Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — FY2017 Earnings Presentation
27 slides from Itau Unibanco's earnings presentation, Feb 8, 2018
Slide 1: Conference Call 2017 Earnings Review
Conference Call 2017 Earnings Review Candido Botelho Bracher President and CEO Caio Ibrahim David Executive Vice-President, CFO and CRO Alexsandro Broedel Lopes Executive Finance Director and Investor Relations Officer
Slide 2: Pro Forma Information
Pro Forma Information The merger between Itaú Chile and CorpBanca was concluded on April, 1st 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 orde
Slide 3: Medium and Long-Term Strategic Agenda
Medium and Long-Term Strategic Agenda CORPORATE GOVERNANCE AND SUSTAINABILITY PERMEATE ALL EFFORTS ON KEY STRATEGIC OBJECTIVES Commitment to permanently improve corporate governance plays a vital role in protecting stakeholders’ interests. We incorporate sustainability into our strategy through a co
Slide 4: Highlights
Highlights Itaú Unibanco Holding S.A. + 30 bps (4Q17/3Q17) + 160 bps (2017/2016) R$6.3 bn R$24.9 bn Recurring Net Income1 Recurring ROE (p.a.)1 Credit Quality (Dec-17) +2.4% (4Q17/3Q17) + 13.5% (2017/2016) R$6.1 bn R$24.1 bn 21.9% 21.8% 23.5% 23.2% + 80 bps (4Q17/3Q17) + 200 bps (2017/2016) Consolid
Slide 5: Recurring Net Income and ROE
Recurring Net Income and ROE In R$billions 5.2 5.6 5.6 5.8 6.2 6.2 6.3 6.3 19.6% 20.6% 19.9% 20.7% 22.0% 21.5% 21.6% 21.9% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Itaú Unibanco Holding S.A. 5
Slide 6: Business Model
Business Model 1 Result from Insurance includes the Result from Insurance, Pension Plan and Premium Bonds Operations before Retained Claims and Selling Expenses. 2 Include Tax Expenses (ISS, PIS, COFINS and other), Insurance Selling Expenses and Minority Interests in Subsidiaries. In R$billions Oper
Slide 7: Credit Portfolio
Credit Portfolio In R$billions, end of period 4Q17 3Q17 4Q16 Individuals 1 85.3 1 79.9 3.0% 1 83.4 1.0% Credit Card Loans 6 3.0 57.2 10.3% 5 9.0 6.8% Personal Loans 2 5.3 26.0 -2.7% 26.3 -3.8% Payroll Loans 4 4.2 44.6 -0.8% 44.6 -1.0% Vehicle Loans 1 4.1 1 3.9 1.4% 15.4 -8.4% Mortgage Loans 3 8.7 3
Slide 8: Net Interest Margin and Financial Margin with Clients
Net Interest Margin and Financial Margin with Clients 12.3% 12.5% 13.0% 13.3% 12.6% 12.6% 12.3% 11.9% 6.6% 7.2% 8.4% 8.2% 8.2% 8.9% 9.2% 8.8% 14.1% 14.1% 14.1% 13.8% 12.7% 10.9% 9.2% 7.5% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 10.1% 10.3% 10.5% 10.8% 10.3% 10.3% 10.1% 9.9% 5.4% 6.1% 6.8% 6.6% 6.7%
Slide 9: Financial Margin with the Market
Financial Margin with the Market In R$billions 1 2, 3 0.1 0.1 0.3 0.3 0.2 0.2 0.3 0.2 0.2 1.2 1.6 1.2 1.5 1.8 1.7 1.3 1.1 1.2 1.3 1.7 1.5 1.7 2.0 1.9 1.6 1.4 1.4 1.7 1.7 1.7 1.6 1.7 1.8 1.8 1.7 1.6 - 0 .5 1 .0 1 .5 2 .0 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Financial Margin with the Market -
Slide 10: Credit Quality
Credit Quality 4.9 4.2 3.8 4.2 3.9 4.2 3.6 4.0 3.7 3.5 3.2 0.8 0.5 0.8 1.9 0.9 1.5 0.7 2.0 1.0 1.0 1.8 3.2 3.0 3.1 3.4 3.9 3.8 3.5 3.7 2.8 3.0 2.5 Dec-13 Sep-14 Dec-14 Sep-15 Dec-15 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Individuals Corporate Very Small, Small and Middle Market Companies 6.1 5.2
Slide 11: NPL Creation
In R$billions 5.7 6.0 5.3 6.8 5.3 4.9 4.4 4.4 4.3 4.5 4.3 4.2 4.1 3.8 3.5 3.8 3.6 3.2 1.0 1.5 1.1 2.3 0.8 1.0 0.2 0.2 0.5 0.2 0.3 0.1 0.4 0.8 0.5 0.4 0.5 0.5 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Total Retail Banking - Brazil Wholesale Banking - Brazil Latin America ex-Brazil With Citibank 4.
Slide 12: Cost of Credit and Provision for Loan Losses
5.1 5.1 7.2 6.3 5.6 6.4 5.3 4.5 4.0 4.2 3.1% 3.0% 4.4% 4.1% 3.7% 4.2% 3.6% 3.0% 2.7% 2.9% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Custo do Crédito Cost of Credit / Total Risk (*) – Annualized 3.6 3.4 3.5 3.7 4.3 4.6 4.3 4.4 3.9 4.0 3.5 3.7 3.2 3.5 0.9 1.1 1.9 1.6 1.3 1.4 2.7 1.5 1.8 1.1 1.
Slide 13: Total Allowance by Type of Risk – Consolidated
Total Allowance by Type of Risk – Consolidated 14.4 12.2 1.9 8.2 Dec-17 Allocation of Total Allowance(*) by Type of Risk - Consolidated Regulatory Breakdown Overdue Aggravated Potential³ Expected and/or Potential Loss Related to expected loss in Retail segment and potential loss in Wholesale segment
Slide 14: Coverage Ratio (90-day NPL)
Coverage Ratio (90-day NPL) 206% 210% 215% 204% 222% 231% 243% 246% 247% 97% 102% 104% 104% 104% 104% 101% 100% 100% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Total Total (Expanded¹) Coverage Ratio and Expanded Coverage Ratio Coverage Ratio ¹ Expanded Coverage Ratio is calculate
Slide 15: Commissions & Fees and Result from Insurance
Commissions & Fees and Result from Insurance In R$billions 4Q17 3Q17 2017 2016 Credit Cards 3.3 3.1 6.3% 1 2.4 1 2.1 1.8% Current Account Services 1.7 1.7 2.0% 6 .8 6.4 5.7% Asset Management¹ 0 .9 0 .9 -1.2% 3.5 3 .0 17.9% Credit Operations and Guarantees Provided 0.9 0.8 6.4% 3 .4 3.2 4.2% Collecti
Slide 16: Non-Interest Expenses
Non-Interest Expenses Includes IPTU, IPVA, IOF and other. Does not include PIS, Cofins and ISS; 2 Does not consider overhead allocation. Note: Considering Citibank’s Operations, Non-Interest Expenses would be R$12.7 billion in 4Q17 and R$47.0 billion in 2017. # Employees # Branches and Client Servic
Slide 17: Payout Practice
Payout Practice In order to manage capital efficiently, aiming at creating value to our shareholders, we announced through aMaterial Fact disclosed on September 26, 2017, thatwe intend to: Payout Practice ▪ Maintain the practice of paying dividends and interest on own capital at 35% of net income, h
Slide 18: Capital Ratios
Capital Ratios Changes in the Core Capital Ratio 16.2% 15.5% 15.3% 13.5% -0.7% -0.8% 0.6% -1.8% Common Equity Tier I (CET I) Dec-17 Schedule anticipation impacts CET I with fully loaded Basel III rules Impact of the investment in XP Additional Tier I Tier I Capital with fully loaded Basel III rules
Slide 19: Payout and Share Buyback
Payout and Share Buyback 32.2% 30.6% 45.0% 0.2% 70.6% 13.9% 4.3% 12.4% 2014 2015 2016 2017 Payout Share Buyback 83.0% 49.3% 44.6% 32.3% 2017 Dividend Yield* = 8.0% * Dividend yield considers payout of 83% and the daily closing price average in 2017. Itaú Unibanco Holding S.A. 19
Slide 20: 2017 Forecast
2017 Forecast Consolidated Brazil 2 Forecast 1 Actual Forecast 1 Actual Total Credit Portfolio 3 From 0.0% to 4.0% -0.8% From -2.0% to 2.0% -3.2% Financial Margin with Clients 4 (ex-Impairment and Discounts Granted) From -4.2% to -0.8% -4.7% From -5.2% to -1.8% -4.4% Cost of Credit 5 Between R$15.5
Slide 21: 2018 Forecast
2018 Forecast 2018 forecast considers Citibank’s retail operations. Therefore, 2017 income statement basis for 2018 forecast must consider Citibank’s figures in all lines of the income statement and also in the credit portfolio.* Consolidated Brazil 1 Total Credit Portfolio 2 From 4.0% to 7.0% From
Slide 22: Appendix
Appendix 22
Slide 23: Results | Citibank's Operation
Results | Citibank’s Operation For comparison purposes, we deconsolidated the effects from Citibank’s retail operations in Brazil (Citibank) and we recorded in a specific line in our income statement. Therefore, the information presented in this report does not include Citibank’s balances and result
Slide 24: Results
Results In R$billions 4Q17 3Q17 2017 2016 Operating Revenues 27.5 27.0 2.0% 109.0 111.4 -2.2% Managerial Financial Margin 16.7 16.8 -0.1% 68.3 72.1 -5.3% Financial Margin with Clients 15.3 15.4 -0.6% 62.0 65.1 -4.7% Financial Margin with the Market 1 .4 1 .4 5.3% 6.3 7.0 -10.3% Commissions and Fees
Slide 25: Results – Brazil and Latin America
Results – Brazil and Latin America 2017 2016 In R$billions Consolidated Brazil 1 Latin America (ex-Brazil) 2 Consolidated Brazil 1 Latin America (ex-Brazil) 2 Consolidated Brazil 1 Latin America (ex-Brazil) 2 Operating Revenues 1 09.0 100.0 9 .0 111.4 102.2 9 .3 -2.2% -2.1% -2.9% Managerial Financia
Slide 26: Uses of Capital
Uses of Capital Changes in Capital Requirements Amounts in R$Billion Additional Required Stockholders’ Equity in Dec/2008 Increase in RWA Investments* Capital committed to Citi and XP Stockholders’ Equity of controlling party required in June/17 BIS III Effects Intended 118 44 45 13.5% 9.5% *Main in
Slide 27: Conference Call 2017 Earnings Review
Conference Call 2017 Earnings Review Candido Botelho Bracher President and CEO Caio Ibrahim David Executive Vice-President, CFO and CRO Alexsandro Broedel Lopes Executive Finance Director and Investor Relations Officer