ITUB - Itaú Unibanco Holding S.A. - Announcement to the Market - IFRS - Results for the 4th Quarter of 2018

 R$ million

Balance Sheet

BRGAAP

Adjustments and
Reclassifications ²

IFRS

BRGAAP

Adjustments and
Reclassifications ²

IFRS

Dec/31/2018

Dec/31/2017

Total Assets

1,649,614

(96,817)

1,552,797

1,503,503

(67,264)

1,436,239

Cash and Cash Equivalents, Compulsory Deposits and Financial Assets At Amortized Cost ^{3 4 6}

1,172,276

(12,837)

1,159,439

1,031,742

28,310

1,060,052

(-) Estimated Loss at Amortized Cost⁵

(33,326)

(47)

(33,373)

(36,325)

(412)

(36,737)

Financial Assets at Fair Value Through Other Comprehensive Income ⁴

105,065

(55,657)

49,408

103,538

(51,305)

52,233

(-) Expected Loss at Fair Value Through Other Comprehensive Income ⁵

(3,441)

3,356

(85)

(2,892)

2,808

(84)

Financial Assets at Fair Value Through Profit or Loss ⁴

315,383

(28,737)

286,646

308,570

(35,034)

273,536

Tax Assets⁷

50,242

(7,412)

42,830

59,648

(15,399)

44,249

Investments in Associates and Jointly Controlled Entities, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets 

43,415

4,517

47,932

39,224

3,766

42,990

Total Liabilities

1,505,490

(103,159)

1,402,331

1,364,565

(72,683)

1,291,883

Financial Assets at Amortized Cost ^{3 6}

1,220,233

(100,499)

1,119,734

1,088,090

(63,506)

1,024,584

Financial Assets at Fair Value Through Profit or Loss ⁴

27,675

36

27,711

26,930

281

27,211

Expected Loss (Loan Commitments and Financial Guarantees) ⁵

1,265

2,527

3,792

1,950

2,972

4,922

Provision for Insurance and Pension Plan 

199,995

1,192

201,187

180,445

787

181,232

Provisions

18,613

-

18,613

19,736

-

19,736

Tax Liabilities ⁷

10,915

(5,631)

5,284

20,440

(12,604)

7,836

Other Liabilities

26,794

(784)

26,010

26,974

(612)

26,362

Total Stockholders' Equity

144,124

6,342

150,466

138,938

5,418

144,356

Non-controlling Interests

12,367

1,317

13,684

12,014

964

12,978

Total Controlling Stockholders' Equity ⁸

131,757

5,025

136,782

126,924

4,454

131,378

¹BRGAAP represents accounting practices in force in Brazil for financial institutions, according to regulation of the Central Bank of Brazil;

²Resulted from reclassification of assets and liabilities and other effects from the adoption of IFRS;

³Resulted from the elimination of transactions between parent company and exclusive funds (particularly PGBL and VGBL funds), which are consolidated under IFRS;

⁴Refer to reclassification of financial assets between measurement categories at fair value and amortized cost;

⁵Application of criterion for calculation of Expected Loss as set forth by IFRS;

⁶Difference in accounting, particularly from Foreign Exchange Portfolio, which are now be presented as net effect between Assets and Liabilities;

⁷Difference in accounting, particularly differed taxes, which are now accounted for as net effect between Assets and Liabilities in each one of the consolidated companies;

⁸Reconciliation of Controlling Stockholders' Equity is presented in the following table. 

 R$ million

Stockholders' Equity *

Result *

Dec/31/2018

4thQ/18

3rdQ/18

4thQ/17

jan-dec/18

jan-dec/17

 BRGAAP - Values Attributable to Controlling Stockholders 

131,757

6,206

6,247

5,821

24,977

23,965

(a)Expected Loss - Loan and Lease Operations and Other Financial Assets

539

559

189

(794)

380

(1,311)

(b)Adjustment to Fair Value of Financial Assets

(961)

(42)

(129)

(153)

(303)

191

(c)Acquisition of Interest in Porto Seguro Itaú Unibanco Participações S.A.

443

(1)

(2)

(4)

(7)

(15)

(d)Criteria for Write-Off of Financial Assets 

2,216

(38)

(17)

(37)

(30)

(76)

(e)Financial Lease Operations

365

(29)

(40)

(40)

(149)

(131)

(f) Other adjustments

2,423

(2)

(123)

13

39

570

IFRS - Values Attributable to Controlling Stockholders 

136,782

6,653

6,125

4,806

24,907

23,193

IFRS - Values Attributable to Minority Stockholders 

13,684

204

206

(297)

732

32

IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders 

150,466

6,857

6,331

4,509

25,639

23,225

* Events net of tax effects 

Differences between IFRS and BRGAAP Financial Statements

(a)In the adoption of IFRS 9, there was a change in the calculation model of incurred loss (IAS 39) to expected loss, considering forward-looking information. On BRGAAP, the concept of Expected Loss is used, pursuant to BACEN Resolution No. 2,682/99.⁹

(b) Under IFRS, stocks and quotas classified as permanent investments were measured at fair value and its gains and losses were recorded directly in Result. Additionally, there was a change in the model of classification and measurement of financial assets due to the new categories introduced by IFRS 9.

(c) Under IFRS, the effect of accounting at fair value of the acquisition of interest in Porto Seguro Itaú Unibanco Participações S.A. was recognized.

(d) Criterion for write-off of financial assets on IFRS considers the recovery expectative. 

(e) Under IFRS (IAS 17) the financial lease operations are recorded as Fixed Assets,  as a contra-entry of Other Financial Liabilities. Under BRGAAP, as from September 30,  2015, the consideration of these transactions are now recorded in result, in accordance with CMN Resolution No. 3,617/08.

(f) Other Adjustments is mainly composed of reversal of Amortizations of Goodwill under  BRGAAP.

⁹ More details in the Complete Financial Statements for January to December 2,018.

R$ million

Recurring Result

4th Q/18

4th Q/17

BRGAAP

IFRS

Variation

BRGAAP

IFRS

Variation

Result - Attributale to Controlling Stockholders

6,206

6,653

447

5,821

4,806

(1,015)

Exclusion of the Non-Recurring Events

272

164

(108)

459

424

(35)

Provision for Citibank integration expenditures 

-

-

-

277

277

-

Goodwill Amortization

171

-

(171)

135

-

(135)

Liability Adequacy Test - LAT

85

148

63

(145)

(45)

100

Tax and Social Security Lawsuits

(1)

(1)

-

184

184

-

Impairment

18

18

-

7

7

-

Others

(1)

(1)

-

-

-

-

Recurring Result - Attributable to Controlling Stockholders

6,478

6,817

339

6,280

5,230

(1,050)