Reconciliation of Stockholders’ Equity and Net Income between IAS 39 and IFRS 9


	Reference		12/31/2017						12/31/2016						1/1/2016
	Reference		Stockholders’ Equity			Net Income			Stockholders’ Equity			Net Income			Stockholders’ Equity
In accordance with IAS 39 (excluding non-controlling interests)				134,840			23,903			122,582			23,263			112,252
Adjustments arising from changes in the financial asset derecognition policy, net of tax effects		a		2,402			(78	)		2,462			201			2,280
In accordance with IAS 39 (excluding non-controlling interests)				137,242			23,825			125,044			23,464			114,532
Expected loss		b		(9,858	)		(1,948	)		(7,915	)		(3,438	)		(4,615	)
Loan operations and Finance leases				(8,574	)		(1,192	)		(7,385	)		(2,259	)		(5,189	)
Other financial assets				(1,284	)		(756	)		(530	)		(1,179	)		574
Change in financial assets		c		138			101			36			36			—
Adjustment to fair value of financial assets		d		(540	)		359			(787	)		514			(661	)
Effect of adoption of investments in Associates / Joint ventures				(116	)		—			—			—			—
Deferred taxes on the above adjustments				4,324			522			3,774			1,164			2,534
Interest of non-controlling stockholders				188			334			(57	)		(113	)		187

Total adjustments				(5,864	)		(632	)		(4,949	)		(1,837	)		(2,555	)

In accordance with IFRS 9 - attributable to controlling stockholders				131,378			23,193			120,095			21,627			111,977
In accordance with IFRS 9 - attributable to non-controlling stockholders				12,978			32			12,289			389			1,620
In accordance with IFRS 9 - attributable to controlling and non-controlling stockholders				144,356			23,225			132,384			22,016			113,597

(a)

Change in the policy for partial derecognition of financial assets, in accordance with IAS 8, which caused the proportional treatment as asset, aligning the recovery behavior of financial assets and their economic realization.

(b)

Change in the calculation model based on loss incurred (IAS 39) for expected loss, considering prospective information.

(c)

Adequacy of gross carrying amount of financial assets that had their cash flows modified (without derecognition), and which balances were recalculated in accordance with IFRS 9.

(d)

Change in the measurement model of financial assets due to the new categories introduced by IFRS 9.

Consolidated Balance Sheet at 01/01/2016

(In million Reais)


	IAS 39 01/01/2016										IFRS 9 01/01/2016
Assets	Categories	Balance			Reclassifications ^(a)			Remeasurements / Changes ^(b)			Categories	Balance
Cash and deposits on demand			18,544			—							—
Central Bank compulsory deposits to Brazil			66,556			(66,556	)		—				—
Interbank deposits			30,525			(30,525	)		—				—
Securities purchased under agreements to resell			254,404			(254,404	)		—				—
Financial assets held for trading	Held for trading		164,311			(164,311	)		—				—
Pledged as collateral			11,008			(11,008	)		—				—
Other Financial assets held for trading			153,303			(153,303	)		—				—
Financial assets designated at fair value through profit or loss	Available for sale		642			(642	)		—				—
Derivatives			26,755			(26,755	)		—				—
Available-for-sale financial assets	Available for sale		86,045			(86,045	)		—				—
Pledged as collateral			16,706			(16,706	)		—				—
Other Available-for-sale financial assets			69,339			(69,339	)		—				—
Held-to-maturity financial assets	Held to maturity		42,185			(42,185	)		—				—
Pledged as collateral			9,460			(9,460	)		—				—
Other Held-to-maturity financial assets			32,725			(32,725	)		—				—
Loan operations and lease operations portfolio, net	Loans and receivables		447,404			(447,404	)		—				—
Loan operations and lease operations portfolio			474,248			(474,248	)		—				—
(-) Allowance for loan and lease losses			(26,844	)		26,844			—				—
Other financial assets			53,506			(53,506	)		—				—

Cash and deposits on demand			18,544			—			—				18,544
Financial assets			—			1,172,333			2,513				1,174,846
Central Bank compulsory deposits to Brazil			—			66,556			—				66,556
At amortized cost			—			874,360			1,589		amortized cost		875,949
Interbank deposits			—			30,525			—				30,525
Securities purchased under agreements to resell			—			254,404			—				254,404
Securities			—			88,521			(1,007	)			87,514
Loan operations and lease operations portfolio			—			474,248			4,142				478,390
Other financial assets			—			53,506			—				53,506
(-) Provision for expected loss			—			(26,844	)		(1,546	)			(28,390	)
At fair value through other comprehensive income			—			26,069			2,532		fair value through other comprehensive income		28,601
Securities			—			26,069			2,532				28,601
At fair value through profit or loss			—			205,348			(1,608	)	fair value through profit or loss		203,740
Securities			—			178,593			(1,608	)			176,985
Derivatives			—			26,755			—				26,755
Investments in subsidiaries and joint ventures			4,399			—			—				4,399
Fixed assets, net			8,541			—			—				8,541
Goodwill and Intangible assets, net			8,352			—			—				8,352
Tax assets			52,149			—			3,193				55,342
Other assets			12,097			—			82				12,179

Total assets			1,276,415			—			5,788				1,282,203

	IAS 39 01/01/2016										IFRS 9 01/01/2016
Liabilities and stockholders’ equity	Categories	Balance			Reclassifications ^(a)			Remeasurements / Changes ^(b)			Categories	Balance
Deposits			292,610			(292,610	)		—		—		—
Securities sold under repurchase agreements			336,643			(336,643	)		—		—		—
Financial liabilities held for trading			412			(412	)		—		—		—
Derivatives			31,071			(31,071	)		—		—		—
Interbank market debt			156,886			(156,886	)		—		—		—
Institutional market debt			93,918			(93,918	)		—		—		—
Other financial liabilities			68,715			(68,715	)		—		—		—
Reserves for insurance and private pension			129,305			—			—		—		—
Liabilities for capitalization plans			3,044			(3,044	)		—		—		—
Provisions			18,994			—			—		—		—
Tax liabilities			4,971			—			—		—		—
Other liabilities			25,787			—			—		—		—
Total liabilities			1,162,356			—			—		—		—

Financial liabilities			—			983,299			3,643				986,942
At amortized cost			—			951,816			—				951,816
Deposits			—			292,610			—				292,610
Securities sold under repurchase agreements			—			336,643			—				336,643
Interbank market debt			—			156,886			—				156,886
Institutional market debt			—			93,918			—				93,918
Other financial liabilities			—			71,759							71,759
At fair value through profit or loss			—			31,483			—		Financial Liabilities Designated at Fair Value Through Profit or Loss		31,483
Derivatives			—			31,071			—				31,071
Others			—			412			—				412
Provision for expected loss			—			—			3,643				3,643
Loan commitments			—			—			2,820				2,820
Financial guarantees			—			—			823				823
Reserves for insurance and private pension			129,305			—			—				129,305
Provisions			18,994			—			—				18,994
Tax liabilities			4,971			—			2,606				7,577
Other liabilities			25,787			—			1				25,788
Total liabilities			179,057			983,299			6,250				1,168,606
Total stockholders’ equity attributed to the owners of the parent company			112,252			—			(275	)			111,977
Non-controlling interests			1,807			—			(187	)			1,620
Total stockholders’ equity			114,059			—			(462	)			113,597

Total liabilities and stockholders’ equity			1,276,415			—			5,788				1,282,203

(a)

Reclassifications: refer to reclassifications of financial assets between categories of measurement at fair value and amortized cost;

(b)

Remeasurements: refer to expected credit loss and adjustment to fair value of financial assets reclassified between measurement categories; and financial assets changed and not written-off, which balances were recalculated in accordance with IFRS 9.

Consolidated Balance Sheet at 12/31/2017

(In million Reais)


	IAS 39 12/31/2017											IFRS 9 12/31/2017
Assets	Categories		Balance			Reclassifications ^(a)			Remeasurements / Changes ^(b)			Categories	Balance
Cash and deposits on demand				18,749			—			—				—
Central Bank compulsory deposits to Brazil				98,837			(98,837	)		—				—
Interbank deposits				29,053			(29,053	)		—				—
Securities purchased under agreements to resell				244,707			(244,707	)		—				—
Financial assets held for trading		Held for trading		270,121			(270,121	)		—				—
Pledged as collateral				30,585			(30,585	)		—				—
Other Financial assets held for trading				239,536			(239,536	)		—				—
Financial assets designated at fair value through profit or loss		Available for sale		1,746			(1,746	)		—				—
Derivatives				22,843			(22,843	)		—				—
Available-for-sale financial assets		Available for sale		102,284			(102,284	)		—				—
Pledged as collateral				33,671			(33,671	)		—				—
Other Available-for-sale financial assets				68,613			(68,613	)		—				—
Held-to-maturity financial assets		Held to maturity		36,560			(36,560	)		—				—
Pledged as collateral				974			(974	)		—				—
Other Held-to-maturity financial assets				35,586			(35,586	)		—				—
Loan operations and lease operations portfolio, net		Loans and receivables		465,472			(465,472	)		—				—
Loan operations and lease operations portfolio				493,367			(493,367	)		—				—
(-) Allowance for loan and lease losses				(27,895	)		27,895			—				—
Other financial assets				59,568			(59,568	)		—				—

Cash and deposits on demand				18,749			—			—				18,749
Financial assets				—			1,331,191			(940	)			1,330,251
Central Bank compulsory deposits to Brazil				—			98,837			—				98,837
At amortized cost				—			909,104			(3,375	)	Amortized cost		905,729
Interbank deposits				—			29,053			(5	)			29,048
Securities purchased under agreements to resell				—			244,707			—				244,707
Securities				—			110,304			1,120				111,424
Loan operations and lease operations portfolio				—			493,367			4,352				497,719
Other financial assets				—			59,568			—				59,568
(-) Provision for expected loss				—			(27,895	)		(8,842	)			(36,737	)
At fair value through other comprehensive income				—			49,029			3,120		Fair value through other comprhensive income		52,149
Securities				—			49,029			3,120				52,149
At fair value through profit or loss				—			274,221			(685	)	Fair value through profit or loss		273,536
Securities				—			251,378			(685	)			250,693
Derivatives				—			22,843			—				22,843
Investments in subsidiaries and joint ventures				5,171			—			(116	)			5,055
Fixed assets, net				7,359			—			—				7,359
Goodwill and Intangible assets, net				19,383			—			—				19,383
Tax assets				41,927			—			2,322				44,249
Other assets				11,189			—			4				11,193

Total assets				1,434,969			—			1,270				1,436,239

	IAS 39 12/31/2017											IFRS 9 12/31/2017
Liabilities and stockholders’ equity	Categories		Balance			Reclassifications ^(a)			Remeasurements / Changes ^(b)			Categories	Balance
Deposits				402,938			(402,938	)		—				—
Securities sold under repurchase agreements				312,634			(312,634	)		—				—
Financial liabilities held for trading				465			(465	)		—				—
Derivatives				26,746			(26,746	)		—				—
Interbank market debt				129,616			(129,616	)		—				—
Institutional market debt				98,482			(98,482	)		—				—
Other financial liabilities				77,613			(77,613	)		—				—
Reserves for insurance and private pension				181,232			—			—				—
Liabilities for capitalization plans				3,301			(3,301	)		—				—
Provisions				19,736			—			—				—
Tax liabilities				7,839			—			—				—
Other liabilities				26,361			—			—				—
Total liabilities				1,286,963			—			—				—

Financial liabilities				—			1,051,795			4,922				1,056,717
At amortized cost				—			1,024,584			—				1,024,584
Deposits				—			402,938			—				402,938
Securities sold under repurchase agreements				—			312,634			—				312,634
Interbank market debt				—			124,587			—				124,587
Institutional market debt				—			98,482			—				98,482
Other financial liabilities				—			85,943			—				85,943
At fair value through profit or loss				—			27,211			—		Financial Liabilities Designated at Fair Value Through Profit or Loss		27,211
Derivatives				—			26,746			—				26,746
Others				—			465			—				465
Provision for expected loss				—			—			4,922				4,922
Loan commitments				—			—			3,015				3,015
Financial guarantees				—			—			1,907				1,907
Reserves for insurance and private pension				181,232			—			—				181,232
Provisions				19,736			—			—				19,736
Tax liabilities				7,839			—			(3	)			7,836
Other liabilities				26,361			—			1				26,362
Total liabilities				235,168			1,051,795			4,920				1,291,883
Total stockholders’ equity attributed to the owners of the parent company				134,840			—			(3,462	)			131,378
Non-controlling interests				13,166			—			(188	)			12,978
Total stockholders’ equity				148,006			—			(3,650	)			144,356

Total liabilities and stockholders’ equity				1,434,969			—			1,270				1,436,239

(a)

Reclassifications: refer to reclassifications of financial assets between categories of measurement at fair value and amortized cost;

(b)