Itaú Unibanco S A : Management Discussion & Analysis and Complete Financial Statements (BRGAAP) - 3Q2019

ManagementDiscussion &

Analysis and Complete

Financial Statements

3Q19

Itaú Unibanco Holding S.A.

www.itau.com.br/investor-relations

facebook.com/Itaú

@Itaú

@Itaú

/Itaú

/bancoitau

Contents

Management

Discussion &

Analysis

Page 03

Executive Summary	03
Income Statement and Balance Sheet Analysis	11
Managerial Financial Margin	12
Cost of Credit	13
Credit Quality	15
Commissions and Fees & Result from Insurance	17
Result from Insurance, Pension Plan and Premium Bonds	19
Non-interest Expenses	20
Balance Sheet	22
Credit Portfolio	23
Funding	25
Capital, Liquidity and Market Ratios	26
Results by Business Segments	27
Results by Region - Brazil and Latin America	29
Activities Abroad	30
Additional Information	32
Itaú Unibanco Shares	33
Glossary	34

Report of Independent Auditors

36

Complete

Financial

Statements

Page 37

Management

Discussion &

Analysis

Management Discussion & Analysis and

Complete Financial Statements

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Itaú Unibanco Holding S.A.

04

Management Discussion & Analysis

Executive Summary

ManagerialIncome Summary

We present below the financial indicators of Itaú Unibanco determined at the end of the period.

In R$ millions (except where indicated), end of period	3Q19	2Q19	3Q18		9M19	9M18
Results	Recurring Net Income	7,156	7,034	6,454		21,067	19,255
Managerial Financial Margin (2)	19,071	18,451	17,408		55,191	51,702
	Operating Revenues (1)	30,257	29,492	27,899		87,957	83,345
	Recurring Return on Average Equity - Annualized - Consolidated(3)	23.5%	23.5%	21.3%		23.5%	21.7%
	Recurring Return on Average Equity - Annualized - Brazil(3)	24.6%	24.6%	22.4%		24.7%	22.9%
Performance	Recurring Return on Average Assets - Annualized(4)	1.7%	1.7%	1.6%		1.7%	1.7%
Nonperforming Loans Ratio (90 days overdue) - Total	2.9%	2.9%	2.9%		2.9%	2.9%
	Nonperforming Loans Ratio (90 days overdue) - Brazil	3.4%	3.5%	3.5%		3.4%	3.5%
	Nonperforming Loans Ratio (90 days overdue) - Latin America	1.4%	1.4%	1.3%		1.4%	1.3%
	Coverage Ratio (Total Allowance/NPL 90 days overdue) (5)	208%	208%	235%		208%	235%
	Efficiency Ratio (IE) (6)	45.5%	46.2%	48.8%		46.0%	47.3%
	Risk-Adjusted Efficiency Ratio (RAER) (6)	61.4%	60.9%	61.3%		61.1%	61.0%
	Recurring Net Income per Share (R$) (7,8)	0.73	0.72	0.66
	Net Income per Share (R$) (7,8)	0.57	0.70	0.64
Shares	Number of Outstanding Shares at the end of period - in millions (8)	9,744	9,743	9,714
Book Value per Share (R$) (8)	12.90	12.91	12.87
	Dividends and Interest on Own Capital net of Taxes (9)	2,505	6,136	2,259
	Market Capitalization (10)	342,963	354,265	284,295
	Market Capitalization (10)(US$ million)	82,356	92,444	71,004
	Total Assets	1,738,339	1,678,378	1,613,162
	Total Credit Portfolio, including Financial Guarantees Provided and Corporate Securities	688,993	659,727	636,428
Sheet	Deposits + Debentures + Securities + Borrowings and Onlending (11)	736,750	699,455	696,938
Loan Portfolio/Funding (11)	78.2%	79.0%	76.1%
Balance	Stockholders' Equity	125,719	125,737	125,035
Tier I Capital - BIS III (12)	14.1%	14.9%	14.8%
	Solvency Ratio - Prudential Conglomerate (BIS Ratio)	15.4%	16.3%	16.9%
	Common Equity Tier I - BIS III (12)	12.8%	13.6%	13.8%
	Liquidity Coverage Ratio (LCR)	151.9%	167.2%	170.9%
	Net Stable Funding Ratio (NSFR) (13)	117.5%	121.1%		-
	Assets Under Administration	1,316,634	1,200,283	1,093,487
	Total Number of Employees	96,764	98,446	100,756
Other	Brazil	83,536	85,161	87,070
Abroad	13,228	13,285	13,686
	Branches and CSBs - Client Service Branches	4,704	4,722	4,917
	ATM - Automated Teller Machines (14)	47,518	47,505	47,887

Note:(1) Operating Revenues are the sum of Managerial Financial Margin, Commissions and Fees and Revenues from Insurance, Pension Plan and Premium Bonds Operations before Retained Claims and Selling Expenses; (2) Detailed in Managerial Financial Margin section; (3) Annualized Return was calculated by dividing Recurring 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) The return was calculated by dividing Recurring Net Income by Average Assets; (5) Includes the balance of allowance for financial guarantees provided; (6) For further details on the calculation methodologies of both Efficiency and Risk- Adjusted Efficiency ratios, please refer to the Glossary section; (7) Calculated based on the weighted average number of outstanding shares for the period; (8) Considers the 50% stock split occurred in November 2018. For comparison the number of shares in 3Q18 was recalculated and prior to the split the amount was 6,476 million; (9) Interest on own capital. Amounts paid/provisioned, declared and reserved in stockholders' equity; (10) 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; (11) As detailed in the Balance Sheet section; (12) For periods prior to 2019, considers the immediate and full application of the Basel III rules and, in 3Q18, considers the pro forma impact of the acquisition of investment in XP (-90 bps); (13) We began to disclose the NSFR in 4Q18. For further details, please refer to the Capital, Liquidity and Market Ratios section; (14) Includes ESBs (electronic service branches) and service points at third-party locations and Banco24Horas ATMs.

Itaú Unibanco Holding S.A.

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