Integrated Report 2018

Itaú Unibanco Holding S.A.

Highlights 2018 GRI 102-7

In millions of reais – R$ (unless otherwise indicated)

Human capital
Financial capital 2018 2017 2016 2018
vs. 2017
2017
vs. 2016
2018 2017 2016 2018 2017
vs. 2017 vs. 2016 Total headcount(2) 100,335 99,332 94,779 1.0% 4.8%

Net income attributable to owners Employee satisfaction ratio(3) – % 87.0 85.0 84.0 2 p.p. 1 p.p.
24,907 23,193 21,627 7.4% 7.2%
of the parent company(1)
Investment in personnel(1) 24,846 23,276 22,360 6.7% 4.1%
Annualized recurring return on average
20.4 19.6 20.1 0.8 p.p. -0.5 p.p.
stockholders’ equity(1) – %
Annualized recurring return on
1.7 1.7 1.8 0.0 p.p. -0.1 p.p.
average assets(1) – % Intellectual capital
Dividends and interest on own capital, net(1) 22,437 17,558 10,000 27.8% 75.6%
Itaú Unibanco brand value(4) 29,788 28,196 26,611 5.6% 6.0%
Free own funds raised and managed 2 ( )
2.567,860 2,266,976 2,056,946 13.3% 10.2% Average Evaluation of the Itaú PF app
4.5 4.3 3.6 2.4% 13.5%
on Play Store and Apple Store(2) – 0–5
Total assets 1
( )
1,552,797 1,436,239 1,351,314 8.1% 6.3%
Stockholders’ equity attributed to
136,782 131,378 120,095 4.1% 9.4%
the owners of the parent company(1)
Credit portfolio(1) 536,091 497,719 494,851 7.7% 0.6%
Manufactured capital
Branches, digital branches and banking
Nonperforming Loans Ratio (90 days overdue)(1) 3.5% 3.9% 4.3% -0.4 p.p. -0.4 p.p. 4,940 4,981 5,103 -0.8% -2.4%
service outlets(2) – units

Itaú Unibanco market capitalization(2) 341,968 275,523 219,348 24.1% 25.6% Automated teller machines(2) – units 48,476 46,965 46,175 3.2% 1.7%

Solvency ratio - Prudential Conglomerate Card devices(2) – thousands 1,228 1,157 1,471 6.1% -21.3%
18.0% 18.8% 19.1% -0.8 p.p. -0.3 p.p.
(BIS Ratio)(1)

Social and relationship capital Natural capital

Water consumption(3) – m3 1,449,038 1,390,142 1,410,592 4.2% -1.4%
Total retail customers(2) – millions 49.9 47.3 47.0 5.4% 0.6%
Energy consumption 3 – MWh
( )
606,946 607,888 630,245 -0.3% -3.5%
Total direct shareholders – thousands 148.9 121.1 112.6 22.9% 7.6%
Greenhouse gas emissions(3) – tCO₂e 228,682 244,334 164,791 -6.4% 48.3%
Total suppliers(3) – thousands 13.8 13.0 7.1 6.2% 82.8%
Source: (1) Complete Financial Statements in IFRS – 2018; (2) Management Discussion and Analysis and Complete Financial Statements – 2018;
Taxes, fees and government contribution taxes(2) 23,333 20,495 17,890 13.8% 14.6% and (3) Sustainability Report 2018; and (4) Interbrand.

Itaú Unibanco Integrated Report 2018

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Executive Summary

About this report The report is structured in four sections:

For us, creating value is about
GRI 102-14 | GRI 102-45
Message from the Co-Chairmen of the achieving financial results that
The way we think and our Board of Directors.............................................7 exceed the cost of capital, that
approach to creating long- The co-chairmen of the Board of Directors give a remunerate our shareholders
brief overview of Itaú Unibanco and commemorate
term value are aligned with the the 10th anniversary of the merger. Thereafter,
and other stakeholders through
principles of this integrated they set the context in which our capitals are responsible and long-lasting
report that enable us to inserted, their transformations and the main trends ethical relations based on trust
related to the business.
describe clearly how we and transparency and focused on
generate and share value Message from the Executive Committee...28 the sustainability of the business.
with our shareholders, clients, In this section, the Executive Committee presents
our business model and how it creates value, as Principal directives
employees, suppliers and measured by the distribution of added value to The purpose of this report is to clarify how we
society in a sustainable manner. society, in addition to addressing the importance create value for our shareholders and other
of our governance and our strategic fronts, which, stakeholders. To that end, we describe our
Highlights of the report connected to the relevant topics and the Sustainable strategic fronts and what we are doing to achieve
Our integrated report describes whom we are and Development Objectives, drive our business in the them, in addition to prioritizing the topics
how we strive to create value in the short, medium search to change leagues. considered most relevant for creating value in the
and long terms. We draw attention to how our short, medium and long terms. This integrated
corporate governance drives our business, defines Management Commentary..........................75 report has been prepared in line with the key
our strategies and manages the main business- Our CFO and CRO makes an analysis of our operations. directives on managing and reporting economic,
related risks and opportunities. social, environmental and governance aspects.
To make it easier to read we have flagged the
The Integrated Report 2018 incorporates main directives adopted in this report with the
material changes in comparison with previous browser icons shown below.
editions. Its structure follows the messages from
our key executives and consolidates in a single Strategic fronts
document, using clear language, what we report Having given collective thought to our
in our main publications. greatest strategic challenges, in 2017, we defined
our strategic fronts in order to add consistency and
quality to our results in the years to come. Our entire
efforts on these fronts bear the hallmark of good
corporate governance and sustainability practices.

Itaú Unibanco Integrated Report 2018

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Client centricity Integrated Reporting Manufactured capital
To design products and develop a “service culture” Integrated reporting, conceived by the Equipment and physical facilities used in our business,
where the focus is always on customer satisfaction. International Integrated Reporting Council (IIRC), owned by, leased by or under the control of Itaú, such as
aims to improve the quality of the information branches, automated teller machines, applications and
Digital transformation available, fostering a more cohesive approach, technology systems.
To accelerate our digital transformation process in addition to enhancing responsibility for the
by continuously increasing the productivity of management of organizations. In this report, Natural capital
our technology area and disseminating a digital we are summarizing the basic principles and Reflects renewable and non-renewable natural resources
mentality across the entire bank, to obtain greater the elements of content shown in the <IR> consumed or sequestered for the prosperity of the
efficiency while improving user experience and International Integrated Reporting Framework business. We are talking primarily about air, water, land,
customer satisfaction. (Framework) and we are adopting the mineral ores, forests and biodiversity.
fundamental concepts of value generation,
People management business model and capitals. Sustainable Development
To enhance our incentive models and our assessment
Goals (SDG)
tools to consider the new dynamics of cooperative Financial capital
working, making them more effective for even- Financial resources available or allocated to The SDGs are a social, environmental and economic
handed evaluation of individual achievements in our own or third-party business, obtained as agenda of the UNO and world leaders until 2030.
multifunctional teams. financial products or services. 1 Eradication of poverty
2 Zero hunger
Risk management Social and relationship capital
3 Health and well-being
So that we can fully comply with the guidelines on Our main stakeholders and how we relate to
4 Quality education
risk appetite. Managing risks is the essence of our them, reflecting our ability to share value and to
business and the responsibility of every employee. improve individual and collective well-being. 5 Gender equality
6 Clean water and sanitation
Internationalization Human capital 7 Clean and renewable energy
Advancing in the internationalization process does Our employees and their skills, experiences, 8 Decent work and economic growth
not necessarily mean expanding our business into motivations to innovate, develop and improve 9 Industry, innovation and infrastructure
new countries, but rather achieving in the countries processes, products and services through
10 Reduction of inequalities
where we operate the same quality of management meritocracy, leadership and collaboration.
11 Sustainable cities and communities
and level of results we enjoy in Brazil.
Intellectual capital 12 Responsible consumption and production
Sustainable profitability Consisting of the reputation achieved by 13 Countering climate change
To continually enhance the efficiency of our our brand, our intellectual property and 14 Life underwater
operations, having the ability to identify opportunities our ability to develop new technologies, 15 Life on land
for reducing costs, managing investments to become products and services that create competitive 16 Peace, justice and effective institutions
more agile, in addition to efficiently managing capital advantages and ensure the perennial nature
17 Partnerships for targets
allocation using an appropriate cost of capital. of the business.

Itaú Unibanco Integrated Report 2018

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This agenda was compiled based on the Integrity and ethics
The purpose of this report is to
Millennium Objectives and seeks to increase provide, in a concise manner, the
the value of corporate sustainability by sharing Digital transformation maximum relevant information
purposes and good practices, generating
opportunities aligned with the new economy and Customer satisfaction
connecting not only financial
stronger global cooperation to reduce the adverse aspects, but also those of a social,
impacts on society. Value creation environmental and governance
Risk management
nature, so that our stakeholders can
In this report, we are presenting the potential
SDOs for our business, highlighted in grey, in other make the best possible decisions in a
words, those that may be significantly affected, Diversity transparent and timely manner.
positively or negatively, by our activities and
commercial operations. Environmental management Information from the report
GRI 102-1 | GRI 102-50

Global Reporting Initiative (GRI) Corporate citizenship The information we are presenting in this report
The GRI is an independent organization that assists refers to the year 2018 (January 1 to December 31).
Employee experience
businesses, governments and organizations For comparative purposes, we are also reporting
to understand and communicate their impacts
Financial inclusion and guidance the years 2017 and 2016, as well as the data and
on issues like climate change, human rights, information from the date of the merger between
governance, corruption and social wellbeing. This Itaú and Unibanco (2008).
report presents a basic level of conformity with the
standards of the GRI.
Stakeholders Our Integrated Report 2018 also incorporates
This report identified the main stakeholders with
information sourced externally, such as social
whom we relate and who were consulted during our
Materiality and material topics and economic indicators, market data and
materiality review.
We consider relevant topics to be those with the projections, as well as sectorial studies over which
capacity to affect our value creation in the short, we have no control. This information will be flagged
medium and long terms from the point of view when presented.
of managing key stakeholders, in line with the Shareholders
directives of the Framework, GRI Standards and We are reporting here the consolidated information
Employees
SDOs. In 2018, we have revised our materiality matrix of Itaú Unibanco Holding S.A., our subsidiaries,
to include the new challenges we are facing. The affiliates or companies over which we have
Customers
topics identified were prioritized, discussed and significant influence, operating in Brazil and
internally validated, with external assurance from Suppliers overseas. The financial information is shown in reais
independent auditors, based on the directives of (R$) – our functional currency. Foreign currency
the AA1000 standard. This review resulted in 10 new Society transactions are converted using the exchange rates
material topics: prevailing on the dates of those transactions.
Government and regulatory bodies

Itaú Unibanco Integrated Report 2018

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The financial information is in accordance with the Forward-looking Information
International Financial Reporting Standards – IFRS This report contains plans and projections
issued by the International Accounting Standards about the financial condition and results of the
Board (IASB) and with the accounting practices operations of Itaú Unibanco which, although
/itaú applicable to financial institutions authorized to based on assumptions of the management and
operate in Brazil by the Central Bank (Bacen), for on information available in the market to date,
/itaú registration with the Brazilian Securities Commission involve inaccuracies and risks that are difficult to
(CVM) and for ascertaining dividend payments and predict and which, therefore, may lead to results
tax liabilities. or consequences other than those expected
/itaú herein. This information is no guarantee of future
In 2018, we began adopting accounting standard performance. Use of these expectations must take
@itaú “IFRS 9 – Financial Instruments”, replacing “IAS 39 – into account the risks and uncertainties involving
Financial Instruments”, altering our methodology for any activities that lie beyond our control, including,
@itaú classifying, measuring and reducing the impairment but not limited to, our ability to realize the extent of
of financial assets. the projected synergies and their schedules, political
and economic changes, volatility in interest and
currency rates, technological changes, inflation,
financial disintermediation, competitor pressure
on products, prices, and changes in tax legislation,
among others.
Learn more
by clicking on the icons Responsibilities
highlighted in this report Management is responsible for preparing this
Our head office is located at
Alfredo Egydio de Souza Aranha Square, report and for the internal controls it has deemed
Access our IR website 100 – 04344-902, São Paulo, SP – Brazil necessary to allow this information to be prepared
free of material distortion, irrespective of
Our phone number whether caused by fraud or error. This report was
+ 55 (11) 2794-3547
reviewed by PriceWaterhouseCoopers Auditores
Independents (PwC), an independent audit firm as
Registration
CNPJ 60.872.504/0001-23 stated in the opinion. Alexsandro Broedel
NIRE 35500010230 Executive Finance Director
I wish you all good reading! and Head of Investor Relations
Contact us GRI 102-3
Investors
Individuals: [email protected]
Institutions: [email protected]
Learn more about our executives’ experience

Itaú Unibanco Integrated Report 2018

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Message from the Co-Chairmen of the Board of Directors

About Itaú Unibanco

Our founders had a clear In 1933, Unibanco’s operations were taken over by
idea of what a bank should Walter Moreira Salles, who then took charge of our Our Vision
development. Olavo Setubal, in turn, became Chief
be and the values that should To be the leading bank in sustainable
Executive Officer of Itaú in 1959, with the support of
govern what we do Eduardo Villela, the founder’s son-in-law.
performance and customer satisfaction

Dear reader, In 2008, we decided to merge the two organizations

and create one of the world’s largest banks, Itaú
We are proud to celebrate the 10th anniversary of Unibanco. The partnership has meant the union Our Purpose
the merger between Itaú and Unibanco in 2018. The of two complementary mentalities that share a To foster people’s power of transformation
union of the two successful track records of two common history marked by mergers, acquisitions
ground-breaking banks in the use of technology, and takeovers, ethics and transparency in business,
as well as leaders of the sector in Brazil. The coming respect for the law, recognition of human capital,
together of the two organizations has enabled us customer satisfaction and social development.
to become the largest Brazilian private bank in total Our Way GRI 102-16
assets, as well as leader in Latin America in market The merger was considered the greatest deal in A strong culture hallmarked by ethics,
value, while our brand was considered the most the country’s history, especially if we consider the collaboration, meritocracy and total and
valuable among Brazilian brands by Interbrand in difficult times we were experiencing on account of a unbridled respect for people:
2018, valued at R$29.8 billion. serious international financial crisis.
1. It’s only good for us if it’s good for the client
Our story begins in 1924, when the banking section 2. We’re passionate about performance
of Casa Moreira Salles, founded by João Moreira
3. People mean everything to us
Salles, commenced operations as a banking
correspondent for the leading banks in the state of 4. The best argument is the one that matters
Minas Gerais, subsequently becoming União dos 5. Simple, always
Bancos Brasileiros, widely known as Unibanco. In
6. We think and act like owners
the case of Itaú, the other pillar of our story, it was
founded two decades later, in 1943, when Banco 7. Ethics are non-negotiable
Central de Crédito was founded by Alfredo Egydio de
Souza Aranha in the city of São Paulo.

Itaú Unibanco Integrated Report 2018

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Our history GRI 102-5

England
Germany
France Switzerland
Spain
United States

Present in of America
Portugal Japan

19
Bahamas
Mexico Cayman Islands

United Arab
Panama Emirates
Colombia

countries
Peru

Brazil

with a focus on Paraguay

Latin America Chile

Uruguay

Argentina

Closure of the Acquisition of 82% equity Association with 2018 Investment

capital of Rede stake in Recovery Banco Corpbanca of 11% in Ticket
Casa Moreira Salles 2008 2012 2014 2016 2018
1924
is born

Creation of Banco
1943
Central de Crédito
Merger of 2009 2013 2015 2016 2018
Itaú with Alliance with Acquisition of 50% equity Acquisition of Citicard and 2018 Acquisition of a
Unibanco Acquisition of
Porto Seguro Credicard stake in ConectCar Citi retail operations in Brazil minority equity holding
in XP Investimentos

Itaú Unibanco Integrated Report 2018

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Business context
From the merger until today, a series of international However, in 2015 we were taken by surprise Brazilian GDP growth
events continued to influence our business and by a new financial crisis triggered by high Real change (%)
people’s lives, such as fluctuations in the US dollar, government expenditures, leading to sharp drop 7.5
the credit squeeze, high inflation, fluctuating in GDP in 2015 and 2016 and an increase in the
interest rates and the economic recession which number of unemployed.
would only show signs of recovery in 2010.
4.0
Beginning in 2017, with low, but positive, growth,
3.0
During this period, the USA experienced the the Brazilian economy showed signs of a 1.9
greatest financial crisis since the 1930s, the reaction, indicating yet again that it would put 1.1 1.1
outcome of inefficient credit policies and risk the crisis behind it. The year 2018 was marked 0.5
-3.5 -3.3
assessments that culminated in the explosion of an by changes in the Brazilian political scenario
unprecedented real estate crisis. and the continuing recovery of the country’s
economy, even if somewhat discretely. After three
The European Union, in turn, was working on a years of recession, GDP grew in 2017 and 2018 by 2010 2011 2012 2013 2014 2015 2016 2017 2018
bail-out plan for the Greek economy, recognizing a 1.1% in both years, in a scenario of low inflation
much higher deficit than previously disclosed. This and lower interest rates. However, we still have
World GDP growth
saw the financial markets cast an even darker cloud major challenges this year and in years to come,
Real change (%)
of suspicion over other countries. especially the need for important structural
reforms in Brazil, such as the social security reform
In Brazil, the economy was recovering from the which is unlikely to happen before the second half 5.4
financial crisis of 2008, producing signs of growth and a of the year, and the tax reform. 4.3
3.8
strengthening economy. Given the social and economic 3.7
3.6
scenario we were facing, in 2012, we developed a Please refer to the section of 20-F Form entitled 3.5 3.5 3.5 3.3
business model based on the fundamental concept Context, items on Macroeconomic Context, Global
of value creation and the cost of capital allocated to Context and Brazilian Context for further details
each activity, in order to obtain fair returns. about economic data and indicators.
2010 2011 2012 2013 2014 2015 2016 2017 2018
This vision with respect to results guides our
operations towards business that effectively Source: Itaú Unibanco Holding and the Brazilian Institute of Geography
Material themes
creates value for stockholders, establishing a and Statistics (IBGE).
Risk management
minimum return required for our operations.
Value creation

Itaú Unibanco Integrated Report 2018

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Nominal Interest Rate – Selic(3) Exchange rate(1) vs. country risk(2)
At the end of the period (%)
4.20 500 financial capital
14
3.90
450
For us to adapt to this scenario,
400
12 we decided in 2012 to revisit our business model and
3.60 350
restructure it into a three-pronged approach: the
10
300 definition of Risk Appetite, the Focus on Insurance
3.30
8 250 and Services and the Control of Costs and Efficiency.
3.00 200
6 The first step was to change the mix of our credit
2.70 150 portfolio, which, in a scenario of economic crisis,
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2.40
100 increased the participation of products with lower
Selic target Actual Selic rate 50 risk, such as real estate loans, guaranteed by real
2.30 0 assets, and payroll loans, whose installments are
mar 13 mar 14 mar 15 mar 16 mar 17 mar 18 mar 19 deducted from payrolls and are concentrated on
Total credit to GDP(3)
At the end of the period (%) Real exchange rate (R$/US$) 5 year CDS stable income customers such as retirees and federal
government employees.
Central government primary result(4)
60
We also give priority to our services and insurance,
Revenue (%) Expenditure (%)
21 6 pension plan and premium bonds, which require less
20
capital allocation and results and value creation of
40
4 which are less volatile in relation to economic cycles.
19 In addition, our business strategy for this operation
20
18 is to focus on mass-market products, traditionally
2
sold through our network of branches and digital
0 17 channels. Accordingly, operations such as life group,
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
16
0 large risks and extended warranty insurance lines
were either sold or discontinued over last years. Even
Inflation rate in 12 months (IPCA)(3) 15
-2 in this context, we have increased the operating
At the end of the period (%)
14 revenues from insurance, pension plan and premium
12 bonds and services.
13 -4
10
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
8
Finally, we are constantly striving to improve
efficiency and obtain productivity gains in our
6
operations, as we see that there are always
Source: (1) Bloomberg (cumulative rates
4 Unemployment rate and minimum wage in Brazil(5)
in the period); positive numbers mean opportunities to improve control of our costs.
depreciation of the real. (2) Bloomberg (end
of period). Sovereign Credit Swap (CDS) is
2 7% 12%
a country risk measure (baseline). (3) Itaú
Unibanco Holding and Bacen. (4) National
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 R$622.00 R$954.00
Treasure and Bacen. (5) Ministry of Labor. 2012 2018

Itaú Unibanco Integrated Report 2018

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To illustrate our strategy of seeking to reduce our Credit portfolios
exposure to risk, the portfolio of Payroll Loans Our loan portfolio at the end of 2009 was R$288.9 billion, rising to
and Mortgages to Individuals jumped from R$31.6
billion in 2012, to R$88.7 billion in 2018, while vehicle
R$412.2 billion in 2011 and ended 2018 with R$636.9 billion.
financing fell from R$51.2 billion in 2012, to R$15.9
billion in 2018. Our risk-adjusted efficiency ratio in Product mix (%) Payroll and mortgages portfolios and vehicles
Loan portfolio in Brazil In billions of reais – R$
2012 was 73.1%, and 61.2% in 2018. As a result, we
have tripled the value creation since 2012, jumping
Review of the business model 104.6
from R$3.1 billion, to R$9.2 billion.
82.8
Payroll and
mortgage
The result was a new bank that, year after year, 5 23 31.6 Variation:
loans
88.7
exceeds its targets for growth and value creation, 22 51.2
26% Vehicles
even in a scenario of increased competition and 4
7 7 15.9
consolidation in the financial services sector in 12 20 2012 2018
Brazil. By 2018, the country had 135 conglomerates
– commercial and multiple banks, development
54 45 Delinquency ratio (%) – 90 days
banks and public banks.
4.4
Besides the traditional competition, the presence 2009 2011 2012 2018
of new entrants is on the rise, driven by 3.3 3.2 3.4
innovative technologies which has increased 2.9 3.1
Payroll and Personal credit 2.9
healthy competition within the domestic financial mortgages Credit card
system. We see this trend as an opportunity to 2012 2013 2014 2015 2016 2017 2018
Vehicles Companies
improve our relationship with our customers.

In the Products and Services section of this Efficiency ratio (%) Commission and fees
report, we highlight our market share and main In billions of reais – R$ 71.0
competitors in each type of product or service we 70.2 Commissions and
73.1 65.9 66.4
68.2
70.1 65.1 fees/Non-interest
offer our customers. 63.7 64.2 63.3 35
63.1 61.2 33 expenses
55.7 29 31

22
26
94%
45.7 49.2 47.3 46.4 47.6 18
44.0 45.3

2012 2013 2014 2015 2016 2017 2018

Risk adjusted efficiency ratio

Learn more about the competitiveness Efficiency ratio 2012 2013 2014 2015 2016 2017 2018
of the banking sector in Brazil
Source: Management Discussion and Analysis and Complete Financial Statements
in BRGAAP – 2018.
Itaú Unibanco Integrated Report 2018
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social and relationship capital
the the objective of changing leagues, so that Social networks are increasingly important in
Turning to the banking sector, we would begin to be compared with the world’s our relationship with society. We have achieved
we are witnessing important best companies in client satisfaction, rather than the second-highest digital community of fans
with just our main competitors in the banking among banks. We monitor our profiles 24 hours a
changes, especially where the sector. This is a challenging target, one that day, clearing up doubts, receiving feedbacks and
competition is concerned. Besides will require us to constantly evolve initiatives attending our clients.
the traditional competition, the and adjustments to our processes and in our
presence of new entrants is on the relationship with our stakeholders. In a world where relations are increasingly digital,
the development of products and services must
rise. We are striving to be leaders In this respect, during 2018 we made a concentrated factor in the customer’s profile, including traditional
in satisfaction through ethical and effort regarding our agenda with our customers, customers. We have made it possible for our
long-lasting relationships. and in the sections on “Client centricity” and “Digital customers to do most of their transactions via
transformation” we describe the key initiatives that internet, but they also have the physical branches at
will lead us to change leagues. their disposal.
The last ten years have seen major social
transformations. Globalization and widespread
access to the internet have changed people’s Itaú on social medias Date of consultation: March 29, 2019

behavior and the profile of consumers, who have

become more demanding and concerned about
propositions that have a positive impact on society.

The internet has revolutionized human behavior,

which is reflected in consumer purchasing habits.
They are no longer afraid to purchase online, they
have begun to do more research and to interact
9 million 829 million views
with companies, considering the evaluations and fans and 768,000 subscribers
opinions of other customers.

To continue to grow and become the leaders in

Relationship channels client satisfaction, we must always be alert to
the transformations affecting society and our
961,000 616,000 275,000
Customer service followers followers followers
4004-4828 – capitals and metropolitan areas customers’ new experiences. It is essential to
0800-728-0728 – other locations understand what our customers are looking for and
+55 (11) 4004-4828 – for overseas customers how each of us can assist them in that search.
Ombudsman’s department
0800-570-0011 In 2017, we implemented a strategic agenda with
six strategic fronts and, in 2018, we launched

Itaú Unibanco Integrated Report 2018

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national and international voluntary commitments Shareholders remuneration (%)(1)
shareholders 2.0
and pacts aimed at integrating social, environmental
A fundamental value of good and governance aspects into our business. Payout 12.4
Repurchase of shares
corporate governance is
The main ones are the Principles for Responsible 2.7x
transparency with investors.
Investment (PRI), the Charter for Human Rights –
4.3
Ethos, the Equator Principles (EP), the Global Impact, 87.2
We hear and understand our investors’ demands the Carbon Disclosure Project (CDP), Women's 0.1 13.9
70.6
0.0 8.9 0.9 4.2 0.2
and we inform them about our business strategies Empowerment Principles (WEP), the Pacto Nacional
45.0
and results in a clear and transparent manner, para Erradicação do Trabalho Escravo (National Pact
33.1 30.0 30.0 32.2 32.2 32.2 30.6
constantly striving to develop initiatives that add for Eradicating Slave Labor), among others.
value for our various stakeholders.
Our efforts to increase the knowledge on how 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
We strive to ensure unfettered communication with to assess environmental and social criteria have
shareholders. In 2018, we held 16 Apimec meetings been recognized as models in Brazil and abroad, as
across Brazil, attracting 2,437 shareholders. Our shown by the recurring presence of the institution
Apimec SP meeting (public meeting) was awarded in the major sustainability indexes abroad, such as Evolution of R$100 invested on the date
the seal of Quality as the Best Apimec SP meeting the Dow Jones Sustainability Index, and recently, before the announcement of the merger
of 2018. We also took part in 54 conferences and in Euronext Vigeo – Emerging 70 Sustainability (10/31/2008 to 12/31/2018)
seven road shows in Brazil and abroad. Index, and in Brazil, for example, in the Corporate
559
Sustainability Index, as well as the numerous prizes
We held four quarterly conference calls the which we have been awarded.
day after each quarterly earnings release. The
calls are conducted in English and afterwards in Daily average trading volume(2)(3) 368
Portuguese and may be accessed by telephone or
Largest dividend distribution of a Volume B3 (R$ million) Volume NYSE (R$ million)
listed company in the country's history on the internet. 269
Number of shares traded – B3 and NYSE
for the second consecutive year 183
Dividends and interest on Currently, our capital stock is composed of 65,322 68,684 65,224 64,883 100
59,800 61,495
shareholders' equity, net of Income tax(1) 9.8 billion shares represented by common shares 51,166 55,365 52,182 51,034

In billions of reais – R$ (ITUB3) and non-voting shares (ITUB4). The non- 1,253
Oct 08 Dec 18
voting shares are also traded on the New York 984 939
2018: 22.4 2015: 7.3 2012: 4.5 827 874 600
Stock Exchange (NYSE), as American Depositary 649 737 702 659 ITUB4 adjusted for dividends CDI
2017: 17.6 2014: 6.6 2011: 4.4 501 409
506 501 432
Receipts (ADR) – ITUB. 459 410 333
2010:
443
3.9 323 653
2016: 10.0 2013: 5.1 418 478 478 ITUB4 without dividend adjustment Dollar
326 442
277 292
2009: 3.5 178 207

Therefore, among other actions, we have assumed 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
and incorporated into our internal processes a few Source: (1) Management Discussion and Analysis and Complete Financial Statements
in BRGAAP – 2018; (2) Economatica and Citadel; and (3) Bloomberg.

Itaú Unibanco Integrated Report 2018

13
Our shares are traded on stock exchanges in Brazil and the United States, in the form of common shares and non-voting shares.

Stock
Exchange

Level 1 Level 2
Shares
code Non-voting share
Common share Non-voting share
American Depositary Shares, or ADS
ITUB3 ITUB4 ITUB
Closing price on
12/31/2018 R$30.05 R$35.50 US$9.14
12/31/2017 R$25.13 R$28.39 US$8.67
oting right (one share
V Priority in receiving the mandatory dividend, in the amount of R$0.022 per share; reference in the
P
has the right to one vote) 80% tag-along; subscription of
– the voting rights of our new shares in any
controlling shareholders do Preference in the subscription of new shares in any capital increase; capital increase.
not differ from the voting ight to vote if the company fails to pay fixed or minimum dividends for the
R
Shareholders' rights of other holders of period established in its bylaws, never exceeding three consecutive years until
rights common shares; dividends are paid; and
80% tag-along; and he creation of a new class of shares, prioritizing non-voting shares, or any
T
reference in the
P change in preference or rights associated with such shares, requires the approval
subscription of new shares of at least 50% of the common shares and by the shareholders representing the
in any capital increase. majority of non-voting shares, in General Stockholder's Meeting.

Number of
shares 4.96 million 4.85 million
Major Non-voting stock (PN) – Free Float
minority
shareholders Foreigners
1. Blackrock and Ishares;
2. The Vanguard Group; and 32% 29% 39%
3. Dodge & Cox.
Learn more about our shares
Source: Management Discussion and Analysis and Complete Financial Statements in BRGAAP – 2018.

Itaú Unibanco Integrated Report 2018

14
society take into account the effects of our relationships In 2017, we contributed
The financial sector plays a key with suppliers, resulting in a continuous chain indirectly with approximately
for the suppliers of our suppliers, and so on, until 5% of the Brazilian GDP and
role for society, serving persons, the economic flow reaches zero, which indirectly
families, companies, governments fuels the Brazilian economy. Meanwhile, the with the maintenance of 7%
and civic institutions. compensation paid to our employees and the of the employed population in
compensation paid to our suppliers support our Brazil. According to this study,
As a financial institution, we recognize our role as induced impact of household consumption, in
agents of transformation and promoters of local addition to financing public spending, thanks to the
each R$1.00 of direct GDP
development. Through innovation, we work to tax receipts. generated by us contributes to
encourage projects, institutions and individuals on the generation of R$3.60 of GDP
the path to building a better world. We are capable Catalyzing impacts are the impacts of the operations in Brazil. In addition, each job
of generating jobs, developing business and of the ten products analyzed in this study, five
fostering entrepreneurship. of which are related to individuals and five to directly held by Itaú Unibanco
companies. All products analyzed under this study contributes to the maintenance
With this in mind, we applied a study of externalities are related to credit, therefore, the direct impacts of 75 jobs in Brazil.
to identify our economic contribution to society. are not taken into consideration in this analysis.
Based on the Utopies Local FootPrint® methodology, However, we still have indirect and induced impacts We work to make dreams come true, to boost
we simulate the economic flows involved in our since the introduction of these amounts into the development, and to awaken the will to do
business and in some credit operations and economy results in relationships with suppliers until increasingly more and to do it better. We conduct
measured the economic contribution of our the economic flow reaches zero (indirect impacts) business by always placing ethics ahead of results
activities, expressed in terms of jobs held and the that lead to an increase in household consumption and consistently seeking innovation and excellence.
added value generated for Brazil’s GDP. (induced impacts). We grow by helping people and the country to
prosper, fostering social progress. We work with
The Utopies Local FootPrint methodology considers In both cases, we classified three types of impacts civil society and third sector entities with the
direct and indirect impacts and catalyzers. that were analyzed in the study: Direct impacts: objective of promoting the articulation of private
Direct impacts refer to net interest margins, financial margin, taxes, purchases and sectors of social investment with causes and public policies in
taxes, procurement, suppliers and creating and suppliers, production and even number of workers. different Brazilian cities, which help us understand
maintaining jobs. The indirect impacts are related to Indirect impacts: how this disseminates to the our role as a financial institution in society.
our supply chain and suppliers, while the catalyzers different sectors, particularly in the supply chain,
consider family consumption and the operating such as tier 1, 2, 3, etc., suppliers. Induced impacts: We have chosen sponsorships and affiliations that
expenses of government entities. household consumption and operating expenses of reflect our operating principles. By contributing
public bodies. to associations, we are collaborating with the
Impacts of operations are the direct social building of discussion forums and dialog between
and economic impacts of the jobs created and industry players and society whose activities
maintained or income generated, which also relate to our interests

Itaú Unibanco Integrated Report 2018

15
as an entity, or to contribute, foster, support and The Fundação Itaú Social continues to contribute Where promoting activities that foster culture are
develop civic, business or institutional activities. to improving education at Brazilian public schools, concerned, we are presenting the main practices of
especially at kindergarten and elementary Instituto Itaú Cultural and the actions of Espaço Itaú
We invest in other sectors, in addition to our core school level. It has built partnerships at the three de Cinema (a chain of movie theaters), as well as the
business with aim of fostering access to culture, government spheres, with civil society organizations sponsorships of projects in different fields of culture.
education, health, leisure, sport and urban mobility. and other companies, as the main way to operate in
It was with this in mind that we founded Instituto the field of education for children and adolescents. The program of Instituto Itaú Cultural is dedicated to
Unibanco (Unibanco Institute) in 1982, Instituto Itaú the cinema, with movie sessions, courses and other
Cultural (Itaú Culture Institute) in 1987, Fundação Itaú We wish to draw attention to the initiative activities, and music, theater and dance activities.
Social (Itaú Social Foundation) in 1993, BBA Educação Leia para uma Criança (Read to a Child), whose
(BBA Education) in 2015 and the Espaço Itaú de purpose is to encourage reading and story The Espaço Itaú de Cinema is mainly aimed at
Cinema (Itaú Espace of Cinema) in 1995. They were sharing to expand children’s cultural repertoire providing different views of the movies, creating
all designed as vehicles for the bank’s efforts, in the and strengthen affective, family and community critical audiences, and bequeathing a legacy
social sphere, to improve Brazil in various aspects. bonds. Every year, we send collections of to society by always supporting projects that
children’s books, with instructions on how to value and reinforce our commitment to the
Investment in education is one of the driving forces for mediate reading, to every state. democratization of culture.
social transformation and a basic pillar of a country’s
sustainable development. The higher the quality of The Associação Itaú Viver Mais (Itaú Live Longer The Instituto Unibanco is an organization that
education, the more educated and more capable Association) is a non-profit association focused works to raise the quality of Brazilian public
its citizens are of achieving the best employment on people over 55. The program engages in education, and secondary schools. Therefore, the
opportunities and quality of life while strengthening developing public policies that target the elderly, Institute develops and implements public school
the country’s economy, which is key to our business. in order to promote governance practices and to system management solutions committed to
qualify the investments by the elderly in funds. ensuring that public schools can guarantee the
We believe that equality in public education promotes right to education for all students.
access to culture, creating autonomous citizens with Among the main projects of the Investment in
a critical capacity to evaluate the reality in which they civil society is the Prêmio Itaú-Unicef (Itaú-Unicef The flagship project of Instituto Unibanco is
live and to propose the necessary changes. Award), which recognizes full-time education Jovem de Futuro (Young People of the Future),
projects carried out by civil society organizations which since 2007 has prepared and implemented
Our social investment in education aims to foster in partnership with public schools. management solutions in partnership with public
universal learning opportunities in formal education, school networks for young people enrolled in the
primarily during high school years, through Another important project is the portal final three years of mandatory schooling.
investments by Itaú BBA, Fundação Itaú Social and Escrevendo o Futuro (Writing the Future), which
Instituto Unibanco. has 384,000 registered users and provides There is an undeniable positive impact of culture
subsidies for educators to improve their on the dissemination of intellectual wealth
knowledge, innovate in teaching strategies and for furthering learning in a society. Expanding
share experiences. people’s contact with cultural diversity

Itaú Unibanco Integrated Report 2018

16
is a way of creating new paths for social In addition, we have a long relationship with tennis, In the following year, we started the system in Chile, in
development. By believing in this, we support and we have developed a complete platform for Santiago, expanding our operation in Latin America,
the democratization of culture through the promoting the sport, from beginners, to high besides Bike Buenos Aires, in Argentina. The project
investments of our foundations and institutes, as performance categories. has reached the mark of 6,899,130 trips since its
well as various sponsorships. inauguration, more than 660 thousand registered
Bearing in mind the relevance of emissions from users and more than 19 million kilometers traveled,
In the case of sport, we believe it makes a means of transport within the total Greenhouse which is equivalent to more than 470 round the world.
significant contribution to building people’s critical Gas (GHG) emissions (in urban areas), we believe
sense, which motivates us to invest in and sponsor that offering a sustainable, non-polluting transport In order to improve the sharing system and the
important activities. option makes an important contribution to the user experience, Bike Itaú has today leading-edge
climate change agenda and effectively reduces technology hitherto unheard of in Brazil, with better
We sponsor a range of sporting projects, such as greenhouse gases of this category. quality standards to provide more comfort, safety
soccer and tennis, with the aim of promoting social and convenience. The laranjinhas (as the bikes are
inclusion through sport, while training people to As our presence is essentially an urban one, we known) are lighter, ergonomic and resistant.
promote the practice of sports in order to transform define urban mobility as a pillar of investment
people’s quality of life. within our sustainability platform, promoting the Since we consider parking lots to be fundamental
integration of bicycles into the transport model of for encouraging mobility through bicycles, we
Our involvement with soccer began 20 years ago cities jointly with government and with society. undertook the construction of five public bicycle
when we sponsored television transmissions like stands, the Estações Bike (Bike Stations).
the Brazilian Championship, the FIFA World Cup Our bicycle sharing system started in Rio de Janeiro
and the Brazilian Men’s and Women’s National in 2012 and was later expanded to other cities such As a financial institution, we recognize our role
Soccer Teams, at all levels. In 2015, we also began as São Paulo (SP), Porto Alegre (RS), Salvador (BA), as an agent of transformation, promoting local
sponsoring the Chilean National Football Team. Recife, Olinda and Jaboatão dos Guararapes (PE) development. In this sense, we work to encourage
and Belo Horizonte (MG). projects, institutions and individuals in an innovative
manner, on the path to building a better world.
We have reinforced our commitment to sustainability and good market practices through engagement and sponsorship of various organizations and
institutions that support initiatives associated with sustainable development, social and banking responsibility, climate change, women's diversity
and empowerment, and market transparency.

1999 2018

Itaú Unibanco Integrated Report 2018

17
Sponsorships and social investments

Health and Innovation and Total

Education Culture Mobility Diversity TOTAL
sport development
Projects 614 65 367 48 60 284 1,438
Incentivized – R$ million 13.3 32.7 54.3 - 12.3 - 112.7
Non-Incentivized – R$ million 271.5 5.6 119.0 74.8 7.6 39.9 518.3

About 3.3 million 407,000 2.9 million 758,000 thousand 6.9 million 9,500
5,000 children, young collections viewers people in 1,117 trips participants
educational people and of books cultural activities
managers adolescents distributed
benefited
Source: Management Discussion and Analysis and Complete Financial Statements in BRGAAP – 2018. (1) Own resources. (2) Resources with fiscal incentive through laws such as Rouanet, Sports Incentive, among others.

Itaú Unibanco Integrated Report 2018

18
government and regulators Itaú Unibanco was the only Brazilian financial The law provides for heavy penalties, both through
institution selected for the list of Ethical Companies administrative and judicial proceedings including
We take our relationships with the by the Ministry of Transparency and the Office of determination of dissolution of a company,
government and regulators very the Federal Controller-General in 2017. prohibition against undertaking to finance with
seriously, working with them to public entities and prohibition against participating
build public policies that address In compliance with Brazilian legislation, we do in public biddings. In addition, the law authorizes
the interests of society. not make donations to political parties or to the public administrative authorities responsible
candidates for election. In 2016, we updated our for the investigation to enter into leniency
In terms of strengthening the institutional causes, Internal Policy on Donations, prohibiting any kind agreements. The self-disclosure of violations
we support projects and activities linked to public of direct donation to government employees and cooperation by legal entities may result in
organizations and other government institutions. and their immediate family members, second the reduction of fines and other sanctions as
We support projects in political education to degree relatives or relatives by kinship, and to determined by the new federal regulation issued
encourage social engagement and citizenship. government bodies or entities and candidates of in March 2015. The new regulation also provides
We offer political initiation courses, in partnership political parties. parameters for the application of the anti-
with the Center for Public Leadership, capable of corruption law including with respect to penalties
changing how ordinary people relate to politics, We are subject to Brazilian anticorruption and compliance programs.
essential for strengthening society’s commitment legislation, and similar legislation in other
to the democratization of politics. countries where we have branches and We are subject to regulation by, and supervision
operations, as well as other cross-border of, several entities, in the countries and for the
Monitoring the progress, at all spheres of anticorruption laws and regulatory regimes. segments in which we operate. The supervisory
government, of bills of law involving the financial These laws require the adoption of integrity activities of these entities are essential to the
sector on issues such as taxation, labor law, procedures to mitigate the risk that any person structure of our business, and they directly impact
security, urban mobility, consumer rights and acting on our behalf may offer an improper our growth strategies.
new technologies. advantage to a public agent in order to obtain
benefits of any kind. The National Monetary Council (CMN, acronym in
We recently got together with representatives Portuguese) is the highest authority responsible for
of the Executive and Legislative powers In January 2014, a new Brazilian anti-corruption establishing monetary and financial policies in Brazil,
and the academic community to discuss the law came into force. The new law establishes that overall supervision of Brazilian monetary, credit,
Taxation Reform, focusing on the Proposal for legal entities will have strict liability (regardless of budgetary, fiscal and public debt policies, regulating
Constitutional Amendment No. 293 of 2004. We fault or willful misconduct) if they are involved in the conditions for the organization, operation and
also met with representatives of the Office of any form of corruption. inspection of financial institutions, as well as supervising
the Chief of Staff, the Ministry of Science and the liquidity and solvency of these institutions. The
Technology, the Central Bank, class entities and Although known as an anticorruption law, it also CMN is also responsible for the general guidelines
the Executive branch to discuss proposals for encompasses other injurious acts contrary to to be followed in the organization and operation of
protecting and handling personal data. the Brazilian or foreign public administration the securities market and the regulation of foreign
including bid rigging and obstruction of justice. investments in Brazil.

Itaú Unibanco Integrated Report 2018

19
The Brazilian Central Bank (Bacen, acronym in directives for insurance and premium bond Anticorruption Law), require us, among other things, to
Portuguese) is responsible for implementing the companies and open private pension entities. maintain policies and procedures aimed at preventing
policies established by the CMN, authorizing the any illegal or improper activities related to corruption
establishment of financial institutions and supervising The Brazilian Superintendency of Private Insurance involving government entities and officials.
them in Brazil. It establishes minimum capital (Susep, acronym in Portuguese) is responsible for
requirements, limits for permanent assets, credit regulating and supervising the insurance, open private We are also required to maintain precise records
limits and reserve requirements, in accordance with pension funds and premium bond markets in Brazil and and a system of internal controls to ensure the
the policies established by the CMN. their participants. accuracy of our books and prevent illegal activities.
We have policies and procedures designed to
The Brazilian Securities Commission (CVM, acronym The National Agency of Supplementary Health (ANS, prevent bribery and other corrupt practices. Our
in Portuguese) is responsible for regulating, applying acronym in Portuguese) is responsible for regulating operations in Brazil and overseas attract different
sanctions and inspecting the Brazilian securities and supervising the health insurance market in Brazil taxation and obligations, according to the country
market (which in Brazil includes derivatives) and its and its participants. where we operate.
participants, as well as overseeing the stock exchange
and organized over-the-counter markets. Given our overseas shares and assets, we are subject During the normal course of our business, we
to information requirements under the 1934 U.S. may figure as parties to labor, civil and fiscal
The B3 S.A. – Brasil, Bolsa, Balcão (Brazilian Stock Securities Exchange Act, as amended, for foreign court proceedings. The criteria for quantifying
Exchange) is one of the world’s largest financial private issuers. Outside Brazil, our main operations the contingencies are adapted to the specific
market infrastructure companies, providing trading are subject to oversight by local regulatory authorities characteristics of the civil, labor law and fiscal
services in an exchange and OTC environment. in the following jurisdictions: South America, in portfolios, as well as other risks.
particular Argentina, Colombia, Chile, Uruguay and
The Brazilian National Commission of Private Paraguay; Europe, in particular, the United Kingdom Fiscal and social security lawsuits are those filed
Insurance (CNSP, acronym in Portuguese) is and Switzerland; Central America in particular Panama, to contest the legality and unconstitutionality of
responsible for establishing the guidelines and and the Caribbean, in particular Bahamas and Cayman the prevailing legislation for which provisions have
Islands; and the United States of America. been made irrespective of the likelihood of loss. Tax
Main rates (%) contingencies represent the principal amount of
Income tax 15.00 Applicable transnational legislation, such as the the taxes involved in administrative or judicial fiscal
Additional income tax 10.00 U.S. Foreign Corrupt Practices Act and U.K. Bribery discussions, assessed under the tax authority’s own
Social Contribution on Net Income 20.00 Act, as well as the applicable Brazilian legislation initiative, plus interest and, if applicable, fines and
Social integration program (mainly Brazilian Law No. 12,846/2013 – the Brazilian other charges.
0.65
(PIS, acronym in Portuguese)
Contribution to financing social security We engage in dialog with players in different sectors, while participating in drafting self-regulation
4.00
(Cofins, acronym in Portuguese)
policies respecting and protecting fundamental human rights and we are signatories to the
Tax over services (ISS, acronym in Portuguese) até 5.00
Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights,
Source: Management Discussion Analysis and Complete Financial Statements
in BRGAAP – 2018.
the International Covenant on Economic, Social and Cultural Rights, and the International Labor
Organization (ILO). Learn more about the covenants and declarations we are signatories to
Learn more about taxes and government contributions

Itaú Unibanco Integrated Report 2018

20
Suppliers by region of Brazil – %
Purchase process
suppliers
The hallmark of our relationship Pre-Purchase
0.7%
with our suppliers consists of North

Evaluation and
transparency, continuity and the Analysis of
historical purchases
Market
analysis specification of
building of shared value. 2.2% Northeast
the scope

These partnerships are established by means of Definition of strategy Prospecting and

for the purchase of administrative and technical
a formal hiring process, the purpose of which is
1.6% Midwest goods and services evaluation of suppliers
to minimize the possible financial, reputational,
operational and legal impacts during the provision of Suppliers
in 2018 Purchase
the service or after the termination of the contract. 91.4% Southeast
14,000
Competition Development Signature of
We have no relationships with organizations that or negotiation of Contractual Contractual
embrace hard labor or child labor in violation of the R$12 billion 4.1% South process Instruments Instruments
in more than
legislation or that explore prostitution. 15,000 contracts
Post-Purchase
Our suppliers submit to a validation process 54.7% of local suppliers
consisting of an analysis of their adherence to Monitoring of the delivery Performance and risk
environmental and social responsibility practices, of the material or service assessment of suppliers
Suppliers by type of activity (%) and the performance to support the demand
compliance with and adherence to legislation.
Construction, maintenance and property 30 indicators to verify for decisions, which may
adherence to quality result in the preparation
As part of our social responsibility, we seek to Advisory and consulting 16 standards/established of action plans to mitigate
engage with suppliers in all regions of Brazil, Information technology 12 service level agreements supply risks
according to the volume of our operations and Marketing 12
proximity to the administrative hubs, where the Training and benefits 4
focus is on local suppliers. Monitoring, management Relationship
Others 26 management with key
of consumption and
Total 100 validity of contracts and suppliers to ensure
centralized management efficiency throughout
Source: Sustainability Report – 2018.
of procurement processes the contract life cycle
and renewals
The purpose of the supplier evaluation process is to mitigate risks in our supply chain.

Monitoring of suppliers'
financial, reputational,
regulatory, social and Learn more about
Register Internal Administrative Technical Approved environmental conditions our suppliers
on site demand analysis analysis company Monitoring

Itaú Unibanco Integrated Report 2018

21
human capital Employees by position – 2018
We have always been convinced However, having a purpose is not enough. We must Total 100,335
that the great power of ensure that it permeates the corporate practices Directors 0.1%
and that is aligned with the objectives and targets
transformation rests with people. Management 14.9%
of the leaders who manage the company.
Recent years have seen an increasing wave of Administrative 37.7%
business in search of a purpose besides profit. We have always had the conviction that the Commercial and Operational 38.5%
And the intention behind this trend is simple: enormous power of transformation resides in Trainee 0.1%
companies with a purpose enjoy better long-term people. It is they who make us evolve, guaranteeing Internship 5.9%
financial results. sustainable results and driving our capacity to
Apprentice 2.7%
create value for society and for the country. Our
In 2017, we disclosed to our employees the challenge is to be increasingly attractive to all
purpose of Itaú Unibanco, highlighting the values generations and to engage with and develop our
that are part of our essence and which have talent. That is why we have consistently invested Employees by gender and position – 2018
brought us this far. in disseminating our purpose and what we call Our Women Men
Way – a strong culture marked by collaboration, Total 59% 41%
The meaning of our trajectory and our purpose is to meritocracy, ethics and total, unrestricted respect Directors 13% 87%
be able to encourage the transformation of people. for individuals.
Management 52% 48%
Behind everything we do there are people. People
with ideas that become solutions that change other If the bank consists of human capital, providing Administrative 51% 49%
people’s lives. Disclosing our purpose is part of the employees with the best experience to enable Commercial and Operational 69% 31%
reassertion of our reason for existing, increasing them to further their development is fundamental. Trainee 38% 62%
the power in everyone to invent and reinvent With this in mind, we have reviewed our work
Internship 56% 44%
themselves. To do so, all our employees need to be models, seeking to foster people’s autonomy and
on the same page. mobility, making them increasingly feel like owners Apprentice 71% 29%

of the business and their own careers. Source: Sustainability Report – 2018.
The purpose of Itaú Unibanco wasn’t born in
2017, it has always existed within all those who During 2018, we intensified our efforts related to
have been part of this organization and who our agenda with our employees, and in the section
are now continuing this legacy. We are people on People management we describe the main
moving people. initiatives that will see us change leagues.

Itaú Unibanco Integrated Report 2018

22
Profile of our diversity
Men Women Afro-descendants People with disabilities

2018 41% 59% 22% 4.8% Visual 0.6%

2017 40% 60% 22% 4.7% Motor 2.6%
2016 40% 60% 21% 4.6% Others 1.6%

Profile by generation
Men Women Brazil Abroad

8% 4% Baby boomers (over 53 years old) 2018 87% 13%

19% 18% Generation X (aged between 2017 86% 14%
41 and 52 years)
73% 78% Generation Y (aged between 2016 85% 15%
18 and 40 years)
Learn more about our employees

Itaú Unibanco Integrated Report 2018

23
Stacked up, equal to Data processing
+ 2 million 103 Burj Khalifa 27 petabytes
per day in
our branches (world's tallest building) of information
manufactured capital
Our distribution channel for
all products and services we
offer to clients.
Our distribution network is divided into traditional
channels which include branches, PABs (banking
services outlets located at corporate clients), alternative to opening full-service branches. In An essential part of this transformation is the
ATMs, telephones and digital channels like Internet addition, we believe they afford us the opportunity increasing use of mobile devices with Internet
Banking, cell phones and SMS. to capture new retail customers while serving access, reflected in the increasing use of mobile
corporate clients and their personnel. ATMs are banking which rose by 23% for individuals and by
Our branch network is our distribution channel for a low-cost alternative to services performed by 21% for businesses in comparison with 2017. Against
all products and services we offer our customers. employees, enabling us to provide service outlets this background, in 2018 we made significant
In 2018, we had 93 specially refurbished branches at significantly lower costs than at branches. Our enhancements to our technology platforms, which
providing services in shopping malls, with a new customers can do practically all transfers related to were also enhanced to provide customers with a more
visual identity and service proposal. These areas bank accounts using automated teller machines. intuitive experience while offering a larger range of
reflect a new concept in customer service, being In addition to all our traditional customer service products and services.
equipped with a differentiated layout inspired in channels (branches, PABs and ATMs), we also
the design of a retail store. Focusing on customer have a partnership with the TecBan ATM network, In relation to our facilities, we remain owners and
relationships, these branches have differentiated which provides customers with limited services – renters of our main administrative offices, which
business hours from regular branches (which are primarily withdrawals. include office buildings at ten different addresses,
normally open from 10 a.m. to 4 p.m.). Moreover, and a total area of 446,050 m2, located primarily
in 2018 we reached 195 digital branches, in line Since 2012, we have provided differentiated services in the city of São Paulo, Brazil. These offices
with our Digital Channels strategy. Likewise, we to certain registered customers. In addition to the include our headquarters, as well as several other
have also changed the opening hours of certain services available to our customers in general, certain administration buildings whose functions include
branches located in commercial centers, which registered customers can make withdrawals and commercial departments, support activities, the
open from 8 a.m. or 9 a.m., and close at 6 p.m. check their current account balances and statements Wholesale Bank, the Investment Bank and our data
or 8 p.m. The aim of this initiative is to adapt our using biometrics. Biometrics allows these registered processing center.
services to the routine of our customers. customers to carry out banking transactions using
fingerprint identification without having to enter a We also lease from third parties part of our
The range of services offered at PABs can be the password or use their card, providing greater security administration offices and most of our banking
same as that of a full-service branch or more and convenience. To use the biometrics, just register branches at competitive prices and under renewable
limited, according to the size of the corporate at any branch of Itaú Unibanco. lease agreements whose expiry periods range from
client and their requirements. PABs are a low-cost the first half of 2018 (currently being renewed on the
same conditions) until the first half of 2037.
Learn more about our fixed assets

Itaú Unibanco Integrated Report 2018

24
intellectual capital
Ticket, through a minority interest of 11%, which Over the ten years since our
The results achieved over the has enabled us to add the benefits issued by the merger, we have been able to
last decades reinforce the company to our customers in the wholesale segment
importance of our managers in and to micro, small and mid-size companies. produce consistent results,
conducting the business. achieving increasingly higher
Our Board of Directors consists of professionals
Our performance and success depend on the with exceptional knowledge and expertise
performance levels which, since
talent and efforts of highly qualified professionals. in different areas of operations, some of the 2008, have enabled us to achieve
Attracting and retaining talent is one of the key key differentials of our management who are an average return on equity
pillars supporting our organization’s results, where working in an ethical and sustainable manner to
the emphasis is on customer satisfaction and efficiently allocate capital and create value for our (ROE) of 22%.
sustainable performance. Our ability to attract, shareholders and other stakeholders.
develop, motivate and retain the right number of
qualified personnel is crucial to our performance
and our ability to achieve global success. At the
same time, we aim to provide our employees with
Social responsibility
a differentiated experience, so that we are able to
Finance Culture

Sustainability
attract and retain highly qualified professionals
Risk management
who value environments that offer equal Educ
opportunities and who wish to build their careers
ation o gy
ol
in dynamic and cooperative work places that Capital markets Banks Accounting Au
dit c hn
Investiments Te
encourage diversity and meritocracy and which
Com Legal
em ent
Manag
are up to date with new work models. Our current plian
business scenario requires us not only a careful ce
Comunication Regu
look at traditional careers, but also new careers lator
y
Le
than are essential to our future. ga
ti ng l
rke
Ma
The results we have achieved over recent decades
underline the importance of our management in
guiding our business. The experience and skills
Retail
of our managers are essential to the sustainable business
growth of our business. As an example, the Knowledge and experience of
conclusion of the acquisition of 49.9% of XP our Board of Directors
Investimento, announced in 2018, strengthens our
business model by expanding the portion of services
revenue through a minority interest. Additionally,
Learn more about the experience of our administrators
in 2018 we agreed a strategic partnership with

Itaú Unibanco Integrated Report 2018

25
natural capital
The perennial nature of natural capital We remain constantly focused on the management and rational use of natural resources, a strategy
represents one of the main challenges that allows us to reduce the impact of our operations and increase our operational efficiency. All
of the present and the future. the initiatives we have developed in relation to eco-efficiency are based on four pillars: deployment
cost, market availability, technical performance of the system and efficiency gains.
We are a services business, and although on a smaller
scale than in the industrial sector, our operations
also exploit natural resources such as water, for both
Goal (between 2013–2021) Goal (between 2018–2021)
direct use and for generating energy in the case of
the operations in Brazil, and the generation of solid Reduce consumption by 15% Reduce 4% Scope 1
waste and electricity consumption. In addition, we
Electricity
emissions by
6% Scope 2
are measuring the emissions from our financing Renewable Non-renewable
consumption (MWh) Scope 1 Scope 2 Scope 3
and investment activities to understand our indirect
impacts and take initiatives that mitigate these. We 2018 209,795 397,152 2018 19,521 50,898 158,263
are members of the Benchmark Club of the Carbon 2017 218,609 351,885 2017 7,960 66,848 169,526
Disclosure Program (CDP) Latin America, in addition
2016 203,920 409,254 2016 10,895 54,340 99,556
to be a component of the portfolios of the Corporate
Sustainability Index (ISE), the Carbon Efficient Index
(ICO2), and the Dow Jones Sustainability Index (DJSI),
which produces an annual report on our emissions.
Within this context we have taken measures to directly
and indirectly reduce our GHG emissions and other
pollutants associated with our business.

We have contingency plans and actions to mitigate

and improve water consumption efficiency in our
Water consumption (m³) Waste Landfills,
businesses. The main initiatives were the installations composting Recycling
treatment (t) and other
of flow reduction devices, rainwater capture and 2018 1,449,038
campaigns for the conscious use of water. 2017 1,390,142 2018 28,490 859

2016 1,410,592 2017 24,609 828

We invest in an energy matrix of renewable sources
2016 1,586 3,508
for the maintenance of our operations. Energy Goal (between 2013–2021)
Goal (between 2017–2021)
13%
from biomass plants or wind farms is also used on a Reduce
smaller scale. consumption by
Reduce disposals by to landfills 4%
Learn more about operational eco-efficiency

Itaú Unibanco Integrated Report 2018

26
The main actions related to the theme were the in relation to last year. By 2020, we will work to certify To track these transformations, in
installation of LED lamps and the replacement of two other major administration hubs, still to be defined,
equipment with high energy consumption. in order to increase certification coverage at our
2017 we implemented a strategic
administration hubs. agenda of six strategic fronts, and
We continuously invest in projects that contribute in 2018, we launched the changing
to the reduction of our emissions. Scope 1 covers Also in 2016 we achieved triple LEED Gold seal
direct emissions from combustion, mainly diesel certification at Edifício Faria Lima 3500, a certification
leagues objective in order to begin
oil. Scope 2 covers indirect emissions in electricity for sustainable constructions conceived and awarded comparisons with the world’s best
consumption. Scope 3 contemplates emissions from by the U.S. Green Building Council (USGBC), the companies in client satisfaction,
transportation of employees, generation of solid most recent being the LEED O+M (Operation and
waste and business travel. Maintenance) modality, complementing the previous not just with our direct competitors
awards under the LEED BC+C (Building Conception in the banking sector. This is a
We remain alert to initiatives and programs that and Construction) and LEED ID+C (Interior Design challenging goal that will demand
promote the reduction and correct disposal of and Construction) modalities, adding to the previous
waste. We have expanded our coverage of waste LEED NC (New Construction) modality obtained for the of us constant evolution in our
management, including the branch network. The CTMM (Mogi Mirim Technology Center). Throughout initiatives and in adjustments to
amount of waste destined for landfills increased in last year, we tested at our branch network new
comparison with the previous year, reflecting better concepts in construction though two projects which,
our processes.
management and control of the indicators. by accompanying their actual results, will generate
eco-efficient items that can be replicated during future Next, our Executive Committee will present our
We also offer financing facilities for projects that refurbishments of our premises. The refurbishment business model, the competitive differentials of
mitigate the impacts of climate change. We have concepts begin with the principle of respecting the our corporate governance and the importance of
partnered with the IDB, CEF, IFC and the BNDES existing structure and materials in the building, to our strategic fronts that guide us in our quest to
to finance renewable energy and low-carbon produce less waste during the refurbishment work. change leagues.
economy projects. Our position on climate change
is available on our site and gives details on these Sincerely,
and other initiatives.

To enhance environmental management at our

facilities, we applied for international environmental
certifications and, in 2017, we began the certification
process of the Itaú Unibanco Corporate Center (CEIC) to Pedro Moreira Salles Roberto Setubal
ISO 14001, which affords us more efficient management
Co-Chairmen of the Co-Chairmen of the
at this hub where 10,000 employees work. Adding to Board of Director Board of Director
this ISO 14001 certification implemented since 2011
at our Tatuapé Administration Center, the number of
Learn more about our executives’ experience
employees certified by ISO 14001 rose from 15% to 40%

Itaú Unibanco Integrated Report 2018

27
Message from the Executive Committee
requirements. Credit transactions require more Banco Itaú Uniclass offers exclusive services such
About the business GRI 102-2 capital, while insurance and services have a lower as investment consulting, exclusive ATMs, special
cost of capital and are more profitable. telephone services, higher credit limits and a
dedicated relationship team.
We are a 100% Brazilian financial Managing the combination of these activities
holding company. Our focus is on means we have a more robust profitability. Our Banco Itaú Personnalité provides specific financial
banking business in Brazil and business structure is divided into three segments advisory services to our high-income clients and
in Latin America. Our business of operations: The Wholesale Bank, the Retail Bank special benefits based on the client’s relationship
and Activities with the Market and Corporations. history. We attend to our clients through a special
model, intended for creating value, Each segment is classified according to the profile branch network in the main Brazilian cities.
prioritizes credit transactions, of our customers and the types of products and Personnalité customers also have access to Itaú
services, insurance and investment. services they procure. Unibanco’s branch and ATM nationwide network,
as well as to banking services internet, telephone
Through these segments, we offer our customers an and mobile banking.
Dear reader, extensive range of financial products and services
at units strategically located in the Americas, Europe We offer our customers a digital platform where
Itaú Unibanco is Brazil’s largest private bank – and and Asia. relationship managers are available on business
one of the world’s largest companies, according to days by phone, email, SMS, video conferencing or
the Forbes ranking considering aspects like business Our international presence creates important online chat from 8am to 10pm (for Uniclass and
generated, assets and market value. However, our synergies, primarily in trade finance, placement Personnalité customers) at no additional cost.
objective goes much further. of Eurobonds and offering our customers more
sophisticated financial transactions.
The rationale behind our business lies in the view
that as a bank we must contribute so that people and
The Retail Bank
businesses have a healthy relationship with money
and make good financial choices. Offer financial products and services to retail
customers, high-income customers and micro and
With 95 years of history and tradition, our aim is small business, as well as products and services to
foster positive changes in people’s and lives and non-account holders, including vehicle financing,
that of society. Our responsibility for the country’s credit cards outside the branch network and credit
development is our essence. transactions closed with banking correspondents.

Our business model encompasses three main In this segment, Banco Itaú de Varejo is our main
activities: credit, insurance and services, and business. Through its operations, we offer an exclusive
trading. Each activity has risks and specific capital service structure to customers throughout Brazil.

Itaú Unibanco Integrated Report 2018

28
The Retail segment represents an important source of investment bank. We provide banking services Activities with the
funding for our operations and generates a significant to major corporations and we raise funds for the market and corporations
volume of financial revenue and bank tariffs. large company segment, including fixed and Manages the financial income associated with
variable income instruments. our capital surplus, subordinated debt surplus,
the carrying cost of the net balance of tax credits
The Wholesale Bank
Our activities in this segment range from capital and liabilities, the net interest margin from trading
Looks after customers with high financial net market transactions to consultancy in mergers and financial instruments through proprietary positions,
Worth (private banking), through the units in acquisitions. These activities are fully integrated, managing interest and Exchange rate gaps and other
Latin America, banking for middle market and which enables us to achieve a personalized risk factors, arbitrage opportunities in local and
large companies and corporations through performance adjusted to our customers’ international markets, marking-to-market of financial
the activities of Itaú BBA, the unit responsible requirements. Our Corporate Investment Bank instruments. This segment also includes our equity
for corporate customers and in its role as an operations are current present in 19 countries. holding in Porto Seguro.

Customer profile by segment

Ultra
Above R$4 billion or above R$750 million in total risk(1)
Private Bank
Over R$5 million in investments Large
Between R$400 million and R$4 billion or over R$200 million in total risk(1)

Wholesale Bank
BBA
Personnalité Corporate
Over R$10,000 or over R$100,000 in investments Between R$200 million and R$400 million

Uniclass Middle
Between R$4,000 and R$10,000 Between R$30 million and R$200 million

Retail Micros, very small and small businesses

Up to R$4,000 Up to R$30 million

Retail Bank
Individuals Companies
by monthly income by annual sales

(1) Total exposure, including financial guarantees provided and private securities.

Itaú Unibanco Integrated Report 2018

29
Business model
Our purpose is to stimulate the power of transformation of people.
Our vision is to be the leading bank in sustainable
performance and client satisfaction.

Capitals Our business activities Products and services Value generated

Financial
and added to society
R$1.6 trillion Retail
(DVA, acronym in Portuguese)
in total assets Banking

ce
73
an
Social • Cr
edi

ern
and relationship t
• In

Gov
49.9 million sur
customers in Retail • Se
anc
rvic
es
e
30%
R$
R$ 22 billion billion
to employee
Human compensation
Trading
and benefits

Credit
100,000
employees

Wholesale
Banking
33%
Intellectual R$ 24 billion
R$29.8 billion to shareholders
dividends and interest
in brand value on own capital
33%
R$ 23 billion
to the government
in taxes and
Manufactured contributions
4.9 thousand branches
and client Security
and services
service branches 3% 3%

Strategic fronts
R$ 2 billion R$ 2 billion
reinvested in to suppliers
the business rentals
Natural
Activity with the
Water and energy Client People Digital Internation- Risk Sustainable market and corporation
consumption, waste centricity management transformation alization management profitability
disposal and emissions Learn more about the Statement of Value Added Demonstration – DVA

Itaú Unibanco Integrated Report 2018

30
Value creation 24.1% 23.9%
In billions of reais – R$

20.3% 21.8% 21.9%

ROE
In 2018, we achieved a
recurring net income of Average 2018
16.9% cost of
R$25.7 billion and we made 16.0% 16.3% 14.6% 14.0% capital Recurring net income
the largest distribution of 25.7 Recurring
23.8 24.9 44% 32%
results in our history. 20.7
22.1 net
income R$11 billion R$8 billion
8.3 4.4 8.2 9.2
We present below the main results Value
7.6 Retail Banking Wholesale Banking
creation
obtained by our business in 2018,
according to management criteria 16.5
adopted in managing and defining 17.7 16.6 Cost of
15.5
13.1 capital
the business strategies. These values
reflect our commitment to creating
value for our shareholders. 2014 2015 2016 2017 2018
Source: Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018.

Products and services Improving our credit portfolio and

reducing the volume of non-performing
For managerial purposes, we classify our loan
portfolio according to the type of operation
loans remained our target in 2018. contracted, the profile and the location of our clients.
We are always striving to implement
To maintain and enhance our sustainable Transactions with individuals consist basically of
and prioritize the offer of new performance, we have enhanced our credit credit cards, personal loans, payroll loans, vehicle
products and services that add value processes, policies, and tools, and intensified our financing and mortgages. Transactions with micro,
to our clients while diversifying our credit collection and recovery efforts. small and medium enterprises cover products such as
working capital finance and discount of duplicates.
revenue sources, enabling us to grow
Most of our loans are for customers domiciled in
Material themes
our non-financial revenues arising Brazil and are expressed in reais. However, a portion Most of the credits granted to companies in this segment
Value creation
primarily from fee income and is indexed to foreign currencies, mainly to the United require collateral such as machinery, equipment, accounts
Integrity and ethics
from insurance, pension plan and States dollar. The portion of our portfolio in foreign and checks receivable or credit card receivables, and may
Financial inclusion and guidance currency consists of loans, import and export finance also be guaranteed by the partners or shareholders of the
Customer satisfaction
premium bonds. and onlendings transactions. company or by third parties.

Learn more about our results in the period

Itaú Unibanco Integrated Report 2018

31
Credit portfolio by type of product
Transactions with large companies are intended for In billions of reais – R$
to large corporate clients. Interest rates can be fixed
Mortgage Credit card SMEs Personal loans
or variable, depending on the product chosen by the 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017
customer. In addition, these loans require a socio-
environmental assessment to cover the risks of the
42.0 +5% 78.3 +16% 68.8 + 14% 29.5 +8%
39.8 67.4 27.3
transaction and to adapt the clients to our policies. 38.2 59.9 59.8 60.3 27.9
Transactions with Latin America include loans granted
by our operations in Argentina, Chile, Colombia,
Paraguay and Uruguay. 16 17 18 16 17 18 16 17 18 16 17 18

Vehicles Payroll loans Corporate Latin America

Irrespective of the rating, all credit transactions 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017
receive an internal credit score that establishes the 121.8 152.1
+11%
46.9 +5%
cut-off limit for each product line. In the case of 15.9 + 12% 107.6 136.4
pre-approved credit, if the customer’s risk profile is 15.6 44.9 44.7 126.8
14.2 102.6 -5%
within the cut-off limit and the parameters set out
in our credit policy, the credit will be considered as
pre-approved and will be automatically available 16 17 18 16 17 18 16 17 18 16 17 18

to the customer. In cases where the credit is not

pre-approved, there is a traditional credit analysis,
individually evaluated by a credit specialist. During Loan portfolio and provision for losses (In billions of reais – R$) Loan portfolio
this process, a credit desk decides approvals, since Portfolio quality – % by business sector
commercial managers have no discretionary limit for Companies – %
approving individual proposals. Credit
portfolio
536.1 Total 6%
Real estate 6%
152.1 Latin America 3% Agro and fertilizers 5%
102.6 Corporate 9% Transportation 5%
78.3 Credit card 8% Food and beverage 6%
68.8 SMEs 7% Vehicles and auto parts 4%
Foreign currency loan portfolio
In millions of reais – R$ 46.9 Payroll loans 5%
Energy and water treatment 5%
42.0 Real estate 0%
90,566 Infrastructure work 4%
29.5 Personal loans 18%
15.9 Vehicles 3% Petrochemicals and chemical 3%
51,444 Provision Financial Institution 4%
48,580
0.1 0.5 2.3 4.5 5.2 5.4 6.1 9.4 33.4 Other sectors 58%
Chilean peso Dollar Other currencies
Source: Management Discussion and Analysis and Complete Financial Statements in BRGAAP – 2018
and Complete Financial Statements in IFRS – 2018.
Itaú Unibanco Integrated Report 2018
32
Transaction values(1) Our brands
We are the Brazilian In billions of reais – R$
credit card market leader.
Credit Debit 2018 vs. 2017
Through our own operations, primarily Itaucard +19%
and Hipercard, as well as cards of associations and
commercial agreements with important retailers,
telephone operators, car manufacturers and airline 344 2018 vs. 2017

companies established in Brazil. 261

290
+12%
104 117
Exclusive benefits Theater
Our main goals in the credit card segment are to 92 50% off Movie theater
promote the growth of our portfolio, improve its
profitability, manage the quality of our assets and 2016 2017 2018
seek the satisfaction of our customers.
Loyalty program
Number of cards(1)
In the case of customer service, we provide apps In millions of units (do not consider additional cards)
With each purchase, the customer
that can be used 24 hours a day. Our apps have earns points that accumulate and can be
2018 vs. 2017
exchanged for discounts, rewards and more.
constantly added new functionalities, such as
hire personal loan, unblocking new credit card, 30.3
32.4 +7%
We also have partnerships with major
balance checking, product redemptions under 29.3 28.1 +6% retailers, telephone operators,
the Loyalty Program and the Virtual Card, which 26.5 2018 vs. 2017
automakers and airlines in Brazil.
simplifies and offers more security for online 25.7
purchases. Another feature of this application is
2016 2017 2018
the timeline, which allows viewing of purchases
and transactions in real time. The app also offers
control of spending by category, enables the card
Market share – Credit cards(2)
to be activated and deactivated, virtual assistance Our main competitors in this sector are:
42.2%
and travel notifications.
Banco Bradesco S.A.

Banco Santander (Brasil)

In 2018, our portfolio grew notwithstanding
the maintenance of our strict credit policies. Banco do Brasil S.A.

Delinquency and risk indicators for our credit card Caixa Econômica Federal
Our virtual card business remained well below the market average.
We are leaders The number of new and smaller
brings greater in the Brazilian digital competitors entering this
comfort and security credit card
market
market, including Nubank and
Banco Original, has increased Learn more about our cards
in recent years.
Learn more
Source: (1) Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and ABECS.

Itaú Unibanco Integrated Report 2018

33
Market share – Acquiring(2)
We operate in the acquiring and In 2018, the amount transacted with credit and debit
34.0%
cards increased, as the market opened up at the end Our main competitors in the
electronic payment solutions industry sector are:
of last year. The launch of the Pop Credicard family
in Brazil. of machines, better customer retention and the Cielo
adjustment of pricing to the competition contributed
Santander GetNet
Our acquiring business consists the accreditation to the increase in the equipment base compared to
process, capture of transactions through affiliation, the previous year. In recent years, events such as
management and relationship with merchants, changes in legislation, coupled with
based on our brands Rede and Pop Credicard. Rede Transaction values(1) the growing number of Fintech
In billions of reais – R$ companies focused on payment
is one of the leading companies in the electronic means have facilitated the entry
We achieved a 34% of new competitors in the market,
payment solutions industry in Brazil and is a Credit Debit market share in terms such as PagSeguro, Stone and Bin.
multiple label acquirer of transactions with credit, 2018 vs. 2017 of total volume Some of these competitors have
of transactions grown significantly.
debit and benefits cards.
+10% (credit and debit)

We operate with the anticipation of receivables for

281
commercial establishments, resulting from credit 256 2018 vs. 2017
252
card sales, and we rent point-of-sale terminals
+15% More than 25 cards
(POS), while offering e-commerce solutions and
135
136 156
accepted on
e-wallet solutions and check consultation via
these terminals.
Rede’s machines
2016 2017 2018

We have begun restructuring of our acquiring

Number of machines(1)
business model, whose priority is to integrate
In millions of equipment
these businesses into our banking operations,
strengthening our direct sales channels and
digital transformation.
1.47
1.23
Pop is our family of card devices for small +6%
businesses and microentrepreneurs. The main 30,3 2018 vs. 2017
1.16
differentials of Pop are the shorter payment terms
and the lowest rates on the market. 2016 2017 2018

Source: (1) Management Discussion and Analysis and Complete Financial

Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and ABECS.

Learn more about Rede Learn more about Pop

Itaú Unibanco Integrated Report 2018

34
Payroll loans Mortgages
In Brazil, payroll loans are a type of specific loan Since 2008, we have been leaders in the mortgage
extended to employees and pensioners of the market for individuals among Brazilian private banks
Composition and evolution
pension system, as borrowers, and banks as of the payroll loans portfolio (%)(2) in terms of the total size of our portfolio. This reflects
creditors, whereby fixed monthly installments are In billions of reais – R$ our focus on aligning the business with our strategy of
deducted directly from the payroll or the borrower’s 2018 vs. 2017 migrating to lower risk portfolios.
pension, as the case may be, to settle the amount
due to the creditor. Our strategy is directed mainly 44.9 44.7
46.9 +5% We have a number of sales channels that are utilized
to pensioners of the Brazilian pension system and 11% Private sector for purposes of mortgage financing products, such as
10% 10%
employees of public and private companies. 11% Public sector our branch network, construction and development
16%
21% companies, mortgage agencies and partnerships
This strategy allows us to expand our 78% INSS
with RE/MAX, a realtor company, and CrediPronto, a
commercial activities with historically lower 74% mortgage financing company.
69%
credit risk, reaching a competitive position in
the offer, distribution and sale of payroll loans Credit approval is based on assumptions involving the
in Brazil. 2016 2017 2018 portion of the customer’s income committed to loan
repayments, the customer´s rating according to our
Our portfolio grew notwithstanding the internal rating system, and the ratio of the amount
maintenance of our strict credit policies, with Learn more about payroll loans of the loan to the value of the asset (Loan to Value –
emphasis on the INSS pension fund portfolio. maximum LTV).
Delinquency and risk indicators of our payroll
loan business continued well below the Market share – Payroll loans(3) Our process is expeditious and efficient, and it takes us
market average. Our main competitors in this
less than one hour to get back to the client for loans up
14.0%
sector are: to R$800 thousand. This financing process can be fully
digital. In addition, the client has access to a specialized
Banco do Brasil S.A.
Origination of the portfolio(1) – % mortgage consultant to provide all the support needed
Itaú Consignado Branches
Caixa Econômica Federal during the process.
Banco Bradesco
62 2018 vs. 2017 Our credit simulator is present on the websites
Banco Santander (Brasil)
60 of real estate developers and partners, bringing
59 -2% our brand closer to the client when they are still
Market share in terms
41 +2% of payroll loans choosing their property.
38 40
2018 vs. 2017

2016 2017 2018 Source: (1) Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018; (2) Complete Financial Statements in IFRS –
December 31, 2018; and (3) Itaú Unibanco Holding and ABECS.

Itaú Unibanco Integrated Report 2018

35
Mortgage by type of customer in Brazil(1) 321 months R$523,000 R$302,000 We provide an additional line of credit for the
In billions of reais – R$
Average Average value Average purchase of automotive accessories and services.
term of property ticket
Our goal is to achieve a 30% penetration in sales
48.6 48.1 48.3 Total
Market share – Real estate finance and mortgages(2) through financing and expand sales to companies
22.4% Our main competitors in this
and corporations within five years.
87% Individuals
78% 83% sector are:

Banco Bradesco In addition, we launched a series of products and

services in 2018. The iCarros product, a classified
22% 17% Banco Santander (Brasil)
13% Companies ads portal, offers a number of solutions to optimize
Caixa Econômica Federal reseller sales, such as iCarros Club, a B2B business
2016 2017 2018
Banco do Brasil S.A. platform for used vehicles.

Loans granted to individuals The opportunity manager, in turn, is a service that

Mortgage origination(1) concentrates opportunities from different sites in a
In billions of reais – R$ single interface for the reseller and communication
takes place on WhatsApp.
2016 14% 86% 9.6
Partnerships The call qualifier records the calls and identifies
2017 19% 81% 8.5 whether customers have any pre-approved vehicle
financing, while the stock integrator automatically
2018 vs. 2017
Learn about mortgages synchronizes the car inventory on different
2018 18% 82% 12.1 +42% classified sites.
We offer exclusive products and
Companies Individuals services to our clients who We have also launched an application platform,
contract vehicle financing. also available in the mobile version, which offers
33,000 properties a simple and complete experience for resellers,
for borrowers in 2018 We receive proposals to finance vehicles through making it easier to calculate, contract and manage
existing partner dealerships throughout Brazil or the financing flow.
directly in our traditional or digital channels for
account holders. Digital Retail, online calculator and credit application
57.8% Average annual vintage 1 Loan to Value ( )
feature that allows customers to quote a vehicle
A fixed interest rate is defined based on the credit financing anywhere they want to. Due to our open
rating and according to the characteristics of the banking system we were able to plug this tool not
38.7% Portfolio 1 Loan to Value ( ) transaction. All vehicle financing operations are
secured by fiduciary disposal of the asset itself,
Source: (1) Management Discussion and Analysis and Complete Financial
and the maximum LTV is set to withstand any
Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and ABECS. periods of stress.

Itaú Unibanco Integrated Report 2018

36
only in iCarros, but also in many partners’ website, 41 months 39% of the value R$32,100 As consortia are regarded as a provision of services
like Jaguar, Land Rover, Fiat Chrysler Automobile, Average % average Average under Brazilian law, the management of consortia
Mitsubishi Motors, and OLX. term down payment ticket does not give rise to default risk or regulatory capital
requirements for us. In addition, since Consortia do
In July 2018, we became the financial partner of Market share – Vehicles(2) not charge interest rates, our revenue comes mainly
Jaguar and Land Rover in Brazil. 9.3% Our main competitors in the sector are: from administration fee charged to clients.
Banco Santander (Brasil)
Finally, we launch the protected purchase and sale, Installments receivable and active contracts(1)
Banco do Brasil S.A.
an escrow account that mediates the payment Amounts in millions of reais and thousands of contracts
between the parties involved in customer to Banco Bradesco S.A.
Balance of
customer car sales transactions, making these Active
Market share in terms installments
contracts
transactions safer for both buyers and sellers. of loans to individuals receivable

395 393 385 -2% 2018 vs. 2017

Consortia operations 10.7 11.1 11.8 +7% 2018 vs. 2017

1. Advertise your vehicle 62.9% Average
annual vintage Consortium is a pool of people and/or legal 2016 2017 2018
2. Simulate financing Loan to Value
persons in a group with the purpose of allowing
3. Check vehicle prices their members, on an equal basis, to acquire
60.5% Portfolio assets, such as vehicles, properties, or services, Market share – Revenue from consortia services(2)
Learn more about icarros
Loan to Value through self-financing. 7.3% Considering only banks,
our main competitors in the
Brazilian Consortia market are:
Partnerships The payments made by the group participants are
Banco Bradesco S.A.
applied to a common fund, used by one or more
members of the consortium at a time, to acquire the Banco do Brasil S.A.
assets elected by the members when the product
Learn more about vehicle financing Considering only banks,
was contracted. In general, the participants receive we are the third largest
the asset during the validity of the contract by provider of these services
Origination and portfolio(1)
In billions of reais – R$ means of a random drawing, bid offering with their
Origination Portfolio +42% own cash resources, part of a letter of credit or their Source: (1) Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and Bacen.
2018 vs. 2017 FGTS balance (only for a real estate Consortium),
15.0
9.4 10.5
with the exception of the random drawing, the other
Learn more about our consortia operations
20.2
+21% options may be combined.
18.3 16.7 2018 vs. 2017

2016 2017 2018

Itaú Unibanco Integrated Report 2018

37
Public setor The main investment options are savings Funding from clients
accounts, Bank CDs and fixed income, investment Main funding in billions of reais – R$
Our public sector segment engages with all funds, the stock market, direct purchases of 1,701
areas of government at federal, state and government securities (Tesouro Direto) and private
+12%
1,519 2018 vs. 2017
municipal level (the Executive, Legislative and pension products. 1,361
Judiciary powers).
Securities broker
We serve approximately 1,131.2 Investment
funds
969.9
5.8 thousand clients in the public sector. Itaú Corretora has provided brokerage services on 814.3
B3 S.A. (Brasil, Bolsa, Balcão) since 1965. We offer
We attend to these customers using exclusive these services to international customers through Onlending
obligations
platforms that differ from those in the branches of our broker in New York. 29.8
17.9
24.2
the retail bank, with teams of managers specially Funds from bills
69.5 and certificates
59.4
trained in providing personalized solutions for We serve more than 172,000 retail 65.7
21.4
collecting taxes, foreign exchange services, public clients in Brazil with positions in the 132.1 58.8
Debentures
asset management, payments to suppliers, civil and
military personnel payrolls and pensions.
stock and fixed income markets,
251.3 Time
accounting for a trading volume of 211.8
deposits
Investment and funding approximately R$41 billion in 2018. 156.3

We offer our customers a full range of investment Revenues from economic and financial advisory and Savings
136.9 deposits
products and we are one of the leaders in the asset brokerage services increased due to greater activity 108.3 120.0
management market. on the capital markets.
69.0 72.6 Demand
61.1 deposits
Advisory and brokerage revenue
We offer our customers the Investimento 360, na
In billions of reais – R$ 2016 2017 2018
open investment platform providing a full advisory +13%
service, analyzing, selecting and recommending
2018 vs. 2017 Source: Management Discussion and Analysis and Complete Financial
the best investment products in the market, 1.4 1.6 Statements in BRGAAP – 2018.
1.0
whether Itaú Unibanco products or those of other
institutions, with total transparency.
2016 2017 2018 Learn more about our securities broker

We zeroed our custody fees for the Tesouro Direto

(direct purchases of Treasury Bonds), fixed income, in
addition to the carrying cost when joining or leaving
PGBL and VGBL pension plans. The benefit is not a
promotion, rather it is valid for all our customers.

Itaú Unibanco Integrated Report 2018

38
Insurance operations that supplement our portfolio. In this way we can satisfy Market share – Insurance(2)
the needs of our customers, both account holders and
8.2% Our main competitors are:
We offer an extensive range of life and personal non-account holders, with products that we do not
accident, automotive, property, credit and travel provide. We are constantly analyzing and evolving our
insurance products. Our insurance business, which distribution strategy and the portfolio offered. Banco Bradesco S.A.
includes our 30% equity interest in Porto Seguro, Banco Santander (Brasil)
consists of massified insurance products related to In 2018, there was an increase in premiums earned Premiums earned Banco do Brasil S.A.
life, property and credit insurance lines. and reduction of retained insurance claims. In
addition, there was gain with the adequacy test of 10.2%
Despite the high concentration
These products are offered in synergy with retail pension liabilities. These gains were more than offset of Brazilian banks in this market,
channels – our branch network, partnerships by the increase in non-interest expenses and the the growing number of Insurtechs
(insurance-focused startups) facilitated
with retailers, customers’ credit cards, vehicle and lower remuneration of our assets, which impacted customer access to insurers, making this
property finance, personal and payroll loans– and the our managerial financial margin. market even more competitive.
Insurance activities
Wholesale Channel.

The recurring insurance activities consist of the offer Premiums earned on recurring Share of the total Brazilian
of bancassurance products related to people, credit activities and the combined ratio(1) insurance market in terms of
premiums earned, excluding VGBL
In billions of reais – R$
insurance and our equity interests in Porto Seguro and Combined ratio
IRB. These products feature lower loss characteristics, Premiums earned
lower volatility in results and lower capital utilization, 58%
making them strategic and relevant for diversifying 49% 49% Learn more about our insurance products
the conglomerate’s revenues. The other activities
correspond to extended warranty, health and other 3.7
+5%
3.6 3.6
products, which are no longer marketed, and to the
2018 vs. 2017
Premium bonds
portfolio in run-off. 2016 2017 2018
Premium bonds are products in which the customer
Our insurance products have been updated in terms pays once only, or in monthly installments, a fixed
Composition of Premiums Earned – %(1)
of cover and assistance, adding greater value to amount that will be returned to them at the end of
our customers when they are alive. To expand our a predetermined period. Premium bond holders are
insurance product portfolio, we are concentrating our 52% Life and personal accidents automatically eligible for periodic prize draws with
existing distribution channels while expanding the 17% Credit life significant cash prizes.
offer of insurance policies through an open platform 15% Protected card
on which we offer Itaú customers products of partner 10% Mortgage Itaú Capitalização (PIC) is a product developed for
2% Property risk
insurance companies. customers who like to compete for prizes and can
4% Others
be purchased through single or monthly payment,
We recently launched our open platform for selling according to the profile and segment of each client.
insurance. The strategy is founded on offering products
Sources: (1) Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018; and (2) Susep.
Itaú Unibanco Integrated Report 2018
39
Currently, our capitalization products are marketed Private pension programs Differences between plans
through our branch network, ATMs and digital
PGBL
channels, and we are developing new technologies Private pension programs are one of the best options
for channel diversification. for financial and succession planning. We provide a Target audience: clients submitting
full income tax (IR) returns and who are
solution to ensure you maintain your quality of life,
registered with INSS.
In line with the corporate principles of social supplementing the income from the State Social
responsibility, we have a partnership with Instituto Security Program through long-term investments. How much to invest: maximum 12% of
Ayrton Senna, a not-for-profit organization dedicated taxable gross income. Any value invested
to furthering the quality of public education in Brazil. In the case of legal entities, we offer specialized in PGBL in the year can be deducted from
the taxable income in the IR return.
Part of the revenue from the PIC, our savings bond, consultancy and we are developing personalized
is channeled to educational products of the Instituto solutions for each company, maintaining close
VGBL
Ayrton Senna. relations with their human resources departments
and embracing a communication strategy focused on Target audience: todos os perfis de clientes.
financial education for our employees. How much to invest: In the case of VGBL
Prizes and current certificates(1) there is no limit of value on investment. So,
In millions of reais and millions of contracts
to determine the amount required for each
Technical provisions and net contributions(1) person, we do a mapping exercise and try to
In billions of reais – R$
Current certificates Prizes understand their objectives.
Technical provisions Net contributions

13.7
16.2 11.3 -30%
13.4 13.2
+4% 11.9
2018 vs. 2017 Market share – Pension plans(2)
2018 vs. 2017

58.3
47.5
177.3
196.6
+11% 23.3%
Our main
47.0 149.4 2018 vs. 2017
-1% competitors in
the private
2018 vs. 2017 pension products
2016 2017 2018 2016 2017 2018
Market share in sector are:
pension plans
Source: (1) Management Discussion and Analysis and Complete Financial
Why invest Pension plans

Statements in BRGAAP – 2018; and (2) FenaPrevi. 24.0%

Retirement Banco Bradesco S.A.
Market share
Future expenses considering
individual
Children’s education plans only
Banco do Brasil S.A.
Learn more about our capitalization products
Tax planning Individual plans

Financial return

Ease of changing plans Learn more about our private pension products

Succession planning

Itaú Unibanco Integrated Report 2018

40
Market share – Investment Bank(2)
Private Banking GRI 102-6 | GRI 102-4 Investment Banking
With a complete global wealth management Our investment banking activities are handled
platform, we are market leaders in Brazil and one by Itaú BBA and assist companies in raising funds
of the main participants in Latin America. Our through fixed income instruments and share issues In mergers and In capital market origination and
acquisitions. distribution transactions – debts.
multidisciplinary team, with the support of a team on public and private capital markets and include
of investment consultants and product specialists, consultancy services in mergers and acquisitions. Itaú BBA’s investment
Credit Suisse
Banco Santander (Brasil) (Brasil), Merrill
provides comprehensive financial services, banking competitors Lynch, Morgan
competitors include: Bradesco BBI e
understanding and responding to our customers’ We advise businesses, equity funds and investors BTG Pactual S.A.
Stanley (Brasil),
JP Morgan (Brasil)
requirements at eight offices in Brazil and our in structuring variable income products and in
offices located in Zurich, Miami, New York, Santiago, mergers and acquisitions. From the research phase
Asunción and Nassau. through to execution, we believe in offering an Learn more about Itaú BBA
extensive an extensive portfolio of investment Sources: (1) Management Discussion and Analysis and Complete Financial
Our customers have access to a full portfolio banking services to Brazilian and other Latin Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and ANBIMA.

of products and services, from investment American companies.

management, to wealth planning, including banking Asset Management
and credit solutions. In addition to our internally In the investment banking segment, our fixed
personalized products and services, we provide income department operates as bookrunner or We manage our customers’ funds through Itaú Asset
our customers access to an open architecture of manager in issuances of debentures, promissory Management. According to Fitch Ratings, the investment
alternative service providers. notes and securitization transactions. management quality rating of Itaú Asset Management is
excellent, and the rating outlook remains stable.
We strive to add value to customers and We participated in 49 merger or
shareholders by offering full, long-term hands- acquisition operations in the South The rating reflects the opinion of Fitch about the
on advisory. We want to continue investing in America in 2018. These transactions extremely Strong operating capability and the
international platforms to enhance our services characteristics of the investment strategies offered.
amounted to US$25.7 billion,
and how we deal with our Brazilian customers, and The rating considers the well-established and rigorous
to expand our Latin America operations. The aim is according to Dealogic. investment process, strong revenue flows and the
to increase the operating efficiency of our platform high quality of the executive team. The assessment
through continuous investment in IT platforms The amount distributed in fixed also reflects the strict risk and compliance policies, the
and to stay focused on risk management and income transactions in Brazil reached heavy investment in technology and controls, a wide-
regulatory aspects. ranging and diversified customer base and extensive
28.9 billion reais, according to ANBIMA. distribution channels.
In December 2018, we reached
Equities transactions amounted to In turn, S&P Global Rating has allocated in AMP-1 (very
29.7% market share in terms
US$6.1 billion consisting of transations in strong) rating to Itaú Asset Management for its asset
of local private banking. South America, according to Dealogic. management practices – the highest level on its rating scale.

Itaú Unibanco Integrated Report 2018

41
Funds under management(1) Capital market solutions Corporate solutions
In billions of reais – R$
We offer local custody and fiduciary services, In December 2018, we were lead managers in
Our brands international custody and corporate solutions, transfers and bookrunners for 198 companies
Kinea
Itaú Asset Management operating in providing transfer and bookkeeping listed on B3, which represents 58.6% of the
+13% +70% services to Brazilian companies issuing shares, companies listed on that stock exchange.
2018 vs. 2017
2018 vs. 2017 corporate bonds, promissory notes and bank credit
681 51 notes. We also operate as colateral agentes in project In addition, we were the second largest transfer
601 30 finance transactions, overdraft accounts and loan agents with 375 offerings of debentures in the
527 11
and financing agreements. Brazilian market, representing 37.2% of this market.

2016 2017 2018 2016 2017 2018 Our focus is on being an all-round services provider, Our main competitors in the stock market are
with specialized professionals, founded on Banco Bradesco and Banco do Brasil. Our main
The ranking is based on the company’s strong technology. Pension funds, insurance companies, competitor in debentures is Banco Bradesco.
position as one of the largest private asset managers asset managers, international institutional investors
in Brazil and Latin America, its mix of products and and issuers of credit and debt securities are our
customers, its highly experienced management major clients in this business, accounting for 59% 37%
of the companies
team and its clear corporate strategy. The ranking approximately 2,850 clients in 21 countries. in the issuance
listed on the of debentures
also factors in its well-structured investment stock exchange in Brazill
management processes, sound operational and risk Global Finance magazine indicated Itaú Securities
management practices, strong fiduciary principles Services as the best sub-custodian in Latin America.
and consistent performance. Nowadays, our platform allows us to offer our clients Market share – Local custody(2)
offshore funds. In addition, we have created the
Market share – Asset management(2) Blockchain Laboratory, the bank’s largest initiative 26.6%

14.7% Our main competitors are: to develop business solutions using blockchain
Banco do Brasil S.A. technology. In this laboratory we have already
Banco Bradesco S.A. begun to develop, as an internal prototype, a specific
In local custody
solution for our share registration products.
Caixa Econômica Federal
According to ANBIMA, in December
The asset management sector in Brazil stood Banco Bradesco S.A.
2018, the local asset custody service
at R$4.618 billion, with 588 financial institutions and
Amounts under custody 1 ( ) in Brazil totaled R$5,054 billion.
fund managers, among them, XP Investimentos. Banco do Brasil S.A.
International Our main competitors are:
In billions of reais – R$
market share in terms of
assets under management 1,562 Local
1,354
1,276
183
218 +19%
174 2018 vs. 2017 Learn more about Itaú Securities
1,171 1,344
Learn more about Itaú Asset Management 1,102
+15%
Learn more about Kinea 2016 2017 2018 2018 vs. 2017 Sources: (1) Management Discussion and Analysis and Complete Financial
Statements in BRGAAP – 2018; and (2) Itaú Unibanco Holding and ABECS.

Itaú Unibanco Integrated Report 2018

42
Strategic fronts
It was while thinking about this new reality Permeating all these challenges are corporate
To accompany the challenges that we chose to be a bank 100% centered governance and sustainability. The fundamental
of our business and to remain on the client, and we have thrown down the role of corporate governance is to guarantee
market leader, we have elected challenge to change leagues. What does this the interests of the difference stakeholders with
six strategic priorities that mean? Leaving the banking league and joining whom we relate, and it is key for achieving long-
the league of the world’s best companies for term sustainable growth. Sustainability, in turn,
will guide our actions in the customer satisfaction, for it is precisely there is fully integrated into the business, in both the
years ahead. that one finds the best experiences and the operational and commercial aspects, making social
most satisfied clients. We know that to get there and environmental issues a part of our daily lives. Its
we have a long road ahead of us. variables need to be incorporated and measured in
The bank we want to build each of our different processes, such as extending
How would you define Itaú Unibanco? A financial Looking at the challenges ahead, we have credit, investments, insurance activities, supplier
institution serving millions of customers? The developed a strategic medium and long-term contracts and funds management.
largest private bank in the Southern Hemisphere? agenda for the business. There are 6 objectives
That’s true. This information says a lot about who we will face to become a benchmark company in Each strategic front is managed internally
we are. But, for each person who has a relationship client satisfaction and to increase the creation of by a group of multidisciplinary specialists.
with us, it is something much more personal. Being value in a sustainable manner. The strategic level consists of members
in the wallet and on the cell phone of so many of the Executive Committee, and its main
people is a huge privilege that goes way beyond We have segmented the six strategic fronts into responsibilities include being the final validator
financial services. Think about a microcredit two groups: Transformation and Continuous of the work undertaken by the team, and
customer. For them, we are the bank that believed Improvement. In the first group, we have defining new targets related to its strategic
in a dream. Think about the cyclist who uses our included the fronts we believe require real front. The tactical level consists of officers,
orange bicycles. They see us as the bank that is transformation within the organization: superintendents, managers and analysts, with
helping to solve the urban mobility problem in client centricity, digital transformation and responsibility for developing and delivering the
their city. We are also the bank of large companies, people management. In the second group, work, while carrying out studies and research
barbershops, the digital bank. And these are just we have included the risk management, with the support of different areas of the bank.
some examples. If we stop to think about it, we are Internationalization and sustainable profitability
one company in many. With customers of every fronts, topics widely disseminated within the We have already reaped some of the fruit, and we
profile, with different people working to serve organization, but which require efforts for their expect to add further value in the years ahead,
them and to afford them the best experiences. continuous improvement. both to society and our shareholders.

Itaú Unibanco Integrated Report 2018

43
No longer comparing ourselves
with the traditional competitors
of the financial market, but to
include ourselves in the select
group of world’s best companies
in client satisfaction. Continuous improvement

Client Risk
centricity management

Governance and Digital Sustainable

changing
sustainability transformation profitability

Permeate all efforts in our

major strategic objectives
Next, we will present the
main initiatives related to
People Internationalization our strategic fronts
management

Transformational

Itaú Unibanco Integrated Report 2018

44
Client centricity
GRI 103-2 | GRI 103-3 Customer Satisfaction
and bodies such as the Consumer Protection Agency
(Procon) and the Central Bank (Bacen).
Another highlight is the Sales Quality Score (SQV), which
relates the level of satisfaction of our customers to the
commercial performance of our employees, i.e. whether
Minor and major aim in life can The results show that we are above the market the products or services marketed meet our customers’
involve a bank. Our approach in average regarding customer satisfaction. However, expectations and if the relationship in the sale was
listening to clients and offering the we believe we can go even further and, therefore, we conducted ethically and transparently. The employee
have adopted the Net Promoter Score (NPS), which is rated throughout the year based on the history of
best experience defines whether consistently and constantly measures each of our complaints, and they may be asked to give feedback and to
that bank will be Itaú Unibanco. customers’ experience with Itaú, understanding their be given training and, as the last resort, even dismissed.
pains and needs.
The goal of the strategic front of client centricity Customer satisfaction survey – 0 to 10
is to transform the experience of our clients’ NPS uses a simple methodology that evaluates an Internal
experience. We have decided to change leagues, organization using a simple question: On a scale
to stop watching only the banks and start taking of 0 to 10, how likey are you to recommend Itaú to
inspiration from champion companies in a friend? Customers who respond to the survey,
satisfaction, regardless of the business segment. whether detractors or promoters, may be approached
by the sales team for a better understanding of the
We want to be the benchmark in satisfaction, evaluation given.
8.00 2018 7.1 2018
8.05 2017 25,068 complaints
transforming our culture so that the client is at the 7.96 2016 7.0 2017
center of everything. Our actions, including digital We share what we learn internally, reflecting on what 25,454 complaints
transformation and efforts in relation to people can be improved and on what we already do well and
management, are oriented towards our clients’ must continue. Learn more about our reputation on the ReclameAQUI site
satisfaction, a key metric for the entire organization.
We consulted more than six million clients of all
In this respect, our Client Relations Policy states segments in 2018. The surveys are carried out mainly Ranking of banks in Brazil
Valid complaints at the Bacen
the guidelines and principles that our employees, on our ATMs, via SMS and Internet Banking. In addition,
correspondents and partners must abide by in all we expanded our contact with customers on social 4º
aspects of client relationships, allowing clients to networks and created a team dedicated to monitoring 6º 6º
freely and conscientiously make decisions about and responding to comments and questions on
products that best serve their interests, needs and Instagram, YouTube and Facebook. 2016 2017 2018
objectives, as well as to defend satisfaction and the
perennial relationship with the client. In this way, we are quick to deal with the simplest issues New complaints at the Procon
to be solved and to quickly reroute the more complex In thousands
What has Itaú done to understand its clients? ones requiring other solutions. This granularity
The first step is to know what our client is looking for. makes all the difference in the cultural change and
76 60 55 -9%
To do this, we conduct opinion surveys and monitor transformation of our products and processes. 2016 2017 2018
client complaints through our relationship channels

Itaú Unibanco Integrated Report 2018

45
What lessons has Itaú Unibanco learned from to the FEBRABAN Banking Technology Report, in
Ombudsman’s department(1) accompanying its customer’s day, in both the 2017, 57% of all transactions in Brazil were via cell
Volume of incidentes (in thousands) traditional and the digital model? phones (the access champion) and internet banking.

57,000 We have learned that it is increasingly necessary

to provide the perfect solution for each type In line with this trend, the bank has launched tools
incidents
95%
resolved within 10 business days
of customer how and when they need it. More
resoluteness. Less bureaucracy. Digitalized
transactions and operations, without wasting time.
to further automate the relationship. The two most
recent examples are payment by proximity via Apple
Pay and Samsung Pay which Itaucard launched in
This is the bank the customer wants. This is what partnership with the brands, and cash transfers
the figures tell us. Currently, over eleven million via messaging applications, like WhatsApp and
personal account holders have chosen digital tools Messenger using the Itaú Keyboard – available for
Main complaints about the (the Itaú app, the Itaú Light app, the Itaú app on Android and iOS. The idea for the functionality arose
Brazilian banking industry their computer, Itaú on the Internet and bidirectional from the need for us to be present in the context
SMS) when doing transactions. And no one doubts within which the customer finds himself, such as
1. Insufficient information about products
that this trend has come to stay. After all, according chatting to a friend via text messaging.
and services;

2. Irregularities involving credit cards; and

3. Irregularities involving other products On a comparative basis, our NPS is higher than that of our main competitors(2)
and services.
Itaú Branches Itaú Uniclass Itaú Personnalité
Competitive NPS (base 100) Competitive NPS (base 100) Competitive NPS (base 100)

100 100 100

78 71 78

66 66
59 58 58 59

2º 3º 4º 2º 3º 4º 2º 3º 4º

Source: (1) Sustainability Report 2018; and (2) Complete Financial Statements in IFRS – 2018.

Itaú Unibanco Integrated Report 2018

46
Evaluation of our apps on the network
Featuring
App Itaú PF
We have improved our channel so Our app comes
as to have a quick, easy and secure with countless
solution. But, if you think that 4.3 4.6 functionalities to
Transactions without
make our customers’
branches could become a thing leaving the messaging app
lives easier
of the past, it is good to know that App Rede
these venues– just like today– will
continue to be strategic for the Control of card receivables
banking industry. Research shows using a cell phone
that most customers consider
human contact very important.
3.8 4.4
For example, in Denmark, 90% of
customers access banks via the App Light
internet (twice the figure for Brazil)
and, even so, branches continue 1st bank with an app
to play a meaningful role in the for reduced-memory
relationship with them. In practice, smartphones
instead of going to the bank to do
transactions, people will use the
4.5
branches in a more consultative
way, looking for customized App Open an Account
solutions that will help them plan
their financial affairs and realize 1st bank to open accounts
via cell phones
their dreams. That is why we are In April 2018, we launched our
rethinking the entire customer
experience at these locations.
4.6 4.8 digital portfolios and became
early movers in Brazil with
App Itaucard Apple Pay, and later Samsung
Pay. By December 2018 we
had reached more than one
4.4 3.6 million customers and a market
share of 65% of the volume of
purchases using eWallets.
App Itaú Empresas

Source: Complete Financial Statements in IFRS 4.3 3.6

Itaú Unibanco Integrated Report 2018
47
profile. To assist our customers at times of financial

WE WANT TO change leagues AND THE SEVEN

stress, we offer personal loans with the first
installment in up to 90 days.

PRINCIPLES OF
client
centricity WILL TAKE US THERE To enhance our customers’ digital experience, we
are focusing on convenience, agility and security
when offering products and services. The Itaú
Teclado (keyboard), for example, is an innovation that
1 2 3 4 5 6 7 facilitates bank transfers using messaging apps. The
We know and Customer The customer’s Captivating We innovate Clear, simple We recognize PDF reader scans the bar code on a payment slip and
understand is priority in problem is my the customer and test with the and transparent and reward
our customer. decision making. problem. is everyone’s customer and communication customer
automatically fills out the fields of our application
responsibility. quicky learn from with the satisfaction. to close the transaction. Digital wallets (eWallets)
our mistakes and customer. allow customers to make payments using their cell
successes.
phone by proximity, eliminating the use of physical
How does Itaú engage its employees to For our customers’ convenience we have created an cards. The virtual card combines two important
transform the customers’ experiences? open insurance platform which, in addition to our concepts for a good purchase experience: it protects
We periodically strengthen the culture of client insurance products, offers a more complete portfolio the customers’ data and makes it easy to locate the
centricity through in-house campaigns and chats of partner companies that includes automotive, purchase, also without the need for the physical card.
about opportunities for improving customer service. health, life, cell phone protection, dental, installment/
We have adopted seven guiding principles on how we guarantee, savings bond, card protection, assistance What experiences does Itaú Unibanco intend
approach transforming our customers’ experiences. and travel insurance products. to offer its customers in order to become a
In addition, our compensation program is based on benchmark in satisfaction?
customer satisfaction metrics such as NPS. The open platform is in line with the inauguration With an in-depth knowledge of the customer,
of our investment platform, Investimento 360. and by expanding our relationship, we intend to
We have expanded the ways in which we relate Available to Itaú Personnalité customers, it is a offer experiences that captivate the customer. In
to our customers. We have extended business complete advisory service that analyzes selects and a few years’ time, we expect to afford moments so
hours at the bricks-and-mortar and digital recommends the best investment products on the surprising that we will be comparable to Starbucks or
branches, and we have equipped our managers market, whether those of Itaú Unibanco or other Apple, for example, on the question of experience.
with smartphones, tablets and video conference institutions, with total transparency.
technologies for providing customers with the More than just providing services, people are looking
same standard of service of our branches. We have also zeroed out the carrying fees on for something more, something purposeful. Thus, we
pension programs and the custody fees on will continue to focus on our mission of encouraging
With the payment experience of small businesses Tesouro Direto to encourage our customers to people’s power of transformation. We are working
and micro entrepreneurs in mind, we launched invest. We have disclosed the behavioral finance to realize dreams while driving development and
a family of small bank card machines called Pop program among our employees and have created arousing the desire to do more and better. To
Credicard, which stand out from the competition for a credit tutor, an online tool that suggests credit encourage our customers, employees and society to
the short payment period and lower fees. transactions most appropriate to the customer’s transform lives.

Itaú Unibanco Integrated Report 2018

48
Digital transformation
GRI 103-2 Digital Transformation

The global dynamic is changing What has Itaú done to achieve the speed of about their financial affairs with third parties,
innovation shown by Fintechs and thereby providing greater convenience and security. New
exponentially. Engagements are enhance its customers’ digital experience? investment experiences, in turn, are increasing offers
increasingly quicker and people We have adopted a new work method to increase via cell phones, and we have enhanced the client’s
more demanding and connected. productivity and encourage innovation. More than experience. In just one month, the new shelf recorded
6,000 employees now work in multidisciplinary teams, more than half-million accesses.
Major companies in various sectors around the world the Delivery Communities, a model in tune with
have embarked on a voyage of digital transformation the Lean and Agile principles and, therefore, more Another innovation is Teclado Itaú, a tool that
to become more agile and more client-centered. After oriented to clients, delivery of value in short cycles, allows users to transfer money via their cell phones
all, people’s routines are increasingly occupied by experimentation and collaboration. Besides the way without having to exit the application they are
those companies with the ability to develop important of working, we have also continuously evolved our using – like WhatsApp and other chat apps. An
solutions with the speed the customer needs. platforms to ensure that our systems are stable and innovative approach to making simple, convenient
to allow the constant adoption of new technologies to and secure transfers.
Our challenge is to accelerate our digital transformation accelerate the development cycle of new solutions.
process by continually increasing the productivity We have also transformed how our clients deal with
of our information technology area, while fostering Our objective is to captivate the customer through money. We make available e-Wallets that allow them
a digital mentality throughout the entire bank, so differentiated digital experiences that are to move transactions to their cell phones and make
as to become more efficient and to improve the constantly evolving, both in the mobile channel and payments by proximity, eliminating the use of physical
user’s experience and client satisfaction. Technology on the internet. cards. We are operating in partnership with major
currently represents the spinal column of the evolution technology partners like Apple Pay and Samsung Pay,
of Itaú Unibanco. We have made significant progress in the mobile and in 2019, we will also operate via Paypal and Google
channel, implementing more than 42 new Pay. Apple Pay is one of Brazil’s largest e-Wallets, while
The bank is enhancing its strategy of being to the functionalities, affording customers an even more Samsung Pay is showing one of the highest average
forefront in the search for innovative solutions for intuitive and all-round experience. One of these transactions per user.
resolving actual problems by adopting technologies. functionalities is Minhas Finanças (My Finances), a
Our focus is to facilitate people’s lives, offering greater service that helps customers to understand their The Itaú Abre Conta (Open an Account) app allows
convenience, agility and security with the products and financial behavior and to monitor the transactions in 100% digital opening of checking accounts, quickly
services we offer. their checking account by category of expenditure, and securely, without having to go to a physical branch.
for example, meals, services, transport etc. Minhas
The main pillars of digital transformation are: digital Finanças displays the information automatically,
experience, technology platform, Data & Analytics and organized without the client needing to input them
working model. manually or having to share passwords and data

Itaú Unibanco Integrated Report 2018

49
What are Itaú’s main investments with regard content was originated by an authorized participant. ambition. To that end, we have increasingly invested
to new technology platforms? In addition, the existence of the shared data base in our data strategy. In the short term, we want to
We ensure our teams and platforms are in constant prevents conflicts that could arise when various provide experiences so surprising for them to the
evolution, and we foster transformations using players participate in the same transaction. point where we will be compared to companies that
new technologies. Our investments in technology are benchmarks when it comes to experience, like
have risen by 38% in the last four years to ensure We participate in the debates about blockchain at Amazon, Apple and Google, for example.
the continuous evolution of our platform and the FEBRABAN and we are members of international
stability of our systems. syndicates like R3 and the Enterprise Ethereum. In But, we know that there is no other way of joining
addition, we have already had around ten experiments the league of the world’s leading companies in client
One of the technologies where we have intensified in using it, among which we highlight below. satisfaction except through technology. And that
our investments is the cloud. Much more than just is why one of our strategies is heavy investment in
infrastructure, it is a way of storing and processing The Collateral Management Project is the blockchain refining data use. They are the bank’s new capital
data, essential for modernizing our platforms and Project in the Brazilian banking market to be used and, if dealt with, they provide an opportunity for
maintaining them in constant evolution. with actual bank operations, providing a digital offering a new version of Itaú Unibanco to each client,
experience in a still very analog transaction flow: thereby raising their experience to a new level.
A significant part of the financial benefit generated margin calls with other financial institutions. This
by technology projects refers to solutions that used service is intended for business customers and With this in mind, we want to make intensive use of
the cloud in at least one of their applications. involve margin calls on collateral for over-the- intelligent algorithms to automate decisions, gain in
counter derivatives. efficiency and develop personalized services. Within
We have also invested in Application Programming this scenario, the different areas of the bank will share
Interface (API) technology that enables the creation Another experience was the US$100 million from a data ecosystem, tools and development techniques
of re-useable applications for providing services Standard Chartered and Wells Fargo under a Club and, therefore, the analytics operation will take root
and products through our digital channels and for Loan, a similar format to a “syndicated loan”. By across the entire business.
partners. We have already achieved a peak of 256 the same token, Itaú and Standard Chartered have
million hits on our APIs in a single day. successfully concluded the development and proof Currently, our team specializing in data uses
of concept (PoC) for the first blockchain platform in technologies like artificial intelligence and machine
We are accompanying the maturity process of Latin America for transaction in this format. learning to provide our clients with better experiences
new technologies like blockchain. This technology and gains in operational efficiency.
allows individuals and legal entities to upload data Our investments in technology have been
to a shared and authenticated computer network. channeled not only to modernizing our platform The purpose of our Center of Excellence in Digital
This data is then replicated for all participants using (which affords us greater efficiency), but also to Analytics is to capture and democratize the use of
a mechanism known as shared ledger. All data developing solutions and services that transform digital data throughout the bank, accelerating the
registered on the network are encrypted to ensure our client’s experience. 100% client centricity dissemination of a Data Driven culture in managing
the authenticity of the information and that the is our mission as a bank. But captivating them is our the operations and in contact with clients.

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Share of digital transactions
We support the Data Science Center of the We use technology to gain operational efficiency in the Retail Banking product
University of São Paulo (USP), a venue intended for and understand customer behavior
students and teachers. The center aims to promote Transaction volume (%)
Digital Efficiency Ratio
23% 31%
research in the data architecture sector, analytics 73% branch of the branches in 2018
74%
and artificial intelligence, in addition to promoting 20% Brick-
the exchange of information between the private
sector and the university.
26%
of transactions
on the
77% 69% and-
mortar
26% 71%
27% mobile digital branch Digital Brick-and-
In the quest to be at the forefront of innovation channel mortar
2016 2018
in the financial services area, we are founders of

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018
FinTech@CSAIL and the only member from Latin Traditional channels (branch + ATM + telephone) igital channels
D
America in this financial technology studies center (internet + mobile + SMS)
Share of the transactions closed
of the Massachusetts Institute of Technology (MIT). on digital channels

What is the strategy of Itaú Unibanco New individual accounts 2016 2018
(in thousands)
regarding migration from brick-and-mortar Credit 16% 19%
branches to the digital bank 1,073
Brick-and- 952
We want to offer our clients the best service mortar Investment 31% 41%
and experience, always taking into account their branches
225
profile and choices.
App
Payments 61% 76%
61
The digital branch model has been implemented Abre Conta
Note: Digital channel share of transaction
and has advanced rapidly in attending to a 4Q17 4Q18
volume (in R$) of the Retail Bank.
considerable portion of clients who were more
digitalized and demanded a differentiated service.
The model is a winner and is well established, and
the expansion will now proceed as the profile of our
client base and their needs evolves.

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People management
GRI 103-2 | GRI 103-3 Employee’s Experience

In the performance assessment matrix, the X

It is our role to value people Axis evaluates the employee’s performance
as they are, their experiences, based on the results attained in every target
characteristics and mind models, agreed. The target agreement and evaluation
process is divided into four phases: alignment
eliminating barriers so that every with the organization’s objectives, agreeing
employee can develop their targets, evaluating results and feedbacks. The Y
potential, allowing each of us to Axis evaluates whether the employee’s behavior
abides by our values (Our Way) based on the
achieve their best version and results of appraisal surveys undertaken by
dedicating ourselves day after managers, peers and partners.
day to serving and enchanting
our customers.
We believe that meritocracy is the way forward
to more transparent and fair management,
recognizing performances that stand out
in a differentiated manner. This exercise
GENDER AGE RACE
consists of feedback, the offer of the
We are an equal Breaking down restrictive We work to ensure that
appropriate development opportunities for opportunity company paradigms and fostering racial representativeness is a
each employee’s needs, as well as the role of where men and women actions intended for reality. The aim is to enhance
the employees themselves in the continuous enjoy equal opportunities employees aged 55 our attractiveness, increase
search for better opportunities. in terms of development, and above, seeking to the number of hires and
growth within the bank increasingly improve their provide all employees with
To ensure that our people management reflects and compensation. experiences here in the bank. the same opportunities.
the new challenges, we have adopted a program
that values diversity and respect for people.

Our employees undergo an annual

performance appraisal through the
RELIGION PERSONS WITH DISABILITIES LGBT+
Meritocracy Cycle where the focus is on driving
A secure and respectful Fostering accessibility, A secure and respectful
increasingly better results by aligning targets environment, irrespective training and equality environment, irrespective
with our challenges and values. of whether someone is a of opportunity. of sexual orientation and
believer or not. gender identity.

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How important is meritocracy in the people associates can invest part of their share of profit What is Itaú’s strategy for increasing
management process? GRI 102-36 or results in purchasing our shares, also receiving a employee retention?
Our Fixed Compensation Policy recognizes a consideration in shares. To further increase employee retention we offer
professional’s competence and seniority, and the Connecting Opportunities Program that
there may be additional payments according to In addition to the benefits enshrined in the collective supports and provides guidance for employees
our Promotion and Merit policy and collective bargaining agreement, we also offer other benefits in the search for new challenges and work
bargaining agreements. Variable compensation that can vary according to the category of the opportunities within the bank.
recognizes individual performance levels, the employees or the regulations applicable to each
financial results obtained by our business and its jurisdiction. The main benefits in this category All our employees are covered by collective
sustainability in the short, medium and long terms. are the health and dental plans, private pension bargaining agreements and arrangements. The
plans, group life insurance, check-ups, parking, key benefits stipulated in these agreements in
Our employees’ variable compensation consists psychosocial services and personalized advisory in the case of employees working in Brazil are: meal
of Profit Sharing, Results Sharing (PR) and the use of financial products and services. tickets (VR), shopping basket tickets (VA), daycare or
Supplementary Results Sharing. They all depend babysitter allowance and travel vouchers. GRI 102-41
on the performance of the business and each
employee’s individual performance, guaranteeing
a minimum amount according to the collective
bargaining agreement with the respective union. 2018
3.1%
In addition, our employees are also eligible for High
Turnover Voluntary
15,446 10,667 1.4
Performance Compensation (PRAD), Differentiated Hires Dismissals Ratio of hires/
Performance (PD) and the Partners’ Programs. The 10.0% 6.9% 14,145 in 2017 9,454 in 2017
dismissalss
PRAD consists of supplementary results sharing for 9.1% in 2017 9,889 in 2016 10,570 in 2016
Involuntary
para 30% of the employees with the best appraisals, 10.4% in 2016
based on meritocratic criteria.

The Long-term Compensation Program, in turn,

applies to employees in leadership or similar
positions, by means of an individual appraisal based
on results and behavior, involving our preferred Health and
well-being
shares (ITUB4). The Partners’ Program recognizes 2,000 20,000 2,600 1,200 61,000 Absenteeism
and promotes professionals who make a difference 2018
Dietary Employees Adhesions to the Adhesions Anti-flu 1.11
and who are to the fore in building a bank oriented appointments enrolled in the expectant mother to paternity jabs 1.2 in 2017
to the future, aligned with our vision and values. sports club support policy leave 1.3 in 2016
Employees and managers elected as partners or
Source: 2018 Sustainability Report.

Itaú Unibanco Integrated Report 2018

53
We also measure the degree of our employees’ Dress code flexibility
satisfaction and to what extent they recommend
and defend Itaú Unibanco. Therefore, in the
same way as we have implemented a NPS for
customers, we now monitor the e-NPS (Employee
Net Promoter Score).

We believe in the ability of our employees, for

which reason we invest in their professional
2018(1)
and personal development. We make available
Compensation R$10.2 billion 41%
countless technical and behavioral training
Investment in Profit sharing R$4.4 billion 18%
programs, qualification initiatives aligned with the Personnel(1)
stage of each employee’s career and customized Benefits R$3.7 billion 15%
to reflect their Individual Development Plan, R$24.8 billion Charges R$3.0 billion 12%
including live and digital solutions using further R$23.3 in 2017
R$22.4 in 2016 Other R$3.4 billion 14%
education online platforms, language courses,
graduate and masters programs, seminars and
congresses and short-duration course in Brazil 2018(2)
and overseas.
Training
courses
92.9% 6,700 1,441,000
We train our employees to become multiplier Employee Scholarship
agents within and outside the organization on Approximately compliance rate awarded to In-person and digital training sessions
a wide range of issues referring to the business 24 hours employees
or people’s lives, such as financial education, for per employee(2)
example. Courses and financial advisory allow us
to reflect on the relation between consumption, Home office:
life’s objectives and financial equilibrium, so that Pesquisa Pulso 1
( )
Adherence
Ombudsman(2) around 2,600
our employees, their families and friends can (Speak Frankly to the Code 33% Disrespect employees no piloto
enjoy a healthier relationship with money. survey) of Ethics(2) 1,871 31% Non-compliance
with rules
up to two times a week.

87% 55 dismissals
Manifestations 13% Intimatidons Flexible working day:
(81% of adhesion) 10 warnings 1,471 in 2017 10% Lack of
managements
more than 70,000
85% (79%) in 2017 118 notifications 1,341 in 2016 thousand employees
84% (79%) in 2016 effectiveness
in the compensation
14% Other system of hours.
Source: 2018 Sustainability Report.

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54
Composition of the annual compensation of
members of the Board of Directors, Board of Officers,
Fiscal Council and Audit Committee
Monthly fixed Monthly fixed
compensation compensation
Aggregate amount of Aggregate amount of
fees in cash approved fees in cash approved
Stock-based at the Annual General
Stockholders’
at the Annual General
Stockholders’
profit sharing Meeting Meeting

Benefit plan
ITUB4 Annual fixed Composed of medical
ITUB4 compensation and dental care plans,
ITUB4 check-up, private pension
Stock-based
compensation approved
1 2 3 plan, parking lot and
at the Annual General 2 life insurance
Stockholders’ Meeting Board of Board of
Directors Officers
The program consists of Subject to the limits Annual variable Annual variable
granting preferred shares (ITUB4) established by the compensation compensation
or equivalent instruments Compensation Committee
Stock-based compensation Statutory profit, sharing and
approved only in the event of a fees (in cash and in shares)
resolution of the Compensation approved by the Compensation
Committee, subject to the Committee and Limited to
guidelines of CMN Resolution No. the annual amount approved
Eligible audience 3,921 and limited to the extent
determined by the Annual
at the Annual General
Stockholders’ Meeting
General Stockholders’
Meeting

10% 30% Monthly fixed

compensation
Monthly fixed
compensation
of the best of the best Fees in cash Fees in
performance performance approved at the cash determined
Managers Superintendents Annual General by the Board
Stockholders' Audit of Directors
Meeting Fiscal Council Committee
3 4

1 In the event that a member of the Board of Directors is also part of the Board of Officers of Itaú Unibanco or its subsidiaries, the compensation will be in line with the
compensation model of the Board of Officers. Management members who are also part of statutory or non-statutory committees or of our subsidiaries or affiliates are
compensated according to their duties in the executive bodies or areas in which they work. As a rule, they do not receive a specific compensation for belonging to these
committees. A non-management member of the Compensation Committee is compensated for his/her duties executed in the referred Committee.
2 Maximum compensation amounts are defined based on the limits imposed by Article 152 of the Brazilian Corporate Law.

3 Members of the Board of Directors and Audit Committee only receive benefits if they have previously been officers of the Company.
4 For those members of the Audit Committee who are also part of the Board of Directors, the compensation policy of the Board of Directors is applied.

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55
Risk management
GRI 102-15 | GRI 103-2 Risk Management
It’s based on
Board of Directors Statement
Guided by the
Principles of Risk Management
And monitored by metrics
inserted in the day-to-day
of business management

Risk management lies at the

heart of our business and is a We are a universal bank,
operating predominantly in
S ustainability and
customer satisfaction;
Capitalization
Capital ratios in normal and stress situations; and
responsibility of every employee. Latin America. Supported by our Ethics and respect for regulation;
Debt issuance ratings.
risk culture, we operate based on
Price for risk; Liquidity
rigorous ethical and regulatory
What is the importance of risk appetite and compliance standards, seeking
Short and mid-term liquidity indicators.
Diversification;
the risk culture for efficient management of high and growing results, with Composition of results
the business? Operational excellence; and
low volatility, by means of the Largest credit risk;

Dimensions
At Itaú Unibanco, risk appetite defines the type long-lasting relationship with Risk culture. Largest exposures and by rating brackets;
Concentration by sectors, countries;
and level of risk we consider acceptable, while our clients, correctly pricing risks,
and segments; and
risk culture underpins the approaches required well-distributed fund-raising Concentration of market risk.
for managing them. and proper use of capital.
Operational risk
Operational losses events; and
For us, sustainability and customer satisfaction Understanding, identifying, Information technology.
is only doing business that is good for the client measuring, managing
and mitigating risks are Reputation
and for the bank. That is why our risk culture practices essential to Suitability indicators;
transcends policies, procedures and processes. It our activities. Media exposure;
bolsters the individual and collective responsibility Customer complaint tracking; and
Regulatory compliance.
of all employees. We carefully evaluate the risk-
return ratio, properly pricing the risk. Our business,
products and services are diversified, because s
risk
we have a low appetite for volatility. We strive for ake usly
e t scio
operational excellence. We want to be an agile on

W risks
ed
c
bank with a robust and stable infrastructure. We

iscu
foster a proper institutional environment that

ss
is ethical and respects regulations, because we Principles of
risk culture
staunchly defend our reputation. Itaú Unibanco

r is k m
We a n ag
How does the Itaú approach to risk function?

re e r
a
In 2018, through the Strategic Priority Management

al
l
s t
of Risk Management Department, we expanded ac
We ks
is
our approach to risks and classified them as on r
traditional and strategic.

Itaú Unibanco Integrated Report 2018

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We rely on a consolidated governance structure to of Directors in its decision-making with respect CGRC supervisions of our risk management and
manage traditional risks – credit, market, liquidity, to: decisions regarding our risk appetite, in terms control activities in order to ensure their suitability
operating, compliance and information security of capital, liquidity, results, operational risk and to the risk levels assumed and to the complexity of
risk. Our objective is to continue improving how we reputation, ensuring these aspects are in alignment the operations as well as compliance with regulatory
manage traditional risks, in addition to extending with our strategy, and including acceptable capital requirements Review and approval of policies and
the coverage to enable us to manage more strategic and liquidity levels and types of risks to which we strategies for capital management, to establish
risks that could threaten our future profitability – may be exposed, as well as overall limits for each mechanisms and procedures aimed at keeping
business, regulatory, technology and personnel risk. type of risk, tolerance for volatility of results and
risk concentration, and general guidelines about
Strategic risks include risks derived from new tolerance for risks that may impact our brand (e.g.,
participants entering the Market, or a more proactive brand risk). Establishing our minimum expected
attitude of our regulators, and they are as relevant to return on capital as a whole and for our lines of
us as the traditional credit or market risks. business, as well as monitoring performance.

We are striving for robust risk management Credit Risk

processes that pervade the entire organization and Risk of losses associated with failure by a Strategic
which are the basis for strategic decisions to ensure borrower, issuer or counterparty to fulfill
the sustainability of our business. their respective financial obligations as Business Risk
defined in the contracts. • New players;
• Traditional competition;
What is the importance of governance and Market Risk and Liquidity • Changing client’s habits; and
the organizational structure for risk Risk of losses resulting from Credit Business • Business models: new or disruptive.
fluctuations in market values of
management at Itaú? positions held by the institution. Market and Regulatory Risk
Our organizational risk management structure Liquidity • Specific changes in laws and rules
complies with the regulations in Brazil and overseas, Operational Risk Regulatory
affecting certain business and products;
Risk of losses arising from the failure,
and is in line with best market practices. We rely deficiency or inadequacy of internal
• Encouraging competition
on a dedicated structure for coordinating and Operational Traditional Strategic and innovation; and
processes, people and systems, or
• New trends: open banking and data
consolidating information and related processes, all from external events.
acess law.
Technology
of which are subject to verification by independent Compliance Risk Compliance
validation, internal control and audit areas. The Risk of legal or regulatory sanctions, Technology Risk
following committees are part of our risks and financial losses or damage to our • New potentially disruptive
Information
reputation arising from non-compliance People technologies;
capital management governance. Security
with applicable laws and regulations. • Obsolescence of legacy systems; and
• Data and models.
Risk & Capital Management Committee (CGRC) Information Security Risk
supports our Board of Directors in performing its Risk of losses or damage arising People Risk
from theft, fraud, leakage, compro- • Talent attraction and
duties related to our risk and capital management by mise or improper use of proprietary retention capacity; and
meeting, at least, four times annually, and submitting or clients’ information. • New ways of working.
reports and recommendations to assist the Board

Itaú Unibanco Integrated Report 2018

57
capital consistent with the risks we incur, and with the topic or other features, such Credit Committees
the definition of our expected minimum return on decide to submit to the CSC’s review. Board of
capital as a whole and our business lines, such as Directors
performance monitoring. Superior Retail Credit and Collection Committee
(CSCCV) meets on a monthly basis and is responsible for
Additionally, o CGRC is also responsible for the approving credit policies and assessing the performance Internal
supervision of our incentive structures, including of retail credit and collection portfolios and strategies. Audit
compensation, aimed at ensuring its alignment with
risk control and value creation goals and fostering the Superior Wholesale Credit and Collection Committee Risk and Capital Audit
Management Committee 3rd line of defense
improvement in our risk culture. (CSCCA) meets on a monthly basis and is responsible Committee Independent review
for approving credit policies and assessing the of the activities
Market Risk and Liquidity Committee (CSRML) performance of Wholesale Credit and Collection developed by the
meets on a monthly basis and is responsible for portfolios and strategies. institution
setting guidelines and governance for investments
and market and liquidity risks regarding our
consolidated positions and business lines.

The Superior Operational Risk Committee (CSRO)

Legal,
meets on a bimonthly basis and is responsible for General Technology
Institutional General
understanding the risks of our processes and business, and Personnel Wholesale Office Retail Office
Risk and Finance Control and Operations
Department
defining guidelines for operational risks management Dept.
and assessing the results achieved by our Internal
Controls and Compliance System. The CSRO is our main
decision-making committee for all operational risk 1st line of defense 2nd line of defense
management matters. It is responsible for defining our Manages risks originated by Ensures that risks are
these offices; its role is to: managed according to:
operational risk framework and structure and related
Identify; Control; and Risk Policies; and
policies for identification, measurement, assessment,
reporting and monitoring of operational risk. Asses; Report appetite; Procedures
Executive
Committee
Superior Credit Committee (CSC) meets on a weekly
basis and is responsible for analyzing and deciding
on credit proposals that are beyond the authority
of the credit committees that report to the CSC . It is Superior Market Risk Superior Superior Superior Retail Credit Superior Wholesale
Superior Creit
also responsible for analyzing decisions which may and Liquidity Operational Risk Products
Committee (CSC)
and Collection Credit and Collection
Committee (CSRML Committee (CSRO) Committee (CSP) Committee (CSCCV) Committee (CSCCA)
have not been taken due to a lack of consensus at the
committee immediately subordinate to it or cases
where, due to the relevance or characteristics of

Itaú Unibanco Integrated Report 2018

58
Superior Products Committee (CSP) meets on Finally, promoting the risk culture in Brazil and abroad and social losses, analysis of the environmental
a weekly basis and is responsible for evaluating strengthens the individual and collective responsibility risk in the approval of products and services,
products, operations, services and processes of all of our employees, so they can do the right thing, among other dispositions. Brazilian Central Bank is
that are beyond the authority of our Products at the right time and in the right way, respecting the responsible for the inspection of the corresponding
Committees that report to it or that involve image ethical and sustainable way of doing business. filings and information and for the implementation
risk to us. of the provisions of such regulation.
How do we track and monitor our exposure to
Additionally, we have sub-committees, chaired by our social and environmental risks, particularly risks We also recognize that climate change is one of the
chief risk officer and CFO, which are also responsible derived from or associated with climate change? major challenges for us, because climate events may
for risk and capital management. Any such sub- We consider social and environmental risk as the affect our activities in our administrative buildings,
committee may report directly to the Risk and Capital risk of potential losses due to exposure to social and network of branches and data processing centers
Management Committee or to the sub-committees environmental events arising from the performance and are taken into consideration for all geographical
previously mentioned. of our activities. Therefore, among other actions, regions in which we operate in Brazil.
we have assumed and incorporated into our internal
To support this structure, we have the Risks & processes a number of national and international In 2018, a multidisciplinary working group involving
Finance Control and Management Area, structured voluntary commitments and pacts aimed at the areas of Sustainability, Social-environmental
with specialized departments and subordinated integrating social, environmental and governance Risk, Finances, Asset Management and Investor
to our chief risk officer and CFO, intending to aspects into our business. The main ones are the Relations, was created to develop the Climate
independently and in a centralized manner to Principles for Responsible Investment (PRI), the Finance agenda. We participate in the main
ensure that the institution’s risks and capital are Charter for Human Rights – Ethos, the Equator national and international forums and initiatives,
managed in accordance with established policies Principles (EP), the Global Impact, the Carbon in order to anticipate tendencies and help us guide
and procedures. Disclosure Project (CDP), the Brazilian GHG Protocol the way we do business in the short and long terms.
Program, the National Pact for Eradicating Slave As an example, we participated in the Task Force on
The continuous improvement of control processes Labor (Pacto Nacional para Erradicação do Trabalho Climate Financial Disclosure (TCFD) working group
allow us to better understand the particularities of Escravo), among others. of the United Nations Environment Programme
each country and region in which we do business, and Finance (UNEP FI). In this group, we and another 15
quickly adapt to changes in the different regulatory, Financial institutions are subject to specific financial institutions gathered efforts to develop
social and economic market environments. guidelines about the management of social and indicators and tools to strengthen the assessment
environmental risks, due to CMN Resolution No. and disclosure of risks and opportunities related to
Risk management at our foreign subsidiaries is 4,327, as of April 25, 2014, that provided for the climate change in such institutions. Besides that,
undertaken by teams dedicated to control and implementation by financial institutions of social we are also implementing the recommendations
monitor risks, with direct communication channels and environmental responsibility policies containing made by the Financial Stability Board.
that allow the information to flow at a timely manner certain minimum requirements. These rules also
as well as the alignment in the whole group. provide an obligation for registering environmental

Itaú Unibanco Integrated Report 2018

59
Additionally, as a result of the notice published for our
Emissions Offsetting Commitment to Climate Program, Governance Strategy Risk management Goals and metrics
in partnership with Natura and the Brazilian Ekos GRI 102-18 GRI 102-11
Institute, we received more than 100 projects, from 25 The Board of Directors Participation in multisector Climate variables are Development of indicators
Brazilian states, totaling a volume of more than five guides our Sustainability discussion groups, considered in the analysis and tools to strengthen the
million tCO₂. Seven projects were selected to offset the and Social and such as CEBDS, UNEP FI, of the Social and assessment and disclosure
emissions from Itaú and Natura, which had the goal of Environmental FEBRABAN and FGV. Environmental Risk for of risks and opportunities
compensating 500 thousand tCO₂. We have selected Responsibility policy for the corporate segment related to the climate
three projects totaling 86,000 tCO₂e to offset our risks and opportunities A study on the impact and analysis of financing change by means of
emissions from 2016 and 2017. related to climate. of climate changes in of big projects. workgroup of
our Loan portfolio for the UNEP FI about TCFD
Sustainability Governance corporation segment Itaú Asset Management recommendations.
addresses risk in the medium and considers Climate Changes
management and the longterm scenario has themes in its ESG A study for identification
identification of been conducted. integration methodology of business risks and
opportunities related to the in the analysis of opportunities vis-à-vis
climate changes agenda. A study on Emission investments. changed in the climate
financed based on the global standards, with
The Superior Committee on Portfolio Carbon Initiative We consider climate projections for ten years,
Ethics and Sustainability guidelines has been changes in the has been conducted.
resolves on the institution’s conducted. Participation in pricing of our insurance
actions vis-à-vis the the UNEP FI workgroup for products (corporate). Launch of Asset
agenda of climate changes. implementation of TCFD calculator to compare
recommendations emissions of our portfolios
The theme is also discusses considered different with benchmarks.
in the Sustainability climate scenarios.
Committee, the main
Sustainability forum
of the organization.

Learn more our actions related to climate change

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60
Capital management Our minimum capital requirements are expressed Tier I is composed of hybrid debt and equity
Our Board of Directors is the main body as ratios of the capital available, as evidenced by instruments that meet eligibility requirements.
responsible for our capital management, and for Reference Equity (PR), or Total Capital, composed The sum of the Common Equity Tier I and the
approving our capital management policies and of Tier I (comprising principal and additional tier I Additional Tier I results in the Tier I Capital.
guidelines regarding our capitalization level. capital) and Tier II, and the risk-weighted assets,
or RWA (determined as the sum of the risk- Tier II capital is composed of subordinated debt
Through our ICAAP, we assess the adequacy of weighted asset amounts for credit, market and instruments with defined maturity that meet the
our capital to face the incurred risks. For ICAAP, operational risks). eligibility requirements. The sum of Tier I Capital
capital is composed by regulatory capital for and Tier II Capital make up Total Capital.
credit, market and operational risks, and by the In addition to the minimum requirements,
necessary capital to face other risks. the Brazilian Central Bank rules establish The percentage of net income to be distributed
additional Capital Buffers that, together with may change every year based on the company’s
We have adopted a forward-looking approach to the aforementioned requirements, increase the profitability and capital demands, always
the management of our capital. We identify the capital requirement over time. considering the minimum distribution set forth in
risks to which we are exposed and their materiality. the Bylaws.
We assess the need for capital to cover material What is the capital structure of Itaú and how
risks. We have developed methodologies for does the bank manage its capital indicators? In order to ensure our capital soundness and
quantifying additional capital and internal capital Our capital is composed of the Reference Equity, availability to support business growth, we
adequacy assessment, as well as contingency used to verify compliance with operational limits maintain capital levels above the minimum
plans and capital adequacy reports. imposed by the Brazilian Central Bank. The requirements. Our Total Capital, Tier 1 Capital and
Reference Equity in turn is the sum of the Common Common Equity Tier 1 Capital ratios are calculated
We have adopted all minimum capital Equity Tier I, Additional Tier I and Tier II capitals. on a consolidated basis, applied to institutions
requirements required by our regulators. We included in our Prudential Conglomerate.
follow the set of resolutions and circulars issued The Common Equity Tier I capital is the sum
by the Central Bank, in line with the international of common equity capital and profit reserves,
guidelines of Basel III. deducted from prudential adjustments. Additional

Itaú Unibanco Integrated Report 2018

61
Basel III capital requirements

Total Capital (11.5%–14.0%)

Tier II 2.0%
1.5% Total Capital (15%)
Additional
1.5% Tier I (9.5%–12.0%)
Tier I 1.5% Tier I (13.5%)
CET 1 (8.0%–10.5%)
Countercyclical 0–2.5%

ACP Domestic-Systemic importance 1.0% Our

target
Conservation 2.5%
12.0%

Total 4.5%
Capital

2019 The percentage to be distributed may change

every year based on the company’s profitability and
capital demands, always considering the minimum
distribution set forth in the Bylaws.

Total payout simulation to keep Tier I capital(1) at 13.5, under different return and growth scenarios.

ROE
15.0% 17.5% 20.0% 22.5% 25.0%

5.0% 65 – 70% 70 – 75% 75 – 80% 80 – 85% 85 – 90%

RWA 40 – 45% 45 – 50% 50 – 55% 55 – 60% 60 – 65%
10.0%
growth
15.0% 35% 35% 35 – 40% 40 – 45% 45 – 50%

(1) Considering Basel III full application.

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Internationalization
GRI 102-4 | GRI 102-6

We want to reproduce our What does Itaú Unibanco expect from its What are the main initiatives taken
commercial, technology, people operations in Latin America in the years ahead? by Itaú Unibanco to become the digital bank
and risk management model in the Our vision is to be the leading bank in Latin America of Latin America?
and the best digital bank in the countries where In 2018, we introduced the Itaú Abre Conta
countries where we operate and we operate. We want to be the best local bank for application to several countries of Latin America.
to pursue profitability levels close our clients, with the best regional solutions. We Citizens of Argentina, Paraguay and Uruguay
to those of Brazil, in addition to are striving for higher-than-market growth with can become accountholders with us in just a few
continued improvement in efficiency. Our objective minutes, using their cell phones.
searching for synergies and lessons is to have the best brand experience and client
that the exchange of culture and satisfaction to attract, develop and retain the best The Abre Cuenta Digital, as it is called in those
operations makes possible. talent, building high-performance teams in the countries, is a full digital solution for opening
markets where we are present. accounts using any device connected to the
In recent years we have intensified our Internet. One of the competitive advantages is the
internationalization process in Latin America, not We are striving to disseminate our values and leading-edge technology, which includes facial
only to have access to new markets and increase culture to every country where we are present. In recognition. Customers take a selfie, send a copy of
the scale of our business, but also thinking about this way we will influence markets, while generating their identity document and, in five minutes, they
our clients in order to be closer to them and afford shared value and a positive impact. can start using the account.
them better experiences.
Our ambition is to be the digital bank in Latin We are also transforming our applications
In the Northern hemisphere, our service units are America that offers our clients the experience of a for individuals. We have incorporated several
seeking to expand the product offer, optimize and high level of satisfaction. Using our digital business functionalities of the Itau individual customer
simplify structures and processes and innovate accelerator we have managed to replicate our application in Brazil into our operations in Paraguay,
our technology platform. In Latin America, we activities in Brazil in the countries of Latin America Uruguay and Chile, saving around 300,000 hours of
have adopted the universal banking model that where we operate, with lower financial investments development time.
predominates in the Southern Cone. and development time.
We have replicated our Itaucard cards application in
However, advancing with the internationalization Uruguay, Paraguay and Colombia. The Tarjetas app,
process does not necessarily mean expanding our as it is known in those countries, assists our clients
business into new countries, but rather to achieve in in organizing their credit card spending, ordering
the countries where we operate the same quality of cards with immediate approval, checking balances in
management and level of results we have in Brazil. the points program and requesting higher limits or
temporary blocking.

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63
We are offering clients and non-clients in Latin America focus
Argentina, Paraguay and Uruguay a new Recurring net income Efficiency ratio
experience in taking out loans using our
2018 1,335 5.2% 2018 61.8 77.4
digital channels, such as the loan simulator,
and a chatbot for offering and contracting 2017 820 3.3% 2017 67.8 91.9
products and services, among others. The
Itaú Teclado experience is also available to our 2016 949 4.3% 2016 68.3 92.3
clients in Uruguay.
Latin America – R$ billion Latin America as part of the total Efficiency ratio Risk-adjusted efficiency ratio
In Uruguay and Paraguay we have launched
digital branches offering extended business
hours (from 8 a.m. to 8 p.m.), service via
WhatsApp, e-mail and telephone and online
chat with Managers.

Our operations in the Northern hemisphere

are expanding the range of products we can
offer our South American clients and those
operating predominantly in Latin America. To
improve our client service we are optimizing and
simplifying structures and processes, in addition
to innovating on our technology platform.

All these initiatives are the fruit of close

collaboration between the country teams,
leading to economies of scale, transfer of
knowledge and sharing of good practices.
Based on this, we can offer our clients Return on 4.5% 17.9% 23.9% 21.9% - -
other very high added-value experiences. allocated capital
Chile Argentina Uruguay Paraguay Colombia Other countries

Employees 5,820 1,692 1,117 844 3,495 566

ranches and client

B
199 85 27 40 161 -
service branches

Source: Management Discussion and Analysis and Complete Financial Statements in BRGAAP – 2018.

Itaú Unibanco Integrated Report 2018

64
Sustainable to create value for our shareholders and to adjust fact that micro entrepreneurs begin to develop a
to the limits established by our risk appetite. relationship with the formal financial system.
profitability
Capital management is another important pillar of Itaú Microcrédito has specific rules for requesting
We aspire to be leaders in this strategy. In this respect, our Board of Directors loans, among which we can mention working
has set Tier I capital at a minimum of 13.5%, while capital or the refurbishment and purchase
sustainable performance, with the possible surplus, if unlikely to be used, will be of property extended to formal and informal
profitability that exceeds the cost returned to the shareholders. In this way, dividends entrepreneurs engaged in small business. Any
of capital while creating increasing and interest on own capital are distributed as a extension of credit requires the presence of a
function of the variation in risk-weighted assets trained microcredit agent.
value. Our challenge is to continually
and the return on shareholders’ equity.
improve the efficiency of our Our microcredit agents offer micro entrepreneurs
operations, putting clients at the We remunerate our shareholders through monthly loans covered by free micro insurance. The agents
core of our decisions through and supplementary payments of Dividends are also responsible for sharing concepts and
and Interest on Own capital. In 2018, our payout financial information regarding the conscientious
strategic management of costs amounted to R$22.4 billion, or 87.2% of the use of money.
and investments in order to boost recurring net income for the year.
the use of our resources, while Microcredit can also be extended though the
We also create value through our banking intermediary of civil society organizations of
efficiently managing the allocation
responsibility. As a bank, we are able to create jobs, public interest registered with the National
and cost of capital. develop businesses and foster entrepreneurship. Productive Microcredit Program.
Because with everything we think about and do, we
Efficiency is one of the pillars of our strategy for are seeking to address our purpose: to promote the Our investment in microcredit is part of our
sustainable profitability, treated by the bank as a power of transformation in people. On the other strategy of operating as agents of transformation
priority over recent years. We have put together hand, our business can also cause adverse impacts, of society. This operation is very important
initiatives ranging from the reduction of wasted such as indebtedness and environmental damage. because it strengthens our approach to
capitals, to projects for higher productivity and digital sustainability, while increasing our capacity to pass
transformation in the search for economies of scale Using this strategy we have intensified the offer of on knowledge about financial education.
and synergies for the business. Prioritizing technology financial products and services that have a positive
products is based on a single list that takes into impact on society. GRI G4-FS7
account the net present value of each project.
To low-income entrepreneurs lacking the
Our business model, together with risk necessary attributes for access to the formal
management tools and control of efficiency, allows financial system we provide an opportunity for
us to identify granular opportunities to diversify expanding their own business using microcredit.
and expand our operations in response to the need One of the main benefits of this initiative is the

Itaú Unibanco Integrated Report 2018

65
Microentrepreneurs profile analysis
The ultimate objective is to create a virtuous circle boost their companies’ results, the inspirations
in which the bank fosters the economic and social to seeing the path to success and connections for More than 40% attended at least high school;
development of the Brazilian low-income population. them to increase their networking. 52% are married;
Average age is 44 years;
Where sustainable profitability is concerned, we are The women who signed up for the program 55% have dependents (average of two dependents); and
striving to encourage the power of transformation of increased their sales and improved their credit At least 85% of applicants have their own residence, 98%
micro entrepreneurs. indicators. Female account holders, on average, of which fully paid about 20% of businesses
have a 77% higher maximum credit limit than other are formal, of which 95% are individuals.
Another initiative worthy of mention was the account holders.
launch of the Itaú Mulher Empreendedora
(Women’s Entrepreneurship) program in To continue supporting the development of Brazilian
partnership with the International Finance female entrepreneurs, we reached an arrangement
Corporation (IFC), the World Bank and the with the IDB to finance very small, small and mid-
Interamerican Development Bank (IDB). The size companies managed by women in Brazil. The
program aims to support the development of proceeds of the loans from BID Invest in 2017, of
businesses run by women. The values underlying approximately US$100 million, expiring in 2020,
this program include training for women to will finance these companies provided their annual
enhance their management techniques and to revenues do not exceed a maximum of R$8 million.

Portfolio (R$ thousand) Clients

Sector 2018 % 2017 % 2018 % 2017 %
Commerce 8,160 59 5,130 52 2,978 62 1,311 52
Services 3,163 23 2,609 27 1,057 22 711 28
Production and commerce 2,586 19 2,094 21 797 16 502 20
Total 13,909 100 9,833 100 4,832 100 2,524 100

Learn more about Itaú Mulher Empreendedora program Learn more about our Itaú Microcrédito

Itaú Unibanco Integrated Report 2018

66
Another way of ensuring our value creation have adapted the multisectorial dimensions to
while generating positive impacts for society by the reality of each sector, identifying risks and
including environmental, social and governance opportunities, deriving metrics and projecting
(ESG) issues into our credit, insurance and impacts according to different time horizons.
investment operations.
To ensure that the credit extended is aligned with
Sustainability is incorporated into our strategy by ESG practices, we identify, measure, mitigate and
means of a consolidated governance structure monitor the risks that arise through our Social and
integrated into the business, enabling us to Environmental Credit Risk Policy which contains
internalize these issues and trends in our daily the criteria of our social and environmental risk
activities and processes. management strategy prepared on the basis of
the applicable legal and regulatory requisites and
We consider the importance of ESG issues best international practices. In the case of the
insofar as they may affect the value of our large company segment, this analysis has a direct
business and our capital. As fund managers, it impact on customer credit ratings, the cost of
is our responsibility to fully grasp the risks and operations, the allocation of resources to sectors
opportunities that can affect our decisions. of the portfolio, and types of collateral and the
mix of products to be offered.
Our methodology for integrating ESG issues
when evaluating companies or responsible To build the sustainability initiatives into
investments involves inserting variables into our insurance business, we moved ahead
traditional valuation models by analyzing their with previously drafted action plans in the
impact on cash flows and the cost of capital. The search for continuous improvement in our
aim is to adjust the definition of the target price management and governance processes. The
for securities listed on stock exchanges and to aim of these actions plan is to work together
identify in advance events that can create or with regulatory authorities, re-assess social and
destroy value. environmental risks when calculating insurance
premiums and launching new products designed
We have identified eight recurring dimensions in for different customer profiles. When pricing
different sectors that can substantially affect the our insurance transactions we take into account
value of Brazilian companies. These dimensions climate and geographical factors, and the
are structured hierarchically based on their frequency and potential for social, economic
materiality for each sector. Furthermore, we and environmental tragedies.

Itaú Unibanco Integrated Report 2018

67
ANALYZED EXAMPLE OF
DIMENSIONS ENVIRONMENTAL EVALUATION
Water, energy and
materials
DIMENSIONS 1ª phase
RESULTS 2ª phase 3ª phase
Biodiversity

Waste
and land use ESG Research Quantification
Hight
Valuation
management relevance
COMPANY
Climate
Multi-sector Revenue Valuation
change
Long Short Calculation
term
dimensionsterm Cost
Relationships + +
with workers Drivers of sector Expenses Calculation Social
Relationships specific value
Low Provisions and Environmental
with suppliers relevance +
net present value
Relationships Company’s Capital invested
(NPV)
with
communities Relationships performance Cost of capital +
with clients SOCIAL
DIMENSIONS Adjustment to
company’s fair value

GOVERNANCE Risk and

DIMENSIONS
Independence Corporate opportunities
and quality of the Board governance

Legal and regulatory

ANALYZED EXAMPLE OF
DIMENSIONS ENVIRONMENTAL EVALUATION Operational
Water, energy and DIMENSIONS RESULTS
materials Market
Biodiversity
and land use
Waste Hight Potential pricing
management relevance of CO₂ emission
COMPANY
Climate
change
Long Short
Exposure of assets to
term term physical risks and related
Relationships to changes in productivity
with workers

Relationships Low
with suppliers relevance Revenues from
Relationships carbon credit
with
communities Relationships
with clients SOCIAL
DIMENSIONS

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Corporate governance
Alignment and union among shareholders; Family
The main goal of our corporate governance is to
Group's vision, mission and values; control
create an efficient set of incentive and monitoring
IUPAR Significant mergers and acquisitions; With a
mechanisms to ensure that management members
(Itaú Unibanco long-term
are always aligned with our stockholders’ best Participações) Performance evaluation and admission of family members; and
strategic vision
interests in a sustainable way. Discussion and approval of the long-term strategy.

In order to achieve this goal, we have set up

decision-making bodies and institutionalized
procedures to align management with our Definition and monitoring of the company's strategy; Value
meritocratic, performance-focused and long-term Mergers and acquisitions; Creation
value-creation culture. Monitor the Executive Committee's performance; Strategy
Nomination of executive officers (meritocracy); definition
The following illustration presents the three pillars
Budget approval;
of our governance structure.
Itaú Unibanco Definition and supervision of risk appetite and policies
Board of relating to the use of capital;
Directors Definition and monitoring of incentive and
compensation models and goal setting;
Supervision of the technologies strategy;
Definition of meritocracy policies; and
Business operation supervision.

I mplementation of Board of Director's guidelines Professional

and goals; management
Business operation and strategies for products Implementation
Executive and segments; of strategy and
Committee Ensure better allocation and management of day-to-day
financial, operational and human resources; management
Monitoring of market, credit and operational risks; and
Operate the bank in the pursue of value creation.

Learn more about our governance structure

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69
Governance structure
GRI 102-18

Our management is structured so as to ensure that

the issues are widely debated and decisions taken on
a collective. Below, we introduce our management
bodies, their primary functions and the managers
comprising them.

General Stockholder's Meeting

Disclosure and Trading Committee
The company's supreme body that brings stockholders
together, either on an ordinary or extraordinary basis, Fiscal Council This Committee is responsible for:
through a convening notice as set forth by law. Managing the Policy for the Disclosure of Material
An independent body Information and the Policy for Trading Itaú Unibanco
Annual Stockholders' Meeting: It is held in the
operating independently Holding S.A. Securities.
first four-month period of each year, to review,
discuss and vote the financial statements submitted from Management, our Board of Directors Carrying out internal actions intended to improve
Duties

by management, resolve on the allocation of net exeternal auditors and

Board of Officers the information flow.
income for the year, payout of dividends and election of the audit Committee. It
members to the Board of Directors and the Fiscal Council. supervises the activities of It is responsible for establishing Promoting the ethical conduct of our management
our Management, examines our general bussines guidelines, It implements the guidelines proposed by members and employees.
Extraordinary Stockholders' Meeting: It is held and opines on our financial including for our subsidiaries, and the Board of Directors. Officers manage
when convened to resolve on key matters that are statements for the year holds ordinary meetings eight our daily bussines activities, ensuring the Ensuring transparency, quality, equality and security
not the exclusive responsibility of the Annual General ended, among other duties times per year and extraordinary best allocation and management of funds of the information provided to our stockholders,
Stockholders' Meeting. established by Brazilian law. meetings whener necessary. to accomplish the goals we have set. investors and other capital market players.

The Annual Stockholders' Meeting is open on first call It is composed of three It is composed of 11 members, all It is composed of five to 30 members, It is composed of:
with the attendance of stockholders representing at to five members elected non-executive, and of whom five including Chief Executive Officer, General Members of the Board of Directors.
least 25% of voting capital. Any amendments to the annually by our stockholders, are deemed independent (45%). Director, Director Vice President, Executive
Composition

Bylaws should be resolved on at an Extraordinary one of whom by minority The turnover of the Board members Officer and Officer, in conformity with Members of the Board of Officers of Itaú
Stockholders' Meeting, which will be open on first call preferred stockholders. is carried out in accordance with the guidelines established by the Board Unibanco Holding or any other Itaú Unibanco
with the attendance of stockholders repsenting at least our bylaws, which provide for the of Directors for filling these positions. Conglomerate company.
two thirds of the voting capital. ineligibility of persons who have Members are elected annually by the
reached the age of 70, Members are Board of Directors, Each member elected Professionals of proven knowledge in the capital
Our meetings are held with a quorum representing elected annually by our stockholders. to our Board of Officers must be approved markets area.
approximately 90% of our voting capital. by the Central Bank of Brazil. According to
Investor Relations Officer (a permanent member
Brazilian law, an acting officer retains their
of the Committee).
position until they are reelected or
a sucessor takes office.

Learn more about our governance structure

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70
Our policies and rules
GRI 102-25

We adopt policies in order to formalize and consolidate

existing structures to protect the interests of our
Anti-Corruption Corporate Policy Internal Charters
employees, management members and stockholders,
The purpose of these policies is to We have internal charters that regulate the operation
as well as promote our culture and values, always
establish rules for avoiding conflicts of of our Board of Directors, Board of Directors
seeking to run business in an ethical and transparent Policy for Trading Itaú Unibanco interests in processes related to donations Committees, Board of Officers and Fiscal Council,
manner, preventing and fighting fraud and illegal acts Holding S.A. Securities and sponsorships and in relationships with in conformity with applicable legislation and best
and ensuring our business sustainability. clients, suppliers and partners, in the public corporate governance practices.
The purpose of this policy is to establish
and private sectors, and also to establish
guidelines and procedures to be followed
guidelines and procedures to prevent
The following illustration presents the main documents by us and bound persons, to ensure
and combat corruption, such as training,
transparency in the trading of our securities Corporate Governance Policy
related to our corporate governance, including our by all interested parties, without privileging
communication, consultation and
complaint channels.
Bylaws, as approved by our Board of Directors. some to the detriment of others. This Policy consolidates the Corporate Governance principles
and practices adopted by us so that they can be disseminated
throughout our company.

Integrity and Ethics Corporate Program

Learn more about
This Policy establishes additional guidelines to Relationship Policy with Public Officials and Contracting
our regulations
our Code of Ethics related to the Integrity and with Bodies, Entities, and Companies of Public Administration
and policies
Ethics Corporate Program and situations of This policy guides the relationships of our corporate group,
by clicking here
conflicts of interests and ethical dilemmas.
through its employees or directors, with public officials and
public entities with respect to our institutional interests and
the financial system in general, in an organized manner.
Bylaws Additionally, this policy also establishes rules to address our
Our Bylaws establish our principles and rules of operation, such as the definition of commitment to public procurement with government entities
the our corporate purpose, composition of capital stock, responsibilities of statutory and state-owned enterprises(1).
bodies, appropriation of net income, and our listing segment in stock exchanges,
among others.
Corporate Policy and Procedure
Disclosure of Material Information
Code of Ethics
Transactions with Related Parties Policy
The Policy and Procedure Disclosure of Material
This Code of Ethics applies to all of our
The purpose of this policy is to establish rules Information addresses the public disclosure of
employees, members of the Board of Policy for the Nomination of Members of the Board of Directors, and consolidate procedures to be followed in material information and the requirement to keep
Directors and officers and is based on Committees Reporting to the Board of Directors and the Executive Board related party transactions, ensuring equality such information confidential until disclosured in
principles that support an organizational
This policy establishes minimum requirements for the nomination of and transparency and as such, ensuring accordance with applicable regulations.
culture focused on the enhancement of
members to the Board of Directors, Board of Directors committees and stockholders, investors and other stakeholders
people, strict compliance with rules and
our Board of Officers. that we are in compliance with best corporate
regulations and continuous development.
governance practices.

(1) In compliance with Brazilian laws and regulations, since 2014 we have not made any donation of funds to political parties or candidates for election purposes.

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71
Our practices
We believe that the adoption of good corporate governance practices adds value, facilitates access to capital and contributes to longevity
of our organization. After the merger, we continued to evolve in line with best market practices.
Highlights GRI 102-10
2001 2017
1999
Level I of Corporate Policy for Nomination of March 2018:
Inclusion in the Dow Governance of B3 2011 CADE’s approval of the acquisition of
1995 Executives: minimum 30% of
Jones Sustainability Index 2004 Voluntary adherence to the Abrasca’s a minority interest, reaffirming the
Election of Independent independent members in C.A.
Stock Option Plan Audit Committee Code of Self-regulation and Best independence of management – Itaú
Board Members Inclusion in the Boomberg
Creation of Dividend practices of Publicly-Held Companies Unibanco acquired 49.9% of the capital,
2006 Equality Index
reinvestment program Remuneration Committee with 30.1% of the common shares
Certification under section
404 of Sarbanes-Oxley Act April 2018:
Internal Regulation of the First woman elected on the Board
Board of Directors of Directors
2009 2013 May 2018:
2000 Strategy Committee Nomination and Corporate 21 years on the NYSE
Corporate Code of Ethics 2007 Risk and Capital Governance Committee
Voluntary adherence Management Committee Related Party Committee July 2018:
Independent Fiscal Council
to Abrasca’s Manual for Nomination and Corporate 50% stock split – with a 50% increase
Material Information Gorvernance Committee in dividens paid monthly;
1996 Control and Disclosure Encouraging to diversity and New Dress
Personnel Committee
2002 Code “vou como sou” (“I go as I am”)
APIMECs
meetings and Disclosure and Trading Committee
2008 August 2018:
Roadshows
Level II ADR Program
Corporate 2008 General Data Protection Law as a
Tag Along Priority for Itaú Unibanco
Gorvernance Merger
Policy
September 2018:
2005 16 APIMECs;
Nominating and Compensation Committee 17 conferences;
2015 7 roadshows; and
Inclusion in the Corporate Sustainability Index
Inclusion in the Sustainability 4 teleconferences
Vigeo EIRIS Index – Emerging 70
2005 New Management Structure of November 2018:
Trading Committee and Policy 2012 Itaú Unibanco Holding
10 years of merger between Itau
2010
Inclusion in the Corporate Digital Assembly and Unibanco
1999 Partners and
Sustainability Index
APIMECs meetings Associates
Program January 2019:
Inclusion in the Dow Changes in the composition of the
Jones Sustainability Index
2002 2007 Executive Committee:
Disclosure Certification under section
404 of Sarbanes-Oxley Act Caio Ibrahim David assumed the
Committee position of General Director of the
and Policy Wholesale department and Milton
Maluhy assumed the position of Vice-
President of Risks and Finance, being
2003 part of the Executive Comitteee
Election of Independent Members The creation of the Social
Responsability Committee was
approved on January 31, 2019
2001
1997 Stock Option Plan
Level III ADR Level I of Corporate
Governance of B3

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72
BOARD OF DIRECTORS GRI 102-18

“This year we remained with our regular agenda, following up the performance of the • Ensurures the integrity of the
internal audit, the corporate departments responsible for risk management and the Financial Statements;
• Complies with legal and “In 2018, the Compensation Committee discussed its ordinary agenda, which included the
independent auditor. The topics of great deal of attention by the Committee throughout • Promotes discussions on incentive
regulatory requirements; AUDIT COMPENSATION approval of the pool of the global bonus to be distributed to employees and management
2018 included the reports from the several areas on controls regarding information • Ensures the efficiency of internal
Since 2004 Since 2011 and compensation models;
• Develops compensation policies for members. It also approved the target contracts for the members of the Executive
security risks, as well as the performance of the 2nd and 3rd lines of defence in the controls; and
• Risk Management in general (third line management members and employees; and Committee and assessed, for comparison purposes, the target contracts adopted
subsidiaries abroad and their relationships with the respective parent company’s
of defense). • Establishes goals. by the market. Additionally, the Committee met with representatives of the Central
departments. The Committee also focused on the Boards’ actions towards certain
Bank to present the workings of the bank’s governance process for issues related to
aspects of client service and risk management in digital platforms, in addition to the 100% of the members are independent 100% of the members are non-executive compensation, to the work dynamics of the Committee itself and, also, to the alignment
monitoring of internal control systems and management of traditional risks." 
146 meetings held over 36 days 4 meetings
of the compensation policy with the risk policy"
Diego Fresco Gutierrez – Financial Expert of the Audit Committee
Gustavo Jorge Laboissière Loyola – Member of the Board of Directors and member of the
Compensation Committee
"Over the course of 2018, we have made progress on relevant issues concerning People that
will help us strengthen our ability to attract and retain the best talents and increase our ability
to innovate and the connection with our clients. In order to support digital transformation,
we proceeded with the agenda of communities in technology and business, making our • Establishes policies for attracting
and retaining talented professionals; • Proposes budgetary guidelines; “The purpose of the Strategy Committee is to address relevant matters that have
teams more multidisciplinary, in agile cells, with more autonomy and cooperation. We created • Proposes guidelines for recruiting • Provides inputs for decision-making processes; a major impact on the bank. During 2018, it discussed the achieved results and
and developed new careers, such as Data Scientist, and trained thousands of employees in and training employees; and PERSONNEL • Recommends strategic guidelines the actions planned with respect to the strategic fronts of Digital Transformation
topics such as Lean, Agile, Design Thinking and User Experience (UX), which are appropriate • Presents long-term incentive and investment opportunities (Mergers
programs and monitors the culture
Since 2009
ESTRATÉGIA and Customer Satisfaction, it addressed the internationalization process that
for the new environment of relationship with clients and information speed. Additionally, we and Acquisitions); and
of meritocracy. Desde 2009
• Internationalizes and creates new allows the bank to have access to new markets and to increase its scale, it revised
implemented initiatives to improve the experience of our employees, seeking to value their business areas. the Policy For Sustainability And Social Environmental Responsibility and it also
individualities, and to reduce bureaucracy as much as possible in the work environment. Lastly, 100% of the members are non-executive
focused on competition in the digital environment.”
100% of the members are non-executive
in line with the priority agendas we have been developing, we approved important changes
in the incentives models, increasingly stimulating cooperation and team work, but always 3 meetings Roberto Setubal – Co-chairman of the Board of Directors and
3 meetings
recognizing those who make the difference.” member of the Strategy Committee
Pedro Moreira Salles – Co-Chairman of the Board of Directors and Chairman
of the Personnel Committee

“In 2018, the Committee worked effectively on the analysis of transactions between related parties, • Supports the Board of Directors;
in accordance with the governance defined in the Policy for Transactions with Related Parties in • Manages transactions between related • Establishes the risk appetite;
order to ensure stockholders and other stakeholders that Itaú Unibanco is in compliance with the parties; and RELATED • Evaluates the cost of capital x the minimum “In 2018, in addition to exercising its mandate to oversee the risk and capital
• Ensures equality and transparency for PARTIES return expected;
best Corporate Governance Practices, avoiding any conflict of interest or favoritism towards related Since 2013
• Allocates capital;
management activities through a continuous agenda of updating and
these transactions. RISK AND
parties. Over the year, more than 20 cases were analyzed involving issues such as the contracting of CAPITAL • Oversees management activities and monitoring the Group’s Risk Appetite, the Committee further focused its
a consulting firm, trading of investment fund units, sponsorships and donations, three of which are 100% of the members are independent MANAGEMEN risk control; approach on emerging risks in the areas of technology, models, business and
• Improve risk culture; and strategy, as well as in the regulatory environment."
disclosed to the market, in compliance with CVM Instruction No. 480/09." Since 2009
• Complies with regulatory requirements.
Fábio Colletti Barbosa – Independent Member and Chairman of the Related Parties Committee 15 meetings Pedro Luiz Bodin de Moraes – Independent member of the Board of Directors
100% of the members are non-executive and Chairman of the Risk and Capital Management Committee

8 meetings
“During 2018, the Committee maintained its discussion agenda with regards to the structure and
• Periodically reviews the criteria for
composition of the Board of Directors and its Committees. In this context, the establishment nomination and sucession;
of the Social Responsibility Committee, subordinated to the Board of Directors, was approved. • Provides methodological support NOMINATION LATAM
• Asses the outlooks for the
Another highlight was the discussion related to the change in the composition of the Company’s for the assesssment of the Board of AND CORPORATE STRATEGY
world economy;
Directors and Chief Executive Officer; CORPORATE COUNCIL
Executive Committee, as announced to the market in September. The Committee also GOVERNANCE • Adopts internationally accepted
• Nominates members of the Board of
proceeded with the analysis of practices recommended by local and foreign sustainability Directors and General Managers; and
Since 2013 trends, codes and standards; and
indexes and governance codes aiming at the continual improvement of our Corporate • Provides guidelines for the Board of
• Analyzes potential conflicts of interests.
Directors to analyze opportunities. Still in January of 2019, we announced the creation of the
Governance practices. One of the measures arising from this analysis was the formalization of an
internal charter for the Executive Board." 100% of the members are non-executive Social Responsibility Committee, that will report to the Board
Alfredo Egydio Setubal – Member of the Board of Directors and Member of the 2 meetings DIGITAL
ADVISORY
• Proposes technological developments;
• Asses client’s experience; and
of Directors with the scope of defining strategies and monitor
Nomination and Corporate Governance Committee
BOARD • Follows world trends. the performance of initiatives related to the subject.

Itaú Unibanco Integrated Report 2018

73
Executive Committee

Candido Botelho Bracher

President and CEO

Caio Ibrahim David Márcio de Andrade Claudia Politanski André Sapoznik Milton Maluhy Filho
Wholesale General Director Schettini Executive Vice-Presindent Executive Vice-Presindent IT Executive Vice-Presindent
Legal and Human Resources and Operations Risks and Finance (CFO and
Retail General Director
CRO)

Learn more about our executives’ experience

Itaú Unibanco Integrated Report 2018

74
Message from the CFO and CRO

Management Commentary

Dear reader, Summarized Consolidated Statement of Income (in millions of R$)

Begin this section of the integrated report From January
Annual variation
1 to December 31
inviting you to read the Analysis of the Result
in IFRS commented on by the management 2018 2017 R$ millions %
and detailing the result for the year 2018, being Banking Product 104,200 111,523 (7,323) (6.6)
possible to observe the results of our strategy.
Net interest, similar income and dividend 62,565 67,311 (4,746) (7.1)
We have the challenge of fully integrating Adjustments to Fair Value of Financial Assets and
(4,834) 4,181 (9,015) (215.6)
risk management into business performance Liabilities
and incorporating in a structured way the Foreign Exchange results and Exchange variations
2,974 (250) 3,224 (1,289.6)
dimensions of strategic risks. After all, managing on transactions
risks is the essence of our activity and a Non-interest income(1) 43,495 40,281 3,214 8.0
responsibility of all employees.
Expected Loss from Financial Assets and Claims (10,182) (20,966) 10,784 (51.4)

Other operating income (expenses) (63,410) (59,975) (3,435) 5.7

The Audit Committee monitored the preparation and Income before current and deferred
30,608 30,582 26 0.1
disclosure of the consolidated financial statements income tax and social contribution
prepared in accordance with International Financial Current and deferred income and social
(4,969) (7,357) 2,388 (32.5)
Reporting Standards (IFRS), including the assessment contribution taxes
undertaken by Finance Department of the control Net income 25,639 23,225 2,414 10.4
environment over the process to implement IFRS 9 –
Net income attributable to owners
Financial Instruments. 24,907 23,193 1,714 7.4
of the parent company
(1) Includes banking services fees, income related to insurance and private pension operations before claim and selling expenses,
Source: Summary of the Audit Committee Report – Second net of reinsurance and other income. See our complete Financial Statements (IFRS) – 4Q2018 for more details.
Semester of 2018.

Itaú Unibanco Integrated Report 2018

75
Our Net Income Attributable to the Owners of Non-Interest Income rose by 8.0% in 2018, minly Other Operating Income (Expenses) increased by
the Parent Company increased by 7.4% in 2018, due to: (i) asset management fees, as a result of 5.7% in 2018 when compared to the previous year.
compared to the previous year. These results are a higher volume of funds under management Personnel expenses grew by 6.7%, in the wake
detailed as follows: (growth of 16.6% reaching R$1.1 trillion) and of the collective bargaining agreement (which
higher revenues from performance fees; (ii) resulted in 5% wage increase for bank employees)
Net interest, similar income and dividend income from credit and debit card service fees, and the higher headcount due to the hiring of new
decreased by 7.1% in 2018, compared to 2017, mainly mainly driven by higher interchange revenues insurance consultants, REDE sales representatives
due to the effect of lower basic interest rates resulting from an increase in the volume of and technology department personnel to speed
(the average SELIC from 9.9% in 2017 to 6.6% in transactions and revenues from credit and debit up our digital transformation process. We had
2018) and exchange rate variations (the Brazilian card annuity fees; and (iii) income from current more than 100,000 employees at the end of 2018,
real depreciated 17.1% against U.S. dollar in 2018 account services, mainly due to higher number of an increase of 1.0% compared to the previous
and 1.5% in 2017) on our strategy for hedging the current-account holders. The growth of income year. Administrative expenses rose by 6.0% in the
effects of exchange rate variation on our foreign from fees from both credit and debit card services period, mainly due to the higher cost of third-
investments, as further detailed in “Current and and current account services was also related to party services, such as advisory, consultancy,
deferred income and social contribution taxes”. the incorporation of Citibank’s retail operations, advertising, promotion and publication.
which took effect in November and December of
Adjustments to Fair Value of Financial Assets 2017 and was fully recognized in 2018, having been Current and deferred income and social
and Liabilities decreased by 215.6% in 2018, when consolidated on October 31, 2017. contribution taxes fell by 32.5% in 2018 compared
compared to 2017. This decrease was mainly to 2017, mainly due to the fiscal effect on the
due to the effect of exchange rate variation on Expected Loss from Financial Assets and Claims hedge instruments for our investments aboard.
our hedge strategy for our foreign investments decreased 51.4% in 2018 compared to 2017, The result of exchange rate variation on our
(approximately R$68 billion at the end of 2018). mainly due to lower expenses with expected investments aboard is non-taxable, unlike revenue
This effect was offset by the reduction in tax loss with loan and lease operations with from our hedge instruments, which is. With the
expenses, as further detailed in “Current and individuals and legal entities, as a result of the depreciation of the Brazilian real, we incurred
deferred income and social contribution taxes”. improvement in the credit quality our portfolio. losses on hedge instruments abroad, which
From 2015 to 2017, we made greater provisions affected our tax expenses in both periods.
Foreign Exchange Results and Exchange due to an economic context with deteriorating
Variation on Transactions amounted to a gain credit quality, mainly in the wholesale banking
of R$2,974 million in 2018, compared to a loss of segment. More recently, we have noticed an
Basis for Presentations of
R$250 million in 2017, mainly due to the effect of improvement in the credit rating of our large Segment Information
exchange rate variations in the period. As already corporate clients, which has reduced our Our segment information is based on reports used
stated, the Brazilian real depreciated against the expected loss with other financial assets. by senior management to assess the financial
U.S. dollar performance of our businesses and to make
decisions regarding the allocation of funds for
investment and other purposes.

Itaú Unibanco Integrated Report 2018

76
Segment information is not prepared in accordance Summarized Consolidated Statement of Income
with IFRS, but according to the accounting practices
from January 1 to December 31, 2018 (in millions of R$)
adopted in Brazil as established by the Bacen. It
includes the following pro forma adjustments: (i) the Activities
recognition of the impact of capital allocation using Retail Wholesale with the Consolidated IFRS
Adjustments Consolidated
Banking Banking Market + BRGAAP
a proprietary model; (ii) the use of funding and cost Corporation
of capital at market prices, using certain managerial
criteria; (iii) the exclusion of non-recurring events Banking product 72,182 29,389 10,246 111,817 (7,617) 104,200
from our results; and (iv) the reclassification of the
Cost of credit and claims (13,686) (1,608) - (15,294) 5,112 (10,182)
tax effects from hedging transactions we enter into
for our investments abroad. Other operating income (expenses) (40,002) (15,217) (1,070) (56,289) (7,121) (63,410)

We present below the summarized results from Income tax and social contribution (6,939) (3,829) (2,964) (13,732) 8,763 (4,969)
our operating segments for the year ended Non-controlling interest in subsidiaries (184) (550) (35) (769) 37 (732)
December 31, 2018.
Net income 11,371 8,185 6,177 25,733 (826) 24,907
The following analysis should be read in conjunction
with our audited consolidated financial statements,
especially “Note 30 – Segment information.” The
adjustments column shown in this note shows the Summarized Consolidated Statement of Income – Retail Banking
effects of the differences between the segmented (in millions of R$)
results (substantially in accordance with the accounting
From January
practices adopted in Brazil) and those calculated 1 to December 31
Annual variation
according to the principles adopted in our audited
consolidated financial statements in IFRS. 2018 2017 R$ millions %

Banking product 72,182 69,921 2,261 3.2

Retail Banking
The result from this segment is derived from the banking Cost of credit and claims (13,686) (13,388) (298) 2.2
products and services provided to a diversified customer
Other operating income (expenses) (40,002) (37,601) (2,401) 6.4
base of account holders and non-account holders,
individuals and companies in Brazil. It includes retail Income tax and social contribution (6,939) (7,107) 168 (2.4)
customers, high-income customers (Itaú Uniclass and
Personnalité), and very small and small companies. It also Non-controlling interest in subsidiaries (184) (166) (18) 10.8
consists of financing and lending activities at units other
Net income 11,371 11,659 (288) (2.5)
than the branch network and credit cards, in addition to
transactions with Itaú Consignado.

Itaú Unibanco Integrated Report 2018

77
The previous table shows the summarized Cost of credit and claims increased by 2.2% Wholesale Banking
consolidated statement of income with respect to in 2018 when compared to 2017, in line with the The result of this segment is derived from the products
our Retail Banking segment for the years ended previously mentioned loan portfolio growth in the and services offered to middle-market companies,
December 31, 2018 and 2017: segment in Brazil. private banking clients, the activities of the Latin
American units (excluding Brazil), including those of
Our net income in retail banking decreased 2.5% Other operating income (expenses) rose by 6.4% CorpBanca as of the second quarter of 2016 following
in 2018 compared to the previous year. This result when compared to the previous year, mainly due the merger between Banco Itaú Chile and CorpBanca,
is explained as follows: to the intensification of investments in acquiring and the activities of Itaú BBA, the unit in charge of
and insurance operations and by the incorporation commercial operations with large companies, in
Banking product rose by 3.2% compared to of the retail operations acquired from Citibank. addition to operating as an investment banking unit.
previous year. This growth derived from: (i) an Additionally, these expenses felt the impact of
increase of 4.3% in interest margins on account the increase in the number of employees and the The following table sets out the summarized
of higher volumes of credit originated with collective bargaining agreement. consolidated statement of income with respect to
individuals and small and medium business, our Wholesale Banking segment for the years ended
reflecting growth of 10.3% in retail loan operations December 31, 2018 and 2017:
in 2018; and (ii) an increase of 4.3% in banking
service fees, mainly driven by revenues from
current account services, given the increased
number of current-account holders, and by credit Summarized Consolidated Statement of Income – Wholesale Banking
and debit card fees, given the higher number of (in millions of R$)
clients and transaction volume. This result was
From January
partially offset by a reduction in the results from 1 to December 31
Annual variation
insurance and private pension operations.
2018 2017 R$ millions %

Banking product 29,389 28,748 641 2.2

Cost of credit and claims (1,608) (5,882) 4,274 (72.7)
Other operating income (expenses) (15,217) (14,523) (694) 4.8
Income tax and social contribution (3,829) (2,412) (1,417) 58.7
Non-controlling interest in subsidiaries (550) 117 (667) (570.1)
Net income 8,185 6,048 2,137 35.3

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78
Our net income in wholesale banking increased Activities with the Market and to our Activities with the Market and Corporation
by 35.3% from 2017 to 2018. This result is Corporation segment for the years ended December 31, 2018
explained as follows: This segment includes the results from investing our and 2017:
surplus capital, the costs of our surplus subordinated
Banking product rose by 2.2% compared to the debt and the net balance of tax assets and liabilities. Banking product fell by 3.5% as a consequence of
previous year, mainly because of the increase of It also includes the financial margin on market lower interest margins with market.
R$934 million in banking service fees, partially offset transactions, the costs of treasury operations and
by the R$496 million decline in interest margins. The equity pick-up from companies not linked to any Net income in this segment decline by 13.9% in
increase in banking service fees was due to higher segments, as well as adjustments related to minority 2018. This decrease was mainly due to the increase
revenues from asset management services, related shareholdings in subsidiaries and our equity interest of R$1,189 million in income and social contribution
to higher balances and the performance fee of in Porto Seguro. taxes from the recognition of deferred tax assets
managed portfolios and investment funds. at a rate of 40% and, as our effective tax rate in
The following table shows the summarized 2018 was temporarily increased (due to the current
Cost of credit and claims declined by 72.7% consolidated statement of income with respect legislation), tax payments at a rate of 45%.
compared to the previous year, mainly due to the
improvement in credit ratings in this segment,
leading to a lower volume of provisions and even
resulting in reversals in the period.
Summarized Consolidated Statement of Income – Activities with the Market
Non-controlling interest in subsidiaries amounted (in millions of R$)
to a loss of R$550 million in 2018, mainly reflecting
From January
the better results of our operations in Chile. Annual variation
1 to December 31

2018 2017 R$ millions %

Banking product 10,246 10,623 (377) (3.5)

Cost of credit and claims - (6) 6 (100.0)

Other operating income (expenses) (1,070) (1,647) 577 (35.0)

Income tax and social contribution (2,964) (1,775) (1,189) 67.0

Non-controlling interest in subsidiaries (35) (23) (12) 52.2

Net income 6,177 7,172 (995) (13.9)

Itaú Unibanco Integrated Report 2018

79
Balance Sheet
We present below our summarized balance sheet for 2018 and 2017:

Summarized Balance Sheet – Assets (in millions of R$)

As of December 31 Variation

2018 2017 R$ millions %

Cash and compulsory deposits in the Central Bank of Brazil 131,307 117,586 13,721 11.7
Financial assets at amortized cost 994,759 905,729 89,030 9.8

Loan operations and lease operations portfolio 536,091 497,719 38,372 7.7

(-) Provision for Expected Loss (33,373) (36,737) 3,364 (9.2)

Other financial assets(1) 492,041 444,747 47,294 10.6
Financial assets at fair value through other comprehensive income 49,323 52,149 (2,826) (5.4)
Financial assets at fair value through profit or loss 286,646 273,536 13,110 4.8
Investments in associates, and jointly controlling entities, Fixed assets,
47,932 42,990 4,942 11.5
Goodwill and Intangible assets and other assets
Tax assets 42,830 44,249 (1,419) (3.2)
Total assets 1,552,797 1.436,239 116,558 8.1

(1) Includes Interbank deposits, Securities purchased under agreements to resell, Securities and Other Financial Assets.

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80
Our Total Assets grew by 8.1% from 2017 to 2018, Loan and Lease Operations, by type
mainly due to the larger loan operations and (In millions of R$)
lease operations portfolio and other financial
assets at amortized cost. These results are As of December 31 Annual variation
detailed as follows:
2018 2017 R$ milhões %

Loan Operations And Lease Operations Individuals 212,564 193,385 19,179 9.9
Portfolio increased by 7.7% in 2018, compared to
Credit card 78,255 67,413 10,842 16.1
2017, mainly due to growth of 9.9% in individuals,
14.1% in small and medium business and 11.5% Personal loans 29,543 27,295 2,248 8.2
in the Latin America portfolios. This result was Payroll Loans 46,878 44,716 2,162 4.8
partially offset by a reduction of 4.6% in the
corporate portfolio. It is worth pointing out that Vehicles 15,920 14,165 1,755 12.4
individuals portfolio produced growth in all Mortgage loans 41,968 39,796 2,172 5.5
products, as shown in the next table.
Corporate 102,643 107,647 (5,004) (4.6)
This growth is the effect of the higher volume of Small and Medium Businesses 68,812 60,290 8,522 14.1
loans in response to higher demand for credit,
Foreign Loans Latin America 152,072 136,397 15,675 11.5
especially in the small and medium business and
individuals portfolios. In the corporate portfolio, Total Loan operations and lease
536,091 497,719 38,372 7.7
we saw higher demand for securities reflecting the operations portfolio
uptick in capital market activity. The Latin America
portfolio was positively impacted by the variation Financial Assets At Fair Value Through Profit Other Assets At Amortized Cost grew by 10.6%
of the Brazilian real against the currencies of those Or Loss rose by 4.8% due in the main to higher mainly due to the higher volume of securities
countries where we operate. allocations of assets guaranteeing technical purchased under agreements to resell as part of our
provisions related to pension plans. asset and liability management strategy.
Other Assets At Amortized Cost grew by 10.6% in
2018 mainly due to the higher volume of securities Investments In Associates And Jointly Growth in our Total Liabilities can be explained,
purchased under agreements to resell as part of our Controlling Entities, Fixed Assets, Goodwill in the main, by higher deposits, securities sold
asset and liability management strategy. And Intangible Assets And Other Assets grew under repurchase agreements and reserves for
by 11.5%, mainly because of an increase in the non- insurance and private pension. These results are
controlling interest in XP Investimentos (49.9% of the detailed as follows:
total share capital).

Itaú Unibanco Integrated Report 2018

81
Deposits grew by 15.0% in the year, primarily Summarized Balance Sheet - Liabilities and stockholders’ equity
time deposits, due mainly to the migration of (In millions of R$)
resources from repurchase transactions involving
collateralized debentures booked as securities sold As of December 31 Annual variation
under agreements to resell. 2018 2017 R$ milhões %

Securities Sold Under Repurchase Agreements Financial Liabilities 1,151,237 1,056,717 94,520 8.9
grew by 5.6% mainly due to higher proceeds
At Amortized Cost 1,119,734 1,024,584 95,150 9.3
from repurchase agreements on collateralized
third-party securities. As mentioned above, this Deposits 463,424 402,938 60,486 15.0
increase was partially offset by the migration
of funds from repurchase agreements on Securities sold under repurchase agreements 330,237 312,634 17,603 5.6
collateralized debentures. Interbank market debt, Institutional market
326,073 309,012 17,061 5.5
debt and Other financial liabilities
Interbank And Institutional Market Debt And
At Fair Value Through Profit or Loss 27,711 27,211 500 1.8
Other Financial Liabilities rose by 5.5% due to a
higher volume of financial credit bills and import Provision for Expected Loss 3,792 4,922 (1,130) (23.0)
and export financing.
Reserves for insurance and private pension 201,187 181,232 19,955 11.0
Reserves For Insurance And Private Pension were Provisions 18,613 19,736 (1,123) (5.7)
up by 11.0% in the period boosted by the higher
volume of technical provisions for private pensions. Tax liabilities 5,284 7,836 (2,552) (32.6)

Other liabilities 26,010 26,362 (352) (1.3)

Stockholders’ Equity increased by 4.1% in 2018,
due primarily to net income. We remunerate Total liabilities 1,402,331 1,291,883 110,448 8.5
our stockholders by means of monthly and
supplementary payments of dividends and interest Total stockholders’equity attributed to the
136,782 131,378 5,404 4.1
owners of the parent company
on own capital. In 2018, we paid or provisioned in
our stockholders’ equity R$23.7 billion before taxes, Non-controlling interests 13,684 12,978 706 5.4
R$22.4 billion net of taxes. Under the buyback, in
2018 we acquired 19.7 million our own non-voting Total stockholders' equity 150,466 144,356 6,110 4.2
shares, totaling R$510 million.
Total liabilities and stockholders' equity 1,552,797 1,436,239 116,558 8.1

Itaú Unibanco Integrated Report 2018

82
Capital Index Payout and Shares Buyback(1) Dividends and IOC(2)
89.2%
In R$ billion
The Basel Ratio stood at 18.0% on December 31, 2.0%
83.0% 22.9
2018, with a reduction of 0.8 percentage points in
12.4%
relation to December 31, 2017, mainly due to the
payment of additional dividends related to the 2017 16.4 Highlighted on Equity
net income. Tier I (Common Equity Tier I + Additional 49.3% 87.2%
Tier I Capital) was 16.0% and 1.9% in Tier II. Please see 4.3% 70.6%
“Note 32 – Risk and Capital Management” for further 6.0 Paid and provisioned
45.0%
details on our capital risk management. Shares buyback
0.5 Shares buyback
Payout
Considering the applicable Basel III rules, our Tier 2016 2017 2018 2018

I capital was 15.9% at the end of 2018. Due to our

(1) Considers recurring net income in BRGAAP;
Stockholder Remuneration Policy described on (2) Dividends and IOC net of taxes.

page 62 of this report, and taking into account the

effect of 2.4 percentage points after additional Full application of Basel III rules | December 31, 2018
payment of dividends and interest on own capital, 15.9%
our Tier I capital achieved the 13.5% target at the end 13.5% -0.8% -0.3% 0.4% 1.0% -2.4%
13.5%
3.1%
0.6% 1.0%
of 2018. By the same measure, our Common Equity
Tier I ratio stood at 12.5% at the end of 2018.
12.9% 14.9% 12.5%

Tier I Net Income Dividends, IOC Assets Aditional Tier 1 Tier I Additional Tier I
Dec-17 and other and shares deductions Capital issued Dec-18 dividends Dec-18 after
Equity changes buyback and on Mar-18 and and IOC additional
RWA exchange rate dividends and
variation IOC
Common Equity Tier I (CET I) Additional Tier I (AT1)

Itaú Unibanco Integrated Report 2018

83
Highlights of our business in 2018: Watch, iPad and MacBook (Apple Pay) or Samsung (CDBs)(2) from other managers, financial credit bills,
Smartphones and Smartwatch Gear (Samsung Pay). debentures, real estate receivables certificates (CRIs)
Acquisition of Citibank retail business in Brazil 2 and agribusiness receivables certificates (CRAs)(2)).
( )

As of 31 October 2017, after approval from the POP Credicard Additionally, we also zeroed out the initial and final
regulatory bodies, we acquired Citibank’s retail In July 2018, we announced the entry of the Credicard contribution fees for Private Pension plans(3) for all bank
business in Brazil. brand into the merchant acquiring segment, with a customers. This initiative provides them with more
POS machine family (POP Credicard and Mega POP investment options in a scenario of low interest rates.
Citibank’s retail business in Brazil includes 71 branches, Credicard), which can be purchased through its website.
had, as of the date of execution of the Equity Interest Besides selling POS machines, the strategy is to have a Ticket – Minority interest
Purchase Agreement, approximately 300,000 retail simpler commercial proposal, based on shorter payment On September, 2018, we entered into an agreement with
bank clients, approximately 1.1 million credit cards, terms to retailers and competitive rates for debit and Edenred. Under this agreement, we will make a minority
a credit portfolio of approximately R$6 billion and credit card transactions. This operation seeks to target investment of 11% in Ticket, by means of a capital increase
approximately R$35 billion in deposits and assets self-employed individuals, microentrepreneurs and to be paid (i) in cash, equivalent to the book value of such
under management. The retail operations of Citibank in small companies. This initiative is an addition to our equity interest, and (ii) with the contribution of distribution
Brazil were consolidated on October 31, 2017, affecting product offering in the acquiring market. exclusivity rights regarding Ticket Restaurante, Ticket
our result in November and December of 2017 and Alimentação, Ticket Cultura and Ticket Transporte to Itaú’s
recognized fully in 2018. XP Investimentos S.A. – Minority interest corporate client base. Ticket will continue to distribute its
In August 2018, we concluded the acquisition of a products by means of other commercial agreements. The
Perpetual Subordinated Notes 49.9% minority interest in XP Investimentos through a completion of this transaction is conditioned upon the
In March 2018, we accessed the international debt capital injection of R$600 million, and the acquisition of necessary regulatory approvals.
market by issuing US$750 million in perpetual R$5.7 billion(1) in shares. The contract also provides for a
subordinated notes/AT1(1). We had already issued one-off additional transaction in 2022, subject to future Finally, I would like to invite you to read our complete
US$1.25 billion of these notes in December 2017. The approval by the Central Bank and which, if approved, IFRS Financial Statements, containing more detail
Central Bank of Brazil approved the inclusion of this debt, will enable us to hold 62.4% of the total equity of XP and explanatory notes referenced throughout this
as from the issue date, in the bank’s Reference Equity (equal to 40.0% of the common shares) based on an document. I remember that our Investor Relations
as Additional Tier I Capital for the bank’s Tier I Capital income multiple (19 times) of XP, with control of the team is always at your disposal.
ratio. The total increment was approximately 90 basis XP group remaining unchanged, in the hands of the
points on the Tier I Capital capitalization ratio, seeking to shareholders of XP Controle Participações S.A. The Sincerely,
maintain our CET1 at 13.5% and distributing any surplus acquisition of XP Investimentos S.A. did not have a
significant impact on our results.
Expansion of digital payment means: Apple Pay and
Learn more about our Samsung Pay No fees charged for Treasury Direct bonds,
executives’ experience
As of the first quarter of 2018, our clients were able to use Pension funds and Fixed Income products In
(1) Figures on the date of signature of the contract, which were
Apple Pay (exclusively for three months) and Samsung September 2018, we zeroed out our custody fees for Milton Maluhy Filho
adjusted up to the financial settlement date; (2) Respectively Pay as of June. Both tools are new ways for clients to Tesouro Direto (direct retail purchases of treasury
certificates of deposits, securitized real estate loans and Executive Vice-President,
securitized agribusiness loans; and (3) Applicable to PGBL make payments in the retail and e-commerce segments, direct bonds) offered by Itaú Corretora and for CFO and CRO
and VGBL products. enabling them to shop with their iPhone, Apple fixed income products (bank deposit certificates

Itaú Unibanco Integrated Report 2018

84
Independent auditor's limited assurance report financial information", issued by the International (b) u
nderstanding the calculation methodology
on the Integrated Annual Report 2018 Auditing and Assurance Standards Board (IAASB). and the procedures adopted for the
To the Board of Directors Those standards require that we comply with ethical compilation of indicators through interviews
Itaú Unibanco Holdings S.A. requirements, including independence requirements, with the managers responsible for the
São Paulo - SP
and perform our engagement to obtain limited preparation of the information;
assurance that the information included in the
Introduction Integrated Annual Report 2018, taken as a whole, is free (c) applying analytical procedures to quantitative
from material misstatement. information and making inquiries regarding
We have been engaged by Itaú Unibanco Holdings S.A. the qualitative information and its correlation
("ItaúUnibanco") to present our limited assurance report A limited assurance engagement conducted in with the indicators disclosed in the information
on the compilation of selected information related to accordance with the Brazilian standard NBC TO 3000 included in the Integrated Annual Report 2018.
the Integrated Annual Report 2018 of Itaú Unibanco and ISAE 3000 mainly consists of making inquiries of
Holdings S.A. for the year ended December 31, 2018. management and other professionals of the entity (d) comparing the financial indicators with the
involved in the preparation of the information, as well consolidated financial statements in IFRS and/or
Responsibilities of the management as applying analytical procedures to obtain evidence accounting records; and
that allows us to issue a limited assurance conclusion
of the Company on the information, taken as a whole. A limited (e) verifying that the Integrated Annual Reporting
The management of Itaú Unibanco is responsible for assurance engagement also requires the performance includes information about the content elements
the preparation and fair presentation of the selected of additional procedures when the independent and the basic principles established in the
information included in the Integrated Annual auditor becomes aware of matters that lead him to guidelines proposed by the Framework issued by
Report 2018, in accordance with the criteria issued by believe that the information taken as a whole might the IIRC.
International Integrated Reporting Council (IIRC) and present significant misstatements.
for such internal control as it determines is necessary to Scope and limitations
enable the preparation of information free from material The procedures selected are based on our
misstatement, whether due to fraud or error. understanding of the aspects related to the The procedures applied in a limited assurance
compilation and presentation of the information engagement are substantially less detailed
Independent auditor's responsibility included in the Integrated Annual Report 2018, other than those applied in a reasonable assurance
circumstances of the engagement and our analysis engagement, the objective of which is the issuance
Our responsibility is to express a conclusion on the of the areas in which significant misstatements might of an opinion on the information included in the
selected information included in the Integrated exist. The following procedures were adopted:   Integrated Annual Report 2018. Consequently,
Annual Report 2018, based on our limited assurance we are not able to obtain reasonable assurance
engagement carried out in accordance with the Brazilian (a) p
lanning the work, taking into consideration that we would become aware of all significant
standard NBC TO 3000, "Assurance Engagements the materiality and the volume of quantitative matters that might be identified in an assurance
Other than Audit and Review", issued by the Federal and qualitative information and the operating engagement, the objective of which is the issue of
Accounting Council (CFC), which is equivalent to and internal control systems that were used an opinion. If we had performed an engagement
the international standard ISAE 3000, "Assurance to prepare the information included in the with the objective of issuing an opinion, we
engagements other than audits or reviews of historical Integrated Annual Report 2018 of Itaú Unibanco; might have identified other matters and possible

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85
misstatements in the information included in the Conclusion
Integrated Annual Report 2018. Therefore, we do not Based on the procedures performed, described
express an opinion on this information. herein, no matter has come to our attention that
causes us to believe that the information included
Non-financial data are subject to more inherent in the Integrated Annual Report 2018 has not been
limitations than financial data, due to the nature andcompiled, in all material respects, in accordance with
diversity of the methods used to determine, calculate the guidelines of the criteria described throughout
and estimate these data. Qualitative interpretations this report.
of the relevance, materiality, and accuracy of the data
are subject to individual assumptions and judgments. São Paulo, April 30, 2019
Furthermore, we did not consider in our engagement the
data reported for prior periods, nor future projections PricewaterhouseCoopers
and goals. Auditores Independentes
CRC 2SP000160/O-5

Washington Luiz Pereira Cavalcanti

Contador CRC 1SP172940/O-6

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