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Itaú Unibanco Holding S.A. - Announcement to the Market - IFRS - Results for the 2nd Quarter of 2019

Disclosure of results for the second quarter and first half of 2019, according to International Financial Reporting Standards - IFRS

SAO PAULO, July 29, 2019 /PRNewswire/ -- We present below the differences between our financial statements in BRGAAP and in International Financial Reporting Standards – IFRS.

As from January 1st, 2018, IFRS 9 came into effect, the accounting standard that replaces IAS 39 in the treatment of Financial Instruments. The new standard is structured to encompass the pillars of classification, measurement of financial assets and impairment and was applied retrospectively by Itaú Unibanco Holding.

The complete consolidated financial statements under IFRS for the first half of 2019 are available at our website: www.itau.com.br/investor-relations.

Comparison between BRGAAP1 and IFRS                                                







R$ million


Balance Sheet

BRGAAP

Adjustments and
Reclassifications 2

IFRS

BRGAAP

Adjustments and
Reclassifications 2

IFRS



Jun/30/2019



Dec/31/2018



Total Assets

1,678,378

(112,067)

1,566,311

1,649,614

(96,817)

1,552,797


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

1,178,480

(10,790)

1,167,690

1,172,276

(12,837)

1,159,439


(-) Provision for Expected Loss at Amortized Cost 5

(31,952)

261

(31,691)

(33,326)

(47)

(33,373)


Financial Assets at Fair Value Through Other Comprehensive Income 4

120,153

(66,286)

53,867

105,065

(55,657)

49,408


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

(3,224)

3,138

(86)

(3,441)

3,356

(85)


Financial Assets at Fair Value Through Profit or Loss 4

318,080

(36,592)

281,488

315,383

(28,737)

286,646


Tax Assets 7

49,012

(8,633)

40,379

50,242

(7,412)

42,830


Investments in Associates and Joint Ventures, Goodwill, Fixed Assets, Intangible Assets, Assets Held for Sale and Other Assets

47,829

6,835

54,664

43,415

4,517

47,932










Total Liabilities

1,540,126

(117,628)

1,422,498

1,505,490

(103,159)

1,402,331


Financial Assets at Amortized Cost 3 6

1,224,112

(110,254)

1,113,858

1,220,233

(100,499)

1,119,734


Financial Assets at Fair Value Through Profit or Loss 4

35,842

102

35,944

27,675

36

27,711


Expected Loss (Loan Commitments and Financial Guarantees) 5

1,253

2,830

4,083

1,265

2,527

3,792


Reserves for Insurance and Pension Plan

208,393

1,294

209,687

199,995

1,192

201,187


Provisions

18,164

-

18,164

18,613

-

18,613


Tax Liabilities 7

12,764

(7,693)

5,071

10,915

(5,631)

5,284


Other Liabilities

39,597

(3,906)

35,691

26,794

(784)

26,010


Total Stockholders' Equity

138,252

5,561

143,813

144,124

6,342

150,466


Non-controlling Interests

12,515

1,384

13,899

12,367

1,317

13,684


Total Controlling Stockholders' Equity 8

125,737

4,177

129,914

131,757

5,025

136,782


















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


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


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

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


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


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


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

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


Below is the reconciliation of Results to Stockholders' Equity, with the conceptual description of major adjustments.                                                                              

Reconciliation

Stockholders Equity

                                                                                               R$ million

Result *


Jun/30/2019

 2nd Q/19

 1st Q/19

 2nd Q/18

 1st H/19

 1st H/18


 BRGAAP - Values Attributable to Controlling Stockholders

125,737

6,815

6,710

6,244

13,525

12,524


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

443

(77)

(74)

(459)

(151)

(368)


(b) Adjustment to Fair Value of Financial Assets

(1,881)

(6)

125

(57)

119

(132)


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

441

(1)

(1)

(2)

(2)

(4)


(d) Criteria for Write-Off of Financial Assets

2,153

(24)

(39)

(20)

(63)

25


(e) Financial Lease Operations

284

(45)

(36)

(40)

(81)

(80)


(f) Other adjustments

2,737

(135)

62

74

(73)

164


IFRS - Values Attributable to Controlling Stockholders

129,914

6,527

6,747

5,740

13,274

12,129


IFRS - Values Attributable to Minority Stockholders

13,899

163

156

154

319

322


IFRS - Values Attributable to Controlling Stockholders and Minority Stockholders

143,813

6,690

6,903

5,894

13,593

12,451


* 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 30th,  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 the first half of 2019.


















For comparison purposes, we present on the table below the Result and Recurring Result in IFRS and BRGAAP.







R$ million










Recurring Result

2nd Q/19

2nd Q/18



BRGAAP

IFRS

Variation

BRGAAP

IFRS

Variation


Result - Attributable to Controlling Stockholders

6,815

6,527

(288)

6,244

5,740

(504)


Exclusion of the Non-Recurring Events

219

7

(212)

138

17

(121)


Goodwill Amortization

151

-

(151)

150

-

(150)


Civil Lawsuits - Economic Plans

-

-

-

7

7

-


Impairment

-

-

-

10

10

-


Liabilities Adequacy Test - LAT

68

7

(61)

(29)

-

29


Recurring Result - Attributable to Controlling Stockholders

7,034

6,534

(500)

6,382

5,757

(625)




The tables in this report show the figures in million. Variations and summations, however, were calculated in units.

Alexsandro Broedel 
Group Executive Finance Director and Investor Relations Officer

Cision

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