EX-99.1 2 tv492766_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Announcement to the Market

 

Disclosure of results for the first quarter of 2018, according to International Financial Reporting Standards – IFRS

 

We present below the differences between our financial statements in BRGAAP and in International Financial Reporting Standards – IFRS.

 

As from January 1, 2018, IFRS 9 came into effect, the accounting standard that replaces IAS 39 in the treatment of Financial Instruments. The new standard is structured to encompass the pillars of classification, measurement of financial assets and impairment and was applied retrospectively by Itaú Unibanco Holding.

 

The complete consolidated financial statements under IFRS for the first quarter of 2018 are available at our website: www.itau.com.br/investor-relations.

 

Comparison between BRGAAP1 and IFRS

 

                       R$ million 
Balance Sheet  BRGAAP   Adjustments and
Reclassifications 2		   IFRS   BRGAAP   Adjustments and
Reclassifications 2		   IFRS 
       Mar/31/2018           Dec/31/2017     
Total Assets   1,524,354    (82,947)   1,441,407    1,503,503    (67,264)   1,436,239 
Cash and Cash Equivalents, Compulsory Deposits and Financial Assets At Amortized Cost 3 4 5   1,039,613    3,222    1,042,835    1,031,742    28,310    1,060,052 
(-) Estimated Loss at Amortized Cost 5   (35,883)   (661)   (36,544)   (36,325)   (412)   (36,737)
Financial Assets at Fair Value Through Other Comprehensive Income 4   109,277    (48,911)   60,366    103,538    (51,305)   52,233 
(-) Expected Loss at Fair Value Through Other Comprehensive Income 5   (3,003)   2,920    (83)   (2,892)   2,808    (84)
Financial Assets at Fair Value Through Profit or Loss 4   317,345    (26,528)   290,817    308,570    (35,034)   273,536 
Tax Assets 7   54,950    (14,198)   40,752    59,648    (15,399)   44,249 
Investments in Associates and Jointly Controlled Entities, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets   42,055    1,209    43,264    39,224    3,766    42,990 
                               
Total Liabilities   1,393,624    (88,605)   1,305,018    1,364,565    (72,683)   1,291,883 
Financial Assets at Amortized Cost 3 6   1,100,081    (78,219)   1,021,862    1,088,090    (63,506)   1,024,584 
Financial Assets at Fair Value Through Profit or Loss 4   34,815    959    35,774    26,930    281    27,211 
Expected Loss (Loan Commitments and Financial Guarantees) 5   1,863    2,971    4,834    1,950    2,972    4,922 
Provision for Insurance and Pension Plan   185,492    800    186,292    180,445    787    181,232 
Provisions   19,524    -    19,524    19,736    -    19,736 
Tax Liabilities 7   17,016    (11,554)   5,462    20,440    (12,604)   7,836 
Other Liabilities   34,833    (3,563)   31,270    26,974    (612)   26,362 
Total Stockholders' Equity   130,730    5,659    136,389    138,938    5,418    144,356 
Non-controlling Interests   12,219    1,139    13,358    12,014    964    12,978 
Total Controlling Stockholders' Equity 8   118,511    4,520    123,031    126,924    4,454    131,378 

 

1BRGAAP represents accounting practices in force in Brazil for financial institutions, according to regulation of the Central Bank of Brazil;
2Resulted from reclassification of assets and liabilities and other effects from the adoption of IFRS;
3Resulted from the elimination of transactions between parent company and exclusive funds (particularly PGBL and VGBL funds), which are consolidated under IFRS;
4Refer to reclassification of financial assets between measurement categories at fair value and amortized cost;
5Application of criterion for calculation of Expected Loss as set forth by IFRS;
6Difference in accounting, particularly from Foreign Exchange Portfolio, which are now be presented as net effect between Assets and Liabilities;
7Difference in accounting, particularly differed taxes, which are now accounted for as net effect between Assets and Liabilities in each one of the consolidated companies;
8Reconciliation of Controlling Stockholders' Equity is presented in the following table.

 

Itaú Unibanco Holding S.A.

 

 

 

 

Below is the reconciliation of Results to Stockholders’ Equity, with the conceptual description of major adjustments.

 

Reconciliation

 

       R$ million 
   Stockholders'
Equity *		   Result * 
   Mar/31/2018   1st Q/18   1st Q/17 
BRGAAP - Values Attributable to Controlling Stockholders   118,511    6,280    6,052 
(a) Expected Loss - Loan and Lease Operations and Other Financial Assets   (48)   91    (350)
(b) Adjustment to Fair Value of Financial Assets   (367)   (75)   163 
(c) Acquisition of Interest in Porto Seguro Itaú Unibanco Participações S.A.   448    (2)   (2)
(d) Criteria for Write-Off of Financial Assets   2,291    45    77 
(e) Financial Lease Operations   473    (40)   (24)
(f) Other adjustments   1,723    90    147 
IFRS - Values Attributable to Controlling Stockholders   123,031    6,389    6,063 
IFRS - Values Attributable to Minority Stockholders   13,358    168    (57)
IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders   136,389    6,557    6,006 

 

* Events net of tax effects 

 

Differences between IFRS and BRGAAP Financial Statements

 

(a) In the adoption of IFRS 9, there was a change in the calculation model of incurred loss (IAS 39) to expected loss, considering forward-looking information. On BRGAAP, the concept of Expected Loss is used, pursuant to BACEN Resolution No. 2,682/99.9

(b) Under IFRS, stocks and quotas classified as permanent investments were measured at fair value and its gains and losses were recorded directly in Result. Additionally, there was a change in the model of classification and measurement of financial assets due to the new categories introduced by IFRS 9.

(c) Under IFRS, the effect of accounting at fair value of the acquisition of interest in Porto Seguro Itaú Unibanco Participações S.A. was recognized.

(d) Criterion for write-off of financial assets on IFRS considers the recovery behavior.

(e) Under IFRS (IAS 17) the financial lease operations are recorded as Fixed Assets, as a contra-entry of Other Financial Liabilities. Under BRGAAP, as from September 30, 2015, the consideration of these transactions are now recorded in result, in accordance with CMN Resolution No. 3,617/08.

(f) Other Adjustments is mainly composed of reversal of Amortizations of Goodwill under BRGAAP. 

 

9More details in the Complete Financial Statements for the first quarter of 2,018.

 

For comparison purposes, we present on the table below the Result and Recurring Result in IFRS and BRGAAP.

 

       R$ million 
Recurring Result  1st Q/18   1st Q/17 
   BRGAAP   IFRS   Variation   BRGAAP   IFRS   Variation 
Result - Attributale to Controlling Stockholders   6,280    6,389    109    6,052    6,063    11 
Exclusion of the Non-Recurring Events   139    (7)   (146)   123    (11)   (134)
Goodwill Amortization   146    -    (146)   125    -    (125)
Civil Lawsuits - Economic Plans   (97)   (97)   -    18    18    - 
Impairment   92    92    -    -    -    - 
Others   (2)   (2)   -    (20)   (29)   (10)
Recurring Result - Attributable to Controlling Stockholders   6,419    6,383    (37)   6,176    6,052    (124)

 

The tables in this report show the figures in million. Variations and summations, however, were calculated in units.

 

São Paulo, May 1, 2018.

 

Alexsandro Broedel

Group Executive Finance Director and Investor Relations Officer

 

Itaú Unibanco Holding S.A.