BANCO SANTANDER (BRASIL) S.A. Banco Santander (Brasil) S.A.
Parent Company and Consolidated Condensed Interim Financial Statements Prepared in Accordance with Accounting Practices Established by Brazilian Corporate Law, Applicable to Institutions Authorized to Operate by the Central Bank of Brazil
September 30, 2020
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Values expressed in thousands, unless otherwise indicated.
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Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 2
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Values expressed in thousands, unless otherwise indicated.
Performance Review Dear Stockholders:
We present the Management Report to Individual and Condensed Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Bank) related to the period ended September 30, 2020, prepared in accordance with accounting practices set by Brazilian Corporate Law, the standards of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and document template provided by the Accounting National Financial System Institutions (Cosif) and the Brazilian Exchange Commission (CVM), that does not conflict with the rules issued by Bacen.
The Parent Company and Consolidated Condensed Interim Financial Statements based on the international accounting standard issued by the International Accounting Standards Board (IASB) for the period ended September 30, 2020 will be simultaneously released at www.santander.com.br/ri.
1. Macroeconomic Environment
On top of the release of activity indicators across the great majority of economies signaling that fiscal and monetary stimulus packages could have addressed the worst of pandemic's effect in the last quarter, Santander's Bank estimates the COVID-19 pandemic developments were the main theme for the third quarter of 2020. Furthermore, Santander estimates that fiscal and monetary stimuli helped to support financial assets prices and to reverse the worsening registered in the first quarter of the year. As an example, the S&P500 index, which dropped from 3.2 thousand to 2.5 thousand points between December 2019 and march 2020, rose 3.1 thousand points in late June, ending the third quarter at approximately 3.4 thousand points (a rise of 8.5% in the period).
In Brazil, Santander considers that the misfortunes generated by COVID-19 shifted the focus from discussions on structural reforms to debates on measures to fight the economic impacts caused by the pandemic, mainly regarding actions directed at the poorest sections of the population and the business segments most exposed to the misfortunes caused by social distancing policies. In Santander's view, such temporary measures were essential to mitigate the impact of the crisis, but will result in a substantial increase in public expenditure throughout 2020 and, therefore, will cause a significant increase in the level of indebtedness of the Brazilian government. This situation, the Bank evaluates, only reinforces the need to resume discussions on structural reforms after overcoming the pandemic to prevent the trajectory of Brazilian public debt from becoming unsustainable.
After a widespread initial wave of downward revisions to GDP projections in 2020 in the first quarter, the Bank observed that the incentives granted provoked a strong recovery in some segments of the Brazilian economy - notably, in retail trade. This more intense reaction than many had previously imagined led economic agents to start considering less intense falls for the Brazilian GDP this year. While the median projection indicated a 6.6% retraction for the Brazilian GDP at the end of the second quarter of 2020, the median expectation at the end of the third quarter indicated that the Brazilian economy is expected to decline 5.02% this year. The Bank believes that, although less intense, the prospect of a strong contraction in the Brazilian GDP continued to justify the general perception that the IPCA variation should end the year below the target set for 2020 - the median inflation forecast for the year ended the third 2.06%, while the target is 4.0% for 2020. The combination of an expected economic contraction and low inflation is what Santander considers to have given the Brazilian Central Bank room to reduce the base interest rate to its new historical low (2.00% p.a.) in the Copom meeting held in August 2020, in addition to signaling that the Selic rate will remain at this level for an extended period of time.
However, in the Bank's opinion, the scenario of slow growth and high public debt is something that has driven international investors away, which is reflected both in the behavior recorded by the Brazilian 5-year CDS spread as well as in the trajectory of its exchange rate. In the first case, the Brazilian government's instrument of protection against insolvency problems closed the third quarter close to the level recorded in the second quarter (250 basis points and 254 basis points, respectively), although it fluctuated below the level of 200 points during the period. As for the exchange rate, the Bank saw a similar process with the parity against the dollar jumping from USDBRL5.48in the end of June 2020 to USDBRL5.64in the end of the third quarter of this year, even though it was traded close to USDBRL5.11 over the period. In both cases, Santander estimates that the trigger for the worsening recorded in relation to the minimum levels observed in the third quarter is related to the intensification of doubts about the Brazilian fiscal dynamics in the coming years.
Therefore, in order to have an improvement in the performance of these indicators, the Bank believes that measures to signal greater commitment by the Brazilian government with the reversal of the upward trajectory of public spending expected for the years ahead will be necessary. In Santander's viewpoint, this will only be possible with the resumption of structural reforms.
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* Values expressed in thousands, unless otherwise indicated.
2. Performance
2.1) Corporate Net Income
Consolidated Income Statements (R$ Millions) | 9M20 | 9M19 | annual | 3Q20 | 2Q20 | quarter | |||
changes% | changes % | ||||||||
Financial Income | 101,346.73 | 67,691.86 | 49.7 | 21,783.26 | 27,871.60 | (21.8) | |||
Financial Expenses | (94,402.81) | (44,120.6) | 114.0 | (14,493.70) | (24,175.0) | (40.0) | |||
Gross Profit From Financial Operations (a) | 6,943.93 | 23,571.3 | (70.5) | 7,289.56 | 3,696.6 | 97.2 | |||
Other Operating (Expenses) Income (b) | (8,716.56) | (9,302.7) | (6.3) | (2,595.84) | (3,647.7) | (28.8) | |||
Operating Income | (1,772.63) | 14,268.6 | (112.4) | 4,693.72 | 48.9 | 9,498.6 | |||
Non-Operating Income | 252.46 | (92.5) | (372.8) | 15.87 | 31.8 | (50.1) | |||
Income Before Taxes on Income and Profit Sharing | (1,520.17) | 14,175.9 | (110.7) | 4,709.59 | 80.7 | 5,735.9 | |||
Income Tax and Social Contribution (a) | 12,653.25 | (2,077.4) | (709.1) | (412.63) | 2,459.5 | (116.8) | |||
Profit Sharing | (1,421.24) | (1,395.2) | 1.9 | (457.73) | (484.4) | (5.5) | |||
Non-Controlling Interest | (101.12) | (270.6) | (62.6) | (28.08) | (30.1) | (6.7) | |||
Consolidated Net Income | 9,610.71 | 10,432.8 | (7.9) | 3,811.15 | 2,025.7 | 88.1 | |||
OPERATING RESULT BEFORE ADJUSTED | annual | annual | |||||||
TAXATION | 9M20 | 9M19 | 3Q20 | 2Q20 | |||||
variation% | variation% | ||||||||
(R$ Million) | |||||||||
Result before Taxation on Profit and | (1,520.0) | 14,176.0 | (110.7) | 4,709.6 | 80.6 | 5,743.2 | |||
Participation | |||||||||
Foreign Exchange Hedge | 17,519.2 | 2,411.7 | 626.4 | 2,071.8 | 3,145.2 | (34.1) | |||
Operating Income Before Adjusted Taxation | 15,999.2 | 16,587.7 | (3.5) | 6,781.4 | 3,225.8 | 110.2 | |||
INCOME TAX | 9M20 | 9M19 | annual | 3Q20 | 2Q20 | annual | |||
(R$ Million) | variation% | variation% | |||||||
Income tax and social contribution | 12,653.0 | (2,077.0) | (709.2) | (412.6) | 2,459.5 | (116.8) | |||
Foreign Exchange Hedge | (17,519.2) | (2,411.7) | 626.4 | (2,071.8) | (3,145.2) | (34.1) | |||
Adjusted Income Tax and Social | (4,866.2) | (4,488.7) | 8.4 | (2,484.5) | (685.7) | 262.3 | |||
Contribution | |||||||||
The Bank's rapid adaptation to different scenarios, supported by a solid balance sheet position and a well-defined business model, made it possible to capture important opportunities in the period, always prioritizing customer needs. Accordingly, we offer a plan to extend installments of various types of financing granted to customers in order to provide greater financial capacity. In this quarter, an extraordinary provision of R$3.2 billion was made, supported by assumptions based on stress scenarios. In addition, the Bank continued to evolve our risk models, which helped to maintain the quality of the credit portfolio at controlled levels. As a result of our actions in the period, we observed an increase in margins while reaching the best historical level of the efficiency index. Managerial net income reached R$5,989 million, down 15.9% in twelve months and 44.6% in the quarter. Excluding the effect of the extraordinary provision expense, net income totaled R$7,749 million, an increase of 8.8% in twelve months and 1.1% in three months. The return on average shareholders' equity (adjusted for goodwill, reached 17.1% in the first half, down 4.2 pp and 12.0% in three months. Excluding the extraordinary provision expense, ROAE was 22.1% in the first half, an increase of 0.8 pp in twelve months, and 0.4 pp less in three months.
a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches and the Subsidiary Santander Brasil EFC
Banco Santander operates branches in the Cayman Islands and Luxembourg and the subsidiary Santander Brasil Establecimiento Financiero de Credito, EFC, or "Santander Brasil EFC" which are used, mainly, to raise funds in the capital and financial foreign markets, providing credit lines that are extended to clients for trade-related financings and working capital. To protect the exposures to foreign exchange rate variations, the Bank uses derivatives. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (Real) in foreign investments are nontaxable to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives is to protect the after-tax net income.
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* Values expressed in thousands, unless otherwise indicated.
The different tax treatment of such foreign exchange rate differences results in a volatility on the operational earnings or losses and on the gross revenue tax expense (PIS/Cofins) and income taxes (IR/CSLL), as demonstrated below:
Foreign Exchange Hedge of the Grand Cayman and | annual | quarter | ||||
Luxembourg Branchs and the subsidiary Santander Brasil EFC | 9M20 | 9M19 | 3Q20 | 2Q20 | ||
changes% | changes % | |||||
(R$ Million) | ||||||
Exchange Variation - Profit From Financial Operations | 21,807.26 | 3,525.9 | 518.49 | 2,449.38 | 697.0 | 251.40 |
Derivative Financial Instruments - Profit From Financial Operations | (40,098.66) | (5,994.8) | 568.89 | (4,587.68) | (4,024.5) | 13.99 |
Income Tax and Social Contribution | 17,519.22 | 2,411.7 | 626.42 | 2,071.83 | 3,145.2 | (34.13) |
PIS/Cofins - Tax Expenses | 772.19 | 57.2 | 1,249.98 | 66.47 | 178.8 | (62.83) |
2.2) Assets and Liabilities
Consolidated Balance Sheets | Sep/20 | Dec/19 | annual | |
(R$ Millions) | changes% | |||
Current and Long-Term Assets | 968,520.5 | 844,294.7 | 14.7 | |
Permanent Assets | 13,698.1 | 13,248.4 | 3.4 | |
Total Assets | 982,218.6 | 857,543.1 | 14.5 | |
Current and Long-Term Liabilities | 903,720.9 | 785,789.3 | 15.0 | |
Deferred Income | 577.3 | 285.2 | 102.4 | |
Non-Controlling Interest | 1,154.5 | 1,695.4 | (31.9) | |
Stockholders' Equity | 76,765.9 | 69,773.2 | 10.0 | |
Total Liabilities and Stockholders' Equity | 982,218.6 | 857,543.1 | 14.5 |
2.3) Stockholders' Equity
On September 30, 2020, Banco Santander consolidated Stockholders' Equity increased by 10.2% compared to December 31, 2019.
The change in Stockholders' Equity between September 30, 2020 and December 31, 2019 was mainly due to the net income for the period in the amount of R$9,611 million, the positive equity valuation adjustment (marketable securities and derivative financial instruments) in the amount of R$1,408 million and in an employee benefit plan in the amount of R$666 million, due to the remeasurement of actuarial obligations due to the change in interest rates caused by the macroeconomic scenario observed until the third quarter of 2020.
For additional information, see explanatory note to financial statements nº23.
2.4) Basel Index
Bacen determines that financial institutions maintain a Reference Equity (PR), PR Level I and Principal Capital compatible with the risks of their activities, higher than the minimum requirement of the Required Reference Equity, represented by the sum of the credit risk, risk market risk and operational risk.
As established in CMN Resolution No. 4,193 / 2013, the requirement for PR in 2019 was 10.5%, comprising 8.0% of Minimum Equity of Reference plus 2.5% of Additional Capital Conservation. Considering this surcharge, PR Level I increased to 8.5% and Minimum Principal Capital to 7.0%.
For the base year 2020, the PR requirement remains at 10.25%, including 8.0% of Reference Equity Minimum, plus 1.25% of Capital Conservation Additional and 1.0% of Systemic Additional. PR Level I reaches 8.25% and Minimum Principal Capital 6.75%.
In view of the pandemic scenario, the Central Bank of Brazil has been monitoring the Brazilian market and defining a set of rules to minimize the impacts of the pandemic. In the case of capital, it reduces the reduction in the Additional Capital Conservation Additional from 2.5% to 1.25%, expanding the capacity to grant new credit operations.
The Basel ratio is calculated in accordance with the Financial Statements of the Prudential Conglomerate prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen, as shown below:
Basel Index% | Sep/20 | Dec/19 |
Basel I Ratio | 13.58 | 13.97 |
Basel Principal Capital | 12.28 | 12.90 |
Basel Regulatory Capital | 14.86 | 15.04 |
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Values expressed in thousands, unless otherwise indicated.
2.5) Main Subsidiaries
The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the period ended September 30, 2020, of the main subsidiaries of Banco Santander:
Subsidiaries (R$ Millions) | Total Assets | Stockholders' | Net | Loan | Ownership/Interest |
Equity | Income | Portfolio (1) | (%) | ||
Aymoré Crédito, Financiamento e Investimento S.A. | 48,310.2 | 1,304.4 | 328.9 | 46,083.4 | 100% |
Getnet Adquirência e Serviços para Meios de Pagamento S.A. | 33,909.0 | 2,019.6 | 209.9 | - | 100% |
Banco Bandepe S.A. | 29,137.5 | 5,348.7 | 74.5 | - | 100% |
Banco RCI Brasil S.A. | 11,247.3 | 1,413.1 | 139.0 | 9,070.4 | 39.89% |
Santander Leasing S.A. Arrendamento Mercantil | 7,146.9 | 5,878.9 | 138.9 | 2,001.2 | 100% |
Santander Corretora de Seguros, Investimento e Serviços S.A. | 6,030.2 | 3,468.5 | 447.7 | - | 100% |
Santander Brasil, Establecimiento Financiero de Credito, S.A. | 5,396.3 | 4,984.3 | 1.9 | - | 100% |
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | 1,760.7 | 1,728.9 | 58.3 | - | 100% |
Santander Corretora de Câmbio e Valores Mobiliários S.A. | 1,245.9 | 715.4 | 71.3 | - | 100% |
(1) Includes balances referring to leasing portfolio and other credits.
The financial statements of the Subsidiaries above were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, in conjunction with the CMN, Bacen rules and model of the document provided for in the Accounting Plan of Cosif Institutions, of CVM, in which they do not conflict with the rules issued by Bacen, without the elimination of transactions with related companies.
3. Corporate Restructuring
During the period ended September 30, 2020 and the year ended December 31, 2019, several corporate movements were implemented in order to reorganize the operations and activities of the entities in accordance with the business plan of Banco Santander.
For additional information, see explanatory note to financial statements nº2.
4. Strategy and Rating Agencies
For information regarding the Bank's strategy and rating at rating agencies, see the Results Report available at www.santander.com.br/ri.
5. Corporate Governance
Banco Santander's Board of Directors met and resolved:
On October 26th, 2020, to approve the Parent Company and Consolidated Condensed Interim Financial Statements of Banco Santander, prepared in accordance to the accountancy practices adopted in Brazil, applicable to the institutions authorized to operate by Bacen and Parent Company and Consolidated Condensed Interim Financial Statements prepared in accordance to the International Financial Reporting Standards (IFRS), both relative to the period ended in September, 30th, 2020.
On September 1st, 2020, to re-ratify the resolutions at the Company's Board of Directors' Meeting held on May 21, 2020, which dealt with the election of the members of the Company's Audit Committee for a new term.
On August 28, 2020, to know the resignation of Mr. Rafael Bello Noya, Officer without specific designation of the Company.
On July 29,2020, approve (i) the proposal for the merger of Bosan Participações S.A. by the Company; (ii) the proposal for the merger of Banco Olé Consignado S.A. by the Company; and (iii) the call of an Extraordinary General Meeting of the Company to be held on August 31, 2020, at 3 p.m., to resolve on the following Agenda: (a) to ratify the hiring of PricewaterhouseCoopers Auditores Independentes, a specialized company responsible for preparing the corresponding appraisal reports of the Merged Companies; (b) to approve the Appraisal Reports; (c) to approve the Protocol and Justification of Bosan; (d) to approve the merger of Bosan by the Company; (e) to approve the Protocol and Justification of Banco Olé; (f) to approve the merger of Banco Olé by the Company; and (g) to authorize the managers of the Company to perform all necessary and/or convenient acts for the implementation of the Mergers.
On July 28, 2020, approve the Banco Santander Consolidated Financial Statements, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the Banco Santander Interim Consolidated Financial Statements, prepared in accordance with the International Financial Reporting Standards (IFRS), both referring to the semester ended June 30, 2020.
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* Values expressed in thousands, unless otherwise indicated.
On July 28, 2020, to approve the proposal for declaration and payment of interest on equity, in the gross amount of R$ 770 million, for payment as of September 25, 2020, without any indexation.
On July 03, 2020, approve the election of Mr. João Marcos Pequeno De Biase as Executive Officer without specific designation of the Bank.
On June 29, 2020, approve (i) the departure of Mr. René Luiz Grande from the position of member of the Bank's Risk and Compliance Committee; and (ii) the election of Mr. René Luiz Grande to the position of member of the Bank's Audit Committee.
On June 12, 2020, approve the election of Ms. Virginie Genès-Petronilho as a member of the Bank's Risk and Compliance Committee.
On May 27, 2020, approve the amendment to the Internal Regulations of the Board of Directors, the Audit Committee and the Risks and Compliance Committee.
On May 21, 2020, approve the election of the members of the Bank's Audit Committee for a new term of officer: Ms. Deborah Stern Vieitas, Mr. Luiz Carlos Nannini and Ms. Maria Elena Cardoso Figueira.
On May 21, 2020, approve the new version of the Remuneration Policy, according to the positive recommendation of the Remuneration Committee, in compliance with of the CMN Resolution n° 3.921/2010.
On May 21, 2020, approve the local implementation of the versions presented for the Policies: (i) Social Responsibility; (ii) Social Investment, and (iii) Corporate Culture, according to the positive recommendation of the Sustainability Committee.
On April 28, 2020, approve the election of Mr. Pedro Augusto de Melo as a member and Coordinator of the Bank's Risk and Compliance Committee.
On April 27, 2020, to approve the proposal for declaration and payment of interest on equity, in the gross amount of R$ 890 million, for payment as of June 26, 2020, without any indexation.
On April 27, 2020, approve the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with the accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the consolidated Condensed Intermediate Financial Statements of Banco Santander, prepared in accordance with International Financial Reporting Standards (IFRS), both for the period ended March 31, 2020.
On April 23, 2020, (i) acknowledgment of the resignation presented by Mr. Celso Clemente Giacometti to the positions of member of the Board of Directors, Coordinator of the Nomination and Governance Committee and member of the Remuneration Committee of the Bank; (ii) approve the appointment of Mr. Álvaro Antonio Cardoso de Souza, current member of the Nomination and Governance Committee of the Bank, to the position of Coordinator of the referred Committee; (iii) approve the exoneration of Mr. Bernardo Parnes from the position of Coordinator of the Risk and Compliance Committee of the Bank; (iv) approve the appointment of Mr. Álvaro Antonio Cardoso de Souza, current member of the Risk and Compliance Committee of the Bank, to the position of Coordinator of the referred Committee; and (v) approve the exoneration of Mr. José Roberto Machado Filho, Executive Officer of the Bank.
On April 07, 2020, approve the election of Sr. Marcelo Augusto Dutra Labuto as Director with no specific designation.
On February 28, 2020, approve the resignation of Mr. Ulisses Gomes Guimarães, Director with no specific designation of the Bank; (ii) know the resignation of Mr. Gilberto Duarte de Abreu Filho, Director without a specific designation of the Bank; and (iii) approve the election of Mr. Sandro Rogério da Silva Gamba as an Officer without a specific designation of the Bank.
On February 26, 2020, approve Banco Santander Form 20-F for the year ended December 31, 2019.
On February 26, 2020, approve Banco Santander 's Consolidated Financial Statements for the year ended December 31, 2019, prepared in accordance with International Accounting Standards (IFRS).
On February 3, 2020, approve the election of Sres. Sandro Kohler Marcondes, Vítor Ohtsuki and Geraldo José Rodrigues Alckmin Neto as Directors with no specific designation.
On January 28, 2020, approve Banco Santander Individual and Consolidated Financial Statements, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen for the year ended December 31, 2019.
There was no change in corporate governance decided by the Bank for the base date of March 31, 2020. These decisions are described in the Management Report of the Individual and Consolidated Financial Statements of December 31, 2019.
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Values expressed in thousands, unless otherwise indicated.
6. Risk Management
On February 23, 2017, Bacen published CMN Resolution No. 4,557, which provides for the structure of risk and capital management (GIRC), effective from the same year. The resolution highlights the need to implement an integrated risk and capital management structure, define an integrated stress test program and declare the Risk Appetite Statement (RAS - Risk Appetite Statement), set up a Risk Committee, define a disclosure policy of published information, appointment of director for risk management, director of capital and director responsible for information disclosure policy. Banco Santander develops necessary actions on a continuous and progressive basis, aiming at adhering to the resolution. No relevant impacts were identified as a result of this standard.
For more information, see note 25 to this publication.
Capital Management Structure
Banco Santander 's capital management structure has robust governance, which supports the processes related to this topic and establishes the responsibilities of each of the teams involved. In addition, there is a clear definition of the guidelines that must be adopted for effective capital management. Further details can be found in the Risk and Capital Management Structure, available on the Investor Relations website.
Internal Audit
The Internal Audit reports directly to the Board of Directors, with the Audit Committee responsible for its supervision.
Internal Audit is a permanent function and independent from any other function or unit, whose mission is to provide the Board of Directors and senior management with independent assurance on the quality and effectiveness of internal control and risk management systems (current or emerging) and government, thus contributing to the protection of the organization's value, solvency and reputation. The Internal Audit has a quality certificate issued by the Institute of Internal Auditors (IIA).
In order to fulfill its functions and coverage risks inherent in Banco Santander activity, Internal Audit has a set of tools developed internally and updated when necessary. Among them, the risk matrix stands out, used as a planning tool, prioritizing the risk level of the auditable universe considering, among others, its inherent risks, the latest audit rating, the degree of compliance with the recommendations and its dimension. The work programs, which describe the audit tests to be carried out, are periodically reviewed.
The Audit Committee and the Board of Directors have favorably analyzed and approved the Internal Audit work plan for 2020.
7. People
People are an essential element in the Organization. After all, they are the ones who think, design, develop, interact and build what Banco Santander wants to be. This is why the Bank invests in each of the 45,147 employees here in Brazil.
For the development of these people, the Corporate Academy - Academia Santander, works for a strong, transversal culture, providing that everyone, online and in person, can improve what they already know and explore new possibilities.
Banco Santander supports leaders and managers so that they are close and available. This performance is based on three pillars: Feedback, Open Chat and Personalized Recognition, making sure there is alignment between everyone through recurring and frank conversations, career direction and special moments to reward the growth of the teams.
Banco Santander values a diverse environment, where each competence and each difference is valued. An example is the Affinity Group, created to promote diversity and inclusion based on the 5 pillars: Female Leadership; Racial Equity; Disabled people; Diversity of Formations, Experiences and Generations and the LGBT + pillar. Another good example is the Talent Show, which reached its 2nd edition this year. In it, Banco Santander opens space to get to know the most different performances and explore the universe of skills that exist in the Bank, allowing interaction and fraternization among colleagues.
The result of all these actions is the high level of engagement, proven by means of two surveys that were carried out annually and which brought excellent indicators. One of them points out that at least 91% of employees say they want to stay at Banco Santander for a long time. It is believed that this satisfaction reflects positively on interactions with Customers, generating greater ties, sustainable growth and investments in Society, which leads Banco Santander to be the best Bank for all stakeholders.
Since 2007, the bank has held Santander Week, a week that aims to celebrate institutional culture and connect with the community, through initiatives that mobilize more than 45 thousand employees. In the 2020 edition, the challenges imposed by the pandemic, motivated the institution to go beyond the borders of branches and corporate buildings, inviting the entire society to participate, multiplying the effect of the annual campaign. The whole joint effort was reverted to the project "Mothers of Favela ", of the Central Única das Favelas (CUFA), which supports mothers who are heads of families of more than 5,000 favelas across Brazil to take care of their homes and their communities. And an unprecedented action marked the end: "O Canal é Seu", a 12-hour turnaround on more
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* Values expressed in thousands, unless otherwise indicated.
than 20 TVs, radio and portals, which took turns every 30 minutes to show a special program with artists and influencers who invited viewers to participate in the initiative.
In addition to the collection of R$ 7,226 million that will be distributed to the Mothers of the Favela in the form of a digital basic basket, days of Santander Week, part of the executive committee visited four of the institutions supported by the Bank since the beginning of the pandemic, having the opportunity to get to know more closely the impact caused by the action taken with the employees and the Heróis Usam program Masks. Bank leaders also went to CUFA branches in different regions of the country to get to know the great work done by the organization, and, once again, assumed functions in relevant areas of daily life, such as reception, cleaning, among others. 2020 was the dissemination of #efeitosantander throughout Brazil!
8. Sustainable Development
Santander Brasil's Sustainability strategy is based on three pillars: (i) Strategic and efficient use of Environmental Resources, (ii) Development of Potentials and (iii) Resilient and Inclusive Economy. The Bank's vision, through these pillars, is to contribute to a better, more prosperous and fair society, maintaining excellence and responsibility in internal management, with ethical values as the basis and technology at the service of people and businesses.
In relation to the Social and Environmental Business, Santander in the third quarter: i) participated in the issuance of Suzano's Sustainable Linked-Bond in the amount of $ 750 million. This was the second operation carried out in the world of Sustainable Linked- Bond, which is a new international debt instrument in which a company raises funds linked to the achievement of environmental goals;
- launched a R$ 5 billion line to support water supply, sewage collection and treatment and storm drainage initiatives; iii) acted as bookkeeper and intermediary for Oleoplan's CBios, which is one of the first biodiesel companies to sell decarbonization credits; and
- in partnership with two other private pairs, presented an integrated plan with the objective of effectively contributing to the sustainable development of the Amazonia.
In 2020, Santander Brasil received updates on its performance in the rating of ESG Agencies (environmental, social and governance). It remains in Vigeo Eiris' ranking of 'Best Emerging Market Performers'; received improvements in its score in the analysis of FTSE4Good, being above the average of the sector (Banks), of the industry (financial) and also of the average of the Brazilian companies; and in relation to MSCI, it remains AA (on a AAA-CCC scale), being above the industry average in almost all dimensions.
As a result of the global health crisis scenario, Banco Santander has been promoting actions to support customers and society. One of these actions includes supporting five institutions that are working on the front lines in the fight against Covid-19. More than R$ 7 million was raised, half of the amounts donated by employees and the other half doubled by the Bank. Other actions can be seen on the Santander website, through the link https://www.santander.com.br/camivais/cuidar.
9. Independent Audit
The policy of Banco Santander, including its subsidiaries, in contracting services not related to the auditing of the Financial Statements by its independent auditors, is based on Brazilian and international auditing standards, which preserve the auditor's independence. This reasoning provides for the following: (i) the auditor must not audit his own work, (ii) the auditor must not exercise managerial functions in his client, (iii) the auditor must not promote his client's interests, and (iv ) the need for approval of any services by the Bank's Audit Committee.
In compliance with CVM Instruction 381/2003, Banco Santander informs that in the period ended September 30, 2020, PricewaterhouseCoopers did not provide services unrelated to the independent auditing of the Financial Statements of Banco Santander and controlled companies over 5% of the total fees related to independent audit services.
In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls in place to ensure its independence, which include assessing the work performed, covering any service other than an independent audit of the Financial Statements of Banco Santander and its subsidiaries. This assessment is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and provision of professional services not related to the auditing of the Financial Statements by its independent auditors during the period ended September 30, 2020, did not affect the independence and objectivity in conducting the external audit exams carried out at Banco Santander and other entities of the Group, since the above principles were observed.
The Board of Directors
The Executive Board
(Authorized at the Board of Directors' Meeting of 26/10/2020)
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 9
* Values expressed in thousands, unless otherwise indicated.
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 10
* Values expressed in thousands, unless otherwise indicated.
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 11
* Values expressed in thousands, except when indicated.
Balance Sheet
Bank | Consolidated | ||||
Notes | 9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | |
Current Assets | 593,561,170 | 496,060,072 | 581,102,464 | 514,863,901 | |
Cash | 4 | 15,148,271 | 9,543,649 | 15,338,105 | 9,924,644 |
Interbank Investments | 5 | 106,211,134 | 82,235,455 | 57,443,333 | 42,571,395 |
Money Market Investments | 49,257,048 | 28,703,365 | 49,014,764 | 28,703,365 | |
Interbank Deposits | 53,072,218 | 43,230,118 | 4,546,701 | 3,565,203 | |
Foreign Currency Investments | 3,881,868 | 10,301,972 | 3,881,868 | 10,302,827 | |
Securities and Derivative Financial Instruments | 6 | 101,728,420 | 61,649,371 | 108,565,496 | 72,160,634 |
Own Portfolio | 59,759,611 | 27,746,398 | 70,290,158 | 34,097,174 | |
Subject to Repurchase Commitments | 13,430,200 | 26,824,877 | 9,040,074 | 21,338,877 | |
Derivative Financial Instruments | 22,864,509 | 2,653,751 | 21,083,856 | 8,894,341 | |
Deposited in the Central Bank | 10,032 | - | 10,032 | - | |
Privatization Currencies | 575 | 512 | 575 | 512 | |
Pledged in Guarantees | 2,051,933 | 456,012 | 4,529,241 | 3,861,909 | |
Securities Obtained from Commitments with Free Mover | 3,611,560 | 3,967,821 | 3,611,560 | 3,967,821 | |
Interbank Accounts | 72,742,638 | 78,178,662 | 84,794,375 | 88,952,546 | |
Payments and Receipts Pending Settlement | 16,561,502 | 9,027,921 | 28,397,623 | 19,267,302 | |
Restricted Deposits: | 56,163,378 | 69,121,251 | 56,383,554 | 69,663,608 | |
Central Bank Deposits | 56,159,317 | 69,121,095 | 56,379,493 | 69,663,452 | |
National Housing System (SFH) | 4,061 | 156 | 4,061 | 156 | |
Interbank Transfers | 4,560 | 7,854 | - | - | |
Correspondents | 13,198 | 21,636 | 13,198 | 21,636 | |
Lending Operations | 8 | 128,554,076 | 83,319,998 | 135,661,554 | 112,150,045 |
Public Sector | 38,391 | 153,586 | 38,391 | 153,586 | |
Private Sector | 133,370,831 | 86,455,503 | 141,670,749 | 116,405,810 | |
(Allowance for Loan Losses) | 8.e | (4,855,146) | (3,289,091) | (6,047,586) | (4,409,351) |
Leasing Operations | 8 | - | - | 856,779 | 1,202,645 |
Private Sector | - | - | 869,850 | 1,216,238 | |
(Allowance for Lease Losses) | 8.e | - | - | (13,071) | (13,593) |
Other Receivables | 167,391,354 | 179,592,907 | 176,359,990 | 185,981,022 | |
Credits for Avals and Sureties Honored | 77,829 | 23,283 | 81,078 | 377,915 | |
Foreign Exchange Portfolio | 115,703,610 | 123,396,135 | 115,703,610 | 123,396,135 | |
Income Receivable | 1,856,438 | 2,226,778 | 1,741,894 | 2,025,186 | |
Trading Account | 4,289,856 | 2,325,866 | 7,538,166 | 3,912,093 | |
Others | 10 | 46,363,626 | 52,071,971 | 52,190,676 | 56,713,037 |
(Allowance for Other Receivables Losses) | 8.e | (900,005) | (451,126) | (895,434) | (443,344) |
Other Assets | 1,785,277 | 1,540,030 | 2,082,832 | 1,920,970 | |
Other Assets | 1,113,616 | 1,195,777 | 1,417,772 | 1,524,102 | |
(Allowance for Valuation) | (102,809) | (115,705) | (231,132) | (254,950) | |
Prepaid Expenses | 774,470 | 459,958 | 896,192 | 651,818 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 12
* Values expressed in thousands, except when indicated. | |||||
Bank | Consolidated | ||||
Notes | 9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | |
Long-Term Assets | 351,896,307 | 305,377,691 | 387,418,027 | 329,430,790 | |
Interbank Investments | 5 | 28,359,805 | 33,694,075 | 1,956,747 | 796,099 |
Interbank Deposits | 28,359,805 | 33,694,075 | 1,956,747 | 796,099 | |
Securities and Derivative Financial Instruments | 6 | 133,306,660 | 112,305,951 | 140,766,205 | 121,294,033 |
Own Portfolio | 37,320,267 | 23,603,436 | 38,440,927 | 28,228,324 | |
Subject to Repurchase Commitments | 63,122,355 | 71,638,459 | 63,122,355 | 71,617,304 | |
Derivative Financial Instruments | 13,987,501 | 8,532,484 | 13,990,973 | 8,546,799 | |
Deposited with the Central Bank | 1,943,159 | - | 1,943,159 | - | |
Privatization Currencies | - | 370 | - | 370 | |
Pledged in Guarantees | 10,498,955 | 8,028,432 | 16,834,368 | 12,398,466 | |
Securities Obtained from Commitments with Free Mover | 6,434,423 | 502,770 | 6,434,423 | 502,770 | |
Interbank Accounts | 350,966 | 312,411 | 350,966 | 312,411 | |
Restricted Deposits: | 350,966 | 312,411 | 350,966 | 312,411 | |
National Housing System (SFH) | 350,966 | 312,411 | 350,966 | 312,411 | |
Lending Operations | 8 | 127,018,621 | 110,094,019 | 172,691,874 | 148,292,513 |
Public Sector | 1,001,305 | 964,378 | 1,002,572 | 965,758 | |
Private Sector | 141,786,574 | 123,678,363 | 189,097,754 | 163,374,180 | |
(Allowance for Loan Losses) | 8.e | (15,769,258) | (14,548,722) | (17,408,452) | (16,047,425) |
Leasing Operations | 8 | - | - | 1,562,273 | 1,564,446 |
Public Sector | - | - | - | 1,119 | |
Private Sector | - | - | 1,583,493 | 1,583,641 | |
(Allowance for Lease Losses) | 8.e | - | - | (21,220) | (20,314) |
Other Receivables | 62,575,878 | 48,661,212 | 69,802,788 | 56,678,875 | |
Receivables for Guarantees Honored | 513,630 | 298,195 | 413,020 | 298,195 | |
Foreign Exchange Portfolio | 835,042 | 1,108,978 | 835,042 | 1,108,978 | |
Income Receivable | 252,491 | 156,939 | 252,491 | 156,939 | |
Trading and Intermediation of Values | - | - | - | 562,425 | |
Deferred Taxes | 9 | 41,709,608 | 28,074,411 | 45,893,743 | 31,904,371 |
Others | 10 | 19,794,648 | 19,395,717 | 23,023,403 | 23,122,032 |
(Allowance for Other Receivables Losses) | 8.e | (529,541) | (373,028) | (614,911) | (474,065) |
Other Assets | 284,377 | 310,023 | 287,174 | 492,413 | |
Temporary Assets | 1,444 | 1,622 | 1,450 | 56,875 | |
(Allowance for Losses) | (1,444) | (1,622) | (1,449) | (1,630) | |
Prepaid Expenses | 284,377 | 310,023 | 287,173 | 437,168 | |
Permanent Assets | 39,804,164 | 37,097,964 | 13,698,120 | 13,248,376 | |
Investments | 27,752,568 | 26,831,540 | 381,957 | 354,490 | |
Investments in Affiliates and Subsidiaries: | 12 | 27,731,674 | 26,810,793 | 361,009 | 333,674 |
Domestic | 22,747,394 | 23,263,738 | 361,009 | 333,674 | |
Foreign | 4,984,280 | 3,547,055 | - | - | |
Other Investments | 45,211 | 45,064 | 50,470 | 50,344 | |
(Allowance for Losses) | (24,317) | (24,317) | (29,522) | (29,528) | |
Fixed Assets | 6,081,278 | 6,214,168 | 6,986,615 | 7,181,088 | |
Real Estate in Use | 2,449,971 | 2,467,216 | 2,753,700 | 2,753,149 | |
Others Fixed Assets | 12,225,494 | 13,818,040 | 13,942,297 | 15,483,559 | |
(Accumulated Depreciation) | (8,594,187) | (10,071,088) | (9,709,382) | (11,055,620) | |
Intangible Assets | 13 | 5,970,318 | 4,052,256 | 6,329,548 | 5,712,798 |
Goodwill | 28,323,672 | 26,496,592 | 29,513,388 | 29,050,911 | |
Others Intangible Assets | 9,291,408 | 8,485,328 | 9,958,217 | 9,196,813 | |
(Accumulated Amortization) | (31,644,762) | (30,929,664) | (33,142,057) | (32,534,926) | |
Total Assets | 985,261,641 | 838,535,727 | 982,218,611 | 857,543,067 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 13
* Values expressed in thousands, except when indicated. | |||||
Bank | Consolidated | ||||
Notes | 9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | |
Current Liabilities | 665,841,911 | 594,642,669 | 648,605,973 | 598,591,332 | |
Deposits | 14 | 291,782,765 | 214,983,542 | 287,970,117 | 212,838,421 |
Demand Deposits | 43,591,258 | 29,392,188 | 43,413,922 | 29,107,534 | |
Savings Deposits | 59,443,489 | 49,039,857 | 59,443,489 | 49,039,857 | |
Interbank Deposits | 6,541,643 | 4,573,086 | 4,369,529 | 3,457,996 | |
Time Deposits | 182,206,372 | 131,978,411 | 180,743,174 | 131,096,194 | |
Other Deposits | 3 | - | 3 | 136,840 | |
Money Market Funding | 14 | 97,312,675 | 111,939,869 | 90,508,089 | 106,248,412 |
Own Portfolio | 75,524,155 | 97,227,938 | 70,719,562 | 91,536,480 | |
Third Parties | 7,499,974 | 8,743,348 | 5,499,981 | 8,743,348 | |
Linked to Trading Portfolio Operations | 14,288,546 | 5,968,583 | 14,288,546 | 5,968,584 | |
Funds from Acceptance and Issuance of Securities | 14 | 50,659,509 | 60,517,226 | 30,720,698 | 51,265,094 |
Exchange Acceptances | 100,862 | - | 378,717 | 34,240 | |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 26,658,655 | 42,445,229 | 28,353,878 | 43,567,117 | |
Funding by Structured Operations Certificates | 22,203,088 | 16,295,922 | 291,199 | 5,887,662 | |
Interbank Accounts | 1,696,904 | 1,776,075 | 1,696,904 | 1,776,075 | |
Receipts and Payments Pending Settlement | 2,187,781 | 41,756 | 2,508,208 | 369,578 | |
Interbank Transfers | 2,031,853 | - | 2,352,280 | 327,822 | |
Interbank Accounts | 155,928 | 41,756 | 155,928 | 41,756 | |
Third-Party Funds in Transit | 4,162,043 | 4,019,119 | 4,162,043 | 4,019,119 | |
Internal Transfers of Assets | 4,165,680 | 4,002,824 | 4,165,680 | 4,002,824 | |
Borrowings | (3,637) | 16,295 | (3,637) | 16,295 | |
Local Borrowings - Other Institutions | 14 | 59,241,154 | 43,870,657 | 54,491,052 | 41,322,712 |
Foreign Borrowings | - | - | 11,402 | 33,585 | |
Domestic Onlendings - Official Institutions | 59,241,154 | 43,870,657 | 54,479,650 | 41,289,127 | |
National Economic and Social Development Bank | 14 | ||||
(BNDES) | 4,499,065 | 3,697,638 | 4,499,065 | 3,697,638 | |
Federal Savings and Loan Bank (CEF) | 2,519,074 | 1,355,447 | 2,519,074 | 1,355,447 | |
National Equipment Financing Authority (FINAME) | 86,657 | 94,725 | 86,657 | 94,725 | |
Other Institutions | 1,627,158 | 1,755,646 | 1,627,158 | 1,755,646 | |
Derivative Financial Instruments | 266,176 | 491,820 | 266,176 | 491,820 | |
Derivative Financial Instruments | 6 | 19,676,565 | 3,774,395 | 18,636,233 | 10,112,463 |
Instrumentos Financeiros Derivativos | 19,676,565 | 3,774,395 | 18,636,233 | 10,112,463 | |
Other Payables | 136,320,354 | 151,798,467 | 155,109,468 | 168,717,895 | |
Collected Taxes and Other | 1,857,054 | 96,928 | 1,859,240 | 131,179 | |
Foreign Exchange Portfolio | 108,075,113 | 116,991,021 | 108,075,113 | 116,991,021 | |
Social and Statutory | 248,769 | 8,188,762 | 120,636 | 8,376,961 | |
Tax and Social Security | 9 | 1,997,614 | 2,854,815 | 3,402,577 | 4,092,434 |
Trading Account | 280,492 | 1,063,403 | 2,916,765 | 3,149,991 | |
Debt Instruments Eligible to Compose Capital | 15 | 239,171 | 170,939 | 239,171 | 170,939 |
Others | 16 | 23,622,141 | 22,432,599 | 38,495,966 | 35,805,370 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 14
* Values expressed in thousands, except when indicated. | |||||
Bank | Consolidated | ||||
Notes | 9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | |
Long-Term Liabilities | 242,194,120 | 173,943,594 | 255,115,976 | 187,197,923 | |
Deposits | 14 | 95,426,259 | 59,228,624 | 96,247,800 | 60,089,570 |
Interbank Deposits | 262,189 | 100,686 | 1,741,572 | 841,294 | |
Time Deposits | 95,164,070 | 59,127,938 | 94,506,228 | 59,248,276 | |
Money Market Funding | 14 | 28,655,042 | 17,692,578 | 28,655,042 | 17,692,578 |
Own Portfolio | 246,538 | 159,745 | 246,538 | 159,745 | |
Linked to Trading Portfolio Operations | 28,408,504 | 17,532,833 | 28,408,504 | 17,532,833 | |
Funds from Acceptance and Issuance of Securities | 14 | 40,433,586 | 31,062,142 | 42,828,468 | 34,697,521 |
Exchange Acceptances | - | - | 746,504 | 1,557,513 | |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 30,431,679 | 26,271,049 | 32,080,057 | 28,644,786 | |
Securities Issued Abroad | 9,062,608 | 3,123,591 | 9,062,608 | 2,827,720 | |
Funding by Structured Operations Certificates | 939,299 | 1,667,502 | 939,299 | 1,667,502 | |
Borrowings | 14 | 1,330,307 | 1,788,469 | 1,362,034 | 1,802,272 |
Local Borrowings - Other Institutions | - | - | 31,727 | 13,803 | |
Foreign Borrowings | 1,330,307 | 1,788,469 | 1,330,307 | 1,788,469 | |
Domestic Onlendings - Official Institutions | 14 | 7,856,379 | 8,056,939 | 7,856,379 | 8,056,939 |
National Economic and Social Development Bank (BNDES) | 4,895,312 | 4,897,785 | 4,895,312 | 4,897,785 | |
Federal Savings and Loan Bank (CEF) | 61,712 | 68,325 | 61,712 | 68,325 | |
National Equipment Financing Authority (FINAME) | 2,899,355 | 3,063,173 | 2,899,355 | 3,063,173 | |
Other Institutions | - | 27,656 | - | 27,656 | |
Derivative Financial Instruments | 6 | 19,747,449 | 10,208,817 | 19,884,721 | 10,510,899 |
Derivative Financial Instruments | 19,747,449 | 10,208,817 | 19,884,721 | 10,510,899 | |
Other Payables | 48,745,098 | 45,906,025 | 58,281,532 | 54,348,144 | |
Foreign Exchange Portfolio | 920,717 | 1,004,861 | 920,717 | 1,004,861 | |
Tax and Social Security | 9 | 3,026,582 | 3,659,656 | 3,579,575 | 4,199,423 |
Trading Account | 10,842 | - | 978,331 | 557,370 | |
Debt Instruments Eligible to Compose Capital | 15 | 14,234,562 | 10,005,022 | 14,234,562 | 10,005,022 |
Others | 16 | 30,552,395 | 31,236,486 | 38,568,347 | 38,581,468 |
Deferred Income | 347,380 | 261,741 | 577,288 | 285,219 | |
Deferred Income | 347,380 | 261,741 | 577,288 | 285,219 | |
Stockholders' Equity | 18 | 76,878,230 | 69,687,723 | 76,765,897 | 69,773,232 |
Capital: | 57,000,000 | 57,000,000 | 57,000,000 | 57,000,000 | |
Brazilian Residents | 4,808,186 | 4,808,186 | 4,808,186 | 4,808,186 | |
Foreign Residents | 52,191,814 | 52,191,814 | 52,191,814 | 52,191,814 | |
Capital Reserves | 201,358 | 197,369 | 198,648 | 194,115 | |
Profit Reserves | 17,962,614 | 12,909,736 | 17,962,609 | 12,986,778 | |
Adjustment to Fair Value | (468,065) | 261,753 | (468,488) | 273,474 | |
Retained Earnings | 2,973,927 | - | 2,864,732 | - | |
(-) Treasury Shares | (791,604) | (681,135) | (791,604) | (681,135) | |
Non Controlling Interest | 18.e | - | - | 1,154,477 | 1,695,361 |
Total Stockholders' Equity | 76,878,230 | 69,687,723 | 77,920,374 | 71,468,593 | |
Total Liabilities | 985,261,641 | 838,535,727 | 982,218,611 | 857,543,067 |
The accompanying notes from Management are an integral part of these financial statements.
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 15
-
Values expressed in thousands, except when indicated.
Income Statements
Bank | Consolidated | ||||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | ||
Notes | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Income Related to Financial Operations | 19,386,106 | 93,353,547 | 26,356,017 | 61,342,105 | 21,783,259 | 101,346,732 | 28,080,448 | 67,691,863 | |
Loan Operations | 10,526,199 | 38,535,232 | 12,462,860 | 32,536,043 | 12,980,453 | 47,472,382 | 15,834,012 | 42,104,483 | |
Leasing Operations | - | - | - | - | 72,546 | 228,806 | 97,691 | 268,767 | |
Securities Transactions | 6.a | 8,513,306 | 59,087,304 | 13,609,377 | 26,774,837 | 8,105,609 | 57,308,001 | 12,522,803 | 24,116,050 |
Derivatives Transactions | (385,544) | 132,585 | 499,263 | (2,527,128) | (116,702) | 594,967 | (85,598) | (3,376,027) | |
Foreign Exchange Operations | 456,715 | (5,688,877) | (1,238,344) | 1,520,348 | 464,997 | (5,552,342) | (1,318,344) | 1,520,359 | |
Compulsory Deposits | 275,430 | 1,287,303 | 1,022,861 | 3,038,005 | 276,356 | 1,294,918 | 1,029,884 | 3,058,231 | |
Expenses on Financial Operations | (13,122,853) | (90,733,774) | (21,720,758) | (42,546,730) | (14,493,701) | (94,402,806) | (22,252,860) | (44,120,576) | |
Funding Operations Market | 14.b | (6,575,702) | (47,194,837) | (12,725,666) | (26,850,322) | (6,863,436) | (48,057,294) | (12,580,161) | (26,630,738) |
Borrowings and Onlendings Operations | (4,357,124) | (31,685,845) | (6,096,422) | (7,578,326) | (4,364,171) | (31,711,186) | (6,096,154) | (7,523,008) | |
Operations of Sale or Transfer of Financial Assets | (127,500) | (1,133,182) | (232,717) | (250,100) | (127,419) | (1,133,050) | (238,419) | (270,110) | |
Allowance for Loan Losses | 8.f | (2,062,527) | (10,719,910) | (2,665,953) | (7,867,982) | (3,138,675) | (13,501,276) | (3,338,126) | (9,696,720) |
Gross Income Related to Financial Operations | 6,263,253 | 2,619,773 | 4,635,259 | 18,795,375 | 7,289,558 | 6,943,926 | 5,827,588 | 23,571,287 | |
Other Operating Revenues (Expenses) | (2,094,609) | (5,877,046) | (2,106,982) | (6,124,649) | (2,595,842) | (8,716,555) | (2,938,387) | (9,302,714) | |
Banking Service Fees | 20 | 2,436,799 | 6,931,602 | 2,603,074 | 7,644,646 | 3,378,682 | 9,505,816 | 3,477,828 | 10,125,119 |
Income Related to Bank Charges | 20 | 1,179,680 | 3,342,170 | 1,100,711 | 3,270,334 | 1,367,662 | 3,824,873 | 1,272,477 | 3,756,404 |
Personnel Expenses | 21 | (1,574,942) | (4,717,291) | (1,678,535) | (4,964,279) | (1,798,394) | (5,420,020) | (1,914,707) | (5,652,150) |
Other Administrative Expenses | 22 | (2,872,688) | (8,152,541) | (2,534,452) | (7,476,974) | (3,210,003) | (9,343,485) | (2,969,745) | (8,787,796) |
Tax Expenses | (727,066) | (1,446,072) | (640,769) | (2,233,671) | (995,847) | (2,290,771) | (893,022) | (3,219,081) | |
Investments in Affiliates and Subsidiaries | 12 | 415,040 | 2,237,263 | 551,371 | 2,160,418 | 15,393 | 24,941 | 13,389 | 35,109 |
Other Operating Revenues | 23 | 1,134,249 | 3,467,480 | 1,366,509 | 2,591,491 | 1,515,853 | 4,694,826 | 1,698,682 | 3,324,679 |
Other Operating Expenses | 24 | (2,085,681) | (7,539,657) | (2,874,891) | (7,116,614) | (2,869,188) | (9,712,735) | (3,623,289) | (8,884,998) |
Operating Income | 4,168,644 | (3,257,273) | 2,528,277 | 12,670,726 | 4,693,716 | (1,772,629) | 2,889,201 | 14,268,573 | |
Non-Operating Income | 25 | 22,098 | 252,928 | 8,468 | 23,064 | 15,872 | 252,455 | 18,850 | (92,532) |
Income Before Taxes on Income and Profit Sharing | 4,190,742 | (3,004,345) | 2,536,745 | 12,693,790 | 4,709,588 | (1,520,174) | 2,908,051 | 14,176,041 | |
Income Tax and Social Contribution | 9 | (35,484) | 13,982,731 | 1,517,689 | (926,031) | (412,625) | 12,653,247 | 1,258,960 | (2,077,432) |
Provision for Income Tax | 398,487 | 24,643 | 978,198 | (301,343) | (16,567) | (1,143,051) | 730,101 | (1,385,424) | |
Provision for Social Contribution Tax | 300,355 | (26,685) | 600,425 | (169,240) | 81,910 | (662,310) | 506,318 | (645,032) | |
Deferred Tax Credits | (734,326) | 13,984,773 | (60,934) | (455,448) | (477,968) | 14,458,608 | 22,541 | (46,976) | |
Profit Sharing | (411,331) | (1,291,581) | (420,685) | (1,262,363) | (457,730) | (1,421,238) | (469,896) | (1,395,158) | |
Non Controlling Interest | 18.e | - | - | - | - | (28,084) | (101,124) | (89,412) | (270,575) |
Net Income | 3,743,927 | 9,686,805 | 3,633,749 | 10,505,396 | 3,811,149 | 9,610,711 | 3,607,703 | 10,432,876 | |
Number of Shares (Thousands) | 18.a | 7,498,531 | 7,498,531 | 7,498,531 | 7,498,531 | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 16
* Values expressed in thousands, except when indicated.
Net Income per Thousand Shares (R$) | 499.29 | 1,291.83 | 484.59 | 1,400.99 | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 17
* Values expressed in thousands, except when indicated.
Comprehensive Income Statements
Bank | Consolidated | |||
01/01 to | 01/01 to | 01/01 to | 01/01 to | |
09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 | |
Profit for the Period | 9,686,805 | 10,505,396 | 9,610,711 | 10,432,876 |
Other Comprehensive Income that will be subsequently | ||||
reclassified for profit or loss when specific conditions are met: | (1,395,856) | 2,036,942 | (1,408,052) | 2,040,810 |
Available-for-sale financial assets | (1,205,187) | 2,085,933 | (1,217,383) | 2,084,619 |
Available-for-sale financial assets | (2,485,316) | 3,557,354 | (2,497,827) | 3,556,040 |
Income taxes | 1,280,129 | (1,471,421) | 1,280,444 | (1,471,421) |
Cash flow hedges | (190,669) | (48,991) | (190,669) | (43,809) |
Cash flow hedges | (106,742) | 74,775 | (106,742) | 77,876 |
Income taxes | (83,927) | (123,766) | (83,927) | (121,685) |
Other Comprehensive Income that won't be reclassified for | ||||
Net income: | 666,091 | (811,155) | 666,091 | (811,155) |
Defined Benefits plan | 666,091 | (811,155) | 666,091 | (811,155) |
Defined Benefits plan | 1,278,431 | (1,305,655) | 1,278,431 | (1,305,655) |
Income taxes | (612,340) | 494,500 | (612,340) | 494,500 |
Comprehensive Income for the Period | 8,957,040 | 11,731,183 | 8,868,750 | 11,662,531 |
The accompanying notes from Management are an integral part of these financial statements.
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 18
* Values expressed in thousands, unless otherwise indicated.
Statements of Changes in Stockholders' Equity - Bank
Profit Reserves | Adjustment to Fair Value | ||||||||||||
Others | |||||||||||||
Reserve for | Affiliates Adjustment | ||||||||||||
Capital | Legal | Dividend | Own | and | to Fair | Retained Earnings | (-)Treasury | ||||||
Notes | Capital | Reserves | Reserve Equalization | Position Subsidiaries | Value | Retained | Shares | Total | |||||
Balances as of December 31, 2018 | 57,000,000 | 140,707 | 3,113,605 | 6,506,949 | 1,885,972 | 114,491 | (3,071,043) | - | (461,432) | 65,229,249 | |||
Employee Benefit Plans | - | - | - | - | - | - | (811,155) | - | - | (811,155) | |||
Treasury Shares | - | - | - | - | - | - | - | - | (178,240) | (178,240) | |||
Emission Costs of Treasury Shares | - | - | - | - | - | - | - | - | (1,527) | (1,527) | |||
Result of Treasury Shares | - | 4,221 | - | - | - | - | - | - | - | 4,221 | |||
Reservations for Share - Based Payment | - | (36,643) | - | - | - | - | - | - | - | (36,643) | |||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | 2,068,491 | (31,549) | - | - | - | 2,036,942 | |||
Net Income | - | - | - | - | - | - | - | 10,505,396 | - | 10,505,396 | |||
Allocations: | |||||||||||||
Legal Reserve | 18,c | - | - | 343,582 | - | - | - | - | (343,582) | - | - | ||
Interest on Capital | 18,b | - | - | - | - | - | - | - | (3,000,000) | - | (3,000,000) | ||
Reserve for Dividend Equalization | 18,c | - | - | - | 4,528,755 | - | - | - | (4,528,755) | - | - | ||
Others | 18,c | - | - | - | - | - | - | - | 690 | - | 690 | ||
Balances as of September 30, 2019 | 57,000,000 | 108,285 | 3,457,187 | 11,035,704 | 3,954,463 | 82,942 | (3,882,198) | 2,633,749 | (641,199) | 73,748,933 | |||
Changes in the Period | - | (32,422) | 343,582 | 4,528,755 | 2,068,491 | (31,549) | (811,155) | 2,633,749 | (179,767) | 8,519,684 | |||
Balances as of December 31, 2019 | 57,000,000 | 197,369 | 3,818,064 | 9,091,672 | 3,920,714 | 91,380 | (3,750,341) | - | (681,135) | 69,687,723 | |||
Employee Benefit Plans | - | - | - | - | - | - | 666,090 | - | - | 666,090 | |||
Treasury Shares | - | - | - | - | - | - | - | - | (110,469) | (110,469) | |||
Income with Treasury Shares | 18,d | - | (15,476) | (15,476) | |||||||||
Reservations for Share - Based Payment | - | 19,465 | - | - | - | - | - | - | - | 19,465 | |||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | (1,387,736) | (8,172) | - | - | - | (1,395,908) | |||
Net Income | - | - | - | - | - | - | - | 9,686,805 | - | 9,686,805 | |||
Allocations: | |||||||||||||
Legal Reserve | 18,c | - | - | 297,144 | - | - | - | - | (297,144) | - | - | ||
Interest on Capital | 18,b | - | - | - | - | - | - | - | (1,660,000) | - | (1,660,000) | ||
Reserve for Dividend Equalization | 18,c | - | - | - | 4,755,734 | - | - | - | (4,755,734) | - | - | ||
Balances as of September 30, 2020 | 57,000,000 | 201,358 | 4,115,208 | 13,847,406 | 2,532,978 | 83,208 | (3,084,251) | 2,973,927 | (791,604) | 76,878,230 | |||
Changes in the Period | - | 3,989 | 297,144 | 4,755,734 | (1,387,736) | (8,172) | 666,090 | 2,973,927 | (110,469) | 7,190,507 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 19
* Values expressed in thousands, unless otherwise indicated.
Statements of Changes in Stockholders' Equity - Consolidated
Reservas de Lucros | Ajustes de Avaliação Patrimonial | ||||||||||||
Others | |||||||||||||
Reserve for | Affiliates Adjustment | Total | |||||||||||
Capital | Legal | Dividend | and | to Fair Retained Earnings | (-)Treasury Stockholders' | Stockholders' | |||||||
Notes | Capital | Reserves | Reserve Equalization Own PositionSubsidiaries | Value | Retained | Shares | Equity Minority Interest | Equity | |||||
Balances as of December 31, 2018 | 57,000,000 | 142,414 | 3,113,606 | 6,509,735 | 1,885,972 | 114,491 | (3,071,043) | - | (461,432) | 65,233,743 | 2,069,929 | 67,303,672 | |
Employee Benefit Plans | - | - | - | - | - | - | - | - | - | - | - | - | |
Treasury Shares | - | - | - | - | - | - | (811,155) | - | (178,240) | (989,395) | - | (989,395) | |
Result of Treasury Shares | - | 4,221 | - | - | - | - | - | - | - | 4,221 | - | 4,221 | |
Reservations for Share - Based Payment | - | (39,914) | - | - | - | - | - | - | - | (39,914) | - | (39,914) | |
Adjustment to Fair Value - Securities and Derivative | |||||||||||||
Financial Instruments | - | - | - | - | 2,068,491 | (31,549) | - | - | - | 2,036,942 | - | 2,036,942 | |
Capital Restructuring | - | - | - | - | - | - | - | - | (1,527) | (1,527) | - | (1,527) | |
Net Income | - | - | - | - | - | - | - | 10,432,876 | - | 10,432,876 | - | 10,432,876 | |
Allocations: | |||||||||||||
Legal Reserve | 18,c | - | - | 343,582 | - | - | - | - | (343,582) | - | - | - | - |
Dividends | 18,b | - | - | - | - | - | - | - | - | - | - | - | - |
Provision of Interest on Capital | 18,b | - | - | - | - | - | - | - | (3,000,000) | - | (3,000,000) | - | (3,000,000) |
Reserve for Dividend Equalization | 18,c | - | - | - | 4,528,755 | - | - | - | (4,528,755) | - | - | - | - |
Unrealized Profit | - | - | - | (2,787) | - | 3,869 | - | 4,374 | - | 5,456 | - | 5,456 | |
Non Controlling Interest Results | 18,e | - | - | - | - | - | - | - | - | - | - | 270,575 | 270,575 |
Others | - | - | - | - | - | - | - | 690 | - | 690 | (531,560) | (530,870) | |
Balances as of September 30, 2019 | 57,000,000 | 106,721 | 3,457,188 | 11,035,703 | 3,954,463 | 86,811 | (3,882,198) | 2,565,603 | (641,199) | 73,683,092 | 1,808,944 | 75,492,036 | |
Changes in the Period | - | (35,693) | 343,582 | 4,525,968 | 2,068,491 | (27,680) | (811,155) | 2,565,603 | (179,767) | 8,449,349 | (260,985) | 8,188,364 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 20
* Values expressed in thousands, unless otherwise indicated.
Reservas de Lucros | Ajustes de Avaliação Patrimonial | |||||||||||||
Affiliates | ||||||||||||||
Reserve for | and | Others | Total | |||||||||||
Capital | Legal | Dividend | Own Subsidiarie | Adjustment | Retained Earning | (-)Treasury Stockholders | Minority Interes Stockholders | |||||||
Notes | Capital | Reserves | Reserve Equalization | Position | s to Fair Value | s Retained | Shares | ' Equity | t | ' Equity | ||||
Balances as of December | ||||||||||||||
31, 2019 | 57,000,000 | 194,115 | 3,818,065 | 9,168,713 | 3,932,436 | 91,380 | (3,750,342) | - | (681,135) | 69,773,232 | 1,695,361 | 71,468,593 | ||
Employee Benefit Plans | - | - | - | - | - | - | 666,090 | - | - | 666,090 | - | 666,090 | ||
Treasury Shares | - | (15,476) | - | - | - | - | - | - | (110,469) | (125,945) | - | (125,945) | ||
Reservations for Share - | ||||||||||||||
Based Payment | - | 20,009 | - | - | - | - | - | - | - | 20,009 | - | 20,009 | ||
Adjustment to Fair Value - Securities and | ||||||||||||||
Derivative Financial Instruments | - | - | - | - | (1,399,879) | (8,173) | - | - | - | (1,408,052) | - | (1,408,052) | ||
Net Income | - | - | - | - | - | - | - | 9,610,711 | - | 9,610,711 | - | 9,610,711 | ||
Allocations: | ||||||||||||||
Legal Reserve | 18,c | - | - | 297,144 | - | - | - | - | (297,144) | - | - | - | - | |
Dividends | 18,b | - | - | - | - | - | - | - | - | - | - | - | - | |
Provision of Interest on | ||||||||||||||
Capital | 18,b | - | - | - | - | - | - | - | (1,660,000) | - | (1,660,000) | - | (1,660,000) | |
Reserve for Dividend | 18,c | - | - | - | 4,755,734 | - | - | - | (4,755,734) | - | - | - | - | |
Equalization | ||||||||||||||
Unrealized Profit | - | - | - | 33,101 | - | - | - | (33,101) | - | - | - | - | ||
Non Controlling Interest | ||||||||||||||
Results | 18,e | - | - | - | - | - | - | - | - | - | - | (101,124) | (101,124) | |
Others | - | - | - | (110,148) | - | - | - | - | - | (110,148) | (439,760) | (549,908) | ||
Balances as of September 30, 2020 | 57,000,000 | 198,648 | 4,115,209 | 13,847,400 | 2,532,557 | 83,207 | (3,084,252) | 2,864,732 | (791,604) | 76,765,897 | 1,154,477 | 77,920,374 | ||
Changes in the Period | - | 4,533 | 297,144 | 4,678,687 | (1,399,879) | (8,173) | 666,090 | 2,864,732 | (110,469) | 6,992,665 | (540,884) | 6,451,781 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 21
* Values expressed in thousands, except when indicated.
Cash Flows Statements
Bank | Consolidated | ||||
01/01 to | 01/01 to | 01/01 to | 01/01 to | ||
Notes 09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 | ||
Operational Activities | |||||
Net Income | 9,686,805 | 10,505,396 | 9,610,711 | 10,432,876 | |
Adjustment to Net Income | (37,970,632) | 7,141,184 | (30,501,456) | 11,720,599 | |
Allowance for Loan Losses | 8,e | 10,719,910 | 7,867,982 | 13,501,276 | 9,696,720 |
Provision for Legal Proceedings and Administrative and Legal Obligations | 17,c | 983,547 | 1,295,035 | 1,123,110 | 1,508,142 |
Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations | 17,c | 248,060 | 370,446 | 286,499 | 451,606 |
Deferred Tax Credits and Liabilities | 9 | (14,127,896) | 35,969 | (13,498,737) | (377,901) |
Equity in Affiliates and Subsidiaries | 12 | (2,237,263) | (2,160,418) | (24,941) | (35,109) |
Depreciation and Amortization | 22 | 1,937,155 | 1,639,284 | 2,285,648 | 2,053,665 |
Recognition (Reversal) Allowance for Other Assets Losses | 25 | (13,027) | (11,417) | (23,742) | 92,223 |
Gain (Loss) on Sale of Other Assets | 25 | (45,888) | (1,273) | (35,406) | 14,319 |
Gain (Loss) on Sale of Investments | 25 | (168,588) | - | (168,588) | (6,268) |
Provision for Financial Guarantees | 23 | (7,327) | (36,294) | (7,327) | (36,294) |
Monetary Adjustment of Escrow Deposits | 23 | (203,662) | (387,814) | (235,032) | (449,123) |
Recoverable Taxes | 23 | (112,621) | (50,745) | (133,143) | (76,725) |
Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents | 2,295 | (507) | 2,295 | (507) | |
Effects of Changes in Foreign Exchange Rates on Assets and Liabilities | (33,634,412) | (1,371,336) | (33,634,412) | (1,371,336) | |
Others | (1,310,923) | (47,728) | 61,045 | 257,187 | |
Changes on Assets and Liabilities | 57,257,695 (13,104,291) | 63,710,307 | (12,914,457) | ||
Decrease (Increase) in Interbank Investments | (15,004,827) | 6,733,285 | (12,664,808) | 13,445,445 | |
Decrease (Increase) in Securities and Derivative Financial Instruments | (35,460,745) | (13,242,111) | (38,646,586) | (13,571,648) | |
Decrease (Increase) in Lending and Leasing Operations | (72,538,909) | (25,910,231) | (60,986,124) | (34,063,300) | |
Decrease (Increase) in Deposits on Central Bank of Brazil | 12,961,778 | (1,155,809) | 13,283,959 | (1,187,434) | |
Decrease (Increase) in Other Receivables | (668,010) | (8,795,399) | (1,438,278) | (10,017,083) | |
Decrease (Increase) in Other Assets | (288,866) | 173,312 | (94,379) | 149,521 | |
Net Change on Other Interbank and Interbranch Accounts | (5,275,360) | 1,506,157 | (6,882,789) | 5,056,671 | |
Increase (Decrease) in Deposits | 112,996,858 | 2,075,408 | 111,289,926 | 6,036,734 | |
Increase (Decrease) in Money Market Funding | (3,664,730) | (8,926,561) | (4,777,859) | (9,181,124) | |
Increase (Decrease) in Borrowings | 11,421,142 | 18,704,113 | 9,236,909 | 17,900,148 | |
Increase (Decrease) in Other Liabilities | 52,693,725 | 17,256,065 | 55,488,250 | 15,477,926 | |
Increase (Decrease) in Change in Deferred Income | 85,639 | (17,991) | 292,069 | (59,878) | |
Income Tax Recovered/(Paid) | - | (1,504,529) | (389,983) | (2,900,435) | |
Net Cash Provided by (Used in) Operational Activities | 28,973,868 | 4,542,289 | 42,819,564 | 9,239,018 | |
Investing Activities | |||||
Increase in Equity at Affiliates and Subsidiaries | 12 | (499,000) | (2,046,249) | - | - |
Purchase of Investment | (147) | - | (130) | - | |
Purchase of Fixed Assets | (867,288) | (989,974) | (986,175) | (1,417,067) | |
Purchase of Intangible Assets | (2,984,433) | (1,063,209) | (1,547,010) | (1,182,294) | |
Net Cash Received on Sale/Reduction of Investments | - | - | 4 | 6,699 | |
Acquisition of Minority Residual Interest in Subsidiary | 2,c | (1,601,100) | (1,291,630) | (1,606,000) | (1,292,630) |
Proceeds from Assets not in Use | 445,709 | 453,236 | 461,053 | 479,934 | |
Proceeds from Property for Own Use | 84,269 | 30,309 | 49,059 | 45,036 | |
Proceeds from Affiliates and Subsidiaries | 3,066,644 | 7,254 | 171,213 | 7,254 | |
Dividends and Interest on Capital Received | 1,293,445 | 1,270,187 | (5,165) | 55,210 | |
Net Cash Provided by (Used in) Investing Activities | (1,061,893) | (3,630,076) | (3,463,151) | (3,343,102) | |
Financing Activities | |||||
Purchase of Own Share | 18,d | (110,469) | (178,240) | (110,469) | (178,240) |
Issuance of Long - Term Emissions | 57,025,095 | 46,700,608 | 46,517,680 | 43,827,040 | |
Long - Term Payments | (67,167,344) | (39,609,511) | (68,707,700) | (41,408,783) | |
Subordinated Debts - Payments | - | (9,924,747) | - | (9,924,747) | |
Debt Instruments Eligible to Compose Capital - Payments | - | (328,892) | - | (328,892) | |
Dividends and Interest on Capital Paid | (8,415,750) | (6,039,908) | (8,283,747) | (6,168,340) | |
Increase (decrease) in Minority Interest | - | - | - | (310,294) | |
Capital Increase in Controlled Companies Held by Minority Interest | 12 | - | - | - | 100,000 |
Net Cash Provided by (Used in) Financing Activities | (18,668,468) | (9,380,690) | (30,584,236) | (14,392,256) | |
Exchange Variation on Cash and Cash Equivalents | (2,295) | 507 | (2,295) | 507 | |
Increase (Decrease) in Cash and Cash Equivalents | 9,243,499 | (8,467,970) | 8,772,177 | (8,495,833) | |
Cash and Cash Equivalents at the Beginning of Period | 4 | 21,421,432 | 25,854,948 | 21,443,663 | 25,285,982 |
Cash and Cash Equivalents at the End of Period | 4 | 30,662,636 | 17,386,978 | 30,213,546 | 16,790,149 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 22
* Values expressed in thousands, except when indicated.
Statements of Value Added
Bank | Consolidated | ||||||||
Notes | 01/01 to 09/30/2020 | 01/01 to 09/30/2019 | 01/01 to 09/30/2020 | 01/01 to 09/30/2019 | |||||
Income Related to Financial Operations | 93,353,547 | 61,342,105 | 101,346,732 | 67,691,863 | |||||
Income Related to Bank Charges and Banking Service Fees | 20 | 10,273,772 | 10,914,980 | 13,330,689 | 13,881,523 | ||||
Allowance for Loans Losses | 8,f | (10,719,910) | (7,867,982) | (13,501,276) | (9,696,720) | ||||
Other Revenues and Expenses | (3,819,249) | (4,502,059) | (4,765,454) | (5,652,851) | |||||
Financial Expenses | (80,013,864) | (34,678,748) | (80,901,530) | (34,423,856) | |||||
Third-party Input | (5,622,615) | (5,267,042) | (6,453,764) | (6,142,457) | |||||
Materials, Energy and Others | (183,726) | (188,293) | (195,952) | (197,088) | |||||
Third-Party Services | 22 | (1,367,295) | (1,388,194) | (1,785,083) | (1,753,297) | ||||
Others | (4,071,594) | (3,690,555) | (4,472,729) | (4,192,072) | |||||
Gross Added Value | 3,451,681 | 19,941,254 | 9,055,397 | 25,657,502 | |||||
Retentions | |||||||||
Depreciation and Amortization | 22 | (1,937,155) | (1,639,284) | (2,285,648) | (2,053,665) | ||||
Added Value Produced Net | 1,514,526 | 18,301,970 | 6,769,749 | 23,603,837 | |||||
Added Value Received from Transfer Investments in Affiliates and Subsidiaries | 12 | 2,237,263 | 2,160,418 | 24,941 | 35,109 | ||||
Added Value to Distribute | 3,751,789 | 20,462,388 | 6,794,690 | 23,638,946 | |||||
Added Value Distribution | |||||||||
Employee | 6,008,872 | 0,0% | 6,060,554 | 29,6% | 6,841,258 | 0,0% | 6,854,829 | 29,0% | |
Compensation | 21 | 2,758,105 | 2,886,565 | 3,112,134 | 3,254,268 | ||||
Benefits | 21 | 932,903 | 1,015,876 | 1,069,051 | 1,151,252 | ||||
Government Severance Indemnity Funds for Employees - FGTS | 229,493 | 108,325 | 278,880 | 123,918 | |||||
Others | 2,088,371 | 2,049,788 | 2,381,193 | 2,325,391 | |||||
Taxes and Contributions | 2,359,638 | 0,0% | 1,823,192 | 8,9% | 4,760,485 | 0,0% | 2,603,906 | 11,0% | |
Federal | 1,853,588 | 1,638,147 | 4,125,806 | 2,363,681 | |||||
State | 244 | 32 | 358 | 48 | |||||
Municipal | 505,806 | 185,013 | 634,321 | 240,177 | |||||
Compensation of Third-Party Capital - Rental | 22 | 592,771 | 0,0% | 570,648 | 2,8% | 604,073 | 0,0% | 591,674 | 2,5% |
Remuneration of Interest on Capital | (5,209,492) | 0,0% | 12,007,994 | 58,7% | (5,411,126) | 0,0% | 13,588,537 | 57,5% | |
Interest on Equity | 18,b | 1,659,975 | 1,000,000 | - | 1,000,000 | ||||
Profit Reinvestment | (6,869,467) | 11,007,994 | (5,310,002) | 12,859,112 | |||||
Participation Results of Non-Controlling Stockholders | 18,f | - | - | (101,124) | (270,575) | ||||
Total | 3,751,789 | 0,0% | 20,462,388 | 100,0% | 6,794,690 | 0,0% | 23,638,946 | 100,0% |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 23
-
Values expressed in thousands, except when indicated.
1. General Information
Banco Santander (Brasil) S,A, (Banco Santander or Bank), directly and indirectly controlled by Banco Santander, S,A,, based in Spain (Banco Santander Spain), is the lead institution of the Financial and Prudential Conglomerate (Conglomerate Santander) under the authority of the Brazilian Central Bank (Bacen), established as a corporation, with head headquarters at Avenida Presidente Juscelino Kubitschek, 2041 and 2235 - A Block - Vila Olímpia - São Paulo - SP, Banco Santander operates as a multiple service bank, conducting its operations by means of portfolios such as commercial, investment, loans and advances, mortgage loans, leasing and foreign exchange, Through its subsidiaries, the Bank also operates on the segments of payment industry, shares club management, securities and insurance brokerage operations, consumer finance, payroll-deductible loans, digital platforms, management and recovery of non- performing loans, capitalization and pension plan, The Bank's activities are conducted within the context of a group of institutions that operate on an integrated basis in the financial market, The corresponding benefits and costs of providing services are absorbed between them and are conducted in the normal course of business and under commutative conditions,
2. Presentation of Financial Statements
- Presentation
The individual and condensed consolidated interim financial statements of Banco Santander (Brasil) S,A,, which include its dependence abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with accounting practices adopted in Brazil, established by the Brazilian Corporation Law, National Monetary System (CMN), Central Bank of Brazil (Bacen) and the model of the document provided for in the Accounting Plan of the Institutions of the National Financial System (COSIF) of the Brazilian Securities and Exchange Commission (CVM), in which they do not conflict with the standards issued by the Central Bank and show all information relevant to the financial statements, which are consistent with those used by management in its management,
The CMN Resolution nº 4,720/2019 and Bacen Circular nº 3,959/2019 established general criteria and procedures for the preparation and disclosure of the Financial Statements effective from January / 2020, including: the presentation of the Statement of Comprehensive Income and the presentation of Financial Statements Condensed intermediates, The changes made by them are being contemplated from this Financial Statement,
The consolidated financial statements include the Bank and its subsidiaries indicated in Note 2,b,1 and investment funds in Note 2,b,3, where Santander Conglomerate companies are the main beneficiaries or holders of the main obligations, The portfolios of these investment funds are classified by type of operation and are distributed in the same categories in which they were originally allocated,
In the preparation of the consolidated financial statements, equity interests, relevant balances receivable and payable, income and expenses arising from transactions between branches in the country, foreign branches and subsidiaries, unrealized results between these companies were eliminated and the participation minority shareholders' equity and income,
All the relevant information related to Banco Santander's financial statements, and only them, are being evidenced, and correspond to those used by Banco Santander´s management,
During the preparation of the consolidated financial statements the information regarding equity in subsidiaries, significant receivable and payable balances, revenues and expenses arising from transactions between domestic branches, foreign branches and subsidiaries, unrealized profits between these entities and non-controlling stockholders participation are stated separately in stockholders' equity and in the income statements,
Leasing operations have been reclassified in order to reflect its financial position according to the financial method,
The preparation of financial statements requires Management estimates that affect the reported amounts of assets and liabilities, disclosure of provision and contingent liabilities and the reported amounts of revenues and expenses for the reporting periods, Since Management's judgment involves making estimates concerning the probability of future events, actual amounts could differ from those estimates, The main estimates are provision of allowance for loan losses, realization of the tax credit, contingent liabilities, pension plan and the fair value of financial assets,
The Board of Directors authorized the issuance of the Financial Statements of the exercise ended September 30, 2020 at the meeting held on October 26, 2020,
The consolidated interim financial statements based on international accounting standards issued by the International Accounting Standards Board (IASB) for the exercise ended on September 30, 2020 will be disclosed in a legal term, at the website www,santander,com,br/ri,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 24
- Values expressed in thousands, except when indicated.
- Affiliates, Subsidiaries and Jointly Controlled Entities b,1) Affiliates and Subsidiaries - Scope of Consolidation
Quantity of Shares or | |||||
Quotas Owned (in | |||||
Thousands) | |||||
Common | |||||
Shares and | Preferred | Direct | |||
Investments | Activity | Quotas | Shares Participation Participation | ||
Controlled by Banco Santander | |||||
Santander Leasing S,A, Arrendamento Mercantil (Santander | |||||
Leasing) | Leasing | 85 | - | 78,58% | 100,00% |
Santander Brasil Administradora de Consórcio Ltda, (Santander | |||||
Brasil Consórcio) | Buying Club | 238,886 | - | 100,00% | 100,00% |
Banco Bandepe S,A, | Bank | 3,589 | - | 100,00% | 100,00% |
Banco RCI Brasil S,A, | Bank | 81 | 81 | 39,89% | 39,89% |
Aymoré Crédito, Financiamento e Investimento S,A, (Aymoré | |||||
CFI) | Financial | 2,877 | - | 100,00% | 100,00% |
Santander CCVM | Broker | 14,067,673 | 14,067,673 | 99,99% | 100,00% |
Santander Corretora de Seguros, Investimentos e Serviços S,A, | |||||
(Santander Corretora de Seguros) | Other Activities | 7,184 | - | 100,00% | 100,00% |
Getnet S,A, (Note 2,c,i & 2,c,e) | Payment Institution | 69,565 | - | 100,00% | 100,00% |
Sancap Investimentos e Participações S,A, (Sancap) | Holding | 23,538,159 | - | 100,00% | 100,00% |
Santander Brasil EFC | Financial | 75 | - | 100,00% | 100,00% |
Recovery of | |||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S,A, | Defaulted Credits | 1,464,627 | - | 100,00% | 100,00% |
Santander Holding Imobiliária S,A, (Note 2,c,h) | Holding | 481,196 | - | 100,00% | 100,00% |
Santander Brasil Tecnologia S,A, | Tecnology | 45,371 | - | 100,00% | 100,00% |
Rojo Entretenimento S,A, | Other Activities | 7,417 | - | 94,60% | 94,60% |
BEN Benefícios e Serviços S,A, (BEN Benefícios) | Other Activities | 90,000 | - | 100,00% | 100,00% |
Esfera Fidelidade S,A, | Other Activities | 10,001 | - | 100,00% | 100,00% |
Banco Olé Bonsucesso Consignado S,A, (Olé Consignado) | |||||
100,00% | Bank | 435,599 | - | 60,00% | 100,00% |
Bosan Participações S,A, | Other Activities | 303,056 | 93,718 | 100,00% | 100,00% |
Sanb Promotora de Vendas e Cobrança Ltda, | Other Activities | 6,950 | - | 100,00% | 100,00% |
Santander Tecnologia e Inovação Ltda, | Other Activities | 5,045 | - | 100,00% | 100,00% |
Toque Fale Serviços de Telemarketing Ltda, (Toque Fale) | |||||
(Nota 2,c,c) | Other Activities | 75,050 | - | 100,00% | 100,00% |
Controlled by Aymoré CFI | |||||
Banco PSA | Bank | 105 | - | 0,00% | 50,00% |
Banco Hyundai Capital Brasil S,A, (Nota 2,c,j,1) | Bank | 150,000 | - | 0,00% | 50,00% |
Controlled by Santander Leasing | |||||
PI Distribuidora de Títulos e Valores Mobiliários S,A, | Leasing | 182 | - | 0,00% | 100,00% |
Controlled by Sancap | |||||
Santander Capitalização S,A, (Santander Capitalização) | Capitalization | 64,615 | - | 0,00% | 100,00% |
Evidence Previdência S,A, | Private Pension | 42,819,564 | - | 0,00% | 100,00% |
Controlada da Santander Holding Imobiliária S,A, | |||||
Summer Empreendimentos Ltda, | Other Activities | 17,084 | - | - | 100,00% |
Controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S,A, | |||||
Collection and | |||||
Return Capital Serviços de Recuperação de Créditos S,A, (Nota | Recover of Credit | ||||
2,c,d) | Management | 200 | - | 0,00% | 100,00% |
Controlled by Return Capital Serviços de Recuperação de Créditos S,A, (current name of Ipanema Empreendimentos e Participações S,A,)
Return Gestão de Recursos S,A, (atual denominação social da | Resources | ||||
Gestora de Investimentos Ipanema S,A,) | Management | 11 | - | 0,00% | 100,00% |
Jointly Controlled Companies by Sancap | |||||
Santander Auto S,A, (Nota 2,c,g) | Other Activities | 22,452 | - | 0,00% | 50,00% |
Controlled by Getnet S,A | |||||
Auttar HUT Processamento de Dados Ltda, (Auttar HUT) | Other Activities | 3,865 | - | 0,00% | 100,00% |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 25
* Values expressed in thousands, except when indicated. b,2) Jointly Controlled - Equity Method
Quantity of Shares or | |||||
Quotas Owned (in | |||||
Thousands) | |||||
Common | |||||
Shares and | Preferred | Direct | |||
Investments | Activity | Quotas | Shares Participation Participation | ||
Jointly Controlled Companies by Banco Santander | |||||
Norchem Participações e Consultoria S,A, (Norchem | |||||
Participações) | Other Activities | 950 | - | 50,00% | 50,00% |
Estruturadora Brasileira de Projetos S,A, - EBP (EBP) | Other Activities | 3,859 | 2,953 | 11,11% | 11,11% |
Gestora de Inteligência de Crédito S,A, (Gestora de Crédito) | Credit Bureau | 3,560 | 3,560 | 20,00% | 20,00% |
Campo Grande Empreendimentos Ltda, | Other Activities | 255 | - | 25,32% | 25,32% |
Jointly Controlled Companies by Santander Corretora de Seguros | |||||
Webmotors S,A, | Other Activities | 425,126,827 | - | - | 70,00% |
TecBan - Tecnologia Bancária S,A, (TecBan) | Other Activities | 743,944 | 68,771 | - | 18,98% |
PSA Corretora de Seguros e Serviços Ltda, (PSA Corretora de | |||||
Seguros) | Insurance Broker | 450 | - | - | 50,00% |
Hyundai Corretora de Seguros Ltda, (Nota 2,c,j,2) | Insurance Broker | 1,000 | - | - | 50,00% |
Controlled by Webmotors S,A, | |||||
Loop Gestão de Pátios S,A, (Loop) | Other Activities | 23,243 | - | - | 51,00% |
Controlled by TecBan | |||||
Tbnet Comércio, Locação e Administração Ltda, (Tbnet) | Other Activities | 539,353 | - | - | 100,00% |
Controlled by Tebnet | |||||
Tbforte Segurança e Transporte de Valores Ltda, (Tbforte) | Other Activities | 517,505 | - | - | 100,00% |
Affiliate of Banco Santander | |||||
Norchem Holdings e Negócios S,A, (Norchem Holdings) | Other Activities | 1,679 | - | 29,00% | 29,00% |
b,3) Investment Funds Consolidated
- Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior (Santander FI Amazonas);
- Santander Fundo de Investimento Diamantina Multimercado Crédito Privado de Investimento no Exterior (Santander FI Diamantina);
- Santander Fundo de Investimento Guarujá Multimercado Crédito Privado de Investimento no Exterior (Santander FI Guarujá);
- Santander Fundo de Investimento Unix Multimercado Crédito Privado (Santander FI Unix);
- Santander Fundo de Investimento SBAC Referenciado DI Crédito Privado (Santander FI SBAC);
- Santander Paraty QIF PLC (Santander Paraty) (4);
- Venda de Veículos Fundo de Investimento em Direitos Creditórios (Venda de Veículos FIDC) (1);
- Fundo de Investimento em Direitos Creditórios RN Brasil - Financiamento de Veículos (FI RN Brasil - Financiamento de Veículos) (2);
- Prime 16 - Fundo de Investimento Imobiliário (atual denominação do BRL V - Fundo de Investimento Imobiliário - FII) (3);
- Santander FI Hedge Strategies Fund (Santander FI Hedge Strategies) (4);
- Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema VI - Não Padronizado (Fundo Investimento Ipanema NPL VI) (5);
- Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema V - Não Padronizado (Fundo Investimento Ipanema NPL V);
- Santander Hermes Multimercado Crédito Privado Infraestrutura Fundo de Investimentos; and
- Fundo de Investimentos em Direitos Creditórios Atacado - Não Padronizado (6),
- The carmaker Renault (not belonging to the Conglomerate Santander) sells its trade receivables to the Fund, This Fund buys only trade receivables from Renault carmaker, In turn, the Banco RCI Brasil S,A, (Note 14) owns 100% of its subordinated shares,
- Banco RCI Brasil S,A, sold receivables (CDC portfolio) to FI RN Brasil - Financiamento de Veículos, The senior shares will have only one investor, Banco RCI Brasil S,A, holds 100% of subordinated shares,
- Banco Santander was a creditor for certain overdue credit operations that had real estate as collateral, The operation for the recovery of these credits consists of the contribution of properties as collateral to the capital of the Real Estate Investment Fund and the consequent transfer of the Fund's quotas to Banco Santander, by means of a payment in payment of the aforementioned credit operations,
- Banco Santander, through its subsidiaries, holds the risks and benefits of Santander Paraty and the Santander FI Hedge Strategies Subfund, resident in Ireland, and both are fully consolidated in its Consolidated Financial Statements, In the Irish market, an investment fund can not act directly and, for that reason, it was necessary to create another structure (a sub-fund), Santander FI Hedge Strategies, Santander Paraty does not have a financial position, and all position is derived from the financial position of Santander FI Hedge Strategies,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 26
- Values expressed in thousands, except when indicated.
- Refers to a structure in which Banco Santander sold certain credit operations, which had already been transferred to losses (operations overdue for more than 360 days) to this fund, Atual Serviços de Recuperação de Creditos e Meios Digitais S,A, (current corporate name of Atual Companhia Securitizadora de Creditos Financeiros) (Note 2,b,1), a company controlled by Banco Santander, holds 100% of the shares in this fund,
- This fund started to be consolidated in October 2017 and is indirectly controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S,A,
- Corporate Restructuring
Several social movements were implemented in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander,
i) Disposal of the equity interest held in Super Payments and Administration of Means of Electronic Media S,A,
On February 28, 2020, the sale to Superdigital Holding Company, SL of a company indirectly controlled by Banco Santander, SA, of the shares representing the entire share capital of Super Payments and Administração de Meios Eletrônico SA ("Superdigital") for the amount R$270 million, As a result, the Company is no longer a shareholder of Superdigital,
ii) Put option of equity interest in Banco Olé Bonsucesso Consignado S,A,
On March 14, 2019, the minority shareholder of Banco Olé Bonsucesso Consignado S,A, (Olé Consignado) formalized its interest to exercise the put option right provided in the Investment Agreement, executed on July 30, 2014, to sell its 40% equity interest in the capital stock of Olé Consignado to Banco Santander (Brazil) S,A, ("Banco Santander"),
On December 20, 2019, the parties entered into a binding agreement for the acquisition, by Banco Santander, of the all the shares issued by Bosan Participações S,A, (holding company whose only asset are shares representing 40% of the capital of Banco Olé), for the total amount of R$1,6 billion ("Operation"), to be paid on the closing date of the Operation,
On January 31, 2020, the Company and the shareholders of Bosan Participações SA ("Bosan") concluded the definitive agreement and signed the purchase and sale agreement for 100% of the shares issued by Bosan, through the transfer of Bosan's shares to Company and payment to sellers in the total amount of R$1,608,772,783,47, As a result, Banco Santander became, directly and indirectly, the holder of 100% of Banco Olé's shares,
iii) Acquisition of direct equity interest in Toque Fale Serviços de Telemarketing LTDA,
On March 24, 2020, the Company acquired shares representing the total share capital of Toque Fale Serviços de Telemarketing LTDA ("Toque Fale") for the amount of R$1,099,854,72, corresponding to the equity value of the quotas on February 29, 2020, previously held by Getnet Adquirência e Serviços para Means of Payment SA and Auttar HUT Processamento de Dados LTDA, As a result, the Company became a direct shareholder of Toque Fale and holder of 100% of its capital,
iv) Acquisition of Summer Empreendimentos Ltda,
On May 14, 2019, Banco Santander (Brasil) S,A, and its wholly owned subsidiary Santander Holding Imobiliária S,A, ("SHI") entered into a binding document with the partners of Summer Empreendimentos Ltda, ("Summer") establishing the terms of the negotiation of purchase and sale of quotas representing the totality of Summer's share capital, The acquisition was approved by BACEN on September 16, 2019 and concluded on September 20, 2019, so that SHI now holds 99,999% and Banco Santander 0,001% of the shares representing Summer's share capital, Due to the Entity's sale plan in the short term, Summer was initially recorded as Non- Current Assets Held by the Sale, at cost, In June 2020, with the failure to execute the established plan, Summer became part of the scope of Banco Santander Consolidated Financial Statements,
v) Incorporations of Banco Olé Consignado and Bosan Participações S,A,
On August 31, 2020, the shareholders of Banco Santander (Brasil) SA ("Santander Brasil") approved the merger, by Santander Brasil, of Banco Olé Consignado SA and Bosan Participações SA, The mergers (i) did not result in an increase in the Santander Brasil's share capital; and (ii) are subject to approval by the Central Bank of Brazil,
3. Significant Accounting Policies
There was no change in the accounting practices and policies adopted by the Bank for the base date of September 30, 2020, These practices are described in note 3 of the Individual and Consolidated Financial Statements of December 31, 2019,
Resolution nº, 4,782 of March 16, 2020, subsequently amended by Resolution nº, 4,791 of March 26, 2020, which came into force as of its publication date, determines that in cases of restructuring of credit operations carried out up to 30 As of September 2020, the restructuring is no longer an indicator for considering problematic assets, In case this classification has already been made considering exclusively the restructuring characteristic, the risk exposure as a problematic asset can be reversed, The Resolution determines that
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 27
* Values expressed in thousands, except when indicated.
this rule does not apply to operations that were already classified as problematic on the date of publication of the Resolution and operations that present evidence that they will not be honored in the new conditions,
Resolution nº, 4,803 of April 9, 2020, which came into force as of its publication date and allows operations renegotiated in the period from March 1 to September 30, 2020 to be reclassified to the level at which they were classified on the day February 29, 2020, except for operations that on February 29, 2020 had a delay equal to or greater than fifteen days in the payment of the installment of principal or charges and operations that show evidence that they will not be honored in the new conditions,
Resolution No, 4,797 was revoked, and replaced by Resolution No, 4820, which takes effect from May 29, 2020 and determines that financial institutions and other institutions authorized to operate by the Central Bank of Brazil are prevented from:
- remunerate own capital, including in the form of prepayment, above:
- amount equivalent to the minimum mandatory dividend, including in the form of interest on capital, in the case of institutions incorporated in the form of a joint stock company;
- amount equivalent to the minimum profit distribution established in the articles of association in the case of institutions incorporated in the form of limited liability companies
- repurchase own shares (it will only be allowed if through stock exchanges or an organized over-the-counter market, up to the limit of 5% (five percent) of the shares issued, including the shares recorded in treasury at the entry into force of this Resolution);
- Reduce the social capital, except in cases that are mandatory, in accordance with the governing legislation or when approved by the Central Bank;
- increase any remuneration, fixed or variable, of directors and members of the board of directors, in the case of corporation, administrators, in the case of limited companies;
The amounts subject to the aforementioned prohibitions cannot be subject to a future disbursement obligation, and these prohibitions apply as of the publication date of Resolution No, 4,797 (on April 6, 2020) and December 31, 2020 and must be observed regardless of the maintenance of funds in an amount higher than the Additional Principal Capital (ACP), which are dealt with in Resolutions No, 4,193, of March 1, 2013, and 4,783, of March 16, 2020,
Any anticipation of the amounts mentioned in items "a" and "b" of item I must be carried out onservatively, consistent and compatible with the uncertainties of the current economic situation,
4. Cash and Cash Equivalents
Bank | ||||
9/30/2020 | 12/31/2019 | 9/30/2019 | 12/31/2018 | |
Cash | 15,148,271 | 9,543,649 | 9,914,117 | 11,358,459 |
Interbank Investments | 15,514,365 | 11,877,783 | 7,472,861 | 14,496,489 |
Money Market Investments | 10,315,860 | 110,746 | 643,358 | 4,925,769 |
Interbank Deposits | 1,316,637 | 1,465,065 | 1,891,109 | 1,702,653 |
Foreign Currency Investments | 3,881,868 | 10,301,972 | 4,938,394 | 7,868,067 |
Total | 30,662,636 | 21,421,432 | 17,386,978 | 25,854,948 |
Consolidated | ||||
9/30/2020 | 31/12/2019 | 9/30/2019 | 12/31/2018 | |
Cash | 15,338,105 | 9,924,644 | 10,306,910 | 11,629,112 |
Interbank Investments | 14,875,441 | 11,519,019 | 6,483,239 | 13,656,870 |
Money Market Investments | 10,315,860 | 110,746 | 643,358 | 4,925,769 |
Interbank Deposits | 677,713 | 1,105,446 | 900,222 | 862,449 |
Foreign Currency Investments | 3,881,868 | 10,302,827 | 4,939,659 | 7,868,652 |
Total | 30,213,546 | 21,443,663 | 16,790,149 | 25,285,982 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 28
-
Values expressed in thousands, except when indicated.
5. Interbank Investments
Bank | |||||
9/30/2020 | 12/31/2019 | ||||
Up to 3 | From 3 to 12 | Over 12 | Total | Total | |
Months | Months | Months | |||
Money Market Investments | 28,351,346 | 20,905,702 | - | 49,257,048 | 28,703,365 |
Own Portfolio | 5,338,294 | 3,868,962 | - | 9,207,256 | 821,425 |
Financial Treasury Bills - LFT | 121,637 | 654,829 | - | 776,466 | 10,500 |
National Treasury Bills - LTN | 2,573,014 | 745,871 | - | 3,318,885 | - |
National Treasury Notes - NTN | 2,643,643 | 2,468,262 | - | 5,111,905 | 810,925 |
Third-party Portfolio | 7,484,957 | - | - | 7,484,957 | 9,011,703 |
National Treasury Bills - LTN | - | - | - | - | 457,427 |
National Treasury Notes - NTN | 7,484,957 | - | - | 7,484,957 | 8,554,276 |
Sold Position | 15,528,095 | 17,036,740 | - | 32,564,835 | 18,870,237 |
Financial Treasury Bills - LFT | - | 593,860 | - | 593,860 | |
National Treasury Bills - LTN | 2,793,690 | 5,328,414 | - | 8,122,104 | 2,906,634 |
National Treasury Notes - NTN | 12,734,405 | 11,114,466 | - | 23,848,871 | 15,963,603 |
Interbank Deposits | 15,673,900 | 37,398,318 | 28,359,805 | 81,432,023 | 76,924,193 |
Foreign Currency Investments | 3,881,868 | - | - | 3,881,868 | 10,301,972 |
Total | 47,907,114 | 58,304,020 | 28,359,805 | 134,570,939 | 115,929,530 |
Consolidated | |||||
9/30/2020 | 12/31/2019 | ||||
Up to 3 | From 3 to 12 | Over 12 | Total | Total | |
Months | Months | Months | |||
Money Market Investments | 28,854,933 | 20,159,831 | - | 49,014,764 | 28,703,365 |
Own Portfolio | 5,841,881 | 3,123,091 | - | 8,964,972 | 821,425 |
Financial Treasury Bills - LFT | 71,706 | 654,829 | - | 726,535 | 10,500 |
National Treasury Bills - LTN | 3,127,107 | - | - | 3,127,107 | - |
National Treasury Notes - NTN | 2,643,068 | 2,468,262 | - | 5,111,330 | 810,925 |
Third-party Portfolio | 7,484,957 | - | - | 7,484,957 | 9,011,703 |
National Treasury Bills - LTN | - | - | - | - | 457,427 |
National Treasury Notes - NTN | 7,484,957 | - | - | 7,484,957 | 8,554,276 |
Sold Position | 15,528,095 | 17,036,740 | - | 32,564,835 | 18,870,237 |
Financial Treasury Bills - LFT | - | 593,860 | - | 593,860 | |
National Treasury Bills - LTN | 2,793,690 | 5,328,414 | - | 8,122,104 | 2,906,634 |
National Treasury Notes - NTN | 12,734,405 | 11,114,466 | - | 23,848,871 | 15,963,603 |
Interbank Deposits | - | 4,546,701 | 1,956,747 | 6,503,448 | 4,361,302 |
Foreign Currency Investments | 3,881,868 | - | - | 3,881,868 | 10,302,827 |
Total | 32,736,801 | 24,706,532 | 1,956,747 | 59,400,080 | 43,367,494 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 29
-
Values expressed in thousands, except when indicated.
6. Securities and Derivatives Financial Instruments
- Securities
- By Category
Bank | Consolidated | ||||||||||||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | ||||||||||
Effect of Adjustment to Fair | Effect of Adjustment to Fair | ||||||||||||
Value on: | Value on: | ||||||||||||
Amortized | Carrying | Carrying | Amortized | Carrying | Carrying | ||||||||
Cost | Income | Equity | Amount | Amount | Cost | Income | Equity | Amount | Amount | ||||
Trading Securities | 45,956,934 | (324,735) | - | 45,632,199 | 32,557,896 | 55,516,098 | (61,798) | - | 55,454,301 | 35,977,471 | |||
Government Securities | 45,358,893 | (322,945) | - | 45,035,948 | 30,755,634 | 52,186,331 | (60,007) | - | 52,126,324 | 33,158,573 | |||
Private Securities | 598,041 | (1,790) | - | 596,251 | 1,802,262 | 3,329,767 | (1,790) | - | 3,327,977 | 2,818,898 | |||
Available-for-Sale Securities | 131,503,185 | 2,374,067 | 2,235,516 | 136,112,768 | 118,508,274 | 137,638,462 | 2,374,067 | 2,351,940 | 142,364,469 | 128,296,445 | |||
Government Securities | 100,611,810 | 2,299,446 | 1,640,045 | 104,551,301 | 89,526,633 | 107,399,861 | 2,299,446 | 1,753,835 | 111,453,142 | 98,943,695 | |||
Private Securities | 30,891,375 | 74,620 | 595,471 | 31,561,467 | 28,981,641 | 30,238,602 | 74,620 | 598,104 | 30,911,326 | 29,352,750 | |||
Held-to-Maturity Securities | 16,438,103 | - | - | 16,438,103 | 11,739,597 | 16,438,103 | - | - | 16,438,103 | 11,739,597 | |||
Government Securities | 15,899,247 | - | - | 15,899,247 | 11,275,488 | 15,899,247 | - | - | 15,899,247 | 11,275,488 | |||
Private Securities | 538,856 | - | - | 538,856 | 464,109 | 538,856 | - | - | 538,856 | 464,109 | |||
Total Securities | 193,898,223 | 2,049,331 | 2,235,516 | 198,183,070 | 162,805,767 | 209,592,664 | 2,312,269 | 2,351,940 | 214,256,873 | 176,013,513 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 30
-
Values expressed in thousands, except when indicated.
II) Trading Securities
Bank | ||||||||||||
09/30/2020 | 12/31/2019 By Maturity | 09/30/2020 | ||||||||||
Amortized | Adjustment to Fair | Carrying | Carrying | Without | Up to 3 | From 3 to 12 | From 1 to 3 | |||||
Trading Securities | Cost | Value - Income | Amount | Amount | Maturity | Months | Months | Years | Over 3 Years | Total | ||
Government Securities | 45,358,893 | (322,945) | 45,035,948 | 30,755,634 | - | 3,547,971 | 11,802,501 | 11,206,544 | 18,478,932 | 45,035,948 | ||
Financial Treasury Bills - LFT | 2,014,015 | (2,952) | 2,011,063 | 3,158,889 | - | - | 1,237,767 | 132,354 | 640,942 | 2,011,063 | ||
National Treasury Bills - LTN | 14,553,580 | (59,439) | 14,494,141 | 6,838,515 | - | 3,323,612 | 5,226,633 | 2,592,041 | 3,351,856 | 14,494,141 | ||
National Treasury Notes - NTN | 27,980,673 | (258,093) | 27,722,580 | 20,687,308 | - | 212,513 | 4,589,514 | 8,465,005 | 14,455,549 | 27,722,580 | ||
Agricultural Debt Securities - TDA | 50,706 | 3,572 | 54,279 | 70,922 | - | 11,244 | 16,081 | 13,629 | 13,325 | 54,279 | ||
Brazilian Foreign Debt Notes | 737,884 | (5,684) | 732,200 | - | - | - | 731,530 | 246 | 424 | 732,200 | ||
Debentures | 22,035 | (349) | 21,686 | - | - | 603 | 976 | 3,270 | 16,837 | 21,686 | ||
Private Securities | 598,041 | (1,790) | 596,251 | 1,802,262 | 247,432 | 9,838 | 19,711 | 24,765 | 294,505 | 596,251 | ||
Shares | 1 | (1) | 0 | - | 0 | - | - | - | - | 0 | ||
Investment Fund Shares | 241,806 | 5,626 | 247,432 | 834,063 | 247,432 | - | - | - | - | 247,432 | ||
Debentures | 248,224 | (4,130) | 244,094 | 439,819 | - | 9,838 | 19,201 | 11,395 | 203,660 | 244,094 | ||
Eurobonds | - | - | - | 492,774 | - | - | - | - | - | - | ||
Certificates of Real Estate Receivables - CRI | 18,829 | (377) | 18,452 | 22,869 | - | - | - | 4,795 | 13,656 | 18,452 | ||
Certificates of Agribusiness Receivables - CRA | 89,182 | (2,908) | 86,273 | 12,737 | - | - | 510 | 8,575 | 77,189 | 86,273 | ||
Total | 45,956,934 | (324,735) | 45,632,199 | 32,557,896 | 247,432 | 3,557,809 | 11,822,211 | 11,231,309 | 18,773,437 | 45,632,199 | ||
Consolidated | ||||||||||||
09/30/2020 | 12/31/2019 By Maturity | 09/30/2020 | ||||||||||
Amortized | Adjustment to Fair | Carrying | Carrying | Without | Up to 3 | From 3 to 12 | From 1 to 3 | |||||
Trading Securities | Cost | Value - Income | Amount | Amount | Maturity | Months | Months | Years | Over 3 Years | Total | ||
Government Securities | 52,186,331 | (60,007) | 52,126,324 | 33,158,573 | - | 3,547,971 | 16,464,731 | 11,266,064 | 20,847,557 | 52,126,324 | ||
Financial Treasury Bills - LFT | 6,871,505 | (5,034) | 6,866,471 | 3,530,356 | - | - | 5,737,593 | 191,873 | 937,005 | 6,866,471 | ||
National Treasury Bills - LTN | 14,552,790 | (59,439) | 14,493,352 | 6,838,515 | - | 3,323,612 | 5,226,633 | 2,592,041 | 3,351,066 | 14,493,352 | ||
National Treasury Notes - NTN | 29,951,411 | 6,926 | 29,958,337 | 22,718,780 | - | 212,513 | 4,751,918 | 8,465,005 | 16,528,901 | 29,958,337 | ||
Agricultural Debt Securities - TDA | 50,706 | 3,572 | 54,279 | 70,922 | - | 11,244 | 16,081 | 13,629 | 13,325 | 54,279 | ||
Brazilian Foreign Debt Notes | 737,884 | (5,684) | 732,200 | - | - | - | 731,530 | 246 | 424 | 732,200 | ||
Debentures | 22,035 | (349) | 21,686 | - | - | 603 | 976 | 3,270 | 16,837 | 21,686 | ||
Private Securities | 3,329,767 | (1,790) | 3,327,977 | 2,818,898 | 2,005,732 | 9,838 | 52,176 | 24,765 | 1,235,466 | 3,327,977 | ||
Shares | 1,262,625 | (1) | 1,262,624 | 665,075 | 1,262,624 | - | - | - | - | 1,262,624 | ||
Investment Fund Real Estate | 737,481 | 5,626 | 743,108 | 1,068,068 | 743,108 | - | - | - | - | 743,108 | ||
Investment Fund Shares | - | - | - | 36,067 | - | - | - | - | - | - | ||
Debentures | 1,179,161 | (4,130) | 1,175,031 | 439,819 | - | 9,838 | 19,201 | 11,395 | 1,134,597 | 1,175,031 | ||
Eurobonds | 10,024 | - | 10,024 | 492,774 | - | - | - | - | 10,024 | 10,024 | ||
Certificates of Real Estate Receivables - CRI | 18,829 | (377) | 18,452 | 22,869 | - | - | - | 4,795 | 13,656 | 18,452 | ||
Certificates of Agribusiness Receivables - CRA | 89,182 | (2,908) | 86,273 | 12,737 | - | - | 510 | 8,575 | 77,189 | 86,273 | ||
Bill of Exchange | 32,465 | - | 32,465 | 81,489 | - | - | 32,465 | - | - | 32,465 | ||
Total | 55,516,098 | (61,798) | 55,454,301 | 35,977,471 | 2,005,732 | 3,557,809 | 16,516,907 | 11,290,829 | 22,083,024 | 55,454,301 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 31
- Values expressed in thousands, except when indicated.
III) Available-for-Sale Securities
09/30/2020 | 12/31/2019 | ||||
Effect of Adjustment to Fair | |||||
Value on: | |||||
Amortized | Carrying | Carrying | |||
Available-for-Sale Securities | Cost | Income | Equity | Amount | Amount |
Government Securities | 100,611,810 | 2,299,446 | 1,640,045 | 104,551,301 | 89,526,633 |
Treasury Certificates - CFT | 1,177 | - | 160 | 1,336 | 1,165 |
Securitized Credit | 548 | - | 27 | 575 | - |
Financial Treasury Bills - LFT | 20,642,477 | - | (113,080) | 20,529,397 | 11,151,613 |
National Treasury Bills - LTN | 33,267,087 | 565,002 | (167,467) | 33,664,622 | 30,984,931 |
National Treasury Notes - NTN (3) | 43,031,685 | 1,734,444 | 1,904,060 | 46,670,189 | 47,388,924 |
Mexican Foreign Debt Bonds | 2,094,552 | - | 16,398 | 2,110,949 | - |
Brazilian Foreign Debt Bonds (Global Bonds) | 1,574,284 | - | (52) | 1,574,232 | - |
Private Securities | 30,891,375 | 74,620 | 595,471 | 31,561,467 | 28,981,641 |
Shares | 320 | - | (270) | 50 | 60 |
Investment Funds | 2,161,400 | - | (9,192) | 2,152,207 | 3,963,540 |
Debentures (1) | 13,659,879 | 74,620 | 428,337 | 14,162,836 | 11,915,052 |
Promissory Notes - NP | 5,313,396 | - | 30,130 | 5,343,526 | 4,696,855 |
Financial Bills - LF | 260,171 | - | 6,250 | 266,421 | 192,804 |
Certificates of Real Estate Receivables - CRI | 22,038 | - | (165) | 21,873 | 36,680 |
Certificates of Agribusiness Receivables - | |||||
CRA | 40,584 | - | (23) | 40,561 | 36,680 |
Brazilian Foreign Debt Bonds (Global Bonds) | 3,404,280 | - | 109,815 | 3,514,096 | 3,311,195 |
Rural Product Note - CPR | 6,029,308 | - | 30,588 | 6,059,896 | 4,828,775 |
Total | 131,503,185 | 2,374,067 | 2,235,516 | 136,112,768 | 118,508,274 |
Bank | |||||
By Maturity | 09/30/2020 | ||||
Without | Up to 3 From 3 to 12 | From 1 to 3 | |||
Maturity | Months | Months | Years | Over 3 Years | Total |
- | 2,588,679 | 17,873,670 | 23,452,444 | 60,636,508 | 104,551,301 |
- | - | 164 | 1,172 | - | 1,336 |
- | 151 | 424 | - | 0 | 575 |
- | - | 3,216,061 | 6,959,914 | 10,353,421 | 20,529,397 |
- | - | 11,326,323 | 7,485,638 | 14,852,662 | 33,664,622 |
- | 26,388 | 3,330,698 | 9,005,719 | 34,307,384 | 46,670,189 |
- | 2,110,949 | - | - | - | 2,110,949 |
- | 451,191 | - | - | 1,123,042 | 1,574,232 |
2,266,476 | 916,773 | 6,909,117 | 9,557,394 | 11,911,708 | 31,561,467 |
50 | - | - | - | - | 50 |
2,152,207 | - | - | - | - | 2,152,207 |
733 | 93,693 | 1,370,702 | 5,136,172 | 7,561,537 | 14,162,836 |
36,037 | 177,042 | 2,788,464 | 2,213,853 | 128,131 | 5,343,526 |
- | - | - | 266,421 | - | 266,421 |
- | - | 18,293 | - | 3,580 | 21,873 |
- | - | - | - | 40,561 | 40,561 |
- | - | - | - | 3,514,096 | 3,514,096 |
77,448 | 646,039 | 2,731,658 | 1,940,947 | 663,804 | 6,059,896 |
2,266,476 | 3,505,451 | 24,782,787 | 33,009,837 | 72,548,216 | 136,112,768 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 32
* Values expressed in thousands, except when indicated.
09/30/2020 | 12/31/2019 | ||||||||
Effect of Adjustment to Fair | |||||||||
Value on: | |||||||||
Amortized | Carrying | Carrying | |||||||
Available-for-Sale Securities | Cost | Income | Equity | Amount | Amount | ||||
Government Securities | 107,399,861 | - | 2,299,446 | - | 1,753,835- | 111,453,142 | - | 98,943,695 | |
Treasury Certificates - CFT | 1,177 | - | 160 | 1,336 | 1,165 | ||||
Securitized Credit | 548 | - | 27 | 575 | - | ||||
Financial Treasury Bills - LFT | 23,077,662 | - | (117,342) | 22,960,320 | 16,547,365 | ||||
National Treasury Bills - LTN | 34,989,367 | 565,002 | (109,151) | 35,445,218 | 32,500,648 | ||||
National Treasury Notes - NTN | 45,662,271 | 1,734,444 | 1,963,797 | 49,360,512 | 49,894,517 | ||||
Mexican Foreign Debt Bonds | 2,094,552 | - | 16,398 | 2,110,949 | - | ||||
Brazilian Foreign Debt Bonds (Global | |||||||||
Bonds) | 1,574,284 | - | (52) | 1,574,232 | - | ||||
Private Securities | 30,238,602 | 74,620 | 598,104 | 30,911,326 | 29,352,750 | ||||
Shares | 47,541 | - | (270) | 47,271 | 82,387 | ||||
Investment Fund Shares in Participation - | |||||||||
FIP | 1,450,099 | - | (9,192) | 1,440,907 | 3,082,832 | ||||
Investment Fund Shares | 34,190 | - | 2,633 | 36,823 | 57,531 | ||||
Debentures | 13,636,994 | 74,620 | 428,337 | 14,139,952 | 13,063,691 | ||||
Eurobonds | 3,404,280 | - | 109,815 | 3,514,096 | 3,311,195 | ||||
Promissory Notes - NP | 5,313,396 | - | 30,130 | 5,343,526 | 4,696,855 | ||||
Financial Bills - LF | 260,171 | - | 6,250 | 266,421 | 192,804 | ||||
Certificates of Real Estate Receivables - CRI | 22,038 | - | (165) | 21,873 | 36,680 | ||||
Certificates of Agribusiness Receivables - | |||||||||
CRA | 40,584 | - | (23) | 40,561 | - | ||||
Rural Product Note - CPR | 6,029,308 | - | 30,588 | 6,059,896 | 4,828,775 | ||||
Total | 137,638,462 | 2,374,067 | 2,351,940 | 142,364,469 | 128,296,445 |
Consolidated | |||||||
By Maturity | 09/30/2020 | ||||||
Without | Up to 3 From 3 to 12 | From 1 to 3 | |||||
Maturity | Months | Months | Years | Over 3 Years | Total | ||
61,153 | 2,588,679 | 20,951,962 | 26,012,191 | 61,839,158 | 111,453,142 | ||
- | - | 164 | 1,172 | - | 1,336 | ||
- | 151 | 424 | - | 0 | 575 | ||
61,153 | - | 3,876,390 | 8,319,298 | 10,703,479 | 22,960,320 | ||
- | - | 12,015,077 | 8,403,256 | 15,026,885 | 35,445,218 | ||
- | 26,388 | 5,059,907 | 9,288,465 | 34,985,752 | 49,360,512 | ||
- | 2,110,949 | - | - | - | 2,110,949 | ||
- | 451,191 | - | - | 1,123,042 | 1,574,232 | ||
1,639,219 | 916,773 | 6,909,117 | 9,557,394 | 11,888,823 | 30,911,326 | ||
47,271 | - | - | - | - | 47,271 | ||
1,440,907 | - | - | - | - | 1,440,907 | ||
36,823 | - | - | - | - | 36,823 | ||
733 | 93,693 | 1,370,702 | 5,136,172 | 7,538,653 | 14,139,952 | ||
- | - | - | - | 3,514,096 | 3,514,096 | ||
36,037 | 177,042 | 2,788,464 | 2,213,853 | 128,131 | 5,343,526 | ||
- | - | - | 266,421 | - | 266,421 | ||
- | - | 18,293 | - | 3,580 | 21,873 | ||
- | - | - | - | 40,561 | 40,561 | ||
77,448 | 646,039 | 2,731,658 | 1,940,947 | 663,804 | 6,059,896 | ||
1,700,372 | 3,505,451 | 27,861,079 | 35,569,584 | 73,727,981 | 142,364,469 |
- In the Bank and Consolidated, includes securities issued by mixed-capital companies and R$369,700 (12/31/2019 - R$262,027) securities available for sale,
- On September 30, 2020, the quantite of 1,400,000 in the amount of R$1,623,169 (12/31/2019 - 1,140,000 in the amount of R$1,229,297) of National Treasury Notes - NTN, are linked to the obligation assumed by Banco Santander to cover the reserves to be amortized under Plan V of the Social Security Fund (Banesprev),
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 33
- Values expressed in thousands, except when indicated.
IV) Held-to-Maturity Securities
Bank/Consolidated | |||||||
By Maturity | 09/30/2020 | ||||||
Amortized Cost | From 3 to 12 | ||||||
Held-to-Maturity Securities (1) | 09/30/2020 | 12/31/2019 | Up to 3 Months | Months | From 1 to 3 Years | Over 3 Years | Total |
Government Securities | 15,899,247 | 11,275,488 | 25,894 | 1,903,438 | 2,177,697 | 11,792,218 | 15,899,247 |
National Treasury Notes - NTN | 5,026,446 | 3,414,897 | 25,894 | - | - | 5,000,552 | 5,026,446 |
Brazilian Foreign Debt Bonds | 10,872,801 | 7,860,591 | - | 1,903,438 | 2,177,697 | 6,791,666 | 10,872,801 |
Private Securities | 538,856 | 464,109 | - | 365,025 | 173,831 | - | 538,856 |
Certificates of Agribusiness Receivables - CRA | 538,856 | 464,109 | 365,025 | 173,831 | - | 538,856 | |
Total | 16,438,103 | 11,739,597 | 25,894 | 2,268,463 | 2,351,528 | 11,792,218 | 16,438,103 |
(1) The market value of held to maturity securities is R$17,399,508, (12/31/2019 - R$12,514,855),
For the quarter ended September 30, 2020, there were no disposals of federal government securities and other securities classified in the category of securities held to maturity, Given the provisions of Article 5 of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity securities classified as held-to-maturity,
The market value of securities is estimated based on the average quotation on organized markets and their estimated cash flows, discounted to present value using the applicable interest rate curves, considered as representative of market conditions at the end of balance,
V) Financial Income - Securities Transactions
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Income From Fixed-Income Securities (1) | 7,297,844 | 57,462,506 | 11,888,371 | 20,855,522 | 7,506,636 | 57,982,641 | 12,622,415 | 22,262,789 |
Income From Interbank Investments | 1,666,598 | 5,466,861 | 2,510,373 | 6,495,090 | 922,805 | 2,905,174 | 1,030,597 | 2,755,989 |
Income From Variable-Income Securities | 697 | (57,272) | 18,479 | 80,961 | 18,125 | (9,256) | (256,443) | (251,146) |
Financial Income of Pension and Capitalization | - | - | - | - | 50,661 | 137,897 | 41,545 | 108,146 |
Provision for Impairment Losses (2) | (34,581) | (194,259) | (67,644) | (41,030) | (34,581) | (194,259) | (72,876) | (46,262) |
Others (3) | (417,252) | (3,590,532) | (740,202) | (615,706) | (358,037) | (3,514,196) | (842,435) | (713,466) |
Total | 8,513,306 | 59,087,304 | 13,609,377 | 26,774,837 | 8,105,609 | 57,308,001 | 12,522,803 | 24,116,050 |
- Includes exchange variation revenue in the amount of R$40,485,350 in the Bank and in the Consolidated (2019 - revenue of R$473,791 in the Bank and in the Consolidated),
- Corresponds to the permanent loss record, referring to securities classified as available for sale,
- Includes the net valuation of investment fund shares and interest and exchange variation expenses in the amount of R$3,824,080 in the Bank and in the Consolidated (2019 - expense of R$144,262 in the Bank and in the Consolidated),
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 34
- Values expressed in thousands, except when indicated. b) Derivatives Financial Instruments
The main risk factors associated to derivatives contracted are related to exchange rates, interest rates and stocks, To manage these and other market risk factors the Bank uses practices which include the measurement and follow up of the limit´s usage previously defined on internal committees, as well as the daily follow up of the portfolios values in risk, sensitivities and changes in the interest rate and exchange exposure, liquidity gaps, among other practices which allow the control and follow up on the main risk metrics that can affect the Bank´s position in the several markets which it acts, Based on this management model, the Bank has accomplished its goal, using operations with derivatives, in optimize the relation risk/benefits even in situation with great volatility,
The derivatives fair value is determined through quotation of market prices, The swaps contracts fair value is determined using discounted cash flow modeling techniques, reflecting suitable risk factors, The fair value of NDF and Future contracts are also determined based on the quotation of market prices for derivatives traded in specific chamber or using the same methodology applied for swap contracts, The fair value of options derivatives is determined based on the mathematical models, such as Black & Scholes, using yield rates, implied volatilities and the fair value of the corresponding asset, The current market prices are used to price the volatilities, For the derivatives which do not have prices directly disclosed by specific chamber, their fair values are obtained through pricing models which use market information, based on disclosed prices of more liquid assets, Interest rate curves and market volatilities are extracted from theses prices to be used as first input in these models,
I) Summary of Derivative Financial Instruments
For better presentation, as of the Financial Statements of 30 June 2020, swap operations was presented showing the balances of the differentials receivable and payable separately, without compensation, The reference values are now presented without the addition of the updated equity position of the referred contracts, the disclosure of the previous period was modified for comparison purposes,
Below, the composition of the Derivative Financial Instruments portfolio (Assets and Liabilities) by type of instrument, demonstrated by their market value:
Bank | Consolidated | ||||||||||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | ||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||
Swap | 17,582,737 | 20,249,517 | 8,620,854 | 10,167,632 | 15,517,554 | 19,085,568 | 14,625,238 | 16,701,678 | |||
Options | 3,999,298 | 3,769,744 | 886,927 | 1,593,625 | 4,241,710 | 4,030,634 | 1,065,752 | 1,699,729 | |||
Term Contract and Other Contracts | 15,269,976 | 15,404,752 | 1,678,454 | 2,221,955 | 15,315,564 | 15,404,752 | 1,750,150 | 2,221,955 | |||
Total | 36,852,010 | 39,424,014 | 11,186,235 | 13,983,212 | 35,074,829 | 38,520,954 | 17,441,140 | 20,623,362 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 35
* Values expressed in thousands, except when indicated.
II) Derivatives Recorded in Memorandum Accounts and Balance Sheets
Bank | ||||||
09/30/2020 | 12/31/2019 | |||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value |
Swap | (3,761,978) | (2,666,780) | (1,941,477) | (1,546,778) | ||
Assets | 292,419,589 | 8,211,773 | 17,582,737 | 265,269,199 | 2,910,364 | 8,620,854 |
CDI (Interbank Deposit Rates) | 49,857,310 | 61,331 | 418,207 | 41,137,936 | 209,224 | 199,018 |
Fixed Interest Rate - Real | 53,331,591 | 4,617,194 | 8,890,158 | 39,637,946 | 1,900,884 | 6,792,917 |
Indexed to Price and Interest Rates | 4,469,803 | 1,336,111 | 1,487,119 | 2,954,640 | 218,540 | 301,476 |
Foreign Currency | 183,460,033 | 2,000,905 | 6,601,429 | 181,538,677 | 581,716 | 1,327,443 |
Others | 1,300,852 | 196,232 | 185,824 | - | - | - |
Liabilities | 283,576,774 | (11,973,751) | (20,249,517) | 265,269,199 | (4,851,841) | (10,167,632) |
CDI (Interbank Deposit Rates) | 46,609,424 | (9,041,755) | (14,854,317) | 33,151,770 | (3,025,371) | (94,260) |
Fixed Interest Rate - Real | 62,496,056 | (2,931,879) | (4,049,780) | 53,487,374 | (990,820) | (7,410,825) |
Indexed to Price and Interest Rates | 44,170,818 | (117) | (38,355) | 125,014,868 | (11,658) | (851,739) |
Foreign Currency | 128,731,902 | - | (1,273,566) | 52,431,130 | (816,100) | (1,685,199) |
Others | 1,568,574 | - | (33,499) | 1,184,057 | (7,892) | (125,609) |
Options | 1,258,094,516 | (291,986) | 229,554 | 1,446,691,032 | (713,535) | (706,698) |
Purchased Position | 613,753,975 | 1,448,461 | 3,999,298 | 678,193,198 | 641,222 | 886,927 |
Call Option - Foreign Currency | 1,221,464 | 37,897 | 38,325 | 223,477 | 1,318 | 34 |
Put Option - Foreign Currency | 1,971,677 | 69,019 | 65,698 | 1,508,663 | 473 | 4,865 |
Call Option - Other | 79,013,627 | 305,340 | 847,276 | 98,154,363 | 295,668 | 136,084 |
Interbank Market | 79,013,627 | 305,340 | 847,276 | 98,154,363 | 295,668 | 136,174 |
Others (2) | - | - | - | - | - | (90) |
Put Option - Other | 531,547,207 | 1,036,205 | 3,047,999 | 578,306,695 | 343,763 | 745,944 |
Interbank Market | 531,547,207 | 1,036,204 | 3,047,999 | 578,306,695 | 343,763 | 746,006 |
Others (2) | - | - | - | - | - | (62) |
Sold Position | 644,340,541 | (1,740,447) | (3,769,744) | 768,497,834 | (1,354,757) | (1,593,625) |
Call Option - Foreign Currency | 1,306,075 | (70,051) | (77,176) | 254,944 | (3,102) | (1,471) |
Put Option - Foreign Currency | 1,954,755 | (127,061) | (165,170) | 315,601 | (1,528) | (4,340) |
Call Option - Other | 94,279,311 | (282,775) | (513,344) | 174,166,801 | (562,827) | (428,690) |
Interbank Market | 1,671,056 | (49,974) | (513,344) | 174,166,801 | (562,827) | (428,617) |
Others (2) | 92,608,255 | (232,800) | - | - | - | (73) |
Put Option - Other | 546,800,400 | (1,260,560) | (3,014,054) | 593,760,488 | (787,300) | (1,159,124) |
Interbank Market | 546,800,400 | (1,260,560) | (3,014,054) | 593,760,488 | (787,300) | (1,159,037) |
Others (2) | - | - | - | - | - | (87) |
Futures Contracts | 285,666,999 | - | - | 432,564,396 | - | - |
Purchased Position | 115,740,703 | - | - | 72,332,139 | - | - |
Exchange Coupon (DDI) | 15,238,695 | - | - | 7,105,006 | - | - |
Interest Rates (DI1 and DIA) | 100,502,008 | - | - | 55,430,519 | - | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 36
* Values expressed in thousands, except when indicated.
Foreign Currency | - | - | - | 9,781,856 | - | - |
Indexes (3) | - | - | - | - | - | - |
Treasury Bonds/Notes | - | - | - | 14,758 | - | - |
Sold Position | 169,926,296 | - | - | 360,232,257 | - | - |
Exchange Coupon (DDI) | 79,114,013 | - | - | 145,668,039 | - | - |
Interest Rates (DI1 and DIA) | 69,323,206 | - | - | 196,170,105 | - | - |
Foreign Currency | 21,172,817 | - | - | 17,208,599 | - | - |
Indexes (3) | 316,260 | - | - | 290,254 | - | - |
Treasury Bonds/Notes | - | - | - | 895,261 | - | - |
Forward Contracts and Others | 131,570,221 | 1,771,034 | (134,776) | 100,659,795 | (900,818) | (706,698) |
Purchased Commitment | 73,960,421 | 3,856,483 | 15,269,976 | 50,216,459 | (269,708) | 1,515,257 |
Currencies | 67,953,936 | 3,855,774 | 15,274,277 | 50,215,376 | (269,708) | 1,514,167 |
Others | 6,006,485 | 709 | (4,301) | 1,083 | - | 1,090 |
Sell Commitment | 57,609,800 | (2,085,449) | (15,404,752) | 49,298,439 | (631,110) | (2,221,955) |
Currencies | 53,142,777 | (2,082,758) | (15,404,526) | 49,294,662 | (631,085) | (2,221,955) |
Others | 4,467,023 | (2,691) | (226) | 3,777 | (25) | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 37
* Values expressed in thousands, except when indicated.
Consolidated | ||||||
09/30/2020 | 12/31/2019 | |||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value |
Swap | (3,761,978) | (3,568,014) | (1,941,477) | (2,076,440) | ||
Assets | 288,711,605 | 8,211,773 | 15,517,554 | 279,253,821 | 2,910,364 | 14,625,235 |
CDI (Interbank Deposit Rates) | 45,086,646 | 61,331 | 3,690,504 | 40,341,402 | 209,224 | 6,231,769 |
Fixed Interest Rate - Real | 51,821,036 | 4,617,194 | 7,963,801 | 45,240,041 | 1,900,884 | 6,792,917 |
Indexed to Price and Interest Rates | 4,366,347 | 1,336,111 | 1,487,116 | 2,169,578 | 218,540 | 301,476 |
Foreign Currency | 187,000,805 | 2,000,905 | 2,190,309 | 191,502,800 | 581,716 | 1,299,073 |
Others | 436,771 | 196,232 | 185,824 | - | - | - |
Liabilities | 250,258,031 | (11,973,751) | (19,085,568) | 279,197,765 | (4,851,841) | (16,701,675) |
CDI (Interbank Deposit Rates) | 43,889,318 | (9,041,755) | (14,854,318) | 24,273,545 | (3,025,371) | (94,260) |
Fixed Interest Rate - Real | 43,828,728 | (2,931,879) | (4,049,779) | 69,561,856 | (990,820) | (13,061,820) |
Indexed to Price and Interest Rates | 44,170,818 | (117) | 1,656,051 | 125,014,868 | (11,658) | (1,681,390) |
Foreign Currency | 116,800,593 | - | (1,685,542) | 59,163,439 | (816,100) | (1,685,199) |
Others | 1,568,574 | - | (151,980) | 1,184,057 | (7,892) | (179,006) |
Options | 1,276,475,307 | (291,987) | 211,076 | 1,446,536,131 | (713,534) | (633,977) |
Purchased Position | 619,054,529 | 1,448,460 | 4,241,710 | 678,089,904 | 641,140 | 1,065,752 |
Call Option - Foreign Currency | 1,221,464 | 37,897 | 38,325 | 171,871 | 1,318 | (280) |
Put Option - Foreign Currency | 1,971,677 | 69,019 | 65,698 | 1,456,975 | 391 | 184,002 |
Call Option - Other | 82,245,573 | 305,340 | 1,077,120 | 98,154,363 | 295,668 | 136,086 |
Interbank Market | 79,013,628 | 305,340 | 847,276 | 98,154,363 | 295,668 | 136,177 |
Others (2) | 3,231,945 | - | 229,844 | - | - | (91) |
Put Option - Other | 533,615,815 | 1,036,204 | 3,060,567 | 578,306,695 | 343,763 | 745,944 |
Interbank Market | 531,547,207 | 1,036,204 | 3,047,999 | 578,306,695 | 343,763 | 746,006 |
Others (2) | 2,068,607 | - | 12,568 | - | - | (62) |
Sold Position | 657,420,778 | (1,740,447) | (4,030,634) | 768,446,227 | (1,354,674) | (1,699,729) |
Call Option - Foreign Currency | 1,306,075 | (70,051) | (77,177) | 254,944 | (3,102) | (1,471) |
Put Option - Foreign Currency | 1,954,755 | (127,061) | (180,292) | 263,994 | (1,445) | (2,841) |
Call Option - Other | 102,049,339 | (282,775) | (588,637) | 174,166,801 | (562,827) | (428,393) |
Interbank Market | 1,671,056 | (49,974) | (513,344) | 174,166,801 | (562,827) | (428,620) |
Others (2) | 100,378,282 | (232,800) | (75,293) | - | - | 227 |
Put Option - Other | 552,110,609 | (1,260,560) | (3,184,528) | 593,760,488 | (787,300) | (1,267,024) |
Interbank Market | 546,800,400 | (1,260,560) | (3,014,054) | 593,760,488 | (787,300) | (1,159,037) |
Others (2) | 5,310,208 | - | (170,473) | - | - | (107,987) |
Futures Contracts | 286,054,267 | - | - | 432,564,399 | - | - |
Purchased Position | 116,047,231 | - | - | 71,603,247 | - | - |
Exchange Coupon (DDI) | 15,238,697 | - | - | 7,105,006 | - | - |
Interest Rates (DI1 and DIA) | 100,808,534 | - | - | 54,701,627 | - | - |
Foreign Currency | - | - | - | 9,781,856 | - | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 38
* Values expressed in thousands, except when indicated.
Indexes (3) | - | - | - | - | - | - |
Treasury Bonds/Notes | - | - | - | 14,758 | - | - |
Sold Position | 170,007,036 | - | - | 360,961,152 | - | - |
Exchange Coupon (DDI) | 79,114,013 | - | - | 146,032,485 | - | - |
Interest Rates (DI1 and DIA) | 69,815,922 | - | - | 196,170,106 | - | - |
Foreign Currency | 20,760,841 | - | - | 17,305,604 | - | - |
Indexes (3) | 316,260 | - | - | 290,254 | - | - |
Treasury Bonds/Notes | - | - | - | 1,162,703 | - | - |
Forward Contracts and Others | 131,570,221 | 1,770,326 | (89,188) | 99,514,898 | (900,818) | (471,805) |
Purchased Commitment | 73,960,421 | 3,855,774 | 15,315,564 | 50,216,459 | (269,708) | 1,750,150 |
Currencies | 67,953,936 | 3,855,774 | 15,274,278 | 50,215,376 | (269,708) | 1,677,365 |
Others | 6,006,485 | - | 41,286 | 1,083 | - | 72,785 |
Sell Commitment | 57,609,800 | (2,085,448) | (15,404,752) | 49,298,439 | (631,110) | (2,221,955) |
Currencies | 53,142,777 | (2,082,758) | (15,404,526) | 49,294,662 | (631,085) | (2,221,955) |
Others | 4,467,023 | (2,690) | (226) | 3,777 | (25) | - |
- Nominal value of the updated contracts,
- Includes options of indexes, mainly being options involving US treasury, shares and stock indexes,
- Includes Bovespa and S&P indexes,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 39
* Values expressed in thousands, except when indicated.
III) Derivative Financial Instruments by Counterparty, Opening by Maturity and Trading Market
Bank | ||||||||||||
Notional | ||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||
09/30/2020 | 12/31/2019 | 09/30/2020 | 09/30/2020 | |||||||||
Related | Financial | Up to | From 3 to | Over | Over the | |||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | Counter (3) | |||
Swap | 38,882,917 | 99,259,034 | 154,277,638 | 292,419,589 | 265,269,199 | 42,423,222 | 75,298,149 | 174,698,218 | 85,725,919 | 206,693,670 | ||
Options | 22,706,945 | 676,880 | 1,234,710,691 | 1,258,094,516 | 1,446,691,032 | 61,274,984 | 1,194,496,303 | 2,323,229 | 1,235,352,032 | 22,742,484 | ||
Futures Contracts | 3,198,239 | - | 282,468,760 | 285,666,999 | 432,564,396 | 181,045,338 | 52,995,667 | 51,625,994 | 285,666,999 | - | ||
Forward Contracts and Others | 63,812,057 | 52,317,471 | 15,440,693 | 131,570,221 | 100,659,795 | 63,310,093 | 44,625,769 | 23,634,359 | 365,653 | 131,204,568 | ||
Consolidated | ||||||||||||
Notional | ||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||
09/30/2020 | 12/31/2019 | 09/30/2020 | 09/30/2020 | |||||||||
Related | Financial | Up to | From 3 to | Over | Over the | |||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | Counter (3) | |||
Swap | 38,882,917 | 126,261,976 | 123,566,712 | 288,711,605 | 279,253,821 | 43,690,222 | 129,906,721 | 115,114,663 | 85,725,921 | 202,985,685 | ||
Options | 22,706,946 | 676,881 | 1,253,091,480 | 1,276,475,307 | 1,446,536,131 | 75,690,009 | 1,197,998,881 | 2,786,416 | 1,235,352,034 | 41,123,273 | ||
Futures Contracts | 3,198,239 | - | 282,856,028 | 286,054,267 | 432,564,399 | 181,561,992 | 53,122,939 | 51,369,336 | 286,054,267 | - | ||
Forward Contracts and Others | 63,812,057 | 52,317,471 | 15,440,693 | 131,570,221 | 99,514,898 | 63,310,091 | 44,625,771 | 23,634,360 | 365,655 | 131,204,566 |
- Includes operations with B3 S,A, - Brazil, Bolsa, Balcão (B3) and other stock and commodity exchanges as counterparty,
- It consists of operations that are included in registration chambers, according to Bacen regulations,
IV) Hedge Accounting
The effectiveness determined for the hedge portfolio is in accordance with Bacen Circular 3,082 / 2002 and the following hedge accounting structures were established:
IV,I) Market Risk Hedge
The Bank's market risk hedging strategies consist of a hedge of exposure to variation in market risk, in receipts and interest payments related to assets and liabilities recognized,
The Bank's market risk hedging methodology segregates transactions by risk factor (eg, real / dollar exchange rate risk, fixed interest rate risk in reais, dollar exchange rate risk, inflation, interest rate risk, etc,), Transactions generate exposures that are consolidated by risk factor and compared to pre-established internal limits,
To protect the market risk variation in the receipt and payment of interest, the Bank uses swap contracts and interest rate futures contracts relating to fixed assets and liabilities, The Bank applies the market risk hedge as follows:
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 40
* Values expressed in thousands, except when indicated.
- Designates Foreign Currency + Coupon versus %CDI and Pre - Real Interest Rate or contracts dollar futures (DOL, DDI/DI) as derivatives instruments in Hedge Accounting structures, with foreign currency loan operations being the object of such transactions,
- The Bank has an active loan portfolio originating in Dollar at a fixed rate at Santander EFC, whose operations are recorded in Euro, As a way of managing this mismatch, the Bank designates each Euro Floating Foreign Currency swap versus Fixed Dollar corresponding credit protection instrument,
- The Bank has a portfolio of assets indexed to the Euro and traded at offshore branches, In the transaction, the value of the asset in Euro will be converted to the Dollar by the rate of the exchange contract of the transaction, As from the conversion, the principal amount of the funding, already expressed in US dollars, will be adjusted by a floating or fixed rate, The assets will be covered with Swap Cross Currency in order to cross the risk in Euro for LIBOR + Coupon,
- The Bank has a pre-fixed interest rate risk generated by government securities (NTN-F and LTN) in the Financial Assets portfolio available for sale, To manage this mismatch, the entity contracts DI futures on the Stock Exchange and designates them as a hedging instrument in a hedge accounting structure,
- The Bank has a risk to the IPCA index generated by debentures in the portfolio of securities available for sale, To manage this mismatch, the Bank contracts IPCA (DAP) futures on the Stock Exchange and designates them as a hedging instrument in a Hedge Accounting structure,
- Santander Leasing has a pre-fixed interest rate risk generated by government securities (NTN-F) in the portfolio of available-for-sale securities, To manage this mismatch, the Entity contracts interest swaps and designates them as a hedging instrument in a hedge accounting structure,
In market risk hedging, the results, both on hedging instruments and on the objects (attributable to the type of risk being hedged) are recognized directly in the income statement,
IV,II) Cash Flow Hedge
The Bank's cash flow hedging strategies consist of a hedge of exposure to changes in cash flows, interest payments and exchange rate exposure, which are attributable to changes in interest rates on recognized assets and liabilities and changes of unrecognized assets and liabilities,
The Bank applies the cash flow hedge as follows:
- It contracts fixed dollar swaps versus foreign exchange and designates them as a hedging instrument in a Cash Flow Hedge structure, with the purpose of protecting foreign exchange loans and negotiated with third parties through agency in offshore branches and securities held to maturity of Brazilian foreign debt securities,
- Contracts USD Futures or DDI + DI Futures (Synthetic Dollar Futures) and designates them as a derivative instrument in a Cash Flow Hedge structure, the object of which in this relation is part of the Bank's credit portfolio in Dollars and Promissory Notes in the portfolio of securities available for sale,
- The Bank has post-fixed interest rate risk generated by public securities (LFT) in the portfolio of available-for-sale securities, which present expected cash flows subject to Selic variations over their duration, To manage these oscillations, it contracts DI futures on the Stock Exchange and designates them as a derivative instrument in a Hedge Accounting structure,
- Banco RCI Brasil S,A, has operations CDI indexed whose purpose is funding with financial letters (LF), bills of exchange (LC) and Interbank Deposit Certificates (CDI) and designates interest rate swaps as instruments,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 41
* Values expressed in thousands, except when indicated.
In cash flow hedge, the effective portion of the variation in the value of the hedge instrument is temporarily recognized in equity under the caption equity valuation adjustments until the forecasted transactions occur, when that portion is recognized in the income statement, The non-effective portion of the variation in the value of foreign exchange hedge derivatives is recognized directly in the income statement, As of September 30, 2020 and December 31, 2019, no results were recorded for the ineffective portion,
Bank | |||||||||||||||||||||||||
09/30/2020 | 12/31/2019 | ||||||||||||||||||||||||
Strategies | Adjustment to Fair Value | Accounting Value | Notional | Adjustment to Fair Value | Accounting Value | Notional | |||||||||||||||||||
Instruments | Instruments | Instruments | Instruments | Instruments | Instruments | ||||||||||||||||||||
Market Risk Hedge | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | |||||||||||||
Swap Contracts | 48,279 | (39,500) | 4,559,079 | 5,403,057 | 5,185,954 | 123,791 | 601,119 | 1,447,179 | 2,336,460 | 2,241,894 | 1,735,341 | 1,420,344 | |||||||||||||
Credit Operations Hedge | (753,744) | (24,121) | 199,198 | 168,134 | 1,637,032 | 118,123 | 60,414 | 895,584 | 1,254,893 | 1,146,503 | 1,194,479 | 876,548 | |||||||||||||
Securities Hedge | 802,023 | (15,378) | 4,359,881 | 5,234,923 | 3,548,922 | 5,668 | 540,705 | 551,594 | 1,081,567 | 1,095,391 | 540,862 | 543,796 | |||||||||||||
Futures Contracts | 2,385,793 | - | 50,350,239 | 54,928,412 | 47,171,371 | - | 3,000,490 | - | 48,427,614 | 36,569,735 | 45,854,445 | - | |||||||||||||
Securities Hedge | 2,385,793 | - | 50,350,239 | 54,928,412 | 47,171,371 | - | 3,000,490 | - | 48,427,614 | 36,569,735 | 45,854,445 | - | |||||||||||||
Cash Flow Hedge | |||||||||||||||||||||||||
Swap Contracts | - | - | 1,525,866 | 1,550,064 | 1,171,860 | 5,668 | 602,634 | 504,512 | 889,117 | 2,056,007 | 1,735,341 | - | |||||||||||||
Credit Operations Hedge | - | - | - | - | - | - | 56,887 | 294,403 | 687,239 | 738,262 | 1,194,479 | - | |||||||||||||
Securities Hedge | - | - | 1,525,866 | 1,550,064 | 1,171,860 | 5,668 | 545,747 | 210,109 | 201,878 | 1,317,745 | 540,862 | - | |||||||||||||
Futures Contracts | - | - | 46,472,443 | 40,082,944 | 43,203,957 | - | - | - | 17,726,566 | 18,680,868 | 3,219,566 | 789,631 | |||||||||||||
Credit Operations Hedge (2) (3) | - | - | 25,543,341 | 21,020,406 | 22,859,369 | - | - | - | 14,506,878 | 15,195,149 | - | - | |||||||||||||
Securities Hedge | - | - | 20,929,102 | 19,062,538 | 20,344,589 | - | - | - | 3,219,688 | 3,485,719 | 3,219,566 | 789,631 | |||||||||||||
Consolidated | |||||||||||||||||||||||||
09/30/2020 | 12/31/2019 | ||||||||||||||||||||||||
Strategies | Adjustment to Fair Value | Accounting Value | Notional | Adjustment to Fair Value | Accounting Value | Notional | |||||||||||||||||||
Instruments | Instruments | Instruments | Instruments | Instruments | Instruments | ||||||||||||||||||||
Market Risk Hedge | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | Objects (1) | (1) | |||||||||||||
Swap Contracts | 48,271 | (39,487) | 4,559,368 | 5,516,479 | 5,185,954 | 123,791 | 602,633 | 1,283,074 | 3,208,463 | 4,227,057 | 2,605,830 | 3,249,742 | |||||||||||||
Credit Operations Hedge | (753,752) | (24,109) | 199,487 | 168,147 | 1,637,032 | 118,123 | 56,887 | 585,670 | 2,021,557 | 1,398,121 | 1,964,670 | 1,118,210 | |||||||||||||
Securities Hedge | 802,023 | (15,378) | 4,359,881 | 5,348,332 | 3,548,922 | 5,668 | 545,747 | 697,404 | 1,186,907 | 2,828,936 | 641,160 | 2,131,532 | |||||||||||||
Futures Contracts | 2,385,793 | - | 50,350,239 | 54,928,412 | 47,171,371 | - | 3,000,490 | - | 48,427,614 | 36,569,735 | 45,427,125 | 789,631 | |||||||||||||
Securities Hedge | 2,385,793 | - | 50,350,239 | 54,928,412 | 47,171,371 | - | 3,000,490 | - | 48,427,614 | 36,569,735 | 45,427,125 | 789,631 | |||||||||||||
Cash Flow Hedge | |||||||||||||||||||||||||
Swap Contracts | - | - | 6,744,097 | 7,728,501 | 6,166,485 | - | - | 5,163,218 | 7,123,421 | 7,460,858 | 5,499,281 | 5,624,154 | |||||||||||||
Credit Operations Hedge | - | - | - | - | - | - | - | 3,494 | 977,621 | 1,058,007 | 687,239 | 90,518 | |||||||||||||
Securities Hedge | - | - | 1,550,064 | 1,525,866 | 1,171,860 | - | - | 210,109 | 1,201,878 | 1,317,745 | 198,415 | 1,107,636 | |||||||||||||
Funding Hedge | - | - | 5,194,033 | 6,202,634 | 4,994,625 | - | - | 4,949,615 | 4,943,922 | 5,085,106 | 4,613,628 | 4,426,000 | |||||||||||||
Futures Contracts | - | - | 40,082,944 | 46,529,881 | 43,203,957 | - | - | - | 7,726,566 | 54,460,972 | 54,194,819 | 4,501,878 | |||||||||||||
Credit Operations Hedge (2) (3) | - | - | 21,020,406 | 25,543,341 | 22,859,369 | - | - | - | 4,506,878 | 50,975,253 | 50,975,253 | 4,501,878 | |||||||||||||
Securities Hedge | - | - | 19,062,538 | 20,986,540 | 20,344,589 | - | - | - | 3,219,688 | 3,485,719 | 3,219,566 | - |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 42
* Values expressed in thousands, except when indicated.
-
The Bank operates some Cash Flow Hedge strategies, hedging assets from its portfolio (object), regards that, the table is presented showing the liability amounts from the respective instruments, For structures whose objects are futures, the table is presented showing the balance of the daily adjustment, registered in the suspense accounts,
(1) Credit amounts refer to active operations and operations owed to passive operations,
(2) Updated value of the instruments on September 30, 2020 is R$8,293,988 (12/31/2019 - R$8,425,386),
Bank | Consolidated | ||||||||||||
9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | ||||||||||
Up to 3 | From 3 to | Over | Up to 3 | From 3 to | Over | ||||||||
Strategies | Months | 12 Months | 12 Months | Total | Total | Months | 12 Months | 12 Months | Total | Total | |||
Market Risk Hedge | |||||||||||||
Swap Contracts | 64,129 | 5,263,551 | 114,877 | 5,442,557 | 1,420,344 | 177,537 | 5,263,551 | 114,877 | 5,555,965 | 3,249,741 | |||
Credit Operations Hedge | 64,129 | 13,250 | 114,877 | 192,255 | 876,548 | 64,129 | 13,250 | 114,877 | 192,256 | 1,118,210 | |||
Securities Hedge | - | 5,250,301 | - | 5,250,301 | 543,796 | 113,408 | 5,250,301 | - | 5,363,709 | 2,131,532 | |||
Futures Contracts | 9,025,400 | 15,852,495 | 30,050,517 | 54,928,412 | 789,631 | 9,025,400 | 15,852,495 | 30,050,517 | 54,928,412 | 789,631 | |||
Securities Hedge | 9,025,400 | 15,852,495 | 30,050,517 | 54,928,412 | 789,631 | 9,025,400 | 15,852,495 | 30,050,517 | 54,928,412 | 789,631 | |||
Cash Flow Hedge | |||||||||||||
Swap Contracts | - | 1,550,064 | - | 1,550,064 | 1,245,735 | - | 1,550,064 | - | 1,550,064 | 6,327,615 | |||
Credit Operations Hedge | - | - | - | - | 138,099 | - | - | - | - | 435,872 | |||
Hedge de Títulos e Valores Mobiliários | - | 1,550,064 | - | 1,550,064 | 1,107,636 | - | 1,550,064 | - | 1,550,064 | 1,107,636 | |||
Securities Hedge | - | - | - | - | - | - | - | - | - | 4,784,106 | |||
Funding Hedge | - | 597,463 | 39,485,481 | 40,082,944 | 54,460,972 | - | 597,463 | 39,485,481 | 40,082,944 | 54,460,972 | |||
Credit Operations Hedge (2) (3) | - | - | 21,020,406 | 21,020,406 | 50,975,253 | - | - | 21,020,406 | 21,020,406 | 50,975,253 | |||
Securities Hedge | - | 597,463 | 18,465,075 | 19,062,538 | 3,485,719 | 597,463 | 18,465,075 | 19,062,538 | 3,485,719 |
At the Bank and Consolidated, the mark-to-market effect of swap and future asset contracts corresponds to a credit in the amount of R$11,528 (12/31/2019 - R$11,063) and is recorded in shareholders' equity, net of tax effects, of which R$6,340 will be realized against revenue in the next twelve months,
V) Credit Derivatives Information
Banco Santander uses credit derivatives with the objectives of performing counterparty risk management and meeting its customers' demands, performing protection purchase and sale transactions through credit default swaps and total return swaps, primarily related to Brazilian sovereign risk securities,
Total Return Swaps - TRS
Credit derivatives refer to the exchange of the return of the reference obligation by a cash flow and in which, in the event of a credit event, the protection buyer is usually entitled to receive from the protection seller the equivalent of the difference between the restated amount and the fair value (market value) of the reference obligation on the settlement date of the agreement,
Credit Default Swaps - CDS
These are credit derivatives where, in the event of a credit event, the protection buyer is entitled to receive from the protection seller the equivalent of the difference between the face value of the CDS agreement and the fair value (market value) of the reference obligation on the settlement date of the contract, In return, the seller receives compensation for the sale of the protection,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 43
* Values expressed in thousands, except when indicated.
Below, the composition of the Credit Derivatives portfolio shown by its reference value and effect in the calculation of Required Stockholders' Equity,
Bank/Consolidated | ||||
Valor Nominal | ||||
09/30/2020 | 12/31/2019 | |||
Retained Risk - Total Rate of | Retained Risk - Total Rate of | |||
Return Swap | Transferred Risk - Credit Swap | Return Swap | Transferred Risk - Credit Swap | |
Credit Swaps | 3,408,853 | - | 2,435,880 | - |
Total | 3,408,853 | - | 2,435,880 | - |
Amount related to the premium paid on CDS for use as guarantee (risk transfer) in the amount of R$0 (12/31/2019 - R$0),
The effect on the PLE of the risk received was R$11,611 (12/31/2019 - R$5,257),
During the period there was no occurrence of a credit event related to taxable events provided for in the contracts,
09/30/2020 | 12/31/2019 | |||
Maximum Potential for Future Payments - Gross | Over 12 Months | Total | Over 12 Months | Total |
Per Instrument: CDS | 3,408,853 | 3,408,853 | 2,435,880 | 2,435,880 |
Per Risk Classification: Below Investment Grade | 3,408,853 | 3,408,853 | 2,435,880 | 2,435,880 |
Per Reference Entity: Brazilian Government | 3,408,853 | 3,408,853 | 2,435,880 | 2,435,880 |
VI) Derivative Financial Instruments - Margin Given in Guarantee
The margin given as collateral for transactions traded on B3 with its own and third party derivative financial instruments is composed of federal government securities,
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Financial Literature of the Treasury - LFT | 415,226 | 5,342,992 | 1,029,143 | 5,950,561 |
National Treasury Bills - LTN | 7,430,739 | 1,086,556 | 7,433,795 | 1,086,556 |
National Treasury Notes - NTN | 2,485,999 | 660,918 | 2,669,168 | 841,790 |
Total | 10,331,964 | 7,090,465 | 11,132,106 | 7,878,907 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 44
-
Values expressed in thousands, except when indicated.
7. Interbank Accounts
The amount of interbank accounts is composed of restricted deposits with the Bacen to meet compulsory obligations for demand deposits, savings deposits and time deposits, and payments and receipts pending settlement, represented by checks and other documents sent to clearinghouses payment transactions (assets and liabilities position),
8. Loan Portfolio and Allowance for Loan Losses a) Loan Portfolio
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Lending Operations | 276,197,102 | 211,251,830 | 331,809,467 | 280,899,334 |
Loans and Discounted Titles | 174,396,766 | 116,282,045 | 173,887,437 | 130,994,834 |
Financing | 45,528,552 | 42,287,183 | 101,650,246 | 97,221,898 |
Rural and Agroindustrial - Financing | 13,393,697 | 12,940,784 | 13,393,697 | 12,940,784 |
Real Estate Financing | 42,878,087 | 39,741,818 | 42,878,087 | 39,741,818 |
Leasing Operations | - | - | 2,453,343 | 2,800,998 |
Advances on Foreign Exchange Contracts (1) | 6,654,994 | 6,054,424 | 6,654,994 | 6,054,424 |
Other Receivables (2) | 53,809,023 | 58,912,075 | 56,444,052 | 62,281,242 |
Receivables for Guarantees Honored | 591,459 | 321,478 | 494,098 | 328,371 |
Income Receivable from Advances Granted | 170,267 | 97,756 | 170,267 | 97,756 |
Debtors for Purchase of Assets | 628,433 | 653,347 | 676,200 | 653,347 |
Other Receivables Several | 52,418,864 | 57,839,494 | 55,006,126 | 61,201,768 |
Total | 336,661,119 | 276,218,329 | 397,361,856 | 352,035,998 |
- Advance on foreign exchange contracts are classified as a reduction of other obligations,
- Comprise receivables for guarantees honored other receivables - others (granted to borrowers to purchase securities, assets, notes and receivable - Note 10) and income receivable on foreign exchange contracts,
Sale or Transfer Operations of Financial Assets
According to CMN Resolution nº 3,533/2008 updated with later norms, the lending operations with substantial retention of risks and benefits, started from January 1, 2012 to remain registered in the loan portfolio, For lending operations made until December 31, 2011, regardless of the retention or transfer of substantial risks and benefits, financial assets were written off from the record of the original operation and the result recorded in the transfer to the appropriate result,
(i) With Substantial Transfer of Risks and Benefits
In the Bank and Consolidated, during period ended at September 30, 2020, operations were carried out credit assignment without co-obligation in the amount of R$1,022,593 (12/31/2019 - R$2,986,361) and were recorded substantially in borrowings and discounted securities, classified at risk level E and F, In the first quarter of 2020, there were no assignments between Group entities (12/31/2019 - R$746,106),
During the period ended September 30, 2020, loan assignments were made in full without co-obligation, in the amount of R$725,100 in the Bank and in the Consolidated relating to loan losses, In the third quarter of 2020, there were no assignments between Group entities
(ii) With Substantial Retention of Risks and Benefits
On December 2011, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$688,821, which fall due until October 2041, On September 30, 2020, the present value of the divested operations is R$194,568 (12/31/2019- R$75,833),
These assignment operations were carried out with a co-obligation clause, and compulsory repurchase is envisaged in the following situations:
- Contracts in default for a period exceeding 90 consecutive days;
- Contracts subject to renegotiation;
- Contracts subject to portability in accordance with CMN Resolution nº 3,401/2006; and
- Contracts subject to intervention,
The compulsory repurchase price will be calculated by unpaid balance of the loan due date at the time of its repurchase, From the date of transfer, cash flows from operations will be paid directly to the assignee entity,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 45
- Values expressed in thousands, except when indicated.
- Loan Portfolio by Maturity
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Overdue | 5,306,683 | 7,684,024 | 5,615,045 | 8,585,560 |
Due to: | ||||
Up to 3 Months | 74,985,407 | 76,147,368 | 82,075,227 | 87,843,597 |
From 3 to 12 Months | 91,352,570 | 69,667,171 | 110,528,508 | 90,380,199 |
Over 12 Months | 165,016,459 | 122,719,766 | 199,143,076 | 165,226,642 |
Total | 336,661,119 | 276,218,329 | 397,361,856 | 352,035,998 |
c) Loan Portfolio by Business Sector
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Private Sector | 335,621,423 | 275,100,366 | 396,320,893 | 350,916,654 |
Industry | 65,628,907 | 53,728,646 | 66,514,611 | 54,671,234 |
Commercial | 43,862,849 | 33,864,887 | 47,926,946 | 39,183,683 |
Financial Institutions | 1,534,911 | 1,983,283 | 1,589,242 | 1,991,233 |
Services and Other (1) | 56,684,960 | 41,607,698 | 58,955,727 | 44,886,880 |
Individuals | 163,307,646 | 140,385,489 | 216,670,128 | 206,623,415 |
Credit Cards | 33,374,543 | 34,914,437 | 33,374,543 | 34,914,437 |
Mortgage Loans | 40,896,556 | 37,218,524 | 40,896,556 | 37,218,524 |
Payroll Loans | 45,705,261 | 27,941,932 | 45,705,261 | 42,446,859 |
Financing and Vehicles Lease | 2,157,844 | 2,379,093 | 53,552,487 | 51,774,184 |
Others (2) | 41,173,442 | 37,931,503 | 43,141,281 | 40,269,411 |
Agricultural | 4,602,150 | 3,530,363 | 4,664,239 | 3,560,209 |
Public Sector | 1,039,696 | 1,117,964 | 1,040,963 | 1,119,344 |
State | 415,046 | 441,599 | 415,046 | 441,599 |
Municipal | 624,650 | 676,365 | 625,917 | 677,745 |
Total | 336,661,119 | 276,218,330 | 397,361,856 | 352,035,998 |
- Includes the activities of mortgage companies - business plan, transportation services, health, personal and others,
- Includes personal loans, overdraft among others,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 46
- Values expressed in thousands, except when indicated.
- Classification of Loan Portfolio and Respective Allowance for Loan Losses by Risk Level
Bank | ||||||||||||||||||||
09/30/2020 | 12/31/2019 | |||||||||||||||||||
% | Loan Portfolio | Allowance | Loan Portfolio | Allowance | ||||||||||||||||
Risk Level | Minimum Allowance Required | Current Past Due (1) | Total (3) | RequiredAdditional (2) | Total | Current Past Due (1) | Total (3) | RequiredAdditional (2) | Total | |||||||||||
AA | 0,0% | 159,534,917 | - | 159,534,917 | - | - | - | 121,753,569 | - | 121,753,569 | - | - | - | |||||||
A | 0,5% | 95,080,014 | - | 95,080,014 | - | 475,400 | - | 291,475 | - | 766,875 | 77,795,391 | - | 77,795,391 | 388,977 | - | 388,977 | ||||
B | 1,0% | 28,348,825 | 2,038,965 | 30,387,790 | - | 303,878 | - | 521,071 | - | 824,949 | 23,816,916 | 2,120,722 | 25,937,638 | 259,376 | 17 | 259,393 | ||||
C | 3,0% | 20,356,272 | 1,994,776 | 22,351,048 | - | 670,531 | - | 1,421,557 | - | 2,092,088 | 19,823,183 | 1,966,467 | 21,789,650 | 653,690 | 1,665 | 655,355 | ||||
D | 10,0% | 8,190,887 | 2,134,147 | 10,325,034 | - | 1,032,503 | - | 1,808,441 | - | 2,840,944 | 7,926,118 | 2,088,778 | 10,014,896 | 1,001,490 | 1,547,683 | 2,549,173 | ||||
E | 30,0% | 2,450,512 | 1,588,228 | 4,038,740 | - | 1,211,622 | - | 669,734 | - | 1,881,356 | 2,266,765 | 2,323,208 | 4,589,973 | 1,376,992 | 659,874 | 2,036,866 | ||||
F | 50,0% | 2,112,682 | 1,384,924 | 3,497,606 | - | 1,748,803 | - | 574,029 | - | 2,322,832 | 1,769,671 | 1,475,413 | 3,245,084 | 1,622,542 | 447,224 | 2,069,766 | ||||
G | 70,0% | 1,957,862 | 1,167,022 | 3,124,884 | - | 2,187,418 | - | 723,133 | - | 2,910,551 | 1,450,313 | 1,225,377 | 2,675,690 | 1,872,983 | 418,317 | 2,291,300 | ||||
H | 100,0% | 3,517,099 | 4,826,913 | 8,344,012 | - | 8,344,012 | - | - | 8,344,012 | 2,734,332 | 5,676,805 | 8,411,137 | 8,411,137 | - | 8,411,137 | |||||
Total | 321,549,070 | 15,134,975 | 336,684,045 | - | 15,974,167 | - | 6,009,440 | - | 21,983,607 | 259,336,258 | 16,876,770 | 276,213,028 | 15,587,187 | 3,074,780 | 18,661,967 | |||||
Consolidated | ||||||||||||||||||||
09/30/2020 | 12/31/2019 | |||||||||||||||||||
Loan Portfolio | Allowance | Loan Portfolio | Allowance | |||||||||||||||||
Risk Level | % Minimum Allowance Required | Current Past Due (1) | Total (3) | RequiredAdditional (2) | Total | Current Past Due (1) | Total (3) | RequiredAdditional (2) | Total | |||||||||||
AA | 0,0% | 171,882,404 | - | 171,882,404 | - | - | - | 141,210,954 | - | 23,199 | 141,187,755 | - | - | - | ||||||
A | 0,5% | 130,896,989 | - | 130,896,989 | - | 654,485 | - | 312,239 | - | 966,724 | 120,434,015 | - | 120,434,015 | 602,170 | 20,772 | 622,942 | ||||
B | 1,0% | 33,619,965 | 2,937,412 | 36,557,377 | - | 365,574 | - | 533,153 | - | 898,727 | 29,095,941 | 3,746,497 | 32,842,438 | 328,424 | 18 | 328,442 | ||||
C | 3,0% | 21,818,722 | 2,968,419 | 24,787,141 | - | 743,614 | - | 1,557,322 | - | 2,300,936 | 21,140,394 | 3,371,115 | 24,511,509 | 735,345 | 1,664 | 737,009 | ||||
D | 10,0% | 8,763,775 | 2,640,353 | 11,404,128 | - | 1,140,413 | - | 1,997,551 | - | 3,137,964 | 8,368,581 | 2,820,515 | 11,189,096 | 1,118,910 | 1,547,683 | 2,666,593 | ||||
E | 30,0% | 2,623,852 | 2,165,875 | 4,789,727 | - | 1,436,918 | - | 772,005 | - | 2,208,923 | 2,332,530 | 2,835,000 | 5,167,530 | 1,550,259 | 659,875 | 2,210,134 | ||||
F | 50,0% | 2,238,324 | 1,737,554 | 3,975,878 | - | 1,987,939 | - | 655,501 | - | 2,643,440 | 1,859,486 | 1,812,213 | 3,671,699 | 1,835,850 | 447,224 | 2,283,073 | ||||
G | 70,0% | 2,043,836 | 1,354,900 | 3,398,736 | - | 2,379,116 | - | 772,441 | - | 3,151,557 | 1,482,247 | 1,458,609 | 2,940,856 | 2,058,599 | 418,318 | 2,476,917 | ||||
H | 100,0% | 3,814,434 | 5,877,968 | 9,692,402 | - | 9,692,402 | - | - | 9,692,402 | 2,943,753 | 7,139,229 | 10,082,982 | 10,082,982 | - | 10,082,982 | |||||
Total | 377,702,301 | 19,682,481 | 397,384,782 | - | 18,400,461 | - | 6,600,212 | - | 25,000,673 | 328,867,901 | 23,159,979 | 352,027,880 | 18,312,539 | 3,095,554 | 21,408,092 |
- Includes installments falling due and overdue,
- The additional provision is constituted based mainly on the expectation of realization of the loan portfolio, in addition to the minimum required by the current regulation,
- The total loan portfolio includes the amount of R$ 22,926 (12/31/2019 - R$ 5,301) in the Bank and R$ 22,926 (12/31/2019 - R$ 8,118) in Consolidated, referring to the adjustment to market value credit operations that are subject to protection, registered in accordance with article 5 of Bacen Circular Letter 3,624 of December 26, 2013 and which are not included in the note on risk levels,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 47
*Values expressed in thousands, except when indicated.
e) Changes in Allowance for Loan Losses
Bank | Consolidated | |||
01/01 a | 01/01 a | 01/01 a | 01/01 a | |
09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 | |
Opening Balance | 18,661,967 | 16,734,154 | 21,408,092 | 18,789,123 |
Allowances Recognized | 10,719,910 | 7,867,982 | 13,501,276 | 9,696,720 |
Write-offs | (7,398,270) | (9,079,788) | (9,908,695) | (10,244,718) |
Closing Balance | 21,983,607 | 15,522,348 | 25,000,673 | 18,241,125 |
Recoveries Credits (1) | 1,782,654 | 1,661,458 | 2,060,762 | 1,606,698 |
f) Renegotiated Credits
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Renegotiated Credits | 18,385,558 | 13,752,395 | 22,911,566 | 16,292,323 |
Allowance for Loan Losses | (9,183,573) | (7,525,483) | (10,053,828) | (8,283,230) |
Percentage of Coverage on Renegotiated Credits | 49.9% | 54.7% | 43.9% | 50.8% |
g) Loan Portfolio Concentration
Consolidated | ||||
09/30/2020 | 12/31/2019 | |||
Loan Portfolio and Credit Guarantees (1), Securities (2) and | ||||
Derivatives Financial Instruments (3) | Risk | % | Risk | % |
Largest Debtor | 6,417,066 | 1.4% | 4,207,082 | 0.9% |
10 Largest | 34,563,152 | 7.2% | 30,837,795 | 6.9% |
20 Largest | 53,971,068 | 10.9% | 48,360,114 | 10.9% |
50 Largest | 88,308,671 | 17.7% | 78,111,867 | 17.6% |
100 Largest | 117,122,122 | 23.7% | 102,168,739 | 23.0% |
- Includes installments of credit to builders/developers,
- Refers to debentures, promissory notes and certificates of real estate receivables - CRI,
- Refers to credit of derivatives risk,
9. Tax Assets and Liabilities a) Tax Credits
a,1) Nature and Origin of Recorded Deferred Tax Assets
Bank | ||||
Balances on | Balances on | |||
12/31/2019 Recognition (4) | Realization | 09/30/2020 | ||
Allowance for Loan Losses | 14,047,657 | 4,756,015 | (2,039,328) | 16,893,569 |
Reserve for Legal and Administrative Proceedings - Civil | 1,503,264 | 465,625 | (256,345) | 1,738,419 |
Reserve for Tax Risks and Legal Obligations | 1,541,030 | 159,154 | (155,538) | 1,544,684 |
Reserve for Legal and Administrative Proceedings - Labor | 2,249,941 | 564,037 | (508,265) | 2,307,363 |
Agio | - | 56,746 | - | 56,746 |
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 2,092,265 | 821,392 | (1,148,582) | 1,765,075 |
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 76,976 | 227,068 | - | 304,044 |
Accrual for Pension Plan (2) | 1,882,812 | 145,654 | (738,056) | 1,290,410 |
Profit Sharing, Bonuses and Personnel Gratuities | 436,935 | 583,823 | (678,748) | 346,825 |
Other Temporary Provisions (3) | 3,881,291 | - | (468,592) | 3,412,699 |
Total Tax Credits on Temporary Differences | 27,712,171 | 7,779,514 | (5,993,454) | 29,659,834 |
Tax Losses and Negative Social Contribution Bases | - | 11,874,616 | - | 11,874,616 |
Social Contribution Tax - Executive Act 2,158/2001 | 362,240 | - | (187,082) | 175,158 |
Balance of Recorded Deferred Tax Assets | 28,074,411 | 19,654,130 | (6,180,536) | 41,709,608 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 48
*Values expressed in thousands, except when indicated.
Consolidated | ||||
Balances on | Balances on | |||
12/31/2019 Recognition (4) | Realization | 09/30/2020 | ||
Allowance for Loan Losses | 15,961,619 | 5,742,107 | (2,608,210) | 19,224,741 |
Reserve for Legal and Administrative Proceedings - Civil | 1,617,815 | 513,104 | (328,757) | 1,828,037 |
Reserve for Tax Risks and Legal Obligations | 2,367,353 | 190,190 | (177,361) | 2,380,220 |
Reserve for Legal and Administrative Proceedings - Labor | 2,388,470 | 585,694 | (538,300) | 2,437,514 |
Agio | - | 56,746 | - | 56,746 |
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 2,095,470 | 838,520 | (1,151,029) | 1,782,961 |
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 153,977 | 235,548 | (2) | 389,523 |
Accrual for Pension Plan (2) | 1,897,061 | 146,805 | (747,106) | 1,296,760 |
Profit Sharing, Bonuses and Personnel Gratuities | 496,819 | 638,290 | (748,629) | 391,295 |
Other Temporary Provisions (3) | 4,155,209 | 140,718 | (540,785) | 3,755,142 |
Total Tax Credits on Temporary Differences | 31,133,793 | 9,087,722 | (6,840,179) | 33,542,939 |
Tax Losses and Negative Social Contribution Bases | 408,338 | 11,876,397 | (109,090) | 12,175,645 |
Social Contribution Tax - Executive Act 2,158/2001 | 362,240 | - | (187,082) | 175,158 |
Balance of Recorded Deferred Tax Assets | 31,904,371 | 20,964,119 | (7,136,351) | 45,893,742 |
- Includes tax credits IRPJ, CSLL, PIS and Cofins,
- Includes tax credits IRPJ and CSLL, adjustments on plan benefits to employees as mentioned,
- Composed mainly by administrative provisions nature,
- Includes the effects of the change in the CSLL rate for banks of any kind, in accordance with Constitutional Amendment 103/19,
On September, 2020, there are deferred tax assets not registered in assets in the amount of R$ 6,169 (12/31/2019 - R$209,771) in the Consolidated, whose expectation of achievement exceeds 10 years,
The accounting record of the deferred tax assets in the Santander Brasil financial statements was made at the rates applicable to the expected period of its realization and is based on the projection of future results and a technical study prepared pursuant to CMN Resolution nº 3,059/2002, with the amendments to the Resolution CMN nº 4,441/2015
a,2) Expected Realization of Recorded Tax Credits
Bank | ||||||
09/30/2020 | ||||||
Temporary Differences | Tax Loss - | Total | ||||
Year | IRPJ | CSLL | PIS/Cofins | Carryforwards | CSLL 18% | Recorded |
2020 | 1,280,551 | 1,038,975 | 24,345 | 2,074,467 | 4,418,338 | |
2021 | 4,913,004 | 3,964,426 | 97,379 | 1,289,827 | 175,158 | 10,439,794 |
2022 | 4,717,471 | 3,796,047 | 97,379 | 997,388 | - | 9,608,285 |
2023 | 3,457,944 | 2,782,908 | 73,035 | 1,735,908 | - | 8,049,795 |
2024 | 1,083,669 | 809,514 | - | 2,678,174 | - | 4,571,357 |
2025 a 2027 | 470,744 | 376,595 | - | 3,098,852 | - | 3,946,191 |
2028 a 2029 | 295,278 | 257,363 | - | - | - | 552,641 |
2030 | 68,448 | 54,759 | - | - | - | 123,207 |
Total | 16,287,109 | 13,080,587 | 292,138 | 11,874,616 | 175,158 | 41,709,608 |
Consolidated | ||||||
09/30/2020 | ||||||
Temporary Differences | Tax Loss - | Total | ||||
Year | IRPJ | CSLL | PIS/Cofins | Carryforwards | CSLL 18% | Recorded |
2020 | 1,452,586 | 1,139,387 | 24,934 | 2,117,540 | 4,734,447 | |
2021 | 5,561,261 | 4,344,555 | 99,734 | 1,360,916 | 175,158 | 11,541,624 |
2022 | 5,317,590 | 4,154,631 | 99,734 | 1,025,008 | - | 10,596,963 |
2023 | 3,937,135 | 3,069,267 | 74,818 | 1,759,275 | - | 8,840,495 |
2024 | 1,608,038 | 1,092,976 | 68 | 2,678,818 | - | 5,379,900 |
2025 a 2027 | 480,113 | 379,629 | 205 | 3,175,713 | - | 4,035,660 |
2028 a 2029 | 313,521 | 269,106 | 189 | 58,375 | - | 641,191 |
2030 | 68,636 | 54,826 | - | - | - | 123,462 |
Total | 18,738,880 | 14,504,377 | 299,682 | 12,175,645 | 175,158 | 45,893,742 |
Due to differences between accounting, tax and corporate, expected realization of tax credits should not be taken as indicative of future net income,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 49
*Values expressed in thousands, except when indicated.
a,3) Present Value of Tax Credits
The present value of the tax credits recorded is R$ 40,452,130 (12/31/2019 - R$25,724,592) in the Bank and R$ 44,496,054 (12/31/2019
- R$29,133,062) in the Consolidated, calculated according to with the expectation of realizing the temporary differences, tax loss carryforwards, negative social contribution tax, Social Contribution 18% - MP 2,158/2001 and the average funding rate, projected for the corresponding periods,
- Other Liabilities - Tax and Social Security
Bank | Consolidated | |||||||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |||||
Deferred Tax Liabilities | 4,498,180 | 5,444,706 | 5,127,701 | 6,013,811 | ||||
Provision for Taxes and Contributions on Income | - | - | 984,773 | 460,654 | ||||
Taxes Payable | 526,016 | 1,069,765 | 869,678 | 1,817,392 | ||||
Total | 5,024,196 | 6,514,471 | 6,982,152 | 8,291,857 | ||||
b,1) Nature and Origin of Deferred Tax Liabilities | ||||||||
Bank | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition | Realization | 09/30/2020 | |||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 1,573,996 | 27,368 | - | 1,601,364 | ||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash | ||||||||
Flow Hedge (1) | 3,737,329 | - | (964,814) | 2,772,515 | ||||
Excess Depreciation of Leased Assets | 5,441 | - | (14) | 5,427 | ||||
Others | 127,940 | 14,189 | (23,254) | 118,875 | ||||
Total | 5,444,706 | 41,557 | (988,082) | 4,498,181 | ||||
Consolidated | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition | Realization | 09/30/2020 | |||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 1,686,421 | 65,783 | (5,307) | 1,746,897 | ||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash | ||||||||
Flow Hedge (1) | 3,807,649 | 10,338 | (989,935) | 2,828,052 | ||||
Excess Depreciation of Leased Assets | 318,240 | 29,486 | (8,236) | 339,490 | ||||
Others | 201,501 | 43,752 | (31,991) | 213,262 | ||||
Total | 6,013,811 | 149,359 | (1,035,469) | 5,127,701 | ||||
(1) Includes IRPJ, CSLL, PIS and Cofins | ||||||||
b,2) Expected Realization of Deferred Tax Liabilities | ||||||||
Bank | ||||||||
9/30/2020 | ||||||||
Temporary Differences | Total | |||||||
Year | IRPJ | CSLL | PIS/Cofins | Recorded | ||||
2020 | 184,801 | 147,474 | 35,639 | 367,914 | ||||
2021 | 739,204 | 589,898 | 142,554 | 1,471,656 | ||||
2022 | 739,204 | 589,898 | 142,554 | 1,471,656 | ||||
2023 | 556,057 | 443,742 | 106,915 | 1,106,714 | ||||
2024 | 6,614 | 5,273 | - | 11,887 | ||||
2025 a 2027 | 19,843 | 15,819 | - | 35,662 | ||||
2028 a 2029 | 13,229 | 10,546 | - | 23,775 | ||||
2030 | 4,962 | 3,955 | - | 8,917 | ||||
Total | 2,263,914 | 1,806,605 | 427,662 | 4,498,181 |
Consolidated
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 50
*Values expressed in thousands, except when indicated.
9/30/2020 | |||||||||
Temporary Differences | Total | ||||||||
Year | IRPJ | CSLL | PIS/Cofins | Recorded | |||||
2020 | 289,264 | 156,721 | 36,054 | 482,039 | |||||
2021 | 882,598 | 621,157 | 144,217 | 1,647,972 | |||||
2022 | 828,403 | 621,157 | 144,217 | 1,593,777 | |||||
2023 | 631,761 | 467,449 | 108,277 | 1,207,487 | |||||
2024 | 41,834 | 6,323 | 454 | 48,611 | |||||
2025 a 2027 | 89,162 | 17,747 | 1,362 | 108,271 | |||||
2028 a 2029 | 16,613 | 11,954 | 1,249 | 29,816 | |||||
2030 | 5,558 | 4,170 | - | 9,728 | |||||
Total | 2,785,193 | 1,906,678 | 435,830 | 5,127,701 | |||||
c) Income Tax and Social Contribution | |||||||||
Bank | |||||||||
07/01 a | 01/01 a | 07/01 a | 01/01 a | ||||||
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | ||||||
Income Before Taxes on Income and Profit Sharing | 4,190,742 | (3,004,345) | 2,536,745- | 12,693,790 | |||||
Profit Sharing (1) | (411,331) | (1,291,581) | (420,684)- | (1,262,362) | |||||
Unrealized Income | - | - | -- | - | |||||
Income Before Taxes | 3,779,411 | (4,295,926) | 2,116,061- | 11,431,428 | |||||
Total Income and Social Contribution Tax at the Rates of 25% and | |||||||||
20%, Respectively (3) | (1,700,735) | 1,933,166 | (846,424)- | (4,572,571) | |||||
Equity in Subsidiaries (2) | 186,768 | 1,006,768 | 220,548- | 864,167 | |||||
Nondeductible Expenses, Net of Non-Taxable Income | 38,027 | 29,221 | 467,344- | 1,257,431 | |||||
Exchange Variation - Foreign Branches | 986,571 | - | 9,032,479 | 1,526,223- | 1,323,811 | ||||
Income and Social Contribution Taxes on Temporary Differences and Tax | |||||||||
Losses from Previous Exercises | 43,254 | 503,511 | 115,792- | 142,815 | |||||
Interest on Capital | 346,500 | - | 733,500- | -- | - | ||||
Effects of Change in Rate of CSLL (3) | - | - | -- | - | |||||
Other Adjustments Social Contribution Taxes 5% (4) | -- | 56,791- | -- | - | |||||
Other Adjustments, Including Profits Provided Abroad | 64,131 | 687,295 | 34,206- | 58,316 | |||||
Income and Social Contribution Taxes | (35,484) | 13,982,731 | 1,517,689- | (926,031) | |||||
Consolidated | |||||||||
07/01 a | 01/01 a | 07/01 a | 01/01 a | ||||||
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | ||||||
Income Before Taxes on Income and Profit Sharing | 4,709,588 | (1,520,174) | 2,908,051 | 14,176,041 | |||||
Profit Sharing (1) | (457,730) | (1,421,238) | (469,896) | (1,395,158) | |||||
Unrealized Income | 8,341 | 68,209 | 28,262 | 44,523 | |||||
Income Before Taxes | 4,260,200 | (2,873,202) | 2,466,418 | 12,825,406 | |||||
Total Income and Social Contribution Tax at the Rates of 25% and 20%, | |||||||||
Respectively (5) | (1,917,090) | 1,292,941 | (986,567) | (5,130,162) | |||||
Equity in Subsidiaries (2) | 6,926 | 11,223 | 5,353 | 14,041 | |||||
Nondeductible Expenses, Net of Non-Taxable Income | 43,280 | 47,416 | 493,255 | 1,395,088 | |||||
Exchange Variation - Foreign Branches | 986,571 | 9,032,479 | 1,526,223 | 1,323,811 | |||||
Income and Social Contribution Taxes on Temporary Differences and Tax | |||||||||
Losses from Previous Exercises | 38,244 | 544,467 | 116,132 | 176,984 | |||||
Interest on Capital | 333,000 | 733,500 | - | - | |||||
Effects of Change in Rate of CSLL (3) | 64,671 | 237,565 | 37,712 | 91,455 | |||||
Other Adjustments Social Contribution Taxes 5% | (9,122) | 63,374 | - | - | |||||
Other Adjustments, Including Profits Provided Abroad | 40,895 | 690,282 | 66,853 | 51,351 | |||||
Income and Social Contribution Taxes | (412,625) | 12,653,247 | 1,258,960 | (2,077,432) |
- The basis of calculation is the net income, after IR and CSLL,
- As a result of equity in subsidiaries are not included interest on capital received and receivable,
- Effect of rate differences for the other non-financial companies, which the social contribution tax rate is 9% and 15%,
- Increase in the CSLL rate, as of March 2020, for an indefinite period,
Foreign Exchange Hedge of the Grand Cayman Branch, Luxembourg Branch and the Subsidiary Santander Brasil EFC
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 51
*Values expressed in thousands, except when indicated.
Banco Santander operates two branchs, one in the Cayman Islands and one in Luxembourg, and a subsidiary called Santander Brasil Establecimiento Financiero de Credito, EFC, or "Santander Brasil EFC" (independent subsidiary in Spain) which are used mainly to raise funds in the capital and financial markets, providing credit lines that are extended to customers for trade-related financings and working capital (Note 11),
To protect the exposures to foreign exchange rate variations, the Bank uses derivatives and international funding, According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (real) in foreign investments are nontaxable or deductible to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible, The purpose of these derivatives are to protect the after-tax results,
Tax treatment distinct from such exchange rate differences results in volatility in "Operating Income before Taxation" and in the caption "Income Taxes", Following are the effects of the operations carried out, as well as the total effect of the Currency Hedge for the period ended in September 30, 2020 and 2019:
01/01 a | 01/01 a | |
R$ | 09/30/2020 | 09/30/2019 |
Financial Operations | ||
Result generated by the exchange rate variations on the Bank's investment in the Cayman and EFC | ||
Agency | 21,807,261 | 3,525,929 |
Result generated by derivative contracts used as hedge | (40,098,666) | (5,994,824) |
Tax Expenses | ||
Tax effect of derivative contracts used as hedge - PIS/COFINS | 772,189 | 57,168 |
Income Tax and Social Contribution | ||
Tax effect of derivative contracts used as hedge - IR/CS | 17,519,216 | 2,411,727 |
(1) The basis of calculation is the net income, after IR and CSLL, |
10. Other Receivables - Other
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Notes and Credits Receivable (Note 8,a) | ||||
Credit Cards | 27,183,198 | 28,854,952 | 27,183,198 | 28,973,079 |
Receivables (1) | 25,235,667 | 28,984,542 | 27,822,928 | 31,820,361 |
Escrow Deposits for: | ||||
Tax Claims | 5,809,101 | 5,644,233 | 7,611,533 | 7,445,344 |
Labor Claims | 2,053,698 | 2,022,832 | 2,249,315 | 2,208,429 |
Others - Civil | 1,134,586 | 1,057,348 | 1,370,385 | 1,319,644 |
Contract Guarantees - Former Controlling Stockholders (Note | 103,829 | 103,272 | 103,828 | 103,272 |
17,i) | ||||
Recoverable Taxes | 2,173,399 | 2,238,982 | 3,159,345 | 3,320,147 |
Receivables - Buyer Services | - | - | - | - |
Reimbursable Payments | 224,475 | 196,039 | 285,901 | 225,380 |
Salary Advances/Others | (2,032,370) | 100,128 | (1,917,429) | 325,185 |
Employee Benefit Plan | 262,903 | 283,046 | 323,632 | 346,422 |
Debtors for Purchase of Assets (Note 7,a) | 628,433 | 653,347 | 676,199 | 713,936 |
Receivable from Affiliates | 20,149 | 44,457 | 9,578 | 18,842 |
Others | 3,361,206 | 1,284,510 | 6,411,029 | 3,015,028 |
Total | 66,158,274 | 71,467,688 | 75,289,442 | 79,835,069 |
- It consists of operations with credit assignment characteristics substantially composed of "Confirming" operations with companies subject to credit risk and analysis of loan losses by segment in accordance with the Bank risk policies,
11. Dependences Information and Foreign Subsidiary
Branches:
Cayman
The Grand Cayman Agency is licensed under the Banks and Fiduciary Companies Act and is duly registered as a Foreign Company with the Registrar of Companies in Grand Cayman, Cayman Islands, The agency is therefore duly authorized to carry out banking business in the Cayman Islands and is currently engaged in fund raising business in the international banking and capital market to provide credit lines to Banco Santander, which are then extended to Banco Santander clients' for financing working capital and foreign trade, It also receives deposits in foreign currency from corporate clients and individuals and provides credit to Brazilian and foreign clients, primarily to support commercial operations with Brazil,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 52
*Values expressed in thousands, except when indicated.
Luxembourg
On June 9, 2017, Banco Santander obtained authorization from the Brazilian Central Bank to set up an agency in Luxembourg with a capital of US$1 billion, with the objective of complementing the foreign trade strategy for corporate clients (large Brazilian companies and their operations abroad) and offer financial products and services through an offshore entity that is not established in a jurisdiction with favored taxation and that allows for the increase of funding capacity, The opening of the agency was authorized by the Minister of Finance of Luxembourg on March 5, 2018, On April 3, 2018, after the reduction of the capital of the Cayman Agency in the equivalent amount, the value of US$1 billion was allocated to capital of the Luxembourg branch,
Subsidiary:
Banco Santander has a subsidiary in Spain, Santander Brasil, Establecimiento Financiero de Credito, S,A, (Santander Brasil EFC), to complement the foreign trade strategy for corporate clients - large brazilian companies and their operations abroad - and offer products and financial services through an offshore entity that is not established in a jurisdiction with favored taxation,
The summarized financial position of dependency and foreign subsidiary, converted at the exchange rate prevailing at balance sheet date in the financial statements include (without eliminating transactions with related parties):
Grand Cayman Branch (3) | Luxembourg Branch (3) | Santander Brasil EFC (3) | ||||
9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | 9/30/2020 | 12/31/2019 | |
Assets | 193,864,738 | 124,944,302 | 43,277,801 | 19,955,679 | 5,396,333 | 3,850,302 |
Current and Long-term Assets | 193,864,738 | 124,944,302 | 43,277,481 | 19,955,392 | 5,396,333 | 3,850,302 |
Cash | 3,001,709 | 3,205,293 | 2,370,515 | 162,231 | 145,544 | 319,152 |
Interbank Investments | 57,124,659 | 34,116,739 | 5,525,153 | 1,941,192 | 4,761,504 | 2,582,385 |
Securities and Derivatives Financial Instruments | 94,284,492 | 63,736,330 | 4,664,281 | 1,002,697 | 20,726 | 16,799 |
Lending Operations (1) | 22,994,436 | 16,466,558 | 26,883,016 | 16,570,321 | - | 590,941 |
Foreign Exchange Portfolio | 10,682,228 | 4,145,245 | 3,463,320 | 167,985 | - | - |
Others | 5,777,214 | 3,274,137 | 371,196 | 110,966 | 468,559 | 341,025 |
Permanent Assets | - | - | 320 | 287 | - | - |
Liabilities | 193,864,738 | 124,944,302 | 43,277,801 | 19,955,679 | 5,396,333 | 3,850,302 |
Current and Long-term Liabilities | 112,331,581 | 70,332,537 | 36,330,120 | 15,429,041 | 412,035 | 303,219 |
Deposits and Money Market Funding | 28,473,410 | 10,798,572 | 5,639,593 | 2,469,606 | 43,450 | 29,766 |
Funds from Acceptance and Issuance of Securities | 20,027,820 | 14,999,864 | 11,240,028 | 6,235,813 | - | - |
Debt Instruments Eligible to Compose Capital | 14,473,732 | 10,175,961 | - | - | - | - |
Borrowings (2) | 25,025,797 | 24,297,747 | 14,903,362 | 6,318,373 | - | - |
Foreign Exchange Portfolio | 10,718,688 | 4,120,196 | 3,192,047 | 168,134 | - | - |
Others | 13,612,134 | 5,940,197 | 1,355,090 | 237,115 | 368,585 | 273,453 |
Deferred Income | 180 | 119 | 16,166 | 12,331 | 18 | 29 |
Stockholders' Equity | 81,532,977 | 54,611,646 | 6,931,515 | 4,514,307 | 4,984,280 | 3,547,054 |
01/01 a | 01/01 a | 01/01 a | 01/01 a | 01/01 a | 01/01 a | |
09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 | |
Net Income | 2,578,250 | 1,973,237 | 625,983 | 211,598 | 1,881 | 21,329 |
- Refers mainly to lending and export financing operations,
- Borrowings abroad regarding financing lines to exports and imports and other lines of credit,
-
The functional currency is Real,
12. Investments in Affiliates and Subsidiaries Subsidiary
Bank | ||||||||||
Adjusted | Net Income | |||||||||
Stockholder | (Loss) | Equity Accounting | ||||||||
s' Equity | Adjusted | Investments Value | Results | |||||||
01/01 a | 01/01 a | 01/01 a | ||||||||
09/30/2020 | 09/30/2020 | 09/30/2020 | 12/31/2019 09/30/2020 | 09/30/2020 | ||||||
Controlled by Banco Santander | ||||||||||
Santander Leasing | 5,878,925 | 138,879 | 4,619,695 | 4,528,041 | 109,507 | 46,937 | ||||
Banco Bandepe S,A, | 5,348,678 | 74,526 | 5,348,678 | 5,277,643 | 74,526 | 212,123 | ||||
Santander Brasil EFC | 4,984,280 | 1,881 | 4,984,280 | 3,547,055 | 2,244 | 21,329 | ||||
Santander Corretora de Seguros | 3,445,108 | 445,516 | 3,445,108 | 3,002,236 | 445,516 | 321,543 | ||||
Getnet S,A, | 2,019,612 | 209,970 | 2,019,611 | 2,611,765 | 209,970 | 472,941 | ||||
Ágio na Aquisição de Participação Residual da | ||||||||||
Getnet S,A, | - | - | 14,532 | 1,080,439 | - | - | ||||
Atual Serviços de Recuperação de Créditos e Meios | ||||||||||
Digitais S,A, | 1,728,864 | 58,275 | 1,710,327 | 1,322,052 | 58,275 | 31,461 | ||||
Aymoré CFI | 1,304,398 | 328,913 | 1,304,398 | 937,539 | 328,913 | 622,545 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 53
*Values expressed in thousands, except when indicated.
Sancap | 1,221,637 | 268,138 | 1,221,637 | 1,040,469 | 268,122 | 105,440 | |||
Banco Olé Consignado (1) | - | - | 926,278 | 154,380 | 39,871 | ||||
Bosan S,A, | - | - | - | 95,350 | 59,569 | ||||
Ágio na Aquisição de Participação da Bosan S,A, | - | - | 13 | - | - | 51,750 | |||
Santander CCVM | 715,396 | 71,329 | 715,394 | 646,400 | 71,329 | 77,831 | |||
Banco RCI Brasil S,A, | 1,413,087 | 138,981 | 563,693 | 524,503 | 55,441 | 59,933 | |||
Santander Brasil Consórcio | 600,833 | 175,877 | 600,833 | 424,956 | 175,877 | 151,857 | |||
Others | 1,441,505 | 135,546 | 1,183,475 | 941,417 | 189,697 | -114,712 | |||
Total | 27,731,674 | 26,810,793 | 2,239,147 | 2,160,418 | |||||
Consolidated | |||||||||
Adjusted | Net Income | ||||||||
Stockholders' | (Loss) | ||||||||
Equity | Adjusted | Investments Value | Equity Accounting Results | ||||||
01/01 a | 01/01 a | 01/01 a | |||||||
09/30/2020 | 09/30/2020 09/30/2020 | 12/31/2019 09/30/2020 | 09/30/2020 | ||||||
Jointly Controlled Companies Directly and Indirectly | |||||||||
by Banco Santander | |||||||||
TecBan | 568,308 | 72,230 | 107,865 | 94,155 | 13,709 | 8,853 | |||
Gestora de Crédito | 170,804 | (67,914) | 34,161 | 47,744 | (13,581) | (7,873) | |||
Webmotors S,A, | 218,678 | 38,050 | 153,075 | 126,440 | 26,635 | 32,381 | |||
Norchem Holdings | 96,459 | (151) | 20,980 | 21,252 | (33) | 443 | |||
Norchem Participações | 41,744 | 666 | 20,872 | 21,080 | 333 | 796 | |||
EBP | 11,525 | 148 | 1,280 | 3,889 | 16 | 175 | |||
Santander Auto | 31,636 | (4,711) | 15,818 | 12,374 | (2,356) | (247) | |||
Hyundai Corretora de Seguros Ltda, | 1,959 | 91 | 979 | 934 | 46 | 6 | |||
PSA Corretora | 1,427 | 347 | 714 | 540 | 173 | 373 | |||
Others (2) | 5,265 | 5,266 | - | 127 | |||||
Total | 361,009 | 333,674 | 24,942 | 35,109 |
- On January 31, 2020, the purchase of the minority stake in Banco Olé Consignado SA was completed, thus, the Bank became, directly and indirectly, holder of 100% of the shares of Banco Olé (Note 2,cii),
-
Comprised mainly of the goodwill portion allocated to Webmotors,
13. Intangibles
Bank | ||||
09/30/2020 | 12/31/2019 | |||
Cost | Amortization | Net | Net | |
Goodwill on Acquired Companies | 28,323,672 | (26,539,791) | 1,783,881 | 274,745 |
Other Intangible Assets | 9,291,408 | (5,104,970) | 4,186,437 | 3,777,511 |
Acquisition and Development of Software | 5,281,700 | (3,326,896) | 1,954,804 | 1,851,076 |
Exclusivity Contracts for Provision of Banking Services | 3,592,055 | (1,744,141) | 1,847,914 | 1,926,342 |
Others | 417,653 | (33,933) | 383,720 | 93 |
Total | 37,615,080 | (31,644,762) | 5,970,318 | 4,052,256 |
Consolidated | ||||
09/30/2020 | 12/31/2019 | |||
Cost | Amortization | Net | Net | |
Goodwill on Acquired Companies | 29,513,388 | (27,586,290) | 1,927,098 | 1,611,812 |
Other Intangible Assets | 9,958,217 | (5,555,767) | 4,402,451 | 4,100,986 |
Acquisition and Development of Software | 5,855,388 | (3,704,699) | 2,150,690 | 2,118,798 |
Exclusivity Contracts for Provision of Banking Services | 3,592,055 | (1,744,141) | 1,847,914 | 1,926,342 |
Others | 510,774 | (106,928) | 403,847 | 55,846 |
Total | 39,471,606 | (33,142,057) | 6,329,548 | 5,712,798 |
(*) For the quarter ended September 30, 2020, there was no impairment,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 54
*Values expressed in thousands, except when indicated.
14. Funding
a) Opening of Equity Accounts
Bank | ||||||
09/30/2020 | 12/31/2019 | |||||
Without | Up to 3 | From 3 to | Over 12 | |||
Maturity | Months | 12 Months | Months | Total | Total | |
Deposits | 103,112,260 | 83,277,850 | 105,392,655 | 95,426,259 | 387,309,024 | 274,212,166 |
Demand Deposits | 43,591,258 | - | - | - | 43,591,258 | 29,392,188 |
Savings Deposits | 59,443,489 | - | - | - | 59,443,489 | 49,039,857 |
Interbank Deposits | - | 2,450,748 | 4,090,895 | 262,189 | 6,803,832 | 4,673,772 |
Time Deposits (1) | 77,513 | 80,827,099 | 101,301,760 | 95,164,070 | 277,370,442 | 191,106,349 |
Others | - | 3 | - | - | 3 | - |
Money Market Funding | - | 78,338,764 | 12,527,494 | 35,101,459 | 125,967,718 | 129,632,447 |
Own Portfolio | - | 70,838,790 | 4,684,766 | 247,138 | 75,770,693 | 97,387,683 |
Government Securities | - | 60,961,999 | 4,679,826 | 246,537 | 65,888,362 | 87,881,427 |
Debt Securities in Issue | - | 2,971 | 1,498 | - | 4,469 | 86,595 |
Others | - | 9,873,820 | 3,442 | 601 | 9,877,862 | 9,419,661 |
Third Parties | - | 7,499,974 | - | - | 7,499,974 | 8,743,348 |
Linked to Trading Portfolio Operations | - | - | 7,842,729 | 34,854,321 | 42,697,050 | 23,501,416 |
Funds from Acceptance and Issuance of Securities | - | 11,479,938 | 28,811,002 | 50,802,156 | 91,093,096 | 91,579,368 |
Exchange Acceptances | - | 100,862 | - | 100,862 | ||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 8,407,045 | 18,251,599 | 30,431,690 | 57,090,334 | 68,716,278 |
Real Estate Credit Notes - LCI (1) | - | 2,901,756 | 6,944,798- | 16,316,286 | 26,162,840 | 24,995,265 |
Agribusiness Credit Notes - LCA | - | 2,700,431 | 5,770,810- | 6,591,283 | 15,062,524 | 14,776,877 |
Treasury Bills - LF (2) | - | 2,804,858 | 5,535,991- | 6,231,183 | 14,572,032 | 27,587,340 |
Guaranteed Real Estate Credit Notes - LIG (3) | - | - | -- | 1,292,938 | 1,292,938 | 1,356,796 |
Securities Issued Abroad | - | 2,610,235 | 9,224,293 | 19,431,168 | 31,265,696 | 19,419,513 |
Funding by Structured Operations Certificates | - | 462,657 | 1,234,247 | 939,299 | 2,636,203 | 3,443,577 |
Borrowings and Onlendings | - | 53,463,781 | 10,276,438 | 9,186,686 | 72,926,906 | 57,413,704 |
Foreign Borrowings | - | 51,164,663 | 8,076,492 | 1,330,307 | 60,571,461 | 45,659,127 |
Import and Export Financing Lines | - | 43,054,192 | 5,831,644 | 723,747 | 49,609,582 | 31,794,109 |
Other Credit Lines | - | 8,110,471 | 2,244,848 | 606,560 | 10,961,879 | 13,865,018 |
Domestic Onlendings | - | 2,299,119 | 2,199,947 | 7,856,379 | 12,355,445 | 11,754,577 |
Total | 103,112,260 226,660,330 157,007,590 | 190,516,564 677,296,743 552,837,685 | ||||||
Consolidated | ||||||||
09/30/2020 | 12/31/2019 | |||||||
Without | Up to 3 | From 3 to | Over 12 | |||||
Maturity | Months | 12 Months | Months | Total | Total | |||
Deposits | 102,934,924 | 81,283,358 | 103,751,832 | 96,247,802 | 384,217,916 | 272,927,991 | ||
Demand Deposits | 43,413,922 | - | - | - | 43,413,922 | 29,107,534 | ||
Savings Deposits | 59,443,489 | - | - | - | 59,443,489 | 49,039,857 | ||
Interbank Deposits | - | 368,675 | 4,000,854 | 1,741,572 | 6,111,101 | 4,299,290 | ||
Time Deposits (1) | 77,513 | 80,914,683 | 99,750,978 | 94,506,228 | 275,249,402 | 190,344,470 | ||
Other Deposits | - | - | - | 2 | 2 | 136,840 | ||
Money Market Funding | - | 71,534,177 | 12,527,494 | 35,101,459 | 119,163,131 | 123,940,990 | ||
Own Portfolio | - | 66,034,196 | 4,684,766 | 247,138 | 70,966,100 | 91,696,225 | ||
Government Securities | - | 56,157,405 | 4,679,826 | 246,537 | 61,083,768 | 82,189,969 | ||
Debt Securities in Issue | - | 2,971 | 1,498 | - | 4,469 | 86,595 | ||
Others | - | 9,873,820 | 3,442 | 601 | 9,877,862 | 9,419,661 | ||
Third Parties | - | 5,499,981 | - | - | 5,499,981 | 8,743,348 | ||
Linked to Trading Portfolio Operations | - | - | 7,842,729 | 34,854,321 | 42,697,050 | 23,501,417 | ||
Funds from Acceptance and Issuance of Securities | - | 10,756,853 | 22,588,521 | 40,203,792 | 73,549,166 | 85,962,615 | ||
Exchange Acceptances | - | 47,954 | 330,763 | 746,504 | 1,125,221 | 1,591,753 | ||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 8,909,701 | 19,444,165 | 32,080,068 | 60,433,935 | 72,211,903 | ||
Real Estate Credit Notes - LCI (1) | - | 2,901,756 | 6,944,798 | 16,316,286 | 26,162,840 | 24,995,265 | ||
Agribusiness Credit Notes - LCA | - | 2,700,431 | 5,770,810 | 6,591,283 | 15,062,524 | 14,776,877 | ||
Treasury Bills - LF (2) | - | 3,307,515 | 6,728,557 | 7,879,561 | 17,915,633 | 31,082,965 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 55
*Values expressed in thousands, except when indicated.
Guaranteed Real Estate Credit Notes - LIG (3) | - | - | - | 1,292,938 | 1,292,938 | 1,356,796 |
Securities Issued Abroad | - | 1,336,540 | 1,579,345 | 6,437,921 | 9,353,807 | 8,715,382 |
Funding by Structured Operations Certificates | - | 462,657 | 1,234,247 | 939,299 | 2,636,203 | 3,443,577 |
Borrowings and Onlendings | - | 48,702,277 | 10,287,840 | 9,218,413 | 68,208,530 | 54,879,561 |
Domestic Borrowings | - | - | 11,401 | 31,727 | 43,129 | 47,388 |
Foreign Borrowings | - | 46,403,159 | 8,076,492 | 1,330,307 | 55,809,957 | 43,077,596 |
Import and Export Financing Lines | - | 43,054,192 | 5,831,644 | 723,747 | 49,609,582 | 31,794,109 |
Other Credit Lines | - | 3,348,967 | 2,244,848 | 606,560 | 6,200,375 | 11,283,487 |
Domestic Onlendings | - | 2,299,119 | 2,199,947 | 7,856,379 | 12,355,445 | 11,754,577 |
Total | 102,934,924 | 212,276,666 | 149,716,229 | 180,210,924 | 645,138,743 | 537,711,157 |
- Consider the maturities established in the respective applications, with the possibility of immediate withdrawal, in advance of their maturity,
- Letters of real estate credit are fixed income securities backed by real estate credits and guaranteed by mortgage or fiduciary alienation of real estate, As of September 30, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2026),
- The main characteristics of the financial bills are a minimum term of two years, a minimum nominal value of R$300 and an early redemption permit of only 5% of the amount issued, As of September 30, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2025),
- Guaranteed Real Estate Bills are fixed income securities backed by real estate credits guaranteed by the issuer and a pool of real estate credits apart from the other
At the Bank and Consolidated, the export and import financing lines are funds raised from financial institutions abroad, intended for investment in commercial exchange operations, related to discounting export bills and pre-financing for export and import, whose maturities are up to the year 2023 (12/31/2019 - until the year 2023) and are subject to financial charges, corresponding to the exchange variation plus interest that vary from 0,28% pa to 3,70% p,a (12/31/2019 - from 0,28% per annum to 3,8% p,a),
Country onlending obligations - official institutions incur financial charges corresponding to TJLP, exchange variation of the BNDES currency basket or exchange variation of the US dollar, plus interest, in accordance with the operational policies of the BNDES System,
b) Opening profit and loss accounts
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 09/30/2019 09/30/2019 | 09/30/2020 | 09/30/2020 09/30/2019 | 09/30/2019 | ||||
Time Deposits (1) (2) | 2,271,273 | 11,115,742 | 4,581,337 | 8,789,357 | 2,554,234 | 11,854,151 | 4,433,438 | 8,664,227 |
Savings Deposits | 299,101 | 1,093,765 | 519,766 | 1,576,165 | 299,101 | 1,093,765 | 519,766 | 1,576,165 |
Interbank Deposits | 34,548 | 135,468 | 86,922 | 345,081 | 52,383 | 177,558 | 47,592 | 153,164 |
Money Market Funding | 985,996 | 5,264,892 | 2,307,183 | 7,864,725 | 909,536 | 5,122,401 | 2,229,159 | 7,630,744 |
Upgrade and Provisions Interest and Pension Plans and | - | - | - | - | 36,518 | 103,121 | 16,409 | 99,193 |
Capitalization | ||||||||
Acceptance and Issuance of Securities | - | - | 5,446,747 | 7,841,886 | 1,370,960 | 27,457,838 | 5,510,178 | 8,024,853 |
Others (3) | 2,984,784 | 29,584,970 | (216,289) | 433,108 | 1,640,704 | 2,248,460 | (176,381) | 482,392 |
Total | 6,575,702 | 47,194,83712,725,666 | 26,850,322 | 6,863,436 | 48,057,29412,580,161 | 26,630,738 |
- In the Bank and in the Consolidated, it includes the registration of interest in the amount of R$212,087 (2019 - R$157,770), referring to the issuance of Level I and II Eligible Debt Instrument (Note 15),
- Includes exchange variation expense of R$2,994,329 in the Bank and Consolidated (2019 - exchange variation expense of R$543,210 in the Bank and Consolidated),
15. Debt Instruments Eligible to Capital
The details of the balance of the item Debt Instruments Eligible to Capital referring to the issuance of equity instruments to compose Level I and Level II of the PR due to the Capital Optimization Plan, are as follows:
Bank/Consolidated | ||||||
09/30/2020 | 12/31/2019 | |||||
Debt Instruments Eligible to | Amount | Interest Rate | ||||
Compose Capital | Issuance | Maturity | (Million) | (p,a,) (1) | Total | Total |
Tier I (2) | November - 18 | No Maturity (Perpetual) | US$1,250 | 7,25% | 7,221,222 | 5,092,153 |
Tier II (2) | November - 18 | November - 28 | US$1,250 | 6,13% | 7,252,510 | 5,083,808 |
Total | 14,473,732 | 10,175,961 |
- Interest paid semi-annually, as of May 8, 2019,
- The issues were made through the Cayman Agency and there is no incidence of Income Tax at Source,
Notes have the following common characteristics:
(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand in excess of such minimum value;
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 56
*Values expressed in thousands, except when indicated.
-
The Notes may be repurchased or redeemed by Banco Santander after the 5th (fifth) anniversary from the date of issue of the Notes, at the Bank's sole discretion or due to changes in the tax legislation applicable to the Notes; or at any time, due to the occurrence of certain regulatory events,
16. Other Payables - Other
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Provision Technical for Capitalization Operations | - | - | 2,952,947 | 2,402,614 |
Provision Technical for Pension Operations | - | - | - | 1,901,721 |
Payables for Credit Cards | 26,351,889 | 27,526,591 | 36,577,358 | 36,188,873 |
Provision for Tax Risks and Legal Obligations (Note 22.b) (2) | 4,187,242 | 4,346,769 | 6,488,990 | 6,630,722 |
Provision for Legal and Administrative Proceedings - | 6,191,274 | 6,179,885 | 6,626,135 | 6,739,988 |
Labor and Civil (Note 22.b) (2) | ||||
Provision for Financial Guarantees (Note 21.a) | - | 166,105 | - | 166,105 |
Employee Benefit Plans (Note 34) | 3,675,541 | 4,901,691 | 3,725,905 | 4,956,851 |
Payables for Acquisition of Assets and Rights | 26,817 | 23,034 | 26,817 | 23,034 |
Reserve for Tax Contingencies - Responsibility of | 102,977 | 102,482 | 102,977 | 102,482 |
Former Controllers (Note 22.i) (b) | ||||
Reserve for Legal and Administrative Proceedings - Responsibility | ||||
of | 852 | 791 | 852 | 791 |
Former Controllers Stockholders (Note 22.i) (b) | ||||
Accrued Liabilities | ||||
Personnel Expenses | 1,631,530 | 1,697,771 | 1,881,010 | 1,960,884 |
Administrative Expenses | 374,221 | 388,954 | 609,988 | 593,593 |
Others Payments | 26,381 | 40,179 | 165,117 | 135,235 |
Creditors for Unreleased Funds | 2,278,386 | 1,188,637 | 2,278,386 | 1,188,637 |
Provision of Payment Services | 556,849 | 580,988 | 556,849 | 580,988 |
Suppliers | 856,295 | 437,208 | 1,138,620 | 1,242,839 |
Others (1) | 7,914,282 | 6,088,000 | 13,822,214 | 9,571,481 |
Total | 54,174,536 | 53,669,085 | 76,954,165 | 74,386,838 |
- Includes impacts of the exchange variation referring to Notes,
- In the first half of 2019, the Bank entered into an agreement with a former controller where the registered obligations became the responsibility of the Bank, with no impact on results (Notes 15 and 16,i),
a) Provision for Financial Guarantees
The classification of the guarantees operations for the constitution of provision is based on the estimate of the involved risk, It happens due to the quality evaluation process applied to the clients and operations, using statistical model based on quantitative and qualitative information or on specialized credit analyst, which allow them to be classified according their default probabilities, based on internal and market´s objective variables (bureaus), previously identified as predictive of default probability, After this evaluation, the operations are classified according to the provisioning ratings, having as reference the CMN Resolution nº 2,682/1999, Based on the results of this analysis, amounts related to operations' coverage are registered as provision considering the type of the guarantee, according to the requirements of CMN Resolution nº 4,512/2016,
Bank/Consolidated | ||||
09/30/2020 | 12/31/2019 | |||
Balance | Balance | |||
Guarantees | Guarantees | |||
Type of Financial Guarantee | Provided | Provision | Provided | Provision |
Linked to International Merchandise Trade | 628,573 | 4,589 | 439,507 | 3,017 |
Linked to Bids, Auctions, Provision of Services or Execution of | ||||
Works | 5,105,743 | 5,174 | 5,243,996 | 4,426 |
Linked to the Supply of Goods | 1,436,941 | 1,776 | 1,488,371 | 2,602 |
Linked to the Distribution of Securities by Public Offer | - | - | 340,000 | - |
Guarantee in Legal and Administrative Proceedings of Fiscal | ||||
Nature | 12,006,650 | 105,234 | 12,934,282 | 107,231 |
Other Guarantees | 364,387 | 1,838 | 276,506 | 1,334 |
Other Bank Guarantees | 15,462,422 | 28,145 | 13,944,007 | 37,585 |
Other Financial Guarantees | 6,360,457 | 36,495 | 3,600,051 | 9,910 |
Total | 41,365,173 | 183,251 | 38,266,720 | 166,105 |
Changes in Allowances for Financial Guarantees
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 57
*Values expressed in thousands, except when indicated.
Bank/Consolidated | ||||
07/01 a | 01/01 a | 07/01 a | ||
09/30/2020 | 09/30/2020 | 09/30/2019 | 01/01 a 09/30/2019 | |
Balance at Beginning | 178,469 | 166,105 | 175,928 | 201,411 |
Constitution | 7,844 | 33,793 | 13,767 | 17,207 |
Reversal (1) | (3,062) | (16,647) | (24,579) | (53,502) |
Balance at End | 183,251 | 183,251 | 165,116 | 165,116 |
(1) Corresponds to the honored bond, change in rating and provision recorded in the allowance for doubtful accounts,
17. Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security a) Contingent Assets
In the Bank and Consolidated, on September 30, 2020 and December 31, 2019, no contingent assets were registered),
b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature
Bank | Consolidated | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 12/31/2019 | |
Reserve for Tax Contingencies and Legal Obligations (Note 15) | 4,187,242 | 4,346,769 | 6,488,990 | 6,630,722 |
Accrual for Legal and Administrative Proceedings - Labor and Civil (Note 15) | 6,191,274 | 6,179,885 | 6,626,135 | 6,739,988 |
Labor | 2,952,896 | 3,216,008 | 3,201,944 | 3,517,431 |
Civil | 3,238,378 | 2,963,877 | 3,424,191 | 3,222,557 |
Total | 10,378,516 | 10,526,654 | 13,115,125 | 13,370,710 |
c) Change in Accrual for Judicial and Administrative Proceedings and Legal Obligations
Bank | ||||||
01/01 a | 01/01 a | |||||
09/30/2020 | 09/30/2019 | |||||
Tax | Labor | Civil | Tax | Labor | Civil | |
Balance at Beginning | 4,346,769 | 3,216,008 | 2,963,877 | 4,079,141 | 3,543,801 | 3,144,599 |
Recognition Net of Reversal (1) (3) | (199,760) | 719,819 | 463,488 | 256,397 | 607,735 | 430,904 |
Inflation Adjustment | 73,518 | 13,480 | 161,062 | 110,714 | 60,742 | 198,990 |
Write-offs Due to Payment | (33,285) | (996,411) | (350,049) | (64,250) | (732,346) | (516,398) |
Balance at End | 4,187,242 | 2,952,896 | 3,238,378 | 4,382,002 | 3,479,932 | 3,258,095 |
Escrow Deposits - Other Receivables | 1,549,160 | 1,099,381 | 720,320 | 1,200,752 | 1,215,198 | 632,434 |
Escrow Deposits - Securities | 5,079 | 18,504 | 16,747 | 10,477 | 18,512 | 24,336 |
Total Escrow Deposits (2) | 1,554,239 | 1,117,885 | 737,067 | 1,211,229 | 1,233,710 | 656,770 |
Consolidated | ||||||
01/01 a | 01/01 a | |||||
09/30/2020 | 09/30/2019 | |||||
Tax | Labor | Civil | Tax | Labor | Civil | |
Balance at Beginning | 6,630,722 | 3,517,431 | 3,222,557 | 6,294,007 | 3,829,975 | 3,401,483 |
Recognition Net of Reversal (1) (3) | (203,992) | 756,160 | 570,942 | 246,706 | 666,871 | 594,565 |
Inflation Adjustment | 106,720 | 16,370 | 163,409 | 171,886 | 76,893 | 202,827 |
Write-offs Due to Payment | (44,460) | (1,088,017) | (532,717) | (75,306) | (775,454) | (658,326) |
Balance at End | 6,488,990 | 3,201,944 | 3,424,191 | 6,637,293 | 3,798,285 | 3,540,549 |
Escrow Deposits - Other Receivables | 2,636,886 | 1,195,465 | 728,367 | 2,268,384 | 1,301,502 | 640,415 |
Escrow Deposits - Securities | 5,916 | 18,504 | 16,747 | 11,530 | 18,512 | 24,336 |
Total Escrow Deposits (2) | 2,642,802 | 1,213,969 | 745,114 | 2,279,914 | 1,320,014 | 664,751 |
- Tax risks include the constitution of provisions for taxes related to judicial and administrative proceedings and legal obligations, recorded in tax expenses, other operating income and other operating expenses and income tax and social contribution,
- Refer to the amounts of deposits in guarantees, limited to the amount of the provision and do not include deposits in guarantee related to possible and / or remote contingencies and appeal deposits,
- In the first half of 2019, the Bank entered into an agreement with a former controller where the registered obligations became the Bank's responsibility, with no impact on the result (Notes 16 and 17,i),
d) Provisions for Contingent Civil, Labor, Tax and Social Security
Banco Santander and its subsidiaries are involved in lawsuits and administrative proceedings related to tax, labor, social security and civil arising in the normal course of its activities,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 58
*Values expressed in thousands, except when indicated.
The provisions were constituted based on the nature, complexity, lawsuits historic and company´s assessment of lawsuit losses based on the opinions of internal and external legal advisors, The Santander has the policy to constitute provision of full amount in risk of lawsuits who's the result of loss assessment is probable, The legal obligation of tax and social security were fully recognized in the financial statements,
Management understands that the provisions recorded are sufficient to meet legal obligations and losses from lawsuits and administrative proceedings as follows:
e) Lawsuits and Administrative Proceedings related to Tax and Social Security
Main lawsuits and administrative proceedings related to legal obligations, tax and social security
PIS and Cofins - R$1,929,187 in the Bank and R$3,821,021 in the Consolidated (12/31/2019 - R$1,903,369 in the Bank and R$3,769,611 in the Consolidated): Banco Santander and its subsidiaries filed lawsuits seeking to eliminate the application of Law 9,718/1998, which modified the calculation basis for PIS and Cofins to cover all revenues of legal entities and not only those arising from the provision of services and sale of goods, Regarding the Banco Santander Process, on April 23, 2015, a STF decision was issued admitting the Extraordinary Appeal filed by the Federal Government regarding PIS and denying the follow-up to the Extraordinary Appeal of the Federal Public Prosecutor regarding Cofins, Both appealed this decision, without any success, so that the suit relating to Cofins is defined, ruling the judgment of the Federal Regional Court of the 4th Region of August 2007, favorable to Banco Santander, Pursuant to the STF, Banco Santander's PIS and the PIS and Cofins of other subsidiaries are pending final judgment,
Increase in CSLL Tax Rate - R$114,126 in the Consolidated (12/31/2019 - R$112,548 in the Consolidated): the Bank Santander and its subsidiaries are discussing the increase in the CSLL tax rate, from 9% to 15%, established by Executive Act 413/2008, subsequently converted into Law 11,727/2008, as from April 2008, In 2018, given the classification of success and unfavorable scenario in the Courts, we opted to pay the amounts discussed, except for Companhia de Crédito, Financiamento e Investimento Renault do Brasil (RCI), because the judicial proceedings are pending of judgment,
Main lawsuits and administrative proceedings with probable loss risk
Banco Santander and its subsidiaries are parties in lawsuits and administrative proceedings related to tax and social security matters, which their risk of loss are classified as probable, based on the opinion of legal counsel,
Provisional Contribution on Financial Transactions (CPMF) in Customer Operations - R$923,958 (12/31/2019 - R$906,355) at the Bank and Consolidated: in May 2003, the Brazilian Federal Revenue Service issued an infraction notice at Santander Distribuidora de Titulos e Valores Mobiliários Ltda, (Santander DTVM) and another auto at Banco Santander (Brasil) SA The object of the case was the collection of CPMF on operations carried out by Santander DTVM in the management of its customers' funds and clearing services provided by the Bank to Santander DTVM, which occurred during the years 2000, 2001 and 2002, In June 2015, defenses were assessed with unfavorable decisions at the administrative level (CARF), On July 3, 2015, Banco and Santander Brasil Tecnologia S,A, (current name of Produban Serviços de Informática S,A, and Santander DTVM) filed a lawsuit seeking to cancel both tax debts, This lawsuit was ruled groundless and is currently awaiting judgment by the Regional Federal Court (TRF 3), Based on the legal advisors' assessment, a provision was set up to cover the loss considered probable in the lawsuit,
National Social Security Institute (INSS) - R$37,272 in the Bank and R$$37,279 in the Consolidated (12/31/2019 - R$282,046 in the Bank and R$282,053 in the Consolidated): Banco Santander and the subsidiaries discuss the collection of administrative and judicial claims social security and education salary contributions on various amounts that, according to the opinion of legal advisors, do not have a salary nature,
Services Tax (ISS) - Financial Institutions - R$210,849 in the Bank and R$240,209 in the Consolidated (12/31/2019 - R$208,561 in the Bank and R$224,631 in the Consolidated): Banco Santander and the subsidiaries discuss the requirement administratively and judicially, by several municipalities, the payment of ISS on various revenues arising from operations that are not usually classified as service provision, In addition, other actions involving ISS, classified as possible loss risk, are described in note 17,h,
f) Lawsuits and Administrative Proceedings of Labor
These are lawsuits filed by labor Unions, Associations, Public Prosecutors and former employees claiming labor rights they believe are due, especially payment for overtime and other labor rights, including retirement benefit lawsuits,
For claims considered to be similar and usual, provisions are recognized based on the payments and successes historic, Claims that do not fit the previous criteria have their provisions constituted according to individual assessment performed, and provisions being constituted based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,
Former Banespa employees, Action distributed in 1998 by the Banespa Retired Association (AFABESP) requiring the payment of a semiannual bonus provided for in the Banespa regulations, according to which the payment will be made in the event that the Bank makes a profit and the distribution of this profit is approved by the board of directors, management or, alternatively, PLR, to retired
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 59
*Values expressed in thousands, except when indicated.
employees of the extinct Banco do Estado de São Paulo SA - Banespa, hired until May 22, 1975, The bonus was not paid in 1994 and 1995 because the bank did not make a profit during these years, Partial payments were made between 1996 and 2000 as approved by the board of directors, The aforementioned clause was excluded from the regulation in 2001, The lawsuit was upheld by the Superior Labor Court, The Bank filed the appropriate funds with the STF, which, due to a monocratic decision, dismissed the appeal, A rescissory action was brought to dismiss the decision of the main action and suspend execution, There is a preliminary injunction in force that authorizes the execution of necessary enforcement acts to proceed with the execution until the attachment, however, any acts of seizure of assets or blocking of cash are prohibited until the judgment of the rescission action,
As of September 30, 2020, the case is classified as a probable loss and the provision was recorded based on the estimated loss,
g) Lawsuits and Administrative Proceedings of Civil
These contingencies are generally caused by: (1) Lawsuits with a request for revision of contractual terms and conditions or requests for monetary adjustments, including supposed effects of the implementation of various government economic plans, (2) lawsuits deriving of financing agreements, (3) lawsuits of execution; and (4) lawsuits of indemnity by loss and damage, For civil lawsuits considered common and similar in nature, provisions are recorded based on the average of cases closed, Claims that do not fit the previous criteria are provisioned according to individual assessment performed, and provisions are based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,
The main processes with the classification of risk of loss as probable are described below:
Lawsuits for Indemnity - seeking indemnity for material and emotional damage, regarding the consumer relationship on matters related to credit cards, consumer credit, bank accounts, collection and loans and other operations, In the civil lawsuits considered to be similar and usual, provisions are recorded based on the average of cases closed, Civil lawsuits that do not fit into the previous criteria are provisioned according to the individual assessment made, being the provisions recognized based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,
Economic Plans - they referred to lawsuits filed by savings accountholders, related to supposed inflation purge arising from the Economic Plans (Bresser, Verão, Collor I and II), based on the understanding that such plans violated acquired rights relating to the application of inflation indexes on Saving Accounts, Lawsuits Deposits and Time Deposits (CDB), Provisions arising from such lawsuits are recorded based on the individual evaluation of loss made by external legal consultants,
The Banco Santander is also party in public class lawsuits on the same matter filed by consumer rights organizations, Public Prosecutor's Offices and Public Defender's Offices, The provision is made for the lawsuits with the classification of risk as probable, based on the individual execution orders, The STF is still analyzing the subject and has already ordered the suspension of all the procedures except those that were not already decided in courts or in phase of definitive execution, There are decisions favorable to banks at the STF with regard to the economic phenomenon similar to the savings accounts, as in the case of monetary restatement of time deposits - CDB and agreements (present value table),
However, the Supreme Court´s jurisprudence has not come to a conclusion regarding the constitutionality of the norms that changed Brazil's monetary standard, On April 14, 2010, the STJ was recently decided that the deadline for the filing of civil lawsuits that argue the government's purge is five years, but this decision has not been handed down on the lawsuits yet, Thus, with this decision, a majority lawsuits, as they were filed after the period of five years is likely to be rejected, reducing the values involved, Still, the STF decided that the deadline for individual savers to become party on the public civil litigations, is also five years, counted from the final unappealable sentence, Banco Santander believes in the success of the arguments defended in these courts based on their content and the legal basis,
At the end of 2017, the General Union Law (AGU), Bacen, Institute of Consumer Protection (Idec), the Brazilian Front of the Money savers (Febrapo), the Brazilian Banks Federation (Febraban) have signed an agreement with the purpose to close all lawsuits related to Economic Plans,
The discussions focused on the definition of the amount that would be paid to each person according to the outstanding balance in the saving account, The total amount of the payments will depend on the number of the additional clients, and also on the number of money savers that approved in the courts the existance of their account and balance in the birthday date of the indexes changes, The term of agreement negotiated between the parties was submitted to the STF which approved the terms of the agreement,
The Management considers that the accrued provisions are due to charge interest in accordance with the plans, including considering the agreement approved by the STF,
h) Civil, Labor, Tax, and Security Social Liabilities Contingent Classified with Loss Risk as Possible
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 60
*Values expressed in thousands, except when indicated.
Refer to lawsuits and administrative proceedings involving tax, labor and civil matters classified by legal counsels with loss risk as possible, which they were not recorded,
The tax lawsuits classification with loss risk as possible totaled R$26,446 million in Consolidated, being the main lawsuits as follow:
INSS on Profits or Results (PLR) - Bank and the subsidiaries have several lawsuits and administrative proceedings arising from questioning tax authorities in connection with the taxation for social security purposes of certain items which are not considered to be employee remuneration, As of September 30, 2020, the amounts related to these proceedings totaled approximately R$4,366 million,
Tax on Services (ISS) - Financial Institutions - Banco Santander and its subsidiaries discuss administrative and legal requirements, by several municipalities, of the payment of ISS on various revenues arising from operations that are usually not classified as services, On September 30, 2020, the amounts related to these proceedings totaled approximately R$3,479 million,
Unapproved Compensation - The Bank and its affiliates discuss administrative and legal proceedings with the Federal Revenue Office to grant tax relief with credits arising from overpayments, On September 30, 2020, the amounts related to these proceedings totaled approximately R$4,710 million,
Goodwill Amortization of Banco Real - the Federal Tax Office of Brazil issued infraction notices against the Bank to require the income tax and social payments, including late charges, for the period of 2009, The Tax Authorities considered that the goodwill related to acquisition of Banco Real, amortized for accounting purposes prior to the merger, could not be deduced by Banco Santander for tax purposes, The infraction notice was contested, On July 14, 2015, the Police Judging RFB decided favorably to Banco Santander, fully canceling the tax debt, On November 10, 2016, the appeal was filed, prompting the Bank to lodge an appeal with CARF, which is awaiting judgment, On September 30, 2020, the balance was approximately R$1,436 million,
Credit Losses - Bank and its subsidiaries challenged the tax assessments issued by the Federal Revenue Services claiming the deduction for credit losses because they fail to meet the relevant requirements under applicable law, As of September 30, 2020, the amount related to this claim is approximately R$613 million,
Use of CSLL Tax and Negative Tax Loss - Tax assessments issued by the Federal Revenue Service in 2009 for alleged undue compensation of tax loss carryforwards and negative basis of CSLL, as a consequence of tax assessments drawn up in previous periods, Judgment is pending at the administrative level, As of September 30, 2020, the amount was R$1,069 million,
Goodwill Amortization of Banco Sudameris - the Tax Authorities have issued infraction notices to require the income tax and social contribution payments, including late charges, relating to tax deduction of amortization of goodwill from the acquisition of Banco Sudameris, related to the period of 2007 to 2012, Banco Santander timely presented its appeals, which are pending with CARF, On September 30, 2020, the amounts related to these proceedings totaled approximately R$644 million,
IRPJ and CSLL - - Capital Gain - the Federal Tax Office of Brazil issued infraction notices against Santander Seguros, successor company of ABN AMRO Brasil Dois Participações S,A, (AAB Dois Par), charging income Tax and Social Contribution to related base year 2005, The Federal Tax Office of Brazil claims that capital gain in sales of shares from Real Seguros S,A and Real Vida Previdência S,A, by AAB Dois Par should be taxed by the rate of 34% instead 15%, The assessment was contested administratively based on understanding that tax treatment adopted at the transaction was in compliance with tax laws and capital gain was taxed properly, The administrative ended unfavorably, On July, 2020, the company filed a lawsuit seeking to cancel tax debts, This lawsuit is currently awaiting judgment,, The Banco Santander is responsible for any adverse outcome in this lawsuit as former Zurich Santander Brasil Seguros e Previdência S,A, stockholder, As of September 30, 2020, the amount related to this lawsuit is approximately R$487 million,
The labor claims with classification of loss risk as possible totaled R$210 million in Consolidated, excluding the lawsuits below:
Readjustment of Banesprev retirement complements by the IGPDI - lawsuit filed in 2002 in Federal Court by the Association of Retired Employees of the Banco do Estado de São Paulo S,A, - Banespa, requesting the readjustment of the retirement supplementation by the IGPDI for Banespa retirees who have been admitted until May 22, 1975, The judgment granted the correction but only in the periods in which no other form of adjustment could be applied, The Bank and Banesprev have appealed this decision and although the appeals have not yet been judged, the Bank's success rate in this matter in the High Courts is around 90%, In Provisional Execution, calculations were presented by the Bank and Banesprev with "zero" result due to the exclusion of participants who, among other reasons, are listed as authors in other lawsuits or have already had some type of adjustment, The amount related to this claim is not disclosed due to the current stage of the lawsuit and such disclosure may impact the progress of the claim,
The liabilities related to civil lawsuits with classification of loss risk as possible totaled R$1,665 million in Consolidated, being the main lawsuits as follow:
Indemnity Lawsuit Related to Custody Services - provided by Banco Santander at an early stage which was not handed down yet,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 61
*Values expressed in thousands, except when indicated.
Lawsuit Arising from a Contractual Dispute - the acquisition of Banco Geral do Comércio S,A, on appeal to the Court of the State of São Paulo (TJSP - Tribunal de Justiça do Estado de São Paulo),
i) Other Lawsuits Under the Responsibility of Former Controlling Stockholders
Refer to tax, labor and civil lawsuits, in the amounts of R$102,977, R$213 and R$639 (12/31/2019 - R$102,481, R$213 and R$578 in the Bank and in the Consolidated) in the Bank and in the Consolidated , respectively, recorded in other obligations - miscellaneous (Note 16) under the responsibility of the former controlling shareholders of banks and acquired companies, Based on the contracts signed, these actions are guaranteed full reimbursement by the former controlling shareholders, whose respective rights were accounted for in other credits - miscellaneous (Note 10),
18. Stockholders' Equity a) Capital
According to the by-laws, Banco Santander's capital stock may be increased up to the limit of its authorized capital, regardless of statutory reform, by resolution of the Board of Directors and through the issuance of up to 9,090,909,090 (nine billion, ninety million, nine hundred and nine thousand and ninety) shares, subject to the established legal limits on the number of preferred shares, Any capital increase that exceeds this limit will require stockholders' approval,
The capital stock, fully subscribed and paid, is divided into registered book-entry shares with no par value,
Thousands of | ||||||
Shares | ||||||
09/30/2020 | 12/31/2019 | |||||
Common | Preferred | Total | Common | Preferred | Total | |
Brazilian Residents | 117,247 | 142,822 | 260,069 | 90,069 | 115,785 | 205,854 |
Foreign Residents | 3,701,448 | 3,537,014 | 7,238,462 | 3,728,626 | 3,564,051 | 7,292,677 |
Total | 3,818,695 | 3,679,836 | 7,498,531 | 3,818,695 | 3,679,836 | 7,498,531 |
(-) Treasury Shares | (18,838) | (18,838) | (37,676) | (16,702) | (16,702) | (33,404) |
Total Outstanding | 3,799,857 | 3,660,998 | 7,460,855 | 3,801,993 | 3,663,134 | 7,465,127 |
b) Dividends and Interest on Capital
According to the Bank's bylaws, stockholders are entitled to a minimum dividend equivalent to 25% of net income for the year, adjusted according to legislation, Preferred shares are nonvoting and nonconvertible, but have the same rights and advantages granted to common shares, in addition to priority in the payment of dividends at a rate that is 10% higher than those paid on common shares, and in the capital reimbursement, without premium, in the event of liquidation of the Bank,
Dividend payments have been calculated and paid in accordance with Brazilian Corporate Law,
Prior to the Annual Stockholders Meeting, the Board of Directors may resolve on the declaration and payment of dividends on earnings based on: (i) balance sheets or earning reserves showed in the last balance sheet; or (ii) balance sheets issued in the period shorter than 6 months, since the total of dividends paid in each half of the fiscal year shall not exceed the amount of capital reserves, These dividends are fully attributed to the mandatory dividend,
Resolution No, 4820, of May 29, 2020, prohibits the institutions authorized to operate by the Central Bank of Brazil from paying interest on own capital and dividends above the mandatory minimum established in the bylaws, including in advance, until December 31 December 2020, The rule also prohibits the reduction of capital stock, except in specific situations and the increase in the remuneration of its officers, administrators and members of the Board of Directors and the Fiscal Council,
The following distribution of dividends and interest on capital made on September 30, 2020 and December 31, 2019,
09/30/2020 | ||||||||
In Thousands | Brazilian Real per Thousand Shares/Units | |||||||
of Brazilian | Gross | Net | ||||||
Real | ||||||||
Common | Preferred | Unit | Common | Preferred | Unit | |||
Interest on Capital (1)(3) | 890,000 | 113,7129 | 125,0842 | 238,7972 | 96,6560 | 106,3216 | 202,9776 | |
Interest on Capital (2)(3) | 770,000 | 98,3793 | 108,2172 | 206,5965 | 83,6224 | 91,9846 | 175,6070 | |
Total | 1,660,000 |
- Deliberated by the Board of Directors on April 27, 2020, paid on June 24, 2020, without any monetary restatement,
- Deliberated by the Board of Directors on July 28, 2020, paid on September 25, 2020, without any monetary restatement,
- They were fully imputed to the minimum mandatory dividends to be distributed by the Bank for the fiscal year 2020,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 62
*Values expressed in thousands, except when indicated.
12/31/2019 | ||||||||
In Thousands | Brazilian Real per Thousand Shares/Units | |||||||
of Brazilian | Gross | Net | ||||||
Real | ||||||||
Interest on Capital (1) (6) | 1,000,000 | 127,5853 | 140,3438 | 267,9291 | 108,4475 | 119,2922 | 227,7397 | |
Interest on Capital (2) (6) | 1,000,000 | 127,6399 | 140,4039 | 268,0438 | 108,4939 | 119,3433 | 227,8373 | |
Interest on Capital (3) (6) | 1,000,000 | 127,6610 | 140,4271 | 268,0881 | 108,5119 | 119,3631 | 227,8750 | |
Interest on Capital (4) (6) | 1,010,000 | 128,9673 | 141,8641 | 270,8314 | 109,6222 | 120,5844 | 230,2066 | |
Interim Dividends (5) (6) | 6,790,000 | 867,0180 | 953,7197 | 1,820,7377 | - | - | - | |
Total | 10,800,000 |
- Deliberated by the Board of Directors on March 29, 2019, paid on May 28, 2019, without any monetary restatement,
- Deliberated by the Board of Directors on June 28, 2019, paid on July 31, 2019, without any monetary restatement,
- Deliberated by the Board of Directors on September 30, 2019, paid on October 30, 2019, without any monetary restatement,
- Deliberated by the Board of Directors on December 27, 2019, paid on February 21, 2020, without any monetary restatement,
- Deliberated by the Board of Directors on December 27, 2019, paid on February 21, 2020, without any monetary restatement,
- The amount of interest on own capital and interim dividends was fully imputed to the minimum mandatory dividends distributed by the Bank for the year 2019,
c) Reserves
Net income, after deductions and statutory provisions, will be allocated as follows:
Legal Reserve
According to Brazilian corporate law, 5% to the legal reserve, until it reaches 20% of the share capital, This reserve is intended to ensure the integrity of capital and can only be used to offset losses or increase capital,
Capital Reserve
The Bank´s capital reserve consists of: goodwill reserve for subscription of shares and other capital reserves, and can only be used to absorb losses that exceed retained earnings and profit reserves; redemption, reimbursement or acquisition of shares for the Bank´s own issue; capital increase; or payment of dividends to preferred shares under certain circumstances,
Reserve for Equalization Dividend
After the allocation of dividends, the remaining balance if any, may, upon proposal of the Executive Board and approved by the Board of Directors, be allocated to reserve for equalization of dividends, which will be limited to 50% of the share capital, This reserve aims to ensure funds for the payment of dividends, including as interest on own capital, or any interim payment to maintain the flow of stockholders remuneration,
d) Treasury Shares
In the meeting held on November 1, 2019, the Bank's Board of Directors approved, in continuation of the buyback program that expired on November 5, 2019, the buyback program of its Units and ADRs, by the Bank or its agency in Cayman, to be held in treasury or subsequently sold,
The Buyback Program will cover the acquisition up to 37,256,072 Units, representing 37,256,072 common shares and 37,256,072 preferred shares, which, on December 31, 2019, corresponded to approximately 1% of the Bank's share capital, On December 31, 2019, the Bank held 15,843,587 common shares and 15,843,587 preferred shares being traded,
The Buyback has the purpose to (1) maximize the value creation to stockholders by means of an efficient capital structure management; and (2) enable the payment of officers, management level employees and others Bank's employees and companies under its control, according to the Long Term Incentive Plans, The term of the Buyback Program is 12 months counted from November 5, 2019, and will expire on November 4, 2020,
Bank/Consolidated | ||
Shares in Thousands | ||
09/30/2020 | 12/31/2019 | |
Quantity | Quantity | |
Units | Units | |
Treasury Shares at Beginning of the Period | 16,702 | 13,317 |
Shares Acquisitions | 5,052 | 6,465 |
Payment - Share-Based Compensation | (2,916) | (3,080) |
Treasury Shares at Beginning of the Period | 18,838 | 16,702 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 63
*Values expressed in thousands, except when indicated.
Subtotal - Treasury Shares in Thousands of Reais | R$789,832,34 | R$679,364 |
Issuance Cost in Thousands of Reais | R$1,771,30 | R$1,771 |
Balance of Treasury Shares in Thousands of Reais | 791,603,65 | R$681,135 |
Cost/Share Price | Units | Units |
Minimum Cost | R$7,55 | R$7,55 |
Weighted Average Cost | R$33,24 | R$32,10 |
Maximum Cost | R$49,55 | R$49,55 |
Share Price | R$29,89 | R$42,60 |
- Considering since the beginning of operations on the stock exchange,
- Minority Interest
Stockholders' Equity | Non Controlling Interest | |||||
07/01 a | 01/01 a | 07/01 a | 01/01 a | |||
09/30/2020 | 12/31/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Banco RCI Brasil S,A, (Note 2,b) | 849,394 | 790,340 | 23,462 | 83,540 | (34,134) | (90,309) |
Banco Hyundai Capital Brasil S,A, | 158,835 | 148,589 | 2,017 | 10,246 | 1,715 | 2,888 |
Banco PSA (Note 2,b) | 139,099 | 131,222 | 2,666 | 7,878 | (2,966) | (10,683) |
Rojo Entretenimento S,A, | 7,149 | 7,245 | (61) | (96) | (57) | (121) |
Santander Leasing (Note 2,b) | - | 447 | (0) | (444) | (4) | (4) |
Olé Consignado (Note 2,b) | - | 617,518 | - | - | (50,097) | (150,401) |
FI RN Brasil - Financiamento de Veículos (1) | - | - | - | - | (1,299) | (8,250) |
Getnet S,A, (Note 2,c) | - | - | - | - | - | (3,962) |
Santander FI SBAC | - | - | - | - | (1,374) | (3,359) |
FI Direitos Creditórios RCI Brasil I (1) | - | - | - | - | - | (4,117) |
Return Capital Serviços de Recuperação de | ||||||
Créditos S,A, (Note 2,c) | - | - | - | - | (1,196) | (2,257) |
Total | 1,154,477 | 1,695,361 | 28,084 | 101,124 | (89,412) | (270,575) |
(1) Investment funds closed during 2019, |
19. Related Parties
a) Key Management Personnel Compensation
The Bank's Board of Directors' Meeting held on March 26, 2020 approved, in accordance with the favorable recommendation of the Compensation Committee, the proposal for the maximum global compensation for the Directors (Board of Directors and Executive Board) for the year 2020, in the amount up to R$400,000, covering fixed, variable and share-based compensation and other benefits, The proposal was the subject of a resolution at the Annual General Meeting (AGM) to be held on April 30, 2020,
a,1) Long Term Benefits
The Bank, as well as Banco Santander Espanha, as well as other subsidiaries of the Santander Group in the world, has long-term remuneration programs linked to the performance of the market price of its shares, based on the achievement of goals (Note 26),
a,2) Short Term Benefits
The following table shows the salaries and fees of the Board of Directors and Executive Board and refers to the amount recognized as an expense in the period ended September 30, 2020 and 2019, by Banco Santander and its subsidiaries to their Directors for the positions they hold Banco Santander and other companies of the Santander Conglomerate,
The amounts related to the Variable and Share-Based Compensation will be paid in the subsequent periods,
07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Fixed Compensation | 21,715 | 67,348 | 17,472 | 68,923 |
Variable Compensation - in cash | 11,621 | 71,808 | 24,371 | 61,450 |
Variable Compensation - in shares | 19,379 | 67,953 | 9,855 | 66,996 |
Others | 12,202 | 35,362 | 14,724 | 33,178 |
Total Short-Term Benefits | 64,917 | 242,471 | 66,421 | 230,547 |
Variable Compensation - in cash | 8,950 | 86,933 | 18,025 | 79,274 |
Variable Compensation - in shares | 28,277 | 84,422 | 8,137 | 77,169 |
Total Long-Term Benefits | 37,227 | 171,355 | 26,162 | 156,443 |
Total | 102,144 | 413,826 | 92,583 | 386,990 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 64
*Values expressed in thousands, except when indicated.
Additionally, in the third quarter of 2020, charges on Management's remuneration were paid in the amount of R$21,525 (2019 - R$35,128),
b) Contract Termination
The termination of the employment relationship of managers for non-fulfillment of obligations or voluntarily by the employee does not give right to any financial compensation and its benefits will be discontinued,
c) Lending Operations
The Bank and its subsidiaries may carry out transactions with related parties, in line with the legislation in force as set forth in articles 6 and 7 of CMN Resolution nº 4,693/18, article 34 of Law 6,404/76 "Law of Corporations" and the Policy for Transactions with Related Parties of Santander published on the Investor Relations website, being considered related parties:
- its controllers, natural or legal persons, under the terms of art, 116 of the Law of Corporations;
- its directors and members of statutory or contractual bodies;
- in relation to the persons mentioned in items (i) and (ii), their spouse, companion and relatives, consanguineous or the like, up to the second degree;
- natural persons with qualified equity interest in their capital;
- corporate entities with qualified equity interest in their capital;
- legal entities in whose capital, directly or indirectly, a Santander Financial Institution has a qualified shareholding;
- legal entities in which a Santander Financial Institution has effective operational control or preponderance in the deliberations, regardless of the equity interest; and
- legal entities that have a director or member of the Board of Directors in common with a Santander Financial Institution,
d) Ownership Interest
The table below shows the direct interest (common and preferred shares):
Shares in | ||||||
Thousands | ||||||
09/30/2020 | ||||||
Common Shares | Preferred Shares | |||||
Stockholders | Common Shares | (%) Preferred Shares | (%) | Total Shares Total Shares (%) | ||
Sterrebeeck B,V, (1) | 1,809,583 | 47,4% | 1,733,644 | 47,1% | 3,543,227 | 47,3% |
Grupo Empresarial Santander, S,L, | ||||||
(GES) (1) | 1,107,673 | 29,0% | 1,019,645 | 27,7% | 2,127,318 | 28,4% |
Banco Santander, S,A, (1) | 521,964 | 13,7% | 519,268 | 14,1% | 1,041,232 | 13,9% |
Employees | 2,579 | 0,1% | 2,589 | 0,1% | 5,168 | 0,1% |
Directors (*) | 4,968 | 0,1% | 4,968 | 0,1% | 9,936 | 0,1% |
Others | 353,090 | 9,2% | 380,884 | 10,4% | 733,974 | 9,8% |
Total Outstanding | 3,799,857 | 99,5% | 3,660,998 | 99,5% | 7,460,855 | 99,5% |
Treasury Shares | 18,838 | 0,5% | 18,838 | 0,5% | 37,676 | 0,5% |
Total | 3,818,695 | 100,0% | 3,679,836 | 100,0% | 7,498,531 | 100,0% |
Free Float (2) | 355,669 | 9,3% | 383,473 | 10,4% | 739,142 | 9,9% |
Shares in | ||||||
Thousands | ||||||
12/31/2019 | ||||||
Common Shares | Preferred Shares | |||||
Stockholders | Common Shares | (%) Preferred Shares | (%) | Total Shares Total Shares (%) | ||
Sterrebeeck B,V, (1) | 1,809,583 | 47,4% | 1,733,644 | 47,1% | 3,543,227 | 47,3% |
GES (1) | 1,107,673 | 29,0% | 1,019,645 | 27,7% | 2,127,318 | 28,4% |
Banco Santander, S,A, (1) | 521,964 | 13,7% | 519,268 | 14,1% | 1,041,232 | 13,9% |
Employees | 2,526 | 0,1% | 2,533 | 0,1% | 5,059 | 0,1% |
Directors (*) | 4,525 | 0,1% | 4,525 | 0,1% | 9,050 | 0,1% |
Others | 355,722 | 9,3% | 383,519 | 10,4% | 739,241 | 9,9% |
Total Outstanding | 3,801,993 | 99,6% | 3,663,134 | 99,6% | 7,465,127 | 99,6% |
Treasury Shares | 16,702 | 0,4% | 16,702 | 0,6% | 33,404 | 0,4% |
Total | 3,818,695 | 100,0% | 3,679,836 | 100,0% | 7,498,531 | 100,0% |
Free Float (2) | 358,248 | 9,4% | 386,053 | 10,5% | 744,301 | 9,9% |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 65
*Values expressed in thousands, except when indicated.
- Companies of the Santander Spain Group,
- Composed of Officials and Others,
- None of the members of the Board of Directors and the Executive Board holds 1,0% or more of any class of shares,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 66
*Values expressed in thousands, except when indicated.
e) Related Party Transactions
Santander has a Policy for Transactions with Related Parties approved by the Board of Directors, which aims to ensure that all transactions included in the policy are carried out in view of the interests of Banco Santander and its shareholders, The policy defines powers to approve certain transactions by the Board of Directors, The envisaged rules are also applied to all employees and managers of Banco Santander and its subsidiaries,
The operations and remuneration of services with related parties are carried out in the normal course of business and under conditions of exchange, including interest rates, terms and guarantees, and do not involvee risks greater than the normal collection or have other disadvantages,
Bank | Consolidated | |||||||||||||||||
Assets | Income | Assets | Income | Assets | Income | Assets | Income | |||||||||||
(Liabilities) | (Expenses) | (Liabilities) | (Expenses) | (Liabilities) | (Expenses) | (Liabilities) | (Expenses) | |||||||||||
07/01 to | 01/01 to | 07/01 a | 01/01 a | 07/01 to | 01/01 to | 07/01 a | 01/01 a | |||||||||||
09/30/2020 | 09/30/2020 | 09/30/2020 | 12/31/2019 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2020 | 12/31/2019 | 09/30/2019 | 09/30/2019 | |||||||
Cash | 2,039,210 | - | - | 840,686 | - | - | 2,184,754 | - | - | 1,106,373 | - | - | ||||||
Banco Santander Espanha (2) | 1,963,466 | - | - | 770,425 | - | - | 2,109,010 | - | - | 1,089,578 | - | - | ||||||
Others | 75,744 | - | - | 70,261 | - | - | 75,744 | - | - | 16,795 | - | - | ||||||
Interbank Investments | 75,528,506 | 912,223 | 2,493,734 | 76,904,602 | 1,583,501 | 3,862,851 | - | 190 | 8,094 | 4,111,489 | 20,799 | 83,305 | ||||||
Aymoré CFI (3) | 44,735,223 | 615,836 | 1,844,679 | 42,683,530 | 1,151,797 | 2,671,353 | - | - | - | - | - | - | ||||||
Banco Santander Espanha (1) (2) | - | 191 | 8,067 | 4,111,489 | 20,779 | 83,183 | - | 190 | 8,094 | 4,111,489 | 20,799 | 83,305 | ||||||
Bandepe(3) | 23,615,621 | 120,632 | 412,731 | 10,051,166 | 47,043 | 91,036 | - | - | - | - | - | - | ||||||
Olé Consignado (3) | - | - | - | 12,412,492 | 269,436 | 777,272 | - | - | - | - | - | - | ||||||
Others | 7,177,662 | 175,564 | 228,257 | 7,645,925 | 94,446 | 240,007 | - | - | - | - | - | - | ||||||
Securities | 311,002 | 1,671 | 8,189 | 375,377 | 2,013 | 12,963 | - | - | - | - | - | - | ||||||
Santander Leasing (3) | 311,002 | 1,671 | 8,189 | 375,377 | 2,013 | 12,963 | - | - | - | - | - | - | ||||||
Derivatives Financial Instruments - | ||||||||||||||||||
Net | (5,167,156) | (461,687) | 774,070 | (1,004,057) | (223,871) | (1,376) | (3,516,936) | 115,302 | (1,708,155) | (1,172,059) | (193,417) | 91,325 | ||||||
Real Fundo de Investimento | ||||||||||||||||||
Multimercado Santillana Crédito | ||||||||||||||||||
Privado | ||||||||||||||||||
(Fundo de Investimento Santillana) (4) | (377,014) | 170,660 | (373,448) | (113,931) | - | 714,263 | (377,014) | 170,660 | (373,448) | (113,931) | - | 714,263 | ||||||
Banco Santander Espanha (2) | (3,145,292) | (57,555) | (1,265,171) | (1,026,552) | (157,159) | (557,180) | (3,139,922) | (55,502) | (1,334,989) | (1,058,128) | (193,429) | (622,994) | ||||||
Santander FI Hedge Strategies (3) | ||||||||||||||||||
(Nota 2) | (831,834) | 93,464 | 1,466,751 | 255,838 | 1,022,432 | 1,023,440 | - | - | - | - | - | - | ||||||
Santander FI Diamantina (3) | (873,127) | (580,800) | 884,716 | (201,763) | (1,108,159) | (1,339,085) | - | - | - | - | - | - | ||||||
Key Management Personnel | - | 144 | 282 | - | 12 | 55 | - | 144 | 282 | - | - | - | ||||||
Others | 60,111 | (87,600) | 60,940 | 82,351 | 19,003 | 157,131 | - | - | - | - | 12 | 56 | ||||||
Interfinancial Relations | 13,799,051 | (1,620) | 8,259 | 9,206,678 | 2,088 | 3,939 | - | - | - | - | - | - | ||||||
Getnet S,A, (Nota 12) (3) (7) | 13,794,491 | 292 | 5,595 | 9,198,824 | 985 | 1,879 | - | - | - | - | - | - | ||||||
Santander Leasing (3) | 4,560 | (1,912) | 2,664 | 7,854 | 1,103 | 2,060 | - | - | - | - | - | - | ||||||
Loan Operations | 1,372,434 | 270 | 716 | 616,157 | 83 | 344 | 69,993 | 277 | 738 | 11,284 | 85 | 349 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 67
*Values expressed in thousands, except when indicated.
Getnet S,A, | 1,302,618 | - | - | 605,157 | - | - | - | - | - | - | - | - | |||||
Gestora de Inteligência de Crédito | 38,038 | - | - | - | - | - | 38,038 | - | - | - | - | - | |||||
Loop Gestão de Pátios S,A, | 13,439 | - | - | - | - | - | 13,439 | - | - | - | - | - | |||||
Key Management Personnel (9) | 18,339 | 270 | 716 | 11,000 | 83 | 344 | 18,516 | 277 | 738 | 11,284 | 85 | 349 | |||||
Dividends and Bonuses Receivables | 162,052 | - | - | 280,499 | - | - | 14 | - | - | 20,367 | - | - | |||||
Aymoré CFI(3) | - | - | - | 37,949 | - | - | - | - | - | - | - | - | |||||
Banco RCI Brasil S,A,(3) | - | - | - | 25,091 | - | - | - | - | - | - | - | - | |||||
Webmotors S,A(5) | - | - | - | - | - | - | 14 | - | - | 20,367 | - | - | |||||
Getnet S,A,(3) | - | - | - | 67,518 | - | - | - | - | - | - | - | - | |||||
Sancap Investimentos e Participações | |||||||||||||||||
S,A, (3) | - | - | - | 64,594 | - | - | - | - | - | - | - | - | |||||
Olé Consignado | - | - | - | 75,000 | - | - | - | - | - | - | - | - | |||||
Santander Brasil EFC (3) | 155,661 | - | - | - | - | - | - | - | - | - | - | - | |||||
Santander Leasing(3) | 2,105 | - | - | - | - | - | - | - | - | - | - | - | |||||
Santander Corretora de Seguros (3) | 4,286 | - | - | - | - | - | - | - | - | - | - | - | |||||
Others | - | - | - | 10,347 | - | - | - | - | - | - | - | - | |||||
Trading Account | 689,663 | 666 | 4,782 | 504,782 | 251 | 1,327 | 689,663 | 666 | 90,030 | 504,782 | 9,797 | (2,744) | |||||
Banco Santander Espanha(2) | 689,663 | 666 | 4,782 | 504,782 | 251 | 1,327 | 689,663 | 666 | 90,030 | 504,782 | 9,797 | (2,744) | |||||
Foreign Exchange Portfolio - Net | 253,553 | (105,557) | 775,828 | 294,581 | (158,695) | (162,896) | 253,553 | (105,557) | 775,828 | 294,581 | (158,211) | (162,896) | |||||
Banco Santander Espanha(2) | 253,553 | (105,622) | 775,703 | 294,581 | (158,801) | (163,002) | 253,553 | (105,622) | 775,703 | 294,581 | (158,239) | (163,002) | |||||
Key Management Personnel | - | 65 | 125 | - | 106 | 106 | - | 65 | 125 | - | 28 | 106 | |||||
Income Receivable | 875,840 | 582,722 | 1,542,352 | 884,878 | 522,712 | 1,601,456 | 878,534 | 1,085,719 | 2,199,978 | 901,574 | 407,379 | 1,957,838 | |||||
Zurich Santander Brasil Seguros e | |||||||||||||||||
Previdência S,A,(8) | 806,129 | 524,463 | 1,374,213 | 826,100 | 464,598 | 1,425,712 | 808,823 | 1,113,342 | 2,076,659 | 842,796 | 387,685 | 1,781,615 | |||||
Zurich Santander Brasil Seguros S,A,(8) | 69,711 | 58,259 | 168,139 | 58,778 | 58,114 | 175,744 | 69,711 | (27,623) | 123,319 | 58,778 | 19,694 | 176,223 | |||||
Receivables from Affiliates | 51,723 | 136,545 | 453,301 | 19,396 | 155,687 | 515,804 | 5,572 | 1,083 | 6,130 | 5,022 | 2,825 | 6,948 | |||||
Aymoré CFI (3) | - | 84,217 | 304,949 | - | 118,099 | 361,150 | - | - | - | - | - | - | |||||
Santander CCVM (3) | - | 17,348 | 50,394 | - | 16,358 | 42,863 | - | - | - | - | - | - | |||||
Santander Brasil Consórcio (3) | 604 | 5,739 | 16,257 | - | 5,080 | 14,256 | - | - | - | - | - | - | |||||
Santander Corretora de Seguros(3) | - | 8,400 | 25,199 | - | 8,400 | 24,216 | - | - | - | - | - | - | |||||
Santander Brasil Gestão de Recursos | |||||||||||||||||
Ltda | 169 | 1,057 | 5,500 | - | - | - | 169 | 1,057 | 5,500 | 169 | 2,082 | 4,021 | |||||
Santander Brasil Gestão de Recursos | |||||||||||||||||
Ltda | - | - | - | - | - | - | 532 | - | - | - | - | - | |||||
Esfera Fidelidade S,A, | 4,456 | 770 | 2,310 | 10,064 | - | - | - | - | - | - | - | - | |||||
Banco Santander Espanha (2) | 4,516 | - | - | 4,516 | - | - | 4,516 | - | - | 4,516 | - | - | |||||
Santander FI Hedge Strategies(3) (Nota | |||||||||||||||||
2) | 6,347 | 1,035 | 3,464 | 2,883 | - | - | - | - | - | - | - | - | |||||
Getnet S,A, (3) (7) | 316 | 1,609 | 4,612 | 316 | 1,774 | 33,644 | - | - | - | - | - | - | |||||
Ben Benefícios e Serviços S,A, | - | 146 | 440 | - | 196 | 196 | - | - | - | - | - | - | |||||
Bandepe | - | 93 | 281 | - | - | - | - | - | - | - | - | - | |||||
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | | 68 |
*Values expressed in thousands, except when indicated.
Produban Sreviços de Informatica S,A, | |||||||||||||||||
(4) | 32,190 | 244 | 733 | - | - | - | - | - | - | - | - | - | |||||
Santander fundo de Investimento | |||||||||||||||||
Diamantina Multimercado Crédito | |||||||||||||||||
Privado Investimento no exterior (3) | 1,671 | 10,337 | 25,118 | - | - | - | - | - | - | - | - | - | |||||
Others | 1,454 | 5,550 | 14,044 | 1,617 | 5,780 | 39,479 | 355 | 26 | 630 | 337 | 743 | 2,927 | |||||
Non Operating Income | - | - | 168,588 | - | - | - | - | - | 168,588 | - | - | - | |||||
Super Pagamentos e Administração de | |||||||||||||||||
Meios Eletrônicos S,A, | - | - | 168,588 | - | - | - | - | - | 168,588 | - | - | - | |||||
Other Receivables - Others | 2,485,181 | 32,803 | 187,577 | 307,201 | 101,148 | 286,227 | 2,519,079 | 125,228 | 163,187 | 347,335 | 18,095 | 41,820 | |||||
Gesban Servicios Administrativos | |||||||||||||||||
Globales, S,L, | - | - | - | - | - | - | - | - | 8,006 | - | - | - | |||||
Banco Santander Espanha (2) | 2,475,527 | - | - | 273,232 | 6,448 | 6,448 | 2,519,029 | - | (35) | 347,335 | 6,415 | 6,371 | |||||
Santander Capitalização S,A, (3) | 6,105 | 18,802 | 148,786 | 29,749 | 85,173 | 250,398 | - | - | - | - | - | - | |||||
Banco Santander International (4) | - | 10,506 | 34,227 | - | 9,039 | 26,515 | - | 10,506 | 34,227 | - | 9,039 | 26,515 | |||||
Santander Securities Services Brasil | |||||||||||||||||
DTVM S,A,(4) | - | 374 | 1,124 | - | 371 | 1,112 | - | 2,131 | 6,394 | - | 2,127 | 6,382 | |||||
Key Management Personnel | - | 25 | 118 | - | 70 | 167 | - | 43 | 186 | - | 92 | 263 | |||||
Others | 3,549 | 3,096 | 3,322 | 4,220 | 47 | 1,587 | 50 | 112,548 | 114,409 | - | 422 | 2,289 | |||||
Deposits | (24,972,500) | 269,259 | 679,534 | (12,220,825) | (605,588) | (530,963) | (1,021,988) | (682) | (17,285) | (1,073,134) | (14,061) | (98,734) | |||||
Santander Leasing | (289,186) | (1,438) | (2,522) | (64,547) | (1,100) | (8,037) | - | - | - | - | - | - | |||||
Banco Santander Espanha | (14,240) | - | - | (12,294) | - | - | (57,690) | - | - | - | - | - | |||||
Aymoré CFI | (766,974) | (4,293) | (24,141) | (672,355) | (26,526) | (168,512) | - | - | - | - | - | - | |||||
Zurich Santander Brasil Seguros e | |||||||||||||||||
Previdência S,A | (263,877) | - | - | (199,934) | - | - | (263,877) | - | - | - | - | - | |||||
Zurich Santander Brasil Seguros S,A | (26,438) | - | - | - | - | - | (26,438) | - | - | (199,934) | - | - | |||||
Santander Brasil Gestão de Recursos | |||||||||||||||||
Ltda,(4) | (79) | (583) | (3,757) | (332,916) | (4,432) | (12,061) | (79) | (583) | (3,757) | (332,916) | (4,432) | (12,061) | |||||
Fundo de Investimento Santillana (4) | (10) | 3,314 | - | (20,571) | - | (58,239) | (10) | 3,314 | - | (20,571) | - | (58,239) | |||||
Santander Securities Services Brasil | |||||||||||||||||
DTVM S,A, | (540,292) | (2,864) | (11,962) | (404,427) | (7,773) | (22,450) | (540,292) | (2,864) | (11,962) | - | (7,773) | (22,450) | |||||
Santander Securities Services Brasil | |||||||||||||||||
Participações S,A, (4) | - | - | - | - | - | - | - | - | - | (404,427) | - | - | |||||
Santander Brasil Consórcio (3) | (1,057) | (4) | (16) | - | (16) | (49) | - | - | - | - | - | - | |||||
Santander FI Hedge Strategies (3) | |||||||||||||||||
(Nota 2) | - | - | - | (745,350) | (405,299) | (85,497) | - | - | - | - | - | - | |||||
Santander FI Diamantina(3) | (22,348,749) | 282,270 | 734,880 | (8,920,327) | (141,032) | (141,032) | - | - | - | - | - | - | |||||
Super Pagamentos e Administração de | |||||||||||||||||
Meios Eletrônicos S,A, | (7,468) | - | (1) | - | (596) | (2,604) | (7,468) | - | (1) | - | - | - | |||||
Key Management Personnel | (32,914) | (148) | (700) | (36,068) | (727) | (1,710) | (32,914) | (148) | (700) | (36,104) | (727) | (1,710) | |||||
Others | (681,216) | (6,995) | (12,247) | (812,036) | (18,087) | (30,772) | (93,220) | (401) | (865) | (79,182) | (1,129) | (4,274) | |||||
Repurchase Commitments | (8,967,655) | (83,136) | (170,503) | (5,691,457) | (77,943) | (234,487) | (2,431,698) | (11,551) | (34,375) | - | (3) | (12) | |||||
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | | 69 |
*Values expressed in thousands, except when indicated.
Santander FI Amazonas(3) | (378,821) | (2,350) | (5,560) | (131,317) | (4,644) | (12,197) | - | - | - | - | - | - | |||||
Super Pagamentos e Administração de | |||||||||||||||||
Meios Eletrônicos S,A, | (192,353) | (4,357) | (6,163) | - | - | - | (192,353) | (4,357) | (6,163) | - | - | - | |||||
Apolo Fundo de Investimento em | |||||||||||||||||
Direitos Creditórios | (76,428) | (592) | (592) | - | - | - | (76,428) | (592) | (592) | - | - | - | |||||
Santander Leasing(3) | (1,324,636) | (9,540) | (29,997) | (1,253,584) | (21,091) | (63,626) | - | - | - | - | - | - | |||||
Santander CCVM(3) | (184,283) | (862) | (2,936) | (97,488) | (1,575) | (3,820) | - | - | - | - | - | - | |||||
Santander FI SBAC(3) | (3,107,928) | (51,443) | (71,027) | (2,713,050) | (35,316) | (112,835) | - | - | - | - | - | - | |||||
Santander FI Guarujá(3) | (458,776) | (2,173) | (9,034) | (372,545) | (5,217) | (15,481) | - | - | - | - | - | - | |||||
Santander FI Diamantina(3) | (557,499) | 4,914 | (1,148) | (255,043) | (867) | (2,161) | - | - | - | - | - | - | |||||
Santander FI Unix(3) | (26,601) | (130) | (2,462) | (366,357) | (5,507) | (15,522) | - | - | - | - | - | - | |||||
Fundo de Investimento Santillana (4) | (2,162,914) | (6,602) | (27,613) | - | - | - | (2,162,914) | (6,602) | (27,613) | - | - | - | |||||
Others | (497,264) | (10,001) | (13,964) | (502,073) | (3,723) | (8,833) | (3) | - | - | - | - | - | |||||
Key Management Personnel | (152) | - | (7) | - | (3) | (12) | - | - | (7) | - | (3) | (12) | |||||
Funds from Acceptance and Issuance | |||||||||||||||||
of Securities | (101,794) | (869) | (2,828) | (89,074) | (2,033) | (4,512) | (101,794) | (869) | (2,828) | (89,074) | (2,033) | (4,512) | |||||
Key Management Personnel | (101,794) | (869) | (2,828) | (89,074) | (2,033) | (4,512) | (101,794) | (869) | (2,828) | (89,074) | (2,033) | (4,512) | |||||
Loan and Onlendings | (13,235,044) | (1,629) | (3,012) | (2,581,530) | - | - | (8,475,700) | (1,629) | (3,012) | - | - | - | |||||
Banco Santander Río S,A, | - | - | - | - | - | - | - | - | - | - | - | - | |||||
Banco Santander México (4) | (11,504) | - | - | - | - | - | (11,504) | - | - | - | - | - | |||||
Banco Santander Espanha (2) | (8,464,196) | (1,629) | (3,012) | - | - | - | (8,464,196) | (1,629) | (3,012) | - | - | - | |||||
Santander Brasil EFC (3) | (4,759,344) | - | - | (2,581,530) | - | - | - | - | - | - | - | - | |||||
Dividends and Bonuses in Paying | - | 1,042 | (9,098) | (6,886,828) | - | - | - | 1,042 | (9,098) | (6,886,828) | - | - | |||||
Banco Santander Espanha (2) | - | - | - | (1,067,623) | - | - | - | - | - | (1,067,623) | - | - | |||||
Sterrebeeck B,V, (2) | - | - | - | (3,629,772) | - | - | - | - | - | (3,629,772) | - | - | |||||
GES (2) (4) | - | - | - | (2,177,207) | - | - | - | - | - | (2,177,207) | - | - | |||||
Banco Madesant(4) | - | - | - | (1,948) | - | - | - | - | - | (1,948) | - | - | |||||
Key Management Personnel (11) | - | 1,042 | (9,098) | (10,278) | - | - | - | 1,042 | (9,098) | (10,278) | - | - | |||||
Payables from Affiliates | (492,470) | (207,333) | (1,307,507) | (127,148) | (252,081) | (567,769) | (381,606) | (221,427) | (992,597) | (28,349) | (20,979) | (293,732) | |||||
Santander Brasil Tecnologia S,A, (3) | (4,353) | 51,473 | (165,113) | (46) | 40,586 | (121,228) | - | - | - | - | - | - | |||||
Banco Santander Espanha | (154,120) | (57,049) | (668,504) | - | (176) | (1,154) | (154,141) | (57,049) | (668,504) | (21) | (178) | (1,155) | |||||
Santander Corretora de Seguros (3) | (11,675) | (29,790) | (121,559) | (12,127) | (38,624) | (100,005) | - | - | - | - | - | - | |||||
Getnet S,A, (3) | (14,626) | (5,895) | (17,175) | (12,886) | (7,035) | (22,317) | - | - | - | - | - | - | |||||
Santander Securities Services Brasil | |||||||||||||||||
DTVM S,A, | (8,769) | (12,271) | (35,234) | - | (12,516) | (36,457) | (8,769) | (12,271) | (35,234) | (5,066) | (12,516) | (36,457) | |||||
Santander Leasing(3) | (79,374) | - | - | (79,387) | - | (33,309) | - | - | - | - | - | - | |||||
Santander Brasil Asset Management | |||||||||||||||||
Distribuidora de Títulos e Valores | |||||||||||||||||
Mobiliários S,A (Santander Brasil | |||||||||||||||||
Asset) (4) | (7,203) | - | - | - | - | - | (7,203) | (170) | (429) | (14,406) | 190 | (722) | |||||
Santander Global Technology, S,L,, SOCI | (211,095) | (104,500) | (224,003) | (8,240) | (225,465) | (225,465) | (211,095) | (104,726) | (224,618) | (8,240) | - | (226,488) | |||||
Others | (1,255) | (49,301) | (75,919) | (14,462) | (8,851) | (27,834) | (398) | (47,211) | (63,812) | (616) | (8,475) | (28,910) | |||||
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | | 70 |
*Values expressed in thousands, except when indicated.
Subordinated Debts | (14,473,733) | (754,411) | (5,060,110) | (10,175,961) | (1,088,566) | (1,477,614) | (14,473,733) | (754,411) | (5,060,110) | (10,175,961) | (1,088,566) | (1,477,614) | ||||
Banco Santander Espanha (2) (6) | (14,473,733) | (754,411) | (5,060,110) | (10,175,961) | (1,088,566) | (1,477,614) | (14,473,733) | (754,411) | (5,060,110) | (10,175,961) | (1,088,566) | (1,477,614) | ||||
Donations | - | (4,100) | (12,400) | - | - | - | - | (4,430) | (13,560) | - | (2,078,575) | (2,087,500) | ||||
Santander Cultural | - | - | - | - | - | - | - | - | - | - | (1,036,725) | (1,037,500) | ||||
Fundação Sudameris | - | (4,100) | (12,400) | - | - | - | - | (4,100) | (12,400) | - | (1,041,850) | (1,050,000) | ||||
Fundação Santander | - | - | - | - | - | - | - | (330) | (1,160) | - | - | - | ||||
Other Payables - Others | (4,882,838) | (384,135) | (1,314,195) | (3,926,496) | (762,114) | (1,364,579) | (447,355) | (200,787) | (743,346) | (379,980) | (264,558) | (696,908) | ||||
Banco Santander Espanha(2) | - | - | (1,837) | - | (4,007) | (4,007) | (2,865) | (24) | (1,967) | (1,277) | - | (4,007) | ||||
TecBan (5) | - | (88,161) | (274,477) | - | (255,452) | (255,452) | - | (88,161) | (274,477) | - | - | (255,452) | ||||
Santander Brasil Tecnologia S,A,(3) | - | (57,248) | (168,228) | - | (62,390) | (190,803) | - | - | - | - | - | - | ||||
Aquanima Brasil Ltda,(4) | - | (7,726) | (22,334) | - | (7,109) | (20,934) | - | (7,771) | (22,468) | - | (7,149) | (20,986) | ||||
Santander Securities Services Brasil | ||||||||||||||||
DTVM S,A, | - | (508) | (2,528) | - | (831) | (2,530) | - | (508) | (2,528) | - | (831) | (2,530) | ||||
Zurich Santander Brasil Seguros e | ||||||||||||||||
Previdência S,A,(8) | - | - | - | - | - | - | (19,954) | (4,432) | (16,633) | (21,219) | (6,304) | (17,801) | ||||
Getnet S,A, (3) | (4,468,127) | (142,969) | (461,325) | (3,573,943) | (193,537) | (524,140) | - | - | - | - | - | - | ||||
SANTANDER GLOBAL TECHNOLOGY, | ||||||||||||||||
S,L,, SOCI | - | (2,858) | (9,540) | - | - | - | - | (2,858) | (9,540) | - | - | - | ||||
Key Management Personnel | (414,688) | (91,494) | (371,481) | (352,553) | (234,705) | (360,272) | (422,980) | (102,144) | (413,826) | (357,249) | (250,350) | (395,082) | ||||
Others | (23) | 6,829 | (2,445) | - | (4,083) | (6,441) | (1,556) | 5,111 | (1,907) | (235) | 76 | (1,050) | ||||
Guarantees and Limits (10) | 8,731 | 15 | 42 | 5,010 | - | - | 8,731 | 15 | 42 | 5,010 | - | - | ||||
Key Management Personnel (9) | 8,731 | 15 | 42 | 5,010 | - | - | 8,731 | 15 | 42 | 5,010 | - | - |
- Controller - Banco Santander is indirectly controlled by Banco Santander Espanha (Notes 1 and 26,d), through the subsidiaries GES and Sterrebeeck B,V,
- Direct or indirect subsidiary by Banco Santander,
- Direct or indirect subsidiary by Banco Santander Espanha,
- Jointly-controlledcompany - Banco Santander,
- Refers to the portion acquired by the Controller from the PR Optimization Plan carried out in the first half of 2014,
- Corresponds to receivables related to Acquiring,
- Significant influence of Banco Santander Espanha,
- As of 2019, the policy to carry out loans with key management personnel has changed and the balance of the contracted operations does not depend on the term of the mandates,
- Refers to the recording in the clearing accounts of Guarantees and Limits of credit operations with Key Management Personnel,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 71
*Values expressed in thousands, except when indicated.
20. Income from Services Rendered and Banking Fees
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Asset Management | 142,750 | 435,962 | 193,320 | 540,198 | 261,984 | 740,246 | 291,237 | 807,676 |
Checking Account Services | 1,020,037 | 2,903,486 | 976,012 | 2,817,598 | 1,021,553 | 2,907,836 | 995,091 | 2,855,773 |
Lending Operations and Income from Guarantees Provided | 275,271 | 787,311 | 250,661 | 735,815 | 378,176 | 1,048,531 | 350,473 | 1,016,038 |
Lending Operations | 94,299 | 311,167 | 112,454 | 322,943 | 197,204 | 572,387 | 212,266 | 603,166 |
Income Guarantees Provided | 180,972 | 476,144 | 138,207 | 412,872 | 180,972 | 476,144 | 138,207 | 412,872 |
Insurance Fees | 471,867 | 1,546,511 | 593,628 | 1,798,574 | 745,333 | 2,209,539 | 771,170 | 2,285,355 |
Cards (Debit and Credit) and Acquiring Services | 954,141 | 2,696,950 | 1,001,687 | 3,081,695 | 1,406,512 | 3,968,519 | 1,462,043 | 4,548,407 |
Collection | 375,573 | 1,091,346 | 380,111 | 1,130,989 | 368,629 | 1,086,272 | 381,201 | 1,133,797 |
Brokerage, Custody and Placement of Securities | 293,575 | 628,794 | 239,312 | 622,461 | 361,015 | 838,477 | 317,195 | 774,166 |
Others | 83,265 | 183,412 | 69,054 | 187,650 | 203,142 | 531,269 | 181,895 | 460,311 |
Total | 3,616,479 | 10,273,772 | 3,703,785 | 10,914,980 | 4,746,344 | 13,330,689 | 4,750,305 | 13,881,523 |
21. Personnel Expenses
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Compensation | 931,392 | 2,758,105 | 973,587 | 2,886,565 | 1,045,482 | 3,112,134 | 1,094,511 | 3,254,268 |
Charges | 334,987 | 993,298 | 338,104 | 1,016,275 | 386,393 | 1,161,786 | 400,936 | 1,194,126 |
Benefits | 301,594 | 932,903 | 351,326 | 1,015,876 | 344,688 | 1,069,051 | 400,409 | 1,151,252 |
Training | 6,128 | 29,316 | 13,363 | 38,937 | 7,893 | 33,335 | 16,353 | 44,437 |
Others | 841 | 3,669 | 2,155 | 6,626 | 13,938 | 43,714 | 2,498 | 8,067 |
Total | 1,574,942 | 4,717,291 | 1,678,535 | 4,964,279 | 1,798,394 | 5,420,020 | 1,914,707 | 5,652,150 |
22. Other Administrative Expenses
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Depreciation and Amortization | 679,635 | 1,937,155 | 560,404 | 1,639,284 | 773,634 | 2,285,648 | 702,611 | 2,053,665 |
Outsourced and Specialized Services | 484,077 | 1,367,295 | 467,875 | 1,388,194 | 613,164 | 1,785,083 | 591,770 | 1,753,297 |
Communications | 94,596 | 277,680 | 95,768 | 290,759 | 98,516 | 293,226 | 101,998 | 309,098 |
Data Processing | 770,293 | 2,089,172 | 590,199 | 1,770,779 | 739,835 | 2,061,273 | 606,516 | 1,801,173 |
Advertising, Promotions and Publicity | 112,561 | 323,764 | 115,140 | 320,537 | 141,949 | 417,621 | 147,702 | 447,087 |
Rentals | 197,506 | 592,771 | 191,397 | 570,648 | 199,936 | 604,073 | 198,179 | 591,674 |
Transportation and Travel | 16,303 | 62,279 | 37,397 | 109,720 | 19,755 | 78,308 | 47,871 | 139,733 |
Financial System Services | 61,443 | 190,877 | 53,548 | 167,588 | 75,542 | 244,055 | 72,831 | 217,637 |
Security and Money Transport | 141,933 | 433,675 | 143,459 | 453,031 | 142,223 | 434,497 | 144,343 | 455,453 |
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 72
*Values expressed in thousands, except when indicated.
Asset Maintenance and Upkeep | 75,364 | 206,704 | 63,928 | 174,819 | 82,632 | 229,756 | 66,277 | 185,178 |
Water, Electricity and Gas | 39,997 | 139,265 | 46,425 | 155,572 | 40,634 | 142,006 | 47,584 | 159,507 |
Materials | 4,258 | 44,461 | 12,053 | 32,721 | 8,829 | 53,946 | 14,998 | 37,581 |
Others | 194,722 | 487,443 | 156,859 | 403,322 | 273,354 | 713,993 | 227,065 | 636,713 |
Total | 2,872,688 | 8,152,541 | 2,534,452 | 7,476,974 | 3,210,003 | 9,343,485 | 2,969,745 | 8,787,796 |
23. Other Operating Income
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Net Income Pension and Capitalization | - | - | - | - | 156,350 | 404,024 | 128,922 | 388,975 |
Reversal of Operating Provisions - Fiscal (Note 17,c) | 187,282 | 199,760 | - | - | 183,709 | 203,992 | - | - |
Provision for Financial Guarantees (Note 16,a) | 7,327 | 7,327 | 10,812 | 36,294 | 7,327 | 7,327 | 10,812 | 36,294 |
Monetary Adjustment of Escrow Deposits | 9,562 | 203,662 | 99,874 | 387,814 | 12,592 | 235,032 | 119,091 | 449,123 |
Recoverable Taxes | 8,371 | 112,621 | 16,220 | 50,745 | 12,009 | 133,143 | 24,040 | 76,725 |
Recovery of Charges and Expenses | 208,814 | 809,875 | 192,386 | 581,675 | 184,229 | 658,510 | 138,573 | 398,860 |
Monetary Variation | - | - | 24,287 | 50,598 | - | 3 | 24,851 | 51,663 |
Others (2) | 712,893 | 2,134,235 | 1,022,930 | 1,484,365 | 959,637 | 3,052,795 | 1,252,393 | 1,923,039 |
Total | 1,134,249 | 3,467,480 | 1,366,509 | 2,591,491 | 1,515,853 | 4,694,826 | 1,698,682 | 3,324,679 |
24. Other Operating Expenses
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |
Operating Provisions | ||||||||
Fiscal (Note 17,c) | - | - | 240,519 | 256,397 | - | - | 245,773 | 246,706 |
Labor (Note 17,c) | 205,056 | 719,009 | 343,483 | 607,735 | 221,375 | 756,160 | 359,594 | 666,871 |
Civil (Note 17,c) | 250,010 | 442,471 | 338,548 | 430,904 | 296,851 | 570,942 | 433,782 | 594,565 |
Credit Cards | 817,273 | 2,570,997 | 1,091,252 | 3,237,147 | 771,789 | 2,193,717 | 853,592 | 2,304,505 |
Actuarial Losses - Pension Plan | 55,962 | 194,347 | 93,457 | 203,336 | 55,946 | 195,414 | 94,504 | 203,601 |
Legal Fees and Costs | 29,856 | 71,756 | 30,995 | 111,038 | 30,425 | 75,308 | 18,114 | 114,428 |
Serasa and SPC (Credit Reporting Agency) | 18,256 | 43,341 | 16,726 | 49,844 | 18,660 | 44,914 | 17,248 | 51,231 |
Brokerage Fees | 20,922 | 61,772 | 21,339 | 69,851 | 20,045 | 60,942 | 21,607 | 70,209 |
Commissions | 267,326 | 568,958 | 241,056 | 483,732 | 553,969 | 1,482,937 | 569,970 | 1,423,139 |
Others (1) | 421,020 | 2,867,006 | 457,516 | 1,666,630 | 900,128 | 4,332,401 | 1,009,105 | 3,209,743 |
Total | 2,085,681 | 7,539,657 | 2,874,891 | 7,116,614 | 2,869,188 | 9,712,735 | 3,623,289 | 8,884,998 |
- In the period ended September 30, 2020 and 2019, it mainly includes monetary restatement on provisions for lawsuits and administrative and legal obligations, provisions for the benefit guarantee fund and other provisions,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 73
*Values expressed in thousands, except when indicated.
25. Non-Operating Income
Bank | Consolidated | |||||||
07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | 07/01 to | 01/01 to | |
09/30/2020 | 09/30/2020 09/30/2019 09/30/2019 | 09/30/2020 | 09/30/2020 | 09/30/2019 | 09/30/2019 | |||
Result on sale of Investments | - | 168,588 | - | - | - | 168,588 | 1,899 | 6,268 |
Result on Sale of Other Assets | 15,273 | 45,880 | (5,300) | 1,273 | 14,256 | 35,406 | (15,430) | (14,319) |
Reversal (Recognition) of Allowance for | 2,367 | 13,027 | 13,131 | 11,417 | 3,334 | 23,742 | 27,707 | (92,223) |
Losses on Other Assets (1) | ||||||||
Expense on Assets Not in Use | (13,914) | (38,020) | (12,394) | (40,856) | (13,997) | (38,196) | (13,072) | (41,797) |
Gains (Losses) of Capital | 6,776 | 6,037 | (638) | 333 | 6,760 | 3,783 | (650) | (115) |
Other Income (Expenses) | 11,595 | 57,415 | 13,669 | 50,897 | 5,519 | 59,132 | 18,396 | 49,654 |
Total | 22,098 | 252,928 | 8,468 | 23,064 | 15,872 | 252,455 | 18,850 | (92,532) |
26. Employee Benefit Plans - Post-Employment Benefits a) Share-basedcompensation
Banco Santander has long-term compensation programs linked to the performance of the market price of its shares, The members of Banco Santander 's Executive Board are eligible for these plans, in addition to the participants that were determined by the Board of Directors, whose choice will take into account seniority in the group, The members of the Board of Directors only participate in these plans when they hold positions in the Executive Board,
a,1) Local and Global Programs
Below are the long-term compensation programs and their characteristics,
Period of | ||||
Program | Plan | Liquidity Type | Vesting Period | Exercise/Settlement |
Dec/2017 to | In March/2020 and | |||
Local | Long-Term Incentive Plan - Private Ultra High (1) | Money | Dec/19 | March/2021 |
Global Long-Term - ILP CRDIV - Granted 2015 | Santander Global Group | In March/2019 and | ||
Global | (2) (3) | Shares | 2015 to 2018 | March/2020 |
Santander Brasil Bank | Jul/2019 to | |||
Local | Long-Term Incentive Plan - Technology | Shares | Jun/2022 | In July/2022 |
Santander Brasil Bank | In March/2022 and | |||
Local | Long-Term Incentive Plan - Pi Investments | Shares | Jan/2019 to Dec/2021 | March/2023 |
Santander Brasil Bank | In March/2022 and | |||
Local | Long-Term Incentive Plan - Ben' | Shares | Jan/2019 to Dec/2021 | March/2023 |
Ações Banco Santander | Jan/2020 a | In March/2023 and | ||
Local | Long-Term Incentive Plan - Sim | Brasil | Dec/2022 | March/2024 |
Ações Banco Santander | ||||
Local | Long-Term Incentive Plan - High Performance | Brasil | Sep/2020 a Aug/2023 | In September/2023 |
From March/2023 to | ||||
Global | Long-Term Incentive Plan - DTA | 2019 a 2022 | March/2030 |
- It aims at the growth and profitability of the Private business and the recognition of the Participant's contribution,
- Subject to the achievement of the Santander Group's RTA performance indicator, comparing the Group's evolution in this indicator with that of the main global competitors,
- The Plan does not cause dilution of the Bank's share capital, since it is paid in shares of Santander Spain, The type of settlement of the global program, grant 2015, was changed in March 2019, from Santander Global group shares, to cash,
a,1,a) Fair Value and Performance Parameters for Current Plans
i, Private Ultra High
Each participant had a reference value defined in Reais, if the indicators were reached, the percentage of achievement would be applied over the reference value, with the payment of the first installment in March 2020 and the second in March 2021,
After the performance parameter monitoring period ended in December 2019, the plan was terminated without payment of the intended remuneration,
ii, ILP Technologia
It is a retention plan for key positions launched in July/2019 where the participant must remain in employment until the payment date to be entitled to receive it,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 74
*Values expressed in thousands, except when indicated.
Each executive had a reference value defined in Reais, which was converted into shares of Santander Brasil (SANB11) at a price of R$44,66, which will be delivered in July 2022, with a restriction of 1 year,
Payment is subject to the application of the Malus / Clawback clauses, which may reduce or cancel the shares to be delivered in cases of non-compliance with internal rules and exposure to excessive risks,
Number of | Grant | Group of | Exercise | Exercise | |
Shares | Year | Employees | Start Date | End Date | |
ILP Tecnologia | 123,158 | 2019 | Executives | jul/2019 | jun/2022 |
Balance of Plans on September 30, 2020 | 123,158 | ||||
In 2020, there were no shares delivered or canceled in the plan, |
iii, ILP Pi Investimentos
It is a retention plan for key positions launched in May/2019, where the participant must remain in employment until the payment date,
The agreed ILP values for each participant will be obtained from the determination of the achievement of indicators in two moments: 2020 and 2021,
Payment will be made in SANB11 shares, 50% in March 2022 and 50% in March 2023, with a restriction of 1 year after each payment and is subject to the application of the Malus / Clawback clauses, which may reduce or cancel the shares to be delivered in cases of non-compliance with internal rules and exposure to excessive risks,
2020 Indicators | 2021 Indicators |
Active Customers - customers with average monthly balance | Active Customers - customers with average monthly balance |
Portfolio (AuM) - volume distributed including account balance | Portfolio (AUM) - volume distributed including account balance |
Revenue 2020 | Revenue 2021 |
BAI (Profit before tax indicator) |
In May 2020, the provision recorded for ILP Pi Investimentos was canceled and reversed, due to the impossibility of meeting the plan's performance target, The amount of the expense with the provision for this plan recorded up to 05/2020 was R$ 4,851,
iv, ILP Ben
It is a retention plan for key positions launched in May/2019, where the participant must remain in employment until the payment date,
The agreed ILP values for each participant will be obtained from the determination of the achievement of indicators in two moments: 2020 and 2021,
Payment will be made in SANB11 shares, 50% in March 2022 and 50% in March 2023, with a restriction of 1 year after each payment and is subject to the application of the Malus / Clawback clauses, which may reduce or cancel the shares to be delivered in cases of non-compliance with internal rules and exposure to excessive risks,
Indicators
Number of PJ Clients | Number of PF Customers |
Number of Accredited Establishments | Revenues |
BAI |
v, ILP DTA
This is an incentive plan to boost the digital transformation of Santander, launched in September / 2019, in which the participant must remain in employment until payment,
The eligible executives had a target defined in Reais and the payment will be calculated based on the measurement of the performance indicators in two moments: first period for measuring the fulfillment of key objectives (2019) and second period for determining the payment amount (2020, 2021 and 2022),
If the objectives of the plan are met, payment will be made in March 2023,
ILP DTA will be measured based on the performance of the following global initiatives:
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 75
*Values expressed in thousands, except when indicated.
- Global Trade Service Platform (GTS)
- Global Merchant Services (GMS) Platform
- OpenBank (OB)
- SuperDigital (SD)
Additional Objectives
- Digital Assets
- Digital Centers of Excellence vi, ILP High Performance
It is an incentive plan for key positions launched in August / 2020 where the participant must remain in employment until the payment date to be entitled to receive it,
Each executive had a reference value defined in Reais, which was converted into shares of Santander Brasil (SANB11) at a price of R$ 29,18 and which will be delivered in September 2023, with a restriction of 1 year,
Payment is subject to the application of the Malus / Clawback clauses, which may reduce or cancel the shares to be delivered in cases of non-compliance with internal rules and exposure to excessive risks,
a,2) Variable Remuneration Referenced to Shares
In the long-term incentive plan (deferral), the requirements for payment of future deferred installments of variable remuneration are determined, considering the long-term sustainable financial bases, including the possibility of applying reductions or cancellations depending on the risks assumed and fluctuations of the cost of capital,
The variable remuneration plan with payment referenced in Banco Santander shares is divided into 2 programs: (i) Identified Collective and (ii) Other Employees, The impacts on the result are recorded in the Personnel Expenses item, as follows:
Bank | Consolidated | |||||
01/01 a | 01/01 a | 01/01 a | 01/01 a | |||
Program | Participant | Liquidity Type | 09/30/2020 | 09/30/2019 | 09/30/2020 | 09/30/2019 |
Members of the Executive Committee, | 50% in cash | |||||
indexed to 100% of | ||||||
Collective | Statutory Officers and other executives | |||||
CDI and 50% in | ||||||
Identified | who assume significant and responsible | |||||
shares (Units | ||||||
risks of control areas | ||||||
SANB11) | - | - | - | - | ||
50% in cash | ||||||
Unidentified | Management-level employees and | indexed to 100% of | ||||
employees who are benefited by the | CDI and 50% in | |||||
Collective | ||||||
Deferral Plan | shares (Units | |||||
SANB11) | - | - | - | - |
27. Risk Management, Capital and Sensitivity Analysis a) Risk Management Structure
Banco Santander in Brazil follows the model based on a prudent risk management, It has specialized management structure for each risks listed below, as well as an area that carries out the Integrated Risk Management of the Group, disseminates Risk Pro Culture, manages risk self-assessment and controls Risk Appetite (RAS) - which is approved by the Board of Directors -, attending the requirements of the local regulator and the international good practices, aiming to protect capital and ensure business profitability,
The fundamental principles that rule the risk governance model are:
- All employees are responsible for the management of risk;
- Senior Management Engagement;
- Independence of risk control and management functions;
- Comprehensive approach to management and control of risks;
- Risk management and control must be based on timely, accurate and sufficiently granular management information,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 76
*Values expressed in thousands, except when indicated.
A, Credit Risk
The credit risk management is based in monitoring of credit portfolio and new credit operation indicators, Considering the economic scenario, profitability and defaults projections are estimated under control of appetite for risk, These projections are the basis for a redefinition of credit policies, which affect both the credit evaluation for a specific customer as customers with similar profile,
Another relevant aspect is the preventive management of credit, which is fundamental in maintaining the quality of Banco Santander's portfolio, The monitoring of the customer portfolio is a daily routine of the entire commercial area, with the support of the central areas,
To measure the quality of a client's or facility's credit, the Bank uses its own models score/rating, made by Metodology and independent Validation areas,
On credit restructuring and recovery the Bank uses specific collection teams, which may be:
- Internal teams specializing in with direct action against defaulting clients with delays exceeding 60 days and more significant amounts; and
- External partners specializing in collecting, notifying and filing high-risk clients,
Sale of non-performing loans portfolio is a recurrent part of the recovery strategy (only credit rights), but the Santander may maintain relationships and transactional means with assigned clients,
Besides, the bank constitutes provision in accordance with the current legislation of Bacen and National Monetary System (Note 8,e),
B, Market Risk Management
The management of the market risk consists on developing, measuring and monitoring the use of limits previously approved in internal committees, relevant to the value at risk of the portfolios, the sensitivities arising from variation in market data (interest rates, indices, prices, exchange rates, etc,), liquidity gaps, among others, which might affect the positions of Banco Santander's portfolios in the various markets where it operates,
C, Operational Risk and Internal Controls
Santander's operational risk management model is based on best practices and its premise is to evaluate, monitor, control, implement improvements to reduce exposure to risks and losses, in line with the risk appetite approved by the Board of Directors and adopting the definition of the Basel Committee and Central Bank of Brazil for operational risks, Our governance model is based on the three lines of defense and has people, structures, policies, methodologies and tools to support the adequate management of operational risk,
The Internal Controls Model is based on the methodology developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), covering the strategic, operational, financial disclosure and compliance components and allows compliance with the requirements of regulators BACEN, CVM, B3, SUSEP and SarbanesOxley - SOX (Security Exchange Commission),
D, Bank´s business is highly dependent on the proper functioning of information technology systems,
Our business is highly dependent on the ability of our information technology systems to accurately process a large number of transactions across numerous and diverse markets and products in a timely manner, and on our ability to rely on our digital technologies, computer and email services, software and networks, as well as on the secure processing, storage and transmission of confidential data and other information in our computer systems and networks, The proper functioning of our financial control, risk management, accounting, customer service and other data processing systems is critical to our business and our ability to compete effectively,
E, Compliance and Reputacional Risk Management
Compliance risk management has a proactive focus on this risk, policies, implementation of process, including monitoring, training, advisory, risk assessment and corporate communication of standards and regulations to be applied to each businesses area of the Banco Santander,
F, Unit for the Anti Money Laundering (AML) and Coutering of Financing of Terrorism (CFT)
Area responsible for promoting the development of the prevention of money laundering and combating the financing of terrorism in the different business units, as well as responsible for the Bank's Know Your Customer guidelines, establishing policies, procedures,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 77
*Values expressed in thousands, except when indicated.
monitoring and culture related to the subject, Moreover analyzing the AML/CFT risks in the products and services monitoring the product´s risk and transactions carried out,
G, Social and Environmental Risk
Banco Santander's Social and Environmental Responsibility Policy (PRSA), which complies with National Monetary Council Resolution 4,327/2014 and the SARB 14 self-regulation issued by Febraban, establishes guidelines and consolidates specific policies for social- environmental practices used in business and stakeholder relations, These practices including social and environmental risk management, impacts and opportunities related themes, such as, adequacy in the concession or use of credit, supplier management and analysis of the social and environmental risk which is carried out through the analysis of the socio-environmental practices of wholesale and segment Empresas 3 retail clients, that have limits or credit risk greater than BRL5 million and are included in one of the 14 sectors of social and environmental attention, In other to mitigate operational, capital, credit and reputational risk, Since 2009 Santander is Equator Principles signatory, which standards are applied in order to mitigate social and environmental risks when financing big projects,
The commitments assumed in the PRSA are detailed in others Bank policies, such as, the Anti-Corruption Policy, Supplier Relationships and Homologation Policies and Social-Environmental Risk Policies, besides that the Private Social Investment Policy, which aims to guide the strategy of this topic and present guidelines for social programs that strengthen this strategy,
H, Structure of Capital Management
Santander adopts a robust governance that supports all processes related to effective capital management in order to:
- Clearly define the functions of each team involved in the capital management;
- Ensure that the capital metric limits established in management, risk appetite and the Risk Profile Assessment (RPA) are fulfilled;
- Ensure that the actions related to the institution's strategy consider the impacts generated in the capital allocation;
- Ensure that the Management actively participates in the management and is regularly informed about the behavior of the capital metrics,
At Banco Santander, there is an Executive Vice-President responsible for capital management appointed by the Board of Directors; in addition, there are institutional capital policies, which act as guidelines for capital management, control and reporting (thus fulfilling all the requirements defined in CMN Resolution No, 4,557 / 2017),
For further information, see the "Risk and Capital Management Structure - Resolution nº, 4,557 / BACEN" in "Corporate Governance" and "Risk Management" at https://www,ri,santander,com,br/
b) Operational Limits
As established in CMN Resolution No, 4,193 / 2013, the requirement for PR in 2019 was 10,5%, comprising 8,0% of Minimum Equity of Reference plus 2,5% of Additional Capital Conservation, Considering this surcharge, PR Level I increased to 8,5% and Minimum Principal Capital to 7,0%,
For the base year 2020, the PR requirement remains at 11,5%, including 8,0% of Reference Equity Minimum, plus 2,5% of Capital Conservation Additional and 1,0% of Systemic Additional, PR Level I reaches 8,25% and Minimum Principal Capital 6,75%,
09/30/2020 | 12/31/2019 | |
Tier I Regulatory Capital | 76,23,294 | 66,481,661 |
Principal Capital | 68,983,783 | 61,389,509 |
Supplementary Capital (Note 20) | 7,252,510 | 5,092,153 |
Tier II Regulatory Capital (Note 20) | 7,221,222 | 5,083,808 |
Regulatory Capital (Tier I and II) | 82,456,516 | 71,565,469 |
Credit Risk (1) | 485,855,577 | 407,786,238 |
Market Risk (2) | 18,288,517 | 20,235,208 |
Operational Risk | 57,419,401 | 47,965,481 |
Total RWA (3) | 561,563,495 | 475,986,927 |
Basel I Ratio | 13.58 | 13.97 |
Basel Principal Capital | 12.28 | 12.90 |
Basel Regulatory Capital | 14.86 | 15.04 |
- The credit risk exposures subject to the calculation of the capital requirement using a standardized approach (RWACPAD) are based on the procedures established by Circular Bacen 3,644, of March 4, 2013 and their subsequent complementations through the wording of Circular Bacen 3,174 of August 20, 2014 and Circular Bacen 3,770 of October 29, 2015,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 78
*Values expressed in thousands, except when indicated.
- Includes installments for market risk exposures subject to variations in the rates of foreign currency coupons (RWAjur2), price indices (RWAjur3) and interest rate (RWAjur1 / RWAjur4), in the price of commodities (RWAcomur) ), the price of shares classified in the trading portfolio (RWAacs) and installments for exposure of gold, foreign currency and operations subject to exchange variation (RWAcam),
- Risk Weighted Assets or risk-weighted asset,
Banco Santander publishes the Risk Management Report on a quarterly basis with information on risk management, a brief description of the Recovery Plan, capital management, PR and RWA, The report with more details of the premises, structure and methodologies can be found at www,santander,com,br/ri,
Financial institutions are obliged to maintain the application of resources in permanent assets in accordance with the level of adjusted Reference Equity, The resources invested in permanent assets, calculated on a consolidated basis, are limited to 50% of the value of the Reference Equity adjusted according to the regulations in force, Banco Santander is within the established requirements,
c) Financial Instruments - Sensitivity Analysis
Risk management is focused on portfolios and risk factors, in accordance with Bacen regulations and international good practices,
Financial instruments are segregated into the trading and banking portfolios, as carried out in the management of market risk exposure, in accordance with the best market practices and with the classification criteria for operations and capital management of the Basen Standardized Basel Method , The trading portfolio consists of all transactions with financial instruments and commodities, including derivatives, maintained with the intention of trading, The banking portfolio consists of structural operations arising from the different business lines of Banco Santander and their possible hedges, Accordingly, according to the nature of Banco Santander activities, the sensitivity analysis was divided between the trading and banking portfolios,
Banco Santander performs the sensitivity analysis of financial instruments in accordance with CVM Instruction nº, 475/2008, considering market information and scenarios that would negatively affect the Bank's positions,
The summary tables presented below summarize the sensitivity values generated by the corporate systems of Banco Santander, referring to the trading portfolio and the banking portfolio, for each of the scenarios of the portfolios of March 31, 2019,
Trading Portfolio | Consolidated | |||
Risk Factor | Description | Scenario 1 Scenario 2 | Scenario 3 | |
Interest Rate - Real | Exposures subject to Changes in Interest Fixed Rate | (15,858) | (236,768) | (473,535) |
Coupon Interest Rate | Exposures subject to Changes in Coupon Rate of Interest Rate | (1,047) | (11,105) | (22,209) |
Coupon - US Dollar | Exposures subject to Changes in Coupon US Dollar Rate | (33,905) | (247,690) | (495,381) |
Coupon - Other Currencies | Exposures subject to Changes in Coupon Foreign Currency Rate | (1,623) | (3,116) | (6,232) |
Foreign Currency | Exposures subject to Foreign Exchange | (33) | (5,507) | (11,014) |
Eurobond/Treasury/Global Exposures subject to Interest Rate Variation on Papers Traded on the International Market | (4,455) | (111,386) | (222,773) | |
Inflation | Exposures subject to Change in Coupon Rates of Price Indexes | (653) | (234) | (467) |
Shares and Indexes | Exposures subject to Change in Shares Price | (413) | (10,322) | (20,643) |
Commodities | Exposures subject to Change in Commodity Price | (2) | (42) | (85) |
Total (1) | (57,989) | (626,169) | (1,252,339) |
(1) Amounts net of tax effects,
Scenario 1: shock of + 10bps and -10bps in the interest curves and 1% for price changes (currencies and shares), considering the largest losses by risk factor,
Scenario 2: shock of + 25% and -25% in all risk factors, considering the largest losses by risk factor,
Scenario 3: shock of + 50% and -50% in all risk factors, considering the largest losses by risk factor,
Banking Portfolio | Consolidated | ||||
Risk Factor | Description | Scenario 1 | Scenario 2 | Scenario 3 | |
Interest Rate - Real | Exposures subject to Changes in Interest Fixed Rate | (46,878) | (61,510) | (157,729) | |
TR and Long-Term Interest Rate - | Exposures subject to Change in Exchange TR and TJLP | ||||
(TJLP) | (29,044) | (246,198) | (380,095) | ||
Exposures subject to Change in Coupon Rates of Price | |||||
Inflation | Indexes | (31,938) | (163,836) | (344,781) | |
Coupon - US Dollar | Exposures subject to Changes in Coupon US Dollar Rate | (4,022) | (105,208) | (202,884) | |
Exposures subject to Changes in Coupon Foreign | |||||
Coupon - Other Currencies | Currency Rate | (8,293) | (87,874) | (126,687) | |
Exposures subject to Changes in Interest Rate | |||||
Interest Rate Markets International | Negotiated Roles in International Market | (15,805) | 87,394 | 264,837 | |
Foreign Currency | Exposures subject to Foreign Exchange | (40) | (1,004) | (2,009) | |
Total (1) | (136,020) | (578,236) | (949,348) | ||
(1) Amounts net of tax effects, | |||||
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | | 79 |
*Values expressed in thousands, except when indicated.
Scenario 1: shock of + 10bps and -10bps in the interest curves and 1% for price changes (currencies and shares), considering the largest losses by risk factor,
Scenario 2: shock of + 25% and -25% in all risk factors, considering the largest losses by risk factor,
Scenario 3: shock of + 50% and -50% in all risk factors, considering the largest losses by risk factor,
28. Other information
- Co-obligationsand risks in guarantees provided to customers, recorded in memorandum accounts, reached the amount of R$ 44,109,660 (12/31/2019 - R$41,660,754) in the Bank and R$ 44,109,660 (12/31/2019 - R$41,660,772) in the Consolidated,
- The total value of investment funds and assets under management of the Santander Conglomerate is R$ 2,755,952 (12/31/2019 - R$2,034,999) and the total investment funds and assets under management is R$ 201,874,075 (12/31/2019 - R$230,199,261) recorded in memorandum accounts,
- Insurance in force on September 30, 2020, in the form of fires, vehicles and others, has a coverage value of R$ 1,829,578 (12/31/2019 - R$1,829,578) at the Bank and R$ 1,821,864 (12/31/2019 - R$1,821,864) in Consolidated and in the global modality of banks, an insurance with a coverage value of R$ 392,189 (12/31/2019 - R$392,189) was contracted in the Bank and Consolidated, which can be used alone or in as long as it does not exceed the contracted amount, In addition, at the Bank and the Consolidated on September 30, 2020, there are other policies in force related to other assets in the amount of R$ 7,623,279 (2019 - R$7,623,279),
- Between September 30, 2020 and December 31, 2019, there were no linked asset transactions and obligations for linked asset transactions,
- Clearing and Settlement Agreements - CMN Resolution nº 3,263/2005 - Banco Santander has an agreement for the compensation and settlement of obligations under the National Financial System (SFN), signed with individuals and legal entities, whether or not members of the SFN, resulting in in greater guarantee of financial settlement, with the parties that have this modality of agreement, These agreements establish that the payment obligations to Banco Santander arising from credit and derivative operations, in the event of default by the counterparty, will be offset against Banco Santander's payment obligations to the counterparty,
- Other Obligations - Banco Santander rents properties, mainly used for branches, based on a standard contract which may be cancelled at its own criteria and includes the right to opt for renewals and adjustment clauses, classified as operating lease, The total of the future minimum payments of non-cancellable operating leases is shown below:
30/09/2020 | 31/12/2019 | |
Up to 1 Year | 674,217 | 651,207 |
Between1 to 5 Years | 1,623,611 | 1,492,289 |
More than 5 Years | 176,185 | 147,125 |
Total | 674,217 | 2,290,621 |
Additionally, Banco Santander has contracts with no maturity date determined, totaling R$679 (12/31/2019 - R$918) corresponding to the monthly rent contracts with this feature, Operating lease payments, recognized as expenses in the third quarter of 2020, amounted to R$ 363,338 (2019 - R$700,958),
The rental contracts will be readjusted annually, according to the legislation in force, and the highest percentage is according to the variation of the General Market Price Index (IGPM), The lessee is guaranteed the right to unilaterally terminate these contracts, at any time, in accordance with contractual clauses and legislation in force,
g) Incorporation of the spun-off portion of Integry Tecnologia e Serviços A,H,U Ltda,
On October 31, 2019, the partial spin-off of Integry Tecnologia e Serviços AHU Ltda, Was approved, ("Integry"), a wholly owned subsidiary of Getnet Adquirência e Serviços para Means of Payment S,A ("Getnet"), with a version of the spun-off portion of its assets, referring to its assets and liabilities, to Getnet, The incorporation of the spun-off portion by Getnet is pending approval by the Central Bank of Brazil,
On December 20, 2019, Getnet and Santander Merchant Platform Solutions, SL ("SMPS Global"), a company headquartered in Spain and controlled by Banco Santander, SA (Santander Spain), entered into a Purchase and Sale Agreement of the representative shares of Integry's total share capital, so that SMPS Global now holds 100% of Integry's share capital, On December 23, 2019, Integry changed its name to Santander Merchant Platform Solutions Brasil Ltda,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 80
*Values expressed in thousands, except when indicated.
h) Pandemic Effects - COVID-19
The Bank monitors the effects of this pandemic that affect its operations and that may adversely affect its results, Since the beginning of the pandemic in Brazil, Committees have been set up to monitor the effects of the spread and its impacts, in addition to government actions to mitigate the effects of COVID-19,
The Bank maintains its operational activities, observing the protocols of the Ministry of Health and other Authorities, Among the actions taken, we highlight (a) the dismissal of employees from the risk group and intensification of work in the home office, (b) the definition of a follow-up protocol, with health professionals, for employees and family members who have the symptoms of Covid19 and (c) increased communication about preventive measures and remote means of care,
The Federal Government through the National Monetary Council and the Central Bank of Brazil has adopted measures to mitigate the impacts caused by COVID-19, specifically on credit operations, fundraising, reduction of reserve requirements and aspects related to capital, such as ( a) measures to facilitate the renegotiation of credit operations without an increase in provisions, (b) a reduction in capital requirements, in order to expand the credit system's ability to grant credit and (c) a reduction in reserve requirements, , to improve liquidity conditions,
As of the date of this disclosure, the Bank has identified (a) increase in loan and financing operations, especially for companies; (b) increase in requests for renegotiation and extension of terms for credit operations; (c) impacts on the allowance for loan losses and
(d) increase in funds raised,
Future impacts related to the pandemic, which have a certain degree of uncertainty as to their duration and severity and which, therefore, cannot be accurately measured at this time, will continue to be monitored by Management,
29. Subsequent Events Determination of Interest on Equity
The Board of Directors, in a meeting held on October 26, 2020, approved the Executive Board's proposal, ad referendum of the Ordinary General Meeting to be held until April 30, 2021, for the distribution of Interest on Equity, in the gross amount of R$ 1,000 million , which, after deducting the amount related to income tax withheld at source, in accordance with current legislation, imports a net amount of R$ 850 million, with the exception of immune and / or exempt shareholders, Shareholders who are registered in the Company's records at the end of November 4, 2020 (inclusive) will be entitled to Interest on Equity, Accordingly, as of November 5, 2020 (inclusive), the Company's shares will be traded "Ex-Interest on Equity", The amount of Interest on Equity will be paid as of December 23, 2020 and fully charged to the mandatory dividends to be distributed by the Company for the year 2020, without any monetary restatement, The decision was approved by the Fiscal Council, according to a meeting held on the same date, and is in compliance with the provisions of CMN Resolution No, 4,820 / 2020,
Disposal of Investments in Norchem Participações e Consultoria S,A, (NPC) and Norchm Holdings e Negócios S,A, (NHN)
On October 8, 2020, Banco Santander (Brasil) SA sold its stake in Norchem Participações e Consultoria SA (50% stake) and Norchem Holdings e Negócios SA (22% stake), through a capital reduction and consequent cancellation of the shares held by Banco Santander (Brasil) SA, for which the Bank will receive an amount of approximately R $ 42 million,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 81
Composition of Management Bodies
Administrative Council
Álvaro Antônio Cardoso de Souza - President Sérgio Agapito Lires Rial - Vice-President Deborah Patricia Wright - Counselor (independent) Deborah Stern Vieitas - Counselor (independent) Jose Antonio Alvarez Alvarez - Counselor
José de Paiva Ferreira - Counselor José Maria Nus Badía - Counselor
Marília Artimonte Rocca - Counselor (independent) Pedro Augusto de Melo - Counselor (independent)
Audit Committee
Deborah Stern Vieitas - Coordinator
Luiz Carlos Nannini - Qualified Technical Member
Maria Elena Cardoso Figueira - Member
René Luiz Grande - Member
Risk and Compliance Committee
Pedro Augusto de Melo - Coordinator Álvaro Antonio Cardoso de Souza - Member José de Paiva Ferreira - Member
Virginie Genès-Petronilho - Member
Sustainability Committee
Marilia Artimonte Rocca - Coordinator
Carlos Aguiar Neto - Member
Carlos Rey de Vicente - Member
Mario Roberto Opice Leão - Member
Tarcila Reis Corrêa Ursini - Member
Nomination and Governance Committee
Álvaro Antonio Cardoso de Souza - Member Deborah Patricia Wright - Member
Luiz Fernando Sanzogo Giogi - Member
Compensation Committee
Deborah Patricia Wright - Coordinator Álvaro Antonio Cardoso de Souza - Member Luiz Fernando Sanzogo Giogi - Member
Fiscal Council
João Guilherme de Andrade So Consiglio - Effective Member (President)
Antonio Melchiades Baldisera - Effective member
Louise Barsi - Effective Member
Manoel Marcos Madureira - Substitute
Luciano Faleiros Paolucci - Substitute
Valmir Pedro Rossi - Substitute
*The Fiscal Council was installed at the Annual and Extraordinary Shareholders' Meetings held on April 30, 2020, and the members were approved by the Central Bank of Brazil on July 10, 2020, the date on which they took office in their respective positions, with a mandate until the 2021 Annual General Meeting,
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 82
Executive Board
Chief Executive Officer
Sérgio Agapito Lires Rial
Vice-President Executive Officer and Investor Relations Officer
Angel Santodomingo Martell
Vice-President Executive Officers
Alberto Monteiro de Queiroz Netto
Alessandro Tomao
Antonio Pardo de Santayana Montes
Carlos Rey de Vicente
Ede Ilson Viani
Jean Pierre Dupui
Juan Sebastian Moreno Blanco
Mário Roberto Opice Leão
Patrícia Souto Audi
Vanessa de Souza Lobato Barbosa
Officers without specific designation
Amancio Acúrcio Gouveia
Ana Paula Vitali Janes Vescovi
André de Carvalho Novaes
Carlos Aguiar Neto
Cassio Schmitt
Claudenice Lopes Duarte
Daniel Fantoni Assa
Elita Vechin Pastorelo Ariaz
Franco Luigi Fasoli
Geraldo José Rodrigues Alckmin Neto
Germanuela de Almeida de Abreu
Gustavo Alejo Viviani
Igor Mario Puga
Jean Paulo Kambourakis
João Marcos Pequeno De Biase
José Teixeira de Vasconcelos Neto
Luis Guilherme Mattos de Oliem Bittencourt
Luiz Masagão Ribeiro Filho
Marcelo Augusto Dutra Labuto
Marino Alexandre Calheiros Aguiar
Ramón Sanchez Díez
Ramon Sanchez Santiago
Reginaldo Antonio Ribeiro
Roberto Alexandre Borges Fischetti
Robson de Souza Rezende
Sandro Kohler Marcondes
Sandro Rogério da Silva Gamba
Thomas Gregor Ilg
Vítor Ohtsuki
Accountant
Gilberto Cabeleira Alves - CRC Nº PR040031/ O-7
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 83
*Values expressed in thousands, except when indicated.
Declaration of directors on the financial statements
For the purposes of complying with the provisions of article 25, paragraph 1, item VI, of the Securities Commission (CVM) Instruction 480, of December 7, 2009, the members of the Executive Board of Banco Santander (Brasil) SA (Banco Santander or Company) declare that they discussed, reviewed and agreed with the Financial Statements prepared by Banco Santander´s BRGAAP criteria, for the year ended September 30, 2020, and the documents that comprise them, being: Management Report, balance sheets, statement results, statement of changes in equity, statement of cash flows, statement of added value and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No, 6,404, of December 14, 1976 (Brazilian Corporate Law), the rules of the National Monetary Council, of the Central Bank of Brazil according to the model of Plan C of the National Financial System Institutions (COSIF) and other applicable regulations and legislation, The aforementioned Financial Statements and the documents that comprise them, were the subject of a report without reservation by the Independent Auditors regarding the recommendation for approval issued by the Company's Audit Committee and the favorable opinion of the Company's Fiscal Council,
Members of the Executive Board of Banco Santander on September 30, 2020:
Chief Executive Officer
Sérgio Agapito Lires Rial
Vice-President Executive Officer and Investor Relations Officer
Angel Santodomingo Martell
Vice-President Executive Officers
Alberto Monteiro de Queiroz Netto
Alessandro Tomao
Antonio Pardo de Santayana Montes
Carlos Rey de Vicente
Ede Ilson Viani
Jean Pierre Dupui
Juan Sebastian Moreno Blanco
Mário Roberto Opice Leão
Patrícia Souto Audi
Vanessa de Souza Lobato Barbosa
Officers without specific designation
Amancio Acúrcio Gouveia
Ana Paula Vitali Janes Vescovi
André de Carvalho Novaes
Carlos Aguiar Neto
Cassio Schmitt
Claudenice Lopes Duarte
Daniel Fantoni Assa
Elita Vechin Pastorelo Ariaz
Franco Luigi Fasoli
Geraldo José Rodrigues Alckmin Neto
Germanuela de Almeida de Abreu
Gustavo Alejo Viviani
Igor Mario Puga
Jean Paulo Kambourakis
João Marcos Pequeno De Biase
José Teixeira de Vasconcelos Neto
Luis Guilherme Mattos de Oliem Bittencourt
Luiz Masagão Ribeiro Filho
Marcelo Augusto Dutra Labuto
Marino Alexandre Calheiros Aguiar
Ramón Sanchez Díez
Ramon Sanchez Santiago
Reginaldo Antonio Ribeiro
Roberto Alexandre Borges Fischetti
Robson de Souza Rezende
Sandro Kohler Marcondes
Sandro Rogério da Silva Gamba
Thomas Gregor Ilg
Vítor Ohtsuki
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 84
*Values expressed in thousands, except when indicated.
Directors' Statement on Independent Auditors
For the purposes of complying with the provisions of article 25, paragraph 1, item V, of the Securities and Exchange Commission (CVM) Instruction 480, of December 7, 2009, the members of the Executive Board of Banco Santander (Brasil) SA (Banco Santander or Company) declare that they have discussed, reviewed and agreed with the Financial Statements by the Banco Santander BRGAAP criterion, which includes the Independent Auditors' Report, related to the Financial Statements by Banco Santander BRGAAP criterion, for the year ended September 30, 2020 , and the documents that comprise them, being: Performance Comments, balance sheets, income statement, statement of changes in equity, statement of cash flows, statement of added value and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No, 6,404, of December 14, 1976 (Brazilian Corporate Law) tions), the rules of the National Monetary Council, the Central Bank of Brazil in accordance with the model of the Accounting Plan of the Institutions of the National Financial System (COSIF) and other applicable regulations and legislation, The aforementioned Financial Statements and the documents that comprise them, were the subject of a report without reservation by the Independent Auditors regarding the recommendation for approval issued by the Company's Audit Committee and the favorable opinion of the Company's Fiscal Council,
Members of the Executive Board of Banco Santander on September 30, 2020:
Chief Executive Officer
Sérgio Agapito Lires Rial
Vice-President Executive Officer and Investor Relations Officer
Angel Santodomingo Martell
Vice-President Executive Officers
Alberto Monteiro de Queiroz Netto
Alessandro Tomao
Antonio Pardo de Santayana Montes
Carlos Rey de Vicente
Ede Ilson Viani
Jean Pierre Dupui
Juan Sebastian Moreno Blanco
Mário Roberto Opice Leão
Patrícia Souto Audi
Vanessa de Souza Lobato Barbosa
Officers without specific designation
Amancio Acúrcio Gouveia
Ana Paula Vitali Janes Vescovi
André de Carvalho Novaes
Carlos Aguiar Neto
Cassio Schmitt
Claudenice Lopes Duarte
Daniel Fantoni Assa
Elita Vechin Pastorelo Ariaz
Franco Luigi Fasoli
Geraldo José Rodrigues Alckmin Neto
Germanuela de Almeida de Abreu
Gustavo Alejo Viviani
Igor Mario Puga
Jean Paulo Kambourakis
João Marcos Pequeno De Biase
José Teixeira de Vasconcelos Neto
Luis Guilherme Mattos de Oliem Bittencourt
Luiz Masagão Ribeiro Filho
Marcelo Augusto Dutra Labuto
Marino Alexandre Calheiros Aguiar
Ramón Sanchez Díez
Ramon Sanchez Santiago
Reginaldo Antonio Ribeiro
Roberto Alexandre Borges Fischetti
Robson de Souza Rezende
Sandro Kohler Marcondes
Sandro Rogério da Silva Gamba
Thomas Gregor Ilg
Vítor Ohtsuki
Parent Company and Consolidated Condensed Interim Financial Statements | September 30, 2020 | 85
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Banco Santander (Brasil) SA published this content on 27 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2020 11:54:02 UTC
