Slide 1: Results and ITUB versus Ibovespa Comparison
Results and ITUB versus Ibovespa Comparison Roberto Setubal Executive President and CEO November 17, 2016 Apimec Cycle 2016 Itaú Unibanco Holding S.A.
Slide 2: Quarterly Highlights
Quarterly Highlights ¹ Result from Insurance (-) Retained Claims (-) Insurance Selling Expenses. Note: Results from Brazil consider units abroad ex-Latin America Recurring Net Income R$5.6 billion Consolidated + 0.4% (3Q16/2Q16) - 8.9% (3Q16/3Q15) Recurring ROE (p.a.) - 70 bps (3Q16/2Q16) - 420 bps
Slide 3: Highlights in the Quarter
Highlights in the Quarter + 2.4% (3Q16/2Q16) - 7.3% (3Q16/3Q15) R$5.3 billion Brazil - 30 bps (3Q16/2Q16) - 330 bps (3Q16/3Q15) 20.8% Brazil + 30 bps (3Q16/2Q16) + 100 bps (3Q16/3Q15) NPL 90 4.8% Brazil Ex-Specific Economic Group: 4.4% (3Q16/2Q16) Financial Margin with Clients - Brazil: Efficiency R
Slide 4: Consolidated Results
Consolidated Results 4 In R$ billions 3Q16 2Q16 change 9M16 9M15 change Operating Revenues 28 26 4.2% 81 81 0.2% Managerial Financial Margin 18 17 6.7% 52 53 -2.0% Financial Margin with Clients 16 15 5.9% 47 47 -0.8% Financial Margin with the Market 2 2 15.0% 5 6 -12.3% Commissions and Fees 8 8 0.1%
Slide 5: Credit by Type of Client/Product
Credit by Type of Client/Product 5 In R$ billions, end of period Sept 30, 2016 Change in relation to June/16 Sept/15 Individuals 183 -0.1% -1.9% Credit Card Loans 56 2.4% 1.3% Personal Loans 28 -2.9% -7.9% Payroll Loans 46 -1.8% -0.1% Vehicles 16 -4.8% -26.5% Mortgage Loans 37 2.9% 11.5% Corporate C
Slide 6: Credit by Type of Client/Product
Credit by Type of Client/Product 5 In R$ billions, end of period Sept 30, 2016 Change in relation to June/16 Sept/15 Individuals 183 -0.1% -1.9% Credit Card Loans 56 2.4% 1.3% Personal Loans 28 -2.9% -7.9% Payroll Loans 46 -1.8% -0.1% Vehicles 16 -4.8% -26.5% Mortgage Loans 37 2.9% 11.5% Corporate C
Slide 7: Total Brazil 90-day NPL Ratios
Total Brazil1 90-day NPL Ratios - % 4.8 4.4 4.2 3.9 3.5 3.3 3.2 3.1 3.0 2.9 2.8 3.0 3.0 3.2 3.5 3.6 3.9 5.6 5.2 4.9 4.6 4.3 4.0 3.8 3.7 3.6 3.4 3.3 3.6 3.8 3.9 4.4 4.5 4.8 0.9 0.8 0.8 0.7 0.7 0.7 0.8 0.7 0.9 1.1 1.1 1.1 1.2 1.1 1.1 1.1 1.2 3.6 .4,4* * Consolidated Sept/12 Dec/12 Mar/13 Jun/13 Sept/1
Slide 8: Coverage Ratio (90-day NPL)
Coverage Ratio (90-day NPL) 182% 192% 199% 187% 212% 206% 210% 215% 204% 182% 191% 195% 183% 200% 195% 200% 206% 214% 204% 174% 178% 181% 172% 185% 215% 232% 228% 164% 164% 166% 169% 172% 164% 160% 159% 159% 296% 367% 369% 256% 402% 462% 458% 494% 345% 502% Coverage Ratio (90-day NPL) Sept/14 Dec/14
Slide 9: Non-interest Expenses
Non-interest Expenses 1 In the 3Q16, includes expenses due to the collective bargaining agreement in the amount of R$537 million; 2 Includes IPTU, IPVA, IOF and other. Does not include PIS, Cofins and ISS; 3 Does not consider overhead allocation. 4 Related to the methodology enhancement for calculat
Slide 10: Core Capital Ratio (Common Equity Tier I)
Core Capital Ratio (Common Equity Tier I) Full application of Basel III rules │September 30, 2016 15.7% -1.6 % 14.1 % -0.5 % 13.6 % 1.0 % 14.6 % Common Equity Tier I (CET I) Sep-16 Deductions Schedule Anticipation1 and Riskweighted Assets Rules Anticipation² CET I with fully loaded Basel III Rules I
Slide 11: Business Model
Business Model Jan – Sept 2016 Jan – Sept 2015 In R$ billions Consolidated Credit & Trading Insurance & Services Excess Capital Consolidated Credit & Trading Insurance & Services Excess Capital Operating Revenues 81 45 35 1 77 42 34 1 Financial Margin 52 38 13 1 50 35 14 1 Commissions and Fees 23 7
Slide 12: Recurring Net Income and ROE: Credit & Trading x Insurance & Services
Recurring Net Income (R$ billion) and ROE (%) Credit & Trading x Insurance & Services 4.5 3.5 5.3 7.8 5.3 5.5 7.2 9.0 9.7 9.7 ROE ROE 34.2% 12.6% 43.4% 16.5% 43.9% 14.0% 46.1% 9.4% 71.0% 5.6% Year to Date (9 months) Standard Deviation: 11.9% Standard Deviation: 6.1% Net Income Net Income Credit & Tr
Slide 13: ITUB versus Ibovespa Comparison
ITUB versus Ibovespa Comparison
Slide 14: Quarterly Changes in Ibovespa Financial Results
Quarterly Changes in Ibovespa1 Financial Results (1) Sum of the companies’ Net Profits, weighted by their respective weights in Ibovespa’s theoretical portfolio for the period from September to December 2016. For purposes of comparison, the figures are shown on a total basis, without weighting. R$ b
Slide 15: Quarterly Changes in Financial Results – Itaú Unibanco x Ibovespa-ex
Quarterly Changes in Financial Results – Itaú Unibanco x Ibovespa-ex1 3.7 3.5 4.6 6.0 5.5 (1) Sum of the companies’ Net Profits, weighted by their respective weights in Ibovespa’s theoretical portfolio for the period from September to December 2016, except for Itaú Unibanco, Itaúsa, Vale, and Petrob
Slide 16: Quarterly Changes in Share Price – Itaú Unibanco x Ibovespa-ex
Quarterly Changes in Share Price (ITUB4) – Itaú Unibanco1 x Ibovespa-ex2 103 83 90 98 106 93 102 101 110 114 121 123 126 122 104 103 122 119 114 109 117 134 138 131 140 141 142 150 152 153 161 165 144 140 164 168 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q
Slide 17: Quarterly Changes in Share Price – Itaú Unibanco x Ibovespa-ex
Quarterly Changes in Share Price (ITUB4) – Itaú Unibanco1 x Ibovespa-ex2 103 83 90 98 106 93 102 101 110 114 121 123 126 122 104 103 122 119 114 109 117 134 138 131 140 141 142 150 152 153 161 165 144 140 164 168 100 112 102 110 122 124 115 124 125 125 131 134 127 131 138 116 111 131 135 4Q11 1Q12 2
Slide 18: Quarterly Changes in Net Income and Share Price
Quarterly Changes in Net Income and Share Price (ITUB4) – Itaú Unibanco 23.2 23.9 19.3 20.9 22.8 24.6 21.6 23.6 23.6 25.5 26.4 28.0 28.6 29.2 28.3 24.1 23.9 28.4 27.5 3.7 3.4 3.3 3.4 3.5 3.5 3.6 4.0 4.6 4.4 4.9 5.4 5.5 5.7 6.0 5.9 5.7 5.2 5.5 (1) Quoted price adjusted for bonuses granted in the peri
Slide 19: Quarterly Changes in Financial Results and Ibovespa-ex
Quarterly Changes in Financial Results and Ibovespa - ex 100 117 131 142 165 140 168 21.7 26.4 18.8 12.7 22.9 18.7 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Ibovespa-ex1 - Basis 100 Net Income – Ibovespa-ex2 – R$ billions (1) Recalculated based on
Slide 20: P/E – Itaú Unibanco x Ibovespa-ex
P/E – Quarterly Changes in Price / Earnings per Share – Itaú Unibanco x Ibovespa-ex1 13.5 15.4 14.1 20.4 15.9 16.0 16.0 16.1 15.7 15.2 15.6 15.5 15.1 18.9 16.4 13.8 12.8 15.8 16.6 9.3 9.4 8.2 8.9 9.6 10.3 8.8 9.4 9.1 9.0 9.1 8.9 8.7 8.5 8.0 6.7 6.9 8.8 8.2 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q1
Slide 21: Comparison: Performance x Standard Deviation
Comparison: Performance x Standard Deviation Standard Deviation (Jan 12 to Jun 16) P/E CAGR (Net Income) Net Income* 1 Share Price** 2Q163 (4Q11 to 2Q16) GDP and CDS 2.7% (GDP) 2.6% (CDS) - - Itaú Unibanco 6.7% 2.0% 8.2 9.4% Itaú Unibanco – Credit & Trading 11.9% - - 5.1% Itaú Unibanco – Insurance &
Slide 22: Business Model Jan - Sept 2016
Business Model 21 Jan - Sept 2016 In R$ billions Consolidated Credit & Trading Insurance & Services Excess Capital Operating Revenues 81 45 35 1 Financial Margin 52 38 13 1 Commissions and Fees 23 7 16 0 Result from Insurance 6 0 6 0 Result from Loan Losses -18 -18 0 0 Claim Expenses -1 0 -1 0 Non-i
Slide 23: Risk Control and Management
Risk Control and Management Eduardo Vassimon Executive Vice-President, CFO & CRO 11/17/2016 Apimec Cycle 2016 Itaú Unibanco Holding S.A.
Slide 24: Agenda
Agenda 1. Risk Governance 2. Lessons Learned in Credit Granting 3. What Has Changed in the Wholesale Segment 4. Future - How We Plan to Grow 5. Risk Culture
Slide 25: Risk Governance
Risk 78 Governance ~
Slide 26: Risk Management Structure (1/2)
Risk Management Structure (1/2) Board of Directors Pedro Moreira Salles Itaú Unibanco Holding Roberto Setubal Audit Committee Geraldo Travaglia Capital and Risk Management Committee Pedro Bodin General Technology and Operations Office Marcio Schettini General Wholesale Office Candido Bracher General
Slide 27: Risk Management Structure (2/2)
Risk Management Structure (2/2) Comitê de Divulgação e Negociação Board of Directors Pedro Moreira Salles Itaú Unibanco Holding Roberto Setubal Audit Committee Geraldo Travaglia Capital and Risk Management Committee Pedro Bodin General Technology and Operations Office Marcio Schettini General Wholes
Slide 28: Credit Risk Policies Hierarchy
Credit Risk Policies Hierarchy 1EC = Economic Capital. Board of Directors and Capital and Risk Management Committee Executive Committee General Office and Risk Dept. Defines and monitors Risk Appetite; Approval of policies, strategies and definition of minimum expected return on capital; Improvement
Slide 29: Risk Appetite
Risk Appetite Sustainability and customer satisfaction; Risk pricing; Operational excellence; Diversification; Risk Culture; Ethics and regulatory compliance; Principles Optimization of capital allocation; Low volatility in results; Regional focus; Alignment with “Our Way”; Diversification of busine
Slide 30: Lessons Learned in Credit Granting
2 Lessons Learned in Credit Granting
Slide 31: Change in the Mix – Portfolio Performance (Brazil)
Change in the Mix – Portfolio Performance (Brazil1) 34% 9% 27% 31% 18% 15% 12% 20% 9% 25% dez/jun/16 Payroll Loans Mortgage Loans Personal Loans Credit Card Vehicles 45% 32% 55% 68% dez/jun/16 Corporate Very Small, Small and Middle Market 1Includes external units ex-Latin America; 2Not including end
Slide 32: Evolution of Default NPL Ratio – Over 90 days
4,8 4,8 4,4 4,2 3,9 3,5 3,3 3,2 3,1 3,0 2,9 2,8 3,0 3,0 3,2 3,5 3,6 3,9 7,7 7,9 7,3 7,1 6,8 6,4 6,1 5,8 5,6 5,2 4,9 4,8 4,9 5,4 5,8 6,0 5,9 5,7 0,5 0,4 0,4 0,4 0,6 0,6 0,5 0,6 0,7 0,8 0,9 1,1 1,8 1,5 1,1 1,5 1,6 2,8 8,0 8,1 7,8 7,3 6,4 5,8 5,3 4,9 4,6 4,4 4,2 4,1 4,0 4,2 4,7 5,6 6,0 6,3 jun/12 set/1
Slide 33: Evolution of Default – Individuals (Brazil)
Evolution of Default – Individuals (Brazil) NPL Ratio - Over 90 days (%) Mix jun/12 7,7 7,9 7,3 7,1 6,8 6,4 6,1 5,8 5,6 5,2 4,9 4,8 4,9 5,4 5,8 6,0 5,9 5,7 jun/12 set/12 dez/12 mar/13 jun/13 set/13 dez/13 mar/14 jun/14 set/14 dez/14 mar/15 jun/15 set/15 dez/15 mar/16 jun/16 set/16 6,6 11
Slide 34: Retail Management – Individuals and Small and Medium Companies
Retail Management – Individuals and Small and Medium Companies 98 114 94 123 89 128 88 88 153 88 101 102 95 89 90 112 99 124 94 115 91 91 116 92 130 93 88 157 81 167 79 91 102 114 97 92 96 121 77 130 91 86 87 134 79 136 74 169 72 166 67 65 82 99 127 85 130 77 173 73 155 65 4 Lowest risk Risk Level H
Slide 35: Credit Offer Based on Future Scenario
Credit Offer Based on Future Scenario Risk Level Credit Available Credit Not Available STATISTICAL MODELS POLICY Highest risk Lowest risk Highest risk Risk Level Positive future expectation Risk Level Negative future expectation Easing of credit, maintaining the same appetite Tightening of credit, m
Slide 36: Large Companies Ratings Revised by Credit Committees
Large Companies Ratings Revised by Credit Committees 3-Months Moving Average % Downgrades % Upgrades 38% 52% 51% 42% 45% 45% 50% 51% 59% 56% 60% 64% 73% 74% 79% 80% 92% 76% 58% 55% 62% 48% 49% 58% 55% 55% 50% 49% 41% 44% 40% 36% 27% 26% 21% 20% 8% 24% 42% 45% mar/12 jun/12 set/12 dez/12 mar/13 jun/1
Slide 37: Wholesale – Non-concentrated exposure
Wholesale – Non-concentrated exposure September 30, 2016 R$ billion % Largest Debtor 8 1 10 Largest Debtors 46 7 20 Largest Debtors 75 11 50 Largest Debtors 119 18 100 Largest Debtors 157 24 1Includes Debentures, CRI, Commercial Paper and Financial Bills; 2Not including Private Securities. Credit Po
Slide 38: Lessons Learned in the Wholesale Segment
Focus on reducing volatility in results Lessons Learned in the Wholesale Segment Portfolio management with low incentive for high tickets and volatile industries New credit granting policies Monitoring and ratings: new tools with market data and timely information 1 2 3 4 16
Slide 39: What has changed in the Wholesale segment
3 What has changed in the Wholesale segment
Slide 40: Evolution of Corporate Clients Business
Evolution of Corporate Clients Business Redefinition of the value proposition and operating model; Re-segmentation of clients (new CIB1 and “Commercial Banking”); Diagnosis of leverages for maximizing profitability. Strategic Revision of Corporate Banking Credit portfolio management and improvement
Slide 41: Credit Portfolio Management
Credit Portfolio Management Impacts: Price | Limits | Portfolio Management Portfolio risk dimensions Rating; Exposure; Term; Collateral; Product; Industry volatility; Macro Scenario. Cluster Risk features Risk Cluster = Perception of the client´s “combined risk” Credit Focus. Within the appetite. Mo
Slide 42: Examples: Credit Portfolio Management
Examples Credit Portfolio Management Very low Low Medium High Very high High Risk Company – Outside the appetite Good Rating High Exposure Adequate Term Without Collateral High Industry Volatility Unfavorable Macro Scenario Risk Cluster Possible actions: • Exposure reduction; • Collateral required;
Slide 43: Future – How We Plan to Grow
4 Future – How We Plan to Grow
Slide 44: Building of scenario based on internal and external indicators
Building of scenario based on internal and external indicators jun/13 set/13 dez/13 mar/14 jun/14 set/14 dez/14 mar/15 jun/15 set/15 dez/15 mar/16 jun/16 set/16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Corporate Individuals Vital Signs3 Generation of formal
Slide 45: Projection of Variances in GDP for 2016
Projection of Variances in GDP (%) for 2016 over time 2,6 2,5 2,0 1,8 1,1 0,3 -1,2 -2,8 -4,0 -3,5 -3,2 mar/14 jun/14 set/14 dez/14 mar/15 jun/15 set/15 dez/15 mar/16 jun/16 set/16 Deterioration of expectations for 2016 Consequence: Reduction in the Credit Granting Activity Oct-16 -3.2 2016 Source: M
Slide 46: Projection of Variances in GDP for 2016 and 2017
2,6 2,5 2,0 1,8 1,1 0,3 -1,2 -2,8 -4,0 -3,5 -3,2 0,0 0,0 0,3 1,0 2,0 mar/14 jun/14 set/14 dez/14 mar/15 jun/15 set/15 dez/15 mar/16 jun/16 set/16 Projection of Variances in GDP (%) for 2016 and 2017 over time Improvement of expectations for 2017 Consequence: Increase in the Credit Granting Activity
Slide 47: Strategy – Regional Diversification
7% 12% dez/12 set/16 Strategy – Regional Diversification Brazil2 Latin America3 +5 p.p. 1Includes endorsements and sureties; 2Includes external units ex-Latin America ; 3Only Itaú Unibanco’s equity interest in Itaú CorpBanca as at September 30, 2016 considered. Mix of Credit Products by Region1 93%
Slide 48: Risk Culture
Risk 78 Culture
Slide 49: Risk Culture Journey
2009-2013 2015 2016 2017 Approval Risk Appetite (Risk Vision and Goals) Risk Culture Journey Leaders Dissemination (workshops and Training programs) Holding Communication: - Risk Culture Principles - Key risks of our business Negócios magazine Videos showing fictitious cases Perenity of Risk Culture
Slide 50: Change of Mindset
Change of Mindset Risk management is dissociated from the commercial action. We do not feel encouraged to share and discuss bad news. Risk management derives from our adherence to procedures and rules. We delegate risk management to our managers and control departments. Risks are inherent in our bus
Slide 51: Transforming Experiences: Banking in the Digital Age
Transforming Experiences Banking in the Digital Age André Sapoznik Apimec Cycle 2016 Itaú Unibanco Holding S.A.
Slide 52: Agenda
1. Digital Journey | Recent Evolution 2. Realities and Bets | Technology Transforming Experiences 3. Itaú’s Way of Being Digital 4. Results Agenda 2
Slide 53: Digital Journey | Recent Evolution
1 Digital Journey | Recent Evolution
Slide 54: The relationship with the bank is becoming more digital
The with the bank is becoming more digital _ Itaú’s customer transactions 72% 28% relationship digital_ 4
Slide 55: Relationship managers are becoming more digital
Experience_ our relationship managers are becoming more digital #individuals: digital branches #companies: digital relationship managers • Extended hours (7-24h) • Phone, e-mail, text, chat • Videoconference Fas 5
Slide 56: However, digital trends evolve exponentially
However, digital trends evolve Doing business Consuming content Experiencing the world ”Asset light” market leaders Ownership vs Use Market value US$54,4 Bi Market value US$51 Bi More than 190 countries and 77MM paying subscribers Reached more than 100MM active users, with 40MM paying subscribers Pe
Slide 57: Realities and Bets | Technology Transforming Experiences
2 Realities and Bets | Technology Transforming Experiences
Slide 58: Realities and bets: three levels of bank-customer relationship
experience processing infrastructure bets Maturing trends with significant potential impact realities Transformations that impact the present 3 levels of bank-customer relationship_ 8
Slide 59: Realities and Bets: trends influencing banking
Realities Bets 6 trends influencing thinking and doing banking_ Digital Payments M obile Block Chain BC Open Platforms A.I. Big Data 9
Slide 60: Always on, the mobile reality
Always on, The mobile reality Realities Bets M obile Digital Payments A.I. Big Data Block Chain BC Reality #1_ Open Platforms Expeience Processing Infrastructure 10
Slide 61: The mobile phenomenon
The mobile phenomenon_ Digital individual clients up to 4k monthly income +10k monthly income 826k 4,8MM mobile growth: 2.5x 5,8 mm 11
Slide 62: The new (mobile) banking experience
1. Ubiquity_ where the client wants when the client wants respecting the client’s profile 2. Flawless experiences_ simple, easy and fast frictionless constant evolution 3. Digital hi-touch_ whenever the client needs undertanding the client’s moment support for complex transactions “Banking is no lon
Slide 63: Itaú App: Evolution of mobile completeness
Itaú App Evolution of mobile completeness Personal Banking Light App (2017) Entry-level and low income solution Abreconta App Digital customers acquisition D pp ers on Mobile all customers, all journeys 1 Ubiquity_ 13
Slide 64: Flawless experiences: constant evolution
version version version version 2010 2013 2016 2017 experiences_ constant evolution 2 New architecture card-based Flawless 14
Slide 65: Relationship manager chat
Customer service with extended hours 800k+ chats/month _relationship manager chat Digital hi-touch_ touch in digital timing 3 personal 15
Slide 66: Digital customer service
Credit card demands 400k+ chats/month _digital customer service 3 Digital hi-touch_ personal touch in digital timing 16
Slide 67: Credit renegotiation: integrated journey
Credit renegotiation at client's request Integrated journey: human + digital ~ 5k chats per month _click to call 3 Digital hi-touch_ personal touch in digital timing 17
Slide 68: Reality #2: Big insights
A.I. Big Data Block Chain BC M obile _ big insights Reality #2_ Realities Bets Digital Payments Open Platforms 18
Slide 69: Data: the digital economy currency
Data_ the digital economy currency #monthly... #onsocialnetwork... 19
Slide 70: Big data results
Big data_ results _PREDICT CLIENT`S LATE PAYMENT PREDICTION 91+% ASSERTIVENESS 60+% GAIN IN DEVELOPMENT LEADTIME PROCESSING 7k+ VARIABLES TYPES TION VENESS PREDI ASSERT _PRODUTO CERTO PARA O CLIENTE CERTO RIGHT PRODUCT TO THE RIGHT CLIENT DEVELOPMENT TIME REDUCTION 5 MONTHS TO 1 W E E K P R O C E S
Slide 71: Reality #3: A.I. first, the new age
Block Chain BC M obile Big Data A.I. first _ the new age Reality #3_ Realities Bets Digital Payments Open Platforms 21
Slide 72: Cognitive Intelligence: the future is now
Chess 10120 possibilities Go 10768 possibilities X Go's complexity of plays does not allow statistical performance, it requires intuition to win April 2016_ Google DeepMind Cognitive Intelligence_ the The expectation of the academic community has been exceeded by 10 years future is now 22
Slide 73: New technologies: exponential learning
Step 1 basic learning Step 2 interaction with lots of machines Step 3 evolved learning Source: by New technologies_ e x p o n e n t i a l learning 23
Slide 74: Applied AI: Itaú's chatbots
”I don’t know” rate of only 3% _virtual itaú 10% reduction in call-center contacts Vídeo do virtual sendo utilizado assistente assistente Applied AI _ Itaú’s chatbots 24
Slide 75: Post-app age based on AI
4MM apps available in stores App Stores saturation however… Source: The 2016 Mobile App Report – Comscore e Statista 2016 Google Allo Other examples: Siri Post-app age_ based on AI 50% of users don’t download any apps 85% of the mobile use are concentrated in only 5 apps personal assistants 25
Slide 76: Bet #1: Digital payments, or the end of payment experience?
Digital payments Block Chain BC M obile Big Data A.I. _ or the end of payment experience? Bet #1_ Realities Bets Open Platforms 26
Slide 77: Digital payments: many initiatives, early maturity
NORTH AMERICA Online World On-line purchase with no card number #modals #maturity Physical World Physical purchase with no card requested Integrated Payment Fluid, seamless payment experience #marketatlarge Digital payments_ many initiaves, early maturity #atitaú EUROPE ASIA BRAZIL 27
Slide 78: Bet #2: Blockchain, revolution in system?
Mobile Big Data A.I. _ revolution in system? Bet #2_ Realities Bets Digital Payments trust Open BlockPlaCthfoarmins 28
Slide 79: Blockchain: Itaú's initiatives
CRIPTOCURRENCY 2009 Participating in reference group First bank in Latin America to enter R3 consortium Currently 75 member banks Digital KYC Security and Fraud Prevention Bill Payments Simplification SMART CONTRACT DIGITAL GOODS TRANSACTION DATA AND DOCUMENT INTEGRATED REGISTRY DIGITAL IDENTITY PAY
Slide 80: Bet #3: Open platforms, redefining banking frontiers?
Open Platforms M obile Big Data A.I. Block Chain BC _ redefining banking frontiers? Bet #3_ Realities Bets Digital Payments 30
Slide 81: Open Platform
Platform Ohpen Cloud management platform for investment funds and savings accounts SolarisBank Use Lego’s concept for digital innovation through partners Mastercard developers APIs Open Platform to create new solutions • Scale • Development Cost Reduction • Time-to-Market bank Internal domain Intern
Slide 82: Itaú's Way of Being Digital
3 Itaú’s Way of Being Digital_
Slide 83: Itaú's Way of Being Digital
_new model, new talent _new eco-system Digital Business IT MKT Risk and Security Design CRM UX Digital Operation #connect #inspire #educate #timetomarket Itaú’s Way of Being Digital_ Invested last year R$ 104 MM residents STARTUPS 58 780+EVENTS 30K atendees 3+ events/day 5PRIDES • Visual Identity Aw
Slide 84: Results
4 Results_
Slide 85: Leadership in satisfaction and sustainable performance
Results_ Leadership in satisfaction and sustainable performance INDIVIDUALS SME 7,5 8,0 8,5 9,0 average 2nd #net profit mobile + internet Digital channels’ share in retail bank’s total net profit increased by 13 pp, over the last 2 years. Leadership in digital satisfaction 7,5 8,0 8,5 9,0 average 2n
Slide 86: Thank you
Thank you Apimec 2016 Itaú Unibanco Holding S.A. Transforming Experiences André Sapoznik Business Banking in the Digital Age
Slide 87: Corporate Governance
Corporate Governance Roberto Setubal Executive President & CEO Pedro Moreira Salles Chairman of the Board of Directors 11/17/2016 Apimec Cycle 2016 Itaú Unibanco Holding S.A.
Slide 88: Evolution of the Average Return on Equity (ROE)
Evolution of the Average Return on Equity (ROE) 12.5% 10.3% 15.4% 17.2% 18.9% 31.6% 27.7% 31.5% 26.3% 26.5% 27.0% 35.3% 32.6% 32.1% 24.8% 21.4% 23.5% 22.3% 19.4% 20.9% 24.0% 23.9% 24.5% 20.0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 89: Corporate Governance Objective at Itaú Unibanco
Create an efficient set of incentives and monitoring mechanisms to ensure that management members’ behavior is always aligned with the shareholders’ interests; CREATION OF LONG-TERM VALUE TO SHAREHOLDERS. Corporate Governance Objective at Itaú Unibanco 3
Slide 90: Corporate Governance Objective at Itaú Unibanco
Corporate Governance Objective at Itaú Unibanco How;? 1st – Establishing management bodies and authority levels for proper “ checks and Balances ”. 2nd – Implementing procedures to ensure the Executive Group;' behavior towards value creation by means of: • ... Meritocratic culture; • ... Focus on pe
Slide 91: Executive Committee
Executive Committee Implementation of Board of Directors’ guidelines and goals; Operation of the businesess and strategy for products and segments; Ensure better allocation and management of financial, operational and human resources; Monitoring of market, credit and operational risks; Operate the B
Slide 92: Itaú Unibanco's Governance Structure
Itaú Unibanco’s Governance Structure Assembleia Geral Board of Directors Fiscal Council Executive Committee Related Parties Committee Transactions with related parties 100% of members are independent members ...... Nomination and Corporate Governance Committee Succession of Chairman and CEO and perf
Slide 93: Current Board of Directors
Current Board of Directors Chairman Pedro Moreira Salles Vice President Alfredo Egydio Arruda Villela Filho Roberto Egydio Setubal Members *independent members. Out of 12 members: 75% are non-executive 40% are experienced in commerce and industry 42%are independent Age limit: 70 years. Alfredo Egydi
Slide 94: Risk Management Structure
Risk Management Structure Board of Directors Pedro Moreira Salles Itaú Unibanco Holding Roberto Setubal Audit Committee Geraldo Travaglia Capital and Risk Management Committee Pedro Bodin General Technology and Operations Office Marcio Schettini General Wholesale Office Candido Bracher General Retai
Slide 95: Corporate Governance Objective at Itaú Unibanco
Corporate Governance Objective at Itaú Unibanco How? 1st – Establishing management bodies and authority levels for proper “ checks and Balances ”. 2nd – Implementing procedures to ensure the Executive Group' behavior towards value creation by means of: • ... Meritocratic culture; • ... Focus on perf
Slide 96: Meritocracy at Itaú Unibanco
Meritocracy at Itaú Unibanco Meritocracy: lead with people, recognizing and distinguishing them based on their relative performance. Everyone’s right and obligation. Everyone has clear and challenging goals. Periodic performance reviews (at least annually): all employees. Aligment with Our Way. Forc
Slide 97: Meritocracy Cycle
Goal Setting Assessment: of Goals Assessment of Attitudes Calibration Committees (Forced Performance Ranking) feedback Individual Development Committees Feedback Meritocracy Cycle Executive Board 11
Slide 98: Meritocracy Cycle – Executive Board: Goal Setting
Goal Setting Goals aligned with the organization´s goals. Maximum 10 goals per year. Challenges and priorities. Quantitative goals should have significant weigh. Institutional guidelines for setting goals are disclosed to the departments Behavioral Assessment FOCUS ON THE CLIENT HANDLING WITH PRESSU
Slide 99: Meritocracy Cycle
Meritocracy Cycle 2-day Meeting with the Collegiate (approximately 25 individuals). Evaluated on a case-by-case basis; reported by a spokesman. Final recalibration (Forced Ranking). Attitudes Goals Mín. 5% Min. 5% Max. 30% Max. 10% 13
Slide 100: Focus on Performance - Incentives
Focus on Performance - Incentives All businesses have on average 30% of goals in Net Income and VC – Value Creation. All businesses have ROE and RAROC in goals. Everyone at the Bank is assigned cost goals (minimum 10%). Other goals typically considered: client satisfaction, market share, etc. Bonus
Slide 101: v We believe that solid governance, ensuring meritocracy, oriented to long-term value creation, assures
15 v We believe that solid governance, ensuring meritocracy, oriented to long-term value creation, assures the perennity of Itaú’s Unibanco strong performance.
Slide 102: Succession Planning
Succession Planning
Slide 103: Succession planning and management structure at Itaú Unibanco
Succession planning and management structure at Itaú Unibanco Itaú BBA Itaú Unibanco Itaú Unibanco Holding 2013 Corporate Investment banking Treasury Retail Brasil and Latam Consumer credit Wealth management Insurance Support areas Limit age: All - 60 years Beginning 2015 Itaú Unibanco Holding Execu
Slide 104: Succession planning and management structure at Itaú Unibanco
Succession planning and management structure at Itaú Unibanco 19
Slide 105: Succession planning and management structure at Itaú Unibanco
Succession planning and management structure at Itaú Unibanco 20
Slide 106: Corporate Governance
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