Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — Investor Presentation (November 2018)
111 slides from Itau Unibanco's investor presentation, Nov 1, 2018
Slide 1: 3Q18 Institutional Information
3Q18 Institutional Information
Slide 2: Forward-looking statements
3Q18 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: Disclaimer: Corpbanca Pro Forma Information
Disclaimer Corpbanca 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
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 October 29, 2018
Slide 5: Our Profile
1 Our Profile
Slide 6: Itaú Unibanco at a Glance
Itaú Unibanco at a Glance Leading position in Brazil § US$71.0 billion market cap (1) § 100,756 employees in Brazil and abroad § 4,917 branches and CSBs in Brazil and abroad § 47,887 ATMs in Brazil and abroad § Around 48 million clients in the Retail Bank § Brazilian multinational bank § Major provi
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: 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 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 Latin American Bank CIB NY, Cayman, Bahamas Institutional Clients / Asset NY, Cayman Private Banking Cayman, Bahamas, Mia
Slide 11: A History of Successful Strategic Deals
A History of Successful Strategic Deals 1 (1) Includes mergers, acquisitions, joint-ventures and partnerships. page 11
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 a long-term view • Professional management team • Strong corporate governance • Broad shareholder base (52.74% of our shares in free float) Egydio de Souza Free Float* Moreira Salles Family Non Voting Shares
Slide 14: IUPAR and Itaú Unibanco Governance
IUPAR (Itaú Unibanco Participações) and Itaú Unibanco Governance IUPAR (Itaú Unibanco Participações) Itaú Unibanco Board of Directors Alignment and union among shareholders; Group´s vision, mission and values; Significant mergers & acquisitions; Nominations to the Board of Directors and CEO; Perform
Slide 15: Board of Directors and Executive Committees
Itaú Unibanco Board of Directors and Executive Committees Directors of Co-Chairman Co- Chairman Pedro Moreira Salles Roberto Egydio Setubal Directors Board Alfredo Egydio Setubal Amos Genish 1 Ana Lúcia de Mattos Barretto Villela Fábio Colletti Barbosa 1 Gustavo Jorge Laboissière Loyola 1 João Morei
Slide 16: Risk Management Structure
Risk Management Structure Capital and Risk Board of Directors Audit Committee Management Committee Pedro Moreira Salles Gustavo Loyola 1 Pedro Bodin 1 Roberto Egydio Setubal Internal Audit Paulo Miron Itaú Unibanco Holding President and CEO Candido Bracher 3rd line of defense Independent review of t
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 Digital Committee Committee Parties and Corporate Management Committee Committee Advisory Advisory Committee Governanc
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. Executive Committee General Office and Risk Dept.
Slide 19: Risk Appetite Defined by the Board of Directors
Risk Appetite Defined by the Board of Directors Principles Statement § Sustainability and customer § Optimization of capital satisfaction; allocation; § Risk pricing; § Low volatility in results; § Operational excellence; § Regional focus; § Diversification; § Alignment with “Our Way”; § Risk Cultur
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 Board of Directors Statement “We are a universal bank, operating predominantly in Latin
Slide 21: Retail Management – Individuals and Small and Middle Companies
Retail Management – Individuals and Small and Middle Companies thatrisk POLICYVariablesdistinguishes STATISTICAL MODELS Lowest risk Risk Level Highest Risk 88 153 88 99 124 94 116 92 81 167 79 114 97 77 130 91 67 179 65 73 155 65 Fictitious figures (Basis 100 = lowest risk cell). Higher risk Default
Slide 22: Credit Offer Based on Future Scenario
Credit Offer Based on Future Scenario Lowest risk Base POLICY Scenario Highest risk Positive future expectation Risk Level Credit Available Credit Not Available Easing of credit, maintaining the same appetite STATISTICAL MODELS Risk Level Credit Available Credit Not Available Highest risk Negative f
Slide 23: Business Overview
3 Business Overview
Slide 24: Universal Bank
Universal Bank 1 RETAIL BANKING WHOLESALE BANKING RETAIL AND REAL ESTATE CREDIT ITAÚ BBA 4,404 branches and client service branches and 46,712 ATMs in Brazil; Premier banking brand in Brazil; Strategically positioned for growth in mortgage market (partnerships with Lopes). CREDIT CARD AND CONSUMER F
Slide 25: Client Segmentation
Client Segmentation Individuals Segmentation by monthly income Private Bank >R$5 Million in total investment Personnalité >R$10 Thousand or >R$100 Thousand in total investments Uniclass >R$4 Thousand up to R$10 Thousand Retail up to R$4 Thousand Companies Segmentation by annual sales Ultra over R$4
Slide 26: Retail in Brazil
Retail in Brazil Presence in Brazil 1 (As of September 30, 2018) North 115 Northeast 336 Midwest 314 Southeast 2,951 South 671 Brazil: 4,387 Automated Teller Machines (ATMs) 2 44,631 44,947 45,182 45,353 45,502 45,769 45,891 46,463 46,712 69 26 21 15 8 7 7 7 3 668 648 635 626 617 613 608 610 598 19,
Slide 27: Retail - Credit Cards, Joint Ventures and Partnerships with Retailers
Retail - Credit Cards, Joint Ventures and Partnerships with Retailers in Brazil Highlights • Brazilian market leader in credit card transactions. • Qualification of the client base: proprietary channel x partnerships. • Credit card business comprises: • Issuance of cards • Acquiring: REDE • JVs and
Slide 28: Retail - Cards in Brazil
Retail - Cards in Brazil | Growing Penetration in Household Consumption Expenditure Credit and Debit Cards Billed Volume% at Household Consumption Expenditure 34.9% 33.8% 34.1% 32.1% 31.4% 32.4% 29.9% 29.6% 30.8% 13.3% 12.7% 12.5% 11.1% 11.0% 12.4% 11.6% 11.7% 12.1% 18.8% 18.6% 19.7% 19.2% 19.7% 20.
Slide 29: Retail - Payroll Loan in Brazil
Retail - Payroll Loan in Brazil Evolution of Payroll Loan Portfolio R$billion 45.6 44.6 44.9 44.8 44.6 44.4 44.7 45.4 46.0 4.6 4.4 4.3 4.3 4.4 4.7 4.8 4.9 4.9 9.8 9.2 8.8 8.2 7.6 7.0 6.4 5.9 5.5 31.2 31.0 31.7 32.2 32.6 32.8 33.5 34.6 35.5 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-
Slide 30: Retail - Mortgage Market in Brazil
Retail - Mortgage Market in Brazil Mortgage Loans Evolution 1 Distribution Channels for Individuals Balance R$million As of September 2018 1.5% 47,241 47,591 47,953 Partnerships 14.9% 14.0% 18.9% 12% Regular Real Estate Brokers Branches 31% 12% 81.1% 85.1% 86.0% Developers 17% High Income Branches S
Slide 31: Retail - Vehicle Financing in Brazil
Retail - Vehicle Financing in Brazil Highlights: • Growth of 47% in production (QoQ); • Offers finance through over 10 thousand dealers; • Average ticket size of the new vehicle concessions to individuals of R$32 thousand with LTV of 57% in the 3Q18; • 78% of the financing is guaranteed up to 4 year
Slide 32: Retail - Insurance Ranking in Brazil
Retail - Insurance Ranking in Brazil 1,2 Jan-Aug/18 Jan-Aug/17 Model Total Insurance 3 4th 4th Bancassurance 4 5th 4th Life & Personal Accidents 2nd 3rd Bancassurance Credit Insurance 6th 5th Bancassurance Pension Plan 3rd 3rd Bancassurance Premium Bonds 3rd 3rd Bancassurance Porto Seguro 2nd 2nd Ve
Slide 33: Retail - Association with Porto Seguro
Retail - Association with Porto Seguro Association’s Structure Controlling stockholders of Itaú Unibanco Porto Seguro 57.07% 42.93% PSIUPAR Market 69.88% 30.12% Porto Seguro S.A. (PSSA) 99.99% 100.0% Itaú Seguros de Auto e Subsidiaries Porto Seguro S.A. Residência S.A (ISAR) Highlights • Unification
Slide 34: Very Small, Small and Middle Market in Brazil
Very Small, Small and Middle Market in Brazil SMEs Loan Portfolio 1 R$million 79,649 75,433 72,002 68,974 65,617 67,500 61,547 61,869 63,050 2012 2013 2014 2015 2016 2017 1Q18 2Q18 3Q18 Highlights Full range of financial products and services, including deposits accounts, investment options, insuran
Slide 35: Wholesale - Corporate Companies in Brazil
Wholesale - Corporate Companies in Brazil Corporate Loans 1 R$million 213,815 219,418 194,472 181,541 163,437 165,052 161,990 162,513 159,949 2012 2013 2014 2015 2016 2017 1Q18 2Q18 3Q18 Highlights • Corporate clients with annual sales above R$200 million. • We offer a broad portfolio of banking pro
Slide 36: Wholesale - Corporate and Investment Banking
Wholesale - Corporate and Investment Banking | Leadership Position in Brazil Wholesale Banking Investment Banking Middle Annual revenues from R$30 MM up to R$200 MM Corporate Banking Annual revenues over R$200 MM Investment Banking Leadership position and client recognition LatAm Presence in all ban
Slide 37: Wholesale - Wealth Management Services
Wholesale - Wealth Management Services | Brazil Evolution of Assets Under Administration Investment Product management for the conglomerate and a full range of investment options to Retail Banking. 1,068 R$billion 1,002 1,025 883 922 946 849 802 801 Asset Management Asset Management In September 201
Slide 38: Retail Footprint in Latin America
Retail Footprint in Latin America | September 2018 Mexico | CIB Employees: 8 Colombia1 Employees: 3,511 Branches + CSBs: 162 ATMs: 173 Peru Representative Office Chile Employees: 5,921 Branches + CSBs: 199 ATMs: 464 CIB Argentina Employees: 1,716 Retail and Wholesale Branches + CSBs: 85 ATMs: 176 (1
Slide 39: Segments – Income Statement Pro Forma 3Q18
Segments – Income Statement Pro Forma 3Q18 Retail Banking Wholesale Banking Activities with the Itaú Unibanco In R$millions Market + Corporation Operating Revenues 18,042 7,386 2,470 27,899 Managerial Financial Margin 10,207 4,817 2,384 17,408 Financial Margin with Clients 10,207 4,817 1,128 16,152
Slide 40: Financial Highlights
4 Financial Highlights
Slide 41: Highlights
Highlights Recurring Net Income Consolidated R$6.5 bn + 1.1% (3Q18/2Q18) R$19.3 bn + 3.5% (9M18/9M17) Brazil R$6.1 bn + 0.2% (3Q18/2Q18) R$18.4 bn + 2.4% (9M18/9M17) Recurring ROE (p.a.) Consolidated 21.3% - 30 bps (3Q18/2Q18) 21.7% stable (9M18/9M17) Brazil 22.4% - 30 bps (3Q18/2Q18) 22.9% - 10 bps
Slide 42: Recurring Net Income and Value Creation
Recurring Net Income and Value creation ROE Average Cost of Capital In R$billion Recurring Net Income Value Creation Cost of Capital page 42
Slide 43: Non-Recurring Events
Non-Recurring Events In R$millions 3Q18 2Q18 3Q17 9M18 9M17 Net Income 6,247 6,244 6,077 18,772 18,143 (-) Non-Recurring Events (207) (138) (177) (484) (455) Impairment (1) (10) (137) (102) (145) ∟ Adjustment to reflect the realization value of certain assets mainly related to technology Goodwill Am
Slide 44: Income Statement | Operating Revenues Perspective
Income Statement | Operating Revenues Perspective In R$millions 3Q18 2Q18 3Q17 9M18 9M17 28,021 -0.4% 26,981 81,453 2.3% Operating Revenues 27,899 3.4% 83,345 Managerial Financial Margin 17,408 17,295 0.7% 16,769 3.8% 51,702 51,569 0.3% Financial Margin with Clients 16,152 15,953 1.2% 15,410 4.8% 47
Slide 45: Income Statement | Managerial Financial Margin Perspective
Income Statement | Managerial Financial Margin Perspective In R$millions 3Q18 2Q18 3Q17 9M18 9M17 0.7% 16,769 0.3% Managerial Financial Margin 17,408 17,295 3.8% 51,702 51,569 Financial Margin with Clients 16,152 15,953 1.2% 15,410 4.8% 47,366 46,719 1.4% Financial Margin with the Market 1,257 1,342
Slide 46: Results – Brazil and Latin America
Results – Brazil and Latin America 3Q18 Latin In R$billions Consolidated Brazil 1 America (ex-Brazil) 2 Operating Revenues 27.9 25.1 2.8 Managerial Financial Margin 17.4 15.4 2.1 Financial Margin with Clients 16.2 14.4 1.8 Financial Margin with the Market 1.3 1.0 0.3 Commissions and Fees 8.6 7.9 0.7
Slide 47: Business Model
Business Model In R$billions 9M18 9M17 Insurance Excess Insurance Excess Insurance Excess Consolidated Credit Trading and Consolidated Credit Trading and Consolidated Credit Trading and Capital Capital Capital Services Services Services Operating Revenues 83.3 42.9 1.4 37.7 1.3 81.5 42.1 1.4 35.9 2.
Slide 48: Credit Portfolio with Financial Guarantees Provided and Corporate Securities
Credit Portfolio with Financial Guarantees Provided and Corporate Securities Consolidated Breakdown America Latin In R$billions, end of period 3Q18 2Q18 3Q17 Individuals 200.0 195.0 2.5% 179.9 11.2% Credit Card Loans 68.7 66.1 3.9% 57.2 20.1% Personal Loans 28.9 28.3 1.9% 26.0 11.3% Payroll Loans ¹
Slide 49: Credit Portfolio by Product
Credit Portfolio by Product In R$billions, end of period 3Q18 2Q18 3Q17 2.6% 179.0 11.2% Individuals - Brazil ( 1) 199.1 194.1 Credit Card 68.7 66.1 3.9% 57.2 20.1% Personal Loans 27.9 27.3 2.1% 25.0 11.6% Payroll Loans (2) 46.0 45.4 1.2% 44.6 3.1% Vehicles 15.2 14.7 3.9% 13.9 9.7% Mortgage Loans 41
Slide 50: Credit Portfolio by Currency
Credit Portfolio by Currency 1 R$billion Sep-18 233.4 366.7 600.1 Jun-18 223.5 365.1 588.6 Mar-18 197.9 368.4 566.4 Dec-17 192.4 371.7 564.1 Sep-17 180.7 358.4 539.1 Jun-17 184.9 367.4 552.3 Mar-17 176.5 373.9 550.3 Dec-16 183.3 378.7 562.0 Sep-16 193.8 374.0 567.7 Foreign Currency Local Currency (1
Slide 51: Credit Origination and Private Securities Issuance | Brazil
Credit1 Origination and Private Securities Issuance | Brazil Base 100 = 3Q17 and 9M17 Total Credit2 – Brazil Credit2 - Individuals 27% 38% -7% 19% -3% 31% 136 127 119 143 138 131 100 100 100 100 3Q17 2Q18 3Q18 9M17 9M18 3Q17 2Q18 3Q18 9M17 9M18 Credit2 – Very Small, Small and Credit2 – Corporate Pri
Slide 52: Credit Portfolio Growth in Brazil
Credit Portfolio Growth in Brazil 1 (in R$Billions) Nominal GDP (Sep-14 to Sep-18): 19.5% Accumulated Inflation (IPCA) (Sep-14 to Sep-18): 28.0% Accumulated Interbank Rate: (Sep-14 to Sep-18): 54.3% Credit Card Loans Personal Loans Payroll Loans Vehicle Loans 26.5% -1.0% 26.1% -51.4% 23.2% 1.6% 0.7%
Slide 53: Credit Portfolio Breakdown Companies
Credit Portfolio Breakdown 1 Companies Credit Portfolio by Business Sector 2,3 In R$billions, end of period 3Q18 2Q18 -3.5% Public Sector 5.3 5.4 Private Sector | Companies 331.2 326.6 1.4% Real Estate 20.7 21.5 -4.0% Food and beverage 18.8 18.3 2.6% Agribusiness and fertilizers 17.5 17.2 1.4% Energ
Slide 54: Credit Portfolio by Vintage
Credit Portfolio by Vintage1,2 Profile of credit portfolio by origination period: § Older vintages with higher spreads are losing relevance compared to the most recent ones. § 56.6% of total origination was created in the past 12 months. 468 519 531 42.6% 38.9% 38.8% 4.8% 5.2% 4.5% 6.0% 6.4% 6.1% 7.
Slide 55: Evolution of the Credit Portfolio Mix
Evolution of the Credit Portfolio Mix Corporate and Individuals1 | Brazil Individuals 21.8% 24.4% 24.3% 25.5% 24.4% 25.0% 23.3% 23.4% 23.1% 15.6% 17.0% 18.5% 19.9% 20.8% 21.4% 20.9% 20.9% 20.7% 15.6% 12.7% 10.7% 9.2% 8.4% 7.9% 7.4% 7.6% 7.7% 15.1% 15.8% 15.2% 15.5% 14.1% 14.2% 13.3% 14.1% 14.0% 32.0
Slide 56: Net Interest Margin and Financial Margin with Clients
Net Interest Margin and Financial Margin with Clients Annualized Average Consolidated Brazil 13.8% 12.7% 13.3% 12.6% 12.3% 12.0% 12.0% 12.2% 12.1% 10.8% 10.3% 10.3% 10.1% 9.9% 9.9% 9.9% 9.8% 12.6% 10.9% 9.5% 9.6% 9.2% 8.9% 9.0% 8.2% 8.2% 8.9% 9.2% 7.7% 7.5% 7.3% 7.4% 7.1% 7.4% 7.6% 6.6% 6.7% 6.7% 6.
Slide 57: Loan Portfolio Mix Change
Loan Portfolio Mix Change 1 (%) Consolidated Sep-18 18.9 12.2 2.9 12.9 5.3 9.0 8.7 30.2 Sep-18 27.0 17.4 4.1 18.5 7.5 13.0 12.4 Brazil 2 Sep-17 28.5 16.4 4.1 16.8 7.3 13.8 13.1 Sep-16 30.9 15.9 4.4 15.4 7.6 13.3 12.6 Sep-15 35.4 16.4 5.3 13.5 7.3 10.9 11.2 Sep-14 33.5 17.5 8.2 14.2 7.3 9.8 9.5 Corpo
Slide 58: Financial Margin with the Market
Financial Margin with the Market R$billion 1.7 1.6 1.7 1.8 1.8 1.7 1.6 1.5 1.4 1.4 1.5 1.7 2.0 1.9 1.6 1.7 1.4 1.4 0.1 1.3 1.3 1.5 1.8 1.7 1.2 1.3 1.2 1.3 0.9 1.0 1.1 0.3 0.3 0.3 0.2 0.3 0.5 0.3 0.2 0.2 0.2 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Sale of B3 Shares Financial Margin with the
Slide 59: Provision for Loan Losses and Cost of Credit
Provision for Loan Losses and Cost of Credit Provision for Loan Losses by Segment R$million 4.4% 4.6% 5.8% 5.0% 5.0% 4.7% 4.5% 4.3% 4.3% 4.1% 3.6% 3.7% 3.3% 3.4% 3.0%1 7,824 5,714 5,768 5,997 6,366 6,337 6,169 5,823 5,392 772 4,948 4,282 4,483 4,111 4,271 358 392 399 383 396 412 757 432 1,892 1,629
Slide 60: Allowance for Loan Losses by Risk – Consolidated
Allowance for Loan Losses by Risk– Consolidated Allocation of Total Allowance(*) by Type of Risk - Consolidated R$billion Regulatory Breakdown 35.5 36.6 36.1 35.5 17.0 16.1 14.9 Expected and/or Potential Loss Related to expected loss in Retail segment and potential loss in Wholesale segment Retail -
Slide 61: Non Performing Loans Ratios
Non Performing Loans Ratios 90-day NPL Ratio| Consolidated (%) 15 to 90-day NPL Ratio | Consolidated -% 4.5 4.8 3.9 3.8 3.6 3.6 3.8 3.7 3.7 3.4 3.5 3.6 3.9 3.2 3.2 3.1 3.1 3.0 3.0 3.0 2.8 2.9 0.9 1.1 1.2 1.1 1.2 1.2 1.4 1.5 1.6 1.5 1.3 Sep-14 Jun-15 Sep-15 Jun-16 Sep-16 Jun-17 Sep-17 Dec-17 Mar-18 J
Slide 62: NPL Ratio Evolution – Individuals (Brazil)
NPL Ratio Evolution – Individuals (Brazil) NPL Ratio (Over 90 days) -% Mix jun-12 5.0 5.1 4.6 4.5 Sep-17 Mar-18 Sep-18 Note: Includes the consolidation of Citibank as of 4Q17. page 62
Slide 63: NPL Creation
NPL Creation 6.8 R$billion 5.3 4.9 5.0* 5.0 4.4 4.4 4.4 3.8 4.1 3.8 3.8 3.6 3.5 2.3 3.5 3.3 3.5 3.2 0.8 1.0 1.1* 1.0 0.4 0.5 0.5 0.5 0.8 0.7 0.4 0.5 0.2 0.2 0.5 0.4 -0.3 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Total Retail Banking - Brazil Wholesale Banking - Brazil Latin America ex-Brazil * Ex
Slide 64: Provision for Loan Losses and NPL Creation by Segment
Provision for Loan Losses and NPL Creation by Segment Retail Banking - Brazil 100% 3.2 3.5 3.5 2Q18 Wholesale Banking - Brazil 1.1 -66% 0.2 -0.3 2Q18 Latin America ex–Brazil 114% 0.7 0.6 0.5 2Q18 Total 113% 5.0 4.3 3.8 2Q18 Provision for Loan Losses NPL Creation Provision for Loan Losses / NPL Creat
Slide 65: Coverage Ratio
Coverage Ratio Total 90-day Coverage Ratio 715% 932% 908% 562% 553% 618% * 345% 228% 231% 231% 245% 247% 249% 241% 221% 231% 243% 241% 219% 204% 202% 952% 253% 220% 639% 235% 235% 159% 162% 165% 166% 164% 166% 169% Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Total - Brazil Retail - Brazil Latin
Slide 66: Coverage Ratio (90-day NPL)
Coverage Ratio (90-day NPL) Índice de Cobertura e Índice de Cobertura Expandida Índice de Cobertura 932% 952% 639% 222% 204% 243%246%245% 2 248% 231% 236% 235% 241% 235% 164% 220% 169% 168% 104%104%104%101%100%100% 96% 95% 92% set/16 dez/16 mar/17 jun/17 set/17 dez/17 mar/18 jun/18 set/18 Total Tota
Slide 67: Loan Portfolio Evolution by Risk Level
Loan Portfolio Evolution by Risk Level Brazil 1 Consolidated Total Allowance for Loan Losses (R$million) 32,369 31,026 30,475 36,630 36,118 35,496 Loan Portfolio by Risk Level 43.1% 44.2% 44.5% 42.2% 43.6% 44.0% 36.4% 36.6% 36.7% 34.3% 33.5% 33.6% 5.3% 5.0% 4.9% 9.8% 9.5% 9.1% 4.1% 4.2% 4.0% 4.3% 4.
Slide 68: Renegotiated Loan Operations
Renegotiated Loan Operations Total Renegotiated Portfolio | Breakdown by Days Overdue Brazil 1 R$billion Days overdue: 23.8 22.9 23.1 24.6 24.5 24.4 25.5 25.2 25.7 measured at the moment of 25.3 24.3 24.7 26.4 26.4 26.4 27.6 27.5 27.9 renegotiation 1.5 1.5 1.6 1.8 1.9 2.0 2.0 2.3 2.2 Latin America 2
Slide 69: Credit Quality | Individuals
Credit Quality | Individuals Credit Cards Portfolio Loan-to-Value in Sep-18 Vehicles and Mortgage | Vintages 8.7% 20.8% 55.2% 54.8% 56.9% 57.3% 57.2% 57.9% 8.5% 9.4% 82.8% 69.8% Itaú Unibanco Brazilian Financial System Sep-17 Jun-18 Sep-18 excluding Itaú Unibanco Transactor² Installment with Interes
Slide 70: Banking Fee Revenues and Result from Insurance
Banking Fee Revenues and Result from Insurance, Pension Plans and Premium Bonds In R$millions 3Q18 2Q18 9M18 9M17 3,050 9,069 3.2% Credit Cards 3,168 3.9% 9,357 Current Account Services 1,829 1,819 0.5% 5,466 5,028 8.7% Asset Management ¹ 1,068 1,106 -3.4% 3,188 2,617 21.8% Credit Operations and Gua
Slide 71: Merchant Acquiring - REDE
Merchant Acquiring - REDE Credit Card Transaction Volume R$million 68,259 69,425 70,376 62,370 60,938 61,937 63,558 63,345 65,915 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Numbers Sep-18 % growth 3Q18 x 3Q17 POS number 1.1 million -8.2% Purchase volume R$109.3 billion 14.0% Debit Card Transaction
Slide 72: Insurance Operations | Pro Forma Income Statement
Insurance Operations | Pro Forma Income Statement 3Q18 Recurring Other Total Recurring Activities In R$millions Activities Activities 2Q18 3Q17 946 917 3.2% 874 8.3% Earned Premiums 1,025 79 Revenues from Pension Plan and Premium Bonds 174 174 - 308 -43.4% 242 -27.8% Retained Claims (320) (246) (74)
Slide 73: Insurance Operations | Insurance Core Activities
Insurance Operations | Insurance Core Activities Net Income and Underwriting Margin R$million Combined Ratio 1 74.2% 78.0% 78.5% 74.9% 75.8% 49.8% 48.1% 47.2% 52.3% 51.6% 648 717 701 687 717 54.9% 52.0% 53.3% 57.5% 56.7% 0.4% 0.3% 0.2% 0.1% 0.1% 348 374 398 344 401 29.1% 30.0% 31.9% 32.4% 32.5% 25.5
Slide 74: Pension Plan Segment
Pension Plan Segment Focus on Client Experience 7 Reasons to Invest 1 Plan your retirement 2 Pay your future health expenses 3 Invest in your kids’ education 4 Plan your taxes expenses 5 Improve your investment return Recurring Net Income R$million 341 251 218 205 217 209 195 161 154 3Q16 4Q16 1Q17
Slide 75: Non-interest Expenses
Non-interest Expenses In R$billions 3Q18 2Q18 9M18 9M17 (5.1) (14.8) 3.7% Personnel Expenses (5.3) 4.6% (15.3) Administrative Expenses (4.0) (4.0) 0.8% (11.6) (11.7) -0.7% Personnel Expenses and Administrative Expenses (9.3) (9.0) 3.0% (27.0) (26.5) 1.8% Operating Expenses (1.2) (1.2) 5.4% (3.5) (3.
Slide 76: Efficiency Ratio and Risk-Adjusted Efficiency Ratio
Efficiency Ratio and Risk-Adjusted Efficiency Ratio 69.6 68.6 64.5 63.4 63.3 65.7 60.8 61.0 61.3 48.0 44.8 43.6 45.7 47.3 49.2 45.9 47.1 48.8 69.3 70.1 68.2 66.6 65.0 64.2 63.3 62.7 62.2 45.6 45.3 45.3 45.5 45.3 46.4 47.0 47.4 47.7 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Trailing 12-month Effic
Slide 77: Balance Sheet – Assets and Liabilities
Balance Sheet – Assets and Liabilities 1 R$million Assets 3Q18 2Q18 3Q17 4.2% 1,439,523 9.6% Current and Long-term Assets 1,578,127 1,514,685 Cash and Cash Equivalents 29,467 25,402 16.0% 19,089 54.4% Short-term Interbank Investments 320,965 277,465 15.7% 287,701 11.6% Securities and Derivative Fina
Slide 78: Total Assets | Evolution and Breakdown
Total Assets 1 | Evolution and Breakdown 1,503.5 1,613.2 1,427.1 496.3 30.8% 476.4 29.5% 428.3 26.5% 177.2 11.0% 35.0 2.2% 2016 2017 3Q18 Securities and Derivatives Breakdown Loans Breakdown 2.9% 6.7% Pension Plans Fund Quotas 5.3% 6.6% 8.7% 30.2% Domestic Government Bonds 13.8% 42.4% Corporate Secu
Slide 79: Total Liabilities | Evolution and Breakdown
Total Liabilities 1 | Evolution and Breakdown R$billion 1,613.2 1,503.5 1,427.1 558.4 329.4 201.6 196.7 148.2 125.0 53.7 2016 2017 3Q18 34.6% Deposits, Debentures and Funds from Bills and Structured Operations Certificates 20.4% Deposits Received under Securities, Repurchase Agreements and Fund from
Slide 80: Funding
Funding • • Loan Portfolio mainly funded by domestic client funding Diversified funding base In R$millions, end of period 3Q18 2Q18 3Q17 5.9% 58,609 27.7% Demand Deposits 74,817 70,646 Savings Deposits 132,374 127,342 4.0% 112,249 17.9% Time Deposits 244,247 225,762 8.2% 186,912 30.7% Debentures (Li
Slide 81: Funding from Clients
Funding Funding from Clients 1 1,747 1,805 1,839 1,912 1,648 1,682 1,556 1,595 1,543 1,028 1,070 1,116 1,154 1,215 1,242 1,290 966 971 342 348 329 332 328 336 335 333 348 165 169 168 174 171 189 189 198 207 In R$billions Demand and savings Deposits Time Deposits + Debentures + Funds From Bills Asset
Slide 82: Capital Ratios (BIS) | Prudential Conglomerate
Capital Ratios (BIS) | Prudential Conglomerate 1 In R$millions, end of period 3Q18 2Q18 135,734 Consolidated stockholders’ equity (BACEN) 139,082 Deductions from Core Capital (25,770) (25,277) Core Capital 113,313 110,457 Additional Capital 8,073 7,746 Tier I 121,386 118,203 Tier II 15,866 15,869 Re
Slide 83: Capital Ratios: Full application of Basel III rules
Capital Ratios Full application of Basel III rules │September 30, 2018 - 0.9% 14.8% 1.0% 13.8% Impact of the Tier I (2) investment in XP(2) Sep-18 (1) Common Equity Tier I (CET I) Additional Tier I (AT1) (1) Includes deductions of Goodwill, Intangible Assets, Tax Credits, Equity Investments in Finan
Slide 84: Capital Requirement under the Basel Committee, BACEN and ITUB Target
Capital Requirement under the Basel Committee, BACEN and ITUB Target Minimum Capital Required ITUB Target Basel II Basel III 15.0% 1.5% 11.0% 11.5% 1.5% 2.0% Subordinated 8.0% 5.5% 1.5% If total capital falls below 11.5%, debt (TII) restrictions will T1= 13.5% Stockholders`equity 4.0% 12.0% start to
Slide 85: Payout Practice
Payout Practice In order to manage capital efficiently, aiming at creating value to our shareholders, we announced through a Material Fact disclosed on September 26, 2017, that we intend to: § Maintain the practice of paying dividends and interest on own capital at 35% of net income, however we excl
Slide 86: Basel III – Brazilian Phase-in Requirements
Basel III – Brazilian Phase-in Requirements1 2013 2014 2015 2016 2017 2018 ² 2019 ² Common Equity Capital Ratio 4.50% 4.50% 4.50% 5.13% 8.00% to 10.50% 6.00% 6.88% to 8.75% (Minimum + Additional) Tier I Capital Ratio 5.50% 5.50% 6.00% 6.63% 7.50% 8.38% to 10.25% 9.50% to 12.00% (Minimum + Additional
Slide 87: Ratings
Ratings FitchRatings International National Viability Support Local Currency Foreign Currency Long Term Short Term Long Term Short Term Long Term Short Term bb+ 4 BB B BB B AAA (bra) F1+ (bra) Moody’s International National Subordinated Debt Senior Unsecured Debt Issuer Issuer Foreign Currency Forei
Slide 88: XP Investimentos
XP Investimentos Date Our shares Transaction Value 05/11/2017 Signature of the agrément R$6,650 49.9% 08/31/2018 million Financial settlement page 88
Slide 89: 2018 Forecast
2018 Forecast We kept unchanged the ranges of our 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
Slide 90: Basis for 2018 Forecast
Basis for 2018 Forecast We kept unchanged the ranges of our 2018 forecast. We present below the income statement that includes the result from Citibank’s operation in each of its accounts and its corresponding loan portfolio. This income statement is the basis for the 2018 forecast. Managerial Incom
Slide 91: Information Technology
5 Information Technology
Slide 92: Digital Transformation
Digital Transformation Use of Digital Channels New Accounts Share of Transactions number of current account holders (in millions) individuals accounts (in thousands) 10.7 1,010 952 1,037 1,007 1,108 through digital channels 8.1 9.4 9M16 9M18 165 127 Credit 16% 18% 1.0 1.1 53 61 91 30% 40% 0.9 Invest
Slide 93: Digital Transformation | Evolution of Digital Branches
Digital Transformation | Evolution of Digital Branches Personnalité Clients (in thousands) 338 432 527 2015 2016 2017 Personnalité Branches Uniclass Clients (in thousands) 1,300 1,500 800 2015 2016 2017 Uniclass Branches 51 63 81 72 79 43 2015 2016 2017 7:00am-12:00pm 8:00am-10:00pm 2015 2016 2017 p
Slide 94: Itaú Unibanco in Capital Markets
6 Itaú Unibanco in Capital Markets
Slide 95: Non-voting Shares Appreciation | ITUB4 and ITUB
Non-voting Shares Appreciation | ITUB4 and ITUB Evolution of R$100 invested on the day before the announcement of the merger (October 31, 2008) to October 26, 2018 513 339 267 230 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Sep-18 ITUB4 - Without dividend reinvestiment ITUB
Slide 96: Sustainability
7 Sustainability
Slide 97: Sustainability Timeline
Sustainability Timeline Sustainability Sustainability at the board of directors’ Committee Strategy (officers level) Committee Sustainability Creation of Superior Ethics and Governance operating Sustainability (executive level) committees Committee Itaú Unibanco Merger 2000 2005 2007 2008 2010 2013
Slide 98: Sustainable Performance
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 99: Corporate Sustainability Governance
Corporate Sustainability Governance Board level Definition and monitoring of the sustainability strategy Strategy Committee Members of the Board of Directors Executive level Integration of challenges and trends into businesses Officers level Decision on and prioritization of projects Operating level
Slide 100: Sustainability Strategy
Sustainability Strategy The sustainability strategy was defined from workshops, interviews and panels with internal and external stakeholders SOCIAL-ENVIRONMENTAL RISKS FINANCIAL EDUCATION DIALOG AND TRANSPARENCY AND OPPORTUNITIES Understand people´s needs to offer knowledge and appropriate financia
Slide 101: Dialogue and Transparency | Engagement
Dialogue and Transparency | Engagement Organizations and commitments that are sources of knowledge and trends Integrity and Ethics Responsible Bank Sustainable Development Climate Change Reporting and Transparency Diversity page 101
Slide 102: Transparency with the Market | Reporting
Transparency with the Market | Reporting Consolidated Annual Report Form 20-F Sustainability Report SEC + GRI MTN Program Medium-Term Note Recognitions Integrated Report • First Brazilian financial institution to publish it voluntarily. • Presentation of the results from 6 capitals: financial, socia
Slide 103: The Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) In 2015, the United Nations (UN) and world leaders formally adopted a new sustainable development agenda, the Sustainable Development Goals (SDGs). The private sector has an essential role in this challenge. We are committed to the SDGs and since 2015 we take
Slide 104: Employees | Profile
Employees | Profile 99,332 Employees1 60% 40% 51.4% of management 22% of employees are positions are held by blacks women 2.75% are apprentices 4.7% of employees are disabled persons (1) Employees who were active in December 2017, in Brazil and abroad from companies managed by the human resources de
Slide 105: Employees | Management Cycle
Employees | Management Cycle Attraction and Selection Special Talent Programs Internship: 2,094 people recruited in 2017 (Retention rate: 48%). Trainees: 139 trainees recruited in 2017 (Retention Training and Development Itaú Unibanco Business School Amounts invested in training programs (millions o
Slide 106: Integration of ESG into businesses
Integration of ESG into businesses 1 Governance Policies Sustainability and environmental and social responsibility policy Environmental and social risk policy Committees Sustainability committee Environmental and social risk committee Operational committees (Internal Management, Investment, Reporti
Slide 107: ESG Integration on Business Credit Analysis
ESG Integration on Business Credit Analysis The Environmental and Social Risk Policy contains the criteria for the analysis of clients and projects and the establishment of real estate guarantees and the inclusion of covenants. To this end, we must consider: List of prohibited activities We do not c
Slide 108: Our operations | Buildings, Branches and Data center
Our operations | Buildings, Branches and Data center GOVERNANCE AND TARGETS RENEWABLE ENERGY PILOTS EMISSIONS MANAGEMENT Committee reviews eco-efficiency projects and studies, and tracks environmental targets In administrative buildings, using solar panels and Distributed Generation Develop inventor
Slide 109: Task Force on Climate-related Financial Disclosures (TCFD)
Task Force on Climate-related Financial Disclosures (TCFD) The initiative was conceived under the Financial Stability Board (FSB). It proposes climate disclosure recommendations for the financial and non-financial sectors in the pillars of Governance, Strategy, Management Risks, Goals and Metrics. W
Slide 110: Initiatives | Itaú Women Entrepreneurs and Financial Education
Initiatives| Itaú Women Entrepreneurs e Financial Education Itaú Women Entrepreneurs The Itaú Women Entrepreneurs Program (local acronym IME) was created in 2013 as a result of a partnership with the IFC, World Bank, and the IDB to offer financial and non-financial solutions to women entrepreneurs.
Slide 111: Ethics and Information Security
Ethics and Information Security Our business is based on ethical principles, which reflects the transparency, respect and honesty present in our relationship with stakeholders. Code of ethics Established to guide, prevent and resolve ethical dilemmas and conflicts of interests related to our activit
Itau Unibanco Holding — Investor Presentation (November 2018) on 6ix