EX-99.1 2 v430347_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

CONTENTS

Management Discussion & Analysis	03

Executive Summary	05

Income Statement and Balance Sheet Analysis	15

Managerial Financial Margin	16

Credit Portfolio	18

Result from Loan Losses	22

Commissions and Fees & Result from Insurance, Pension Plan and Premium Bonds	25

Insurance, Pension Plan and Premium Bonds Operations	28

Non-interest Expenses	33

Tax Expenses for ISS, PIS, Cofins and Others	35

Income Tax and Social Contribution on Net Income	35

Other Balance Sheet Information	36

Balance Sheet by Currency	39

Capital Ratios	40

Risk Management	42

Business Analysis	43

Segment Analysis	45

Activities Abroad	50

Additional Information	55

Report of Independent Auditors	61

Complete Financial Statements	63

It should be noted that the managerial financial statements relating to prior periods may have been reclassified for comparison purposes.

The tables in this report show the figures in millions. Variations and totals, 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).

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Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

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

Highlights

In R$ millions (except where indicated), end of period	4Q15			3Q15			4Q14			2015			2014
Results
Recurring Net Income		5,773			6,117			5,660			23,832			20,619
Net Income		5,698			5,945			5,520			23,360			20,242
Operating Revenues ⁽¹⁾		26,680			26,945			23,754			103,910			89,840
Managerial Financial Margin ⁽²⁾		16,764			17,595			14,705			66,557			55,155
Shares
Recurring Net Income per share (R$)⁽³⁾		0.97			1.03			0.94			3.98			3.43
Net Income per share (R$) ⁽³⁾		0.96			1.00			0.92			3.90			3.36
Number of Outstanding Shares at the end of period – in thousands ⁽⁴⁾		5,921,351			5,950,089			6,024,702			5,921,351			6,024,702
Average price of non-voting share on the last trading day of the period (R$) ⁽⁴⁾		26.30			26.21			31.56			26.30			31.56
Book Value per Share (R$)		17.98			17.37			15.91			17.98			15.91
Dividends and Interest on Own Capital net of taxes ⁽⁵⁾		3,429			1,351			3,694			7,304			6,635
Dividends and Interest on Own Capital net of taxes ⁽⁵⁾ per share (R$) ^(*)		0.58			0.23			0.61			1.23			1.10
Market Capitalization ⁽⁶⁾		155,732			155,952			190,161			155,732			190,161
Market Capitalization ⁽⁶⁾ (US$ millions)		39,882			39,254			71,592			39,882			71,592
Performance
Recurring Return on Average Equity – Annualized ⁽⁷⁾		22.3	%		24.0	%		24.7	%		23.9	%		24.0	%
Return on Average Equity – Annualized ⁽⁷⁾		22.0	%		23.3	%		24.0	%		23.5	%		23.5	%
Recurring Return on Average Assets – Annualized ⁽⁸⁾		1.7	%		1.9	%		1.9	%		1.9	%		1.8	%
Return on Average Assets – Annualized ⁽⁸⁾		1.7	%		1.9	%		1.9	%		1.8	%		1.8	%
Solvency Ratio - Prudential Conglomerate (BIS Ratio) ⁽⁹⁾		17.8	%		16.1	%		16.9	%		17.8	%		16.9	%
Common Equity Tier I		14.0	%		12.3	%		12.5	%		14.0	%		12.5	%
Estimated BIS III (Common Equity Tier I) - Full Implementation of BIS III ⁽¹⁰⁾		13.6	%		12.4	%		11.9	%		13.6	%		11.9	%
Annualized Net Interest Margin of Spread-Sensitive Operations ⁽¹¹⁾		11.0	%		10.8	%		10.5	%		10.8	%		10.3	%
Annualized Net Interest Margin with Clients ⁽¹¹⁾		10.9	%		10.9	%		10.4	%		10.7	%		10.3	%
Annualized Net Interest Margin of Spread-Sensitive Operations after Provision for Credit Risk ⁽¹¹⁾		7.1	%		6.9	%		7.6	%		7.0	%		7.3	%
Annualized Net Interest Margin with Clients after Provision for Credit Risk ⁽¹¹⁾		7.5	%		7.4	%		7.8	%		7.3	%		7.6	%
Nonperforming Loans Index (NPL over 90 days)		3.5	%		3.3	%		3.1	%		3.5	%		3.1	%
Nonperforming Loans Index (NPL 15 to 90 days)		2.6	%		3.0	%		2.5	%		2.6	%		2.5	%
Coverage Ratio (Provision for Loan Losses/NPL over 90 days)		208	%		214	%		193	%		208	%		193	%
Efficiency Ratio (ER) ⁽¹²⁾		45.5	%		44.2	%		46.5	%		44.0	%		47.0	%
Risk-Adjusted Efficiency Ratio (RAER) ⁽¹²⁾		64.5	%		63.1	%		61.6	%		63.0	%		62.9	%
Balance Sheet
Total Assets		1,359,172			1,322,693			1,208,702
Total Credit Portfolio, including Sureties and Endorsements		548,073			552,342			525,519
Loan Portfolio (A)		473,829			477,198			451,760
Sureties, Endorsements and Guarantees		74,244			75,143			73,759
Deposits + Debentures + Securities + Borrowings and Onlending (B) ⁽¹³⁾		648,664			618,839			573,106
Loan Portfolio/Funding (A/B)		73.0	%		77.1	%		78.8	%
Stockholders' Equity		106,462			103,353			95,848
Other
Assets Under Administration		765,102			749,755			668,516
Total Number of Employees		90,320			91,437			93,175
Brazil		83,481			84,490			86,192
Abroad		6,839			6,947			6,983
Branches and CSBs – Client Service Branches		4,985			5,012			5,070
ATM – Automated Teller Machines ⁽¹⁴⁾		26,412			26,454			27,916
Indicators
EMBI Brazil Risk		517			447			259			517			259
CDI rate – In the Period (%)		3.4	%		3.4	%		2.8	%		13.3	%		10.8	%
Dollar Exchange Rate – Quotation in R$		3.9048			3.9729			2.6562			3.9048			2.6562
Dollar Exchange Rate – Change in the Period (%)		-1.7	%		28.1	%		8.4	%		47.0	%		13.4	%
Euro Exchange Rate – Quotation in R$		4.2504			4.4349			3.2270			4.2504			3.2270
Euro Exchange Rate – Change in the Period (%)		-4.2	%		28.2	%		4.3	%		31.7	%		-0.2	%
IGP-M – In the Period (%)		3.9	%		1.9	%		1.9	%		10.5	%		3.7	%

(*) The number of outstanding shares was adjusted to reflect the share bonus of 10% granted on June 05, 2014 and July 17, 2015.

Note: (1) Operating Revenues are the sum of Managerial Financial Margin, Commissions and Fees, Other Operating Income and Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses; (2) Described on pages 16 to 17; (3) Calculated based on the weighted average number of outstanding shares; (4) The number of outstanding shares was adjusted to reflect the share bonus of 10% granted on June 05, 2014 and July 17, 2015; (5) IOC – Interest on Capital. Declared amounts paid/accrued; (6) Total number of outstanding shares (common and non-voting shares) multiplied by the average price of non-voting share on the last trading day in the period; (7) Annualized Return was calculated by dividing Net Income by Average Stockholders’ Equity. The quotient of this division was multiplied by the number of periods in the year to derive the annualized rate. The calculation bases of returns were adjusted by the amount of dividends that has not yet been approved at shareholders’ or Board meetings, proposed after the balance sheet closing date; (8) Return was calculated by dividing Net Income by Average Assets. The quotient of this division was multiplied by the number of periods in the year to derive the annualized rate. (9) Up to the fourth quarter of 2014, this ratio was calculated based on the financial conglomerate; (10) Takes into consideration the use of tax credit; (11) Does not include financial margin with the market. See details on page 17; (12) For further details on the calculation methodology of both Efficiency and Risk-Adjusted Efficiency ratios, please refer to page 34; (13) As described on page 38; (14) Includes ESBs (electronic service branches) and service points at third parties’ establishments.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Net Income and Recurring Net Income

Our recurring net income totaled R$5,773 million in the fourth quarter of 2015 as a result of the elimination of non-recurring events, which are presented in the table below, from net income of R$5,698 million for the period.

Non-Recurring Events Net of Tax Effects

In R$ millions	4Q15			3Q15			4Q14			2015			2014
Recurring Net Income		5,773			6,117			5,660			23,832			20,619
Non-Recurring Events		(75	)		(172	)		(140	)		(473	)		(377	)
Social Contribution Rate Increase (a)		-			3,988			-			3,988			-
Complementary Provision for Loan Losses (b)		-			(2,793	)		(668	)		(2,793	)		(668	)
Contingencies Provision (c)		(28	)		(540	)		(38	)		(696	)		(126	)
Financial Leasing Accounting Change (d)		-			(520	)		-			(520	)		-
Pension Fund (e)		-			(130	)		-			(130	)		-
Goodwill Amortization (f)		(32	)		(34	)		(54	)		(162	)		(177	)
Program for Settlement or Installment Payment of Taxes (g)		(4	)		(1	)		(62	)		37			(25	)
Impairment (h)		(7	)		-			(9	)		(50	)		(9	)
Gain from Sale of Large Risk Insurance Operations (i)		-			-			736			-			736
Criteria Adjustment - Credicard (j)		-			-			-			-			(37	)
Porto Seguro (k)		17			-			-			17			(60	)
IRB (l)		-			-			28			-			62
Improvement of Labor Claim Provision Model (m)		-			-			(74	)		-			(74	)
Other		(20	)		(143	)		-			(163	)		-
Net Income		5,698			5,945			5,520			23,360			20,242

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 of 2015 and 2014

(a) Social Contribution Rate Increase: Effect on the balance of the social contribution tax credit resulting from the rate increase from 15% to 20% as established by Provisional Measure No. 675/15 of May 2015 (converted into Law No. 13,169/15 in October 2015).

(b) Complementary Provision for Loan Losses: Complementary provision for loan losses to the minimum required by Resolution No. 2,682/99 of the National Monetary Council mainly due to a more challenging economic environment.

(c) Contingencies Provision: Recognition of provisions for tax and social security lawsuits and losses arising from economic plans that were in effect in Brazil during the 1980's.

(d) Financial Leasing Accounting Change: Regarding financial leasing contracts related to the new Technology Center implementation.

(e) Pension Fund: Provision to settle the surplus of the defined contribution pension fund in accordance with the regulation.

(f) Goodwill Amortization: Effect of the goodwill amortization generated by acquisitions made by the Conglomerate.

(g) Program for the Settlement or Installment Payment of Taxes: Effects of our adherence to the Program for the Settlement or Installment Payment of Federal and Municipal Taxes.

(h) Impairment: Adjustment in the carrying amount of assets in order to reflect its fair value.

(i) Gain from Sale of Large Risk Insurance Operations: Effect of the sale of large risk insurance operation completed on October 31, 2014.

(j) Criteria Adjustment - Credicard: Criteria adjustment for provisions recognition for loan losses resulting from Credicard acquisition.

(k) Porto Seguro: In 2015, effect on the balance of the social contribution tax credit resulting from the rate increase in proportion to our equity in the company and in 2014, effect of the favorable decision, by the Federal Supreme Court (STF), on the legality of the COFINS tax on this type of operation in proportion to our equity in the company, in addition to the provision for losses on tax losses.

(l) IRB: Favorable decision effect on the increase of the PIS/COFINS calculation basis of IRB Brasil Resseguros S.A.

(m) Improvement of Labor Claim Provision Model: Resulting from changes for the improvement of our model for the recognition of provisions for own and third parties’ labor claims.

Managerial Income Statement

We apply consolidation criteria for the managerial results that affect only the breakdown of accounts and, therefore, do not affect net income. These effects are shown in the table on the following page ("Accounting and Managerial Statements Reconciliation"). Additionally, we adjusted the tax effects of the hedges of investments abroad - which were originally accounted for as tax expenses (PIS and COFINS) and income tax and social contribution on net income and were reclassified to the financial margin - and the non-recurring events.

Our strategy for the foreign exchange risk management of the capital invested abroad is aimed at mitigating, through financial instruments, the effects resulting from foreign exchange variations and takes into consideration the impact of all tax effects. In the fourth quarter of 2015, the Brazilian real appreciated 1.7% against the U.S. dollar and of 4.2% against the Euro, compared with depreciations of 28.1% and 28.2%, respectively, in the previous quarter.

Highlights

On December 31, 2015, we entered into an agreement by which we agreed to acquire a 81.94% stake in the equity stock of Recovery do Brasil Consultoria S.A. and 70% of a R$38 billion portfolio in credit rights associated with portfolio recovery activities, resulting from credits mainly originated from market banks.

After obtaining applicable regulatory authorizations and the compliance of certain suspension conditions, we will pay R$640 million for the stake in the equity stock of Recovery and R$ 570 million for the stake in the credit rights portfolio.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Accounting and Managerial Income Statements reconciliation for the past two quarters is presented below.

Accounting and Managerial Statements Reconciliation | 4^thQuarter of 2015

				Non-recurring						Managerial
In R$ millions	Accounting			Events			Tax Effect of Hedge			Reclassifications			Managerial
Operating Revenues		27,543			(202	)		(499	)		(162	)		26,680
Managerial Financial Margin		17,051			23			(499	)		189			16,764
Financial Margin with Clients		15,283			23			-			189			15,495
Financial Margin with the Market		1,768			-			(499	)		-			1,269
Commissions and Fees		8,201			-			-			(556	)		7,645
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		1,849			(205	)		-			627			2,271
Other Operating Income		277			(3	)		-			(274	)		-
Equity in Earnings of Affiliates and Other Investments		194			(17	)		-			(177	)		-
Non-operating Income		(30	)		-			-			30			-
Result from Loan Losses		(4,384	)		-			-			(250	)		(4,634	)
Provision for Loan Losses		(5,866	)		-			-			(250	)		(6,116	)
Recovery of Loans Written Off as Losses		1,482			-			-			-			1,482
Retained Claims		(406	)		-			-			-			(406	)
Other Operating Income/(Expenses)		(13,699	)		312			80			349			(12,959	)
Non-interest Expenses		(11,782	)		302			-			361			(11,119	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,660	)		10			80			(13	)		(1,582	)
Insurance Selling Expenses		(258	)		-			-			-			(258	)
Income before Tax and Profit Sharing		9,053			110			(419	)		(64	)		8,680
Income Tax and Social Contribution		(3,191	)		(35	)		419			(8	)		(2,815	)
Profit Sharing		(72	)		-			-			72			-
Minority Interests		(92	)		-			-			-			(92	)
Net Income		5,698			75			-			-			5,773

Accounting and Managerial Statements Reconciliation | 3^rd Quarter of 2015

				Non-recurring						Managerial
In R$ millions	Accounting			Events			Tax Effect of Hedge			Reclassifications			Managerial
Operating Revenues		15,265			1,342			10,653			(315	)		26,945
Managerial Financial Margin		5,545			1,342			10,653			55			17,595
Financial Margin with Clients		13,922			1,342			-			55			15,319
Financial Margin with the Market		(8,378	)		-			10,653			-			2,276
Commissions and Fees		7,681			-			-			(599	)		7,082
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		1,700			-			-			568			2,268
Other Operating Income		177			(1	)		-			(176	)		-
Equity in Earnings of Affiliates and Other Investments		153			-			-			(153	)		-
Non-operating Income		9			1			-			(10	)		-
Result from Loan Losses		(9,262	)		4,629			-			(20	)		(4,653	)
Provision for Loan Losses		(10,357	)		4,629			-			(20	)		(5,747	)
Recovery of Loans Written Off as Losses		1,094			-			-			-			1,094
Retained Claims		(437	)		-			-			-			(437	)
Other Operating Income/(Expenses)		(12,491	)		544			(1,063	)		263			(12,748	)
Non-interest Expenses		(11,764	)		556			-			302			(10,906	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(459	)		(12	)		(1,063	)		(39	)		(1,574	)
Insurance Selling Expenses		(268	)		-			-			-			(268	)
Income before Tax and Profit Sharing		(6,926	)		6,515			9,590			(72	)		9,108
Income Tax and Social Contribution		13,010			(6,343	)		(9,590	)		12			(2,911	)
Profit Sharing		(60	)		-			-			60			-
Minority Interests		(79	)		-			-			-			(79	)
Net Income		5,945			172			-			-			6,117

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

We present below the income statement from a standpoint that highlights Operating Revenues, which are composed by the sum of the main accounts in which revenues from banking, insurance, pension plan and premium bonds operations are recorded.

Income Statement | Operating Revenues Perspective

In R$ millions	4Q15			3Q15			change					4Q14			change					2015			2014			change
Operating Revenues		26,680			26,945			(266	)	-1.0	%		23,754			2,926		12.3	%		103,910			89,840			14,070		15.7	%
Managerial Financial Margin		16,764			17,595			(831	)	-4.7	%		14,705			2,059		14.0	%		66,557			55,155			11,402		20.7	%
Financial Margin with Clients		15,495			15,319			176		1.1	%		13,687			1,808		13.2	%		59,580			51,560			8,020		15.6	%
Financial Margin with the Market		1,269			2,276			(1,007	)	-44.2	%		1,018			251		24.6	%		6,977			3,595			3,382		94.1	%
Commissions and Fees		7,645			7,082			563		7.9	%		6,825			820		12.0	%		28,500			25,777			2,723		10.6	%
Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses		2,271			2,268			3		0.1	%		2,224			47		2.1	%		8,853			8,908			(55	)	-0.6	%
Result from Loan Losses		(4,634	)		(4,653	)		19		-0.4	%		(3,284	)		(1,350	)	41.1	%		(18,129	)		(13,023	)		(5,106	)	39.2	%
Provision for Loan Losses		(6,116	)		(5,747	)		(369	)	6.4	%		(4,614	)		(1,502	)	32.6	%		(22,898	)		(18,071	)		(4,827	)	26.7	%
Recovery of Loans Written Off as Losses		1,482			1,094			387		35.4	%		1,330			152		11.4	%		4,769			5,049			(279	)	-5.5	%
Retained Claims		(406	)		(437	)		31		-7.0	%		(497	)		91		-18.3	%		(1,597	)		(2,023	)		426		-21.1	%
Operating Margin		21,639			21,855			(216	)	-1.0	%		19,973			1,666		8.3	%		84,184			74,795			9,390		12.6	%
Other Operating Income/(Expenses)		(12,959	)		(12,748	)		(211	)	1.7	%		(11,633	)		(1,326	)	11.4	%		(49,001	)		(44,439	)		(4,563	)	10.3	%
Non-interest Expenses		(11,119	)		(10,906	)		(212	)	1.9	%		(10,113	)		(1,006	)	9.9	%		(41,886	)		(38,483	)		(3,403	)	8.8	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,582	)		(1,574	)		(9	)	0.6	%		(1,239	)		(343	)	27.7	%		(6,056	)		(4,856	)		(1,200	)	24.7	%
Insurance Selling Expenses		(258	)		(268	)		10		-3.7	%		(281	)		23		-8.2	%		(1,060	)		(1,100	)		40		-3.7	%
Income before Tax and Minority Interests		8,680			9,108			(427	)	-4.7	%		8,340			341		4.1	%		35,183			30,356			4,827		15.9	%
Income Tax and Social Contribution		(2,815	)		(2,911	)		96		-3.3	%		(2,595	)		(220	)	8.5	%		(10,994	)		(9,427	)		(1,568	)	16.6	%
Minority Interests in Subsidiaries		(92	)		(79	)		(13	)	16.4	%		(85	)		(7	)	8.6	%		(356	)		(311	)		(45	)	14.5	%
Recurring Net Income		5,773			6,117			(344	)	-5.6	%		5,660			113		2.0	%		23,832			20,619			3,214		15.6	%

We present below the income statement from the standpoint that highlights the Managerial Financial Margin.

Income Statement | Managerial Financial Margin Perspective

In R$ millions	4Q15			3Q15			change					4Q14			change					2015			2014			change
Managerial Financial Margin		16,764			17,595			(831	)	-4.7	%		14,705			2,059		14.0	%		66,557			55,155			11,402		20.7	%
Financial Margin with Clients		15,495			15,319			176		1.1	%		13,687			1,808		13.2	%		59,580			51,560			8,020		15.6	%
Financial Margin with the Market		1,269			2,276			(1,007	)	-44.2	%		1,018			251		24.6	%		6,977			3,595			3,382		94.1	%
Result from Loan Losses		(4,634	)		(4,653	)		19		-0.4	%		(3,284	)		(1,350	)	41.1	%		(18,129	)		(13,023	)		(5,106	)	39.2	%
Provision for Loan Losses		(6,116	)		(5,747	)		(369	)	6.4	%		(4,614	)		(1,502	)	32.6	%		(22,898	)		(18,071	)		(4,827	)	26.7	%
Recovery of Loans Written Off as Losses		1,482			1,094			387		35.4	%		1,330			152		11.4	%		4,769			5,049			(279	)	-5.5	%
Net Result from Financial Operations		12,130			12,942			(812	)	-6.3	%		11,421			709		6.2	%		48,428			42,133			6,295		14.9	%
Other Operating Income/(Expenses)		(3,450	)		(3,835	)		385		-10.0	%		(3,082	)		(368	)	11.9	%		(13,245	)		(11,777	)		(1,469	)	12.5	%
Commissions and Fees		7,645			7,082			563		7.9	%		6,825			820		12.0	%		28,500			25,777			2,723		10.6	%
Result from Insurance, Pension Plan and Premium Bonds Operations		1,607			1,563			43		2.8	%		1,446			161		11.1	%		6,196			5,785			412		7.1	%
Non-interest Expenses		(11,119	)		(10,906	)		(212	)	1.9	%		(10,113	)		(1,006	)	9.9	%		(41,886	)		(38,483	)		(3,403	)	8.8	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,582	)		(1,574	)		(9	)	0.6	%		(1,239	)		(343	)	27.7	%		(6,056	)		(4,856	)		(1,200	)	24.7	%
Income before Tax and Minority Interests		8,680			9,108			(427	)	-4.7	%		8,340			341		4.1	%		35,183			30,356			4,827		15.9	%
Income Tax and Social Contribution		(2,815	)		(2,911	)		96		-3.3	%		(2,595	)		(220	)	8.5	%		(10,994	)		(9,427	)		(1,568	)	16.6	%
Minority Interests in Subsidiaries		(92	)		(79	)		(13	)	16.4	%		(85	)		(7	)	8.6	%		(356	)		(311	)		(45	)	14.5	%
Recurring Net Income		5,773			6,117			(344	)	-5.6	%		5,660			113		2.0	%		23,832			20,619			3,214		15.6	%

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Net Income

Recurring net income for the fourth quarter of 2015 amounted to R$5,773 million, representing a 5.6% decrease from the previous quarter and a 2.0% increase from the same period of the previous year.

Compared to the previous quarter, the highlights were the increases of 1.1% in the financial margin with clients, of 7.9% in our commissions and fees and of 35.4% in recovery of credits written off as losses. These increases were more than offset by the decrease of 44.2% in our financial margin with the market, the increase of 6.4% in provision for loan losses and the increase of 1.9% in our non-interest expenses.

In 2015, recurring net income was R$23,832 million, 15.6% higher compared to the previous year. The increase in net income was mainly due to an increase of 15.7% in operating revenues, partially offset by the increases of 26.7% in the provision for loan losses and of 8.8% in non-interest expenses.

Return on Average Equity

The annualized recurring return on average equity reached 22.3% in the fourth quarter of 2015. Stockholders’ equity reached R$106.5 billion, a 3.0% increase compared to the previous quarter and an 11.1% increase from the same period of the previous year.

Annualized recurring return on risk-weighted assets reached 1.7% in the fourth quarter of 2015, decreasing 20 basis points from the previous quarter.

Operating Revenues

In the fourth quarter of 2015, operating revenues, representing revenues from banking, and insurance, pension plan and premium bond operations, totaled R$26,680 million, a 1.0% decrease from the previous quarter and a 12.3% increase from the same period of the previous year. The main components of operating revenues and other items of income statement are presented below.

Managerial Financial Margin

The managerial financial margin for the fourth quarter of 2015 totaled R$16,764 million, a decrease of R$831 million compared to the third quarter of 2015, mainly due to the decrease of R$1,007 million in our financial margin with the market. Our financial margin with clients increased R$176 million in the quarter.

Compared to 2014, managerial financial margin increased R$11,402 million. This growth was due to the increases of R$8,020 million in financial margin with clients and of R$3,382 million in financial margin with the market.

Financial Margin of Spread-Sensitive Operations, net of the Provision from Loan Losses

Our financial margin of spread-sensitive operations, net of provision for loan losses and recovery of loans written off as losses, increased 0.5% from the fourth quarter of 2014 and 3.2% when compared to the third quarter of 2015. The ratio of the provision for loan losses, net of recovery of loans written off as losses, to the spread-sensitive operations financial margin reached 34.0% this quarter, decreasing 80 basis points when compared to the previous quarter.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Result from Loan Losses

The result from loan losses decreased 0.4% when compared to the previous quarter, totaling R$4,634 million in the quarter. This decrease was mainly due to the increase of 35.4% (R$387 million) in our revenues from recovery of loans written off as losses, partially offset by an increase of 6.4% (R$369 million) in provision for loan losses.

In 2015, the result from loan losses reached R$18,129 million, a 39.2% increase when compared to the previous year, mainly due to higher provisions for loan losses (26.7%).

Commissions and Fees

Commissions and fees increased R$563 million (7.9%) from the previous quarter, totaling R$7,645 million. Compared to the previous year, these revenues grew R$2,723 million (10.6%).

Result from Insurance, Pension Plan and Premium Bonds

In the fourth quarter of 2015, the result from insurance, pension plan and premium bonds from core activities, which consist of mass-market products related to life, property, credit, pension plan and premium bonds reached R$1,455 million, a decrease of R$14 million when compared to the previous quarter and an increase of R$88 million when compared to the fourth quarter of 2014. The loss ratio of core activities reached 29.4% this quarter.

Non-Interest Expenses

Non-interest expenses increased 1.9% in the fourth quarter of 2015 when compared to the third quarter of 2015. Personnel expenses decreased R$112 million, whereas administrative expenses increased R$208 million in the fourth quarter of 2015 when compared to the previous quarter, mainly due to expenses on third-party services, data processing and telecommunications.

Compared to 2014, non-interest expenses increased R$3,403 million, up 8.8% from the same period of the previous year. Excluding operations abroad expenses, the increase would have been 6.2% in the period.

Efficiency Ratio and Risk-Adjusted Efficiency Ratio ^(*)

(*) Calculation criteria are detailed on page 34.

In the fourth quarter of 2015, efficiency ratio, according to the criteria that include all expenses except result from loan losses, reached 45.5%, an increase of 130 basis points compared to the previous quarter, mainly due to the decrease in financial margin with the market (44.2%) combined with the increase in our non-interest expenses (1.9%). In the 12-month period, the efficiency ratio reached 44.0%, improving 20 basis points from the previous quarter and 300 basis points from the same period of the previous year.

In the fourth quarter of 2015, the risk-adjusted efficiency ratio, which also includes the result from loan losses, reached 64.5%, an increase of 140 basis points when compared to the previous quarter, due to a decrease in the provision for loan losses (0.4%), in addition to the effects previously mentioned. In the 12-month period, risk-adjusted efficiency ratio reached 63.0%.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Balance Sheet | Assets

In R$ millions, end of period	4Q15			3Q15			change			4Q14			change
Current and Long-term Assets		1,340,483			1,303,953			2.8	%		1,188,779			12.8	%
Cash and Cash Equivalents		18,544			18,138			2.2	%		17,527			5.8	%
Short-term Interbank Investments		280,944			229,677			22.3	%		229,828			22.2	%
Securities and Derivative Financial Instruments		338,391			345,844			-2.2	%		299,627			12.9	%
Interbank and Interbranch Accounts		67,373			69,906			-3.6	%		63,810			5.6	%
Loan, Lease and Other Loan Operations		473,829			477,198			-0.7	%		451,760			4.9	%
(Allowance for Loan Losses)		(34,078	)		(34,193	)		-0.3	%		(26,948	)		26.5	%
Other Assets		195,480			197,382			-1.0	%		153,175			27.6	%
Foreign Exchange Portfolio		68,909			64,209			7.3	%		42,392			62.6	%
Other		126,571			133,173			-5.0	%		110,782			14.3	%
Permanent Assets		18,689			18,740			-0.3	%		19,923			-6.2	%
Investments		3,939			3,732			5.5	%		3,526			11.7	%
Real Estate in Use		7,055			7,244			-2.6	%		7,561			-6.7	%
Intangible Assets and Goodwill		7,695			7,763			-0.9	%		8,836			-12.9	%
Total Assets		1,359,172			1,322,693			2.8	%		1,208,702			12.4	%

At the end of the fourth quarter of 2015, our assets totaled R$1.36 trillion, a growth of 2.8% (R$36.5 billion) when compared to the previous quarter. The main changes are presented below:

Compared to the previous year, the increase of 12.4% (R$150.5 billion) was mainly due to the increases in short-term interbank investments, securities and loan operations.

Balance Sheet | Liabilities and Equity

In R$ millions, end of period	4Q15		3Q15		change			4Q14		change
Current and Long-Term Liabilities		1,248,995		1,215,583		2.7	%		1,109,017		12.6	%
Deposits		292,610		300,729		-2.7	%		294,773		-0.7	%
Demand Deposits		61,092		57,388		6.5	%		48,733		25.4	%
Savings Deposits		111,319		111,451		-0.1	%		118,449		-6.0	%
Interbank Deposits		14,949		18,370		-18.6	%		19,125		-21.8	%
Time Deposits		105,250		113,520		-7.3	%		108,465		-3.0	%
Deposits Received under Securities Repurchase Agreements		350,954		317,914		10.4	%		325,013		8.0	%
Fund from Acceptances and Issue of Securities		75,590		59,478		27.1	%		47,750		58.3	%
Interbank and Interbranch Accounts		6,926		11,473		-39.6	%		5,260		31.7	%
Borrowings and Onlendings		104,589		104,580		0.0	%		88,776		17.8	%
Derivative Financial Instruments		31,116		42,346		-26.5	%		17,394		78.9	%
Technical Provisions for Insurance, Pension Plans and Premium Bonds		132,053		126,136		4.7	%		112,675		17.2	%
Other Liabilities		255,155		252,927		0.9	%		217,374		17.4	%
Subordinated Debt		65,785		65,910		-0.2	%		54,569		20.6	%
Foreign Exchange Portfolio		68,466		63,140		8.4	%		43,176		58.6	%
Other		120,905		123,877		-2.4	%		119,629		1.1	%
Deferred Income		1,960		1,908		2.7	%		1,423		37.7	%
Minority Interest in Subsidiaries		1,755		1,849		-5.0	%		2,415		-27.3	%
Stockholders' Equity		106,462		103,353		3.0	%		95,848		11.1	%
Total Liabilities and Equity		1,359,172		1,322,693		2.8	%		1,208,702		12.4	%

The main changes in liabilities at the end of the fourth quarter of 2015, compared to the previous quarter, are presented in the chart below:

Compared to the previous year, the main changes are as follows:

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

Credit Portfolio with Endorsements, Sureties and Private Securities

At the end of the fourth quarter of 2015, our total credit portfolio (including sureties, endorsements and private securities) reached R$585,504 million, decreasing 0.9% when compared to the previous quarter and increasing 4.6% compared to the same period of the previous year. Excluding the effect of the foreign exchange variation, our credit portfolio would have remained unchanged in the period and would have decreased 2.9% in the 12-month period.

In the individuals segment, the highlight in the quarter was the growth of the credit card portfolio (6.3%) and of the mortgage loan portfolio (3.4%). In the 12-month period, the highlights were the payroll loan and mortgage loan portfolios, which increased 12.1% and 19.8%, respectively, whereas the vehicles portfolio decreased 7.6% in the quarter and 30.9% in the 12-month period.

The companies segment, excluding private securities, decreased 1.8% in the quarter and increased 0.9% in the 12-month period. The corporate portfolio decreased 1.6% when compared to the previous quarter and increased 2.0% in the 12-month period, whereas the very small, small and middle market companies portfolio decreased 2.4% when compared to the previous quarter and 1.7% in the 12-month period. Excluding the effect of the foreign exchange variation, the corporate portfolio would have decreased 1.0% when compared to the previous quarter and 9.2% in the 12-month period.

The balance of our operations in Latin America decreased 0.6% in the quarter and increased 34.8% in the 12-month period. Excluding the effect of the foreign exchange variation, the growth of this portfolio would have been 4.9% when compared to the previous quarter and 7.3% in the 12-month period.

The balance of endorsements and sureties reached R$74,244 million at the end of the fourth quarter of 2015, with a decrease of 1.2% when compared to the previous quarter and an increase of 0.7% in the past 12 months, mainly due to changes in the Latin America portfolio, which decreased 8.9% from the previous quarter and increased 28.8% in the 12-month period.

In R$ millions, end of period	4Q15		3Q15		change			4Q14		change
Individuals		187,556		186,128		0.8	%		186,212		0.7	%
Credit Card Loans		58,542		55,051		6.3	%		59,321		-1.3	%
Personal Loans		28,961		30,256		-4.3	%		28,541		1.5	%
Payroll Loans ⁽¹⁾		45,437		45,695		-0.6	%		40,525		12.1	%
Vehicle Loans		19,984		21,632		-7.6	%		28,927		-30.9	%
Mortgage Loans		34,631		33,493		3.4	%		28,898		19.8	%
Companies		288,393		293,686		-1.8	%		285,816		0.9	%
Corporate Loans ⁽²⁾		205,704		208,947		-1.6	%		201,692		2.0	%
Very Small, Small and Middle Market Loans ⁽³⁾		82,688		84,739		-2.4	%		84,125		-1.7	%
Latin America ^{(2) (4)}		72,125		72,528		-0.6	%		53,491		34.8	%
Total with Endorsements and Sureties		548,073		552,342		-0.8	%		525,519		4.3	%
Corporate - Private Securities ⁽⁵⁾		37,431		38,332		-2.4	%		34,175		9.5	%
Total with Endorsements, Sureties and Private Securities		585,504		590,674		-0.9	%		559,694		4.6	%
Total with Endorsements, Sureties and Private Securities ⁽⁶⁾ (ex-foreign exchange rate variation)		585,504		585,556		0.0	%		603,046		-2.9	%
Endorsements and Sureties		74,244		75,143		-1.2	%		73,759		0.7	%
Individuals		550		545		1.0	%		552		-0.4	%
Corporate		65,976		66,499		-0.8	%		66,159		-0.3	%
Very Small, Small and Middle Market		4,067		4,092		-0.6	%		4,213		-3.5	%
Latin America ⁽⁴⁾		3,650		4,007		-8.9	%		2,835		28.8	%

(1) Includes operations originated by the institution and acquired operations. (2) Certain credits that were classified as a Corporate Loans were reclassified to Latin America segment and for comparison purposes, prior periods have been reclassified. (3) Includes Rural Loans to Individuals. (4) Includes Argentina, Chile, Colombia, Paraguay and Uruguay. (5) Includes Debentures, CRI and Commercial Paper. (6) Calculated based on the conversion of the foreign currency portfolio (U.S. dollar and currencies of Latin America). Note: Mortgage and Rural Loan portfolios from the companies segment are allocated according to the client’s size. For further details, please refer to page 18.

Credit Portfolio – Currency Breakdown

On December 31, 2015, R$147.1 billion of our total credit assets were denominated in or indexed to foreign currencies. That portion decreased 3.5% in the quarter, mainly due to the appreciation of the Brazilian real against the U.S. dollar and the currencies of other Latin American countries.

NPL Ratio (90 days overdue)

At the end of the fourth quarter of 2015, the NPL ratio for operations overdue for over 90 days (NPL 90) increased 20 basis points when compared to the previous quarter and 40 basis points compared to December 2014. At the end of the fourth quarter, there were transfers of financial assets with no risk retention and with low probability of recovery, to affiliated company, related to specific economic groups. Excluding the effect of the transfer of financial assets, the NPL ratio for operations overdue for over 90 days of the total portfolio and of the companies portfolio would have reached 3.7% and 2.3%, respectively, in December 2015.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Executive Summary

2015 Forecast ^(*)

The table below presents the results for 2015 compared with our forecast previously disclosed:

		Actual

Total Credit Portfolio ¹	Growth of 3.0% to 7.0%	Growth of 4.6% ²

Managerial Financial Margin ³	Growth of 14.5% to 17.5%	Growth of 20.7%

Provision for Loan Losses Net of Recovery of Loans	Between R$15 billion and R$18 billion	R$18.1 billion

Commissions and Fees and Result from Insurance Operations ⁴	Growth of 9.5% to 11.5%	Growth of 9.9%

Non-Interest Expenses	Growth of 7.0% to 10.0%	Growth of 8.8%

2016 Forecast ^(*)

The table below presents our 2016 forecast:

	Consolidated	Brazil ⁵

Total Credit Portfolio ¹	from -0.5% to 4.5%	from -1.0% to 3.0%

Financial Margin with Clients	Growth of 2.0% to 5.0%	Growth of 1.0% to 4.0%

Provision for Loan Losses Net of Recovery of Loans	Between R$22 billion and R$25 billion	Between R$21 billion and R$24 billion

Commissions and Fees ⁴	Growth of 6.0% to 9.0%	Growth of 4.5% to 7.5%

Non-Interest Expenses	Growth of 5.0% a 7.5%	Growth of 4.0% a 6.5%

(1)

Includes endorsements, sureties and private securities;

(2)

Excluding foreign exchange rate variation - Decrease of 2.9%

(3)

Includes Financial Margin with Clients and Financial Margin with the Market;

(4)

Commissions and Fees (+) Income from Insurance, Pension Plan and Premium Bonds Operations (-) Expenses for Claims (-) Insurance, Pension Plan and Premium Bonds Selling Expenses;

(5)

Includes units abroad ex-Latin America.

(*)

Does not include the effect of CorpBanca´s transaction.

Although the growth plans and projections of results presented above are based on management assumptions 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 beyond our control. These risks and uncertainties include, but 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 on products, prices and changes in tax legislation, among others.

Itaú Unibanco Holding S.A.

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Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Managerial Financial Margin

The managerial financial margin for the fourth quarter of 2015 totaled R$16,764 million, decreasing R$831 million or 4.7% when compared to the previous quarter.

In 2015, the managerial financial margin totaled R$66,557 million, increasing R$11,402 million or 20.7% when compared to 2014. The main drivers of these changes are presented below:

In R$ millions	4Q15		3Q15		change					2015		2014		change
Financial Margin with Clients		15,495		15,319		176		1.1	%		59,580		51,560		8,020	15.6	%
Spread-Sensitive Operations		13,629		13,367		262		2.0	%		52,720		46,220		6,500	14.1	%
Working Capital and Other		1,866		1,952		(86	)	-4.4	%		6,860		5,340		1,520	28.5	%
Financial Margin with the Market		1,269		2,276		(1,007	)	-44.2	%		6,977		3,595		3,382	94.1	%
Total		16,764		17,595		(831	)	-4.7	%		66,557		55,155		11,402	20.7	%

Managerial Financial Margin with Clients

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

For clarity purposes, we classify these operations into two different groups: i) financial margin on spread-sensitive operations and ii) working capital and other.

In the fourth quarter of 2015, financial margin with clients totaled R$15,495 million, an increase of 1.1% when compared to the previous quarter, due to the increased margin on spread-sensitive operations, which was higher than the reduction in the margin of working capital and other.

In 2015, our financial margin with clients totaled R$59,580 million, an increase of 15.6% when compared to 2014, due to the higher margin of spread-sensitive operations and of working capital and other.

Spread-Sensitive Operations

The financial margin of spread-sensitive operations, which includes the results from credit assets, non-credit assets and liabilities, totaled R$13,629 million in the fourth quarter of 2015, an increase of 2.0%, or R$262 million when compared to the previous period.

In 2015, the financial margin of spread-sensitive operations reached R$52,720 million and increased 14.1% or R$6,500 million when compared to the previous year.

Annualized Rate of Spread-Sensitive Operations

In R$ millions	4Q15			3Q15			change
Average Balance		510,263			511,977			(1,715	)	-0.3	%
Financial Margin		13,629			13,367			262		2.0	%
Average Rate ( p.a. )		11.0	%		10.8	%				20	bps

Working Capital and Other

The financial margin of working capital and other reached R$1,866 million in the fourth quarter of 2015, a 4.4% decrease when compared to the third quarter of 2015, mainly due to the lower average CDI rate in the quarter.

Annualized Rate of Working Capital and Other

In R$ millions	4Q15			3Q15			change
Average Balance		77,412			69,383			8,029		11.6	%
Financial Margin		1,866			1,952			(86	)	-4.4	%
Average Rate ( p.a. )		9.9	%		11.6	%				-170	bps
CDI - Annualized Quarterly Rate		13.8	%		14.0	%				-20	bps

Managerial Financial Margin with the Market

The financial margin with the market consists of treasury transactions that include Asset and Liability Management (ALM) and proprietary trading operations.

The financial margin with the market in the fourth quarter of 2015 totaled R$1,269 million, driven by the management of structural positions in Brazil and abroad.

Financial Margin with the Market

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Managerial Financial Margin with Clients

As a result of the previously mentioned changes, the annualized average rate of managerial financial margin with clients, which excludes the financial margin with the market, reached 10.9% in the fourth quarter of 2015, remaining stable when compared to the third quarter of 2015.

The annualized average rate of risk-adjusted financial margin with clients reached 7.5% in the fourth quarter of 2015, with an increase of 10 basis points when compared to the previous quarter.

The annualized average rate of spread-sensitive operations reached 11.0% in the quarter, with an increase of 20 basis points when compared to the previous quarter.

The annualized average rate of risk-adjusted financial margin of spread-sensitive operations reached 7.1% in the fourth quarter of 2015, with an increase of 20 basis points when compared to the previous quarter.

	4Q15								3Q15								2015
	Average		Financial			Average			Average		Financial			Average			Average		Financial			Average
In R$ millions, end of period	Balance		Margin			Rate (p.a.)			Balance		Margin			Rate (p.a.)			Balance		Margin			Rate (p.a.)
Spread-Sensitive Operations		510,263		13,629			11.0	%		511,977		13,367			10.8	%		507,356		52,720			10.8	%
Working Capital and Other		77,412		1,866			9.9	%		69,383		1,952			11.6	%		69,164		6,860			10.3	%
Financial Margin with Clients		587,675		15,495			10.9	%		581,360		15,319			10.9	%		576,520		59,580			10.7	%
Provision for Loan Losses				(6,116	)							(5,747	)							(22,898	)
Recovery of Loans Written Off as Losses				1,482								1,094								4,769
Financial Margin of Spread-Sensitive Operations after Provisions for Credit Risk		510,263		8,994			7.1	%		511,977		8,714			6.9	%		507,356		34,591			7.0	%
Financial Margin with Clients after Provisions for Credit Risk		587,675		10,861			7.5	%		581,360		10,666			7.4	%		576,520		41,451			7.3	%

Financial Margin with Clients and Spread-Sensitive Operations before and after Provisions for Credit Risk

Composition of the Change in the Financial Margin with Clients

In order to better demonstrate the effect of the changes in our financial margin, we segregated the effects of changes in the balance of spread-sensitive operations, mix of products, clients and spreads and working capital and other effects.

In the fourth quarter of 2015, the 1.1% increase in our financial margin with clients was mainly driven by the positive effect of the mix of products, clients and spreads, which more than offset the negative effect of the lower volume of spread-sensitive operations and the decrease in working capital margin and other.

Financial Margin with Clients Change

^(*)Balances do not include the effects of foreign exchange rate variations.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Credit Portfolio

Credit Portfolio by Product

In the table below, the loan 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.

In R$ millions, end of period	4Q15		3Q15		change			4Q14		change
Individuals		209,319		207,257		1.0	%		201,760		3.7	%
Credit Card		58,542		55,051		6.3	%		59,321		-1.3	%
Personal Loans		28,411		29,712		-4.4	%		27,988		1.5	%
Payroll Loans ⁽¹⁾		45,437		45,695		-0.6	%		40,525		12.1	%
Vehicles		19,984		21,632		-7.6	%		28,927		-30.9	%
Mortgage Loans		34,631		33,493		3.4	%		28,898		19.8	%
Rural Loans		258		257		0.4	%		277		-6.9	%
Latin America ⁽²⁾		22,055		21,416		3.0	%		15,823		39.4	%
Companies		264,511		269,942		-2.0	%		250,000		5.8	%
Working Capital ^{(3) (5)}		107,850		107,536		0.3	%		108,526		-0.6	%
BNDES/Onlending		48,559		50,890		-4.6	%		52,018		-6.6	%
Export / Import Financing ⁽⁵⁾		37,071		39,043		-5.1	%		30,738		20.6	%
Vehicles		4,253		4,715		-9.8	%		5,573		-23.7	%
Mortgage Loans		10,966		11,021		-0.5	%		10,336		6.1	%
Rural Loans		9,393		9,634		-2.5	%		7,977		17.8	%
Latin America ^{(2) (5)}		46,419		47,104		-1.5	%		34,833		33.3	%
Total without Endorsements and Sureties		473,829		477,198		-0.7	%		451,760		4.9	%
Endorsements and Sureties		74,244		75,143		-1.2	%		73,759		0.7	%
Total with Endorsements and Sureties		548,073		552,342		-0.8	%		525,519		4.3	%
Corporate Private Securities ⁽⁴⁾		37,431		38,332		-2.4	%		34,175		9.5	%
Total Risk		585,504		590,674		-0.9	%		559,694		4.6	%

(1) Includes operations originated by the institution and acquired operations. (2) Includes Argentina, Chile, Colombia, Paraguay and Uruguay; (3) Also includes Overdraft, Receivables, Hot Money, Leasing, and other; (4) Includes Debentures, CRI and Commercial Paper. (5) Certain credits that were classified as Working Capital and Export / Import Financing were reclassified to the Latin America segment, and for comparison purposes, prior periods have been reclassified.

Individuals portfolio reached R$209,319 million at the end of the fourth quarter of 2015, an increase of 1.0% when compared to the previous quarter. In this quarter, the highlight was the growth of 6.3% in the credit card portfolio, reaching R$58,542 million, of 3.4% in mortgage loans, reaching R$34,631 million, and of 3.0% in the Individuals portfolio - Latin America, reaching R$22,055 million. Our vehicle portfolio decreased 7.6% reaching R$19,984 million.

The companies loan portfolio decreased 2.0% in the fourth quarter of 2015, totaling R$264,511 million. Changes in this portfolio were mainly driven by decreases of 9.8% in vehicle portfolio, which reached R$4,253 million, of 5.1% in export-import financing, which reached R$37,071 million, of 4.6% in BNDES/Onlending, which reached R$48,559 million, and of 1.5% in the companies portfolio – Latin America, which reached R$46,419 million.

Excluding the effect of the foreign exchange variation and corporate private securities, the loan portfolio, without endorsements and sureties, would have increased 0.3% when compared to the previous quarter and decreased 3.7% in the 12-month period.

Credit Portfolio by Business Sector (including endorsements and sureties)

The changes in the companies loans portfolio, including the Latin America portfolio, are listed below:

In R$ millions, end of period	4Q15		3Q15		change
Public Sector		4,648		4,719		(71	)	-1.5	%
Private Sector \| Companies		329,428		335,598		(6,170	)	-1.8	%
Vehicles and auto parts		21,867		22,597		(731	)	-3.2	%
Real Estate		21,124		21,310		(185	)	-0.9	%
Food and beverage		20,484		20,131		353		1.8	%
Transportation		16,695		17,766		(1,071	)	-6.0	%
Agribusiness and fertilizers		16,403		17,219		(815	)	-4.7	%
Energy and water treatment		13,750		12,865		885		6.9	%
Steel and metallurgy		13,234		13,816		(581	)	-4.2	%
Sugar and Alcohol		11,028		11,290		(262	)	-2.3	%
Banks and other financial institutions		10,255		10,753		(498	)	-4.6	%
Petrochemical and chemical		9,977		10,164		(186	)	-1.8	%
Telecommunications		9,614		9,421		194		2.1	%
Capital Assets		9,366		9,643		(277	)	-2.9	%
Mining		8,214		7,948		266		3.3	%
Construction Material		7,457		7,777		(320	)	-4.1	%
Pharmaceutical and cosmetics		6,791		6,973		(182	)	-2.6	%
Infrastructure work		6,745		7,100		(354	)	-5.0	%
Oil and gas		6,497		7,176		(678	)	-9.5	%
Electronic and IT		6,267		6,646		(379	)	-5.7	%
Clothing and footwear		5,312		5,505		(193	)	-3.5	%
Services - Other		31,397		32,016		(619	)	-1.9	%
Commerce - Other		19,208		17,695		1,513		8.6	%
Industry - Other		9,547		9,902		(355	)	-3.6	%
Other		48,195		49,890		(1,695	)	-3.4	%
Total		334,076		340,317		(6,241	)	-1.8	%

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Credit Concentration

Our loan, lease and other credit operations, including endorsements and sureties, are spread over our loan portfolio in a way that only 22.6% of the credit risk was concentrated on the 100 largest debtors at the end of the fourth quarter of 2015. The credit concentration of the 100 largest debtors (group consolidated) is as follows:

In R$ millions, end of period	Risk		% of total credits		% of total Assets
Largest Debtor		4,754		0.9		0.3
10 Largest Debtors		35,526		6.5		2.6
20 Largest Debtors		55,185		10.1		4.1
50 Largest Debtors		92,745		16.9		6.8
100 Largest Debtors		123,664		22.6		9.1

Renegotiated Loan Operations

According to the rules of CMN Resolution No. 2,682/99, balances of all contracts that have had changes to their original contractual terms should be reported as renegotiated loans. To allow a better understanding, we segregate renegotiated loans into those that had changes in the original contractual terms, but were not overdue or were less than 30 days overdue, and into those that had credits renegotiated when overdue more than 30 days, as shown below:

In R$ millions, end of period	Portfolio			LLP			%
Total Renegotiated Loans Operations		22,951			(7,792	)		33.9	%
Renegotiated Loans Operations less than 30 days overdue*		(8,020	)		1,417			17.7	%
Renegotiated Loans Operations over 30 days overdue*		14,932			(6,375	)		42.7	%

* Measured at the moment of renegotiation.

Further information in Note 8-d of our financial statements.

Total renegotiated loan operations include all operations under renegotiation, either non overdue, overdue, or coming from the recovery of loans written off as losses. In the case of write-offs, we recognize a provision for the total amount renegotiated (therefore not generating an immediate result) that is reversed only when there is a strong indication of the recovery of this credit (after payments are received on a regular basis for a few months).

On December 31, 2015, total renegotiated loans reached R$22,951 million, with an increase of R$1,049 million when compared to the previous quarter, while loans that were overdue for more than 30 days when renegotiated totaled R$14,932 million, an increase of R$1,391 million.

At the end of the fourth quarter of 2015, total renegotiated loans accounted for 4.8% of our loan portfolio, whereas renegotiated loans overdue for more than 30 days accounted for 3.2% of this portfolio. The following chart presents this change:

The NPL 90 of renegotiated loans overdue for more than 30 days reached 18.8% at the end of the fourth quarter of 2015, and the coverage ratio of these loans overdue for more than 90 days reached 228%. The evolution of these ratios is presented below:

Loan Portfolio by Origination Period

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

Given the profile of the terms of our different credit products, the composition of new contract vintages also showed a similar profile over the past periods. At the end of December 2015, 57.3% of the loan portfolio was composed of vintages of 2015.

Sale and Transfer of Financial Assets

In the fourth quarter of 2015, there were transfers of financial assets with no risk retention, to affiliated company, of R$1,249 million and with a 75% average provision. Due to lower probability of recovery, these credits were transferred for the amount of R$301 million, based on appraisal report. This operation generated a negative impact on income before taxes of R$15 million. In addition, R$17 million was provisioned and the combined negative impact on net income was R$17 million.

The bank also transferred assets to non-affiliated companies in the amount of R$946 million, which positively impacted net income by R$45 million. These operations are mainly related to non-overdue student loan portfolios from our operations in Chile, in accordance with local legislation.

Additionally, we sold portfolios that were already written off as losses. This sale positively impacted our net income by R$29 million in the fourth quarter of 2015.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Loan Portfolio Mix Evolution in Brazil (excluding endorsements and sureties)

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

Loan Portfolio Mix - Companies

The proportion of credits to very small, small and middle market companies has decreased when compared to credits to large companies in our loan portfolio mix, which can be seen in the chart below.

Loan Portfolio Mix – Individuals

The evolution of our loan portfolio mix for individuals in past periods shows the growth of the payroll loan and mortgage loan portfolios, which currently represent the second and third largest balances in our individuals portfolio. The decrease in the share of vehicle financing is a result of the nominal balance reduction of this portfolio.

We present below additional information about Payroll Loans, Mortgage Loans and Vehicle Financing.

Payroll Loans

We operate in the payroll loans market through two different distribution channels: directly through our own distribution network (branches, CSBs and electronic channels) and through Banco Itaú BMG Consignado S.A., a financial institution controlled by us aimed at offering, distributing and marketing payroll loans. This operation started in December 2012 and enables us to expand our business in this segment, based on our values and transparency principles, following our good management practices and policies.

Evolution of the Payroll Loan Portfolio and NPL

At the end of December 2015, total payroll loans reached R$45,437 million, a 12.1% (R$4,912 million) increase in 12 months. The highlights were the portfolio of loans to retirees and pensioners of the INSS and to public servants, which, together, grew 13.7% compared to the end of December 2014.

Payroll loans originated by the branch network totaled R$16,167 million on December 31, 2015, a 15.9% increase in 12 months, whereas payroll loans originated by other channels reached R$29,271 million, up 10.1% compared to the same period of the previous year.

Evolution of Payroll Loan Portfolio

Our strategy of higher growth in the INSS Beneficiaries segment, combined with the credit policies adopted, allowed the portfolio growth to be followed by a low delinquency level over the last two years. A slower pace of the portfolio growth drove the recent increase in 90-day NPL.

90-day NPL ratio (Mar -12 = 100) | Total Payroll Loan Portfolio

Note: Comparable to the National Financial System information disclosed by the Brazilian Central Bank.

Evolution of the Share of Payroll Loans in Personal Loans

The increase in the payroll loans balance allowed for a higher share of the personal loans, which reached 61.1% in this period from 58.7% in December 2014.

Mortgage Loans

Our mortgage portfolio reached R$45.597 million at the end of December 2015. Our portfolio grew 2.4% in the quarter and 16.2% in the past 12 months. The individuals portfolio, totaling R$34,631 million at the end of this quarter, increased 3.4% when compared to the previous quarter and 19.8% in twelve months. At the end of December 2015, the companies portfolio totaled R$10,966 million, a 0.5% decrease from the previous quarter and a 6.1% increase in the past twelve months.

Evolution of the Mortgage Portfolio

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

In the fourth quarter of 2015, the volume of new mortgage loan financing for individuals was R$2,384 million, whereas financing to companies amounted to R$702 million, totaling R$3,086 million.

Origination Volume

In R$ millions	4Q15		3Q15		change			4Q14		change
Individuals		2,384		2,868		-16.9	%		2,491		-4.3	%
Companies		702		974		-28.0	%		1,763		-60.2	%
Total		3,086		3,841		-19.7	%		4,253		-27.4	%

Source: ABECIP.

Our individual mortgage loan portfolio collaterals are under the legal framework of fiduciary lien (alienação fiduciária) and account for 99.6% of the portfolio. Since 2007, we have been using this framework for 100% of our contracts.

Our new financing contracts use the Constant Amortization System, through which decreasing installments lead to faster balance amortization, reducing the loan-to-value ratio (ratio of the amount of the financing to the value of the real estate property) at a faster pace than other amortization systems.

The portfolio loan-to-value (LTV) reached 43.7% at the end of December 2015, an increase of 130 basis points when compared to December 2014.

The average quarterly LTV of the originated vintages reached 55.3%, down 190 basis points from the LTV of vintages originated in the third quarter of 2015 and down 430 basis points from the same period of 2014.

Loan–to-value | Vintage and Portfolio

In the current period, the 90-day NPL of the vintages originated in June 2015 reached 0.16%, remaining at levels that demonstrates the high credit quality of the portfolio.

NPL over 90 (%) | Six months after origination

Note: Loan portfolio to individuals.

Vehicle Financing

Our portfolio of vehicle financing to individuals totaled R$19,984 million, and to companies reached R$4,253 million, totaling R$24,237 million on December 31, 2015.

This quarter, the average amount of vehicle financing to individuals originated by the branch network, dealerships and car retailers was R$24.4 thousand, with an average term of 40 months and average down payment of 43%. Both the average down payment and financing term remained steady over 2015.

Average Term and Down Payment - Individuals

New loans granted to individuals through our branches, dealerships and car retailers totaled R$2,187 million, whereas new loans granted to companies totaled R$515 million in the fourth quarter of 2015.

The loan-to-value of our vehicle portfolio reached 70.8% at the end of December 2015, continuing the declining trend of the past few quarters.

Loan–to-value | Portfolio ^(*)

(*) Loans originated by dealerships and car retailers to individuals and companies.

The 90-day NPL of vintages originated in August 2015 reached 0.35% in December 2015.

NPL over 90 (%) | Four months after origination

In this quarter, we received a monthly average of 13.9 million visits through iCarros, a classified ads website that facilitates the purchase and sale of new and used vehicles.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Result from Loan Losses

In R$ millions	4Q15			3Q15			change					2015			2014			change
Provision for Loan Losses		(6,116	)		(5,747	)		(369	)	6.4	%		(22,898	)		(18,071	)		(4,827	)	26.7	%
Recovery of Loans Written Off as Losses		1,482			1,094			387		35.4	%		4,769			5,049			(279	)	-5.5	%
Result from Loan Losses		(4,634	)		(4,653	)		19		-0.4	%		(18,129	)		(13,023	)		(5,106	)	39.2	%

Result from loan losses (provision, net of recovery of loans written off as losses) totaled R$4,634 million in the fourth quarter of 2015, a 0.4% decrease when compared to the previous quarter. Provision for loan losses was up 6.4% when compared to the previous quarter, whereas revenues from recovery of loans written off as losses increased 35.4% from the previous quarter.

The increase in recovery of loans written off as losses compared to the third quarter was mainly due to the restructuring of one operation of a specific group of the corporate segment that had already been written off as a loss. This restructuring totaled R$488 million, of which R$283 million refers to financial assets received and R$205 million to a new loan operation which was booked with 100% of provision in accordance to the current regulation. There was a negative adjust of R$125 million in the financial margin with the market to adjust to market value the financial asset received. This operation generated an effect of R$158 million before taxes and of R$87 million in our net income.

In 2015, the result from loan losses totaled R$18,129 million, with a 39.2% increase from 2014. This increase was mainly driven by higher provision for loan losses, which totaled R$22,898 million in the period, mainly due to increases in provisions for economic groups of the corporate segment in 2015. Additionally, income from recovery of loans written off as losses amounted to R$4,769 million in 2015, a 5.5% decrease when compared to 2014.

Provision for Loan Losses by Segment

Note: Retail Banking includes loan loss provisions expenses of Corporation segment.

In the fourth quarter of 2015, provision for loan losses totaled R$4,621 million in the Retail segment, a 7.4% increase from the previous quarter, and totaled R$1,495 million in the Wholesale segment, a 3.4% increase from the previous quarter.

Provision for Loan Losses and Loan Portfolio

The ratio of provision for loan losses to the loan portfolio reached 5.2% in the fourth quarter of 2015, an increase of 30 basis points from the previous quarter.

The ratio of the result from loan and lease losses to the loan portfolio reached 4.0% this quarter, remaining stable compared to the previous period.

Result from Loan Losses and Loan Portfolio

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

Allowance for Loan Losses and Loan Portfolio

At the end of December 2015, the loan portfolio without endorsements and sureties increased 4.9% from December 2014, totaling R$473,829 million, whereas allowance for loan losses increased 26.5% in twelve months, totaling R$34,078 million. The allowance for loan losses grew mainly due to the recognition of complementary allowance, in the amount of R$4,655 million in 2015.

The decrease in the allowance for loan losses in the quarter was mainly a result of a transfer of financial assets with no risk retention, to affiliated company, related to operations of specific economic groups that happened in December 2015. The balance of these operations was partially provided for (F, G and H ratings) at the time of the transfer and, therefore, our net income was negatively impacted by approximately R$17 million.

The ratio of the allowance for loan losses without complementary allowance to the loan portfolio balance reached 4.9% on December 31, 2015, a 30-basis-point increase in twelve months.

The balance of the complementary allowance includes provisions recognized for endorsements and sureties, which totaled R$404 million.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Delinquency Ratios

Nonperforming Loans

(*) Overdue loans are loan operations having at least one installment more than 14 days overdue, irrespective of collateral provided.

The overdue loan portfolio decreased 6.3% from the previous quarter and increased 11.7% from December 2014.

The coverage ratio, which is the ratio of allowance for loan losses to the total overdue loan portfolio, reached 126% at the end of December 2015, up 1500 basis points compared to December 2014, mainly due to the increase in the complementary allowance for loan losses.

The portfolio of credits overdue for over 90 days increased 2.8% from the previous quarter and 17.5% from the same period of the previous year, whereas the portfolio of credits overdue for over 60 days increased 2.9% and 17.8% in the same comparative periods, respectively. Had we not transferred the financial assets as mentioned before, the balance of credits overdue for more than 90 days would have reached R$17,661 million in December 2015.

NPL Ratio (%) | over 90 days

The NPL ratio of credits overdue for more than 90 days increased 20 basis points when compared to the previous quarter and reached 3.5% in the end of December 2015. When compared to December 2014, there was a 40 basis points increase.

For individuals, this ratio increased 30 basis points when compared to the previous quarter and 70 basis points when compared to the same period of 2014.

For companies this ratio decreased 10 basis points when compared to September 2015. Foreign exchange rate variation had no significant impact in the quarter. Had we not transferred the financial assets as mentioned before, the 90-day NPL of the total portfolio and the companies portfolio would have reached 3.7% and 2.3%, respectively, in December 2015.

NPL Ratio (%) | over 90 days

Corporate, Very Small, Small and Middle Market Companies

The 90-day NPL for large companies reached 0.9% in the quarter, a decrease of 40 basis points when compared to the previous quarter. Had we not transferred the financial assets as mentioned before, the ratio would have reached 1.7% as of December 2015.

The ratio for very small, small and middle-market companies increased 30 basis points from the previous quarter and reached 3.4%.

NPL Ratio (%) | 15 to 90 days

Short-term delinquency, measured based on the balance of operations overdue from 15 to 90 days (NPL 15-90) decreased 40 basis points when compared to September 2015. In the quarter, the ratio for individuals decreased 30 basis points and for companies it decreased 40 basis points.

In the 12-month period, the NPL 15-90 increased 10 basis points, driven by the increase of 10 basis points in the companies ratio. The ratio for individuals reached 3.8% in December 2015, the same ratio as in December 2014.

NPL Ratio by Activity Sector

In R$ millions, end of	Total		NPL			NPL Over 90
December 2015	Portfolio		15-90 days			days
Public Sector		3,182		0.0	%		0.0	%
Private Sector		470,647		2.6	%		3.5	%
Companies		257,229		1.6	%		1.9	%
Industry and Commerce		125,281		1.5	%		2.0	%
Services		104,139		1.7	%		1.7	%
Primary Sector		25,285		1.8	%		2.5	%
Other		2,524		0.6	%		0.6	%
Individuals		213,419		3.8	%		5.4	%
Total		473,829		2.6	%		3.5	%

Regarding the NPL by activity sector, the 90-day NPL for industry and commerce was 2.0%, for services was 1.7% and for the primary sector was 2.5%. For further information on NPL Ratios by Activity, please refer to the Risk Management Report required by Circular No. 3,678 of the Brazilian Central Bank of October 31, 2013, which is available on our Investor Relations website.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Coverage Ratio | 90 days

Note: Coverage ratio is derived from the division of the allowance for loans losses balance by the balance of operations more than 90 days overdue.

The 90-day coverage ratio reached 208% on December 31, 2015, a 600 basis point decrease compared to the previous quarter and up 1,500 basis points from December 2014, mainly due to the increase in complementary allowance of R$4,655 million recognized in the third quarter of 2015. Had we not transferred the financial assets mentioned on page 19 of this report, the coverage ratio would have reached 198% in December 2015.

Loan Portfolio Risk Level

Our credit risk management is aimed at maintaining the quality of the loan portfolio at levels appropriate for each market segment in which we operate.

We improved the guarantee control system (vehicles, mortgage loans, financial investments, among others) to capture the updated market values for these individual operations. Therefore, operations with guarantees where the updated amount exceeds the debt balance are classified at better risk levels. On the other hand, operations with guarantees where the updated amount is insufficient to mitigate the entire risk are classified at worse risk levels.

On December 31, 2015, the portfolios rated “AA” and “A” accounted for 79.6% of the total loan portfolio.

Total loans rated from “D” to “H” accounted for 8.7% of total loans, 30 basis points higher compared to the previous quarter.

Loan Portfolio Evolution by Risk Level

Note: Does not consider endorsements and sureties.

Loan Portfolio Write-Off

(*) Loan portfolio average balance for the previous two quarters.

Loan portfolio write-off totaled R$4,891 million in the fourth quarter of 2015, a R$77 million decrease when compared to the previous quarter.

The ratio of written-off operations to the average balance of the loan portfolio reached 1.0%, unchanged from the same period of the previous year, and decreased 10 basis points when compared to the previous quarter.

Recovery of Loans Written off as Losses

In the fourth quarter of 2015, recovery of loans written off as losses increased R$387 million, or 35.4%, from the previous quarter, and R$152 million, or 11.4%, from the fourth quarter of 2014.

The increase in the quarter was mainly driven by the recovery of loans written off as losses of a specific group in the corporate segment that amounted R$488 million.

Additionally we sold portfolios that were already written off as losses. This operation generated an impact on recovery of loans written off as losses of R$53 million in the fourth quarter of 2015. The impact of this sale on the net income was R$29 million.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Commissions and Fees and Result from Insurance, Pension Plan and Premium Bonds

In R$ millions	4Q15		3Q15		change					4Q14		change				2015		2014		change
Asset Management		756		760		(4	)	-0.5	%		650		106	16.3	%		2,867		2,642		224		8.5	%
Current Account Services		1,623		1,462		161		11.0	%		1,293		330	25.5	%		5,858		4,876		983		20.2	%
Credit Operations and Guarantees Provided		840		824		16		1.9	%		799		41	5.2	%		3,264		3,033		231		7.6	%
Collection Services		382		383		(1	)	-0.3	%		368		14	3.8	%		1,515		1,528		(12	)	-0.8	%
Credit Cards		3,204		2,929		275		9.4	%		2,996		208	6.9	%		11,946		11,046		900		8.1	%
Other		840		725		116		16.0	%		719		121	16.8	%		3,050		2,652		398		15.0	%
Commissions and Fees		7,645		7,082		563		7.9	%		6,825		820	12.0	%		28,500		25,777		2,723		10.6	%
Result from Insurance, Pension Plan and Premium Bonds		1,607		1,563		43		2.8	%		1,446		161	11.1	%		6,196		5,785		412		7.1	%
Total		9,251		8,645		606		7.0	%		8,271		981	11.9	%		34,696		31,562		3,134		9.9	%
(-) Result from Other Insurance Activities(*)		152		95		57		60.6	%		80		73	91.2	%		430		536		(106	)	-19.8	%
Total excluding Other Insurance Activities(*)		9,099		8,551		549		6.4	%		8,191		908	11.1	%		34,266		31,026		3,240		10.4	%

In the fourth quarter of 2015, commissions and fees amounted to R$7,645 million, an increase of 7.9% when compared to the previous quarter and of 12.0% when compared to the fourth quarter of 2014.

In the year, these revenues reached R$28,500 million, a 10.6% increase from the same period of the previous year, mainly driven by higher revenues from credit card and current account services.

These revenues, together with the result from insurance, pension plan and premium bonds, totaled R$9,251 million in the fourth quarter of 2015, an increase of 7.0% from the previous quarter and of 11.9% when compared to the same period of the previous year.

Excluding the result from other insurance activities(*), our revenues reached R$9,099 million in the quarter, an increase of 6.4% compared to the third quarter of 2015 and of 11.1% from the same period of the previous year.

(*) Other insurance activities include extended warranty, large risks, health insurance, other products and our stake in IRB.

Asset Management

Asset management revenues totaled R$756 million in the fourth quarter of 2015, a 0.5% decrease from the previous quarter. Compared to the fourth quarter of 2014, these revenues recorded a 16.3% increase mainly driven by the higher volume of consortium and fund management operations.

In the year, these revenues reached R$2,867 million, an 8.5% increase when compared to the same period of the previous year.

Asset Administration

Fund management fees amounted to R$578 million in the fourth quarter of 2015, a 16.9% increase compared to the fourth quarter of 2014, driven by the higher volume of investment funds.

Total assets under administration reached R$765 billion in December 2015, with increases of 2.0% from the previous quarter and of 14.4% compared to the same period of the previous year.

According to the ANBIMA ranking, in December 2015 we were second in the fund management and managed portfolio* ranking, with a 21.3% market share.

* Includes Itaú Unibanco and Intrag.

Consortia Administration Fees

Consortia administration fees totaled R$178 million in the fourth quarter of 2015, decreasing 2.5% from the third quarter of 2015 and increasing 14.3% compared to the same period of the previous year, mainly driven by the market growth of consortia and the campaigns carried out internally.

In December 2015, we reached approximately 415 thousand active contracts, a 3.3% increase from the same period of the previous quarter.

In December 2015, installments receivable reached R$11.8 billion, a 3.0% decrease from September 2015 and an 8.0% increase from December 2014.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Current Account Services

Revenues from current account services totaled R$1,623 million in the fourth quarter of 2015, an 11.0% increase from the previous quarter and a 25.5% increase from the fourth quarter of 2014.

In the year, these revenues recorded a 20.2% increase compared to the same period of 2014. These increases in revenues from current account services are mainly due to the offering of differentiated products and services aimed at adding more value to the experience of our clients. These products include differentiated current account service packages for individuals and the convenience and versatility of products offered to companies.

Loan Operations and Guarantees Provided

Revenues from loan operations and guarantees provided totaled R$840 million, a 1.9% increase from the third quarter of 2015 and a 5.2% increase compared to the same period of the previous year.

In the year, these revenues increased 7.6% compared to the same period of the previous year.

In the fourth quarter of 2015, the ratio of revenues from loan operations to the loan portfolio without endorsements and sureties reached 0.4% p.a.

The ratio of annual revenues from guarantees provided to the endorsements and sureties portfolio reached 1.8% p.a.

(*) Loan portfolio average balance from two previous quarters.

Collection Services

Revenues from collection services reached R$382 million in the fourth quarter of 2015, decreasing 0.3% from the third quarter of 2015. When compared to the same period of the previous year, these revenues increased 3.8%.

Credit Cards

Credit card revenues amounted to R$3,204 million in the fourth quarter of 2015, a 9.4% increase from the previous quarter, mainly as a result of higher revenues and of the increased volume of transactions in the period due to year-end sales.

In the year, credit card revenues reached R$11,946 million, an 8.1% increase compared to the same period of the previous year, mainly driven by higher revenues from interchange, MDR (Merchant Discount Rate) and annual fees, and by the increase in the number of POS equipment rented in the period.

The proportion of credit card revenues related to card issuance corresponds to 52.8% of total revenues.

Transaction Volume and Card Accounts | Credit and Debit Cards

Through proprietary and partnership operations, we offer a wide range of credit and debit cards to more than 60.3 million current account holders and non-account holders (in number of accounts). In the fourth quarter of 2015, the volume of transactions amounted to R$92.4 billion, a 2.5% increase from the same period of 2014.

We are the leading player in the Brazilian credit card market, through Itaucard, Hipercard, Hiper, Credicard, joint ventures and commercial agreements with leading companies in sectors such as telecom, vehicles, retail and aviation at the Brazilian market, totaling 34.3 million client accounts, including both account and non-account holders.

In the fourth quarter of 2015, the volume of credit card transactions amounted to R$68.0 billion, a 0.4% increase from the same period of the previous year.

In the debit card segment, which only includes current account holders, we have 26.0 million accounts. The volume of debit card transactions amounted to R$24.5 billion in the fourth quarter of 2015, a 9.0% increase from the same period of the previous year.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Transaction Volume and Card Accounts | Credit and Debit Cards

Acquiring Services

Our merchant acquiring business comprises the process of capturing transactions through the affiliation, management and relationship with commercial establishments through the company REDE.

In the fourth quarter of 2015, the transaction volume totaled R$104.5 billion, an increase of 11.2% when compared to the third quarter of 2015 and of 1.4% from the volume recorded in the same period of the previous year.

Transaction Volume | Credit and Debit Cards

In the fourth quarter of 2015, the volume of credit card transactions was R$67.1 billion, representing 64.2% of the total volume of transactions generated by the acquiring services, an 8.5% increase from the third quarter of 2015 and a 1.1% increase from the same period of the previous year.

In addition to the transaction volume mentioned above, we captured and processed over R$1.4 billion in transactions within our retail partners and joint ventures in the fourth quarter of 2015.

In the fourth quarter of 2015, the volume of debit card transactions was R$37.4 billion, representing 35.8% of the total transaction volume, a 16.5% increase from the third quarter of 2015 and a 2.0% increase from the same period of the previous year.

Equipment Base^(*)

At the end of the fourth quarter of 2015, our base of active installed equipment reached 1,876 thousand units, a decrease of 1.2% from the previous quarter and an increase of 4.2% compared to the fourth quarter of 2014.

^(*)100% of REDE’s equipment base is able to capture Hiper brand transactions.

Other

In R$ millions	4Q15		3Q15		change
Foreign Exchange Services		23		22		1
Brokerage and Securities Placement		93		100		(7	)
Custody Services and Portfolio Management		86		77		10
Economic and Financial Advisory Services		198		129		70
Other Services		440		397		43
Total		840		725		116

Both revenues from economic and financial advisory services and revenues from other services in foreign units increased compared to the previous quarter.

Commissions and Fees and Result from Insurance, Pension Plan and Premium Bonds

In the fourth quarter of 2015, the ratio of total commissions and fees added to the result from insurance, pension plan and premium bonds, divided by these total revenues, added to the managerial financial margin, reached 35.6%.

The operational coverage ratio, which represents the extent to which non-interest expenses were covered by commissions and fees added to the result from insurance, pension plans and premium bonds, reached 83.2% in this quarter, an increase of 390 basis points when compared to the previous quarter, mainly driven by higher commissions and fees.

(*) Insurance Operations include insurance, pension plan and premium bonds.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Itaú Insurance, Pension Plan and Premium Bonds

Itaú Insurance, Pension Plan and Premium Bonds

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 business.

The disclosure of the results from Itaú Insurance, Pension Plan and Premium Bonds is broken down into Core Activities and Other Activities.

As of the third quarter of 2015, the capital allocation criteria for insurance, pension plan and premium bonds operations, started to use the managerial model, which is based on the BACEN regulatory model, that replaced the SUSEP regulatory model.

In order to maintain comparability, the information was reprocessed as of the second quarter of 2014.

Sales Cost Model

Itaú Unibanco’s practice is to allocate the selling costs to all of our products and services based on the corresponding utilization of each channel (full allocation method). For that reason, the selling costs related to insurance, pension plan and premium bonds products in our branch network and other electronic or physical distribution channels are recorded in our income statement for the insurance segment. This practice has both accounting and managerial effects.

Pro Forma Recurring Income Statement of Insurance Operations

	4Q15									3Q15									change						4Q14									change
In R$ millions	Total			Core Activities			Other Activities			Total			Core Activities			Other Activities			Total			Core Activities			Total			Core Activities			Other Activities			Total			Core Activities
Earned Premiums		1,359			1,009			350			1,445			1,069			377			-6.0	%		-5.6	%		1,478			1,009			469			-8.0	%		0.0	%
Revenues from Pension Plan and Premium Bonds		247			247			-			242			242			-			2.1	%		2.1	%		182			182			-			35.8	%		35.8	%
Retained Claims		(406	)		(309	)		(98	)		(437	)		(324	)		(113	)		-7.0	%		-4.8	%		(497	)		(301	)		(196	)		-18.3	%		2.4	%
Selling Expenses		(258	)		(46	)		(212	)		(268	)		(40	)		(228	)		-3.7	%		15.2	%		(281	)		(37	)		(244	)		-8.2	%		24.2	%
Result from Insurance, Pension Plan and Premium Bonds		942			901			40			982			946			36			-4.1	%		-4.7	%		882			853			29			6.8	%		5.7	%
Managerial Financial Margin		270			203			68			227			189			38			19.2	%		7.5	%		218			170			48			24.1	%		19.2	%
Commissions and Fees		443			443			(1	)		438			438			(0	)		1.1	%		1.1	%		440			438			2			0.5	%		1.1	%
Earnings of Affiliates		121			70			51			97			70			28			24.2	%		0.9	%		106			86			21			13.7	%		-17.9	%
Non-interest Expenses		(526	)		(449	)		(77	)		(497	)		(454	)		(42	)		5.8	%		-1.3	%		(525	)		(453	)		(72	)		0.1	%		-1.0	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(85	)		(70	)		(16	)		(84	)		(71	)		(13	)		2.0	%		-1.9	%		(75	)		(69	)		(6	)		14.0	%		1.3	%
Income before Tax and Minority Interests		1,165			1,100			65			1,164			1,118			46			0.1	%		-1.6	%		1,047			1,025			21			11.3	%		7.2	%
Income Tax/Social Contribution and Minority Interests		(498	)		(503	)		5			(432	)		(424	)		(8	)		15.3	%		18.7	%		(393	)		(395	)		2			27.0	%		27.4	%
Recurring Net Income		667			597			70			732			694			38			-8.9	%		-14.0	%		654			631			23			1.9	%		-5.4	%

Recurring Return on Allocated Capital		142.2	%		140.5	%		158.9	%		143.5	%		149.8	%		81.4	%		-130	bps		-930	bps		90.8	%		116.7	%		13.0	%		5,140	bps		2,380	bps
Efficiency Ratio (ER)		31.1	%		29.0	%		54.1	%		29.9	%		28.9	%		47.8	%		120	bps		10	bps		33.4	%		30.6	%		77.3	%		-230	bps		-170	bps
Combined Ratio		74.0	%		59.7	%		114.9	%		71.6	%		59.8	%		105.1	%		230	bps		-10	bps		75.7	%		59.6	%		110.5	%		-180	bps		20	bps

Note: Combined Ratio for insurance activities. Non-interest Expenses comprise Personnel Expenses, Other Administrative Expenses and Other Operating Expenses.

Our core activities consist of mass-market products related to Life, Property, Credit, Pension and Premium Bonds. Other insurance activities include to extended warranty, health insurance, our stake in IRB and other.

We continue to concentrate efforts on distribution through our own channels, due to greater agility and efficiency, which positively impact our profitability. Sales of insurance and premium bonds products through bankfone, bankline/internet, ATMs and teller terminals accounted for 47.9% of sales to account holders in the quarter, a 240-basis-point increase compared to the previous quarter. Sales of premium bonds through these channels increased 7.0% from the previous quarter and accounted for 70.0% of total new sales. Sales of insurance and premium bonds to clients of digital branches accounted for 7.0% of total sales in the fourth quarter of 2015.

Recurring net income from Insurance Operations reached R$667 million in the fourth quarter of 2015, decreasing 8.9% from the previous quarter and increasing 1.9% from the same period of the previous year.

Recurring net income from core activities was R$597 million in the fourth quarter of 2015, a decrease of 14.0% from the third quarter of 2015, mainly due to increase in the social contribution tax rate. When compared to the same period of the previous year, the decrease was 5.4%.

Recurring net income from other insurance activities reached R$70 million in the quarter, an increase of 84.0% when compared to the previous quarter, mainly driven by the higher earnings from affiliates due to our stake in IRB.

The annualized recurring return for insurance operations reached 142.2% in the period, a decrease of 130 basis points when compared the previous quarter.

The insurance ratio, which represents the ratio of recurring net income from insurance, pension plan and premium bonds operations to Itaú Unibanco’s recurring net income, reached 11.5%, a 50 basis point decrease from the previous quarter.

Insurance Ratio⁽¹⁾ and ROE | Insurance Operations

(1) Insurance Ratio (%) = Recurring net income from Insurance, Pension Plan and Premium Bonds operations / Itaú Unibanco’s recurring net income.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Itaú Insurance, Pension Plan and Premium Bonds

Breakdown of Recurring Net Income | Insurance Operations

In the fourth quarter of 2015, the ratio of the result of core activities to the recurring net income from Itaú Insurance, Pension Plan and Premium Bonds reached 89.5%.

Balance Sheet | Insurance Operations

The balance sheet of our Insurance Operations is presented below. As at December 31, 2015, total assets amounted to R$133.9 billion, a 4.8% increase from the third quarter of 2015 and a 15.3% increase from the same period of the previous year, mainly due to increases in securities.

Combined Ratio | Insurance Activities

Note: The combined ratio of insurance activities is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes on earned premiums.

The combined ratio, which reflects operating cost efficiency as a percentage of income from earned premiums, reached 74.0% in the period, an increase of 230 basis points from the previous quarter, mainly driven by the decrease in earned premiums and the increase in non-interest expenses related to other activities. When compared to the same period of the previous year, this ratio decreased 180 basis points.

Efficiency Ratio

The efficiency ratio was 31.1% in the fourth quarter of 2015, a 120 basis point increase from the previous quarter. Considering only our core activities, efficiency ratio reached 29.0% in the period.

Total technical provisions, including insurance, pension plan and premium bonds, totaled R$132.1 billion in the period, a 4.7% increase from the previous quarter and a 17.2% increase from the fourth quarter of 2014.

	4Q15								3Q15								4Q14
In R$ millions, end of period	Insurance		Pension Plan		Premium Bonds		Total		Insurance		Pension Plan		Premium Bonds		Total		change			Insurance		Pension Plan		Premium Bonds		Total		change
Assets
Current and Long-Term Assets
Securities		4,369		124,967		3,080		132,416		4,390		118,637		3,062		126,088		5.0	%		5,794		104,890		3,108		113,791		16.4	%
Other Assets ¹		1,465		-		-		1,465		1,710		-		-		1,710		-14.3	%		2,349		-		-		2,349		-37.7	%
Total Assets		5,834		124,967		3,080		133,880		6,099		118,637		3,062		127,798		4.8	%		8,143		104,890		3,108		116,141		15.3	%

Liabilities and Equity
Current and Long – Term Liabilities		5,062		124,315		3,051		132,429		5,363		118,069		3,041		126,473		4.7	%		6,458		103,925		3,031		113,413		16.8	%
Technical Provisions – Insurance		4,872		-		-		4,872		5,186		-		-		5,186		-6.1	%		6,004		-		-		6,004		-18.9	%
Technical Provisions – Pension Plans and VGBL		-		124,137		-		124,137		-		117,914		-		117,914		5.3	%		-		103,661		-		103,661		19.8	%
Technical Provisions – Premium Bonds		-		-		3,044		3,044		-		-		3,036		3,036		0.3	%		-		-		3,010		3,010		1.1	%
Other Liabilities		190		178		8		376		177		155		6		338		11.3	%		453		263		21		738		-49.1	%
Allocated Tier I Capital		771		652		29		1,452		736		568		21		1,325		9.6	%		1,686		965		77		2,728		-46.8	%
Total Liabilities and Equity		5,834		124,967		3,080		133,880		6,099		118,637		3,062		127,798		4.8	%		8,143		104,890		3,108		116,141		15.3	%

(1) Other assets include mainly receivables from insurance.
Note: Does not include our 30% stake in Porto Seguro.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Insurance Core Activities

Pro Forma Recurring Income Statement of the Insurance Segment | Core Activities

In R$ millions	4Q15			3Q15			change					4Q14			change
Earned Premiums		1,009			1,069			(59	)	-5.6	%		1,009			(0	)	0.0	%
Retained Claims		(296	)		(316	)		20		-6.2	%		(293	)		(4	)	1.3	%
Selling Expenses		(47	)		(39	)		(8	)	20.7	%		(37	)		(10	)	25.7	%
Underwriting Margin		666			714			(48	)	-6.7	%		680			(14	)	-2.0	%
Managerial Financial Margin		63			62			1		1.1	%		32			30		94.6	%
Commissions and Fees		103			103			(0	)	-0.1	%		123			(20	)	-15.9	%
Earnings of Affiliates		70			70			1		0.9	%		86			(15	)	-17.9	%
Non-interest Expenses		(219	)		(243	)		23		-9.6	%		(228	)		9		-3.9	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(41	)		(42	)		1		-3.4	%		(44	)		3		-7.0	%
Income before Tax and Minority Interests		642			664			(22	)	-3.3	%		649			(6	)	-1.0	%
Income Tax/Social Contribution and Minority Interests		(303	)		(241	)		(62	)	25.6	%		(248	)		(55	)	22.4	%
Recurring Net Income		339			423			(84	)	-19.8	%		401			(62	)	-15.3	%
Efficiency Ratio (ER)		25.5	%		26.8	%				-130	bps		26.0	%				-60	bps

Our insurance core activities consist of mass-market products related to Life, Property and Credit. These products are offered in synergy in retail channels - branch network, partnership with retailers, credit card clients, real estate and vehicle financing, personal and payroll loans - and in the wholesale channel. These products have characteristics such as low loss ratio, low volatility in the result and less use of capital, making them strategic and increasingly relevant in the diversification of the conglomerate’s revenues.

Net Income | Insurance Core Activities

In the fourth quarter of 2015, recurring net income from core activities was R$339 million, a decrease of 19.8% from the third quarter of 2015, mainly due to the increase in the social contribution tax rate.

Earned Premiums Breakdown | Insurance Core Activities

In the fourth quarter of 2015, earned premiums from insurance core activities reached R$1,009 million, a 5.6% decrease from the previous quarter. When compared to the fourth quarter of 2014, earned premiums remained stable.

Considering only our core activities, which include our 30% stake in Porto Seguro, our earned premiums market share of the core insurance total market reached 14.4% in the 2015 year-to-date(*). Regarding the technical result of insurance core activities, our market share reached 18.1% in the 2015 year-to-date(*).

Retained Claims Breakdown | Insurance Core Activities

In the fourth quarter of 2015, retained claims from insurance core activities amounted to R$296 million, a decrease of 6.2% from the previous quarter.

Underwriting Margin | Insurance Core Activities

The underwriting margin from our insurance core activities amounted to R$666 million in the fourth quarter of 2015, a 6.7% decrease from the previous quarter and a 2.0% decrease from the fourth quarter of 2014. In the quarter, the ratio of underwriting margin to earned premiums reached 66.0%, an 80 basis point decrease from the third quarter of 2015.

(*) Most recent data available on November 30, 2015, based on information disclosed by SUSEP.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Insurance Core Activities and Pension Plan

Combined Ratio | Insurance Core Activities

Note: The combined ratio is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes on earned premiums.

The combined ratio, which reflects the efficiency of operating expenses as a percentage of income from earned premiums, reached 59.7%, a decrease of 10 basis points from the previous quarter, mainly driven by a reduction in non-interest expenses and a lower loss ratio.

The extended combined ratio, which reflects the operating cost efficiency as a percentage of income from earned premiums, managerial financial margin and commissions and fees, reached 51.3% in the fourth quarter of 2015, a decrease of 50 basis points from the previous quarter.

Extended Combined Ratio | Insurance Core Activities

Note: The extended combined ratio is the sum of retained claims, selling expenses, administrative expenses, other operating income and expenses, tax expenses for ISS, PIS and Cofins and other taxes on the sum of earned premiums, managerial financial margin and commissions and fees.

Efficiency Ratio | Insurance Core Activities

In the fourth quarter of 2015, the efficiency ratio reached 25.5%, a 130 basis point decrease from the previous quarter.

Pro Forma Recurring Income Statement of the Pension Plan Segment

In R$ millions	4Q15			3Q15			change					4Q14			change
Revenues from Pension Plan		88			91			(3	)	-3.5	%		33			55		166.1	%
Retained Claims		(12	)		(8	)		(4	)	50.9	%		(9	)		(3	)	38.4	%
Selling Expenses		(1	)		(1	)		(0	)	3.1	%		(0	)		(1	)	-
Result from Pension Plan		75			82			(7	)	-8.8	%		24			51		211.1	%
Managerial Financial Margin		67			59			8		13.1	%		83			(16	)	-19.6	%
Commissions and Fees		340			336			5		1.4	%		316			25		7.9	%
Non-interest Expenses		(127	)		(127	)		0		0.0	%		(150	)		23		-15.3	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(20	)		(21	)		1		-3.0	%		(17	)		(3	)	19.1	%
Income before Tax and Minority Interests		335			329			6		1.8	%		256			79		30.9	%
Income Tax/Social Contribution and Minority Interests		(145	)		(131	)		(14	)	11.0	%		(99	)		(46	)	46.4	%
Recurring Net Income		190			198			(8	)	-4.3	%		157			33		21.0	%
Efficiency Ratio (ER)		27.5	%		27.8	%				-40	bps		36.9	%				-940	bps

Product and advisory service innovation has played a significant role in the sustainable growth of our pension plan operations for individuals. For companies, we offer specialized advisory services and develop customized solutions. 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.

Recurring net income of the Pension Plan segment reached R$190 million in the fourth quarter of 2015, a decrease of 4.3% from the previous quarter of 2015, mainly due to the increase in the social contribution tax rate.

When compared to the same period of the previous year, there was a 21.0% increase, mainly driven by higher net pension plan contributions and administration fees, as well as lower non-interest expenses.

Revenues from Administration Fees

The revenues from administration fees totaled R$340 million in the fourth quarter of 2015, with increases of 1.4% from the previous quarter and of 7.9% from the fourth quarter of 2014.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Pension Plan and Premium Bonds

Pension Plan Technical Provisions and Redemption Rate

On December 31, 2015, technical provisions for pension plans totaled R$124.1 billion, with increases of 5.3% compared to September 30, 2015, and of 19.8% from the same period of the previous year.

According to the National Federation of Pension and Life Insurance (FENAPREVI), in November 2015 our market share in total technical provisions was 23.8% whereas the market share in plans for individuals was 24.1%, both decreasing 20 basis points from the same period of the previous year.

The redemption rate, which represents the ratio of redemptions to the balance of technical provisions for pension plans, reached 2.5%, a 20 basis point decrease from the previous quarter and stable compared to the fourth quarter of 2014.

Total and Net Pension Plan Contributions

Total pension plan contributions in the quarter totaled R$5,802 million, increasing 8.5% from the previous quarter, mainly impacted by higher VGBL contributions. Net contributions for the fourth quarter of 2015 reached R$2,676 million, a 26.4% increase from the third quarter of 2015.

Pro Forma Recurring Income Statement of the Premium Bonds Segment

In R$ millions	4Q15			3Q15			change					4Q14			change
Revenues from Premium Bonds		159			151			8		5.4	%		149			10		7.0	%
Managerial Financial Margin		73			68			6		8.6	%		55			18		33.7	%
Non-interest Expenses		(102	)		(85	)		(18	)	20.7	%		(75	)		(27	)	36.7	%
Tax Expenses for ISS, PIS and Cofins and other taxes		(9	)		(8	)		(1	)	9.1	%		(8	)		(1	)	8.6	%
Income before Tax and Minority Interests		122			125			(2	)	-1.8	%		121			1		1.2	%
Income Tax/Social Contribution and Minority Interests		(55	)		(52	)		(3	)	6.0	%		(48	)		(7	)	14.2	%
Recurring Net Income		68			73			(5	)	-7.4	%		73			(5	)	-7.3	%
Efficiency Ratio (ER)		45.5	%		40.5	%				510	bps		38.2	%				730	bps

The PIC Premium Bonds product is targeted at clients who are interested in competing for prizes. This product can be purchased through a single payment or monthly payment modality, in accordance with the profile and segment of each client. The premium bonds business serves a large public demand and, at the end of the fourth quarter of 2015, it had issued 14.0 million certificates.

In line with our sustainability principles, we have a partnership with the Ayrton Senna Institute, a non-profit organization that works to improve the quality of education at public schools in Brazil. Part of the revenues from the monthly payments for premium bonds certificates is transferred to projects of this Institute.

In the fourth quarter of 2015, 708 clients received prizes in the aggregate amount of R$13.8 million. Sales of premium bonds under the traditional mode to account holders increased 7.0% from the previous quarter. Total sales to account holders grew 11.5% when compared to the previous quarter and 38.0% from the fourth quarter of 2014.

The Premium Bonds segment’s recurring net income totaled R$68 million in the fourth quarter of 2015, a 7.4% decrease from the previous quarter, mainly influenced by higher non-interest expenses and increase in the social contribution tax rate. When compared to the same period of the previous year, the recurring net income decreased 7.3% due to the higher cost allocated to the product, as a result of a review of our allocation costs model.

Our business model helps us to retain the leadership in terms of technical result(*), including the total premium bonds market, with a market share of 29.4% in the year, based on information disclosed by SUSEP.

Premium Bonds Technical Provisions

On December 31, 2015, technical provisions for premium bonds reached R$3,044 million, increases of 0.3% from the previous quarter and of 1.1% when compared to the fourth quarter of 2014.

(*) Most recent data available on November 30, 2015. Technical Result = Net Collection from Cancellation Fees (-) Variation of Provision for Redemption and Deferred Income (+) Income from Raffles (-) Acquisition Costs (+) Revenues from Redemptions of Securities.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Non-interest Expenses

In R$ millions	4Q15			3Q15			change					4Q14			change					2015			2014			change
Personnel Expenses		(4,899	)		(5,011	)		112		-2.2	%		(4,426	)		(473	)	10.7	%		(18,773	)		(16,885	)		(1,888	)	11.2	%
Administrative Expenses		(4,558	)		(4,350	)		(208	)	4.8	%		(4,253	)		(305	)	7.2	%		(17,101	)		(16,211	)		(890	)	5.5	%
Operating Expenses		(1,530	)		(1,410	)		(120	)	8.5	%		(1,273	)		(257	)	20.2	%		(5,502	)		(4,885	)		(617	)	12.6	%
Other Tax Expenses (*)		(131	)		(136	)		4		-3.1	%		(162	)		30		-18.7	%		(510	)		(502	)		(8	)	1.6	%
Total		(11,119	)		(10,906	)		(212	)	1.9	%		(10,113	)		(1,006	)	9.9	%		(41,885	)		(38,483	)		(3,403	)	8.8	%
( - ) Operations Abroad		(1,239	)		(1,131	)		(108	)	9.6	%		(860	)		(379	)	44.1	%		(4,369	)		(3,146	)		(1,223	)	38.9	%
Total (ex-operations abroad)		(9,880	)		(9,775	)		(104	)	1.1	%		(9,253	)		(626	)	6.8	%		(37,516	)		(35,336	)		(2,180	)	6.2	%

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

Non-interest expenses totaled R$11,119 million in the fourth quarter of 2015, an increase of 1.9%, or R$212 million, from the third quarter of 2015. This increase is mainly driven by the growths of 4.8% or R$208 million in administrative expenses, and of 8.5% or R$120 million in operating expenses, partially offset by a decrease of 2.2% or R$112 million in personnel expenses.

In 2015, non-interest expenses increased 8.8% when compared to the previous year. Excluding operations abroad, these expenses would have increased 6.2%.

Personnel Expenses

In R$ millions	4Q15			3Q15			change
Compensation, Charges and Social Benefits		(3,280	)		(3,568	)		287
Profit Sharing ^(*)		(869	)		(917	)		48
Employee Terminations and Labor Claims		(687	)		(473	)		(214	)
Training		(62	)		(52	)		(9	)
Total		(4,899	)		(5,011	)		112

(*) Includes variable compensation and stock option plans.

Personnel expenses totaled R$4,899 million in the fourth quarter of 2015, a 2.2% decrease when compared to the previous period. This decrease was primarily driven by lower expenses on compensation, charges and social benefits by 8.1% or R$287 million. This decrease was partially offset by the higher expenses with terminations and labor claims of R$214 million in the period.

Number of Employees

The total number of employees decreased to 90,320 at the end of the fourth quarter of 2015 from 91,437 of the previous quarter.

Note: For companies under our control, 100% of the total number of employees is considered. No employees are considered for companies not controlled by us.

Administrative Expenses

In R$ millions	4Q15			3Q15			change
Third-Party Services		(1,130	)		(1,016	)		(114	)
Data Processing and Telecommunications		(1,088	)		(1,025	)		(63	)
Facilities		(721	)		(681	)		(39	)
Depreciation and Amortization		(523	)		(560	)		37
Advertising, Promotions and Publications		(294	)		(266	)		(27	)
Security		(168	)		(176	)		7
Financial System Services		(145	)		(153	)		8
Transportation		(111	)		(100	)		(11	)
Materials		(75	)		(103	)		28
Travel		(53	)		(55	)		1
Other		(251	)		(216	)		(36	)
Total		(4,558	)		(4,350	)		(208	)

Administrative expenses totaled R$4,558 million, an increase of 4.8% compared to the third quarter of 2015. This increase was mainly due to higher expenses on third-party services, concentrated on consulting services and on data processing and telecommunication.

Operating Expenses

In R$ millions	4Q15			3Q15			change
Provision for Contingencies		(399	)		(555	)		157
Selling - Credit Cards		(682	)		(508	)		(173	)
Claims		(48	)		(65	)		17
Other		(402	)		(281	)		(121	)
Total		(1,530	)		(1,410	)		(120	)

Operating expenses increased R$120 million in the fourth quarter of 2015 compared to the third quarter of 2015, mainly driven by higher selling expenses, related to card commissions, partially offset by lower provisions for contingencies.

Other Tax Expenses (*)

Other tax expenses totaled R$131 million in the fourth quarter of 2015, a decrease of R$4 million compared to the third quarter of 2015.

(*) Does not include ISS, PIS or Cofins.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

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 from loan losses).

Risk-Adjusted Efficiency Ratio	=	Non-Interest Expenses (Personnel Expenses + Administrative Expenses + Operating Expenses + Other Expenses) + Result from Loan Losses
		(Managerial Financial Margin + Commissions and Fees + Result of Insurance, Pension Plan and Premium Bonds - Tax Expenses for ISS, PIS, Cofins and Other Taxes)

Efficiency Ratio

In the fourth quarter of 2015, efficiency ratio reached 45.5%, an increase of 130 basis points compared to the third quarter of 2015. This increase was mainly due to the decrease in financial margin with the market and the increase in non-interest expenses. In the 12-month period, efficiency ratio reached 44.0%, an improvement of 20 basis points from the previous quarter. Compared to the fourth quarter of 2014, this ratio improved 300 basis points.

Risk-Adjusted Efficiency Ratio

The risk-adjusted efficiency ratio, in the criteria including all expenses and also the result from loan losses, reached 64.5% in the fourth quarter of 2015, an increase of 140 basis points compared to the previous quarter, mainly as a result of the decrease in the financial margin with the market.

When compared to the fourth quarter of 2014, the risk-adjusted efficiency ratio increased 290 basis points mainly due to the increase of 32.6% in provision for loan losses and of 9.9% in non-interest expenses.

In the 12-month period, the risk-adjusted efficiency ratio reached 63.0%, an increase of 10 basis points from the same period of 2014.

Operating Revenues Distribution

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

(*) Net of Tax Expenses for ISS, PIS, Cofins and Other (taxes on revenues), Claims and Insurance Selling Expenses.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Income Statement Analysis

Points of Service

Automated Teller Machines (ATMs) | Brazil and Abroad

At the end of the fourth quarter of 2015, the number of ATMs totaled 26,412, a decrease of 42 units compared to the third quarter of 2015. This decrease is a result of the shareholders’ agreement with Tecban and its shareholders, announced on July 18, 2014, which provides for the substitution of part of the external ATMs network for Banco24Horas ATMs.

Note: (i) Includes Banco Itaú Argentina and companies in Chile, Uruguay and Paraguay.

(ii) Includes ESBs (Electronic Service Branches) and points of service in third-parties’ establishments.

(iii) Does not include points of sale and ATMs of Banco 24h.

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

We ended the fourth quarter of 2015 with 4,985 branches and client service branches (CSBs) in Brazil and abroad.

In Brazil, the movement observed in the number of branches is related to the profile of our customers, which has been increasingly demanding services through digital channels.

(i) Points of service include only Client Service Branches (CSBs).

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

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

Geographical Distribution of Service Network (*)

Number of Branches and Client Service Branches (CSBs)

(1) Does not include branches and points of service abroad and Itaú BBA.

Tax Expenses for ISS, PIS, Cofins and Other

Tax expenses amounted to R$1,582 million in the fourth quarter of 2015, a 0.6% increase from the previous quarter and a 27.7% increase from the same period of 2014.

Income Tax and Social Contribution on Net Income

In the fourth quarter of 2015, income tax and social contribution on net income (CSLL) expenses totaled R$2,815 million and the effective tax rate reached 32.4%.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Balance Sheet

Assets

On December 31, 2015, total assets amounted to R$1.4 trillion, an increase of 2.8% compared to the end of the previous quarter and an increase of 12.4% from the previous year.

The breakdown of our assets and details on their main components are presented below:

Total Assets

R$ billions

Asset Breakdown | December 31, 2015

Short-term Interbank Investments and Securities Portfolio

On December 31, 2015, the balance of our short-term interbank investments and securities portfolio, including derivative financial instruments, totaled R$619.3 billion, corresponding to an increase of 7.6% compared to the previous quarter, mainly due to the increase in short-term interbank investments.

In R$ millions, end of period	4Q15		%			3Q15		%			change			4Q14		%			change
Short-term Interbank Investments		280,944		45.4	%		229,677		39.9	%		22.3	%		229,828		43.4	%		22.2	%
Total Public Securities		123,360		19.9	%		127,478		22.2	%		-3.2	%		119,658		22.6	%		3.1	%
Public Securities - Domestic		112,272		18.1	%		115,207		20.0	%		-2.5	%		109,426		20.7	%		2.6	%
Public Securities - Foreign		11,087		1.8	%		12,271		2.1	%		-9.6	%		10,232		1.9	%		8.4	%
Denmark		2,548		0.4	%		3,032		0.5	%		-15.9	%		2,699		0.5	%		-5.6	%
United States		2,154		0.3	%		2,079		0.4	%		3.6	%		1,174		0.2	%		83.5	%
Korea		1,626		0.3	%		1,625		0.3	%		0.0	%		1,782		0.3	%		-8.8	%
Paraguay		980		0.2	%		1,443		0.3	%		-32.1	%		977		0.2	%		0.3	%
Chile		1,442		0.2	%		1,403		0.2	%		2.8	%		1,251		0.2	%		15.3	%
Spain		1,060		0.2	%		1,062		0.2	%		-0.2	%		783		0.1	%		35.4	%
Argentina		701		0.1	%		680		0.1	%		3.1	%		631		0.1	%		11.1	%
Uruguay		233		0.0	%		347		0.1	%		-33.0	%		311		0.1	%		-25.0	%
Other		343		0.1	%		599		0.1	%		-42.7	%		624		0.1	%		-45.0	%
Corporate Securities		71,038		11.5	%		73,831		12.8	%		-3.8	%		67,450		12.7	%		5.3	%
PGBL/VGBL - Fund Quotas		117,128		18.9	%		111,012		19.3	%		5.5	%		97,184		18.4	%		20.5	%
Derivative Financial Instruments		26,865		4.3	%		33,523		5.8	%		-19.9	%		15,335		2.9	%		75.2	%
Total		619,335		100.0	%		575,521		100.0	%		7.6	%		529,455		100.0	%		17.0	%

Evolution of Short-Term Interbank Investments and Securities Portfolio

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

Securities by Category

Our securities portfolio is classified into three categories: trading, available-for-sale and held-to-maturity. On December 31, 2015, the securities portfolio totaled R$311,527 million.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Balance Sheet

Funding

In R$ millions, end of period	4Q15		3Q15		change			4Q14		change
Demand Deposits		61,092		57,388		6.5	%		48,733		25.4	%
Savings Deposits		111,319		111,451		-0.1	%		118,449		-6.0	%
Time Deposits		105,250		113,520		-7.3	%		108,465		-3.0	%
Debentures (Linked to Repurchase Agreements and Third Parties’ Operations)		152,215		135,639		12.2	%		139,910		8.8	%
Funds from Bills ⁽¹⁾ and Structured Operations Certificates		50,808		33,324		52.5	%		31,665		60.5	%
(1) Total - Funding from Account Holders and Institutional Clients (*)		480,684		451,322		6.5	%		447,223		7.5	%
Onlending		38,804		40,336		-3.8	%		45,230		-14.2	%
(2) Total – Funding from Clients		519,488		491,658		5.7	%		492,453		5.5	%
Assets Under Administration		765,102		749,755		2.0	%		668,516		14.4	%
Technical Provisions for Insurance, Pension Plan and Premium Bonds		132,053		126,136		4.7	%		112,675		17.2	%
(3) Total – Clients		1,416,643		1,367,549		3.6	%		1,273,644		11.2	%
Interbank deposits		14,949		18,370		-18.6	%		19,125		-21.8	%
Funds from Acceptance and Issuance of Securities		24,782		26,154		-5.2	%		16,085		54.1	%
Total Funds from Clients + Interbank Deposits		1,456,374		1,412,073		3.1	%		1,308,854		11.3	%

Repurchase Agreements ⁽²⁾		198,739		182,274		9.0	%		185,103		7.4	%
Borrowings		65,786		64,244		2.4	%		43,546		51.1	%
Foreign Exchange Portfolio		68,466		63,140		8.4	%		43,176		58.6	%
Subordinated Debt		65,785		65,910		-0.2	%		54,569		20.6	%
Collection and Payment of Taxes and Contributions		239		4,444		-94.6	%		226		5.8	%
Working Capital ⁽³⁾		89,529		86,461		3.5	%		78,340		14.3	%
Working Capital and Other		488,543		466,474		4.7	%		404,960		20.6	%
Total Funds (Working Capital, Raised and Managed Assets)		1,944,917		1,878,547		3.5	%		1,713,815		13.5	%

(*) Funds from Institutional Clients totaled R$36,709 million, which corresponds to 7.6% of the total raised with Account Holders and Institutional Clients.

(1) Includes funds from Real Estate, Mortgage, Financial, Credit and Similar Notes. (2) Does not include own issued debentures classified as funding. (3) Equity + Non-Controlling Interest – Permanent Assets.

At the end of the fourth quarter of 2015, total funds from clients, including interbank deposits, amounted to R$1.5 trillion, corresponding to an increase of R$44,301 million compared to the third quarter of 2015. The main drivers were increases of R$17,484 million in funds from bills and structured operations certificates, R$16,575 million in debentures, and R$15,346 million in investment funds and managed portfolios, which were partially offset by the decrease of R$8,269 in time deposits.

Debentures issued by leasing companies of the conglomerate, after being purchased by the bank (the Conglomerate’s parent company), are negotiated with similar characteristics as those of CDBs and other time deposits, although they are classified as deposits received under securities repurchase agreements. Therefore, these deposits are reclassified in the table above as deposits from account holders. At the end of the fourth quarter of 2015, this type of funding totaled R$152,215 million.

Total funds (working capital, raised and managed assets) amounted to R$1.9 trillion at the end of the fourth quarter of 2015, an increase of R$66,372 million compared to the end of the third quarter of 2015, mainly driven by a combination of the increases in funds from clients, repurchase agreements, foreign exchange portfolio and borrowings.

In the 12-month period, we highlight the increase of R$147,520 million in funds from clients, including interbank deposits, mainly due to the increase in investment funds and managed portfolios, technical provisions for insurance, pension plan and premium bonds, bills and structured operations certificates and demand deposits. Total funds (working capital, raised and managed assets) increased R$231,105 million in the 12-month period.

Funds from clients ⁽¹⁾

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

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Balance Sheet

Loans to Funding Ratio

In R$ millions, end of period	4Q15			3Q15			change			4Q14			change
Funding from Clients		519,488			491,658			5.7	%		492,453			5.5	%
Funds from Acceptance and Issuance of Securities Abroad		24,782			26,154			-5.2	%		16,085			54.1	%
Borrowings		65,786			64,244			2.4	%		43,546			51.1	%
Other ⁽¹⁾		38,608			36,783			5.0	%		21,022			83.7	%
Total (A)		648,664			618,839			4.8	%		573,106			13.2	%
(-) Reserve Required by Brazilian Central Bank		(72,412	)		(70,800	)		2.3	%		(72,413	)		0.0	%
(-) Cash (Currency) ⁽²⁾		(18,544	)		(18,138	)		2.2	%		(17,527	)		5.8	%
Total (B)		557,708			529,901			5.2	%		483,166			15.4	%
Loan Portfolio (C) ⁽³⁾		473,829			477,198			-0.7	%		451,760			4.9	%
C/A		73.0	%		77.1	%		-410	bps		78.8	%		-580	bps
C/B		85.0	%		90.1	%		-510	bps		93.5	%		-850	bps

(1) Consider installments of subordinated debt that are not included in the Tier II Referential Equity.

(2) 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 loan portfolio balance does not include endorsements and sureties.

The loans to funding ratio before the deduction of compulsory deposits and cash and cash equivalents reached 73.0% at the end of the fourth quarter of 2015 compared to 77.1% at the end of the third quarter of 2015.

Excluding reserve requirements and cash and cash equivalents, this ratio reached 85.0% at the end of the fourth quarter of 2015 compared to 90.1% at the end of the third quarter of 2015.

Loan to Funding Ratio

(*) Gross funding, ex-deductions of reserve requirements and cash and cash equivalents.

External Funding - Securities ⁽¹⁾

The table below highlights the main securities issued by Itaú Unibanco abroad in effect on December 31, 2015.

In US$ millions

		Balance at							Exchange		Balance at		Issue	Maturity
Instrument	Issuer	Sep 30,15		Issuances		Amortization			Variation		Dec 31,15		Date	Date	Coupon % p.a.
Fixed Rate Notes ⁽²⁾	Itaú Chile		97									97	7/24/2007	7/24/2017		UF ⁽⁵⁾+ 3.79	%
Fixed Rate Notes ⁽³⁾	Itaú Chile		98									98	10/30/2007	10/30/2017		UF⁽⁵⁾+ 3.44	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,000									1,000	4/15/2010	4/15/2020		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,000									1,000	9/23/2010	1/22/2021		5.75	%
Medium Term Notes ⁽⁴⁾	Itaú Unibanco Holding S.A., Grand Cayman Branch		126				(126	)				-	11/23/2010	11/23/2015		10.50	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		250									250	1/24/2011	1/22/2021		5.75	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		500									500	6/15/2011	12/21/2021		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		550									550	1/24/2012	12/21/2021		6.20	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,250									1,250	3/19/2012	3/19/2022		5.65	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,375									1,375	8/6/2012	8/6/2022		5.50	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,870									1,870	11/13/2012	5/13/2023		5.13	%
Medium Term Notes	Itaú Unibanco Holding S.A., Grand Cayman Branch		1,050									1,050	5/26/2015	5/26/2018		2.85	%
Structured Notes ⁽⁶⁾			2,289		66		(19	)				2,335
Total			11,454		66		(145	)		-		11,375

(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 to R$500 million at issuance date; (5) Development Financial Unit; (6) 180-day Libor.

On December 31, 2015, funds obtained abroad totaled US$11,375 million, corresponding to a decrease of US$79 million compared to the third quarter of 2015 (presented in the “Funding” table in the previous section as Foreign Borrowings through Securities and Subordinated Debt).

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Balance Sheet by Currency

We adopted a management policy for foreign exchange risk associated with our asset and liability positions primarily intended to mitigate impacts from fluctuations in foreign exchange rates on consolidated results.

Brazilian tax legislation determines that gains and losses from exchange rate variation 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 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. As at December 31, 2015, the net exchange position was a liability of US$11,066 million.

Assets | December 31, 2015

				Business in						Foreign		Business
In R$ millions, end of period	Consolidated			Brazil			Local Currency			Currency		Abroad
Cash and Cash Equivalents		18,544			7,966			5,737			2,229		11,484
Short - Term Interbank Investments		280,944			255,974			255,974			0		25,131
Securities and Derivative Instruments		338,391			272,341			268,401			3,940		108,805
Loans, Leases and Other Loan Operations		439,751			318,017			303,114			14,903		186,764
Loans		473,829			350,448			335,545			14,903		188,411
(Allowance for Loan Losses)		(34,078	)		(32,431	)		(32,431	)		0		(1,647	)
Other Assets		262,853			222,400			198,403			23,997		86,462
Foreign Exchange Portfolio		68,909			43,967			20,410			23,558		69,673
Other		193,944			178,433			177,994			439		16,789
Permanent Assets		18,689			84,759			17,462			67,297		1,227
Total Assets		1,359,172			1,161,456			1,049,090			112,366		419,872
Derivatives - Purchased Positions											384,723
Total Assets After Adjustments (a)											497,089

Liabilities | December 31, 2015

			Business in				Foreign			Business
In R$ millions, end of period	Consolidated		Brazil		Local Currency		Currency			Abroad
Deposits		292,610		180,603		180,150		453			113,041
Funds Received under Securities Repurchase Agreements		350,954		327,167		327,167		0			23,787
Funds from Acceptances and Issue of Securities		75,590		93,248		53,003		40,244			22,776
Borrowings and Onlendings		104,589		105,960		39,157		66,802			63,657
Interbank and Interbranch Accounts		6,926		6,674		2,665		4,009			252
Derivative Financial Instruments		31,116		20,824		20,824		-			12,612
Other Liabilities		255,155		185,147		160,711		24,436			116,053
Foreign Exchange Portfolio		68,466		43,484		19,122		24,362			69,712
Other		186,690		141,662		141,589		74			46,340
Technical Provisions of Insurance, Pension Plan and Premium Bonds		132,053		131,953		131,951		2			100
Deferred Income		1,960		1,664		871		793			296
Minority Interest in Subsidiaries		1,755		1,755		1,755		-			0
Stockholders' Equity of Parent Company		106,462		106,462		106,462		-			67,297
Capital Stock and Reserves		83,103		82,916		82,916		-			66,182
Net Income		23,360		23,547		23,547		-			1,115
Total Liabilities and Equity		1,359,172		1,161,456		1,024,717		136,740			419,872
Derivatives - Sold Positions								403,558
Total Liabilities and Equity After Adjustments (b)								540,298
Net Foreign Exchange Sold Position Itaú Unibanco (c = a - b)								(43,209	)
Net Foreign Exchange Sold Position Itaú Unibanco (c) in US$								(11,066	)

Note: Does not include eliminations of operations between local and foreign units.

Assets and liabilities denominated in foreign currencies

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

In R$ millions, end of period	4Q15			3Q15			change
Investments Abroad		67,297			69,803			(2,506	)	-3.6	%
Net Foreign Exchange Position (Except Investments Abroad)		(110,506	)		(109,844	)		(663	)	0.6	%
Total		(43,209	)		(40,040	)		(3,169	)	7.9	%
Total in US$		(11,066	)		(10,078	)		(987	)	9.8	%

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Capital Ratios (BIS)

Solvency Ratios | Prudential Conglomerate and Financial Conglomerate

				Prudential			Financial
In R$ millions, end of period	4Q15			3Q15			4Q14
Stockholders' equity of the parent company		106,462			103,353			95,848
Consolidated stockholders’ equity (BACEN)		111,061			108,251			103,079
Non-voting shares excluded from Tier I		-			-			(1,048	)
Deductions from core capital		(10,107	)		(12,934	)		(5,819	)
Core Capital		100,955			95,318			96,212
Additional capital		46			46			20
Tier I		101,001			95,364			96,232
Tier II		27,464			29,399			33,559
Referential Equity (Tier I and Tier II)		128,465			124,763			129,790
Required Referential Equity		79,471			85,213			84,488
Risk-weighted Assets (RWA)		722,468			774,662			768,075
Credit Assets Expansion Simulation		445,397			359,547			411,839
Excess Capital		48,994			39,550			45,302

Ratios (%)
Tier I		14.0			12.3			12.5
Tier II		3.8			3.8			4.4
BIS (Referential Equity / Total Risk-weighted Exposure)		17.8			16.1			16.9

Itaú Unibanco’s minimum capital requirements are in accordance with the set of rules disclosed by the Brazilian Central Bank, which implement the Basel III global capital requirements in Brazil. These requirements are expressed as ratios of the capital available – demonstrated by the Tier I and Tier II Referential Equity, or Total Capital - to risk-weighted assets.

As of the first quarter of 2015, these ratios are reported in the Prudential Conglomerate, which includes not only the financial institutions in the Financial Conglomerate (in effect through December 2014), but also similar institutions(*).

Referential Equity | Prudential Conglomerate

On December 31, 2015, our Referential Equity reached R$128,465 million, an increase of R$3,702 million compared to September 30, 2015, mainly driven by a higher Tier I Capital, which reached R$101,001 million at the end of the fourth quarter of 2015, an increase of R$5,637 million compared to September 30, 2015. Tier II Capital totaled R$27,464 million at the end of the fourth quarter of 2015, a decrease of R$1,935 million from September 30, 2015.

Taking into consideration our current capital base, if we immediately fully applied the Basel III rules established by the Brazilian Central Bank, our core capital (Common Equity Tier I) would be 13.6% on December 31, 2015, including the use of all tax credits. This scenario is presented in the following chart.

Estimated Core Capital Ratio (Common Equity Tier I)

¹Includes deductions of Goodwill, Intangible Assets, Tax Credits from Temporary Differences and Tax Loss, Pension Fund Assets, Equity Investments in Financial Institutions, Insurance and similar companies. ²Includes the increase of the multiplier of the market risk, operational risk and certain credit risk accounts. This multiplier, which is at 9.09 nowadays, will be to 12.5 in 2019. ³ Does not include any reversal of the complementary allowance for loan losses.

Solvency Ratios | Prudential Conglomerate

On December 31, 2015, our BIS ratio reached 17.8%, an increase of 170 basis points from September 30, 2015. This increase was driven by the higher referential equity, mainly impacted by the net income for the period and by the decrease in the balance of tax credits. The BIS ratio increase was also due to the decrease in RWA, which, in addition to being impacted by tax credits, is influenced by the entry into force of Circular No. 3,770 of the Brazilian Central Bank and the decrease in the loan portfolio.

Our BIS ratio exceeds the minimum of 11% required by the Brazilian Central Bank and represents an excess capital of R$49.0 billion, allowing for an increase of up to R$445.4 billion in credit assets based on 100% risk-weighting.

In addition to the minimum capital requirements, as of this quarter Circular No. 3,748 of the Brazilian Central Bank comes into effect, adding a Leverage Ratio to the Basel III framework in Brazil, which is defined as the ratio of Tier I Capital to Total Exposure (calculated based on this Circular). On December 31, 2015, the Leverage Ratio reached 7.9%.

Subordinated Debt and Referential Equity Tier II

December 31, 2015

On December 31, 2015, the account balance of the subordinated debt reached R$65,785 million, a 0.2% decrease from the previous quarter, mainly due to the appreciation of the Brazilian real against the U.S. dollar, which impacted the balance of debts issued in foreign currency.

(*) Similar institutions include consortium managers, payment institutions, companies that acquire operations or directly or indirectly assume credit risk, and investment funds in which the conglomerate substantially retains risks and benefits. (**) In accordance with the present rules, we calculated the Referential Equity considering the balance of Subordinated Debt for December 2012.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Capital Ratios (BIS)

Risk Exposure

			Prudential		Financial
In R$ millions, end of period	4Q15		3Q15		4Q14
Credit Risk-weighted Assets (RWA_CPAD)		679,593		728,976		706,081
FPR at 2%		179		219		75
FPR at 20%		7,000		6,873		3,249
FPR at 35%		11,695		9,667		8,139
FPR at 50%		46,025		49,583		34,486
FPR at 75%		136,104		138,755		146,705
FPR at 85%		129,884		151,295		139,730
FPR at 100%		288,057		304,598		307,259
FPR at 250%		37,858		35,744		34,838
FPR at 300%		10,751		17,918		14,015
FPR up to 1250% ¹		1,990		2,400		4,430
Derivatives – future potential gain and variation of the counterparty credit quality		10,050		11,924		13,156
Operational Risk-weighted Assets (RWA_OPAD)		28,623		28,623		36,817
Market Risk-weighted Assets (RWA_MPAD)		14,252		17,062		25,176
Gold, foreign currency and operations subject to exchange rate variation (RWA_CAM)		1,536		3,435		13,403
Operations subject to interest rate variation (RWA_JUR)		11,291		11,844		10,347
Operations subject to commodity price variations (RWA_COM)		473		574		952
Operations subject to stock price variation (RWA_ACS)		952		1,209		474
Total Risk-weighted Exposure (RWA) [RWA_CPAD+ RWA_OPAD+RWA_MPAD]		722,468		774,662		768,075

Note: FPR - Risk Weighting Factor.

¹ Includes the application of the “F” factor, as required by Article 29 of Circular No. 3,644/13.

On December 31, 2015, total risk-weighted exposure amounted to R$722,468 million, a decrease of R$52,194 million compared to September 30, 2015, mainly due to the reduction of the credit risk-weighted assets (RWA_CPAD), which reached R$679,593 million on December 31, 2015. This change was mainly driven by the entry into force of Circular No. 3,770 of the Brazilian Central Bank, and to the reduction of tax credits and loan operation balances due to foreign exchange variations.

In the fourth quarter of 2015, the operational risk-weighted assets (RWA_OPAD) reached R$28,623 million, remaining stable compared to September 30, 2015. The RWA_OPAD is calculated every six months, according to Circulars Nos. 3,640, 3,675 and 3,739 of the Brazilian Central Bank.

On December 31, 2015, market risk-weighted assets (RWA_MPAD) totaled R$14,252 million, a decrease of R$2,811 million compared to September 30, 2015, mainly due to the reduced portion required for exposure to gold, foreign currency and operations subject to exchange rate variation (RWA_CAM).

Evolution of the Composition of the Risk-weighted Exposure

Credit Risk-weighted Exposure

Risk-weighted ROA

In the fourth quarter of 2015, the annualized recurring return on average assets reached 1.7%, a decrease of 20 basis points compared to the fourth quarter of 2014.

Annualized recurring return on risk-weighted assets reached 3.1% in the quarter, up 10 basis points from the same period of the previous year.

In this period, the risk-weighted leverage was 5.6, a decrease of 60 basis points from the previous quarter, mainly driven by a lower total risk-weighted exposure (RWA).

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Risk Management

Corporate Principles of Risk and Capital Management

We regard risk and capital management as essential instruments for optimizing the use of resources and selecting the best business opportunities in order to create value to our shareholders.

Risk management covers the entire institution and is in line with the guidelines of the Board of Directors and Senior Management, which, through Superior Committees, determine the overall goals, expressed as targets and limits for the risk management business units. Meanwhile, the control and capital management units support Itaú Unibanco’s management through monitoring processes and risk and capital analysis.

We adopt a prospective approach regarding capital management, and, through the Internal Capital Adequacy Assessment Process (ICAAP), we assess the sufficiency of regulatory capital to cover our risks, represented by the regulatory capital for credit, market and operational risks, as well as the capital required to cover other risks. The ICAAP process comprises the following phases: identification of material risks, definition of additional capital requirement to material risks and of internal methodologies for capital quantification; preparation of the capital plan, for normal and stress situations; and structuring the capital contingency plan.

For further information on the risk and capital management structure, please refer to the Investor Relations website at www.itau.com.br/ investor-relations Corporate Governance >> Risk Management and Capital– Pillar 3.

Credit Risk

Our credit risk management is aimed at keeping the level of the loan portfolio quality consistent with our risk appetite for each market segment in which we operate.

The credit risk control is centralized and is carried out by a department that is independent from the business units and responsible for risk control. The main responsibilities include monitoring and controlling the performance of loan portfolios, and managing the process of development, review and approval of institutional credit risk policies. Our centralized process for approving policies and validating models ensures the synchronization of credit actions.

Operational Risk

Our operational risk management structure is composed of operational risk management and control activities aimed at supporting the organization of decision-making processes, always aiming at the proper identification and evaluation of risks, the creation of value for shareholders, as well as the protection of our assets and image.

Liquidity Risk

Liquidity risk is defined as the possibility that we will fail to efficiently meet expected and unexpected, current and future obligations, including those related to guarantees, without affecting our daily operations and incurring significant losses.

The liquidity risk measurement comprises all financial operations of our companies, as well as possible contingent or unexpected exposures, such as those arising from settlement services, provision for endorsements and sureties and lines of credit raised but not used.

Market Risk

Our market risk is controlled by a department that is independent of the business units and responsible for carrying out, on a daily basis: (i) risk measurement and assessment, (ii) monitoring of stress scenarios, limits and alerts, (iii) applying, analyzing and testing stress scenarios, (iv) reporting risk results to those accountable for in the business units, in accordance with our governance, (v) monitoring the actions required to adjust positions and/or risk levels to make them viable, and (vi) supporting the safe launch of new financial products. To this end, Itaú Unibanco has a structured communication and information process that provides feedback for the monitoring of the Superior Committees and compliance with the requirements of Brazilian and foreign regulatory bodies.

VaR of Itaú Unibanco

Our Consolidated VaR is calculated based on the “Historical Simulation” approach. This methodology fully reprices the positions using the real historical distribution of assets.

The market risk exposure of the portfolios of Itaú Unibanco and its foreign subsidiaries is presented in the VaR by Risk Factor Group table below, which shows where the higher concentrations of market risk occur.

The decrease in the total VaR compared to the previous quarter is mainly due to the decrease in market volatility.

VaR by Risk Factor ⁽¹⁾

In R$ millions, end of period	4Q15			3Q15
Itaú Unibanco
Brazilian Interest rates		121.2			212.9
Other Foreign Interest rates		108.6			122.0
FX rates		13.1			33.3
Brazilian Inflation Indexes		108.9			233.9
Equities and Commodities		59.3			34.1
Foreign Units
Itaú BBA International ⁽²⁾		3.0			9.1
Banco Itaú Argentina ⁽³⁾		7.8			9.1
Banco Itaú Chile ⁽³⁾		4.7			9.5
Banco Itaú Uruguay ⁽⁴⁾		2.6			2.8
Banco Itaú Paraguay ⁽²⁾		7.6			1.9
Banco Itaú BBA Colombia ⁽³⁾		0.4			1.4
Diversification Effect		(233.3	)		(353.6	)
Total VaR		204.0			316.3
Maximum VaR in the Quarter		327.6			340.7
Average VaR in the Quarter		213.6			214.1
Minimum VaR in the Quarter		170.8			152.3

(1) The Values represented above consider 1 day as time horizon and 99% confidence. (2) The VaR calculated based on historical simulation approach as of this quarter. (3) The VaR calculated based on historical simulation approach as of the first quarter of 2015. (4) The VaR calculated based on historical simulation approach as of the third quarter of 2015.

Evolution of Itaú Unibanco’s VaR

Itaú Unibanco Holding S.A.

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Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Segment Analysis

Pro Forma Adjustments

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

The financial statements were adjusted in order to replace the accounting stockholders’ equity with funding at market prices. Subsequently, the financial statements were adjusted 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.

As of the first quarter of 2015, we changed the presentation of our segments in order to reflect them with the bank’s current organizational structure. We report the following segments: (a) Retail Banking, (b) Wholesale Banking and (d) Activities with the Market + Corporation. Retail Banking include the previous Commercial Banking – Retail and Consumer Credit – Retail segments, with the transfer of the Private Bank and Latam operations to the Wholesale Banking.

The Activities with the Market + Corporation column presents the result from excess capital, excess subordinated debt and the net balance of tax assets and liabilities. It also shows the financial margin with the market, costs of Treasury operations, the equity pickup of companies not linked to each segment and our stake in Porto Seguro.

Allocated Capital

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

The economic allocated capital model (EAC) was adopted for the Pro Forma financial statements by segment and, as of 2015, we changed our calculation methodology. In addition to the Tier I allocated capital, the EAC model includes the effects of the calculated expected loan losses, complementary to that required by the Brazilian Central Bank through CMN Circular No. 2,682/99.

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

Based on Tier I capital measure we determined the Return on Allocated Capital, which corresponds to an operational performance ratio consistently adjusted to the required capital needed to support the risks of the financial positions assumed in accordance with our risk appetite.

Income Tax Rate

We adopt the full income tax rate, net of the tax effect of payment of interest on capital, for the Retail Banking, Wholesale Banking and Activities with the Market + Corporation segments. The difference between the income tax amount determined for each segment and the effective income tax amount, as stated in the consolidated financial statements, is stated in the column Activities with the Market + Corporation.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Segment Analysis

The Pro Forma financial statements of the Retail Banking, Wholesale Banking and Activities with the Market + Corporation presented below, are based on managerial information derived from internal models, to more accurately reflect the activities of the business units. As of the first quarter of 2015, we changed our segments presentation and our Economic Allocated Capital calculation methodology.

Pro Forma Balance Sheet by Segment | On December 31, 2015

							Activities with the
	Retail			Wholesale			Market +
In R$ millions	Banking			Banking			Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		858,630			544,908			125,927			1,340,483
Cash and Cash Equivalents		13,884			4,678			-			18,544
Short-term Interbank Investments		323,182			110,480			-			280,944
Securities and Derivative Financial Instruments		180,287			147,553			38,334			338,391
Interbank and Interbranch Accounts		63,760			4,938			-			67,373
Loan, Lease and Other Credit Operations		222,774			251,056			-			473,829
(Allowance for Loan Losses)		(16,852	)		(6,241	)		-			(23,093	)
(Complementary Expected Loss Provisions)		-			-			(10,985	)		(10,985	)
Other Assets		71,596			32,445			98,578			195,480
Foreign Exchange Portfolio		8,742			18,858			47,485			68,909
Others		62,855			13,588			51,093			126,571
Permanent Assets		14,571			2,328			1,790			18,689
Total Assets		873,202			547,236			127,716			1,359,172
Liabilities and Equity
Current and Long-Term Liabilities		838,508			502,452			97,017			1,248,995
Deposits		235,282			172,998			-			292,610
Deposits Received under Securities Repurchase Agreements		301,607			72,503			-			350,954
Funds from Acceptances and Issue of Securities		73,610			42,906			-			75,590
Interbank and Interbranch Accounts		2,127			4,802			-			6,926
Borrowings and Onlendings		10,529			94,060			-			104,589
Derivative Financial Instruments		25			33,737			-			31,116
Other Liabilities		113,087			51,634			97,017			255,155
Foreign Exchange Portfolio		9,041			18,472			47,128			68,466
Others		104,046			33,162			49,889			186,690
Technical Provisions for Insurance, Pension Plans and Premium Bonds		102,241			29,813			-			132,053
Deferred Income		1,525			435			-			1,960
Minority Interest in Subsidiaries		1,663			-			92			1,755
Economic Allocated Capital - Tier I (*)		31,506			44,350			30,607			106,462
Total Liabilities and Equity		873,202			547,236			127,716			1,359,172

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

Pro Forma Income Statement by Segment | 4^thquarter of 2015

							Activities with the
	Retail			Wholesale			Market +
In R$ millions	Banking			Banking			Corporation			Itaú Unibanco
Operating Revenues		17,972			7,143			1,565			26,680
Managerial Financial Margin		10,138			5,082			1,544			16,764
Financial Margin with Clients		10,138			5,082			275			15,495
Financial Margin with the Market		-			-			1,269			1,269
Commissions and Fees		5,699			1,935			11			7,645
Result from Insurance, Pension Plans and Premium Bonds Operations		2,135			126			10			2,271
before Retained Claims and Selling Expenses
Result from Loan Losses		(3,770	)		(902	)		38			(4,634	)
Provision for Loan Losses		(4,659	)		(1,495	)		38			(6,116	)
Recovery of Loans Written Off as Losses		889			593			-			1,482
Retained Claims		(391	)		(15	)		-			(406	)
Operating Margin		13,811			6,225			1,603			21,639
Other Operating Income/(Expenses)		(9,518	)		(3,005	)		(436	)		(12,959	)
Non-interest Expenses		(8,059	)		(2,635	)		(425	)		(11,119	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,202	)		(371	)		(9	)		(1,582	)
Insurance Selling Expenses		(257	)		1			(2	)		(258	)
Income before Tax and Minority Interests		4,293			3,220			1,168			8,680
Income Tax and Social Contribution		(1,562	)		(1,157	)		(97	)		(2,815	)
Minority Interests in Subsidiaries		(85	)		-			(7	)		(92	)
Recurring Net Income		2,646			2,063			1,064			5,773
Recurring Return on Average Allocated Capital		32.4	%		19.4	%		15.0	%		22.3	%
Efficiency Ratio (ER)		50.0	%		39.0	%		27.3	%		45.5	%
Risk-Adjusted Efficiency Ratio (RAER)		73.4	%		52.3	%		24.9	%		64.5	%

Note: Non-interest Expenses considers Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses.

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

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Segment Analysis

Pro Forma Balance Sheet by Segment | On September 30, 2015

In R$ millions	Retail Banking			Wholesale Banking			Activities with the Market + Corporation			Itaú Unibanco
Assets
Current and Long-Term Assets		812,726			529,413			121,093			1,303,953
Cash and Cash Equivalents		14,901			3,278			-			18,138
Short-term Interbank Investments		266,539			88,536			-			229,677
Securities and Derivative Financial Instruments		186,453			150,831			34,249			345,844
Interbank and Interbranch Accounts		66,158			5,123			-			69,906
Loan, Lease and Other Credit Operations		222,181			255,018			-			477,198
(Allowance for Loan Losses)		(15,811	)		(7,397	)		-			(23,208	)
(Complementary Expected Loss Provisions)		-			-			(10,985	)		(10,985	)
Other Assets		72,306			34,024			97,829			197,382
Foreign Exchange Portfolio		8,145			17,571			44,246			64,209
Others		64,160			16,453			53,583			133,173
Permanent Assets		14,856			2,071			1,813			18,740
Total Assets		827,582			531,484			122,906			1,322,693
Liabilities and Equity
Current and Long-Term Liabilities		790,531			490,423			93,907			1,215,583
Deposits		240,505			177,745			-			300,729
Deposits Received under Securities Repurchase Agreements		261,876			56,059			-			317,914
Funds from Acceptances and Issue of Securities		57,633			34,343			-			59,478
Interbank and Interbranch Accounts		6,539			4,937			-			11,473
Borrowings and Onlendings		10,643			93,937			-			104,580
Derivative Financial Instruments		27			45,350			-			42,346
Other Liabilities		115,254			49,970			93,907			252,927
Foreign Exchange Portfolio		8,338			17,035			43,521			63,140
Others		106,917			32,935			50,386			189,787
Technical Provisions for Insurance, Pension Plans and Premium Bonds		98,053			28,082			-			126,136
Deferred Income		1,469			439			-			1,908
Minority Interest in Subsidiaries		1,761			-			87			1,849
Economic Allocated Capital - Tier I (*)		33,820			40,622			28,911			103,353
Total Liabilities and Equity		827,582			531,484			122,906			1,322,693

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

Pro Forma Income Statement by Segment | 3^rdquarter of 2015

							Activities with the
	Retail			Wholesale			Market +
In R$ millions	Banking			Banking			Corporation			Itaú Unibanco
Operating Revenues		17,619			6,824			2,502			26,945
Managerial Financial Margin		10,220			4,893			2,482			17,595
Financial Margin with Clients		10,220			4,893			206			15,319
Financial Margin with the Market		-			-			2,276			2,276
Commissions and Fees		5,248			1,824			10			7,082
Result from Insurance, Pension Plans and Premium Bonds Operations before Retained Claims and Selling Expenses		2,151			106			11			2,268
Result from Loan Losses		(3,331	)		(1,358	)		36			(4,653	)
Provision for Loan Losses		(4,338	)		(1,445	)		36			(5,747	)
Recovery of Loans Written Off as Losses		1,007			87			-			1,094
Retained Claims		(425	)		(12	)		-			(437	)
Operating Margin		13,864			5,453			2,538			21,855
Other Operating Income/(Expenses)		(9,299	)		(2,867	)		(582	)		(12,748	)
Non-interest Expenses		(7,956	)		(2,549	)		(401	)		(10,906	)
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1,079	)		(316	)		(179	)		(1,574	)
Insurance Selling Expenses		(264	)		(2	)		(2	)		(268	)
Income before Tax and Minority Interests		4,565			2,586			1,956			9,108
Income Tax and Social Contribution		(1,573	)		(808	)		(530	)		(2,911	)
Minority Interests in Subsidiaries		(75	)		-			(4	)		(79	)
Recurring Net Income		2,917			1,778			1,422			6,117
Recurring Return on Average Allocated Capital		33.6	%		18.0	%		20.4	%		24.0	%
Efficiency Ratio (ER)		50.2	%		39.3	%		17.3	%		44.2	%
Risk-Adjusted Efficiency Ratio (RAER)		71.2	%		60.2	%		15.7	%		63.1	%

Note: Non-interest Expenses considers Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses.

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

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Segment Analysis

Retail Banking

The revenues from Retail Banking come from the offer of banking products and services to retail and high-income clients and very small and small companies, in addition to financial products and services offered to our non-account holder clients, including vehicle financing and credit cards offered outside the branch network, and Itaú BMG Consignado operations.

In the fourth quarter of 2015, recurring net income for the segment totaled R$2,646 million, a 9.3% decrease from the previous quarter.

The decrease in net income for the quarter was mainly due to (i) increase of 7.4% in provision for loan losses, (ii) reduced recovery of loans written off as losses, iii) decrease of 0.8% in financial margin with clients, and iv) increase of 1.3% in non-interest expenses. With positive effect on net income, commissions and fees increased R$450 million, or 8.6%, compared to the third quarter of 2015.

The Retail Banking annualized return on allocated capital reached 32.4% in the quarter. The efficiency ratio was 50.0% and the risk-adjusted efficiency ratio reached 73.4%.

Loan Portfolio – Retail Banking

At the end of December 2015, loan portfolio totaled R$222,774 million, increasing 0.3% compared to September 2015.

Coverage ratio for NPL over 90 days (without complementary allowance) reached 124% on December 31, 2015, decreasing 400 basis points from September 30, 2015.

Allowance for Loan Losses and Coverage Ratio

Wholesale Banking

The revenues from the Wholesale Banking segment come from: i) activities of Itaú BBA, the unit responsible for commercial operations with large companies and for investment banking services, ii) the result from our units abroad, and iii) products and services offered to middle market companies, high-net worth clients (Private Banking) and institutional clients.

In the fourth quarter of 2015, operating revenues amounted to R$7,143 million, an increase of 4.7%, or R$318 million from the previous quarter, mainly due to the increases of 3.9% or R$189 million in the financial margin with clients and of 6.0% or R$110 million in commissions and fees.

Result from loan losses totaled R$902 million in the fourth quarter of 2015, a decrease of 33.6% from the previous quarter, mainly due to the higher recovery of loans written off as losses related to an operation of a specific group in the corporate segment.

Non-interest expenses increased 3.4%, or R$86 million, from the third quarter of 2015 and totaled R$2,635 million in the current period.

Therefore, the increase in the Wholesale Banking net income was 16.0% from the previous quarter, totaling R$2,063 million in the fourth quarter of 2015.

In the fourth quarter of 2015, return on allocated capital reached 19.4% per year, the efficiency ratio was 39.0%, and the risk-adjusted efficiency ratio reached 52.3%.

Loan Portfolio – Wholesale Banking

The loans portfolio reached R$251,056 million at December 31, 2015, up 1.6% compared to September 30, 2015.

Coverage ratio for NPL over 90 days (without complementary allowance) reached 218% at the end of the fourth quarter of 2015, 1,100 basis points higher than the previous quarter. In the quarter, the decrease in the NPL over 90 days was due to the transfer of financial that happened in December 2015, as mentioned in page 19 of this report.

Allowance for Loan Losses and Coverage Ratio

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Segment Analysis

Middle Market

Aiming at a more specialized service structure, since 2013 part of the medium sized business sub-segment has become part of the Wholesale Banking. This sub-segment serves approximately 30 thousand clients (economic groups) with sales between R$30 million and R$300 million.

Our result is well balanced between earnings from credit and services. Our risk appetite continues to focus on high-rating clients, and 75.8% of loans are granted to B2 and higher ratings.

Our credit portfolio (including sureties and endorsements) decreased 1.6% from the third quarter of 2015, basically due to local currency products.

Large Companies

Our clients are around 3,500 large corporate groups and over 190 financial institutions. We offer them a broad portfolio of banking products and services, from cash management to structured operations and transactions in capital markets.

The credit portfolio (including endorsements and sureties) decreased 1.6% from the third quarter of 2015. In our credit portfolio, 89.9% of credits are rated “AA”, “A” and “B”, according to criteria set forth in Resolution No. 2,682 of the National Monetary Council.

For derivatives, we maintained our relevant position in CETIP (Clearing House for the Custody and Financial Settlement of Securities). We focused on operations that hedge our clients’ exposures to foreign currencies, interest rates and commodities.

Investment Banking

Fixed Income: we took part in local operations with debentures, promissory notes and securitization, which totaled R$14.2 billion from January to November 2015. In international fixed-income issues, we originated deals of US$1.8 billion with Latin-American companies in the same period, according to Dealogic data^(*).

(*) Includes only transactions in US dollars and local currency above US$50 million.

Mergers and Acquisitions: in the period from January to December 2015, we were leaders in the Thomson Reuters ranking for the number of operations in the Brazilian Market, with a total volume of US$11.1 billion.

Project Finance: in the fourth quarter, we were the exclusive financial advisor to the financing operations related to the Light Rail Vehicles in Rio de Janeiro (R$760 million), an important urban mobility project to the heritage of the Rio de Janeiro Olympic Games, and to the Itarema wind power complex (R$653 million) with 207MW capacity, sufficient to serve 250,000 people. We also provided advisory services to China Three Gorges for the winning bid at the auction for the concession for exploring hydroelectric assets totaling 4,995MW capacity with a grant of R$14.1 billion.

Wealth Management and Services

Asset Management

In December 2015, we reached R$473.1 billion^(*) in managed assets, accounting for 15.9% of the market. In the last 12 months, the volume of managed assets grew 18.1% in total, and noteworthy were fixed income and money market funds. In addition to a strong local presence, we are present in the world’s major financial centers, with strategically allocated professionals, searching for opportunities and investment solutions appropriate for different customer profiles.

(*)Source: ANBIMA (Brazilian Financial and Capital Markets Association) – December 2015. Considers Itaú Unibanco and Intrag.

Securities Services

With four business lines, the Securities Services area serves both publicly and closely-held companies, pension funds, asset management and international investors, totaling 3,429 clients in 22 countries. We ended December 2015 with a custody market share of 23.4% and a total of R$1,041 billion in assets under custody. Our business lines are:

Local Custody and Fiduciary Administration: we offer custody and accounting services for portfolios, investment, mutual and pension funds, services of fund administration, rebalancing fund services and contracting of service providers. We ended December with R$906 billion under custody, an increase of 11% from the same period of 2014.

International Custody: we offer services of custody and representation to investors from outside Brazil, custody of ADR programs and depositary services for Brazilian Depositary Receipts (BDR) programs. We ended December with R$135 billion under custody, a decrease of 13% from the same period of 2014.

Corporate Solutions: we offer many solutions for capital markets, such as the control of stock option programs, bookkeeping, debentures, settlement and custody of promissory notes and bank credit notes. We also work as guarantee agents in operations of Project Finance, Escrow Accounts, and loan and financing contracts. We are leaders in the bookkeeping of shares, providing services to 222 companies listed on the BM&F Bovespa, representing 61.8% of the total, and we are also the leaders in the bookkeeping of debentures, acting as bookkeeper of 492 issues as of December 2015.

Source: Itaú Unibanco, ANBIMA (Brazilian Financial and Capital Markets Association) and BM&F Bovespa – December 2015.

Private Bank

With a full global wealth management platform, we are market leaders in Brazil and one of the main players in Latin America. Our multidisciplinary team, which comprises private bankers, investment advisers and product experts, serves our clients from our eight offices in Brazil and in our offices located in Zurich, Miami, New York, Santiago, Montevideo, Asuncion and Nassau.

Activities Abroad

Our activities abroad include business with retail clients and large companies, and investment banking activities in eighteen countries outside Brazil.

Additional information is available on the next pages.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Activities Abroad

In Argentina, Chile, Paraguay and Uruguay, we serve the retail banking, companies, corporate and treasury segments, with commercial banking as our main focus. In Peru, we have an Itaú BBA representation office and, in Colombia, we are gradually intensifying our presence through our corporate and investment banking operation. In Mexico, we operate a full-service broker-dealer.

In 2015, the merger of Itaú Chile with CorpBanca was approved in Chile. With the authorization of the Chilean regulator, and after all the regulatory authorizations already obtained in Brazil, Colombia and Panama, the merger has been authorized by all the competent authorities. The merger shall occur in the first half of 2016. This operation is an important part of our strategy to expand our presence in Latin America, consolidating our prominent position in Chile and Colombia, as well as diversifying our operations in the region.

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

Information about our number of employees abroad and the international service network is presented below:

Employees Abroad

International Service Network

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Activities Abroad

Latin America

Our operations in Latin America are mainly focused on commercial banking and are concentrated in the Southern Cone (Argentina, Chile, Paraguay and Uruguay). Besides this operations we also operate in Colombia in investment banking and corporate segments. In Peru, we operate in the corporate segment through a representation office. In Mexico, our full-service broker-dealer started its operations.

Latin America is a priority for our international expansion due to the geographic and cultural proximity to Brazil. Our purpose is to be recognized as the “Latin American Bank”, becoming a reference in the region for all financial services provided to individuals or companies.

We have expanded our business in the region on a sustainable way over the past years and, our priority now is to gain economies of scale and to maintain a strong presence in the local retail markets and to strengthen our relationships with local companies.

We are presenting the consolidated results for Latin America as well as for its respective countries in constant currency⁽¹⁾ and, from this quarter on, using the managerial concept, which includes the allocation of costs from the structure in Brazil and the impact of the Brazilian income tax.

Annual Income Statement | Latin America ⁽²⁾

	2015									2014
																			Change
	Nominal			Exchange			Constant			Nominal			Exchange			Constant			in Constant
In R$ millions	Currency			Rate Effect ⁽¹⁾			Currency			Currency			Rate Effect ⁽¹⁾			Currency			Currency
Operating Revenues		5,683			386			6,069			4,311			1,091			5,402			12.3	%
Managerial Financial Margin		3,712			281			3,993			2,888			663			3,551			12.4	%
Financial Margin with Clients		3,224			180			3,404			2,410			749			3,159			7.7	%
Financial Margin with the Market		488			101			589			478			(87	)		392			50.3	%
Commissions and Fees		1,870			97			1,966			1,375			413			1,788			10.0	%
Insurance, Pension Plan and Premium Bonds		101			8			110			47			16			63			74.7	%
Result from Loan Losses		(519	)		(39	)		(559	)		(434	)		(130	)		(564	)		-0.9	%
Provision for Loan Losses		(586	)		(43	)		(629	)		(481	)		(145	)		(625	)		0.5	%
Recovery of Loans Written Off as Losses		66			4			70			47			15			61			13.7	%
Retained Claims		(30	)		(2	)		(32	)		(15	)		(4	)		(19	)		63.2	%
Other Operating Expenses		(3,479	)		(150	)		(3,629	)		(2,594	)		(625	)		(3,219	)		12.7	%
Non-Interest Expenses		(3,359	)		(128	)		(3,487	)		(2,489	)		(597	)		(3,086	)		13.0	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(119	)		(22	)		(141	)		(105	)		(28	)		(133	)		6.6	%
Insurance Selling Expenses		0			(0	)		(0	)		(0	)		(0	)		(0	)		119.5	%
Income before Tax and Minority Interests		1,655			194			1,849			1,268			332			1,600			15.6	%
Income Tax and Social Contribution		(542	)		(68	)		(610	)		(409	)		(97	)		(505	)		20.6	%
Recurring Net Income		1,113			127			1,240			859			235			1,094			13.3	%
Return on Average Equity - Annualized		17.5	%					18.3	%		16.3	%					15.7	%		250	bps
Efficiency Ratio		60.7	%					59.2	%		59.4	%					58.8	%		40	bps

(1) Consists of the elimination of foreign exchange variation, which is obtained by the application of the average foreign exchange rate of December 2015 to all periods analyzed and hedge adjustments.

(2) Includes our operations in Argentina, Chile, Paraguay, Uruguay, Colombia, Peru and Mexico.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Activities Abroad

Quarter Income Statement | Latin America ⁽¹⁾

	4Q15									3Q15
																			Change
	Nominal			Exchange			Constant			Nominal			Exchange			Constant			in Constant
In R$ millions	Currency			Rate Effect ⁽²⁾			Currency			Currency			Rate Effect ⁽²⁾			Currency			Currency
Operating Revenues		1,580			26			1,606			1,573			(36	)		1,536			4.5	%
Managerial Financial Margin		1,048			37			1,085			1,041			(39	)		1,003			8.3	%
Financial Margin with Clients		935			(22	)		913			830			12			842			8.4	%
Financial Margin with the Market		113			59			172			211			(51	)		160			7.5	%
Commissions and Fees		501			(11	)		489			507			1			508			-3.7	%
Insurance, Pension Plan and Premium Bonds		31			(0	)		31			25			1			26			20.9	%
Result from Loan Losses		(112	)		3			(109	)		(132	)		(5	)		(138	)		-20.7	%
Provision for Loan Losses		(133	)		3			(130	)		(150	)		(5	)		(155	)		-16.5	%
Recovery of Loans Written Off as Losses		21			(0	)		21			18			0			18			15.6	%
Retained Claims		(11	)		(0	)		(11	)		(6	)		(0	)		(6	)		70.0	%
Other Operating Expenses		(1,006	)		20			(986	)		(902	)		(10	)		(912	)		8.1	%
Non-Interest Expenses		(966	)		23			(943	)		(874	)		(1	)		(875	)		7.8	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(40	)		(3	)		(43	)		(27	)		(9	)		(37	)		18.1	%
Insurance Selling Expenses		0			(0	)		0			(0	)		(0	)		(0	)		-230.1	%
Income before Tax and Minority Interests		452			49			501			532			(52	)		481			4.1	%
Income Tax and Social Contribution		(155	)		(23	)		(178	)		(184	)		22			(162	)		10.0	%
Recurring Net Income		296			26			323			348			(29	)		319			1.1	%
Return on Average Equity - Annualized		15.3	%					16.9	%		22.5	%					20.2	%		- 340	bps
Efficiency Ratio		63.2	%					60.7	%		56.8	%					58.6	%		220	bps

(1) Includes our operations in Argentina, Chile, Paraguay, Uruguay, Colombia, Peru and Mexico.

(2) Consists of the elimination of foreign exchange variation, which is obtained by the application of the average foreign exchange rate of December 2015 to all periods analyzed and hedge adjustments.

Net income for the fourth quarter of 2015 totaled R$323 million, an increase of 1.1% when compared to the third quarter of 2015. The financial margin increased 8.3% in the period, mainly as a result of higher treasury results in Argentina and of the sale of a student loan portfolio in Chile (R$79 million effect). On the other hand, there was a reduction in commission and fees, mainly due to the new regulation of credit card charges in Paraguay and to lower commissions in the corporate segment (investment structuring) in Chile.

The provision for loan losses decreased 16.5% in the fourth quarter, mainly due to higher provisions in the companies segment in Chile that occurred in the third quarter of 2015.

Non-interest expenses increased 7.8% mainly due to higher marketing, communication and personnel expenses, as well as integration expenses in Chile.

Argentina

Net income in Argentina reached R$94 million in the fourth quarter of 2015, mainly impacted by higher treasury results, influenced by market volatility. Non-interest expenses reached R$243 million, an increase of 13.4% from previous quarter, mainly due to the increase in marketing, promotion and personnel expenses.

Income Statement | Argentina

In R$ millions	4Q15			3Q15			change
Operating Revenues		451			420			7.2	%
Managerial Financial Margin		336			293			15.0	%
Financial Margin with Clients		232			229			1.1	%
Financial Margin with the Market		105			63			64.9	%
Commissions and Fees		114			128			-10.6	%
Result from Loan Losses		(6	)		(12	)		-46.6	%
Provision for Loan Losses		(9	)		(14	)		-40.2	%
Recovery of Loans Written Off as Losses		2			3			-10.8	%
Other Operating Expenses		(285	)		(250	)		13.9	%
Non-Interest Expenses		(243	)		(214	)		13.4	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(41	)		(35	)		16.9	%
Income before Tax and Minority Interests		160			159			0.7	%
Income Tax and Social Contribution		(66	)		(60	)		9.0	%
Recurring Net Income		94			99			-4.4	%
Return on Average Equity - Annualized		50.5	%		56.4	%		-590	bps
Efficiency Ratio		59.4	%		55.7	%		370	bps

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Activities Abroad

Chile

In Chile, we operate in the commercial bank (retail), including high-income clients segments, in addition to operations in the companies and corporate segments.

In this quarter, net income reached R$114 million, a 20.6% increase from the previous period. Financial margin increased 14.0%, mainly due to the sale of a student loan portfolio, with a positive impact of R$79 million.

Commission and fees decreased 16.6% mainly due to commissions in corporate segment (investment structuring) in the third quarter, which did not occur in the current quarter. Provision for loan losses reached R$75 million, a reduction of 33.9% when compared to the previous quarter, mainly due to higher provisions in the companies segments in the third quarter.

Non-interest expenses increased 11.6% mainly driven by expenses with CorpBanca integration, increase in fees on agreements for channels, transmission services and marketing actions.

Income Statement | Chile

In R$ millions	4Q15			3Q15			change
Operating Revenues		553			522			6.0	%
Managerial Financial Margin		404			354			14.0	%
Financial Margin with Clients		383			310			23.7	%
Financial Margin with the Market		21			44			-53.4	%
Commissions and Fees		119			142			-16.6	%
Insurance, Pension Plan and Premium Bonds		31			26			20.9	%
Result from Loan Losses		(63	)		(103	)		-39.2	%
Provision for Loan Losses		(75	)		(114	)		-33.9	%
Recovery of Loans Written Off as Losses		12			10			19.0	%
Retained Claims		(11	)		(6	)		70.0	%
Other Operating Expenses		(320	)		(286	)		11.7	%
Non-Interest Expenses		(318	)		(285	)		11.6	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(0	)		(0	)		3.9	%
Insurance Selling Expenses		(2	)		(1	)		45.1	%
Income before Tax and Minority Interests		160			126			26.8	%
Income Tax and Social Contribution		(46	)		(32	)		45.3	%
Recurring Net Income		114			95			20.6	%
Return on Average Equity - Annualized		10.4	%		11.4	%		-100	bps
Efficiency Ratio		58.7	%		55.3	%		340	bps

Paraguay

Our strategy for the commercial (retail) and companies segments over the past few years, allowed the consolidation of our position in the market. We hold the leading position among banks in Paraguay in terms of results and deposits (data provided by the Central Bank of Paraguay, December 2015).

This quarter, our net income in Paraguay was influenced by Law N° 5,476/2015 of Congreso de la Nación and by 2/Acta 60 of the Central Bank of Paraguay, which establish regulations related to the charge of commissions on financial products, setting limits to interest rates for credit cards, eliminating fees and regulating the realization of promotions. Therefore, the financial margin and commission and fees decreased 13.9% and 7.2%, respectively.

On the other hand, non-interest expenses decreased 11.0%, due to lower marketing and promotion expenses, as a consequence of the regulatory restrictions.

Income Statement | Paraguay

In R$ millions	4Q15			3Q15			change
Operating Revenues		201			228			-12.0	%
Managerial Financial Margin		141			164			-13.9	%
Financial Margin with Clients		121			141			-13.9	%
Financial Margin with the Market		20			23			-13.5	%
Commissions and Fees		60			64			-7.2	%
Result from Loan Losses		(15	)		(12	)		20.1	%
Provision for Loan Losses		(16	)		(16	)		-0.8	%
Recovery of Loans Written Off as Losses		1			4			-66.4	%
Other Operating Expenses		(96	)		(108	)		-11.0	%
Non-Interest Expenses		(96	)		(108	)		-11.0	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		0			0			-62.3	%
Income before Tax and Minority Interests		90			108			-16.5	%
Income Tax and Social Contribution		(35	)		(41	)		-14.1	%
Recurring Net Income		55			67			-18.0	%
Return on Average Equity - Annualized		21.7	%		30.9	%		-920	bps
Efficiency Ratio		47.9	%		47.4	%		50	bps

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Activities Abroad

Uruguay

We are the third largest private bank in Uruguay in terms of loan portfolio (data provided by the Central Bank of Uruguay - BCU, December 2015) and we were recognized as the best bank in Uruguay by Euromoney magazine. We are also the leading player in the credit card segment through our credit card operator OCA.

Net income of our operations in Uruguay was R$43 million. Commission and fees increased 5.2%, mainly driven by higher credit card commissions and custody and fund management fees. On the other hand, provision for loan losses significantly increased this quarter, due to the downgrade of a specific client in the companies segment.

Non-interest expenses increased 10.6% in the quarter due to higher marketing, personnel, system and communication expenses.

Income Statement | Uruguay

In R$ millions	4Q15			3Q15			change
Operating Revenues		340			334			2.0	%
Managerial Financial Margin		166			168			-1.2	%
Financial Margin with Clients		142			142			0.1	%
Financial Margin with the Market		24			26			-8.4	%
Commissions and Fees		174			166			5.2	%
Result from Loan Losses		(28	)		(10	)		165.0	%
Provision for Loan Losses		(29	)		(12	)		147.3	%
Recovery of Loans Written Off as Losses		1			1			-19.0	%
Other Operating Expenses		(246	)		(223	)		10.5	%
Non-Interest Expenses		(246	)		(222	)		10.6	%
Tax Expenses for ISS, PIS, Cofins and Other Taxes		(1	)		(1	)		0.7	%
Income before Tax and Minority Interests		66			101			-34.0	%
Income Tax and Social Contribution		(24	)		(37	)		-36.2	%
Recurring Net Income		43			63			-32.7	%
Return on Average Equity - Annualized		16.0	%		29.1	%		-1.310	bps
Efficiency Ratio		72.3	%		66.7	%		560	bps

Colombia

Our presence in Colombia is growing and we aim to be one of the three main investment and wholesale banks over the course of the next years. The sectors evaluated as most attractive are: Mining, Energy, Oil, Gas, and Infrastructure.

Peru

In Peru, we have a representation office and we are considering increasing our activities in corporate and investment banking segments, following the same strategy as in Colombia, in order to take advantage of the country strong growth.

Mexico

In October 2014, the Brazilian Central Bank approved the opening of a full service broker and, in November 2014, we received the approval of the local regulatory authority. The operation started in December of 2015.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Ownership Structure

Itaú Unibanco Holding’s capital stock is comprised of common shares (ITUB3) and non-voting shares (ITUB4), both traded on the BM&FBOVESPA. The non-voting shares are also traded as depositary receipts on the NYSE (New York) and BCBA (Argentina) as ADRs and CEDEARs, respectively.

Outstanding Shares | Itaú Unibanco Holding S.A.

In thousands	Common Shares		Non-voting Shares			Total
Number of Shares		3,047,040		3,036,876			6,083,916
Treasury Shares
On 12/31/2014		2.5		53,829			53,831
Purchases of treasury shares		-		111,525			111,525
Exercised options - Granting of stock options		-		(5,874	)		(5,874	)
Disposals - Stock option plan		-		(5,343	)		(5,343	)
Bonuses in Shares (10%)		0.3		8,426			8,426
On 12/31/2015 ⁽¹⁾		2.8		162,563			162,565
Total Shares (-) Treasury Shares		3,047,037		2,874,313			5,921,351

(1) The average cost of non-voting treasury shares was R$26.78 and of the common treasury shares was R$7.25. For further information, including information on the “Stock Option Plan”, see Note 16 to the financial statements.

Our ownership structure aims to optimize capital allocation among the many segments that compose the conglomerate. Itaú Unibanco Holding is controlled by IUPAR, which is jointly controlled by Itaúsa and Cia. E. Johnston. Itaúsa is controlled by the members of the Egydio de Souza Aranha family while Cia. E. Johnston is controlled by the members of the Moreira Salles family.

The organizational chart below summarizes the current ownership structure as at December 31, 2015:

Note: The percentages do not include treasury shares.

(1) Besides the treasury stocks, the percentages do not consider the participation of controlling stockholders.

Annual Stockholders’ Meeting

Our Annual Stockholders’ Meeting will be held on March 30, 2016, and the call notice with information on the agenda and voting procedures, among other, will be disclosed until the end of February 2016, in accordance with our corporate event schedule.

As in the four past years, we will provide an electronic platform for our stockholders to cast their votes remotely on our Investor Relations website. This system enables early voting through an online proxy by means of a digital certificate, which ensures easy access for stockholders.

Free Float - Non-voting Shares | on 12/31/2015

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Stock Market Performance

Stock Market Performance | 4Q15

Our common and non-voting shares were traded on all BM&FBOVESPA’s sessions during 2015. Additionally, our non-voting shares are included in several Stock Exchange indexes on which financial institutions shares may be listed.

	(R$)			(R$)			(US$)
	Non-voting Shares			Common Shares			ADRs
	ITUB4			ITUB3			ITUB
Closing Price at 12/31/2015⁽¹⁾		26.33			24.58			6.51
Maximum price in the quarter		30.29			28.00			8.22
Average price in the quarter		27.84			25.59			7.20
Minimum price in the quarter		26.00			23.85			6.46
Closing Price at 09/30/2015		26.51			24.52			6.62
Maximum price in 12 months⁽²⁾⁽³⁾		35.91			32.66			12.42
Average price in 12 months⁽²⁾		30.14			27.93			9.23
Minimum price in 12 months⁽²⁾⁽⁴⁾		24.72			23.81			6.01
Closing Price at 12/31/2014⁽¹⁾		31.45			29.36			11.83
Change in 4Q15		-0.7	%		0.2	%		-1.7	%
Change in the last 12 months		-16.3	%		-16.3	%		-45.0	%
Average daily trading financial volume - in 12 months (million)⁽²⁾		474.7			3.2			152.6
Average daily trading financial volume in 4Q15 (million)		484.0			2.8			138.0

(1) On 12/31/2015 and 12/31/2014 no trading session was held at the BM&FBOVESPA. Therefore, the amounts presented refer to 12/30/2015 and 12/30/2014.

(2) From 01/01/15 to 12/31/15;

(3) Prices on 11/24/14 for non-voting shares, on 04/24/15 for common shares and on 10/14/14 for ADRs;

(4) Prices on 08/24/15 for non-voting shares, on 09/30/15 for common shares and on 09/24/15 for ADRs.

Closing price at the end of each period ⁽¹⁾

(1) ITUB4, ITUB3 and ITUB historical information of 2014, 2013 and 2012 was adjusted by the July 2015, June 2014 and May 2013 bonus.

Liquidity of our shares

	4Q15			3Q15			4Q14
BM&FBovespa (ITUB4)
Total Financial Volume Traded in the spot market (R$ million)		29,042			30,760			33,763
Volume of Transactions (thousand)		2,101.5			2,302.6			1,877.7
Average volume by transaction (R$ thousand)		13.8			13.4			18.0
Negotiability Index ⁽¹⁾		5.07	%		5.19	%		4.32	%
NYSE (ADR)
Total Financial Volume Traded (R$ million)		33,975			31,948			33,874
Volume of Transactions (thousand)		2,316.6			2,528.5			2,348.3
Average volume by transaction (R$ thousand)		14.7			12.6			14.4
Total outstanding ADRs (million)		873.9			942.9			913.0
Ratio of Total Outstanding ADRs to Total Outstanding Non-Voting Shares		30.4	%		32.5	%		33.7	%

(1) The negotiation index represents the percentage of share trading in relation to all shares traded in the spot market on BM&FBovespa. For calculation purposes, it considered the trading in the three last months of each period. Source: Economática.

Market Capitalization vs. Ibovespa Index

On December 31, 2015, our market capitalization was R$155.7 billion, and the compound annual growth rate (CAGR) was 1.1% since 2012. The Ibovespa index reached 43.3 thousand points in the same period and its CAGR was 10.7% negative. According to information provided by Bloomberg, on December 31, 2015 we were the 2^nd largest company by market capitalization in Brazil and the largest among financial institutions.

Market Indicators

Price / Earnings¹ – represents the ratio of price to net income per share.

Price / Book Value ² – represents the ratio of market capitalization to stockholders' equity.

(1): Closing price of non-voting share at the period end/Earnings per share. For calculation purposes, the retained earnings of the last 12 months were considered. (2): Closing price of non-voting share at the period-end/Book value per share.

Average Daily Trading Volume (BM&FBovespa + NYSE)

Financial trading profile by investor

Foreign investors accounted for 71.1% of the financial volume of our shares traded on stock exchanges in 2015.

(1) Cooperatives, public companies, limited-liability companies, municipal/state/federal governments, financial entities, churches and charities and/or non-profit organizations, among other.

(2) Includes foreign investors trading on the BM&FBOVESPA, as well those trading on the NYSE.

Dividends and Interest on Capital

We remunerate our stockholders by means of monthly and complementary payments of dividends and interest on capital. In 2015, we paid or recognized a provision of R$7.3 billion in dividends and interest on capital, net of taxes.

Dividend Yield (Dividends and Interest on Capital Distributed / Average Price¹) It is the ratio of total dividends/interest on capital distributed to the share price, which indicates the return on investment to the stockholder through profit sharing during each period.

Payout (Net Dividends and Interest on Capital Distributed / Net Income)

(1): Average price on the first day of each period.

(2): For calculation purposes, it was considered the total Dividends/Interest on capital distributed in the last 12 months of each period.

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Stock Market Performance

Net Income per Share¹and Recurring Net Income per Share¹

(1) For calculation purposes, the retained earnings of the last 12 months were considered.

(2) ITUB4, ITUB3 and ITUB historical information of 2014, 2013 and 2012 was adjusted by the July 2015, June 2014 and May 2013 bonus.

Market Consensus

Major market analysts periodically issue recommendations on the shares that are the subject matter of their analyses. These recommendations help many investors choose the best option in which to invest their capital.

Based on information provided by Thomson Analytics and Bloomberg on December 31, 2015, we present in the table below a summary of the recommendations on Itaú Unibanco Holding’s non-voting shares.

	Thomson	Bloomberg
Buy	9	15
Hold	7	6
Sell	2	2
Number of Analysts	18	23

Based on the information provided by Thomson, the average estimated target price for 2015 was R$32.45. According to Bloom-berg, the average estimated target price was R$32.80.

Shares Buyback

In 2015, we acquired ⁽¹⁾ 115.4 million non-voting shares in the amount of R$3.3 billion for the average price of R$28.80 per share. The balance of treasury shares reached 162.6 million non-voting shares in December 2015, which is equivalent to 5.7% of outstanding shares of the same class.

Additionally, in January 2016, 8.0 million non-voting shares were repurchased.

In February 2016, the renewal of the share buyback program was approved at a Board of Directors meeting, authorizing the acquisition of up to 10.0 million common shares and 50.0 million non-voting shares, effective from February 3, 2016 to August 2, 2017.

(1) All amounts were adjusted to reflect the 10% share bonus approved at the Shareholders’ Meeting held on April 29, 2015.

10% Bonus in Shares

For the third consecutive year, we provided our stockholders with a 10% bonus in shares, and, therefore, in July 2015, they were granted one new share for each ten shares of the same type held.

The monthly dividend was maintained at R$ 0.015 per share, which represents a 10% increase in the amounts received on a monthly basis, and the cost of the bonus shares was R$18.35, which impacted the average price of the shareholders’ portfolio.

Euronext Vigeo - Emerging 70 Sustainability Index

In 2015, we were selected for the first time to make up the Euronext Vigeo – Emerging 70 Sustainability Index portfolio. This index is made up of 70 companies, selected from 900 listed companies in developing countries, with the best corporate responsibility performance according to the ratings assigned by Vigeo.

Credit Risk Assessment by Rating Agencies

In 2015, the changes in Itaú Unibanco Holding S.A. and Itaú Unibanco S.A. ratings and outlooks were due to external factors, as follows: (i) change in Moody’s global methodology for banks; (ii) downgrade of Brazil´s sovereign credit rating and change in outlook from “stable” to “review for possible downgrade” by Moody’s; (iii) downgrade of Brazil´s sovereign credit rating to speculative grade by Standard & Poor’s; and (iv) two downgrades of Brazil´s sovereign credit rating, the second of which to speculative grade by Fitch Ratings.

The ratings of Itaú Unibanco S.A. are investment grade by Fitch Ratings and Moody´s and the rating of Itaú Unibanco Holding S.A. is investment grade by Fitch Ratings. To learn more about these ratings, please visit (www.itau.com.br/investor-relations) in Itaú Unibanco > Market Opinion > Ratings.

Non-voting Shares (ITUB4) Appreciation

The chart below shows the simulation of R$100 invested on December 29, 2005 through December 30, 2015, by comparing the amounts with and without the reinvestment of dividends to the performance of Ibovespa and the CDI (Interbank Deposit Certificate).

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Stock Market Performance

Corporate Events

Merger of Itaú Chile with CorpBanca – In 2015, the merger was approved in Chile. Therefore, we obtained all the regulatory authorizations in Brazil, Chile, Colombia and Panama.

The bank resulting from the merger will be called Itaú CorpBanca, which will operate under the “Itaú” brand and will be controlled by us, with a 33.58% stake in Itaú CorpBanca’s capital.

The implementation of the merger, which is expected to take place in the first half of 2016, will bring the following benefits to the shareholders of Banco Itaú Chile and CorpBanca:

Creation of one of the strongest financial institutions in Latin America;

Larger customer service network;

Lower funding costs and greater ability to further leverage Tier 1 capital; and

Operating cost synergies.

This operation consolidates the strategy to expand our presence in Latin America, placing us in an outstanding position in Chile and Colombia, as well as diversifying our operations in the region.

Acquisition of ConectCar shares – In October 2015, Rede entered into an Agreement for the Purchase and Sale of Shares and Other Covenants, by which it agreed to acquire 50% of the capital stock of ConectCar Soluções de Mobilidade Eletrônica S.A., by paying R$170 million to Odebrecht Transport S.A. The remaining 50% of ConectCar’s capital stock will be held by Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A. The operation was approved by the Administrative Council for Economic Defense (CADE) and the Brazilian Central Bank (BACEN) in the end of 2015.

Control Acquisition – Recovery – In December 2015, we entered into an agreement with Banco BTG Pactual S.A. (“BTG”), by which we agreed to purchase a 81.94% stake in Recovery do Brasil Consultoria S.A. (“Recovery”), which is the total stake of BTG in Recovery.

After obtaining the regulatory and governmental authorizations required and complying with certain suspension conditions, we will pay R$640 million to BTG for the stake in Recovery.

In addition to the acquisition of the stake in Recovery’s capital stock, in the same operation we agreed to purchase approximately 70% of a R$38 billion portfolio in credit rights, associated with recovery activities, resulting from credits originated by some market banks. Subject to the same conditions precedent to the acquisition of the stake in Recovery’s capital stock, we will pay R$570 million to BTG for the stake in this portfolio.

Subsequent Event

List of Compliant Debtors – On January 21, 2016, we announced the Memorandum of Understanding entered into with four other banks, aimed at creating a credit intelligence bureau (CIB) company, which will be structured as a corporation under shared control, 20% for each bank. The CIB will develop a database with the purpose of gathering, reconciling and addressing registration data and credit information, of individuals and companies, which expressly authorize their inclusion in such database, as required by the applicable regulations. This procedure will lead to an increased information interchange on these individuals and companies, thus enabling the development and attainment of higher efficiency levels for credit management, which may facilitate credit granting, on a medium and long-term basis, to the National Financial System players and other credit companies. The technical operations of CIB will be carried out together with a technical partner selected to develop and implement the technological and analytical platform through a service agreement. The creation of the CIB is subject to the execution of final agreements among the five banks, and to the satisfaction of certain conditions precedent, including the approval of the proper regulatory authorities.

Market Relations

In 2015, we participated in 30 conferences and 9 road shows in Brazil and abroad. We also held 22 Apimec (Association of Capital Markets Analysts and Investment Professionals) meetings this year in Brazil, with the attendance of more than 2.6 thousand participants, which enable us to strengthen our relationship with stockholders, capital market analysts and investors.

2016 Agenda

February 2		Earnings Release - 4^th Quarter of 2015

February 3		Conference Call - 4^th Quarter of 2015 Earnings Result

Until February, 26		Call Notice for the Annual Stockholders´ Meeting of 2016 Disclosure

March 30		Annual Stockholders´ Meeting

May 3		Earnings Release - 1^st Quarter of 2016

August 2		Earnings Release - 2^nd Quarter of 2016

October 31		Earnings Release - 3^rd Quarter of 2016

Itaú Unibanco Holding S.A.

Management Discussion & Analysis

Stock Market Performance

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Itaú Unibanco Holding S.A.

(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 December 31, 2015, on which we issued an unqualified opinion dated February 1, 2016, 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 year ended December 31, 2015.

Scope of the Review

We conducted our review in accordance with NBC TA 720, "The auditor's responsibility relating to other information in documents containing audited financial statements", which establishes the procedures to be performed in engagements of this nature. Those procedures primarily 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 at December 31, 2015, 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).

Sao Paulo, February 1^st, 2016


PricewaterhouseCoopers		Washington Luiz Pereira Cavalcanti
Auditores Independentes		Contador CRC 1SP172940/O-6
CRC 2SP000160/O-5

Itaú Unibanco Holding S.A.

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Itaú Unibanco Holding S.A.

MANAGEMENT REPORT – January to December 2015

To our Stockholders:

The Management Report and the Financial Statements of Itaú Unibanco Holding S.A. (Itaú Unibanco) and its subsidiaries for the period from January to December 2015, follow 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 Superintendence of Private Insurance (SUSEP), National Council of Private Insurance (CNSP) and the National Superintendence of Supplementary Pension (PREVIC).

The information presented in this material is available on the Investor Relations’ website of Itaú Unibanco: (www.itau.com.br/investor-relations > Financial Information) and on the CVM, Securities and Exchange Commission (SEC) and the Buenos Aires Stock Exchange (BCBA) websites. Our results may also be accessed on mobile devices and tablets, and through our application “Itaú RI” (APP), respectively.

OVERVIEW

	2015			2014
Net income (R$ billion)		23.4			20.2
Recurring net income (R$ billion)		23.8			20.6
Recurring return on average equity - annualized		23.9	%		24.0	%
Return on average equity - annualized		23.5	%		23.5	%
BIS of Prudential Conglomerate ⁽¹⁾		17.8	%		16.9	%
Total Assets (R$ billion)		1,359.2			1,208.7
Total Loan Portfolio (including Sureties, Endorsements and Guarantees) (R$ billion)		548.1			525.5
Employees		90,320			93,175
Brazil		83,481			86,192
Abroad		6,839			6,983
Branches and CSB – Client Service Branches (units)		4,891			5,039
Digital Branches		94			31
ATM – Automated Teller Machines (units)		26,412			27,916
Activities Abroad ⁽²⁾		18			18

⁽¹⁾ The criteria used for Basel ratio calculation criterion related to December 31, 2014 and December 31, 2015 were the financial conglomerate and prudential conglomerate, respectively.

⁽²⁾ Does not include Brazil.

ECONOMIC ENVIRONMENT

2.1) International Context (ex- Latam)

The U.S. economy continues showing improvement in the labor market. The unemployment rate fell to 5.0% in December 2015 from 5.7% at the end of 2014. This favorable change followed a moderate growth in GDP, which expanded by 2.6% in the year through September, as compared to the same period of the previous year.

In the same comparison, Eurozone and Japan GDP grew by 1.5% and 0.4%, respectively; China, however, decelerated to 6.9% when compared to 7.3% achieved in 2014. This moderate growth in China has affected the expansion of emerging countries, including those of Latin America.

2.2) Latam Context (ex- Brazil)

In Latin America, commodities-exporting countries continue growing less in relation to the previous decade. Lower prices of commodities negatively affect investment, confidence and domestic income. Mexico has not fully benefited from the U.S. recovery, and falling oil prices have hindered the implementation of a reform in the energy sector.

Due to the currencies’ depreciation, inflation has been higher in almost all countries. The central banks of Chile, Colombia, Peru and Mexico are increasing monetary policy rates, despite low growth. The slowdown in economic activity and tax revenues related to lower commodities prices are also forcing governments to cut spending.

Although the region’s economic environment is unfavorable, economic fundamentals gave rise to differences between countries. Accordingly, slowdown in Chile, Colombia, Peru and Mexico has been smoother in relation to other Latin American countries.

2.3) Domestic Context

In the domestic scenario, GDP slowed in the period from January to September 2015, posting a 3.2% drop as compared to the previous year. Unemployment rate rose to 7.5% in November 2015 from 4.9% in November 2014. Inflation reached 10.67% in 2015. The Central Bank of Brazil increased the interest rate to 14.25% in July 2015 and kept it unchanged for the remaining year. The primary deficit accumulated in the year reached 0.7% of GDP in November 2015, compared to a 0.4% GDP in the same period of 2014. The current account deficit decreased due to a more depreciated exchange rate and a reduction of economic activity. Deficit in external accounts fell to 3.3% of GDP in 2015 from 4.3% in 2014.

The US dollar appreciated 47% against the real in 2015, closing at R$3.90/US$. Brazil has international reserves of approximately US$370 billion.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

OUR HIGHLIGHTS IN 2015

3.1) A new management structure for Itaú Unibanco

In February, we announced changes in our management structure, chaired by Mr. Roberto Setubal, with the introduction of a new executive committee composed of three general managers (Wholesale, Retail, and Technology & Operations) and two vice-presidents (Management and Control of Risks & Finance; and Legal, Personnel & Institutional).

3.2) New Data Center Opened

In March 2015, we opened our new data center. This technology center will increase 25 fold the processing and storage capacity of our operations, in addition to providing a 43% reduction in the use of energy, as compared to our current consumption. The new data center will support our growth up to 2050, ensuring the high performance and availability of our operations. The migration of our systems and services is scheduled to be completed in the second half of 2016.

3.3) Corporate Events

Repurchase of shares – In 2015, we acquired^(a) 115.4 million preferred shares of our own issue, in the total amount of R$3.3 billion, at the average price of R$28.80 per share.

The balance of treasury shares reached 162.6 million preferred shares in December 2015, equivalent to 5.7% of outstanding shares of the same class (free float).

Additionally, in January 2016, 8.0 million preferred shares were repurchased.

In February 2016, it was decided, at a meeting of the Board of Directors, the renewal of the buyback program, authorizing the acquisition of up to 10.0 million common shares and 50.0 million preferred shares valid for de period of from February 3, 2016 to August 2, 2017.

(a) All amounts were adjusted at the 10% bonus shares approved at the Stockholders’ Meeting held on April 29, 2015.

10% Bonus Shares for Itaú Unibanco Shares – For the third consecutive year, we granted a 10% bonus for our shares and in July 2015, our stockholders received a new share for every ten shares of the same type they held.

The monthly dividend was maintained at R$0.015 per share, which represents a 10% increase in the amounts received on a monthly basis, and the assigned cost of the bonus shares was R$18.348050984612, which impacted the average price of the shareholders’ portfolio.

3.4) Mergers, Acquisitions and Partnerships

Merger of Itaú Chile with CorpBanca – In 2015, the merger was approved in Chile. Therefore, we obtained all regulatory approvals in Brazil, Chile, Colombia and Panama.

The bank resulting from the merger will be called Itaú CorpBanca, which will operate under the “Itaú” brand and will be controlled by Itaú Unibanco through a 33.58% ownership interest in its capital.

The implementation of the merger, which will occur in the first half of 2016, will bring the following benefits to the stockholders of Banco Itaú Chile and CorpBanca:

· Creation of one of the strongest financial institutions of Latin America;

· A larger customer service network;

· Lower funding costs and increased leverage capacity of Tier 1 capital; and

· Operating cost synergies.

This operation consolidates the bank’s strategy to expand its presence in Latin America, placing the bank in an outstanding position in Chile and Colombia, as well as diversifying our operations in the region.

Alliance with MasterCard – In March 2015 we entered into an agreement with MasterCard Brasil Soluções de Pagamento Ltda. to establish an alliance for a 20-year term, in the payment solutions market in Brazil. This alliance will operate a new electronic payments network through a company controlled by MasterCard, in which Itaú Unibanco will have certain veto and approval rights. This alliance is subject to approval by regulatory authorities.

Acquisition of ConectCar shares – In October 2015, Rede entered into an Agreement for the Purchase and Sale of Shares and Other Covenants, by which it agreed to acquire 50% of the capital stock of ConectCar Soluções de Mobilidade Eletrônica S.A., by paying R$170 million to Odebrecht Transport S.A. The remaining 50% of ConectCar’s capital stock will be held by Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A. The operation was approved by the Administrative Council for Economic Defense (CADE) and the Central Bank of Brazil (BACEN) in the end of 2015.

Control acquisition – Recovery – In December 2015, we entered into an agreement with Banco BTG Pactual S.A. (“BTG”) by which we agreed to purchase a 81.94% stake in Recovery do Brasil Consultoria S.A. (“Recovery”), which is the total stake of BTG in Recovery.

After obtaining the regulatory and governmental authorizations required and complying with certain suspension conditions, we will pay R$640 million to BTG for the stake in Recovery.

Together with the acquisition of the stake in Recovery’s capital, in the same operation we agreed to purchase approximately 70% of a credit rights portfolio, in the amount of R$38 billion related to the recovery of portfolios, arising from credits originated by some banks from the market. Subject to the same conditions precedent to the acquisition of the stake in Recovery’s capital, we will pay R$570 million to BTG for the stake in this portfolio.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

3.5) Technology

Our technology is aimed at improving people’s day-to-day experience. We seek to have an increasingly relevant involvement in people’s basic demands, by making available the best experience they can have.

That is why we create our digital channels. For our clients to have the bank wherever and whenever they wish, be it at the branch or even in their pockets, in the car, in the park or any other place.

Digital channels – In 2015, 67% of our bank transactions came through our digital channels, which represented 8.9 billion transactions, a 23% increase compared to the previous year.

Over 40% of individual account holders access our digital channels on a monthly basis, whereas for the companies segment this figure exceeds 60%.

We highlight the mobile channel, which in 2015 grew by 5 percentage points in the share of transactions, accounting for 17% of the bank’s total transactions.

To ensure that our clients enjoy even more comfort and convenience, we continue to invest in our Digital Branches – an innovative pioneering relationship model, causing the bank to become even more available to clients, beyond traditional opening times and through the digital channel of their preference.

In December 2015, we reached the milestone of 1.1 million clients of the Digital Branches.

Social networks - In 2015, we continue to be the largest brand channel on Youtube in Brazil and the largest in the world in the financial segment, reaching over 192 million views up to December 31, 2015.

Our year-end message, called "Happy 2016”, was the most viewed video watched by Brazilians in December, according to the Youtube Ads LeaderBoard ranking. The video, narrated by actress Fernanda Montenegro, reached almost 52 million views on Youtube and Facebook, with 98% of positive comments.

In 2015, we achieved 7.6 million fans on Facebook. We have the largest community among banks in the world and one of the 15 largest fan bases among Brazilian brands, according to SocialBakers. Our profile on Twitter achieved over 594 thousand followers, which makes it the number one in Brazil's financial segment. We also have 64.7 thousand followers on Instagram.

Upon monitoring our profiles on social networks, which lists the interactions we have with our audiences – such as doubts, suggestions, compliments and complaints – we had over 549 thousand comments on Itaú Unibanco, of which 74% were positive or neutral, according to Gauge (a business innovation and business intelligence consulting firm).

“Cubo” – Our technology investments go beyond our core business.

In May 2015, we launched “Cubo”, in partnership with Redpoint eventures. A non-profit initiative, Cubo consists in a large development center for technological entrepreneurship, offering coworking spaces, education and networking activities, the purpose of which is to contribute on a structured basis to expand innovative and transforming initiatives. The headquarters of the Cubo was opened in September 2015 in São Paulo.

3.6) Subsequent Event

Credit Intelligence Bureau – On January 21, 2016, we announced the Memorandum of Understanding entered into with four other banks, aimed at creating a credit intelligence bureau (CIB), which will be structured as a corporation under shared control, 20% for each bank. CIB will develop a data base aiming to aggregate, reconcile and treat registration data and credit information of individuals and legal entities that expressly authorize their inclusion in such data base as required by applicable law. This action will increase the exchange of information of such individuals and legal entities, enabling higher levels of efficiency and improvement on credit management activities. This initiative shall facilitate, for participants of the Brazilian Financial System and other companies on the credit market, the granting of credit lines at long and medium terms. The technical implementation of CIB shall be performed together with a technical partner selected to develop and implement the technological and analytical platform through a service agreement. The creation of the CIB is subject to the execution of final agreements among the five banks, and to the satisfaction of certain precedent conditions, including the approval of the proper regulatory authorities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

OUR PERFORMANCE

4.1) Income and Returns

In R$ billion	Jan to Dec/2015			Jan to Dec/2014			Change (%) ⁽¹⁾
Income from financial operations before loan and losses		49.7			51.9			(4.1	)
Expenses for allowance for loan losses		(27.2	)		(19.3	)		41.3
Income from recovery of credits written off as loss		4.8			5.0			(5.5	)
Banking service fees and income from bank charges		30.8			27.7			11.1
Result from insurance, pension plan and capitalization operations		4.2			3.8			8.7
Personnel, other administrative and operating expenses		(43.8	)		(39.2	)		11.6
Tax expenses		(5.4	)		(5.1	)		5.6
Equity in earnings of affiliates and Other operating revenues ⁽²⁾		1.6			2.3			(30.9	)
Income tax and social contribution, Minority interest in subsidiaries and Profit sharing – Management Members		8.6			(7.0	)		-
Net income		23.4			20.2			15.4
Recurring net income ⁽³⁾		23.8			20.6			15.6
Dividends and interest on capital (net of taxes)		7.3			6.6			10.1
Recurring return on average equity - annualized		23.9	%		24.0	%		-10	bps
Return on average equity - annualized		23.5	%		23.5	%		-
Recurring return on average assets - annualized		1.9	%		1.8	%		10	bps
Return on average assets - annualized		1.8	%		1.8	%		-

(1) Change is calculated based on actual figures in units.

(2) Equity in earnings of affiliates, jointly controlled entities and other investments, Other operating revenues and Non-operating income.

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

The following contributed to the increase in net income from January to December 2015:

Banking service fees and income from bank charges: an 11.1% growth compared to the previous year, due to the increased income from credit cards, arising mainly from annual fees and other services; current account services, due to higher income from service packages; funds management, loan operations and guarantees provided.

Income from insurance, pension plan and capitalization operations: an 8.7% growth in relation to 2014, influenced by lower expenses on claims in the period – for additional information see item 4.4. Itaú Insurance, Pension Plan and Capitalization.

Expenses for allowance for loan and lease losses: a 41.3% increase from the same period of the previous year, mainly due to the recognition of a complementary provision for loan losses to the minimum required by CMN Resolution No. 2,682/99 in the amount of R$2,793 million^(b), mainly due to a lower economic growth scenario.

Personnel, and other administrative and operating expenses: an 11.6% increase from the same period of the previous year, due to greater expenses on compensation and social benefits, greater expenses on facilities and data processing and telecommunications, and by higher operating expenses, due to the recognition of tax and social security provisions of R$560 million^(b) and civil provisions.

Income from financial operations before loan and losses, Income tax and social contribution and tax expenses: the decrease in income from financial operations before loan losses is mainly due to the tax effects of hedging foreign investments^(c), which are recorded under Income Tax, Social Contribution on Net Income (CSLL) and Tax expenses. If we had reclassified this result, the financial margin would have reached R$64.8 billion, a 17.7% increase from the same period of the previous year. This same reclassification to Income Tax and Social Contribution on Net Income line would have brought this figure to a R$4.6 billion expense, with a 50.0% decrease from the same period of the previous year; if we brought this reclassification to the Tax Expenses line we would have recorded a R$6.6 billion expense, a 21.3% increase from the same period of the previous year.

Income from financial operations before loan losses was negatively impacted by R$520 million^(b) due to the change of the accounting treatment of the financial lease agreement related to the implementation of the Technology Center, intangible and fixed assets, and advances to suppliers.

Increase in the Social Security Rate – In 2015, the impact on results arising from the revaluation of tax credit balance from social contribution due to the increase in the tax rate was positive by R$3,988^(b) million in the period.

^(b) Non-recurring effects, net of tax effects. For additional information on non-recurring effects see Note 22 k) to the Complete Financial Statements.

^(c) Brazilian tax legislation sets forth that gains and losses from foreign exchange variation on foreign investments are not taxable for PIS/COFINS/IE/CSLL purposes. On the other hand, gains and losses from financial instruments used to hedge this asset position are impacted by tax effects.

The different tax treatment granted to these foreign exchange differences results in volatility in Gain (loss) from operations and tax expense accounts (PIS/COFINS) and income tax (income tax/social contribution on net income).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

4.2) Asset Data

In R$ billion	Dec 31, 2015		Dec 31, 2014		Change (%) ⁽¹⁾
Total assets		1,359.2		1,208.7		12.4
Loan Portfolio with endorsements, sureties and private securities		585.5		559.7		4.6
Loan portfolio with endorsements and sureties		548.1		525.5		4.3
Corporate – Private securities		37.4		34.2		9.5
Free, raised and managed own assets		1,944.9		1,713.8		13.5
Subordinated debt		65.8		54.6		20.6
Stockholders’ equity		106.5		95.8		11.1

(1) Change is calculated based on actual figures.

4.2.1) Assets

Total consolidated assets reached R$1.4 trillion at the end of December 2015, a 12.4% growth from the same period of the previous year, mainly driven by an increase in short-term interbank investments and securities.

The diversification of our business is reflected in the changing composition of our loan portfolio in the last few years, focusing on origination in lower risk products with increased guarantees.

Loan Portfolio

On December 31, 2015, the balance of the loan portfolio, including endorsements and sureties, reached R$548.1 billion, a 4.3% increase from December 31, 2014, mainly driven by increased payroll loans, mortgage loans, the corporate and Latin America portfolios.

If we also included the risks associated to the credits we have in the private securities modality, this increase will reach 4.6%. Excluding the effects of foreign exchange variation, our loan portfolio, including private securities, would have decreased 2.9% from the previous year.

On December 31, 2015 and 2014, the breakdown of the portfolio, including endorsements and sureties, is as follows:

4.2.2) Funding

Total free, raised and managed own assets amounted to R$1.9 trillion on December 31, 2015, up 13.5% from the same period of the previous year.

As compared to December 2014, we recorded a 3.1% increase in the sum of demand deposits and savings deposits. On December 31, 2015, the loan portfolio to funding ratio reached 73.0%.

In R$ billion	Dec 31, 2015		Dec 31, 2014		Change (%) ⁽¹⁾
Demand Deposits		61.1		48.7		25.4
Savings		111.3		118.4		(6.0	)
Time Deposits		105.3		108.5		(3.0	)
Debentures ( (Linked to Repurchase Agreements and Third Parties’ Operations)		152.2		139.9		8.8
Funds from Bills ⁽²⁾and Structured Operations Certificates		50.8		31.7		60.5
Total - Funding from Account Holders and Institutional Clients (*)		480.7		447.2		7.5

(1) Change is calculated based on actual figures.

(2) Includes funds from Real Estate, Mortgage, Financial, Credit and Similar Notes.

(*) Funds from Institutional Clients totaled R$36.7 billion, which corresponds to 7.6% of the total raised with Account Holders and Institutional Clients.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

Brazil – Individuals

Credit Card (Itaucard, Hipercard, Credicard and partnerships)

We are leaders in the credit card segment in Brazil in terms of transacted volume^(d).

At December 31, 2015, the balance of the credit card portfolio was R$58.5 billion, a 1.3% decrease from the previous year.

From January to December 2015, the transacted volume in credit cards reached R$250.8 billion, which represented a 5.1% increase as compared to the previous year.

In the debit card segment, which includes account holders only, we have a base of 26.0 million accounts. Transacted volume reached R$83.8 billion from January to December 2015, a 12.4% growth from the same period of the previous year.

(d) Source: Itaú Unibanco and ABECS ((Brazilian Association of Credit Card Companies and Services) – January to November 2015.

Payroll loans

We are leaders in payroll loans among Brazilian private banks.

The loan portfolio balance reached R$45.4 billion (R$16.2 billion in our branch network and R$29.3 billion in other distribution channels), a 12.1% increase compared to December 31, 2014, and reached 8.3% of the bank’s total loans.

Noteworthy are the portfolios of retirees and pensioners from the INSS, which accounted for 63.5% of the total payroll loan portfolio.

Personal loans

In December 2015 the balance of the personal loan portfolio reached R$29.0 billion, up 1.5% from the same period of the previous year.

Mortgage loans

We are leaders, among private banks, in mortgage loans to individuals with the use of savings funds (SBPE, the Brazilian savings and loans system)^(e).

Our offer is made by a network of branches, development companies, and real estate agents. Mortgage loans reached R$34.6 billion, a 19.8% increase in 12 months, and accounted for the third largest balance of our loan portfolio for individuals in December 2015.

The ratio of the loan amount to the value of the financed properties was approximately 43.7% from January to December 2015.

From January to December 2015, we carried out approximately 34.1 thousand financing operations to borrowers, in the amount of R$10.5 billion. For entrepreneurs, the volume of financing operations contracted generated 20.0 thousand new units, in the amount of R$3.4 billion.

In September 2015, we were ranked first in three categories for Latin America and three categories for Brazil at the Euromoney’s Real Estate Survey, organized by Euromoney magazine. This survey acknowledges the best companies operating in the real estate market sector worldwide.

(e) Source: Itaú Unibanco and ABECIP (Brazilian Association of Mortgage Loans and Savings Companies) - December 2015

Vehicles

The balance of the vehicles financing portfolio reached R$20.0 billion, a 30.9% decrease from the same period of the previous year. Between January and December 2015, new vehicle financing contracts reached 8.8 billion, with average term of 40 months, and half of the transactions were carried out with maximum terms of up to 36 months.

The ratio of the loan amount to the average asset value of the portfolio was 70.8% in December 2015, continuing the downward trend.

Brazil - Companies

Large Companies

At December 31, 2015 the balance of the loan portfolio reached R$205.7 billion, a 2.0% increase from the same period of the previous year.

In derivatives, we are the leaders in CETIP in terms of financial volume and number of contracts. The focus was on operations hedging exposures to foreign currencies, interest rates and commodities with clients.

Very small, small and medium-market companies

At December 31, 2015 the balance of the loan portfolio reached R$82.7 billion, a 1.7% decrease from the same period of the previous year.

We kept the focus on reviewing and streamlining our product offering to very small, small and medium-market companies. As an example, the “Conta Certa” (right account), besides having more services, enables clients to customize the number of payment forms, wire and electronic transfers (DOCs and TEDs), custody of cheques, among others, in accordance with their needs.

Latin America

Our loan portfolio in Latin America reached R$72.1 billion, posting a 34.8% increase from December 2014. Excluding the foreign exchange effect of the respective local currencies against the Real, the growth of the loan portfolio was 7.3% in the period. We highlight the 35.8% (8.1% ex-foreign exchange rate variation) in Chile, a growth of 44.1% (14.8% ex-foreign exchange rate variation) in loans to individuals and 30.5% (3.9% ex-foreign exchange rate variation) for the companies segment.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

Default

Our policy for reducing risk in credit granting, started in 2011, resulted in the improvement of the default, mainly impacted by the change in the credit profile of our portfolio. As a result of the economic scenario:

Total default rate (NPL over 90 days) reached 3.5% at December 31, 2015, up by 40 bps from December 31, 2014.

In the individuals portfolio, the default rate reached 5.4% at the end of December 2015, increasing 70 bps from the same period of the previous year, and

In the companies portfolio, the default rate reached 1.9% at the end of December 2015, increasing 10 bps from the same period of the previous year.

Due to an expected continuing challenging economic environment for 2016, we recognized provisions complementary to the minimum required by the Central Bank of Brazil, which brought in the balance of these provisions to R$11.0 billion.

The coverage ratio of portfolio past due for over 90 days reached 208% in December 2015, a 15 p.p. increase from the same period of the previous year.

4.2.3) Capital Strength

In order to ensure our strength and the capital availability to support business growth, regulatory capital levels were kept above the requirements of BACEN (Consolidated Prudential*), as evidenced by the Basel ratio and Common Equity Tier I and Tier II (see to the Risk Management – Pillar 3 report in the Corporate Governance section on the IR website).

At the end of December 2015, the Basel ratio reached 17.8%, of which 14.0% was Tier I Capital and 3.8% of Tier II Capital, mainly composed of shares, quotas, reserves and retained earnings, and subordinated debt. These indicators evidence our effective capacity of absorbing losses.

Our subordinated debt, which is part of our regulatory capital Tier II, reached R$27.1 billion at December 31, 2015.

*Capital^()**	Dec 31, 2015		Dec 31, 2014		Change
Nível I		14.0		12.5		150	bps
Nível II		3.8		4.4		-60	bps
Basel ratio		17.8		16.9		90	bps

(*) Consolidated Prudential: Consolidated financial statements including financial companies and the like. As from the base date January 2015, in accordance with Circular 4,278, this is the basis for the consolidation calculation.

4.2.3.1) Credit Risk Ratings by Rating Agencies

In 2015, changes in ratings and in rating outlooks of Itaú Unibanco Holding S.A. and Itaú Unibanco S.A. occurred due to exogenous factors, as follows: (i) change in Moody’s global methodology for banks; (ii) downgrade of Brazil´s sovereign credit rating and change in outlook from “stable” to “review for possible downgrade” by Moody’s; (iii) downgrade of Brazil´s sovereign credit rating to speculative grade by Standard & Poor’s; and (iv) two downgrades of Brazil´s sovereign credit rating, the second of which to speculative grade by Fitch Ratings.

Itaú Unibanco S.A. ratings are investment grade by Fitch Ratings and Moody’s, and Itaú Unibanco Holding S.A. rating is investment grade by Fitch Ratings. To learn more about these ratings, please visit (www.itau.com.br/investor-relations > Itaú Unibanco > Market Opinion > Ratings).

4.3) Services

We are constantly seeking to implement and focus on the offer of new products and services that add value to our clients and diversify our sources of income, allowing the growth of our non-financial income arising mainly from banking service fees, income from bank charges and from insurance, pension plan and capitalization operations.

Asset Management

In December 2015, we reached R$473.1 billion^(f) in assets under management, according to the ANBIMA management ranking, accounting for 15.9% of the market. We posted a 18.1% growth compared to the same period of the previous year, and particularly noteworthy were fixed income and pension plan funds. In addition to the strong performance in the domestic market, we are present in main global financial centers, with strategically allocated professionals searching for investment opportunities and solutions adequate to different clients' profiles.

Kinea, the investments management company controlled by Itaú Unibanco, holds R$6.9 billion in managed assets.

(f) Source: ANBIMA Management Ranking – November 2015. Includes Itaú Unibanco and Intrag.

Custody and Bookkeeping Services

In the custody market, we hold R$1.0 trillion in assets, according to the ANBIMA management ranking in November 2015, which represents a 5.6% increase as compared to the same period of the previous year^(g). We provided services to 222 companies listed on the BM&FBOVESPA, accounting for 62.0% of the bookkeeping market. In debenture bookkeeping, we operated as the bookkeeper of 498 issues until November 2015, accounting for 51.8% of the market^(g).

(g) Source: Itaú Unibanco, ANBIMA and BM&FBovespa – November 2015.

Private Banking

With a full global wealth management platform, we are market leaders in Brazil and one of the main players in Latin America. Our multidisciplinary team, composed of private bankers, investment advisers and product experts, serves clients in offices in 8 cities in Brazil and abroad, in our offices located in Zurich, Miami, New York, Santiago, Montevideo, Asuncion, and Nassau.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

In 2015, we were acknowledged by the main publications in the private banking market “Best Private Banking Services Overall in Brazil” by Euromoney magazine, “Best Private Bank in Brazil” by PWM/ The Banker, “Outstanding Global Private Bank – Latin America” by Private Banker International and “Best Private Bank in Brazil” and “Best Private Bank in Latin America” by Global Finance. These awards are granted according to the outcome of assessments conducted by major Wealth Management market institutions and players, and take into account client relationship, portfolio management, asset allocation, offering, risk control and business strategy.

Consortium (Vehicles and Properties)

In December 2015, the balance of installments receivable reached R$11.8 billion, with an increase of 8.0% when compared to December 2014.

We reached approximately 415 thousand agreements in force, a 3.3% increase when compared to the previous year.

Consortia management fees reached R$683.7 million from January to December 2015.

Investment Banking

From January to December 2015, we highlight our Merger and Acquisition operation, which provided financial advisory on 54 transactions in Latin America, totaling US$11.1 billion and topping the Thomson Reuters ranking.

In local fixed income, we took part in debentures, promissory notes and securitization transactions, which totaled R$14.2 billion in the period from January to November 2015. In international issues of fixed income of Latin American companies, we acted as the joint bookrunners of offerings with a total volume of US$1.8 billion in the period, according to Dealogic^(h).

To serve international clients, we rely on units in Argentina, Chile, Colombia, Arab Emirates, the United States, Hong Kong, Mexico, United Kingdom and Peru, with a representation office in the latter.

In this same period, we were awarded as the “Most Innovative Investment Bank in LatAm 2015” by The Banker and “Best Investment Bank in Latin America”, “Best Investment Bank in Brazil”, “Best Investment Bank in Argentina”, “Best M&A Bank in Latin America” and “Best Equity Bank in Latin America” organized by Global Finance.

(h) Includes only transactions in US dollars and local currency above US$50 million.

Electronic Payment Means

From January to December 2015, we reached 4,028.1 million debit and credit cards transactions, a 4.4% increase from the same period of the previous year.

The volume transacted on credit cards was R$249.7 billion from January to December 2015. This amount accounts for 65.2% of total transactions arising from acquiring business, and a 7.8% increase from the previous year.

The volume captured in debit cards was R$133.4 billion and represented 34.8% of the volume transacted from January to December 2015, up 5.9% as compared to the same period of 2014.

We closed the period with 1.9 million installed equipments, a 4.2% growth compared to the previous year.

REDE and Poynt Co. entered into an agreement for the exclusive distribution of a new terminal model that accepts payments with cards in the retail segment. These new devices will be offered to our retail partners over 2016.

In 2015, we were elected the company of the year at the Época Awards “Reclame Aqui (complain here) in the “Electronic Means of Payment” organized by Época magazine and the Reclame Aqui. Also in 2015 REDE was elected one of the 25 most valued brands in Brazil at the 2015 Brazilian Most Valued Brands survey conducted by Interbrand.

4.4) Itaú insurance, pension plan and capitalization

Insurance⁽ⁱ⁾

We continue to concentrate distribution efforts on our own channels, by giving priority to sales through more efficient channels that generate positive impacts in our operation.

Net income for the period posted a 6.2% reduction in up to December 2015, as compared to the same period of the previous year, due to the accelerated termination of the agreement between Itaú Seguros S.A. and Via Varejo in the third quarter of 2014.

The result of insurance core activities^(j)posted a 0.8% grown in 2015, when compared to the previous year. Earned premiums posted a 6.4% reduction in relation to 2014, totaling R$5.6 billion in the period. Retained claims totaled R$1.6 billion in 2015, a 21.0% reduction in relation to 2014. The drop in earned premiums and retained claims were impacted by the sale of the large risks portfolio in 2014.

In 2015, loss ratio was 27.7%, a 510 bps reduction from the prior year. The combined ratio was 70.3%, a 350 bps reduction from the previous year. Technical provisions for insurance reached R$4.9 billion at December 31, 2015.

Sales through bankline/internet, ATM, bankfone and bank-teller terminals accounted for 40.2% of total sales to accountholders from January to December 2015. Sales growth of insurance policies to accountholders through ATMs was 39.1% up to December 2015 compared to the previous year, and now account for 9.1% of sales to accountholders in the period. The amount of sales to clients of the Digital Branches accounted for 7.8% of insurance gross sales to accountholders in the fourth quarter of 2015.

(i) Not considering our interest in Porto Seguro.

(j) Our core activities consist in the offer of Personal, Equity, Credit Life, Pension Plan and Capitalization mass products.

Pension Plan

The gross total funding from pension plans totaled R$20.5 billion in 2015, a 17.0% drop as compared to the previous year. Funding from individual pension plans reached R$18.4 billion in the period.

Revenues from management fees increased 9.9% in relation to the period from January to December 2014, reaching R$1.3 billion. Technical provisions were up 19.8% from the same period of the previous year, totaling R$124.1 billion at the end of December 2015, mainly driven by increased provisions for VGBL product.

In November 2015, according to the National Federation of Private Pension Funds and Life Insurance (FENAPREVI), our market share of total technical provisions ^(k) was 23.8%, whereas the individual plans accounted for 24.1%.

(k) Source: FENAPREVI – data of November /2015.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

Capitalization

In capitalization, we reached 14.0 million certificates in force at December 31, 2015, posting a 5.8% decrease from the previous year. The technical provisions for capitalization reached R$3.0 billion at December 31, 2015, and collections of capitalization certificates reached R$2.8 billion in 2015, recording a 13.6% increase from the same period of the previous year.

In 2015, the volume of collections from account holders posted a 22.5% increase.

The amount of sales to Digital Branches clients accounted for 4.9% of total capitalization certificates to accountholders in the fourth quarter of 2015.

We remained leaders in terms of technical result ^(l), taking into account the total capitalization market, with a 29.4% market share from January to November 2015, according to SUSEP.

(l) Source: SUSEP (November 2015). Technical Result = Net revenue from capitalization certificates (+) Results from raffles (-) Acquisition costs (+) Revenue from redemption of certificates.

4.5) Stock Market

Market value – at December 31, 2015, we were ranked the second largest company in Brazil based on market value (R$155.7 billion), and the first among financial institutions, according to the Bloomberg ranking.

Volume of transactions - the daily average volume of transactions of our shares on BM&FBOVESPA from January to December 2015 was 32.0 thousand per session, 25.5% higher than in the same period of last year, with an average volume of R$15.0 thousand per transaction. Comparatively, Ibovespa’s daily average volume of transactions increased 6.1% and the average volume per transaction was R$7.2 thousand. On NYSE, the daily average volume of transactions of ITUB was 36.7 thousand per session, 0.3% higher than the total from January to December 2014, with an average volume of R$13.8 thousand per transaction.

Stockholders’ Compensation:

Dividends and interest on capital: We remunerate our stockholders with monthly and supplementary payments of dividends and interest on capital. From January to December 2015, we paid or provided for R$7.3 billion in dividends and interest on capital, net of taxes.

Return on investment: At December 31, 2015^(m), the return on investment in terms of dividends/interest on capital to stockholders in relation to the share price at January 2, 2015, net of taxes, was 3.75%.

(m) Includes total dividends/interest on capital distributed in the 12-month period.

Relations with the market

In 2015, we took part in 30 conferences and nine road shows in Brazil and abroad, and held 22 Apimec (Association of Capital Market Analysts and Investment Professionals) meetings this year in Brazil, with the attendance of over 2.6 thousand participants, thus strengthening our relationship with stockholders, analysts and investors of capital markets. As a result of our activities, we received the following acknowledgements:

2015 Latin America Executive Team Rankings – organized by Institutional Investor magazine, we were acknowledged in 9 out of 11 categories: Best Investor Relations by the buy-side and sell-side; the Best CEO by the buy-side and sell-side; the Best CFO by the buy-side, and the Best Investor Relations Professional: 1^st place by the buy-side and sell-side and 2^nd place by the buy side; Best Investor Relations Meetings.

IR Magazine Awards Brazil 2015 – organized by IR Magazine and the Brazilian Institute of Investor Relations (IBRI), we were acknowledged in three categories: Best Investor Relations in the Financial Sector; Best use of technology (large cap), and Best Annual Report.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

The table below shows the main market indicators at December 31, 2015:

			R$		%
Shares	December 31, 2015		December 31, 2014		Change
Recurring net income per share⁽¹⁾		3.98		3.43		16.0
Net income per share⁽¹⁾		3.90		3.36		16.1
Book value per share⁽¹⁾		17.98		15.91		13.0
Number of outstanding shares (in millions)⁽²⁾⁽³⁾		5,921.4		6,024.7		(1.7	)
Dividends/Interest on capital, net per share		1,2376		1,2204		1.4
Price of preferred share (ITUB4)⁽²⁾⁽⁴⁾		26.30		31.56		(16.7	)
Price of common share (ITUB3)⁽²⁾⁽⁴⁾		24.28		29.00		(16.3	)
Price of preferred share (PN)⁽²⁾⁽⁴⁾/Net income per share (annualized)		6.74		9.39		(28.2	)
Price of preferred share (PN)⁽²⁾⁽⁴⁾/Stockholders’ equity per share		1.46		1.98		(26.3	)
Market value (in billions) ⁽⁵⁾⁽⁶⁾		155.7		190.2		(18.1	)

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

(2) Adjusted by bonus carried out on July 17, 2015;

(3) For better comparability, outstanding shares in the period of September 30, 2014 were adjusted by the bonus shares.

(4) Based on the average quotation on the last day of the period;

(5) 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);

(6) Considering the closing quotation of common and preferred (ON and PN) shares multiplied by total outstanding shares of each type of shares, the market value reached R$150.6 billion on December 31, 2015 and R$183,1 billion December 31, 2014, resulting a variation of 17.8%.

4.6) Statement of Added Value

The distribution of added value is an accounting reference that allows to see how the generation of the bank’s value is distributed among its different audiences. Our added value, which shows the wealth generated for the community, reached R$55.2 billion in 2015, (disregarding the hedge tax effect), a 3.8% increase when compared to 2014. This result refers to the direct economic value generated and distributed by us, including income, operating costs, employee compensation, donations and other investments in the community, retained earnings and payments to capital providers and governments, as shown on the right:

OUR CORPORATE GOVERNANCE

We seek the constant evolution of our management policies and mechanisms to assure excellence in our practices and sustainable growth.

Thus, in 2001 we were one of the first companies to voluntarily adhere to Corporate Governance Level 1 of BM&FBOVESPA and in 2002 we recorded our ADSs Level 2 on the NYSE. We voluntarily adhered to Self-Regulation and Good Practices Code of Publicly-Held Companies of the Brazilian Association of Publicly-Held Companies (Abrasca).

Our governance practices have been acknowledged, and, as a result, our shares have been included in the Corporate Sustainability Index (ISE) portfolio of BM&FBOVESPA since it was created in 2005, and in the Dow Jones Sustainability World Index since its creation in 1999. We adopt a Code of Ethics applicable to all our employees, members of the Board of Directors and officers. Our Code is based on principles that support an organizational culture focused on valuing people, strictly compliance with rules and regulations, and the constant search for development.

We have a Policy for Disclosure of Material Information, which establishes guidelines and procedures to be followed in the disclosure of material information and protection of confidentiality not yet disclosed. Additionally, we also adopted the Policy for Trading of Securities, which establishes guidelines and procedures to be followed by the company and people related thereto for trading securities issued by the company.

Our management is structured to assure that issues are duly discussed and decisions are made on a joint basis.

The General Meeting is the decision making and governing body that brings together the shareholders, on a yearly basis before the end of April, and on extraordinary basis whenever corporate interest so requires. The Board of Directors is the body responsible for establishing the general guidelines for our business. Their members are elected yearly and the Board’s performance is assessed every term of office, to assure that its members are aligned with the organization's values and that they represent the interests of our stockholders.

Our Board of Directors currently has 12 members, four of which are independent (33%). We have seven committees reporting to the Board of Directors: Audit, Compensation, People, Appointments and Corporate Governance, Strategy; Capital and Risk Management, and Related Parties. Its members are elected by the Board for a one-year term of office and they should have proven expertise in their respective areas. These and other information on our corporate governance structure are available on our Investor Relations website: https://www.itau.com.br/investorrelations/ corporate governance.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

CORPORATE CONTROLS

6.1) Risk and Capital Management

We consider risk management as an essential instrument to optimize the use of funds and to choose the best business opportunities, aiming at maximizing the value added to stockholders. Our risk management is the process through which:

the existing and potential risks in our operations are identified and measured; and

policies, procedures and methodologies for risk management and control consistent with the Board of Directors’ guidelines and our strategies are approved;

Our portfolio is managed in search for the best risk-return ratio.

The purpose of risk identification is to map the risk events of internal and external nature that may affect the strategies and purpose of our support and business units, with possible impacts on income, capital and reputation.

We adopt a proactive attitude in capital management, comprising the following phases: identification and analysis of material risks, capital planning, stress tests conducted focusing on the analysis of the impact of severe events on our capitalization level, maintenance of the capital contingency plan, internal assessment of capital adequacy and preparation of management reports.

6.2) Anti-money laundering and illegal actions regulations

Financial institutions perform a key role in the prevention and fight against illegal actions, among which are money laundering, terrorism financing, and frauds. The major challenge is to identify and repress increasingly sophisticated operations that try to dissimulate the origin, title and movement of goods and funds arising from illegal activities.

We established a corporate policy with the purpose to prevent our involvement with illegal activities and to protect our reputation and image before the employees, clients, strategic partners, suppliers, service providers, regulatory bodies and regulatory bodies and society, by means of a governance structure focused on transparency, strict compliance with rules and regulations, and cooperation with legal and police authorities. We also seek to continually align with the best national and international practices for prevention and fight against illegal actions, through investments and continuous qualification of our employees.

As it is in compliance with corporate policy guidelines, we established a program to prevent and fight against illegal actions, based on the following pillars:

Client Identification Process;

“Know Your Client" (KYC) Process;

“Know Your Partner" (KYP) Process;

“Know Your Supplier" (KYS) Process;

“Know Your Employee" (KYE) Process;

Assessment of New Products and Services;

Monitoring of Transactions;

Communication of Suspicious Transactions to Regulatory Bodies; and

Training.

This program is applicable to all our conglomerate, including our subsidiaries and affiliates in Brazil and abroad. Governance on prevention and fight against illegal actions is carried out by the Board of Directors, Audit Committee, Compliance and Operational Risk Committee, Internal Operational Risk Committee and by the Anti-Money Laundering Committee.

6.3) Operational Structure and Internal Controls

The integrated management of operational risk, internal controls and compliance follows the internal policy approved by the Board of Directors and is structured in three lines of defense:

1^st line: represented by business and risk control areas, being responsible for identifying, measuring, assessing and managing operational risk events, as well as for maintaining an effective control environment (including the compliance with internal and external rules).

2^nd line: represented by the internal control / independent validation area, being responsible, among others, for disseminating and assuring the implementation of decisions, policies, and strategies for operating risk management, as well as for validating policies and processes on an independent basis.

3^rd line: represented by the Internal Audit area, being responsible, among others, for verifying, on an independent and periodic basis, the adequacy of processes and procedures for risk identification and management.

Following the best Basel agreement practices, we perform the independent validation of risk model and processes. This activity is performed by the Internal Controls and Compliance Office (DCIC), which, being segregated from the business and control risk area, guarantees the independence of assessments.

6.4) Information Security

The Information Security area is responsible for providing structured and consolidated information on the main information security risks in different organization levels, aiming at reducing financial losses and the image risk in Brazil and abroad, based on the definition of policies, process and procedures that support all information chain.

We monitor and treat any type of attack and security incident quickly and efficiently, managing all safety tools with a certified team specialized in diversified technologies. We manage access to systems and resources effectively, monitoring the movements required to ensure security in consultation of systems and information.

We work together with the business and technology areas to maintain the architecture of solutions and products with highest security level.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

We are certified in the public pages of the www.itau.com.br website under the Brazilian NBR ISO/IEC 27001 standard, aiming at ensuring protection and privacy of the information provided by clients and other sources, with the sole and exclusive purposes of meeting the targets established in interactive products and services.

PEOPLE

We had 90,320 employees at the end of December 2015, including 6,839 in foreign units. The employees’ fixed compensation plus charges and benefits totaled R$13.2 billion from January to December 2015, with a 14.4% increase from the same period of the previous year.

Over R$201.6 million was invested in training programs in 2015, totaling 1.5 million hours. The following programs are worth noting among the total hires made in 2015:

109 people for the 2016 Trainee Program. Young people from the whole country took part in the selection process, in addition to our interns and collaborators eligible for the program.

4,008 students for the Itaú Unibanco Internship Program, 49% of whom were made permanent.

1,741 employees for the Apprentice Program;

218 employees for the Inclusion of Disabled People Program.

The turnover rate, which measures the ratio of hiring and termination (either voluntary or not) in 2015 was 10.6%. We invested in the employee relocation program, which purpose was to create opportunities for internal transfers, considering the availability of openings and the profile of internal employees. In the Career Opportunity Program (POC), which makes openings available for internal movement between areas, 1,598 collaborators were allocated internally. Conducted annually, the “Fale Francamente” (speak up) survey measures the employee’s satisfaction with the organizational environment and people management. In 2015, 88% of our employees voluntarily took part in the survey in Brazil and abroad. The satisfaction rate was 82% in Brazil and abroad, a 200 bps increase as compared to 2014.

In 2015, we were granted, for the 7^thtime, and the 5^th consecutive year, the Great Places to Work award, promoted by Você S/A magazine in partnership with Fundação Instituto de Administração (FIA).

Also for the 7^th time, and the 3^rd consecutive year, we are among the “Best in People Management”, in a survey conducted by Valor Carreira magazine and Aon consulting company.

Another important acknowledgement received in December 2015 was our classification, for the 2^nd consecutive year, among The Best Companies for Disabled Workers. This was the 2^nd edition of the survey conducted by the Government of the State of São Paulo – Secretariat for the Rights of Disable People – and by Fundação Instituto de Pesquisas Econômicas (FIPE).

SUSTENTABILITY

Sustainability is incorporated into the corporate strategy by means of a consolidated governance structure integrated into business, which permits to internalize social and environmental topics in daily activities and processes. Our sustainability activities are based on three strategic focus: financial education, dialogue and transparency, and social and environmental risks and opportunities.

The management of social and environmental risk is based on the identification, measurement, mitigation and monitoring of risks. In February 2015, the Policy on Sustainability and Social and Environmental Responsibility was reviewed and published based on the criteria established by BACEN Resolution No. 4,327. In compliance with this policy, the analysis of social and environmental risks is conducted based on the characteristics, needs, risk exposure and particularities of each business front.

In 2015, we launched the papers “Riscos e Oportunidades Socioambientais – a trajetória do Itaú Unibanco” (social and environmental risks and opportunities – the path of Itaú Unibanco) and “Escolhas e Dinheiro - Um estudo sobre comportamento e decisões financeiras” (choices and money – a study on behavior and financial decisions), which reflect our position, operation and future commitments regarding Social and Risks and Opportunities and Financial Education, respectively. These materials were launched in engagement events, with the presence of sustainability stakeholders, bringing together over 250 people.

Itaú Unibanco is now part of the Euronext Vigeo Emerging 70 Sustainability Index

In December 2015, we were selected for the first time to make up the portfolio of the Euronext Vigeo – Emerging 70 sustainability index. The index is made up of 70 companies, selected among the 900 companies listed in developing countries, which showed the best performances in corporate responsibility, according to the ratings assigned by Vigeo.

Dow Jones Sustainability World Index (DJSI) - we were selected for the 16^th consecutive year to make up the Dow Jones Sustainability World Index (DJSI), the main sustainability index in the world, in its 2015/2016 edition.

In this edition, we achieved the best rate in the banking sector in the “Anti-Crime Policies/Actions”, “Financial Stability and Systemic Risk”, Financial Inclusion and Social Report” criteria. Itaú Unibanco was also selected to make up the portfolio of the Dow Jones Sustainability Emerging Markets Index.

Participation in the BM&FBOVESPA Corporate Sustainability Index (ISE) – For the 11^th consecutive year we were chosen the make up the portfolio of the 2016 BM&FBOVESPA Corporate Sustainability Index (ISE). ISE reflects the return of a portfolio made up of shares of companies with best performance in all aspects that measure corporate sustainability. Its purposes are to work as a benchmark for socially responsible investments and act as an inducer of good practices in the Brazilian entrepreneurial environment.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

The Most Sustainable Financial Institution – In November 2015, we were elected by Exame magazine as the most sustainable financial information of 2015. We were also recognized as an outstanding company in the “Human Rights” category due to our policy of respect of diversity and anti-discrimination in the workplace. This is the sector’s most important acknowledgment in the Brazilian territory.

8.1) Client Satisfaction

Client satisfaction is such a fundamental value for us that it is stated in our vision: “To be the leading bank in sustainable performance and client satisfaction”. Therefore, we focus on the ongoing monitoring of client satisfaction levels and are attentive to their statements of positioning.

Regarding our clients inquiries and positioning, we recorded 143 million responses in our channels, taking into account only those carried out by our employees or representation officers. Over 93% of these were related to the provision of information, consultation and requests, and a little more than 6% were related to discontent.

Out of the total issues, over 99.5% were resolved or clarified by the bank’s own client services. The remaining escalated to other consumer protection bodies or were taken to the court. In spite of the high client retention rates disclosed by our internal channels, we continue to give priority to investments to improve processes and further increase client's satisfaction.

PRIVATE SOCIAL INVESTMENTS

Investments made in the social area – mainly those intended to improve education, health, culture, sports and urban mobility – are related to our purpose of changing the people’s world for better.

We aim at employing the same expertise and efficiency we apply in our business to develop projects, Technologies and tools that encourage people to acquire more knowledge and critical awareness, so they are able to make better choices.

In 2015, we invested R$547.6 million in projects, either by resources incentivized by laws (Rouanet, Sports incentive laws) or by donations and sponsorships carried out by Itaú Unibanco itself, thus contributing to education, health, culture, sports and mobility projects.

	Amount		Number of
Sponsorship	(R$ million)		projects
Non-incentivized⁽¹⁾		341.4		194
Education		188.8		170
Culture		77.6		6
Sports		6.0		4
Urban mobility		69.0		14
Incentivized⁽²⁾		206.2		338
Education		23.3		100
Health		65.6		60
Culture		98.5		155
Sports		18.8		23
Total		547.6		532

(1) Own funds of the group companies and own budgets of foundations and institutions.

(2) Tax incentivized funds through laws such as Rouanet and Sports Incentive laws, among others.

9.1) Education and Health

Fundação Itaú Social – with activities in the whole Brazilian territory, it is focused on the development, implementation and promotion of social technologies aimed at advancing public education policies, enhancing the commitment of our employees – and society in general – through a volunteer culture and the systematized evaluation of social policies and projects. Therefore, its operation is fully based on partnerships with the government, public-interest organizations of civil society and other parties, in order to promote a better understanding and cooperation towards the improvement of public policies. In 2015, we highlight the following programs:

Coordenadores de Pais (Parents Coordinators): a strategy to bring families and school together. This methodology was implemented in 424 schools in the city of Salvador, after one year as a pilot-project. In 2015, the program was taken to four other Brazilian locations;

Itaú Criança (Itaú child): a reading incentive campaign that has distributed over 40 million books free of charge; and

Itaú-Unicef Award: in its 11^th edition, social managers and educators took part in full education qualification program.

Instituto Unibanco – devises, assesses and disseminates solutions that bring changes in the reality of high schools to expand the youth’s learning opportunities, in search for a fairer and transforming society. Related main programs are as follows:

Jovem de Futuro (youth with a future): in 2015, 1,394 public schools took part in the Jovem de Futuro program, benefiting 644.6 thousand students (according to the 2014 School Census) in seven states. Approximately 3.8 thousand principals, pedagogical and technical coordinators from State Education Departments took part in in-person qualification programs and over 28.5 thousand teachers attend remote education qualification programs.

Estudar Vale a Pena (studying is worthwhile): In 2015, 848 volunteers were engaged in actions that benefited approximately 6.8 thousand high school students.

Fomento (fomentation): aims at improving school management with a focus on the fomentation of gender and racial equality. In 2015, 10 racial equality projects were supported; 10 gender equality projects were selected (among 171 enrolled) to be supported in 2016.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

9.2) Culture

Instituto Itaú Cultural - in 2015, Itaú Cultural celebrated 28 years of commitment to the Brazilian art and culture. Involved in mapping, supporting and promoting the Brazilian art and culture, the institute has organized innumerous activities free of charge both in its main office in the city of São Paulo and in other locations inside and outside Brazil. It undertook over 720 national and international activities over 2015, with 390 thousand visitors to the programs developed, 22 exhibits, two of them at Espaço Memória, and had over 10.5 million hits on the website.

In 2015, it launched the 17^th edition of the Rumos (directions) program, which received over 12 thousand projects enrolled, and the Caminhadas Rumos (directions journey) program, which was visited in all Brazilian States by over 2.3 thousand people. Also in 2015 the main office in São Paulo hosted an exhibit with works displayed in the last program edition.

Celebrating one year, the Espaço Olavo Setubal (Olavo Setubal space), which hosts over 1,300 items of our art collection, was visited by over 57 thousand people.

Under Itaú Cultural management, from January to December 2015, the Ibirapuera auditorium offered 164 shows (82 free of charge) to over 371 thousand people.

Since 2009, the institute has been present on Facebook, and has 735 thousand fans, being the largest page of a Brazilian cultural institution. In addition, we are active on Twitter (94 thousand followers), on Youtube channel (we have over 4.6 million views distributed in a collection of over 4.6 thousand videos about Brazilian art and culture) and on Instagram (over 22 thousand followers). Also in 2015 we launched a children-oriented website called “O Mundo de Bartô no Itaú Cultural” (Barto’s world in Itaú Cultural).

Espaço Itaú de Cinema – established in 1995 as Espaço Unibanco, the Itaú Unibanco movie theaters how independent movies in Brazil. Present in six cities with eight movie complexes, their 56 screening rooms contribute to the access to culture in Brazil. In 2015, about 3.5 million people went to Espaço Itaú de Cinema.

9.3) Sports

We invest in the development of sports because we believe in its transformation potential based on citizenship building.

Our involvement with soccer started over 20 years ago, when we sponsored the broadcast of games in several competitions. Since 2008 we have sponsored Brazil’s National soccer team in all its categories. In addition to soccer, we support a number of tennis projects, such as the Champions of Life tennis project of the Guga Kuerten Institute, the Tennis for All circuit and the Caravana do Esporte (sports caravan) project.

Since 2009, the Caravana do Esporte Project has qualified approximately 18 thousand teachers from 17 Brazilian states, assisting over 200 thousand children directly and 1.8 million indirectly.

We also sponsored the International youth tennis championship in Porto Alegre, the College Sports League, the largest college sports Project in Brazil, and the Future Women’s Tennis Circuit, a world tour tennis tournament.

Through the federal sports incentive law, we also sponsor the Junior, High School and College Tennis Circuit, which started in 2009 aimed at promoting sports in league with education.

We marked our presence in tournaments such as Rio Open and Miami Open, and also hold the Itaú Master Tours every year (13^th edition).

9.4) Urban Mobility

We invest in urban mobility in large cities, focusing on the importance of bicycles as a means of transportation, transforming the way people live and relate with their cities. To reach this purpose, our platform is composed by bicycle sharing programs, actions to improve infrastructure in the cities and awareness initiatives for a more harmonic coexistence among the different means of transportation.

In 2015, in addition to seeking to improve current programs in seven Brazilian cities (São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador, Recife, and Brasília), we invested in actions aimed at children, and noteworthy was the “Escolinha bike” (bike children’s school), which reached over 12 thousand children in 3 months. We also implemented three new bicycle stands in container and started an innovative bicycle mobility program in Fernando de Noronha, to be completed in 2016. We also contributed for the inclusion of bicycles in driving schools throughout the State of Pernambuco.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

10) AWARDS AND RECOGNITION

From January to December 2015, we received significant recognition that contributed to strengthen our reputation. Below is the list of awards received by the bank in the period:

2015 Brazilian Most Valuable Brands

(Interbrand)

With our brand valued at R$24.5 billion, an amount higher than the last three years, in December 2015 we were once again the leaders in the Interbrand survey that ranks the Brazilian most valuable brands in 2015. This is the 12th time that our brand tops the ranking, since the list was created back in 2001. In its 12^th edition, this survey analyses different ways by which a brand influences an organization, since its impact on financial results to meeting client’s expectations.

The most admired companies in Brazil (Carta Capital magazine)	In October 2015, we were ranked number one in the "Retail Segment” segment at the 18th edition of the survey conducted by Carta Capital magazine. In the overall ranking – irrespective of sectors – we were ranked number 5.
Adviser of the Year - 2015 Caboré Award (Meio & Mensagem)	In November 2015, we were granted the Caboré Award for the 5th time as Advertiser of the Year, and we continue to be the biggest winner in this category. Created in 1980 by Meio & Mensagem newspaper, the Caboré Award is regarded as the most important Brazilian advertising segment award, acknowledging the main professionals and companies that are instrumental in developing the communications sector in Brazil.
Aberje Award (Aberje)	In November 2015 we won a number of prizes at the 2015 edition of the Aberje Award, both in the regional and countrywide stages. The winning projects were “90 years of Itaú Unibanco” in the “Historical responsibility and corporate heritage” category and "Urban mobility in Itaú: a cause beyond our little orange bikes” in the “Communication and relationship with government organizations) category. At the regional stage, the highlight was the case named "The comics of memories – the history of 90 years of Itaú Unibanco told in comics.
DatacenterDynamics Awards (DatacenterDynamics)	In November 2015, we won the award in the "Best Transformation Project in Data Center" category with the case “Itaú Unibanco: Transforming a data center into a power density environment”. In its 5th edition in Brazil, the DatacenterDynamics Awards recognizes innovation, leadership and original thinking in the Brazilian data center industry.
Euromoney Cash Management Survey 2015 (Euromoney magazine)	In November 2015 we won the award in the “Best cash manager in Brazil” category. Euromoney conducts a survey with large, middle and small institutions in over 60 countries to elect the winners.
Company Reporting IFRS Annual Report Benchmarking	In 2015, for the 3rd consecutive year, we top the ranking of the study Company Reporting IFRS Annual Report Benchmarking, a report that analyses, on an independent, technical and detailed basis, the financial information disclosed by companies and their competitors. Our report was recognized by the continuous presentation of financial information in line with regulatory requirements, and which quality is considered superior when compared with our domestic and international peers.

11) REGULATION

11.1) INDEPENDENT AUDITORS – CVM Instruction No. 381

Procedures adopted by the Company

The policy adopted by us, including our 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 December 2015, 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 21, February 11, March 23 and May 26 – acquisition of research and technical materials;

September 9 – advisory on internal processes and usual market practices for middle-market operations;

September 23 – review of tax-accounting bookkeeping, and

November 18 - diagnostic on controls on the credit card debt negotiation process.

Independent Auditors’ Justification - PricewaterhouseCoopers

The provision of the above described non-audit related professional services does 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, including the approval by the Audit Committee.

11.2) BACEN – Circular nº 3.068/01

We hereby represent 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$42.2 billion, corresponding to 12.5% of total securities and derivative financial instruments held in December 2015.

11.3) International Financial Reporting Standards (IFRS)

We disclosed the consolidated financial statements in accordance with the international financial reporting standards (IFRS) at the same date of this publication, pursuant to CVM/SEP Circular Letter No. 01/13. The complete financial statements are available on the Investor Relations website of Itaú Unibanco (www.itau.com.br/investor-relations > Financial Information).

12) ACKNOWLEDGEMENTS

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

(Approved at the Board of Directors' Meeting of February 1, 2016).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

BOARD OF DIRECTORS

Chairman

Pedro Moreira Salles

Vice-Chairmen

Alfredo Egydio Arruda Villela Filho

Roberto Egydio Setubal

Members

Alfredo Egydio Setubal

Candido Botelho Bracher

Demosthenes Madureira de Pinho Neto

Fábio Colletti Barbosa

Gustavo Jorge Laboissière Loyola

Henri Penchas

Nildemar Secches

Pedro Luiz Bodin de Moraes

Ricardo Villela Marino

AUDIT COMMITTEE

Chairman

Geraldo Travaglia Filho

Members

Antonio Francisco de Lima Neto

Diego Fresco Gutierrez

Luiz Alberto Fiore

Maria Helena dos Santos Fernandes de Santana

Sergio Darcy da Silva Alves

FISCAL COUNCIL

President

Iran Siqueira Lima

Members

Alberto Sozin Furuguem

Luiz Alberto de Castro Falleiros

Accountant

Reginaldo José Camilo

CRC-1SP – 114.497/O-9

EXECUTIVE BOARD

Chief Executive Officer

Roberto Egydio Setubal

Director-Generals

Candido Botelho Bracher

Márcio de Andrade Schettini

Marco Ambrogio Crespi Bonomi

Executive Vice-Presidents

Claudia Politanski

Eduardo Mazzilli de Vassimon

Executive Directors

Alexsandro Broedel Lopes

Leila Cristiane Barboza Braga de Melo

Paulo Sergio Miron

Directors

Adriano Cabral Volpini

Álvaro Felipe Rizzi Rodrigues

Cláudio José Coutinho Arromatte

Eduardo Hiroyuki Miyaki

Emerson Macedo Bortoloto

José Virgilio Vita Neto

Marcelo Kopel (*)

Matias Granata

Rodrigo Luis Rosa Couto

Wagner Bettini Sanches

(*) Investor Relations Director.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO S.A.

Chief Executive Officer	Directors (continued)

Candido Botelho Bracher	Fernando Julião de Souza Amaral
Márcio de Andrade Schettini	Fernando Mattar Beyruti
Marco Ambrogio Crespi Bonomi	Flávio Delfino Júnior
	Francisco Vieira Cordeiro Neto
Executive Vice-Presidents	Gabriel Amado de Moura
	Gabriela Rodrigues Ferreira (**)
	Gilberto Frussa
Alberto Fernandes	Gustavo Trovisco Lopes
Caio Ibrahim David	Henrique Pinto Echenique
Claudia Politanski	Ilan Goldfajn
Eduardo Mazzilli de Vassimon	João Antonio Dantas Bezerra Leite
Ricardo Villela Marino	João Carlos de Gênova
	Jorge Luiz Viegas Ramalho
	José Félix Valencia Ríos
	José Virgilio Vita Neto
Executive Directors	Laila Regina de Oliveira Pena de Antonio
	Leon Gottlieb
Alexsandro Broedel Lopes	Lineu Carlos Ferraz de Andrade
Álvaro de Alvarenga Freire Pimentel	Livia Martines Chanes (*)
André Luis Texeira Rodrigues	Luís Eduardo Gross Siqueira Cunha
André Sapoznik	Luís Tadeu Mantovani Sassi
Carlos Eduardo Monico	Luiz Felipe Monteiro Arcuri Trevisan
Christian George Egan	Luiz Fernando Butori Reis Santos
Fernando Barçante Tostes Malta	Luiz Severiano Ribeiro
Fernando Marsella Chacon Ruiz	Marcello Siniscalchi
Flávio Augusto Aguiar de Souza	Marcelo Kopel
João Marcos Pequeno de Biase	Marcelo Luis Orticelli
Leila Cristiane Barboza Braga de Melo	Marcio Luis Domingues da Silva
Luís Antonio Rodrigues	Marco Antonio Sudano
Luís Fernando Staub	Marcos Antônio Vaz de Magalhães
Luiz Eduardo Loureiro Veloso	Marcos Vanderlei Belini Ferreira
Milton Maluhy Filho	Mário Lúcio Gurgel Pires
Ricardo Ribeiro Mandacaru Guerra	Matias Granata
	Messias dos Santos Esteves
	Osvaldo José Dal Fabbro
	Pedro Barros Barreto Fernandes
Directors	Pedro Constantino Campos Donati Jorge
Adilso Martins de Lima	Renata Helena de Oliveira Tubini
Adriano Cabral Volpini	Ricardo Lima Soares
Adriano Maciel Pedroti	Ricardo Nuno Delgado Gonçalves
Álvaro Felipe Rizzi Rodrigues	Ricardo Orlando
André Carvalho Whyte Gailey	Ricardo Urquijo Lazcano
André Ferrari	Roberto Fernando Vicente
André Henrique Caldeira Daré	Rodrigo Luís Rosa Couto
Andréa Matteucci Pinotti Cordeiro	Rodrigo Rodrigues Baia
Antonio Carlos Barbosa Ortiz	Rogério Carvalho Braga
Atilio Luiz Magila Albiero Junior	Rooney Silva
Carlos Eduardo de Castro	Sergio Guillinet Fajerman
Carlos Henrique Donegá Aidar	Sergio Mychkis Goldstein (***)
Carlos Orestes Vanzo	Thales Ferreira Silva
Cesar Ming Pereira da Silva	Thiago Luiz Charnet Ellero
Cesar Padovan	Vanessa Lopes Reisner
Cícero Marcus de Araújo	Wagner Bettini Sanches
Cintia Carbonieri Fleury de Camargo
Claudio César Sanches
Cláudio José Coutinho Arromatte
Cristiane Magalhães Teixeira Portella
Cristiano Rogério Cagne
Cristina Cestari
Edilson Pereira Jardim
Eduardo Cardoso Armonia
Eduardo Corsetti
Elaine Cristina Zanatta Rodrigues Vasquinho
Emerson Savi Junqueira
Fabiana Pascon Bastos
Fabiano Meira Dourado Nunes
Fernando Della Torre Chagas

(*) Elected at the ESM of August 10, 2015, approved by the BACEN of October 01, 2015.

(**) Elected at the ESM of November 27, 2015, in approval by the BACEN.

(***) Elected at the ESM of December 14, 2015, in approval by the BACEN.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

BANCO ITAÚ BBA S.A.

BOARD OF DIRECTORS

Chairman

Candido Botelho Bracher

Vice-Chairmen

Alberto Fernandes

Members

Álvaro de Alvarenga Freire Pimentel

Christian George Egan

Roderick Sinclair Greenlees

Directors

Alexsandro Broedel Lopes

André Carvalho Whyte Gailey

Carlos Henrique Donegá Aidar

Cristiano Rogério Cagne

Flávio Delfino Júnior

Gabriel Amado de Moura

Gilberto Frussa

João Carlos de Gênova

Marco Antônio Sudano

Rodrigo Luís Rosa Couto

Sergio Mychkis Goldstein (*)

Vanessa Lopes Reisner

(*) Elected at the ESM of December 14, 2015, in approval by the BACEN.

ITAÚ SEGUROS S.A.

Chief Executive Officer

Luiz Eduardo Loureiro Veloso

Directors

Adriano Cabral Volpini

Alexsandro Broedel Lopes

Carlos Henrique Donegá Aidar

Cláudio José Coutinho Arromatte

Henrique Pinto Echenique

Leon Gottlieb

Luís Eduardo Gross Siqueira Cunha (*)

(*) Elected at the ESM of November 27, 2015, in approval by the SUSEP.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

Assets	Note	12/31/2015			12/31/2014
Current assets			948,456,300			858,654,710
Cash and cash equivalents			18,544,382			17,527,249
Interbank investments	4b and 6		280,199,949			228,886,899
Money market			247,445,766			204,258,864
Money market – Assets Guaranteeing Technical Provisions - SUSEP	11b		2,990,703			2,496,426
Interbank deposits			29,763,480			22,131,609
Securities and derivative financial instruments	4c, 4d and 7		222,630,200			204,403,117
Own portfolio			60,910,005			37,495,296
Subject to repurchase commitments			9,933,108			41,347,429
Pledged in guarantee			6,270,523			2,195,950
Securities under resale agreements with free movement			3,599,774			313,479
Deposited with the Central Bank			3,653,086			9,306,822
Derivative financial instruments			15,749,607			9,705,135
Assets guaranteeing technical provisions - PGBL / VGBL fund quotas	11b		117,128,328			97,183,898
Assets guaranteeing technical provisions – other securities	11b		5,385,769			6,855,108
Interbank accounts			66,791,013			63,304,170
Pending settlement			205,144			163,380
Central Bank deposits			66,555,999			63,106,314
National Housing System (SFH)			831			2,183
Correspondents			29,039			32,293
Interbranch accounts			31,367			24,723
Loan, lease and other credit operations	8		239,365,642			237,592,277
Operations with credit granting characteristics	4e		255,053,588			252,512,538
(Allowance for loan losses)	4f		(15,687,946	)		(14,920,261	)
Other receivables			118,221,907			102,821,919
Foreign exchange portfolio	9		54,167,026			38,948,083
Income receivable			2,489,756			2,484,824
Transactions with credit card issuers	4e		25,847,033			24,909,861
Receivables from insurance and reinsurance operations	4m I and 11b		1,366,962			1,388,022
Negotiation and intermediation of securities			7,550,368			3,963,971
Deferred tax assets	14b I		16,622,721			13,369,948
Escrow deposits - Civil, Labor, Tax and Social lawsuits	12b and 12d		2,130,165			2,128,452
Sundry	13a		8,047,876			15,628,758
Other assets	4g		2,671,840			4,094,356
Assets held for sale			561,036			264,667
(Valuation allowance)			(75,439	)		(68,616	)
Unearned reinsurance premiums	4m I		26,253			8,228
Prepaid expenses	4g and 13b		2,159,990			3,890,077
Long term receivables			392,027,199			330,124,066
Interbank investments	4b and 6		743,690			941,441
Money market			-			12
Interbank deposits			743,690			941,429
Securities and derivative financial instruments	4c, 4d and 7		115,761,015			95,223,407
Own portfolio			66,742,574			58,896,509
Subject to repurchase commitments			390,114			21,631,443
Pledged in guarantee			4,839,777			783,644
Securities under resale agreements with free movement			24,234,440			3,433,377
Deposited with the Central Bank			2,202,583			-
Derivative financial instruments			11,115,091			5,629,776
Assets guaranteeing technical provisions – other securities	11b		6,236,436			4,848,658
Interbank accounts - National Housing System (SFH)			550,184			480,726
Loan, lease and other credit operations	8		200,385,649			187,220,067
Operations with credit granting characteristics	4e		218,775,911			199,247,792
(Allowance for loan losses)	4f		(18,390,262	)		(12,027,725	)
Other receivables			73,574,889			45,824,783
Foreign exchange portfolio	9		14,742,316			3,444,225
Deferred tax assets	14b I		40,360,894			24,712,181
Escrow deposits - Civil, Labor, Tax and Social lawsuits	12b and 12d		10,502,497			11,478,246
Sundry	13a		7,969,182			6,190,131
Other assets	4g		1,011,772			433,642
Unearned reinsurance premiums	4m I		5			-
Prepaid expenses	4g and 13b		1,011,767			433,642
Permanent assets			18,688,942			19,922,899
Investments	4h, 15a II and III		3,938,692			3,525,861
Investments in affiliates and jointly controlled entities			3,500,615			3,098,591
Other investments			646,991			636,155
(Allowance for losses)			(208,914	)		(208,885	)
Real estate in use	4i and 15b I		7,055,331			7,560,821
Real estate in use			4,168,061			4,520,797
Other fixed assets			11,835,330			11,526,073
(Accumulated depreciation)			(8,948,060	)		(8,486,049	)
Goodwill	4j and 15b II		231,915			203,919
Intangible assets	4k and 15b III		7,463,004			8,632,298
Acquisition of rights to credit payroll			1,000,524			1,058,465
Other intangible assets			9,706,684			9,882,971
(Accumulated amortization)			(3,244,204	)		(2,309,138	)
Total assets			1,359,172,441			1,208,701,675

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Balance Sheet (Note 2a)

(In thousands of Reais)

Liabilities	Note	12/31/2015			12/31/2014
Current liabilities			706,655,604			650,080,857
Deposits	4b and 10b		232,618,778			228,939,729
Demand deposits			61,092,014			48,733,456
Savings deposits			111,318,801			118,449,430
Interbank deposits			14,213,853			18,621,809
Time deposits			45,994,110			43,135,034
Deposits received under securities repurchase agreements	4b and 10c		195,509,298			188,423,431
Own portfolio			41,299,939			75,413,506
Third-party portfolio			129,578,895			111,073,152
Free portfolio			24,630,464			1,936,773
Funds from acceptances and issuance of securities	4b and 10d		28,733,305			26,401,512
Real estate, mortgage, credit and similar notes			23,028,617			21,940,555
Foreign borrowing through securities			4,811,425			3,381,311
Structured operations certificates			893,263			1,079,646
Interbank accounts			520,016			435,832
Pending settlement			226,476			187,361
Correspondents			293,540			248,471
Interbranch accounts			6,406,470			4,824,359
Third-party funds in transit			6,391,476			4,615,431
Internal transfer of funds			14,994			208,928
Borrowing and onlending	4b and 10e		57,736,971			47,023,024
Borrowing			45,853,016			28,081,222
Onlending			11,883,955			18,941,802
Derivative financial instruments	4d and 7g		14,506,051			7,817,021
Technical provision for insurance, pension plan and capitalization	4m II and 11a		7,611,960			6,678,779
Other liabilities			163,012,755			139,537,170
Collection and payment of taxes and contributions			239,041			226,009
Foreign exchange portfolio	9		55,342,490			39,737,737
Social and statutory	16b II		5,109,874			4,719,480
Tax and social security contributions	4n, 4o and 14c		6,011,347			6,276,657
Negotiation and intermediation of securities			10,959,548			7,187,828
Credit card operations	4e		56,645,922			59,226,366
Subordinated debt	10f		10,208,125			1,784,407
Provisions for contingent liabilities	12b		3,583,199			3,101,473
Sundry	13c		14,913,209			17,277,213
Long term liabilities			542,339,451			458,935,661
Deposits	4b and 10b		59,991,640			65,833,519
Interbank deposits			735,265			503,272
Time deposits			59,256,375			65,330,247
Deposits received under securities repurchase agreements	4b and 10c		155,444,814			136,589,676
Own portfolio			121,170,524			112,819,297
Free portfolio			34,274,290			23,770,379
Funds from acceptances and issuance of securities	4b and 10d		46,857,049			21,348,192
Real estate, mortgage, credit and similar notes			23,834,408			7,491,121
Foreign borrowing through securities			19,970,930			12,703,599
Structured Operations Certificates			3,051,711			1,153,472
Borrowing and onlending	4b and 10e		46,852,304			41,753,444
Borrowing			19,932,743			15,465,007
Onlending			26,919,561			26,288,437
Derivative financial instruments	4d and 7g		16,609,638			9,577,451
Technical provision for insurance, pension plan and capitalization	4m II and 11a		124,441,300			105,996,419
Other liabilities			92,142,706			77,836,960
Foreign exchange portfolio	9		13,123,310			3,438,509
Tax and social security contributions	4n, 4o and 14c		8,870,575			7,386,438
Subordinated debt	10f		55,576,439			52,784,528
Provisions for contingent liabilities	12b		11,149,709			10,221,476
Sundry	13c		3,422,673			4,006,009
Deferred income	4p		1,959,711			1,422,717
Non-controlling interests	16f		1,755,235			2,414,727
Stockholders' equity	16		106,462,440			95,847,713
Capital			85,148,000			75,000,000
Capital reserves			1,537,219			1,315,744
Revenue reserves			25,349,568			21,212,015
Asset valuation adjustment	4c, 4d and 16e		(1,218,967	)		(352,166	)
(Treasury shares)			(4,353,380	)		(1,327,880	)
Total liabilities and stockholders' equity			1,359,172,441			1,208,701,675

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Income (Note 2a)

(In thousands of Reais)

		2nd Half of			01/01 to			01/01 to
	Note	2015			12/31/2015			12/31/2014
Income related to financial operations			86,727,080			163,594,126			125,023,816
Loan, lease and other credit operations			39,675,809			78,318,939			67,439,225
Securities and derivative financial instruments			35,066,010			64,820,019			39,137,237
Financial income related to insurance, pension plan and capitalization operations	11c		6,997,963			13,432,414			9,883,338
Foreign exchange operations			1,913,602			1,282,085			2,671,245
Compulsory deposits			3,073,696			5,740,669			5,892,771
Expenses related to financial operations			(64,131,451	)		(113,853,167	)		(73,137,167	)
Money market			(38,146,787	)		(70,841,576	)		(54,124,515	)
Financial expenses on technical provisions for insurance, pension plan and capitalization	11c		(6,587,786	)		(12,556,522	)		(8,987,140	)
Borrowing and onlending			(19,396,878	)		(30,455,069	)		(10,025,512	)
Income related to financial operations before loan and losses			22,595,629			49,740,959			51,886,649
Result of allowance for loan losses	8d I		(13,646,383	)		(22,427,019	)		(14,203,006	)
Expenses for allowance for loan losses			(16,222,166	)		(27,196,141	)		(19,251,619	)
Income related to recovery of credits written off as loss			2,575,783			4,769,122			5,048,613
Gross income related to financial operations			8,949,246			27,313,940			37,683,643
Other operating revenues (expenses)			(6,800,510	)		(12,575,365	)		(11,555,313	)
Banking service fees	13d		10,886,089			21,017,929			19,145,036
Income related to bank charges	13e		4,996,132			9,796,669			8,595,196
Result from insurance, pension plan and capitalization operations	11c		2,179,787			4,167,504			3,833,776
Personnel expenses	13f		(10,010,412	)		(18,712,569	)		(16,443,317	)
Other administrative expenses	13g		(8,775,825	)		(16,968,559	)		(16,210,590	)
Tax expenses	4o and 14a II		(2,436,855	)		(5,373,598	)		(5,087,378	)
Equity in earnings of affiliates, jointly controlled entities and other investments	15a II and III		347,723			646,391			609,810
Other operating revenues	13h		455,642			930,287			557,124
Other operating expenses	13i		(4,442,791	)		(8,079,419	)		(6,554,970	)
Operating income			2,148,736			14,738,575			26,128,330
Non-operating income	2c		(20,594	)		1,285			1,116,420
Income before taxes on income and profit sharing			2,128,142			14,739,860			27,244,750
Income tax and social contribution	4o and 14a I		9,817,955			9,215,376			(6,437,350	)
Due on operations for the period			(4,087,906	)		(8,562,441	)		(7,717,137	)
Related to temporary differences			13,905,861			17,777,817			1,279,787
Profit sharing – Management Members - Statutory - Law No. 6,404 of 12/15/1976			(131,946	)		(239,331	)		(260,592	)
Non-controlling interests	16f		(171,205	)		(356,071	)		(305,244	)
Net income			11,642,946			23,359,834			20,241,564
Weighted average of the number of outstanding shares	16a					5,982,383,840			6,016,443,824
Net income per share – R$						3.90			3.36
Book value per share - R$ (outstanding at 12/31)						17.98			15.91

Supplementary information

Exclusion of non recurring effects	2a and 22k					472,655			377,160
Net income without non recurring effects						23,832,489			20,618,724
Net income per share – R$						3.98			3.43

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Cash Flows

(In thousands of Reais)

		2nd Half of			01/01 to			01/01 to
	Note	2015			12/31/2015			12/31/2014
Adjusted net income			25,525,397			51,293,743			49,818,501
Net income			11,642,946			23,359,834			20,241,564
Adjustments to net income:			13,882,451			27,933,909			29,576,937
Granted options recognized and share-based payment – variable compensation			203,542			179,457			550,007
Adjustment to market value of securities and derivative financial instruments (assets / liabilities)	7h		(749,550	)		(990,626	)		(378,981	)
Effects of changes in exchange rates on cash and cash equivalents			(6,451,534	)		(9,680,662	)		1,185,920
Allowance for loan losses			16,222,166			27,196,141			19,251,619
Interest and foreign exchange expenses related to operations with subordinated debt			9,974,440			16,457,702			7,747,171
Financial expenses on technical provisions for pension plan and capitalization			6,587,786			12,556,522			8,987,140
Depreciation and amortization	15b		1,237,997			2,621,944			2,689,262
Interest expenses related to provision for contingent and legal liabilities	12b		722,763			1,478,090			1,018,977
Provision for contingent and legal liabilities	12b		2,369,042			3,949,052			3,379,897
Interest income related to escrow deposits	12b		(203,746	)		(285,184	)		(377,358	)
Deferred taxes (excluding hedge tax effects)			(3,812,140	)		(2,790,652	)		(1,279,787	)
Equity in earnings of affiliates, jointly controlled entities and other investments	15a III		(347,723	)		(646,391	)		(609,810	)
Interest and foreign exchange income related to available-for-sale securities			(9,464,517	)		(16,940,813	)		(9,011,825	)
Interest and foreign exchange income related to held-to-maturity securities			(3,246,357	)		(6,821,408	)		(3,514,899	)
(Gain) loss on sale of available-for-sale financial assets	7i		742,635			1,418,363			689,667
(Gain) loss on sale of investments			43,779			47,204			10,674
(Gain) loss on sale of foreclosed assets			14,259			34,502			35,051
(Gain) loss on sale of fixed assets			(4,039	)		10,292			41,324
(Gain) loss on sale of investments due from ISSC	2c		-			-			(1,151,110	)
Non-controlling interests			171,205			356,071			305,244
Other			(127,557	)		(215,695	)		8,754
Change in assets and liabilities			6,582,933			(46,085,355	)		3,773,019
(Increase) decrease in assets			(88,404,261	)		(111,593,655	)		(70,682,484	)
Interbank investments			(59,788,045	)		(52,772,854	)		(29,097,053	)
Securities and derivative financial instruments (assets / liabilities)			13,066,000			(7,853,080	)		9,056,684
Compulsory deposits with the Central Bank of Brazil			(6,399,379	)		(3,449,685	)		13,903,967
Interbank and interbranch accounts (assets / liabilities)			156,179			1,553,035			529,077
Loan, lease and other credit operations			(26,843,919	)		(42,581,042	)		(58,365,762	)
Other receivables and other assets			(8,289,456	)		(5,447,872	)		(6,927,642	)
Foreign exchange portfolio and negotiation and intermediation of securities (assets / liabilities)			(305,641	)		(1,042,157	)		218,245
(Decrease) increase in liabilities			94,987,194			65,508,300			74,455,503
Deposits			12,167,096			(2,162,830	)		20,389,786
Deposits received under securities repurchase agreements			45,653,944			25,941,005			32,833,930
Funds for issuance of securities			23,415,817			27,840,650			1,493,314
Borrowing and onlending			12,451,204			15,812,807			12,123,166
Credit card operations (assets / liabilities)			2,664,449			(3,517,616	)		2,702,260
Technical provision for insurance, pension plan and capitalization			3,878,210			6,824,570			6,525,093
Collection and payment of taxes and contributions			(4,200,842	)		13,032			21,029
Other liabilities			916,253			701,246			5,790,980
Deferred income			460,343			536,994			297,263
Payment of income tax and social contribution			(2,419,280	)		(6,481,558	)		(7,721,318	)
Net cash provided by (used in) operating activities			32,108,330			5,208,388			53,591,519
Interest on capital / dividends received from affiliated companies			144,977			318,182			356,939
Funds received from sale of available-for-sale securities			5,655,350			13,613,849			62,433,178
Funds received from redemption of held-to-maturity securities			1,665,934			3,159,592			2,666,716
Disposal of assets not for own use			72,168			112,020			45,062
Disposal of investments			70,580			73,295			247,995
Cash and cash equivalents net assets and liabilities due from ISSC for-sale	2c		-			-			1,473,605
Cash and cash equivalents, net assets and liabilities due from BMG Seguradora acquisition	2c		-			-			(87,166	)
Sale of fixed assets			96,011			105,053			61,440
Termination of intangible asset agreements			29,299			66,815			220,374
Purchase of available-for-sale securities			(6,403,454	)		(10,285,141	)		(46,551,053	)
Purchase of held-to-maturity securities			(1,526,481	)		(4,089,878	)		(11,321,805	)
Purchase of investments			(123,512	)		(130,531	)		(256,072	)
Purchase of fixed assets	15b		(547,188	)		(1,166,276	)		(2,846,623	)
Purchase of intangible assets	15b		(512,330	)		(1,060,107	)		(2,389,160	)
Net cash provided by (used in) investment activities			(1,378,646	)		716,873			4,053,430
Increase in subordinated debt			-			-			206,777
Decrease in subordinated debt			(3,418,226	)		(5,242,073	)		(9,024,075	)
Change in non-controlling interests	16f		42			(772,780	)		291,145
Granting of stock options			68,702			344,133			535,557
Purchase of treasury shares			(2,077,286	)		(3,324,436	)		(34,746	)
Dividends and interest on capital paid to non-controlling interests			(186,273	)		(242,783	)		(85,117	)
Dividends and interest on capital paid			(2,305,685	)		(7,008,406	)		(6,318,783	)
Net cash provided by (used in) financing activities			(7,918,726	)		(16,246,345	)		(14,429,242	)

Net increase (decrease) in cash and cash equivalents			22,810,958			(10,321,084	)		43,215,707

Cash and cash equivalents at the beginning of the period			57,929,067			87,831,981			45,802,194
Effects of changes in exchange rates on cash and cash equivalents			6,451,534			9,680,662			(1,185,920	)
Cash and cash equivalents at the end of the period	4a and 5		87,191,559			87,191,559			87,831,981

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Consolidated Statement of Added Value

(In thousands of Reais)

		2nd Half of			01/01 to					01/01 to
	Note	2015			12/31/2015					12/31/2014
Income			91,572,009			177,080,781					144,068,362
Financial operations			86,727,080			163,594,126					125,023,816
Banking services			15,882,221			30,814,598					27,740,232
Result from insurance, pension plan and capitalization operations			2,179,787			4,167,504					3,833,776
Result from loan losses	8d		(13,646,383	)		(22,427,019	)				(14,203,006	)
Other			429,304			931,572					1,673,544
Expenses			(68,568,498	)		(121,932,586	)				(79,692,137	)
Financial operations			(64,131,451	)		(113,853,167	)				(73,137,167	)
Other			(4,437,047	)		(8,079,419	)				(6,554,970	)
Inputs purchased from third parties			(7,187,519	)		(13,655,318	)				(12,925,456	)
Materials, energy and others	13g		(178,020	)		(379,805	)				(349,778	)
Third-party services	13g		(2,146,267	)		(4,015,606	)				(4,198,611	)
Other			(4,863,232	)		(9,259,907	)				(8,377,067	)
Data processing and telecommunications	13g		(2,125,929	)		(4,050,998	)				(3,870,363	)
Advertising, promotions and publication	13g		(559,573	)		(1,038,998	)				(950,161	)
Installations			(750,950	)		(1,438,533	)				(1,216,018	)
Transportation	13g		(211,211	)		(410,572	)				(432,344	)
Security	13g		(343,726	)		(674,919	)				(627,212	)
Travel expenses	13g		(107,784	)		(211,961	)				(203,405	)
Other			(764,059	)		(1,433,926	)				(1,077,564	)
Gross added value			15,815,992			41,492,877					51,450,769
Depreciation and amortization	13g		(937,615	)		(2,021,995	)				(2,069,003	)
Net added value produced by the company			14,878,377			39,470,882					49,381,766
Added value received through transfer	15a III		347,723			646,391					609,810
Total added value to be distributed			15,226,100			40,117,273					49,991,576
Distribution of added value			15,226,100			40,117,273					49,991,576
Personnel			9,108,244			16,988,147		42.3	%		14,870,554		29.7	%
Compensation			7,078,782			13,342,121		33.3	%		11,882,043		23.8	%
Benefits			1,606,241			2,841,816		7.1	%		2,288,307		4.6	%
FGTS – government severance pay fund			423,221			804,210		2.0	%		700,204		1.4	%
Taxes, fees and contributions			(6,346,986	)		(1,878,025	)	-4.7	%		13,358,083		26.7	%
Federal			(6,957,053	)		(3,016,794	)	-7.5	%		12,317,460		24.6	%
State			2,245			15,658		0.0	%		66,750		0.1	%
Municipal			607,822			1,123,111		2.8	%		973,873		1.9	%
Return on third parties’ assets - Rent			650,691			1,291,246		3.2	%		1,216,131		2.4	%
Return on own assets			11,814,151			23,715,905		59.1	%		20,546,808		41.1	%
Dividends and interest on capital			2,620,622			5,503,962		13.7	%		4,397,560		8.8	%
Retained earnings (loss) for the period			9,022,324			17,855,872		44.5	%		15,844,004		31.7	%
Minority interest in retained earnings			171,205			356,071		0.9	%		305,244		0.6	%

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Balance Sheet

(In thousands of Reais)

	Note	12/31/2015			12/31/2014
Assets

Current assets			16,131,517			20,494,701
Cash and cash equivalents			155,156			114,898
Interbank investments	4b and 6		9,978,893			3,060,088
Money market			6,425,125			29,874
Interbank deposits			3,553,768			3,030,214
Securities and derivative financial instruments	4c, 4d and 7		116,760			13,544,527
Own portfolio			1,726			13,544,527
Pledged in guarantee			4,287			-
Derivative Financial Instruments			110,747			-
Other receivables			5,873,169			3,774,794
Income receivable	15a I		4,783,721			2,829,300
Deferred tax assets	14b I		165,479			5,736
Escrow deposits - Civil, Labor, Tax and Social lawsuits			184			-
Sundry	13a		923,785			939,758
Other assets – prepaid expenses	4g		7,539			394
Long term receivables			73,580,387			38,431,546
Interbank investments – interbank deposits	4b and 6		72,531,822			38,212,705
Securities and derivative financial instruments - Derivative financial
instruments	4c, 4d and 7		274,731			-
Other receivables			773,834			218,841
Deferred tax assets	14b I		7,588			5,098
Escrow deposits - Civil, Labor, Tax and Social lawsuits			17,018			26,730
Sundry	13a		749,228			187,013
Permanent assets			74,303,404			66,562,137
Investments - Investments in subsidiaries	15a I		74,303,372			66,562,075
Real estate in use	4i		32			62
Total assets			164,015,308			125,488,384
Liabilities
Current liabilities			5,163,186			2,303,088
Deposits - interbank deposits	4b and 10b		1,957,145			-
Funds from acceptance and issuance of securities	4b and 10d		11,360			5,542
Other liabilities			3,194,681			2,297,546
Social and statutory	16b II		2,419,246			1,842,166
Tax and social security contributions	4n, 4o and 14c		238,051			114,666
Subordinated debt	10f		428,991			291,892
Provisions for contingent liabilities			2,848			2,787
Sundry			105,545			46,035
Long term liabilities			48,171,280			21,295,460
Deposits - Interbank deposits	4b and 10b		13,354,529			-
Funds from acceptance and issuance of securities	4b and 10d		4,099,088			500,000
Derivative Financial Instruments	4d		71,289			-
Other liabilities			30,646,374			20,795,460
Tax and social security contributions	4n, 4o and 14c		99,945			1,125
Subordinated debt	10f		30,348,216			20,638,858
Provisions for contingent liabilities			176,009			155,477
Sundry			22,204			-
Stockholders' equity	16		110,680,842			101,889,836
Capital			85,148,000			75,000,000
Capital reserves			1,537,219			1,315,744
Revenue reserves			29,724,889			27,224,331
Asset valuation adjustment	4c and 4d		(1,375,886	)		(322,359	)
(Treasury shares)			(4,353,380	)		(1,327,880	)
Total liabilities and stockholders' equity			164,015,308			125,488,384

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Statement of Income

(In thousands of Reais)

		2nd Half of			01/01 to			01/01 to
	Note	2015			12/31/2015			12/31/2014
Income related to financial operations			3,957,977			6,591,515			4,495,970
Securities and derivative financial instruments			3,957,977			6,591,515			4,495,970
Expenses related to financial operations			(1,406,966	)		(2,190,099	)		(1,104,706	)
Money market			(1,406,966	)		(2,190,099	)		(1,104,706	)
Gross income related to financial operations			2,551,011			4,401,416			3,391,264
Other operating revenues (expenses)			7,360,167			16,181,335			14,083,620
Personnel expenses			(69,296	)		(143,517	)		(102,489	)
Other administrative expenses			(24,934	)		(48,381	)		(35,408	)
Tax expenses	14a II		(112,739	)		(244,240	)		(202,534	)
Equity in earnings of subsidiaries	15a I		7,919,555			17,016,358			14,361,021
Other operating revenues (expenses)			(352,419	)		(398,885	)		63,030
Operating income			9,911,178			20,582,751			17,474,884
Non-operating income			7,191			22,525			24,825
Income before taxes on income and profit sharing			9,918,369			20,605,276			17,499,709
Income tax and social contribution	4o		538,457			473,080			(96,561	)
Due on operations for the period			606,326			435,972			(94,210	)
Related to temporary differences			(67,869	)		37,108			(2,351	)
Profit sharing – Management Members - Statutory - Law No. 6,404 of 12/15/1976			(3,294	)		5,440			(11,591	)
Net income			10,453,532			21,083,796			17,391,557
Weighted average of the number of outstanding shares	16a					5,982,383,840			6,016,443,824
Net income per share – R$						3.52			2.89
Book value per share - R$ (outstanding at 12/31)						0.03			0.03

Supplementary information

Exclusion of non recurring effects	2a and 22k					472,655			377,160
Net income without non recurring effects						21,556,451			17,768,717
Net income per share – R$						3.60			2.95

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Statement of Changes in Stockholders’ Equity (Note 16)

(In thousands of Reais)

			Capital						Asset valuation			Retained			(Treasury
	Capital		reserves			Revenue reserves			adjustment			earnings			shares)			Total
Balance at 07/01/2015		85,148,000		1,331,243			21,890,585			(161,240	)		-			(2,342,126	)		105,866,462
Purchase of treasury shares		-		-			-			-			-			(2,077,286	)		(2,077,286	)
Granting of stock options		-		2,434			236			-			-			66,032			68,702
Granting of options recognized		-		34,043			-			-			-			-			34,043
Share-based payment – variable compensation		-		169,499			-			-			-			-			169,499
Asset valuation adjustments:
Change in adjustment to market value		-		-			-			(1,151,553	)		-			-			(1,151,553	)
Remeasurements in liabilities of post-employment benefits		-		-			1,158			(63,093	)		-			-			(61,935	)
Net income		-		-			-			-			10,453,532			-			10,453,532
Appropriations:
Legal reserve		-		-			522,677			-			(522,677	)		-			-
Statutory reserves		-		-			4,607,729			-			(4,607,729	)		-			-
Dividends and interest on capital		-		-			2,702,504			-			(5,323,126	)		-			(2,620,622	)
Balance at 12/31/2015		85,148,000		1,537,219			29,724,889			(1,375,886	)		-			(4,353,380	)		110,680,842
Changes in the period		-		205,976			7,834,304			(1,214,646	)		-			(2,011,254	)		4,814,380
Balance at 01/01/2014		60,000,000		870,456			31,748,411			(1,534,691	)		-			(1,854,432	)		89,229,744
Reserve Capitalization - ESM 04/23/2014		15,000,000		-			(15,000,000	)		-			-			-			-
Purchase of treasury shares		-		-			-			-			-			(34,746	)		(34,746	)
Granting of stock options		-		(104,719	)		78,978			-			-			561,298			535,557
Granting of options recognized		-		249,219			-			-			-			-			249,219
Share-based payment – variable compensation		-		300,788			-			-			-			-			300,788
Payment of interest on capital on 02/28/2014 – declared after 12/31/2013 - R$ 0.5236 per share		-		-			(2,597,055	)		-			-			-			(2,597,055	)
Asset valuation adjustments:
Change in adjustment to market value		-		-			-			1,010,254			-			-			1,010,254
Remeasurements in liabilities of post-employment benefits		-		-			-			202,078			-			-			202,078
Net income		-		-			-			-			17,391,557			-			17,391,557
Appropriations:
Legal reserve		-		-			869,578			-			(869,578	)		-			-
Statutory reserves		-		-			9,177,792			-			(9,177,792	)		-			-
Dividends and interest on capital		-		-			2,946,627			-			(7,344,187	)		-			(4,397,560	)
Balance at 12/31/2014		75,000,000		1,315,744			27,224,331			(322,359	)		-			(1,327,880	)		101,889,836
Changes in the period		15,000,000		445,288			(4,524,080	)		1,212,332			-			526,552			12,660,092
Balance at 01/01/2015		75,000,000		1,315,744			27,224,331			(322,359	)		-			(1,327,880	)		101,889,836
Reserve Capitalization - ESM 04/29/2015		10,148,000		-			(10,148,000	)		-			-			-			-
Purchase of treasury shares		-		-			-			-			-			(3,324,436	)		(3,324,436	)
Granting of stock options		-		42,018			3,179			-			-			298,936			344,133
Granting of options recognized		-		55,508			-			-			-			-			55,508
Share-based payment – variable compensation		-		123,949			-			-			-			-			123,949
Payment of interest on capital on 02/26/2015 – declared after 12/31/2014 - R$ 0.5380 per share		-		-			(2,935,613	)		-			-			-			(2,935,613	)
Asset valuation adjustments:
Change in adjustment to market value		-		-			-			(1,005,610	)		-			-			(1,005,610	)
Remeasurements in liabilities of post-employment benefits		-		-			1,158			(47,917	)		-			-			(46,759	)
Net income		-		-			-			-			21,083,796			-			21,083,796
Appropriations:
Legal reserve		-		-			1,054,190			-			(1,054,190	)		-			-
Statutory reserves		-		-			11,823,140			-			(11,823,140	)		-			-
Dividends and interest on capital		-		-			2,702,504			-			(8,206,466	)		-			(5,503,962	)
Balance at 12/31/2015		85,148,000		1,537,219			29,724,889			(1,375,886	)		-			(4,353,380	)		110,680,842
Changes in the period		10,148,000		221,475			2,500,558			(1,053,527	)		-			(3,025,500	)		8,791,006

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Statement of Cash Flows

(In thousands of Reais)

		2nd Half of			01/01 to			01/01 to
	Note	2015			12/31/2015			12/31/2014
Adjusted net income			10,209,671			15,859,686			7,303,898
Net income			10,453,532			21,083,796			17,391,557
Adjustments to net income:			(243,861	)		(5,224,110	)		(10,087,659	)
Granted options recognized and share-based payment – variable compensation			203,542			179,457			550,007
Interest and foreign exchange expense related to operations with subordinated debt			7,368,726			11,568,731			3,652,352
Deferred taxes			67,869			(37,108	)		2,351
Equity in earnings of subsidiaries	15a I		(7,919,555	)		(17,016,358	)		(14,361,021	)
Amortization of goodwill			28,871			57,744			57,745
Effects of changes in exchange rates on cash and cash equivalents			6,669			23,393			10,844
Other			17			31			63
Change in assets and liabilities			(7,266,576	)		(7,481,814	)		(5,105,868	)
(Increase) decrease in interbank investments			(16,910,464	)		(34,842,671	)		(3,175,376	)
(Increase) decrease in securities and derivative financial instruments (assets / liabilities)			(316,138	)		13,224,325			(1,601,945	)
(Increase) decrease in other receivables and other assets			(626,547	)		(645,565	)		(412,104	)
Increase (decrease) in deposits			15,311,674			15,311,674			(106,540	)
(Decrease) increase in other liabilities			(333,326	)		(486,436	)		190,097
Payment of income tax and social contribution			(31	)		(43,141	)		-
Net cash provided by (used in) operating activities			2,943,095			8,377,872			2,198,030
Interest on capital / dividends received			4,262,186			6,097,368			6,604,743
(Purchase) sale of investments			(334,436	)		89,741			(1,910,494	)
(Purchase) sale of fixed assets			(1	)		(2	)		-
(Purchase) sale of intangible assets			-			-			(23	)
Net cash provided by (used in) investment activities			3,927,749			6,187,107			4,694,226
Decrease in subordinated debt			(1,038,054	)		(1,722,274	)		(1,171,549	)
(Increase) decrease in funds for issuance of securities			339,064			3,604,906			-
Granting of stock options			68,702			344,133			535,557
Purchase of treasury shares			(2,077,286	)		(3,324,436	)		(34,746	)
Dividends and interest on capital paid			(2,305,685	)		(7,008,406	)		(6,318,783	)
Net cash provided by (used in) financing activities			(5,013,259	)		(8,106,077	)		(6,989,521	)

Net increase (decrease) in cash and cash equivalents			6,249,329			6,458,902			(97,265	)

Cash and cash equivalents at the beginning of the period			337,620			144,772			252,881
Effects of changes in exchange rates on cash and cash equivalents			(6,669	)		(23,393	)		(10,844	)
Cash and cash equivalents at the end of the period	4a and 5		6,580,281			6,580,281			144,772

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Statement of Added Value

(In thousands of Reais)

		2nd Half of			01/01 to			01/01 to
	Note	2015			12/31/2015			12/31/2014
Income			6,696,704			9,319,459			5,745,937
Financial operations			3,957,978			6,591,515			4,495,970
Other			2,738,726			2,727,944			1,249,967
Expenses			(3,903,183	)		(4,734,071	)		(2,021,132	)
Financial operations			(1,406,966	)		(2,190,099	)		(1,104,706	)
Other			(2,496,217	)		(2,543,972	)		(916,426	)
Inputs purchased from third parties			(24,686	)		(47,907	)		(34,926	)
Third-party services			(19,307	)		(35,300	)		(20,976	)
Advertising, promotions and publication			(324	)		(1,152	)		(1,153	)
Expenses for financial system services			(2,900	)		(5,080	)		(4,257	)
Insurance			-			-			(6	)
Other			(2,155	)		(6,375	)		(8,534	)
Gross added value			2,768,835			4,537,481			3,689,879
Deprecitation and amortization			(28,890	)		(57,776	)		(57,808	)
Net added value produced by the company			2,739,945			4,479,705			3,632,071
Added value received through transfer	15a I		7,919,555			17,016,358			14,361,021
Total added value to be distributed			10,659,500			21,496,063			17,993,092
Distribution of added value			10,659,500			21,496,063			17,993,092
Personnel			172,846			128,262			110,429
Compensation			171,794			126,417			108,902
Benefits			892			1,521			1,226
FGTS – government severance pay fund			160			324			301
Taxes, fees and contributions			32,874			283,531			490,624
Federal			32,847			283,483			490,581
Municipal			27			48			43
Return on third parties’ assets - rent			248			474			482
Return on own assets			10,453,532			21,083,796			17,391,557
Dividends and interest on capital			2,620,622			5,503,962			4,397,560
Retained earnings (loss) for the period			7,832,910			15,579,834			12,993,997

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ITAÚ UNIBANCO HOLDING S.A.

Notes to the Financial Statements

Exercise from January 1 to December 31, 2015 and 2014

(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 in 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 an 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 – December 31, 2015

Note 2 – Presentation of the financial statements

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 the 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 and 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), the National Council of Private Insurance (CNSP) and the National Superintendence of Supplementary Pension – (PREVIC), which include the use of estimates deemed necessary to calculate the accounting provisions and the valuation of financial assets.

In order to enable the analysis of the net income, the heading Net income without non recurring effects is presented within the Consolidated Statement of Income, and this effect is shown under the heading Exclusion of non recurring 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 results of these operations, are presented, grouped together, under Loan, lease and other loan operations in the Statement of Income. Advances on exchange contracts are reclassified from Other Liabilities – Foreign exchange portfolio to Loan operations. The foreign exchange result is presented on an adjusted basis, with reclassification of expenses and income, in order exclusively to represent the impact of variations and differences in rates on the balance sheet accounts denominated in foreign currencies.

Consolidation

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

Intercompany transactions, intercompany balances and intercompany results have been eliminated on consolidation. The investment funds of which ITAÚ UNIBANCO HOLDING CONSOLIDATED companies are the main beneficiaries or holders of principal obligations are consolidated. The investments in these fund portfolios are classified by type of transaction and were distributed by type of security, based on the same categories to which these securities were originally allocated. The effects of foreign exchange variations on investments abroad are classified under the heading Securities and derivative financial instruments in the Statement of Income for subsidiaries with the same functional currency as the parent company, and in Asset valuation adjustment for subsidiaries with a functional currency different from that of the parent company (Note 4s).

The difference in 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 originating from purchases of investments, from the recording of transactions with minority stockholders where there is no change of control (Note 4q), and in the record of exchange variations on investments abroad, and hedges of these investments where the functional currency is different from that of the parent company, net of the respective deferred tax assets.

In ITAÚ UNIBANCO HOLDING, the goodwill recorded in subsidiaries, mainly originated from the ITAÚ and UNIBANCO merger and acquisition by minority stockholders of REDE, is 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.

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

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

The consolidated financial statements cover ITAÚ UNIBANCO HOLDING and its direct and indirect subsidiaries. We present below the main companies which together represent over 95% of total consolidated assets:

				Interest in voting						Interest in total
		Country of		capital at						capital at
		Incorporation	Activity	12/31/2015			12/31/2014			12/31/2015			12/31/2014
Banco Itaú Argentina S.A.		Argentina	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaú BBA S.A.		Brazil	Financial institution		100.00	%		99.99	%		100.00	%		99.99	%
Banco Itaú Chile		Chile	Financial institution		99.99	%		99.99	%		99.99	%		99.99	%
Banco Itaú BMG Consignado S.A	(Note 2c)	Brazil	Financial institution		60.00	%		60.00	%		60.00	%		60.00	%
Banco Itaú Paraguay S.A.		Paraguay	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Banco Itaú Suisse S.A.		Switzerland	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
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 Itauleasing S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Cia. Itaú de Capitalização		Brazil	Capitalization		100.00	%		100.00	%		100.00	%		100.00	%
Dibens Leasing S.A. - Arrendamento Mercantil		Brazil	Leasing		100.00	%		100.00	%		100.00	%		100.00	%
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		Brazil	Consumer Finance Credit		50.00	%		50.00	%		50.00	%		50.00	%
Hipercard Banco Múltiplo S.A.		Brazil	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau Bank, Ltd.		Cayman Islands	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau BBA Colombia S.A. Corporación Financiera		Colombia	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itau BBA International plc		United Kingdom	Financial institution		100.00	%		100.00	%		100.00	%		100.00	%
Itaú BBA USA Securities Inc.		United States	Broker		100.00	%		100.00	%		100.00	%		100.00	%
Itaú BMG Seguradora S.A.	(Note 2c)	Brazil	Insurance		60.00	%		60.00	%		60.00	%		60.00	%
Itaú Corretora de Valores S.A.		Brazil	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 Financeira S.A. - Crédito, Financiamento e Investimento	(1)	Brazil	Consumer Finance Credit		-			100.00	%		-			100.00	%
Itaú Unibanco S.A.		Brazil	Financial institution		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	%
Luizacred S.A. Soc. Cred. Financiamento Investimento		Brazil	Consumer Finance Credit		50.00	%		50.00	%		50.00	%		50.00	%
Redecard S.A. – REDE		Brazil	Acquirer		100.00	%		100.00	%		100.00	%		100.00	%

(1) Company merged in 01/31/2015 into Itaú Unibanco S.A. and Itaú BBA Participações S.A.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

Business development

Acquisitions

Recovery do Brasil Consultoria S.A.

At December 31, 2015, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Itaú Unibanco S.A., entered into an agreement for purchase and sale and other covenants with Banco BTG Pactual S.A. (BTG) for acquisition of a 81.94% interest in the capital of Recovery do Brasil Consultoria S.A. (Recovery), corresponding to BTG’s total interest in Recovery, for the amount of R$ 640 million.

In the same transaction, ITAÚ UNIBANCO HOLDING CONSOLIDATED agreed on the acquisition of approximately 70% of the portfolio of R$ 38 billion in credit rights related to the recovery of portfolios held by BTG, for the amount of R$ 570 million.

Established in 2000 in Argentina and present in Brazil since 2006, Recovery is the market leader in the management of overdue receivables portfolio. Recovery’s activities consist in prospecting and assessing portfolios, structuring and managing operations, acting in all segments, from individual to corporate loans, with financial and non-financial institutions, and offering a competitive advantage to its clients.

Effective acquisitions and financial settlements will occur after the fulfillment of certain contractual conditions and obtainment of regulatory and government authorizations required.

The transaction will not have significant accounting effect on the results of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

ConectCar Soluções de Mobilidade Eletrônica S.A.

On October 21, 2015, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Redecard S.A. (Rede), entered into a share purchase and sale commitment with Odebrecht Transport S.A. for the acquisition of 50% of capital stock of ConectCar Soluções de Mobilidade Eletrônica S.A. (ConectCar) for the amount of R$ 170 million.

ConectCar is an institution engaged in own payment arrangements and a provider of intermediation services for automatic payment of tolls, fuels and parking lots, ranked as the second largest company in the sector, currently operating in 12 States and in the Federal District. It was organized in 2012 as the result of a partnership between Odebrecht Transport S.A. and Ipiranga Produtos de Petróleo S.A., a company controlled by Ultrapar Participações S.A., which currently holds the remaining 50% of ConectCar’s capital stock.

The operation was approved by BACEN on December 23, 2015.

Governance will be shared with the Ultra group, and the effective acquisition and financial settlement will occur after the fulfillment of certain contractual conditions.

The transaction will not have significant accounting effect on the results of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Corpbanca

On January 29, 2014, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Banco Itaú Chile S.A. (BIC) entered into a Transaction Agreement with CorpBanca and its controlling shareholders (Corp Group) establishing the terms and conditions for the unification of operations of BIC and CorpBanca in Chile and the other jurisdictions in which CorpBanca operates.

The operation will be consummated through:

Capital increase in BIC in the amount of US$ 652 million to be made by ITAÚ UNIBANCO HOLDING CONSOLIDATED or one of its subsidiaries,

ii.

Merger of BIC into CorpBanca, with cancellation of BIC’s shares and issue of new shares by CorpBanca, at the estimated rate of 85,420.07 shares of CorpBanca for each 1 share of BIC, to be approved in the shareholders meeting of CorpBanca so that the interests in the bank resulting from the merger, which will be called Itaú CorpBanca, will be 33.58% for ITAÚ UNIBANCO HOLDING CONSOLIDATED and 33.13% for Corp Group, and

iii.

Subsequent integration of Itaú BBA Colômbia S.A. into the operations of Itaú CorpBanca or its subsidiaries.

Itaú CorpBanca will be controlled by ITAÚ UNIBANCO HOLDING CONSOLIDATED, which will enter into a shareholders’ agreement with Corp Group when the operation is consummated. This agreement will entitle ITAÚ UNIBANCO HOLDING CONSOLIDATED and Corp Group to appoint members for the Board of Directors of Itaú CorpBanca in accordance to their interests in capital stock, and this group of shareholders will have the privilege of electing the majority of members of the Board of Directors, and ITAÚ UNIBANCO HOLDING CONSOLIDATED will be entitled to elect the majority of these members. The chairmen of the Boards of Directors of Itaú CorpBanca and its subsidiaries will be appointed by Corp Group, and their vice-chairmen by ITAÚ UNIBANCO HOLDING CONSOLIDATED. The executives of Itaú CorpBanca and its subsidiaries will be proposed by ITAÚ UNIBANCO HOLDING CONSOLIDATED and ratified by the Board of Directors of Itaú CorpBanca. The shareholders agreement will also set forth that Corp Group will be entitled to approve, together with ITAÚ UNIBANCO HOLDING CONSOLIDATED, certain strategic matters of Itaú CorpBanca and it will include provisions on the transfer of shares between ITAÚ UNIBANCO HOLDING CONSOLIDATED and Corp Group, and third parties.

Approvals for the merger were obtained from CorpBanca and BIC shareholders, and from all proper regulatory authorities in Chile, Brazil, Colombia and Panamá. However, as set forth in the amendment to the Transaction Agreement, entered into on June 2, 2015, the parties agreed that the operation will be closed by May 2, 2016, when they will be fully prepared for the corporate reorganization process.

It is estimated that said transaction will not have significant accounting effects on the results of ITAÚ UNIBANCO HOLDING CONSOLIDATED, which will consolidate Itaú CorpBanca after the closing of the operation.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

MasterCard Brasil Soluções de Pagamento Ltda.

On March 13, 2015, o ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Itaú Unibanco S.A., entered into an agreement with MasterCard Brasil Soluções de Pagamento Ltda. to create an alliance in the payment solutions market in Brazil.

The purposes of the operation are (a) to focus on the expansion of its issue and acquisition business, particularly related to the new payment solutions network, (b) to have access to new payment solutions technologies, (c) to obtain significant scale and efficiency gains, and (d) to benefit from MasterCard’s expertise in the management of payment solution brands.

The effectiveness of the alliance is subject to the satisfaction of certain conditions precedent and approval by proper regulatory authorities.

MaxiPago

On September 3, 2014, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Redecard S.A. (Rede) entered into a share purchase agreement with the controlling shareholders of MaxiPago Serviços de Internet S.A., a gateway company – network interconnection for mobile electronic payments.

On the same date, subscription and payment of 13,336 shares (33.33%) and acquisition of 24,174 shares (41.67%) were carried out, so that Rede became the holder of 43,510 common shares, representing 75% of total voting capital of MaxiPago.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the operation was closed on January 8, 2015.

The difference between the amount paid and net assets at fair value resulted in the recognition of goodwill due to expected future profitability.

Purchase price	14,500
(-) Fair value of identified assets and liabilities	(3,994	)
(=)Goodwill	10,506

Tecnologia Bancária S.A. (TECBAN) – New Shareholders’ Agreement

On July 17, 2014, ITAÚ UNIBANCO HOLDING CONSOLIDATED, together with other financial institutions, signed the New Shareholders’ Agreement, which came into effect as from the operation closing date.

In line with the global trend towards best practices, the agreement establishes that, approximately within 4 years, the Parties should replace part of their external ATM networks by Banco24Horas network, generating increased efficiency, greater quality and capillarity of customer service. In addition to the Parties, approximately 40 other banks are clients of TECBAN.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the operation was closed on November 14, 2014.

Interest	Current			Previous
Shares		935,995,448			974,021,768
%		24.93	%		25.94	%

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

MCC Securities e MCC Corredora de Bolsa

On July 20, 2011, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Banco Itaú Chile S.A. (BIC), entered into a share purchase agreement with MCC Inversiones Globales (MCC Inversiones) and MCC Beneficial Owners (Chilean individuals), for phased acquisition of total shares of MCC Securities.

On August 1, 2011, the parties entered into an agreement for phased acquisition of total shares of MCC Corredora de Bolsa.

On August 18, 2014, they entered into a new agreement for acquiring in advance the remaining shares of MCC Securities and MCC Corredora de Bolsa.

	Current						Previous
	MCC Securities			MCC Corredora			MCC Securities			MCC Corredora
Shares		6,000,000			2,046			3,000,001			1,024
%		100	%		100	%		50	%		50.05	%

Accordingly, with this operation ITAÚ UNIBANCO HOLDING CONSOLIDATED validates its relevant share in the Chilean private banking market, as it now fully consolidates MCC Securities and MCC Corredora de Bolsa in its financial statements beginning in August 31, 2014, the closing date of the transaction.

The difference between the amount paid and net assets at fair value resulted in the recognition of goodwill due to expected future profitability and of Intangible assets.

	In thousands of US$
Purchase price		77,585
(-) Fair value of identified assets and liabilities		(13,279	)
(-) Brand		(2,040	)
(=) Goodwill		62,266

BMG Seguradora S.A.

On June 25, 2013, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Banco Itaú BMG Consignado S.A., entered into a share purchase agreement with the controlling shareholders of Banco BMG S.A., for the acquisition of 99.996% of the shares of BMG Seguradora S.A., represented by 35,292,627 shares for the amount of R$ 88,138.

BMG Seguradora S.A. entered into an exclusivity agreement with Banco BMG S.A. and Itaú BMG Consignado for the distribution of insurance products to be linked to the products sold by these banks. The purpose of the acquisition is to expand the insurance activities of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the transaction was closed on January 27, 2014.

The difference between the amount paid and net assets at fair value resulted in the recognition of goodwill due to expected future profitability.

Purchase price	88,138
(-) Fair value of identified assets and liabilities	(65,418	)
(=) Goodwill	22,720

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

Citibank N.A. Uruguay Branch

On July 28, 2013, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Banco Itaú Uruguay S.A. (BIU), entered into an agreement with Citibank N.A. Uruguay Branch, with rules for the acquisition of retail transactions in Uruguay.

As a result of this operation, BIU assumed a client portfolio related to retail transactions (current account, savings accounts and time deposits). The assets acquired involved mainly credit card transactions that Citibank developed in the country under Visa, Mastercard and Diners brands.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the operation was closed on December 31, 2013.

The difference between the amount paid and net assets at fair value resulted in the recognition of goodwill due to expected future profitability and intangible assets.

	In thousands of US$
Purchase price		25,500
(-) Intangible Assets Subject to Amortization		(529	)
(+) Deferred Tax Liability		132
(=) Goodwill		25,103

Credicard

On May 14, 2013, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Banco Itaucard S.A., entered into a share and quota purchase agreement with Banco Citibank, for the acquisition of Banco Citicard S.A. and Citifinancial Promotora de Vendas Ltda., including the “Credicard” brand, for R$2,948 million. These entities were responsible for the offer and distribution of financial products and services of the “Credicard” brand, particularly personal loans and credit cards.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the operation was closed on December 20, 2013.

Due to this operation, ITAÚ UNIBANCO HOLDING CONSOLIDATED fully consolidated Banco Citicard and Citifinancial Promotora de Vendas in its financial statements as from December 2013. On August 31, 2014, Banco Citicard was merged into Banco Itaucard S.A.

The difference between the amount paid and net assets at fair value resulted in the recognition of goodwill due to expected future profitability and intangible assets.

Purchase price	2,948,409
(-) Fair value of identified assets and liabilities	(1,069,569	)
(-) Brand	(26,.875	)
(+) Deferred Tax Liability	10,714
(=) Goodwill	1,862,679

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

II.

Partnerships and Associations

Association with Banco BMG S.A.

On July 9, 2012, ITAÚ UNIBANCO HOLDING CONSOLIDATED entered into an Association Agreement with Banco BMG S.A. (BMG) aiming at the offering, distribution and sale of payroll loans through the organization of the financial institution Banco Itaú BMG Consignado S.A., in which ITAÚ UNIBANCO HOLDING CONSOLIDATED held control with a 70% interest in total voting capital, and BMG held the remaining 30%. The capital subscribed by shareholders was R$ 1,000,000, proportionally to each interest.

ITAÚ UNIBANCO HOLDING CONSOLIDATED contributed with its economic and financial capacity, administrative experience and controls, and BMG contributed with its commercial and operating competence, in addition to the technological platform required for the development of activities.

After the compliance with the conditions precedent and approval by proper regulatory authorities, the transaction was closed on January 7, 2013.

On April 29, 2014, the agreement establishing the unification of payroll loans business, concentrating the transactions at Itaú BMG Consignado, was entered into. Starting July 25, 2014 and during the term of the association, Itaú BMG Consignado is BMG’s exclusive channel for the offer of payroll loans in the Brazilian territory, subject to certain exceptions.

In consideration for the business unification, on July 25, 2014 BMG increased the capital of Itaú BMG Consignado by R$ 181 million and, therefore, ITAÚ UNIBANCO HOLDING CONSOLIDATED started to hold a 60% interest in the total voting capital and BMG started to hold the remaining 40%. The possibility of this unification had already been initially considered.

This transaction had no significant accounting effects and ITAÚ UNIBANCO HOLDING CONSOLIDATED continued to consolidate Itaú BMG Consignado in its financial statements.

Fiat Group Automobiles S.p.A. and Fiat Automóveis S.A.

On August 20, 2013, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Itaú Unibanco S.A., renewed the commercial cooperation agreement maintained with Fiat Group Automobiles S.p.A. and Fiat Automóveis S.A. This agreement sets forth exclusivity for the offer of financing in promotional campaigns of car maker Fiat for the sale of new cars and exclusive use of Fiat brand in activities related to vehicle financing.

The operation did not have significant accounting effects on the financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

100

III.

Disposals

Major Risk Insurance Operation

On July 4, 2014, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Itaú Unibanco S.A., entered into a share purchase agreement with ACE Ina International Holdings Ltd. (ACE), through which the former undertook to sell totally of its interest in Itaú Seguros Soluções Corporativas S.A. (ISSC).

ISSC held the major risks operations of ITAÚ UNIBANCO HOLDING CONSOLIDATED, which clients were middle-market and large companies with policies with high amounts insured.

After the compliance with the conditions precedent and approval by proper regulatory authorities, ACE paid R$ 1.5 billion to ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries, through ISSC. On October 31, 2014, ISSC transferred the shares upon financial settlement by ACE, updating the price of operation considering the shareholders equity position on the operation closing date, in the amount of R$ 379,258.

This transaction is linked with ITAÚ UNIBANCO HOLDING CONSOLIDATED’s strategy of selling retail personal and property insurance, typically related to retail banking.

Via Varejo

On October 1, 2014, ITAÚ UNIBANCO HOLDING CONSOLIDATED, through its subsidiary Itaú Seguros S.A., received from Via Varejo the amount of R$ 584 million due to the early termination of operating agreements related to the offer of extended warranty insurance in Ponto Frio and Casas Bahia stores. The amount received refers substantially to the refund of amounts disbursed under contractual terms, duly restated.

The operation had no relevant accounting effects on the financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

101

Note 3 – Requirements regarding capital and fixed asset limits

a) Basel and fixed asset ratios

Represented below are the main indicators at 12/31/2015, according to present regulation which defines the Consolidated Prudential as the calculation basis:

	Consolidated
	Prudential (1)
Reference equity ⁽²⁾		128,465,152
Basel ratio		17.8	%
Tier I		14.0	%
Common Equity		14.0	%
Additional Capital		0.0	%
Tier II		3.8	%
Fixed assets ratio		27.7	%
Excess capital in relation to fixed assets		28,615,872

(1)

Consolidated financial statements including financial companies and the like. As from the base date January 2015, in accordance with Circular 4,278, this is the basis for the consolidation calculation;

(2)

According to CMN Resolutions No. 4,192, of March 1, 2013, No. 4,278, of October 31, 2013, No. 4,311, of February 20, 2014 and No. 4,442, of October 29, 2015, CMN defines Regulatory Capital, for the purpose of operational limit calculation, as the sum of two tiers, Tiers I and II, in which Tier I is comprised of Common Equity Tier 1 and Additional Tier 1 Capital. The calculation is composed of items that are an integral part of the Stockholders’ Equity plus prudential adjustments and deductions, in addition to eligible instruments, particularly subordinated debt.

Management considers the current Basel ratio (17.8%, based on the Consolidated Prudential, of which 14.0% of Common Equity and Tier I and 3.8% of Tier II) to be adequate, as it exceeds by 6.8 percent the minimum required by the authorities (11.0%).

In 2015, the Financial System Consolidated is no longer calculated for capital effects, in compliance with the standards in force, and has been replaced by the Consolidated Prudential.

CMN Resolution No. 4,192, of March 1, 2013, as amended, addresses the Reference Equity calculation methodology, and CMN Resolution No. 4,193, of March 1, 2013, as amended, addresses the minimum requirements for Reference Equity, Tier I, and Common Equity Tier I, and introduces the Additional Common Equity Tier 1. ITAÚ UNIBANCO HOLDING CONSOLIDATED opted to use a Standardized Approach to calculate credit and market risk-weighted assets, and the Alternative Standardized Approach to calculate operational risk-weighted assets, based on the regulations in force.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

102

The reference equity used for the calculation of ratios and the risk-weighted assets at 12/31/2015, are as follows:

	Consolidated
	Prudential
Stockholders' equity ITAÚ UNIBANCO HOLDING S.A. (consolidated)		106,462,440
Non-controlling interests		915,986
Changes in ownership interest in a subsidiary as a result of capital transaction		3,682,993
Consolidated stockholders’ equity (BACEN)		111,061,419
Common Equity deductions ⁽¹⁾		(10,106,722	)
Common Equity Tier I		100,954,697
Additional Tier I deductions		45,987
Additional Tier I Capital		45,987
Tier I (Common Equity + Additional Capital)		101,000,684
Instruments eligible for inclusion in Tier II		27,403,171
Tier II deductions		61,297
Tier II		27,464,468
Regulatory Capital (Tier I + Tier II)		128,465,152
Risk-weighted assets		722,467,645
Risk-weighted assets of credit risk (RWA_CPAD)		679,593,183		94.1	%
a) Per weighting factor (FPR):
FPR at 2%		179,196		0.0	%
FPR at 20%		7,000,033		1.0	%
FPR at 35%		11,694,800		1.6	%
FPR at 50%		46,024,625		6.4	%
FPR at 75%		136,104,497		18.8	%
FPR at 85%		129,883,910		18.0	%
FPR at 100%		288,057,254		39.9	%
FPR at 250%		37,858,011		5.2	%
FPR at 300%		10,751,102		1.5	%
FPR at 1250% ⁽²⁾		1,990,212		0.3	%
Derivatives – Future potential gain on and variation in the counterparty credit quality Minimum Required Regulatory Capital		10,049,543		1.4	%
b) Per type:
Securities		51,085,465		7.1	%
Loan operations - retail		109,882,310		15.2	%
Loan operations – non-retail		237,364,598		32.9	%
Joint obligations - retail		242,329		0.0	%
Joint obligations – non-retail		46,654,780		6.5	%
Loan commitments - retail		25,971,524		3.6	%
Loan commitments – non-retail		12,923,898		1.8	%
Other exposures		195,468,279		27.1	%
Risk-weighted assets of operational risk (RWA_OPAD)		28,622,953		4.0	%
Retail		7,470,420		1.0	%
Commercial		16,490,550		2.3	%
Corporate finance		1,379,791		0.2	%
Negotiation and sales		(4,927,254	)	-0.7	%
Payments and settlements		3,074,061		0.4	%
Financial agent services		2,872,911		0.4	%
Asset management		2,144,545		0.3	%
Retail brokerage		117,929		0.0	%
Business plans		-		0.0	%
Risk-weighted assets of market risk:		14,251,509		2.0	%
Gold, foreign currency and operations subject to foreign exchange variation (RWA_CAM)		1,536,064		0.2	%
Operations subject to interest rate variations		11,290,672		1.6	%
Fixed rate denominated in Real (RWA_JUR1)		2,127,454		0.3	%
Foreign currency coupon (RWA_JUR2)		6,699,591		0.9	%
Price index coupon (RWA_JUR3)		2,463,618		0.3	%
Interest rate coupon (RWA_JUR4)		9		0.0	%
Operations subject to commodity price variation (RWA_COM)		472,600		0.1	%
Operations subject to stock price variation (RWA_ACS)		952,173		0.1	%
RWA		722,467,645		100.0	%
Minimum Required Regulatory Capital		79,471,441
Excess capital in relation to Minimum Required Regulatory Capital		48,993,711		61.6	%
Ratio (%)		17.8	%
Regulatory Capital calculated for covering the interest rate risk of operations not classified into the trading portfolio (RBAN)		1,274,661

(1) As from June 30, 2015, Resolution No. 4,277/13 establishes the application of prudential adjustments related to pricing of financial instruments evaluated by market value, impacting deductions of capital by R$ 432 million.

(2) Considers the application of "F" factor required by article 29 of Circular No. 3,644/13.

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

	Reference			Weighted
Changes in the Basel Ratio	equity			exposure			Effect
Ratio at 12/31/2014 - Operating Consolidated		129,790,456			768,074,569			16.9	%
Change - consolidated prudential ^(*)		570,344			(17,234,271	)		0.5	%
Net income for the period		21,842,433			-			2.9	%
Interest on capital and dividends		(8,439,575	)		-			-1.1	%
Benefits to employees - CVM Resolution No. 695, December 13, 2012		(46,759	)		-			0.0	%
Granting of options recognized		55,508			-			0.0	%
Granting of stock options – options exercised during the period		344,133			-			0.1	%
Asset valuation adjustment		(1,005,610	)		-			-0.1	%
Deductions in reference equity		(5,566,721	)		-			-0.7	%
Purchase of treasury shares		(3,324,436	)					-0.4	%
Subordinated debt and redeemable preferred shares		(6,143,778	)		-			-0.8	%
Other changes in reference equity		389,157			-			0.1	%
Changes in risk exposure					(28,372,653	)		0.7	%
Ratio at 12/31/2015 - Consolidated Prudential		128,465,152			722,467,645			17.8	%

(*) Effect due to the change from the Financial Consolidated System to the Consolidated Prudential.

Capital for insurance activity

In July 2015, the National Council of Private Insurance (CNSP) issued CNSP Resolution No. 321, which, among other things, deals with the minimum capital requirements for underwriting, credit, operating and market risks for insurers, open private pension entities, capitalization companies and reinsurers. Upon publication of this resolution, CNSP Resolutions No. 228, 280, 283, 284, 316 and 317 are cancelled.

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Note 4 – Summary of the main accounting practices

Cash and cash equivalents - For the purposes of the 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 positions that have original maturities of up to 90 days.

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

Securities - Recorded at the 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 – securities acquired to be actively and frequently traded, and adjusted to market value, with a counter-entry to the results for the period;

Available-for-sale securities – securities that can be negotiated but are not acquired for the purposes of active and frequent trading. They are adjusted to their market value, with a counter-entry to an account disclosed in stockholders’ equity;

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

Gains and losses on available-for-sale securities, when realized, are recognized on the trade date in the statement of income, with a counter-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 causes, are recorded in the results as realized losses.

Derivative financial instruments - these are classified on the date of their acquisition, according to whether or not management intends to use them either as a hedge, according to BACEN Circular No. 3,082, of January 30, 2002. Transactions involving financial instruments, carried out at the client’s request, on 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 that are used for protection against risk exposure or to modify the characteristics of financial assets and liabilities, which have changes in market value closely related with those of the items being protected at the beginning and throughout the duration of the contract, and which are found to be effective reducing the risk related to the exposure being protected against, are classified as hedges, 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.

Cash Flow Hedge - the effective amounts of the hedges 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.

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Net Investment Hedge of Foreign Operations - accounted for similarly to cash flow hedge, i.e. the portion of gains or losses on a hedging instrument that is determined to be an effective hedge is recognized in stockholders’ equity, and reclassified to income for the period in the event of the disposal of the foreign operation. The ineffective portion is recognized in income for the period.

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 an accrual basis until the 60th day overdue in financial companies, according to the estimates 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.

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 in accordance with the rules determined by CMN Resolution No. 2,682 of December 21, 1999, which are as follows are:

Provisions are recorded from the date on which 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;

Taking into account default exclusively, the write-off as losses occurs 360 days after the credits have matured or after 540 days for operations that mature after a period of 36 months.

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 a provision, according to current regulations, unearned reinsurance premiums (Note 4m I); and prepaid expenses, corresponding to disbursements, the benefits of which will be felt in future periods.

From January 1, 2015, Itaú Unibanco has adopted the option provided in Circular No. 3,693/13, which establishes accounting procedures for the compensation of local correspondents in connection with credit origination. These compensation amounts for local correspondents in connection with transactions originated after January 1, 2017 will be fully recorded as expenses for the period.

Investments – investments in subsidiary and affiliated companies are accounted for based on 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 making a provision in accordance with current standards.

Fixed assets - these assets are stated at the cost of acquisition or construction, less accumulated depreciation, and were adjusted to market value up to December 31, 2007, when applicable, for insurance, pension plan and capitalization operations, and these adjustments to market value are supported by appraisal reports. They correspond to rights related to tangible assets intended for the maintenance of the company’s operations or exercised for this purpose, including assets arising from transactions that transfer to the company their benefits, risks and controls. The consideration received under lease contracts started to be recorded in income in accordance with CMN Resolution No. 3,617 / 08, as of September 30, 2015, as determined by the Central Bank.

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 tested annually for impairment.

Intangible assets – correspond to rights acquired related to intangible assets intended to be held by the company, or which are exercised for this purpose, according to CMN Resolution No. 3,642, of November 26, 2008. They are composed of: (i) the goodwill amount paid on the acquisition of the company, transferred to intangible assets in view of the transfer of the acquirer’s equity by the acquired, as set forth by Law No. 9,532/97, to be amortized based on the period defined in the appraisal reports; (ii) usage rights and rights acquired to credit payrolls and partnership agreements, amortized over the terms of the contracts or to the extent that the economic benefits flow to the company and (iii) software and customer portfolios, amortized over terms varying from five to ten years.

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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.

Insurance, pension plan and capitalization operations - insurance premiums, accepted coinsurances and selling expenses are accounted for by issuing an insurance policy or 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 insurance premiums installments is accounted for as incurred. Revenues from social security contributions, gross revenue from premium bonds 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 while recovery of these paid amounts is pending from the Reinsurer, installments of unsettled claims and incurred but not reported claims - Reinsurance, classified in assets in accordance with the criteria established by CNSP Resolution No. 321, of July 15, 2015, as amended by CNSP Resolution No. 319, of December 12, 2014, and SUSEP Circular No. 517, of July 30, 2015;

Unearned reinsurance premiums – Recognized to determine the portion of unearned reinsurance 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 current legislation as amended by CNSP Resolution No. 319, of December 12, 2014, and SUSEP Circular No. 517, of July 30, 2015.

II -

The technical provisions for insurance, pension plan and capitalization are recognized in accordance with the technical notes approved by SUSEP and the criteria established by the current legislation.

II.I-

Insurance and pension plan:

Provision for unearned premiums – this provision is recognized, based on insurance premiums, for the coverage of amounts payable related to claims and expenses to be incurred, throughout their terms to maturity, in connection with the risks assumed at the calculation base date. The calculation is performed on the level of policies or endorsement of agreements in force, on a pro rata die basis. The provision includes an estimate for effective and not issued risks.

Provision for unsettled claims – this provision is recognized for the coverage of amounts payable related to lump-sum payments and income overdue from claims reported up to the calculation base date, but not yet paid. The provision covers administrative and legal claims, gross of accepted coinsurance operations and reinsurance operations and net of ceded coinsurance operations. The provision should include, whenever required, IBNER (claims incurred but not sufficiently reported) for the aggregate development of claims reported but not paid, which amounts may be changed throughout the process up to final settlement.

Provision for claims incurred and not reported – this provision is recognized for the coverage of expected unsettled amounts related to claims incurred but not reported up to the calculation base date, gross of accepted coinsurance operations and reinsurance operations, and net of ceded coinsurance operations.

Mathematical provisions for benefits to be granted - recognized for the coverage of commitments assumed to participants or policyholders, based on the assumptions set forth in the contract, while the event that gave rise to the benefit and/or indemnity has not occurred. The provision is calculated in accordance with the methodology approved in the actuarial technical note to the product.

Mathematical provisions for granted benefits - recognized after the event triggering the benefit occurs, for the coverage of the commitments assumed to the participants or insured parties, based on the assumptions established in the agreement. The provision is calculated in accordance with the methodologies approved in the technical actuarial note on the product.

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Provision for financial surplus – recognized to ensure the amounts intended for the distribution of a financial surplus, in accordance with the regulations in force, in the event that it is stated in the agreement. Corresponds to the financial income exceeding the minimum return guaranteed in the product.

Supplemental Coverage Provision – recognized whenever technical provisions are found to be insufficient, determined based on the Liability Adequacy Test, in accordance with the provisions specified in the regulations in force.

Provision for redemptions and other amounts to be regularize – includes amounts related to redemptions to regularize, returns on premiums or funds, transfers requested but, for any reason, not yet transferred to the insurance company or open private pension entity beneficiary, and where premiums have been received but not quoted.

Provision for related expenses - recognized for the coverage of expected amounts related to expenses on benefits and indemnities, due to events which have occurred and will occur.

II.II -

Capitalization:

Mathematical provision for capitalization – recognized until the event triggering the benefit occurs, and comprised of the portion of the amounts collected for capitalization. It includes monetary restatement and interest, from the beginning of the validity date.

Provision for redemption – recognized from the date of the event triggering the redemption of the certificate and/or the event triggering the distribution of the bonus until the date of financial settlement, or the date on which the evidence of payment of the obligation is received

Provision for raffles unrealized – comprises the portion of the amounts collected for raffles for each tickets, which have been funded but, at the recognition date, have not yet been realized.

Provision for raffles payable – recognized from the date when the raffle is drawn until the date of financial settlement, or the date when the evidence of payment of the obligation is received, or in conformity with other cases provided by law.

Supplementary provision for raffles – recognized to supplement the provision for raffles unrealized, and is used for coverage of possible shortfall related to the expected amount of raffles to be drawn.

Provision for administrative expenses - recognized for the coverage of the expected amounts of administrative expenses for the capitalization plans.

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 where there is evidence of a high likelihood 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 through offsetting 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 on a conservative basis, usually recorded based on the opinion of legal advisors and considering the probability that financial resources shall be required to settle 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 adequate measurement, in spite of the uncertainty of their terms 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 the simultaneous recognition of receivables, without any effect on results.

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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 challenge, recognized at the full amount under discussion.

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

Taxes - these provisions are calculated in accordance with current legislation at the rates shown below, using the respective calculation bases.

Income tax	15.00	%
Additional income tax	10.00	%
Social contribution ⁽¹⁾	20.00	%
PIS ⁽²⁾	0.65	%
COFINS ⁽²⁾	4.00	%
ISS up to	5.00	%

(1)

On October 06, 2015, Law No. 13,169, a conversion of Provisional Measure No. 675, which increased the Social Contribution tax rate from 15% to 20% until December 31, 2018, for financial institutions, insurance companies and credit card management companies, was introduced. For the other companies, the tax rate remains at 9%.

(2)

For non-financial subsidiaries that fall into the non-cumulative calculation system, the PIS rate is 1.65% and COFINS rate is 7.60%.

On May 14, 2014, Law No. 12,973 was enacted to change the federal tax legislation about IRPJ, CSLL, PIS and COFINS, which effects started on 01/01/2015, since ITAÚ UNIBANCO HOLDING CONSOLIDATED did not exercise the option of advancing the effects pursuant to articles 75 and 96. Among other matters, said Law provides for:

the revocation of the Transition Tax Regime – TTR, established by Law No. 11,638/07, amended by Law No. 11,941, of May 27, 2009;

taxation of legal entities domiciled in Brazil, in connection with the equity increase arising from the interest in profit earned abroad by subsidiaries and affiliates and profit earned by individuals resident in Brazil by means of a legal entity controlled abroad.

Said law has not had significant accounting effects on the consolidated financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

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.

Transactions with non-controlling interests - Changes in ownership interest in a subsidiary, which do not result in loss of control, are accounted for as capital transactions and any difference between the amount paid and the amount corresponding to non-controlling is recognized directly in consolidated stockholders' equity.

Post-employments benefits

Pension plans - defined benefit plans

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

The following amounts are recognized in the consolidated statement of income:

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

interest on the net amount of assets (liabilities) of defined benefit plans is the change, during the period, in the net amount recognized in assets and liabilities, due to the time elapsed, which comprises the interest income on plan assets, interest expense on the obligations of the defined benefit plan and interest on the asset ceiling effects.

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Actuarial gains and losses arise from the non-realization of the actuarial assumptions established in the latest actuarial evaluation as compared to those effectively carried out, as well as the effects of changes in these assumptions. Gains and losses are fully recognized in equity valuation adjustments.

Pension plans - defined contribution

For defined contribution plans, contributions to plans made by ITAÚ UNIBANCO HOLDING CONSOLIDATED, through pension plan funds, are recognized as expenses when due.

Other post-employment benefit obligations

Certain companies that merged into ITAÚ UNIBANCO HOLDING CONSOLIDATED over the past few years were sponsors of post-employment healthcare benefit plans. ITAÚ UNIBANCO HOLDING CONSOLIDATED is contractually committed to maintaining these benefits over specific periods, as well as the benefits granted based on judicial rulings.

Similarly to the defined benefit pension plans, these obligations are assessed annually by independent and qualified actuaries, and the costs expected from these benefits are accrued during the length of service. Gains and losses arising from adjustments and changes in actuarial assumptions are debited from or credited to stockholders’ equity in Equity asset valuation adjustment in the period in which they occur.

Foreign currency translation

I- Functional and presentation currency

The financial statements of ITAÚ UNIBANCO HOLDING CONSOLIDATED are presented in Reais, which is its functional and presentation currency. For each subsidiary and investment in associates and joint ventures, ITAÚ UNIBANCO HOLDING CONSOLIDATED defined the functional currency, as provided for in CVM deliberation CVM Nº 640/10.

The assets and liabilities of subsidiaries with a functional currency other than the Brazilian Real are translated as follows:

Assets and liabilities are translated at the closing rate at the balance sheet date;

Income and expenses are translated at monthly average exchange rates;

Exchange differences arising from currency translation are recorded in Cumulative Translation Adjustments (CTA).

II - Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of income as part of securities and derivative financial instruments.

In the case of monetary assets classified as available-for-sale, the exchange differences resulting from a change in the amortized cost of the instrument are recognized in the income statement, while those resulting from other changes in the carrying amount, except impairment losses, are recognized in cumulative translation adjustments until derecognition or impairment.

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Note 5 - Cash and cash equivalents

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

	12/31/2015		12/31/2014
Cash and cash equivalents		18,544,382		17,527,249
Interbank deposits		22,021,881		13,939,368
Securities purchased under agreements to resell – Funded position		46,625,296		56,365,364
Total		87,191,559		87,831,981

In ITAÚ UNIBANCO HOLDING it is composed of the following:

	12/31/2015		12/31/2014
Cash and cash equivalents		155,156		114,898
Securities purchased under agreements to resell – Funded position		6,425,125		29,874
Total		6,580,281		144,772

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Note 6 - Interbank investments

	12/31/2015												12/31/2014
	0 - 30		31 - 180		181 - 365		Over 365		Total		%		Total		%
Money market		189,444,543		57,996,535		4,688		-		247,445,766		88.0		204,258,876		88.9
Funded position ^(*)		56,520,348		25,026,943		4,688		-		81,551,979		29.0		80,219,777		34.9
Financed position		126,207,698		3,964,369		-		-		130,172,067		46.3		98,974,662		43.1
With free movement		3,659,450		3,964,369		-		-		7,623,819		2.7		27,326,584		11.9
Without free movement		122,548,248		-		-		-		122,548,248		43.6		71,648,078		31.2
Short position		6,716,497		29,005,223		-		-		35,721,720		12.7		25,064,437		10.9
Money market – Assets Guaranteeing Technical Provisions - SUSEP		2,990,703		-		-		-		2,990,703		1.1		2,496,426		1.1
Interbank deposits		23,454,367		3,433,018		2,876,095		743,690		30,507,170		10.9		23,073,038		10.0
Total		215,889,613		61,429,553		2,880,783		743,690		280,943,639		100.0		229,828,340		100.0
% per maturity term		76.8		21.9		1.0		0.3		100.0
Total – 12/31/2014		160,614,468		64,278,280		3,994,151		941,441		229,828,340
% per maturity term		69.9		28.0		1.7		0.4		100.0

(*)

Includes R$ 9,460,888 (R$ 5,944,804 at 12/31/2014) related to money market with free movement, in which securities are 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$ 6,425,125 (R$ 29,874 at 12/31/2014), Interbank deposits with maturity of 31 to 180 days (R$ 2,371,382 at 12/31/2014), with maturity of 181 to 365 days to R$ 3,553,768 (R$ 658,832 at 12/31/2014) and over 365 days amounting to R$ 72,531,822 (R$ 38,212,705 at 12/31/2014).

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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

	12/31/2015																																12/31/2014
				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		116,732,948			(1,023,670	)		(3,436,939	)		112,272,339			33.2		7,120,106			13,782			550,534			5,991,649			8,689,251			89,907,017			109,425,756
Financial treasury bills		14,499,079			248			(33	)		14,499,294			4.3		-			-			-			2,017,879			2,178,667			10,302,748			22,113,964
National treasury bills		18,773,080			(127,279	)		(3	)		18,645,798			5.5		7,111,303			-			523,081			690,382			543,221			9,777,811			18,915,039
National treasury notes		43,428,878			(667,827	)		(883,389	)		41,877,662			12.4		7,330			13,696			19,874			2,972,776			2,020,039			36,843,947			44,065,273
National treasury/securitization		237,062			(325	)		(22,152	)		214,585			0.1		-			86			166			1,561			493			212,279			254,433
Brazilian external debt bonds		39,794,849			(228,487	)		(2,531,362	)		37,035,000			10.9		1,473			-			7,413			309,051			3,946,831			32,770,232			24,077,047
Government securities - abroad		11,144,489			2,361			(59,412	)		11,087,438			3.3		1,888,133			1,635,154			1,721,113			3,772,662			1,162,711			907,665			10,232,010
Argentina		687,679			13,694			-			701,373			0.2		222,471			467,043			9,425			-			1,435			999			631,070
Belgium		143,442			(6,649	)		-			136,793			0.0		-			-			-			-			136,793			-			163,863
Chile		1,444,527			(183	)		(2,430	)		1,441,914			0.4		529,293			883,923			10,192			-			17,887			619			1,250,576
Colombia		76,828			(4,149	)		-			72,679			0.0		159			-			8,336			24,138			848			39,198			88,282
Korea		1,625,652			-			(1	)		1,625,651			0.5		455,237			-			521,137			649,277			-			-			1,782,322
Denmark		2,548,471			-			-			2,548,471			0.8		-			-			541,860			1,519,380			487,231			-			2,699,276
Spain		1,059,940			-			-			1,059,940			0.3		306,616			-			-			753,324			-			-			782,590
United States		2,159,785			19			(5,760	)		2,154,044			0.6		195,072			85,943			409,670			515,533			195,164			752,662			1,173,935
France		-			-			-			-			0.0		-			-			-			-			-			-			133,050
Netherlands		121,784			-			(193	)		121,591			0.0		-			-			-			-			121,591			-			151,431
Italy		-			-			-			-			0.0		-			-			-			-			-			-			70,325
Mexico		2,522			(13	)		-			2,509			0.0		-			-			-			907			1,067			535			3,477
Paraguay		1,023,041			-			(43,136	)		979,905			0.3		168,051			189,871			208,148			260,765			127,261			25,809			977,276
Peru		1,031			(53	)		-			978			0.0		-			-			-			-			-			978			-
Uruguay		240,070			(304	)		(6,822	)		232,944			0.1		11,234			8,374			12,345			49,338			64,819			86,834			310,561
Other		9,717			(1	)		(1,070	)		8,646			0.0		-			-			-			-			8,615			31			13,976
Corporate securities		71,903,280			(88,229	)		(776,639	)		71,038,412			21.0		5,028,678			2,221,525			2,581,914			8,599,974			9,718,701			42,887,620			67,449,949
Shares		2,485,556			(67,394	)		(9,667	)		2,408,495			0.7		2,408,495			-			-			-			-			-			2,693,227
Rural product note		1,175,652			-			(46,126	)		1,129,526			0.3		41,223			359,291			123,145			109,366			193,970			302,531			1,407,483
Bank deposit certificates		1,619,893			244			(3,244	)		1,616,893			0.5		553,446			669,009			311,054			81,353			25			2,006			1,381,387
Securitized real estate loans		17,900,792			-			(207,132	)		17,693,660			5.2		342,071			-			-			318,781			257,275			16,775,533			16,071,003
Fund quotas		838,579			(59,041	)		(231	)		779,307			0.2		779,307			-			-			-			-			-			778,670
Credit rights		24,059			-			-			24,059			0.0		24,059			-			-			-			-			-			100,975
Fixed income		663,359			(55,659	)		(15	)		607,685			0.2		607,685			-			-			-			-			-			596,236
Variable income		151,161			(3,382	)		(216	)		147,563			0.0		147,563			-			-			-			-			-			81,459
Debentures		24,506,491			61,820			(318,175	)		24,250,136			7.2		290,918			411,358			749,978			435,021			2,156,808			20,206,053			21,460,116
Eurobonds and others		11,199,763			(23,852	)		(67,508	)		11,108,403			3.3		109,518			549,868			270,583			1,699,614			4,234,820			4,244,000			7,770,972
Financial bills		10,719,221			1			(46,932	)		10,672,290			3.2		252,685			6,201			811,483			5,842,301			2,519,108			1,240,512			14,077,374
Promissory notes		1,060,251			-			(69,186	)		991,065			0.3		251,015			190,624			230,288			113,538			205,600			-			1,396,726
Other		397,082			(7	)		(8,438	)		388,637			0.1		-			35,174			85,383			-			151,095			116,985			412,991
PGBL / VGBL fund quotas ⁽¹⁾		117,128,328			-			-			117,128,328			34.6		117,128,328			-			-			-			-			-			97,183,898
Subtotal - securities		316,909,045			(1,109,538	)		(4,272,990	)		311,526,517			92.1		131,165,245			3,870,461			4,853,561			18,364,285			19,570,663			133,702,302			284,291,613
Trading securities		184,856,986			(1,109,538	)		-			183,747,448			54.3		127,370,471			582,975			1,034,987			6,131,974			5,281,985			43,345,056			172,712,326
Available-for-sale securities		89,867,266			-			(4,272,990	)		85,594,276			25.3		3,452,699			3,287,486			3,818,574			11,913,530			12,738,324			50,383,663			77,146,194
Held-to-maturity securities ⁽²⁾		42,184,793			-			-			42,184,793			12.5		342,075			-			-			318,781			1,550,354			39,973,583			34,433,093
Derivative financial instruments		18,460,274			8,404,424			-			26,864,698			7.9		6,038,415			4,121,716			2,919,518			2,669,958			3,600,117			7,514,974			15,334,911
Total securities and derivative financial instruments (assets)		335,369,319			7,294,886			(4,272,990	)		338,391,215			100.0		137,203,660			7,992,177			7,773,079			21,034,243			23,170,780			141,217,276			299,626,524

Derivative financial instruments (liabilities)		(24,874,827	)		(6,240,862	)		-			(31,115,689	)		100.0		(3,847,876	)		(3,774,758	)		(3,533,856	)		(3,349,561	)		(4,105,871	)		(12,503,767	)		(17,394,472	)

(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 counter-entry to long term liabilities in Pension Plan Technical Provisions account, as determined by SUSEP.

(2) Unrecorded negative adjustment to market value in the amount of R$ 3,292,837 (R$ 218,844 at 12/31/2014), according to Note 7e.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

113

b) Summary by portfolio

	12/31/2015
			Restricted to
	Own portfolio		Repurchase agreements		Free portfolio		Pledged guarantees (*)		Central Bank		Derivative financial instruments		Assets guaranteeing technical provisions (Note 11b)		Total
Government securities - domestic		58,528,715		10,118,878		27,135,617		3,493,813		5,855,669		-		7,139,647		112,272,339
Financial treasury bills		3,861,658		6,452,635		-		3,300,354		-		-		884,647		14,499,294
National treasury bills		15,308,445		3,327,094		-		10,259		-		-		-		18,645,798
National treasury notes		29,401,041		339,149		-		26,803		5,855,669		-		6,255,000		41,877,662
National treasury / Securitization		214,585		-		-		-		-		-		-		214,585
Brazilian external debt bonds		9,742,986		-		27,135,617		156,397		-		-		-		37,035,000
Government securities - abroad		7,436,451		75,421		-		3,575,125		-		-		441		11,087,438
Argentina		566,307		-		-		135,066		-		-		-		701,373
Belgium		136,793		-		-		-		-		-		-		136,793
Chile		1,416,280		7,696		-		17,497		-		-		441		1,441,914
Colombia		72,679		-		-		-		-		-		-		72,679
Korea		808,380		-		-		817,271		-		-		-		1,625,651
Denmark		764,541		-		-		1,783,930		-		-		-		2,548,471
Spain		532,613		-		-		527,327		-		-		-		1,059,940
United States		1,892,953		-		-		261,091		-		-		-		2,154,044
Netherlands		121,591		-		-		-		-		-		-		121,591
Mexico		2,509		-		-		-		-		-		-		2,509
Paraguay		903,125		67,725		-		9,055		-		-		-		979,905
Peru		978		-		-		-		-		-		-		978
Uruguay		217,670		-		-		15,274		-		-		-		232,944
Other		32		-		-		8,614		-		-		-		8,646
Corporate securities		61,687,413		128,923		698,597		4,041,362		-		-		4,482,117		71,038,412
Shares		2,399,330		-		-		9,165		-		-		-		2,408,495
Rural product note		1,129,526		-		-		-		-		-		-		1,129,526
Bank deposit certificates		1,451,282		128,923		-		14,249		-		-		22,439		1,616,893
Securitized real estate loans		17,693,660		-		-		-		-		-		-		17,693,660
Fund quotas		686,225		-		-		364		-		-		92,718		779,307
Credit rights		1,161		-		-		-		-		-		22,898		24,059
Fixed income		537,501		-		-		364		-		-		69,820		607,685
Variable income		147,563		-		-		-		-		-		-		147,563
Debentures		19,485,387		-		-		4,016,372		-		-		748,377		24,250,136
Eurobonds and other		10,409,806		-		698,597		-		-		-		-		11,108,403
Financial bills		7,052,495		-		-		1,212		-		-		3,618,583		10,672,290
Promissory notes		991,065		-		-		-		-		-		-		991,065
Other		388,637		-		-		-		-		-		-		388,637
PGBL / VGBL fund quotas		-		-		-		-		-		-		117,128,328		117,128,328
Subtotal - securities		127,652,579		10,323,222		27,834,214		11,110,300		5,855,669		-		128,750,533		311,526,517
Trading securities		42,453,560		8,431,408		3,560,158		3,202,022		3,653,086		-		122,447,214		183,747,448
Available-for-sale securities		56,276,121		1,891,814		14,814,524		7,908,274		2,202,583		-		2,500,960		85,594,276
Held-to-maturity securities		28,922,898		-		9,459,532		4		-		-		3,802,359		42,184,793
Derivative financial instruments		-		-		-		-		-		26,864,698		-		26,864,698
Total securities and derivative financial instruments (assets)		127,652,579		10,323,222		27,834,214		11,110,300		5,855,669		26,864,698		128,750,533		338,391,215
Total securities and derivative financial instruments (assets) – 12/31/2014		96,391,805		62,978,872		3,746,856		2,979,594		9,306,822		15,334,911		108,887,664		299,626,524

(*) 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 – December 31, 2015

114

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.

	12/31/2015																					12/31/2014
	Cost		Adjustment to market value (in results)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
Government securities - domestic		57,679,096		(1,023,670	)		56,655,426		30.8		7,120,043		13,721		540,752		4,510,098		4,063,090		40,407,722		62,943,497
Financial treasury bills		12,134,054		248			12,134,302		6.6		-		-		-		646,611		1,673,969		9,813,722		20,656,001
National treasury bills		11,361,917		(127,279	)		11,234,638		6.1		7,111,303		-		513,413		690,382		411,876		2,507,664		8,898,461
National treasury notes		29,015,656		(667,827	)		28,347,829		15.4		7,267		13,635		19,760		2,862,493		1,634,153		23,810,521		30,843,596
National treasury / Securitization		3,119		(325	)		2,794		-		-		86		166		1,561		493		488		5,460
Brazilian external debt bonds		5,164,350		(228,487	)		4,935,863		2.7		1,473		-		7,413		309,051		342,599		4,275,327		2,539,979
Government securities - abroad		1,187,548		2,361			1,189,909		0.6		318,075		561,401		24,997		45,621		149,633		90,182		1,586,226
Argentina		687,679		13,694			701,373		0.4		222,471		467,043		9,425		-		1,435		999		630,918
Belgium		143,442		(6,649	)		136,793		0.1		-		-		-		-		136,793		-		106,574
Chile		35,985		(183	)		35,802		-		26,497		1,450		7,236		-		-		619		131,993
Colombia		76,747		(4,149	)		72,598		-		78		-		8,336		24,138		848		39,198		88,282
United States		131,961		19			131,980		0.1		-		85,943		-		-		-		46,037		448,191
Mexico		2,522		(13	)		2,509		-		-		-		-		907		1,067		535		3,477
Paraguay		67,725		-			67,725		-		67,725		-		-		-		-		-		128,201
Peru		1,031		(53	)		978		-		-		-		-		-		-		978		-
Uruguay		40,444		(304	)		40,140		-		1,304		6,965		-		20,576		9,490		1,805		40,970
Other		12		(1	)		11		-		-		-		-		-		-		11		7,620
Corporate securities		8,862,014		(88,229	)		8,773,785		4.8		2,804,025		7,853		469,238		1,576,255		1,069,262		2,847,152		10,998,705
Shares		1,998,855		(67,394	)		1,931,461		1.1		1,931,461		-		-		-		-		-		1,908,984
Bank deposit certificates		43,689		244			43,933		-		29,714		7,055		3,010		4,153		-		1		100,937
Securitized real estate loans		-		-			-		-		-		-		-		-		-		-		672
Fund quotas		620,945		(59,041	)		561,904		0.3		561,904		-		-		-		-		-		636,878
Credit rights		24,059		-			24,059		-		24,059		-		-		-		-		-		54,007
Fixed income		446,434		(55,659	)		390,775		0.2		390,775		-		-		-		-		-		562,541
Variable income		150,452		(3,382	)		147,070		0.1		147,070		-		-		-		-		-		20,330
Debentures		1,353,278		61,820			1,415,098		0.8		-		-		8,775		12,934		120,898		1,272,491		1,215,296
Eurobonds and other		1,015,681		(23,852	)		991,829		0.5		28,261		798		520		137,148		494,615		330,487		1,061,702
Financial bills		3,825,898		1			3,825,899		2.1		252,685		-		456,933		1,422,020		453,749		1,240,512		6,072,283
Others		3,668		(7	)		3,661		-		-		-		-		-		-		3,661		1,953
PGBL / VGBL fund quotas		117,128,328		-			117,128,328		63.8		117,128,328		-		-		-		-		-		97,183,898
Total		184,856,986		(1,109,538	)		183,747,448		100.0		127,370,471		582,975		1,034,987		6,131,974		5,281,985		43,345,056		172,712,326
% per maturity term											69.3		0.3		0.6		3.3		2.9		23.6
Total – 12/31/2014		173,016,351		(304,025	)		172,712,326		100.0		105,144,131		8,478,910		4,201,162		12,903,374		7,064,056		34,920,693
% per maturity term											60.8		4.9		2.4		7.5		4.1		20.2

At 12/31/2015, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Fund quotas fixed income R$ 4,287 without maturity (R$ 13,544,527 of 12/31/2014 portfolio is composed of Corporate Securities – Bank deposit certificates with maturity over 720 days).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

115

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.

	12/31/2015																					12/31/2014
	Cost		Adjustments to market value (in stockholders' equity)			Market value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value
Government securities - domestic		32,544,402		(3,436,939	)		29,107,463		34.0		63		61		9,782		1,481,551		3,333,082		24,282,924		25,624,380
Financial treasury bills		2,365,025		(33	)		2,364,992		2.8		-		-		-		1,371,268		504,698		489,026		1,457,963
National treasury bills		9,671		(3	)		9,668		0.0		-		-		9,668		-		-		-		3,420,385
National treasury notes		10,093,222		(883,389	)		9,209,833		10.8		63		61		114		110,283		268,509		8,830,803		9,263,549
National treasury / Securitization		233,943		(22,152	)		211,791		0.2		-		-		-		-		-		211,791		248,973
Brazilian external debt bonds		19,842,541		(2,531,362	)		17,311,179		20.2		-		-		-		-		2,559,875		14,751,304		11,233,510
Government securities - abroad		9,942,015		(59,412	)		9,882,603		11.5		1,570,058		1,073,753		1,696,116		3,727,041		1,013,078		802,557		8,620,032
Argentina		-		-			-		0.0		-		-		-		-		-		-		152
Belgium		-		-			-		0.0		-		-		-		-		-		-		57,289
Chile		1,408,542		(2,430	)		1,406,112		1.6		502,796		882,473		2,956		-		17,887		-		1,118,583
Colombia		81					81		0.0		81		-		-		-		-		-		-
Korea		1,625,652		(1	)		1,625,651		1.9		455,237		-		521,137		649,277		-		-		1,782,322
Denmark		2,548,471		-			2,548,471		3.0		-		-		541,860		1,519,380		487,231		-		2,699,276
Spain		1,059,940		-			1,059,940		1.2		306,616		-		-		753,324		-		-		782,590
United States		2,027,824		(5,760	)		2,022,064		2.4		195,072		-		409,670		515,533		195,164		706,625		725,744
France		-		-			-		0.0		-		-		-		-		-		-		133,050
Netherlands		121,784		(193	)		121,591		0.1		-		-		-		-		121,591		-		151,431
Italy		-		-			-		0.0		-		-		-		-		-		-		70,325
Paraguay		955,316		(43,136	)		912,180		1.1		100,326		189,871		208,148		260,765		127,261		25,809		849,075
Uruguay		184,720		(6,822	)		177,898		0.2		9,930		1,409		12,345		28,762		55,329		70,123		243,852
Other		9,685		(1,070	)		8,615		0.0		-		-		-		-		8,615		-		6,343
Corporate securities		47,380,849		(776,639	)		46,604,210		54.5		1,882,578		2,213,672		2,112,676		6,704,938		8,392,164		25,298,182		42,901,782
Shares		486,701		(9,667	)		477,034		0.6		477,034		-		-		-		-		-		784,243
Rural product note		1,175,652		(46,126	)		1,129,526		1.2		41,223		359,291		123,145		109,366		193,970		302,531		1,407,483
Bank deposit certificate		1,576,200		(3,244	)		1,572,956		1.7		523,728		661,954		308,044		77,200		25		2,005		1,280,447
Securitized real estate loans		2,244,241		(207,132	)		2,037,109		2.4		-		-		-		-		-		2,037,109		2,523,246
Fund quotas		217,634		(231	)		217,403		0.3		217,403		-		-		-		-		-		141,792
Credit rights		-		-			-		0.0		-		-		-		-		-		-		46,968
Fixed income		216,925		(15	)		216,910		0.3		216,910		-		-		-		-		-		33,695
Variable income		709		(216	)		493		0.0		493		-		-		-		-		-		61,129
Debentures		23,153,213		(318,175	)		22,835,038		26.6		290,918		411,358		741,203		422,087		2,035,910		18,933,562		20,244,820
Eurobonds and other		10,180,220		(67,508	)		10,112,712		11.8		81,257		549,070		270,063		1,562,466		3,740,205		3,909,651		6,706,896
Financial bills		6,893,323		(46,932	)		6,846,391		8.0		-		6,201		354,550		4,420,281		2,065,359		-		8,005,091
Promissory notes		1,060,251		(69,186	)		991,065		1.2		251,015		190,624		230,288		113,538		205,600		-		1,396,726
Other		393,414		(8,438	)		384,976		0.4		-		35,174		85,383		-		151,095		113,324		411,038
Total		89,867,266		(4,272,990	)		85,594,276		100.0		3,452,699		3,287,486		3,818,574		11,913,530		12,738,324		50,383,663		77,146,194
% per maturity term											4.0		3.8		4.5		13.9		14.9		58.9
Total – 12/31/2014		77,674,681		(528,487	)		77,146,194		100.0		4,037,103		4,011,549		5,667,279		7,290,173		10,211,071		45,929,019
% per maturity term											5.2		5.2		7.3		9.4		13.2		59.5

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

116

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 12/31/2015, not considered in results, is an impairment loss of R$ 704,526 (R$ 663,826 at 12/31/2014) relating to the market adjustment of the reclassified securities.

	12/31/2015																		12/31/2014
	Carrying value		%		0 - 30		31 - 90		91 - 180		181 - 365		366 - 720		Over 720 days		Market value		Carrying value		Market value
Government securities - domestic (*)		26,509,450		62.9		-		-		-		-		1,293,079		25,216,371		24,824,670		20,857,879		21,253,623
National treasury bills		7,401,492		17.6		-		-		-		-		131,345		7,270,147		6,890,782		6,596,193		6,507,654
National treasury notes		4,320,000		10.2		-		-		-		-		117,377		4,202,623		4,483,242		3,958,128		4,415,835
Brazilian external debt bonds		14,787,958		35.1		-		-		-		-		1,044,357		13,743,601		13,450,646		10,303,558		10,330,134
Government securities - abroad		14,926		0.0		-		-		-		-		-		14,926		15,024		25,752		31,050
Uruguay		14,906		0.0		-		-		-		-		-		14,906		14,906		25,739		30,864
Other		20		0.0		-		-		-		-		-		20		118		13		186
Corporate securities		15,660,417		37.1		342,075		-		-		318,781		257,275		14,742,286		14,052,262		13,549,462		13,367,264
Bank deposit certificate		4		0.0		4		-		-		-		-		-		4		3		3
Securitized real estate loans		15,656,551		37.1		342,071		-		-		318,781		257,275		14,738,424		14,048,396		13,547,085		13,364,887
Eurobonds and other		3,862		0.0		-		-		-		-		-		3,862		3,862		2,374		2,374
Total		42,184,793		100.0		342,075		-		-		318,781		1,550,354		39,973,583		38,891,956		34,433,093		34,651,937
% per maturity term						0.8		-		-		0.8		3.7		94.7
Total – 12/31/2014		34,433,093		100.0		43,558		59,347		204,889		671,758		1,103,478		32,350,063
% per maturity term						0.1		0.2		0.6		2.0		3.2		94.0

(*) Includes investments of Itaú Vida e Previdência S.A. in the amount of R$ 2,581,700 (R$ 2,380,399 at 12/31/2014).

Reclassification of securities

No reclassification was made in the period.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

117

g) Derivative financial instruments

The globalization of the markets in recent years has resulted in a high level of sophistication of financial products used. As a result of this process, there has been 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, ITAÚ UNIBANCO HOLDING and its subsidiaries operate in the derivatives markets for meeting the growing needs of their clients, as well as enacting their risk management policy. This policy is based on the use of derivative instruments to minimize the risks resulting from commercial and financial operations.

The derivative financial instrument 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.

The derivative contracts traded by the institution with clients in Brazil include swaps, forwards, options 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 mostly listed on the Chicago, New York and London Exchanges. It should be emphasized that there are over-the-counter operations, but their risks are low 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 on stock exchanges.

The main risk factors of the derivatives, assumed at 12/31/2015, were related to the foreign exchange rate, interest rate, commodities, US 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, through the use of transactions involving derivatives, has been able to optimize the risk-return ratios, even in highly volatile situations.

Most derivatives included in the institution’s portfolio are traded on 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 the liquidity of a specific contract is identified. Derivatives typically valued in this way are futures contracts. Likewise, there are other instruments whose quotations (fair prices) are directly disclosed by independent institutions and which are valued based on this direct information. A substantial portion of the Brazilian government securities, highly-liquid international (public and private) securities and shares are in this situation.

For derivatives the prices of which are not directly disclosed by stock exchanges, fair prices are obtained based on pricing models which use market information, deducted based on the prices disclosed for higher liquidity assets. Interest and market volatility curves which provide input for the models are extracted from those prices. Over- the-counter derivatives, forward contracts and securities with limited liquidity are in this situation.

The total value of margins pledged in guarantee was R$ 5,811,502 (R$ 2,904,834 at 12/31/2014) and was basically composed of government securities.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

118

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
	12/31/2015		12/31/2014		12/31/2015			12/31/2015			12/31/2015			12/31/2014
Futures contracts		589,451,000		331,020,643		(70,795	)		599,216			528,421			(354,255	)
Purchase commitments		189,036,329		97,929,466		702,292			622,801			1,325,093			(646,819	)
Commodities		315,862		156,790		9			-			9			(143	)
Indexes		60,485,098		43,125,904		702,485			(6,494	)		695,991			(632,987	)
Interbank market		88,410,675		29,994,303		(39,859	)		830			(39,029	)		48,492
Foreign currency		34,227,660		17,796,025		39,777			628,465			668,242			(62,033	)
Fixed rates		-		41,171		-			-			-			3
Securities		5,507,537		6,810,701		24			-			24			(89	)
Other		89,497		4,572		(144	)		-			(144	)		(62	)
Commitments to sell		400,414,671		233,091,177		(773,087	)		(23,585	)		(796,672	)		292,564
Commodities		158,315		341,241		(123	)		-			(123	)		17
Indexes		73,466,159		19,288,872		(753,926	)		8,296			(745,630	)		316,070
Interbank market		190,855,366		82,595,130		60,443			477			60,920			(116,083	)
Foreign currency		129,357,213		123,067,744		(79,305	)		(32,358	)		(111,663	)		92,559
Securities		6,259,555		7,798,190		(176	)		-			(176	)		1
Other		318,063		-		-			-			-			-
Swap contracts						(8,848,632	)		1,665,125			(7,183,507	)		(4,717,330	)
Asset position		327,833,655		270,200,211		4,764,351			4,382,801			9,147,152			4,816,590
Commodities		3,559		-		64			(4	)		60			-
Indexes		134,427,343		103,903,526		(17,847	)		1,049,942			1,032,095			724,245
Interbank market		60,887,785		68,534,186		426,009			818,030			1,244,039			801,130
Foreign currency		14,667,813		12,056,429		3,068,008			1,232,760			4,300,768			1,392,862
Fixed rates		106,316,027		81,916,526		910,902			1,138,346			2,049,248			1,704,909
Floating rate		11,490,552		3,763,467		376,873			143,440			520,313			192,850
Securities		25,011		15,538		-			-			-			440
Other		15,565		10,539		342			287			629			154
Liability position		336,682,287		275,333,146		(13,612,983	)		(2,717,676	)		(16,330,659	)		(9,533,920	)
Commodities		15,481		24,702		-			-			-			(3	)
Indexes		100,825,734		72,197,428		(2,316,377	)		(311,357	)		(2,627,734	)		(2,470,825	)
Interbank market		37,889,004		51,283,974		(232,894	)		(1,165,990	)		(1,398,884	)		(671,894	)
Foreign currency		33,943,785		24,795,573		(6,084,378	)		(755,484	)		(6,839,862	)		(2,203,529	)
Fixed rates		152,593,472		121,047,859		(4,795,478	)		69,548			(4,725,930	)		(3,934,436	)
Floating rate		11,194,757		5,664,874		(154,923	)		(559,477	)		(714,400	)		(202,232	)
Securities		63,769		87,833		(28,689	)		5,084			(23,605	)		(29,472	)
Other		156,285		230,903		(244	)		-			(244	)		(21,529	)
Option contracts		285,405,246		505,401,336		134,899			(335,521	)		(200,622	)		854,125
Purchase commitments - long position		61,880,109		88,641,492		2,287,481			1,660,464			3,947,945			1,945,460
Commodities		480,548		614,142		25,195			(11,392	)		13,803			14,915
Indexes		5,505,146		35,437,660		65,819			(24,797	)		41,022			58,200
Interbank market		5,116,201		12,430,047		14,922			6,047			20,969			81,828
Foreign currency		44,802,387		36,917,646		2,073,251			1,473,050			3,546,301			1,460,636
Fixed rates		5,506		2,258		-			24			24			18
Floating rate		-		8,234		-			-			-			-
Securities		5,871,988		3,153,007		100,590			208,379			308,969			313,937
Other		98,333		78,498		7,704			9,153			16,857			15,926
Commitments to sell - long position		85,099,471		143,623,660		1,481,415			153,062			1,634,477			1,964,563
Commodities		159,039		175,726		9,056			12,220			21,276			13,548
Indexes		27,824,299		77,499,793		133,292			16,469			149,761			162,229
Interbank market		12,347,369		23,358,896		15,941			(15,738	)		203			1,359
Foreign currency		36,526,214		30,935,917		1,024,424			(556,940	)		467,484			206,109
Fixed rates		179,269		114,124		7,815			(1,381	)		6,434			4,395
Floating rate		-		163,144		-			-			-			199
Securities		8,014,549		11,342,911		290,523			697,356			987,879			1,575,814
Other		48,732		33,149		364			1,076			1,440			910
Purchase commitments - short position		58,928,405		88,218,841		(2,020,564	)		(2,139,978	)		(4,160,542	)		(2,044,002	)
Commodities		248,592		433,440		(6,251	)		(387	)		(6,638	)		(8,627	)
Indexes		5,417,570		38,387,923		(66,460	)		20,997			(45,463	)		(87,393	)
Interbank market		5,145,727		7,380,355		(20,949	)		(29,642	)		(50,591	)		(63,948	)
Foreign currency		42,749,941		34,499,771		(1,864,100	)		(1,900,855	)		(3,764,955	)		(1,566,881	)
Fixed rates		112,107		68,291		-			(399	)		(399	)		(498	)
Securities		5,156,135		7,370,563		(55,100	)		(220,539	)		(275,639	)		(300,729	)
Other		98,333		78,498		(7,704	)		(9,153	)		(16,857	)		(15,926	)
Commitments to sell - short position		79,497,261		184,917,343		(1,613,433	)		(9,069	)		(1,622,502	)		(1,011,896	)
Commodities		289,960		327,776		(22,082	)		(38,999	)		(61,081	)		(43,246	)
Indexes		30,277,260		123,693,987		(158,340	)		(23,084	)		(181,424	)		(182,354	)
Interbank market		7,694,060		20,849,245		(9,839	)		9,823			(16	)		(1,805	)
Foreign currency		33,751,306		30,937,030		(1,146,668	)		740,404			(406,264	)		(294,674	)
Fixed rates		21,515		2,656		(738	)		37			(701	)		(181	)
Securities		7,414,428		9,073,500		(275,402	)		(696,174	)		(971,576	)		(488,726	)
Other		48,732		33,149		(364	)		(1,076	)		(1,440	)		(910	)
Forward contracts		40,226,794		7,938,348		2,135,464			78,900			2,214,364			1,634,161
Purchases receivable		516,045		161,055		517,624			(36	)		517,588			161,117
Foreign currency		-		-		1,278			-			1,278			-
Fixed rates		154,166		93,567		154,082			31			154,113			93,637
Floating rate		353,502		65,834		353,490			428			353,918			65,748
Securities		8,377		1,654		8,774			(495	)		8,279			1,732
Purchases payable		-		-		(508,126	)		-			(508,126	)		(160,301	)
Fixed rates		-		-		(154,082	)		-			(154,082	)		(93,426	)
Floating rate		-		-		(353,489	)		-			(353,489	)		(65,221	)
Securities		-		-		(555	)		-			(555	)		(1,654	)
Sales receivable		23,208,125		2,201,473		2,448,803			81,006			2,529,809			2,154,787
Commodities		7		247		7			-			7			246
Indexes		490		82		481			(2	)		479			76
Interbank market		20,697,118		323		-			71,766			71,766			323
Fixed rates		152,638		386,410		157,333			-			157,333			385,450
Floating rate		163,707		121,523		163,640			-			163,640			124,494
Securities		2,194,165		1,692,888		2,127,342			9,242			2,136,584			1,644,198
Sales deliverable		16,502,624		5,575,820		(322,837	)		(2,070	)		(324,907	)		(521,442	)
Interbank market		16,502,624		5,575,820		-			(3,078	)		(3,078	)		(8,430	)
Foreign currency		-		-		(1,864	)		-			(1,864	)		-
Fixed rates		-		-		(157,333	)		178			(157,155	)		(386,547	)
Floating rate		-		-		(163,640	)		830			(162,810	)		(126,465	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

119

	Memorandum account / Notional amount				Balance sheet account receivable / (received) (payable) / paid			Adjustments to market value (in results / stockholders' equity)			Market value
	12/31/2015		12/31/2014		12/31/2015			12/31/2015			12/31/2015			12/31/2014
Credit derivatives		12,662,485		11,161,056		60,068			(320,695	)		(260,627	)		(55,166	)
Asset position		4,605,455		6,803,523		354,290			259,861			614,151			122,802
Foreign currency		3,624,943		1,805,766		353,455			210,657			564,112			50,084
Fixed rate		-		3,931,442		135			50			185			32,247
Securities		788,052		826,088		449			45,180			45,629			34,591
Other		192,460		240,227		251			3,974			4,225			5,880
Liability position		8,057,030		4,357,533		(294,222	)		(580,556	)		(874,778	)		(177,968	)
Foreign currency		4,359,709		1,790,279		(289,561	)		(267,494	)		(557,055	)		(53,133	)
Fixed rate		546,672		563,114		(5,634	)		(2,574	)		(8,208	)		(10,153	)
Securities		2,763,313		1,934,814		889			(275,037	)		(274,148	)		(113,347	)
Other		387,336		69,326		84			(35,451	)		(35,367	)		(1,335	)
Forwards operations		148,476,851		101,873,392		203,802			84,170			287,972			412,707
Asset position		71,227,116		54,431,208		3,285,746			144,407			3,430,153			2,105,593
Commodities		418,640		181,579		47,267			(267	)		47,000			14,764
Indexes		22,115		-		1,235			-			1,235			-
Foreign currency		70,786,361		54,211,918		3,237,244			144,674			3,381,918			2,087,901
Securities		-		37,711		-			-			-			2,928
Liability position		77,249,735		47,442,184		(3,081,944	)		(60,237	)		(3,142,181	)		(1,692,886	)
Commodities		152,230		152,105		(13,266	)		2,400			(10,866	)		(18,565	)
Indexes		76,503		-		(3,015	)		-			(3,015	)		-
Foreign currency		77,019,554		47,290,079		(3,065,650	)		(62,637	)		(3,128,287	)		(1,673,200	)
Securities		1,448		-		(13	)		-			(13	)		(1,121	)
Target flow of swap		2,817,151		2,535,478		(329,407	)		139,259			(190,148	)		(136,499	)
Target flow of swap		1,697,505		1,616,789		199,151			156,063			355,214			93,062
Interbank market		591,088		709,277		-			-			-			-
Foreign currency		1,106,417		907,512		199,151			156,063			355,214			93,062
Liability position - Foreign currency		1,119,646		918,689		(528,558	)		(16,804	)		(545,362	)		(229,561	)
Other derivative financial instruments		17,463,862		12,032,976		300,048			253,108			553,156			302,696
Asset position		16,121,232		7,434,214		3,192,208			967,580			4,159,788			1,970,937
Foreign currency		10,468,238		2,647,440		2,882,777			588,990			3,471,767			1,581,175
Fixed rate		1,464,245		627,634		71,279			63,431			134,710			16,092
Securities		3,726,050		4,070,915		238,315			278,560			516,875			372,587
Other		462,699		88,225		(163	)		36,599			36,436			1,083
Liability position		1,342,630		4,598,762		(2,892,160	)		(714,472	)		(3,606,632	)		(1,668,241	)
Foreign currency		282,681		3,473,880		(2,846,965	)		(686,045	)		(3,533,010	)		(1,605,322	)
Securities		942,852		906,211		(45,070	)		(25,060	)		(70,130	)		(58,665	)
Other		117,097		218,671		(125	)		(3,367	)		(3,492	)		(4,254	)

				Asset		18,460,274			8,404,424			26,864,698			15,334,911
				Liability		(24,874,827	)		(6,240,862	)		(31,115,689	)		(17,394,472	)
				Total		(6,414,553	)		2,163,562			(4,250,991	)		(2,059,561	)

Derivative contracts mature as follows (in days):

Memorandum account / notional amount	0 - 30		31 - 180		181 - 365		Over 365		12/31/2015		12/31/2014
Futures		152,086,669		138,544,733		74,365,008		224,454,590		589,451,000		331,020,643
Swaps		10,653,936		39,701,845		46,156,833		226,556,690		323,069,304		266,189,335
Options		93,586,662		123,391,160		40,860,341		27,567,083		285,405,246		505,401,336
Forwards (onshore)		6,590,811		22,349,172		10,118,294		1,168,517		40,226,794		7,938,348
Credit derivatives		-		1,436,518		428,220		10,797,747		12,662,485		11,161,056
Forwards (offshore)		43,650,686		70,687,687		23,365,169		10,773,309		148,476,851		101,873,392
Target flow of swap		-		-		-		1,697,505		1,697,505		1,616,789
Other derivative financial instruments		1,554,826		3,261,289		576,529		12,071,218		17,463,862		12,032,976

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

120

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.

	12/31/2015																									12/31/2014
	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 - BM&FBOVESPA		(70,795	)		599,216			528,421		2.0		638,771		(155,016	)		(17,684	)		(49,275	)		75,984		35,641		-
Swaps - adjustment receivable		4,764,351			4,382,801			9,147,152		34.0		666,755		224,165			403,359			1,512,316			1,934,395		4,406,162		4,816,590
BM&FBOVESPA		581,481			78,791			660,272		2.5		16,707		12,517			24,789			103,525			125,830		376,904		108,667
Companies		3,948,659			1,179,915			5,128,574		19.1		628,198		29,254			46,152			1,036,722			838,304		2,549,944		2,961,156
Financial institutions		(33,571	)		2,859,110			2,825,539		10.4		20,520		177,492			325,198			328,841			656,522		1,316,966		1,354,437
Individuals		267,782			264,985			532,767		2.0		1,330		4,902			7,220			43,228			313,739		162,348		392,330
Option premiums		3,768,896			1,813,526			5,582,422		20.8		2,413,182		677,012			608,435			713,894			692,385		477,514		3,910,023
BM&FBOVESPA		2,028,738			569,264			2,598,002		9.7		2,073,812		228,458			140,425			112,761			31,402		11,144		1,711,125
Companies		449,509			828,174			1,277,683		4.8		118,520		147,368			130,627			193,587			411,994		275,587		585,154
Financial institutions		1,284,044			412,335			1,696,379		6.3		220,850		300,377			336,625			398,755			248,989		190,783		1,612,363
Individuals		6,605			3,753			10,358		0.0		-		809			758			8,791			-		-		1,381
Forwards (onshore)		2,966,427			80,970			3,047,397		11.4		1,197,896		1,312,673			529,836			5,829			1,163		-		2,315,904
BM&FBOVESPA		2,137,328			80,510			2,217,838		8.3		368,337		1,312,673			529,836			5,829			1,163		-		1,644,844
Companies		411,467			89			411,556		1.5		411,556		-			-			-			-		-		329,059
Financial institutions		417,632			371			418,003		1.6		418,003		-			-			-			-		-		342,001
Credit derivatives - Financial institutions		354,290			259,861			614,151		2.3		-		296			1,611			1,952			25,782		584,510		122,802
Forwards (offshore)		3,285,746			144,407			3,430,153		12.7		1,029,869		793,759			526,776			433,492			233,027		413,230		2,105,593
BM&FBOVESPA		47,384			(1	)		47,383		0.2		3,488		18,903			7,415			17,577			-		-		-
Companies		1,349,030			104,496			1,453,526		5.4		177,185		326,584			288,185			294,452			134,934		232,186		913,169
Financial institutions		1,887,400			39,254			1,926,654		7.1		849,057		447,412			230,439			120,609			98,093		181,044		1,189,995
Individuals		1,932			658			2,590		0.0		139		860			737			854			-		-		2,429
Target flow of swap - Financial institutions		199,151			156,063			355,214		1.3		-		-			-			-			355,214		-		93,062
Other derivative financial instruments		3,192,208			967,580			4,159,788		15.5		91,942		1,268,827			867,185			51,750			282,167		1,597,917		1,970,937
Companies		312,908			330,025			642,933		2.4		6,865		12,589			14,000			33,505			244,232		331,742		429,511
Financial institutions		2,879,300			637,555			3,516,855		13.1		85,077		1,256,238			853,185			18,245			37,935		1,266,175		1,541,426
Total		18,460,274			8,404,424			26,864,698		100.0		6,038,415		4,121,716			2,919,518			2,669,958			3,600,117		7,514,974		15,334,911
% per maturity term												22.5		15.3			10.9			9.9			13.4		28.0
Total - 12/31/2014		13,501,788			1,833,123			15,334,911		100.0		2,388,199		2,220,682			2,858,463			2,237,791			1,188,858		4,440,918
% per maturity term												15.6		14.5			18.6			14.6			7.8		29.0

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

121

	12/31/2015																													12/31/2014
	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
Futures - BM&FBOVESPA		-			-			-			-		-			-			-			-			-			-			(354,255	)
Swaps - difference payable		(13,612,983	)		(2,717,676	)		(16,330,659	)		52.5		(783,384	)		(481,060	)		(987,471	)		(1,898,084	)		(2,618,030	)		(9,562,630	)		(9,533,920	)
BM&FBOVESPA		(665,788	)		(440,358	)		(1,106,146	)		3.6		(8,813	)		(10,013	)		(33,717	)		(145,450	)		(339,716	)		(568,437	)		(367,678	)
Companies		(5,449,336	)		(462,808	)		(5,912,144	)		19.0		(703,383	)		(422,236	)		(278,919	)		(952,568	)		(1,338,789	)		(2,216,249	)		(3,823,436	)
Financial institutions		(1,887,870	)		(1,642,367	)		(3,530,237	)		11.3		(60,057	)		(21,075	)		(661,590	)		(644,486	)		(284,281	)		(1,858,748	)		(1,553,619	)
Individuals		(5,609,989	)		(172,143	)		(5,782,132	)		18.6		(11,131	)		(27,736	)		(13,245	)		(155,580	)		(655,244	)		(4,919,196	)		(3,789,187	)
Option premiums		(3,633,997	)		(2,149,047	)		(5,783,044	)		18.6		(1,458,386	)		(1,285,489	)		(894,728	)		(846,119	)		(804,594	)		(493,728	)		(3,055,898	)
BM&FBOVESPA		(1,592,812	)		(771,707	)		(2,364,519	)		7.7		(1,110,882	)		(564,789	)		(509,837	)		(130,413	)		(40,340	)		(8,258	)		(546,081	)
Companies		(249,010	)		(412,605	)		(661,615	)		2.1		(71,119	)		(45,442	)		(63,314	)		(149,828	)		(143,714	)		(188,198	)		(378,190	)
Financial institutions		(1,780,790	)		(967,038	)		(2,747,828	)		8.8		(276,385	)		(673,888	)		(320,950	)		(560,382	)		(620,023	)		(296,200	)		(2,130,065	)
Individuals		(11,385	)		2,303			(9,082	)		-		-			(1,370	)		(627	)		(5,496	)		(517	)		(1,072	)		(1,562	)
Forwards (onshore)		(830,963	)		(2,070	)		(833,033	)		2.6		(828,091	)		(4,130	)		(812	)		-			-			-			(681,743	)
BM&FBOVESPA		(1,864	)		(3,078	)		(4,942	)		-		-			(4,130	)		(812	)		-			-			-			(8,431	)
Companies		(411,467	)		804			(410,663	)		1.3		(410,663	)		-			-			-			-			-			(331,751	)
Financial institutions		(417,632	)		204			(417,428	)		1.3		(417,428	)		-			-			-			-			-			(341,561	)
Credit derivatives		(294,222	)		(580,556	)		(874,778	)		2.8		-			(8,593	)		(8,797	)		(5,456	)		(105,119	)		(746,813	)		(177,968	)
Companies		-			-			-			-		-			-			-			-			-			-			(12,803	)
Financial institutions		(294,222	)		(580,556	)		(874,778	)		2.8		-			(8,593	)		(8,797	)		(5,456	)		(105,119	)		(746,813	)		(165,165	)
Forwards (offshore)		(3,081,944	)		(60,237	)		(3,142,181	)		10.1		(691,898	)		(727,849	)		(785,248	)		(580,658	)		(233,028	)		(123,500	)		(1,692,886	)
BM&FBOVESPA		(41,360	)		1			(41,359	)		0.1		(7,544	)		(9,995	)		(10,200	)		(13,551	)		(69	)		-			-
Companies		(1,820,237	)		(128,408	)		(1,948,645	)		6.3		(259,617	)		(479,455	)		(565,088	)		(355,973	)		(178,736	)		(109,776	)		(866,414	)
Financial institutions		(1,219,601	)		68,991			(1,150,610	)		3.7		(424,620	)		(237,803	)		(209,715	)		(210,525	)		(54,223	)		(13,724	)		(823,374	)
Individuals		(746	)		(821	)		(1,567	)		-		(117	)		(596	)		(245	)		(609	)		-			-			(3,098	)
Target flow of swap - Companies		(528,558	)		(16,804	)		(545,362	)		1.8		-			-			-			-			(334,977	)		(210,385	)		(229,561	)
Other derivative financial instruments		(2,892,160	)		(714,472	)		(3,606,632	)		11.6		(86,117	)		(1,267,637	)		(856,800	)		(19,244	)		(10,123	)		(1,366,711	)		(1,668,241	)
Companies		(151,068	)		(710,194	)		(861,262	)		2.8		(525	)		(2,903	)		(6,070	)		(3,825	)		(10,123	)		(837,816	)		(323,526	)
Financial institutions		(2,741,092	)		(4,278	)		(2,745,370	)		8.8		(85,592	)		(1,264,734	)		(850,730	)		(15,419	)		-			(528,895	)		(1,344,715	)
Total		(24,874,827	)		(6,240,862	)		(31,115,689	)		100.0		(3,847,876	)		(3,774,758	)		(3,533,856	)		(3,349,561	)		(4,105,871	)		(12,503,767	)		(17,394,472	)
% per maturity term													12.4			12.1			11.4			10.7			13.2			40.2
Total - 12/31/2014		(15,994,646	)		(1,399,826	)		(17,394,472	)		100.0		(1,730,683	)		(1,418,586	)		(1,786,382	)		(2,881,370	)		(1,327,331	)		(8,250,120	)
% per maturity term													9.9			8.2			10.3			16.6			7.6			47.4

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

122

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.

	12/31/2015
	Futures		Swaps		Options		Forwards (onshore)		Credit derivatives		Forwards (offshore)		Target flow of swap		Other derivative financial instruments
BM&FBOVESPA		437,660,534		29,381,642		169,652,903		39,402,625		-		36,107,042		-		-
Over-the-counter market		151,790,466		293,687,662		115,752,343		824,169		12,662,485		112,369,809		1,697,505		17,463,862
Financial institutions		150,161,611		144,711,816		90,613,434		413,070		12,662,485		79,700,710		-		8,476,788
Companies		1,628,855		70,807,150		24,582,414		411,099		-		32,464,658		1,697,505		8,987,074
Individuals		-		78,168,696		556,495		-		-		204,441		-		-
Total		589,451,000		323,069,304		285,405,246		40,226,794		12,662,485		148,476,851		1,697,505		17,463,862
Total – 12/31/2014		331,020,643		266,189,335		505,401,336		7,938,348		11,161,056		101,873,392		1,616,789		12,032,976

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

123

IV - Credit derivatives

See below the composition of the Credit Derivatives (assets and liabilities) portfolio stated at their notional amounts, and their effect on the calculation of Required Reference Equity.

	12/31/2015								12/31/2014
	Notional amount			Notional amount of credit					Notional amount of			Notional amount of credit
	of credit			protection purchased with					credit protection			protection purchased with
	protection sold			identical underlying amount		Net position			sold			identical underlying amount		Net position
Credit swaps		(8,798,831	)		3,863,654		(4,935,177	)		(6,829,045	)		2,661,445		(4,167,600	)
Total return rate swaps		-			-		-			(1,670,566	)		-		(1,670,566	)
Total		(8,798,831	)		3,863,654		(4,935,177	)		(8,499,611	)		2,661,445		(5,838,166	)

The effect on the reference equity (Note 3) was R$ 466,572 (R$ 360,125 at 12/31/2014).

During the period, there was no occurrence of a credit event as defined in the agreements.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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V - Accounting hedge

The effectiveness computed for the hedge portfolio was in conformity with the provisions of BACEN Circular No. 3,082 of January 30, 2002, and the following accounting hedge structures are established:

Cash flow -the purpose of this hedge of ITAÚ UNIBANCO HOLDING CONSOLIDATED is to hedge cash flows of interest receipt and payment (CDB / Redeemable Preferred Shares / Syndicated Loans / Assets Transactions) and exposures to future exchange rate (anticipated transactions and unrecognized firm commitments) related to its variable interest rate risk (CDI / LIBOR), and foreign exchange rate risk, making the cash flow constant (fixed rate) and regardless of the variations of DI CETIP Over and LIBOR and foreign exchange rate.

	12/31/2015							12/31/2014
	Hedge Instrument					Hedge assets		Hedge Instruments					Hedge assets
Strategies	Nominal value		Adjustment to market value ^(*)			Book value		Nominal value		Adjustment to *market value ^()**			Book value
Hedge of deposits and securities purchased under agreements to resell		81,086,279		3,604,369			87,494,921		60,602,942		934,022			63,080,201
Hedge of preferred shares		-		-			-		1,044,078		65,874			1,044,078
Hedge of syndicated loan		8,200,080		(90,455	)		8,200,080		5,578,020		(15,047	)		5,578,020
Hedge of highly probable forecast transactions		1,124,582		16,033			1,124,582		80,970		(41	)		83,241
Hedge of assets transactions		7,405,168		(262,698	)		7,875,594		-		-			-
Total		97,816,109		3,267,249			104,695,177		67,306,010		984,808			69,785,540

(*) Recorded in Stockholders’ Equity under heading Asset Valuation Adjustments.

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$ 522,564 (R$ (257,341) at 12/31/2014).

To hedge future cash flows of highly probable forecast transactions, arising from futures contracts in foreign currency, against the exposure to future interest rate, ITAÚ UNIBANCO HOLDING CONSOLIDATED negotiated DDI Futures contracts on BM&FBOVESPA and NDF (Non Deliverable Forward) contracts traded in the over-the-counter market. During the second quarter of 2015, part of the flow of these agreements was realized, and , accordingly, Asset Valuation Adjustment was reclassified and included in the deemed cost of assets related to Hedge of Highly Probable Forecast Transaction.

To hedge future cash flows of futures receipts and payments against exposure to variable interest rate (CDI / LIBOR), ITAÚ UNIBANCO HOLDING CONSOLIDATED negotiated DI futures contracts on BM&FBOVESPA, interest rate swap and Euro-Dollar Futures on Chicago Stock Exchange.

II)

Market risk – The hedging strategy against market risk of ITAÚ UNIBANCO HOLDING CONSOLIDATED consists of hedging the exposure to variation in market risk, in interest receipts, which are attributable to changes in interest rates related to recognized assets and liabilities.

	12/31/2015
	Hedge instrument				Hedge assets
Strategies	Nominal value		*Adjustment to market value ^()**		Nominal value		*Adjustment to market value ^()**
Hedge of loans		4,345,899		58,886		4,345,899		60,505
Hedge of structured funding		780,960		142		780,960		57
Total		5,126,859		59,028		5,126,859		60,562

	12/31/2014
	Hedge instrument					Hedge assets
Strategies	Nominal value		*Adjustment to market value ^()**			Nominal value		Adjustment to market value (*)
Hedge of loans		2,611,681		40,078			2,611,681		59,689
Hedge of structured funding		531,240		(140	)		531,240		143
Total		3,142,921		39,938			3,142,921		59,832

(*) Recorded under heading Results from Securities and Derivative Financial Instruments.

To protect against market risk variation upon receipt of interest, ITAÚ UNIBANCO HOLDING CONSOLIDATED uses interest rate swap contracts. Hedge items refer to fixed assets and liabilities denominated in Chilean Unit of Account – CLF, and denominated in Euros and dollars, issued by subsidiaries in Chile and London, respectively, maturing between 2016 and 2030.

Receipts (payments) of interest flows are expected to occur and will affect the statement of income in monthly periods.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

125

III)

Hedge of net investment in foreign operations – ITAÚ UNIBANCO HOLDING CONSOLIDATED's strategy of net investments in foreign operations consist of a hedge of the exposure in foreign currency arising from the functional currency of foreign operations, compared to the functional currency of the head office.

	12/31/2015							12/31/2014
	Hedge instrument					Hedge assets		Hedge instrument					Hedge assets
Strategies	Nominal value		*Adjustment to market value ^()**			Nominal value		Nominal value		Adjustment to market value (*)			Nominal value
Hedge of net investment in foreign operations ^(*)		21,926,507		(5,949,493	)		12,815,084		14,764,203		(821,829	)		8,858,344
Total		21,926,507		(5,949,493	)		12,815,084		14,764,203		(821,829	)		8,858,344

(*) Recorded in Stockholders’ Equity under heading Asset Valuation Adjustments.

To hedge the changes of future cash flows of exchange variation of net investments in foreign operations, ITAÚ UNIBANCO HOLDING CONSOLIDATED uses DDI Futures contracts traded on BM&FBOVESPA, Financial Assets and Forward contracts or NDF contracts entered into by our subsidiaries abroad.

Receipts (payments) of interest flows are expected to occur and will affect the statement of income upon the total or partial disposal of investments.

IV) We present below the maturity terms of cash flow hedge and market risk hedge strategies:

	12/31/2015
Strategies	0-1 year		1-2 years		2-3 years		3-4 years		4-5 years		5-10 years		Over 10 years		Total
Hedge of deposits and securities purchased under agreements to resell		15,772,631		30,132,393		25,262,478		6,004,001		1,297,685		2,617,091		-		81,086,279
Hedge of syndicated loan		-		8,200,080		-		-		-		-		-		8,200,080
Hedge of highly probable anticipated transactions		1,124,582		-		-		-		-		-		-		1,124,582
Hedge of assets transactions		-		4,627,345		2,777,823		-		-		-		-		7,405,168
Hedge of loans		339,218		275,614		474,414		898,104		87,662		447,235		1,823,652		4,345,899
Hedge of structured funding		780,960		-		-		-		-		-		-		780,960
Hedge of net investment in foreign operations ^(*)		21,926,507		-		-		-		-		-		-		21,926,507
Total		39,943,898		43,235,432		28,514,715		6,902,105		1,385,347		3,064,326		1,823,652		124,869,475

(*) Classified as current, since instruments are frequently renewed.

	12/31/2014
Strategies	0-1 years		1-2 years		2-3 years		3-4 years		4-5 years		5-10 years		Over 10 years		Total
Hedge of deposits and securities purchased under agreements to resell		14,263,434		8,475,689		17,105,981		19,209,023		1,473,823		74,992		-		60,602,942
Hedge of preferred shares		1,044,078		-		-		-		-		-		-		1,044,078
Hedge of syndicated loan		-		-		5,578,020		-		-		-		-		5,578,020
Hedge of highly probable anticipated transactions		80,970		-		-		-		-		-		-		80,970
Hedge of loans		-		257,120		208,910		160,700		574,802		382,174		1,027,974		2,611,681
Hedge of structured funding		-		531,240		-		-		-		-		-		531,240
Hedge of net investment in foreign operations ^(*)		14,764,203		-		-		-		-		-		-		14,764,203
Total		30,152,685		9,264,049		22,892,911		19,369,723		2,048,625		457,166		1,027,974		85,213,134

(*) Classified as current, since instruments are frequently renewed.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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h) Changes in adjustments to unrealized ^(*) market value for the period

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Opening balance		(302,110	)		(2,016,483	)
Adjustments with impact on:
Results		990,626			378,981
Trading securities		(805,513	)		527,121
Derivative financial instruments		1,796,139			(148,140	)
Stockholders’ equity		(6,589,726	)		1,335,392
Available-for-sale		(3,744,503	)		1,405,103
Accounting hedge – derivative financial instruments		(2,845,223	)		(69,711	)
Futures		(2,779,349	)		(113,743	)
Swaps		(65,874	)		44,032

Closing balance		(5,901,210	)		(302,110	)
Adjustment to market value		(5,901,210	)		(302,110	)
Trading securities		(1,109,538	)		(304,025	)
Available-for-sale securities		(4,272,990	)		(528,487	)
Derivative financial instruments		(518,682	)		530,402
Trading securities		2,163,562			367,423
Accounting hedge		(2,682,244	)		162,979
Futures		(2,682,244	)		97,105
Swaps		-			65,874

(*) The term unrealized in the context of Circular nº. 3,068 of 11/08/2001, of the Central Bank means not converted into cash.

i) Realized gain of securities portfolio and derivatives financial instruments and foreign exchange variation on investments abroad

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Gain (loss) – trading securities		(2,268,978	)		(72,692	)
Gain (loss) – available-for-sale securities		(1,418,363	)		(689,667	)
Gain (loss) – derivatives		151,912			(434,719	)
Gain (loss) – foreign exchange variations on investments abroad		19,922,928			3,866,683
Total		16,387,499			2,669,605

During the periods ended 12/31/2015 and 12/31/2014, ITAÚ UNIBANCO HOLDING did not recognize impairment losses for Held-to-Maturity Financial Assets.

During the period ended 12/31/2015, ITAÚ UNIBANCO HOLDING recognized R$ 1,408,031 as impairment losses for Available-for-Sale Financial Assets, recorded in the statement of income in the line "Net gain (loss) on investment securities and derivatives".

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Sensitivity analysis (trading and banking portfolios)

In compliance with CVM Instruction No. 475, ITAÚ UNIBANCO HOLDING CONSOLIDATED carried out a sensitivity analysis by market risk factors considered relevant to which it was exposed. The biggest losses arising, by risk factor, in each scenario, were stated together with their impact on the results, net of tax effects, by providing an overview of ITAÚ UNIBANCO HOLDING CONSOLIDATED’s exposure under exceptional scenarios.

The sensitivity analyses of the non-trading and the trading portfolio shown in this report are an evaluation of a static position of the portfolio exposure and, therefore, do not consider 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 to significant losses. In addition, the study's sole purpose is to disclose the exposure to risk and the respective protective actions, taking into account the fair value of financial instruments, irrespective of the accounting practices adopted by ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Trading portfolio	Exposures	12/31/2015 (*)
		Scenarios
Risk factors	Risk of variations in:	I			II			III
Interest Rate	Fixed Income Interest Rates in Reais		(285	)		(114,002	)		(228,507	)
Foreign Exchange Linked	Foreign Exchange Linked Interest		(162	)		(5,312	)		(11,459	)
Foreign Exchange Rates	Prices of Foreign Currencies		657			57,436			242,760
Price Index Linked	Interest of Inflation coupon		(32	)		(4,063	)		(649	)
TR	TR Linked Interest Rates		0			(7	)		(14	)
Equities	Prices of Equities		(148	)		27,369			50,887
Total			30			(38,579	)		53,018

(*) Amounts net of tax effects.

Trading and Banking portfolios	Exposures	12/31/2015 (*)
		Scenarios
Risk factors	Risk of variations in:	I			II			III
Interest Rate	Fixed Income Interest Rates in Reais		(4,376	)		(1,572,640	)		(3,021,487	)
Foreign Exchange Linked	Foreign Exchange Linked Interest		873			(22,408	)		(25,705	)
Foreign Exchange Rates	Prices of Foreign Currencies		533			33,770			200,816
Price Index Linked	Interest of Inflation coupon		(1,334	)		(229,441	)		(444,651	)
TR	TR Linked Interest Rates		783			(276,817	)		(635,021	)
Equities	Prices of Equities		4,591			(86,428	)		(176,770	)
Total			1,070			(2,153,964	)		(4,102,818	)

(*) Amounts net of tax effects.

The following scenarios are used to measure the sensitivity:

	·	Scenario I: Addition of 1 base point to the fixed interest rate, currency coupon, inflation , and interest rate index, and 1 percentage point in currency and share prices;

	·	Scenario II: Shocks of 25 percent in interest fixed rates, currency coupon, inflation, interest rate indexes and currency and share prices, for both growth and decline, considering the highest possible resulting losses per risk factor;

Scenario III: Shocks of 50 percent in interest fixed rates, currency coupon, inflation, interest rate indexes and currency and share prices, for both growth and decline, considering the highest possible resulting losses per risk factor.

Derivative financial instruments engaged by ITAÚ UNIBANCO HOLDING CONSOLIDATED are shown in the item Derivative financial instruments in this note.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Note 8 - Loan, lease and other credit operations

Composition of the portfolio with credit granting characteristics

I – By type of operations and risk level

	12/31/2015																				12/31/2014
Risk levels	AA		A		B		C		D		E		F		G		H		Total		Total
Loan operations		237,310,497		78,286,569		33,231,508		14,800,800		13,931,892		3,823,241		3,112,315		2,656,783		10,603,555		397,757,160		372,915,522
Loans and discounted trade receivables		90,085,330		68,596,306		26,210,112		11,006,427		9,470,584		3,093,764		2,660,461		2,355,306		9,063,931		222,542,221		203,648,106
Financing		85,812,811		7,702,175		5,502,583		2,995,113		3,551,088		556,291		400,641		196,300		1,448,065		108,165,067		113,400,315
Farming and agribusiness financing		7,665,744		940,192		625,288		254,950		61,850		70,716		3,483		3,691		25,210		9,651,124		8,254,119
Real estate financing		53,746,612		1,047,896		893,525		544,310		848,370		102,470		47,730		101,486		66,349		57,398,748		47,612,982

Lease operations		2,876,241		659,702		577,775		210,769		70,294		33,062		36,642		31,601		105,506		4,601,592		6,406,905

Credit card operations		-		51,023,837		4,549,976		1,657,528		841,993		675,004		653,427		548,047		3,346,074		63,295,886		63,204,819

Advance on exchange contracts ⁽¹⁾		2,862,206		525,979		258,246		176,160		103,905		63,519		1,926		577		8,263		4,000,781		3,791,705

Other sundry receivables ⁽²⁾		1,079,527		2,616,843		517		19,123		3,983		26,453		10,584		145		416,905		4,174,080		5,441,379

Total operations with credit granting characteristics		244,128,471		133,112,930		38,618,022		16,864,380		14,952,067		4,621,279		3,814,894		3,237,153		14,480,303		473,829,499		451,760,330
Endorsements and sureties ⁽³⁾																				74,243,854		73,759,054
Total with endorsements and sureties		244,128,471		133,112,930		38,618,022		16,864,380		14,952,067		4,621,279		3,814,894		3,237,153		14,480,303		548,073,353		525,519,384
Total – 12/31/2014		226,011,045		141,107,513		36,573,770		15,159,149		8,790,070		4,388,026		3,872,076		3,108,617		12,750,064		451,760,330

(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 – December 31, 2015

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II – By maturity and risk level

	12/31/2015																													12/31/2014
	AA		A			B			C			D			E			F			G			H			Total			Total
	Overdue Operations ^{(1) (2)}
Falling due installments		-		-			2,041,462			2,078,140			1,732,139			1,319,228			1,313,570			1,105,717			4,073,567			13,663,823			12,898,932
01 to 30		-		-			108,457			111,883			74,644			56,453			54,531			48,400			183,264			637,632			631,184
31 to 60		-		-			79,868			101,749			73,680			52,457			56,554			45,748			175,988			586,044			548,845
61 to 90		-		-			79,928			92,390			80,419			49,362			48,012			42,861			160,200			553,172			630,527
91 to 180		-		-			204,876			252,802			191,611			131,451			141,105			118,455			437,351			1,477,651			1,552,558
181 to 365		-		-			340,301			384,557			318,146			233,504			246,040			257,637			789,158			2,569,343			2,832,663
Over 365		-		-			1,228,032			1,134,759			993,639			796,001			767,328			592,616			2,327,606			7,839,981			6,703,155
Overdue installments		-		-			646,372			872,429			1,067,882			1,070,987			1,302,758			1,239,016			7,239,241			13,438,685			11,360,526
01 to 14		-		-			7,098			66,159			35,600			27,871			25,227			23,350			86,945			272,250			229,603
15 to 30		-		-			618,443			134,080			112,165			76,816			53,711			59,671			386,750			1,441,636			1,535,087
31 to 60		-		-			20,831			640,410			216,649			143,442			146,329			104,780			291,532			1,563,973			1,296,228
61 to 90		-		-			-			19,136			658,091			165,968			158,469			132,665			335,412			1,469,741			1,188,801
91 to 180		-		-			-			12,644			45,377			644,085			892,959			894,399			1,519,171			4,008,635			2,925,356
181 to 365		-		-			-			-			-			12,805			26,063			24,151			4,527,022			4,590,041			4,030,140
Over 365		-		-			-			-			-			-			-			-			92,409			92,409			155,311
Subtotal		-		-			2,687,834			2,950,569			2,800,021			2,390,215			2,616,328			2,344,733			11,312,808			27,102,508			24,259,458
Specific allowance		-		-			(26,878	)		(88,517	)		(280,002	)		(717,065	)		(1,308,164	)		(1,641,313	)		(11,312,808	)		(15,374,747	)		(13,389,636	)
Subtotal - 12/31/2014		-		-			3,033,801			3,023,302			2,297,583			1,646,639			2,332,384			1,823,695			10,102,054			24,259,458

	Non-Overdue Operations
Falling due installments		243,511,440		132,334,488			35,553,438			13,741,193			12,070,911			2,193,557			1,176,151			874,156			3,114,501			444,569,835			425,787,462
01 to 30		19,818,175		31,381,581			6,267,069			3,482,443			4,179,186			442,547			193,390			109,536			454,887			66,328,814			60,799,810
31 to 60		18,453,076		13,634,895			3,469,870			798,993			464,550			90,749			90,966			32,421			178,863			37,214,383			39,854,647
61 to 90		10,542,355		9,278,701			1,999,287			674,211			323,309			82,950			34,748			24,747			105,125			23,065,433			25,895,046
91 to 180		23,341,818		17,074,675			5,397,174			1,377,261			885,720			127,899			86,627			60,025			239,117			48,590,316			47,785,983
181 to 365		32,267,830		16,916,971			5,009,908			2,159,386			1,298,755			215,763			161,209			104,913			300,224			58,434,959			58,907,339
Over 365		139,088,186		44,047,665			13,410,130			5,248,899			4,919,391			1,233,649			609,211			542,514			1,836,285			210,935,930			192,544,637
Overdue up to 14 days		617,031		778,442			376,750			172,618			81,135			37,507			22,415			18,264			52,994			2,157,156			1,713,410
Subtotal		244,128,471		133,112,930			35,930,188			13,913,811			12,152,046			2,231,064			1,198,566			892,420			3,167,495			446,726,991			427,500,872
Generic allowance		-		(665,565	)		(359,302	)		(417,414	)		(1,215,205	)		(669,319	)		(599,283	)		(624,694	)		(3,167,495	)		(7,718,277	)		(7,228,089	)
Subtotal - 12/31/2014		226,011,045		141,107,513			33,539,969			12,135,847			6,492,487			2,741,387			1,539,692			1,284,922			2,648,010			427,500,872
Grand total		244,128,471		133,112,930			38,618,022			16,864,380			14,952,067			4,621,279			3,814,894			3,237,153			14,480,303			473,829,499			451,760,330
Existing allowance		-		(665,565	)		(386,180	)		(505,931	)		(6,368,070	)		(4,620,817	)		(3,814,513	)		(3,236,829	)		(14,480,303	)		(34,078,208	)		(26,947,986	)
Minimum allowance required		-		(665,565	)		(386,180	)		(505,931	)		(1,495,207	)		(1,386,384	)		(1,907,447	)		(2,266,007	)		(14,480,303	)		(23,093,024	)		(20,617,725	)
Additional allowance ⁽³⁾		-		-			-			-			(4,872,863	)		(3,234,433	)		(1,907,066	)		(970,822	)		-			(10,985,184	)		(6,330,261	)
Grand total - 12/31/2014		226,011,045		141,107,513			36,573,770			15,159,149			8,790,070			4,388,026			3,872,076			3,108,617			12,750,064			451,760,330
Existing allowance		-		(941,880	)		(1,093,556	)		(1,514,413	)		(2,636,127	)		(2,193,574	)		(2,710,066	)		(3,108,306	)		(12,750,064	)		(26,947,986	)
Minimum allowance required		-		(705,538	)		(365,738	)		(454,789	)		(913,118	)		(1,316,408	)		(1,936,038	)		(2,176,032	)		(12,750,064	)		(20,617,725	)
Additional allowance ⁽³⁾		-		(236,342	)		(727,818	)		(1,059,624	)		(1,723,009	)		(877,166	)		(774,028	)		(932,274	)		-			(6,330,261	)

(1)

Operations with overdue installments for more than 14 days or under control of administrators or in companies in the process of declaring bankruptcy.

(2)

The balance of non-accrual operations amounts to R$ 19,458,112 (R$ 16,513,578 at 12/31/2014).

(3)

Allocated to each level of risk in order to explain the additional volume.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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III – By business sector

	12/31/2015		%			12/31/2014		%
Public Sector		3,182,031		0.7	%		4,389,521		1.0	%
Energy		90,485		0.0	%		70,700		0.0	%
Petrochemical and chemical		2,757,581		0.6	%		3,984,181		0.9	%
Sundry		333,965		0.1	%		334,640		0.1	%
Private sector		470,647,468		99.3	%		447,370,809		99.0	%
Companies		257,228,709		54.3	%		241,947,412		53.6	%
Sugar and alcohol		10,247,162		2.2	%		10,277,389		2.3	%
Agribusiness and fertilizers		14,603,639		3.1	%		13,719,202		3.0	%
Food and beverage		12,560,732		2.7	%		11,554,068		2.6	%
Banks and other financial institutions		6,421,221		1.4	%		5,855,569		1.3	%
Capital assets		7,057,410		1.5	%		8,731,199		1.9	%
Pulp and paper		3,192,334		0.7	%		2,604,913		0.6	%
Publishing and printing		979,742		0.2	%		1,016,109		0.2	%
Electronic and IT		3,950,227		0.8	%		4,171,650		0.9	%
Packaging		2,833,322		0.6	%		2,456,485		0.5	%
Energy and sewage		7,869,816		1.7	%		8,375,346		1.9	%
Education		1,537,953		0.3	%		1,401,446		0.3	%
Pharmaceuticals and cosmetics		4,242,089		0.9	%		4,361,151		1.0	%
Real estate agents		19,589,283		4.1	%		17,134,697		3.8	%
Entertainment and tourism		4,034,802		0.9	%		3,928,899		0.9	%
Wood and furniture		2,899,608		0.6	%		2,946,950		0.7	%
Construction materials		5,684,766		1.2	%		5,513,576		1.2	%
Steel and metallurgy		11,026,165		2.3	%		8,815,243		2.0	%
Media		1,007,561		0.2	%		1,353,110		0.3	%
Mining		5,418,497		1.1	%		4,687,285		1.0	%
Infrastructure work		4,611,977		1.0	%		3,975,625		0.9	%
Oil and gas ^(*)		5,147,870		1.1	%		4,456,687		1.0	%
Petrochemical and chemical		7,587,043		1.6	%		6,254,454		1.4	%
Health care		2,073,895		0.4	%		2,059,486		0.5	%
Insurance, reinsurance and pension plans		1,372		0.0	%		2,238		0.0	%
Telecommucations		1,284,566		0.3	%		1,733,512		0.4	%
Third sector		3,790,031		0.8	%		2,993,881		0.7	%
Trading		1,680,596		0.4	%		1,886,000		0.4	%
Transportation		14,581,511		3.1	%		16,373,248		3.6	%
Domestic appliances		2,150,605		0.5	%		2,498,565		0.6	%
Vehicles and autoparts		15,887,639		3.4	%		14,761,807		3.3	%
Clothing and shoes		4,837,228		1.0	%		4,887,006		1.1	%
Commerce - sundry		16,527,303		3.5	%		13,908,506		3.1	%
Industry - sundry		9,116,153		1.9	%		7,564,080		1.7	%
Sundry services		28,285,013		6.0	%		27,176,997		6.0	%
Sundry		14,509,578		3.1	%		12,511,033		2.8	%
Individuals		213,418,759		45.0	%		205,423,397		45.4	%
Credit cards		62,435,688		13.2	%		62,308,689		13.7	%
Real estate financing		45,224,230		9.5	%		36,437,998		8.1	%
Consumer loans / overdraft		83,276,136		17.6	%		74,705,322		16.5	%
Vehicles		22,482,705		4.7	%		31,971,388		7.1	%
Grand total		473,829,499		100.0	%		451,760,330		100.0	%
(*) Comprises trade of fuel.

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b) Credit concentration

	12/31/2015				12/31/2014
			% of				% of
*Loan, lease and other credit operations ^()**	Risk		total		Risk		total
Largest debtor		4,753,765		0.9		5,323,600		1.0
10 largest debtors		35,526,292		6.5		32,787,688		6.2
20 largest debtors		55,184,754		10.1		53,209,479		10.1
50 largest debtors		92,744,982		16.9		88,484,667		16.8
100 largest debtors		123,664,291		22.6		118,678,717		22.6
(*) The amounts include endorsements and sureties.

	12/31/2015				12/31/2014
Loan, lease and other credit operations and securities of companies and			% of				% of
*financial institutions ^()**	Risk		total		Risk		total
Largest debtor		8,050,610		1.2		5,506,955		0.9
10 largest debtors		51,671,998		8.0		41,262,200		6.8
20 largest debtors		82,207,618		12.7		68,924,307		11.3
50 largest debtors		134,404,588		20.8		119,971,624		19.7
100 largest debtors		175,610,164		27.2		160,804,702		26.5
(*) The amounts include endorsements and sureties.

c) Changes in allowance for loan losses

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Opening balance		(26,947,986	)		(26,371,185	)
Net increase for the period		(27,196,141	)		(19,251,619	)
Required by Resolution No. 2,682/99		(22,541,218	)		(18,138,325	)
Additional ⁽⁴⁾		(4,654,923	)		(1,113,294	)
Transfer of financial assets (Note 8f)		1,975,618			-
Write-Off		18,917,420			18,837,406
Exchange variation		(827,119	)		(162,588	)
Closing balance ⁽¹⁾		(34,078,208	)		(26,947,986	)
Required by Resolution No. 2,682/99		(23,093,024	)		(20,617,725	)
Specific allowance ⁽²⁾		(15,374,747	)		(13,389,636	)
Generic allowance ⁽³⁾		(7,718,277	)		(7,228,089	)
Additional allowance ⁽⁴⁾		(10,985,184	)		(6,330,261	)

(1)

The allowance for loan losses related to the lease portfolio amounts to: R$ (178,183) (R$ (314,220) at 12/31/2014).

(2)

Operations with overdue installments for more than 14 days or under responsibility of administrators or companies in the process of declaring bankruptcy.

(3)

For operations not covered in the previous item due to the classification of the client or operation.

(4)

Refers to the provision in excess of the minimum required percentage by CMN Resolution No. 2,682 of December 21, 1999.

At 12/31/2015, the balance of the allowance in relation to the loan portfolio is equivalent to 7.2% (6.0% at 12/31/2014).

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d) Recovery and renegotiation of credits

I - Composition of the result of allowance for loan losses

				01/01 to
	01/01 to 12/31/2015			12/31/2014

Expenses for allowance for loan losses		(27,196,141	)		(19,251,619	)
Income related to recovery of credits written off as loss		4,769,122			5,048,613
*Result of allowance for loan losses ^()**		(22,427,019	)		(14,203,006	)

(*) The amounts related to the lease portfolio from 01/01 to 12/31/2015 are: Expenses related to the allowance for loan losses R$ (138,568) (R$ (214,041) from 01/01 to 12/31/2014) and Income related to recovery of credits written off as losses amounting to R$ 129,773 (R$ 226,384 from 01/01 to 12/31/2014).

II - Renegotiated loan operations

	12/31/2015									12/31/2014
				Allowance for									Allowance
	Portfolio ⁽¹⁾			Loan Losses			%			Portfolio ⁽¹⁾			for Loan			%
Amended Credit Agreements		22,951,427			(7,791,795	)		33.9	%		16,601,311			(6,818,386	)		41.1	%
(-) Amended Operations non-overdue ⁽²⁾		(8,019,564	)		1,416,796			17.7	%		(5,029,559	)		973,396			19.4	%
Renegotiated loan operations		14,931,863			(6,374,999	)		42.7	%		11,571,752			(5,844,990	)		50.5	%

(1) The amounts related to reagreed loans the lease portfolio are R$ 108,361 (R$ 245,216 at 12/31/2014).

(2) Resulting from non-overdue transations or with a delay of less than 30 days, as a result of changes in the original contractual terms.

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Restricted operations on assets

See below the information related to the restricted operations involving assets, in accordance with CMN Resolution No. 2,921, of January 17, 2002.

	12/31/2015										01/01 to 12/31/2015			12/31/2014		01/01 to 12/31/2014
							Over 365				Income					Income
	0 - 30		31 - 180		181 - 365		days		Total		(expenses)			Total		(expenses)
Restricted operations on assets
Loan operations		-		-		204,995		240,640		445,635		100,162			204,793		36,545
Liabilities - restricted operations on assets
Foreign borrowing through securities		-		2,713		6,406		442,596		451,715		(96,515	)		204,292		(36,332	)
Net revenue from restricted operations												3,647					213

At 12/31/2015, and 12/31/2014 there were no balances in default.

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Operations of sale or transfers and acquisition of financial assets

I -

Credit assignments (transfers of receivables) carried out through December 2011 were recorded in accordance with the current regulations, 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 whereby the bank assumes joint obligations, at 12/31/2015 where the entity substantially retained the related risks and benefits, is R$ 170,958 (R$ 222,497 at 12/31/2014), composed of real estate financing of R$ 159,083 (R$ 208,897 at 12/31/2014) and farming financing of R$ 11,875 (R$ 13,600 at 12/31/2014).

II-

Beginning in January 2012, as provided for by CMN Resolution No. 3,533, of January 31, 2008 and supplementary regulation, accounting records take into consideration the retention or non-retention of risks and benefits on sales or transfers of financial assets.

ITAÚ UNIBANCO HOLDING CONSOLIDATED carried out operations involving the sale or transfer of financial assets where there was retention of credit risks of financial assets transferred. Therefore, such credits continue to be recorded as credit operations totaling R$ 5,496,609 at 12/31/2015. The operations are composed as follows: real estate financing with an amount recorded in assets of R$ 2,647,276 and a fair value of R$ 2,624,626 and an amount recorded as liabilities in the line Other sundry liabilities of R$ 2,646,088, a fair value of R$ 2,623,438 and working capital operations, with an amount recorded in assets of R$ 2,849,333 with fair value of R$ 2,849,333, and the amount recorded in liabilities under Other Liabilities – Sundry of R$ 2,849,273 with a fair value of R$ 2,849,273.

Sales or transfers of financial assets without any risk and benefit retention totaling R$ 1,664,097 with an effect on results of R$ 154,469, net of the allowance for loan losses.

On June 30, 2015 and December 31, the transfer of financial assets with no retention of risks and benefits between related companies, related to the operations which recovery expectation is considered by Management as remote, was carried out.

The portfolio transferred on June 30, 2015, amounting to R$ 1,080.021, fully provided for, was carried out for R$ 52,124, in accordance with the appraisal report. The operation did not give rise to any impact in the consolidated result.

The portfolio transferred on December 31, 2015, amounting to R$ 1,248,904, with average provision of 75%, was carried out for R$ 301,183, in accordance with the appraisal report. The operation gave rise to an impact in the consolidated result amounting to (R$ 15,014).

Acquisitions of loan portfolios with the retention of assignor’s risks from 01/01 up to 12/31/2015 total R$ 2,241,224.

Acquisitions of loan portfolios with the retention of assignor’s risks the amount is R$ 314,493 at 12/31/2015.

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Note 9 - Foreign exchange portfolio

	12/31/2015			12/31/2014
Assets - other receivables		68,909,342			42,392,308
Exchange purchase pending settlement – foreign currency		34,967,029			23,942,804
Bills of exchange and term documents – foreign currency		12,387			-
Exchange sale rights – local currency		34,184,352			19,093,822
(Advances received) – local currency		(254,426	)		(644,318	)
Liabilities – other liabilities (Note 2a)		68,465,800			43,176,246
Exchange sales pending settlement – foreign currency		33,397,229			18,753,402
Liabilities from purchase of foreign currency – local currency		34,852,882			24,266,769
Other		215,689			156,075
Memorandum accounts		2,287,745			1,245,537
Outstanding import credits – foreign currency		1,314,109			1,198,924
Confirmed export credits – foreign currency		973,636			46,613

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Note 10 – Funding, borrowing and onlending

a) Summary

	12/31/2015												12/31/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Deposits		190,351,317		27,978,880		14,288,581		59,991,640		292,610,418		32.9		294,773,248		36.3
Deposits received under securities repurchase agreements		159,062,020		15,184,948		21,262,330		155,444,814		350,954,112		39.5		325,013,107		40.0
Funds from acceptance and issuance of securities		4,127,554		16,509,670		8,096,081		46,857,049		75,590,354		8.5		47,749,704		5.9
Borrowing and onlending		4,419,173		29,333,803		23,983,995		46,852,304		104,589,275		11.7		88,776,468		10.9
Subordinated debt ^(*)		4,722,346		1,810,142		3,675,637		55,576,439		65,784,564		7.4		55,617,390		6.9
Total		362,682,410		90,817,443		71,306,624		364,722,246		889,528,723				811,929,917
% per maturity term		41.1		9.5		8.5		40.9
Total – 12/31/2014		354,495,757		81,829,432		57,295,369		318,309,359		811,929,917
% per maturity term		43.7		10.1		7.1		39.2

(*) At 12/31/2014 includes R$ 1,048,455 of Redeemable Preferred Shares classified under non-controlling interests in the Balance Sheet.

b) Deposits

	12/31/2015												12/31/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Demand deposits		61,092,014		-		-		-		61,092,014		20.9		48,733,456		16.5
Savings accounts		111,318,801		-		-		-		111,318,801		38.0		118,449,430		40.2
Interbank		4,475,544		8,726,701		1,011,608		735,265		14,949,118		5.1		19,125,081		6.5
Time deposits		13,464,958		19,252,179		13,276,973		59,256,375		105,250,485		36.0		108,465,281		36.8
Total		190,351,317		27,978,880		14,288,581		59,991,640		292,610,418				294,773,248
% per maturity term		65.1		9.5		4.9		20.5
Total – 12/31/2014		183,573,672		36,828,551		8,537,506		65,833,519		294,773,248
% per maturity term		62.3		12.5		2.9		22.3

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c) Deposits received under securities repurchase agreements

	12/31/2015												12/31/2014
							Over 365
	0 - 30		31 - 180		181 - 365		days		Total		%		Total		%
Own portfolio		12,826,142		10,836,412		17,637,385		121,170,524		162,470,463		46.3		188,232,803		57.9
Government securities		9,827,983		206,244		13,408		3,582		10,051,217		2.9		43,459,973		13.4
Own issue		2,861,936		10,562,047		17,623,977		121,166,942		152,214,902		43.4		139,909,918		43.0
Foreign		136,223		68,121		-		-		204,344		0.1		4,862,912		1.5
Third-party portfolio		129,578,895		-		-		-		129,578,895		36.9		111,073,152		34.2
Free portfolio		16,656,983		4,348,536		3,624,945		34,274,290		58,904,754		16.8		25,707,152		7.9
Total		159,062,020		15,184,948		21,262,330		155,444,814		350,954,112				325,013,107
% per maturity term		45.3		4.3		6.1		44.3
Total – 12/31/2014		161,993,276		11,279,963		15,150,192		136,589,676		325,013,107
% per maturity term		49.8		3.5		4.7		42.0

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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d) Funds from acceptance and issuance of securities

	12/31/2015												12/31/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Funds from bills:		3,855,648		13,190,978		5,981,991		23,834,408		46,863,025		62.0		29,431,676		61.6
Financial		246,020		2,797,375		816,809		14,635,689		18,495,893		24.5		10,644,873		22.3
Real estate		2,478,190		8,079,966		1,884,011		2,011,342		14,453,509		19.1		10,832,183		22.7
Bills of credit related to agribusiness		1,124,107		2,304,821		3,266,401		7,079,657		13,774,986		18.2		7,810,374		16.4
Mortgage notes		7,331		8,816		14,770		107,720		138,637		0.2		144,246		0.3
Foreign securities		99,033		2,842,609		1,869,783		19,970,930		24,782,355		32.8		16,084,910		33.7
Non-trade related – issued abroad		99,033		2,842,609		1,869,783		19,970,930		24,782,355		32.8		16,084,910		33.7
Brazil risk note programme		30,586		61,412		261,557		5,531,070		5,884,625		7.8		3,061,963		6.4
Structure note issued		56,047		1,318,917		808,796		6,490,414		8,674,174		11.5		6,394,235		13.4
Bonds		10,710		120,611		133,860		7,319,291		7,584,472		10.0		4,011,213		8.4
Fixed rate notes		-		1,175,772		663,816		305,054		2,144,642		2.9		1,673,953		3.5
Eurobonds		1,690		8,023		1,754		149,397		160,864		0.2		657,524		1.4
Other		-		157,874		-		175,704		333,578		0.4		286,022		0.6
*Structured Operations Certificates ^()**		172,873		476,083		244,307		3,051,711		3,944,974		5.2		2,233,118		4.7
Total		4,127,554		16,509,670		8,096,081		46,857,049		75,590,354				47,749,704
% per maturity term		5.5		21.8		10.7		62.0
Total – 12/31/2014		3,959,451		13,833,959		8,608,102		21,348,192		47,749,704
% per maturity term		8.3		29.0		18.0		44.7

(*) As of 12/31/2015, the market value of the funding from Structured Operations Certificates issued is R$ 4,510,947 (R$ 2,525,830 of 12/31/2014) according to BACEN Circular Letter No. 3,623.

ITAÚ UNIBANCO HOLDING’s portfolio is composed of Brazil Risk Note Programme with maturities of 31 days to 180 days (R$ 5,542 at 12/31/2014), of 181 to 365 days R$ 11,360 and over 365 days in the amount of R$ 4,099,088 (R$ 500,000 at 12/31/2014), totaling R$ 4,110,448 (R$ 505,542 at 12/31/2014).

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Borrowing and onlending

	12/31/2015												12/31/2014
	0-30		31-180		181-365		Over 365 days		Total		%		Total		%
Borrowing		3,832,472		23,270,316		18,750,228		19,932,743		65,785,759		62.9		43,546,229		49.1
Domestic		906,293		70,061		73,947		43,773		1,094,074		1.0		888,575		1.0
Foreign ^(*)		2,926,179		23,200,255		18,676,281		19,888,970		64,691,685		61.9		42,657,654		48.1
Onlending		586,701		6,063,487		5,233,767		26,919,561		38,803,516		37.1		45,230,239		50.9
Domestic – official institutions		586,701		6,063,484		5,232,204		26,919,561		38,801,950		37.1		45,228,106		50.9
BNDES		211,173		3,103,003		3,132,461		8,883,265		15,329,902		14.7		17,532,677		19.7
FINAME		375,422		2,957,389		2,090,482		17,382,227		22,805,520		21.8		27,163,046		30.6
Other		106		3,092		9,261		654,069		666,528		0.6		532,383		0.6
Foreign		-		3		1,563		-		1,566		0.0		2,133		0.0
Total		4,419,173		29,333,803		23,983,995		46,852,304		104,589,275				88,776,468
% per maturity term		4.3		28.1		22.9		44.7
Total – 12/31/2014		4,795,395		19,194,244		23,033,385		41,753,444		88,776,468
% per maturity term		5.5		21.6		25.9		47.0

(*) Foreign borrowing are basically represented by foreign exchange transactions related to export pre-financing and import financing.

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f) Subordinated debt

	12/31/2015															12/31/2014
	0-30		31-180		181-365		Over 365 days			Total			%			Total			%
CDB		4,502,839		1,022,040		1,235,297		806,699			7,566,875			11.5			7,458,744			13.4
Financial treasury bills		88,875		472,586		2,423,699		23,927,896			26,913,056			40.9			25,765,817			46.4
Euronotes		125,323		303,668		-		30,431,666			30,860,657			46.9			20,991,270			37.7
Bonds		5,309		11,848		16,641		493,628			527,426			0.8			413,624			0.7
(-) Transaction costs incurred (Note 4b)		-		-		-		(83,450	)		(83,450	)		(0.1	)		(60,520	)		(0.1	)
Total Other Liabilities		4,722,346		1,810,142		3,675,637		55,576,439			65,784,564						54,568,935
Redeemable preferred shares		-		-		-		-			-			-			1,048,455			1.9
*Grand total ^()**		4,722,346		1,810,142		3,675,637		55,576,439			65,784,564						55,617,390
% per maturity term		7.1		2.8		5.6		84.5
Total – 12/31/2014		173,963		692,715		1,966,184		52,784,528			55,617,390
% per maturity term		0.4		1.2		3.5		94.9

(*) According to current legislation, the accounting balance of subordinated debt as of December 2015 was used for the calculation of reference equity as of December, 2012, totaling R$ 51,134,447.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Description
	Principal amount
Name of security / currency	(original currency)		Issue	Maturity	Return p.a.	Account balance
Subordinated CDB - BRL
		465,835	2006	2016	100% of CDI + 0.7% (*)		1,235,297
		2,719,268	2010	2016	110% to 114% of CDI		5,257,266
		122,500			IPCA + 7.21% to 7.33%		267,613
		366,830	2010	2017	IPCA + 7.21% to 7.33%		806,699

					Total		7,566,875

Subordinated financial bills - BRL		365,000	2010	2016	100% of CDI + 1.35% a 1.36%		384,821
		1,874,000			112% to 112.5% of CDI		1,973,116
		30,000			IPCA + 7%		59,390
		206,000	2010	2017	IPCA + 6.95% to 7.2%		312,164
		3,223,500	2011	2017	108% to 112% of CDI		3,494,200
		352,400			IPCA + 6.15% to 7.8%		578,184
		138,000			IGPM + 6.55% to 7.6%		240,906
		3,650,000			100% of CDI + 1.29% to 1.52%		3,789,816
		500,000	2012	2017	100% of CDI + 1.12%		506,275
		42,000	2011	2018	IGPM + 7%		60,345
		30,000			IPCA + 7.53% to 7.7%		44,433
		460,645	2012	2018	IPCA + 4.4% to 6.58%		689,817
		3,782,100			100% of CDI + 1.01% to 1.32%		3,900,015
		6,373,127			108% to 113% of CDI		7,028,255
		112,000			9.95% to 11.95%		157,938
		2,000	2011	2019	109% to 109.7% of CDI		3,110
		12,000	2012	2019	11.96%		18,591
		100,500			IPCA + 4,7% a 6,3%		147,928
		1,000			110% of CDI		1,526
		20,000	2012	2020	IPCA + 6% to 6.17%		32,592
		1,000			111% of CDI		1,532
		6,000	2011	2021	109.25% to 110.5% of CDI		9,573
		2,306,500	2012	2022	IPCA + 5.15% to 5.83%		3,453,716
		20,000			IGPM + 4.63%		24,813
					Total		26,913,056

Subordinated euronotes - USD
		1,000,000	2010	2020	6.2%		3,947,729
		1,000,000	2010	2021	5.75%		3,890,497
		750,000	2011	2021	5.75% to 6.2%		3,075,838
		550,000	2012	2021	6.2%		2,147,640
		2,625,000	2012	2022	5.5% to 5.65%		10,363,629
		1,870,000	2012	2023	5.13%		7,351,874
					Total		30,777,207

Subordinated bonds - CLP		41,528,200	2008	2033	3.5% to 4.5%		240,924
		47,831,440	2014	2034	3.8%		286,502
					Total		527,426

Total							65,784,564

(*) 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 amounting to R$ 125,323 (R$ 85,326 at 12/31/2014), with maturities of 31 to 180 days amounting to R$ 303,668 (R$ 206,567 12/31/2014) and over 365 days amounting to R$ 30,348,216 (R$ 20,638,857 at 12/31/2014), totaling R$ 30,777,207 (R$ 20,930,750 at 12/31/2014).

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Note 11 - Insurance, pension plan and capitalization operations

Composition of the technical provisions

	Insurance				Pension plan				Capitalization				Total
	12/31/2015		12/31/2014		12/31/2015		12/31/2014		12/31/2015		12/31/2014		12/31/2015		12/31/2014
Unearned premiums		3,026,570		4,015,424		15,405		12,282		-		-		3,041,975		4,027,706
Mathematical provision of benefits to be granted and benefits granted		24,090		12,646		122,913,919		102,310,929		-		-		122,938,009		102,323,575
Redemptions and other unsettled amounts		23,330		21,202		166,332		168,051		-		-		189,662		189,253
Financial surplus		1,388		1,474		546,923		518,676		-		-		548,311		520,150
Unsettled claims		782,739		759,711		18,157		14,832		-		-		800,896		774,543
Claims / events incurred but not reported		423,925		635,402		23,726		19,417		-		-		447,651		654,819
Administrative and related expenses		41,268		41,962		49,941		69,620		17,612		16,260		108,821		127,842
Mathematical provision for capitalization and redemptions		-		-		-		-		2,995,218		2,963,938		2,995,218		2,963,938
Raffles payable and to be held		-		-		-		-		29,843		26,361		29,843		26,361
Complementary raffles		-		-		-		-		569		2,720		569		2,720
Other provisions⁽¹⁾		548,946		516,375		403,079		547,513		280		403		952,305		1,064,291
Total ⁽²⁾		4,872,256		6,004,196		124,137,482		103,661,320		3,043,522		3,009,682		132,053,260		112,675,198

(1) It considers mostly the Supplemental Coverage Provision, regulated by SUSEP Circular No. 517, of July 30, 2015.

(2) This table covers the amendments established by SUSEP Circular No. 517, of July 30, 2015, also for comparison purposes.

The total of Technical Provisions represents the amount of obligations after the Liability Adequacy Test is carried out.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Assets guaranteeing technical provisions - SUSEP

	Insurance				Pension plan						Capitalization				Total
	12/31/2015		12/31/2014		12/31/2015			12/31/2014			12/31/2015		12/31/2014		12/31/2015			12/31/2014
Interbank investments – money market		976,887		884,172		1,206,054			764,644			807,762		847,610		2,990,703			2,496,426
Securities and derivative financial instruments		2,807,330		2,949,975		123,980,645			103,598,443			1,962,558		2,339,246		128,750,533			108,887,664
PGBL / VGBL fund quotas ⁽¹⁾		-		-		117,128,328			97,183,898			-		-		117,128,328			97,183,898
Government securities – domestic		-		-		82,694,405			64,366,424			-		-		82,694,405			64,366,424
National treasury bills		-		-		15,928,532			17,889,931			-		-		15,928,532			17,889,931
National treasury notes		-		-		20,566,875			35,063,466			-		-		20,566,875			35,063,466
Financial treasury bills		-		-		46,198,998			11,413,027			-		-		46,198,998			11,413,027
Corporate securities		-		-		33,666,247			32,239,131			-		-		33,666,247			32,239,131
Bank deposit certificates		-		-		2,539,005			3,180,440			-		-		2,539,005			3,180,440
Debentures		-		-		4,024,734			3,144,639			-		-		4,024,734			3,144,639
Shares		-		-		460,339			635,986			-		-		460,339			635,986
Credit note		-		-		-			577,265			-		-		-			577,265
Financial treasury bills		-		-		26,541,294			24,638,761			-		-		26,541,294			24,638,761
Others		-		-		100,875			62,040			-		-		100,875			62,040
PGBL / VGBL fund quotas		-		-		488,715			232,506			-		-		488,715			232,506
Derivative financial instruments		-		-		118,446			105,374			-		-		118,446			105,374
Loans for shares		-		-		250,761			366,148			-		-		250,761			366,148
Accounts receivable / (payable)		-		-		(90,246	)		(125,685	)		-		-		(90,246	)		(125,685	)
Other assets		2,807,330		2,949,975		6,852,317			6,414,545			1,962,558		2,339,246		11,622,205			11,703,766
Government		1,109,745		1,070,334		5,932,326			4,144,096			98,016		131,963		7,140,087			5,346,393
Private		1,697,585		1,879,641		919,991			2,270,449			1,864,542		2,207,283		4,482,118			6,357,373
Receivables from insurance and reinsurance operations ⁽²⁾		1,464,700		2,349,487		-			-			-		-		1,464,700			2,349,487
Credit rights		759,399		959,667		-			-			-		-		759,399			959,667
Commercial – extended guarantee		653,345		1,327,625		-			-			-		-		653,345			1,327,625
Reinsurance		51,956		62,195		-			-			-		-		51,956			62,195
Total		5,248,917		6,183,634		125,186,699			104,363,087			2,770,320		3,186,856		133,205,936			113,733,577

(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 counter-entry to lliabilities in Pension plan technical provision accounts.

(2) Recorded under Other receivables and Other assets.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Financial and operating income

	Insurance																		Pension plan																		Capitalization						Total
	01/01 to 12/31/2015									01/01 to 12/31/2014									01/01 to 12/31/2015									01/01 to 12/31/2014									01/01 to			01/01 to			01/01 to			01/01 to
	Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			Direct			Reinsurance			Withheld			12/31/2015			12/31/2014			12/31/2015			12/31/2014
Financial income related to insurance, pension plan and capitalization operations		361,483			-			361,483			419,496			-			419,496			298,377			-			298,377			296,345			-			296,345			216,032			180,357			875,892			896,198
Financial income		404,714			-			404,714			657,164			-			657,164			12,607,975			-			12,607,975			8,871,012			-			8,871,012			419,725			355,162			13,432,414			9,883,338
Financial expenses		(43,231	)		-			(43,231	)		(237,668	)		-			(237,668	)		(12,309,598	)		-			(12,309,598	)		(8,574,667	)		-			(8,574,667	)		(203,693	)		(174,805	)		(12,556,522	)		(8,987,140	)
Operating income related to insurance, pension plan and capitalization operations		3,160,799			(47,076	)		3,113,723			3,418,467			(636,855	)		2,781,612			456,572			(2,381	)		454,191			463,908			(554	)		463,354			599,590			588,810			4,167,504			3,833,776
Premiums and contributions		4,877,634			(82,979	)		4,794,655			7,221,878			(1,026,913	)		6,194,965			17,756,341			(5,764	)		17,750,577			15,574,934			(4,557	)		15,570,377			2,686,120			2,383,515			25,231,352			24,148,857
Changes in technical provisions		998,159			15,988			1,014,147			(181,936	)		(36,907	)		(218,843	)		(17,269,119	)		-			(17,269,119	)		(15,079,280	)		-			(15,079,280	)		(2,657	)		14,652			(16,257,629	)		(15,283,471	)
Expenses for claims, benefits, redemptions and raffles		(1,610,939	)		13,950			(1,596,989	)		(2,395,703	)		372,882			(2,022,821	)		(23,845	)		1,750			(22,095	)		(25,880	)		339			(25,541	)		(2,089,621	)		(1,838,751	)		(3,708,705	)		(3,887,113	)
Selling expenses		(1,056,566	)		5,965			(1,050,601	)		(1,150,454	)		54,083			(1,096,371	)		(4,522	)		-			(4,522	)		(3,780	)		-			(3,780	)		(4,653	)		-			(1,059,776	)		(1,100,151	)
Other operating revenues and expenses		(47,489	)		-			(47,489	)		(75,318	)		-			(75,318	)		(2,283	)		1,633			(650	)		(2,086	)		3,664			1,578			10,401			29,394			(37,738	)		(44,346	)
Total income related to insurance, pension plan and capitalization operations		3,522,282			(47,076	)		3,475,206			3,837,963			(636,855	)		3,201,108			754,949			(2,381	)		752,568			760,253			(554	)		759,699			815,622			769,167			5,043,396			4,729,974

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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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 of a similar nature and with individual amounts not considered significant): contingencies are determined on a monthly basis and the expected amount of losses is accrued based on statistical models that take into account the type of lawsuit and the characteristics of the court (Small Claims Court or Regular Court).

Individual lawsuits (related to claims with unusual characteristics or involving significant amounts): calculation is carried out on a periodic basis, from the calculation of the claimed amount which, in turn, is estimated based on the de jure or de facto characteristics related to that lawsuit. The amounts considered as representing probable losses are recorded as provisions.

In general, contingencies arise from revisions of contracts and compensation for damages and pain and suffering. ITAÚ UNIBANCO HOLDING CONSOLIDATED is also a party to specific lawsuits related to the collection of understated inflation adjustments to savings accounts resulting from economic plans.

From 1986 to 1994, the Brazilian federal government implemented several consecutive monetary stabilization plans (MSPs) to combat hyperinflation. In order to implement these plans, the Brazilian federal government enacted several laws based on its power to regulate the monetary and financial systems, as granted by the Brazilian federal constitution.

Savings account holders at the time when these MSPs were implemented challenged the constitutionality of the laws in connection with such plans, claiming, from the banks in which they held savings accounts, additional interest based on the inflation rates applied to the deposit accounts based on the MSPs.

ITAÚ UNIBANCO HOLDING CONSOLIDATED is a defendant in numerous standardized lawsuits filed by individuals in respect of the MSP, and records provisions for such claims upon service of a process for a claim. In addition, ITAÚ UNIBANCO HOLDING CONSOLIDATED is a defendant in class actions, similar to the lawsuits brought by individuals, filed by either: (i) consumer protection associations, or (ii) the Public Prosecution Office on behalf of savings account holders. Holders of savings accounts may claim any amount due based on such a decision. ITAÚ UNIBANCO HOLDING CONSOLIDATED records provisions when individual plaintiffs apply to enforce such decisions, using the same criteria adopted to determine provisions for individual lawsuits.

The Federal Supreme Court (STF) has issued some decisions favorable to savings account holders, but has not issued a final ruling with respect to the constitutionality of the MSPs as applicable to savings accounts. In relation to a similar dispute with respect to the constitutionality of the MSPs as applicable to time deposits and other private agreements, the STF has determined that the bills were constitutional. As a response to this discrepancy, the National Confederation of the Financial System (CONSIF) an association of Brazilian financial institutions, filed a special proceeding with the STF (Action against the violation of a constitutional fundamental right - “ADPF” No. 165), in which the Central Bank filed an amicus brief, arguing that savings account holders did not incur actual damages and that the MSPs as applicable to savings accounts were in accordance with the federal constitution. Accordingly, the STF suspended the rulings on all appeals involving this matter until it pronounces a final decision. However, there is no estimate when the judgment by STF will occur, since, due to the disqualification of certain ministers, there is no sufficient quorum at this time to resolve on the issue.

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The most important rulings will address the following issues: (i) the accrual of compensatory interest on the amount due to the plaintiff, on filings that carry no specific claim to such interest; (ii) the initial date of default interest, for class actions; and (iii) the possibility of compensating the negative difference arising in the month of the MSP implementation, between the interests actually paid on savings accounts and the inflation rate for the same period, with the positive difference arising in the months subsequent to the MSP implementation, between the interests actually paid on savings accounts and the inflation rate of the same period. In relevant sentences in 2015, the STJ decided that: (i) the inclusion of interest in the calculation of execution is not applicable if there is no express sentence for this; and (ii) there shall be no payment of interest to holders of savings accounts after the proven closing date of those accounts. The thesis that understated inflation of plans subsequent to those challenged in the lawsuit can be included as full monetary correction of the debt, even with no express claim by the holder of savings account, has been reaffirmed. Additionally, STJ reaffirmed that the term for filling collection lawsuits expired within five years counted from the implementation date of the monetary stabilization plan (MSP). Accordingly, various collective lawsuits continue being extinguished by the Judiciary Branch as a result of this decision.

No amount is recorded as a provision in relation to Civil lawsuits which likelihood of loss is considered possible, which total estimated risk is R$ 2,459,520 (R$ 1,800,483 at 12/31/2014) and the main nature of which refers 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 loss amount is determined and accrued monthly according to the statistical share pricing model and is reassessed taking into account court rulings. These are adjusted to reflect 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 allowances, pension plan supplements and other matters are discussed.

No amount is recorded as a provision for labor claims for which the likelihood of loss is considered possible, and for which the total estimated risk is R$ 828,672 (R$ 416,161 at 12/31/2014).

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.

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The table below shows the changes in the respective provisions for contingent liabilities and the respective escrow deposit balances:

													01/01 to
	01/01 to 12/31/2015												12/31/2014
	Civil			Labor			Other			Total			Total
Opening balance		4,643,356			5,597,552			158,831			10,399,739			9,888,019
(-) Contingencies guaranteed by indemnity clauses (Note 4n I)		(132,284	)		(1,028,517	)		-			(1,160,801	)		(945,077	)
Subtotal		4,511,072			4,569,035			158,831			9,238,938			8,942,942
Monetary restatement/charges		321,878			547,714			-			869,592			503,679
Changes in the period reflected in results (Notes 13f and 13i)		1,747,025			1,637,156			(24,013	)		3,360,168			2,582,715
Increase ^(*)		2,698,455			1,795,586			(21,188	)		4,472,853			3,581,852
Reversal		(951,430	)		(158,430	)		(2,825	)		(1,112,685	)		(999,137	)
Payment		(1,589,049	)		(1,711,495	)		-			(3,300,544	)		(2,790,398	)
Subtotal		4,990,926			5,042,410			134,818			10,168,154			9,238,938
(+) Contingencies guaranteed by indemnity clauses (Note 4n I)		236,018			1,089,443			-			1,325,461			1,160,801
Closing balance		5,226,944			6,131,853			134,818			11,493,615			10,399,739
Closing balance at 12/31/2014		4,643,356			5,597,552			158,831			10,399,739
Escrow deposits at 12/31/2015		1,741,289			2,217,823			-			3,959,112
Escrow deposits at 12/31/2014		2,073,184			2,567,273			-			4,640,457

(*) Civil provisions include the provision for economic plans amounting to R$ 232,966 (R$ 209,864 from 01/01 to 12/31/2014) (Note 22k).

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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 a legal obligation, regardless of the likelihood of loss, that is, a favorable outcome for the institution is dependent upon the recognition of the unconstitutionality of the applicable laws in force. In other cases, the Bank recognizes a provision whenever the likelihood of loss is considered probable.

The table below shows the changes in the provisions and respective balances of escrow deposits for Tax and Social Security lawsuits:

										01/01 to
	01/01 to 12/31/2015									12/31/2014
	Legal
Provisions	obligation			Contingencies			Total			Total
Opening balance		3,703,721			2,923,211			6,626,932			8,973,897
Effect of change in consolidation criteria		-			-			-			(346	)
Reclassification of Contingent Liabilities (*)		314,641			(314,641	)		-			-
(-) Contingencies guaranteed by indemnity clauses (Note 4n II)		-			(60,646	)		(60,646	)		(57,028	)
Subtotal		4,018,362			2,547,924			6,566,286			8,916,523
Monetary restatement / charges		263,819			344,679			608,498			515,298
Changes in the period reflected in results		70,421			518,463			588,884			797,182
Increase		72,041			1,098,412			1,170,453			1,156,565
Reversal		(1,620	)		(579,949	)		(581,569	)		(359,383	)
Payment		(91,361	)		(236,321	)		(327,682	)		(3,662,717	)
Subtotal		4,261,241			3,174,745			7,435,986			6,566,286
(+) Contingencies guaranteed by indemnity clauses (Note 4n II)		-			64,548			64,548			60,646
Closing balance (Note 14c)		4,261,241			3,239,293			7,500,534			6,626,932
Closing balance at 12/31/2014 (Note 14c)		3,703,721			2,923,211			6,626,932

(*) At June 30, 2015, lawsuits from Contingent Liabilities were reclassified to Legal Liabilities.

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										01/01 to
	01/01 to 12/31/2015									12/31/2014
	Legal
Escrow deposits	Obligation			Contingencies			Total			Total
Opening balance		4,324,134			412,301			4,736,435			5,658,098
Effect of change in consolidation criteria		-			-			-			(566	)
Reclassification of Deposits (*)		342,742			(342,742	)		-			-
Appropriation of income		227,970			57,214			285,184			377,358
Changes in the period		(1,014,765	)		332,006			(682,759	)		(1,298,808	)
Deposited		21,135			333,406			354,541			193,433
Withdrawals		(943,475	)		(1,030	)		(944,505	)		(5,128	)
Reversals to income		(92,425	)		(370	)		(92,795	)		(1,487,113	)
Closing balance		3,880,081			458,779			4,338,860			4,736,082
Relocated to assets pledged in guarantee of contingencies (Note 12d)		-			(116	)		(116	)		353
Closing balance after relocated		3,880,081			458,663			4,338,744			4,736,435
Closing balance at 12/31/2014		4,324,134			412,301			4,736,435

(*) At June 30, 2015, lawsuits from Contingent Liabilities were reclassified to Legal Liabilities. Accordingly, the same treatment was applied to guarantees.

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The main discussions related to the provisions recognized for Tax and Social Security Lawsuits are as follows:

CSLL – Isonomy – R$ 1,098,160: as the law increased the CSLL rate for financial and insurance companies to 15%, the company is discussing the lack of constitutional support for this measure and, due to the principle of isonomy, the company is defending the levying of CSLL at the regular rate of 9%. The corresponding escrow deposit balance totals R$ 1,083,612;

INSS – Accident Prevention Factor (FAP) – R$ 834,203: it challenges the legality of FAP and inconsistent calculation by the INSS. The corresponding escrow deposit balance totals R$ 97,717;

PIS and COFINS – Calculation basis – R$ 613,201: the company is defending the levying of contributions on revenue, understood as revenue from the sales of assets and services. The corresponding escrow deposit balance totals R$ 540,488;

IRPJ and CSLL – Taxation of profits earned abroad – R$ 559,164: the company is discussing the calculation basis for the levying of these taxes on profits earned abroad and the non-applicability of Regulatory Instruction SRF No. 213-02 in which it exceeds the parameters of the legal text. The corresponding escrow deposit balance totals R$ 215,122.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Off-balance sheet contingencies – The estimated amounts at risk in the main tax and social security lawsuits with a likelihood of loss deemed possible, which total R$ 16,165,417, are described below:

INSS – Non-compensatory amounts – R$ 4,429,167: we defend the non-taxation of these amounts, mainly profit sharing, stock options, transportation vouchers and sole bonuses;

IRPJ and CSLL – Goodwill – Deduction – R$ 2,867,499: the deductibility of goodwill on acquisition of investments with future expected profitability, and R$ 611,833 of this amount is guaranteed in company purchase agreements;

IRPJ, CSLL, PIS and COFINS – Requests for offsetting dismissed – R$ 1,364,627: cases in which the liquidity and the ability to offset credit are discussed;

IRPJ and CSLL – Interest on capital – R$ 1,300,614: the company is defending 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;

ISS – Banking Institutions – R$ 960,452: these are banking operations, revenue from which may not be interpreted as prices for services rendered, and/or which arises from activities not listed under Supplementary Law No. 116/03 or Law No. 406/68.

Receivables - reimbursement of contingencies

The receivables balance arising from reimbursements of contingencies totals R$ 1,093,491 (R$ 675,896 at 12/31/2014) (Note 13a), basically represented by the guarantee for the Banco Banerj S.A. privatization process which occurred in 1997, where the State of Rio de Janeiro created a fund to guarantee civil, labor and tax contingencies.

Assets pledged as contingencies

Assets pledged in guarantee for contingencies are related to liability contingencies and restricted or deposited as presented below:

	12/31/2015		12/31/2014
Securities (basically financial treasury bills – Note 7b)		792,983		821,015
Deposits in guarantee		4,334,805		4,229,805

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Escrow deposits are generally required to be made with the court in connection with lawsuits in Brazil, and they are held by the respective court until a decision is made. In case of a decision against ITAÚ UNIBANCO HOLDING CONSOLIDATED, the deposited amount is released from escrow and transferred to the counterparty to the lawsuit. In the case of a decision in favor of ITAÚ UNIBANCO HOLDING CONSOLIDATED, the deposited amount is released at the full deposited and updated amount.

In general, provisions related to lawsuits of ITAÚ UNIBANCO HOLDING CONSOLIDATED are long term, considering the time required for the termination of these lawsuits in the Brazilian judicial system, which is the reason why no estimate of the specific year in which these lawsuits will be terminated has been disclosed.

According to the opinion of its legal advisors, ITAÚ UNIBANCO HOLDING CONSOLIDATED 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 evaluations by internal and external legal advisors of other cases, showed that the accrued amounts are sufficient, in the terms of CMN Resolution No. 3,823, of December 16, 2009, and BACEN Circular Letter No. 3,429, of February 11, 2010.

Program for Cash or Installment Payment of Taxes

ITAÚ UNIBANCO HOLDING and its subsidiaries adhered to the Program for Cash or Installment Payment of Taxes, substantially related to the Federal area, established by Law No. 13,097, of January 19, 2015 and Law No. 13,043/2014. The program included debits managed by the Federal Reserve Service of Brazil and was established in accordance with the main article as follows:

Refis of Capital Gain Earned in the Merger of Shares from Nova Bolsa - Law 13,097/15 article 145 – Arising from capital gain earned until December 31, 2008 due to the sale of shares resulting from the conversion of equity securities from nonprofit associations.

The net effect of the program in the results was R$ 27,309, and is reflected in Other Operating Income, Income Tax and Social Contribution.

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Programs for Cash or Installment Payment of Municipal Taxes

ITAÚ UNIBANCO HOLDING and its subsidiaries adhered to the Programs for Incentivized Installment Payment substantially related to the municipal level, established by Laws: São Paulo (Law No. 16,097, of 12/29/2014); (Law No. 55,828, of 01/07/2015); Rio de Janeiro (Law No. 5,854, of 04/27/2015). The programs included debts managed by said municipalities and can be defined as follows:

PPI – Incentivized Installment Payment – the programs promote the regularization of debts mentioned in these laws, arising from tax and non-tax credits, either recognized or not, including those that are part of the Enforceable Debt, either filed or to be filed in court.

The net effect of the programs in result was R$ 9,514, and it is recorded in Other Operating Income, Income Tax and Social Contribution.

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Note 13 - Breakdown of accounts

Other sundry receivables

	12/31/2015			12/31/2014
Social contribution for offsetting (Note 14b I)		645,254			644,891
Taxes and contributions for offsetting		4,888,940			4,248,000
Escrow deposits for foreign fundraising program		366,246			620,515
Receivables from reimbursement of contingent liabilities (Note 12c)		1,093,491			675,896
Receivables from reimbursement of contingent liabilities		2,115,133			1,510,741
(Allowance for loan losses)		(1,021,642	)		(834,845	)
Rights receivable from financial assets sold or transferred		-			5,894,183
Sundry domestic debtors		721,042			1,802,433
Premiums from loan operations		1,663,655			2,370,887
Sundry foreign debtors		2,086,874			2,179,015
Retirement plan assets (Note 19)		2,182,574			2,456,923
Recoverable payments		138,935			43,281
Salary advances		58,131			61,226
Amounts receivable from related companies		39,671			44,470
Operations without credit granting characteristics		1,612,127			338,005
Securities and credits receivable		1,944,039			961,521
(Allowance for loan losses)		(331,912	)		(623,516	)
Other		520,118			439,164
Total		16,017,058			21,818,889

In ITAÚ UNIBANCO HOLDING, Other Sundry Receivables is mainly composed of Deferred tax assets of R$ 911,726 (R$ 498,467 at 12/31/2014) (Note 14b I).

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Prepaid expenses

	12/31/2015		12/31/2014
Commissions ^(*)		1,957,541		3,059,258
Related to vehicle financing		144,370		282,392
Related to insurance and pension plan		640,882		1,292,360
Restricted to commissions / partnership agreements		85,586		185,531
Related to Payroll Loans		929,331		1,136,245
Other		157,372		162,730
Advertising		474,879		516,264
Other		739,337		748,197
Total		3,171,757		4,323,719

(*) In the fourth quarter of 2015, the impact on income related to commission from local correspondents, as described in Note 4g, was R$ 172,033.

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Other sundry liabilities

	12/31/2015		12/31/2014
Provisions for sundry payments		2,185,212		2,410,150
Personnel provision		1,390,370		1,397,753
Sundry creditors - local		1,755,682		1,727,888
Sundry creditors - foreign		3,000,966		2,673,884
Liabilities for official agreements and rendering of payment services		808,358		932,602
Related to insurance operations		252,888		259,825
Liabilities for purchase of assets and rights		44,536		18,377
Creditors of funds to be released		1,110,193		1,274,407
Funds from consortia participants		44,567		29,718
Provision for retirement plan benefits (Note 19)		490,251		517,097
Provision for health insurance ⁽¹⁾		716,342		684,590
Expenses for lease interests ⁽²⁾		-		804,248
Liabilities from transactions related to credit assignments (Note 8f)		5,495,361		4,335,974
Liabilities from sales operations or transfer of financial assets		37,962		3,509,711
Other		1,003,194		706,998
Total		18,335,882		21,283,222

(1) Provision set up to cover possible future deficits up to the total discontinuation of the portfolio, arising from the difference between monthly installments adjustments, authorized annually by the regulatory body, and the actual variation of hospital costs that affect the compensation of claims (Note 13i).

(2) Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

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Banking service fees

	01/01 to		01/01 to
	12/31/2015		12/31/2014
Asset management		4,144,762		3,765,743
Funds management fees		3,461,031		3,155,428
Consortia management fee		683,731		610,315
Current account services		797,046		775,193
Credit cards		9,824,313		9,013,462
Relationship with stores		9,777,856		8,922,251
Credit card processing		46,457		91,211
Sureties and credits granted		2,297,627		2,003,728
Loan operations		1,008,397		876,976
Guarantees provided		1,289,230		1,126,752
Receipt services		1,515,380		1,527,572
Collection fees		1,249,369		1,278,440
Collection services		266,011		249,132
Other		2,438,801		2,059,338
Custody services and management of portfolio		303,813		278,326
Economic and financial advisory		670,667		630,635
Foreign exchange services		87,274		81,970
Other services		1,377,047		1,068,407
Total		21,017,929		19,145,036

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Income related to bank charges

	01/01 to		01/01 to
	12/31/2015		12/31/2014
Loan operations / registration		966,024		1,090,600
Credit cards – annual fees and other services		3,214,789		2,897,342
Deposit account		118,065		116,336
Transfer of funds		199,725		185,402
Income related to securities brokerage		373,724		384,992
Service package fees		4,924,342		3,920,524
Total		9,796,669		8,595,196

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Personnel expenses

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Compensation		(8,037,980	)		(7,087,952	)
Charges		(2,539,843	)		(2,363,715	)
Welfare benefits (Note 19)		(2,640,269	)		(2,102,627	)
Training		(201,645	)		(185,680	)
Labor claims and termination of employees (Note 12b)		(1,988,204	)		(1,500,771	)
Stock Option Plan		(214,325	)		(230,696	)
Total		(15,622,266	)		(13,471,441	)
Employees’ profit sharing		(3,090,303	)		(2,971,876	)
Total including employees’ profit sharing		(18,712,569	)		(16,443,317	)

Other administrative expenses

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Data processing and telecommunications		(4,050,998	)		(3,870,363	)
Depreciation and amortization		(2,021,995	)		(2,069,003	)
Installations		(2,729,779	)		(2,432,149	)
Third-party services		(4,015,606	)		(4,198,611	)
Financial system services		(575,257	)		(507,561	)
Advertising, promotions and publication		(1,038,998	)		(950,161	)
Transportation		(410,572	)		(432,344	)
Materials		(379,805	)		(349,778	)
Security		(674,919	)		(627,212	)
Travel expenses		(211,961	)		(203,405	)
Other		(858,669	)		(570,003	)
Total		(16,968,559	)		(16,210,590	)

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Other operating revenue

	01/01 to		01/01 to
	12/31/2015		12/31/2014
Reversal of operating provisions		279,167		12,037
Recovery of charges and expenses		77,169		55,689
Program for Settlement or Installment Payment of Federal (Note 12e)		64,755		158,215
Other		509,196		331,183
Total		930,287		557,124

Other operating expenses

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Provision for contingencies (Note 12b)		(2,459,622	)		(1,772,360	)
Civil lawsuits		(1,747,025	)		(1,523,652	)
Tax and social security contributions		(736,610	)		(313,112	)
Other		24,013			64,404
Selling - credit cards		(3,215,603	)		(2,566,818	)
Claims		(266,497	)		(301,921	)
Provision for health insurance (Note 13c)		(31,752	)		(29,662	)
Refund of interbank costs		(283,610	)		(249,513	)
Other		(1,822,335	)		(1,634,696	)
Total		(8,079,419	)		(6,554,970	)

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Note 14 - Taxes

Composition of expenses for taxes and contributions

I - Statement of calculation of income tax and social contribution:

	01/01 to			01/01 to
Due on operations for the period	12/31/2015			12/31/2014
Income before income tax and social contribution		14,739,860			27,244,750
Charges (income tax and social contribution) at the rates in effect (Note 4o)		(6,142,100	)		(10,897,900	)
Increase/decrease in income tax and social contribution charges arising from:
Investments in affiliates and jointly controlled entities		181,566			114,557
Foreign exchange variations on investments abroad		8,328,697			1,470,871
Interest on capital		2,584,764			1,737,975
Corporate reorganizations (Note 4q)		630,549			638,650
Dividends and interest on external debt bonds		270,824			311,024
Other nondeductible expenses net of non taxable income (*)		(14,416,741	)		(1,092,314	)
Income tax and social contribution expenses		(8,562,441	)		(7,717,137	)
Related to temporary differences
Increase (reversal) for the period		13,888,661			3,258,583
Increase (reversal) of prior periods		(99,097	)		(1,978,796	)
Increase in the social contribution tax rate (Note 14b IV)		3,988,253			-
(Expenses)/Income related to deferred taxes		17,777,817			1,279,787
Total income tax and social contribution expenses		9,215,376			(6,437,350	)

(*) Includes temporary (additions) and exclusions.

II - Composition of tax expenses:

	01/01 to			01/01 to
	12/31/2015			12/31/2014
PIS and COFINS		(3,789,942	)		(3,668,031	)
ISS		(965,003	)		(884,281	)
Other		(618,653	)		(535,066	)
Total (Note 4o)		(5,373,598	)		(5,087,378	)

The tax expenses of ITAÚ UNIBANCO HOLDING amount to R$ 244,240 (R$ 202,534 at 12/31/2014) and are mainly composed of PIS and COFINS.

III-

Tax effects on foreign exchange management of investments abroad

In order to minimize the effects on income in connection with the foreign exchange variations on investments abroad, net of the respective tax effects, ITAÚ UNIBANCO HOLDING CONSOLIDATED carries out derivative transactions in foreign currency (hedges), as mentioned in Note 22b.

The results of these transactions are considered in the calculation base of income tax and social contribution, in accordance with their nature, while the foreign exchange variations on investments abroad are not included therein, pursuant to the tax legislation in force.

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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
	12/31/2014		12/31/2015		12/31/2014		Realization / Reversal			Increase		12/31/2015
Reflected in income and expense accounts						34,999,143		(9,951,093	)		27,952,630		53,000,680
Related to income tax and social contribution loss carryforwards						5,364,024		(239,228	)		518,271		5,643,067
Related to disbursed provisions						19,542,545		(5,853,469	)		18,540,770		32,229,846
Allowance for loan losses						18,087,004		(5,201,197	)		12,547,070		25,432,877
Adjustment to market value of securities and derivative financial instruments (assets/liabilities)						195,583		(195,583	)		5,674,148		5,674,148
Allowance for real estate						264,711		(90,669	)		44,975		219,017
Goodwill on purchase of investments						901,179		(363,262	)		-		537,917
Other						94,068		(2,758	)		274,577		365,887
Related to non-disbursed provisions ⁽¹⁾		27,488,033		39,144,995		10,092,574		(3,858,396	)		8,893,589		15,127,767
Related to the operation		21,157,772		28,159,811		7,560,470		(3,858,396	)		7,031,619		10,733,693
Provision for contingent liabilities		10,829,476		14,528,316		4,299,579		(1,396,853	)		2,483,782		5,386,508
Civil lawsuits		4,437,181		5,226,944		1,817,990		(503,919	)		835,263		2,149,334
Labor claims		3,836,454		6,131,853		1,460,030		(536,393	)		888,290		1,811,927
Tax and social security contributions		2,526,306		3,155,761		1,010,522		(350,659	)		760,229		1,420,092
Other		29,535		13,758		11,037		(5,882	)		-		5,155
Adjustments of operations carried out on the futures settlement market		7,991		3,337,500		3,196		(4,415	)		1,392,320		1,391,101
Legal obligation - tax and social security contributions		1,715,810		2,188,419		392,510		(442,376	)		558,364		508,498
Provision related to health insurance operations		684,590		716,342		273,827		-			48,527		322,354
Other non-deductible provisions		7,919,905		7,389,234		2,591,358		(2,014,752	)		2,548,626		3,125,232
Related to provisions exceeding the minimum required not disbursed – allowance for loan losses		6,330,261		10,985,184		2,532,104		-			1,861,970		4,394,074
Reflected in stockholders’ equity accounts						3,082,986		(779,480	)		1,679,429		3,982,935
Corporate reorganizations (Note 4q)		7,394,072		5,539,517		2,513,984		(630,549	)		-		1,883,435
Adjustment to market value of available-for-sale securities		1,422,505		4,665,556		569,002		(148,931	)		1,679,429		2,099,500
Total ⁽²⁾		36,304,610		49,350,068		38,082,129		(10,730,573	)		29,632,059		56,983,615
Social contribution for offsetting arising from Option established in article 8 of Provisional Measure No. 2,158-35 of August 24, 2001						644,891		-			363		645,254

(1) From a financial point of view, rather than recording the provision of R$ 39.144.995 (R$ 27,488,033 at 12/31/2014) and deferred tax assets of R$ 15.665.070 (R$ 10,092,574 at 12/31/2014), only the net provisions of the corresponding tax effects should be considered, which would reduce the total deferred tax assets from R$ 56.983.615 (R$ 38,082,129 at 12/31/2014) to R$ 41.318.545 (R$ 27,989,555 at 12/31/2014).

(2) The accounting records of deferred tax assets on income tax losses and/or social contribution loss carryforwards, as well as those arising from temporary differences, are based on technical feasibility studies which consider the expected generation of future taxable income, considering the history of profitability for each subsidiary individually, and for the consolidated taken as a whole. For the subsidiaries, Itaú Unibanco S.A. and Banco Itaucard S.A., due to their specific tax status, a petition has been sent to Central Bank of Brazil, in compliance with paragraph 7 of article 1 of Resolution No. 4,441/15 and pursuant to Circular 3,776/15, to maintain the respective deferred tax assets.

At ITAÚ UNIBANCO HOLDING, the Deferred Tax Assets totaled R$ R$ 173,068 (R$ 10,834 at 12/31/2014) and are basically represented by Provisions for Guarantee Accounts of R$ 131,596, Administrative Provisions of R$ 14,146 (R$ 5,518 at 12/31/2014) and Provisions related to Legal, Tax and Social Security Liabilities of R$ 14,002 (R$ 5,200 at 12/31/2014), which expected realization is dependent upon the progress of the lawsuit.

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II -

Provision for Deferred Income Tax and Social Contribution balance and the changes therein changes are shown as follows:

			Realization /
	12/31/2014		Reversal			Increase			12/31/2015
Reflected in income and expense accounts		4,056,830		(2,336,245	)		1,779,716			3,500,301
Depreciation in excess – leasing		2,507,980		(2,164,144	)		1,143,443			1,487,279
Restatement of escrow deposits and contingent liabilities		986,004		(115,216	)		258,990			1,129,778
Provision for pension plan benefits		336,799		(33,543	)		76,843			380,099
Adjustment to market value of securities and derivative financial instruments		5,621		(5,621	)		205,166			205,166
Adjustments of operations carried out on the future settlement market		5,907		(12,122	)		62,672			56,457
Taxation of results abroad – capital gains		164,651		-			2,511			167,162
Other		49,868		(5,599	)		30,091			74,360
Reflected in stockholders’ equity accounts		937,308		(149,322	)		1,060,235			1,848,221
Adjustment to market value of available-for-sale securities		122,170		(87,201	)		-			34,969
Cash flow hedge		373,592		-			1,060,236			1,433,828
Provision for pension plan benefits ^(*)		441,546		(62,121	)		(1	)		379,424
Total		4,994,138		(2,485,567	)		2,839,951			5,348,522

(*) Reflected in stockholders' equity, pursuant to CVM Resolution nº 695/12 (Note 19).

At ITAÚ UNIBANCO HOLDING, the provision for deferred income tax and social contribution totals R$ 127,831 (R$ 3,879 at 12/31/2014), mainly represented by restatement of Adjustment to market value of securities and derivative financial instruments.

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III -

The estimate of realization and present value of tax credits and social contribution to offset, arising from Provisional Measure 2,158-35 of 08/24/2001 and from the Provision for Deferred Income Tax and Social Contribution existing at December 31, 2015, are:

																					Provision for
	Deferred tax assets																				deferred
						Tax loss/social										Social					income tax
	Temporary					contribution loss										contribution for					and social						Net deferred
	differences		%			carryforwards		%			Total		%			offsetting		%			contribution			%			taxes		%
2016		16,524,138		32	%		98,583		2	%		16,622,721		29	%		26,496		4	%		(690,439	)		13	%		15,958,778		31	%
2017		7,787,104		15	%		255,633		4	%		8,042,737		14	%		46,178		7	%		(933,103	)		18	%		7,155,812		14	%
2018		7,802,849		15	%		434,360		8	%		8,237,209		14	%		11,203		2	%		(1,303,907	)		24	%		6,944,505		13	%
2019		7,887,605		15	%		213,560		4	%		8,101,165		14	%		32,741		5	%		(403,932	)		8	%		7,729,974		15	%
2020		2,320,147		5	%		2,541,664		45	%		4,861,811		9	%		528,636		82	%		(443,127	)		8	%		4,947,320		9	%
after 2020		9,018,705		18	%		2,099,267		37	%		11,117,972		20	%		-		0	%		(1,574,014	)		29	%		9,543,958		18	%
Total		51,340,548		100	%		5,643,067		100	%		56,983,615		100	%		645,254		100	%		(5,348,522	)		100	%		52,280,347		100	%
Present value (*)		45,013,635					4,400,986					49,414,621					538,681					(4,507,071	)					45,446,231

(*) 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 service fees and others, which can vary in relation to actual data and amounts.

Net income in the financial statements is not directly related to the taxable income for income tax and social contribution, due to differences between the accounting criteria and tax legislation, in addition to corporate aspects. Accordingly, we recommend that the trends for the realization of deferred tax assets arising from temporary differences, income tax and social contribution loss carry forwards are not used as an indication of future net income.

IV -

Considering the temporary effects of Law 13,169/15, which increases the Social Contribution tax rate to 20% until December 31, 2018, tax credits were accounted for based on their expected realization. The effect on the consolidated statement of income was R$ 3,988,253. There are no unrecorded deferred tax assets at 12/31/2015 and 12/31/2014.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

165

Tax and social security contributions

	12/31/2015		12/31/2014
Taxes and contributions on income payable		3,191,161		3,579,541
Taxes and contributions payable		2,080,998		1,385,695
Provision for deferred income tax and social contribution (Note 14b II)		5,348,522		4,994,138
Legal liabilities – tax and social security (Note 12b)		4,261,241		3,703,721
Total		14,881,922		13,663,095

At ITAÚ UNIBANCO HOLDING, the balance of Tax and Social Security Contributions totals R$ 337,996 (R$ 115,791 at 12/31/2014) and is mainly comprised of Taxes and contributions on income payable of R$ 197,682 (R$ 110,786 at 12/31/2014) and Tax and Social Contribution R$ 127,831 (R$3,879 at 12/31/2014).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

166

Taxes paid or provided for and withheld from third parties

The amount of taxes paid or provided for mainly arises from those 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 provision of service, in addition to that levied on financial operation.

	12/31/2015		12/31/2014
Taxes paid or provided for		17,395,610		17,681,370
Taxes withheld and collected from third parties		15,256,704		13,049,062
Total		32,652,314		30,730,432

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

167

Note 15 – Permanent Assets

Investment

I - Change of investments - ITAÚ UNIBANCO HOLDING

	Balance at 12/31/2014												Changes																										Equity in
	Book value																		Equity in earnings of subisidiaries																				earnings of
			Adjustments													Dividends / interest															Adjustments in								subsidiaries
	Stockholders'		under investor			Unrealized					Balance at		Amortization of			on capital			Earnings/			Changes in		Adjustments under			Unrealized				marketable securities of			Corporate			Balance at		from 01/01 to
Companies	equity		criteria ⁽¹⁾			results			Goodwill		12/31/2014		goodwill			paid/provided for ⁽²⁾			(loss)			exchange rates		investor criteria (1)			results		Total		subsidiaries and other			Events ⁽³⁾			12/31/2015		12/31/2014
Domestic		61,095,711		27,405			(495,139	)		24,287		60,652,264		(6,336	)		(7,588,324	)		14,385,226			-		(7,702	)		121,817		14,499,341		(1,064,976	)		(399,429	)		66,092,540		13,278,918
Itaú Unibanco S.A.		49,772,836		6,470			(437,129	)		24,287		49,366,464		(6,336	)		(2,333,329	)		9,823,457			-		5,109			109,227		9,937,793		(1,075,571	)		-			55,889,021		8,862,194
Banco Itaú BBA S.A.		5,685,182		23,400			(57,048	)		-		5,651,534		-			(852,425	)		841,943			-		(20,225	)		11,628		833,346		11,837			(1	)		5,644,291		905,157
Banco Itaucard S.A. ⁽⁴⁾		2,609,183		(4,228	)		(962	)		-		2,603,993		-			(3,014,360	)		3,000,916			-		8,654			962		3,010,532		(695	)		-			2,599,470		3,188,006
Itaú -BBA Participações S.A.		1,759,868		-			-			-		1,759,868		-			(1,864	)		180,204			-		-			-		180,204		(17	)		(399,424	)		1,538,767		28,879
Itaú Corretora de Valores S. A. ⁽⁴⁾		1,268,625		1,763			-			-		1,270,388		-			(1,386,342	)		538,701			-		(1,240	)		-		537,461		(529	)		-			420,978		294,679
Itau Seguros S.A.		16		-			-			-		16		-			(4	)		5			-		-			-		5		(1	)		(3	)		13		5
Itaú Administração Previdenciária Ltda.		1		-			-			-		1		-			-			-			-		-			-		-		-			(1	)		-		-
Itaú Seguros Soluções Corporativas S.A. ⁽⁵⁾		-		-			-			-		-		-			-			-			-		-			-		-		-			-			-		(2	)
Foreign		5,806,994		-			-			102,817		5,909,811		(51,408	)		(463,465	)		545,775			1,971,242		-			-		2,517,017		(10,811	)		309,688			8,210,832		1,082,103
Banco Itau Chile S.A. ⁽⁶⁾⁽⁷⁾		-		-			-			-		-		41,473			(168,836	)		338,732			478,098		-			-		816,830		(7,082	)		3,674,317			4,356,702		-
BICSA Holdings LTD ⁽⁶⁾⁽⁷⁾		-		-			-			-		-		3,769			-			47,960			415,706		-			-		463,666		(50	)		1,556,368			2,023,753		-
Banco Itaú Uruguay S.A.		893,805		-			-			9,424		903,229		(4,712	)		(178,074	)		399,629			191,842		-			-		591,471		(11,004	)		-			1,300,910		223,857
OCA S.A.		228,851		-			-			2,504		231,355		(1,389	)		(67,773	)		134,948			46,263		-			-		181,211		318			-			343,722		85,219
Itaú Chile Holdings, INC.		4,618,931		-			-			90,483		4,709,414		(90,483	)		-			(378,001	)		829,180		-			-		451,179		7,325			(4,896,245	)		181,190		762,181
ACO Ltda.		3,505		-			-			42		3,547		(21	)		-			377			652		-			-		1,029		-			-			4,555		240
OCA Casa Financiera S.A. ⁽⁸⁾		61,902		-			-			364		62,266		(45	)		(48,782	)		2,130			9,501		-			-		11,631		(318	)		(24,752	)		-		10,606
Grand total		66,902,705		27,405			(495,139	)		127,104		66,562,075		(57,744	)		(8,051,789	)		14,931,001			1,971,242		(7,702	)		121,817		17,016,358		(1,075,787	)		(89,741	)		74,303,372		14,361,021

(1) Adjustment arising from the standardization of the investee’s financial statements according to the investor’s accounting policies;

(2) Dividends approved and not paid are recorded as Dividends receivable.

(3) Corporate Events arising from acquisitions, spin-offs, merges, takeovers, and increases or decreases of capital.

(4) The investment and the equity in earnings reflect the different interest in preferred shares, profit sharing and dividends.

(5) Investment sold on October 31, 2014 to ACE Seguradora S.A.

(6) Company entrance on July 31, 2015.

(7) On July 17, 2015, after approval of proper regulatory authorities, the subsidiary Itaú Chile Holdings (ICH) was dissolved. Therefore, the investments held by ICH were transferred to ITAÚ UNIBANCO HOLDING. The transaction had an accounting effect of R$ (251) million.

(8) Company liquidated on March 30, 2015.

								Number of shares/quotas owned by
			Stockholders’		Net income			ITAÚ UNIBANCO HOLDING						Equity share in		Equity share in
Companies	Capital		equity		for the period			Common		Preferred		Quotas		voting capital (%)		capital (%)
Domestic
Itaú Unibanco S.A.		40,325,563		56,198,972		9,824,543			2,124,156,731		2,057,245,497		-		100.00		100.00
Banco Itaú BBA S.A.		3,574,844		5,689,711		843,800			4,474,435		4,474,436		-		100.00		100.00
Banco Itaucard S.A. ⁽⁴⁾		15,564,076		19,382,804		3,318,726			3,596,744,163		1,277,933,118		-		1.51		2.04
Itaú -BBA Participações S.A.		1,328,562		1,538,767		180,204			548,954		1,097,907		-		100.00		100.00
Itaú Corretora de Valores S. A. ⁽⁴⁾		802,482		1,364,771		767,275			-		811,503		-		-		2.87
Itau Seguros S.A.		3,767,415		5,434,520		2,016,822			450		1		-		0.00		0.00
Itaú Administração Previdenciária Ltda.		59,251		119,078		27,999			-		-		1,299		0.00		0.00
Foreign
Banco Itau Chile S.A. ⁽⁷⁾		1,891,092		4,315,232		338,040			-		-		1,433,689		100.00		100.00
BICSA Holdings LTD ⁽⁷⁾		1,291,945		2,019,985		47,980			-		-		330,860,746		100.00		100.00
Banco Itaú Uruguay S.A.		583,146		1,296,198		399,628			4,465,133,954		-		-		100.00		100.00
OCA S.A.		19,618		342,288		134,948			1,502,176,740		-		-		100.00		100.00
Itaú Chile Holdings, INC.		556,997		181,190		(378,001	)		100		-		-		100.00		100.00
ACO Ltda.		17		4,568		381			-				131		99.24		99.24

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

168

II - Composition of investments

a) The table below shows the major investments of ITAÚ UNIBANCO HOLDING CONSOLIDATED:

	% participation
	at 12/31/2015						12/31/2015
	Total			Voting			Stockholders’ equity		Net income		Investment		Equity in earnings

Domestic												3,498,825		632,912
BSF Holding S.A ⁽¹⁾		49.00	%		49.00	%		1,561,489		447,053		1,064,156		219,056
IRB-Brasil Resseguros S.A. ^{(2) (3)}		15.01	%		15.01	%		3,212,706		682,911		475,071		102,464
Porto Seguro Itaú Unibanco Participações S.A.⁽²⁾⁽³⁾		42.93	%		42.93	%		3,933,114		699,842		1,688,619		300,466
Others ^{(4a) (5)}												270,979		10,926
Foreign - Other ^(6a)												1,790		122
Total												3,500,615		633,034

	% participation
	at 12/31/2014						12/31/2014
	Total			Voting			Stockholders’ equity		Net income		Investment		Equity in earnings

Domestic												3,097,365		584,933
BSF Holding S.A.⁽¹⁾		49.00	%		49.00	%		1,232,135		412,993		982,044		202,367
IRB-Brasil Resseguros S.A. ^{(2) (3)}		15.01	%		15.01	%		3,015,628		890,111		445,481		133,808
Porto Seguro Itaú Unibanco Participações S.A^{.(2) (3)}		42.93	%		42.93	%		3,659,150		491,855		1,570,044		211,171
Others ^{(4b) (5)}												99,796		37,587
Foreign - Others ^(6b)												1,226		(330	)
Total												3,098,591		584,603

(1)

Includes goodwill in the amount of R$ 299.027 at 12/31/2015 (R$ 378,298 at 12/31/2014);

(2)

For the purpose of accounting for participation in earnings, the position at 11/30/2015 and 11/30/2014, as provided for in Circular Letter nº 1,963 of August 23, 1991, from BACEN;

(3)

Adjustments resulting from standardization of the financial statements of the investee to the financial policies to the investor’s;

(4)

a) At 12/31/2015, includes Kinea Private Equity, Olímpia Promoção e Serviços S.A., Tecnologia Bancária S.A. and Eneva S.A. b) At 12/31/2014 includes Kinea Private Equity, Latosol Empreendimentos e Participações LTDA, Olímpia Promoção e Serviços S.A. and Tecnologia Bancária S.A.

(5)

Includes equity in earnings not arising from net income.

(6)

a) At 12/31/2015, includes Compãnia Uruguaya de Medios de Processamiento and Rias Redbanc S.A. b) At 12/31/2014, includes Compãnia Uruguaya de Medios de Processamiento, Rias Redbanc S.A. and Rosefield Finance Ltda.

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

169

III) Other investments

	12/31/2015			12/31/2014
Other investments		646,991			636,155
Shares and quotas		50,695			52,288
Investments through tax incentives		201,625			201,625
Equity securities		11,809			14,915
Other		382,862			367,327
(Allowance for loan losses)		(208,914	)		(208,885	)
Total		438,077			427,270
Equity - Other investments		13,357			25,207

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

170

b) Fixed assets, goodwill and intangible assets

I) Fixed assets

				Real Estate in Use ^{(2) (3)}						Other Fixed Assets ⁽³⁾
Real estate in use ⁽¹⁾	Fixed assets under construction			Land			Buildings			Improvements			Installations			Furniture and equipment			EDP Systems			Other (communication, security and transportation)			Total
Annual depreciation rates								4%			10%			10 a 20%			10 a 20%			20 a 50%			10 a 20%

Cost
Balance at 12/31/2014		2,274,324			942,571			2,220,493			1,465,691			1,116,719			917,103			6,336,816			773,153			16,046,870
Acquisitions		197,478			-			5,867			138,819			75,189			140,683			524,755			83,485			1,166,276
Disposals		(2	)		(6,460	)		(13,407	)		(112,418	)		182,455			(68,166	)		(532,787	)		(4,741	)		(555,526	)
Exchange variation		679			3,083			34,858			80,690			5,590			7,507			5,731			6,080			144,218
Transfers		(1,681,220	)		-			777,174			63,347			421,745			-			418,954			-			-
Other ⁽⁴⁾		(503	)		(37	)		573			36,945			-			(23,190	)		(812,825	)		590			(798,447	)
Balance at 12/31/2015		790,756			939,157			3,025,558			1,673,074			1,801,698			973,937			5,940,644			858,567			16,003,391

Depreciation
Balance at 12/31/2014		-			-			(1,695,460	)		(753,421	)		(519,761	)		(503,692	)		(4,534,893	)		(478,822	)		(8,486,049	)
Depreciation expenses		-			-			(73,802	)		(257,332	)		(128,851	)		(92,549	)		(841,532	)		(78,604	)		(1,472,670	)
Disposals		-			-			9,377			109,017			(183,062	)		12,813			489,035			3,001			440,181
Exchange variation		-			-			(6,311	)		(27,414	)		(1,794	)		1,179			(6,548	)		(3,243	)		(44,131	)
Other ⁽⁴⁾		-			-			2,024			(419	)		(7,994	)		2,944			617,741			313			614,609
Balance at 12/31/2015		-			-			(1,764,172	)		(929,569	)		(841,462	)		(579,305	)		(4,276,197	)		(557,355	)		(8,948,060	)

Impairment
Balance at 12/31/2014		-			-			-			-			-			-			-			-			-
Additions / assumptions		-			-			-			-			-			-			-			-			-
Reversals		-			-			-			-			-			-			-			-			-
Balance at 12/31/2015		-			-			-			-			-			-			-			-			-

Book value
Balance at 12/31/2015		790,756			939,157			1,261,386			743,505			960,236			394,632			1,664,447			301,212			7,055,331
Balance at 12/31/2014		2,274,323			942,571			525,036			712,269			596,958			413,411			1,801,922			294,331			7,560,821

(1)

The contractual commitments for the purchase of the fixed assets totaled R$ 59,297 achievable by 2016.

(2)

Includes amounts pledged in guarantee of voluntary deposits (Note 12d).

(3)

Includes the amount of R$ 4,329 (R$ 3,686 at 31/12/2014) related to attached real estate.

(4)

Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

171

II) Goodwill

				Changes
	Amortization period	Balance at 12/31/2014		Acquisitions		Amortization expenses			Disposals (*)			Exchange variation		Balance at 12/31/2015

Goodwill (Notes 2b and 4j)	10 years		203,919		10,506		(6,045	)		(12,133	)		35,668		231,915

(*) Goodwill transferred to intangible assets resulting from the merger of Itaú Unibanco Financeira (Note 2c).

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172

III) Intangible assets

				Other intangible assets
Intangible ⁽¹⁾	Rights for acquisition of payroll ⁽²⁾			Association for the promotion and offer of financial products and services			Acquisition of software			Development of software			Goodwill on Acquisition (Note 4k)			Other Intangible Assets			Total
Annual amortization rates		20%			8%			20%			20%			20%			10% to 20%

Cost
Balance at 12/31/2014		1,066,922			1,561,377			1,891,898			2,836,712			1,483,340			2,122,547			10,962,796
Acquisitions		108,900			39,279			409,928			488,458			15,167			2			1,061,734
Disposals		(168,943	)		(195,288	)		(105,991	)		(14,530	)		(2,521	)		(445	)		(487,718	)
Exchange variation		-			449			108,540			-			3,731			182,337			295,057
Other ⁽³⁾		(2,430	)		2,772			(5,513	)		-			312,583			(1,416,861	)		(1,109,449	)
Balance at 12/31/2015		1,004,449			1,408,589			2,298,862			3,310,640			1,812,300			887,580			10,722,420

Amortization
Balance at 12/31/2014		(555,311	)		(330,524	)		(887,177	)		(111,981	)		(106,044	)		(305,685	)		(2,296,722	)
Amortization expenses ⁽⁴⁾		(213,245	)		(143,862	)		(356,236	)		(138,468	)		(245,411	)		(46,007	)		(1,143,229	)
Disposals		168,922			144,314			105,991			-			-			445			419,672
Exchange variation		-			399			(51,778	)		-			(1,596	)		(148,533	)		(201,508	)
Other ⁽³⁾		-			-			1,716			(2,037	)		(3,093	)		3,503			89
Balance at 12/31/2015		(599,634	)		(329,673	)		(1,187,484	)		(252,486	)		(356,144	)		(496,277	)		(3,221,698	)

Impairment ⁽⁵⁾
Balance at 12/31/2014		(18,251	)		(1,792	)		-			(13,733	)		-			-			(33,776	)
Additions / assumptions		-			-			-			(3,942	)		-			-			(3,942	)
Disposals		-			-			-			-			-			-			-
Balance at 12/31/2015		(18,251	)		(1,792	)		-			(17,675	)		-			-			(37,718	)

Book value
Balance at 12/31/2015		386,564			1,077,124			1,111,378			3,040,479			1,456,156			391,303			7,463,004
Balance at 12/31/2014		493,360			1,229,061			1,004,721			2,710,998			1,377,296			1,816,862			8,632,298

(1) The contractual commitments for the purchase of the new intangible assets totaled R$ 280,958 achievable by 2016.

(2) 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.

(3) Change in the Accounting Treatment of Financial Lease (Notes 4i and 22k).

(4) Amortization expenses related to the rights for acquisition of payrolls and associations are disclosed in the expenses on financial operations.

(5) Pursuant to BACEN Resolution No. 3,566, of May 29, 2001 (Note 13i).

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

173

Note 16 – Stockholders' equity

a) Shares

The Extraordinary Stockholders’ Meeting held on April 29, 2015 approved an increase in subscribed and paid-up capital by R$ 10,148,000, with the capitalization of the amounts recorded in Revenue Reserve – Statutory Reserve, with a 10% bonus share. Bonus shares started being traded on July 17,2015 and the process was approved by the Central Bank on June 25,2015. Accordingly, capital stock was increased by 553,083,268 shares.

Capital comprises 6,083,915,949 book-entry shares with no par value, of which 3,047,040,198 are common and 3,036,875,751 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$ 85,148,000 (R$ 75,000,000 at 12/31/2014), of which R$ 58,283,710 (R$ 51,563,010 at 12/31/2014) refers to stockholders domiciled in the country and R$ 26,864,290 (R$ 23,436,990 at 12/31/2014) 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 12/31/2014		2,758,685,730		1,043,799,342			3,802,485,072
Residents abroad at 12/31/2014		11,350,814		1,716,996,795			1,728,347,609
Shares of capital stock at 12/31/2014		2,770,036,544		2,760,796,137			5,530,832,681
Bonus Shares - ESM of 04/29/2015 - Carried out at 06/25/2015		277,003,654		276,079,614			553,083,268
Shares of capital stock at 12/31/2015		3,047,040,198		3,036,875,751			6,083,915,949
Residents in Brazil at 12/31/2015		3,033,657,386		1,130,776,196			4,164,433,582
Residents abroad at 12/31/2015		13,382,812		1,906,099,555			1,919,482,367
Treasury shares at 12/31/2014		2,541		53,828,551			53,831,092			(1,327,880	)
Purchase of treasury shares		-		111,524,800			111,524,800			(3,324,436	)
Exercised – granting of stock options		-		(5,873,741	)		(5,873,741	)		3,682
Disposals – stock option plan		-		(5,342,874	)		(5,342,874	)		295,254
Bonus Shares - ESM of 04/29/2015		254		8,425,914			8,426,168			-
Treasury shares at 12/31/2015 ⁽¹⁾		2,795		162,562,650			162,565,445			(4,353,380	)
Outstanding shares at 12/31/2015		3,047,037,403		2,874,313,101			5,921,350,504
Outstanding shares at 12/31/2014 ⁽²⁾		3,047,037,403		2,977,664,345			6,024,701,748

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

(2) For better comparability, outstanding shares for the period ending December 31, 2014 were adjusted to reflect the bonuses of June 25, 2015.

We detail below of the cost of shares purchased in the period, as well the average cost of treasury shares and their market price (in Brazilian reais per share) at 12/31/2015:

Cost / Market value	Common		Preferred
Minimum		-		24.96
Weighted average		-		28.80
Maximum		-		31.86
Treasury shares
Average cost		7.25		26.78
Market value		24.58		26.33

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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 the Brazilian Corporate Law. Both types of shares participate equally, after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per share (non-cumulative) 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, amounting to R$ 0.015 per share.

I - Calculation

Net income - ITAÚ UNIBANCO HOLDING	21,083,796
Adjustments:
(-) Legal reserve	(1,054,190	)
Dividend calculation basis	20,029,606
Mandatory dividend	5,007,402
Dividend – paid / provided for	7,304,529		36.5	%

II – Payments / provision of interest on capital and dividends

	Gross		WTS			Net
Paid / Prepaid		3,001,912		(310,510	)		2,691,402
Dividends - 11 monthly installments of R$ 0.015 per share paid in February to December 2015		931,847		-			931,847
Interest on capital - R$ 0.3460 per share, paid on 08/25/2015		2,070,065		(310,510	)		1,759,555

Declared (recorded in other liabilities – Social and Statutory)		2,502,050		(186,051	)		2,315,999
Dividends - 1 monthly installment of R$ 0.015 per share paid on 01/04/2015		89,123		-			89,123
Dividends declared - R$ 0.1980 per share		1,172,586		-			1,172,586
Interest on capital - R$ 0.2090 per share, credited on December 30, 2015 to be paid until April 30, 2016		1,240,341		(186,051	)		1,054,290

Declared after December 31, 2015 (Recorded in Revenue Reserves – Unrealized profits)		2,702,504		(405,376	)		2,297,128
Interest on capital - R$ 0.4564 per share		2,702,504		(405,376	)		2,297,128

Total from 01/01 to 12/31/2015 - R$ 1.2376 net per share		8,206,466		(901,937	)		7,304,529
Total from 01/01 to 12/31/2014 - R$ 1.2204 net per share		7,344,187		(709,059	)		6,635,128

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c) Capital and revenue reserves - ITAÚ UNIBANCO HOLDING

	12/31/2015		12/31/2014
Capital reserves		1,537,219		1,315,744
Premium on subscription of shares		283,512		283,512
Granted options recognized – Law No. 11,638, Share-based instruments and Share-based payment		1,252,602		1,031,127
Reserves from tax incentives and restatement of equity securities and other		1,105		1,105
Revenue reserves		29,724,889		27,224,331
Legal		6,894,840		5,840,650
Statutory:		20,127,545		18,437,054
Dividends equalization ⁽¹⁾		8,231,199		6,411,951
Working capital increase ⁽²⁾		5,261,426		5,303,905
Increase in capital of investees ⁽³⁾		6,634,920		6,721,198
Unrealized profits ⁽⁴⁾		2,702,504		2,946,627

(1)

Reserve for Dividends Equalization – its purpose is to guarantee funds for the payment of advances on 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 12/31/2015			01/01 to 12/31/2014			12/31/2015			12/31/2014
ITAÚ UNIBANCO HOLDING		21,083,796			17,391,557			110,680,842			101,889,836
Amortization of goodwill		608,209			941,819			(562,321	)		(1,162,035	)
Corporate reorganizations (Note 4q)		1,854,555			1,878,381			(3,656,081	)		(4,880,088	)
Conversion adjustments of foreign investments (Note 4s)		(186,726	)		29,807			-			-
Foreign exchange variations of investments		(3,169,017	)		(345,887	)		-			-
Hedge of net investments in foreign operations		5,111,631			821,829			-			-
Tax effects – hedge of net investments in foreign operations		(2,129,340	)		(446,135	)		-			-
ITAÚ UNIBANCO HOLDING CONSOLIDATED		23,359,834			20,241,564			106,462,440			95,847,713

e) Asset valuation adjustments - ITAÚ UNIBANCO HOLDING CONSOLIDADO

	12/31/2015			12/31/2014
Available-for-sale securities		(2,934,270	)		(697,486	)
Hedge cash flow		1,782,581			551,407
Remeasurements in liabilities of post-employment benefits		(224,197	)		(176,280	)
Foreign exchange variation on investments / Net Investment Hedge in Foreign Operations		156,919			(29,807	)
Asset valuation adjustments		(1,218,967	)		(352,166	)

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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f) Non-controlling interests

	Stockholders’ equity				Net Income
	12/31/2015		12/31/2014		01/01 to 12/31/2015			01/01 to 12/31/2014
Itau Bank, Ltd. ^(*)		-		1,048,455		-			-
Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento		433,265		436,684		(121,581	)		(108,793	)
Banco Itaú BMG Consignado S.A. (Note 2c)		915,958		539,436		(150,425	)		(89,920	)
Luizacred S.A. Soc. Cred. Financiamento Investimento		292,323		288,373		(64,525	)		(92,111	)
IGA Participações S.A.		61,340		52,703		(10,628	)		(2,241	)
Investimentos Bemge S.A.		24,008		22,147		(1,879	)		(1,423	)
Banco Investcred Unibanco S.A.		19,205		19,858		653			(1,155	)
Others		9,136		7,071		(7,686	)		(9,601	)
Total		1,755,235		2,414,727		(356,071	)		(305,244	)

(*) Represented by Preferred Shares issued on December 31, 2002 and redeemed on March 31, 2015 by Itau Bank Ltd., in the amount of US$ 393,072 thousand, with dividends calculated based on LIBOR plus 1.25% p.a., payable on a monthly basis.

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g) Share-based payment

ITAÚ UNIBANCO HOLDING and its subsidiaries have share-based payment programs aimed at involving its management members and employees in the medium and long term corporate development process.

These payments are only made in years where there are sufficient profits to enable the distribution of mandatory dividends, in order to limit the maximum dilutive effect to which stockholders are subject, and at a quantity that does not exceed the limit of 0.5% of the total shares held by the controlling and minority stockholders at the balance sheet date.

These programs are settled through the delivery of ITUB4 treasury shares to stockholders.

From 01/01 to 12/31/2015, the accounting effect of the share-based payment in income was R$ (734,191) (R$ (441,065) from 01/01 to 12/31/2014).

I – Stock Option Plan (Simple Options)

ITAÚ UNIBANCO HOLDING has a Stock Option Plan (“Simple Options”) aimed at involving management members and employees in the medium and long term corporate development program of ITAÚ UNIBANCO HOLDING and its subsidiaries, offering them the opportunity to benefit from the appreciation that their work and dedication bring to the shares.

In addition to the grants provided under the Plan, ITAÚ UNIBANCO HOLDING also maintains control over the rights and obligations in connection with the options granted under the plans approved at the Extraordinary Stockholders’ Meetings held on April 24, 2009 and April 19, 2013 related to the Unibanco – União de Bancos Brasileiros S.A., Unibanco Holdings S.A. and Redecard S.A. stock option plans, respectively. Accordingly, the exchange of shares for ITUB4 did not have a relevant financial impact.

Simple options have the following characteristics:

Exercise price: calculated based on the average prices of shares in the three months of the year prior to the grant date. The prices determined will be restated to the last business day of the month prior to the option exercise date based on IGP-M or, in its absence, on an index to be determined internally, and should be paid within the period in force for the settlement of operations on BM&FBOVESPA.

Vesting period: determined upon issue, from one to seven years, counted from the grant date. The vesting period is normally determined at five years.

Fair value and economic assumptions for cost recognition: the fair value of Simple Options is calculated on the grant date based on the Binominal model. Economic assumptions used are as follows:

(i)

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

(ii)

Price of the underlying asset (ITUB4 shares): closing price on BM&FBOVESPA on the calculation base date.

(iii)

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

(iv)

Risk-free interest rate: IGP-M coupon rate at the expiration date of the Simple Option;

(v)

Expected volatility: calculated based on the standard deviation from the history of the last 84 monthly returns of the ITUB4 share closing prices, disclosed by BM&FBOVESPA, adjusted by the IGP-M variation.

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	Simple options
				Weighted		Weighted
				average		average
	Quantity			Exercise price		Market value
Opening balance at 12/31/2014		55,162,112			32.43
Options exercisable at the end of the period		28,872,290			32.15
Options outstanding but not exercisable		26,289,822			32.73
Options:
Granted		-			-
Canceled / Forfeited ^(*)		(9,062,437	)		40.08
Exercised		(151,358	)		24.32		34.36
Closing balance at 12/31/2015		45,948,317			35.08
Options exercisable at the end of the period		32,407,235			36.74
Options outstanding but not exercisable		13,541,082			31.12
Range of exercise prices
Granting 2008-2009					26.34 - 40.28
Granting 2010-2012					23.88 - 42.79
Weighted average of the remaining contractual life (in years)		2.60

(*) Refers to non-exercise based on the beneficiary’s decision.

	Simple options
				Weighted		Weighted
				average		average
	Quantity			Exercise price		Market value
Opening balance at 12/31/2013		71,848,530			29.86
Options exercisable at the end of the period		36,008,273			27.65
Options outstanding but not exercisable		35,840,257			32.95
Options:
Granted		-			-
Canceled / Forfeited ^(*)		(1,531,443	)		31.80
Exercised		(15,154,975	)		27.28		33.39
Closing balance at 12/31/2014		55,162,112			32.43
Options exercisable at the end of the period		28,872,290			32.15
Options outstanding but not exercisable		26,289,822			32.73
Range of exercise prices
Granting 2006-2009					23.80 - 39.87
Granting 2010-2012					23.88 - 38.66
Weighted average of the remaining contractual life (in years)		2.56

(*) Refers to non-exercise based on the beneficiary’s decision.

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II – Partner Plan

The employees and management members of ITAÚ UNIBANCO HOLDING and its subsidiaries may be selected to participate in the program investing a percentage of their bonus to acquire ITUB4 shares and share-based instruments. Accordingly, the ownership of these shares should be held by the beneficiaries for a period from three to five years, counted from the initial investment, and are thus subject to market price variation. After complying with the suspensive conditions set forth in the program, beneficiaries will be entitled to receive ITUB4 as consideration, in accordance with the numbers of shares provided for in the program regulation.

The acquisition prices of own shares and Share-Based Instruments are established every six months and is equivalent to the average of the ITUB4 quotation in the 30 days prior to the determination of the acquisition price.

The fair value of the ITUB4 as consideration is the market price at the grant date, less expected dividends.

The weighted average of the fair value of the ITUB4 shares as consideration was estimated at R$ 29.22 per share at 12/31/2015 (R$ 29.65 per share at 12/31/2014).

Law No. 12,973/14, which adjusted the tax legislation to the international accounting standards and terminated the Transitional Tax Regime (RTT), set up a new legal framework for payments made in shares. We made changes to the Partner Plan, and adjusted its tax effects, with conform with this new legislation.

Changes in the Partner Program

	Quantity
Balance at 12/31/2014		26,734,428
New granted		10,402,541
Cancelled		(808,809	)
Exercised		(5,722,383	)
Balance at 12/31/2015		30,605,777
Weighted average of remaining contractual life (years)		2.02

	Quantity
Balance at 12/31/2013		20,187,002
New granted		12,107,909
Cancelled		(1,712,039	)
Exercised		(3,848,444	)
Balance at 12/31/2014		26,734,428
Weighted average of remaining contractual life (years)		2.05

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III- Variable Compensation

The policy established in compliance with CMN Resolution No. 3,921/10 sets forth that fifty percent (50%) of the management’s variable compensation should be paid in cash and fifty percent (50%) should be paid in shares for a period of three years. Shares are delivered on a deferred basis, of which one-third (1/3) per year, will be contingent upon the executive’s remaining with the institution. The deferred unpaid portions may be reversed proportionally to the significant reduction of the recurring income realized or the negative income for the period.

The fair value of the ITUB4 share is the market price at its grant date.

The weighted average of the fair value of ITUB4 shares was estimated at R$ 31.24 per share at 12/31/2015 (R$ 25.33 per share at 12/31/2014).

Change in variable compensation in shares	2015
	Quantity
Balance at 12/31/2014		15,901,823
New		12,538,652
Delivered		(7,551,031	)
Cancelled		(593,468	)
Balance at 12/31/2015		20,295,976

Change in variable compensation in shares	2014
	Quantity
Balance at 12/31/2013		8,290,751
New		11,002,630
Delivered		(2,954,758	)
Cancelled		(436,800	)
Balance at 12/31/2014		15,901,823

Itaú Unibanco Holding S.A. – Complete Financial Statements – December 31, 2015

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Note 17 – Related parties

Transactions between related parties are disclosed in compliance with CVM Resolution n° 642, of October 7, 2010, and CMN Resolution n° 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 the lack of risk is taken into consideration.

The unconsolidated related parties are as follows:

Itaú Unibanco Participações S.A. (IUPAR), the Companhia E.Johnston de Participações S.A. (shareholder of IUPAR) and ITAÚSA, direct and indirect shareholders of ITAÚ UNIBANCO HOLDING;

The non-financial subsidiaries of ITAÚSA, specially: Itautec S.A., Duratex S.A., Elekeiroz S.A., ITH Zux Cayman Company Ltd and Itaúsa Empreendimentos S.A.;

Fundação Itaú Unibanco - Previdência Complementar, FUNBEP – Fundo de Pensão Multipatrocinado, Fundação Bemgeprev, UBB Prev - Previdência Complementar, and Fundação Banorte Manuel Baptista da Silva de Seguridade Social, closed-end supplementary pension entities that administer retirement plans sponsored by ITAÚ UNIBANCO HOLDING and / or its subsidiaries;

Fundação Itaú Social, Instituto Itaú Cultural, Instituto Unibanco, Instituto Assistencial Pedro Di Perna, Instituto Unibanco de Cinema and Associação Itaú Viver Mais, entities sponsored by ITAÚ UNIBANCO and subsidiaries to act in their respective areas of interest, as described in Notes 22e and 22j; and

Investments in Porto Seguro Itaú Unibanco Participações S.A. and BSF Holding S.A.

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The transactions with these related parties are basically characterized by:

	ITAÚ UNIBANCO HOLDING													ITAÚ UNIBANCO HOLDING CONSOLIDATED
			Assets / (liabilities)						Revenue / (expense)							Assets / (liabilities)						Revenue / (expense)
	Annual rate	12/31/2015			12/31/2014			01/01 to 12/31/2015			01/01 to 12/31/2014			Annual rate	12/31/2015			12/31/2014			01/01 to 12/31/2015			01/01 to 12/31/2014
Interbank investments			82,507,384			41,272,793			5,574,400			3,804,610				-			-			-			-
Itaú Unibanco S.A.	14.15% pre fixed or 100% of SELIC		47,643,687			33,322,825			4,388,325			3,361,000				-			-			-			-

Agência Grand Cayman	5,83% to 6.36% pre fixed		10,817,237			7,444,294			559,378			443,610				-			-			-			-

Itaú Unibanco S.A. Nassau Branch	2,96% pre fixed		24,046,460			505,674			626,697			-				-			-			-			-

Securities and derivative financial instruments			-			13,544,527			409,817			654,235				-			-			-			-
Agência Grand Cayman			-			13,544,527			409,817			654,235				-			-			-			-
Deposits			(15,310,445	)		-			(280,620	)		-				-			-			-			-
Itaú Unibanco S.A.			-			-			-			-				-			-			-			-
Itaú Unibanco S.A. Nassau Branch			(15,310,445	)		-			(279,106	)		-				-			-			-			-
Others			-			-			(1,514	)		-				-			-			-			-
Securities sold under repurchase agreements			-			(24,202	)		-			(7,358	)			(249,880	)		(141,413	)		(21,182	)		(12,855	)
Duratex S.A.			-			-			-			-		99% to 101.5% of CDI		(41,275	)		(100,152	)		(8,956	)		(10,284	)
Elekeiroz S.A.			-			-			-			-		99% to 100% of CDI		(8,498	)		(5,769	)		(605	)		(1,670	)
Itautec S.A.			-			-			-			-		100% of CDI		(110,201	)		(1,538	)		(1,218	)		(172	)
Itaúsa Empreendimentos S.A.			-			-			-			-		99% to 100% of CDI		(63,551	)		(26,071	)		(7,425	)		-
Olimpia Promoção e Serviços S.A.			-			-			-			-		100% of Selic		(10,774	)		(7,883	)		(1,219	)		(729	)
Others			-			(24,202	)		-			(7,358	)			(15,581	)		-			(1,759	)		-
Amounts receivable from (payable to) related companies / Banking service fees (expenses)			(341	)		581,286			(3,877	)		(3,328	)			(116,206	)		(108,347	)		20,441			8,847
Itaú Unibanco S.A.			-			581,546			-			-				-			-			-			-
Itaú Corretora de Valores S.A.			(342	)		(260	)		(3,877	)		(3,328	)			-			-			-			-
Itaúsa Investimentos Itaú S.A.			-			-			-			-				-			-			1,979			-
Itaúsa Empreendimentos S.A.						-						-				-			-			84			-
Olimpia Promoção e Serviços S.A.			-			-			-			-				(2,391	)		-			(27,822	)		-
Fundação Itaú Unibanco - Previdência Complementar			-			-			-			-				(113,911	)		(13,276	)		38,723			34,886
FUNBEP - Fundo de Pensão Multipatrocinado			-			-			-			-				299			279			5,272			5,183
Fundação BEMGEPREV			-			-			-			-				-			25			-			639
Fundação Banorte Manuel Baptista da Silva de Seguridade Social			-			-			-			-				-			(92,732	)		-			292
Others			1			-			-			-				(203	)		(2,643	)		2,205			(32,153	)
Rent revenues (expenses)			-			-			(273	)		(255	)						-			(56,077	)		(51,067	)
Itaúsa Investimentos Itaú S.A.			-			-			(19	)		(18	)			-			-			(1,743	)		-
Itaú Seguros S.A.			-			-			(194	)		(181	)			-			-			-			-
Fundação Itaú Unibanco - Previdência Complementar			-			-			-			-				-			-			(41,855	)		(37,920	)
FUNBEP - Fundo de Pensão Multipatrocinado			-			-			-			-				-			-			(12,479	)		(13,147	)
Others			-			-			(60	)		(56	)			-			-			-			-
Donation expenses			-			-			-			-				-			-			(84,435	)		(78,300	)
Instituto Itaú Cultural			-			-			-			-				-			-			(83,000	)		(77,500	)
Associação Itaú Viver Mais			-			-			-			-				-			-			(1,435	)		(800	)
Data processing expenses			-			-			-			-				-			-			-			(284,889	)
Itautec S.A.			-			-			-			-				-			-			-			(284,889	)

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$ (4,250) (R$ 5,376 from 01/01 to 12/31/2014) in view of the use of the common structure.

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 the capital stock.

Therefore, no loans or advances are made to any subsidiaries, executive officers, Board of Directors members or their relatives.

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b) Compensation of management key personnel

The fees attributed in the period to ITAÚ UNIBANCO HOLDING CONSOLIDATED management members are as follows:

	01/01 to		01/01 to
	12/31/2015		12/31/2014
Compensation		458,368		343,703
Board of Directors		26,572		14,469
Management members		431,796		329,234
Profit sharing		239,331		260,592
Board of Directors		962		11,956
Management members		238,369		248,636
Contributions to pension plans		9,539		6,592
Board of Directors		99		4
Management members		9,440		6,588
Stock option plan – Management members		199,957		233,754
Total		907,195		844,641

Information related to the granting of the share-based payment, benefits to employees and post-employment benefits is detailed in Notes 16g II and 19, respectively.

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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 CONSOLIDATED.

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 a 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:

									Effects ⁽¹⁾
	Book value				Market				Results						Stockholders’ equity
	12/31/2015		12/31/2014		12/31/2015		12/31/2014		12/31/2015			12/31/2014			12/31/2015			12/31/2014
Interbank deposits		30,507,170		23,073,038		30,507,465		23,073,278		295			240			295			240
Securities and derivative financial instruments		338,391,215		299,626,524		335,098,378		299,845,368		(8,270,353	)		(973,469	)		(3,292,837	)		218,844
Adjustment of available-for-sale securities										(4,272,990	)		(528,487	)		-			-
Adjustment of held-to-maturity securities										(3,997,363	)		(444,982	)		(3,292,837	)		218,844
Loan, lease and other credit operations		439,751,291		424,812,344		439,133,927		427,317,235		(617,364	)		2,504,891			(617,364	)		2,504,891
Investments
BM&FBOVESPA		14,610		14,610		119,373		107,973		104,763			93,363			104,763			93,363
Porto Seguro Itaú Unibanco Participações S.A. ⁽²⁾		1,688,619		1,570,044		2,829,841		2,988,093		1,141,222			1,418,049			1,141,222			1,418,049
Funding and borrowing ⁽³⁾		261,575,716		218,886,295		262,680,335		219,598,918		(1,104,619	)		(712,623	)		(1,104,619	)		(712,623	)
Subordinated debt (Note 10f)		65,784,564		55,617,390		63,684,418		56,174,412		2,100,146			(557,022	)		2,100,146			(557,022	)
Treasury shares		4,353,380		1,327,880		4,280,343		1,862,550		-			-			(73,037	)		534,670

(1) This does not consider the corresponding tax effects.

(2) Parent company of Porto Seguro S.A.

(3) Funding is represented by interbank and time deposits, funds from acceptance and issuance of securities and borrowing.

Fair value is a measurement based, whenever possible, on information observable in the market. It is the price estimated at which a non-mandatory transaction to sell an asset or to transfer a liability would occur between market players, on the measurement date, under current market conditions. It does not represent unrealized results of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

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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 as at their 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 up to 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 BACEN, are recorded at their market values, 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 maturities 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;

Investments - in companies BM&FBOVESPA and Porto Seguro at the share value quoted on stock exchanges.

Time and interbank deposits and funds from the acceptance and issuance of securities and foreign borrowing 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 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.

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Note 19 – Post-Employments Benefits

Pursuant to CVM Resolution No. 695, dated December 13, 2012, we present the policies adopted by ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries regarding benefits to employees, as well as the accounting procedures adopted.

The total amounts recognized in Income for the Period and Stockholders’ Equity – Asset valuation adjustment were as follows:

Total amounts recognized in Income for the period

	Defined benefit						Defined contribution						Other benefits						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
	12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014
Cost of current service		(68,063	)		(74,242	)		-			-			-			-			(68,063	)		(74,242	)
Net interest		(6,271	)		(32,593	)		218,803			196,030			(16,990	)		(14,284	)		195,542			149,153
Contribution ^(*)		-			-			(380,216	)		(132,623	)		-			-			(380,216	)		(132,623	)
Benefits paid		-			-			-			-			12,906			8,902			12,906			8,902
Remeasurements		-			-			-			-			-			-			-			-
Total Amounts Recognized		(74,334	)		(106,835	)		(161,413	)		63,407			(4,084	)		(5,382	)		(239,831	)		(48,810	)

(*) In 2015, includes a provision to settle the surplus of social security funds, in the amount of R$ 236,266. In the period, contributions to the defined contributions plan, including PGBL, totaled R$ 207,178 (R$ 190,333 from 01/01 to 12/31/2014), of which R$ 143,950 (R$ 132,623 from 01/01 to 12/31/2014) arising from social security funds.

Total amounts recognized in Stockholders’ Equity – Asset valuation adjustment

	Defined benefit						Defined contribution						Other benefits						Total
	12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014
At the beginning of the period		(75,206	)		(354,467	)		(220,808	)		(285,565	)		(8,436	)		6,744			(304,450	)		(633,288	)
Effects on asset ceiling		(102,758	)		(452,566	)		(37,917	)		76,952			-			-			(140,675	)		(375,614	)
Remeasurements		133,326			731,827			(56,557	)		(12,195	)		(4,134	)		(15,180	)		72,635			704,452
Total Amounts Recognized		(44,638	)		(75,206	)		(315,282	)		(220,808	)		(12,570	)		(8,436	)		(372,490	)		(304,450	)

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a) Retirement plans

ITAÚ UNIBANCO HOLDING CONSOLIDATED and some of its subsidiaries sponsor defined benefit and variable contribution plans, whose basic purpose is to grant benefits that, in general, provide a life annuity benefit, and may be converted into survivorship annuities, according to the plan's regulations. 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 regulations, which does not require actuarial calculation, except as described in Note 19c.

Employees hired prior to July 31, 2002, for those who came from Itaú, and prior to February 27, 2009 for those who came 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 variable contribution plan (PGBL), managed by Itaú Vida e Previdência S.A.

Supplementary plans are managed by closed-end private pension entities with independent legal structures, as detailed below:

Entity		Benefit plan
Fundação Itaubanco - Previdência Complementar		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 Defined Contribution Plan ⁽³⁾
		Itaubank Retirement Plan ⁽³⁾
		Itaú Defined Benefit Plan ⁽¹⁾
		Itaú Defined Contribution Plan ⁽²⁾
		Unibanco Pension Plan ⁽³⁾
		Prebeg benefit plan ⁽¹⁾
		UBB PREV defined benefit plan ⁽¹⁾
		Benefit Plan II ⁽¹⁾
		Supplementary Retirement Plan – Flexible Premium Annuity (ACMV) ⁽¹⁾
		REDECARD Basic Retirement Plan ⁽¹⁾
		REDECARD Supplementary Retirement Plan ⁽²⁾
		REDECARD Pension Plan ⁽³⁾
		ITAUCARD Retirement Defined Benefit Plan ⁽¹⁾
		ITAUCARD Supplementary Retirement Plan ⁽²⁾
Funbep Fundo de Pensão Multipatrocinado		Funbep I Benefit Plan ⁽¹⁾
		Funbep II Benefit Plan ⁽²⁾

(1) Defined benefit plan;

(2) Variable contribution plan;

(3) Defined contribution plan.

b) Governance

The closed-end private pension entities (EFPC) and benefit plans they manage are regulated in conformity with the related specific legislation. The EFPC are managed by the Executive Board, Advisory Council and Fiscal Council, with some members appointed by the sponsors and others appointed as representatives of active and other participants, pursuant to the respective Entity’s bylaws. The main purpose of the EFPC is to pay benefits to eligible participants, pursuant to the Plan Regulations, maintaining the plans assets invested separately and independently from ITAÚ UNIBANCO HOLDING CONSOLIDATED.

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c) Defined benefit plan

I - Main assumptions used in actuarial valuation of Retirement Plans

	12/31/2015	12/31/2014
Discount rate ⁽¹⁾	11.28% a.a.	10.24% p.a.
Mortality table ⁽²⁾	AT-2000	AT-2000
Turnover ⁽³⁾	Itaú Experience 2008/2010	Itaú Experience 2008/2010
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 ⁽⁴⁾	Projected Unit Credit	Projected Unit Credit

(1) The adoption of this assumption is based on interest rates obtained from the actual interest curve in IPCA, for medium term liabilities of retirement plans sponsored by ITAÚ UNIBANCO HOLDING CONSOLIDATED. At 12/31/2015 assumption were adopted consistently with the economic scenario at the balance sheet date rate, considering the volatility of the interest markets and the models adopted.

(2) The mortality tables adopted correspond to those disclosed by Society of Actuaries (SOA), the North-American Entity which corresponds to Brazilian Institute of Actuarial Science (IBA), which reflects a 10% increase in the probabilities of survival compared to the respective basic tables.

The life expectancy in years per the AT-2000 mortality table for participants aged 55 years is 27 and 31 years for men and women, respectively.

(3) The turnover assumption is based on the effective experience of ITAÚ UNIBANCO HOLDING CONSOLIDATED, resulting in the average of 2.4% p.a. based on the 2008/2010 experience.

(4) Using the Projected Unit Credit, the mathematical reserve is determined based on 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.

Biometric/demographic assumptions adopted are consistent with the group of participants of each benefit plan, pursuant to the studies carried out by an independent external actuarial consulting company.

The main differences between the assumptions above and those adopted upon determination of the actuarial liability of defined benefit plans, for the purposes of recording in the balance sheet of the closed-end private pension entities (EFPCs) that manage them, are the discount rate and the actuarial method. Regarding the discount rate assumption, EFPCs adopt a rate consistent with the flow of receipts/payments, in accordance with the study conducted by an independent external consulting company. Regarding the actuarial method, the aggregate method is adopted, 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- Risk Exposure

Due to its defined benefit plans, ITAÚ UNIBANCO HOLDING CONSOLIDATED is exposed to a number of risks, the most significant ones are:

- Volatility of assets

The actuarial liability is calculated by adopting a discount rate defined based on the income related to securities issued by the Brazilian treasury (government securities). If the actual income related to plan investments is lower than expected, this may give rise to a deficit. The plans have a significant percentage of fixed-income securities pegged to the plan commitments, aimed at minimizing volatility and short and medium term risk.

- Changes in investment income

A decrease in income related to public securities will imply a decrease in the discount rate and, therefore, will increase the plan’s actuarial liability. The effect will be partially offset by the recognition of these securities at market value.

- Inflation risk

Most of the plan benefits are pegged to the inflation rates, and a higher inflation will lead to higher obligations. The effect will also be partially offset because a significant portion of the plan assets is pegged to government securities restated at the inflation rate.

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- Life expectancy

Most of the plan obligations are to provide life benefits, and therefore an increase in life expectancy will result in increased plan liabilities.

III –Management of defined benefit plan assets

The general purpose of managing EFPC funds is to search for a long term balance between assets and obligations to pay of retirement benefits, by exceeding the actuarial targets (discount rate plus benefit adjustment index, established in the plan regulations).

Regarding the assets guaranteeing the actuarial liability reserves, management should ensure the payment capacity of retirement benefits in the long term by avoiding the risk of mismatching assets and liabilities in each pension plan.

At 12/31/2015 and 12/31/2014 the allocation of plan assets and the allocation target for 2016, by type of asset, are as follows:

	Fair value				% Allocation
Types	12/31/2015		12/31/2014		12/31/2015			12/31/2014			2016 Target
Fixed income securities		12,368,880		12,249,770		90.73	%		91.16	%	53% to 100%
Variable income securities		536,846		641,518		3.94	%		4.77	%	0% to 20%
Structured investments		27,311		22,119		0.20	%		0.17	%	0% to 10%
Real estate		633,001		487,730		4.64	%		3.63	%	0% to 7%
Loans to participants		67,363		36,620		0.49	%		0.27	%	0% to 5%
Total		13,633,401		13,437,757		100.00	%		100.00	%

The defined benefit plan assets include shares of ITAÚ UNIBANCO HOLDING CONSOLIDATED, its main parent company (ITAÚSA) and of subsidiaries of the latter, with a fair value of R$ 451,578 (R$ 554,278 at 12/31/2014), and real estate rented to Group companies, with a fair value of R$ 605,812 (R$ 454,738 at 12/31/2014).

Fair value - the fair value of the plan assets is adjusted up to the Balance Sheet date, as follows:

Fixed-Income Securities and Structured Investments – accounted for at market value, considering the average trading price on the calculation date, net realizable value obtained upon the technical addition of pricing, considering, at least, the payment terms and maturity, credit risk and the indexing unit.

Variable income securities – accounted for at market value, taken to be understood the share average quotation at the last day of the month or at the closest date on the stock exchange on which the share has posted the highest liquidity rate.

Real Estate – stated at acquisition or construction cost, adjusted to market value based on reappraisals made in 2015, supported by technical appraisal reports. Depreciation is calculated under the straight line method, considering the useful life of the real estate.

Loans to participants – adjusted up to the report date, in compliance with the respective agreements.

Fund Allocation Target - the fund allocation target is based on Investment Policies that are currently revised and approved by the Advisory Council of each EFPC, considering a five-year period, which establishes guidelines for investing funds guaranteeing Actuarial Liability and for classifying securities.

IV- Net amount recognized in the balance sheet

Following is the calculation of the net amount recognized in the balance sheet, corresponding to the defined benefit plan:

	12/31/2015			12/31/2014
1 - Net assets of the plans		13,633,401			13,437,757
2 - Actuarial liabilities		(11,587,180	)		(11,694,678	)
3- Surplus (1-2)		2,046,221			1,743,079
4- Asset restriction (*)		(2,133,856	)		(1,847,316	)
5 - Net amount recognized in the balance sheet (3-4)		(87,635	)		(104,237	)
Amount recognized in Assets (Note 13a)		223,805			242,267
Amount recognized in Liabilities (Note 13c)		(311,440	)		(346,504	)

(*) Corresponds to the excess of the present value of the available economic benefit, in conformity with item 64 of CVM Resolution nº 695.

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V- Changes in the net amount recognized in the balance sheet:

	12/31/2015
				Actuarial									Recognized
	Plan net assets			liabilities			Surplus			Asset Ceiling			amount
Value at the beginning of the period		13,437,757			(11,694,678	)		1,743,079			(1,847,316	)		(104,237	)
Cost of current service		-			(68,063	)		(68,063	)		-			(68,063	)
Net interest ⁽¹⁾		1,334,430			(1,151,988	)		182,442			(188,713	)		(6,271	)
Benefits paid		(907,650	)		907,650			-			-			-
Contributions of sponsor		60,368			-			60,368			-			60,368
Contributions of participants		14,758			-			14,758			-			14,758
Effects on asset ceiling		-			-			-			(102,758	)		(102,758	)
Remeasurements ⁽²⁾ ⁽³⁾		(306,262	)		419,899			113,637			4,931			118,568
Value at end of the period		13,633,401			(11,587,180	)		2,046,221			(2,133,856	)		(87,635	)

	12/31/2014
				Actuarial									Recognized
	Plan net assets			liabilities			Surplus			Asset Ceiling			amount
Value at the beginning of the period		12,512,070			(11,576,853	)		935,217			(1,292,637	)		(357,420	)
Cost of current service		-			(74,242	)		(74,242	)		-			(74,242	)
Net interest ⁽¹⁾		1,177,598			(1,086,631	)		90,967			(123,560	)		(32,593	)
Benefits paid		(780,237	)		780,237			-			-			-
Contributions of sponsor		80,757			-			80,757			-			80,757
Contributions of participants		15,014			-			15,014			-			15,014
Effects on asset ceiling		-			-			-			(452,566	)		(452,566	)
Remeasurements ⁽²⁾ ⁽³⁾		432,555			262,811			695,366			21,447			716,813
Value at end of the period		13,437,757			(11,694,678	)		1,743,079			(1,847,316	)		(104,237	)

(1) Corresponds to the amount calculated on 01/01/2015 based on the beginning amount (Net Assets, Actuarial Liabilities and Restriction of Assets), taking into account the estimated amount of payments/ receipts of benefits/ contributions, multiplied by the discount rate of 10.24% p.a.(On 01/01/2014 the rate used was 9.72% p.a.).

(2) Remeasurements recorded in net assets and asset ceiling correspond to the income earned above/below the expected return rate.

(3) The actual return on assets amounted to R$ 1,028,168 (R$ 1,610,153) at 12/31/2014).

During the period, contributions made totaled R$ 60,368 (R$ 80,757 from 01/01 to 12/31/2014). The contribution rate increases based on the beneficiary’s salary.

In 2016, the expected contribution to retirement plans sponsored by ITAÚ UNIBANCO HOLDING CONSOLIDATED is R$ 54,871.

The estimate for payment of benefits for the next 10 years is as follows:

	Estimated
Period	payment
2016		949,161
2017		976,687
2018		1,008,715
2019		1,041,954
2020		1,083,423
2021 to 2025		5,935,349

VI- Sensitivity of defined benefit obligation

The impact, due to the change in the assumption – discount rate by 0.5%, which would be recognized in Actuarial liabilities of the plans, as well as in Stockholders’ Equity – Asset valuation adjustment of the sponsor (before taxes) would amount to:

							Effect which would be
	Effects on actuarial liabilities						recognized in Stockholders’
	of the plans						*Equity ^()**
				Percentage of
				actuarial
Change in Assumption	Value			liabilities			Value
- Decrease by 0.5%		566,363			4.92	%		(280,500	)
- Increase by 0.5%		(519,825	)		(4.51	%)		201,040

(*) Net of effects of asset ceiling.

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d) Defined contribution plans

The defined contribution plans have pension funds set up using 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.

I - Change in the net amount recognized in the balance sheet:

	12/31/2015									12/31/2014
	Pension Plan						Recognized			Pension Plan						Recognized
	Fund			Asset Ceiling			Amount			Fund			Asset Ceiling			Amount
Amount - beginning of the period		2,438,272			(223,616	)		2,214,656			2,361,025			(274,533	)		2,086,492
Net interest		239,251			(20,448	)		218,803			222,657			(26,627	)		196,030
Contribution (Note 19)		(380,216	)		-			(380,216	)		(132,623	)		-			(132,623	)
Effects on asset ceiling		-			(37,917	)		(37,917	)		-			76,952			76,952
Remeasurements		(68,710	)		12,153			(56,557	)		(12,787	)		592			(12,195	)
Amount - end of the period (Note 13a)		2,228,597			(269,828	)		1,958,769			2,438,272			(223,616	)		2,214,656

e) Other post-employment benefits

ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries do not offer other post-employment benefits, except in those cases arising from obligations under acquisition agreements signed by ITAÚ UNIBANCO HOLDING CONSOLIDATED, as well as in relation to the benefits granted due to a judicial sentence, in accordance with the terms and conditions established, in which health plans are totally or partially sponsored for specific groups of former workers and beneficiaries.

Based on the report 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:

I - Change in the net amount recognized in the balance sheet:

	12/31/2015			12/31/2014
At the beginning of the period		(170,593	)		(146,818	)
Cost of interest		(16,990	)		(14,284	)
Benefits paid		12,906			8,902
Remeasurements		(4,134	)		(18,393	)
At the end of the period (Note 13c)		(178,811	)		(170,593	)

The estimate for payment of benefits for the next 10 years is as follows:

	Estimated
Period	payment
2016		11,839
2017		12,724
2018		13,599
2019		14,500
2020		15,377
2021 to 2025		91,514

II - Sensitivity Analyses - Cost of Healthcare

For calculation of benefits obligations projected beyond the assumptions used for the defined benefit plans (Note 19c 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 following effects:

	Recognition	1% increase		1% decrease
Service cost and cost of interest	Income		3,568		(3,034	)
Present value of obligation	Asset valuation adjustment		20,077		(16,977	)

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Note 20 – Information on foreign subsidiaries

	Foreign branches ⁽¹⁾						Latin America consolidated ⁽²⁾						Itaú Europe consolidated ⁽³⁾						Cayman consolidated ⁽⁴⁾						Other foreign companies ⁽⁵⁾						Foreign consolidated ⁽⁶⁾
	12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014			12/31/2015			12/31/2014
Assets
Current assets and long term receivables
Cash and cash equivalents		4,323,580			3,771,485			6,757,049			4,245,994			813,424			818,689			27,854,590			382,972			1,902,778			736,810			11,483,679			8,942,153
Interbank investments		48,650,798			21,233,647			4,945,746			3,031,288			8,146,099			3,572,909			21,546,862			18,131,543			39,142			267,170			25,130,763			15,373,441
Securities		79,151,513			46,543,642			7,279,972			5,976,035			5,118,244			3,659,780			17,666,759			13,815,816			324,525			28,573			108,805,103			69,099,328
Loan, lease and other credit operations		112,478,472			91,335,395			55,628,888			40,784,779			18,315,220			12,077,880			456,874			122,706			1,640			968			186,763,687			144,241,879
Foreign exchange portfolio		64,427,572			34,499,152			1,451,778			783,352			3,953,919			3,038,607			-			5,783			-			-			69,672,903			37,963,922
Other assets		6,263,446			5,149,097			9,174,515			6,007,878			1,127,605			413,293			280,145			1,855,621			159,006			5,983,691			16,789,104			18,952,537
Permanent assets
Investments		115			-			9,113			7,012			18,612			8,106			239,689			165,693			864,900			580,688			28,157			15,334
Fixed and intangible assets		21,705			17,650			1,002,283			791,728			151,580			146,014			-			154			23,466			17,579			1,199,035			973,124
Total		315,317,201			202,550,068			86,249,344			61,628,066			37,644,703			23,735,278			68,044,919			34,480,288			3,315,457			7,615,479			419,872,431			295,561,718
Liabilities
Current and long term liabilities
Deposits		96,036,125			68,412,757			52,289,632			39,063,854			17,022,817			8,916,120			18,916,307			991,485			-			629,980			113,041,018			100,927,458
Demand deposits		48,983,770			12,979,539			15,394,327			10,903,996			10,800,653			6,810,015			21,220			935,614			-			629,980			45,010,975			31,241,469
Savings deposits		-			-			10,480,863			7,355,315			-			-			-			-			-			-			10,480,863			7,355,315
Interbank deposits		32,022,335			33,224,674			68,712			93,124			3,707,792			1,367,478			18,895,087			55,871			-			-			14,100,657			19,272,151
Time deposits		15,030,020			22,208,544			26,345,730			20,711,419			2,514,372			738,627			-			-			-			-			43,448,523			43,058,523
Deposits received under securities repurchase agreements		23,986,753			16,923,394			382,453			430,504			-			-			17,022,521			12,156,697			-			1,097,268			23,787,112			15,343,261
Funds from acceptance and issuance of securities		6,015,097			1,582,027			8,056,688			4,441,480			8,382,928			6,407,293			321,638			1,547,210			-			-			22,776,350			13,953,807
Borrowing		57,906,787			36,329,668			4,477,648			3,217,156			1,272,611			645,101			-			9,969			-			-			63,657,045			40,201,894
Derivative financial instruments		8,946,358			4,414,944			1,850,200			1,193,684			2,115,848			1,212,659			11,899			532,816			-			-			12,612,457			6,930,661
Foreign exchange portfolio		64,462,300			35,089,207			1,460,470			780,975			3,950,047			2,991,722			-			6,120			-			-			69,712,451			38,505,052
Other liabilities		37,337,889			24,702,689			6,615,124			4,324,436			728,634			791,686			2,141,679			2,155,906			163,461			3,594,641			46,692,560			35,030,020
Deferred income		210,772			208,736			5,996			3,068			79,206			52,782			-			-			-			1,526			295,974			266,112
Non-controlling interests		-			-			406			282			-			1			-			1,048,455			-			-			406			1,048,738
Stockholders’ equity
Capital and reserves		21,313,724			13,746,074			9,864,199			7,215,200			3,674,001			2,392,006			29,063,904			15,991,400			3,285,805			2,367,296			66,181,866			41,030,179
Net income for the period		(898,604	)		1,140,572			1,246,528			957,427			418,611			325,908			566,971			40,230			(133,809	)		(75,232	)		1,115,192			2,324,536
Total		315,317,201			202,550,068			86,249,344			61,628,066			37,644,703			23,735,278			68,044,919			34,480,288			3,315,457			7,615,479			419,872,431			295,561,718
Statement of Income
Income related to financial operations		4,525,565			4,761,559			6,462,143			4,587,736			909,312			637,904			502,530			282,234			3,509			(7,658	)		12,013,578			9,842,775
Expenses related to financial operations		(4,063,305	)		(2,839,374	)		(2,379,628	)		(1,995,578	)		(240,434	)		(163,904	)		258,818			(102,994	)		(4,689	)		(5,366	)		(6,078,674	)		(4,754,265	)
Result of loan losses		(966,141	)		(642,207	)		(435,335	)		(368,154	)		7,582			(990	)		(45,564	)		-			(268	)		(340	)		(1,439,727	)		(1,011,690	)
Gross income related to financial operations		(503,881	)		1,279,978			3,647,180			2,224,004			676,460			473,010			715,784			179,240			(1,448	)		(13,364	)		4,495,177			4,076,820
Other operating revenues (expenses)		(395,343	)		(137,863	)		(1,379,135	)		(1,014,966	)		(180,672	)		(110,740	)		(148,814	)		(139,010	)		(123,067	)		(63,767	)		(2,269,145	)		(1,462,294	)
Operating income		(899,224	)		1,142,115			2,268,045			1,209,038			495,788			362,270			566,970			40,230			(124,515	)		(77,131	)		2,226,032			2,614,526
Non-operating income		(120	)		-			11,374			13,269			(558	)		(122	)		-			-			3,630			2,857			10,854			13,459
Income before taxes on income and profit sharing		(899,344	)		1,142,115			2,279,419			1,222,307			495,230			362,148			566,970			40,230			(120,885	)		(74,274	)		2,236,886			2,627,985
Income tax		740			(1,543	)		(1,011,588	)		(245,434	)		(60,600	)		(17,515	)		1			-			(8,359	)		(958	)		(1,079,807	)		(265,451	)
Statutory participation in income		-			-			(21,255	)		(19,405	)		(16,019	)		(18,725	)		-			-			(4,565	)		-			(41,839	)		(38,130	)
Non-controlling interests		-			-			(48	)		(41	)		-			-			-			-			-			-			(48	)		132
Net income (loss)		(898,604	)		1,140,572			1,246,528			957,427			418,611			325,908			566,971			40,230			(133,809	)		(75,232	)		1,115,192			2,324,536

(1)

Itaú Unibanco S.A. - Agências Grand Cayman, New York, Tokyo and Nassau Branch, ITAÚ UNIBANCO HOLDING S.A - Agência Grand Cayman.

(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 Valores S.A., Itaú Chile Holdings Inc., BICSA Holdings LTD., Banco Itaú Chile S.A., Itaú Chile Inversiones, Servicios Y Administración S.A., Itaú BBA Corredor de Bolsa Limitada, Itaú Chile Corredora de Seguros Ltda., Itaú Chile Administradora General de Fondos S.A., Recuperadora de Créditos Ltda, Itaú Chile Compañia de Seguros de Vida S.A., ACO Ltda., Banco Itaú Uruguay S.A., OCA S.A., Unión Capital AFAP S.A., Banco Itau Paraguay,Itaú BBA México S.A (new company name of Tarjetas Unisoluciones S. A. de Capital Variable), Proserv - Promociones Y Servicios S.A. de C. V., MCC Asesorias Limitada (Note 2c), MCC Securities INC. (Note 2c), MCC Corredora de Bolsa (Note 2c), Itaú BBA Colômbia and Itau BBA Mexico Casa de Bolsa S.A. de CV; only at 12/31/2014 , Oca Casa Financeira S.A. and Itaú BBA SAS.

(3)

IPI - Itaúsa Portugal Investimentos, SGPS Lda. (49%), Itaúsa Europa - Investimentos, SGPS, Lda., Itaúsa Portugal - SGPS S.A.,Itau BBA International (Cayman) Ltd., Itaú Europa Luxemburgo S.A, Banco Itaú International, Itaú Bank & Trust Bahamas Ltd., Itaú International Securities Inc., Itaú Bahamas Directors Ltd., Itaú Bahamas Nominees Ltd., Banco Itau Suisse S.A. and Itau BBA International plc.

(4)

Itau Bank Ltd., ITB Holding Ltd., Jasper International Investment LLC, Itaú Bank & Trust Cayman Ltd., Uni-Investments Inter. Corp., Itaú Cayman Directors Ltd., Itaú Cayman Nominees Ltd., BIE Cayman Ltd.; only at 12/31/2014, UBT Finance S.A. and Fundo ETF IPSA.

(5)

Afinco Americas Madeira, SGPS Soc. Unipessoal Ltda., IPI - Itaúsa Portugal Investimentos, SGPS Lda. (51%), Banco Del Paraná S.A.,Topaz Holding Ltd., Itaú USA Inc., Itaú BBA USA Securities Inc., Itaú International Investment LLC, Mundostar S.A., Karen International Ltd., Nevada Woods S.A., Albarus S.A., Garnet Corporation, Itau Global Asset Management, Itaú Asia Securities Ltd., Itaú Middle East Limited, Itaú USA Asset Management Inc., Itau BBA UK Securities Limited, Itaú Japan Asset Management Ltd., Itaú UK Asset Management Limited, Itaú Singapore Securities Pte. Ltd.

(6)

Foreign consolidated information presents balances net of consolidation eliminations.

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Note 21 – Risk and capital management

Risk and capital management is considered by ITAÚ UNIBANCO HOLDING CONSOLIDATED an essential instrument to optimize the use of funds and select the best business opportunities, aiming at maximizing the creation of value to the stockholders.

At ITAÚ UNIBANCO HOLDING CONSOLIDATED, risk and capital management is the process in which:

The existing and potential risks in ITAÚ UNIBANCO HOLDING CONSOLIDATED’s operations are identified and measured;

Norms, procedures and methodologies for risk management and control consistent with the Board of Directors’ guidelines and ITAÚ UNIBANCO HOLDING CONSOLIDATED’s strategies are approved;

The ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risk portfolio is managed considering the best risk-return ratio.

The purpose of the identification of risks is to map the internal and external risks that may affect the strategies of the business and support units, with potential to impact results, capital, liquidity and reputation of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Risk management processes are spread throughout the whole institution, aligned with the guidelines of the Board of Directors and Executives that, through panels, define the global objectives that are measured as goals and limits to the risk management units. Control and capital management units, in turn, support the ITAÚ UNIBANCO HOLDING CONSOLIDATED’s management by monitoring and analyzing risk and capital.

In compliance with Resolution No. 3,988, of the National Monetary Council (CMN), BACEN Circular No. 3547 and BACEN Circular Letter No. 3,565, ITAÚ UNIBANCO HOLDING CONSOLIDATED implemented its capital management structure and its internal capital adequacy assessment process (ICAAP), adopting a prospective attitude in the management of its capital. The Board of Directors is responsible for full approval of the ICAAP report, a process that aims to assess the capital adequacy of ITAÚ UNIBANCO HOLDING CONSOLIDATED by identifying material risks, establishing the need for additional capital for material risks and in-house methodologies to quantify capital, to develop the capital plan, both in normal times and stress situations, and to structure the capital contingence plan. Additionally, ITAÚ UNIBANCO HOLDING CONSOLIDATED adopts the stress test and tool for the internal capital adequacy assessment.

The result of the last ICAAP – conducted with the base date December 2014 – indicated that ITAÚ UNIBANCO HOLDING CONSOLIDATED has, in addition to capital to face all material risks, a significant capital surplus, thus assuring the institution’s equity soundness.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s organizational structure of risk management is in conformity with regulations in force in Brazil and abroad and in line with the best market practices. The market, credit, liquidity, operational and underwriting risks control is performed in a centralized way by an independent unit, aiming at assuring that ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risks are being managed in accordance with established risk appetite policies, norms and procedures. This independent structure is also responsible for centralizing ITAÚ UNIBANCO HOLDING’s capital management. The purpose of centralizing control is to provide the Executives and the Board of Directors with an overview of ITAÚ UNIBANCO HOLDING CONSOLIDATED’s risk exposure, as well as a prospective view on the adequacy of its capital so as to optimize and speed up corporate decision-making.

ITAÚ UNIBANCO HOLDING CONSOLIDATED uses proprietary IT systems to fully meet the applicable rules on capital reserve, and also for risk measurement, in compliance with the models issued by the regulatory models in force. It also coordinates actions to check for adherence to qualitative and quantitative requirements established by the regulatory bodies for compliance with the minimum mandatory capital requirement and risk monitoring.

Further information on risk management can be found on the website www.itau.com.br/relacoes-com-investidores, under section Corporate Governance / Risk Management – Pillar 3, which is not part of the financial statements.

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I – Market risk

Market risk is the possibility of incurring financial losses arising from the changes in the market value of positions held by a financial institution, including the risks of transactions subject to foreign exchange variation, interest rates, share prices, price indexes and commodity prices, among other indices related to risk factors.

Market risk management is the process through which the ITAÚ UNIBANCO HOLDING CONSOLIDATED plans, monitors and controls the risks of variations in financial instruments market values due to market changes, aimed at optimizing the risk-return ratio, by using an appropriate structure, alerts, models and adequate tools for management limits.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s Market Risk Management Policy is in line with the principles of Resolution No. 3,464, issued by the National Monetary Council (CMN) (as amended), being a set of principles that drive the ITAÚ UNIBANCO HOLDING CONSOLIDATED strategy towards control and management of market risk of all business units and legal entities.

The document that details the guidelines set out by the corporate guidelines on market risk control, which is not part of the financial statements, can be read on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report – Market Risk.

ITAÚ UNIBANCO HOLDING CONSOLIDATED’s market risk management strategy is aimed at balancing corporate business goals, taking into account, among other things:

Political, economic and market conditions;

Portfolio profile of ITAÚ UNIBANCO HOLDING CONSOLIDATED;

Expertise within the group to support operations in specific markets.

The process for managing the market risk of ITAÚ UNIBANCO HOLDING CONSOLIDATED is conducted within the governance and hierarchy of committees and a framework of limits and warnings approved specifically for this purpose, covering different levels and classes of market risk (such as interest rate, and exchange variation risk, among others). This framework of limits and warnings ranges from the monitoring of risk aggregate indicators (portfolio level) to granular limits (individual desk level). The framework of market risk covers from the risk factor level, with specific limits aiming at improving the risk monitoring and understanding process, and at avoiding risk concentration. These limits are quantified by assessing the forecasted results of the balance sheet, size of stockholders’ equity, liquidity, markets complexity and volatility and the institution’s appetite for risk. Limits are monitored daily and excesses and potential violations are reported and discussed for each established limit:

Within one business day, for management of business units in charge and executives of the risk control area and business areas; and

Within one month, for proper committees.

Daily risk reports, used by the business and control areas, are issued to the top management. Additionally, risk control and management process is submitted to periodic reviews.

The structure of limits and alerts follows the Board of Directors' guidelines and is approved by panels. The process to definite limit levels and violation reports follow the governance to approve the internal policies of ITAÚ UNIBANCO HOLDING CONSOLIDATED. The information flow established aims at disseminating information to the several levels of executives of the institution, including the members of the Executive Board, by means of the Committees in charge of risk management. This limit and warning framework increases effectiveness and the control coverage is reviewed at least on an annual basis.

The purpose of market risk control of ITAÚ UNIBANCO HOLDING structure is:

Providing visibility and assurance to all executive levels that the assumption of market risks is in line with ITAÚ UNIBANCO HOLDING CONSOLIDATED and the risk-return objective;

Promoting a disciplined and educated discussion on the global risk profile and its evolution over time;

Increasing transparency on the way the business seeks to optimize results;

Providing early warning mechanisms in order to make the effective risk management easier, without jeopardizing the business purposes; and

Monitoring and avoiding risk concentration.

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 of processes at ITAÚ UNIBANCO HOLDING CONSOLIDATED.

The market risk is controlled by an area independent from the business areas, which is responsible for the daily activities of: (i) risk measurement and assessment, (ii) monitoring of stress scenarios, limits and warnings, (iii) application, analysis and tests of stress scenarios, (iv) risk reporting for individuals responsible within the business areas, in compliance with governance of ITAÚ UNIBANCO HOLDING CONSOLIDATED, (v) monitoring of actions required for adjustment of positions and/or risk levels to make them feasible, and (vi) support to the launch of new financial products with security. For that purpose, ITAÚ UNIBANCO HOLDING CONSOLIDATED has a structured reporting and information process and an information flow that provides input for the follow-up by committees and complies with the requirements of Brazilian and foreign regulatory agencies.

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ITAÚ UNIBANCO HOLDING CONSOLIDATED hedges transactions with clients and proprietary positions, including its foreign investments, in order to mitigate risk arising from fluctuations in relevant market risk factors and maintaining the classification the transactions into the current exposure limits. Derivatives are commonly used for these hedging activities. When these transactions are classified as hedges for accounting purposes, specific supporting documentation is provided, including ongoing follow-up of hedge effectiveness (retrospective and prospective) and other changes in the accounting process. The accounting and managerial hedging procedures are governed by the institutional polices of ITAÚ UNIBANCO HOLDING CONSOLIDATED.

Hedge accounting is treated in detail in the financial statement notes.

The market risk structure categorizes transactions as part of either the banking portfolio or the trading portfolio, in accordance with general criteria established by CMN Resolution No. 3.464 and BACEN Circular No. 3.354.

The trading portfolio consists of all transactions involving financial instruments and goods, including derivatives, which are carried out with the intention of trading.

The banking portfolio is basically characterized by transactions from the banking business, and transactions related to the management of the balance sheet of the institution. It has the no-intention of resale and medium and long term time horizons as general guidelines.

Exposures to market risks inherent in the many different financial instruments, including derivatives, are broken down into a number of risk factors, primary market components for pricing.

The main risk factors measured by ITAÚ UNIBANCO HOLDING CONSOLIDATED are as follows:

Interest rates: the risk of losses from transactions subject to interest rates variations;

Foreign exchange-linked interest rate: the risk of losses arising from positions in transactions which are subject to a foreign exchange-linked interest rate;

Foreign exchange rates: the risk of losses from positions subject to foreign exchange rate variation;

Price index-linked: the risk of losses from transactions subject to the variations in the price of index-linked interest rates;

Variable income: risk of loss subject to variation in prices of shares and commodities;

The National Monetary Council (CMN) has regulations that establish the segregation of exposure to market risk at least in the following categories: interest rate, exchange rate, shares and commodities. Inflation rates are addressed as a group of risk factors and received the same treatment as the other risk factors, such as interest rates, exchange rates, etc., and follow the structure of risk and limits governance adopted by ITAÚ UNIBANCO HOLDING CONSOLIDATED to manage market risk.

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 certain time horizon and confidence level;

Losses in stress scenarios: simulation technique to assess the behavior of assets and liabilities and derivatives of a portfolio when several risk factors are taken to extreme market situations (based on prospective and historical scenarios);

Stop loss: metrics which purpose is to review positions, should losses accumulated in a certain period reach a certain amount;

Concentration: cumulative exposure of a certain financial instrument or risk factor, calculated at market value (“MtM – Mark to Market”);

Stressed VaR: statistical metric arising from VaR calculation, which purpose is to capture higher risk in simulations for the current portfolio, considering returns that can be seen in historical scenarios of extreme volatility.

In addition to the aforementioned risk measures, sensitivity and loss control measures are also analyzed. They comprise:

Mismatching analysis (GAPS): graphic representation by risk factor of cash flows expressed at market value, allocated at the maturity dates;

Sensitivity (DV01- Delta Variation): impact on the market value of cash flows, when submitted to an one annual basis point increase in the current interest rates or index rate;

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.

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ITAÚ UNIBANCO HOLDING CONSOLIDATED uses proprietary systems to measure the consolidated market risk. The processing of these systems principally takes place in São Paulo, in an access-controlled environment, being highly available, which has data safekeeping and recovery processes, and counts on such an infrastructure to ensure the continuity of business in contingency (disaster recovery) situations.

ITAÚ UNIBANCO HOLDING CONSOLIDATED, maintaining its conservative management and portfolio diversification, continued with its policy of operating within low limits in relation to its capital during the period.

At 12/31/2015, ITAÚ UNIBANCO HOLDING CONSOLIDATED recorded total VaR of R$ 204.0 million (R$ 193.1 million at 12/31/2014).

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II – Credit risk

Credit risk is the possibility of losses arising from the breach by the borrower, issuer or counterparty of the respective agreed-upon financial obligations, the devaluation of loan agreement due to downgrading of the borrower’s, the issuer’s, the counterparty’s risk rating, the reduction in gains or compensation, the advantages given upon posterior renegotiation and the recovery costs.

The credit risk management of ITAÚ UNIBANCO HOLDING CONSOLIDATED’s is the primary responsibility of all business units and aims to keep the quality of loan portfolios in levels consistent with the institution’s risk appetite for each market segment in which it operates.

ITAÚ UNIBANCO HOLDING CONSOLIDATED 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 CONSOLIDATED’s centralized process for making decisions and establishing a credit policy guarantees the synchrony of credit actions.

To protect the institution against losses arising from loan operations, ITAÚ UNIBANCO HOLDING CONSOLIDATED considers all aspects that determine the client’s credit risk to define a provision level that is adequate 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 and the volume of the regulatory provision is determined.

In line with the principles of CMN Resolution No. 3,721 of April 30, 2009, ITAÚ UNIBANCO HOLDING CONSOLIDATED has a structure for and institutional norm 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, which is not part of the financial statements, can be read on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report – Credit Risk.

III – Operational risk

For ITAÚ UNIBANCO HOLDING CONSOLIDATED operational risk is defined as the possibility of losses from failure of, insufficient or inadequate internal processes, people and systems, or from external events impacting the realization of strategic, tactical or operational objectives. 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 ITAÚ UNIBANCO HOLDING CONSOLIDATED.

The purpose of the management framework is to identify, prioritize, and manage possible operating risks, monitor and report management activities aiming at assuring the quality of the control environment, in compliance with internal guidelines and regulation in force.

The managers of executive areas use corporate methodologies that are built and made available by the internal control, compliance and operational risk area.

Within the governance of the management process there are specific forums to address operational risk, internal control and compliance where periodically there are consolidated reports on risk monitoring, controls, action plans and operational losses presented to the executives of the business areas.

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A summarized version of such policy, which is not part of the financial statements, is available on the website www.itau.com.br/relacoes-com-investidores in the section Corporate Governance, Rules and Policies, Public Access Report – Operational risk.

IV – Liquidity risk

Liquidity risk is defined as the institution’s possibility of not being able to efficiently meet its expected and unexpected obligations, both current and future, including those arising from the pledged guarantees, without affecting its daily operations and without incurring significant losses.

Liquidity risk control is carried out by an area independent from the business areas, and which is responsible for defining the constitution of a reserve, proposing assumptions for behavior of cash flow, identifying, assessing, monitoring, controlling and reporting, on a daily basis, the exposure to liquidity risks in different time horizons, proposing limits for liquidity risk and monitoring the established limits consistent with the risk appetite of the institution, informing on possible noncompliance, considering the liquidity risks individually in countries where ITAÚ UNIBANCO HOLDING CONSOLIDATED operates, simulating the behavior of cash flow under stress conditions, assessing and reporting risks inherent in new products and transactions in a timely fashion, and reporting information required by regulatory bodies. Every activity is subject to analysis by independent areas of validation, internal controls and audit.

The measurement of liquidity risk covers all financial transactions of ITAÚ UNIBANCO HOLDING CONSOLIDATED companies, as well as possible contingent or unexpected exposures, such as those arising from settlement services, pledge of endorsements and sureties and credit facilities contracted and not used.

The document that expresses the guidelines set forth by the internal policy on liquidity risk, that is not part of the financial statements, may be viewed on the website www.itau.com.br/relacoes-com-investidores, in the section Corporate Governance, Rules and Policies, Public Access Report - Liquidity Risk.

V - Insurance, Pension Plan and Capitalization Risks

The products that make up the portfolios of ITAÚ UNIBANCO HOLDING’s insurance companies are related to the life insurance and elementary, pension plan and capitalization lines. Therefore, we understand that the major risks inherent in these products are as follows:

Subscription risk is the possibility of losses arising from operations of insurance, pension plan and capitalization that go against the organization’s expectations, directly or indirectly associated with the technical and actuarial bases adopted to calculate premiums, contributions and provisions;

Market risk is the possibility of incurring losses due to fluctuations in the market values of assets and liabilities comprising the actuarial technical reserves;

Credit risk is the possibility of a certain debtor failing to meet any obligations in connection with the settlement of operations involving the trade of financial assets or reinsurance;

Operational risk is the possibility of incurring losses arising from the failure, deficiency or inadequacy or internal processes, personnel and systems, or external events impacting the achievement of strategic, tactical or operational purposes of the insurance, pension plan and capitalization operations;

Liquidity risk in insurance operations is the possibility of the institution’s failure to timely meet its obligations with insured and beneficiaries in view of lack of liquidity of the assets comprising the actuarial technical reserves.

The management process of insurance, pension plan and capitalization risks is based on responsibilities defined and communicated between the control and business areas, assuring independence between them and focusing on the particularities of each risk, in accordance with the guidelines established by ITAÚ UNIBANCO HOLDING CONSOLIDATED.

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Note 22 –Supplementary information

Insurance policy - ITAÚ UNIBANCO HOLDING CONSOLIDATED and its subsidiaries, despite the low risk exposure due to the physical non-concentration of their assets, have a policy of guaranteeing their valuables and assets at amounts considered sufficient to cover possible claims.

Foreign currency – The balances in Reais linked to the foreign currencies were as follows:

	12/31/2015			12/31/2014
Permanent foreign investments		67,297,058			43,354,715
Net amount of other assets and liabilities indexed to foreign currency, including derivatives		(110,506,272	)		(70,332,835	)
Net foreign exchange position		(43,209,214	)		(26,978,120	)

The net foreign exchange position, considering the tax effects on the net balance of other assets and liabilities indexed to foreign currencies, reflects the low exposure to exchange variations.

Investment funds and managed portfolios - ITAÚ UNIBANCO HOLDING CONSOLIDATED, 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
	12/31/2015		12/31/2014		12/31/2015		12/31/2014		12/31/2015		12/31/2014
Investment funds		570,013,716		479,738,249		570,013,716		479,738,249		2,227		2,233
Fixed income		536,825,667		445,180,059		536,825,667		445,180,059		1,866		1,850
Shares		33,188,049		34,558,190		33,188,049		34,558,190		361		383
Managed portfolios		267,929,761		271,594,436		195,088,151		188,777,838		16,255		15,275
Customers		147,717,083		137,805,777		110,020,237		90,974,991		16,191		15,208
Itaú Group		120,212,678		133,788,659		85,067,914		97,802,847		64		67
Total		837,943,477		751,332,685		765,101,867		668,516,087		18,482		17,508

(*) It refers to the distribution after elimination of double-counting of managed portfolios in investment funds.

d) Consortia funds

	12/31/2015		12/31/2014
Monthly estimate of installments receivable from participants		162,058		144,701
Group liabilities by installments		11,796,178		10,918,672
Participants – assets to be delivered		10,365,397		9,922,420
Funds available for participants		1,545,852		1,235,265
(In units)
Number of managed groups		761		834
Number of current participants		414,950		401,653
Number of assets to be delivered to participants		182,996		205,414

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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).

During the period from 01/01 to 12/31/2015 and 12/31/2014 the consolidated companies made no donations, and the Foundation’s social net assets totaled R$ 2,384,928 (R$ 2,934,150 at 12/31/2014). The income arising from its investments will be used to achieve the Foundation’s social purposes.

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 an amount of R$ 83,000 (R$ 77,500 from 01/01 to 12/31/2014).

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 supplementary, through the civil society’s institutions.

Instituto Unibanco de Cinema - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco de Cinema, an entity whose objectives are (i) the fostering of culture in general; and (ii) providing the low-income population with access to cinematography, videography and similar productions, for which it shall own and manage movie theaters, and theaters to screen films, videos, video-laser discs and other related activities, as well as to screen and divulge films of importance, especially those produced in Brazil.

Associação Itaú Viver Mais - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Associação Itaú Viver Mais, 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 healthcare activities. During the period from 01/01 to 12/31/2015, the consolidated companies have made donations to Associação Itaú Viver Mais amounting to R$ 1,435 (R$ 800 from 01/01 to 12/31/2014).

Instituto Assistencial Pedro di Perna - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Assistencial Pedro di Perna, an entity whose objective is to provide social services, stimulate sporting activities, and promote recreation, aiming at the welfare of its members, in the manner and based on the conditions established by its Internal Rules, and using the funds available.

Exclusions of non recurring effects net of tax effects – ITAÚ UNIBANCO HOLDING and ITAÚ UNIBANCO

	01/01 to			01/01 to
	12/31/2015			12/31/2014
Increase in the social contribution tax rate (Note 14b IV)		3,988,253			-
Complementary allowance for loan losses (*)		(2,793,110	)		(667,800	)
Provision for contingencies – Tax and social security (Notes 12b and 15a I)		(559,748	)		-
Change in the Accounting Treatment of Financial Lease (Note 4i)		(519,999	)		-
Social security fund (Note 19)		(129,946	)		-
Goodwill on acquisition (Note 15b II)		(162,184	)		(176,985	)
Civil Lawsuits - Economic Plans		(136,644	)		(125,918	)
Realization of assets and Impairment		(50,136	)		(8,546	)
Program for Cash or Installment Payment of Taxes (Notes 12e and 12f)		36,823			(25,294	)
COFINS / Provision for loss carryforwards - Porto Seguro (Note 15a II)		-			(59,515	)
Favorable decision on thesis of broadening the PIS / COFINS calculation base from IRB (Note 15a II)		-			61,635
Increase in the rate - Porto Seguro S.A.		16,974			-
Allowance for loan losses - Credicard		-			(36,713	)
Gain from disposal of major risk insurance operations (Note 2c)		-			736,017
Improvement of the labor claim provision model (Note 12)		-			(74,041	)
Others		(162,938	)		-
Total		(472,655	)		(377,160	)

(*) Recognition of a provision supplementary to the minimum required by Resolution No. 2,682/99 of the National Monetary Council.

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Agreements for offsetting and settlement of liabilities within the scope of the National Financial System – Offset agreements were entered into within the scope of derivative contracts, as well as agreements for the offsetting and settlement of receivables and payables pursuant to CMN Resolution No. 3,263, of February 24, 2005, the purpose of which is to enable the offsetting of credits and debits maintained with the same counterparty, and where the maturity dates of receivables and payables can be advanced to the date an event of default by one of the parties occurs or in the case of bankruptcy of the debtor.

Subsequent events

In January 21, 2016, the ITAÚ UNIBANCO HOLDING, through its subsidiary Itaú Unibanco S.A., sidnedd a Memorandum of Understanding with Banco Bradesco S.A. Banco do Brasil S.A., Banco Santander S.A. and Caixa Econômica Federal in order to create a credit intelligence bureau (“CIB”) wich will enable greater efficiency in the management and granting of credit lines at long and medium terms.

CIB will be structured as a corporation and the Parties, each of them holding a 20% equity ownership, will share its control.

CIB’s incorporation is subject to the execution of definitive documents among the Parties, as well as the satisfaction of certain conditions precedent, including the approval by applicable regulatory authorities.

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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”) stand alone, which comprise the balance sheet as at December 31, 2015and the statements of income, changes in equity and cash flows for the year and 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 December 31, 2015 and the consolidated statements of income and cash flows for the year and 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 December 31, 2015, and the financial performance and cash flows, as well as the consolidated financial performance and cash flows, for the year and 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).

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Other matters

Statement of value added

We also have audited the Bank’s and the Consolidated statements of value added for the year and six-month period ended December 31, 2015, 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, February 1st, 2016

PricewaterhouseCoopers

Auditores Independentes

CRC 2SP000160/O-5

Washington Luiz Pereira Cavalcanti

Contador CRC 1SP172940/O-6

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ITAÚ UNIBANCO HOLDING S.A.

CNPJ. 60.872.504/0001-23

A Listed Company

NIRE. 35300010230

SUMMARY OF THE AUDIT COMMITTEE REPORT SECOND HALF OF 2015

The Audit Committee of Itaú Unibanco S.A.

According to its Charter (available on the website www.itau.com.br/investor-relations), the Audit Committee (Committee) is responsible for the quality and integrity of the financial statements of the Itaú Unibanco Financial Conglomerate, for compliance with legal and regulatory requirements, for the activities, independence and the quality of the services rendered by the independent auditor and by the Internal Audit, and for the quality and effectiveness of the internal controls and risk management systems of the Conglomerate. The Committee serves as the sole vehicle for all the institutions in the Conglomerate, including insurance, private pension and capitalization companies, where the appointment of an Audit Committee is required.

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 resulting from direct observation.

Management is responsible for preparing the financial statements of Itaú Unibanco Holding S.A. and of its subsidiaries and affiliated companies and for establishing the procedures necessary to ensure the quality of the processes that generate the information used to prepare the financial statements and 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 certifying that they fairly represent, in all material respects, the financial position of the Conglomerate, in conformity with accounting practices adopted in Brazil arising from 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 accordance with International Financial Reporting Standards (IFRS). The same independent auditors should also issue, annually, an opinion on the quality and effectiveness of internal controls related to financial reports (section 404 of the Sarbanes Oxley (SOX) Act.

Activities of the Committee

The Committee met 26 days in the period from August 1, 2015 to January 27, 2016, resulting in a total of 84 meetings. Members of the Committee visited foreign units, attended the public meeting of APIMEC (Associação dos Analistas e Profissionais de Investimento do Mercado de Capitais), held in the capital city of São Paulo, on the discussion of strategies and results as of June 30, 2015, and participated as observers in the meetings of the Senior Ethics Commission, the Accounting Standards and Policies Commission as well as in those of the Audit Committee of Itaú BBA International plc.

As part of its activities, the Committee took knowledge of the results of inspections and comments by regulators and monitors the resulting management action plans, preparing reports for the Board of Directors summarizing the actions taken, the required level of attention and a opinion on the adequacy of those actions taken. Additionally, the Committee holds meetings with the supervisors of the Banco Central do Brasil/Desup and the Banco Central do Brasil/Decon.

Risk Management and Internal Control System

In the second half of 2015, during meetings with officers responsible for the Risk Management and Control and Finance Area, the Committee assessed aspects related to risk management and control in the Conglomerate, with emphasis on credit, liquidity, market, underwriting, and operational risks. The Committee also monitored the evolution of the Conglomerate’s internal controls system, through meetings with the officers in charge of the Internal Control, Compliance and Operational Risk Area and through engagements carried out by the Internal Audit.

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As part of its responsibilities, the Committee monitors several matters through meetings with the respective officers, highlighting the risks and related controls associated with: (i) technology and information security; (ii) cyber security; (iii) foreign units, particularly those related to the integration of Banco Itaú Chile with CorpBanca; (iv) money laundering prevention; (v) contingencies – mainly those involving higher risk and amount; (vi) allowance for loan losses with corporations; (vii) monitoring of portfolio risks; (viii) credit processes, which include credit granting models and credit maintenance, and (ix) debt restructuring transactions.

Based on the information brought to its attention, the Committee acknowledges the constant improvement of the existing internal controls and risk management systems.

Compliance with Legislation, Regulatory Requirements and Internal Policies and Procedures

The Committee considers that the duties and responsibilities, as well as the procedures for assessing and monitoring legal risks are established and continue to be followed in accordance with corporate guidelines. Based on the assessment conducted by the Internal Control, Compliance and Operational Risk Office, on the work performed by Internal Audit and on the reports prepared by external auditors, the Audit Committee concludes that no deficiencies were identified about compliance with 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 widely discuss the results of their work and relevant accounting matters, thus enabling the members of the Committee to form a well-supported opinion as to the integrity of the financial accounting statements and financial reports, assessing as fully satisfactory the volume and quality of information provided by PricewaterhouseCoopers, which supports its opinion on the integrity of the financial statements.

Contracting of services to be provided by independent auditors require prior approval by the Committee which assesses the risks of loss of independence and conflicts of interest. The Committee did not identify situations that could affect the objectivity and independence of the external auditors. The Committee is monitoring compliance with independence requirements in the process of appointment of the new Chief Audit Executive.

Internal Audit

The Committee approves the annual work plan of Internal Audit and monitors its execution on a quarterly basis, making itself aware of work performed that was not originally planned and opines on the cancellation of originally planned work.

The Committee evaluates positively the coverage and quality of the work performed by internal audit. 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.

Insurance, pensions and capitalization companies

As required by Conselho Nacional de Seguros Privados regulations, the Committee monitored companies supervised by the Superintendência de Seguros Privados (Itaú Seguros S.A., Itaú BMG Seguradora S.A., Itaú Vida e Previdência S.A. and Cia Itaú de Capitalização), and the activities described in this Summary include the matters relevant to these companies. During the period, the Committee monitored management actions with respect to regulatory matters, including the progress of the process to adapt the policies, processes and controls of Itaú BMG Seguradora S.A. to those of the Conglomerate.

Consolidated Financial Statements

The Committee analyzed the procedures involved in the preparation of individual and consolidated financial statements, explanatory footnotes and financial reports published with the consolidated financial statements. Those matters were discussed with PricewaterhouseCoopers and with executives of the organization. The Committee also examined the relevant accounting practices used by the Itaú Unibanco Financial Conglomerate for the preparation of the financial statements, which are in accordance with the accounting practices adopted in Brazil applicable to institutions authorized to operate by the Banco Central do Brasil and the entities under the supervision of the Superintendência de Seguros Privados. The Committee also monitored the preparation and disclosure of the consolidated financial statements prepared in accordance with the international accounting standards issued by the International Accounting Standards Board (IASB).

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Recommendations

The Committee held quarterly meetings with the Chairman of the Board of Directors and with the Chief Executive Officer of Itaú Unibanco, and in those meetings, the Committee had the opportunity to present recommendations over different matters related to its activities, and also holds biannual meetings with the Board of Directors of Itaú Unibanco Holding S.A. for reporting its activities and recommendations.

Conclusion

The Committee, having duly considered its responsibilities and the natural limitations resulting from 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 December 31, 2015.

São Paulo, February 1, 2016.

The Audit Committee

Geraldo Travaglia Filho – President

Antônio Francisco de Lima Neto

Diego Fresco Gutierrez

Luiz Alberto Fiore

Maria Helena dos Santos Fernandes de Santana

Sergio Darcy da Silva Alves

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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., after having examined the financial statements for the fiscal year ended December 31, 2015 and verified the accuracy of all items examined, and in view of the unqualified opinion of PricewaterhouseCoopers Auditores Independentes, understand that these documents adequately reflect the company’s capital structure, financial position and the activities conducted during the period, and they have the conditions to be submitted to the appreciation and approval of the Stockholders.

São Paulo (SP), February 1, 2016.

IRAN SIQUEIRA LIMA

President

ALBERTO SOZIN FURUGUEM	LUIZ ALBERTO DE CASTRO FALLEIROS
Member	Member

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ITAÚ UNIBANCO HOLDING S.A.

CNPJ 60.872.504/0001-23

A Publicly Listed Company

NIRE 35300010230

SUMMARIZED MINUTES OF THE MEETING OF THE EXECUTIVE BOARD OF FEBRUARY 1, 2016

DATE, TIME AND PLACE: On February 1, 2016 at 9:00 a.m. at Praça Alfredo Egydio de Souza Aranha, 100, Torre Olavo Setubal, Piso Itaú Unibanco in the city and state of São Paulo.

CHAIR: Roberto Egydio Setubal.

QUORUM: The majority of the members.

RESOLUTIONS UNANIMOUSLY ADOPTED:

After analyzing and discussing the account statements for the fiscal year 2015, the management discussion and analysis report for the operation, as well as the report of PricewaterhouseCoopers Auditores Independentes, pursuant to the provisions in clauses V e VI, Article 25 of Instruction 480/09 of the Brazilian Securities and Exchange Commission, the Executive Board decided unanimously:

a) to declare that it has reviewed, discussed and agrees with the opinions expressed in the report issued by PricewaterhouseCoopers Auditores Independentes; and

b) to declare that it has reviewed, discussed and agrees with the account statements and with the management discussion and analysis for the operation with respect to the fiscal year ending December 31, 2015.

CONCLUSION: With the work of the meeting concluded, these minutes were drafted, read, approved and signed by all. São Paulo (SP), February 1, 2016. (signed) Roberto Egydio Setubal – Chief Executive Officer; Candido Botelho Bracher, Márcio de Andrade Schettini and Marco Ambrogio Crespi Bonomi – General Director; Claudia Politanski and Eduardo Mazzilli de Vassímon – Executive Vice Presidents; Alexsandro Broedel Lopes and Leila Cristiane Barbosa Braga de Melo – Executive Officers; Adriano Cabral Volpini, Álvaro Felipe Rizzi Rodrigues, Cláudio José Coutinho Arromatte, José Virgilio Vita Neto, Marcelo Kopel, Matias Granata, Rodrigo Luís Rosa Couto e Wagner Bettini Sanches – Officers.

MARCELO KOPEL

Investor Relations Officer

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