Itau Unibanco Holding S.a. · BMFBOVESPA:ITUB3
Itau Unibanco — Q3 2017 Earnings Presentation
108 slides from Itau Unibanco's earnings presentation, Nov 3, 2017
Slide 1: 3Q17 Institutional Presentation
3Q17 Institutional Presentation Institutional Information Itaú Unibanco Holding S.A.
Slide 2: Forward-looking statements
3Q17 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: Pro Forma Information
page 3 Pro Forma Information The merger between Itaú Chile and CorpBanca was concluded on April, 1st 2016. As from the second quarter of 2016, Itaú CorpBanca, the company resulting from this merger, was consolidated in our financial statements, as we are the controlling shareholder of the new bank.
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 30, 2017
Slide 5: Our Profile
1 Our Profile
Slide 6: Itaú Unibanco at a Glance
page 6 Itaú Unibanco at a Glance Leading position in Brazil ▪ US$89.0 billion market cap (1) ▪ 96,326 employees in Brazil and abroad ▪ 4,919 branches and CSBs in Brazil and abroad ▪ 46,700 ATMs in Brazil and abroad ▪ Brazilian multinational bank ▪ Major provider of finance for the expansion of Brazi
Slide 7: Our Vision
page 7 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
Slide 8: Our Way
page 8 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 sust
Slide 9: Main Challenges
page 9 Main Challenges Focus on Clients We must further increase the focus on clients, aligned with international best practices not limited to the financial sector, developing products and a “service culture” always focused on client satisfaction throughout all the activities of the bank. Seeking e
Slide 10: Itaú Unibanco Global Footprint
page 10 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, Baha
Slide 11: A History of Successful Strategic Deals
page 11 A History of Successful Strategic Deals 1 Foundation of Banco Itaú Casa Moreira Salles Banco del Buen Ayre BEG Alliance with: Unibanco Itaú (1) Includes mergers, acquisitions, joint-ventures and partnerships. (2) Pending Regulators approval. Acquisition of the remaining 50% of: Uruguay 1924
Slide 12: Acquisition of Citibank's Retail Business in Brazil
page 12 Acquisition of Citibank’s Retail Business in Brazil On October 26, we announced that we obtained the final regulatory authorization required for the acquisition of Citibank’s retail business (for individuals) in Brazil. This transaction includes loans, deposits, credit cards, branches, asset
Slide 13: Corporate Governance
2 Corporate Governance
Slide 14: Corporate Governance at Itaú Unibanco
page 14 Corporate Governance at Itaú Unibanco 28% 38% 34% Itaú Unibanco Holding S.A. 63.26% ON 16.97% PN 34.45% Total 36.74% ON 83.03% PN 65.55% Total 51.00% ON 26.28% Total 50.00% ON 33.47% Total 100,00% Total 38.66% ON 0.004% PN 19.93% Total 9.49% ON 99.60% PN 53.17% Total Non Voting Shares Free F
Slide 15: IUPAR and Itaú Unibanco Governance
page 15 IUPAR (Itaú Unibanco Participações) and Itaú Unibanco Governance Executive Committee Implementation of Board of Directors’ guidelines and goals; Operation of the businesses and strategy for products and segments; Ensure better allocation and management of financial, operational and human res
Slide 16: Board of Directors and Executive Committees
page 16 Itaú Unibanco Board of Directors and Executive Committees (1) Independent Director. Board of Directors Chief Executive Officer (CEO) • Large and Medium Corporates • Asset Management • Institutional Treasury • Private Bank • Custody • Latin America • Branches • Cards • REDE • Real Estate • In
Slide 17: Risk Management Structure
page 17 Risk Management Structure Audit Committee Gustavo Loyola 1 Capital and Risk Management Committee Pedro Bodin 1 Executive Finance and Market Risk Control Office Investor Relations Office Operational Risk and Compliance Executive Office Credit Risk and Modeling Office 3rd line of defense Indep
Slide 18: Governance Structure at Itaú Unibanco
page 18 Governance Structure at Itaú Unibanco Shareholder’s Meeting Board of Directors Fiscal Council Personnel Committee Related Parties Committee Nomination and Corporate Governance Committee Risk and Capital Management Committee Strategy Committee Compensation Committee International Advisory Boa
Slide 19: Credit Risk Policies Hierarchy
page 19 Credit Risk Policies Hierarchy Board of Directors and Capital and Risk Management Committee ▪ Defines and monitors Risk Appetite; ▪ Approval of policies, strategies and definition of minimum expected return on capital; ▪ Improvement of Risk Culture. ▪ Defines a Global Policy; ▪ Approves poli
Slide 20: Risk Appetite
page 20 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
Slide 21: Risk Appetite (as approved by the Board)
page 21 Risk Appetite (as approved by the Board of Directors) “We are a universal bank, operating predominantly in Latin America. Supported by our risk culture, we operate based on rigorous ethical and regulatory compliance standards, seeking high and growing results, with low volatility, by means o
Slide 22: Retail Management – Individuals and Small and Medium Companies
page 22 Retail Management – Individuals and Small and Medium Companies 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 79 110 91 112 102 114 97 113 92 118 96 121 77 130 91 114 86 118 87 134 79 136 74 1
Slide 23: Credit Offer Based on Future Scenario
page 23 Credit Offer Based on Future Scenario Credit Not Available STATISTICAL MODELS POLICY Highest risk Lowest risk Highest risk Positive future expectation Negative future expectation Tightening of credit, maintaining the same appetite Easing of credit, maintaining the same appetite Base Scenario
Slide 24: Business Overview
3 Business Overview
Slide 25: Universal Bank
page 25 Universal Bank 1 (1) September 30, 2017 figures; (2) Includes Insurance, Pension Plan and Premium Bonds operations. • Approximately 28.8 million credit card accounts and 25.9 million debit card accounts; • Leader in Brazilian credit card market, extensive number of joint ventures and partner
Slide 26: Client Segmentation
page 26 Client Segmentation Individuals Segmentation by monthly income Companies Segmentation by annual sales Retail Banking Wholesale Banking 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
Slide 27: Retail in Brazil – Presence in Brazil
page 27 822 824 813 794 780 766 757 736 718 3,871 3,821 3,755 3,707 3,664 3,653 3,553 3,523 3,523 74 94 108 115 130 135 144 154 156 4,767 4,739 4,676 4,616 4,574 4,554 4,454 4,413 4,397 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 CSB Brick and Mortar Branches Digital Branches 24,7
Slide 28: Retail - Credit Cards, Joint Ventures and Partnerships
page 28 Retail - Credit Cards, Joint Ventures and Partnerships with Retailers in Brazil Highlights JVs and Partnerships • Focus on credit card instruments • Long term agreements • Alignment of incentives • Brazilian market leader in credit card transactions • Qualification of the client base: propri
Slide 29: Retail - Cards in Brazil
page 29 Retail - Cards in Brazil | Growing Penetration in Household Consumption Expenditure Credit and Debit Cards Billed Volume % at Household Consumption Expenditure Sources: ABECS (Brazilian Credit Card Companies Association) and IBGE (Statistics and Geography Brazilian Institute). Only the purch
Slide 30: Retail - Payroll Loan in Brazil
page 30 45.7 45.4 46.7 46.5 45.6 44.6 44.9 44.8 44.6 35.4% 35.6% 35.4% 36.2% 37.0% 37.7% 38.0% 38.7% 39.5% 64.6% 64.4% 64.6% 63.8% 63.0% 62.3% 62.0% 61.3% 60.5% Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Branches Itaú Consignado S.A. 28.4 28.8 30.9 31.4 31.2 31.0 31.7 32.2 32.6 1
Slide 31: Retail - Mortgage Market in Brazil
page 31 77.7% 80.0% 81.1% 22.3% 20.0% 18.9% 48,053 47,797 47,241 Sep-16 Jun-17 Sep-17 Individuals Companies 55.1% 54.5% 54.8% 41.9% 40.9% 40.8% Sep-16 Jun-17 Sep-17 Vintage (quarterly average) Portfolio Real Estate Brokers 30% High Income Branches 28% Developers 19% Regular Branches 14% Partnerships
Slide 32: Retail - Vehicle Financing in Brazil
page 32 100 109 68 54 49 47 48 46 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 14,102 13,887 2Q17 3Q17 Retail - Vehicle Financing in Brazil • Offers finance through over 12 thousand dealers. • Average ticket size of approximately R$29.5 thousand. • 84% of the financing is guaranteed up to 4 years. • 90%
Slide 33: Retail - Insurance Ranking in Brazil
page 33 Retail - Insurance Ranking in Brazil 1,2 (1) Source SUSEP, date: Aug-17, includes our 30% interest in Porto Seguro. Doesn´t consider Health and VGBL is consider in Pension Plans; (2) Insurance = Earned Premiums; Pension Plans = Provision for Benefits to be Granted and Premium Bonds = Revenue
Slide 34: Retail - Association with Porto Seguro
page 34 Retail - Association with Porto Seguro • Unification of residential and automobile insurance operations; • Exclusive offer and distribution of residential and automobile insurance products to Itaú Unibanco’s customers in Brazil and Uruguay; • Itaú Unibanco Holding nominates 2 of 5 board of d
Slide 35: Very Small, Small and Middle Market in Brazil
page 35 Very Small, Small and Middle Market in Brazil SMEs Loan Portfolio 1 R$ million Full range of financial products and services, including deposits accounts, investment options, insurance, cash management, credit products and collection, among others. Very Small and Small Market • Clients with
Slide 36: Wholesale - Corporate Companies in Brazil
page 36 Wholesale - Corporate Companies in Brazil Corporate Loans 1 • Corporate clients with sales above R$200 million. • We offer a broad portfolio of banking products and services, from cash management to structured operations and transactions in capital markets. • We serve approximately 5,900 lar
Slide 37: Wholesale - Corporate and Investment Banking
page 37 (1) Source: Dealogic; (2) Source: Dealogic; (3) Source: ANBIMA – Brazilian association of Financial and Capital Markets Entities. Information from Aug-17; (4) Source: Dealogic;. (5) Source: Cetip. Wholesale - Corporate and Investment Banking | Leadership Position in Brazil Wholesale Banking
Slide 38: Wholesale - Wealth Management Services
page 38 Wholesale -Wealth Management Services | Brazil R$ billion With a full global wealth management platform, leadership position in Brazil We were recently recognized by the world’s top international Private Banking market publications: Private Banker International • Outstanding Private Bank - L
Slide 39: Retail Footprint in Latin America
page 39 Employees: 1,682 Branches + CSBs: 87 ATMs: 178 Argentina Employees: 5,972 Branches + CSBs: 196 ATMs: 472 Chile Employees: 82,401 Branches + CSBs: 4,397 ATMs: 45,502 Brazil Colombia1 Employees: 3,694 Branches + CSBs: 175 ATMs: 176 Employees: 1,120 Branches + CSBs: 25 Points of Service OCA: 35
Slide 40: Segments – Income Statement Pro Forma 3Q17
page 40 Segments – Income Statement Pro Forma 3Q17 Note: Non-interest Expenses item is made up of Personnel Expenses, Administrative Expenses, Other Tax Expenses and Operating Expenses. Consolidated figures do not represent the sum of the parts, because there are transactions between the companies t
Slide 41: Financial Highlights
4 Financial Highlights
Slide 42: Profitability | Sustainable Performance
page 42 Profitability | Sustainable Performance 57% Stockholders’ Equity (R$ billion) Sep-12 79.0 Dividends & Interest on Own Capital1 net of taxes (R$ billion) Recurring Net Income (R$ billion) Sep-17 123.6 9M12 2.0 9M17 11.4 163% Value Creation (R$ billion) 9M12 2.4 9M17 6.2 484% Recurring ROE (%)
Slide 43: Highlights
page 43 Highlights Recurring Net Income Recurring ROE (p.a.) Credit Quality (Sep-17) Commissions and Fees and Result from Insurance1: Financial Margin with Clients: + 10 bps (3Q17/2Q17) + 170 bps (9M17/9M16) R$6.3 bn R$18.6 bn 1 Result from Insurance (-) Retained Claims (-) Insurance Selling Expense
Slide 44: Recurring ROE
page 44 Recurring ROE Consolidated ROE / ROA (1) Includes units abroad ex-Latin America. Brazil 1 24.1% 22.1% 19.6% 20.6% 19.9% 20.7% 22.0% 21.5% 21.6% 1.8% 1.6% 1.4% 1.6% 1.6% 1.6% 1.7% 1.7% 1.7% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Annualized Recurring Return on Average Equity (quarterly)
Slide 45: Non-Recurring Events
page 45 Non-Recurring Events In R$ millions 3Q17 2Q17 3Q16 9M17 9M16 Recurring Net Income 6,254 6,169 5,595 18,599 16,332 Non-Recurring Events (177) (155) (200) (455) (308) IRB 155 - - 155 - ∟ Disposal of IRB shares Goodwill Amortization (125) (123) (120) (373) (309) ∟ Effect from the amortization g
Slide 46: Income Statement | Operating Revenues Perspective
page 46 Income Statement | Operating Revenues Perspective In R$ millions 3Q17 2Q17 3Q16 9M17 9M16 Operating Revenues 26,981 27,205 -0.8% 27,950 -3.5% 81,453 82,519 -1.3% Managerial Financial Margin 16,769 17,385 -3.5% 18,059 -7.1% 51,569 53,266 -3.2% Financial Margin with Clients 15,410 15,762 -2.2%
Slide 47: Income Statement | Managerial Financial Margin Perspective
page 47 Income Statement | Managerial Financial Margin Perspective In R$ millions 3Q17 2Q17 3Q16 9M17 9M16 Managerial Financial Margin 16,769 17,385 -3.5% 18,059 -7.1% 51,569 53,266 -3.2% Financial Margin with Clients 15,410 15,762 -2.2% 16,310 -5.5% 46,719 4 8,260 -3.2% Financial Margin with the Ma
Slide 48: Results – Brazil and Latin America
page 48 Results – Brazil and Latin America (1) Includes units abroad ex-Latin America. (2) Latin America information is presented in nominal currency. (3) Result from Insurance includes the Result from Insurance, Pension Plan and Premium Bonds Operations before Retained Claims and Selling Expenses.
Slide 49: Business Model
page 49 Business Model (1) Result from Insurance includes the Result from Insurance, Pension Plan and Premium Bonds Operations before Retained Claims and Selling Expenses. (2) Include Tax Expenses (ISS, PIS, COFINS and other), Insurance Selling Expenses and Minority Interests in Subsidiaries. (3) Th
Slide 50: Credit Portfolio
page 50 In R$ billions, end of period 3Q17 2Q17 3Q16 Individuals 179.9 179.4 0.3% 182.5 -1.4% Credit Card Loans 57.2 56.4 1.4% 55.7 2.6% Personal Loans 26.0 25.9 0.3% 27.9 -6.9% Payroll Loans ¹ 44.6 44.8 -0.5% 45.6 -2.3% Vehicle Loans 13.9 14.1 -1.5% 15.9 -12.7% Mortgage Loans 38.3 38.3 0.1% 37.3 2.
Slide 51: Credit Portfolio by Currency
page 51 Credit Portfolio by Currency 241.9 234.3 216.0 194.9 193.8 183.3 176.5 184.9 180.7 399.9 400.9 384.7 378.1 374.0 378.7 373.9 367.4 358.4 641.8 635.2 600.7 573.0 567.7 562.0 550.3 552.3 539.1 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Foreign Currency Local Currency R$ bil
Slide 52: Credit Portfolio by Product
page 52 Credit Portfolio by Product (1) Includes units abroad ex-Latin America; (2) Includes operations originated by the institution and acquired operations; (3) Also includes Overdraft, Receivables, Hot Money, Leasing, and other; (4) Includes Argentina, Chile, Colombia, Panama, Paraguay, Peru and
Slide 53: Credit Portfolio Growth in Brazil
page 53 350 383 409 362 341 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 73 69 68 58 57 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 121 136 155 122 106 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 23 28 33 37 38 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 27 28 30 27 25 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 43 54 55 56 57 Sep-13 Sep-14 Sep
Slide 54: Companies Credit Portfolio by Business Sector
page 54 Companies Credit Portfolio by Business Sector 1 Credit Portfolio Breakdown (2) Includes financial guarantees provided. (1) Includes financial guarantees provided. Industry and Extractivism = Mining + Steel and Metallurgy + Capital Assets + Petrochemical and Chemical + Energy and sewage + Oil
Slide 55: Credit Portfolio Analysis
page 55 Credit Portfolio Analysis Profile of credit portfolio by origination period: ▪ Older vintages with higher spreads are losing relevance compared to the most recent ones. ▪ 52.6%of total origination was created in the past 12 months. R$ billion 28.5% 29.9% 29.0% 9.4% 9.0% 10.5% 6.0% 7.4% 7.0%
Slide 56: Evolution of the Credit Portfolio Mix
page 56 27.7% 31.6% 30.5% 30.2% 29.7% 29.9% 30.6% 31.2% 32.0% 17.2% 16.6% 15.8% 15.7% 16.0% 15.6% 15.1% 14.3% 14.0% 27.5% 22.1% 17.6% 14.1% 11.7% 9.9% 8.7% 8.2% 7.8% 14.5% 15.0% 15.5% 16.2% 18.0% 19.2% 20.5% 21.3% 21.4% 13.2% 14.7% 20.5% 23.9% 24.6% 25.4% 25.1% 24.9% 24.9% Sep-13 Mar-14 Sep-14 Mar-1
Slide 57: Managerial Financial Margin With Clients
page 57 15,762 39 127 69 43 140 147 168 15,410 2Q17 Mix of products, clients and spreads Liabilities' Margin Average Asset Portfolio 2 Working Capital and other Structured operations from the wholesale segment in 2Q17 Higher Number of calendar days Latin America Financial Margin with Clients 3 3Q17
Slide 58: Financial Margin with Clients | Annualized Average Rate
page 58 Financial Margin with Clients | Annualized Average Rate 11.0% 11.1% 11.1% 11.6% 7.4% 7.5% 6.1% 6.7% 10.1% 10.3% 10.5% 10.8% 10.3% 10.3% 10.1% 5.4% 6.1% 6.8% 6.6% 6.7% 7.3% 7.4% 14.0% 14.1% 14.1% 14.1% 14.1% 13.8% 12.7% 10.9% 9.2% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Annualized averag
Slide 59: Loan Portfolio Mix Change
page 59 Sep-17 20.8 12.0 3.0 12.2 5.3 10.1 9.5 27.113.0 Loan Portfolio Mix Change 1 (%) (1) Does not include financial guarantees provided; (2) Includes units abroad ex-Latin America; (3) Excludes Brazil. Corporate Very Small, Small and Middle Market Vehicles Credit Card Personal Loans Latin America
Slide 60: Financial Margin with the Market
page 60 Financial Margin with the Market R$ billion (1) Includes units abroad ex-Latin America; (2) Excludes Brazil; (3) The Latin America pro forma Financial Margin with the Market from 2015 and 1Q16 does not consider CorpBanca's information, which is classified in financial margin with clients. 1
Slide 61: Provision for Loan Losses and Cost of Credit
page 61 3,649 3,851 3,628 3,378 3,464 3,747 4,302 4,621 4,323 4,395 3,932 3,996 3,550 3,732 3,236 915 1,112 1,892 1,629 1,295 1,362 2,728 1,546 264 208 1,825 1,070 1,410 619 532 323 338 358 392 399 383 772 396 412 757 432 598 514 4,400 4,630 4,865 4,828 5,714 5,768 5,997 6,366 7,824 6,337 6,169 5,82
Slide 62: Allowance for Loan Losses by Risk
page 62 Allowance for Loan Losses by Risk– Consolidated R$ billion 13.8 12.2 1.9 8.7 Sep/17 Allocation of Total Allowance(*) by Type of Risk - Consolidated Regulatory Breakdown Overdue Aggravated Potential3 Expected and/or Potential Loss Related to expected loss in Retail segment and potential loss
Slide 63: Non Performing Loans Index
page 63 Non Performing Loans Index 90-day NPL Ratio| Consolidated (%) 90-day NPL Ratio | Brazil 1 (%) Note: Total and Latin America 15 to 90-day NPL Ratios prior to June 2016 do not include CorpBanca. (1) Includes units abroad ex-Latin America. (2) Excludes Brazil. 15 to 90-day NPL Ratio - Consolida
Slide 64: NPL Ratio Evolution – Individuals (Brazil)
page 64 7.7 7.3 6.8 6.1 5.6 4.9 4.9 5.8 5.9 5.6 5.1 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Sep-17 NPL Ratio Evolution – Individuals (Brazil) Mix jun-12 NPL Ratio (Over 90 days) -% 6.0
Slide 65: NPL Creation
page 65 NPL Creation R$ billion 6.3 5.7 6.0 5.3 6.8 5.3 4.9 4.3 4.5 4.4 4.4 4.3 4.2 4.1 3.8 3.5 3.8 3.6 1.3 1.0 1.5 1.1 2.3 0.8 1.0 0.2 0.2 0.6 0.2 0.3 0.1 0.4 0.8 0.5 0.4 0.5 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Total Retail Banking - Brazil Wholesale Banking - Brazil Latin America ex-Brazi
Slide 66: Provision for Loan Losses and NPL Creation by Segment
page 66 0.4 0.4 0.6 0.2 0.8 0.3 0.4 0.1 0.4 0.4 0.8 0.8 0.4 0.5 0.6 0.4 0.5 0.5 62% 230% 262% 499% 105% 100% 86% 154% 97% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1.3 1.4 2.7 1.3 1.0 1.5 1.5 1.1 1.8 2.3 1.1 0.8 1.4 1.0 0.6 0.2 0.5 1 0.2 98% 136% 186% 146% 79% 141% 148% 263% 230% 3Q15 4Q15 1Q16 2
Slide 67: Allowance and Coverage Ratio
page 67 2,816 2,709 2,957 2,710 2,942 2,899 3,000 3,194 3,392 22,377 22,341 24,299 25,536 25,721 24,093 23,798 23,530 22,566 1,870 1,884 1,927 10,985 10,985 10,985 10,224 10,440 10,440 8,971 8,810 8,745 36,179 36,035 38,241 38,470 39,103 37,431 37,640 37,417 36,630 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Slide 68: Coverage Ratio (90-day NPL)
page 68 Coverage Ratio (90-day NPL) Coverage Ratio and Expanded Coverage Ratio Coverage Ratio (1) Expanded Coverage Ratio is calculated from the division of the total allowance balance* by the sum of 90 days overdue operations and of renegotiated loan portfolio excluding the double counting of 90 da
Slide 69: Loan Portfolio Evolution by Risk Level
page 69 Loan Portfolio Evolution by Risk Level Brazil 1 Total Note: Loan portfolio without financial guarantees provided. Total allowance includes the provision for financial guarantees provided, which is recorded in liabilities as from March 2017, in accordance with CMN Resolution No. 4,512/16. (1)
Slide 70: Renegotiated Loans Portfolio
page 70 3.6 4.2 4.6 5.0 6.7 4 5.1 4.9 4.6 4.6 16.3% 18.2% 20.4% 20.7% 26.4%* 20.8% 19.7% 17.6% 17.2% Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Total Renegotiated Loans Portfolio 90-day NPL Total of Renegotiated Loans Portfolio 90-day NPL Ratio 7.1 7.8 8.5 10.4 11.2 9.9 9.9 10.9
Slide 71: Credit Quality | Individuals
page 71 82,5% 68,9% 7,3% 9,4% 10,2% 21,8% Itaú Unibanco Brazilian Financial System excluding Itaú Unibanco Revolving Credit + Overdue Loans ¹ Installment with Interest Transactor² 30.5% 29.7% 30.6% 32.0% 15.8% 16.0% 15.1% 14.0% 17.6% 11.7% 8.7% 7.8% 15.5% 18.0% 20.5% 21.4% 20.5% 24.6% 25.1% 24.9% Se
Slide 72: Banking Fee Revenues and Result from Insurance
page 72 8,827 9,480 8,882 9,376 9,380 9,576 9,441 9,498 9,845 31.8% 34.4% 33.5% 34.8% 34.2% 33.7% 35.2% 35.3% 37.0% 76.6% 79.6% 81.4% 82.1% 75.8% 80.3% 85.8% 82.2% 83.3% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Commissions and Fees and Result from Insurance Operations² Commissions and Fees and R
Slide 73: Merchant Acquiring - REDE
page 73 61,866 67,110 59,982 61,328 62,370 68,259 60,938 61,937 63,558 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 32,055 37,358 32,916 32,070 32,851 37,548 32,867 32,014 32,234 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1,383 1,513 1,426 1,447 1,501 1,535 1,433 1,401 1,399 3Q15 4Q15 1Q16 2Q16 3Q
Slide 74: Insurance Operations | Pro Forma Income Statement
page 74 38 70 64 53 36 51 70 (6) 42 423 339 418 391 360 314 417 382 328 198 190 225 211 218 205 217 161 209 73 68 70 72 69 73 73 63 62 732 667 778 728 683 643 777 601 641 11.9% 11.7% 15.1% 13.1% 12.2% 11.1% 12.6% 9.7% 10.3% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Other Activities Insurance - Co
Slide 75: Insurance Operations Breakdown
page 75 71.0% 65.5% 59.3% 61.5% 63.5% 63.8% 63.4% 52.6% 57.4% 1.0% 1.4% 1.8% 1.9% 2.1% 0.7% 1.9% 4.2% 7.8% 11.3% 10.9% 10.8% 11.0% 12.3% 9.3% 9.7% 12.0% 12.1% 1.7% 3.4% 2.5% 2.6% 2.5% 4.4% 1.6% 3.1% 2.0% 14.9% 18.8% 25.7% 23.0% 19.7% 21.8% 23.4% 28.1% 20.7% 316 296 293 264 289 285 254 185 253 3Q15 4
Slide 76: Pension Plan Segment
page 76 Pension Plan Segment Recurring Income 1 Plan your retirement 2 Pay your future health expenses 3 Invest in your kids’ education 7 Succession planning 4 Plan your taxes expenses 5 Improve your investment return Concept 1,3,6,9: How much do the client have to save to enjoy a peaceful retiremen
Slide 77: Non-interest Expenses, Branches and Employees
page 77 540 540 539 538 545 549 551 542 522 822 824 813 794 780 766 757 736 718 3,871 3,821 3,755 3,707 3,664 3,653 3,553 3,523 3,523 74 94 108 115 130 135 144 154 156 5,307 5,279 5,215 5,154 5,119 5,103 5,005 4,955 4,919 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Branches + CSB
Slide 78: Efficiency Ratio and Risk-Adjusted Efficiency Ratio
page 78 Efficiency Ratio and Risk-Adjusted Efficiency Ratio Non-Interest Expenses (Personnel Expenses + Administrative Expenses + Operating Expenses + Other Expenses) + Cost of Credit (Managerial Financial Margin + Commissions and Fees + Result of Insurance, Pension Plan and Premium Bonds - Tax Expe
Slide 79: Balance Sheet – Assets and Liabilities
page 79 Balance Sheet – Assets and Liabilities R$ million Assets 3Q17 2Q17 3Q16 Current and Long-term Assets 1,439,523 1,422,005 1.2% 1,373,139 4.8% Cash and Cash Equivalents 19,089 22,700 -15.9% 20,176 -5.4% Short-term Interbank Investments 287,701 288,333 -0.2% 278,663 3.2% Securities and Derivati
Slide 80: Total Assets | Evolution and Breakdown
page 80 Total Assets | Evolution and Breakdown R$ billion (1) Net of Allowance for Loan Losses; (2) Gross Loans, including financial guarantees provided. Cash and Cash Equivalents, Interbank Investments and Interbank and Interbranch Accounts Securities and Derivatives Financial Instruments Loans 1 O
Slide 81: Total Liabilities | Evolution and Breakdown
page 81 Deposits Received under Securities, Repurchase Agreements and Fund from Acceptances and Issue of Securities 1 Subordinated Debt Deposits, Debentures and Funds from Bills and Structured Operations Certificates Interbank and Interbranch Accounts, Borrowings and Onlendings and Derivative Financ
Slide 82: Funding
page 82 • Loan Portfolio mainly funded by domestic client funding • Diversified funding base Funding (*) Funds from Institutional Clients in Brazil totaled R$27,550 million, corresponding to 5.4% of total funds raised from Account Holders and Institutional Clients. (1) Includes funds from Real Estat
Slide 83: Funding from Clients and Maturity Breakdown
page 83 78.3% 74.4% 74.4% 76.2% 75.4% 74.3% 74.6% 73.9% 73.9% 90.3% 85.5% 86.5% 89.0% 88.8% 88.9% 90.0% 89.8% 90.8% 33.9% 46.9% 10.9% 8.3% Ratio between Loan Portfolio and Funding 2 % Funding (Maturity Breakdown) Over 365 0-30 31-180 181-365 (2) Includes demand, savings and time deposits plus debent
Slide 84: Capital Ratios (BIS) | Prudential Conglomerate
page 84 Capital Ratios (BIS) | Prudential Conglomerate 1 (1) Includes financial institutions, consortium managers, payment institutions, companies that acquire operations or directly or indirectly assume credit risk and investment funds in which the conglomerate substantially retains risks and benef
Slide 85: Core Capital Ratio (Common Equity Tier I)
page 85 15.7% 0.8% -0.2% 0.1% 0.2% 0.1% 16.7% Common Equity Tier I Jun-17 3Q17 Net Income Dividends and Interest on Own Capital Other changes in stockholder's equity Tax Credits Risk-Weighted Assets Common Equity Tier 1 Sep-17 16.7% 16.1% 15.8% 14.6% 13.5% -0.6% -0.3% -1.2% -1.1% Common Equity Tier
Slide 86: Capital Requirement under Basel, BACEN and ITUB Target
page 86 Capital Requirement under the Basel Committee, BACEN and ITUB Target 4.0% 4.0% 8.0% 5.5% 5.5% 11.0% If total capital falls below 11.5%, restrictions will start to be applied to the distribution of dividends and bonus 2.0% 8.0% 11.5% 1.5% N1= 9.5% Minimum Capital Required 15.0% 12.0% 1.5% 1.5
Slide 87: Capital Management
page 87 Capital Management (1) Includes total amounts of dividends and share buyback. Simulations include the June 2017 base and Citibank’s Brazilian retail business and the 49.9% minority interest in XP Investimentos transactions; (2) Risk-Weighted Assets; (3) Return on Equity. Total Payout1 simula
Slide 88: Basel III – Brazilian Phase-in Requirements
page 88 Basel III – Brazilian Phase-in Requirements1 (1) Source: Brazilian Central Bank; (2) On Oct. 29, 2015, the Brazilian Central Bank released the additional capital requirements through Resolution No. 4,443 and Circulars No. 3,768 and No. 3,769; (3) According to Circular Bacen nº 3,769 and Bace
Slide 89: Ratings
page 89 Ratings FitchRatings Moody’s Standard &Poor’s Viability Support Local Currency Foreign Currency Long Term Short Term Long Term Short Term Long Term Short Term bb+ 3 BB+ B BB+ B AAA (bra) F1+ (bra) International National Subordinated Debt Foreign Currency Senior Unsecured Debt Foreign Currenc
Slide 90: 2017 Forecast
page 90 2017 Forecast We kept unchanged the ranges of our 2017 forecast. (1) Considers USD-BRL exchange rate at R$3.50 in Dec-17; (2) Includes units abroad ex-Latin America; (3) Includes financial guarantees provided and corporate securities; (4) The evolution of the Financial Margin with Clients al
Slide 91: Information Technology
5 Information Technology
Slide 92: Digital Transformation
page 92 Digital Transformation Traditional Itaú 3,828 = 1.2 MM m2 Branches and PABs 46,000 ATMs 2MM people visit our branches every day Digital Itaú 7MM mobile monthly accesses 100K simultaneous access We have 17 petabytes of information Efficiency More value delivery Synchronized planning Increase
Slide 93: Digital Transformation | Evolution of digital clients
page 93 Total clients (2.7) (2.5) (1.2) (1.0) (3.3) (4.4) 3.7 5.2 7.7 4.3 (613) (190) (37) (468) (437) (135) 227 803 573 907 6,4 MM 8,8 MM 840 thousands 1,042 thousands Internet Mobile Mobile users Mobile users +108% +152% 2014 2017 (YTD) 2014 2017 (YTD) +38% +24% Digital Transformation | Evolution
Slide 94: Digital Transformation | Evolution of Digital Branches
Digital Transformation | Evolution of Digital Branches #individuals Personnalité Clients Uniclass Clients (in thousands) (in million) 338 432 506 0.8 1.3 1.7 2015 2016 2017 2015 2016 2017 Personnalité Branches Uniclass Branches (in thousands) (in million) 51 63 77 43 72 79 Extended Hours: 7:00am-12:
Slide 95: Evolution of Customers in Remote Channels
page 95 Evolution of Customers in Remote Channels theclientchanges Clients (million) Digital Clients Internet + Mobile Apps 3Q17 vs. 3Q16 3Q17 vs. 3Q16 3Q17 vs. 3Q16 6.7 7.8 8.6 9.4 10.8 11.7 13.1 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 0.5 1.2 2.6 4.6 6.4 8.1 10.2 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 13%
Slide 96: New Data Center
page 96 New Data Center • 815,000 m2 area – bigger than 120 soccer fields • The biggest green data center of Latin America with LEED certification • The biggest data center under construction in Brazil • 43% of reduction on energy consumption New IT Architecture supporting the dual active model, max
Slide 97: Itaú Unibanco in Capital Markets
6 Itaú Unibanco in Capital Markets
Slide 98: Non-voting Shares (ITUB4) Appreciation
page 98 Non-voting Shares (ITUB4) Appreciation 420 300 199 245 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Evolution of R$100 invested on the day before the announcement of the merger (October 31, 2008) to September 30, 2017 Annual Average Appreciation (1) With dividends reinvestment (2) Witho
Slide 99: Sustainability
7 Sustainability
Slide 100: Corporate Sustainability Governance
page 100 Corporate Sustainability Governance Frequency: semiannual Frequency: semiannual Board of Directors officers level board level Strategy Committee Corporate Sustainability Committee Strategic Foundations and Institutes Committee operational level Operational Foundations and Institutes Committ
Slide 101: Sustainable Performance
Sustainable Performance Society Shareholders Generating shared value Clients Customer satisfaction Employees Pride of belonging Our Vision Is to be the leading bank in sustainable performance and customer satisfaction Sustainable Performance means creating shared values for employees, clients, share
Slide 102: Sustainability Strategy
page 102 Be the leading bank in sustainable performance and customer satisfaction Understand people´s needs to offer knowledge and appropriate financial solutions, contributing for individuals and companies to have a healthy relationship with money Financial Education Search business opportunities a
Slide 103: Dialogue and Transparency | Engagement
page 103 Dialogue and Transparency | Engagement Women’s Empowerment Climate Change Ethics and Integrity Reporting and Transparency Sustainable Development Responsible Bank Organizations and commitments that are sources of knowledge and trends
Slide 104: Transparency with the Market | Reporting
page 104 Transparency with the Market | Reporting ▪ In 2015, we made progress in the presentation of our business model, which now includes risk factors, strategies for the Form 20-F SEC Sustainability Report + GRI MTN Program Medium-Term Note Consolidated Annual Report Leaders in Transparency in th
Slide 105: Employees | Profile
page 105 Employees | Profile 87,711 Employees1 20.6% of employees are blacks (1) Employees who were active in December 2016, in Brazil and abroad from companies managed by the human resources department 60% 40% 49.6% of management positions are held by women 3.1% are apprentices 4.5% of employees ar
Slide 106: Employees | Management Cycle
page 106 Employees | Management Cycle Attraction and Selection Training and Development Performance Assessment Compensation and Benefits Internship: 3,982 people recruited in 2016. Retention rate: 53%.* Trainees: 123 trainees recruited in 2016. Retention rate: 97%* of the 2015 group 10.9% 10.6% 10.4
Slide 107: Financial Education | Initiatives
page 107 Financial Education | Initiatives Digital platform content 21 million views since 2014. Merchandising 55 million people impacted “Mito ou Verdade Itaú” (Myth or Truth – Itaú) showed in “Caldeirão do Huck” TV program. Financial guidance campaigns 42 million views in the networks of the Vida
Slide 108: Social and Environmental Risks
page 108 Social and Environmental Risks Signatory since 2008 Signatory since 2004 The data center was certified in 2014 Signatory since 2012 The center in Tatuapé is certified since 2011 Sustainability Policy and Social and Environmental Responsibility Business Our Operations Investments Credit Insu
Itau Unibanco Holding — Q3 2017 Earnings Presentation on 6ix