE SECURITIES		9,125,316		(13,619	)		9,111,697		6.6		2,281,618		82,407		312,029		1,043,817		1,735,348		3,656,478		9,182,938
Eurobonds and other		1,640,917		(10,725	)		1,630,192		1.2		-		-		35,366		134,765		102,540		1,357,521		1,569,698
Bank deposit certificates		352,920		-			352,920		0.3		-		-		7,330		178,326		-		167,264		2,768,924
Shares		746,878		(52,444	)		694,434		0.5		694,434		-		-		-		-		-		1,004,149
Debentures		1,471,777		5,632			1,477,409		1.1		-		82,407		-		55,354		372,610		967,038		1,429,563
Promissory notes		269,333		-			269,333		0.2		-		-		269,333		-		-		-		-
Fund quotas		1,544,786		42,398			1,587,184		1.1		1,587,184		-		-		-		-		-		1,194,445
Fixed income		1,136,666		16,864			1,153,530		0.8		1,153,530		-		-		-		-		-		795,957
Credit rights		272,772		-			272,772		0.2		272,772		-		-		-		-		-		199,020
Variable income		135,348		25,534			160,882		0.1		160,882		-		-		-		-		-		199,468
Securitized real estate loans		22,382		1,555			23,937		0.0		-		-		-		-		1,303		22,634		621,857
Financial bills		3,076,323		(35	)		3,076,288		2.2		-		-		-		675,372		1,258,895		1,142,021		594,302
PGBL/VGBL FUND QUOTAS		65,605,935		-			65,605,935		46.7		65,605,935		-		-		-		-		-		51,123,685
Total		139,772,941		410,028			140,182,969		100.0		75,993,251		2,046,074		448,049		6,607,801		10,318,200		44,769,594		129,387,108
% per maturity term											54.2		1.5		0.3		4.7		7.4		31.9
Total 06/30/2011		129,334,383		52,725			129,387,108		100.0		63,363,844		1,545,293		2,008,256		4,867,589		19,590,715		38,011,411
% per maturity term											49.0		1.2		1.6		3.8		15.1		29.4

At June 30, 2012, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Government Securities – Financial Treasury Bills amounting to R$ 6,805 (R$ 6,147 at 06/30/2011 with maturity over 365 days) with maturity of 31 to 90 days.  

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 103

d) Available-for-sale securities

See below the composition of the portfolio of available-for-sale securities by type, stated at cost and market value and by maturity term.

	06/30/2012																			06/30/2011
				Adjustments to
				market value (in
				stockholders'														Over 720
		Cost		equity)		Market value	%	0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		days			Market value
GOVERNMENT SECURITIES - DOMESTIC		21,123,177		919,470		22,042,647	33.8	1,524,598		374,428		1,252		616,663		2,183,154		17,342,552			9,835,072
Financial Treasury Bills		3,282,712		2,318		3,285,030	5.6	-		342,698		-		128,197		2,138,017		676,118			4,094,577
National Treasury Bills		1,521,582		(71	)	1,521,511	2.6	1,521,511		-		-		-		-		-			-
National Treasury Notes		5,855,355		556,282		6,411,637	10.9	38		391		287		488,466		41,710		5,880,745			2,147,931
National Treasury/Securitization		256,818		5,393		262,211	0.4	27		-		-		-		-		262,184			257,035
Brazilian External Debt Bonds		10,206,032		355,445		10,561,477	14.3	3,022		31,043		965		-		2,942		10,523,505			3,333,680
Other		678		103		781	0.0	-		296		-		-		485		-			1,849
GOVERNMENT SECURITIES - ABROAD		6,047,445		(22,161	)	6,025,284	10.2	945,675		703,839		613,347		3,441,052		175,100		146,271			5,876,580
Denmark		1,445,772		-		1,445,772	2.5	-		-		-		1,445,772		-		-			3,269,608
Spain		-		-		-	-	-		-		-		-		-		-			781,531
Korea		1,671,953		-		1,671,953	2.8	-		-		-		1,671,953		-		-			294,972
Chile		2,110,027		(481	)	2,109,546	3.6	720,057		703,389		578,311		43,722		18,367		45,700			579,170
Paraguay		261,825		(21,564	)	240,261	0.4	94,288		-		19,788		61,574		22,872		41,739			387,216
Uruguay		294,229		(746	)	293,483	0.5	18,181		450		15,248		133,619		92,991		32,994			373,340
United States		197,778	(12)			197,766	0.3	113,149		-		-		84,412		-		205			15,114
France		-		-		-	0.0	-		-		-		-		-		-			151,961
Other		65,861		642		66,503	0.1	-		-		-		-		40,870		25,633			23,668.00
CORPORATE SECURITIES		30,304,283		619,281		30,923,564	56.0	3,181,765		835,591		1,927,077		2,110,914		4,700,009		18,168,208			22,070,019
Eurobonds and other		4,762,699		12,380		4,775,079	11.7	598,341		62,139		742,286		725,309		103,723		2,543,281			3,921,165
Bank deposit certificate		307,874		(274	)	307,600	0.5	23,607		62,534		70,622		150,697		-		140			524,834
Shares		1,745,050		(16,209	)	1,728,841	2.7	1,728,841		-		-		-		-		-			2,103,380
Debentures		9,858,219		151,844		10,010,063	17.0	2,610		452,777		9,238		686,370		1,851,932		7,007,136			6,608,011
Promissory notes		965,645		297		965,942	1.6	-		40,545		925,397		-		-		-			672,757
Fund quotas		784,214		4,081		788,295	1.4	784,097		-		-		-		-		4,198			722,785
Fixed income		33,458		(23	)	33,435	0.1	29,237		-		-		-		-		4,198			16,971
Credit rights		719,688		-		719,688	1.2	719,688		-		-		-		-		-			667,134
Variable income		31,068		4,104		35,172	0.1	35,172		-		-		-		-		-			38,680
Securitized real estate loans		8,242,807		449,687		8,692,494	14.7	33,373		211,587		115,203		281,537		892,087		7,158,707			7,214,930
Financial Bills		2,857,560		(222	)	2,857,338	4.9	-		-		-		-		1,824,753		1,032,585			-
Other		780,215		17,697		797,912	1.50	10,896		6,009		64,331		267,001		27,514		422,161			302,157
TOTAL		57,474,905		1,516,590		58,991,495	100.0	5,652,038		1,913,858		2,541,676		6,168,629		7,058,263		35,657,031			37,781,671
Adjustments of securities reclassified in prior years to the held-to-maturity category				10,297				9.6	%	3.2	%	4.3	%	10.5	%	12.0	%	60.4	%
Accounting adjustment - Hedge - Circular No. 3,082				(579,594	)
Deferred taxes				(395,479	)
Minority interest in subsidiaries				(15,810	)
ADJUSTMENT TO MARKET VALUE – SECURITIES – 06/30/2012				536,004
TOTAL 06/30/2011		37,408,960		372,711		37,781,671	100.0	4,377,176		1,411,195		3,398,540		3,742,709		2,945,359		21,906,692
Adjustments of securities reclassified in prior years to the held-to-maturity category				11,215				11.0	%	3.6	%	8.6	%	9.4	%	9.4	%	58.0	%
Accounting adjustment - Hedge - Circular No. 3,082				35,137
Deferred taxes				(165,127	)
Minority interest in subsidiaries				(2,265	)
Adjustments of securities of unconsolidated affiliates				(283,715	)
ADJUSTMENT TO MARKET VALUE – SECURITIES – 06/30/2012				(32,044	)

At June 30, 2012, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Government Securities in the amount of R$ 7,462 with maturity of 31 to 90 days (R$ 6,740 at 06/30/2011 with maturity over 365 days).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 104

e) Held-to-maturity securities

See below the composition of the portfolio of held-to-maturity securities by type, stated at cost and by maturity term. Included in the carrying value at June 30, 2012, not considered in results, are the amounts of R$ 10,297 (R$ 11,215 at 06/30/2011) relating to the market adjustment of the reclassified securities at December 31, 2003. Securities classified under this type, if stated at market value, would present a positive adjustment of R$ 960,522 (R$ 565,693 at 06/30/2011).

	06/30/2012																06/30/2011
	Carrying value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Carrying value
GOVERNMENT SECURITIES - DOMESTIC		3,010,609		97.0		-		-		-		116,233		28,511		2,865,865		2,968,659
National Treasury Notes (*)		2,893,985		93.0		-		-		-		-		28,120		2,865,865		2,757,420
Brazilian External Debt Bonds		116,624		4.0		-		-		-		116,233		391		-		211,239
Other		-		-		-		-		-		-		-		-		0
GOVERNMENT SECURITIES - ABROAD		713		0.0		501		203		-		-		-		9		15,174
CORPORATE SECURITIES		104,698		3.0		3		31,449		1,451		2,476		49,694		19,625		157,642
Eurobonds and other		70,030		2.0		3		-		708		-		49,694		19,625		120,941
Share		-		0.0		-		-		-		-		-		-		-
Debentures (*)		32,192		1.0		-		31,449		743		-		-		-		32,144
Securitized real estate loans (*)		2,476		0.0		-		-		-		2,476		-		-		4,557
Total		3,116,020		100.0		504		31,652		1,451		118,709		78,205		2,885,499		3,141,475
% per maturity term						0.0		1.02		0.0		3.8		2.5		92.6
Total 06/30/2011		3,141,475		100.0		82,140.00		48,741.00		0		72,166		126,747		2,811,681
% per maturity term						2.6		1.6		0.0		2.3		4.0		89.5

 (*) Includes investments of Itaú Vida e Previdência S.A. in the amount of R$ 2,102,333 (R$ 1,999,579 at 06/30/2011).

f) Realized and unrealized gain of securities portfolio

	01/01 to		01/01 to
	06/30/2012		06/30/2011
Gain (loss) - Trading securities		642,928		(845,818	)
Gain (loss) – Available-for-sale securities		593,878		225,537
Total realized gain		1,236,806		(620,281	)
Adjustment to market value of trading securities		383,330		(199,620	)
Total		1,620,136		(819,901	)

g) Reclassification of securities (article 5 of BACEN Circular No. 3,068, of 11/08/2001)

Management sets forth guidelines to classify securities. The classification of the current portfolio of securities, as well as the securities purchased in the period, is periodically and systematically evaluated based on such guidelines.

As set forth in Article 5 of BACEN Circular No. 3,068, of November 8, 2008, the revaluation regarding the classification of securities can only be made upon preparation of trial balances for six-month periods. In addition, the transfer from “held-to-maturity” to the other categories can only occur in view of an isolated, unusual, nonrecurring and unexpected event, which has occurred after the classification date.

No reclassifications or changes to the existing guidelines have been made in the period.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 105

h) Derivative Financial Instruments

The globalization of the markets in recent years has resulted in a high level of sophistication in the financial products used. As a result of this process, there has been an increasing demand for derivative financial instruments to manage market risks, mainly arising from fluctuations in interest and exchange rates, commodities and other asset prices. Accordingly, ITAU UNIBANCO HOLDING and its subsidiaries operate in the derivative markets for meeting the growing needs of their clients, as well as carrying out their risk management policy. Such policy is based on the use of derivative instruments to minimize the risks resulting from commercial and financial operations.

The derivative financial instruments’ business with clients is carried out after the approval of credit limits. The process of limit approval takes into consideration potential stress scenarios.

Knowing the client, the sector in which it operates and its risk appetite profile, in addition to providing information on the risks involved in the transaction and the negotiated conditions, ensures transparency in the relationship between the parties and the supply of a product that better meets the needs of the client.

The derivative transactions carried out by ITAÚ UNIBANCO HOLDING and its subsidiaries with clients are neutralized in order to eliminate market risks.

Most derivative contracts traded by the institution with clients in Brazil are swap, forward, option and futures contracts, which are registered at the BM&FBOVESPA or at the CETIP S.A. OTC Clearing House (CETIP). Overseas transactions are carried out with futures, forwards (onshore), options and swaps with registration mainly in the Chicago, New York and London Exchanges. It should be emphasized that there are over-the-counter operations, but their risks are low as compared to the institutions’ total. Noteworthy is also the fact that there are no structured operations based on subprime assets and all operations are based on risk factors traded at stock exchanges.

The main risk factors of the derivatives, assumed at June 30, 2012, were related to the foreign exchange rate, interest rate, commodities, U.S. dollar coupon, Reference Rate coupon, Libor and variable income. The management of these and other market risk factors is supported by sophisticated statistical and deterministic models. Based on this management model, the institution, with the use of transactions involving derivatives, has been able to optimize the risk-return ratios, even under highly volatile situations.

Most derivatives included in the institution’s portfolio are traded at stock exchanges. The prices disclosed by stock exchanges are used for these derivatives, except in cases in which the low representativeness of price due to liquidity of a specific contract is identified. Derivatives typically precified like this are futures contracts. Likewise, there are other instruments whose quotations (fair prices) are directly disclosed by independent institutions and which are precified based on this direct information. A great part of the Brazilian government securities, highly-liquid international (public and private) securities and shares fit into this situation.

For derivatives whose prices are not directly disclosed by stock exchanges, fair prices are obtained by pricing models which use market information, deducted based on prices disclosed for higher liquidity assets. Interest and market volatility curves which provide entry data for the models are extracted from those prices. Over- the-counter derivatives, forward contracts and securities without much liquidity are in this situation.

The total value of margins pledged in guarantee was R$ 4,092,370 (R$ 4,677,250 at June 30, 2011) and was basically composed of government securities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 106

I - Derivatives by index

	Memorandum account Notional amount				Balance sheet account receivable / (received) (payable) paid			Adjustment to market value (in results / stockholders' equity)			Market value
	6/30/2012		6/30/2011		6/30/2012			6/30/2012			6/30/2012			6/30/2011
Futures contracts		378,073,650		375,969,757		652,685			(70,318	)		582,367			12,108
Purchase commitments		146,229,448		116,410,464		(530,319	)		(67,430	)		(597,749	)		(63,595	)
Foreign currency		7,024,665		11,344,141		(350,610	)		(73,548	)		(424,158	)		(26,876	)
Interbank market		117,292,162		91,194,586		20,668			(43	)		20,625			(9,461	)
Indices		16,931,612		13,106,870		(199,417	)		7,778			(191,639	)		(26,908	)
Securities		4,523,727		406,431		-			(8,213	)		(8,213	)		(1,868	)
Commodities		457,282		-		(960	)		6,596			5,636			-
Other		-		358,436		-			-			-			1,510
Commitments to sell		231,844,202		259,559,293		1,183,004			(2,888	)		1,180,116			75,703
Foreign currency		13,007,273		21,621,832		419,393			2,727			422,120			(20,783	)
Interbank market		131,509,684		209,915,377		(11,803	)		128			(11,675	)		28,051
Indices		80,989,394		23,711,622		774,992			(4,019	)		770,973			73,706
Fixed rates		6,162,565		1,803,421		-			1,727			1,727			364
Commodities		175,286		-		422			(3,451	)		(3,029	)		-
Other		-		2,507,041		-			-			-			(5,635	)
Swap contracts		-		-		(596,275	)		(135,008	)		(731,283	)		1,332,629
Asset position		109,629,772		75,513,881		2,248,336			1,165,306			3,413,642			3,505,938
Foreign currency		8,692,296		5,164,447		744,617			34,813			779,430			41,238
Interbank market		40,310,180		37,449,092		307,150			11,530			318,680			2,070,474
Fixed rates		28,494,528		11,952,797		338,278			389,526			727,804			392,957
Floating rate		4,033,509		873,254		12,362			2,366			14,728			18,745
Indices		27,755,147		19,369,832		798,948			708,631			1,507,579			980,358
Securities		339,573		100,995		46,935			15,327			62,262			65
Commodities		4,494		-		7			(7	)		-			-
Other		45		603,464		39			3,120			3,159			2,101
Liability position		110,226,047		74,497,491		(2,844,611	)		(1,300,314	)		(4,144,925	)		(2,173,309	)
Foreign currency		12,540,182		9,322,841		(1,194,644	)		131,953			(1,062,691	)		(332,416	)
Interbank market		26,466,040		20,238,218		(62,038	)		4,908			(57,130	)		(411,632	)
Fixed rates		31,696,383		12,883,412		(443,845	)		(490,490	)		(934,335	)		(322,187	)
Floating rate		6,295,609		3,237,936		(101,689	)		(668	)		(102,357	)		(489	)
Indices		32,632,229		27,040,577		(942,688	)		(969,974	)		(1,912,662	)		(1,005,728	)
Securities		507,032		100,426		(99,452	)		24,116			(75,336	)		-
Commodities		71,905		-		(255	)		(159	)		(414	)		-
Other		16,667		1,674,081		-			-			-			(100,857	)
Option contracts		1,349,393,610		2,777,953,317		1,119,189			(474,757	)		644,432			946,098
Purchase commitments - long position		309,581,400		1,065,312,933		935,404			(207,371	)		728,033			728,205
Foreign currency		16,408,054		16,377,483		665,064			(24,765	)		640,299			220,770
Interbank market		65,253,336		912,374,218		95,860			(83,128	)		12,732			342,353
Floating rate		322,811		262,022		1,608			(1,521	)		87			773
Indices		225,804,403		134,560,670		125,666			(96,882	)		28,784			57,815
Securities		688,117		1,427,457		27,010			6,098			33,108			85,702
Commodities		970,826		-		19,576			(8,957	)		10,619			-
Other		133,853		311,083		620			1,784			2,404			20,792
Commitments to sell - long position		435,549,338		570,657,573		2,024,208			524,077			2,548,285			1,946,922
Foreign currency		11,495,622		13,253,878		161,736			(30,548	)		131,188			847,057
Interbank market		46,386,529		471,021,224		282,065			99,449			381,514			26,496
Fixed rates		-		1,568		-			-			-			133
Floating rate		1,059,142		239,052		1,314			(345	)		969			394
Indices		372,151,880		81,560,691		654,308			225,444			879,752			43,822
Securities		2,844,530		3,849,843		858,013			204,894			1,062,907			1,017,393
Commodities		1,188,269		-		26,284			(6,010	)		20,274			-
Other		423,366		731,317		40,488			31,193			71,681			11,627
Purchase commitments - short position		196,190,298		681,175,675		(801,995	)		83,501			(718,494	)		(791,112	)
Foreign currency		10,578,657		10,260,501		(407,751	)		(201,807	)		(609,558	)		(194,399	)
Interbank market		40,721,204		572,762,025		(72,029	)		56,988			(15,041	)		(324,856	)
Indices		144,029,038		96,204,957		(303,084	)		243,297			(59,787	)		(221,096	)
Securities		590,106		1,752,495		(9,551	)		(14,301	)		(23,852	)		(44,005	)
Commodities		139,543		-		(8,925	)		1,350			(7,575	)		-
Other		131,750		195,697		(655	)		(2,026	)		(2,681	)		(6,756	)
Commitments to sell - short position		408,072,574		460,807,136		(1,038,428	)		(874,964	)		(1,913,392	)		(937,917	)
Foreign currency		8,322,304		11,784,147		(184,756	)		81,409			(103,347	)		(658,938	)
Interbank market		61,874,679		350,572,124		(123,381	)		(454,974	)		(578,355	)		(58,398	)
Fixed rates		-		1,568		-			-			-			(133	)
Floating rate		-		-		-			137			137			-
Indices		335,974,710		95,982,615		(545,677	)		(333,981	)		(879,658	)		(39,121	)
Securities		1,255,792		2,249,901		(129,381	)		(136,839	)		(266,220	)		(177,343	)
Commodities		222,343		-		(14,578	)		412			(14,166	)		-
Other		422,746		216,781		(40,655	)		(31,128	)		(71,783	)		(3,984	)
Forward contracts		16,645,496		14,852,331		1,239,390			(48,539	)		1,190,851			1,116,594
Purchases receivable		7,196,918		332,298		1,076,903			(75,287	)		1,001,616			223,235
Foreign currency		6,788,471		48,948		687,937			(75,379	)		612,558			4,726
Fixed rates		130,827		162,478		130,825			-			130,825			162,476
Floating rate		257,968		53,576		257,856			(37	)		257,819			53,734
Securities		63		-		63			-			63			-
Commodities		3,386		-		38			42			80			-
Other		16,203		67,296		184			87			271			2,299
Purchases payable		2,472,911		7,263,225		(466,482	)		(527	)		(467,009	)		(766,722	)
Foreign currency		2,425,752		6,933,793		(69,544	)		(1,252	)		(70,796	)		(534,604	)
Interbank market		-		137,970		-			-			-			(1	)
Fixed rates		-		-		(130,825	)		-			(130,825	)		(164,918	)
Floating rate		-		-		(257,856	)		37			(257,819	)		(53,734	)
Securities		-		-		(63	)		-			(63	)		-
Commodities		39,415		-		(7,997	)		652			(7,345	)		-
Other		7,744		191,462		(197	)		36			(161	)		(13,465	)
Sales receivable		4,438,206		7,145,949		1,859,104			594			1,859,698			2,115,067
Foreign currency		1,962,156		5,240,303		32,273			4,737			37,010			260,118
Interbank market		508,492		1,242		4,042			38			4,080			1,224
Fixed rates		953,551		166,514		952,519			539			953,058			166,614
Floating rate		164,572		266,948		164,382			-			164,382			267,030
Indices		19,345		-		19,170			-			19,170			-
Securities		680,929		-		673,741			(27	)		673,714			-
Commodities		134,549		-		12,448			(4,549	)		7,899			-
Other		14,612		1,470,942		529			(144	)		385			1,420,081
Sales deliverable		2,537,461		110,859		(1,230,135	)		26,681			(1,203,454	)		(454,986	)
Foreign currency		2,522,629		54,704		(177,326	)		28,387			(148,939	)		(6,261	)
Interbank market		-		-		-			-			-			-
Fixed rates		-		-		(885,181	)		(1,025	)		(886,206	)		(164,172	)
Floating rate		-		-		(164,382	)		-			(164,382	)		(267,030	)
Commodities		14,832		-		(3,246	)		(681	)		(3,927	)		-
Other		-		56,155		-			-			-			(17,523	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 107

	Memorandum account / Notional amount				Balance sheet account receivable / (received) (payable) / paid			Adjustments to market value (in results / stockholders' equity)			Market value
	6/30/2012		6/30/2011		6/30/2012			6/30/2012			6/30/2012			6/30/2011
Credit derivatives		9,116,031		6,972,241		630,426			134,089			764,515			577,031
Asset position		3,643,693		4,001,819		759,709			174,885			934,594			673,943
Foreign currency		130,481		21,196		122			1,023			1,145			1,050
Fixed rate		2,340,564		3,763,707		759,585			151,315			910,900			672,852
Floating rate		-		-		-			-			-			(2,717	)
Securities		1,073,269		216,916		(13	)		21,321			21,308			2,758
Other		99,379		-		15			1,226			1,241			-
Liability position		5,472,338		2,970,422		(129,283	)		(40,796	)		(170,079	)		(96,912	)
Foreign currency		123,658		20,796		(111	)		(1,046	)		(1,157	)		(1,006	)
Interbank market		-		-		-			-			-			-
Fixed rate		4,204,305		2,721,192		(129,170	)		(17,203	)		(146,373	)		(93,145	)
Securities		1,044,996		228,434		13			(21,321	)		(21,308	)		(2,761	)
Other		99,379		-		(15	)		(1,226	)		(1,241	)		-
Forwards operations		37,934,503		21,033,076		(23,808	)		80,392			56,584			(603,209	)
Asset position		18,596,552		7,516,001		455,740			52,829			508,569			796,878
Foreign currency		18,159,001		6,412,011		447,388			52,829			500,217			212,410
Interbank market		19,713		15,102		365			-			365			292
Fixed rate		-		611,971		-			-			-			575,735
Floating rate		405,271		476,917		7,228			-			7,228			8,441
Indices		12,567		-		759			-			759			-
Liability position		19,337,951		13,517,075		(479,548	)		27,563			(451,985	)		(1,400,087	)
Foreign currency		19,214,160		13,250,493		(476,961	)		27,563			(449,398	)		(813,963	)
Interbank market		13,930		10,561		(521	)		-			(521	)		(55	)
Floating rate		74,788		256,021		(1,356	)		-			(1,356	)		(3,251	)
Indices		35,073		-		(710	)		-			(710	)		-
Swap with target flow		130,506		-		(192	)		(1,826	)		(2,018	)		-
Asset position - Interbank market		65,157		-		-			-			-			-
Liability position - Interbank market		65,349		-		(192	)		(1,826	)		(2,018	)		-
Target flow of swap - Asset position - Foreign currency		73,808		-		-			3,306			3,306			-
Other derivative financial instruments		4,283,682		3,512,344		278,782			76,005			354,787			153,999
Asset position		3,762,584		3,020,203		397,247			101,400			498,647			420,395
Foreign currency		645,166		273,201		73,902			106,507			180,409			196,039
Securities		3,117,418		-		323,345			(5,107	)		318,238			-
Other		-		2,747,002		-			-			-			224,356
Liability position		521,098		492,141		(118,465	)		(25,395	)		(143,860	)		(266,396	)
Foreign currency		410,456		391,618		(80,844	)		(25,395	)		(106,239	)		(197,754	)
Securities		110,642		-		(37,621	)		-			(37,621	)		-
Other		-		100,523		-			-			-			(68,642	)
				ASSET		10,409,336			1,669,421			12,078,757			10,422,691
				LIABILITIES		(7,109,139	)		(2,106,077	)		(9,215,216	)		(6,887,441	)
				TOTAL		3,300,197			(436,656	)		2,863,541			3,535,250
Derivative contracts mature as follows (in days):
Memorandum account/notional amount		0 - 30		31 - 180		181 - 365			Over 365			6/30/2012			6/30/2011
Futures		72,398,574		84,077,342		109,018,083			112,579,651			378,073,650			375,969,757
Swaps		7,033,451		27,525,718		22,994,651			49,827,616			107,381,436			72,350,390
Options		314,786,813		106,792,105		900,981,411			26,833,281			1,349,393,610			2,777,953,317
Forwards (onshore)		3,606,520		6,980,837		2,892,967			3,165,172			16,645,496			14,852,331
Credit derivatives		109,150		2,751,576		963,581			5,291,724			9,116,031			6,972,241
Forwards (offshore)		9,784,356		19,448,292		5,452,533			3,249,322			37,934,503			21,033,076
Swaps with target flow		-		-		-			65,157			65,157			-
Target flow of swap		-		-		-			73,808			73,808			-
Other		22,679		842,356		365,791			3,052,856			4,283,682			3,512,344

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 108

II - Derivatives by counterparty

See below the composition of the Derivative Financial Instruments portfolio (assets and liabilities) by type of instrument, stated at cost, market value, and maturity term.

	6/30/2012																												6/30/2011
	Cost		Adjustments to market value (in results / stockholders' equity)			Market value			%		0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days			Market value
ASSET
Futures		652,685		(70,318	)		582,367			4.8		(25,163	)		505,788			96,512			82,501			(42,406	)		(34,865	)		12,108
BM&F Bovespa		652,685		(72,498	)		580,187			4.8		(25,423	)		504,975			96,376			82,224			(43,154	)		(34,811	)		19,419
Financial institutions		-		9,019			9,019			0.1		260			2,983			448			1,011			2,564			1,753			(4,783	)
Companies		-		(6,839	)		(6,839	)		-0.1		-			(2,170	)		(312	)		(734	)		(1,816	)		(1,807	)		(2,528	)
Option premiums		2,959,612		316,706			3,276,318			27.1		1,019,640			234,447			200,616			952,192			65,175			804,248			2,675,127
BM&F Bovespa		1,698,010		156,924			1,854,934			15.4		892,664			91,819			154,484			702,042			13,831			94			1,456,978
Financial institutions		283,941		(24,649	)		259,292			2.1		88,375			99,491			19,374			41,847			7,271			2,934			565,130
Companies		977,661		184,431			1,162,092			9.6		38,601			43,137			26,758			208,303			44,073			801,220			653,019
Forwards (onshore)		2,936,007		(74,693	)		2,861,314			23.7		495,319			631,484			151,014			326,961			409,903			846,633			2,338,302
BM&F Bovespa		697,351		12			697,363			5.8		256,303			374,681			64,832			1,489			58			-			1,420,575
Financial institutions		152,457		(413	)		152,044			1.3		106,576			5,610			1,306			38,552			-			-			113,677
Companies		2,085,349		(74,319	)		2,011,030			16.6		132,440			251,193			84,876			286,892			409,561			846,068			804,050
Individuals		850		27			877			0.0		-			-			-			28			284			565			-
Swaps - Adjustment receivable		2,248,336		1,165,306			3,413,642			28.2		270,169			447,364			239,778			215,844			729,269			1,511,218			3,505,938
BM&F Bovespa		222,149		219,169			441,318			3.7		19,725			44,837			16,584			25,054			107,564			227,554			285,462
Financial institutions		179,074		187,747			366,821			3.0		53,817			83,274			17,577			31,059			72,627			108,467			521,965
Companies		1,837,925		751,625			2,589,550			21.4		196,615			318,923			201,407			157,906			542,966			1,171,733			2,655,908
Individuals		9,188		6,765			15,953			0.1		12			330			4,210			1,825			6,112			3,464			42,603
Credit derivatives		759,709		174,885			934,594			7.7		58,444			507,318			1,219			3,489			43,405			320,719			673,943
Financial institutions		594,291		38,699			632,990			5.2		58,444			507,307			920			1,537			877			63,905			493,570
Companies		165,418		136,186			301,604			2.5		-			11			299			1,952			42,528			256,814			180,373
Forwards (offshore)		455,740		52,829			508,569			4.2		91,512			113,565			85,311			99,939			57,113			61,129			796,878
Financial institutions		331,498		-			331,498			2.7		70,585			75,796			57,456			59,205			29,207			39,249			689,343
Companies		124,154		52,565			176,719			1.5		20,927			37,769			27,804			40,433			27,906			21,880			106,701
Individuals		88		264			352			0.0		-			-			51			301			-			-			834
Swaps with target flow - Companies		-		3,306			3,306			0.0		-			-			-			-			671			2,635			-
Other - Financial institutions		397,247		101,400			498,647			4.3		54,782			17,240			46,161			29,054			86,248			265,162			420,395
BM&F Bovespa		-		53,924			53,924			0.4		53,924			-			-			-			-			-			-
Financial institutions		243,179		(5,106	)		238,073			2.0		3			121			11,083			2,359			81,406			143,101			420,395
Companies		154,068		52,582			206,650			1.9		855			17,119			35,078			26,695			4,842			122,061			-
Total		10,409,336		1,669,421			12,078,757			100.0		1,964,703			2,457,206			820,611			1,709,980			1,349,378			3,776,879			10,422,691
% per maturity term												16.3			20.3			6.8			14.2			11.2			31.3
Total at 06/30/2011		10,034,491		388,200			10,422,691			-		1,495,202			2,936,181			1,284,908			1,036,833			878,322			2,791,245
% per maturity term												14.3			28.2			12.3			9.9			8.4			26.8

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 109

	6/30/2012																													6/30/2011
	Cost			Adjustments to market value (in results / stockholders' equity)			Market value			%		0 - 30			31 - 90			91 - 180			181 - 365			366 - 720			Over 720 days			Market value
LIABILITIES
Option premiums		(1,840,423	)		(791,463	)		(2,631,886	)		28.6		(1,048,690	)		(154,191	)		(152,829	)		(1,169,517	)		(69,309	)		(37,350	)		(1,729,029	)
BM&F Bovespa		(1,296,697	)		(692,848	)		(1,989,545	)		21.6		(894,084	)		(81,847	)		(105,344	)		(890,510	)		(17,644	)		(116	)		(1,302,421	)
Financial institutions		(422,377	)		(102,233	)		(524,610	)		5.7		(121,379	)		(63,243	)		(37,894	)		(230,436	)		(37,052	)		(34,606	)		(400,052	)
Companies		(121,017	)		3,389			(117,628	)		1.3		(33,227	)		(8,998	)		(9,591	)		(48,571	)		(14,613	)		(2,628	)		(26,556	)
Individuals		(332	)		229			(103	)		-		-			(103	)		-			-			-			-			-
Forwards (onshore)		(1,696,617	)		26,154			(1,670,463	)		18.2		(158,418	)		(71,265	)		(34,286	)		(209,125	)		(354,298	)		(843,071	)		(1,221,708	)
BM&F Bovespa		-			-			-			-		-			-			-			-			-			-			(1	)
Financial institutions		(107,125	)		243			(106,882	)		1.2		(105,336	)		(795	)		-			(427	)		(215	)		(109	)		(69,052	)
Companies		(1,589,492	)		25,911			(1,563,581	)		17.0		(53,082	)		(70,470	)		(34,286	)		(208,698	)		(354,083	)		(842,962	)		(1,152,273	)
Swaps - difference payable		(2,844,611	)		(1,300,314	)		(4,144,925	)		45.0		(208,451	)		(558,855	)		(143,654	)		(698,578	)		(623,573	)		(1,911,814	)		(2,173,309	)
BM&F Bovespa		(399,672	)		(327,439	)		(727,111	)		7.9		(1,415	)		(122,686	)		(15,767	)		(135,369	)		(83,167	)		(368,707	)		(389,341	)
Financial institutions		(585,498	)		(381,314	)		(966,812	)		10.5		(84,260	)		(101,965	)		(38,552	)		(197,487	)		(137,853	)		(406,695	)		(370,070	)
Companies		(1,817,437	)		(582,799	)		(2,400,236	)		26.0		(113,186	)		(326,567	)		(81,244	)		(346,792	)		(397,864	)		(1,134,583	)		(1,393,503	)
Individuals		(42,004	)		(8,762	)		(50,766	)		0.6		(9,590	)		(7,637	)		(8,091	)		(18,930	)		(4,689	)		(1,829	)		(20,395	)
Credit derivatives		(129,283	)		(40,796	)		(170,079	)		1.9		(7,673	)		(5,871	)		(6,112	)		(4,107	)		(4,758	)		(141,558	)		(96,912	)
Financial institutions		(128,985	)		(35,256	)		(164,241	)		1.8		(7,673	)		(5,444	)		(5,306	)		(2,487	)		(3,881	)		(139,450	)		(96,912	)
Companies		(298	)		(5,540	)		(5,838	)		0.1		-			(427	)		(806	)		(1,620	)		(877	)		(2,108	)		-
Forwards (offshore)		(479,548	)		27,563			(451,985	)		5		(88,578	)		(175,436	)		(46,559	)		(88,817	)		(50,312	)		(2,283	)		(1,400,087	)
Financial institutions		(342,290	)		1			(342,289	)		3.7		(70,327	)		(155,818	)		(28,417	)		(44,796	)		(42,931	)		-			(1,296,068	)
Companies		(136,967	)		27,685			(109,282	)		1.2		(18,202	)		(19,388	)		(18,013	)		(44,015	)		(7,381	)		(2,283	)		(104,013	)
Individuals		(291	)		(123	)		(414	)		0.0		(49	)		(230	)		(129	)		(6	)		-			-			(6	)
Swaps with target flow - Companies		(192	)		(1,826	)		(2,018	)		0.0		-			-			-			-			(316	)		(1,702	)		-
Other		(118,465	)		(25,395	)		(143,860	)		1.4		(113	)		(1,125	)		(10,994	)		(1,224	)		(107,586	)		(22,818	)		(266,396	)
Financial institutions		(84,946	)		(3,364	)		(88,310	)		1.0		-			-			-			-			(84,662	)		(3,648	)		(266,396	)
Companies		(33,519	)		(22,031	)		(55,550	)		0.4		(113	)		(1,125	)		(10,994	)		(1,224	)		(22,924	)		(19,170	)		-
Total		(7,109,139	)		(2,106,077	)		(9,215,216	)		100.0		(1,511,923	)		(966,743	)		(394,434	)		(2,171,368	)		(1,210,152	)		(2,960,596	)		(6,887,441	)
% per maturity term													16.4			10.5			4.3			23.6			13.1			32.1
Total at 06/30/2011		(6,987,169	)		99,728			(6,887,441	)		-		(661,429	)		(1,620,832	)		(1,153,313	)		(858,215	)		(1,077,769	)		(1,515,883	)
% per maturity term													9.6			23.5			16.7			12.5			15.6			22.0

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 110

III - Derivatives by notional amount

See below the composition of the Derivative Financial Instruments portfolio by type of instrument, stated at their notional amounts, per trading location (organized or over-the-counter market) and counterparties. 

	6/30/2012
	Futures		Swaps		Options		Forwards (onshore)		Credit derivatives		Forwards (offshore)		Swap with target flow		Target flow of swap		Other
BM&F/Bovespa		295,783,441		11,608,699		1,300,797,716		1,209,166		-		-		-		-		-
Overt-the-counter market		82,290,209		95,772,737		48,595,894		15,436,330		9,116,031		37,934,503		65,157		73,808		4,283,682
Financial institutions		18,463,605		35,942,705		38,038,770		818,297		6,826,516		31,076,099		-		-		2,716,328
Companies		63,826,604		53,733,258		10,538,012		14,603,448		2,289,515		6,818,407		65,157		73,808		1,567,354
Individuals		-		6,096,774		19,112		14,585		-		39,997		-		-		-
Total		378,073,650		107,381,436		1,349,393,610		16,645,496		9,116,031		37,934,503		65,157		73,808		4,283,682
Total 06/30/2011		375,969,757		72,350,390		2,777,953,317		14,852,331		6,972,241		21,033,076		-		-		3,512,344

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 111

IV - Credit derivatives

See below the composition of Credit Derivatives (assets and liabilities) portfolio stated at notional amount, and effect on calculation of Required Referential Equity.

	Credit risk amount
		6/30/2012		6/30/2011
Transferred		(3,643,693	)	(4,001,819	)
Credit swaps whose underlying assets are:
Securities		(2,585,278	)	(3,348,031	)
Total return rate swaps whose underlying assets are:
Securities		(1,058,415	)	(653,788	)
Received		5,472,338		2,970,422
Credit swaps whose underlying assets are:
Securities		5,472,338		2,962,880
Total return rate swaps whose underlying assets are:
Securities		-		7,542
Total		1,828,645		(1,031,397	)

During the period, there was no occurrence of credit event related to those set forth in agreements.

According to CMN Resolution No. 3,490, which became effective on July 1, 2008 (Note 3), the effect of the calculation of the Required Referential Equity amounts to R$ 107,274 at 06/30/2012 (R$ 174,587 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 112

V - Accounting hedge

a) Cash flow - the purpose of the hedge relationship of ITAÚ UNIBANCO HOLDING is to protect the cash flows of payment of debt interest (CDB / Redeemable preferred shares) related to its variable interest rate risk (CDI / LIBOR), making the cash flow constant (fixed rate) and regardless of the variations of DI Cetip Over and LIBOR.

To protect the future cash flows of debt against exposure to variable interest rate (CDI), at June 30, 2012, ITAÚ UNIBANCO HOLDING negotiated DI Futures agreements at BM&FBOVESPA with maturity between 2012 and 2017 in the amount of R$ R$ 61,631,476 (R$ 44,709,254 at June 30, 2011). To protect the future cash flows of debt against exposure to variable interest rate (LIBOR), at June 30, 2012 ITAÚ UNIBANCO HOLDING negotiated swap contracts with maturity in 2015 in the amount of R$ 794,516 (R$ 613,625 at June 30, 2011). These derivative financial instruments gave rise to adjustment to market value net of tax effects recorded in stockholders’ equity of R$ (356,700) (R$ 19,449 at June 30, 2011), of which R$ (340,816) (R$ (31,173) at June 30, 2011) refers to CDB and (R$ 15,884) (R$ (11,724) at June 30, 2011) refers to Redeemable Preferred shares. The hedged items total R$ 62,737,823 (R$ 45,643,500 at June 30, 2011), of which R$ 61,943,307 (R$ 45,029,926 at June 30, 2011) are CDB with maturities between 2012 and 2017 and R$ 794,516 (R$ 613,625 at June 30, 2011) are swaps of Redeemable Preferred Shares with maturity in 2015.

The gains or losses related to the accounting hedge of cash flows that we expect to recognize in Results in the following 12 months amount to R$ (91,304) (R$ 651,122 at June 30, 2011).

The effectiveness computed for hedge portfolio was in conformity with the provisions of BACEN Circular No. 3,082 of January 30, 2002.

b) Market Risk – The hedging strategy against market risk of ITAÚ UNIBANCO HOLDING consists in hedging the exposure to variation in market risk, receipt of interest, which are attributable to changes in interest rates related to recognized assets.

To hedge the variation in market risk in the receipt of interest, ITAÚ´UNIBANCO HOLDING uses interest rate swap contracts, in the amount of R$ 36,382. These Derivative Financial Instruments gave rise to an adjustment to market value of R$ 73.

Hedge assets are prefixed items, in the amount of R$ 36,382, expressed in UF (Chilean Unit of Account - CLF), issued in Chile, with maturities between 2012 and 2036. Such items gave rise to an adjustment to market value of R$ 73 which represents the effective hedge portion recognized in income.

ITAÚ UNIBANCO HOLDING uses the market risk hedge as follows:

Ÿ To hedge against market risk variation in the receipt of interest resulting from variations in the fair value of ICPR rate (Real Promédio Camera Index).

The effectiveness computed for hedge portfolio is in conformity with the provisions of BACEN Circular No. 3.082 of January 30, 2002.

Hedge relationships were designated in 2012 and swaps will mature in 2012. Receipts (payments) of interest flows are expected to occur and will affect the statement of income in monthly periods.

c) Related operations - the swap operations contracted in a negotiation associated with the funding and/or investment in the amount of R$ 36,916 (R$ 47,980 at June 30, 2011) are recorded at amounts restated in accordance with variations occurred in respective ratios (“curve”) and are not valued at their market value, as permitted by BACEN Circular No. 3,150, of September 11, 2002.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 113

VI - Realized and unrealized gain of the derivative financial instruments portfolio

	01/01 to 06/30/2012			01/01 to 06/30/2011
Swap		(456,933	)		915,109
Forwards (onshore)		34,674			82,389
Futures		(1,031,889	)		643,717
Options		339,021			326,342
Credit derivatives		54,295			59,366
Other		747,472			(1,066,293	)
Foreign exchange variation on investments abroad		1,300,848			(1,215,313	)
Total		987,488			(254,683	)

VII - Clearing agreements

Derivative operations on the over-the-counter market are carried out under the derivative agreements which provide for clearing of amounts payable and receivable resulting from such derivatives, pursuant to article three of paragraph two, of CMN Resolution No. 3,263, of 02/24/2005.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 114

i) Changes in adjustment to market value for the period

	01/01 to			01/01 to
	06/30/2012			06/30/2011
Opening balance		(160,343	)		1,408,206
Adjustments with impact on:
Results		598,852			(442,559	)
Trading securities		383,330			(199,620	)
Derivative financial instruments		215,522			(242,939	)
Stockholders’ equity		495,926			4,036
Available-for-sale		797,991			(82,145	)
Accounting Hedge – Derivative Financial Instruments		(302,065	)		86,181
Futures		(308,136	)		87,180
Swap		6,071			(999	)
Closing balance		934,435			969,683
Adjustment to market value		934,435			969,683
Trading securities		410,028			52,725
Available-for-sale securities		1,516,590			372,711
Derivative financial instruments		(992,183	)		544,247
Trading securities		(412,589	)		509,110
Accounting hedge		(579,594	)		35,137
Futures		(555,527	)		56,319
Swap		(24,067	)		(21,182	)

For better understanding, the following table shows the unrealized gains of available-for-sale securities and held-to-maturity securities:

	06/30/2012		06/30/2011
Adjustment of available-for-sale securities – stockholders’ equity		1,516,590		372,711
Adjustment to held-to-maturity securities (*)		970,819		576,908
Total unrealized gain		2,487,409		949,619

(*) Includes the amount of R$ 10,297 (R$ 11,215 at 06/30/2011) regarding the adjustment to market value of securities reclassified up to December 31, 2003, not recognized in net income.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 115

j) Sensitivity analysis (TRADING AND BANKING PORTFOLIOS)

In compliance with CVM Instruction No. 475 of December 17, 2008, ITAÚ UNIBANCO HOLDING carried out a sensitivity analysis by market risk factors considered relevant to which the group was exposed. Each market risk factor was subject to a sensitivity level, with shock applications of 25% and 50%, both for growth and fall. The biggest losses arising, by risk factor, in each scenario, were stated with impact on result, net of tax effects, by providing a vision of the ITAÚ UNIBANCO HOLDING exposure under exceptional scenarios.

Measurement of market risk segregates operations in trading portfolio and banking portfolio, pursuant to the criteria set forth in the New Capital Accord – Basel II and in the instructions CMN Resolution No. 3,464 of June 26, 2007 and BACEN Circular No. 3,354 of June 27, 2007.

The sensitivity analyses shown in this report are an evaluation of an instant position of the portfolio exposure and, therefore, do not consider the management’s quick response capacity (treasury and control areas), which triggers risk mitigating measures, whenever a situation of high loss or risk is identified by minimizing the sensitivity towards significant losses. In addition, we point out that the presented results do not necessarily translate into accounting results, because the study's sole purpose is to disclose the exposure to risks and the respective protective actions, taking into account the fair value of financial instruments, irrespective of the accounting practices adopted by the institution.

Trading portfolio consists of all transactions, including derivatives, which are held with the intention of trading in the short term or of hedging other financial instruments of this portfolio, and that are not subject to limitations on their marketability. These are transactions designated for obtaining benefits from price movements, actual or expected in the short term or conduction of arbitrage.

Amounts in reais thousands
Trading portfolio	Exposures	30/06/2012 (*)
Risk factors	Risk of variation in:	Scenarios
		I			II		III
Fixed rate	Fixed rates in reais		(1,003	)	(24,937	)	(49,594	)
Foreign exchange	Rates of foreign currency coupon		252		(6,385	)	(12,940	)
Foreign currency	Exchange variation		(8,752	)	(218,804	)	(437,609	)
Price indices	Rates of price index coupon		(336	)	(8,349	)	(16,580	)
Reference rate	Rate of TR coupon		371		(9,360	)	(18,888	)
Shares	Share price		1,116		(27,912	)	(55,825	)
	Total without correlation		(8,352	)	(295,749	)	(591,435	)
	Total with correlation		(5,682	)	(201,207	)	(402,372	)

(*) Amounts net of tax effects.

The banking portfolio comprises transactions that do not fit into the trading portfolio. Consists in operations designated for active management of financial risks and held not for trading in the short term. Its composition may include derivatives.

Amount in reais thousands
Trading and Banking portfolios	Exposures	30/06/2012 (*)
Risk factors	Risk of variation in:	Scenarios
		I			II			III
Fixed rate	Fixed rates in reais		(3,478	)		(86,650	)		(172,674	)
Foreign exchange	Rates of foreign currency coupon		(944	)		(23,313	)		(46,058	)
Foreign currency	Exchange variation		2,889			(72,220	)		(144,440	)
Price indices	Rates of price index coupon		(5,209	)		(126,735	)		(246,557	)
Reference rate	Rate of TR coupon		(5,756	)		(140,859	)		(275,576	)
Shares	Share price		4,580			(114,512	)		(229,024	)
	Total without correlation		(7,917	)		(564,287	)		(1,114,329	)
	Total with correlation		(5,386	)		(383,902	)		(758,113	)

(*) Amounts net of tax effects.

The following scenarios are used to measure the sensitivity:

Scenario I: Addition of 1 base point to the fixed-rate curve, currency coupon, inflation and commodities and interest rate indices, and 1 percentage point in currency and share prices, which is based on market information (BM&FBOVESPA, Andima, etc);

Scenario II: Shocks at 25 base points in fixed-rate curves, currency coupon, inflation and interest rate indices, and 25 percentage points in currency and share prices, both for growth and fall, considering the largest resulting losses per risk factor;

Scenario III: Shocks at 50 base points in fixed-rate curves, currency coupon, inflation and interest rate indices, and 50 percentage points in currency and share prices, both for growth and fall, considering the largest resulting losses per risk factor.

Derivative financial instruments engaged by ITAÚ UNIBANCO HOLDING are shown in the item Derivative Financial Instruments in this note.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 116

NOTE 8 - LOAN, LEASE AND OTHER CREDIT OPERATIONS

a) Composition of the portfolio with credit granting characteristics

I – By type of operations and risk level

Risk levels	6/30/2012																			6/30/2011
	AA		A		B		C		D		E		F		G		H
Loan operations		109,832,345		100,537,904		33,058,926		17,242,422		11,167,223		3,006,705		2,960,349		2,181,302		10,488,617	290,475,793		244,743,976
Loans and discounted trade receivables		48,611,817		49,773,134		22,498,615		12,800,940		9,392,759		2,216,278		2,383,111		1,740,036		8,908,894	158,325,584		132,690,919
Financing		40,723,238		41,318,373		9,344,326		3,758,450		1,433,136		674,223		552,246		423,036		1,503,816	99,730,844		86,763,551
Farming and agribusiness financing		3,339,828		673,738		553,814		71,996		215,829		90,180		593		1,281		29,251	4,976,510		5,549,860
Real estate financing		17,157,462		8,772,659		662,171		611,036		125,499		26,024		24,399		16,949		46,656	27,442,855		19,739,646
Lease operations		4,520,717		10,162,307		3,052,195		1,410,657		781,266		333,013		289,190		245,794		786,922	21,582,061		32,539,239
Credit card operations		-		30,081,979		1,626,037		2,025,019		768,315		458,439		438,303		374,518		2,710,669	38,483,279		35,940,155
Advance on exchange contracts (1)		3,059,812		1,169,452		487,556		322,674		34,216		1,962		5,370		70		1,549	5,082,661		3,313,140
Other sundry receivables (2)		1,120		1,045,865		4,293		30,637		14,495		5,788		10,310		6,374		45,928	1,164,810		427,099
Total operations with credit granting characteristics		117,413,994		142,997,507		38,229,007		21,031,409		12,765,515		3,805,907		3,703,522		2,808,058		14,033,685	356,788,604		316,963,609
Endorsements and sureties (3)																			56,610,581		43,143,815
Total with endorsements and sureties		117,413,994		142,997,507		38,229,007		21,031,409		12,765,515		3,805,907		3,703,522		2,808,058		14,033,685	413,399,185		360,107,424
TOTAL – 06/30/2011		89,832,081		146,457,698		28,597,506		16,888,418		14,593,189		3,503,215		3,322,941		2,496,900		11,271,661	316,963,609

(1) Includes Advances on Exchange Contracts and Income Receivable from Advances Granted, reclassified from Liabilities – Foreign Exchange Portfolio/Other Receivables (Note 2a);

(2) Includes Securities and Credits Receivable, Debtors for Purchase of Assets and Endorsements and Sureties paid;

(3) Recorded in Memorandum Accounts.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 117

II – By maturity and risk level

	6/30/2012																													6/30/2011
	AA		A			B			C			D			E			F			G			H			Total			Total
	OVERDUE OPERATIONS (1) (2)
Falling due installments		-		-			3,665,118			3,705,203			3,075,598			1,784,480			1,649,368			1,279,195			5,215,610			20,374,572			14,584,526
01 to 30		-		-			231,904			235,519			177,905			82,094			73,984			62,272			370,785			1,234,463			773,954
31 to 60		-		-			123,053			130,143			110,829			61,700			53,684			48,036			216,464			743,909			643,747
61 to 90		-		-			119,927			128,728			108,953			60,742			52,979			47,722			217,304			736,355			634,765
91 to 180		-		-			371,435			357,208			316,979			179,229			165,000			141,774			620,332			2,151,957			1,816,947
181 to 365		-		-			648,834			753,790			592,769			339,797			310,120			265,454			1,111,338			4,022,102			3,127,906
Over 365		-		-			2,169,965			2,099,815			1,768,163			1,060,918			993,601			713,937			2,679,387			11,485,786			7,587,207
Overdue installments		-		-			628,114			828,002			1,096,523			937,464			1,109,089			1,050,728			6,334,613			11,984,533			11,830,250
01 to 14		-		-			27,559			87,836			63,804			35,718			27,469			25,185			109,763			377,334			300,649
15 to 30		-		-			550,287			172,305			177,096			70,270			45,567			34,483			154,248			1,204,256			1,380,402
31 to 60		-		-			50,268			517,423			249,137			149,530			113,693			69,225			294,640			1,443,916			1,573,367
61 to 90		-		-			-			36,668			548,857			174,291			178,371			104,714			379,622			1,422,523			1,415,942
91 to 180		-		-			-			13,770			57,629			477,198			669,778			761,594			1,323,249			3,303,218			3,372,547
181 to 365		-		-			-			-			-			30,457			74,211			55,527			3,962,386			4,122,581			3,565,333
Over 365		-		-			-			-			-			-			-			-			110,705			110,705			222,010
SUBTOTAL		-		-			4,293,232			4,533,205			4,172,121			2,721,944			2,758,457			2,329,923			11,550,223			32,359,105			26,414,776
SPECIFIC ALLOWANCE		-		-			(42,932	)		(135,996	)		(417,212	)		(816,583	)		(1,379,229	)		(1,630,946	)		(11,550,223	)		(15,973,121	)		(12,814,597	)
SUBTOTAL – 06/30/2011		-		-			4,052,539			3,336,025			3,467,946			2,233,899			2,152,436			1,970,408			9,201,523			26,414,776
		NON-OVERDUE OPERATIONS
Falling due installments		116,660,887		141,940,759			33,514,250			16,177,330			8,400,803			1,057,091			931,739			468,193			2,446,233			321,597,285			288,818,566
01 to 30		13,790,738		28,214,988			7,129,054			4,463,784			1,915,288			173,119			97,229			63,705			602,889			56,450,794			43,130,384
31 to 60		7,966,026		10,798,704			3,084,138			1,301,196			645,781			55,686			46,916			24,864			203,642			24,126,953			25,067,314
61 to 90		5,872,036		7,691,695			2,187,088			987,774			377,857			37,359			21,406			18,095			156,889			17,350,199			18,698,155
91 to 180		11,260,238		15,960,530			4,589,244			1,813,524			843,529			88,642			77,131			44,820			320,463			34,998,121			33,799,965
181 to 365		17,569,787		20,221,080			5,131,346			2,419,871			1,340,778			145,706			93,611			74,387			288,906			47,285,472			41,551,783
Over 365		60,202,062		59,053,762			11,393,380			5,191,181			3,277,570			556,579			595,446			242,322			873,444			141,385,746			126,570,965
Overdue up to 14 days		753,107		1,056,748			421,525			320,874			192,591			26,872			13,326			9,942			37,229			2,832,214			1,730,267
SUBTOTAL		117,413,994		142,997,507			33,935,775			16,498,204			8,593,394			1,083,963			945,065			478,135			2,483,462			324,429,499			290,548,833
GENERIC ALLOWANCE		-		(715,029	)		(339,358	)		(494,946	)		(859,339	)		(325,189	)		(472,533	)		(334,695	)		(2,483,462	)		(6,024,551	)		(5,901,563	)
SUBTOTAL – 06/30/2011		89,832,081		146,457,698			24,544,967			13,552,393			11,125,243			1,269,316			1,170,505			526,492			2,070,138			290,548,833
GRAND TOTAL		117,413,994		142,997,507			38,229,007			21,031,409			12,765,515			3,805,907			3,703,522			2,808,058			14,033,685			356,788,604			316,963,609
EXISTING ALLOWANCE		-		(715,029	)		(382,290	)		(794,259	)		(3,828,378	)		(1,902,573	)		(2,592,095	)		(2,807,778	)		(14,033,685	)		(27,056,087	)		(23,774,575	)
Minimum allowance required (3)		-		(715,029	)		(382,290	)		(630,942	)		(1,276,552	)		(1,141,772	)		(1,851,761	)		(1,965,641	)		(14,033,685	)		(21,997,672	)		(18,716,160	)
Additional allowance (4)		-		-			-			(163,317	)		(2,551,826	)		(760,801	)		(740,334	)		(842,137	)		-			(5,058,415	)		(5,058,415	)
GRAND TOTAL 06/30/2011		89,832,081		146,457,698			28,597,506			16,888,418			14,593,189			3,503,215			3,322,941			2,496,900			11,271,661			316,963,609
EXISTING ALLOWANCE		-		(732,288	)		(285,975	)		(534,521	)		(4,376,497	)		(1,751,258	)		(2,325,726	)		(2,496,649	)		(11,271,661	)		(23,774,575	)
Minimum allowance required (3)		-		(732,288	)		(285,975	)		(506,653	)		(1,459,319	)		(1,050,965	)		(1,661,470	)		(1,747,829	)		(11,271,661	)		(18,716,160	)
Additional allowance (4)		-		-			-			(27,868	)		(2,917,178	)		(700,293	)		(664,256	)		(748,820	)		-			(5,058,415	)

(1) Operations with overdue installments for more than 14 days or under responsibility of bankruptcy or in process of bankruptcy companies;

(2) The balance of non-accrual operations amounts to R$ 22,424,385 (R$ 17,374,356 at 06/30/2011);

(3) The policy of not using "AA" ratings for individuals was maintained. As a consequence, all loan operations with clients classified in these segments are charged by recording a provision upon the granting of loan;

(4) According to BACEN’s request, it is classified into risk level to show the additional amounts calculated to maintain the strength necessary for absorbing possible increases in default expected in history of scenarios of losses incurred.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 118

III – By business sector

	6/30/2012		%			6/30/2011		%
PUBLIC SECTOR		1,131,999		0.3	%		1,590,205		0.5	%
Energy		349,531		0.1	%		532,643		0.2	%
Petrochemical and chemical		496,441		0.1	%		239,607		0.1	%
Sundry		286,027		0.1	%		817,955		0.3	%
PRIVATE SECTOR		355,656,605		99.7	%		315,373,404		99.5	%
COMPANIES		198,507,091		55.6	%		172,474,532		54.4	%
Sugar and alcohol		7,483,500		2.1	%		6,432,760		2.0	%
Agribusiness and fertilizers		12,310,065		3.5	%		10,018,990		3.2	%
Food and beverage		9,554,288		2.7	%		8,590,915		2.7	%
Banks and other financial institutions		4,933,844		1.4	%		4,985,920		1.6	%
Capital assets		7,059,650		2.0	%		7,028,631		2.2	%
Pulp and paper		2,611,141		0.7	%		1,784,756		0.6	%
Publishing and printing		1,637,166		0.5	%		1,301,499		0.4	%
Electronic and IT		4,607,492		1.3	%		4,731,283		1.5	%
Packaging		1,896,559		0.5	%		1,517,685		0.5	%
Energy and sewage		5,331,400		1.5	%		5,431,982		1.7	%
Education		1,103,480		0.3	%		1,089,408		0.3	%
Pharmaceuticals and cosmetics		3,989,380		1.1	%		3,558,644		1.1	%
Real estate agents		12,581,215		3.5	%		10,364,269		3.3	%
Entertainment and tourism		3,429,865		1.0	%		3,227,181		1.0	%
Wood and furniture		3,121,738		0.9	%		2,842,774		0.9	%
Construction material		5,241,056		1.5	%		4,547,933		1.4	%
Steel and metallurgy		8,105,390		2.3	%		6,929,562		2.2	%
Media		834,683		0.2	%		975,788		0.3	%
Mining		2,639,113		0.7	%		1,716,292		0.5	%
Infrastructure work		4,746,086		1.3	%		4,556,514		1.4	%
Oil and gas		2,917,685		0.8	%		2,613,481		0.8	%
Petrochemical and chemical		5,971,808		1.7	%		5,256,420		1.7	%
Health care		1,767,016		0.5	%		1,662,220		0.5	%
Insurance and reinsurance and pension plans		5,307		0.0	%		14,508		0.0	%
Telecommunications		1,012,435		0.3	%		1,037,181		0.3	%
Third sector		102,973		0.0	%		119,655		0.0	%
Trading		1,948,429		0.5	%		2,402,836		0.8	%
Transportation		16,440,640		4.6	%		13,075,374		4.1	%
Domestic appliances		2,350,332		0.7	%		2,070,922		0.7	%
Vehicles and autoparts		13,335,285		3.7	%		11,561,864		3.6	%
Clothing and shoes		5,154,359		1.4	%		5,008,567		1.6	%
Commerce - Sundry		14,413,988		4.0	%		12,849,809		4.1	%
Industry - Sundry		4,516,640		1.3	%		2,435,764		0.8	%
Sundry services		17,391,899		4.9	%		12,278,313		3.9	%
Sundry		7,961,184		2.2	%		8,454,832		2.7	%
INDIVIDUALS		157,149,514		44.0	%		142,898,872		45.1	%
Credit cards		37,699,042		10.6	%		35,405,232		11.2	%
Real estate financing		19,905,385		5.6	%		13,742,350		4.3	%
Consumer loans/overdraft		42,970,300		12.0	%		33,576,808		10.6	%
Vehicles		56,574,787		15.9	%		60,174,482		19.0	%
GRAND TOTAL		356,788,604		100.0	%		316,963,609		100.0	%

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 119

The balances as of June 30, 2011 were reclassified in order to align the sector exposure criteria for disclosure purposes on internal and publicly-available reports. The main impacts are highlighted below:

Prior disclosure	Current disclosure	06/30/2011
Agribusiness	Sugar and alcohol		7,367,136
Agribusiness	Sundry		2,704,715
Agribusiness	Agribusiness and fertilizers		3,565,253
Heavy construction (constructors)	Infrastructure work		4,367,745
Distribution of fuels	Oil and gas		3,144,465
Electrical and electronic	Domestic appliances		2,502,307
Fertilizers and insecticides	Agribusiness and fertilizers		1,742,717
Holding company	Sundry		3,665,015
Import and export	Tradings		2,502,608
Hospital care materials and equipment	Pharmaceuticals and cosmetics		1,095,409
Media	Publishing and printing		1,403,116
Other - Industry	Packaging		1,656,025
Other services	Education		1,292,450
Service companies	Entertainment and tourism		3,411,029
Service companies	Sundry services		1,703,365
Chemical and petrochemical	Oil and gas		889,334
Supermarkets	Commerce - Sundry		2,307,317

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 120

b) Credit concentration

	6/30/2012				6/30/2011
Loan, lease and other credit operations (*)	Risk		% of Total		Risk		% of Total
Largest debtor		4,070,365		1.0		2,356,061		0.7
10 largest debtors		25,279,571		6.1		18,474,353		5.1
20 largest debtors		40,949,626		9.9		30,797,931		8.6
50 largest debtors		64,413,704		15.6		51,178,478		14.2
100 largest debtors		84,541,433		20.5		67,945,807		18.9

	6/30/2012				6/30/2011
Loan, lease and other credit operations and securities of companies and financial institutions (*)	Risk		% of Total		Risk		% of Total
Largest debtor		5,856,206		1.3		4,825,640		1.2
10 largest debtors		35,833,616		7.7		28,509,271		7.1
20 largest debtors		57,086,210		12.3		46,537,738		11.6
50 largest debtors		90,845,748		19.5		74,105,201		18.4
100 largest debtors		116,546,183		25.0		96,164,675		23.9

(*) The amounts include endorsements and sureties.

c) Changes in allowance for loan losses

	01/01 to			01/01 to
	06/30/2012			06/30/2011
Opening balance		(25,771,727	)		(22,018,217	)
Net increase for the period		(12,019,821	)		(9,487,170	)
Required by Resolution No. 2,682/99		(12,019,821	)		(8,960,150	)
Additional allowance (3)		-			(527,020	)
Write-Off		10,735,461			7,730,812
Closing balance		(27,056,087	)		(23,774,575	)
Required by Resolution No. 2,682/99		(21,997,672	)		(18,716,160	)
Specific allowance (1)		(15,973,121	)		(12,814,597	)
Generic allowance (2)		(6,024,551	)		(5,901,563	)
Additional allowance (3)		(5,058,415	)		(5,058,415	)

(1) Operations with overdue installments for more than 14 days or under responsibility of bankruptcy or in process of bankruptcy companies;

(2) For operations not covered in the previous item due to the classification of the client or operation;

(3) As from the first quarter of 2011, refers to the provision in excess of the minimum required percentage by CMN Resolution No. 2,682 of December 21, 1999, based on the expected loss methodology adopted in the institution’s credit risk management, which also considers the potential losses in revolving credit.

At June 30, 2012, the balance of the allowance in relation to the loan portfolio is equivalent to 7.6% (7.5% at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 121

d) Recovery and renegotiation of credits

I - Composition of the result of allowance for loan losses

	01/01 to 06/30/2012			01/01 to 06/30/2011
Expenses for allowance for loan losses		(12,019,821	)		(9,487,170	)
Income from recovery of credits written off as loss		2,318,352			2,599,605
Result of allowance for loan losses		(9,701,469	)		(6,887,565	)

II - Renegotiated credits

	6/30/2012			6/30/2011
Renegotiated credits		18,450,127			11,997,248
Allowance for loan losses		(7,651,592	)		(4,616,560	)
(%)		41.5			38.5

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 122

e) Restricted operations on assets

We present below information related to the restricted operations on assets, in accordance with CMN Resolution No. 2,921, of January 17, 2002.

	6/30/2012								01/01 to 06/30/2012
	0 - 30		31 - 180		Over 365 days		Total		Income (expenses)
Restricted operations on assets
Loan operations		28,815		1,400		118,246		148,461		13,374
Liabilities - restricted operations on assets
Foreign borrowings through securities		28,815		1,400		118,246		148,461		(13,374	)
Net revenue from restricted operations										-

At June 30, 2012, there were no balances in default.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 123

f) Operations of sale or transfers and acquisitions of financial assets

I. Credit assignments (transfers of receivables) carried out through December 2011 were recorded in accordance with current regulation together with income recognition at the time of the assignment, regardless of the risks and benefits being retained or not.

In compliance with CMN Resolution No. 3,809, of October 28, 2009, the amount of operations assigned with joint obligation, at June 30, 2012 where the entity significantly retained the related risks and benefits is R$ 483,060 (R$ 31,665 at 06/30/2011), composed of real estate financing of R$ 463,606 (R$ 9,579 at 06/30/2011) and farming financing of R$ 19,454 (R$ 22,086 at 06/30/2011).

II. Beginning January 2012, as provided for by CMN Resolution No. 3,533/08 and supplementary regulation, accounting records take into consideration the retention or non-retention of risks and benefits on sale or transfers of financial assets.

ITAÚ UNIBANCO HOLDING carried out operations for sale or transfer of financial assets in which there was a retention of credit risks of financial assets transferred, through the acquisition of subordinated quotas of credit right funds. Therefore, such credits continue to be recorded as credit operations and are represented by the following information at June 30, 2012:

	Asset				Liabilities
Nature of operation	Book value		Fair value		Book value		Fair value
Large companies – Working capital		28,509		31,426		28,509		31,426

Sales or transfers of financial assets without risk and benefit retention amount to R$ 455,533 with effect on results of R$ 9.

In the period, loan portfolios with assignor’s risk retention the, in the amount of R$ 1,015,485, totaling R$ 2,805,380 at June 30, 2012, were also purchased.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 124

NOTE 9 - FOREIGN EXCHANGE PORTFOLIO

	6/30/2012			6/30/2011
ASSETS  - OTHER RECEIVABLES		36,583,863			24,869,496
Exchange purchase pending settlement – foreign currency		20,134,786			14,826,053
Bills of exchange and term documents – foreign currency		-			41
Exchange sale rights – local currency		17,111,531			10,489,907
(Advances received) – local currency		(662,454	)		(446,505	)
LIABILITIES – OTHER LIABILITIES (Note 2a)		36,775,178			25,458,427
Exchange sales pending settlement – foreign currency		17,165,366			10,318,969
Liabilities from purchase of foreign currency – local currency		19,605,290			15,135,534
Other		4,522			3,924
MEMORANDUM ACCOUNTS		1,493,715			467,841
Outstanding import credits – foreign currency		1,450,340			451,342
Confirmed export credits – foreign currency		43,375			16,499

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 125

NOTE 10 – FUNDING AND BORROWINGS AND ONLENDING

a) Summary

	6/30/2012												6/30/2011
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Deposits		127,529,625		20,534,411		12,347,709		74,563,375		234,975,120		40.3		208,914,215		39.4
Deposits received under securities repurchase agreements		67,782,624		8,598,394		12,141,768		106,577,030		195,099,816		33.4		197,863,817		37.3
Funds from acceptance and issuance of securities		2,875,630		16,049,987		8,553,920		26,816,038		54,295,575		9.3		32,296,756		6.1
Borrowings and onlending		3,156,280		12,624,731		15,090,512		24,707,419		55,578,942		9.5		52,946,948		10.0
Subordinated debt (*)		778,836		1,989,339		2,578,523		38,399,712		43,746,410		7.5		37,826,792		7.1
TOTAL		202,122,995		59,796,862		50,712,432		271,063,574		583,695,863				529,848,528
% per maturity term		34.6		10.2		8.7		46.4
TOTAL – 06/30/2011		201,245,705		59,690,428		48,177,440		220,734,955		529,848,528
% per maturity term		38.0		11.3		9.1		41.7

(*) Includes R$ 798,525 (R$ 616,299 at 06/30/2011) of Redeemable Preferred Shares classified under Minority Interest in Balance Sheet.

b) Deposits

	6/30/2012												6/30/2011
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Demand deposits		31,360,997		-		-		-		31,360,997		13.3		24,463,040		11.7
Savings accounts		73,055,957		-		-		-		73,055,957		31.1		60,008,457		28.7
Interbank		3,242,062		3,798,955		2,431,919		212,738		9,685,674		4.1		2,802,190		1.3
Time deposits		19,870,609		16,735,456		9,915,790		74,350,637		120,872,492		51.4		121,640,528		58.2
TOTAL		127,529,625		20,534,411		12,347,709		74,563,375		234,975,120				208,914,215
% per maturity term		54.3		8.7		5.3		31.7
TOTAL – 06/30/2011		108,032,811		26,323,478		12,528,807		62,029,119		208,914,215
% per maturity term		51.7		12.6		6.0		29.7

ITAÚ UNIBANCO HOLDING’s portfolio is composed of interbank deposits in the amount of R$ 5,056,765 (R$ 4,012,223 at 06/30/2011 with maturity over 365 days) with maturity of 31 to 180 days.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 126

c) Deposits received under securities repurchase agreements

	6/30/2012												6/30/2011
	0 – 30		31 - 180		181 - 365		Over 365 days		Total		%		Total		%
Own portfolio		39,233,098		8,378,387		11,882,072		89,707,941		149,201,498		76.5		143,860,576		72.7
Government securities		28,027,779		323,408		3,438		22,218		28,376,843		14.5		35,935,578		18.2
Own issue		3,659,410		8,054,898		11,758,521		89,685,723		113,158,552		58.1		102,179,866		51.6
Foreign		7,545,909		81		120,113		-		7,666,103		3.9		5,745,132		2.9
Third-party portfolio		28,497,554		-		-		-		28,497,554		14.6		37,625,123		19.0
Free portfolio		51,972		220,007		259,696		16,869,089		17,400,764		8.9		16,378,118		8.3
TOTAL		67,782,624		8,598,394		12,141,768		106,577,030		195,099,816				197,863,817
% per maturity term		34.7		4.4		6.2		54.7
TOTAL – 06/30/2011		86,818,606		9,859,041		12,373,770		88,812,400		197,863,817
% per maturity term		43.9		5.0		6.3		44.8

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 127

d) Funds from acceptance and issuance of securities

	6/30/2012												6/30/2011
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
FUNDS FROM BILLS:		2,732,049		12,524,739		5,551,398		17,948,981		38,757,167		71.3		19,519,062		60.4
of real estate loans		-		2,036,301		2,307,462		13,317,845		17,661,608		32.5		5,655,309		17.5
Financial		2,364,728		9,965,723		2,731,288		1,903,788		16,965,527		31.2		11,350,056		35.1
Bill of credit related to agribusiness		358,206		511,086		488,082		2,532,194		3,889,568		7.2		2,261,182		7.0
Mortgage notes		9,115		11,629		24,566		195,154		240,464		0.4		252,515		0.8
DEBENTURES		-		1,033,025		-		1,532,128		2,565,153		4.7		1,041,712		3.2
FOREIGN SECURITIES		143,581		2,492,223		3,002,522		7,334,929		12,973,255		23.9		11,735,982		35.7
Trade Related – issued abroad - Structure Note Issued		-		-		-		-		-		-		2,251,280		7.0
Non-Trade Related – Issued abroad		143,581		2,492,223		3,002,522		7,334,929		12,973,255		23.9		9,484,702		28.7
Brazil Risk Note Programme		49,490		1,119,529		1,459,383		3,649,244		6,277,646		11.6		3,123,891		9.7
Structure Note Issued		82,551		1,022,786		1,243,765		1,606,969		3,956,071		7.3		1,091,681		3.4
Bonds		6,925		18,599		25,055		1,345,552		1,396,131		2.6		-		-
Fixed Rate Notes		3,356		279,469		3,978		694,710		981,513		1.8		221,320		0.7
Euro Medium Term Note Programme		1,236		8,279		270,341		38,454		318,310		0.6		1,139,649		3.5
Euro Certificates of Deposits		-		-		-		-		-		-		3,046,619		9.4
Medium Term Note		-		-		-		-		-		-		86,020		0.3
Eurobonds		-		-		-		-		-		-		775,522		2.4
Other		23		43,561		-		-		43,584		0.1		-		-
TOTAL		2,875,630		16,049,987		8,553,920		26,816,038		54,295,575				32,296,756
% per maturity term		5.3		29.6		15.8		49.4
TOTAL –  06/30/2011		3,514,762		10,153,821		3,628,477		14,999,696		32,296,756
% per maturity term		10.9		31.4		11.2		46.5

ITAÚ UNIBANCO HOLDING’s portfolio is composed of Brazil Risk Note Programme with maturity of 31 days to 180 days in the amount of R$ 5,542 (R$ 5,542 at 06/30/2011) and over 365 days in the amount of R$ 500,000 (R$ 500,000 at 06/30/2011), totaling R$ 505,542 (R$ 505,542 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 128

e) Borrowings and onlending

	6/30/2012												6/30/2011
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
BORROWINGS		2,219,735		7,001,473		8,735,437		2,928,137		20,884,782		37.6		18,669,934		35.3
Domestic		249,852		92,792		4,149		49,085		395,878		0.7		2,730,992		5.2
Foreign (*)		1,969,883		6,908,681		8,731,288		2,879,052		20,488,904		36.9		15,938,942		30.1
ONLENDING		936,545		5,623,258		6,355,075		21,779,282		34,694,160		62.4		34,277,014		64.7
Domestic – official institutions		936,545		5,618,903		5,938,411		21,589,458		34,083,317		61.3		33,781,687		63.8
BNDES		247,626		1,100,168		1,103,868		7,236,498		9,688,160		17.4		9,653,414		18.2
FINAME		683,146		4,457,368		4,784,137		14,155,930		24,080,581		43.3		23,756,255		44.9
Other		5,773		61,367		50,406		197,030		314,576		0.6		372,018		0.7
Foreign		-		4,355		416,664		189,824		610,843		1.1		495,327		0.9
TOTAL		3,156,280		12,624,731		15,090,512		24,707,419		55,578,942				52,946,948
% per maturity term		5.7		22.7		27.2		44.5
TOTAL- 06/30/2011		2,818,274		12,462,965		11,445,198		26,220,511		52,946,948
% per maturity term		5.3		23.5		21.6		49.5

(*) Foreign borrowings are basically represented by foreign exchange transactions related to export pre-financing and import financing.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 129

f) Subordinated debt

	6/30/2012															6/30/2011
	0-30		31-180		181-365		Over 365 days			Total			%			Total			%
CDB		715,074		1,912,321		2,575,044		10,668,115			15,870,554			36.3			23,195,838			61.3
Financial Treasury bills		-		-		-		17,474,250			17,474,250			39.9			7,769,867			20.5
Euronotes		63,762		69,449		-		9,191,475			9,324,686			21.3			5,208,867			13.8
Bonds		-		3,560		3,479		308,427			315,466			0.7			275,446			0.7
Eurobonds		-		-		-		-			-			-			792,245			2.1
(-) Transaction costs incurred (Note 4b)		-		-		-		(37,071	)		(37,071	)		(0.1	)		(31,770	)		(0.1	)
TOTAL OTHER LIABILITIES		778,836		1,985,330		2,578,523		37,605,196			42,947,885						37,210,493
Redeemable preferred shares		-		4,009		-		794,516			798,525			1.8			616,299			1.6
GRAND TOTAL (*)		778,836		1,989,339		2,578,523		38,399,712			43,746,410						37,826,792
% per maturity term		1.8		4.5		5.9		87.8
TOTAL- 06/30/2011		61,252		891,123		8,201,188		28,673,229			37,826,792
% per maturity term		0.2		2.4		21.7		75.8

(*) The amount of R$ 38,982,533 (R$ 33,688,284 at 06/30/2011) is included in the Referential Equity, using the proportionalities set forth in CMN Resolution No. 3,444 of February 28, 2007 and changes made by CMN Resolution No. 3,532 of January 31, 2008.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 130

Description
Name of security	Issue		Maturity		Return p.a.	Principal R$
Subordinated CDB
		2002		2012	102,5% of CDI		200,000
		2007		2012	103,8% of CDI		93,000
					100% of CDI + 0,35% to 0,45%		731,836
					IGPM + 7,31 to 7,35%		278,350
		2008		2013	100% of CDI + 0,5% to 0,6%		1,558,200
					106% to 107% of CDI		48,401
		2003		2013	102% of CDI		40,000
		2007		2014	100% of CDI + 0,35% to 0,6%		1,864,500
					IGPM + 7,35%		33,200
		2008		2014	112% of CDI		1,000,000
		2008		2015	119,8% of CDI		400,000
		2010		2015	113% of CDI		50,000
		2006		2016	100% of CDI + 0,7% (*)		465,835
		2010		2016	110% to 114% of CDI		2,719,268
					IPCA + 7,33%		122,500
		2010		2017	IPCA + 7,45%		366,830
					TOTAL		9,971,920
Subordinated financial bills
		2010		2016	100% of CDI + 1,35% to 1,36%		365,000
					112% to 112,5% of CDI		1,874,000
					IPCA + 7%		30,000
		2010		2017	IPCA + 6,95% to 7,2%		206,000
		2011		2017	108% to 112% of CDI		3,223,500
					IPCA + 6,15% to 7,8%		352,400
					IGPM + 6,55% to 7,6%		138,000
					100% of CDI + 1,29% to 1,52%		3,650,000
		2012		2017	100% of CDI + 1,12%		500,000
		2011		2018	IGPM + 7%		42,000
					IPCA + 7,53% to 7,7%		30,000
		2012		2018	IPCA + 5,76% to 6,58%		426,000
					100% of CDI + 1,10% to 1,32%		2,527,400
					108% to 112,5% of CDI		3,416,900
					PRE + 12,2%		12,000
		2011		2019	109% to 109,7% of CDI		2,000
		2012		2019	PRE + 12,2%		12,000
					IPCA + 5,01% to 6,30%		91,000
					110% of CDI		1,000
		2012		2020	IPCA + 6,00% to 6,17%		20,000
					111% of CDI		1,000
		2011		2021	109,25 to 110,5% of CDI		6,000
		2012		2022	IPCA + 5,83%		60,000
					TOTAL		16,986,200
Subordinated euronotes
		2010		2020	6.2%		1,730,600
		2010		2021	5.75%		1,694,200
		2011		2021	5,75% to 6,2%		1,198,900
		2012		2021	6.2%		956,505
		2012		2022	5.65%		2,277,625
					TOTAL		7,857,830
Subordinated bonds
		2005		2015	1.42%		193,834
		2008		2033	3,5% to 4,5%		141,127
					TOTAL		334,961
Preferred shares
		2002		2015	3.04%		1,388,841

(*) Subordinated CDBs may be redeemed as from November 2011.

ITAÚ UNIBANCO HOLDING’s portfolio is composed of Subordinated Euronotes with maturity of up to 30 days in the amount of R$ 63,762 (R$ 49,557 at 06/30/2011), with maturity of 31 to 180 days in the amount of R$ 69,449 (R$ 21,777 06/30/2011) and over 365 days in the amount of R$ 9,154,404 (R$ 4,252,638 at 06/30/2011), totaling R$ 9,287,615 (R$ 4,323,972 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 131

NOTE 11 - INSURANCE, PENSION PLAN AND CAPITALIZATION OPERATIONS

a) Composition of the technical provisions per segment

	INSURANCE				PENSION PLAN				CAPITALIZATION				TOTAL
	6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012		6/30/2011
Unearned premiums		3,232,574		2,810,399		-		-		-		-		3,232,574		2,810,399
Mathematical provision of benefits to be granted and benefits granted		18,492		19,971		69,989,112		55,344,077		-		-		70,007,604		55,364,048
Premium deficiency / Insufficient contribution		341,031		286,566		715,444		646,269		-		-		1,056,475		932,835
Financial surplus		1,532		1,504		494,744		469,201		-		-		496,276		470,705
Mathematical provision for redemptions		-		-		-		-		2,813,612		2,706,382		2,813,612		2,706,382
Provision for raffles		-		-		-		-		19,908		18,025		19,908		18,025
Unsettled claims		2,597,778		2,252,802		-		-		-		-		2,597,778		2,252,802
Claims / Events incurred but not reported (IBNR)		808,074		697,614		11,031		10,842		-		-		819,105		708,456
Other provisions (Note 4m II.I)		1,288,542		1,211,316		183,014		184,893		38,555		43,100		1,510,111		1,439,309
TOTAL		8,288,023		7,280,172		71,393,345		56,655,282		2,872,075		2,767,507		82,553,443		66,702,961

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 132

b) Assets Guaranteeing Technical Provisions - SUSEP

	INSURANCE				PENSION PLAN				CAPITALIZATION				TOTAL
	6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012		6/30/2011
Interbank investments – money market		784,771		972,123		746,622		1,087,394		1,113,943		1,015,617		2,645,336		3,075,134
Securities and derivative financial instruments		3,231,158		2,467,794		70,956,863		55,847,049		1,866,963		1,792,299		76,054,984		60,107,142
PGBL/VGBL FUND QUOTAS (1)		-		-		65,605,935		51,123,685		-		-		65,605,935		51,123,685
Government securities - Domestic		-		-		43,373,267		35,605,229		-		-		43,373,267		35,605,229
National Treasury Bills		-		-		21,179,034		21,749,971		-		-		21,179,034		21,749,971
National Treasury Notes		-		-		19,739,577		11,930,052		-		-		19,739,577		11,930,052
Financial Treasury Bills		-		-		2,454,656		1,925,206		-		-		2,454,656		1,925,206
Corporate securities		-		-		21,784,524		15,335,261		-		-		21,784,524		15,335,261
Bank deposit certificates		-		-		5,486,779		6,348,369		-		-		5,486,779		6,348,369
Debentures		-		-		3,032,645		4,575,039		-		-		3,032,645		4,575,039
Shares		-		-		1,186,008		1,939,574		-		-		1,186,008		1,939,574
Promissory notes		-		-		-		12,292		-		-		-		12,292
Credit note		-		-		863,129		-		-		-		863,129		-
Financial Treasury bills		-		-		11,213,927		2,458,453		-		-		11,213,927		2,458,453
Securitized real estate loans		-		-		2,036		1,534		-		-		2,036		1,534
PGBL/VGBL fund quotas		-		-		175,655		58,337		-		-		175,655		58,337
Derivative financial instruments		-		-		29,196		54,635		-		-		29,196		54,635
Accounts receivable / (payable)		-		-		243,293		70,223		-		-		243,293		70,223
Other assets		3,231,158		2,467,794		5,350,928		4,723,364		1,866,963		1,792,299		10,449,049		8,983,457
Government		1,051,945		774,851		3,989,822		3,522,078		271,462		79,482		5,313,229		4,376,411
Private		2,179,213		1,692,943		1,361,106		1,201,286		1,595,501		1,712,817		5,135,820		4,607,046
Receivables from insurance and reinsurance operations (2)		4,418,628		3,874,417		-		-		-		-		4,418,628		3,874,417
Credit rights		1,050,063		1,010,370		-		-		-		-		1,050,063		1,010,370
Commercial – Extended guarantee		1,285,935		1,178,871		-		-		-		-		1,285,935		1,178,871
Reinsurance		2,082,630		1,685,176		-		-		-		-		2,082,630		1,685,176
Escrow deposits for loss		-		39,093		-		-		-		-		-		39,093
TOTAL		8,434,557		7,353,427		71,703,485		56,934,443		2,980,906		2,807,916		83,118,948		67,095,786

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to long-term liabilities in Pension Plan Technical Provisions account, as determined by SUSEP.

(2) Recorded under Other receivables and Other assets.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 133

c) Financial and operating income per segment

	INSURANCE						PENSION PLAN						CAPITALIZATION						TOTAL
	01/01 to			01/01 to			01/01 to			01/01 to			01/01 to			01/01 to			01/01 to			01/01 to
	6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011
Financial income from insurance, pension plan and capitalization operations		173,800			127,688			117,892			90,309			69,322			62,616			361,014			280,613
Financial income		192,468			168,956			2,989,262			2,271,738			151,727			154,753			3,333,457			2,595,447
Financial expenses		(18,668	)		(41,268	)		(2,871,370	)		(2,181,429	)		(82,405	)		(92,137	)		(2,972,443	)		(2,314,834	)
Operating income from insurance, pension plan and capitalization operations		1,164,842			965,507			36,912			13,851			258,271			234,980			1,460,025			1,214,338
Premiums and contributions		2,833,670			2,707,934			7,981,018			5,382,450			998,353			926,125			11,813,041			9,016,509
Changes in technical provisions		(176,808	)		(367,671	)		(7,914,434	)		(5,354,504	)		(4,656	)		(10,153	)		(8,095,898	)		(5,732,328	)
Expenses for claims, benefits, redemptions and raffles		(976,120	)		(805,140	)		(25,733	)		(12,396	)		(736,435	)		(678,893	)		(1,738,288	)		(1,496,429	)
Selling expenses		(487,497	)		(480,487	)		(1,357	)		(1,483	)		(2,081	)		(1,829	)		(490,935	)		(483,799	)
Other operating revenues and expenses		(28,403	)		(89,129	)		(2,582	)		(216	)		3,090			(270	)		(27,895	)		(89,615	)
Total result from insurance, pension plan and capitalization operations		1,338,642			1,093,195			154,804			104,160			327,593			297,596			1,821,039			1,494,951

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 134

NOTE 12 - CONTINGENT ASSETS AND LIABILITIES AND LEGAL LIABILITIES – TAX AND SOCIAL SECURITY

In the ordinary course of its businesses, ITAÚ UNIBANCO HOLDING CONSOLIDATED is involved in contingencies that may be classified as follows.

a) Contingent Assets: there are no contingent assets recorded.

b) Provisions and Contingencies: The criteria to quantify contingencies are adequate in relation to the specific characteristics of civil, labor and tax lawsuits portfolios, as well as other risks.

- Civil lawsuits:

Collective lawsuits (related to claims considered similar and which each individual amount is not considered significant): contingencies are determined on a monthly basis and the expected amount of losses is accrued according to statistical references that take into account the type of lawsuit and the characteristics of the legal body (Small Claims Court or Regular Court).

Individual lawsuits (related to claims with unusual characteristics or involving significant amounts): determined from time to time, based on the amount claimed and the likelihood of loss, which, in turn, is estimated according to the “de facto” and “de jure” characteristics related to such lawsuit. The amounts of losses which likelihood of loss is considered probable are accrued.

Contingencies usually arise from revision of contracts and compensation for property damage and pain and suffering; most of these lawsuits are filed in the Small Claims Court and therefore limited to 40 minimum monthly wages. ITAÚ UNIBANCO CONSOLIDATED is also party to specific lawsuits over the charging of understated inflation adjustment to savings accounts in connection with economic plans.

The case law at the Federal Supreme Court is favorable to banks in relation to an economic phenomenon similar to savings, as in the case of adjustment to time deposits and contracts in general. Additionally, the Superior Court of Justice has recently decided that the term for filing public civil actions over understated inflation is five years. In view of such decision, some of the lawsuits may be dismissed because they were filed after the five-year period.

In the accounting books no amount is recognized in relation to Civil Lawsuits which likelihood of loss is considered possible, which total estimated risk is R$ 1,636,535 and main natures of these lawsuits refer to claims form compensation or collections, the individual amounts of which are not significant.

- Labor claims

Collective lawsuits (related to claims considered similar and which each individual amount is not considered significant): The expected amount of loss is determined and accrued monthly according to the statistical share pricing model, plus the average cost of fees. These are adjusted to the amounts deposited as guarantee for their execution when realized.

Individual lawsuits (related to claims with unusual characteristics or involving significant amounts): determined from time to time, based on the amount claimed and the likelihood of loss, which, in turn, is estimated according to the “de facto” and “de jure” characteristics related to such lawsuit. The amounts of losses which likelihood of loss is considered probable are accrued.

Contingencies are related to lawsuits in which alleged labor rights based on labor legislation specific to the related profession, such as overtime, salary equalization, reinstatement, transfer allowance, pension plan supplement and other, are discussed;

There are no labor claims falling under the category of possible loss.

- Other Risks

These are quantified and accrued mainly based on the evaluation of rural credit transactions with joint liability and FCVS (salary variations compensation fund) credits assigned to Banco Nacional.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 135

The table below shows the changes in the respective provisions for contingent liabilities and the respective escrow deposits balances:

	01/01 to 06/30/2012												01/01 to 06/30/2011
	Civil			Labor			Other			Total			Total
Opening balance		3,165,594			4,013,915			165,303			7,344,812			7,132,647
(-) Contingencies guaranteed by indemnity clauses (Note 4n I)		(136,688	)		(929,875	)		-			(1,066,563	)		(1,421,626	)
Subtotal		3,028,906			3,084,040			165,303			6,278,249			5,711,021
Restatement/Charges		76,116			58,490			-			134,606			102,946
Changes in the period reflected in results (Notes 13f and 13i)		869,393			534,144			8,963			1,412,500			1,058,159
Increase (*)		1,072,971			556,912			10,158			1,640,041			1,355,329
Reversal		(203,578	)		(22,768	)		(1,195	)		(227,541	)		(297,170	)
Payment		(738,217	)		(395,183	)		-			(1,133,400	)		(882,072	)
Subtotal		3,236,198			3,281,491			174,266			6,691,955			5,990,054
(+) Contingencies guaranteed by indemnity clauses (Note 4n I)		129,017			903,919			-			1,032,936			1,313,310
Closing balance (Note 13c)		3,365,215			4,185,410			174,266			7,724,891			7,303,364
Closing balance at 06/30/2011 (Note 13c)		3,059,153			4,081,603			162,608
Escrow deposits at 06/30/2012 (Note 13a)		2,069,275			2,470,128			-			4,539,403
Escrow deposits at 06/30/2011 (Note 13a)		1,851,067			2,386,057			-			4,237,124

(*) Civil provisions include the provision for economic plans amounting to R$ 141,494 (R$ 265,467 from January 1 to June 30, 2011) (Note 22k).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 136

- Tax and social security lawsuits

Contingencies are equivalent to the principal amount of taxes involved in tax, administrative or judicial challenges, subject to tax assessment notices, plus interest and, when applicable, fines and charges. The amount is accrued when it involves legal obligation, regardless of the likelihood of loss, that is, a favorable outcome to the institution is dependent upon the recognition of the unconstitutionality of the applicable law in force. In other cases, the Bank recognizes a provision whenever the likelihood of loss is probable.

The table below shows the changes in the provisions and respective escrow deposits for Tax and Social Security lawsuits balances:

	01/01 to 06/30/2012									01/01 to 06/30/2011
Provisions	Legal obligation			Contingencies			Total			Total
Opening balance		6,273,013			2,371,539			8,644,552			7,256,753
(-) Contingencies guaranteed by indemnity clauses		-			(57,436	)		(57,436	)		(44,474	)
Subtotal		6,273,013			2,314,103			8,587,116			7,212,279
Restatement/Charges		394,685			71,402			466,087			280,787
Changes in the period reflected in results		235,157			(61,866	)		173,291			476,511
Increase		244,130			79,968			324,098			535,104
Reversal		(8,973	)		(141,834	)		(150,807	)		(58,593	)
Payment		-			(53,315	)		(53,315	)		(42,987	)
Subtotal		6,902,855			2,270,324			9,173,179			7,926,590
(+) Contingencies guaranteed by indemnity clauses		-			59,527			59,527			12,295
Closing balance (Note 13c)		6,902,855			2,329,851			9,232,706			7,938,885
Closing balance at 06/30/2011 (Notes 13c and 14c)		5,635,186			2,303,699			7,938,885			-

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 137

	01/01 to 06/30/2012									01/01 to 06/30/2011
Escrow deposits	Legal obligation			Contingencies			Total			Total
Opening balance		3,979,486			1,198,827			5,178,313			4,682,937
Appropriation of income		162,556			51,146			213,702			215,073
Changes in the period		175,362			1,257			176,619			134,119
Deposited		193,892			12,611			206,503			163,141
Withdrawals		(17,849	)		(11,146	)		(28,995	)		(20,449	)
Conversion into income		(681	)		(208	)		(889	)		(8,573	)
Closing balance		4,317,404			1,251,230			5,568,634			5,032,129
Relocated to assets pledged in guarantee of contingencies (note 12d)		-			(894,673	)		(894,673	)		-
Closing balance after relocated		4,317,404			356,557			4,673,961			5,032,129
Closing balance at 06/30/2011		3,864,711			1,167,418			5,032,129

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 138

The main discussions related to Legal Obligations are described as follows:

· PIS and COFINS – Calculation basis – R$ 3,182,504: we defend the levy of contributions on revenue, understood as the revenue from sales of assets and services. The escrow deposit balance totals R$ 1,093,830.

· CSLL – Isonomy – R$ 1,641,054, as the law increased the CSLL rate for financial and insurance companies to 15%, we discuss the lack of constitutional support for this measure and, due to the principle of isonomy, we defend the levy at the regular rate of 9%. The escrow deposit balance totals R$ 356,285.

· IRPJ and CSLL –Taxation of profits earned abroad – R$ 504,535: We discuss the calculation basis for levy of these taxes on profits earned abroad and the non-applicability of Regulatory Instruction SRF No. 213-02 in which it exceeds the suitability of the legal text. The escrow deposit balance totals R$ 462,979.

· PIS – R$ 379,849 - Principles of anteriority over 90 days and non-retroactivity: we request the rejection of Constitutional Amendments No. 10/96 and 17/97 in view of the principle of anteriority and non-retroactivity, aiming at making payments based on Supplementary Law No. 07/70. The corresponding escrow deposit totals R$ 109,183.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 139

Off-balance sheet contingencies - The amounts related to Tax and Social Security Lawsuits considered to be as possible loss, which total estimated risk is R$ 7,397,154, are the following:

· IRPJ, CSLL, PIS and COFINS – request for offset dismissed - R$ 1,370,272: cases in which the liquidity and the offset credit certainty are discussed.

· IRPJ/CSLL - Interest on capital - R$ 925,956: we defend the deductibility of interest on capital declared to stockholders based on the Brazilian long-term interest rate (TJLP) on the stockholders’ equity for the year and for prior years.

· INSS – Non-compensatory amounts – R$ 857,216: we defend the non-taxation of these amounts, mainly profit sharing, transportation vouchers and sole bonus.

· IRPJ/CSLL - Losses and discounts on receipt of credits – R$ 447,727: deductibility of effective losses as operating expense – credit assignment and renegotiation.

· ISS – Banking Institutions – R$ 402,081: these are banking operations, which revenue may not be interpreted as price per service rendered and/or arises from activities not listed under a Supplementary Law.

· IRPJ, CSLL – Profit made available abroad R$ 314,058: Application of the Brazilian tax rule (taxable income) – IN 213/2002 and non availability of profit with the simple transfer of capital between the Holding’s investees.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 140

c) Receivables - Reimbursement of contingencies

The Receivables balance arising from reimbursements of contingencies totals R$ 716,056 (R$ 804,968 at 06/30/2011) (Note 13a), basically represented by the guarantee in the Banco Banerj S.A. privatization process occurred in 1997, in which the State of Rio de Janeiro created a fund to guarantee the equity recomposition of Civil, Labor and Tax Contingencies.

d) Assets pledged as Contingencies

Assets pledged in guarantee for contingencies are related to liability contingencies and restricted or deposited as presented below:

	6/30/2012		6/30/2011
Securities (basically Financial Treasury Bills – Note 7b)		1,452,039		1,534,731
Deposits in guarantee		4,343,923		3,339,365

According to the opinion of its legal advisors, ITAÚ UNIBANCO HOLDING and its subsidiaries are not involved in any other administrative or judicial proceedings that may significantly impact the results of their operations. The combined evaluation of all existing provisions for all contingent liabilities and legal obligations, which are recognized based on statistical models for claims involving small amounts and on individual evaluation by internal and external legal advisors of other cases, showed that the accrued amounts are sufficient, as provided for by CMN Resolution No. 3,823, of December 16, 2009, and BACEN Circular Letter No. 3,429, of February 11, 2010.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 141

NOTE 13 - BREAKDOWN OF ACCOUNTS

a) Other sundry receivables

	6/30/2012			6/30/2011
Deferred tax assets (Note 14b I)		30,828,784			25,697,624
Social contribution for offset (Note 14b I)		665,223			818,673
Taxes and contributions for offset		3,358,770			2,824,388
Escrow deposits for legal liabilities and tax and social security contingencies (Note 12b)		9,017,884			8,371,494
Escrow deposits for legal liabilities – civil and labor (Note 12b)		4,539,403			4,237,124
Escrow deposits for foreign fund raising program		690,274			1,608,438
Receivables from reimbursement of contingent liabilities (Note 12c)		716,056			804,968
Sundry domestic debtors		1,054,520			1,022,663
Sundry foreign debtors		179,653			119,185
Retirement plan assets (Note 19)		1,925,210			1,620,015
Recoverable payments		74,306			56,774
Salary advances		218,227			210,328
Amounts receivable from related companies		15,548			79,900
Operations without credit granting characteristics		178,490			341,076
Securities and credits receivable		526,067			646,797
(Allowance for loan losses)		(347,577	)		(305,721	)
Other		176,028			143,426
Total		53,638,376			47,956,076

At ITAÚ UNIBANCO HOLDING, Other Sundry Receivables are basically composed of Taxes and Contributions for Offset of R$ 144,313 (R$ 249,750 at 06/30/2011) and Deferred Tax Assets of R$ 776,983 (R$ 810,727 at 06/30/2011) (Note 14b I). 

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 142

b) Prepaid expenses

	6/30/2012		6/30/2011
Commissions		3,303,481		2,935,480
Related to vehicle financing		1,048,055		804,296
Related to insurance and pension plan		1,384,426		1,303,304
Restricted to commissions/partnership agreements		548,323		577,751
Other		322,677		250,129
Fundo Garantidor de Crédito (*)		245,971		433,153
Advertising		429,163		404,697
Other		304,174		336,204
Total		4,282,789		4,109,534

(*) Refers to spontaneous payment, equivalent to the prepayment of installments of the contribution to the Fundo Garantidor de Crédito (Brazilian deposit guarantee fund), according to BACEN Circular No. 3,416, of 10/24/2008.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 143

c) Other sundry liabilities

	6/30/2012		6/30/2011
Provisions for contingent liabilities (Note 12b)		10,054,742		9,607,063
Provisions for sundry payments		2,136,545		2,001,849
Personnel provision		1,383,021		1,267,493
Sundry creditors - local		833,869		1,077,946
Sundry creditors - foreign		904,835		717,939
Liabilities for official agreements and rendering of payment services		493,864		1,636,215
Related to insurance operations		1,108,601		987,603
Liabilities for purchase of assets and rights		3,049		42,926
Creditors of funds to be released		1,020,437		1,071,404
Funds from consortia participants		82,996		80,298
Provision for Retirement Plan Benefits (Note 19)		314,895		230,005
Provision for health insurance (*)		629,381		615,097
Expenses for lease interests (Note 4i)		258,085		280,575
Other		536,572		624,592
Total		19,760,892		20,241,005

(*) Provision set up to cover possible future deficits up to the total discontinuance of the portfolio, arising from the difference of adjustments to monthly installments, authorized annually by the regulatory body, and the actual variation of hospital costs that affect the compensation of claims (Note 13i).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 144

d) Banking service fees

	01/01 to 06/30/2012		01/01 to 06/30/2011
Asset management		1,447,472		1,274,773
Funds management fees		1,351,999		1,222,660
Consortia management fee		95,473		52,113
Current account services		336,128		332,429
Credit cards		3,157,884		2,877,966
Relationship with stores		3,008,620		2,687,578
Credit card processing		149,264		190,388
Sureties and credits granted		776,264		835,835
Loan operations		352,172		493,550
Guarantees provided		424,092		342,285
Receipt services		700,067		630,931
Collection fees		567,573		490,705
Collection services		132,494		140,226
Other		787,923		709,645
Custody services and management of portfolio		113,192		104,296
Economic and financial advisory		220,092		179,272
Foreign exchange services		48,931		39,226
Other services		405,708		386,851
Total		7,205,738		6,661,579

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 145

e) Income from bank charges

	01/01 to 06/30/2012		01/01 to 06/30/2011
Loan operations/registration		566,665		770,124
Credit cards – annual fees and other services (*)		901,353		617,971
Deposit account		72,712		73,125
Transfer of funds		67,205		62,994
Income from securities brokerage (*)		186,740		249,152
Service package fees and other		1,081,319		704,751
Total		2,875,994		2,478,117
(*) In compliance with BACEN Circular Letter No. 3,490.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 146

f) Personnel expenses

	01/01 to 06/30/2012			01/01 to 06/30/2011
Compensation		(2,887,191	)		(2,973,765	)
Charges		(1,040,855	)		(985,931	)
Welfare benefits		(679,081	)		(762,155	)
Training		(123,438	)		(117,036	)
Labor claims and termination of employees (Note 12b)		(819,022	)		(567,904	)
Stock Option Plan		(88,214	)		(80,112	)
Total		(5,637,801	)		(5,486,903	)
Employees’ profit sharing		(1,192,337	)		(1,091,158	)
Total with Employees’ profit sharing		(6,830,138	)		(6,578,061	)

g) Other administrative expenses

	01/01 to 06/30/2012			01/01 to 06/30/2011
Data processing and telecommunications		(1,752,703	)		(1,737,794	)
Depreciation and amortization		(814,093	)		(682,146	)
Installations		(1,141,948	)		(1,020,468	)
Third-party services		(1,599,339	)		(1,525,930	)
Financial system services		(240,172	)		(216,435	)
Advertising, promotions and publication		(447,204	)		(436,949	)
Transportation		(255,693	)		(282,752	)
Materials		(216,792	)		(219,011	)
Security		(263,198	)		(240,169	)
Travel expenses		(90,210	)		(86,492	)
Other		(266,019	)		(234,227	)
Total		(7,087,371	)		(6,682,373	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 147

h) Other operating revenue

	01/01 to 06/30/2012		01/01 to 06/30/2011
Reversal of operating provisions		5,677		58,000
Recovery of charges and expenses		36,296		46,984
Other		99,411		117,793
Total		141,384		222,777

i) Other operating expenses

	01/01 to 06/30/2012			01/01 to 06/30/2011
Provision for contingencies (Note 12b)		(826,962	)		(813,955	)
Civil lawsuits:		(869,393	)		(673,843	)
Tax and social security contributions		51,394			(150,644	)
Other		(8,963	)		10,532
Selling - Credit cards		(760,207	)		(940,073	)
Claims		(315,349	)		(285,171	)
Provision for health insurance (Note 13c)		(6,452	)		(8,733	)
Refund of interbank costs		(113,221	)		(99,721	)
Other		(533,849	)		(352,500	)
Total		(2,556,040	)		(2,500,153	)

j) Non operating income – basically composed of the result in the full disposal of investment in Banco BPI, S.A. in the amount of R$ (302,921) and in the partial disposal of interest in Orbitall Serviços e Processamento de Informações Comerciais S.A. in the amount of R$ (17,596).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 148

NOTE 14 - TAXES

a)	Composition of expenses for taxes and contributions
	I - Statement of calculation with Income Tax and Social Contribution:

	01/01 to 06/30/2012			01/01 to 06/30/2011
Income before income tax and social contribution		8,777,429			10,141,535
Charges (income tax and social contribution) at the rates in effect (Note 4o)		(3,510,972	)		(4,056,614	)
Increase/decrease to income tax and social contribution charges arising from:
Investments in affiliates		34,796			26,680
Foreign exchange variation on investments abroad		493,017			(479,834	)
Interest on capital		934,816			838,346
Dividends and interest on external debt bonds		127,940			191,099
Other nondeductible expenses net of non taxable income		197,301			786,061
Deferred tax asset recognized from prior periods		152,532			152,331
Total income tax and social contribution		(1,570,570	)		(2,541,931	)

II - Composition of tax expenses: 

	01/01 to 06/30/2012			01/01 to 06/30/2011
PIS and COFINS		(1,673,217	)		(1,692,618	)
ISS		(315,663	)		(319,851	)
Other		(219,651	)		(147,157	)
Total (Note 4o)		(2,208,531	)		(2,159,626	)

At ITAÚ UNIBANCO HOLDING tax expenses are basically composed of PIS and COFINS in the amount of R$ 108,958 (R$ 131,210 from 01/01 to 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 149

III - Tax effects on foreign exchange management of investments abroad

In order to minimize the effects on income in connection with the foreign exchange variation on investments abroad, net of respective tax effects, ITAÚ UNIBANCO HOLDING carries out derivative transactions in foreign currency (hedge), as mentioned in Note 22b.

Results of these transactions are considered in the calculation base of income tax and social contribution, according to their nature, while the foreign exchange variation on investments abroad is not included therein, pursuant to tax legislation in force.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 150

b) Deferred taxes

I - The deferred tax asset balance and its changes, segregated based on its origin and disbursements incurred, are represented as follows:

	PROVISIONS				DEFERRED TAX ASSETS
	6/30/2011		6/30/2012		12/31/2011		Realization / Reversal			Increase		6/30/2012		6/30/2011
Reflected in income and expense accounts						28,159,488		(5,911,947	)		8,342,134		30,772,122		25,677,262
Related to income tax and social contribution loss carryforwards						4,203,850		(782,124	)		1,798,816		5,220,542		3,301,309
Related to disbursed provisions						15,837,257		(3,753,334	)		4,735,055		16,818,978		14,392,593
Allowance for loan losses						11,490,145		(2,534,664	)		4,292,143		13,247,624		9,835,348
Adjustment to market value of securities and derivative financial instruments (assets/liabilities)						527,127		(527,127	)		431,705		431,705		19,830
Allowance for real estate						75,130		(10,490	)		995		65,635		83,259
Goodwill on purchase of investments						3,602,265		(650,127	)		-		2,952,138		4,310,567
Other						142,590		(30,926	)		10,212		121,876		143,589
Related to non-disbursed provisions (*)		21,629,129		23,372,497		8,118,381		(1,376,489	)		1,808,263		8,732,602		7,983,360
Related to the operation		16,570,714		18,314,082		6,398,519		(1,376,489	)		1,808,263		7,012,740		6,263,499
Legal liabilities – tax and social security		2,306,251		2,772,922		1,319,269		(1,679	)		207,737		1,525,327		1,307,086
Provision for contingent liabilities		7,006,405		7,912,131		2,863,876		(343,682	)		464,679		2,984,873		2,683,072
Civil lawsuits:		2,804,771		3,209,636		1,184,829		(183,810	)		268,933		1,269,952		1,107,985
Labor claims		2,568,049		2,741,966		984,208		(93,390	)		144,686		1,035,504		971,663
Tax and social security contributions		1,567,130		1,910,071		675,302		(66,351	)		51,060		660,011		577,619
Other		66,455		50,458		19,537		(131	)		-		19,406		25,805
Adjustments of operations carried out in futures settlement market		24,731		24,856		11,618		(3,073	)		1,219		9,764		7,493
Provision related to health insurance operations		615,097		629,381		249,172		-			2,581		251,753		246,039
Other non-deductible provisions		6,618,230		6,974,792		1,954,584		(1,028,055	)		1,132,047		2,058,576		2,019,809
Related to provisions exceeding the minimum required not disbursed – allowance for loan losses		5,058,415		5,058,415		1,719,862		-			-		1,719,862		1,719,861
Reflected in stockholders’ equity accounts – adjustment to market value of available-for-sale securities (Note 2b)				681,100		123,436		-			115,673		239,109		20,362
Total		21,629,129		24,053,597		28,282,924		(5,911,947	)		8,457,807		30,828,784		25,697,624
Social contribution for offset arising from Option established in article 8 of Provisional Measure No. 2,158-35 of 08/24/2001						714,602		(49,379	)		-		665,223		818,673

(*) From a financial point of view, rather than recording the provision of R$ 23,372,497 (R$ 21,629,129 at 06/30/2011) and deferred tax assets of R$ 8,550,155 (R$ 7,983,360 at 06/30/2011), only the net provisions of the corresponding tax effects should be considered, which would reduce the total deferred tax assets from R$ 30,828,784 (R$ 25,697,624 at 06/30/2011) to R$ 22,278,629 (R$ 17,714,264 at 06/30/2011).

 At ITAÚ UNIBANCO HOLDING, the deferred tax assets totaled R$ 776,983 (R$ 810,727 at 06/30/2011) and are basically represented by legal liabilities – tax and social security of R$ 387,987 (R$ 266,691 at 06/30/2011), which expected realization is dependent upon the progress of the lawsuit, and tax loss of R$ 262,161 (R$ 411,987 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 151

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

	12/31/2011		Realization / Reversal			Increase		6/30/2012		6/30/2011
Reflected in income and expense accounts		9,583,023		(1,763,863	)		1,045,465		8,864,625		9,981,461
Depreciation in excess – leasing		7,560,086		(1,520,612	)		268,561		6,308,035		8,128,661
Restatement of escrow deposits and contingent liabilities		935,240		(63,300	)		165,321		1,037,261		892,251
Adjustment to market value of securities and derivative financial instruments		178,124		(178,124	)		306,975		306,975		184,075
Provision for Pension Plan Benefits		593,803		-			83,748		677,551		580,653
Adjustments of operations carried out in future settlement market		101,510		(907	)		194,342		294,945		67,754
Taxation of results abroad – capital gains		63,451		-			3,179		66,630		50,869
Other		150,809		(920	)		23,339		173,228		77,198
Reflected in stockholders’ equity accounts – adjustment to market value of available-for-sale securities (Note 2b)		295,897		(70,904	)		405,016		630,009		186,653
Total		9,878,920		(1,834,767	)		1,450,481		9,494,634		10,168,114

At ITAÚ UNIBANCO HOLDING, the Provision for deferred income tax and social contribution totals R$ 4,281 (R$ 3,366 at 06/30/2011), basically represented by Restatement of escrow deposits and contingent liabilities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 152

III - The estimate of realization and present value of deferred tax assets and social contribution for offset, arising from Provisional Measure No. 2,158-35 of August 24, 2001 and from the Provision for Deferred Income Tax and Social Contribution existing at June 30, 2012, in accordance with the expected generation of future taxable income, based on the history of profitability and technical feasibility studies, are:

	Deferred tax assets																				Provision for  deferred
	Temporary differences		%			Tax loss/social contribution loss carryforwards		%			Total		%			Social contribution for offset		%			income tax and social contribution			%			Net deferred taxes		%
2012		8,372,327		33	%		514,350		10	%		8,886,677		29	%		28,675		4	%		(2,142,441	)		23	%		6,772,911		31	%
2013		4,741,014		19	%		1,540,373		30	%		6,281,387		20	%		262,898		40	%		(2,469,249	)		26	%		4,075,036		19	%
2014		4,209,921		16	%		1,515,617		29	%		5,725,538		19	%		309,094		46	%		(2,130,884	)		22	%		3,903,748		18	%
2015		2,693,201		11	%		1,402,852		27	%		4,096,053		13	%		50,327		8	%		(878,709	)		9	%		3,267,671		15	%
2016		2,343,780		9	%		247,350		5	%		2,591,130		8	%		12,617		2	%		(736,400	)		8	%		1,867,347		8	%
after 2016		3,247,999		13	%		-		0	%		3,247,999		11	%		1,612		0	%		(1,136,951	)		12	%		2,112,660		10	%
Total		25,608,242		100	%		5,220,542		100	%		30,828,784		100	%		665,223		100	%		(9,494,634	)		100	%		21,999,373		100	%
Present value (*)		22,976,638					4,753,339		0.0	%		27,729,977					611,170					(8,515,208	)					19,825,939

 (*) The average funding rate, net of tax effects, was used to determine the present value.

The projections of future taxable income include estimates related to macroeconomic variables, exchange rates, interest rates, volume of financial operations and services fees and others which can vary in relation to actual data and amounts.

Net income in the financial statements is not directly related to taxable income for income tax and social contribution, due to differences existing between accounting criteria and tax legislation, besides corporate aspects. Accordingly, we recommend that the trend of the realization of deferred tax assets arising from temporary differences, income tax and social contribution loss carryforwards be not used as an indication of future net income.

IV - In view of the unconstitutionality lawsuit related to the increase in the social contribution rate, established by Articles 17 and 41 of Law No. 11,727 of June 24, 2008, filed on June 26, 2008 by the National Confederation of the Financial System (CONSIF), deferred tax assets were recorded up to the amount added to the Tax Liabilities, while the amount of R$ 745,301 is unrecorded (R$ 1,343,737 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 153

c) Tax and social security contributions

	6/30/2012		6/30/2011
Taxes and contributions on income payable		2,713,675		2,310,931
Taxes and contributions payable		1,071,035		1,171,512
Provision for deferred income tax and social contribution (Note 14b II)		9,494,634		10,168,114
Legal liabilities – tax and social security (Note 12b)		6,902,855		5,635,186
Total		20,182,199		19,285,743

At ITAÚ UNIBANCO HOLDING, the balance of Tax and Social Security Contributions totals R$ 963,203 (R$ 738,907 at 06/30/2011) and is basically comprised of Legal Liabilities - Tax and Social Security of R$ 901,435 (R$ 633,739 at 06/30/2011), whose nature refers to PIS and COFINS – Revenue x Gross Revenue. We request either the levy of taxes only on the revenue understood as income from sale of assets and services or the levy of PIS Repique (calculated on income tax payable) (at 5% of income tax due), in lieu of the levy on total revenues recorded, by alleging the unconstitutionality of paragraph 1 of article 3 of Law No. 9,718/98.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 154

d) Taxes paid or provided for and withheld from third parties

The amount of taxes paid or provided for is basically levied on income, revenue and payroll. In relation to the amounts withheld and collected from third parties, the Company takes into consideration the interest on capital and on the service provision, in addition to that levied on financial operation.

	6/30/2012		6/30/2011
Taxes paid or provided for		8,500,655		7,875,483
Taxes withheld and collected from third parties		6,639,840		5,907,572
Total		15,140,495		13,783,055

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 155

NOTE 15 – PERMANENT ASSETS

a) Investments

I - Change of investments

Companies			Balances at 12/31/2011		Amortization of goodwill			Dividends paid/provided for (1)			Equity in earnings of subsidiaries (2)		Adjustments in marketable securities of subsidiaries and Other			Balances at 06/30/2012		Balances at 06/30/2011		Equity in earnings of subsidiaries from 01/01 to 06/30/2011
Domestic				53,724,893		(3,168	)		(6,400,575	)		3,810,264		681,055			51,812,469		51,326,254		4,746,938
Itaú Unibanco S.A.	(3 a)(4a)(5a)(6)(7a)			45,004,168		(3,168	)		(3,994,870	)		1,421,185		646,372			43,073,687		43,847,779		2,973,957
Banco Itaú BBA S.A.	(5 b)			6,768,322		-			(1,645,000	)		927,721		34,096			6,085,139		4,562,571		614,225
Banco Itaucard S.A.	(4 b)(5c)(8)			1,211,086		-			(760,604	)		1,234,948		579			1,686,009		1,107,291		860,825
Itaú Corretora de Valores S. A.	(8)			693,193		-			-			224,964		8			918,165		517,006		44,965
Itaú-BBA Participações S.A.				48,124		-			(101	)		1,446		-			49,469		1,291,607		165,312
Itauseg Participações S.A.	(9)			-		-			-			-		-			-		-		87,654
Foreign				2,583,601		(25,705	)		-			348,964		(5,018	)		2,901,842		2,161,471		8,032
Itaú Chile Holding, INC.	(3 b)			2,175,208		(22,621	)		-			234,109		(4,329	)		2,382,367		1,823,618		2,568
Banco Itaú Uruguay S.A.	(3 c)(7b)			269,922		(2,356	)		-			80,272		(689	)		347,149		217,259		(6,207	)
OCA S.A.	(3 d)			98,484		(626	)		-			30,549		-			128,407		86,735		12,177
OCA Casa Financiera S.A.	(3 e)			37,343		(91	)		-			4,019		-			41,271		31,549		(528	)
ACO Ltda.		(3 f)		2,644		(11	)		-			15		-			2,648		2,310		22
GRAND TOTAL				56,308,494		(28,873	)		(6,400,575	)		4,159,228		676,037			54,714,311		53,487,725		4,754,970

 (1) Dividends approved and not paid are recorded as Dividends receivable;

(2) At June 30, 2012, includes foreign exchange variation in the amount of R$ 154,229;

(3) At June 30, 2012, includes goodwill in the amounts of: (a) R$ 40,126; (b) R$ 203,586; (c) R$ 21,204; (d) R$ 5,635; (e) R$ 818; (f) R$ 95;

(4) At June 30, 2012, includes Adjustments of unrealized results in the results of operations and in investments, respectively, in the amounts of: (a) R$ 913 and R$ (5,532); (b) R$ 14,978 and R$ (38,331);

(5) At June 30, 2012, includes adjustments to standardize procedures under the scope of the investor in the results of operations and investments, respectively, in the amounts of: (a) R$ (3,160) and R$ (5,649); (b) R$ 5,998 and R$ (57,471); and

(c) R$ 225,412 and R$ 364,657;

(6) At June 30, 2012, includes installment of dividends provided for in the amount of R$ 49,145;

(7) At June 30, 2012, equity in earnings of subsidiaries reflects equity in other variations of the stockholders’ equity of the subsidiary in the amount of: (a) R$ 1,585 and (b) R$ (4);

(8) The investment and the equity in earnings reflect the different interest in preferred shares, profit sharing and dividends;

(9) Investment sold to Banco Itaucard S.A. at April 11, 2011.

					Net income		Number of shares/quotas owned by ITAÚ UNIBANCO						Equity share in		Equity share in  capital
Companies	Capital		Stockholders’ equity		for the period		Common		Preferred		Quotas		voting capital (%)		(%)
Domestic
Itaú Unibanco S.A.		39,676,320		42,995,597		1,421,847		2,081,169,523		2,014,258,290		-		100.00		100.00
Banco Itaú BBA S.A.		4,224,086		6,142,611		921,723		5,284,526		5,284,526		-		99.99		99.99
Banco Itaucard S.A.		15,553,776		17,569,354		1,099,888		3,592,433,657		1,277,933,118		-		1.51		2.04
Itaú Corretora de Valores S. A.		1,046,841		2,107,442		249,000		-		811,503		-		-		1.94
Itaú-BBA Participações S.A.		25,196		49,469		1,446		12,953		25,906		-		100.00		100.00
Foreign														-		-
Itaú Chile Holding, INC.		1,919,906		2,178,781		74,019		100		-		-		100.00		100.00
Banco Itaú Uruguay S.A.		153,910		325,945		84,113		1,639,430,739		-		-		100.00		100.00
OCA S.A.		14,102		122,772		32,028		1,502,176,740		-		-		100.00		100.00
OCA Casa Financiera S.A.		18,200		40,453		4,539		646		-		-		100.00		100.00
ACO Ltda.		12		2,572		39		-		-		131		99.24		99.24

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 156

II -  Composition of investments

	06/30/2012			06/30/2011
Investment in affiliates		2,346,074			1,858,411
Domestic		2,345,149			1,428,109
Serasa S.A.		271,952			266,181
Porto Seguro Itaú Unibanco Participações S.A. (1)		1,213,400			1,121,598
Tecnologia Bancária S.A.(1)		42,123			40,247
BSF Holding S.A . (Note 2a)		817,596			-
Other		78			83
Foreign		925			430,302
Banco BPI, S.A. (BPI) (Note 13j)		-			429,864
Other		925			438
Other investments		1,127,251			1,301,373
Investments through tax incentives		169,228			160,575
Equity securities		11,800			10,837
Shares and quotas		281,601			383,695
Interest in Instituto de Resseguros do Brasil - IRB		227,170			227,170
Other		437,452			519,096
(Allowance for loan losses)		(207,899	)		(185,413	)
Total		3,265,426			2,974,371

(1) For the purpose of accounting for participation in earnings, the position at 05/31/2012 was used, as provided in Circular Letter nº 1,963 of 05/23/1991, of BACEN;

 III - Equity in earnings of affiliates and other investments 

	01/01 to 06/30/2012			01/01 to 06/30/2011
Investment in affiliates – Domestic		115,740			97,197
Investment in affiliates – Foreign (Note 15 to II)		(101,489	)		(210,193	)
Dividends received from other investments		69,711			70,700
Other		(3,609	)		(773	)
Total		80,353			(43,069	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 157

 b) Fixed assets, goodwill and intangible assets

I) Fixed assets

						CHANGES
	Annual depreciation/ amortization rates (%)		Balance at 12/31/2011			Acquisitions		Depreciation and amortization expenses			Impairment			Disposals			Exchange variation			Other			Balance at 06/30/2012			Balance at 06/30/2011
REAL ESTATE IN USE (1)
REAL ESTATE IN USE (2)(3)				1,869,778			113,403		(42,102	)		-			(172,866	)		1,043			(42,846	)		1,726,410			1,710,650
Land				1,113,371			41,677		-			-			(166,911	)		527			(17,922	)		970,742			961,982
Buildings				756,407			71,726		(42,102	)		-			(5,955	)		516			(24,924	)		755,668			748,668
Cost				2,339,809			71,726		-			-			(7,508	)		1,383			(74,616	)		2,330,794			2,288,291
Accumulated depreciation		4		(1,583,402	)		-		(42,102	)		-			1,553			(867	)		49,692			(1,575,126	)		(1,539,623	)
OTHER FIXED ASSETS (3)				3,417,220			762,232		(627,284	)		10,258			(32,216	)		27,144			(7,030	)		3,550,324			3,070,715
Improvements				637,610			111,268		(129,004	)		-			(57	)		18,756			17,719			656,292			616,788
Cost				1,238,789			111,268		-			-			(124,146	)		20,470			17,373			1,263,754			1,138,766
Accumulated depreciation		10		(601,179	)		-		(129,004	)		-			124,089			(1,714	)		346			(607,462	)		(521,978	)
Installations				390,904			113,505		(32,038	)		-			(21	)		5,414			(13,541	)		464,223			322,612
Cost				937,332			113,505		-			-			(7,276	)		3,588			(16,588	)		1,030,561			850,365
Accumulated depreciation		10 to 20		(546,428	)		-		(32,038	)		-			7,255			1,826			3,047			(566,338	)		(527,753	)
Furniture and equipment				487,065			59,077		(36,252	)		11,035			(18,577	)		(1,107	)		(8,527	)		492,714			435,314
Cost				848,022			59,077		-			11,035			(22,134	)		(2,564	)		(6,375	)		887,061			865,874
Accumulated depreciation		10 to 20		(360,957	)		-		(36,252	)		-			3,557			1,457			(2,152	)		(394,347	)		(430,560	)
EDP systems (4)				1,644,858			462,754		(400,869	)		-			(12,343	)		3,947			(6,260	)		1,692,087			1,476,351
Cost				4,988,233			462,754		-			-			(147,158	)		(5,766	)		(10,041	)		5,288,022			4,835,578
Accumulated depreciation		20 to 50		(3,343,375	)		-		(400,869	)		-			134,815			9,713			3,781			(3,595,935	)		(3,359,227	)
Other (communication, security and transportation)				256,783			15,628		(29,121	)		(777	)		(1,218	)		134			3,579			245,008			219,650
Cost				549,504			15,628		-			(777	)		(3,091	)		37			3,415			564,716			533,677
Accumulated depreciation		10 to 20		(292,721	)		-		(29,121	)		-			1,873			97			164			(319,708	)		(314,027	)
TOTAL REAL ESTATE IN USE				5,286,998			875,635		(669,386	)		10,258			(205,082	)		28,187			(49,876	)		5,276,734			4,781,365
Cost				12,015,060			875,635		-			10,258			(478,224	)		17,675			(104,754	)		12,335,650			11,474,533
Accumulated depreciation				(6,728,062	)		-		(669,386	)		-			273,142			10,512			54,878			(7,058,916	)		(6,693,168	)

 (1) There are no contractual commitments for purchase of new fixed assets;

(2) Includes amounts pledged in guarantee of voluntary deposits (Nota 12b);

(3) Includes the amount of R$ 2,132 related to attached real estate; fixed assets under construction in the amount of R$ 172,843, consisting of R$ 100,013 in real estate in use; R$ 43,072 in improvements, and R$ 29,758 in equipment;

(4) Includes lease contracts, mainly related to data processing equipment, which are accounted for as finance lease. Pursuant to this method, assets and liabilities are accounted for in the financial statements, and assets are depreciated consistently with the depreciation criteria usually adopted for own assets. These contracts amount to R$ 237,666 at 06/30/ 2012.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 158

II) Goodwill

					CHANGES
	Amortization period		Balance at 12/31/2011		Acquisitions		Amortization expenses			Exchange Variation		Other		Balance at  06/30/2012		Balance at 06/30/2011
GOODWILL (Notes 2b and  4j) (*)		10 years		95,691		6,325		(12,867	)		3,876		-		93,025		67,617

(*) At August 1, 2011, ITAÚ UNIBANCO HOLDING acquired 50% plus 1 share of capital of MCC Securities Inc (Cayman Islands) for R$ 50,748, of which R$ 48,415 for the equity interest and R$ 2,333 for the exclusivity right to act on the sale of MCC Securities business. The transaction gave rise to a goodwill of R$ 52,169 and this interest was proportionally consolidated in the financial statements of ITAÚ UNIBANCO HOLDING.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 159

III) Intangible assets

						CHANGES
	Annual  depreciation/ amortization  rates  (%) (2)		Balance at 12/31/2011			Acquisitions		Depreciation and amortization expenses (3)			Impairment (5)			Disposals			Exchange variation			Other			Balance at 06/30/2012			Balance at 06/30/2011
INTANGIBLE ASSETS (1)
RIGHTS FOR ACQUISITION OF PAYROLL (4)				751,448			150,654		(190,730	)		-			(369	)		-			-			711,003			877,837
Cost				1,647,548			150,654		-			-			(93,838	)		-			7,510			1,711,874			2,388,708
Accumulated amortization		Up to 9		(896,100	)		-		(190,730	)		-			93,469			-			(7,510	)		(1,000,871	)		(1,510,871	)
OTHER INTANGIBLE ASSETS				3,058,364			646,012		(231,807	)		(3,731	)		(298	)		20,654			9,770			3,498,964			2,245,911
Association for the promotion and offer of financial products and services				1,280,818			12,000		(68,350	)		(3,731	)		(261	)		5,473			2,019			1,227,968			1,081,003
Cost				1,391,335			12,000		-			(3,731	)		(35,971	)		6,045			3,609			1,373,287			1,165,218
Accumulated amortization		Up to 5		(110,517	)		-		(68,350	)		-			35,710			(572	)		(1,590	)		(145,319	)		(84,215	)
Expenditures on acquisition of software				1,338,634			634,012		(122,624	)		-			(33	)		4,989			7,751			1,862,729			743,070
Cost				1,871,619			634,012		-			-			(112,756	)		12,902			47,482			2,453,259			1,273,930
Accumulated amortization		20		(532,985	)		-		(122,624	)		-			112,723			(7,913	)		(39,731	)		(590,530	)		(530,860	)
Other intangible assets				438,912			-		(40,833	)		-			(4	)		10,192			-			408,267			421,838
Cost				613,832			-		-			-			(57	)		22,061			-			635,836			546,873
Accumulated amortization		10 to 20		(174,920	)		-		(40,833	)		-			53			(11,869	)		-			(227,569	)		(125,035	)
TOTAL INTANGIBLE ASSETS				3,809,812			796,666		(422,537	)		(3,731	)		(667	)		20,654			9,770			4,209,967			3,123,748
Cost				5,524,334			796,666		-			(3,731	)		(242,622	)		41,008			58,601			6,174,256			5,374,729
Accumulated amortization				(1,714,522	)		-		(422,537	)		-			241,955			(20,354	)		(48,831	)		(1,964,289	)		(2,250,981	)

(1) There are no contractual commitments for purchase of new intangible assets;

(2) All intangible assets have defined useful lives, except for goodwill on acquisition;

(3) Amortization expenses of the rights for acquisition of payrolls and associations are disclosed in the expenses on financial operations.

(4) Represents the recording of amounts paid for acquisition of rights to provide services of payment of salaries, proceeds, retirement and pension benefits, and similar benefits;

(5) Pursuant to BACEN Resolution No. 3,566, of May 29, 2001 (Note 13i).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 160

NOTE 16 – STOCKHOLDERS’ EQUITY

a) Shares

Capital comprises 4,570,936,100 book-entry shares with no par value, of which 2,289,286,400 are common and 2,281,649,700 are preferred shares without voting rights, but with tag-along rights, in the event of the public offer of common shares, at a price equal to 80% of the amount paid per share with voting rights in the controlling stake, as well as a dividend at least equal to that of the common shares. Capital stock amounts to R$ 45,000,000 (R$ 45,000,000 at 06/30/2011), of which R$ 31,598,872 (R$ 31,689,731 at 06/30/2011) refers to stockholders domiciled in the country and R$ 13,401,128 (R$ 13,310,269 at 06/30/2011) refers to stockholders domiciled abroad.

The table below shows the change in shares of capital stock and treasury shares during the period:

	NUMBER
	Common			Preferred			Total			Amount
Residents in Brazil at 12/31/2010		2,286,135,621			918,287,035			3,204,422,656
Residents abroad at 12/31/2010		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
Cancellation of Shares – ESM of 04/25/2011 – Approved at 08/22/2011		(75	)		(44	)		(119	)
Shares of capital stock at 12/31/2011 and 06/30/2012		2,289,286,400			2,281,649,700			4,570,936,100
Residents in Brazil at 06/30/2012		2,282,303,961			927,394,316			3,209,698,277
Residents abroad at 06/30/2012		6,982,439			1,354,255,384			1,361,237,823
Treasury shares at 12/31/2011 (*)		2,100			57,293,971			57,296,071			(1,663,562	)
Purchase of treasury shares		-			3,500,000			3,500,000			(99,045	)
Exercised – Granting of stock options		-			(4,773,109	)		(4,773,109	)		111,314
Disposals – Stock option plan		-			(2,725,760	)		(2,725,760	)		106,416
Treasury shares at 06/30/2012 (*)		2,100			53,295,102			53,297,202			(1,544,877	)
Outstanding shares at 06/30/2012		2,289,284,300			2,228,354,598			4,517,638,898
Outstanding shares at 06/30/2011		2,289,284,273			2,245,384,854			4,534,669,127

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

We detail below the average cost of treasury shares and their market price at June 30, 2012:

Cost/Market value	Common		Preferred
Minimum		-		27.25
Weighted average		-		28.30
Maximum		-		28.99
Treasury shares
Average cost		9.65		28.99
Market value		25.41		28.29

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 161

b) Dividends

Stockholders are entitled to a mandatory dividend of not less than 25% of annual net income, which is adjusted according to the rules set forth in Brazilian Corporate Law. Both types of shares participate equally, after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per share 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, and beginning with the payment made in April 2012, it was increased by 25% to R$ 0.015 per share, in accordance with the Board of Directors’ meeting of February 6, 2012.

I - Calculation

Net income	5,472,036
Adjustments:
(-) Legal reserve	(273,602	)
Dividend calculation basis	5,198,434
Mandatory dividend	1,299,609
Dividend – paid/provided for	1,444,686		27.8	%

II – Payments/Provision of interest on capital and dividends

	Gross		WTS			Net
Paid / Prepaid		311,708		-			311,708
Dividends - 2 monthly installments of R$ 0.012 per share paid from February to March 2012		108,332		-			108,332
Dividends - 3 monthly installments of R$ 0.015 per share paid from April to June 2012		203,376		-			203,376
Declared up to June 30, 2012 (Recorded in Other Liabilities – Social and Statutory)		1,150,276		(162,376	)		987,900
Dividends - 1 monthly installment of R$ 0.015 per share paid on 07/02/2012		67,764		-			67,764
Interest on capital - R$ 0,2396 per share		1,082,512		(162,376	)		920,136
Declared after June 30, 2012 (Recorded in Revenue Reserves – Unrealized profits) (*)		170,680		(25,602	)		145,078
Interest on capital - R$ 0,0378 per share		170,680		(25,602	)		145,078
Total from 01/01 to 06/30/2012 - R$ 0.3198 net per share		1,632,664		(187,978	)		1,444,686
Total from 01/01 to 06/30/2011 - R$ 0.3020 net per share		1,554,351		(184,065	)		1,370,286

 (*) In compliance with BACEN Circular Letter nº 3.516, of july 21, 2011.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 162

c) Capital and revenue reserves

	6/30/2012		6/30/2011
CAPITAL RESERVES		775,402		619,298
Premium on subscription of shares		283,512		283,512
Granted options recognized – Law No. 11,638 and Share-based instruments		490,785		334,681
Reserves from tax incentives and restatement of equity securities and other		1,105		1,105
REVENUE RESERVES		36,647,057		29,946,904
Legal		4,121,628		3,541,997
Statutory:		32,354,749		26,404,907
Dividends equalization (1)		9,541,775		7,903,045
Working capital increase (2)		9,851,808		8,084,973
Increase in capital of investees (3)		12,961,166		10,416,889
Unrealized profits		170,680		-

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

(2) Reserve for Working Capital Increase – its purpose is to guarantee funds for the company’s operations;

(3) Reserve for Increase in Capital of Investees – its purpose is to guarantee the preferred subscription right in the capital increases of investees;

d) Reconciliation of net income and stockholders’ equity (Note 2b)

	Net income				Stockholders’ equity
	01/01 to 06/30/2012		01/01 to 06/30/2011		6/30/2012			6/30/2011
ITAÚ UNIBANCO HOLDING		5,472,036		5,769,625		81,413,586			74,486,158
Amortization of goodwill		1,257,819		1,362,883		(5,777,999	)		(8,403,362	)
ITAÚ UNIBANCO HOLDING CONSOLIDATED		6,729,855		7,132,508		75,635,587			66,082,796

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 163

e) Minority interest in subsidiaries

	Stockholders’ equity				Results
	6/30/2012		6/30/2011		01/01 to 06/30/2012			01/01 to 06/30/2011
Unibanco Participações Societárias S.A. (1)		-		1,234,866		-			(44,489	)
Itau Bank, Ltd. (2)		798,525		616,299		-			-
Redecard S.A.		802,567		683,206		(381,315	)		(302,220	)
Biu Participações S.A.		113,125		113,680		(9,466	)		(10,881	)
Itaú Gestão de Ativos S.A.		64,127		60,701		(982	)		(590	)
Biogeração de Energia S.A.		9,993		24,187		(2,462	)		889
Investimentos Bemge S.A.		19,296		18,075		(558	)		(591	)
Other		9,665		10,743		(2,520	)		(2,690	)
Total		1,817,298		2,761,757		(397,303	)		(360,572	)

(1) On July 28, 2011, Dibens Leasing S.A. Arrendamento Mercantil, subsidiary of ITAÚ UNIBANCO HOLDING acquired minority interest in subsidiaries of Unibanco Participações Societárias for the amount of R$ 1,226,847.

(2) Represented by redeemable preferred shares issued on December 31, 2002 by Itau Bank Ltd., in the amount of US$ 393,072, with maturity on June 30, 2015 and semiannual dividends calculated based on LIBOR plus 1.25% p.a..

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 164

f) Stock Option Plan

I – Purpose and Guidelines of the Plan

The ITAÚ UNIBANCO HOLDING has a stock option plan for its executives. This program aims at involving the management members in the medium and long-term corporate development process, by granting simple stock options or partner options, personal, not pledgeable 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 total quantity, the beneficiaries, the type of option, the life of the option under each series, which may range from a minimum of 5 and a maximum of 10 years, and the vesting period for exercising the options and the period the acquired shares are unavailable due to the exercise of 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.

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

II - Characteristics of the Programs

II.I – Simple Options

Prior Programs

Before the merger, Itaú and Unibanco each had Stock Option Plans (Prior Programs). The eligible beneficiaries of the program were granted simple options, depending 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

The eligible beneficiaries of the program are granted simple options, dependent upon the individual employee performance. The exercise price is calculated based on the average prices of preferred shares at the BM&FBOVESPA in the last three months of the year prior to the granting date or, alternatively, subject to the positive or negative adjustment of up to 20%. 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.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 time they acquire own shares and/or share-based instruments, Partner Options are granted in accordance with the classification of executives. Vesting period of Partners Options or share-based instruments is from 1 to 7 years. Share-based instruments and Partner 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 amounts in legal tender during the exercise.

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 Partners Options should be held, without any liens or encumbrances, for periods from 5 to 8 years, counted from the date of acquisition of own shares.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 165

The weighted average fair value of the Share-Based Instruments at the granting date was estimated for the shares purchased in the period ended June 30, 2012 – R$ 36.00 per share (at June 30, 2011 - R$ 37.00 per share).

The fair value of the Share-Based Instruments is the market price quoted at the granting date for preferred shares of ITAÚ UNIBANCO HOLDING less the cash price paid by the beneficiaries. Amount received for the purchase of Share-Based Instruments for the period ended June 30, 2012 - R$ 50,361 (at June 30, 2011 - R$ 48,489).

Summary of Changes in the Plan

							Restated		Exercised options				Number of shares
Granting			Vesting period		Exercise		exercise		Weighted average		Weighted average		Prior balance							Forfeited (*) /			To be exercised		To be exercised
No.	Date		until		until		price (R$ 1)		exercise price		market price		12/31/2011		Granted		Exercised			Cancelled			at 06/30/2012		at 06/30/2011
Simple Options
11th		02/21/2005		12/31/2009		12/31/2012		19.40		19.00		33.92		937,275		-		(333,375	)		-			603,900		1,515,475
11th		08/06/2007		12/31/2009		12/31/2012		19.40		-		-		11,357		-		-			-			11,357		11,357
12th		02/21/2006		12/31/2010		12/31/2013		28.86		28.22		37.08		6,854,365		-		(1,894,985	)		-			4,959,380		7,086,525
12th		08/06/2007		12/31/2010		12/31/2013		28.86		-		-		15,867		-		-			-			15,867		15,867
16th		08/10/2009		12/31/2010		12/31/2014		32.81		-		-		874,167		-		-			-			874,167		874,167
34th		03/21/2007		03/21/2011		03/20/2012		37.81		-		-		75,901		-		-			(75,901	)		-		75,901
35th		03/22/2007		03/22/2011		03/21/2012		37.76		-		-		29,518		-		-			(29,518	)		-		29,518
36th		05/14/2008		05/14/2011		05/13/2012		46.72		-		-		25,301		-		-			(25,301	)		-		25,301
30th		07/04/2006		07/04/2011		07/03/2012		29.96		-		-		52,707		-		-			-			52,707		52,707
33rd		08/30/2006		08/30/2011		08/29/2012		33.18		32.70		38.42		21,083		-		(21,083	)		-			-		21,083
13th		02/14/2007		12/31/2011		12/31/2014		36.74		35.91		38.32		7,732,975		-		(344,650	)		(1,048,200	)		6,340,125		7,933,175
13th		08/06/2007		12/31/2011		12/31/2014		36.74		-		-		30,649		-		-			-			30,649		30,649
13th		10/28/2009		12/31/2011		12/31/2014		36.74		-		-		45,954		-		-			-			45,954		45,954
34th		03/21/2007		03/21/2012		03/20/2013		37.81		-		-		75,901		-		-			-			75,901		75,901
35th		03/22/2007		03/22/2012		03/21/2013		37.76		-		-		29,514		-		-			-			29,514		29,514
36th		05/14/2008		05/14/2012		05/13/2013		46.98		-		-		25,300		-		-			-			25,300		25,300
Total options to be exercised										28.09		36.85		16,837,834		-		(2,594,093	)		(1,178,920	)		13,064,821		17,848,394
17th		09/23/2009		09/23/2012		12/31/2014		37.91		-		-		29,551		-		-			-			29,551		29,551
14th		02/11/2008		12/31/2012		12/31/2015		42.36		-		-		9,266,066		-		-			(1,963,220	)		7,302,846		9,418,828
14th		05/05/2008		12/31/2012		12/31/2015		42.36		-		-		20,625		-		-			-			20,625		20,625
14th		10/28/2009		12/31/2012		12/31/2015		42.36		-		-		45,954		-		-			-			45,954		45,954
36th		05/14/2008		05/14/2013		05/13/2014		46.98		-		-		25,300		-		-			-			25,300		25,300
15th		03/03/2009		12/31/2013		12/31/2016		27.70		27.10		35.23		14,114,940		-		(1,418,080	)		-			12,696,860		14,888,990
15th		10/28/2009		12/31/2013		12/31/2016		27.70		-		-		45,954		-		-			-			45,954		45,954
18th		04/17/2010		12/31/2014		12/31/2017		45.00		-		-		6,052,223		-		-			(33,005	)		6,019,218		6,052,223
18th		05/11/2010		12/31/2014		12/31/2017		45.00		-		-		1,163,919		-		-			(29,548	)		1,134,371		1,194,258
37th		04/19/2011		12/31/2015		12/31/2018		43.96		-		-		9,769,432		-		-			(85,298	)		9,684,134		9,863,110
37th		01/13/2012		12/31/2015		12/31/2018		43.96		-		-		-		15,383		-			-			15,383		-
38th		01/13/2012		12/31/2016		12/31/2019		32.88		-		-		-		15,097		-			-			15,097		-
38th		04/27/2012		12/31/2016		12/31/2019		32.88		-		-		-		10,373,657		-			(19,186.00	)		10,354,471		-
Total options outstanding										27.10		35.23		40,533,964		10,404,137		(1,418,080	)		(2,130,257	)		47,389,764		41,584,793
Total simple options										27.74		36.28		57,371,798		10,404,137		(4,012,173	)		(3,309,177	)		60,454,585		59,433,187
Partners Options
4th		03/03/2008		03/03/2011		-		-		-		-		39,906		-		-			(39,906	)		-		39,906
5th		09/03/2008		09/03/2011		-		-		-		-		46,710		-		-			(46,710	)		-		478,937
6th		03/06/2009		03/06/2012		-		-		-		35.90		719,023		-		(681,490	)		(37,533	)		-		719,023
7th		06/19/2009		03/06/2012		-		-		-		35.90		79,446		-		(79,446	)		-			-		79,446
Total options to be exercised												35.90		885,085		-		(760,936	)		(124,149	)		-		1,317,312
1st		09/03/2007		09/03/2012		-		-		-		-		309,508		-		-			-			309,508		316,604
3rd		02/29/2008		09/03/2012		-		-		-		-		33,474		-		-			-			33,474		33,474
4th		03/03/2008		03/03/2013		-		-		-		-		388,432		-		-			-			388,432		399,914
8th		08/17/2010		08/16/2013		-		-		-		-		339,632		-		-			-			339,632		343,433
9th		08/30/2010		08/16/2013		-		-		-		-		329,711		-		-			(5,285	)		324,426		329,711
11th		09/30/2010		08/16/2013		-		-		-		-		17,717		-		-			-			17,717		17,717
5th		09/03/2008		09/03/2013		-		-		-		-		449,442		-		-			(2,929	)		446,513		467,871
10th		09/30/2010		09/29/2013		-		-		-		-		1,862,409		-		-			(38,519	)		1,823,890		1,879,978
17th		06/14/2012		02/27/2014		-		-		-		-		-		7,791		-			-			7,791		-
12th		02/28/2011		02/28/2014		-		-		-		-		1,558,584		-		-			(21,802	)		1,536,782		1,575,420
6th		03/06/2009		03/06/2014		-		-		-		-		704,604		-		-			(2,374	)		702,230		704,604
7th		06/19/2009		03/06/2014		-		-		-		-		79,445		-		-			-			79,445		79,445
14th		11/04/2011		08/18/2014		-		-		-		-		509		-		-			-			509		-
17th		06/14/2012		08/18/2014		-		-		-		-		-		2,527		-			-			2,527		-
13th		08/19/2011		08/19/2014		-		-		-		-		706,397		-		-			(18,476	)		687,921		-
17th		06/14/2012		02/23/2015		-		-		-		-		-		8,187		-			-			8,187		-
15th		02/24/2012		02/24/2015		-		-		-		-		-		1,583,044		-			(2,843	)		1,580,201		-
16th		02/24/2012		02/24/2015		-		-		-		-		-		69,156		-			(4,673	)		64,483		-
8th		08/17/2010		08/16/2015		-		-		-		-		338,923		-		-			-			338,923		343,393
9th		08/30/2010		08/16/2015		-		-		-		-		329,152		-		-			(5,464	)		323,688		329,152
11th		09/30/2010		08/16/2015		-		-		-		-		17,712		-		-			-			17,712		17,712
10th		09/30/2010		09/29/2015		-		-		-		-		1,858,518		-		-			(39,030	)		1,819,488		1,878,790
17th		06/14/2012		02/27/2016		-		-		-		-		-		7,790		-			-			7,790		-
12th		02/28/2011		02/28/2016		-		-		-		-		1,557,215		-		-			(22,010	)		1,535,205		1,575,137
14th		11/04/2011		08/18/2016		-		-		-		-		508		-		-			-			508		-
17th		06/14/2012		08/18/2016		-		-		-		-		-		2,527		-			-			2,527		-
13th		08/19/2011		08/19/2016		-		-		-		-		706,338		-		-			(16,780	)		689,558		-
17th		06/14/2012		02/23/2017		-		-		-		-		-		8,186		-			-			8,186		-
15th		02/24/2012		02/24/2017		-		-		-		-		-		1,582,979		-			(2,843	)		1,580,136		-
16th		02/24/2012		02/24/2017		-		-		-		-		-		69,151		-			(4,751	)		64,400		-
Total options outstanding										-		-		11,588,230		3,341,338		-			(187,779	)		14,741,789		10,292,355
Total Partners Options										-		35.90		12,473,315		3,341,338		(760,936	)		(311,928	)		14,741,789		11,609,667
TOTAL SIMPLE/PARTNERS OPTIONS										27.74		36.22		69,845,113		13,745,475		(4,773,109	)		(3,621,105	)		75,196,374		71,042,854

(*) Refers to the non exercise due to the beneficiary’s option.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 166

Summary of Changes in the Share-Based Instruments

No.	Vesting period			Prior balance 12/31/2011		New		Converted into shares			Cancelled			Balance at 06/30/2012
1st		08/17/2010	08/16/2012		110,588		-		-			-			110,588
1st		08/17/2010	08/16/2013		110,577		-		-			-			110,577
1st		08/30/2010	08/16/2012		10,216		-		-			-			10,216
1st		08/30/2010	08/16/2013		10,212		-		-			-			10,212
1st		09/30/2010	08/16/2012		3,971		-		-			-			3,971
1st		09/30/2010	08/16/2013		3,970		-		-			-			3,970
2nd		09/30/2010	09/29/2012		424,163		-		(5,533	)		(11,834	)		406,796
2nd		09/30/2010	09/29/2013		424,154		-		-			(11,834	)		412,320
3rd		02/28/2011	02/27/2011		444,040		-		(444,040	)		-			-
3rd		02/28/2011	02/27/2012		444,030		-		-			(8,679	)		435,351
3rd		02/28/2011	02/27/2013		444,020		-		-			(8,678	)		435,342
4th		02/24/2012	02/24/2013		-		468,852		-			(4,671	)		464,181
4th		02/24/2012	02/24/2014		-		468,836		-			(4,671	)		464,165
4th		02/24/2012	02/24/2015		-		468,821		-			(4,671	)		464,150
Total					2,429,941		1,406,509		(449,573	)		(55,038	)		3,331,839

No.	Vesting period			Balance at 12/31/2010		New		Converted into shares		Cancelled		Balance at 06/30/2011
1st		08/17/2010	08/16/2011		114,980		-		-		-		114,980
1st		08/17/2010	08/16/2012		114,969		-		-		-		114,969
1st		08/17/2010	08/16/2013		114,958		-		-		-		114,958
1st		08/30/2010	08/16/2011		10,221		-		-		-		10,221
1st		08/30/2010	08/16/2012		10,216		-		-		-		10,216
1st		08/30/2010	08/16/2013		10,212		-		-		-		10,212
1st		09/30/2010	08/16/2011		3,972		-		-		-		3,972
1st		09/30/2010	08/16/2012		3,971		-		-		-		3,971
1st		09/30/2010	08/16/2013		3,970		-		-		-		3,970
2nd		09/30/2010	09/29/2011		424,172		-		-		-		424,172
2nd		09/30/2010	09/29/2012		424,163		-		-		-		424,163
2nd		09/30/2010	09/29/2013		424,154		-		-		-		424,154
3rd		02/28/2011	02/27/2011		-		444,040		-		-		444,040
3rd		02/28/2011	02/27/2012		-		444,030		-		-		444,030
3rd		02/28/2011	02/27/2013		-		444,020		-		-		444,020
Total					1,659,958		1,332,090		-		-		2,992,048

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 167

III – 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 and the Black & Scholes method for Partners 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 BM&FBOVESPA 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 BM&FBOVESPA, adjusted by the IGP-M variation.

Granting			Vesting period		Exercise		Price of underlying		Fair		Expected			Risk-free			Expected
No.	Date		until		period until		asset		value		dividends			interest rate			volatility
Simple Options
37th		01/13/2012		12/31/2015		12/31/2018		35.50		11.06		2.97	%		5.25	%		30.32	%
38th		01/13/2012		12/31/2016		12/31/2019		35.50		11.57		2.97	%		5.25	%		30.32	%
38th		04/27/2012		12/31/2016		12/31/2019		29.70		11.57		3.07	%		3.91	%		29.93	%
Partners Options (*)
15th		02/24/2012		02/24/2015		-		36.00		32.94		2.97	%		-			-
15th		02/24/2012		02/24/2017		-		36.00		31.04		2.97	%		-			-
16th		02/24/2012		02/24/2015		-		36.00		32.94		2.97	%		-			-
16th		02/24/2012		02/24/2017		-		36.00		31.04		2.97	%		-			-
17th		06/14/2012		08/18/2014		-		29.57		27.66		3.07	%		-			-
17th		06/14/2012		02/27/2014		-		29.57		28.05		3.07	%		-			-
17th		06/14/2012		02/23/2015		-		29.57		27.22		3.07	%		-			-
17th		06/14/2012		08/18/2016		-		29.57		26.01		3.07	%		-			-
17th		06/14/2012		02/27/2016		-		29.57		26.39		3.07	%		-			-
17th		06/14/2012		02/23/2017		-		29.57		25.59		3.07	%		-			-

 (*) The fair value of option is measured based on the fair value of Itaú Unibanco share at the granting date.

IV - 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 June 30, 2012 was R$ (88,214) (R$ (80,112) from January 1 to June 30, 2011), as contra-entry to Capital Reserve – Granted Options Recognized – Law No. 11,638 (Note 16 c).

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

	6/30/2012			6/30/2011
Amount received for the sale of shares – exercised options		193,673			154,669
(-) Cost of treasury shares sold		(217,730	)		(138,568	)
(+) Write-off of cost recognized of exercised options		86,991			55,548
Effect on sale (*)		62,934			71,649

 (*) Recorded in revenue reserves.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 168

NOTE 17 – RELATED PARTIES

a) Transactions between related parties are disclosed in compliance with CVM Resolution No. 642, of October 7, 2010, and CMN Resolution No. 3,750 of June 30, 2009. These transactions are carried out at amounts, terms and average rates in accordance with normal market practices during the period, as well as under reciprocal conditions.

Transactions between companies included in consolidation were eliminated from the consolidated financial statements and take into consideration the lack of risk.

The unconsolidated related parties are the following:

· Itaú Unibanco Participações S.A. (IUPAR) and ITAÚSA, parent companies of ITAÚ UNIBANCO HOLDING;.

· The non-financial subsidiaries of ITAÚSA, specially: Itautec S.A., Duratex S.A., Elekeiroz S.A. and Itaúsa Empreendimentos S.A.;

· Fundação Itaubanco, FUNBEP – Fundo de Pensão Multipatrocinado, Caixa de Previdência dos Funcionários do BEG (PREBEG), Fundação Bemgeprev, Itaubank Sociedade de Previdência Privada, UBB – Prev Previdência Complementar, and Fundação Banorte Manuel Baptista da Silva de Seguridade Social, closed-end private pension entities that administer supplementary retirement plans sponsored by ITAÚ UNIBANCO HOLDING and/or its subsidiaries; and

· Fundação Itaú Social, Instituto Itaú Cultural, Instituto Unibanco, Instituto Assistencial Pedro Di Perna, Instituto Unibanco de Cinema, and Associação Clube “A”, entities sponsored by ITAÚ UNIBANCO and subsidiaries to act in their respective areas of interest, as described in Notes 22e and 22j.

· Investments in Porto Seguro Itaú Unibanco Participações S.A., SERASA S.A. and BSF Holding S.A..

Additionally, there are operations with jointly controlled entities, particularly Banco Investcred Unibanco S.A., Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento, Luizacred S.A. Soc. Créd. Financiamento Investimento, FAI Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento, FIC Promotora de Vendas Ltda. and Ponto Frio Leasing S.A. Arrendamento Mercantil.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 169

The transactions with these related parties are basically characterized by:

	ITAÚ UNIBANCO HOLDING												ITAÚ UNIBANCO HOLDING CONSOLIDATED
	ASSETS/(LIABILITIES)						REVENUE/(EXPENSE)							ASSETS/(LIABILITIES)						REVENUE/(EXPENSES)
	06/30/2012			06/30/2011			01/01 to 06/30/2012			01/01 to 06/30/2011			Annual rate	06/30/2012			06/30/2011			01/01 to 06/30/2012			01/01 to 06/30/2011
Interbank investments		32,906,954			25,628,076			1,324,870			877,312				1,778,573			1,737,534			83,030			88,104
Itaú Unibanco S.A.		32,906,954			25,628,076			1,324,870			877,312				-			-			-			-
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		-			-			-			-		103% of CDI 9.11% to 13.79% pre-fixed average 11.06% pre-fixed		573,012			490,880			28,185			25,056
FAI Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento		-			-			-			-		103% of CDI 9.11% to 13.25% pre-fixed average 9.33% pre-fixed		186,989			334,748			8,220			15,646
Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento		-			-			-			-		103% of CDI 12.07% to 12.12% pre-fixed average 12,07% pre-fixed		1,018,572			911,761			46,625			47,394
Other		-			-			-			-				-			145			-			8
Derivative financial instruments		-			-			-			(312	)			-			-			-			-
Itaú Unibanco S.A.		-			-			-			(312	)			-			-			-			-
Deposits		(5,056,765	)		(4,012,223	)		(224,322	)		(188,615	)			(2,274	)		(6,578	)		(1,840	)		(569	)
Itaú Unibanco S.A.		(5,056,765	)		(4,012,223	)		(224,322	)		(188,615	)			-			-			-			-
Duratex S.A.		-			-			-			-				(2,024	)		-			(1,321	)		-
Elekeiroz S.A.		-			-			-			-				-			-			(247	)		-
Porto Seguro S.A.		-			-			-			-				-			-			(8	)		-
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		-			-			-			-				-			-			(186	)		-
FAI Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento		-			-			-			-				(250	)		-			(70	)		-
Ponto Frio Leasing S.A. Arrendamento Mercantil		-			-			-			-				-			(5,266	)		-			(557	)
Banco Investcred Unibanco S.A.		-			-			-			-				-			(1,312	)		(1	)		(12	)
Other		-			-			-			-				-			-			(7	)		-
Securities sold under repurchase agreements		-			-			-			-				(100,969	)		(97,256	)		(5,970	)		(5,244	)
Itaúsa Empreendimentos S.A.		-			-			-			-				-			(56,648	)		-			-
Duratex S.A.		-			-			-			-				-			(5,585	)		(517	)		(1,004	)
Elekeiroz S.A.		-			-			-			-				-			-			(279	)		(1,317	)
Itautec S.A.		-			-			-			-				-			(9,856	)		-			-
FIC Promotora de Venda Ltda.		-			-			-			-		100% of SELIC		(13,740	)		(8,251	)		(448	)		(364	)
Facilita Promotora S.A.		-			-			-			-		100% of SELIC		(491	)		(6,515	)		(96	)		(302	)
Olimpia Promoção e Serviços S.A.		-			-			-			-		100% of SELIC		(1,519	)		(3,349	)		(60	)		(265	)
Banco Investcred Unibanco S.A.		-			-			-			-		8.39% p.a. pre-fixed		(18,500	)		(7,052	)		(899	)		(675	)
Maxfácil Participações S.A		-			-			-			-		100% of SELIC		(66,719	)		-			(2,966	)		-
Other		-			-			-			-				-			-			(705	)		(1,309	)
Amounts receivable from (payable to) related companies		(233	)		(3,925	)		-			-				(117,567	)		(63,150	)		-			-
Itaú Unibanco S.A.		-			(3,557	)		-			-				-			-			-			-
Itaú Corretora de Valores S. A.		(233	)		(368	)		-			-				-			-			-			-
Itaúsa Investimentos Itaú S.A.		-			-			-			-				158			67,081			-			-
Porto Seguro S.A.		-			-			-			-				6,563			(927	)		-			-
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		-			-			-			-				4,228			(2,016	)		-			-
FIC Promotora de Venda Ltda.		-			-			-			-				-			-			-			-
FAI Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento		-			-			-			-				(1,419	)		(740	)		-			-
Facilita Promotora S.A.		-			-			-			-				-			-			-			-
Olimpia Promoção e Serviços S.A.		-			-			-			-				(1,015	)		(167	)		-			-
Banco Investcred Unibanco S.A.		-			-			-			-				-			-			-			-
Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento		-			-			-			-				(3,703	)		(13,802	)		-			-
Maxfácil Participações S.A		-			-			-			-				-			-			-			-
Fundação Itaubanco		-			-			-			-				1,274			1,098			-			-
Caixa de Prev.dos Func. do Banco Beg - PREBEG		-			-			-			-				(7,449	)		(9,563	)		-			-
Fundação BEMGEPREV		-			-			-			-				(8,128	)		(3,207	)		-			-
UBB Prev Previdência Complementar		-			-			-			-				(24,219	)		(19,194	)		-			-
Fundação Banorte Manuel Baptista da Silva de Seguridade Social		-			-			-			-				(85,031	)		(81,123	)		-			-
Other		-			-			-			-				923			(868	)		-			-
Banking service fees (expenses)		-			-			(1,649	)		(2,277	)			-			-			28,248			27,688
Itaú Corretora de Valores S. A.		-			-			(1,649	)		(2,277	)			-			-			-			-
Fundação Itaubanco		-			-			-			-				-			-			11,948			10,233
FUNBEP - Fundo de Pensão Multipatrocinado		-			-			-			-				-			-			2,442			2,337
Caixa de Prev.dos Func. do Banco Beg - PREBEG		-			-			-			-				-			-			916			-
Itaúsa Investimentos S.A.		-			-			-			-				-			-			573			333
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		-			-			-			-				-			-			485			840
FAI Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento		-			-			-			-				-			-			202			436
Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento		-			-			-			-				-			-			2			-
Olimpia Promoção e Serviços S.A.		-			-			-			-				-			-			(6,084	)		810
Porto Seguro S.A.		-			-			-			-				-			-			15,454			10,569
Other		-			-			-			-				-			-			1,578			1,468
Rent revenues (expenses)		-			-			(106	)		(113	)			-			-			(18,623	)		(18,601	)
Itaúsa Investimentos S.A.		-			-			(8	)		(8	)			-			-			-			(697	)
Itaú Seguros S.A.		-			-			(75	)		(80	)			-			-			-			-
Fundação Itaubanco		-			-			-			-				-			-			(13,504	)		(12,831	)
FUNBEP - Fundo de Pensão Multipatrocinado		-			-			-			-				-			-			(4,447	)		(4,251	)
Other		-			-			(23	)		(25	)			-			-			(672	)		(822	)
Donation expenses		-			-			-			-				-			-			(35,700	)		(27,190	)
Instituto Itaú Cultural		-			-			-			-				-			-			(34,900	)		(27,000	)
Fundação Itaú Social		-			-			-			-				-			-			-			(190	)
Associação Clube "A"		-			-			-			-				-			-			(800	)		-
Data processing expenses		-			-			(14	)		(28	)			-			-			(140,764	)		(147,279	)
Itautec S.A.		-			-			(14	)		(28	)			-			-			(140,764	)		(147,279	)
Non-Operating Income		-			-			-			-				-			-			-			48,088
Itaúsa Investimentos S.A.		-			-			-			-				-			-			-			48,088

In addition to the aforementioned operations, ITAÚ UNIBANCO HOLDING and non-consolidated related parties, as an integral part of the Agreement for Apportionment of Common Costs of Itaú Unibanco, recorded in Other Administrative Expenses in the amount of R$ 4,691 (R$ 4,602 from 01/01 to 06/30/2011) in view of the use of common structure.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 170

In accordance with the rules in effect, the financial institutions cannot grant loans or advances to the following:

a) any individual or company that control the Institution or any entity under common control with the institution, or any officer, director, fiscal council member or direct relative of such individuals;

b) any entity controlled by the Institution; or

c) any entity of which the bank directly or indirectly holds at least 10% of capital stock.

Therefore, no loans or advances are made to any subsidiaries, executive officers, Board of Directors members or their relatives.

Itaú Unibanco Holding made regular donations to Fundação Itaú Social, a philanthropic foundation which objectives are: to create "Programa Itaú Social", aimed at coordinating activities that are of the community’s interest, support and develop social, scientific and cultural projects, mainly in the elementary education and health areas; support projects or initiatives in progress, maintained or sponsored by entities qualifying to work, according to "Programa Itaú Social". In addition, Itaú Unibanco is the founding partner and sponsor of Instituto Itaú Cultural - IIC, an entity which objective is to promote and preserve the Brazilian cultural heritage.

b) Compensation of Management Key Personnel

The fees attributed in the period to ITAÚ UNIBANCO HOLDING management members are as follows:

	6/30/2012		6/30/2011
Compensation		143,370		157,134
Board of Directors		3,354		2,899
Management members		140,016		154,235
Profit sharing		79,701		106,524
Board of Directors		1,500		1,000
Management members		78,201		105,524
Contributions to pension plans		5,639		3,618
Board of Directors		2		82
Management members		5,637		3,536
Stock option plan – Management members		79,116		69,340
Total		307,826		336,616

Information related to the granting of the stock option plan, benefits to employees and post-employment is detailed in Notes 16f IV and 19, respectively.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 171

NOTE 18 - MARKET VALUE

The financial statements are prepared in accordance with accounting principles which assume the normal continuity of the operations of ITAÚ UNIBANCO HOLDING and its subsidiaries.

The book value of each financial instrument, whether included or not in the balance sheet (comprises investments in affiliates and other investments), when compared to the value that might be obtained in an active market, or in the absence of such market, using the net present value of future cash flows adjusted based on the current market interest, is approximately equal to the market value, or does not have a market quotation available, except for the instruments in the table below:

									Unrealized income (loss) (1)
	BOOK VALUE				MARKET				Results						Stockholders’ equity
	6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012			6/30/2011			6/30/2012			6/30/2011
Interbank deposits		24,881,221		15,279,798		24,928,325		15,284,062		47,104			4,264			47,104			4,264
Securities and derivative financial instruments		214,369,241		180,732,945		215,329,763		181,298,638		2,487,409			949,619			960,522			565,693
Adjustment of available-for-sale securities										1,516,590			372,711			-			-
Adjustment of held-to-maturity securities										970,819			576,908			960,522			565,693
Loan, lease and other credit operations		329,732,517		293,189,034		331,583,644		293,297,580		1,851,127			108,546			1,851,127			108,546
Investments (2)
BM&FBovespa		24,755		58,107		190,385		465,066		165,630			406,959			165,630			406,959
BPI (3)		-		429,864		-		429,864		-			-			-			-
Cetip S.A.		291		30,333		11,668		362,470		11,377			332,137			11,377			332,137
Porto Seguro Itaú Unibanco Participações S.A. (4)		1,213,400		1,121,598		1,715,205		2,388,509		501,805			1,266,911			501,805			1,266,911
Serasa		271,951		266,181		1,496,301		1,069,625		1,224,350			803,444			1,224,350			803,444
Parent company		179,910		176,093		1,404,260		979,537		1,224,350			803,444			1,224,350			803,444
Minority stockholders (5)		92,041		90,088		92,041		90,088		-			-			-			-
Fundings and borrowings (6)		205,738,523		175,409,408		205,924,560		175,498,515		(186,037	)		(89,107	)		(186,037	)		(89,107	)
Subordinated debt (Note 10f)		43,746,410		37,826,792		44,053,353		38,025,424		(306,943	)		(198,632	)		(306,943	)		(198,632	)
Treasury shares		1,544,877		1,048,000		1,507,772		1,321,923		-			-			(37,105	)		273,923
Total unrealized										5,795,822			3,584,141			4,231,830			3,474,138

(1) This does not consider the corresponding tax effects.

(2) Starting December 2011, Redecard is no longer disclosed since it is an investment in subsidiary.

(3) Unrealized result, considers adjustments to market value of available-for-sale securities.

(4) Parent company of Porto Seguro S.A.

(5) The investment held by minority stockholders does not affect the result of ITAÚ UNIBANCO HOLDING.

(6) Funding is represented by interbank and time deposits, funds from acceptance and issuance of securities and borrowings.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 172

To obtain the market values for these financial instruments, the following criteria were adopted:

· Interbank investments were determined based on their nominal amounts, monetarily restated to maturity dates and discounted to present value using future market interest rates and swap market rates for fixed-rate securities and using market interest rates for fixed-rate securities, achieved at the closing of BM&FBOVESPA at the balance sheet date, for floating-rate securities;

· Securities and derivative financial instruments, according to the rules established by Circulars No. 3,068 and 3,082 of November 8, 2001 and January 30, 2002, respectively, issued by the Central Bank of Brazil (BACEN), are recorded at their market value, except for those classified as Held to Maturity. Government securities allocated in this category have their market value calculated based on the rates obtained in the market, and validated through the comparison with information provided by the National Association of Financial Market Institutions (ANBIMA). Private securities included in this category have their market value calculated using a criterion similar to the one adopted for Investments in Interbank Deposits, as described above;

· Loans with maturity over 90 days, when available, were calculated based on the net present value of future cash flows discounted at market interest rates effective on the balance sheet date, taking into account the effects of hedges as well (swap contracts);

· Investments - in companies BPI, BM&FBOVESPA, CETIP and Porto Seguro at the share value in stock exchanges and Serasa S.A. based on the historical average of Price/Income ratio of its parent company.

· Time and interbank deposits and funds from acceptance and issuance of securities and foreign borrowings through securities, when available, were calculated based on their present value determined by future cash flows discounted at market rates obtained at the closing of BM&FBOVESPA on the balance sheet date;

· Subordinated debt, based on the net present value of future fixed or floating cash flows in foreign currency, net of the market interest rates effective on the balance sheet date and considering the credit risk of the issuer. The floating cash flows are estimated as from the interest curves of the indexation market places;

· Treasury shares are valued according to the average quotation available on the last trading day of the month or, if this is not available, according to the most recent quotation on prior trading days, published in the daily bulletin of each Stock Exchange.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 173

NOTE 19 – BENEFITS TO EMPLOYEES

Pursuant to CVM Resolution No. 600, dated October 7, 2009, we present the policies adopted by ITAÚ UNIBANCO HOLDING and its subsidiaries regarding benefits to employees, as well as the accounting procedures adopted:

ITAÚ UNIBANCO HOLDING and some of its subsidiaries sponsor defined benefit and variable contribution plans, which basic purpose is granting benefits that, in general, provide a life annuity benefit, and may be converted into survivorship annuities, according to the plan's regulation. They also sponsor defined contribution plans, the benefit of which is calculated based on the accumulated balance at the eligibility date, according to the plan's regulation, which does not require actuarial calculation.

Employees hired until July 31, 2002, who come from Itaú, and until February 27, 2009, who come from Unibanco, are beneficiaries of the above-mentioned plans. As regards the employees hired after these dates, they have the option to voluntarily participate in a defined contribution plan (PGBL), managed by Itaú Vida e Previdência S.A.

a) Description of the Plans

The plans’ assets are invested in separate funds, with the exclusive purpose of providing benefits to eligible employees, and they are maintained independently from ITAÚ UNIBANCO HOLDING. These funds are maintained by closed-end private pension entities with independent legal structures, as detailed below:

Entity	Benefit plan
Fundação Itaubanco	Supplementary retirement plan – PAC (1)
	Franprev benefit plan - PBF (1)
	002 benefit plan - PB002 (1)
	Itaulam basic plan - PBI (1)
	Itaulam Supplementary Plan - PSI (2) Itaubanco Plan (3)
	Itaubank Retirement Plan (3)
Fundação Bemgeprev	Supplementary Retirement Plan – Flexible Premium Annuity (ACMV) (1)
Funbep Fundo de Pensão Multipatrocinado	Funbep I Benefit Plan (1)
	Funbep II Benefit Plan (2)
Caixa de Previdência dos Funcionários do Banco Beg - Prebeg	Prebeg Benefit Plan (1)
Itaú Fundo Multipatrocinado	Itaú Defined Benefit Plan (1)
	Itaú Defined Contribution Plan (2)
Múltipla - Multiempresas de Previdência Complementar	Redecard Basic Retirement Plan (1)
	Redecard Supplementary Retirement Plan (2) Redecard Supplementary Plan (3)
UBB-PREV - Previdência Complementar	Unibanco Pension Plan (3)
	Basic Plan (1)
	IJMS Plan (1)
Banorte Fundação Manoel Baptista da Silva de Seguridade Social	Benefit Plan II (1)

(1) Defined benefit plan;

(2) Variable contribution plan;

(3) Defined contribution plan.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 174

b) Defined benefit plan

I - Main assumptions used in actuarial valuation of Retirement Plans

	2012	2011
Discount rate	9.72% p.a.	9.72% p.a.
Expected return rate on assets	11.32 % p.a.	12.32% p.a.
Mortality table (1)	AT-2000	AT-2000
Turnover (2)	Itaú Exp. 2008/2010	Itaú Exp. 2003/2004
Future salary growth	7.12 % p.a.	7.12% p.a.
Growth of the pension fund and social security benefits	4.00 % p.a.	4.00% p.a.
Inflation	4.00 % p.a.	4.00% p.a.
Actuarial method (3)	Projected Unit Credit	Projected Unit Credit

(1) The mortality tables adopted correspond to those disclosed by SOA – Society of Actuaries, the North-American Entity which corresponds to IBA – Brazilian Institute of Actuarial Science, which reflects a 10% increase in the probabilities of survival as compared to the respective basic tables;

The life expectancy in years by the AT-2000 mortality table for participants of 55 years of age is 27 and 31 years for men and women, respectively.

(2) The turnover assumption is based on the effective experience of ITAÚ UNIBANCO HOLDING, resulting in the average of 2.4% p.a. based on the 2008/2010 experience;

(3) Using the Projected Unit Credit, the mathematical reserve is determined by the current projected benefit amount multiplied by the ratio between the length of service in the company at the assessment date and the length of service that will be reached at the date when the benefit is granted. The cost is determined taking into account the current projected benefit amount distributed over the years that each participant is employed.

The basic difference between the assumptions above and those adopted upon determination of the actuarial liability of defined benefit plans, for purposes of recording in the balance sheet of the closed-end private pension entities that manage them, is the actuarial method. For this purpose, the Bank adopts the aggregate method, by which the mathematical reserve is defined based on the difference between the present value of the projected benefit and the present value of future contributions, subject to the methodology defined in the respective actuarial technical note.

II –Management of defined benefit plan assets

The purpose of the management of the funds from the closed-end private pension entities is the long-term balance between social security assets and liabilities by exceeding the actuarial goals.

As regards the assets guaranteeing mathematical reserves, management should ensure the payment capacity of benefits in the long-term by preventing the risk of mismatching assets and liabilities by pension plan.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 175

At June 30, 2012 the allocation of plan assets and the allocation target for 2012, by type of asset, are as follows:

Types	At 06/30/2012		At 06/30/2011		% Allocation
					6/30/2012			6/30/2011			2012 Target
Fixed income securities		11,217,192		10,201,466		91.76	%		87.62	%		53% a 100	%
Variable income securities		628,634		1,050,561		5.14	%		9.02	%		0% a 25	%
Structured investments		14,561		13,695		0.12	%		0.12	%		0% a 10	%
Foreign investments		-		3,961		0.00	%		0.03	%		0% a 3	%
Real estate		341,158		349,281		2.79	%		3.00	%		0% a 6	%
Loans to participants		23,267		24,477		0.19	%		0.21	%		0% a 5	%
Total		12,224,812		11,643,441		100.00	%		100.00	%

The defined benefit plan assets include shares of ITAÚ UNIBANCO HOLDING, its main parent company (ITAÚSA) and of subsidiaries of the latter, with a fair value of R$ 474,131 (R$ 478,186 at 06/30/2011), and real estate rented to Group companies, with a fair value of R$ 293,126 (R$ 299,073 at 06/30/2011).

The expected income from defined benefit plan assets is based on projections of returns for each of the segments detailed above. For the fixed-income segment, the adopted interest rates were taken from long-term securities included in the portfolios, and the interest rates practiced in the market at the closing of the balance sheet. For the variable-income segment, conservative expectations of annual returns were adopted. For the real estate segment, the cash inflows of expected rental payments for the following 12 months were adopted. For all segments, the basis adopted was the portfolio positions at the balance sheet date.

III- Net amount recognized in the balance sheet

We present below the calculation of the net amount recognized in the balance sheet:

	6/30/2012			6/30/2011
1 - Net assets of the plans		12,224,812			11,643,441
2 - Actuarial liabilities		(10,612,531	)		(10,106,711	)
3- Surplus (1-2)		1,612,281			1,536,730
4- Asset restriction (*)		(1,354,081	)		(1,215,740	)
5 - Net amount recognized in the balance sheet (3-4)		258,200			320,990
Amount recognized in Assets		449,954			443,570
Amount recognized in Liabilities		(191,754	)		(122,580	)

(*) Corresponds to the excess of present value of the available economic benefit, in conformity with item 58 of CVM Resolution No. 600.

In conformity with the exemption set forth in CVM Resolution No. 647, gains and losses accumulated to 01/01/2010 were recognized in Stockholders’ equity, net of tax effects and, taking into account the subsidiary company’s adjustments. The actuarial gains and losses for the period from 01/01 to 06/30/2012 were recognized in Results under “Personnel expenses”.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 176

IV - Change in net assets, actuarial liabilities, and surplus

	6/30/2012									6/30/2011
	Net assets			Actuarial liabilities			Surplus			Net assets			Actuarial liabilities			Surplus
Present value – beginning of the period		11,772,927			(10,413,448	)		1,359,479			11,167,828			(9,815,180	)		1,352,648
Inclusion of Redecard Plan								-			60,817			(55,897	)		4,920
Expected return on assets (2)		651,243						651,243			673,037			-			673,037
Cost of current service		-			(42,214	)		(42,214	)		-			(47,152	)		(47,152	)
Cost of interest		-			(492,478	)		(492,478	)		-			(467,086	)		(467,086	)
Benefits paid		(335,608	)		335,608			-			(280,220	)		280,220			-
Contributions of sponsor		20,551						20,551			15,869			-			15,869
Contributions of participants		6,814						6,814			4,507			-			4,507
Actuarial gain/(loss) (1) (2)		108,885						108,885			1,603			(1,616	)		(13	)
Present value – end of the period		12,224,812			(10,612,531	)		1,612,281			11,643,441			(10,106,711	)		1,536,730

(1) Gains/losses recorded in Net Assets correspond to the income earned above/below the expected return rate of assets.

(2) The actual return on assets amounted to R$ 760,128 (R$ 674,640 at 06/30/2011)

The history of actuarial gains and losses is as follows: 

	6/30/2012			6/30/2011
Net assets of the plans		12,224,812			11,643,441
Actuarial liabilities		(10,612,531	)		(10,106,711	)
Surplus		1,612,281			1,536,730
Experience adjustments in net assets		108,885			1,603
Experience adjustments in actuarial liabilities		-			(1,616	)

V- Total revenue (expenses) recognized in income for the period

Total expenses recognized in defined benefit plans include components, as follows: 

	6/30/2012			6/30/2011
Cost of current service		(42,214	)		(47,152	)
Cost of interest		(492,478	)		(467,086	)
Expected return on the plan assets		651,243			673,037
Effect on asset restriction		(91,471	)		(107,062	)
Gain/loss for the period		108,885			(13	)
Contributions of participants		6,814			4,507
Total revenue (expenses) recognized in income for the period		140,780			56,231

During the period, contributions made totaled R$ 20,551 (R$ 15,869 at June 30, 2011). The contribution rate increases based on the beneficiary’s salary. 

In 2012, the expected contribution to retirement plans sponsored by ITAÚ UNIBANCO HOLDING is R$ 38,870.

We present below the estimated benefit payments for the next 10 years: 

Period	Estimated payment
2012		645,780
2013		673,231
2014		697,244
2015		721,382
2016		746,311
2017 to 2021		4,118,739

c) Defined contribution plans

The defined contribution plans have pension funds set up by the portion of sponsors’ contributions not included in the participant’s accounts balance and by the loss of eligibility to a plan benefit, as well as by resources from the migration from the defined benefit plans. The fund will be used for future contributions to the individual participants' accounts, according to the rules of the respective benefit plan regulation.

At June 30, 2012 the amount recognized in assets is R$ 1,475,256 (R$ 1,176,445 at 06/30/2011).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 177

Total revenue recognized in defined contribution plans includes the following components: 

	6/30/2012			6/30/2011
Contributions		(74,671	)		(73,601	)
Actuarial gain/(loss)		107,269			(1,380	)
Effect on asset restriction		(528	)		82,259
Total revenue recognized in income for the period		32,070			7,278

In conformity with the exemption set forth in CVM Resolution No. 647, gains and losses accumulated until 01/01/2010 were recognized in Stockholders’ equity, net of tax effects and, taking into account the subsidiary company’s adjustments. The actuarial gains and losses for the period from 01/01 to 06/30/2012 were recognized in Results under “Personnel expenses”.

In the period, contributions to the defined contribution plans, including PGBL, totaled R$ 96,864 (R$ 93,022 at 06/30/2011), of which R$ 74,671 (R$ 73,601 at 06/30/2011) arises from pension funds.

d) Other post-employment benefits

ITAÚ UNIBANCO HOLDING and its subsidiaries do not offer other post-employment benefits, except in those cases arising from maintenance obligations according to the acquisition agreements signed by Itaú Unibanco Holding, under the terms and conditions established, in which health plans are totally or partially sponsored for retired workers and beneficiaries.

I- Changes

Based on the reported prepared by an independent actuary, the changes in obligations for these other projected benefits and the amounts recognized in the balance sheet, under liabilities, of Itaú Unibanco Holding are as follows:

	6/30/2012			6/30/2011
At the beginning of the period		(120,154	)		(105,335	)
Cost of interest		(5,689	)		(4,984	)
Benefits paid		2,702			2,894
At the end of the period		(123,141	)		(107,425	)

In conformity with the exemption set forth in CVM Resolution No. 647, gains and losses accumulated until 01/01/2010 were recognized in Stockholders’ equity, net of tax effects and, taking into account the subsidiary company’s adjustments. The actuarial gains and losses for the period from 01/01 to 06/30/2012 were recognized in Results under “Personnel expenses”.

We present below the estimated benefit payments for the next 10 years:

Period	Estimated payment
2012		6,366
2013		6,852
2014		7,362
2015		7,854
2016		8,363
2017 to 2021		50,248

II- Assumptions and sensitivities 1%

For calculation of benefits obligations projected beyond the assumptions used for the defined benefit plans (Note 19b l), the 8.16% p.a. increase in medical costs assumption is adopted.

Assumptions for rates related to medical assistance costs have a significant impact on the amounts recognized in income. A change of one percentage point in the medical assistance cost rates would have the effects as follows:

	1.0% increase		1.0% decrease
Effects on service cost and cost of interest		1,609		(1,321	)
Effects on present value of obligation		16,559		(13,563	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 178

NOTE 20 – INFORMATION ON FOREIGN SUBSIDIARIES

	Foreign branches (1)						Latin America Consolidated (2)						Itaú Europa Consolidated  (3)						Cayman Consolidated (4)						Other foreign companies (5)						Foreign consolidated (6)
	6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011			6/30/2012			6/30/2011
Assets
Current assets and long-term receivables
Cash and cash equivalents		2,587,434			1,674,585			2,659,289			1,437,194			329,114			1,238,075			1,110,272			1,881,379			869,412			1,054,024			5,960,362			4,490,368
Interbank investments		14,500,152			11,615,897			1,472,125			1,032,141			2,990,397			609,264			6,945,425			5,019,371			967,086			331,543			14,220,606			11,888,204
Securities		47,274,304			32,927,582			4,324,376			2,431,851			1,678,713			1,833,636			5,393,394			5,175,125			29,911			518			57,868,761			41,048,559
Loan, lease and other credit operations		32,071,192			24,806,786			22,877,655			14,320,149			7,724,425			5,878,232			316,280			266,604			799			958			62,929,532			45,197,040
Foreign exchange portfolio		28,772,844			21,774,115			454,267			301,073			2,955,473			1,652,684			305,096			716,470			-			-			32,280,039			24,038,963
Other assets		2,874,809			1,449,128			2,968,756			1,672,545			311,120			356,339			1,005,962			2,009,086			139,139			151,353			7,158,237			5,593,741
Permanent assets		-			-						-			-			-			-			-			-			-			-			-
Investments		23,688			25,614			5,125			3,946			4,107			214,101			51,061			37,301			5,440			226,341			38,362			468,548
BPI (Note 15a II)		-			-			-			-			-			210,633			-			-			-			219,231			-			429,864
Other investments		23,688			25,614			5,125			3,946			4,107			3,468			51,061			37,301			5,440			7,110			38,362			38,684
Fixed and intangible assets		28,169			15,018			528,076			357,023			183,892			162,134			1,648			2,318			17,233			12,055			759,019			548,548
Total		128,132,592			94,288,725			35,289,669			21,555,922			16,177,241			11,944,465			15,129,138			15,107,654			2,029,020			1,776,792			181,214,918			133,273,971
LIABILITIES
Current and long-term liabilities
Deposits		47,573,545			30,374,901			24,457,229			14,254,175			6,127,817			4,546,587			5,194,388			1,793,132			-			28,527			71,295,247			42,750,127
Demand deposits		9,099,794			4,745,219			6,483,815			4,203,629			3,332,815			2,131,430			333,448			846,523			-			-			17,649,361			9,092,468
Savings deposits		-			-			3,461,638			2,403,906			-			-			-			-			-			-			3,461,638			2,403,906
Interbank deposits		8,873,219			8,895			145,312			89,772			823,465			1,492,981			-			-			-			28,527			9,361,366			1,214,166
Time deposits		29,600,532			25,620,787			14,366,464			7,556,868			1,971,537			922,176			4,860,940			946,609			-			-			40,822,882			30,039,587
Deposits received under securities repurchase agreements		8,657,246			5,913,154			206,734			322,795			-			-			1,350,994			1,927,262			-			-			7,920,571			6,865,570
Funds from acceptance and issuance of securities		3,636,952			4,951,718			1,688,786			1,005,227			4,070,890			2,993,602			2,856,386			2,723,132			-			-			12,217,037			11,673,671
Borrowings		16,326,738			11,856,699			2,160,905			1,237,384			589,782			636,575			20,371			51,873			-			-			19,097,797			13,783,520
Derivative financial instruments		1,911,147			2,394,514			252,591			120,854			600,499			375,001			825,888			1,141,482			-			-			2,896,008			2,711,731
Foreign exchange portfolio		28,801,219			21,699,682			456,063			295,486			2,956,494			1,654,456			299,161			704,046			-			-			32,305,296			23,948,292
Other liabilities		12,287,008			7,115,825			2,266,683			1,732,622			400,244			388,433			1,888,004			275,033			101,489			98,253			16,741,084			9,518,413
Deferred income		53,447			41,665			7,448			5,639			18,669			21,274			33			140			1,220			1,859			80,817			70,577
Minority interest in subsidiaries		-			-			9,259			32,422			68			60			798,525			616,229			3			4			798,815			616,539
Stockholders’ equity
Capital and reserves		8,104,647			9,009,392			3,507,820			2,403,374			1,600,297			1,392,507			1,944,823			5,949,038			2,131,267			1,698,969			17,247,797			20,446,736
Net income for the period		780,643			931,175			276,151			145,944			(187,519	)		(64,030	)		(49,435	)		(73,713	)		(204,959	)		(50,820	)		614,449			888,795
Total		128,132,592			94,288,725			35,289,669			21,555,922			16,177,241			11,944,465			15,129,138			15,107,654			2,029,020			1,776,792			181,214,918			133,273,971
Statement of Income
Income from financial operations		1,812,307			1,538,317			1,249,993			745,983			131,607			218,574			130,797			60,135			5,031			35,178			3,209,455			2,563,632
Expenses of financial operations		(799,371	)		(673,932	)		(496,926	)		(271,141	)		(68,806	)		(173,774	)		(110,360	)		(120,456	)		(226	)		(427	)		(1,365,429	)		(1,189,571	)
Result of loan losses		(186,159	)		55,217			(62,836	)		(52,323	)		1,241			(1,420	)		-			-			(40	)		(7	)		(247,793	)		1,467
Gross income from financial operations		826,777			919,602			690,231			422,519			64,042			43,380			20,437			(60,321	)		4,765			34,744			1,596,233			1,375,528
Other operating revenues (expenses)		(45,983	)		11,662			(345,965	)		(231,885	)		(94,786	)		(86,612	)		(69,872	)		(12,506	)		(42,231	)		(69,448	)		(588,708	)		(404,630	)
Operating income		780,794			931,264			344,266			190,634			(30,744	)		(43,232	)		(49,435	)		(72,827	)		(37,466	)		(34,704	)		1,007,525			970,898
Non-operating income		(48	)		(12	)		1,363			(681	)		(147,976	)		-			-			159			(153,430	)		524			(300,763	)		(739	)
Income before taxes on income and profit sharing		780,746			931,252			345,629			189,953			(178,720	)		(43,232	)		(49,435	)		(72,668	)		(190,896	)		(34,180	)		706,762			970,159
Income tax		(103	)		(77	)		(69,229	)		(42,787	)		(8,412	)		(18,516	)		-			-			(14,063	)		(16,642	)		(91,808	)		(78,022	)
Statutory participation in income		-			-			(99	)		-			(389	)		(2,280	)		-			(1,045	)		-			-			(488	)		(3,325	)
Minority interest in subsidiaries		-			-			(150	)		(1,222	)		2			(2	)		-			-			-			2			(17	)		(17	)
Net income (loss)		780,643			931,175			276,151			145,944			(187,519	)		(64,030	)		(49,435	)		(73,713	)		(204,959	)		(50,820	)		614,449			888,795

(1) Itaú Unibanco S.A. - Grand Cayman, New York and Tokyo, ITAÚ UNIBANCO HOLDING S.A. - Grand Cayman Branch, Banco Itaú-BBA S.A. - Nassau Banch, only 6/30/2011, Banco Itaú BBA S.A Sucursal Uruguai, Unibanco Grand Cayman Branch and Itaú Unibanco S.A. - Nassau Branch.

(2) Banco Itaú Argentina S.A, Itaú Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, Itrust Servicios Inmobiliarios S.A.C.I, Itaú Sociedad de Bolsa S.A., Itaú Chile Holdings Inc., BICSA Holdings LTD., Banco Itaú Chile S.A., Banco Itaú Chile S.A., Itaú Chile Inversiones, Servicios Y Administración S.A., Itaú Chile Corredor de Bolsa Ltda., Itaú Chile Corredora de Seguros Ltda., Itaú Chile Administradora General de Fondos S.A., Itaú Chile Securitizadora S.A., Recuperadora de Créditos Ltda, Itaú Chile Compañia de Seguros de Vida S.A., ACO Ltda., Banco Itaú Uruguay S.A., OCA Casa Financiera S.A., OCA S.A., Unión Capital AFAP S.A., Banco Itau Paraguay, Tarjetas Unisoluciones S. A. de Capital Variable y Proserv - Promociones Y Servicios S.A. de C. V .; only at 6/30/2012, MCC Asesorias Limitada (50%), MCC Securites INC. (50%), Itaú BBA SAS and MCC Corredora de Bolsa (50,0489%).

(3) IPI - Itaúsa Portugal Investimentos, SGPS Lda. (49%), Itaúsa Europa - Investimentos, SGPS, Lda., Itaú Europa, SGPS, Lda., Itaúsa Portugal - SGPS, S.A., Banco Itau BBA International, S.A , Itau BBA International (Cayman) Ltd., Banco Itaú Europa Luxembourg S.A., BIE Cayman, Ltd., Banco Itaú Europa International, Itaú Bank & Trust Bahamas Ltd., Itaú Europa Securities Inc., Federal Director International Services, S.A., Bay State Corporation Limited and Banco Itau Suisse S.A; only at 6/30/2011, Itaú Madeira Investimentos SGPS Ltda., Kennedy Director International Services S.A., Cape Ann Corporation Limited., BIE Directors Ltd and BIE Nominees Lda; only at 6/30/2012, Itaú BBA International Limited.

(4) Itau Bank Ltd., ITB Holding Ltd., Jasper International Investiment LLC, Unibanco Cayman Bank Ltd., Itaú Bank & Trust Cayman Ltd., Uni-Investments Inter. Corp., Unipart Partic. Internac. Ltd., Rosefield Finance Ltd. (50%) and UBT Finance S.A.; only at 6/30/2011, Unibanco Securities Inc. and Itau USA Asset Management.

(5) Afinco Americas Madeira, SGPS, Soc. Unipessoal Ltda., Zux Cayman Company Ltd., Topaz Holding Ltd., United Corporate Services Inc (new company name of Itaú USA Inc), Itaú International Investment LLC, Albarus S.A., Banco Del Paraná S.A., Garnet Corporation, Itau Global Asset Management, Mundostar S.A., Karen International Ltd., Nevada Woods S.A., Itaú Asia Securities Ltd., Líbero Trading International Ltd., IPI - Itaúsa Portugal Investimentos, SGPS Lda. (51%), Itaú BBA USA Securities Inc., Itaú Middle East Limited, Unipart B2B Investments, S.L., Itau BBA UK Securities Limited, Itaú Japan Asset Management Ltd. and Itaú (Beijing) Investment Consultancy Limited; only at 6/30/2012: Itaú UK Asset Management Limited and Itaú Asia Asset Management Limited.

(6) Foreign consolidated information presents balances net of eliminations from consolidation.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 179

NOTE 21 – RISK MANAGEMENT

The purpose of risk identification is to map the risk events of internal and external nature that may affect the strategies of support and business units and the fulfillment of their objectives, with possibility of impact on income, capital and liquidity of the bank.

Risk management is considered by ITAÚ UNIBANCO HOLDING an essential tool for optimizing the use of resources and selecting the best business opportunities, in order to maximize shareholder value.

At ITAÚ UNIBANCO HOLDING, Risk Management is the process in which:

· The existing and potential risks from the bank operations are identified and measured;

· Policies, procedures and methodologies for risk management and control consistent with the Board of Directors’ guidelines and the bank’s strategies are approved;

· The bank’s risk portfolio is managed considering the best risk-return ratio;

Risk management processes are spread throughout the whole institution, with full involvement of the Board of Directors and Executives that, through Committees of the Board of Directors and Senior Commissions, define the global objectives that are measured as goals and limits to the risk management units. Control units, in turn, support the bank’s management by monitoring and analyzing risk.

ITAÚ UNIBANCO HOLDING’s risk management organizational structure is in accordance with the Basel Accord’s recommendations. The control structure of Market, Credit, Liquidity, Operational and Underwriting risks is centralized at ITAÚ UNIBANCO HOLDING aiming at assuring that the conglomerate risks are being managed in accordance with established policies and procedures. The purpose of centralizing control is to provide the Executives and the Board of Directors with an overview of conglomerate’s risk exposure, so as to optimize and speed up corporate decision-making.

The purpose of that structure is to follow up the regulatory requirements issued by the conglomerate’s lead institution. ITAÚ UNIBANCO HOLDING manages proprietary IT systems to fully meet the applicable rules on capital reserve in connection with the capital portions, pursuant to determinations and models issued by the Central Bank (BACEN). It also coordinates actions to check for adherence to qualitative and quantitative requirements established by the relevant authorities for compliance with the minimum mandatory capital requirement.

In compliance with Resolution No. 3,988 of June 30, 2011 of the National Monetary Council (CMN), ITAÚ UNIBANCO HOLDING is defining and implementing its capital management structure. In January 2012 the Board of Directors has recently approved the appointment of an officer in charge and definition of the required structure to meet the resolution requirements, applicable to the whole financial group and the other companies included in the economic-financial conglomerate. The institutional policy has also been recently approved by the Board of Directors, and processes, procedures and systems required for the effective implementation of the capital management structure have been established.

Further information on risk management can be found on the website www.itau-unibanco.com.br/ri, under section Corporate Governance/Risk Management – Circular 3.477.

I – Market Risk

Market risk is the possibility of incurring losses arising from the variations in the market values of positions held by a financial institution, including the risks of transactions subject to the variations in foreign exchange and interest rates, and equities and commodity prices.

The market risk management is the process through which the institution plans, monitors and controls the risks of variations in financial instruments market values, aiming at optimizing the risk-return ratio, by using an appropriate structure of Adequate management limits, models and tools.

The scope of the market risk control carried out by ITAÚ UNIBANCO HOLDING is extended to all the financial instruments included in the portfolios of companies under its responsibility. In this sense, the ITAÚ UNIBANCO HOLDING’s Market Risk Management Policy is in line with the principles of Resolution No. 3,464 of June 26, 2007, issued by the National Monetary Council (CMN) (as amended), being a set of principles that drive the institution’s strategy towards control and management of market risk of all business units and legal entities of the ITAÚ UNIBANCO HOLDING.

The document that details the guidelines set out by this internal policy on market risk control can be read on the website www.itau-unibanco.com.br/ri, in the section Corporate Governance, Rules and Policies, Public Access Report – Market Risk.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 180

The control of market risk is carried out by an area independent from the business ones, and is responsible for carrying out daily measurement, assessment and report activities by way of control units set in the legal entities of ITAÚ UNIBANCO HOLDING.The executive area also performs the monitoring, assessment and consolidated reporting of market risk information, including possible extrapolation of risk limits, reporting the event to the business unit in charge and monitoring the actions required to adjust the position and/or risk level.For this purpose, the ITAÚ UNIBANCO HOLDING relies on a structured communication and information process, aiming at providing feedback for the follow-up of the superior committees and compliance with the regulatory bodies in Brazil and abroad.

The market risk control and management process is submitted to periodic reviews aimed at keeping it aligned with the best market practices and adhering to the continuous improvement processes at ITAÚ UNIBANCO HOLDING.

The process for managing market risks of ITAÚ UNIBANCO HOLDING occurs within the governance and hierarchy of committees and limits approved specifically for this purpose, and that covers from the monitoring of aggregate indicators of risk to granular limits, assuring effectiveness and coverage of control.These limits are dimensioned considering the projected results of the balance sheet, the level of equity and the profile of risk of each legal entity, which are defined in terms of risk measures used by management.Limits are monitored daily and excesses are reported and discussed in the corresponding committees.

The structure of limits is designed and approved by the Superior Risk Committee (CSRisc), after discussions and deliberations by the Superior Institutional Treasury Committee (CSTI) about metrics and market risk limits.

The market risk analyses are conducted based on the following metrics:

· Value at Risk (VaR):statistical measure that estimates the expected maximum potential economic loss under normal market conditions, considering a defining holding period and confidence level;

· Losses in Stress Scenarios:simulation technique to assess the behavior of assets and liabilities of a portfolio when several risk factors are taken to extreme market situations (based on prospective scenarios);

· Stop Loss:effective losses added to the maximum potential loss in bullish and bearish scenarios;

· Earnings at Risk (EaR):Measure that quantifies the P&L impact of a given portfolio, considering regular market conditions, time horizon related to the longest transaction in the banking portfolio and a predetermined confidence interval.

In addition to the aforementioned risk measures, sensitivity and loss control measures are also analyzed.Among them, the following is included:

· Mismatching (gap) analysis (GAPS):graphic representation by risk factor of cash flows expressed at market value, allocated at the maturity dates;

· Sensitivity (DV1- Delta Variation):impact on the market value of cash flows, when submitted to an one annual basis point increase in the current interest rates.Applied to risk factors;

· Sensitivity to Several Risk Factors (Greeks):partial derivatives of an option portfolio in relation to the prices of underlying assets, implied volatilities, interest rates and time;

· Stop Loss:maximum loss that a certain portfolio classified in the trading portfolio is authorized to reach.

The consolidated ITAÚ UNIBANCO HOLDING S.A., maintaining its conservative management and portfolio diversification, continued with its policy of operating within low limits in relation to its capital.

In June/2012, Itaú Unibanco recorded a Total Global VaR of R$ 402 million (R$ 143 million in March 2012).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 181

II – Credit Risk

Credit risk is the possibility of incurring losses in connection with the breach by the borrower or counterparty of the respective agreed-upon financial obligations, devaluation of loan agreement due to downgrading of the borrower’s risk rating, reduction in gains or compensation, advantages given upon renegotiation and recovery costs.

In line with the principles of CMN Resolution No. 3,721 of April 30, 2009, ITAÚ UNIBANCO HOLDING has a structure for and policy on credit risk management, approved by its Board of Directors, applicable to the companies and subsidiaries in Brazil and abroad.

The document that outlines the guidelines set out by this internal policy on credit risk control can be read on the websitewww.itau-unibanco.com.br/ri, in the section Corporate Governance, Rules and Policies, Public Access Report – Credit Risk.

The objective of ITAÚ UNIBANCO HOLDING’s credit risk management aims at creating value to stockholders, managing the risk-adjusted return and maintaining the quality of credit portfolio in levels adequate to each market segment in which it operates.

ITAÚ UNIBANCO HOLDING establishes its credit policy based on internal factors, such as the client rating criteria and portfolio development analysis, the registered default levels, the incurred return rates, and the allocated economic capital; and external factors, related to the economic environment in Brazil and abroad, including market share, interest rates, market default indicators, inflation, and consumption increase/decrease. ITAÚ UNIBANCO HOLDING’s centralized process for making decisions and establishing a credit policy guarantees the synchrony of credit actions and optimization of business opportunities.

To protect the institution against losses arising from loan operations, ITAÚ UNIBANCO HOLDING considers all aspects that determine the client’s credit risk to define the provision level commensurate with the risk incurred in each operation. For each operation, the assessment and rating of the client or economic group, the operation rating, and the possible existence of past-due amounts are taken into account.

ITAÚ UNIBANCO HOLDING recognizes a provision additional to that required by BACEN, aiming at ensuring a provision level compatible with the expected loss model adopted by the institution's credit risk management, based on internal models. This allowance is usually quantified in view of the past performance of loan portfolios, based on exposure, probabilities of default and expected recovery of transactions.

III – Operational Risk

The operational risk is the possibility of incurring losses arising from failure, deficiency or inadequacy of internal processes, personnel and systems, or external events. It includes the legal risk, associated with the inadequacy or deficiency in agreements signed by the institution, as well as sanctions for failing to meet legal provisions and compensation for damages to third parties arising from activities performed by the institution. That definition does not include the strategic risk and reputation risk.

The increasing sophistication of banking business environment and the development of technology make the risk profiles of organizations more complex, clearly outlining this risk class, which management is not a new practice, but now requires a specific structure, different from those traditionally adopted for credit and market risks.Therefore, operational risk management becomes important since it assures the identification, assessment/measurement, response, monitoring and reporting of the exposure to the organization's operational risk.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 182

ITAÚ UNIBANCO HOLDING formulated a policy on operational risk management, approved by its Board of Directors, applicable to the companies and subsidiaries in Brazil and abroad. The policy comprises a set of principles, procedures and tools to enable the company to make permanent adjustments to operational risk management, in view of the nature and complexity of products, services, activities, processes and systems.

The structure formalized in this policy establishes procedures for the identification, assessment, mitigation, monitoring, and communications related to operational risks, as well as the roles and responsibilities of the bodies that participate in this structure. A summarized version of such policy is available on the website www.itau-unibanco.com.br/ri in the section Corporate Governance, Rules and Policies, Public Access Report – Operational Risk.

On April 30, 2008, BACEN published Circular No. 3.383 and Circular Letters Nos. 3,315 and No. 3,316, which establish the criteria for calculation of PRE related to the operational risk (POPR), addressed by Resolution No. 3,490. Therefore, since July 1, 2008, ITAÚ UNIBANCO HOLDING has allocated capital to Operational Risk using the Alternative Standardized Approach.

IV – Liquidity Risk

Liquidity risk is the occurrence of imbalances between tradable assets and falling due liabilities - mismatching between payments and receipts - which may affect the institution’s payment capacity, taking into consideration the different currencies and payment terms and their rights and obligations.

Management of liquidity risk seeks to adopt best practices to guarantee liquidity sufficient to support possible outflows in market stress situations, as well as the compatibility between funding, and terms and liquidity of assets.

ITAÚ UNIBANCO HOLDING has a structure dedicated to monitoring, controlling and analyzing liquidity risk, through models of variables projections that affect cash flows and the level of reserves in local and foreign currencies.

Additionally, the institution establishes guidelines and limits whose compliance is periodically analyzed in technical committees and whose purpose is providing safety margin in addition to the minimum projected needs.Liquidity management policies and associated limits are established based on prospective scenarios that are regularly reviewed and on top management definitions.

V - Underwriting Risk

Underwriting risk is the possibility of incurring losses arising from insurance, pension plan and capitalization operations that are contrary to the organization’s expectations and that are directly or indirectly associated with the technical and actuarial bases used to calculate premiums, contributions and technical reserves, arising from insurance, pension plan and capitalization operations.

With the purpose of standardizing risk practices and control in the whole group, the risk control area establishes corporate policies approved in different levels of ITAÚ UNIBANCO HOLDING to conduct the institutional guidelines on the topics related to underwriting risks.

To create and amend underwriting risk policies, there is governance that assures the approval of risks inherent in products, processes or business proposals. Decisions are made in different approval levels, in accordance with the risk level, and they may come to specific committees of underwriting risks or Superior Risk Committee of the group, in compliance with the limits of approval levels.

The risk control governance also establishes limits for borderline risks between underwriting and credit in line with Resolution No. 228 of December 6, 2010 of the National Council of Private Insurance (CNSP). An internal policy defines the quality of credit risk of reinsurers and the concentration limits, in compliance with CNSP Resolution No. 168 of December 17, 2007, following the same credit governance of the group.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 183

NOTE 22 – ADDITIONAL INFORMATION

a) Insurance policy - ITAÚ UNIBANCO HOLDING and its subsidiaries, despite the low risk exposure due to a physical non-concentration of their assets, have the policy to guarantee their valuables and assets at amounts considered sufficient to cover possible claims.

b) Foreign currency – the balances in Reais linked to the foreign currency were:

	6/30/2012			6/30/2011
Permanent foreign investments		17,862,246			21,335,531
Net amount of other assets and liabilities indexed to foreign currency, including derivatives		(29,111,031	)		(37,178,584	)
Net foreign exchange position		(11,248,785	)		(15,843,053	)

The net foreign exchange position, considering the tax effects on the net balance of other assets and liabilities indexed to foreign currency, reflects the low exposure to exchange variations.

c) Investment funds and managed portfolios - ITAÚ UNIBANCO HOLDING, through its subsidiaries, manages the following types of funds: privatization, fixed income, shares, open portfolio shares, investment clubs, customer portfolios and group portfolios, domestic and foreign, classified in memorandum accounts, distributed as follows:

	Amount				Amount (*)				Number of funds
	6/30/2012		6/30/2011		6/30/2012		6/30/2011		6/30/2012		6/30/2011
Investment funds		335,160,828		289,075,135		335,160,828		289,075,135		3,385		3,127
Fixed income		305,169,183		258,081,200		305,169,183		258,081,200		2,546		2,262
Shares		29,991,645		30,993,935		29,991,645		30,993,935		839		865
Managed portfolios		158,049,118		156,299,714		87,462,418		90,316,782		15,331		15,143
Customers		96,772,168		89,793,979		79,445,859		74,618,429		15,265		15,075
Itaú Group		61,276,950		66,505,735		8,016,559		15,698,353		66		68
TOTAL		493,209,946		445,374,849		422,623,246		379,391,917		18,716		18,270

(*) It refers to the distribution after elimination of double-counting of managed portfolios in investment funds.

d) Funds of consortia

	6/30/2012		6/30/2011
Monthly estimate of installments receivable from participants		78,579		62,454
Group liabilities by installments		5,862,983		4,469,451
Participants – assets to be delivered		5,439,149		4,186,454
Funds available for participants		596,934		408,814
(In units)
Number of managed groups		790		717
Number of current participants		240,364		190,721
Number of assets to be delivered to participants		138,900		120,906

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 184

e) Fundação Itaú Social - ITAÚ UNIBANCO HOLDING and its subsidiaries are the main sponsors of Fundação Itaú Social, the objectives of which are: 1) managing the “Itaú Social Program”, which aims at coordinating the organization’s role in projects of interest to the community by supporting or developing social, scientific and cultural projects, mainly in the elementary education and health areas; 2) supporting projects or initiatives in progress, supported or sponsored by entities qualified to work in the ”Programa Itaú Social” (Itaú Social Program); and 3) providing food and other similar benefits to the employees of ITAÚ UNIBANCO HOLDING and other companies of the group.

During the period from January 1 to June 30, 2012 the consolidated companies made no donations (R$ 190 at June 30, 2011) and the Foundation’s social net assets totaled R$ 2,702,467 (R$ 2,666,259 at June 30, 2011). The income arising from its investments will be used to achieve the Foundation’s social purposes.

f) Instituto Itaú Cultural – IIC - ITAÚ UNIBANCO HOLDING and its subsidiaries are supporters of Instituto Itaú Cultural - IIC, an entity formed to grant incentives, promote and preserve Brazil’s cultural heritage. During the period, the consolidated companies donated the amount of R$ 34,900 (R$ 27,000 from January 1 to June 30, 2011).

g) Instituto Unibanco - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco, an entity whose objective is to support projects on social assistance, particularly education, culture, promotion of integration to labor market, and environmental protection, directly and/or supplementarily, through the civil society’s institutions.

h) Instituto Unibanco de Cinema - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco de Cinema, an entity whose objective is (i) the fostering of culture in general; and (ii) providing access of low-income population to cinematography, videography and similar productions, for which it shall maintain movie theaters owned or managed by itself, and theaters to screen films, videos, video-laser discs and other related activities, as well as to screen and divulge films of great importance, especially those produced in Brazil.

i) Associação Clube “A” - ITAÚ UNIBANCO HOLDING and is subsidiaries sponsor Associação Clube “A”, an entity whose objective is the provision of social services for the welfare of beneficiaries, in the way and conditions established by its Internal Rules, and according to the funds available. These services may include, among others, the promotion of cultural, educational, sports, entertainment and health care activities. During the period from January 1 to June 30, 2012, the consolidated companies made donations to Clube “A” in the amount of R$ 800.

j) Instituto Assistencial Pedro di Perna - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Assistencial Pedro di Perna, an entity whose objective is the provision of social services, stimulate sport activities, and promote recreation, aimed at the welfare of its members, in the way and conditions established by its Internal Rules, and according to the funds available.

k) Exclusions of nonrecurring effects net of tax effects – Holding and Holding Consolidated

	01/01 to 06/30/2012			01/01 to 06/30/2011
Program for Settlement or Installment Payment of Federal - Law No. 11,941/09 (Notes 12b and 14)		-			508,993
Provision for contingencies – economic plans (Note 12)		(93,387	)		(175,314	)
Market value based on the share price – BPI (Note 15a II)		(305,447	)		(155,860	)
Total		(398,834	)		177,819

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 185

l) Reclassifications for comparison purposes – The Company carried out reclassifications in the balances of June 30, 2011,for financial statements comparison purposes, in view of the regrouping of the following headings: In the Balance Sheet, the reclassification of Technical Provision for Insurance, Pension Plan and Capitalization to Other Assets and the reclassification related to Investment Funds from Minority Interest in Subsidiaries to Other Liabilities – Sundry. In Statement of Income, the reclassification of Provision for Tax and Social Security from Other Operating Expenses to Other Operating Revenues, the reclassification of the Reward Program from Other Operating Expenses to Banking Service Fees, in compliance with CVM Resolution No. 597, of September 15, 2009 and the reclassification of Income from Credit Cards and Securities Brokerage from Banking Service Fees to Income from Bank Charges and the reclassification from Minority Interest in Subsidiaries to Expenses of Financial Operations.

	Prior disclosure			Reclassification/ deconsolidation			Adjusted balances
CURRENT ASSETS AND LONG-TERM RECEIVABLES		781,553,289			1,178,871			782,732,160
OTHER ASSETS		3,511,970			1,178,871			4,690,841
Prepaid expenses		2,930,663			1,178,871			4,109,534
TOTAL ASSETS		792,500,390			1,178,871			793,679,261
CURRENT AND LONG-TERM LIABILITIES		722,279,573			1,726,421			724,005,994
TECHNICAL PROVISION FOR INSURANCE, PENSION PLAN AND CAPITALIZATION		65,524,090			1,178,871			66,702,961
OTHER LIABILITIES		149,327,552			547,550			149,875,102
Sundry		19,693,455			547,550			20,241,005
MINORITY INTEREST IN SUBSIDIARIES		3,309,307			(547,550	)		2,761,757
TOTAL LIABILITIES		792,500,390			1,178,871			793,679,261
EXPENSES OF FINANCIAL OPERATIONS		(21,494,173	)		(27,689	)		(21,521,862	)
Money market		(18,623,205	)		(27,689	)		(18,650,894	)
INCOME FROM FINANCIAL OPERATIONS BEFORE LOAN LOSSES		24,315,768			(27,689	)		24,288,079
GROSS INCOME FROM FINANCIAL OPERATIONS		17,428,203			(27,689	)		17,400,514
OTHER OPERATING REVENUES (EXPENSES)		(7,386,471	)		-			(7,386,471	)
Banking service fees		7,528,702			(867,123	)		6,661,579
Credit cards		3,495,937			(617,971	)		2,877,966
Other		958,797			(249,152	)		709,645
Income from bank charges		1,610,994			867,123			2,478,117
OPERATING INCOME		10,041,732			(27,689	)		10,014,043
INCOME BEFORE TAXES ON INCOME AND PROFIT SHARING		10,169,224			(27,689	)		10,141,535
MINORITY INTEREST IN SUBSIDIARIES		(388,261	)		27,689			(360,572	)
NET INCOME		7,132,508			-			7,132,508

m) Subsequent event

On July 9, 2012, ITAÚ UNIBANCO HOLDING entered into the Association Agreement with Banco BMG S.A. (“BMG”), aiming at the offering, distribution and commercialization of payroll advance loans.

This Association will be structured as a new business of Itaú Unibanco and BMG through a new financial institution to be named Banco Itaú BMG Consignado S.A., in which Itaú Unibanco will hold the control, through a seventy per cent (70%) interest in the total voting capital, and BMG will hold the remaining thirty per cent (30%). The institution initial capital will be one (R$ 1) billion, to be subscribed by shareholders in the aforementioned proportion. The completion of the transaction depends on the approval of BACEN.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 186

Independent Auditor’s Report

To the Board of Directors and Stockholders

Itaú Unibanco Holding S.A.

We have audited the accompanying financial statements of Itaú Unibanco Holding S.A. (the “Bank”) standing alone, which comprise the balance sheet as at June 30, 2012 and the statements of income, changes in equity and cash flows for the six-month period then ended, as well as the accompanying consolidated financial statements of Itaú Unibanco Holding S.A. and its subsidiaries (“Consolidated”), which comprise the consolidated balance sheet as at June 30, 2012 and the consolidated statements of income and cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Independent Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Itaú Unibanco Holding S.A. and of Itaú Unibanco Holding S.A. and its subsidiaries as at June 30, 2012, and the financial performance and cash flows, as well as the consolidated financial performance and cash flows, for the six-month period then ended, in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 187

Other matters 

Statement of value added

We also have audited the Bank’s and the consolidated statements of value added for the six-month period ended June 30, 2012, prepared under management responsibility, the presentation of which is required by the Brazilian corporate legislation for listed companies. These statements were subject to the same audit procedures described above and, in our opinion, are fairly presented, in all material respects, in relation to the financial statements taken as a whole.

São Paulo, July 23, 2012

PricewaterhouseCoopers

Auditores Independentes

CRC 2SP000160/O-5

Paulo Sergio Miron

Contador CRC 1SP173647/O-5

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 188

ITAÚ UNIBANCO HOLDING S.A.

CNPJ. 60.872.504/0001-23 A Listed Company NIRE. 35300010230

SUMMARY OF THE AUDIT COMMITTEE REPORT

According to its Charter (available on website www.itau-unibanco.com.br/ir), the Committee is responsible for the quality and integrity of the financial statements of the Itaú Unibanco Financial Conglomerate, for the compliance with legal and regulatory requirements, for the activities, independence and quality of the services rendered by the independent and the internal auditors, and for the quality and effectiveness of the internal controls and risk management systems of the Conglomerate. The assessments made by the Committee are based on information received from management, external auditors, internal auditors, those responsible for risk management and internal controls, and on its own analysis based on direct observation.

Management is responsible for preparing the financial statements of Itaú Unibanco Holding S.A. and its subsidiary and affiliated companies and for establishing the necessary procedures to ensure the quality of the processes that generate the information used to prepare the financial statements and the financial reports. Management is also responsible for risk control and monitoring and for the supervision of the corporate activities of internal controls and compliance.

PricewaterhouseCoopers Auditores Independentes is responsible for auditing the financial statements and for ensuring that they fairly represent, in all material aspects, the financial position of the Conglomerate, in conformity with the accounting practices adopted in Brazil arising from the Brazilian corporate law and the requirements of the Conselho Monetário Nacional, Comissão de Valores Mobiliários, Banco Central do Brasil, Conselho Nacional de Seguros Privados, and Superintendência de Seguros Privados, as well as in conformity with the International Financial Reporting Standards (IFRS).

Internal Audit focuses on issues which present the highest risk potential, on the assessment of internal controls and risk management systems, on the evaluation of the quality of processes and on by remote monitoring of risks.

Committee Activities

The Committee met fifteen times in the period from February 2012 to July 2012, a total of 22 days. In addition, in a session on July 23th, the Committee analyzed the financial statements as of June 30, 2012 as well as examined and approved the Audit Committee Report and this Summary on the activities performed in the semester up to that baseline date.

Risk Management and Internal Controls

In 2012, during meetings with Officers responsible for Risk Control and Finance, the Committee examined the aspects related to risk management and control in the Conglomerate, with emphasis on credit, liquidity and market risks. Through meetings with the Officer in charge of the internal control and compliance, the Committee also monitored the implementation and application of the framework for operational risk management.

Based on the information brought to its attention, the Audit Committee considers to be positive the efforts that have been made to ensure the effectiveness of the existing internal controls and risk management systems.

The Committee has also been monitoring the efforts of Itaú Unibanco to converge to Basel II recommendations in relation to the development of the Company’s internal risk management models, which should result in better controls in the integrated management of the businesses.

It also considers that the approach that the Organization has adopted to prepare itself for the use of internal models as required by Basel II is firmly established and properly focused.

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 189

Compliance with the Legislation, Regulatory Requirements and the Internal Policies and Procedures

The Audit Committee considers that the duties and responsibilities, as well as the procedures for assessing and monitoring legal risks are established and continue to be adopted in accordance with the corporate guidelines. Based on the information brought to its attention from the areas in charge, on the work carried out by the Internal Audit and on the reports prepared by the external auditors, the Audit Committee concludes that no deficiencies were identified in the compliance with the legislation, regulatory requirements and internal policies and procedures that might pose risks to the continuity of the Organization.

External Audit

The Committee has a regular channel of communication with the external auditors to extensively discuss the results of their work and relevant accounting aspects, thus enabling the Committee’s members to form a well-based opinion as to the integrity of the financial accounting statements and of the financial reports.

The Committee assesses as fully satisfactory the amount and the quality of the information provided by PricewaterhouseCoopers, which supports its opinion on the integrity of the financial statements. The Committee did not identify situations that could affect the objectivity and independence of the external auditors.

Internal Audit

The Audit Committee approves the annual working plan of the Internal Audit and the revised version of this plan for the second half of the year and, on a quarterly basis, monitors its compliance, making itself aware of work performed that was not planned and providing an opinion on the cancellation of works envisaged in the plan.

The Committee evaluates positively the coverage and quality of the work performed by the internal auditors. The results presented monthly during the Committee’s meetings did not bring to its attention the existence of residual risks that could affect the soundness and the continuity of the Organization.

Consolidated Financial Statements

The Committee analyzed the processes for preparing individual and consolidated balance sheets, notes to the financial statements and financial reports published with the consolidated financial statements. It discussed this subject with PricewaterhouseCoopers and with Senior Management of the Conglomerate. An evaluation was also made of the relevant accounting practices used by the Itaú Unibanco Financial Conglomerate in the preparation of its financial statements. The Committee verified that they are in conformity with the generally accepted accounting principles applicable to institutions that have authorization to carry out operations from the Banco Central do Brasil or subject to regulation by the Superintendência de Seguros Privados.

During the semester, the aspects deemed significant for the preparation of the financial statements at December 31, 2011, filed with the Securities and Exchange Commission – SEC, were also analyzed. The Audit Committee states that Management has complied with the procedures established by the U.S. legislation for the financial statements prepared in conformity with the International Financial Reporting Standards.

Recommendations

Regular meetings were held with the Chairman of the Board of Directors and with the Chief Executive Officer of Itaú Unibanco. During those meetings, the Committee had the opportunity to present its opinions and points of view concerning different aspects of its activities.

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Conclusion

This Audit Committee, with due consideration to its responsibilities and to the natural limitations due to the scope of its activities, recommends to the Board of Directors the approval of the consolidated financial statements of Itaú Unibanco Holding S.A., for the semester ended on June 30, 2012.

São Paulo, July 23th, 2012.

The Audit Committee

Gustavo Jorge Laboissière Loyola – President

Alkimar Ribeiro Moura

Eduardo Augusto de Almeida Guimarães

Guy Almeida Andrade – Financial Expert

Luiz Alberto Fiore

Itaú Unibanco Holding S.A. – Complete Financial Statements – June 30, 2012 191

ITAÚ UNIBANCO HOLDING S.A.

CNPJ. 60.872.504/0001-23 Listed Company NIRE. 35300010230

OPINION OF THE FISCAL COUNCIL

The effective members of the Fiscal Council of ITAÚ UNIBANCO HOLDING S.A., having examined the financial statements for the period from January to June 30, 2012, have verified the accuracy of all items examined and, in view of the unqualified opinion of PricewaterhouseCoopers Auditores Independentes, understand that they adequately reflect the company’s capital structure, financial position and the activities conducted during the period.

São Paulo, July 23, 2012.

IRAN SIQUEIRA LIMA

President

ALBERTO SOZIN FURUGUEM

Member

LUIZ ALBERTO DE CASTRO FALLEIROS

Member

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