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Segment Information
 12 Months Ended
Dec. 31, 2019
Text Block [Abstract]  
Segment Information
Note 30 – Segment Information
The current operational and reporting segments of ITAÚ UNIBANCO HOLDING are described below:
 
•
 
Retail Banking
The segment comprises retail customers, account holders and
non-account
holders, individuals and legal entities, high income clients (Itaú Uniclass and Personnalité) and the companies segment (microenterprises and small companies). It includes financing and credit offers made outside the branch network, in addition to credit cards and payroll loans.
 
•
 
Wholesale Banking
It comprises products and services offered to middle-market companies, high net worth clients (Private Banking), and the operation of Latin American units and Itaú BBA, which is the unit responsible for business with large companies and Investment Banking operations.
 
•
 
Activities with the Market + Corporation
Basically corresponds to the result arising from capital surplus, subordinated debt surplus and the net balance of tax credits and debits. It also includes the financial margin on market trading, Treasury operating costs, and equity in earnings of companies not included in either of the other segments.
 
a)
Basis of Presentation
Segment information is based on the reports used by senior management to assess performance and to make decisions about allocation of funds for investment and other purposes.
These reports use a variety of information for management purposes, including financial and
non-financial
information supported by bases different from information prepared according to accounting practices adopted in Brazil. The main indicators used for monitoring business performance are Recurring Income, and Return on Economic Capital allocated to each business segment.
Information by segment has been prepared in accordance with accounting practices adopted in Brazil and is adjusted by the items below:
Allocated capital:
The statements for each segment consider capital allocation based on a proprietary model and consequent impacts on results arising from this allocation. This model includes the following components: Credit risk, operating risk, market risk and insurance underwriting risk.
Income tax rate:
We take the total income tax rate, net of the tax effect from the payment of interest on capital, for the Retail Banking, Wholesale Banking and Activities with the Market + Corporation. The difference between the income tax amount calculated by segment and the effective income tax amount, as stated in the consolidated financial statements, is allocated to the Trading + Institutional column.
 
 
•
 
Reclassification and application of managerial criteria
The managerial statement of income was used to prepare information per segment. These statements were obtained based on the statement of income adjusted by the impact of
non-recurring
events and the managerial reclassifications in income.
The main reclassifications between the accounting and managerial results are:
Operating revenues:
Considers the opportunity cost for each operation. The financial statements were adjusted so that the stockholders’ equity was replaced by funding at market price. Subsequently, the financial statements were adjusted to include revenues related to capital allocated to each segment. The cost of subordinated debt and the respective remuneration at market price were proportionally allocated to the segments, based on the economic capital allocated.
 
Tax effects of hedging:
The tax effects of hedging of investments abroad were adjusted – they were originally recorded as tax expenses (PIS and COFINS) and Income Tax and Social Contribution on Net Income – and are now reclassified to financial margin.
Insurance:
The main reclassifications of revenues refer to the financial margins obtained from technical provisions for insurance, pension plans and capitalization, in addition to revenue from management of pension plan funds.
Other reclassifications:
Other Income, Share of Income of Associates and joint ventures,
Non-
Operating Income, Profit Sharing of Management Members and Expenses for Credit Card Reward Program were reclassified to those lines representing the way the ITAÚ UNIBANCO HOLDING manages its business, to provide a clearer understanding of our performance.
The adjustments and reclassifications column shows the effects of the differences between the accounting principles followed for the presentation of segment information, which are substantially in line with the accounting practices adopted for financial institutions in Brazil, except as described above, and the policies used in the preparation of these consolidated financial statements according to IFRS. Significant adjustments are as follows:
 
 • 
Requirements for impairment testing of financial assets are based on the expected loan losses model;
 
 • 
Adjustment to fair value due to reclassifications of financial assets to categories of measurement at amortized cost, at fair value through profit and loss or at fair value through other comprehensive income, as a result of the concept of business models of IFRS 9;
 
 • 
Financial assets modified and not
written-off,
with their balances recalculated in accordance with the requirements of IFRS 9;
 
 • 
Effective interest rate of financial assets and liabilities measured at amortized cost, appropriating revenues and costs directly attributable to their acquisition, issue or disposal over the transaction term, whereas in the standards adopted in Brazil, recognition of expenses and revenues from fees occurs at the time these transactions are contracted;
 
 • 
Goodwill generated in a business combination is not amortized, whereas in the standards adopted in Brazil, it is amortized.
 
b) Consolidated Statement of Managerial Result
ITAÚ UNIBANCO HOLDING S.A.
From January 1 to December 31, 2019
 
   
Retail
Banking
  
Wholesale
Banking
  
Activities with the
Market +

Corporation
  
ITAÚ
UNIBANCO
  
Adjustments
  
IFRS consolidated 
(
3)
 
Operating revenues
  
 
79,227
 
 
 
30,650
 
 
 
9,913
 
 
 
119,790
 
 
 
(2,711
) 
 
 
117,079
 
Interest margin
(1)
   46,764   18,778   9,088   74,630   (5,280)   69,350 
Revenues from banking services
   25,411   11,306   590   37,307   1,725   39,032 
Income from insurance and private pension operations before claim and selling expenses
   7,052   566   235   7,853   (3,300)   4,553 
Other revenues
   0   0   0   0   4,144   4,144 
Cost of Credit
  
 
(16,072
) 
 
 
(2,082
) 
 
 
0
 
 
 
(18,154
) 
 
 
882
 
 
 
(17,272
) 
Claims
  
 
(1,206
) 
 
 
(59
) 
 
 
0
 
 
 
(1,265
) 
 
 
(30
) 
 
 
(1,295
) 
Operating margin
  
 
61,949
 
 
 
28,509
 
 
 
9,913
 
 
 
100,371
 
 
 
(1,859
) 
 
 
98,512
 
Other operating income / (expenses)
  
 
(41,430
) 
 
 
(15,403
) 
 
 
(986
) 
 
 
(57,819
) 
 
 
(9,450
) 
 
 
(67,269
) 
Non-interest
expenses
(2)
   (36,346)   (13,940)   (365)   (50,651)   (10,361)   (61,012) 
Tax expenses for ISS, PIS and COFINS and Other
   (5,084)   (1,463)   (621)   (7,168)   (404)   (7,572) 
Share of profit or (loss) in associates and joint ventures
   0   0   0   0   1,315   1,315 
Net income before income tax and social contribution
  
 
20,519
 
 
 
13,106
 
 
 
8,927
 
 
 
42,552
 
 
 
(11,309
) 
 
 
31,243
 
Income tax and social contribution
   (7,095)   (3,856)   (2,545)   (13,496)   10,066   (3,430) 
Non-controlling
interest in subsidiaries
   (198)   (444)   (51)   (693)   (7)   (700) 
Net income
  
 
13,226
 
 
 
8,806
 
 
 
6,331
 
 
 
28,363
 
 
 
(1,250
) 
 
 
27,113
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total assets (*) – 12/31/2019
  
 
1,056,275
 
 
 
682,271
 
 
 
147,901
 
 
 
1,738,713
 
 
 
(101,232
) 
 
 
1,637,481
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total liabilities – 12/31/2019
  
 
1,013,186
 
 
 
625,614
 
 
 
104,799
 
 
 
1,595,865
 
 
 
(107,849
) 
 
 
1,488,016
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(*)
Includes:
       
Investments in associates and joint ventures
   1,911   0   13,666   15,577   (480)   15,097 
Fixed assets, net
   5,252   1,160   0   6,412   754   7,166 
Goodwill and Intangible assets, net
   6,681   7,645   0   14,326   5,393   19,719 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
(1)
Includes interest and similar income, expenses and dividend of R$ 64,325, net gains (loss) on investment securities and derivatives of R$ 4,098 and results from foreign exchange operations and exchange variation of transactions abroad of R$ 927.
(2)
Refers to general and administrative expenses including depreciation and amortization expenses of R$ (4,630).
(3)
The IFRS consolidated figures do not represent the sum of the segments because there are intercompany transactions that were eliminated only in the consolidated financial statements. Segments are assessed by top management, net of income and expenses between related parties.
 
ITAÚ UNIBANCO HOLDING S.A.
From January 1 to December 31, 2018
 
   
Retail
Banking
  
Wholesale
Banking
  
Activities with the
Market +

Corporation
  
ITAÚ
UNIBANCO
  
Adjustments
  
IFRS
consolidated 
(
3)
 
Operating revenues
  
 
72,182
 
 
 
29,389
 
 
 
10,246
 
 
 
111,817
 
 
 
(7,617
) 
 
 
104,200
 
Interest margin
(1)
   40,243   18,930   9,912   69,085   (8,380)   60,705 
Revenues from banking services
   25,131   9,810   138   35,079   1,730   36,809 
Income from insurance and private pension operations before claim and selling expenses
   6,808   649   196   7,653   (3,692)   3,961 
Other revenues
   —     —     —     —     2,725   2,725 
Cost of Credit
  
 
(12,526
) 
 
 
(1,540
) 
 
 
—  
 
 
 
(14,066
) 
 
 
5,112
 
 
 
(8,954
) 
Claims
  
 
(1,160
) 
 
 
(68
) 
 
 
—  
 
 
 
(1,228
) 
 
 
—  
 
 
 
(1,228
) 
Operating margin
  
 
58,496
 
 
 
27,781
 
 
 
10,246
 
 
 
96,523
 
 
 
(2,505
) 
 
 
94,018
 
Other operating income / (expenses)
  
 
(40,002
) 
 
 
(15,217
) 
 
 
(1,070
) 
 
 
(56,289
) 
 
 
(7,121
) 
 
 
(63,410
) 
Non-interest
expenses
(2)
   (35,296)   (13,817)   (331)   (49,444)   (8,094)   (57,538) 
Tax expenses for ISS, PIS and COFINS and Other
   (4,706)   (1,400)   (739)   (6,845)   226   (6,619) 
Share of profit or (loss) in associates and joint ventures
   —     —     —     —     747   747 
Net income before income tax and social contribution
  
 
18,494
 
 
 
12,564
 
 
 
9,176
 
 
 
40,234
 
 
 
(9,626
) 
 
 
30,608
 
Income tax and social contribution
   (6,939)   (3,829)   (2,964)   (13,732)   8,763   (4,969) 
Non-controlling
interest in subsidiaries
   (184)   (550)   (35)   (769)   37   (732) 
Net income
  
 
11,371
 
 
 
8,185
 
 
 
6,177
 
 
 
25,733
 
 
 
(826
) 
 
 
24,907
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total assets (*) – 12/31/2018
  
 
1,042,145
 
 
 
655,393
 
 
 
142,853
 
 
 
1,649,613
 
 
 
(96,816
) 
 
 
1,552,797
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total liabilities – 12/31/2018
  
 
1,005,194
 
 
 
597,528
 
 
 
93,546
 
 
 
1,505,490
 
 
 
(103,159
) 
 
 
1,402,331
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(*)
Includes:
       
Investments in associates and joint ventures
   1,220   —     11,438   12,658   (639)   12,019 
Fixed assets, net
   5,526   879   —     6,405   897   7,302 
Goodwill and Intangible assets, net
   6,845   8,178   —     15,023   4,306   19,329 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
(1)
Includes interest and similar income,expenses and dividend of R$ 62,565, net gains (loss) on investment securities and derivatives of R$ (4,834) and results from foreign exchange operations and exchange variation of transactions abroad of R$ 2,974.
(2)
Refers to general and administrative expenses including depreciation and amortization expenses of R$ (3,332).
(3)
The IFRS Consolidated figures do not represent the sum of the segments because there are intercompany transactions that were eliminated only in the consolidated financial statements. Segments are assessed by top management, net of income and expenses between related parties.
ITAÚ UNIBANCO HOLDING S.A.
From January 1 to December 31, 2017
 
   
Retail
Banking
  
Wholesale
Banking
  
Activities with

the Market +

Corporation
  
ITAÚ
UNIBANCO
  
Adjustments
  
IFRS
consolidated 
(
3)
 
Operating revenues
  
 
69,921
 
 
 
28,748
 
 
 
10,623
 
 
 
109,292
 
 
 
2,231
 
 
 
111,523
 
Interest margin
(1)
   38,570   19,426   10,515   68,511   2,731   71,242 
Revenues from banking services
   24,096   8,876   42   33,014   1,434   34,448 
Income from insurance and private pension operations before claim and selling expenses
   7,255   446   66   7,767   (3,068)   4,699 
Other revenues
   —     —     —     —     1,134   1,134 
Cost of Credit
  
 
(12,166
) 
 
 
(5,829
) 
 
 
(6
) 
 
 
(18,001
) 
 
 
(1,773
) 
 
 
(19,774
) 
Claims
  
 
(1,222
) 
 
 
(53
) 
 
 
—  
 
 
 
(1,275
) 
 
 
83
 
 
 
(1,192
) 
Operating margin
  
 
56,533
 
 
 
22,866
 
 
 
10,617
 
 
 
90,016
 
 
 
541
 
 
 
90,557
 
Other operating income / (expenses)
  
 
(37,601
) 
 
 
(14,523
) 
 
 
(1,647
) 
 
 
(53,771
) 
 
 
(6,204
) 
 
 
(59,975
) 
Non-interest
expenses
(2)
   (33,186)   (13,265)   (831)   (47,282)   (6,212)   (53,494) 
Tax expenses for ISS, PIS and COFINS and Other
   (4,415)   (1,258)   (816)   (6,489)   (542)   (7,031) 
Share of profit or (loss) in associates and joint ventures
   —     —     —     —     550   550 
Net income before income tax and social contribution
  
 
18,932
 
 
 
8,343
 
 
 
8,970
 
 
 
36,245
 
 
 
(5,663
) 
 
 
30,582
 
Income tax and social contribution
   (7,107)   (2,412)   (1,775)   (11,294)   3,937   (7,357) 
Non-controlling
interest in subsidiaries
   (166)   117   (23)   (72)   40   (32) 
Net income
  
 
11,659
 
 
 
6,048
 
 
 
7,172
 
 
 
24,879
 
 
 
(1,686
) 
 
 
23,193
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total assets (*) – 12/31/2017
  
 
970,137
 
 
 
604,384
 
 
 
119,309
 
 
 
1,503,503
 
 
 
(67,264
) 
 
 
1,436,239
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total liabilities – 12/31/2017
  
 
934,835
 
 
 
548,185
 
 
 
71,873
 
 
 
1,364,566
 
 
 
(72,683
) 
 
 
1,291,883
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(*)
Includes:
       
Investments in associates and joint ventures
   1,168   —     3,986   5,154   (99)   5,055 
Fixed assets, net
   5,105   1,290   —     6,395   964   7,359 
Goodwill and Intangible assets, net
   8,739   7,694   —     16,433   2,950   19,383 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
(1)
Includes net interest and similar income and expenses of R$ 67,311, net gain (loss) on investment securities and derivatives of R$ 4,181 and foreign exchange results and exchange variation on transactions of abroad R$ (250).
(2)
Refers to general and administrative expenses including depreciation and amortization expenses of R$ (3,034).
(3)
The IFRS Consolidated figures do not represent the sum of the segments because there are intercompany transactions that were eliminated only in the consolidated financial statements. Segments are assessed by top management, net of income and expenses between related parties.
 
c) Result of
Non-Current
Assets and Main Services and Products by Geographic
Region
 
   
12/31/2019
   
12/31/2018
 
  
Brazil
   
Abroad
   
Total
   
Brazil
   
Abroad
   
Total
 
Non-current
assets
   16,123    10,762    26,885    15,435    11,196    26,631 
 
   
01/01 to 12/31/2019
   
01/01 to 12/31/2018
   
01/01 to 12/31/2017
 
  
Brazil
   
Abroad
   
Total
   
Brazil
   
Abroad
   
Total
   
Brazil
   
Abroad
   
Total
 
Income related to financial operations 
(1)
 
(2)
   117,541    27,767    145,308    108,362    22,955    131,317    131,689    17,883    149,572 
Income from insurance and private pension operations before claim and selling expenses
   4,423    130    4,553    3,812    149    3,961    4,551    148    4,699 
Revenues from banking services
   35,283    3,749    39,032    33,211    3,598    36,809    31,296    3,152    34,448 
 
(1)
Includes interest and similar income, dividend income, net gain (loss) on investment securities and derivatives, foreign exchange results, and exchange variation on transactions abroad.
(2)
ITAÚ UNIBANCO HOLDING does not have customers representing 10% or higher of its revenues.