PR Newswire | Aug 3, 2020 09:24PM EDT

2nd Quarter of 2020

08/03 20:23 CDT

Ita Unibanco Holding S.A. Announcement to the Market - IFRS - Results for the 2nd Quarter of 2020Disclosure of results for the second quarter and first half of 2020, according to International Financial Reporting Standards - IFRS SAO PAULO, Aug. 3, 2020

SAO PAULO, Aug. 3, 2020 /PRNewswire/ -- We present below the differences between our financial statements in BRGAAP and in International Financial Reporting Standards - IFRS.

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

The complete consolidated financial statements under IFRS for the first half of 2020 are available at our website: www.itau.com.br/investor-relations.

Comparison between BRGAAP^1 and IFRS

R$ million

Adjustments and Adjustments and BRGAAP Reclassifications^ IFRS BRGAAP Reclassifications^ IFRSBalance Sheet 2 2

Jun/30/2020 Dec/31/2019

Total Assets 2,075,122 (121,113) 1,954,009 1,738,713 (101,232) 1,637,481

Cash,CompulsoryDeposits andFinancial 1,405,789 (29,562) 1,376,227 1,164,753 3,535 1,168,288Assets AtAmortized Cost^3 4 6

(-) Provisionfor ExpectedLoss at (48,286) 3,755 (44,531) (38,888) 2,859 (36,029)Amortized Cost^5

FinancialAssets at FairValue Through 192,368 (85,975) 106,393 166,676 (89,930) 76,746OtherComprehensiveIncome ^4

(-) ExpectedLoss at FairValue Through (3,056) 2,942 (114) (3,162) 3,076 (86)OtherComprehensiveIncome ^5

FinancialAssets at FairValue Through 400,834 (9,684) 391,150 345,677 (22,748) 322,929Profit or Loss^4

Tax Assets^7 77,316 (7,063) 70,253 56,835 (7,875) 48,960

Investments inAssociates andJoint Ventures,Goodwill, FixedAssets, 50,156 4,475 54,631 46,822 9,851 56,673IntangibleAssets, AssetsHeld for Saleand OtherAssets

Total 1,937,304 (126,228) 1,811,076 1,595,865 (107,849) 1,488,016Liabilities

FinancialAssets at 1,559,442 (124,021) 1,435,421 1,265,471 (105,641) 1,159,830Amortized Cost^3 6

FinancialAssets at FairValue Through 89,310 645 89,955 48,008 21 48,029Profit or Loss^4

Provision forExpected Loss(Loan 1,080 3,890 4,970 959 3,181 4,140Commitments andFinancialGuarantees) ^5

Provision forInsurance and 214,890 1,253 216,143 217,216 1,118 218,334Pension Plan

Provisions 19,897 - 19,897 21,454 - 21,454

Tax Liabilities 9,286 (4,098) 5,188 13,870 (5,979) 7,891^7

Other 43,399 (3,897) 39,502 28,887 (549) 28,338Liabilities

TotalStockholders' 137,818 5,115 142,933 142,848 6,617 149,465Equity

Non-controlling 11,461 (209) 11,252 10,861 1,679 12,540Interests

TotalControlling 126,357 5,324 131,681 131,987 4,938 136,925Stockholders'Equity ^8

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

^2Resulted from reclassification of assets and liabilities and othereffects from the adoption of IFRS;

^3Resulted from the elimination of transactions between parent company andexclusive funds (particularly PGBL and VGBL funds), which are consolidatedunder IFRS;

^4Refer to reclassification of financial assets between measurementcategories at fair value and amortized cost;

^5Application of criterion for calculation of Expected Loss as set forthby IFRS;

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

^7Difference in accounting, particularly deferred taxes, which are nowaccounted for as net effect between Assets and Liabilities in each one of theconsolidated companies;

^8Reconciliation of Controlling Stockholders' Equity is presented in thefollowing table.

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

R$ million

Stockholders Result * Equity *Reconciliation Jun/30/2020 2nd Q/ 1st 2nd 1st H/ 1st H 20 Q/20 Q/19 20 /19

BRGAAP - Values Attributable 126,357 3,424 3,401 6,815 6,825 13,525to Controlling Stockholders

(a) Expected Loss - Loan andLease Operations and Other 1,829 249 (136) (77) 113 (151)Financial Assets

(b) Adjustment to Fair Value of (696) (257) (126) (6) (383) 119Financial Assets

(c) Acquisition of Interest inPorto Seguro Ita? Unibanco 437 (1) (1) (1) (2) (2)Participa??es S.A.

(d) Criteria for Write-Off of 1,971 65 (21) (24) 44 (63)Financial Assets

(e) Financial Lease Operations 124 (32) (37) (45) (69) (81)

(f) Other adjustments 1,659 (1,725) 379 (135) (1,346) (73)

IFRS - Values Attributable to 131,681 1,723 3,459 6,527 5,182 13,274Controlling Stockholders

IFRS - Values Attributable to 11,252 (3,626) 219 163 (3,407) 319Minority Stockholders

IFRS - Values Attributable toControlling Stockholders and 142,933 (1,903) 3,678 6,690 1,775 13,593Minority Stockholders

* Events net of tax effects

Differences between IFRS and BRGAAP Financial Statements

(a) In the adoption of IFRS 9, there was a change in the calculation model ofincurred loss (IAS 39) to expected loss, considering forward-lookinginformation. On BRGAAP, the concept of Expected Loss is used, pursuant to BACENResolution No. 2,682/99.^9

(b) Under IFRS, stocks and quotas classified as permanent investments weremeasured at fair value and its gains and losses were recorded directly inResult. Additionally, there was a change in the model of classification andmeasurement of financial assets due to the new categories introduced by IFRS 9.

(c) Under IFRS, the effect of accounting at fair value of the acquisition ofinterest in Porto Seguro Ita? Unibanco Participa??es S.A. was recognized.

(d) Criterion for write-off of financial assets on IFRS considers the recoveryexpectative.

(e) Under IFRS (IAS 17) the financial lease operations are recorded as FixedAssets, as a contra-entry of Other Financial Liabilities. Under BRGAAP, as fromSeptember 30^th, 2015, the consideration of these transactions are now recordedin result, in accordance with CMN Resolution No. 3,617/08.

(f) Other Adjustments is mainly due to the impairment of goodwill andintangible assets of Ita? Corpbanca and reversal of the Amortization ofGoodwill under BRGAAP.

^9More details in the Complete Financial Statements for the first half of2020.

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

R$ million

2nd Q/20 2nd Q/19 Recurring Result BRGAAP IFRS Variation BRGAAP IFRS Variation

Result - Attributable to 3,424 1,723 (1,701) 6,815 6,527 (288)Controlling Stockholders

Exclusion of the Non-Recurring (782) (2,085) (1,303) (219) (7) 212Events

Donation to 'Todos pela Sa?de' (834) (834) - - - -

Reclassification of investment 379 379 - - - -in IRB

Impairment of goodwill andintangible assets - Ita? (19) (1,452) (1,433) - - -Corpbanca

Goodwill amortization (206) - 206 (151) - 151

Liability Adequacy Test - (76) (76) (68) (7) 61

Other (102) (102) - - - -

Recurring Result - Attributable 4,205 3,808 (398) 7,034 6,534 (500)to Controlling Stockholders

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

Sao Paulo, August 3rd, 2020.

Alexsandro BroedelGroup Executive Finance Director and Head of Investor Relations

Ita Unibanco - Corporate Communication(11) 5019-8880 / 8881 - imprensa@itau-unibanco.com.br

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SOURCE Ita Unibanco Holding S.A.