Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — Q4 2014 Earnings Presentation
121 slides from Itau Unibanco's earnings presentation, Apr 10, 2015
Slide 1: Institutional Presentation 4Q14
4Q14 Institutional Presentation Itau Unibanco Holding S.A. ITUB NYSE
Slide 2: Forward-looking statements
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 known
Slide 3: Agenda
Agenda 1. Brazilian Economy and Banking Sector 2. Our Profile 3. Business Overview 4. Financial Highlights 5. Information Technology 6. Itau Unibanco in Capital Markets 7. Sustainability As of April 10, 2015
Slide 4: Brazilian Economy and Banking Sector
Brazilian Economy and Banking Sector
Slide 5: Macroeconomic Outlook
Macroeconomic Outlook 1 2011 2012 2013 2014 2015 ² 2016 ² World Economy GDP - World % 3.9% 3.2% 3.0% 3.3% 3.5% 3.7% GDP - USA % 1.6% 2.3% 2.2% 2.4% 2.8% 2.5% GDP - Euro Zone % 1.5% -0.6% -0.4% 0.9% 1.6% 1.9% GDP - China % 9.3% 7.8% 7.7% 7.4% 6.9% 6.6% Brazilian Economy GDP - Brazil 2.7% 1.0% 2.5% 0.
Slide 6: Brazilian Economic Evolution
Brazilian Economic Evolution¹ Two very different periods: 1980 / 1995 1995 / 2013 Presidents 5 3 Finance ministers 15 3 CB presidents 14 6 Currencies 6 1 Avg annual inflation (IPCA) 728% 7% Credit Default Swap (CDS) | Brazil 492.9 238.0 357.9 345.0 132.6 138.4 138.8 184.7 94.8 117.5 122.9 170.8 fev/
Slide 7: Brazil | Macroeconomic Outlook
Brazil | Macroeconomic Outlook 1 GDP | % (YoY) GDP Forecasts | % (QoQ) 10% 8% 2.3% 2.1% 6% 1.8% 4% 2.7% 1.3% (3Q14) 2% 0.8% 0.5% 0.8% -0.6% (3Q14) 0.2% -0.1% -0.6% 0% 0.3% 0.1% 0.0% -2% -0.2% -0.2% (3Q14) -4% -0.7% -1.2% -0.8% -0.7% -6% -1.0% -1.1% -8% Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-1
Slide 8: Brazil | Macroeconomic Outlook
Brazil | Macroeconomic Outlook 1 Net External Debt / Exports Net External Government Debt / Exports 400% 290% 300% 140% 200% 100% -10% 0% -100% -160% 1Q01 1Q02 1Q/03 1Q04 1Q/05 1Q/06 1Q/07 1Q/08 1Q/09 1Q/10 1Q/11 1Q12 1Q13 1Q14 1Q15 Feb-94 Feb-97 Feb-00 Feb-03 Feb-06 Feb-09 Feb-12 Feb-15 (E) With Ex
Slide 9: Brazil | Macroeconomic Outlook
Brazil | Macroeconomic Outlook 1 Net External Debt (USD Billion) International Reserves (USD Billion) 190.3 388.1 373.1 375.8 374.1 370.2 162.7 165.0 352.0 151.0 135.7 101.1 288.6 74.8 238.5 193.8 180.3 -11.9 -27.7 -50.6 85.8 -61.8 -56.2 -56.2 -58.9 -72.9 -73.1 52.9 53.8 49.3 -89.7 35.9 37.8 2000 20
Slide 10: Brazil | Macroeconomic Outlook
Brazil | Macroeconomic Outlook Real Interest Rates | Selic/IPCA % ¹ 12-Month Primary Budget Surplus | % GDP 2 5% 11.6% 11.1% 4% 10.5% 9.8% 9.4% 3% 2% 7.4% 6.6% 6.5% 1% 6.2% 0% 5.0% 4.3% 4.6% 4.6% 4.2% 3.9% -1% -0.61% (Jan-15) -2% 1.3% -3% -4% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20
Slide 11: Credit Evolution/GDP
Credit Evolution/GDP 1 Credit Evolution/GDP | Brazil (%) Mortgage Evolution/GDP | Brazil 10.5% 62.2% 8.4% 56.7% 53.2% 6.8% 48.9% 5.5% 43.6% 45.1% 40.6% 4.1% 3.2% 2.3% jan/09 jan/10 jan/11 jan/12 jan/13 jan/14 jan/15 jan/09 jan/10 jan/11 jan/12 jan/13 jan/14 jan/15 Credit/GDP | World (2013) Mortgage/
Slide 12: Brazil | Banking Sector Outlook
Brazil | Banking Sector Outlook Total Non- Earmarked Loans (R$ billion) 1 Loan growth – by customer (y/y %) ² 45% 1,578 1,566 1,508 40% 1,399 35% 1,232 1,058 30% 905 835 25% 629 20% 472 382 15% 13.4% 301 242 10% 11.1% 9.1% 5% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0% aug/08
Slide 13: Brazil's Fast Changing Consumer Profile
Brazil’s Fast Changing Consumer Profile Poverty (% population) Loans to individuals by product type 100% Rural 90% Overdraft 80% Leasing 28.7 28.8 28.4 28.7 28.1 Other* 27.5 26.9 26.7 Expected 70% 25.4 Reduction of Mortgage 70% 22.8 60% BNDES 19.3 18.3 50% Credit Card 16.0 15.3 40% 13.7 12.9 Acquisi
Slide 14: Brazil | Leverage and Monthly Debt Service
Brazil | Leverage and Monthly Debt Service Credit levels are growing from a very low base – international comparison Total credit has room to grow to a higher percentage of the GDP, from current 62.2%, approaching per capita adjusted international levels in 2020. Income growth and distribution m
Slide 15: Spread and Delinquency Evolution
Spread and Delinquency Evolution ¹ Individuals Spread and Delinquency | Brazil (%) Corporate Spread and Delinquency | Brazil (%) 23.6% 22.7% 22.2% 22.8% 22.2% 22.5% 22.0% 22.1% 21.5% 21.3% 20.8% 20.7% 20.3% 20.4% 9.2% 8.7% 8.4% 8.8% 8.8% 8.0% 7.6% 7.7% 8.2% 8.3% 8.3% 8.0% 7.7% 7.4% 5.0% 4.9% 4.6% 4.
Slide 16: Brazil | Reserve Requirements and Restricted Loans
Brazil | Reserve Requirements and Restricted Loans Rate Before the During the Current Reserve Requirements and Restricted Loans Current 2008 Crisis 2008 Crisis Remuneration (1) (2) Reserve Requirement 45% 42% 45% Zero Additional Reserve Requirement 8% 5% 0% SELIC Demand Deposits Total 53% 47% 45% Ru
Slide 17: Our Profile
2 Our Profile
Slide 18: 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 19: Our Culture
Our Culture Our Way of Making it Happen All for the Client Processes serving People Passion for Performance Nimble and Uncomplicated Ethical and Responsible Leadership Leave your stripes at the door All-Stars who are Team Players A Sparkle in One's Eyes Focus on Innovation and Focused Innovation Dre
Slide 20: 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 December 2014 US$ 71.2 billion market cap (1) Highlights 93,175 employees in Brazil and abroad Total Assets BRL 1,208.7 Bln 5,070 branches and
Slide 21: Market cap and ROE vs global banks
ROE (%) 24.7 Wells Fargo & Co 284.4 Ind & Comm Bk Of China 21.6 Ind & Comm Bk Of China 271.0 Agricultural Bank Of China 21.0 JPMorgan Chase & Co 233.9 China Construction Bank Market Cap (USD Bln) 20.4 China Construction Bank 207.9 Royal Bank Of Canada 19.1 Agric. Bank Of China 191.3 Comm Bank Of Aus
Slide 22: Corporate Governance at Itaú Unibanco
Corporate Governance at Itaú Unibanco Ownership Structure Strengths of our structure E.S.A Moreira Salles • Family ownership ensuring long-term view Family Family • Professional management team 34.0% 100% 61.4% voting shares • Broad shareholder base (Free float of 54% with strong foreign investor pr
Slide 23: Board of Directors and Executive Committees
Itaú Unibanco Board of Directors and Executive Committees Board of Directors Chairman Pedro Moreira Salles Vice Chairmen Alfredo Egydio Arruda Villela Filho Roberto Egydio Setubal Directors Alfredo Egydio Setubal Candido Botelho Bracher Israel Vainboim * Demosthenes Madureira de Pinho Neto Nildemar
Slide 24: Governance between IUPAR and Itaú Unibanco
Governance between IUPAR and Itaú Unibanco Family control with long-term strategic vision • Corporate structure and shareholder agreement • Alignment and liaison among shareholders • Vision, mission and values IUPAR • Dividend payout target • High-value mergers and acquisitions • Appointment of Boar
Slide 25: Governance Structure at Itaú Unibanco
Governance Structure at Itaú Unibanco General Shareholder’s Meeting Fiscal Council Separate roles for Chairman and CEO Board of Directors Strategy Committee • Established in company by-laws Audit Committee reporting to Nomination and Corporate Governance Commitee Board Personnel Committee Risk and C
Slide 26: Itaú Unibanco – New Structure
Itaú Unibanco – New Structure Striving for long-term sustainability New Structure Itaú Unibanco Holding Itaú Unibanco Holding Technology, General Wholesale Retail Operations and Director Efficiency Vice Legal and Human President Risk and Finance Resources Age Limit: Itaú Unibanco Holding – 62 years
Slide 27: 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 In the Northern hemisphere, we want to be recognized as: The bank expert in Latin America CIB London, Lisbon, Madrid, Paris, Frankfurt Institutional Client
Slide 28: Retail Footprint in Latin America
Retail Footprint in Latin America | December 2014 Mexico | CIB Employees: 16 Colombia| CIB Employees: 44 Paraguay Brazil Branches and CSBs: 34 Branches and CSBs: 4,819 Non-Bank Correspondents : 40 ATMs: 27,309 ATMs: 297 Employees: 86,192 Employees: 789 Peru Assets: R$ 1,208.7 billion (Holding) Asset
Slide 29: A History of Successful Strategic Deals
A History of Successful Strategic Deals 1 Uruguay (2) Acquisition of the remaining Casa 50% of: Moreira Salles Merger 2008 Unibanco 1924 1995 - 1998 2000 - 2003 2004 - 2007 1944 Itaú Alliance with: Foundation of Banco Itaú BEG Banco del Buen Ayre Note: (1) Includes mergers, acquisitions, joint-ventu
Slide 30: Itaú CorpBanca
Itaú CorpBanca Transaction Status Operations in Latin America Oct/14 Apr/14 Mar/14 Jan/14 Itaú Unibanco Signing of Transaction Agreement Loans Assets Branches (R$ (R$ Employees and CSBs Transaction Q&A published billion) billion) Transaction Agreement and Shareholders’ Chile 27 35 99 2,563 Agr
Slide 31: Business Overview
3 Business Overview
Slide 32: Universal Bank
Universal Bank 1 • Approximately 36.7 million credit card accounts and 25.9 million • 5,070 branches and client service branches and 27,916 ATMs debit card accounts. • Premier banking brand in Brazil • Leader in Brazilian credit card market, extensive number of joint ventures and partnerships with r
Slide 33: Commercial Banking
Commercial Banking Strong Client Base, Large Network and Wide Range of Products Presence in Brazil(1) (As of December 31, 2014) Highlights: Brazil Itaú Branches: 23 million customers with income up to BRL 4,000; 4 million people daily in our branches (40% non-account holders); North 134 4,810
Slide 34: Mortgage Market
Mortgage Market Mortgage Loans Evolution Distribution Channels for Individuals Balance R$ million +14.9% As of Dec, 2014 Regular Branches Real Estate 14% Brokers 20% 34,151 37,686 39,235 29.1% 26.9% 26.3% Developers 23% Partnership High 22% 70.9% 73.1% 73.7% Income Branches 20% Dec-13 Sep-14 Dec-14
Slide 35: Mortgage
Mortgage Distribution Internal Process Itaú Model Branches Least bureaucratic process in the Brazilian market. 100% of the documents are digitalized. Partnership Brokers Model Products Retail Coelho da Contractual Residential and Commercial financing. Fonseca Partnership Offering additional
Slide 36: Vehicle Financing
Vehicle Financing Individuals Portfolio iCarros – Average # of access per month (in million) R$ million 60,118 60,093 52,276 51,220 47,853 40,319 13 13 13 28,927 12 1Q14 2Q14 3Q14 4Q14 2008 2009 2010 2011 2012 2013 2014 Highlights Highlights iCarros is a classified website that makes the purchase
Slide 37: Vehicle Portfolio
Vehicle Portfolio Average Plan (months) - Regional Market Concentration¹ Individuals (Itaú Unibanco) 49-60 2.9% 37-48 49.1% North 25-36 26.1% 5.9% Northeast 18.4% <=24 21.9% Midwest 9.3% Origination Distribution per Channel - Individuals (Itaú Unibanco) Southeast 44.1% Branches 27% South 22.3% Deale
Slide 38: Credit Cards, Joint Ventures and Partnerships with Retailers
Credit Cards, Joint Ventures and Partnerships with Retailers 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 agreements Credit card
Slide 39: Cards and Merchant Services
Cards and Merchant Services Launched in October, with nationwide acceptance Originated from Hipercard with great strength in the Northeastern and Southern regions Combines the distribution of Itaú with that of REDE (with more than 1 million points of sale) Might be issued by Itaú Unibanco as
Slide 40: Cards and Payments - Issuing
Cards and Payments - Issuing Bankcard Monoline JVs Branches DDA Uniclass Open market Personnalité Corporate Purchase Volume 40% 21% 38% R$ 67.7 bln (4Q14) Outstanding (Dec/14) 28% 20% 52% R$ 59.3 bln # Accounts (Dec/14) 28% 16% 56% 36.7 million page 40
Slide 41: Cards in Brazil | Growing Penetration
Cards in Brazil | Growing Penetration in Household Consumption Expenditure Credit and Debit Cards Billed Volume % at Household Consumption Expenditure 31.3% 29.9% 28.7% 29.0% 27.5% 28.0% 28.0% 27.2% 26.1% 25.0% 11.5% 10.6% 10.0% 10.0% 21.8% 9.4% 9.7% 10.0% 20.5% 9.3% 9.1% 8.3% 7.4% 7.1% 19.9% 19.0%
Slide 42: One of the Major Issuers and Acquirers in the World
One of the Major Issuers and Acquirers in the World European Issuers – Purchase USA Issuers- Purchase Volume – USA Acquirers - Purchase Volume Volume - Credit 2013 (1) Credit 2013 (2) – Credit and Debit 2013 (3) Itaú Unibanco Amex Bank of America HSBC Chase Vantiv Barclays Bank of America Chase Paym
Slide 43: Acquiring
Acquiring Credit Card Transaction Volume Debit Card Transaction Volume R$ million R$ million 36,634 66,357 32,955 30,618 58,612 57,849 29,060 27,994 29,287 29,410 52,976 50,120 52,625 52,434 54,916 26,545 26,257 45,147 47,406 23,337 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 3Q12 4Q12 1Q13 2Q
Slide 44: Wealth Management Services
Wealth Management Services | Best Private Bank Overall Services Evolution of Assets Under Administration R$ Billion Highlights One of the largest mutual fund managers among private banks in Brazil (according to ANBIMA, based on AuM) 628 627 635 646 669 One of the top providers of securities serv
Slide 45: Payroll Loan
Payroll Loan Portfolio Balance Portfolio Balance by Channel R$ Million + 11.2% + 139.5% + 21.5% + 79.5% 40,525 36,436 26,576 29,892 13,949 24,652 22,578 11,480 58.0% 63.9% 65.6% 51.2% 11,098 49.2% 42.0% 36.1% 34.4% 50.8% 48.8% dec/13 dec/14 dec/13 dec/14 dec/13 mar/13 jun/14 sep/14 dec/14 Originated
Slide 46: Consortia
Consortia Balance of installments receivable (R$ MM) Highlights 10,989 11,134 10,919 9,077 9,849 10,177 Consortia is a self-financing system for 7,737 6,490 6,732 the programmed purchase in installments of real estate and vehicles, which supplements our retail products. dec/12 mar/13 jun/13 sep/13
Slide 47: Insurance Ranking
Insurance Ranking jan-nov/14 ¹ jan-nov/13 ¹ Model Insurance with 30% from Porto Seguro 2 2nd 2nd Life 2,3 2nd 2nd Bancassurance Extended Warranty 2 1st 1st Bancassurance Vehicles 2,4 Leader: Porto Seguro Leader: Porto Seguro Broker Residential 2,4 Leader: Porto Seguro Leader: Porto Seguro Broker Pen
Slide 48: Online Insurance
Online Insurance “Proteja” - www.itau.com.br/proteja Insurance Store - www.lojadesegurositau.com.br With the intent to spread the importance of protection and fostering a culture focused on insurance, Itaú has launched, in Online store specially developed to offer insurance September 2014, the “Prot
Slide 49: Association with Porto Seguro
Association with Porto Seguro Association’s Structure Highlights Unification of residential and automobile insurance Controling stockholders of Itaú Unibanco Porto Seguro operations; 57.07% 42.93% Exclusive offer and distribution of residential and automobile insurance products to Itaú Unibanco’
Slide 50: Itaú BMG Consignado – Business Unification
Itaú BMG Consignado – Business Unification Ownership Structure before after Unification of payroll loan businesses of BMG and Itaú BMG Itaú Unibanco BMG Itaú Unibanco BMG Consignado Holding S.A. Shareholders Holding S.A. Shareholders BMG will raise its stake in Itaú BMG Funding Contract Consigna
Slide 51: Itaú BBA | Four large business segments
Itaú BBA | Four large business segments Itaú BBA provides a full range of products to meet clients’ objectives Investment Institutional Corporate Middle Market Banking Treasury Equities Ultra Large Upper Middle Banking, External Units and Trading Large Corporate Middle Fixed Income ALM, Funding Corp
Slide 52: Itaú BBA | "One Stop" Shop
Itaú BBA | “One Stop” Shop 3,516 Employees Corporate + 3,300 Middle Market Largest corporations in Brazil and Latin America Investment Banking 210 Financial Institutions 780 Global Institutional clients page 52
Slide 53: Itaú BBA | Leadership Among Large Corporate Clients
Itaú BBA | Leadership Position Among Large Corporate Clients in Brazil +11.1% Corporate Loans R$ million CAGR(11-14) 15.5% 211,241 190,140 157,912 137,119 2011 2012 2013 2014 Derivatives | Market Leadership¹ IB | Market Leadership Dec-12 Dec-13 Dec-14 2012 2013 2014 Total 1st 1st 1st M&A² 2nd 2nd 1s
Slide 54: Very Small, Small and Middle Market
Very Small, Small and Middle Market SMEs Loan Portfolio R$ million Highlights Clients with annual revenues up to R$ 300 million Full range of financial products and services, including deposits accounts, investment options, insurance, cash management, credit products and collection, among others
Slide 55: Financial Highlights
4 Financial Highlights
Slide 56: Financial Highlights
Financial Highlights Total Assets ¹ Stockholders’ Equity 1 R$ billion R$ billion CAGR(06-14) 18.4% CAGR(06-14) 13.9% 95.8 1,208.7 81.0 1,105.7 74.2 1,014.4 71.3 60.9 851.3 751.4 50.7 43.7 637.2 608.3 60,118 60,141 40.8 60,118 60,141 52,276 33.9 52,276 47,853 47,853 11.8 445.0 9.9 313.8 35,245 150.0
Slide 57: Balance Sheet – Assets and Liabilities
Balance Sheet – Assets and Liabilities R$ million Dec 31, 14 - Dec 31, 14 - Assets Dec 31, 14 Sep 30, 14 Dec 31, 13 Sep 30, 14 Dec 31, 13 Current and Long-term Assets 1,188,779 1,139,030 1,088,131 4.4% 9.2% Cash and Cash Equivalents 17,527 16,636 16,576 5.4% 5.7% Short-term Interbank Investments 229
Slide 58: Total Assets | Breakdown
Total Assets 1 | Breakdown R$ billion Securities Breakdown International Government Derivatives Bonds 3.4% 5.1% Domestic Government Bonds 36.5% 1,208.7 Corporate Securities 1,105.7 22.5% 1,014.4 311.2 25.9% Cash, Cash 851.3 Equivalents and Short- term Interbank Deposits 751.4 60,118 60,141 52,276 29
Slide 59: Loans by Type of Client
Loans by Type of Client R$ million Variation Dec 31, 14 – Dec 31, 14 – Dec 31, 14 Sep 30,14 Dec 31, 13 Sep 30, 14 Dec 31, 13 Individuals 186,212 178,280 168,714 4.4% 10.4% Credit Card 59,321 54,265 54,234 9.3% 9.4% Personal Loans 28,541 28,690 27,373 -0.5% 4.3% Payroll Loans (1) 40,525 36,436 22,578
Slide 60: Credit Portfolio by Product
Credit Portfolio by Product R$ million Variation Dec 31, 14 – Dec 31, 14 – Dec 31, 14 Sep 30,14 Dec 31, 13 Sep 30, 14 Dec 31, 13 Individuals 201,760 192,023 181,780 5.1% 11.0% Credit Card 59,321 54,265 54,234 9.3% 9.4% Personal Loans 27,988 28,159 26,859 -0.6% 4.2% Payroll Loans (1) 40,525 36,436 22
Slide 61: Credit Portfolio Breakdown
Credit Portfolio Breakdown Credit Concentration ¹ R$ million Loan, lease, other credit operations and securities of Loan, lease and other credit operations As of December 31, 14 companies and financial institucions Risk % of Total Risk % of Total Largest Debtor 5,324 1.0% 5,507 0.9% 10 largest debto
Slide 62: Financial Highlights
Financial Highlights Managerial Financial Margin Non-Interest Expenses 1 R$ billion R$ billion 9.6 9.8 10.1 14.4 14.7 9.4 9.0 13.5 13.6 8.2 8.5 8.3 8.6 8.7 12.8 12.6 12.7 12.5 7.9 11.5 11.6 11.8 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
Slide 63: Income Statement – Financial Margin Perspective
Income Statement 1 Managerial Financial Margin Perspective R$ million Variation 4Q14 - 4Q14 - 2014 4Q14 3Q14 4Q13 2014 2013 3Q14 4Q13 2013 Managerial Financial Margin 14,705 14,369 12,703 55,155 47,637 336 2.3% 2,002 15.8% 7,518 15.8% Financial Margin w ith Clients 13,687 13,287 11,964 51,560 45,694
Slide 64: Income Statement – Operating Revenues Perspective
Income Statement 1 Operating Revenues Perspective R$ million Variation 4Q14 - 4Q14 - 2014 - 4Q14 3Q14 4Q13 2014 2013 3Q14 4Q13 2013 Operating Revenues 23,754 23,305 20,880 89,840 78,475 449 1.9% 2,874 13.8% 11,365 14.5% Managerial Financial Margin 14,705 14,369 12,703 55,155 47,637 336 2.3% 2,002 15
Slide 65: Non Recurring Events
Non Recurring Events R$ million page 65
Slide 66: Credit and Insurance & Services
Credit and Insurance & Services R$ million (*) For managerial calculation, we use a 13.75% capital ratio, which is the minimum required capital of 11% plus a 25% safety margin. page 66
Slide 67: Credit
Credit R$ million (*) For managerial calculation, we use a 13.75% capital ratio, which is the minimum required capital of 11% plus a 25% safety margin. page 67
Slide 68: Financial Margin with Market
Financial Margin with Market R$ million 884 899 829 828 628 638 474 495 470 1,083 1,018 875 881 36 739 597 614 1,083 1,018 839 340 881 268 739 597 63 614 268 277 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Financial Margin With Market (ex Sale of Shares) Sale of Cetip/BM&F Bovespa Shares Average 12
Slide 69: Managerial Financial Margin With Clients
Managerial Financial Margin With Clients 1 R$ million 4Q14 3Q14 2014 Average Average Financial Average Average Financial Average Financial Average Rate Rate Balance Margin Rate (p.y.) Balance Margin Balance Margin (p.y.) (p.y.) Interest Rate Sensitive Margin w ith Clients - Brazil and Abroad (A) 76,
Slide 70: Net Interest Margin (NIM)
Net Interest Margin (NIM) 1 13.4% 13.4% 12.8% 12.7% 12.6% 12.3% 12.2% 11.4% 11.6% 11.4% 11.3% 11.3% 11.4% 11.2% 10.8% 10.9% 10.9% 10.9% 11.1% 11.7% 11.0% 11.0% 9.8% 10.8% 10.8% 9.4% 9.4% 9.7% 9.1% 9.1% 10.3% 9.4% 9.4% 10.2% 8.9% 8.1% 9.1% 7.8% 8.8% 7.7% 7.9% 7.3% 7.3% 8.3% 6.9% 7.1% 7.0% 8.0% 7.9% 7
Slide 71: Financial Margin of Credit and LLP expenses
Financial Margin of Credit and LLP expenses The Financial Margin of Credit, net of Loan Loss Provision Expenses and Recoveries grew 12.0% compared to 4Q13. LLPNR/ Financial margin with Clients R$ million 43.8% 39.7% 36.7% 32.8% 30.7% 29.5% 29.9% 27.6% 28.6% 11,182 11,492 10,943 10,296 10,349 10,121
Slide 72: Evolution of the Credit Portfolio Mix
Evolution of the Credit Portfolio Mix 1 2.9% 3.2% 3.3% 3.5% 3.7% 4.4% 4.9% 5.3% 5.5% 6.0% 7.2% 8.5% 9.0% 5.7% 6.1% 6.4% 6.7% 7.1% 7.4% 7.8% 8.3% 8.3% 8.7% 8.7% 7.5% 8.0% 7.9% 7.8% 8.8% 8.7% 7.3% 7.3% 7.1% 6.9% 6.5% 6.8% 5.6% 5.8% 6.8% 6.6% 6.5% 7.1% 7.4% 6.2% 7.6% 8.4% 8.8% 8.7% 8.4% 11.3% 10.5% 8.3
Slide 73: Evolution of the Credit Portfolio Mix Corporate and Individuals
Evolution of the Credit Portfolio Mix Corporate and Individuals1 Individuals 3.6% 3.6% 4.0% 4.1% 4.4% 5.0% 6.2% 6.5% 6.7% 7.1% 7.4% 7.3% 7.0% 7.1% 6.9% 6.6% 6.4% 6.4% 6.6% 6.5% 7.1% 7.4% 8.0% 8.4% 9.9% 11.2% 6.9% 7.7% 8.5% 8.7% 9.4% 12.2% 12.4% 13.7% 16.2% 10.0% 19.1% 20.4% 10.6% 11.2% 14.6% 11.7% 1
Slide 74: Credit Portfolio Analysis
Credit Portfolio Analysis¹ Profile of credit portfolio by origination period: Older vintages with higher spreads are losing relevance compared to the most recent ones. R$ million 404,065 428,832 451,760 Others 6.0% 5.0% 9.9% 5.5% 6.7% 2011 11.4% 8.4% 10.1% 3.2% 2012 4.1% 4.7% 16.6% 4.4% 18.1% 5.5% 5
Slide 75: Managerial Financial Margin Evolution Breakdown
Managerial Financial Margin Evolution Breakdown Quarterly Margin Evolution R$ million 13,287 (105) 299 415 (208) 13,687 3Q14 Mix of Product, Interest Loan Other 4Q14 Clients and rate- sensitive Balance Spreads operations Evolution of the Product Mix (*) Dec/14 30.4% 17.0% 6.4% 13.1% 9.2% 6.2% 8.7% 9
Slide 76: Non-Performing Loans and Coverage Ratios
Non-Performing Loans and Coverage Ratios NPL Ratio | 90 days Coverage Ratio | 90 days 193% 174% 176% 176% 181% 165% 170% 7.3% 7.5% 158% 161% 45% 6.6% 6.7% 6.9% 6.7% 35% 37% 37% 37% 6.4% 30% 32% 33% 6.0% 29% 5.8% 5.2% 5.1% 5.4% 5.2% 42% 43% 41% 46% 50% 52% 4.9% 5.1% 4.8% 5.0% 4.7% 40% 39% 43% 4.5% 4.
Slide 77: NPL Creation and Write Off
NPL Creation and Write Off R$ Billion 6.6 6.1 6.0 5.8 5.7 5.6 5.5 5.4 5.4 5.1 5.9 5.1 5.3 4.6 4.8 5.0 5.3 5.3 4.9 4.8 4.7 4.1 4.1 4.4 4.7 4.4 4.2 4.0 4.1 4.1 4.1 3.6 1.9% 1.5% 1.6% 1.7% 1.6% 1.6% 1.5% 1.4% 1.4% 1.3% 1.1% 1.0% 1.1% 1.1% 1.0% 0.9% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
Slide 78: Individuals Vehicle Portfolio
Individuals Vehicle Portfolio Loan average term and down payment¹ Itaú Unibanco’s Origination Decrease in loan terms and increase in average down payments 46 42 40 39 39 38 40 39 39 39 39 80% 84% 87% 91% 97% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 38 38 39 39 39 40 41 42 43 28 31 20% 16% 1
Slide 79: Credit Ratios
Credit Ratios Evolution of Expense for Allowance for Loan Losses R$ million 6,210 6,139 6,120 5,741 5,587 4,939 4,912 4,741 4,537 4,465 4,614 4,191 4,252 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Allowance for Loan Losses Renegotiation Portfolio 4.0% 3.8% 3.6% 3.4% 7.6% 7.3% 7
Slide 80: Total Liabilities | Evolution and Breakdown
Total Liabilities ¹ ² | Evolution and Breakdown R$ billion CAGR(06-14) 18.4% (2) 1,208.7 1,105.7 1,014.4 27.0% Deposits + Debentures 466.3 851.3 11.8% Deposits Received under Securities, Repurchase Agreements and 751.4 Fund from Acceptances and Issue of Securities 3 637.2 9.2% Interbank and Interbra
Slide 81: Funding
Funding Loan Portfolio mainly funded by domestic client funding R$ billion Variation Diversified funding base Dec 31.14 Sep 30.14 Dec 31.13 QoQ YoY Demand Deposits 48.7 44.6 42.9 9.3% 13.6% Savings Deposits 118.4 113.7 106.2 4.2% 11.6% Time Deposits 108.5 119.1 117.1 -8.9% -7.4% Debentures (Link
Slide 82: Funding and Assets Under Administration
Funding and Assets Under Administration Largest mutual fund manager among private banks in Brazil (according to ANBIMA, based on AuM as of December 31, 2014) Ability to transfer flows from AuM to Bank’s Balance Sheet and vice-versa, depending on CD yields The majority of our Assets under Manag
Slide 83: Insurance and Services
Insurance and Services R$ billion (*) (*) For managerial calculation, we use a 13.75% capital ratio, which is the minimum required capital of 11% plus a 25% safety margin. page 83
Slide 84: Insurance and Services | Result by business line
Insurance and Services| Result by business line (1) Includes checking accounts, payment and receiving services and foreign spot transactions. (2) Revenues and hedges from asset liability management for interest rate and duration mismatches. Does not involve credit risk. page 84
Slide 85: Banking Fee Revenues and Result from Insurance
Banking Fee Revenues and Result from Insurance, Pension Plans and Premium Bonds* R$ million Variation 4Q14 3Q14 2014 2013 4Q14 - 3Q14 2014 - 2013 Asset Management 650 688 2,642 2,474 (38) -5.5% 169 6.8% Current Account Services 1,293 1,217 4,876 4,188 77 6.3% 688 16.4% Credit Operations and Guarante
Slide 86: Insurance Operations
Insurance Operations Revenues1 | Core Activities Claims Ratio and Combined Ratio | In R$ millions Core Activities 59.5% 57.1% 27.8% 28.0% ¹ Revenues: Earned Premiums, Net Revenues from Pension Plan and Premium Bonds. Recurring Net Income | Core Activities and Other Market Share ¹ | Technical Result
Slide 87: REDE
REDE Credit and Debit | Transaction Volumes Credit and Debit | Revenues and MDR In R$ billions Equipment Base | Revenues and Units Revenues from Prepayment Net Income of Receivables In R$ millions Note: Hipercard included in 1Q13, 2Q13 and 3Q13 for comparison purposes. page 87
Slide 88: Services
Services Asset Administration Funds from Clients In R$ billions In R$ billions Consortia Cash Management In R$ billions In R$ billions Clients 2013 = 100 page 88
Slide 89: Non-interest Expenses
Non-interest Expenses Variation 4Q14 3Q14 2014 2013 4Q14-3Q14 2014-2013 Personnel expenses (4,426) (4,352) (16,885) (15,520) (74) 1.7% (1,365) 8.8% Administrative Expenses (4,253) (4,127) (16,211) (14,680) (126) 3.1% (1,530) 10.4% Operating expenses ¹ (1,273) (1,162) (4,885) (4,339) (110) 9.5% (546)
Slide 90: Number of Employees
Number of Employees (amount) 104,542 102,694 99,017 97,030 96,977 6,284 6,400 96,355 94,820 94,280 95,696 94,909 94,383 94,164 93,175 6,500 6,603 6,654 6,740 6,761 6,840 6,913 6,888 6,963 7,032 6,983 98,258 96,294 92,517 90,427 90,323 89,615 88,059 87,440 88,783 88,021 87,420 87,132 86,192 dec/11 ma
Slide 91: Efficiency Ratio and Risk Adjusted Efficiency Ratio
Efficiency Ratio and Risk Adjusted Efficiency Ratio1 74.2 73.9 73.4 71.7 69.5 68.0 66.2 64.9 64.3 47.2 48.0 48.5 48.4 47.9 47.2 45.2 46.1 46.6 73.4 72.8 72.1 68.4 66.4 65.3 64.8 63.2 63.0 46.6 48.0 49.1 48.2 48.7 47.7 47.1 45.5 46.2 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Quarter E.R. (%) Quart
Slide 92: Operating Revenues and Efficiency Ratio
Operating Revenues and Efficiency Ratio (-) Loan Losses and Retained Income Before Tax and Profit Operating Revenues* (-) Efficiency Ratio Claims Net of = Sharing/Operating Revenues* (+) Recovery/Operating Revenues * Risk Adjusted Efficiency Ratio 48.0 48.2 49.1 48.7 47.7 47.1 45.5 46.2 R.A.E.R 4Q14
Slide 93: Efficiency Ratio
Efficiency Ratio 1 R$ million Efficiency Ratio and Risk-Adjusted Efficiency Ratio 4Q14 3Q14 2Q14 1Q14 4Q13 Total Expenses (A) (10,394) (10,037) (9,847) (9,304) (9,625) Non-Interest Expenses (10,113) (9,753) (9,577) (9,039) (9,358) Insurance Selling Expenses (281) (284) (270) (265) (267) Managerial F
Slide 94: Capital Ratios (BIS)
Capital Ratios (BIS) (*) Includes Tax Credits excluded from Tier I, Deferred Permanent Assets to Market value of Securities and Derivatives excluded from Tier I. page 94
Slide 95: Capital Ratios
Capital Ratios Estimated Core Capital Ratio (Common Equity Tier I – CET I) – Dec/14 Full application of Basel III rules 0.3% (2.1%) 12.5% 0.8% 11.9% 0.4% 11.1% 10.7% CET I Consolidation Basel III Phase- CET I with Mitigated CET I Use of the full tax Method Change ¹ In ² fully Investment with fully U
Slide 96: Basel III – Brazilian Phase-in Requirements
Basel III – Brazilian Phase-in Requirements¹ 2013 2014 2015 2016 2017 2018 2019 Common Equity Capital Ratio 5.125% to 5.75% to 6.375% to 7.0% to 4.50% 4.50% 4.50% (Minimum + Aditional) 5.75% 7.0% 8.28% 9.5% 6.625% to 7.25% to 7.875% to 8.5% to Tier I Capital Ratio (Minimum + Aditional) 5.50% 5.50% 5
Slide 97: Ratings
Ratings Credit rating agencies' evaluations confirm the soundness of our business FitchRatings International National Viability Support National Currency Foreign Currency Long Term Short Term Long Term Short Term Long Term Short Term a- 2 A- F1 BBB+ F2 AAA (bra) F1+ (bra) Moody’s International Natio
Slide 98: Segmentation
Segmentation Itaú Unibanco Commercial Activities with Consumer Wholesale Banking - the Market + Credit - Retail Banking Retail Corporation Note: The consumer-credit’s chart reflects mainly the operations performed in channels dedicated to non-account holders. page 98
Slide 99: Segments – Income Statement 4Q14
Segments – Income Statement 4Q14 R$ million Com m ercial Activities w ith Consum er Wholesale Itaú Banking the Market + Credit Retail Banking Unibanco Retail Corporation Operating revenues 13,778 4,668 3,960 1,347 23,754 Managerial Financial Margin 7,681 2,882 2,878 1,264 14,705 Financial Margin w i
Slide 100: 2014 Outlook
2014 Outlook * ex- Exchange Variation 8.0% ex- Credicard 7.0% page 100
Slide 101: 2015 Outlook
2015 Outlook 2015 Outlook * Total Loan Portfolio ' Growth of 6.0% to 9.0% Managerial Financial Margin 2 Growth of 10.0% to 14.0% Loan Loss Provision Expenses net of Recoveries Between R$ 13 billion and R$ 15 billion Service Fees and Result from Insurance* Growth of 9.0% to 11.0% Non-Interest Expense
Slide 102: Information Technology
5 Information Technology
Slide 103: Information Technology
Information Technology Total Number of Transactions Share of Transactions per Channel 100% 3% 74% 6% 70% 62% 26% 30% 58% 57% 80% 37% 41% 53% 59% 41% 5% 45% 5% 60% 5% 47% 4% 5% 42% 43% 41% 43% 4% 38% 38% 40% 33% 32% 30% 31% 26% 28% 20% 2008 2009 2010 2011 2012 2013 1Q14 26% 26% 25% 22% 20% 17% 1 2 St
Slide 104: Itaú Unibanco's Technological Evolution
Itaú Unibanco’s Technological Evolution Convenience New Tools Multi-Channel Experience • Biometrics • Remote Contract Signing • Tokpag • Easy Password Creation • International ATM • SMS Two Way • Internet payments using • Personnalité´s • Virtual Communication mobile phone customer-manager new featu
Slide 105: New Data Center
New Data Center 815,000 m² 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 consuption New IT Architecture 2015 – 2020 (1st phase) supporting the dual active mod
Slide 106: Itaú Unibanco in Capital Markets
Ita Unibanco in Capital Markets
Slide 107: Trading Symbols
Trading Symbols Since May 20, 2009 Itaú Unibanco is known in the financial market as ITUB ADR: ITUB Common: ITUB3 CEDEAR: ITUB4 (Non-voting shares) Non-voting Shares: ITUB4 (Non-voting Shares) page 107
Slide 108: Market Capitalization and Average Daily Trading Volume
Market Capitalization and Average Daily Trading Volume 179.6 190.2 1 175.1 152.8 150.6 157.0 140.5 115.3 107.9 874 827 736 242 702 641 650 659 559 277 419 189 207 292 326 191 319 632 95 452 443 459 410 409 368 333 224 2006 2007 2008 2009 2010 2011 2012 2013 2014 NYSE (ADR) (R$ million) BM&FBOVESPA -
Slide 109: Non-Voting Shares (ITUB4) Appreciation
Non-Voting Shares (ITUB4) Appreciation Evolution of R$100 invested from December 31, 2004 to December 31, 2014 Annual Average Appreciation Itaú (1) Itaú (2) Ibovespa (3) CDI (4) 10 years 14.6% 11.2% 6.7% 11.6% 5 years 4.9% 1.6% -6.1% 9.7% 12 months 25.8% 21.0% -4.5% 13.3% Lehman Subprime Brothers Co
Slide 110: Earnings per Share – EPS
Earnings per Share – EPS In R$ 1.03 1.00 0.91 0.99 1.01 0.86 0.83 0.90 0.74 0.81 0.71 0.72 0.85 0.68 0.66 0.66 0.66 0.66 0.65 0.64 0.64 0.73 0.62 0.69 0.67 0.64 0.64 0.63 0.65 0.62 0.60 0.63 0.60 0.62 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 EPS - Itaú Uni
Slide 111: Sustainability
vf Sustainability
Slide 112: Sustainability
Sustainability Sustainable Performance Sustainability Map To create shared value to employees, customers, shareholders and society, ensuring business longevity page 112
Slide 113: Financial Literacy
Financial Literacy Understand people’s needs to offer knowledge and suitable To be the leading bank in financial solutions, helping individuals and companies to have sustainable performance and customers’ a healthy relationship with money. satisfacion Transparency Platform and 6 Flags Responsible Us
Slide 114: Socio-Environmental Risks and Opportunities
Socio-Environmental Risks and Opportunities Seek business opportunities and manage E&S risks To be the leading bank in considering market trends, regulations, customer and sustainable performance and customers’ society demands. satisfacion Knowledge generation among BU’s (synergies) Credit E&S ris
Slide 115: Dialogue Transparency
Dialogue Transparency Build long term relationships based on trust to improve To be the leading bank in our business and create shared value. sustainable performance and customers’ satisfacion Customers Transparency Platform Suppliers Customers Forum Workshops with suppliers Ombudsman and re
Slide 116: Sustainability in Business
Sustainability in Business • The only Latin American Bank that participates since it was created (14 consecutives years) • Itaú Unibanco has been in ISE for 9 years (since it was created in 2005) • In 2012, Itaú Unibanco was named “Sustainable Bank of the Year in Americas” by Financial Times and Int
Slide 117: Voluntary Commitments
Voluntary Commitments Protocolo Verde page 117
Slide 118: Appendix
| Appendix
Slide 119: 4Q14 | Income Statement Adjustments
4Q14 | Income Statement Adjustments R$ million Non-recurring Tax Effect of Managerial Accounting Managerial Effects Hedge Reclassifications Operating Revenues 23,214 (1,106) 2,007 (361) 23,754 Managerial Financial Margin 12,583 20 2,007 95 14,705 Financial Margin w ith Clients 13,572 20 - 95 13,687
Slide 120: 3Q14 | Income Statement Adjustments
3Q14 | Income Statement Adjustments R$ million Non-recurring Tax Effect of Managerial Accounting Managerial Effects Hedge Reclassifications Operating Revenues 21,406 (158) 2,322 (265) 23,305 Managerial Financial Margin 12,044 30 2,322 (27) 14,369 Financial Margin w ith Clients 13,284 30 - (27) 13,28
Slide 121: 4Q13 | Income Statement Adjustments
4Q13 | Income Statement Adjustments R$ million Non-recurring Tax Effect of Managerial Accounting Managerial Effects Hedge Reclassifications Operating Revenues 21.216 (976) 1,031 (391) 20,880 Managerial Financial Margin 11.732 48 1,031 (109) 12,703 Financial Margin w ith Clients 12.025 48 - (109) 11,
Itaú Unibanco Holding — Q4 2014 Earnings Presentation on 6ix