Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — Investor Presentation (August 2017)
104 slides from Itau Unibanco's investor presentation, Aug 2, 2017
Slide 1: 2Q17 Institutional Information
2Q17 Institutional Information
Slide 2: Forward-looking statements
2Q17 This presentation contains forward-looking statements regarding Itaú Unibanco Holding, its subsidiaries and affiliates - anticipated synergies, growth plans, projected results and future strategies. Although these forward-looking statements reflect management’s good faith beliefs, they involve
Slide 3: Pro Forma Information
Pro Forma Information The merger between Itaú Chile and CorpBanca was concluded on April, 1(st)2016. As from the second quarter of 2016, Itaú CorpBanca, the company resulting from this merger, was consolidated in our financial statements, as we are the controlling shareholder of the new bank. In ord
Slide 4: Agenda
Agenda 1. Our Profile 2. Corporate Governance 3. Business Overview 4. Financial Highlights 5. Information Technology 6. Itaú Unibanco in Capital Markets 7. Sustainability As of July 31, 2017
Slide 5: Our Profile
1 Our Profile
Slide 6: Itaú Unibanco at a Glance
Itaú Unibanco at a Glance Leading position in Brazil through key competitive strengths Financial Highlights and Ratios As of and for the quarter ended June 2017 US$ 72.3 billion market cap (1) Highlights 95,065 employees in Brazil and abroad Total Assets BRL 1,448.3 Bln 4,955 branches and CSBs in Br
Slide 7: Our Vision
Our Vision Vision: To be the leading bank in sustainable performance and customer satisfaction • Implement a customer satisfaction-oriented culture, that is business-driven, through a simplified operational structure • Maximize shareholder returns, aiming at firm-wide growth • We aspire to be the pr
Slide 8: Our Way
Our Way 1. It’s only good for us if it’s good for the client We are people providing service to people, with passion and excellence. We work with the client and for the client – because they are the main reason behind why we do what we do. 2. We’re passionate about performance Generating sustainable
Slide 9: Main Challenges
Main Challenges Seeking excellence and value creation for all our stakeholders, we perceive as our main challenges: Focus on Clients Risk Management We must further increase the focus on clients, aligned with We must commit ourselves to fully comply with the Risk international best practices not lim
Slide 10: Itaú Unibanco Global Footprint
Itaú Unibanco Global Footprint Itaú Unibanco has an important presence in key financial centers supported by a unique recognition and reputation We want to be recognized as: The bank expert in Latin America CIB London, Lisbon, Madrid, Paris, Frankfurt Institutional Clients / Asset London Private Ban
Slide 11: A History of Successful Strategic Deals
A History of Successful Strategic Deals (1) Uruguay 2 Retail – Brazil Acquisition of the Acquisition of the Casa remaining 50% of: minority interest of: Banco Itaú BMG Moreira Consignado Salles Merger 2008 Acquisition of the minority interest of: Unibanco 2 1924 1944 1995 - 1998 2000 - 2003 2004 - 2
Slide 12: Corporate Governance
2 Corporate Governance
Slide 13: Corporate Governance at Itaú Unibanco
Corporate Governance at Itaú Unibanco Strengths of our structure Family ownership ensuring long-term view Professional management team Broad shareholder base Família Moreira Salles Cia. E. Johnston de (Free float of 53.1% with strong foreign investor presence) Participações Strong corporate governan
Slide 14: IUPAR and Itaú Unibanco Governance
IUPAR (Itaú Unibanco Participações) and Itaú Unibanco Governance Alignment and union among shareholders; Group´s vision, mission and values; Family control IUPAR Família (Itaú Unibanco Significant mergers & acquisitions; with a strategic Moreira Salles Participações) Nominations to the Board of Dire
Slide 15: Board of Directors and Executive Committees
Itaú Unibanco Board of Directors and Executive Committees Co-Chairman Co- Chairman Pedro Moreira Salles Roberto Egydio Setubal of Directors Directors Alfredo Egydio Setubal Gustavo Jorge Laboissière Loyola 3 Marco Bonomi Board Amos Genish 3 João Moreira Salles Pedro Luiz Bodin de Moraes 3 Fábio Coll
Slide 16: Risk Management Structure
Risk Management Structure Capital and Risk Board of Directors Pedro Moreira Salles Audit Committee Management Committee Roberto Setubal Geraldo Travaglia Pedro Bodin 3rd line of defense Internal Audit Independent review of the Paulo Miron activities developed by the institution. Itaú Unibanco Holdin
Slide 17: Governance Structure at Itaú Unibanco
Governance Structure at Itaú Unibanco Shareholder’s Meeting Fiscal Council Board of Directors Audit Personnel Related Nomination Risk and Capital Strategy Compensation International Committee Committee Parties and Corporate Management Committee Committee Advisory Committee Governance Committee Board
Slide 18: Credit Risk Policies Hierarchy
Credit Risk Policies Hierarchy Defines and monitors Risk Appetite; Board of Directors and Capital and Risk Management Committee Approval of policies, strategies and definition of minimum expected return on capital; Improvement of Risk Culture. Defines a Global Policy; Approves policies having the mo
Slide 19: Risk Appetite Defined by the Board of Directors
Risk Appetite Defined by the Board of Directors Principles Principles Dimensions Sustainability and customer Optimization of capital Reputation; satisfaction; allocation; Liquidity; Risk pricing; Low volatility in results; Capitalization; Operational excellence; Regional focus; Operational Risk; Div
Slide 20: Risk Appetite (as approved by the Board of Directors)
Risk Appetite (as approved by the Board of Directors) The Risk Appetite... establishes the types and levels of risk acceptable to the bank, within which management seeks to maximize value creation. It is based on Guided by the and monitored by 43 metrics inserted Board of Directors Principles of Ris
Slide 21: Retail Management – Individuals and Small and Medium Companies
Retail Management – Individuals and Small and Medium Companies STATISTICAL MODELS Lowest risk Risk Level Highest Risk 100 100 102 98 114 94 123 89 128 88 148 88 153 88 100 100 104 101 102 95 101 89 106 90 112 99 124 94 115 91 115 91 116 92 130 93 148 88 157 81 167 79 v POLICY Variables that distingu
Slide 22: Credit Offer Based on Future Scenario
Credit Offer Based on Future Scenario STATISTICAL MODELS Lowest Highest Risk Level risk risk Base Credit Available Scenario POLICY Credit Not Available Highest risk Positive future expectation Negative future expectation Risk Level Risk Level Credit Available Credit Available Credit Not Available Cr
Slide 23: Business Overview
3 Business Overview
Slide 24: Universal Bank
Universal Bank 3 • Approximately 28.7 million credit card accounts and 25.7 • 4,396 branches and client service branches and million debit card accounts; 45,353 ATMs in Brazil; • Leader in Brazilian credit card market, extensive number • Premier banking brand in Brazil; of joint ventures and partner
Slide 25: Client Segmentation
Client Segmentation Individuals Segmentation Companies Segmentation by monthly income by annual sales Ultra Private Bank over R$ 4 Billion or >750 Million debt* >R$5 Million in total investment Large >R$ 400 Million up to R$ 4 Billion or >200 Million debt* Corporate >R$ 200 Million up to R$ 400 Mill
Slide 26: Retail in Brazil
Retail in Brazil Presence in Brazil 3 (As of June 30, 2017) Automated Teller Machines (ATMs) 3 44,352 44,293 44,631 44,947 45,182 45,353 43,631 43,749 44,037 69 26 21 15 563 372 209 110 75 715 686 668 648 635 626 767 765 694 17,539 17,912 18,550 18,504 18,935 19,456 19,868 20,516 20,809 North 118 No
Slide 27: Retail - Credit Cards, Joint Ventures and Partnerships
Retail - Credit Cards, Joint Ventures and Partnerships with Retailers in Brazil Highlights Highlights JVs and Partnerships • Brazilian market leader in credit card transactions • Focus on credit card instruments • Qualification of the client base: proprietary channel x partnerships • Long term agree
Slide 28: Retail - Cards in Brazil | Growing Penetration
Retail - Cards in Brazil | Growing Penetration in Household Consumption Expenditure Credit and Debit Cards Billed Volume % at Household Consumption Expenditure 29.9% 30.3% 28.1% 28.2% 28.3% 28.8% 28.4% 27.8% 28.0% 11.6% 11.9% 10.1% 10.1% 10.6% 11.0% 10.9% 10.7% 11.1% 17.7% 18.0% 17.6% 18.3% 17.4% 17
Slide 29: Merchant Acquiring - REDE
Merchant Acquiring - REDE Credit Card Transaction Volume Debit Card Transaction Volume R$ million R$ million 67,110 68,259 37,358 37,548 61,795 61,866 59,982 61,328 62,370 60,938 61,937 31,710 32,055 32,916 32,070 32,851 32,867 32,014 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q15 3Q15 4Q15 1Q16
Slide 30: Retail - Payroll Loan in Brazil
Retail - Payroll Loan in Brazil Evolution of Payroll Loan Portfolio Composition of Payroll Loans Portfolio R$ billion 45.5 45.7 45.4 46.7 46.5 45.6 44.6 44.9 44.8 5.3 5.3 5.0 4.8 4.7 4.6 10% 4.4 4.3 4.3 11.0 10.4 9.8 9.2 8.8 8.2 12.5 12.0 11.6 18% 30.9 31.4 31.2 31.0 31.7 32.2 27.7 28.4 28.8 72% Jun
Slide 31: Retail - Mortgage Market in Brazil
R etail - Mortgage Market in Brazil Mortgage Loans Evolution Distribution Channels for Individuals Balance R$ million As of June 2017 1.5% 47,092 48,488 47,797 Partnerships 23.0% 20.9% 20.0% 7% Regular Branches 14% 77.0% 79.1% 80.0% Developers 20% Real Estate Brokers 28% Jun-16 Mar-17 Jun-17 Individ
Slide 32: Retail - Vehicle Financing in Brazil
Retail - Vehicle Financing in Brazil Highlights: Individuals Portfolio Individuals and Corporate • Offers finance through over 12 thousand dealers. R$ milhões Loans Granted R$ milhões • Average ticket size of approximately R$ 28.6 thousand. -16% • 81% of the financing is guaranteed up to 4 years. •
Slide 33: Retail - Insurance Ranking in Brazil
Retail - Insurance Ranking in Brazil (1,2) jan-may/17 jan-may/16 Model Total Insurance 3 4 th 4 th Bancassurance 3 rd 3 rd Life & Personal Accidents 3 rd 3 rd Bancassurance Credit Insurance 5 th 5 th Bancassurance Pension Plan 3 rd 3 rd Bancassurance Premium Bonds 2 nd 2 nd Bancassurance Porto Segur
Slide 34: Retail - Association with Porto Seguro
Retail - Association with Porto Seguro Association’s Structure Highlights • Unification of residential and automobile insurance Controlling stockholders of Itaú Unibanco Porto Seguro operations; 57.07% 42.93% • Exclusive offer and distribution of residential and automobile insurance products to Itaú
Slide 35: Very Small, Small and Middle Market in Brazil
Very Small, Small and Middle Market in Brazil SMEs Loan Portfolio 3 R$ million 79,649 75,433 72,002 68,974 61,547 59,957 59,778 2012 2013 2014 2015 2016 1Q17 2Q17 Highlights Full range of financial products and services, including deposits accounts, investment options, insurance, cash management, cr
Slide 36: Wholesale - Corporate and Investment Banking
Wholesale - Corporate and Investment Banking | Leadership Position in Brazil Wholesale Banking Ranking Corporate Banking Jun-17 2016 2015 Annual revenues up to R$ 30 MM M&A¹ 1st 1st 1st Investment Banking Local DCM² 1st 2nd 2nd Leadership position and client International DCM(3) 7th 10th 4th recogni
Slide 37: Wholesale - Wealth Management Services
Wholesale - Wealth Management Services | Brazil Evolution of Assets Under Administration R$ billion 981 951 888 890 822 794 733 749 695 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Private Banking with a full global wealth management platform, BEST FUND MANAGER leadership position
Slide 38: Retail Footprint in Latin America
Retail Footprint in Latin America | June 2017 Mexico | CIB Employees: 9 Panama Colombia3 Employees: 3,622 Branches: 176 ATMs: 176 Brazil Employees: 81,252 Peru Representative Branches + CSBs: 4,413 Office ATMs: 45,353 Paraguay Chile Employees: 5,966 Employees: 802 Branches + CSBs: 215 Branches + CSB
Slide 39: Segments – Income Statement Pro Forma 2Q17
Segments – Income Statement Pro Forma 2Q17 Wholesale Activities with the Retail Banking Itaú Unibanco In R$ millions Banking Market + Corporation Operating revenues 17,217 7,309 2,679 27,205 Managerial Financial Margin 9,684 5,065 2,636 17,385 Financial Margin with Clients 9,684 5,065 1,014 15,762 F
Slide 40: Financial Highlights
4 Financial Highlights
Slide 41: Highlights
Highlights Recurring Net Income 2Q17/1Q17 1H17/1H16 Consolidated R$6.2 bn - 0.1% (2Q17/1Q17) Financial Margin with Clients: + 1.4% - 2.0% R$12.3 bn +15.0% (1H17/1H16) Brazil R$5.9 bn - 1.2% (2Q17/1Q17) Financial Margin with the Market: - 13.1% + 7.2% R$11.9 bn + 16.6% (1H17/1H16) Cost of Credit: - 1
Slide 42: Recurring ROE
Recurring ROE Consolidated ROE / ROA 24.8% 24.1% 22.1% 19.6% 22.0% 21.5% 20.6% 19.9% 20.7% 1.8% 1.8% 1.6% 1.4% 1.6% 1.6% 1.6% 1.7% 1.7% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Annualized Recurring Return on Average Equity (quarterly) Annualized Recurring Return on Average Assets (quarterly) Bra
Slide 43: Non-Recurring Events
Non-Recurring Events In R$ millions 2Q17 1Q17 2Q16 1H17 1H16 Recurring Net Income 6,169 6,176 5,575 12,345 10,737 Non-Recurring Events (155) (123) (57) (278) (108) Impairment (a) (7) - (9) (7) (9) Goodwill Amortization (b) (123) (125) (156) (248) (188) Contingencies Provision (c ) (22) (18) (31) (40
Slide 44: Income Statement | Operating Revenues Perspective
Income Statement | Operating Revenues Perspective In R$ millions 2Q17 1Q17 change 2Q16 change 1H17 1H16 change Operating Revenues 27,205 27,266 -0.2% 27,448 -0.9% 54,471 54,569 -0.2% Managerial Financial Margin 17,385 17,415 -0.2% 17,558 -1.0% 34,800 35,207 -1.2% Financial Margin with Clients 15,762
Slide 45: Income Statement | Managerial Financial Margin Perspective
Income Statement | Managerial Financial Margin Perspective In R$ millions 2Q17 1Q17 change 2Q16 change 1H17 1H16 change Managerial Financial Margin 17,385 17,415 -0.2% 17,558 -1.0% 34,800 35,207 -1.2% Financial Margin with Clients 15,762 15,547 1.4% 16,038 -1.7% 31,309 31,950 -2.0% Financial Margin
Slide 46: Results – Brazil and Latin America
Results – Brazil and Latin America 1H17 1H16 change Latin Latin Latin Consolidated Brazil (1) America Consolidated Brazil (1) America Consolidated Brazil (1) America In R$ billions (ex-Brazil)(2) (ex-Brazil)(2) (ex-Brazil)(2) Operating Revenues 54.5 50.1 4.4 54.6 49.6 4.9 -0.2% 0.8% -10.2% Manageria
Slide 47: Business Model
Business Model 1H17 1H16 change Insurance Excess Insurance Excess Insurance Excess Consolidated Credit Trading Consolidated Credit Trading Consolidated Credit Trading In R$ billions and Services Capital and Services Capital and Services Capital Operating Revenues 54.5 28.3 1.0 23.7 1.4 54.6 30.2 1.2
Slide 48: Credit Portfolio with Endorsements, Sureties and Private Securities
Credit Portfolio with Endorsements, Sureties and Private Securities In R$ billions, end of period 2Q17 1Q17 change 2Q16 change Individuals 179.4 180.5 -0.6% 182.6 -1.8% Credit Card Loans 56.4 56.2 0.3% 54.5 3.5% Personal Loans 25.9 26.3 -1.6% 28.7 -9.9% Payroll Loans 44.8 44.9 -0.1% 46.5 -3.7% Vehic
Slide 49: Credit Portfolio by Product
Credit Portfolio by Product In R$ millions, end of period 2Q17 1Q17 change 2Q16 change Individuals - Brazil ( 1 ) 179,061 180,154 -0.6% 182,459 -1.9% Credit Card 56,376 56,215 0.3% 54,455 3.5% Personal Loans 25,387 25,798 -1.6% 28,240 -10.1% Payroll Loans (2) 44,785 44,850 -0.1% 46,489 -3.7% Vehicle
Slide 50: Credit Portfolio Growth in Brazil
Credit Portfolio Growth in Brazil 3 (in R$ Billions) Nominal GDP (May-13 a May-17): 27.2% Accumulated Inflation (IPCA) (Jun-13 a Jun-17): 30.4% Accumulated Interbank Rate: (Jun-13 a Jun-17): 59.8% Credit Card Loans Personal Loans Payroll Loans Vehicle Loans Considers the acquisition of the “Credicar
Slide 51: Credit Portfolio Breakdown
Credit Portfolio Breakdown Companies Credit Portfolio by Business Sector 3 R$ million Credit Concentration 3 In R$ millions, end of period 2Q17 1Q17 change Loan, lease, other credit operations Loan, lease and other and securities of companies and Public Sector 3,435 4,451 (1,016) -22.8% credit opera
Slide 52: Credit Portfolio Analysis
Credit Portfolio Analysis Profile of credit portfolio by origination period: R$ million Older vintages with higher spreads are losing relevance compared to the most recent ones. 52.6% of total origination was created in the past 12 months. 497,959 478,095 479,875 6.4% 5.6% 5.4% 4.3% 3.1% 2.7% 6.3% 5
Slide 53: Evolution of the Credit Portfolio Mix
Evolution of the Credit Portfolio Mix Corporate and Individuals3 | Brazil Individuals 12.1% 13.4% 17.4% 21.8% 24.4% 24.3% 25.5% 24.4% 25.0% 13.6% 14.4% 15.3% 15.6% 17.0% 18.5% 17.5% 16.0% 19.9% 20.8% 21.4% 16.4% 15.1% 15.8% 15.2% 15.5% 14.1% 14.2% 27.2% 32.2% 31.1% 32.0% 30.1% 31.3% 29.9% 32.3% 31.5
Slide 54: Managerial Financial Margin With Clients
Managerial Financial Margin With Clients3 2Q17 1Q17 Average Financial Average Rate Average Financial Average Rate In R$ millions, end of period Balance Margin (p.a.) Balance Margin (p.a.) Spread-Sensitive Operations 542,107 13,613 10.4% 552,535 13,486 10.3% Working Capital and Other 91,017 2,149 9.8
Slide 55: Financial Margin with Clients | Annualized Average Rate
Financial Margin with Clients | Annualized Average Rate 14.0% 14.1% 14.1% 14.1% 14.1% 13.8% 13.1% 12.7% 11.6% 11.1% 11.1% 10.9% 10.9% 11.0% 10.8% 10.3% 10.1% 10.3% 10.5% 10.3% 7.4% 7.4% 7.5% 6.7% 6.1% 7.3% 6.8% 6.6% 6.7% 6.1% 5.4% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Annualized average rate
Slide 56: Loan Portfolio Mix Change
Loan Portfolio Mix Change 3 (%) Itaú Unibanco’s share in Latin America businesses Consolidated Jun-17 23.9 11.9 2.9 11.7 5.3 8.0 9.3 26.9 12.9 Jun-17 32.7 16.3 4.0 16.1 7.2 10.9 12.8 Brazil (2) Jun-16 34.0 16.3 4.6 14.9 7.7 9.9 12.7 Jun-15 36.7 16.8 5.9 14.0 7.4 7.9 11.3 Jun-14 35.2 18.7 9.1 14.4 7.
Slide 57: Financial Margin with the Market
Financial Margin with the Market R$ billion 1.7 1.7 1.8 1.8 1.7 1.7 1.7 1.6 1.4 2.3 2.0 1.9 1.7 1.7 1.6 1.6 1.5 2.1 1.3 1.7 1.4 1.6 1.8 1.2 1.2 1.5 1.3 0.2 0.2 0.3 0.3 0.2 0.2 0.3 0.1 0.1 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Financial Margin with the Market - Brazil 3 Financial Margin with t
Slide 58: Provision for Loan Losses and Cost of Credit
Provision for Loan Losses and Cost of Credit Provision for Loan Losses by Segment 5.8% R$ million 5.0% 5.0% 4.7% 4.3% 4.3% 4.4% 4.6% 7,824 4.5% 4.0% 4.0% 4.1% 3.8% 3.9% 6,366 772 5,997 6,337 6,169 5,714 5,768 383 5,823 5,392 399 2,728 396 412 4,948 4,630 4,865 4,828 358 392 1,362 757 4,400 1,295 1,5
Slide 59: Allowance for Loan Losses by Risk – Consolidated
Allowance for Loan Losses by Risk– Consolidated R$ billion Allocation of Total Allowance(*)by Type of Risk - Consolidated Regulatory Breakdown 38.5 37.6 37.4 37.4 Complementary Expected and/or Retail - Brazil3 6.1 Allowance Potential Loss Related to expected 8.8 10.7 Wholesale - Brazil3 9.1 16.4 los
Slide 60: Non Performing Loans Index
Non Performing Loans Index 90-day NPL Ratio| Consolidated (%) 15 to 90-day NPL Ratio - Consolidated - % 5.2 4.6 4.5 4.0 4.2 4.2 3.9 3.9 3.8 3.7 3.6 3.6 3.6 3.3 4.4 3.4 3.2 2.9 3.2 3.1 2.6 3.9 3.6 2.9 2.8 2.8 3.6 3.4 3.4 3.4 2.6 2.5 3.3 3.2 3.2 3.2 3.1 2.9 3.0 3.0 2.7 3.0 2.5 2.7 2.7 2.6 2.3 1.1 1.2
Slide 61: NPL Ratio Evolution – Individuals (Brazil)
NPL Ratio Evolution – Individuals (Brazil) NPL Ratio (Over 90 days) - % 7.7 7.3 6.8 Mix jun-12 6.1 5.8 5.9 6.1 5.6 5.6 5.2 4.9 4.9 Itaú Unibanco Holding S.A. page 61
Slide 62: NPL Creation
NPL Creation R$ billion 6.8* 6.3 6.0 5.7 5.5 5.3 5.3 5.0 4.9 4.5 4.4 4.3 4.3 4.2 3.9 4.1 3.6 3.8 3.8 3.5 2.3* 1.4 1.3 1.5 1.0 1.0 1.1 1.0 0.8 0.4 0.6 0.8 0.4 0.3 0.4 0.5 0.2 0.3 0.2 0.1 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Total Retail Banking - Brazil Wholesale Banking - Brazil Latin A
Slide 63: Loan Loss Provision and NPL Creation by Segment
L oan Loss Provision and NPL Creation by Segment Retail Banking - Brazil R$ billion 97% 100% 102% 102% 105% 97% 105% 102% 98% 3.7 3.9 4.3 4.3 4.6 4.5 4.3 4.3 4.4 4.2 3.9 4.1 4.0 3.8 3.5 3.5 3.7 3.8 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Wholesale Banking - Brazil R$ billion 120% 98% 136% 186%
Slide 64: Coverage Ratio
Coverage Ratio Total 90-day Coverage Ratio 715% 494% 562% 553% 402% 462% 458% 245% 345%* 256% 232% 231% 231% 243% 216% 215% 215% 243% 208% 228% 231% 188% 204% * 222% 231% 187% 221% 181% 212% 210% 213% 206% 209% 202% 172% 185% 169% 172% 164% 162% 165% 166% 160% 159% 159% Jun-15 Sep-15 Dec-15 Mar-16 J
Slide 65: Coverage Ratio (90-day NPL)
Coverage Ratio (90-day NPL) Coverage Ratio and Expanded Coverage Ratio Coverage Ratio 715% 553% 494% 243% 231% 222% 245% 212% 210% 215% 206% 204% 232% 231% 187% Without CorpBanca With CorpBanca 159% 165% 166% 100% 102% 104% 104% 104% 104% 101% 97% 90% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
Slide 66: Loan Portfolio Evolution by Risk Level
Loan Portfolio Evolution by Risk Level Brazil 3 Total Total Allowance (R$ million) 35,185 33,853 33,469 38,470 37,640 37,417 Loan Portfolio by Risk Level 44.9% 43.5% 43.7% 45.7% 43.1% 42.7% 33.8% 35.9% 35.6% 31.1% 33.4% 33.8% 5.0% 5.0% 5.3% 9.5% 9.5% 9.7% 4.9% 4.0% 4.0% 4.5% 4.2% 4.3% 11.4% 11.6% 11
Slide 67: Renegotiated Loan Operations
Renegotiated Loan Operations Total Renegotiated Portfolio | Breakdown by Days Overdue3 (Data previous to June/16 do not include CorpBanca) R$ billion Brazil (2) Days overdue: 22.7 23.8 22.9 23.1 24.6 measured at the moment of renegotiation 23.0 22.7 24.1 25.3 24.3 24.7 26.4 21.9 1.5 1.8 Latin Americ
Slide 68: Credit Quality | Individuals
Credit Quality | Individuals Credit Cards Portfolio Loan-to-Value in Jun-17 Vehicles and Mortgage | Vintages 10.9% 55% 55% 56% 55% 56% 55% 7.5% 22.9% 8.8% 81.6% 68.3% Itaú Unibanco Brazilian Financial System excluding Itaú Unibanco Jun-16 Mar-17 Jun-17 Revolving Credit + Overdue Loans ¹ Installment
Slide 69: Banking Fee Revenues and Result from Insurance
Banking Fee Revenues and Result from Insurance, Pension Plans and Premium Bonds In R$ millions 2Q17 1Q17 change 2Q16 change 1H17 1H16 change Asset Management ¹ 807 776 31 4.0% 695 111 16.0% 3,007 2,667 340 12.8% Current Account Services 1,665 1,589 76 4.8% 1,553 112 7.2% 6,395 5,612 783 14.0% Credit
Slide 70: Insurance Operations
Insurance Operations Earned Premiums Breakdown | Retained Claims Breakdown | Insurance Core Activities R$ million Insurance Core Activities R$ million 1,068 1,093 1,040 1,039 991 1,002 1,002 978 931 277 316 296 293 264 289 285 254 185 13.1% 13.4% 14.4% 15.9% 15.3% 15.4% 15.2% 16.1% 17.3% 14.9% 18.8%
Slide 71: Pension Plan Segment
Pension Plan Segment Focus on Client Experience Recurring Income R$ million 7 Reasons to Invest 225.5 217.9 217.3 211.5 Plan your retirement 205.1 1 198.0 190.9 189.6 161.4 2 Pay your future health expenses 3 Invest in your kids’ education 4 Plan your taxes expenses 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q1
Slide 72: Non-interest Expenses
Non-interest Expenses In R$ millions 2Q17 1Q17 change 1Q16 change 1H17 1H16 change Personnel expenses (4,989) (4,781) (208) 4.4% (4,609) (380) 8.3% (9,769) (8,967) (802) 8.9% Administrative Expenses (3,969) (3,787) (181) 4.8% (3,993) 25 -0.6% (7,756) (7,687) (69) 0.9% Personnel and Administrative Ex
Slide 73: Efficiency Ratio and Risk-Adjusted Efficiency Ratio
Efficiency Ratio and Risk-Adjusted Efficiency Ratio 63.7 65.9 67.7 69.3 70.1 68.2 66.6 44.0 44.1 44.6 45.6 45.3 45.3 45.5 72.4 69.6 68.6 65.5 69.8 64.5 63.4 45.8 48.0 44.8 43.6 44.9 43.6 45.7 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Quarterly Efficiency Ratio (%) Quarterly Risk-Adjusted Efficiency Ratio (
Slide 74: Balance Sheet – Assets and Liabilities
Balance Sheet – Assets and Liabilities R$ million Assets 2Q17 1Q17 change 2Q16 change Current and Long-term Assets 1,422,005 1,386,959 2.5% 1,369,570 3.8% Cash and Cash Equivalents 22,700 20,224 12.2% 21,852 3.9% Short-term Interbank Investments 288,333 274,435 5.1% 270,899 6.4% Securities and Deriv
Slide 75: Total Assets | Evolution and Breakdown
Total Assets | Evolution and Breakdown 1,475.2 1,448.3 1,427.1 R$ billion 444.3 30.7% Loans 3 404.0 27.9% Cash, Cash Equivalents and Short-term Interbank Deposits 389.6 26.9% Securities 184.1 12.7% Other 26.3 1.8% Permanent 2015 2016 2Q17 Securities Breakdown Loans Breakdown 3 2.6% Corporate Latin A
Slide 76: Total Liabilities | Evolution and Breakdown
Total Liabilities | Evolution and Breakdown R$ billion 1,475.2 1,448.3 1,427.1 508.5 35.1% Deposits + Debentures 20.1% Deposits Received under Securities, Repurchase Agreements and Fund from Acceptances and Issue of Securities 3 291.0 14.3% Others 3 207.1 11.7% Technical Provisions for Insurance, Pe
Slide 77: Funding
Funding • Loan Portfolio mainly funded by domestic client funding • Diversified funding base In R$ millions, end of period 2Q17 1Q17 change Demand Deposits 63,989 61,108 4.7% Savings Deposits 109,517 107,046 2.3% Time Deposits 176,133 152,354 15.6% Debentures (Linked to Repurchase Agreements and Thi
Slide 78: Funding from Clients
Funding Funding from Clients 3 In R$ millions Without CorpBanca With CorpBanca Demand and savings Deposits 1,697 1,745 1,629 1,645 1,550 1,412 1,456 1,469 1,341 1,130 1,168 Time Deposits + Debentures + 1,052 1,060 Funds From Bills 945 979 876 897 831 Assets Under Administration + Technical Provision
Slide 79: Capital Ratios (BIS) | Prudential Conglomerate
Capital Ratios (BIS) | Prudential Conglomerate 3 2Q17 1Q17 2Q16 In R$ millions, end of period Stockholder´s equity of the parent company 118,379 114,897 110,587 Consolidated stockholder´s equity (BACEN) 132,275 128,774 126,874 Deductions from core capital (18,459) (18,320) (15,410) Core capital 113,
Slide 80: Core Capital Ratio (Common Equity Tier I)
Core Capital Ratio (Common Equity Tier I) Changes in the Core Capital Ratio 15.4% 0.8% -0.2% -0.1% -0.2% 0.1% -0.1% 15.7% Common Equity 2Q17 Net Income Dividends and Other changes in Tax Credits Credit Risk-weighted Market Risk-weighted Common Equity Tier I Mar-17 interest on capital stockholders’ e
Slide 81: Basel III – Brazilian Phase-in Requirements
Basel III – Brazilian Phase-in Requirements3 2013 2014 2015 2016 2017 (5) 2018 (5) 2019 (5) Common Equity Capital Ratio 4.50% 4.50% 4.50% 5.13% 6.00% to 7.25% 6.88% to 8.75% 8.00% to 10.50% (Minimum + Additional) Tier I Capital Ratio 5.50% 5.50% 6.00% 6.63% 7.50% to 8.75% 8.38% to 10.25% 9.50% to 12
Slide 82: Ratings
Ratings FitchRatings International National Viability Support Local Currency Foreign Currency Long Term Short Term Long Term Short Term Long Term Short Term bb+ 3 BB+ B BB+ B AAA (bra) F1+ (bra) Moody’s International National Subordinated Debt Senior Unsecured Debt Issuer Issuer Foreign Currency For
Slide 83: Net Payout Ratio
Net Payout Ratio (1,2) • Historical net payout ratio range: between 30% to 35% • Average net payout ratio since the merger(3)between Itaú and Unibanco: 31% • For 2016, net payout(1,2)was R$10 billion, which represented 45% of recurring net income New Net Payout Ratio between 35% and 45% Net payout r
Slide 84: 2017 Forecast
2017 Forecast We kept unchanged the ranges of our 2017 forecast. As of 2Q17, Discounts Granted started to be disclosed in Cost of Credit, composed of Result from Loan Losses, Impairment and Discounts Granted. Therefore, we present this new version of our forecast considering the effects of the recla
Slide 85: Information Technology
5 Information Technology
Slide 86: Digital Strategy Highlights
Digital Strategy Highlights Recent Developments 2017 Individuals and Companies Account Holders • + 400k clients; most downloaded Google App Light Play app in May-17 Internet 2Q17 77% • Light (~5MB), low data consumption • Intuitive and easy browsing and mobile +400 bps • No password needed when maki
Slide 87: Information Technology: Total Number of Transactions
Information Technology Total Number of Transactions 74% 73% 76% 77% 70% 67% 62% 60% 58% 57% 53% 47% 42% 43% 40% 38% 30% 33% 26% 27% 24% 23% 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17 2Q17 Standard Channels¹ Electronic Remote Channels² Share of Transactions per Channel 53% 55% 49% 50% 49% 43%
Slide 88: Relationship managers are becoming more digital
Experience_ our relationship managers are becoming more digital • Extended hours (7-24h) #individuals: digital branches • Phone, e-mail, text, chat #companies: digital relationship managers • Videoconference FAs Itaú Unibanco Holding S.A. page 88
Slide 89: Evolution of Customers in Remote Channels
Evolution of Customers in Remote Channels theclientchanges 2Q17 vs. 2Q16 11% 2Q17 vs. 2Q16 9.1 10.6 11.7 12.8 6.3 7.7 8.4 10% 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q17 vs. 2Q16 7.6 10.0 3.9 6.0 0.4 0.9 2.2 31% 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 Itaú Unibanco Holding S.A. page 89
Slide 90: Itaú Empresas Digital
Itaú Empresas Digital 96% 95% 85% 15% 4% 5% 2014 2015 2016 Digital With Paper Itaú Unibanco Holding S.A. page 90
Slide 91: New Data Center
New Data Center • 815,000 m3 area – bigger than 120 soccer fields • The biggest green data center of Latin America with LEED certification • The biggest data center under construction in Brazil • 43% of reduction on energy consumption New IT Architecture 2015 – 2020 (1st phase) supporting the dual a
Slide 92: Itaú Unibanco in Capital Markets
Itaú Unibanco in Capital 6 Markets
Slide 93: Non-voting Shares (ITUB4) Appreciation
Non-voting Shares (ITUB4) Appreciation Evolution of R$100 invested on the day before the announcement of the merger (October 31, 2008) to June 30, 2017 Annual Average Appreciation Itaú (1) Itaú (2) Ibovespa (3) CDI (4) Since Itaú and Unibanco merger 13.4% 9.8% 5.4% 9.1% 5 years 15.1% 11.2% 5.8% 9.4%
Slide 94: Stock Market Performance
Stock Market Performance Market Capitalization (in R$ billions) 239.0 219.3 179.6 190.2 175.1 152.8 150.6 157.0 155.7 Net Dividend Yield (1) 6.1% 5.6% 3.0% 2.8% 3.0% 2.4% 2.2% 2.4% 4.3% Price/Earnings (2)13.6 x 11.5 x 9.3 x 9.5 x 9.1 x 8.7 x 9.6 x 9.9 x 6.9 x Average Daily Trading Volume (in R$ mill
Slide 95: Sustainability
vf Sustainability
Slide 96: Corporate Sustainability Governance
Corporate Sustainability Governance board level Definition and monitoring of the sustainability strategy Board of Directors Strategy Committee Frequency: annual executive level Integration of challenges and trends into the business Ethics and Sustainability Committee Frequency: semiannual officers l
Slide 97: Sustainable Performance
(Agenda)Sustainable Performance Our Vision Is to be the leading bank in sustainable performance and customer satisfaction Sustainable Performance means creating shared values for employees, clients, shareholders and society, so as to ensure the longevity of our business
Slide 98: Sustainability Strategy
Sustainability Strategy The sustainability strategy was defined from workshops, interviews and panels with internal and external stakeholders Financial Education Understand people´s needs to offer knowledge and appropriate financial solutions, contributing for individuals and companies to have a hea
Slide 99: Dialogue and Transparency | Engagement
Dialogue and Transparency | Engagement Organizations and commitments that are sources of knowledge and trends Sustainable Development Responsible Bank Ethics and Integrity Climate Change Reporting and Transparency Women’s Empowerment Itaú Unibanco Holding S.A. page 99
Slide 100: Transparency with the Market | Reporting
Transparency with the Market | Reporting Consolidated Annual Integrated Report Report First Brazilian financial institution to publish it voluntarily. Sustainability Form 20-F Report In 2015, we made progress in the presentation SEC of our business model, which now includes risk + GRI factors, strat
Slide 101: Employees | Profile
Employees | Profile 87,711 Employees(1) Organizational Climate 60% 40% Confidential annual surveys that measure the employees’ satisfaction with the workplace and people management practices. 49.6% of management Overall 2014 2015 2016 20.6% of employees are Satisfaction positions are held by blacks
Slide 102: Employees | Management Cycle
Employees | Management Cycle Attraction and Training and Performance Compensation and Selection Development Assessment Benefits Special Talent Itaú Unibanco Performance Fixed Compensation Programs Business School Management In 2016, it amounted to approximately R$ 14 billion (plus Internship: 3,982
Slide 103: Financial Education | Initiatives
Financial Education | Initiatives Promote the theme in Enable a real achievement Empower the best choices society Preventive Work Financial Education Program for Digital platform content employees in 2015 and 2016 21 million views since 2014. Financial guidance with clients prone to delinquency by m
Slide 104: Social and Environmental Risks
Social and Environmental Risks Sustainability Policy and Social and Environmental Responsibility Business Our Operations Central Investments Credit Insurance Data Center Management Signatory since 2008 Signatory since 2004 Signatory since 2012 The center in Tatuapé is The data center was certified s
Itau Unibanco Holding — Investor Presentation (August 2017) on 6ix