PR Newswire | Nov 3, 2020 07:39PM EST

11/03 18:38 CST

Ita Unibanco Holding S.A.: Announcement to the MarketDisclosure of results for the third quarter and from January to September of 2020, according to International Financial Reporting Standards - IFRS SAO PAULO, Nov. 3, 2020

SAO PAULO, Nov. 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 from January to September 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

Sep/30/2020 Dec/31/2019

Total Assets 2,110,120 (111,836) 1,998,284 1,738,713 (101,232) 1,637,481

Cash, Compulsory Deposits and Financial Assets At Amortized Cost ^3 4 6 1,452,126 (22,318) 1,429,808 1,164,753 3,535 1,168,288

(-) Provision for Expected Loss at Amortized Cost^5 (50,208) 3,506 (46,702) (38,888) 2,859 (36,029)

Financial Assets at Fair Value Through Other Comprehensive Income ^4 183,882 (90,073) 93,809 166,676 (89,930) 76,746

(-) Expected Loss at Fair Value Through Other Comprehensive Income ^5 (3,445) 3,327 (118) (3,162) 3,076 (86)

Financial Assets at Fair Value Through Profit or Loss ^4 396,328 (4,011) 392,317 345,677 (22,748) 322,929

Tax Assets^7 79,345 (6,874) 72,471 56,835 (7,875) 48,960

Investments in Associates and Joint Ventures, Goodwill, Fixed Assets, 52,092 4,607 56,699 46,822 9,851 56,673Intangible Assets, Assets Held for Sale and Other Assets

Total Liabilities 1,967,754 (117,398) 1,850,356 1,595,865 (107,849) 1,488,016

Financial Assets at Amortized Cost ^3 6 1,594,801 (113,812) 1,480,989 1,265,471 (105,641) 1,159,830

Financial Assets at Fair Value Through Profit or Loss ^4 78,569 449 79,018 48,008 21 48,029

Provision for Expected Loss (Loan Commitments and Financial Guarantees) 1,030 3,651 4,681 959 3,181 4,140^5

Provision for Insurance and Pension Plan 215,085 1,253 216,338 217,216 1,118 218,334

Provisions 19,789 (1) 19,788 21,454 - 21,454

Tax Liabilities ^7 10,894 (4,251) 6,643 13,870 (5,979) 7,891

Other Liabilities 47,586 (4,687) 42,899 28,887 (549) 28,338

Total Stockholders' Equity 142,367 5,562 147,928 142,848 6,617 149,465

Non-controlling Interests 11,808 295 12,103 10,861 1,679 12,540

Total Controlling Stockholders' Equity ^8 130,559 5,267 135,825 131,987 4,938 136,925

^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 other effectsfrom 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 measurement categoriesat fair value and amortized cost;

^5Application of criterion for calculation of Expected Loss as set forth byIFRS;

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

^7Difference in accounting, particularly deffered 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 * Reconciliation Equity *

Sep/30/2020 3rd Q/20 2nd Q/20 3rd Q/19 jan-sep/20 jan-sep/19

BRGAAP - Values Attributable to Controlling Stockholders 130,559 4,492 3,424 5,576 11,317 19,101

(a)Expected Loss - Loan and Lease Operations and Other Financial Assets 1,854 25 249 (240) 138 (391)

(b)Adjustment to Fair Value of Financial Assets (1,059) (8) (257) (108) (391) 11

(c)Acquisition of Interest in Porto Seguro Ita? Unibanco Participa??es S.A. 436 (1) (1) (1) (3) (3)

(d)Criteria for Write-Off of Financial Assets 1,922 (49) 65 (190) (5) (253)

(e)Financial Lease Operations 99 (25) (32) (30) (94) (111)

(f) Other adjustments 2,015 298 (1,725) 158 (1,048) 85

IFRS - Values Attributable to Controlling Stockholders 135,825 4,732 1,723 5,165 9,914 18,439

IFRS - Values Attributable to Minority Stockholders 12,103 367 (3,626) 340 (3,040) 659

IFRS - Values Attributable to Controlling Stockholders and Minority 147,928 5,099 (1,903) 5,505 6,874 19,098 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 of incurred loss (IAS 39) to expected loss, considering forward-looking information. On BRGAAP, the concept of Expected Loss is used, pursuant to BACEN Resolution No. 2,682/99.^9

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

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

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

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

(f)Other Adjustments is mainly due to the impairment of goodwill and intangible assets of Ita? Corpbanca in the 2nd Q/20 and reversal of the Amortization of Goodwill under BRGAAP.

^9More details in the Complete Financial Statements for January to September, 2020.

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

R$ million

3rd Q/20 3rd Q/19 Recurring Result BRGAAP IFRS Variation BRGAAP IFRS Variation

Result - Attributable to Controlling Stockholders 4,492 4,732 240 5,576 5,165 (411)

Exclusion of the Non-Recurring Events (539) (363) 176 (1,580) (1,431) 149

Mark to market of collateralized securities (346) (346) - - - -

Goodwill amortization (169) - 169 (149) - 149

Voluntary severance program - - - (1,431) (1,431) -

Other (24) (17) 7 - - -

Recurring Result - Attributable to Controlling Stockholders 5,030 5,095 65 7,156 6,596 (560)

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

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.