ITAÚ UNIBANCO HOLDING S.A. Itaú Unibanco Holding S.A. ("Company") announces to its shareholders and the market at large that the Complete Financial Statements and the Management Discussion and Analysis for the 4th quarter ending December 31, 2016 are already available at the Investor Relations website (www.itau.com.br/investor‐relations).
Conference calls will be held with research analysts on Wednesday, February 8 in Portuguese at 10:30 a.m. (Brasília time) and in English at 12:00 p.m. (Brasília time).
Please find below the Executive Summary for the 4th quarter 2016.
São Paulo - February 7, 2017.
MARCELO KOPELInvestor Relations Officer
Itaú Unibanco Pro forma Information
As from the second quarter of 2016, Itaú CorpBanca, the company resulting from the merger between Banco Itaú Chile and CorpBanca, was consolidated in our financial statements, as we are the controlling shareholder of the new bank. In order to allow comparison with previous periods, historical pro forma data of the combined results of Itaú Unibanco and CorpBanca for the periods previous to the second quarter of 2016 will be presented in the Management Discussion & Analysis report.
The pro forma statements above mentioned were prepared considering all lines of the income statement, including 100% of Itaú CorpBanca's result. The result related to the minority shareholders is shown in the "minority interests in subsidiaries" line, for both CorpBanca and Itaú Chile.
As the historical data was prepared to demonstrate, on a retroactively basis, the effect of a transaction occurred in a subsequent date, there are limits inherent to pro forma information. The historical data was provided for illustration purposes only and should not be taken as a demonstration of the result that would have been achieved if the merger had occurred on a previous date, nor do they indicate any future result of the combined company.
We present below pro forma information and indicators of Itaú Unibanco in order to allow analysis on the same basis of comparison.
4Q16 | 3Q16 | 4Q15 | 2016 | 2015 | ||
Results | Recurring Net Income | 5,817 | 5,595 | 5,715 | 22,150 | 23,816 |
Operating Revenues (1) | 27,370 | 27,597 | 27,984 | 108,329 | 108,742 | |
Managerial Financial Margin (2) | 17,322 | 17,706 | 17,839 | 69,028 | 70,610 | |
Performance | Recurring Return on Average Equity - Annualized (3) | 20.7% | 19.9% | 22.1% | 20.3% | 23.9% |
Recurring Return on Average Assets - Annualized (4) | 1.6% | 1.6% | 1.6% | 1.6% | 1.7% | |
Nonperforming Loans Ratio (90 days overdue) - Total | 3.4% | 3.9% | 3.2% | 3.4% | 3.2% | |
Nonperforming Loans Ratio (90 days overdue) - Brazil | 4.2% | 4.8% | 3.9% | 4.2% | 3.9% | |
Nonperforming Loans Ratio (90 days overdue) - Latin America | 1.2% | 1.2% | 1.1% | 1.2% | 1.1% | |
Coverage Ratio (Provision for Loan Losses/NPL 90 days overdue) | 222% | 204% | 206% | 222% | 206% | |
Efficiency Ratio (ER) (5) | 47.5% | 48.6% | 46.3% | 46.7% | 44.4% | |
Risk-Adjusted Efficiency Ratio (RAER) (5) | 66.7% | 69.2% | 65.1% | 69.2% | 63.4% | |
Balance Sheet | Total Assets | 1,425,639 | 1,399,100 | 1,474,784 | ||
Total Credit Portfolio, including Sureties and Endorsements | 562,018 | 567,744 | 635,218 | |||
Deposits + Debentures + Securities + Borrowings and Onlending (6) | 661,257 | 656,928 | 745,922 | |||
Loan Portfolio/Funding (6) | 74.3% | 75.4% | 78.3% | |||
Stockholders' Equity | 115,590 | 114,715 | 106,462 | |||
Other | Assets Under Administration Total Number of Employees Brazil Abroad Branches and CSBs - Client Service Branches ATM - Automated Teller Machines (7) | 903,679 | 902,120 | 765,102 | ||
94,779 | 95,984 | 97,865 | ||||
80,871 | 81,737 | 83,481 | ||||
13,908 | 14,247 | 14,384 | ||||
5,103 | 5,119 | 5,279 | ||||
46,175 | 45,859 | 45,559 |
Itaú Unibanco Pro forma Highlights
In R$ millions (except where indicated), end of period4Q16 | 3Q16 | 4Q15 | 2016 | 2015 | ||
Highlights | Recurring Net Income per Share (R$) (8) Net Income per Share (R$) (8) Number of Outstanding Shares at the end of period - in thousands (9) Book Value per Share (R$) Dividends and Interest on Own Capital net of Taxes (10) Dividends and Interest on Own Capital net of Taxes (10) per Share (R$) Market Capitalization (11) Market Capitalization (11) (US$ million) Solvency Ratio - Prudential Conglomerate (BIS Ratio) Common Equity Tier I Estimated BIS III (Common Equity Tier I) - Full Implementation of BIS III (12) | 0.89 0.85 6,512,700 17.75 6,699 1.03 219,348 67,303 19.1% 15.8% 14.0% | 0.86 0.83 6,530,786 17.57 757 0.12 211,632 65,194 19.0% 15.7% 14.6% | 0.88 0.87 6,513,486 16.34 3,429 0.53 155,732 39,882 17.8% 14.0% 13.6% | 3.40 3.32 6,512,700 17.75 10,000 1.53 219,348 67,303 19.1% 15.8% 14.0% | 3.62 3.55 6,513,486 16.34 7,305 1.12 155,732 39,882 17.8% 14.0% 13.6% |
Indicators | EMBI Brazil Risk | 328 | 319 | 517 | 328 | 517 |
CDI rate - In the Period (%) | 3.2% | 3.5% | 3.4% | 14.0% | 13.3% | |
Dollar Exchange Rate - Quotation in R$ | 3.2591 | 3.2462 | 3.9048 | 3.2591 | 3.9048 | |
Dollar Exchange Rate - Change in the Period (%) | 0.4% | 1.1% | -1.7% | -17.8% | 47.0% | |
Euro Exchange Rate - Quotation in R$ | 3.4384 | 3.6484 | 4.2504 | 3.4384 | 4.2504 | |
Euro Exchange Rate - Change in the Period (%) | -5.8% | 3.0% | -4.2% | -16.7% | 31.7% | |
IGP-M - In the Period (%) | 0.7% | 0.5% | 3.9% | 7.2% | 10.5% |
Itaú Unibanco Holding S.A. Highlights - As disclosed (Data prior to 2Q16 do not include CorpBanca)
In R$ millions (except where indicated), end of periodNote: (1) Operating Revenues are the sum of Managerial Financial Margin, Commissions and Fees, Other Operating Income and Result from Insurance, Pension Plan and Premium Bonds Operations before Retained Claims and Selling Expenses; (2) Detailed on Managerial Financial Margin section; (3) Annualized Return was calculated by dividing Net Income by Average Stockholders' Equity. The quotient was multiplied by the number of periods in the year to derive the annualized rate. The calculation bases of returns were adjusted by the amount of dividends that has not yet been approved at shareholders' or Board meetings, proposed after the balance sheet closing date; (4) Return was calculated by dividing Recurring Net Income by Average Assets; (5) For further details on the calculation methodologies of both Efficiency and Risk-Adjusted Efficiency ratios, please refer to Non-Interest Expenses section; (6) As detailed on Other Balance Sheet Information section; (7) Includes ESBs (electronic service branches) and service points at third parties' locations and Banco24Horas ATMs; (8) Calculated based on the weighted average number of outstanding shares for the period; (9) The number of outstanding shares was adjusted to reflect the share bonus of 10% granted on July 17, 2015 and September 14, 2016; (10) IOC - Interest on own capital. Declared amounts paid/accrued; (11) Total number of outstanding shares (common and non-voting shares) multiplied by the average price of the non-voting share on the last trading day in the period; (12) Takes into consideration the additional payment of interest on capital scheduled for March 2017, the consolidation of Citibank's Brazilian retail business, and the use of tax credits.
Net Income and Recurring Net IncomeOur recurring net income totaled R$5,817 million in the fourth quarter of 2016 as a result of the elimination of non-recurring events, which are presented in the table below, from net income of R$5,543 million for the period.
Non-Recurring Events Net of Tax Effects
In R$ millions | 4Q16 | 3Q16 | 4Q15 | 2016 | 2015 |
Recurring Net Income Non-Recurring Events Impairment (a) Goodwill Amortization (b) Contingencies Provision (c) Liability Adequacy Test (d) Pension Fund (e) Program for Settlement or Installment Payment of Taxes (f) Social Contribution Rate Increase (g) Complementary Provision for Loan Losses (h) Financial Leasing Accounting Change (i) Porto Seguro (j) Other | 5,817 (275) (172) (133) (88) (31) 130 1 - - - - 18 | 5,595 (200) - (120) (80) - - - - - - - - | 5,715 (75) (7) (32) (28) - - (4) - - - 17 (20) | 22,150 (583) (180) (442) (231) 109 130 14 - - - - 18 | 23,816 (473) (50) (162) (696) - (130) 37 3,988 (2,793) (520) 17 (163) |
Net Income | 5,543 | 5,394 | 5,640 | 21,567 | 23,343 |
CorpBanca's Pro Forma Consolidation Effects | - | - | (58) | (72) | (16) |
Net Income as Reported | 5,543 | 5,394 | 5,698 | 21,639 | 23,360 |
Note: The impacts of the non-recurring events, described above, are net of tax effects - further details are presented in Note 22-K of the Financial Statements.
Non-Recurring Events- Impairment: Adjustment to reflect the realization value of certain assets.
- Goodwill Amortization: Effect of the goodwill amortization generated by acquisitions made by the Conglomerate.
- Contingencies Provision: Recognition of provisions for tax and social security lawsuits and losses arising from economic plans in effect in Brazil during the 1980's.
- Liability Adequacy Test: Technical provisions adjustment resulting from the liability adequacy test.
- Pension Fund: In 2016, destination of surplus and in 2015, provision to settle the surplus of the defined contribution pension fund in accordance with the regulation.
- Program for the Settlement or Installment Payment of Taxes: Effects of our adherence to the Program for the Settlement or Installment Payment of Federal and Municipal Taxes.
- Social Contribution Rate Increase: Effect on the balance of the social contribution tax credit resulting from the rate increase from 15% to 20% as established by Provisional Measure No. 675/15 of May 2015 (converted into Law No. 13,169/15 in October 2015).
- Complementary Provision for Loan Losses: Complementary provision for loan losses to the minimum required by Resolution No. 2,682/99 of the National Monetary Council mainly due to a more challenging economic environment.
- Financial Leasing Accounting Change: Regarding financial leasing contracts related to new Technology Center implementation.
- Porto Seguro: Effect on the balance of the social contribution tax credit resulting from the rate increase in proportion to our stake in the company.
We apply to the management results consolidation criteria that affect only the breakdown of accounts and, therefore, does not affect net income. These effects are shown in the table on the following page ("Accounting and Managerial Statements Reconciliation"). Additionally, we adjusted the tax effects of the hedges of investments abroad - originally accounted for as tax expenses (PIS and COFINS) and income tax and social contribution on net income and then reclassified to the financial margin - and non-recurring events.
Our strategy for the foreign exchange risk management of the capital invested abroad is aimed at mitigating, through financial instruments, the effects resulting from foreign exchange variations and takes into consideration the impact of all tax effects. In the fourth quarter of 2016, the Brazilian real depreciated 0.4% against the U.S. dollar and appreciated 5.8% against the Euro, compared with depreciations of 1.1% and 3.0%, respectively, in the previous quarter.
Accounting and Managerial Income Statements reconciliation for the past two quarters is presented below.
Accounting and Managerial Statements Reconciliation | 4th Quarter of 2016
In R$ millions | Accounting | Non-recurring Managerial Events Tax Effect of Hedge Reclassifications | Managerial |
Operating Revenues Managerial Financial Margin Financial Margin with Clients Financial Margin with the Market Commissions and Fees Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses Other Operating Income Equity in Earnings of Affiliates and Other Investments Non-operating Income Result from Loan Losses Provision for Loan Losses Recovery of Loans Written Off as Losses Retained Claims Other Operating Income/(Expenses) Non-interest Expenses Tax Expenses for ISS, PIS, Cofins and Other Taxes Insurance Selling Expenses Income before Tax and Profit Sharing Income Tax and Social Contribution Profit Sharing Minority Interests | 27,425 16,959 15,368 1,591 8,624 1,368 224 185 65 (4,885) (5,888) 1,003 (364) (14,557) (12,697) (1,752) (108) 7,618 (2,240) (91) 255 | (6) 401 (450) 5 401 (44) 5 - (44) - 401 - - - (644) 56 - 644 (2) - (222) - - (185) (65) - 0 - - 66 - - 65 - - 1 - - - 502 (37) 271 502 - 269 - (37) 2 - - - 496 365 (113) (128) (365) 22 - - 91 (93) - - | 27,370 17,322 15,329 1,993 7,980 2,068 - - - (4,819) (5,823) 1,004 (364) (13,821) (11,927) (1,786) (108) 8,366 (2,711) - 162 |
Net Income | 5,543 | 275 - - | 5,817 |
Accounting and Managerial Statements Reconciliation | 3rd Quarter of 2016
In R$ millions | Accounting | Non-recurring Managerial Events Tax Effect of Hedge Reclassifications | Managerial |
Operating Revenues Managerial Financial Margin Financial Margin with Clients Financial Margin with the Market Commissions and Fees Result from Insurance, Pension Plan and Premium Bonds Operations Before Retained Claims and Selling Expenses Other Operating Income Equity in Earnings of Affiliates and Other Investments Non-operating Income Result from Loan Losses Provision for Loan Losses Recovery of Loans Written Off as Losses Retained Claims Other Operating Income/(Expenses) Non-interest Expenses Tax Expenses for ISS, PIS, Cofins and Other Taxes Insurance Selling Expenses Income before Tax and Profit Sharing Income Tax and Social Contribution Profit Sharing Minority Interests | 27,309 17,028 15,887 1,141 8,478 1,449 197 112 46 (5,182) (6,121) 939 (375) (14,772) (13,044) (1,592) (136) 6,981 (1,570) (61) 44 | 23 607 (342) 23 607 48 23 - 48 - 607 - - - (653) - - 618 - - (197) - - (112) - - (46) - - (48) - - (48) - - 0 - - - 362 (58) 310 362 - 308 - (58) 2 - - - 385 549 (81) (92) (549) 20 - - 61 (93) - - | 27,597 17,706 15,958 1,749 7,825 2,067 - - - (5,230) (6,169) 939 (375) (14,159) (12,374) (1,648) (136) 7,834 (2,191) - (49) |
Net Income | 5,394 | 200 - - | 5,595 |
Itaú Unibanco Holding SA published this content on 07 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 07 February 2017 09:19:05 UTC.
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