Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — Q2 2019 Earnings Presentation
171 slides from Itau Unibanco's earnings presentation, Jul 30, 2019
Slide 1: Announcement to the Market – 2Q19 Result
Exhibit 99.1 ITAÚ UNIBANCO HOLDING S.A. CNPJ 60.872.504/0001-23 A Publicly-Listed Company NIRE 35300010230 ANNOUNCEMENT TO THE MARKET Itaú Unibanco Holding S.A. nd 2 Quarter 2019 Result Itaú Unibanco Holding S.A. (“Company”) announces to its stockholders and the market at large that the Complete Fin
Slide 2: Attachment 01
fls.2 Attachment 01 fls.2 Attachment 01
Slide 3: 2Q19 Macroeconomic Outlook
2Q19 Macroeconomic Outlook2Q19 Macroeconomic Outlook
Slide 4: Forward-looking statements
2Q19 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 5: Brazilian Economy and Banking Sector
Brazilian Economy and Banking Sector As of July 29, 2019Brazilian Economy and Banking Sector As of July 29, 2019
Slide 6: Macroeconomic Outlook
1 Macroeconomic Outlook 2013 2014 2015 2016 2017 2018 2019 ² 2020 ² World Economy GDP - World 3.5% 3.6% 3.5% 3.3% 3.7% 3.7% 3.2% 3.1% GDP - USA 1.8% 2.5% 2.9% 1.6% 2.2% 2.9% 2.4% 1.5% GDP - Euro Zone -0.2% 1.4% 2.0% 1.9% 2.5% 1.9% 1.0% 1.0% GDP - China 7.9% 7.4% 7.0% 6.7% 6.8% 6.6% 6.2% 5.9% Brazili
Slide 7: Brazil | Macroeconomic Outlook
1 Brazil | Macroeconomic Outlook GDP | % (YoY) GDP | QoQ (%) 7 5 1.6 3.2 3 0.7 0.5 0.5 0.4 1.2 0.3 0.3 1 0.1 0.1 0.0 0.5 -1 -0.1 -0.1 -0.2 -0.6 -0.7 -0.8 -0.8 -3 -5 -7 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 EU USA Brazil Industrial Production 2 x Unemployment Inflation Breakd
Slide 8: Brazil | Macroeconomic Outlook: External Debt
1 Brazil | Macroeconomic Outlook Net External Debt / Exports (%) Net External Government Debt / Exports (%) 160 300 250 110 200 60 150 10 100 -40 50 -86 -90 0 -102 -40 -140 -50 -45 -190 -100 May-03 May-05 May-07 May-09 May-11 May-13 May-15 May-17 May-19 1Q03 1Q05 1Q07 1Q09 1Q11 1Q13 1Q15 1Q17 1Q19 (
Slide 9: Brazil | Macroeconomic Outlook: Debt and Reserves
1 Brazil | Macroeconomic Outlook Net External Debt / GDP (%) International Reserves / GDP (%) 20.7 20.5 387 387 387 382 379 376 374 372 369 352 20.7 20.7 20.0 14.3 18.6 101 12.9 289 75 11.4 15.4 15.2 15.2 239 13.5 13.1 7.7 194 180 6.0 11.3 -12 -28 6.8 -51 -46 -62 -58 86 -61 -67 -72 -75 -79 -90 -85 -
Slide 10: Brazil | Macroeconomic Outlook: Rates and Fiscal
Brazil | Macroeconomic Outlook 2 Real Interest Rates | Selic/IPCA 1 (%) 12- Month Primary Budget Result Consolidated | GDP (%) 5 4 11.6 3 2 7.4 7.2 1 6.8 6.3 5.4 0 4.9 4.3 3.9 -1 -0.9 2.7 2.6 2.5 -1.2 2.4 2.3 -1.4 -2 1.3 1.2 -3 -4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 11: Credit Evolution / GDP
1 Credit Evolution/GDP Credit Evolution / GDP | Brazil 1 (%) Mortgage Evolution / GDP | Brazil 1 (%) 9.7 9.7 9.5 9.4 52.6 9.2 52.0 50.4 49.5 7.9 48.1 47.2 47.0 46.8 6.7 44.1 5.5 4.3 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18
Slide 12: Brazil | Banking Sector Outlook
Brazil | Banking Sector Outlook Total Loans (R$ billion) 1 Loan growth – by customer (YoY %) 2 24 3,287 3,157 3,092 3,114 3,076 19 2,798 2,487 14 1,476 2,142 1,574 1,496 1,505 9.9 1,551 9 1,287 1,812 1,060 5.5 847 4 693 0.3 -1 1,811 1,618 1,588 1,583 1,525 1,511 1,428 1,295 1,119 -6 -11 May-11 May-1
Slide 13: Brazil | Leverage and Monthly Debt Service
Brazil | Leverage and Monthly Debt Service 46.6 45.4 44.4 44.1 43.6 42.7 41.9 41.6 40.6 36.8 33.3 31.0 31.1 31.3 30.6 29.6 29.0 27.7 28.0 26.2 26.7 25.2 25.0 23.2 23.3 23.2 22.9 22.1 21.8 21.7 21.5 20.8 22.5 22.3 19.7 19.3 19.0 20.0 18.3 20.2 20.0 17.7 16.7 21.2 20.0 19.8 19.7 19.7 19.7 18.3 18.9 17
Slide 14: Brazil | Companies Leverage
Brazil | Companies Leverage Companies Leverage (Net Debt/EBITDA) 1 6.0 5.0 4.0 3.0 2.5x 2.0 1.0 - Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Companies Total Credit / GDP 2 (%) 27.7 26.7 26.8 26.7 25.5 24.0 23.1 21.4 20.5 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May
Slide 15: Spread and Delinquency Evolution
Spread and Delinquency Evolution 1 Individuals Spread and Delinquency | Brazil (%) Corporate Spread and Delinquency | Brazil (%) 11.3 11.3 11.1 29.2 10.7 28.3 27.0 26.7 9.6 25.7 25.4 9.3 25.1 9.1 9.2 24.2 23.6 8.7 4.0 3.5 3.3 3.1 3.0 2.6 2.5 2.5 2.4 4.1 3.9 3.8 3.7 3.6 3.5 3.3 3.3 3.4 May-17 Aug-17
Slide 16: Reserve Requirements and Restricted Loans Rate
Brazil | Reserve Requirements and Restricted Loans Rate Reserve Requirements and Restricted Loans Rate Remuneration Reserve Requirement 21.0% No Remuneration Rural Max Interest: 7.5% annual 30.0% ¹ Demand Deposits Microcredit Max Interest: 2.0% monthly 2.0% ² Available to Lend 47.0% Reserve Requirem
Slide 17: 2Q19 Institutional Information
2Q19 Institutional Information2Q19 Institutional Information
Slide 18: Forward-looking statements
2Q19 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 19: Disclaimer – Corpbanca Pro Forma Information
Disclaimer Corpbanca Pro Forma Information st The merger between Itaú Chile and CorpBanca was concluded on April, 1 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 20: Agenda
Agenda 1. Our Profile 2. Corporate Governance 3. Business Overview 4. Financial Highlights 5. Information Technology 6. Itaú Unibanco in Capital Markets 7. Sustainability As of July 29, 2019Agenda 1. Our Profile 2. Corporate Governance 3. Business Overview 4. Financial Highlights 5. Information Tech
Slide 21: Our Profile
Our Profile 1Our Profile 1
Slide 22: Itaú Unibanco at a Glance
Itaú Unibanco at a Glance Financial Highlights and Ratios Leading position in Brazil As of and for the quarter ended June 2019 (1) § US$92.4 billion market cap Highlights § 98,446 employees in Brazil and abroad Total Assets R$1678.4 Bi § 4,722 branches and CSBs in Brazil and abroad (1) Total Loans R
Slide 23: 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 24: 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 25: 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 26: 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 London, Lisbon, Madrid, Paris, Frankfurt Institutional Clients / Asset London Private Banking Zur
Slide 27: A History of Successful Strategic Deals
1 A History of Successful Strategic Deals Acquisition of the remaining 50% of: Retail - Brazil Uruguay NACIONAL Acquisition of the Banco Itaú BMG Consignado minority interest of: Casa Moreira Salles Acquisition of a 1924 minority interest in: Unibanco 1995 - 1998 2000 - 2003 2004 - 2007 Merger 2008
Slide 28: Corporate Governance
Corporate Governance 2Corporate Governance 2
Slide 29: 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 (52.88% of our shares in free float) Egydio de Souza Free Float* Moreira Salles Family Non Voting Shares
Slide 30: IUPAR and Itaú Unibanco Governance
IUPAR (Itaú Unibanco Participações) and Itaú Unibanco Governance Alignment and union among shareholders; Family control Group´s vision, mission and values; IUPAR Significant mergers & acquisitions; (Itaú Unibanco with a strategic Nominations to the Board of Directors and CEO; long-term vision Partic
Slide 31: Board of Directors and Executive Committees
Itaú Unibanco Board of Directors and Executive Committees Co-Chairman Co- Chairman Pedro Moreira Salles Roberto Egydio Setubal . Directors Marco Ambrogio Crespi Bonomi 1 Alfredo Egydio Setubal Gustavo Jorge Laboissière Loyola 1 Pedro Luiz Bodin de Moraes 1 João Moreira Salles Ana Lúcia de Mattos Bar
Slide 32: Risk Management Structure
Risk Management Structure Board of Directors Capital and Risk Audit Committee Pedro Moreira Salles Management Committee Gustavo Loyola 1 Roberto Egydio Setubal Pedro Bodin 1 3rd line of defense Internal Audit Independent review of the Paulo Miron activities developed by the institution. Itaú Unibanc
Slide 33: Governance Structure at Itaú Unibanco
Governance Structure at Itaú Unibanco Shareholder’s Meeting Fiscal Council Board of Directors Digital Nomination Risk and LATAM Social Personnel Related Strategy Compensation Audit Advisory and Corporate Capital Strategy Responsibility Committee Parties Committee Committee Committee Board Governance
Slide 34: Credit Risk Policies Hierarchy
Credit Risk Policies Hierarchy § Defines and monitors Risk Appetite; Board of Directors and § Approval of policies, strategies and definition of minimum Capital and Risk Management Committee expected return on capital; § Improvement of Risk Culture. § Defines a Global Policy; 1 § Approves policies h
Slide 35: Risk Appetite
Risk Appetite Defined by the Board of Directors Principles Statement Dimensions § Sustainability and customer § Optimization of capital § Reputation; satisfaction; allocation; § Liquidity; § Risk pricing;§ Low volatility in results; § Capitalization; § Operational excellence;§ Regional focus; § Oper
Slide 36: Risk Appetite (approved by the Board of Directors)
Risk Appetite (as approved by the Board of Directors) The Risk Appetite... establishes the types and levels of risk acceptable to the bank, within which management seeks to maximize value creation. It is based on Guided by the and monitored by 43 metrics inserted Board of Directors Principles of Ris
Slide 37: Retail Management – Individuals and Small and Middle Companies
Retail Management – Individuals and Small and Middle Companies STATISTICAL MODELS Lowest risk Risk Level Highest Risk 100 100 102 98 114 94 123 89 128 88 148 88 153 88 100 100 104 101 102 95 101 89 106 90 112 99 124 94 115 91 115 91 116 92 130 93 148 88 157 81 167 79 v 110 91 112 102 114 97 113 92 1
Slide 38: Credit Offer Based on Future Scenario
Credit Offer Based on Future Scenario STATISTICAL MODELS Highest Lowest Risk Level risk risk Credit Available Base Scenario Credit Not Available Credit Not Available Highest risk Positive future expectation Negative future expectation Risk Level Risk Level Credit Available Credit Available Credit No
Slide 39: Business Overview
Business Overview 3Business Overview 3
Slide 40: Universal Bank
Universal Bank 1 RETAIL BANKING WHOLESALE BANKING RETAIL AND REAL ESTATE CREDIT ITAÚ BBA 4,214 branches and client service branches and 46,338 ATMs in Brazil; Full coverage of corporate clients with RETAIL annual sales above R$ 200 million; AND REAL Premier banking brand in Brazil; ESTATE Leadership
Slide 41: Client Segmentation
Client Segmentation Individuals Segmentation Companies Segmentation by monthly income by annual sales Ultra Private Bank over R$4 billion or >R$750 million debt* >R$5 million in total investment Large >R$400 million up to R$4 billion or >R$200 million debt* Corporate >R$200 million up to R$400 milli
Slide 42: Retail in Brazil
Retail in Brazil Automated Teller Machines (ATMs) in Brazil 2 Presence in Brazil 1 (As of June 30, 2019) 46,712 45,353 46,463 45,502 45,769 45,891 47,301 46,784 46,338 3 15 7 7 8 7 592 598 610 589 613 584 608 626 617 23,049 22,086 22,431 22,605 21,195 21,423 20,809 20,937 23,053 North 109 Northeast
Slide 43: Retail - Credit Cards, JVs and Partnerships
Retail - Credit Cards, Joint Ventures and Partnerships with Retailers in Brazil Highlights Highlights JVs and Partnerships • Brazilian market leader in credit card transactions; • Focus on credit card instruments; • Qualification of the client base: proprietary channel x partnerships; • Long term ag
Slide 44: Retail - Cards in Brazil
Retail - Cards in Brazil | Growing Penetration in Household Consumption Expenditure Credit and Debit Cards Billed Volume % at Household Consumption Expenditure 38.0% 37.1% 35.1% 34.9% 34.1% 33.8% 32.4% 31.4% 30.8% 14.6% 13.7% 13.0% 13.3% 12.5% 12.7% 12.1% 11.7% 11.6% 23.4% 23.4% 22.1% 21.6% 21.6% 21
Slide 45: Retail - Payroll Loan in Brazil
Retail - Payroll Loan in Brazil Composition of Payroll Loans Portfolio by Sector Evolution of Payroll Loan Portfolio R$ billion 49.1 48.6 46.7 46.0 45.4 44.8 44.6 44.4 44.7 5.8 5.4 5.1 4.9 4.9 4.3 4.4 4.8 4.7 4.5 4.8 5.1 5.5 12% 5.9 6.4 7.6 8.2 7.0 9% 38.8 38.5 36.5 35.5 34.6 33.5 32.6 32.8 32.2 79%
Slide 46: Retail - Mortgage Market in Brazil
Retail - Mortgage Market in Brazil Mortgage Loans Evolution Distribution Channels for Individuals Balance As of June 2019 R$ million 3.5% 47,591 48,544 49,244 Partnerships 10.7% 11.7% 14.9% 13% Real Estate Regular Brokers Branches 32% 12% 88.3% 89.3% 85.1% Developers 12% High Income Branches Jun-18
Slide 47: Retail - Vehicle Financing in Brazil
Retail - Vehicle Financing in Brazil Highlights: Individuals and Corporate Individuals Portfolio Loans Granted • Growth of 43.7% in production (QoQ); R$ million R$ million 30.6% • Offers finance through over 10 thousand dealers; • Average ticket size of the new vehicle concessions to individuals of
Slide 48: Retail - Insurance Ranking in Brazil
1,2 Retail - Insurance Ranking in Brazil jan-may/19 jan-may/18 Model 3 4th 4th Total Insurance 4 5th 5th Recurring Insurance Activities Life & Personal Accidents 2nd 2nd Bancassurance Credit Insurance 6th 6th Bancassurance Pension Plan Bancassurance 3rd 3rd Premium Bonds 4th 3rd Bancassurance Porto
Slide 49: Retail - Association with Porto Seguro
Retail - Association with Porto Seguro Highlights Association’s Structure • Unification of residential and automobile insurance Controlling stockholders of Itaú Unibanco Porto Seguro operations; 57.07% 42.93% • Exclusive offer and distribution of residential and automobile insurance products to Itaú
Slide 50: Very Small, Small and Middle Market in Brazil
Very Small, Small and Middle Market in Brazil SMEs Loan Portfolio 1 R$ million 79,649 78,088 75,433 74,137 72,002 70,795 68,974 61,869 61,547 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 Highlights Full range of financial products and services, including deposits accounts, investment options, insura
Slide 51: Wholesale - Corporate Companies in Brazil
Wholesale - Corporate Companies in Brazil 1 Corporate Loans R$ million 219,418 213,815 194,472 181,541 165,052 163,437 153,302 152,625 151,425 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 Highlights • Corporate clients with annual sales above R$200 million. • We offer a broad portfolio of banking pr
Slide 52: Wholesale - Corporate and Investment Banking
Wholesale - Corporate and Investment Banking | Leadership Position in Brazil Investment Banking Wholesale Banking Fixed Income Middle Until May 2019, we maintained the leadership in the distribution ranking of Annual revenues from R$30 MM up to Anbima, with a distributed volume of R$14.5 billion. R$
Slide 53: Wholesale - Wealth Management Services
Wholesale - Wealth Management Services | Brazil Asset Management Evolution of Assets Under Administration Investment Product management for the conglomerate and a full range of Asset Management investment options to Retail Banking. In June 2019, we reached R$707.61 bi llion in assets under managemen
Slide 54: Retail Footprint in Latin America
Retail Footprint in Latin America | June 2019 Mexico | CIB Employees: 8 Panama Colombia1 Employees: 3,429 Branches + CSBs: 159 ATMs: 169 Brazil Employees: 85,161 Peru Branches + CSBs: 4,214 Representative ATMs: 46,338 Office Paraguay Chile Employees: 854 Employees: 5,663 Branches + CSBs: 44 Branches
Slide 55: Segments – Income Statement Pro Forma 2Q19
Segments – Income Statement Pro Forma 2Q19 Activities with the Retail Banking Wholesale Banking Itaú Unibanco Market + Corporation In R$ millions 19,477 7,506 2,509 29,492 Operating Revenues 11,529 4,728 2,194 18,451 Managerial Financial Margin 11,529 4,728 622 16,879 Financial Margin with Clients -
Slide 56: Financial Highlights
Financial Highlights 4Financial Highlights 4
Slide 57: Highlights
Highlights Recurring Net Income Recurring ROE Credit1 NPL 90 days Consolidated Consolidated Consolidated Consolidated - 10 bps 2.0 % 2.3 % -10 bps R$659.7 bi R$7.0 bn 2Q19 vs. 1Q19 2Q19 vs. 1Q19 23.5% 2Q19 vs. 1Q19 2.9% 2Q19 vs. 1Q19 Brazil Brasil Brazil Brasil -20 bps 2.8 % -20 bp 2.4 % 2Q19 vs. 1Q
Slide 58: 2019 Forecast
2019 Forecast Consolidated Brazil ¹ Total Credit Portfolio ² 8.0% 11.0% 8.0% 11.0% Financial Margin with Clients 9.0% 12.0% 9.0% 12.0% Financial Margin with the Market R$4.6 bn R$5.6 bn R$3.6 bn R$4.6 bn Cost of Credit ³ R$14.5 bn R$17.5 bn R$12.5 bn R$15.5 bn 4 Commissions and Fees and Results from
Slide 59: Recurring Net Income and Value Creation
Recurring Net Income and Value Creation 23.6% 23.5% 21.8% 21.6% ROE 21.3% Average Cost of Capital 14.5% 14.5% 13.5% 13.5% 13.0% Recurring Net Income 7.0 6.9 6.5 6.5 6.4 Value Creation 2.0 3.2 2.9 2.2 2.5 Cost of Capital 4.5 4.3 3.9 4.0 3.9 2Q18 3Q18 4Q18 1Q19 2Q19 page 57 In R$ billionRecurring Net
Slide 60: Income Statement | Operating Revenues Perspective
Income Statement | Operating Revenues Perspective DD D' In R$ millions 2Q19 1Q19 2Q18 1H19 1H18 29,492 28,208 4.6% 28,021 5.3% 57,700 55,446 4.1% Operating Revenues Managerial Financial Margin 18,451 17,668 4.4% 17,295 6.7% 36,119 34,294 5.3% Financial Margin with Clients 16,879 16,424 2.8% 15,953 5
Slide 61: Income Statement | Managerial Financial Margin Perspective
Income Statement | Managerial Financial Margin Perspective DDD In R$ millions 2Q19 1Q19 2Q18 1H19 1H18 Managerial Financial Margin 18,451 17,668 4.4% 17,295 6.7% 36,119 34,294 5.3% Financial Margin with Clients 16,879 16,424 2.8% 15,953 5.8% 33,303 31,214 6.7% Financial Margin with the Market 1,572
Slide 62: Results – Brazil and Latin America
Results – Brazil and Latin America 1H19 1H18 D Latin Latin Latin 1 1 1 Consolidated America Consolidated America Consolidated America Brazil Brazil Brazil In R$ millions (ex-Brazil) (ex-Brazil) (ex-Brazil) Operating Revenues 57,700 51,833 5,867 55,446 50,014 5,433 4.1% 3.6% 8.0% Managerial Financial
Slide 63: Business Model
Business Model In R$ billions 1H19 1H18 Δ Insurance Excess Insurance Excess Insurance Excess Consolidated Credit Trading Consolidated Credit Trading Consolidated Credit Trading & Services Capital & Services Capital & Services Capital Operating Revenues 30 .4 0.9 25.7 0.8 28.4 0.9 25.2 1.0 2.0 (0.1)
Slide 64: Credit Portfolio with Financial Guarantees and Corporate Securities
Credit Portfolio with Financial Guarantees Provided and Corporate Securities DD In R$ billions, end of period 2Q19 1Q19 2Q18 Individuals 222.3 215.6 3.1% 195.0 14.0% Credit Card Loans 79.3 76.4 3.7% 66.1 20.0% Personal Loans 32.8 31.1 5.3% 28.3 15.6% 1 49.1 48.6 1.0% 45.4 8.1% Payroll Loans Vehicle
Slide 65: Credit Portfolio by Product
Credit Portfolio by Product 2Q19 1Q19 2Q18 In R$ billions, end of period D D 1 221.5 214.7 3.2% 194.1 14.2% Individuals - Brazil 79.3 76.4 3.7% 66.1 20.0% Credit Card 31.9 30.1 5.9% 27.3 16.9% Personal Loans 2 49.1 48.6 1.0% 45.4 8.1% Payroll Loans 17.2 16.6 3.9% 14.7 17.4% Vehicles 44.0 42.9 2.6% 4
Slide 66: Credit Portfolio by Currency
Credit Portfolio by Currency 1 R$ billion Jun-19 228.3 389.3 617.6 Mar-19 224.5 384.5 609.0 Dec-18 219.5 379.1 598.6 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 Foreign Currency Local Currency (
Slide 67: Credit Origination and Private Securities Issuance
Credit1 Origination and Private Securities Issuance | Brazil Base 100 = 2Q15 Total Credit2 – Brazil Credit2 - Individuals 28% 14% 131 128 115 100 100 100 92 88 78 76 2Q15 2Q16 2Q17 2Q18 2Q19 2Q15 2Q16 2Q17 2Q18 2Q19 Credit2 – Very Small, Small and Credit2 – Corporate Private Securities Issuance3 Mid
Slide 68: Credit Portfolio Growth in Brazil
Credit Portfolio Growth in Brazil 1 (in R$ Billions) Nominal GDP (Jun-15 to Jun-19): 18.3% Accumulated Inflation (IPCA) (Jun-15 to Jun-19): 21.9% Accumulated Interbank Rate: (Jun-15 to Jun-19): 48.5% Credit Card Loans Payroll Loans Vehicle Loans Personal Loans 7.9% 41.0% 8.0% -27.7% 25.7% 22.0% 9.6%
Slide 69: Credit Portfolio Breakdown
Credit Portfolio Breakdown 1,2 1 Companies Credit Portfolio by Business Sector Credit Concentration Jun-19 2Q19 1Q19D R$ million In R$ billions, end of period Public Sector 2 .3 2.8 -16.7% Private Sector 331.8 330.2 0.5% Loan, lease, other credit operations Real Estate 22.1 21.4 3.0% Loan, lease and
Slide 70: Credit Portfolio by Vintage
1 Credit Portfolio by Vintage Profile of credit portfolio by origination period: R$ billion § Older vintages with higher spreads are losing relevance compared to the most recent ones. § 60.1% of total origination was created in the past 12 months. 519 544 553 34.8% 36.2% 38.9% 5.1% 4.6% 5.2% 6.4% 7.
Slide 71: Loan Portfolio Mix Change
Loan Portfolio Mix Change 1 (%) Jun-19 Consolidated jun/19 18.5 13.6 3.1 14.3 5.8 8.0 8.9 27.9 Ju Jun-19 n-19 25.6 18.8 4.3 19.9 8.0 11.0 12.3 Jun-18 Jun-18 29.3 17.3 4.0 18.2 7.5 11.1 12.5 2 Brazil Jun-17 Jun-17 32.7 16.3 4.0 16.1 7.2 10.9 12.8 Jun-16 Jun-16 34.0 16.3 4.6 14.9 7.7 9.9 12.7 Jun-15 j
Slide 72: Financial Margin with Clients
Financial Margin with Clients Annualized Average Rate Consolidated Brazil 12.3% 12.2% 12.1% 12.2% 12.1% 12.0% 12.0% 11.8% 10.1% 10.0% 10.0% 9.9% 9.9% 9.9% 9.8% 9.8% 9.6% 9.5% 9.2% 9.2% 9.2% 9.2% 8.9% 9.0% 9.2% 7.5% 7.7% 7.6% 7.6% 7.6% 7.4% 7.4% 7.1% 7.5% 6.4% 6.4% 6.7% 6.4% 6.4% 6.4% 3Q17 4Q17 1Q18
Slide 73: Financial Margin with the Market
Financial Margin with the Market R$ billion 1.8 1.7 1.6 1.5 1.5 1.4 1.4 1.3 1.2 3.1 2.8 0.1 1.7 1.6 1.6 1.4 2.0 1.4 1.3 2.2 1.1 1.3 1.2 0.1 0.2 1.1 1.3 1.3 0.9 1.2 1.1 0.9 1.0 0.5 0.8 0.8 0.5 0.2 0.5 0.3 0.2 0.3 0.5 0.3 0.3 1H18 1H19 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Financial Margin with
Slide 74: Provision for Loan Losses and Cost of Credit
Provision for Loan Losses and Cost of Credit Provision for Loan Losses by Segment R$ million 5.8% 5.0% 5.0% 4.7% 4.6% 4.4% 4.5% 4.3% 4.1% 3.7% 3.6% 3.4% 3.3% 3.2% 3.1% 3.0% 2.9% 7,824 6,337 5,997 6,366 5,768 6,169 5,823 5,392 772 4,948 4,483 4,111 4,282 4,271 383 399 396 412 392 757 4,407 432 4,206
Slide 75: Allowance for Loan Losses by Risk – Consolidated
Allowance for Loan Losses by Risk– Consolidated R$ million Regulatory (*) Allocation of Total Allowance by Type of Risk - Consolidated Breakdown 33,091 36,118 Complementary Allowance Expected and/or 34,206 33,091 Potential Loss Retail - Brazil1 7,065 5,748 Related to expected Allowance for Financial
Slide 76: Non Performing Loans Ratios
Non Performing Loans Ratios 15 to 90-day NPL Ratio | Consolidated - % 90-day NPL Ratio| Consolidated (%) 4.5 4.4 4.2 3.9 3.7 3.7 3.6 3.3 3.6 3.5 3.5 3.5 3.3 3.4 2.9 3.1 3.2 3.1 3.1 2.8 2.8 2.6 2.5 3.6 3.2 2.3 3.5 3.4 3.1 3.2 3.1 2.7 3.0 3.0 3.0 2.7 2.9 2.9 2.9 2.7 2.8 2.7 2.5 2.6 2.5 2.3 2.6 2.5 2.4
Slide 77: Coverage Ratio (90-day NPL)
Coverage Ratio (90-day NPL) Coverage Ratio and Expanded Coverage Ratio1 Coverage Ratio 952% 248% 246% 245% 243% 236% 235% 221% 208% 208% 399% 338% 227% 223% 220% 101% 100% 100% 96% 172% 172% 95% 169% 92% 90% 88% 87% Jun-18 Mar-19 Jun-19 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
Slide 78: NPL Creation
NPL Creation R$ billion 5.1 5.0 5.0 4.7 4.4 4.4 4.4 4.4 3.8 3.9 3.8 3.6 3.6 3.5 3.5 3.5 3.3 3.2 1.2 1.0 1.1 0.7 0.5 0.5 0.5 0.4 0.4 0.7 0.5 0.4 0.4 0.4 0.2 0.3 0.2 -0.3 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Total Retail Banking - Brazil Whosale Banking - Brazil Latin America ex-Brazil page 76
Slide 79: Provision for Loan Losses and NPL Creation by Segment
Provision for Loan Losses and NPL Creation by Segment Retail Banking - Brazil R$ billion 113% 107% 108% 108% 104% 99% 100% 98% 89% 3.7 3.5 4.0 3.6 4.2 3.9 3.5 3.3 3.8 3.5 3.5 3.7 3.2 3.6 3.2 3.2 3.5 3.7 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Wholesale Banking - Brazil R$ billion 263% 230% 48%
Slide 80: Loan Portfolio Evolution by Risk Level
Loan Portfolio Evolution by Risk Level Brazil 1 Consolidated Total Allowance for Loan Losses (R$ million) 31,026 29,441 28,249 36,118 34,206 33,091 Loan Portfolio by Risk Level 42.9% 42.9% 42.8% 43.6% 43.2% 44.2% 33.5% 34.5% 34.8% 38.0% 38.1% 36.6% 9.5% 9.8% 10.3% 5.0% 5.8% 6.0% 4.2% 4.2% 4.4% 4.8%
Slide 81: Renegotiated Loan Operations
Renegotiated Loan Operations Total Renegotiated Portfolio | Breakdown by Days Overdue R$ billion Brazil 1 Days overdue: measured at the moment of 24.6 24.5 24.4 25.5 25.2 25.7 25.2 25,4 24.7 renegotiation 26.4 27.9 27.6 27.5 26.4 26.4 27.6 27.3 26.9 Latin America 2 2.0 2.2 2.3 2.1 2.3 2.3 1.8 1.9 2.
Slide 82: Credit Quality | Individuals
Credit Quality | Individuals Loan-to-Value Credit Cards Portfolio in Jun-19 Vehicles and Mortgage | Vintages 59.8% 59.7% 9.4% 58.6% 58.5% 57.3% 56.9% 20.4% 9.7% 10.0% 80.9% 69.6% Itaú Unibanco Brazilian Financial System Jun-18 Mar-19 Jun-19 excluding Itaú Unibanco Transactor¹ Installment with Intere
Slide 83: Banking Fee Revenues and Insurance Results
Banking Fee Revenues and Result from Insurance, Pension Plans and Premium Bonds In R$ millions 2Q19 1Q19 2Q18 1H19 1H18 D D D Credit and Debit Cards 3,192 3,280 -2.7% 3,248 -1.7% 6,472 6, 584 -1.7% Card Issuance 2,228 2,175 2.5% 2,022 10.2% 4,403 4, 077 8.0% Acquiring 964 1,106 -12.8% 1,226 -21.4% 2
Slide 84: Retail - Merchant Acquiring | REDE
Retail - Merchant Acquiring | REDE Debit Card Transaction Volume Credit Card Transaction Volume R$ million R$ million 81,136 46,057 74,095 72,877 70,376 69,425 40,128 39,959 38,711 38,873 65,915 63,558 63,345 61,937 35,818 35,595 32,234 32,014 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 2Q17 3Q17 4
Slide 85: Insurance, Pension Plan and Premium Bonds
Insurance, Pension Plan and Premium Bonds D D D In R$ millions 2Q19 1Q19 2Q18 1H19 1H18 Earned Premiums 1,075 1,052 2.2% 1,002 7.2% 2,127 1,985 7.1% Revenues from Pension Plan 117 57 105.6% 192 -38.7% 175 280 -37.6% Revenues from Premium Bonds 107 102 4.6% 117 -8.3% 209 232 -9.6% Managerial Financia
Slide 86: Insurance Operations
Insurance Operations Earned Premiums Breakdown Retained Claims Breakdown R$ million R$ million 335 320 294 299 297 1,002 1,025 1,045 1,052 1,075 9.2% 10.7% 10.4% 11.6% 13.2% 26.1% 29.2% 9.6% 32.6% 34.5% 9.5% 9.7% 36.6% 9.2% 9.3% 1.4% 1.4% 1.5% 1.6% 1.6% 4.9% 17.3% 3.8% 16.7% 15.7% 16.2% 0.8% 2.4% 14
Slide 87: Pension Plan Segment
Pension Plan Segment Technical Provisions Focus on Client Experience R$ billion 7 Reasons to Invest 204.8 200.4 Plan your retirement 196.6 1 190.0 185.2 Pay your future health expenses 2 Invest in your kids’ education 3 Plan your taxes expenses 4 2Q18 3Q18 4Q18 1Q19 2Q19 Improve your investment retu
Slide 88: Non-interest Expenses
Non-interest Expenses In R$ millions 2Q19 1Q19D 2Q18D 2H19 2H18D Personnel Expenses (5,545) (5,300) 4.6% (5,193) 6.8% (10,846) (10,277) 5.5% Administrative Expenses (4,234) (4,113) 2.9% (4,153) 1.9% (8,347) (8,033) 3.9% Operating Expenses (1,179) (1,082) 9.0% (1,230) -4.2% (2,260) (2,397) -5.7% 1 (9
Slide 89: Efficiency Ratio and Risk-Adjusted Efficiency Ratio
Efficiency Ratio and Risk-Adjusted Efficiency Ratio 65.7 61.0 63.4 63.3 60.9 60.8 61.3 61.7 60.9 47.1 49.2 48.8 48.7 46.2 47.3 45.7 45.9 46.3 66.6 65.0 64.2 63.3 62.2 61.2 61.2 62.7 61.2 47.7 47.6 46.4 47.4 47.7 47.0 47.5 45.5 45.3 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Trailing 12-month Effic
Slide 90: Balance Sheet – Assets and Liabilities
Balance Sheet – Assets and Liabilities R$ million Assets 2Q19 1Q19 2Q18 D'D' Current and Long-term Assets 1,644,066 1,617,065 1.7% 1,514,685 8.5% Cash and Cash Equivalents 33,242 30,376 9.4% 25,402 30.9% Short-term Interbank Investments 284,781 284,398 0.1% 277,465 2.6% Securities and Derivative Fin
Slide 91: Total Assets | Evolution and Breakdown
Total Assets | Evolution and Breakdown R$ billion 1,678.4 1,649.6 1,503.5 521.0 31.0% Loans Portfolio 1 Cash and Cash Equivalents, Interbank Investments and 27.0% 452.8 Interbank and Interbranch Accounts Securities and Derivatives Financial Instruments 28.2% 473.6 11.7% Other 196.7 2.0% Permanent As
Slide 92: Total Liabilities | Evolution and Breakdown
Total Liabilities | Evolution and Breakdown R$ billion 1,678.4 1,649.6 1,503.5 Deposits, Debentures and Funds from Bills and Structured Operations 32.9% 552.5 Certificates Deposits Received under Securities, Repurchase Agreements and Fund 21.0% 1 from Acceptances and Issue of Securities 352.6 2 Othe
Slide 93: Funding
Funding • Loan Portfolio mainly funded by domestic client funding • Diversified funding base In R$ millions, end of period 2Q19 1Q19D 2Q18D Demand Deposits 73,352 74,757 -1.9% 70,646 3.8% Savings Deposits 137,568 136,613 0.7% 127,342 8.0% Time Deposits 250,521 248,049 1.0% 225,762 11.0% Debentures (
Slide 94: Funding from Clients
Funding Funding from Clients 1 In R$ billions 2,026 1,976 1,949 1,912 1,839 Funding from Account Holders and 1,805 1,747 1,682 1,648 Institutional Clients 1,412 1,366 1,335 1,290 1,242 1,215 1,154 1,116 1,070 Assets Under Administration + Technical Provisions for Insurance, Pension Plan and Premium
Slide 95: Capital Ratios (BIS) | Prudential Conglomerate
Capital Ratios (BIS) | Prudential Conglomerate 1 2Q19 1Q19 In R$ millions, end of period Core Capital 115,498 109,156 Tier I (Core Capital + Additional Capital) 126,373 120,124 Referential Equity (Tier I and Tier II) 138,267 132,056 Total Risk-weighted Exposure (RWA) 847,001 823,818 Credit Risk-weig
Slide 96: Capital Ratios – Basel III
Capital Ratios Full aplication of Basel III rules│ June 30, 2019 rd Payment of R$7.7 billion in complementary dividends on August 23 , 2019. 14.9% 14.6% -0.1% 0.8% -0.4% 1.3% 1.3% 13.6% 13.3% Tier I 2Q19 net inco me and Prudential Adjustments RWA Tier I Mar-19 other equity changes Jun-19 Common Equi
Slide 97: Capital Requirement under Basel, BACEN and ITUB Target
Capital Requirement under the Basel Committee, BACEN and ITUB Target ITUB Target Minimum Capital Required Basel II Basel III 15.0% 1.5% 1.5% 11.5% 11.0% 2.0% 8.0% If total capital falls 1.5% Subordinated 5.5% below 11.5%, debt (TII) restrictions will T1= 13.5% 12.0% Stockholders`equity start to be a
Slide 98: 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: Total Payout simulation Maintain the practice of paying dividends to keep Tier I Capital at 13.5% under diffe
Slide 99: 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 100: Digital Transformation
Digital Transformation 5Digital Transformation 5
Slide 101: Digital Strategy | Customer needs
Digital Strategy | Customer needs Does not want to waste time in traffic MOBILITY Wants access to Customers nice and easy LEISURE entertainment expectations have changed. Needs to communicate with his/her network They demand high-quality COMMUNICATION anytime, anywhere experiences rather than just p
Slide 102: Digital Strategy | Customer ownership is the new rule
Digital Strategy | Customer ownership is the new rule Continuously listen to Respect customer customers and follow up privacy to get their feedback Motivate employees Act proactively to to stay engaged anticipate needs Build customer empathy Adapt to customer demands into processes and policies and
Slide 103: Digital Strategy | How to achieve customer ownership?
Digital Strategy | How to achieve customer ownership? Innovators Incumbents X Challenge: change Challenge: scale “Incumbents must find innovation before innovators find distribution” page 101Digital Strategy | How to achieve customer ownership? Innovators Incumbents X Challenge: change Challenge: sc
Slide 104: Digital Strategy | What is Itaú Unibanco doing?
Digital Strategy | What is Itaú Unibanco doing to achieve customer ownership? Bulding digital capabilities on top of major strenghts. Leverage Develop + The capability to continuously transform Lots of data Large customer base + speed to extend our digital offer value proposition addressing A full r
Slide 105: Speed to extend our digital offer (10x)
Speed to extend our digital offer (10x) + speed to extend our digital offer 10x 2x Methodologies CI/CD Processes Business + tech Test automation integration Delivery Technologies using AI (digital channels) Cloud Communities Legacy modernization Business + tech Agile and Analytics Cubo integration (
Slide 106: Working model | Digital-oriented organization
Working model | Digital-oriented organization + speed to extend our digital offer DELIVERY COMMUNITIES Customer TRADITIONAL MODERN centricity Moving from command and control to autonomy means User Experience Project management Continuous evolution of Technology managing and execution our digital sol
Slide 107: Technology platform | Legacy modernization
Technology platform | Legacy modernization + speed to extend our digital offer Microservices advantages: • Scalability and flexibility Benefits of • More frequent deliveries • Availability modernization • Time-to-money reduction • Cost and lock-in reduction Batch processing architecture Event-driven
Slide 108: Technology platform | Cloud
Technology platform | Cloud + speed to extend our digital offer Technology tools that support our working model. Cloud Why is cloud computing important to us? more 8x • Time-to-money reduction solutions • Application modernization in cloud • Cost efficiency • Operational risk reduction 2017 2018 • A
Slide 109: Technology platform | DevOps and SRE
Technology platform | DevOps and SRE + speed to extend our digital offer Accelerate integration, continuous deployment and software delivery. DevOps and SRE Waterfall DevOps Design Code Test Deploy CI/CD Incorporate Waterfall practices to shorten the Agile development life Code Test Code Test Code T
Slide 110: CUBO | Innovation ecosystem
CUBO | Innovation ecosystem + speed to extend our digital offer 1,100 70+ projects residents 13 floors (120 startups) between the bank + rooftop and Cubo startups Cubo is the largest startups 400 members hub for technological entrepreneurship promotion in 215,000+ ft2 Latin America. 2,000 people/day
Slide 111: Technology platform | Data analytics and AI
Technology platform | Data analytics and AI deep knowledge of customer Understand customers and leverage the business. Generated value Training and capacity building Analytics Ops Efficient strategy for model Value capture with AI Human capital training and and analytics has been increasing knowledg
Slide 112: Technology platform | Open banking
Technology platform | Open banking deep knowledge of customer More data about our customers. PHASE 1 PHASE 2 PHASE 3 PHASE 4 2022 2020 2021 CURRENT ACCOUNT INFORMATION PAYMENT PRODUCT INFORMATION CUSTOMER DATA CREDIT INFORMATION Location of points of service, Name, parents’ names, Data related to de
Slide 113: Human capital | Initiatives
Human capital | Iniciatives deep knowledge of customer New ways to Performance based attract talent on cooperation Evaluation combines collective indicators and individual efforts Hackathons + 5,000 pre-select new people employees (2018) Data scientist Analytics Education New Program technology buil
Slide 114: Digital Strategy | Our initiatives are reflected in numbers
Digital Strategy | Our initiatives are reflected in numbers Significant improvement in indicators: Lead time More value Regulatory environment Attended more regulatory Reduced delivery time for Highest return on financial requirements using technology technology solutions benefit projects (Base 100)
Slide 115: Digital experience | Customers increasingly going digital
Digital experience | Itaú Unibanco customers are increasingly going digital Use of Digital Channels1 number of current account holders (in millions) Share of Transactions2 Through digital channels Individuals Companies 1H17 1H19 11.9 Credit 3 17% 20% 10.3 1.2 1.1 1.0 9.1 Investiments 3 37% 46% Payme
Slide 116: Digital Strategy | Continuous updates for a better experience
Digital Strategy | Continuous updates for a better experience 1st bank APP ITAÚ (INDIVIDUALS) offering bank account opening by mobile phone + 11 MM individual clients using digital channels + 40 new features on the mobile 1st bank channel offering a leaner smartphone app 318 updates in our apps in 2
Slide 117: Digital Strategy | Efficiency focus, investing in technology
Digital Strategy | Efficiency focus, while continuously investing in technology Technology investments 160 130 122 18% 100 Inflation (IPCA) accumulated in 111 106 100 101 the period 70.1 64.2 61.2 60.7 47.6 46.4 46.3 45.3 2016 2017 2018 2019 (E) Efficiency Ratio (%) Risk-Adjusted Efficiency Ratio (%
Slide 118: Digital Strategy | REDE commercial initiative
Digital Strategy | REDE commercial initiative ended the prepayment rate on credit card transactions without installments New initiative for clients... June 2019 highlights NEW CLIENTS Using any POS machine + 73% compared to June 2018. from REDE with a bank + 112% appointing Itaú as their bank domici
Slide 119: Digital Strategy | Credicard ZERO
Digital Strategy | Credicard ZERO Paperless, zero fee credit card. Zero annuity and distinguished loyalty program that converts into miles of any company • 100% digital sale: 691k new customers Customer recognition • 45% lower operational costs and 69% lower Global acquisition costs NPS 74 Available
Slide 120: Digital Strategy | Personalized investment offer
Digital Strategy | Personalized investment offer A customized selection of investment products by Itaú or other companies. + knowledge and Transparent understanding recommendations, of customer. respecting investor profile THE BEST OF A BANK AND A and goals. BROKER IN THE SAME PLACE Main products an
Slide 121: Digital Strategy | Insurance open platform
Digital Strategy | Insurance open platform Expansion of insurance portfolio with complementary products offered by partner insurance companies. Residential / Auto Corporate Healthcare 2018 Capitalization 2017 Life Card protection Smartphone Assistance categories protection 07 11 insurers 02 08 Denta
Slide 122: Digital Strategy | iti
Digital Strategy | iti Iti is a multi-purpose platform that allows clients and non-clients to pay, buy, transfer and receive money instantaneously peer-to-peer or through a QR code. Individuals • Access to 800.000 Rede merchants • No minimum income or bank account requirements • Pay, buy, transfer a
Slide 123: Itaú Unibanco in Capital Markets
Itaú Unibanco in Capital Markets 6Itaú Unibanco in Capital Markets 6
Slide 124: 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 June 28, 2019 600 376 278 271 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Jun-19 ITUB4 - Without dividend reinvestiment
Slide 125: Sustainability
Sustainability 7Sustainability 7
Slide 126: Sustainability Timeline
Sustainability Timeline First cell for analysis Sustainability Sustainability of environmental Committee Governance and social risks (officers level) (executive level) 2000 2005 2007 Sustainable performance in corporate vision Creation of Itaú Unibanco operating Merger committees 2013 2010 2008 Posi
Slide 127: Sustainability Strategy
Sustainability Strategy Taking into account and understanding our key activities, impacts and externalities on the external and internal environments are the starting point for our defining our strategic operational strategies. Notwithstanding, we take into account the participation of our stakehold
Slide 128: Corporate Sustainability Governance
Corporate Sustainability Governance Board level Definition and monitoring of the sustainability strategy Board of Directors Board of Directors Members Members of of the Board the Board of Directors of Directors Strategy Committee Strategy Committee Members Members of of the Board the Board of Direct
Slide 129: Dialogue and Transparency | Engagement
Dialogue and Transparency | Engagement Organizations and commitments that are sources of knowledge and trends Responsible Bank Integrity and Ethics Sustainable Development Reporting and Transparency Climate Change Women Empowerment and Diversity Red Mujer Emprendedora Program for the promotion of ge
Slide 130: Transparency with the Market | Reporting
Transparency with the Market | Reporting Integrated Report Integrated Annual Report • First Brazilian financial institution to Integrated publish it voluntarily. Report(20F Sustainability + IIRC) Report + • Presentation of the results from 6 + GRI capitals: financial, social and Financial relationsh
Slide 131: Sustainable Development Goals (SDG)
Sustainable Development Goals (SDG) Our guideline to sustainable thems are th SDG’s, wich allows for risk management and conncections to the Market. Connecting the company's business strategy with sustainable development goals allows increasing the value of corporate sustainability by addressing cha
Slide 132: Employees | Profile
Employees | Profile 1 100,335 Employees Organizational Climate Thinking about the best way to measure and monitor our employees’ satisfaction, in 2018 we redesigned our survey strategy, by 60% 40% discontinuing the Fale Francamente (Speak Frankly) survey, which was replaced by Pulse 51.5%2 of manage
Slide 133: Employees | Management Cycle
Employees | Management Cycle Training and Attraction and Compensation and Performance Selection Benefits Assessment Development Performance Special Talent Itaú Unibanco Fixed Compensation In 2018, it amounted to Management Programs Business School approximately R$17 billion (plus Internship: 2,393 p
Slide 134: Diversity | Commitment and Action
Diversity | Commitment and Action Our Internal Policy for Diversity Our Commitment Integrated Action Enhancement Principles : In 2017, we established an In 2018, the Sustainability 1- Implementation of policies and important milestone in our Committee approved an projects for valuing and promoting j
Slide 135: Initiatives | Itaú Women Entrepreneurs and Financial Education
Initiatives| Itaú Women Entrepreneurs e Financial Education Itaú Women Entrepreneurs Objective of the program Number of participants in the program The Itaú Women Entrepreneurs Program Empower female entrepreneurs in Brazil (local acronym IME) was created in 2013 as a through in-person and online so
Slide 136: 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. Training programs Integrity and Ethics Program Adherence to the termination of The Integrity and Ethics Education Program i
Slide 137: ESG Integration on Business
ESG Integration on Business Responsible Credit Analysis Investments The Environmental and Social Risk Policy contains the criteria for Proprietary methodology to include ESG issues in the valuation of the analysis of clients and projects and the establishment of real fixed income securities and the
Slide 138: Our operations | Buildings, Branches and Data Center
Our operations | Buldings, Branches and Data Center In 2018 we created a working group within the central administration focused on efficiency in utilities, which resulted in the economy of several inputs: -4.0 GWh -13 mil m³ -26 mil m³ -469 tCO2 Issued with diesel oil Consumer Of natural gas Of gas
Slide 139: 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 140: Attachment 03 (Portuguese only)
fls.3 Attachment 02 (portuguese only) fls.3 Attachment 02 (portuguese only)
Slide 141: Teleconferência - Imprensa Resultados do 2º trimestre de 2019
Teleconferência - Imprensa Resultados do 2º trimestre de 2019 Candido Botelho Bracher Presidente e CEO Milton Maluhy Filho Vice-Presidente Executivo, CFO e CRO Alexsandro Broedel Diretor Executivo de Finanças e Relações com Investidores 1Teleconferência - Imprensa Resultados do 2º trimestre de 2019
Slide 142: Destaques do resultado 2º trimestre de 2019
Destaques do resultado 2º trimestre de 2019 Lucro Líquido Recorrente ROE Recorrente Carteira de Crédito ¹ Índice de Inadimplência 90 dias Consolidado Consolidado Consolidado Consolidado 2,0 % 2,3 % -0,1 p.p. -0,1 p.p. R$ 659,7 bi R$ 7,0 bi 23,5% 2,9% 2T19 vs. 1T19 2T19 vs. 1T19 2T19 vs. 1T19 2T19 vs
Slide 143: Crédito por perfil de Cliente ou por tipo de produto
Crédito por perfil de Cliente ou por tipo de produto Em R$ bilhões, ao final do período 2T19 1T19 D 2T18 D Originação de crédito¹ Pessoas Físicas 222,3 215,6 3,1% 1 95,0 14,0% 2T19 vs. 2T18 Cartão de Crédito 7 9,3 76,4 3,7% 6 6,1 20,0% Total Brasil ² 28% Crédito Pessoal 32,8 3 1,1 5,3% 28,3 15,6% Cr
Slide 144: Iniciativa comercial da REDE
Iniciativa comercial da REDE terminou com a taxa de antecipação no cartão de crédito à vista. Nova iniciativa para clientes... Destaques de Junho de 2019 CREDENCIAMENTO Com o uso de maquininhas + 73% em relação à Junho de 2018. da Rede e domicilio + 112% indicação do Itaú como domicílio bancário. ba
Slide 145: Despesas não Decorrentes de Juros (DNDJ)
Despesas não Decorrentes de Juros (DNDJ) # Agências e Postos de Atendimento Em R$ bilhões 2T19 1T19 D 2T18 D 1S19 1S18 D 4.934 D # 4.904 4.722 Despesas de Pessoal ( 5,5) ( 5,3) 4,6% (5,2) 6,8% (10,8) (10,3) 5,5% - 212 160 195 196 + 1 Despesas Administrativas ( 4,2) ( 4,1) 2,9% ( 4,2) 1,9% ( 8,3) (8,
Slide 146: Projeções 2019
Projeções 2019 Consolidado Brasil ¹ Carteira de Crédito Total ² 8,0% 11,0% 8,0% 11,0% Margem Financeira com Clientes 9,0% 9,0% 12,0% 12,0% Margem Financeira com o Mercado R$ 4,6 bi R$ 5,6 bi R$ 3,6 bi R$ 4,6 bi Custo do Crédito³ R$ 14,5 bi R$ 12,5 bi R$ 17,5 bi R$ 15,5 bi 4 Receita de Prestação de S
Slide 147: Itaú Unibanco no mercado de capitais
Itaú Unibanco no mercado de capitais 12 reuniões Apimec realizadas 215,3 mil 1,3 mil pessoas acionistas diretos (+13,5% em relação a 2018) +78% em relação a dez/2017 Volume médio diário 1.418 Apimec São Paulo +62% 03/09/2019 670,0 874 Hotel Unique 432,0 14 horas 748,0 442,0 Transmissão ao vivo pelo
Slide 148: Teleconferência - Imprensa Resultados do 2º trimestre de 2019
Teleconferência - Imprensa Resultados do 2º trimestre de 2019 Candido Botelho Bracher Presidente e CEO Milton Maluhy Filho Vice-Presidente Executivo, CFO e CRO Alexsandro Broedel Diretor Executivo de Finanças e Relações com Investidores 8Teleconferência - Imprensa Resultados do 2º trimestre de 2019
Slide 149: Attachment 04
fls.4 Attachment 03 fls.4 Attachment 03
Slide 150: Itaú Unibanco reports second quarter 2019 earnings of R$ 7.0 billion
Itaú Unibanco reports second quarter 2019 earnings of R$ 7.0 billion Result driven by better financial margin and growth in the credit portfolio São Paulo, July 29, 2019 – Itaú Unibanco, the largest private sector bank in Latin America, reported recurring net income of R$ 7.0 billion in the second q
Slide 151: Non-interest expenses and digital channels
Non-interest expenses were R$ 12.7 billion in the second quarter of 2019, an increase of 3.3% in relation “We believe that large to the same quarter of 2018, principally driven by higher companies should resume investments in the light of personnel expenses. The efficiency ratio reported a progress
Slide 152: Attachment 05
fls.5 Attachment 04 fls.5 Attachment 04
Slide 153: Conference Call 2nd quarter 2019 Earnings Review
Conference Call nd 2 quarter 2019 Earnings Review Candido Botelho Bracher President and CEO Milton Maluhy Filho Executive Vice-President, CFO and CRO Alexsandro Broedel Executive Finance Director and Head of Investor Relations 1Conference Call nd 2 quarter 2019 Earnings Review Candido Botelho Brache
Slide 154: Highlights 2nd quarter 2019
Highlights nd 2 quarter 2019 Recurring Net Income Recurring ROE Credit ¹ NPL 90 days Consolidated Consolidated Consolidated Consolidated 2.0 % 2.3 % -10 bps -10 bps R$659.7 bn R$7.0 bn 23.5% 2.9% 2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19 Brazil Brazil Brazil Brazil 2.8 % 2.4 % -20 bps
Slide 155: Recurring Net Income and Value Creation
Recurring Net Income and Value Creation 23.6% 23.5% 21.8% 21.6% 21.3% ROE Average Cost of Capital 14.5% 14.5% 13.5% 13.5% 13.0% Recurring Net Income 7.0 6.9 6.5 6.5 6.4 Value Creation 2.0 2.9 3.2 2.2 2.5 Cost of Capital 4.5 4.3 4.0 3.9 3.9 2Q18 3Q18 4Q18 1Q19 2Q19 3 In R$ billionRecurring Net Income
Slide 156: Credit by Client profile or Product
Credit by Client profile or Product Credit origination¹ In R$ billions, end of period 2Q19 1Q19 D 2Q18 D 2Q19 vs. 2Q18 Individuals 222.3 2 15.6 3.1% 195.0 14.0% Total Credit Card Loans 79.3 7 6.4 3.7% 66.1 20.0% Brazil ² 28% Personal Loans 32.8 3 1.1 5.3% 2 8.3 15.6% Payroll Loans 49.1 4 8.6 1.0% 45
Slide 157: Financial Margin with Clients
Financial Margin with Clients Annualized Average Rate Brazil Consolidated 12.3% 12.2% 12.1% 12.1% 12.2% 12.0% 12.0% 11.8% 10.1% 10.0% 10.0% 9.9% 9.9% 9.9% 9.8% 9.8% 9.5% 9.6% 9.2% 9.2% 9.2% 8.9% 9.2% 9.0% 9.2% 7.5% 7.7% 7.6% 7.6% 7.6% 7.4% 7.4% 7.5% 7.1% 6.4% 6.4% 6.7% 6.4% 6.4% 6.4% 3Q17 4Q17 1Q18
Slide 158: Financial Margin with the Market
Financial Margin with the Market In R$ billions 1.8 1.7 1.6 1.5 1.5 1.4 1.4 1.3 1.2 3.1 2.8 0.1 1.7 1.6 1.6 1.4 1.4 1.3 2.0 1.1 1.3 2.2 0.1 1.2 0.2 1.1 1.3 1.3 0.9 1.2 1.1 0.9 1.0 0.5 0.8 0.5 0.8 0.5 0.3 0.2 0.2 0.3 0.5 0.3 0.3 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19 Financial Margin
Slide 159: Cost of Credit and Credit Quality
Cost of Credit and Credit Quality NPL Ratio Consolidated (90 days) - % Brazil (90 days) - % Consolidated (15-90 days) - % Brazil (15-90 days) - % 3.1 3.7 3.7 3.1 3.5 3.5 3.5 3.5 3.5 4.6 4.5 3.4 3.4 4.5 4.5 3.4 4.4 4.4 3.2 2.9 2.8 2.7 2.4 3.2 2.3 4.3 2.9 2.6 3.1 2.5 3.0 2.6 2.9 2.9 3.7 2.9 2.5 2.8 2.
Slide 160: Commissions and Fees and Result From Insurance Operations
Commissions and Fees and Result From Insurance Operations 4 In R$ billions Assets Under Administration 2Q19 1Q19 D 2Q18 D 1H19 1H18 D In R$ billions Credit and Debit Cards 3 .2 3 .3 -2.7% 3.2 -1.7% 6.5 6 .6 -1.7% Card Issuance 2.2 2 .2 2.5% 2.0 10.2% 4 .4 4.1 8.0% 14.7% 1,176 Acquiring 1.0 1 .1 -12.
Slide 161: REDE commercial initiative ended the prepayment rate
REDE commercial initiative ended the prepayment rate on credit card transactions without installments New initiative for clients... June 2019 highlights NEW CLIENTS Using any POS machine + 73% compared to June 2018. from REDE with a bank + 112% appointing Itaú as their bank domicile. domicile in Ita
Slide 162: Non-Interest Expenses
Non-Interest Expenses # Branches and Client Service Branches In R$ billions 2Q19 1Q19 D 2Q18 D 1H19 1H18 D 4,934 4,904 Personnel Expenses (5 .5) (5 .3) 4.6% (5.2) 6.8% (1 0.8) (1 0.3) 5.5% D # 4,722 - 212 Administrative Expenses (4.2) (4.1) 2.9% (4 .2) 1.9% (8.3) (8 .0) 3.9% + 1 Operating Expenses (
Slide 163: Capital – Full application of Basel III rules
Capital Full application of Basel III rules│ June 30, 2019 rd Payment of R$7.7 billion in complementary dividends on August 23 , 2019. 14.9% 14.6% -0.1% 0.8% -0.4% 1.3% 1.3% 13.6% 13.3% Tier I 2Q19 net income and Prudential Adjustments RWA Tier I Mar-19 other equity changes Jun-19 Common Equity Tier
Slide 164: Macroeconomic Outlook
Macroeconomic Outlook 2019 Projections 1 Initial Current 2012 2013 2014 2015 2016 2017 2018 GDP - Brazil 2.5% 0.8% 3.0% 2 0.5% GDP - Brazil SELIC rate 6.5% 5.0% 1.9% 1.1% 1.1% -3.3% -3.5% 3 Inflation rate 3.9% 3.6% 3.88 2, 4 Unemployment rate 11.6% 11.8% 2.05 Dollar (FX Rate in R$) Real / Dollar R$3
Slide 165: 2019 Forecast
2019 Forecast Consolidated Brazil ¹ Total Credit Portfolio ² 8.0% 11.0% 8.0% 11.0% Financial Margin with Clients 9.0% 9.0% 12.0% 12.0% Financial Margin with the Market R$4.6 bn R$5.6 bn R$3.6 bn R$4.6 bn Cost of Credit ³ R$14.5 bn R$12.5 bn R$17.5 bn R$15.5 bn 4 Commissions and Fees and Results from
Slide 166: Appendix
Appendix 14Appendix 14
Slide 167: Business Model
Business Model In R$ billions 1H19 1H18Δ Insurance Excess Insurance Excess Insurance Excess Consolidated Credit Trading Consolidated Credit Trading Consolidated Credit Trading & Services Capital & Services Capital & Services Capital Operating Revenues 3 0.4 0.9 2 5.7 0.8 28.4 0 .9 25.2 1.0 2 .0 (0.1
Slide 168: Results
Results In R$ Billions 2Q19 1Q19 Δ 2Q18 Δ 1H19 1H18Δ Operating Revenues 29.5 28.2 4.6% 2 8.0 5.3% 5 7.7 55.4 4.1% Managerial Financial Margin 18.5 17.7 4.4% 17.3 6.7% 3 6.1 34.3 5.3% Financial Margin with Clients 16.9 1 6.4 2.8% 16.0 5.8% 33.3 31.2 6.7% Financial Margin with the Market 1.6 1.2 26.4%
Slide 169: Payout Practice
Payout Practice Maintain the practice of paying dividends and interest on own capital at 35% of net income (however we excluded the maximum limit previously determined at 45%). Set forth, through the Board of Directors, the total amount to be distributed each year considering: our capitalization lev
Slide 170: Digital Transformation
Digital Transformation % of transactions through digital channels Use of Digital Channels ¹ Individuals (in millions) Companies (in millions) 1H17 1H19 11.9 Credit 17% 20% 10.3 1.2 1.1 Investments 1.0 37% 46% 9.1 Payments 66% 81% Jun-17 Jun-18 Jun-19 Jun-17 Jun-18 Jun-19 Note: Share of digital chann
Slide 171: Conference Call 2nd quarter 2019 Earnings Review
Conference Call nd 2 quarter 2019 Earnings Review Candido Botelho Bracher President and CEO Milton Maluhy Filho Executive Vice-President, CFO and CRO Alexsandro Broedel Executive Finance Director and Head of Investor Relations 19Conference Call nd 2 quarter 2019 Earnings Review Candido Botelho Brach
Itau Unibanco Holding — Q2 2019 Earnings Presentation on 6ix