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2021 Reference From Itau Unibanco Holding S.A.
Itaú Unibanco Holding S.A. REFERENCE FORM Base Date: 12.31.2021 (in accordance with Attachment 24 to CVM lnstruction No. 480 of December 7, 2009 “CVM lnstruction No. 480”, as amended) ltaú Unibanco Holding S.A., a company enrolled underneath the National Register of Legal Entities/Ministry of Finance (CNPJ/MF) underneath No. 60.872.504/0001-23, with its Articles of lncorporation registered with the Identification Trade Board of the State of São Paulo underneath NlRE No. 35.3.0001023-0, and registered as a publicly-held firm with the Brazilian Securities and Exchange Commission (“CVM”) underneath No. 19348 (“Bank” or “lssuer”). The lssuer’s head workplace is positioned at Praça Alfredo Egydio de SouzaAranha, Head Office 100, Torre Olavo Setubal, Parque Jabaquara, within the City and State of São Paulo, Brazil, Zip Code 04344-902. The lnvestor Relations division is positioned at Praça Alfredo Egydio de Souza Aranha, 100, Piso Metrô, Torre Olavo Setubal, Parque Jabaquara, within the City and State of São Paulo, Brazil, Zip Code 04344-902. The Group Head Investor Relations Office of lnvestor Relations is Mr. Renato Lulia Jacob. The lnvestor Relations Department’s phone quantity is (0xx11) 2794-3547, fax quantity is +55 11 5019-8717, and e-mail is ri@itau-unibanco.com.br. PricewaterhouseCoopers Auditores Independentes Ltda. for the years ended lndependent Auditors Firm 12/31/2021, 12/31/2020 and 12/31/2019. Bookkeeping Agent Itaú Corretora de Valores S.A. The lssuer’s stockholders’ service is carried out on the branches of ltaú Unibanco S.A., the pinnacle workplace of which is positioned at Praça AlfredoEgydio Stockholders Service de Souza Aranha, 100, Torre Olavo Setubal, Parque Jabaquara, within the City and State of São Paulo, Brazil, Zip Code 04344-902. Newspapers from which the Company discloses O Estado de São Paulo newspaper. lnformation http://www.itau.com.br/relacoes-com-investidores Website The data included within theCompany’s web site shouldn’t be an integral a part of this Reference Form. Last replace of this Reference Form 05/31/2022
Index ITEM 1. IDENTIFICATION OF THE PEOPLE RESPONSIBLE FOR THE CONTENT OF THE FORM 4 ITEM 2. AUDITORS 5 ITEM 3. SELECTED FINANCIAL INFORMATION 7 ITEM 4. RISK FACTORS 15 ITEM 5. RISK MANAGEMENT AND INTERNAL CONTROL POLICY 54 ITEM 6. HISTORY OF THE ISSUER 85 ITEM 7. ACTIVITIES OF THE ISSUER 87 ITEM 8. EXTRAORDINARY BUSINESS 147 ITEM 9. RELEVANT ASSETS 149 ITEM 10. EXECUTIVE OFFICERS’ COMMENTS 155 ITEM 11. PROJECTIONS 187 ITEM 12. GENERAL STOCKHOLDERS’ MEETINGS AND MANAGEMENT 191 ITEM 13. REMUNERATION OF DIRECTORS 253 ITEM 14. HUMAN RESOURCES 282 ITEM 15. CONTROL AND ECONOMIC GROUP 288 ITEM 16. TRANSACTIONS WITH RELATED PARTIES 306 ITEM 17. CAPITAL 313 ITEM 18. SECURITIES 315 ITEM 19. BUYBACK PLANS AND TREASURY SECURITIES 356 ITEM 20. SECURITIES TRADING POLICY 359 ITEM 21. INFORMATION DISCLOSURE POLICY 362 REPORT OF INDEPENDENT AUDITORS ON REFERENCE FORM (CVM INSTRUCTION 480) 364
IDENTIFICATION OF THE PEOPLE RESPONSIBLE FOR THE CONTENT OF THE FORM 1.0 Identification: Name of the individual chargeable for the content material of the shape Position of the individual accountable Milton Maluhy Filho Chief Executive Officer Renato Lulia Jacob Head of Investor Relations 1.1 Chief Executive Officer’s Statement: Name of the individual chargeable for the content material of the shape Position of the individual accountable Milton Maluhy Filho Chief Executive Officer The above-certified officer states that: a. he has revised the reference kind; b. all data contained within the kind is in compliance with the provisions of CVM Instruction No. 480, notably articles 14 to 19; c. the data contained within the kind is a real, correct and full portrait of the Issuer’s financial and monetary scenario and of the dangers inherent in its actions and within the securities issued by it. Signature: 1.2 Head of Investor Relations’ assertion: Name of the individual chargeable for the content material of the shape Position of the individual accountable Renato Lulia Jacob Head of Investor Relations The above-certified officer states that: a. he has revised the reference kind; b. all data contained within the kind is in compliance with the provisions of CVM Instruction No. 480, notably articles 14 to 19; c. the data contained within the kind is a real, correct and full portrait of the Issuer’s financial and monetary scenario and of the dangers inherent in its actions and within the securities issued by it. Signature: 1.3 Chief Executive Officer’s/Head of Investor Relations’ Statement: Name of the individual chargeable for the content material of the shape Position of the individual accountable Milton Maluhy Filho Chief Executive Officer Renato Lulia Jacob Head of Investor Relations The above-certified officers state that: a. they’ve revised the reference kind; b. all data contained within the kind is in compliance with the provisions of CVM Instruction No. 480, notably articles 14 to 19; c. the data contained within the kind is a real, correct and full portrait of the Issuer’s financial and monetary scenario and of the dangers inherent in its actions and within the securities issued by it.
– AUDITORS Items-2.1. and a pair of.2.-Auditors 2021 2020 2019 Is there an auditor? YES YES YES Auditor’s Brazilian Securities and Exchange 2879 2879 2879 Commission (“CVM”) Code Type of auditor Brazilian Brazilian Brazilian Pricewaterhousecoopers Auditores Corporate identify Pricewaterhousecoopers Auditores Independentes Ltda. Pricewaterhousecoopers Auditores Independentes Ltda. Independentes Ltda. Corporate Taxpayer’s Registry (CNPJ) 61.562.112/0001-20 61.562.112/0001-20 61.562.112/0001-20 quantity Service engagement date 03/25/2021 02/10/2020 01/31/2019 Initial date of service provision 01/01/2021 01/01/2020 01/01/2019 R$/Thousand 1. Audit of annual consolidated monetary 1. Audit of annual consolidated monetary statements, evaluation of quarterly monetary statements, evaluation of quarterly monetary statements, in addition to audit and evaluation of statements, in addition to audit and evaluation of monetary monetary statements of our subsidiaries, companies 1. Audit of monetary statements, challenge of reviews required by 75,536 statements of our subsidiaries, companies associated to challenge associated to challenge of consolation letters in securities regulatory authorities and challenge of consolation letters; of consolation letters in securities choices, challenge of reviews choices, challenge of reviews required by regulatory required by regulatory authorities, audit of inner authorities, audit of inner controls associated to controls associated to Sarbanes-Oxley Act necessities; Sarbanes-Oxley Act necessities; 2. Independent assurance on: Issues of implementation of programs in subsidiaries; inner controls, inclusive on sure companies supplied to 2. Independent assurance engagements on shoppers; sustainability report, MD&A, Integrated inner controls, together with companies supplied to Report and annual consolidated report; sure shoppers; sustainability report, MD&A report and a pair of. Other audit procedures and challenge of particular-objective 4,472 commitments assumed with regulatory authorities Integrated Annual Report; commitments assumed reviews; and compliance with monetary covenants. with regulators; compliance with agreements and Description of companies engaged Appraisal reviews on guide worth of firms, accounting diligences; and beforehand agreed-upon procedures on stability sheets of firms bought and revenue share calculation; 3. Review of inquiries to tax authorities on tax points, evaluation 3. Review of tax calculation and settlement and three. Review of tax calculation and settlement and 688 of tax calculation and settlement and compliance with tax compliance with tax guidelines; compliance with tax guidelines; guidelines; 4. Acquisition of coaching, danger administration 4. Procurement of technical supplies and consulting for a system carried out in a 4. Other companies associated to coaching, procurement of 962 impartial evaluation of technique of preparation subsidiary, analysis on the adequacy of inner technical supplies and surveys; of prudential and monetary reviews. controls and acquisition of technical supplies. 5. Review required by regulatory authorities on research of influence of a brand new accounting commonplace.
2.3. Supply different data that the issuer could deem related The coverage adopted by Itaú Unibanco Holding’s Audit Committee to keep away from conflicts of curiosity, lack of independence or objectivity of its impartial auditors is to make sure that the independence rules have been noticed when companies have been contracted and supplied, together with their approval. These tasks are formalized within the Audit Committee Regulations and in company insurance policies. Additional data on gadgets 2.1/2.2: With respect to the Service Period – The service contracting date will likely be retroactive to January 1 of the yr in query, comparable to the start of the authorized relationship between the Parties. With respect to the service supplier’s interval of service – The contracting will likely be in power till the top of the audit service and the issuance of the respective reviews associated to the bottom date of December 31 of the yr in query. 6
SELECTED FINANCIAL INFORMATION 3.1- Financial Information Company X Consolidated (R$) December 31, 2021 2020 2019 a. stockholders’ fairness 164,476,095,000 154,525,314,000 149,465,080,000 b. whole belongings 2,069,206,074,000 2,019,251,302,000 1,637,481,124,000 c. earnings (bills) from monetary operations (1) 75,209,000,000 50,053,064,000 69,350,430,000 d. gross earnings 111,994,663,000 74,219,221,000 98,512,805,000 e. web earnings 28,384,293,000 15,063,894,000 27,813,299,000 f. variety of shares, ex treasury shares (models) 9,779,890,623 9,762,456,896 9,745,601,763 g. guide worth per share (Brazilian reais/unit) 16.82 15.83 15.34 h. fundamental earnings per share (Brazilian reais/ unit) 2.74 1.94 2.78 i. diluted earnings per share (Brazilian reais/ unit) 2.72 1.93 2.77 j. different accounting data chosen by the issuer N/A N/A N/A (1) As a monetary establishment, the Bank considers curiosity and comparable earnings, truthful worth of monetary belongings and liabilities, and overseas trade outcomes and trade variations on transactions overseas as indicators of web income. 3.2. If the issuer disclosed within the earlier yr or if it needs to reveal on this kind non-accounting measures akin to EBITDA (earnings earlier than curiosity, taxes, depreciation and amortization) or EBIT (earnings earlier than curiosity and taxes), the issuer ought to: a) Inform the worth of non-accounting measures No non-accounting measures have been disclosed within the earlier yr in our monetary statements underneath IFRS. b) Perform reconciliation between the quantities disclosed and the quantities within the audited monetary statements Not relevant. c) Explain why it believes that such measurement is probably the most acceptable for the right understanding of its monetary place and the outcomes of its operations Not relevant. 3.3. Identify and touch upon any occasion subsequent to the newest monetary statements for the yr that may considerably change them Acquisition of Ideal Holding Financeira S.A. On January 13, 2022, Itaú Unibanco Holding S.A. entered into an settlement to buy as much as 100% of the capital inventory of Ideal Holding Financeira S.A. (IDEAL). This buy will likely be carried out in two phases over 5 years. In the primary section, Itaú Unibanco Holding S.A. will purchase 50.1% of IDEAL’s whole and voting capital for roughly R$ 650 million to thus maintain the management of that firm. In the second section, after 5 years, Itaú Unibanco Holding S.A. could train the precise to buy the remaining curiosity to succeed in 100% of IDEAL’s capital inventory. IDEAL is a 100% digital brokerage home that presently gives digital buying and selling and direct market entry (DMA) options, inside a versatile and cloud-based mostly platform. The administration and conduct of IDEAL’s enterprise will proceed to be impartial of Itaú Unibanco Holding S.A. in accordance with the phrases and circumstances of the Shareholders’ Agreement of this transaction and Itaú Unibanco Holding S.A. can have non-unique provision of companies. The efficient acquisitions and monetary settlements will happen after the required regulatory approvals are obtained. 7
Techfin: a partnership between Itaú Unibanco and TOTVS On 04/12/2022 we’ve entered into an settlement with TOTVS S.A. (“TOTVS”) to create a three way partnership (“JV”) provisionally generally known as TOTVS TECHFIN S.A. (“TECHFIN”), whose targets are the distribution and growth of monetary companies built-in into the TOTVS administration programs based mostly on intensive use of information, supposed for company shoppers and all the provide chain, prospects and staff. The settlement states that earlier than the operation is consummated, TOTVS will contribute belongings from its present TECHFIN operation to the corporate wherein Itaú Unibanco will maintain 50% of the fairness, and every shareholder will likely be entitled to appoint half of the members of the Board of Directors and the Executive Board. For our fairness stake we can pay TOTVS R$610 million and, as an earnout, we can pay as much as R$450 million after 5 years topic to attainment of targets aligned with progress and efficiency targets. In addition, we’ll contribute our dedication to offer funding for the present and future operations, credit score experience and the event of recent merchandise at TECHFIN. The partnership creates an organization that can mix expertise and monetary options, whereas including the supplementary experience of the shareholders to supply company shoppers, in an agile and built-in method, the very best expertise in contracting merchandise instantly on the platforms already supplied by TOTVS. Bringing collectively the capabilities of Itaú Unibanco and TOTVS may even allow the brand new firm to take advantage of alternatives in a personalised and contextualized method, anticipating prospects’ wants in such a manner as to completely replicate the technique and advance of Open Finance for firms. In addition, the partnership enhances the place of Itaú Unibanco and TOTVS on the head of the digital transformation and evolution of the monetary sector. The conclusion of this transaction is topic to approval by the Brazilian Antitrust Authority (CADE) and the Central Bank of Brazil (BACEN). 3.4. Describe the coverage on allocation of earnings for the previous three years, indicating: The Board of Directors submits to the Annual General Stockholders’ Meeting, along with the monetary statements, a proposal for the allocation of revenue for the yr. Main allocations are as follows: 5% to the Legal Reserve, which should not exceed 20% of capital inventory; distribution of dividends to stockholders (please see gadgets “b” and “c” beneath); and recognition of the Statutory Reserve, whose objective is to ensure funds for fee of dividends, together with as curiosity on capital, or advances, to take care of the stream of stockholders’ remuneration. Its stability can also be used: in redemption, reimbursement or share buyback transactions, underneath present laws; and in contribution to capital inventory, together with via new share bonus. Statutory Reserve will likely be comprised of funds: a)equal to as much as 100% of revenue for the yr, adjusted in accordance with Article 202 of Brazilian Corporate Law (Law No. 6,404/76) (please see merchandise 3.9), respecting always the stockholders’ proper to obligatory dividends, underneath the phrases of those Bylaws and relevant laws; b) equal to at most 100% of the paid-up portion of Revaluation Reserves, recorded as retained earnings; c) equal to at most 100% of the restated quantities for prior years, recorded as retained earnings; and d) arising from credit comparable to dividend advances. The stability of this reserve, added to the Legal Reserve, could not exceed capital inventory, underneath the phrases of Article 199 of Law No. 6,404/76 (please see merchandise 3.9). 8
2021 2020 2019 a. Rules on retention of No modifications within the guidelines earnings a.i. Retained earnings No earnings retained quantities a.ii. Percentages of whole Not relevant declared earnings b. Rules on distribution of Amount not beneath 25% of revenue calculated for the yr dividends c. Frequency of Monthly-mandatory distribution of Half-yearly – further dividends d. Any restrictions on Not relevant CMN Resolution No. 4,820/20, as amended by distribution of CMN Resolution No. 4.885/20, has restricted dividends imposed by the distribution of dividend and fee of laws or particular curiosity on capital in firms regulated by laws relevant the Central Bank of Brazil. to the issuer, in addition to agreements, courtroom, administrative or arbitration choices e. Whether the issuer has Stockholder Remuneration Policy (dividends and curiosity on capital) a formally accredited accredited by the Disclosure and Trading Committee on the assembly held coverage on allocation of on January 28, 2022, which can be accessed on the web sites of CVM earnings, informing the (http://www.cvm.gov.br/> Companhias > Informações Periódicas e Eventuais de Companhias > Itaú Unibanco > Política de Dividendos) and approving physique, date of of the Investor Relations (www.itau.com.br/investor-relations > Itaú approval and, if the Unibanco> Corporate Governance > Rules and Policies) issuer discloses the coverage, the place this doc may be discovered on the Web a) Rules on retention of earnings No modifications have been made to the principles on retention of earnings over the previous three years. In accordance with Brazilian Corporate Law (please see merchandise 3.9), at an Annual General Stockholders’ Meeting and based mostly on a proposal by administration, stockholders could resolve on retaining a portion of revenue for the yr beforehand accredited as a part of the capital funds. Additionally, minimal obligatory dividends is probably not paid in any yr wherein administration informs the Annual General Stockholders’ Meeting that this might be incompatible with the Issuer’s monetary place. Although the Stockholder Remuneration Policy gives for the distribution of dividends and curiosity on capital in an quantity not beneath 35% of adjusted revenue, exceptionally in 2020 the Issuer paid out 25% of adjusted revenue as dividends and curiosity on capital, in accordance with the Material Fact disclosed on February 1, 2021. This was due, amongst different components, to the regulatory restriction imposed by CMN Resolution No. 4,820/20, as amended by CMN Resolution No. 4,885/20, which has restricted the fee of dividends and curiosity on capital in firms regulated by the Central Bank of Brazil. For additional data, please see merchandise 3.4, b (remaining half). On December 10, 2021, a Material Fact was disclosed informing the fee of curiosity on capital in lieu of the month-to-month dividend for fiscal yr 2022. a.i.) Retained earnings quantities In 2020 and 2021, no earnings have been retained however obligatory dividends of 25% of adjusted revenue have been paid, as supplied for within the Issuer’s Bylaws. In 2019, no earnings have been retained, and dividends paid by the Issuer have been greater than minimal obligatory dividends (please see merchandise 3.5 beneath). b) Rules on distribution of dividends Stockholders are entitled to obtain as a compulsory dividend annually the minimal quantity of twenty-5 p.c (25%) of the revenue decided in the identical yr, adjusted by the addition or deduction of the quantities laid out in letters “a” and “b” of merchandise I of Article 202 of Brazilian Corporate Law (please see merchandise 3.9), and in compliance with gadgets II and III thereof. As resolved by the Board of Directors, curiosity on capital may be paid by together with the curiosity on capital paid or credited to the obligatory dividend quantity, as supplied for in Article 9, paragraph 7, of Law No. 9,249/95 (please see merchandise 3.9). Preferred shares entitle their holders to precedence within the fee of an annual minimal dividend of R$0.022 per share, non-cumulative and adjusted for any cut up or reverse cut up. After the fee of precedence dividend 9
to most well-liked stockholders, a dividend will likely be paid to widespread stockholders at R$0.022 per share, non-cumulative and adjusted for any cut up or reverse cut up. Capital Management and Distribution of Profits To guarantee capital power and availability to assist our enterprise progress, regulatory capital ranges have been stored above these required by the Central Bank of Brazil, as evidenced by the Common Equity Tier I, Tier I, and BIS ratios. The whole quantity to be distributed annually will likely be set by the Board of Directors, contemplating, amongst different components: the Company’s capitalization degree, in line with the principles issued by the Central Bank of Brazil; the minimal degree, set by the Board of Directors, of 13.5% for Tier 1 Capital; profitability within the yr; the potential capital use based mostly on anticipated enterprise progress, share buyback packages, mergers and acquisitions, regulatory modifications which will alter capital necessities; and modifications in tax laws. Therefore, the proportion to be distributed could change yearly in line with Company’s profitability and capital calls for, contemplating always the minimal distribution set forth within the Bylaws. Under the implementation of liquidity necessities set by Basel III requirements, on March 1, 2013, CMN issued Resolution No. 4,193 (please see merchandise 3.9), offering for that dividends is probably not paid if a monetary establishment fails to adjust to the extra capital necessities, required of their entirety as from 2019. This restriction on dividend fee will likely be progressively utilized, in line with the extent of nonconformity with further capital necessities. If a monetary establishment’s further capital requirement is decrease than 25% of the capital set by CMN for that yr, no dividends or curiosity on capital will likely be distributed accordingly. If the extra capital requirement is between 25% and 50% of the required quantity, 80% of the supposed dividends and curiosity on capital won’t be distributed. If the extra capital requirement is between 50% and 75% of the required quantity, 60% of the supposed dividends and curiosity on capital won’t be distributed. If the extra capital requirement is between 75% and 100% of the required quantity, 40% of the supposed dividends and curiosity on capital won’t be distributed. At the top of December 2021, BIS ratio reached 14.7%, of which: 13.0% associated to Tier I Capital, composed of the sum of Core Capital and Additional Capital; and Tier I and Tier II Capital quantities totaled R$149.9 billion and R$19.9 billion, respectively, on December 31, 2021. These indicators present proof of our efficient capability of absorbing sudden losses. For additional data, please see the “Risk and Capital Management – Pillar 3” report on our web site https://www.itau.com.br/investor-relations > Results and Reports > regulatory reviews > pillar 3 > Risk and Capital Management – Pillar 3. c) Frequency of distribution of dividends Since July 1980, the Issuer has been remunerating its stockholders with month-to-month and extra funds, with the latter being traditionally made twice a yr and distributed to widespread and most well-liked stockholders alike. Over the previous three years, dividends have been paid on a month-to-month foundation, as set by our Stockholder Remuneration Policy, accredited by the Board of Directors. This Policy has set the month-to-month fee of R$0.015 per share, as a compulsory dividend advance. The date used as reference to find out which stockholders are entitled to obtain these month-to-month dividends is set based mostly on the stockholding place recorded on the final day of the earlier month, and dividends are paid on the primary enterprise day of the following month. The Extraordinary General Stockholders’ Meeting of July 27, 2018 accredited the Company’s inventory cut up at 50%. Monthly dividends remained at R$0.015 per share, in order that the full quantities month-to-month paid by the Company to stockholders have been added by fifty p.c (50%) after the cut up shares have been included within the stockholding place. 10
Additionally, over the previous three years, further dividends have been additionally paid out (half-yearly), for which the Board of Directors determines the bottom date for the stockholding place and fee date. Regarding these half-yearly funds, administration checks the present revenue, determines the dividend quantities to be distributed as obligatory (please see merchandise “a” above), calculates the month-to-month quantity already declared and at last determines the excellent stability payable of the minimal obligatory dividend. This quantity is asserted as a dividend “further” to these paid month-to-month. The Stockholders Remuneration Policy is accessible on our Investor Relations web site https://www.itau.com.br/investor-relations > Itaú Unibanco> Corporate Governance > Rules and Policies > Policies. For the file of funds by the Issuer, please entry the Investor Relations web site https://www.itau.com.br/investor-relations > Itaú Unibanco > Our Shares > Shares, Dividends and Interest on Capital > History of Dividends and Stockholder Remuneration. Additional data on merchandise 3.4: Quoted from: Law No. 6,404/76: http://www.planalto.gov.br/ccivil_03/LEIS/L6404consol.htm Law No. 9,249/95: http://www2.camara.leg.br/legin/fed/lei/1995/lei-9249-26-dezembro-1995-349062-normaatualizada-pl.html Bylaws: Investor Relations web site: www.itau.com.br/investor-relations Itaú Unibanco> Corporate Governance > Regulations and Policies Material Fact-Payout: Investor Relations web site: http://www.itau.com.br/investor-relations Market Information > Announcements to the Market > Material Fact CMN Resolution No. 4,193: https://www.bcb.gov.br/pre/normativos/busca/normativo.asp?tipo=res&ano=2013&numero=4193 3.5. In a desk, please point out for every of the previous three years: R$ million 2021 2020 2019 a. Adjusted web earnings for dividend functions 24,924 18,013 25,376 b. Total distributed dividends 6,231 4,503 18,777 Interest on capital 4,765 2,747 4,648 Mandatory dividend 1,360 1,651 14,024 Minimum precedence dividend 106 105 105 Fixed precedence dividend –c. Percentage of dividends per adjusted web earnings 25.0% 25.0% 74.0% d. Dividend distributed per class and kind of shares: Total widespread shares 3,159 2,287 9,551 Interest on capital 2,416 1,395 2,365 Mandatory dividend 743 892 7,186 Minimum precedence dividend –Fixed precedence dividend –Total most well-liked shares 3,072 2,216 9,226 Interest on capital 2,349 1,352 2,283 Mandatory dividend 617 759 6,838 Minimum precedence dividend 106 105 105 Fixed precedence dividend –e. Payment date of the minimal obligatory dividend Date set at ASM Date set at ASM Date set at ASM f. Return on fairness 18.1% 13.9% 20.2% g. Total retained earnings 19,254 14,091 7,156 Allocation to reserves 19,254 14,091 7,156 Retained earnings – h. Retention approval date 04/29/2022 04/27/2021 04/28/2020 Notes: Adjusted web earnings: Net earnings (1) (- ) 5percentof Legal Reserve Dividend distributed in relation to the Adjusted web earnings (%): Total dividend distributed (2) / Adjusted web earnings. Return on fairness of issuer (%): Net earnings (1) / Stockholders’ fairness (1). Total dividend distributed: Interest on capital (3) (+) Dividends – Calculated per yr. M andatory dividend: M inimum obligatory dividend (+) Additional dividend (- ) M inimum precedence dividend. Retained earnings: Legal Reserve (1) (+) Statutory Reserve (1). Includes Company’s data underneath BRGAAP For 2021, dividends distributed debited to the Statutory Revenue Reserve have been included Net of earnings tax. 11
Year Base interval Payment date Type of occasion Amounts in R$ million (*) Common Preferred 2021 03.11.2022 Interest on capital 57 56 Interest on capital Interest on capital 03.11.2022 Interest on capital 1,112 1,087 December 01.03.2022 Interest on capital 75 72 November 12.01.2021 Interest on capital 75 72 October 11.01.2021 Dividends 75 72 September 10.01.2021 Dividends 75 72 August 09.01.2021 Dividends 75 72 Interest on capital 08.26.2021 Interest on capital 213 208 July 08.02.2021 Dividends 75 72 June 07.01.2021 Dividends 75 72 Interest on capital 08.26.2021 Interest on capital 238 231 May 06.01.2021 Dividends 75 72 Interest on capital 08.26.2021 Interest on capital 205 200 April 05.03.2021 Dividends 74 72 Interest on capital 08.26.2021 Interest on capital 438 426 March 04.01.2021 Dividends 74 72 February 03.01.2021 Dividends 74 72 January 02.01.2021 Dividends 74 72 2020 03.12.2020 Interest on capital Interest on capital 270 261 03.12.2020 Interest on capital Interest on capital 903 874 December 01.04.2021 Dividends 75 72 November 12.01.2020 Dividends 75 72 October 11.03.2020 Dividends 74 72 September 10.01.2020 Dividends 74 72 09.01.2020 Dividends August 74 72 Interest on capital 08.26.2020 Interest on capital 223 216 July 08.03.2020 Dividends 75 72 June 07.01.2020 Dividends 75 72 May 06.01.2020 Dividends 74 72 05.04.2020 Dividends April 74 72 March 04.01.2020 Dividends 74 72 03.02.2020 Dividends February 74 72 02.03.2020 Dividends January 74 72 12
2019 Supplementary 03.07.2020 Supplementary curiosity on capital curiosity on capital 2,396 2,313 Additional dividends 03.07.2020 Additional dividends 2,207 2,130 Interest on capital 03.07.2020 Interest on capital 158 153 December 01.02.2020 Dividends 74 72 November 12.02.2019 Dividends 74 72 October 11.01.2019 Dividends 74 72 September 10.01.2019 Dividends 74 72 August 09.02.2019 Dividends 74 72 Additional dividends 08.23.2019 Additional dividends 3,902 3,766 July 08.01.2019 Dividends 74 72 June 07.01.2019 Dividends 74 72 May 06.03.2019 Dividends 74 72 April 05.02.2019 Dividends 74 72 March 04.01.2019 Dividends 74 72 February 03.01.2019 Dividends 74 72 January 02.01.2019 Dividends 74 72 Amounts for curiosity on capital are web of earnings tax. 3.6. State whether or not, prior to now three years, dividends have been declared in retained earnings or reserves have been acknowledged in prior years Dividends and curiosity on capital declared and paid out in fiscal yr 2021 based mostly on the 2020 earnings, utilizing Revenue Reserves, totaled R$941 and R$1,381 million, respectively. Dividends and curiosity on capital declared and paid out in fiscal yr 2020 based mostly on the 2019 earnings, utilizing Revenue Reserves, totaled R$4,709 and R$4,337 million, respectively. Dividends and curiosity on capital declared and paid out in fiscal yr 2019 based mostly on the 2018 earnings, utilizing Revenue Reserves, totaled R$10,213 and R$6,192 million, respectively. 3.7. In a desk, please describe the issuer’s debt ratio, indicating: sum of present and non-present liabilities; debt ratio (present plus non-present liabilities, divided by stockholders’ fairness); if the issuer so needs, one other debt ratio, indicating: the strategy used to calculate the ratio; the explanation why the issuer understands that this ratio is acceptable for the right understanding of its 2021 2020 2019 a. sum of present and non-present liabilities (in R$) 1,904,729,980,000 1,864,725,988,000 1,488,016,044,000 b.debt ratio (present plus non-present liabilities, divided by stockholders’ fairness) 11.58 12.07 9.96 c. if the issuer so needs, one other debt ratio, indicating: i. the strategy used to calculate the ratio –ii. the explanation why the issuer understands that this ratio is acceptable for the right understanding of its monetary place and debt degree –13
3.8. Liabilities by kind and maturity (1) (R$ million) December 31, 2021 Type of debt Less than one One to 3 Three to 5 More than 5 Total yr years years years Secured money owed 5,965 18,226 12,879 7,629 44,699 Agribusiness credit score payments 4,342 7,451 1,908-13,701 Guaranteed actual state notes 1,623 10,775 10,971 7,629 30,998 Unsecured money owed 856,994 182,588 143,046 191,674 1,374,302 Securities offered underneath repurchase agreements 243,195 3,964 1,695 3,994 252,848 Structured operations certificates 143 260 348 6 757 Deposits 493,752 115,626 105,163 135,831 850,372 Subordinated debt 21,203 11,516 17,689 24,628 75,036 Import and export financing 64,274 18,632 3,527 515 86,948 Financial payments 20,310 3,628 92 29 24,059 Real property credit score payments 3,628 6,931 103 1 10,663 On-lending-home 3,929 3,722 1,304 1,821 10,776 Securities issued overseas 6,560 18,309 13,125 24,849 62,843 Total 862,959 200,814 155,925 199,303 1,419,001 (1) In accordance w ith consolidated monetary statements underneath IFRS. 3.9. Supply different data that the issuer could deem related The monetary data introduced in Item 3 (Selected Financial Information) adopts the IFRS accounting commonplace, apart from gadgets 3.5 and three.6 that adjust to accounting requirements outlined by the Central Bank of Brazil and CMN, since dividends are calculated based mostly on the person web earnings underneath these requirements. 14
RISK FACTORS-Describe danger components Describe danger components which will affect an funding determination, notably these associated to: This part addresses the dangers we take into account materials to our enterprise and an funding in our securities. Should any of the next dangers really happen, our enterprise and monetary situation, in addition to the worth of any investments made in our securities, will likely be adversely affected. Accordingly, traders ought to fastidiously assess the danger components described beneath and the data disclosed on this annual report earlier than investing determination. The dangers described beneath are those who we presently imagine could adversely have an effect on us. Other dangers that we don’t presently take into account materials, rising dangers or dangers not presently identified to us can also adversely have an effect on us. a) The Issuer Credit danger issue We could incur losses related to counterparty publicity dangers, together with the Brazilian federal authorities. We routinely conduct transactions with counterparties within the monetary companies trade, together with brokers and sellers, business banks, funding banks, mutual and hedge funds and different institutional shoppers. Like most Brazilian banks, we additionally spend money on debt securities issued by the Brazilian authorities. As of December 31, 2021, roughly 17.5% of all our belongings and 58.8% of our securities portfolio have been comprised of those public debt securities. We could incur losses if any of our counterparties fail to satisfy their contractual obligations, as a result of chapter, lack of liquidity, operational failure or different causes which might be solely attributable to our counterparties. As an instance, an eventual failure by the Brazilian authorities to make well timed funds underneath the phrases of those securities, or a major lower of their market worth might negatively have an effect on our ends in two methods: instantly, by way of portfolio losses, and not directly, by way of instabilities {that a} default in public debt might trigger to the banking system as a complete, notably since business banks’ publicity to authorities debt is excessive in international locations wherein we function. This counterparty danger can also come up from our coming into into reinsurance agreements or credit score agreements pursuant to which counterparties have obligations to make funds to us and are unable to take action, or from our finishing up transactions within the overseas forex market (or different markets) that fail to be settled on the specified time as a result of non-supply by the counterparty, clearing home or different monetary middleman. Their failure to satisfy their contractual obligations could adversely have an effect on our monetary efficiency. A downgrade of our scores could adversely have an effect on our funding price, our entry to capital and debt markets, our liquidity and, in consequence, our competitiveposition. Credit scores signify the opinions of impartial ranking businesses concerning our skill to repay our indebtedness, and have an effect on the fee and different phrases upon which we’re in a position to get hold of funding. Each of the ranking businesses opinions its scores and ranking methodologies on a periodic foundation and should determine on a grade change at any time, based mostly on components that have an effect on our monetary power, akin to liquidity, capitalization, asset high quality and profitability or as a result of a downgrade of the Brazilian sovereign ranking. Under the factors utilized by the ranking businesses, scores assigned to Brazilian monetary establishments, together with to us are constrained by the grades assigned to the Brazilian sovereign. Events that aren’t topic to our management, akin to financial or political crises, could result in a downgrade of the Brazilian sovereign ranking and a corresponding downgrade of the scores assigned to us. Credit scores are important to {our capability} to lift capital and funding by way of the issuance of debt and to the price of such financing. A downgrade or a possible downgrade in our credit score scores might have an antagonistic influence on our operations, earnings and danger weighting. This could have an effect on web earnings, capital necessities and return on capital ranges, inflicting a damaging influence on our aggressive place. Additionally, if our credit score scores have been to be downgraded, ranking set off clauses which may be a part of our financing agreements with different establishments might lead to a right away have to ship further collateral to counterparties or taking different actions underneath a few of our spinoff contracts, adversely affecting our curiosity margins and outcomes of operations. Thus, a failure to take care of favorable scores and outlooks can have an effect on the fee and availability of our financing by way of the capital markets and different sources of financing, affecting our curiosity margins and capability to function. 15
Changes or uncertainty in base rates of interest might adversely have an effect on us. A good portion of our enterprise is carried out in Brazil, the place the COPOM, establishes the SELIC fee, and makes use of modifications on this fee as an instrument of financial coverage. The SELIC fee is the benchmark rate of interest payable to holders of sure securities issued by the Brazilian authorities and traded on the SELIC System operated by the Central Bank. In current years, the SELIC fee, has fluctuated considerably reflecting the corresponding volatility within the macroeconomic situation and inflationary surroundings. During 2015 and 2016, on account of elevated prospects of inflation and macroeconomic instability, the COPOM elevated the SELIC fee, reaching 14.25% and 13.75% as of December 31, 2015 and December 31, 2016, respectively. In the next years, on account of the widespread decline in inflation, because of the excessive degree of idle capability within the Brazilian economic system and anchored inflation expectations, the Central Bank began a financial easing cycle and the COPOM has lowered the SELIC fee. As of December 31, 2017, and December 31, 2018, the SELIC fee was 7.00% and 6.50%, respectively. As of December 31, 2019 and December 31, 2020, the SELIC fee was 4.5% and a pair of.0%, respectively, and began to extend in March 2021, reaching 9.5% in December 2021. As of the date of the submitting of this annual report, the SELIC fee was 12.75%. We could face challenges related to IBOR transition. A good portion of our earnings, bills and liabilities is instantly tied to rates of interest. Therefore, our outcomes of operations and monetary situation are considerably affected by inflation, rate of interest fluctuations and associated authorities financial insurance policies. In addition, numerous interbank supplied charges that are deemed to be “benchmarks” (the “IBORs”, together with LIBOR and EURIBOR) are the topic of current worldwide and different regulatory steerage and proposals for reform. The majority of those reforms are already efficient, together with nearly all of the provisions of Regulation (EU) 2016/1011. On March 5, 2021, the U.Ok. Financial Conduct Authority (“FCA”) introduced that: (i) all seven euro LIBOR settings, all seven Swiss franc LIBOR settings, the spot subsequent, 1-week,2-month and 12-month Japanese yen LIBOR settings, the in a single day, 1-week,2-month and 12-month sterling LIBOR settings, and the 1-week and a pair of-month US greenback LIBOR settings would stop instantly after December 31, 2021 and (ii) the in a single day and 12-month US greenback LIBOR settings would completely stop instantly after June 30, 2023. This cessation of LIBOR for numerous currencies on the finish of 2021 (and in 2023 for sure tenors of USD LIBOR) may even lead to substitute charges getting used extra extensively, together with within the devices documenting sure of our monetary obligations. For instance, within the U.S., a bunch convened by the Federal Reserve Board and the Federal Reserve Bank of New York, referred to as the Alternative Reference Rate Committee (“ARRC”) and comprised of a various set of personal sector entities, has recognized the Secured Overnight Financing Rate (or “SOFR”) as its most well-liked various fee for the USD LIBOR and the Federal Reserve Bank of New York has begun publishing SOFR day by day. Many banks within the U.S. have begun coming into into transactions the place curiosity is set based mostly on SOFR or plan to take action through the course of 2022, as really helpful by ARRC and sure regulators. Additionally, on April 6, 2021, New York Governor Cuomo signed into legislation laws that gives for the substitution of SOFR in any LIBOR-based mostly contract ruled by New York state legislation that doesn’t embrace clear fallback language, as soon as LIBOR is discontinued. Moreover, many monetary contracts, together with some which govern our monetary obligations, embrace substitute options for LIBOR upon the cessation of LIBOR. It is feasible that some U.S. lenders will elect to make use of various charges apart from SOFR. Central banks in a number of different jurisdictions have additionally introduced plans for publishing various reference charges for different currencies. Moreover some U.S. lenders could elect to make use of options charges apart from SOFR such because the SOFR fee printed by the CME Group which was additionally formally really helpful by the ARRC for money market merchandise. In addition, in 2021 regulators inspired monetary corporations to stop coming into into new contracts that use of LIBOR as a reference fee as quickly aspracticable and in any occasion by December 31, 2021. Additionally, on September 13, 2018, the working group on Euro danger-free charges really helpful the brand new Euro brief-time period fee (“€STR”) as the brand new danger-free fee for the euro space. The €STR was printed for the primary time on October 2, 2019. Also, on 11 May 2021 this working group really helpful EURIBOR fallback set off occasions and substitute charges for EURIBOR based mostly on €STR. Unlike LIBOR, the EURIBOR shouldn’t be anticipated to vanish. However, though EURIBOR has been reformed so as to adjust to the phrases of the Regulation (EU) 2016/1011, it stays unsure as to how lengthy it would proceed in its present kind, or whether or not it will likely be additional reformed or changed with €STR or another benchmark. This and different reforms could trigger IBORs to carry out in another way than prior to now, or to vanish totally, or produce other penalties, which can’t be totally anticipated, which introduce a variety of dangers for us together with authorized dangers arising from potential modifications required to documentation for brand new and current transactions, monetary dangers arising from any modifications within the valuation of monetary devices linked to benchmark charges and hedging mismatch, pricing dangers arising from how modifications to benchmark indices might influence pricing mechanisms on some devices, operational dangers arising from the potential requirement to adapt data expertise programs, commerce reporting infrastructure and operational processes, and business dangers arising from the potential 16
influence of communication with prospects and engagement through the transition interval. Accordingly, the implementation of different benchmark charges could have a fabric antagonistic impact on our enterprise, outcomes of operations, monetary situation and prospects. Operational danger issue We face dangers regarding our operations. Operational dangers, which can come up from errors within the efficiency of our processes, the conduct of our staff, instability, malfunction or outage of our IT system and infrastructure, or lack of enterprise continuity, or comparable points with respect to our distributors, could disrupt our companies and result in materials losses. We face operational danger arising from errors, unintended or premeditated, made within the execution, affirmation or settlement of transactions or from transactions not being correctly recorded, evaluated or accounted for. The incidence of any of those dangers could adversely have an effect on our enterprise, monetary outcomes and reputations. We are uncovered to failures, deficiency or inadequacy of our inner processes, human error or misconduct and cyberattacks. Additionally, we depend on third-social gathering companies. All these components could adversely have an effect on us. Due to the excessive quantity of day by day processing, we’re depending on expertise and administration of data, which exposes us to eventual unavailability of programs and infrastructure akin to energy outages, interruption of telecommunication companies, and generalized system failures, in addition to inner and exterior occasions which will have an effect on third events with which we do enterprise or which might be essential to our enterprise actions (together with inventory exchanges, clearing homes, monetary sellers or service suppliers) and occasions ensuing from wider political or social points, akin to cyberattacks or unauthorized disclosures of non-public data in our possession. We handle and retailer sure proprietary data and delicate or confidential knowledge regarding recognized or identifiable pure individuals, together with our shoppers and to our operations. We could also be topic to breaches of the data expertise programs we use for these functions, in addition to the theft of expertise and mental property. Additionally, we function in lots of geographic places and are continuously topic to the incidence of occasions exterior of our management. Despite the contingency plans we’ve in place, our skill to conduct enterprise in any of those places could also be adversely impacted by a disruption to the infrastructure that helps our enterprise. We are strongly depending on expertise and thus are susceptible to viruses, worms and different malicious software program, together with “bugs” and different issues that would unexpectedly intrude with the operation of our programs and lead to knowledge leakage. Operating failures, together with those who outcome from human error or fraud, not solely improve our prices and trigger losses, however can also give rise to conflicts with our shoppers, lawsuits, regulatory fines, sanctions, interventions, reimbursements and different indemnity prices. Ethical misconduct and noncompliance – moral misconduct or breaches of relevant legal guidelines by our companies or our staff might be damaging to our fame too, and will lead to litigation, regulatory motion and penalties. All of which can have a fabric antagonistic impact on our enterprise, fame and outcomes of operations. Operational danger additionally consists of authorized danger related to inadequacy or deficiency in contracts signed by us, in addition to penalties as a result of noncompliance with legal guidelines and punitive damages to 3rd events arising from the actions undertaken by us. Additionally, we’ve important different companies for the right functioning of our enterprise and expertise infrastructure, akin to name facilities, networks, web and programs, amongst others, supplied by exterior or outsourced firms. Impacts on the supply of those companies, attributable to these firms because of the lack of provide or the poor high quality of the contracted companies, can have an effect on the conduct of our enterprise in addition to our shoppers. We additionally rely in sure restricted capacities on third- social gathering knowledge administration suppliers whose doable safety issues and safety vulnerabilities could have comparable results on us. As a results of the COVID-19 pandemic, we’ve quickly elevated the variety of staff working remotely. This could trigger will increase within the unavailability of our programs and infrastructure, interruption of telecommunication companies, generalized system failures and heightened vulnerability to cyberattacks. Accordingly, our skill to conduct our enterprise could also be adversely impacted. Failure to guard private data might adversely have an effect on us. We handle and maintain confidential private data of recognized or identifiable pure individuals, together with shoppers within the extraordinary course of our enterprise. Although we’ve procedures and controls to safeguard private data in our possession, unauthorized disclosures or safety breaches might topic us to authorized motion and administrative sanctions, in addition to harm that would materially and adversely have an effect on our working outcomes, fame, monetary situation and prospects. 17
Administrative sanctions embrace, however aren’t restricted to, sanctions for non-compliance with the Lei Geral de Proteção de Dados (“LGPD”), or Law No. 13,709/2018, which got here into impact in September 2020. The LGPD units out the eventualities wherein private knowledge may be dealt with, both by bodily or digital means, and protects the holders of information from improper use. Additionally, it requires that the best way firms deal with private knowledge is predicated on the legislation. Further, our enterprise is uncovered to danger from potential non-compliance with insurance policies, worker misconduct or negligence and fraud, which might lead to regulatory sanctions and reputational or monetary hurt. In addition, we could also be required to report occasions associated to cybersecurity points, occasions the place consumer data could also be compromised, unauthorized entry and different safety breaches, to the related regulatory authority and to the themes affected. Any materials disruption or slowdown of our programs might trigger data, together with knowledge associated to consumer requests, to be misplaced or to be delivered to our shoppers with delays or errors, which might cut back demand for our companies and merchandise and will materially and adversely have an effect on us. Failure to adequately defend ourselves in opposition to dangers regarding cybersecurity might materially and adversely have an effect on us. We face numerous cybersecurity dangers, together with however not restricted to: (i) penetration of our data expertise programs and platforms, by sick-intentioned third events, (ii) infiltration of malware (akin to pc viruses) into our programs, (iii) contamination (whether or not intentional or unintended) of our networks and programs by third events with whom we trade knowledge, (iv) unauthorized entry to confidential consumer and/or proprietary knowledge by individuals inside or exterior of our group, and (v) cyber-assaults inflicting programs degradation or service unavailability which will lead to enterprise losses. We have seen in recent times pc programs of firms and organizations being focused, not solely by cyber criminals, but additionally by activists and rogue states. We outline cyberattack as any kind of offensive maneuver employed by states, nations, people, teams or organizations that targets pc data programs, infrastructure, networks and/or private gadgets, utilizing different means, akin to denial of service, malware and phishing, for the aim of stealing, altering or destroying a particular goal by hacking right into a technological inclined system. Cyberattacks can vary from the set up of viruses on a private pc to makes an attempt to destroy the infrastructure of complete nations. We are uncovered to this danger over all the lifecycle of data, from the second it’s collected to its processing, transmission, storage, evaluation and destruction. For instance, in 2020, SolarWinds Inc., one in every of our third-social gathering software program service suppliers, was topic to an information safety incident and, in 2021, are mote code execution vulnerability in Apache Log4j was recognized as affecting massive quantities of programs worldwide. In these situations, our cybersecurity workforce promptly took steps to find out whether or not we have been adversely impacted and to comprise and remediate the incidents. We accomplished investigations of those incidents and concluded that they resulted in no materials antagonistic influence to us, however there may be no assure we won’t expertise such an influence sooner or later, as we’re topic to cyber threats that happen day by day. A profitable cyberattack could lead to unavailability of our companies, leak or compromise of the integrity of data and will give rise to the lack of important quantities of consumer knowledge and different delicate data, in addition to important ranges of liquid belongings (together with money) in addition to harm to our picture, instantly affecting our prospects and companions. In addition, cyberattacks might give rise to the disabling of our data expertise programs used to service our shoppers. As tried assaults proceed to evolve in scope and class, we could incur important prices in our try to change or improve our protecting measures in opposition to such assaults, or to analyze or remediate any vulnerability or ensuing breach. If we fail to successfully handle our cybersecurity danger, for instance, by failing to replace our programs and processes in response to new threats, this might hurt our fame and adversely have an effect on our working outcomes, monetary situation and prospects by way of the fee of consumer compensation, regulatory penalties and fines and/or by way of the lack of belongings. In addition, we’re additionally topic to cyber-assaults in opposition to vital infrastructures of Brazil or of the opposite international locations the place we function. Our data expertise programs are depending on such vital infrastructure and any cyber-assault in opposition to such vital infrastructure might negatively have an effect on our skill to service our shoppers. We additionally assist third events to adapt their infrastructure to work securely from dwelling. There are additionally necessities associated to the data safety course of, such because the LGPD, CVM Resolution No. 35/2021, CMN Resolution No. 4,893/2021, Central Bank Resolution No. 85/2021 and SUSEP Circular No.638/2021, that we’re required to adjust to. We agree on the significance of mitigating cyber dangers and the associated controls are steady monitored to make sure effectiveness as any failure to adjust to these regulatory necessities might adversely have an effect on us. 18
The lack of senior administration, or our skill to draw and keep key personnel, might have a fabric antagonistic impact on us. Our skill to take care of our aggressive place and implement our technique relies on our senior administration. The lack of a number of the members of our senior administration, or our incapability to take care of and entice further personnel, might have a fabric antagonistic impact on our operations and our skill to implement our technique. Our efficiency and success are largely depending on the abilities and efforts of extremely expert people. Talent attraction and retention is without doubt one of the key pillars for supporting the outcomes of our group, which is concentrated on consumer satisfaction and sustainable efficiency. Our skill to draw, develop, encourage and retain the precise variety of appropriately certified folks is vital to our efficiency and skill to thrive globally. Concurrently, we face the problem to offer a brand new expertise to staff, in order that we’re in a position to entice and retain extremely-certified professionals who worth environments providing equal alternatives and who want to construct up their careers in dynamic, cooperative workplaces, which encourage range and meritocracy and are updated with new work fashions. Also, our present enterprise situation calls for not solely a cautious have a look at conventional careers, but additionally at new profession paths which might be indispensable for our future. Our efficiency might be adversely affected if we’re unable to draw, retain and encourage key expertise. As we’re extremely depending on the technical abilities of our personnel, together with successors to essential management positions, in addition to their relationships with shoppers, the lack of key parts of our workforce ( notably to rising rivals, akin to begin-ups and fintechs), might make it tough to compete, develop and handle the enterprise. A lack of such experience might adversely have an effect on our monetary efficiency, future prospects and aggressive place. This loss can additional have an effect on our companies if we lose any key worker who’s tough to switch as a result of a booming expertise market (akin to knowledge scientists, product managers, designers and others) or to range profiles (akin to ladies in management roles). Misconduct of our staff or representatives could adversely have an effect on us. Our enterprise is predicated on institutional rules (“Our Way”), amongst that are “it is solely good for us if it is good for the consumer” and “ethics are non-negotiable”. However, a part of the shopper relationship relies on direct interplay with our staff or representatives. We can’t guarantee you that our particular person staff will all the time adjust to our inner insurance policies and that our inner procedures will successfully monitor and determine misbehavior. Deviations in conduct akin to inappropriate gross sales practices and improper use of data could happen. These dangers may give rise to buyer attrition, want of compensation or reimbursements, litigation and, in line with its extension, could expose the establishment to fame danger, monetary and credibility losses with the market and regulators. We could not be capable to forestall our officers, staff or third events performing on our behalf from participating in conditions that qualify as corruption in Brazil or in another jurisdiction, which might expose us to administrative and judicial sanctions, in addition to have an antagonistic impact to us. We are topic to Brazilian anticorruption laws, and equally-targeted laws of the opposite international locations the place we’ve branches and operations, in addition to different anticorruption legal guidelines and regulatory regimes with a transnational scope. These legal guidelines require the adoption of integrity procedures to mitigate the danger that any individual performing on our behalf could provide an improper benefit to a public agent so as to get hold of advantages of any form. Applicable transnational laws, such because the U.S. Foreign Corrupt Practices Act and U.Ok. Bribery Act, in addition to the relevant Brazilian laws (primarily Brazilian Law No. 12,846/2013 – Lei Anticorrupção Brasileira), require us, amongst different issues, the upkeep of insurance policies and procedures aimed toward stopping any unlawful or improper actions associated to corruption involving authorities entities and officers so as to safe any enterprise benefit, and require us to take care of correct books and a system of inner controls to make sure the accuracy of our books and forestall unlawful actions. We have insurance policies and procedures designed to forestall bribery and different corrupt practices. However, unauthorized actions by our officers, staff or third events performing on our behalf in breach of our inner insurance policies could qualify as corruption in Brazil or in different jurisdiction and we might be uncovered to administrative and judicial sanctions, accounting errors or changes, financial losses and reputational damages or different antagonistic results. The notion or allegations that we, our staff, our associates or different individuals or entities related to us have engaged in any such improper conduct, even when unsubstantiated, could trigger important reputational hurt and different antagonistic results. 19
We function in worldwide markets which topic us to dangers related to the legislative, judicial, accounting, regulatory, political and financial dangers and circumstances particular to such markets, which might adversely have an effect on us or our overseas models. We function in numerous jurisdictions exterior of Brazil by way of branches, subsidiaries and associates, and we anticipate to proceed to broaden our worldwide presence. We face, and anticipate to proceed to face, further dangers within the case of our current and future worldwide operations, together with: political instability, antagonistic modifications in diplomatic relations and unfavorable financial and enterprise circumstances within the markets wherein we presently have worldwide operations or into which we could broaden; extra restrictive or inconsistent authorities regulation of monetary companies, which might lead to elevated compliance prices and/or in any other case prohibit the style wherein we offer our companies; and difficulties in managing operations and adapting to cultural variations, together with points related to (i) enterprise practices and customs which might be widespread in sure overseas international locations however could be prohibited by Brazilian legislation and our inner insurance policies and procedures and (ii) administration and operational programs and infrastructures, together with inner monetary management and reporting programs and features, staffing and managing of overseas operations, which we would not be capable to do successfully or price effectively. As we broaden into these and extra markets these dangers might be extra important and have the potential to have an antagonistic influence on us. Liquidity danger issue We face dangers regarding liquidity of our capital assets. Liquidity danger, as we perceive it, is the danger that we’ll not have ample monetary assets to satisfy our obligations by the respective maturity dates or that we’ll honor such obligations however at an extreme price. This danger is inherent within the actions of any business or retail financial institution. Our capability and value of funding could also be impacted by a variety of components, akin to modifications in market circumstances (e.g., in rates of interest), credit score provide, regulatory modifications, systemic shocks within the banking sector, and modifications out there’s notion of us, amongst others. In eventualities the place entry to funding is scarce and/or turns into too costly, and the entry to capital markets is both not doable or is proscribed, we could discover ourselves obliged to extend the return fee paid to deposits made to draw extra shoppers and/or to settle belongings not compromised and/or probably devalued in order that we can meet our obligations. If the market liquidity is lowered, the demand stress could have a damaging influence on costs, since pure consumers is probably not instantly accessible. Should this occur, we could have a major damaging goodwill on belongings, which can influence the financial institution’s outcomes and monetary place. The persistence or worsening of such antagonistic market circumstances or rises in fundamental rates of interest could have a fabric antagonistic influence on our capability to entry capital markets and on our price of funding. Market danger issue The worth of our securities and derivatives is topic to market fluctuations as a result of modifications in Brazilian or worldwide financial circumstances and, in consequence, could topic us to materials losses. Market danger is the danger of losses as a result of actions in monetary market costs. The securities and spinoff monetary devices in our portfolio could trigger us to file good points and losses, when offered or marked to market (within the case of buying and selling securities), and should fluctuate significantly from interval to interval as a result of home and worldwide financial circumstances. In addition, we could incur losses from fluctuations out there worth of positions held, together with dangers related to transactions topic to variations in overseas trade charges, rates of interest, worth indexes, fairness and commodity costs. We can’t predict the quantity of realized or unrealized good points or losses for any future interval. Gains or losses on our funding portfolio could not contribute to our web income sooner or later or could stop to contribute to our web income at ranges in step with newer intervals. We could not efficiently notice the appreciation or depreciation now current in our consolidated funding portfolio or in any belongings of such portfolio. 20
Hedge danger issue Our hedge technique could not be capable to forestall losses We use numerous devices and methods to hedge our exposures to a variety of dangers related to our enterprise, however we could incur losses if such hedges aren’t efficient. We could not be capable to hedge our positions, or accomplish that solely partially, or we could not have the specified effectiveness to mitigate our publicity to the various dangers and market wherein we’re concerned. Any of those eventualities could adversely have an effect on our enterprise and monetary outcomes. Underwriting danger issue Inadequate pricing methodologies for insurance coverage, pension plan and premium bond merchandise could adversely have an effect on us. Our insurance coverage and pension plan subsidiaries set up costs and calculations for our insurance coverage and pension merchandise based mostly on actuarial or statistical estimates. The pricing of our insurance coverage and pension plan merchandise is predicated on fashions that embrace a variety of assumptions and projections which will show to be incorrect, since these assumptions and projections contain the train of judgment with respect to the degrees and timing of receipt or fee of premiums, contributions, provisions, advantages, claims, bills, curiosity, funding outcomes, retirement, mortality, morbidity, and persistence. We might endure losses as a result of occasions which might be opposite to our expectations instantly or not directly based mostly on incorrect biometric and financial assumptions or defective actuarial bases used for contribution and provision calculations. Although the pricing of our insurance coverage and pension plan merchandise and the adequacy of the related reserves are reassessed on a yearly foundation, we can’t precisely decide whether or not our belongings supporting our coverage liabilities, along with future premiums and contributions, will likely be ample for the fee of advantages, claims, and bills. Accordingly, the incidence of great deviations from our pricing assumptions might have an antagonistic impact on the profitability of our insurance coverage and pension merchandise. In addition, if we conclude that our reserves and future premiums are inadequate to cowl future coverage advantages and claims, we will likely be required to extend our reserves and file these results in our monetary statements, which can have a fabric antagonistic impact on us. Management Risk Factor Our insurance policies, procedures and fashions associated to danger management could also be ineffective and our outcomes could also be adversely affected by sudden losses. Our danger administration strategies, procedures and insurance policies, together with our statistical fashions and instruments for danger measurement, akin to worth in danger, or VaR, for market danger default likelihood estimation fashions for credit score danger or buyer uncommon conduct fashions for fraud detection or cash-laundering danger identification, is probably not totally efficient in mitigating our danger publicity in all financial environments or in opposition to all forms of dangers, together with those who we fail to determine or anticipate. Some of our qualitative instruments and metrics for managing danger are based mostly on our observations of the historic market conduct. In addition, as a result of limitations on data accessible in Brazil, to evaluate shoppers’ creditworthiness, we rely largely on credit score data accessible from our personal databases, on sure publicly accessible client credit score data and different sources. We apply statistical and different instruments to those observations and knowledge to quantify our danger publicity. These instruments and metrics could fail to foretell all forms of future danger exposures. These danger exposures, for instance, might come up from components we didn’t anticipate or appropriately consider in our statistical fashions. This would restrict our skill to handle our dangers. Our losses, subsequently, might be considerably larger than indicated by historic measures. In addition, our quantified modeling could not take all dangers under consideration. Our qualitative method to managing these dangers might show inadequate, exposing us to materials sudden losses. Our outcomes of operations and monetary place rely on our skill to guage losses related to dangers to which we’re uncovered and on our skill to construct these dangers into our pricing insurance policies. We acknowledge an allowance for mortgage losses aiming at making certain an allowance degree suitable with the anticipated loss, in line with inner fashions credit score danger measurement. The calculation additionally includes important judgment on the a part of our administration. Those judgments could show to be incorrect or change sooner or later relying on data because it turns into accessible. These components could adversely have an effect on us. 21
Strategy danger issue Our enterprise technique could not present us the outcomes we anticipate. Our technique and challenges are decided by administration based mostly on associated assumptions, akin to the longer term financial surroundings, and the regulatory, political and social eventualities within the areas wherein we function. These assumptions are topic to inaccuracies and dangers that may not be recognized or anticipated. Accordingly, the outcomes and penalties arising from any doable inaccurate assumptions could compromise our capability to completely or partially implement methods and capital expenditure plans, in addition to to realize the outcomes and advantages anticipated therefrom, which could give rise to monetary losses and cut back the worth creation to our stockholders. Additionally, components past our management, akin to, however not restricted to, financial and market circumstances, modifications in legal guidelines and laws, together with laws limiting charges or rates of interest and fostering an more and more aggressive situation, and different danger components acknowledged on this annual report could make it tough or not possible to implement totally or partially our enterprise mannequin and in addition our reaching the outcomes and advantages anticipated from our marketing strategy. Adverse modifications to the political and financial situation in Latin America could have an effect on a number of the challenges we’ve taken on, such because the internationalization of our enterprise, since our technique to strengthen our place in different international locations can also be depending on the respective financial efficiency of those international locations. The integration of acquired or merged companies includes sure dangers which will have a fabric antagonistic impact on us. As a part of our progress technique within the Brazilian and Latin American monetary sector, we’ve engaged in a variety of mergers, acquisitions and partnerships with different firms and monetary establishments prior to now and should pursue additional such transactions sooner or later. When we do announce, our inventory worth could fall relying on the scale of the acquisition. Even although we evaluation the businesses we plan to amass, it’s typically not viable for these opinions to be full in all respects. Any such transactions contain dangers, such because the doable incurrence of unanticipated prices on account of difficulties in integrating programs, finance, accounting and personnel platforms, failure in diligence or the incidence of unanticipated contingencies, in addition to the breach of the transaction agreements by counterparties. In addition, we could not obtain the working and monetary synergies and different advantages that we anticipated from such transactions in a well timed method, on a price-efficient foundation or in any respect. There can also be the danger that antitrust and different regulatory authorities could impose restrictions or limitations on the transactions or on the companies that come up from sure mixtures or impose fines or sanctions because of the interpretation by the authorities of irregularities with respect to a company merger, consolidation or acquisition. If we’re unable to make the most of enterprise progress alternatives, price financial savings, working efficiencies, income synergies and different advantages we anticipate from mergers and acquisitions, or if we incur larger integration prices than we’ve estimated, then we could also be adversely affected. Reputational danger issue Damage to our fame might hurt our enterprise and outlook. We are extremely depending on our picture and credibility to generate enterprise. A variety of components could tarnish our fame and generate a damaging notion of the establishment by our shoppers, counterparties, stockholders, traders, supervisors, business companions and different stakeholders, akin to noncompliance with authorized obligations, making irregular gross sales to shoppers, coping with suppliers with questionable ethics, damaging publicity, unauthorized disclosure of consumer knowledge, inappropriate conduct by our staff, and third-social gathering failures in danger administration, amongst others. In addition, sure important actions taken by third events, akin to rivals or different market individuals, could not directly harm our fame with shoppers, traders and the market generally. If we’re unable, or are perceived unable, to correctly deal with these points we could also be topic to penalties, fines, class actions, and regulatory investigations, amongst others. Damages to our fame amongst shoppers, traders and different stakeholders could have a fabric antagonistic impact on our enterprise, monetary efficiency and prospects. 22
Financial Reporting danger issue We make estimates and assumptions in reference to the preparation of our monetary statements, and any modifications to these estimates and assumptionscould have a fabric antagonistic impact on our working outcomes. In reference to the preparation of our monetary statements, we use sure estimates and assumptions based mostly on historic expertise and different components. While we imagine that these estimates and assumptions are affordable underneath the circumstances, they’re topic to important uncertainties, a few of that are past our management. Should any of those estimates and assumptions change or show to have been incorrect, our reported working outcomes might be materially adversely affected. As a results of the inherent limitations in our disclosure and accounting controls, misstatements as a result of error or fraud could happen and never be detected. Our disclosure controls and procedures are designed to offer affordable assurance that data required to be disclosed by us in reviews we file with or undergo the SEC underneath the Exchange Act is amassed and communicated to administration, recorded, processed summarized and reported inside the time intervals laid out in SEC guidelines and kinds. We imagine that any disclosure controls and procedures or inner controls and procedures, together with associated accounting controls, can present solely affordable, not absolute, assurance that the targets of the management system are met. These inherent limitations embrace the realities that judgments in determination-making may be defective and that breakdowns can happen due to easy error or mistake. In addition, controls may be circumvented by the person acts of some individuals, by collusion of two or extra folks or by an unauthorized override of the controls. Any failure by us to take care of efficient inner management over monetary reporting could adversely have an effect on investor confidence in our firm and, in consequence, the worth of investments in our securities. We are required underneath the Sarbanes-Oxley Act of 2002 to furnish a report by our administration on the effectiveness of our inner management over monetary reporting and to incorporate a report by our impartial auditors testifying to such effectiveness. Any failure by us to take care of efficient inner management over monetary reporting might adversely have an effect on our skill to report precisely our monetary situation or outcomes of operations. If we’re unable to conclude that our inner management over monetary reporting is efficient, or if our impartial auditors decide that we’ve a fabric weak spot or important deficiency in our inner management over monetary reporting, we might lose investor confidence within the accuracy and completeness of our monetary reviews, the market costs of our shares and ADSs might decline, and we might be topic to sanctions or investigations by the SEC or different regulatory authorities. Failure to treatment any materials weak spot in our inner management over monetary reporting, or to implement or keep different efficient management programs required of public firms topic to SEC regulation, additionally might prohibit our future entry to the capital markets. We undertake Brazilian accounting requirements and managerial disclosures that differ from overseas requirements, together with from the U.S., with which U.S.stockholders are acquainted. For regulatory functions, we put together and make accessible consolidated monetary statements underneath IFRS issued by IASB and underneath the Brazilian GAAP, which can differ from US GAAP in a variety of methods. We use Brazilian GAAP for submitting with the Brazilian Securities and Exchange Commission (“CVM”) and for calculation of fee of dividends and tax liabilities. Furthermore, we disclose quarterly reviews on managerial monetary data not required in different international locations. U.S. traders could also be unfamiliar with these completely different accounting requirements and managerial disclosures adopted by us. Concentration danger issue We face dangers associated to market focus. Concentration danger is the danger related to probably excessive monetary losses triggered by important publicity to a selected part of danger, whether or not or not it’s associated to a selected counterparty, trade, geographic area, mitigating devices, index or forex. Examples of such dangers embrace important publicity to a single counterparty, to counterparties working in the identical financial sector or geographical area, to companies segments or credit score merchandise, or to monetary devices that rely on the identical index or forex. We imagine that failure to diversify transactions with respect to a selected danger issue might generate materials monetary loss for us. 23
Competition danger issue We face dangers related to the more and more aggressive surroundings, and up to date consolidations within the Brazilian banking trade, in addition to competitors based mostly on technological options to conventional banking companies. The Brazilian marketplace for monetary companies is extremely aggressive. We face growing and important competitors from different Brazilian and worldwide banks, along with different non-monetary firms competing in sure segments of the monetary trade wherein we function. These latter rivals is probably not topic to the identical regulatory and capital necessities that we’re and, subsequently, could possibly function with much less stringent regulatory necessities. Competition has elevated on account of current consolidations amongst monetary establishments in Brazil and of laws that (i) improve the flexibility of shoppers to modify enterprise between monetary establishments, (ii) with the consumer’s permission, grant entry to monetary and private data in such establishments, and (iii) set up guidelines for an on the spot fee association. Furthermore, digital applied sciences are altering the methods prospects entry monetary companies and the aggressive surroundings with respect to such companies. The use of digital channels has risen steadily over the previous few years. In this context, new rivals are searching for to disrupt current enterprise fashions by way of technological options to conventional monetary companies. If we’re not efficiently in a position to compete with these disruptive enterprise fashions and markets (akin to startups and fintechs), we could lose market share and, consequently, decrease our margins and profitability. Such elevated competitors can also adversely have an effect on us by, amongst different issues, limiting our skill to retain or improve our present consumer base and to broaden our operations, or by impacting the charges and charges we undertake, which might cut back our revenue margins on monetary and different companies and merchandise we provide. We are topic to Brazilian antitrust laws and that of different international locations wherein we function or will probably function. We are in a dominant place in sure Brazilian banking markets and, subsequently, could also be topic to the Brazilian antitrust legal guidelines together with No. 12,529/11, which deal with, amongst different issues, violation of the financial order. Accordingly, we could also be topic to penalties from Brazilian antitrust authorities, particularly administrative fines and divestiture of belongings. Additionally, we’re topic to the antitrust laws within the jurisdictions the place we function, such because the antitrust legal guidelines of the U.S. (Sherman Act and Clayton Antitrust Act) and of the European Union (Articles 101 and 102 of the Treaty on the Functioning of the European Union). Consequently, we can’t guarantee that Brazilian and overseas antitrust laws won’t adversely have an effect on our enterprise sooner or later. b) Its dad or mum firm, direct or oblique, or management group Strategy danger issue Our controlling stockholder has the flexibility to direct our enterprise. As of December 31, 2021, IUPAR, our controlling stockholder, instantly owned 51.71% of our widespread shares and 26.15% of our whole share capital, giving it the facility to nominate and take away our administrators and officers and decide the result of any motion requiring stockholder approval, together with transactions with associated events, company reorganizations and the timing and of dividend funds. In addition, IUPAR is collectively managed by Itaúsa, which, in flip, is managed by the Egydio de Souza Aranha household, and by Cia. E. Johnston, which in flip is managed by the Moreira Salles household. The pursuits of IUPAR, Itaúsa and the Egydio de Souza Aranha and Moreira Salles households could also be completely different from the pursuits of our different stockholders. Certain of our administrators are affiliated with IUPAR and circumstances could come up wherein the pursuits of IUPAR and its associates battle with the pursuits of our different stockholders. To the extent that these and different conflicting pursuits exist, our stockholders will rely on our administrators duly exercising their fiduciary duties as members of our Board of Directors. Notwithstanding, in line with Brazilian Corporate Law the controlling stockholders ought to all the time vote within the curiosity of the corporate. In addition, they’re prohibited from voting in instances of battle of curiosity within the matter to be determined. c) Its stockholders Risk Factors for ADS Holders 24
The relative worth volatility and restricted liquidity of the Brazilian capital markets could considerably restrict the flexibility of our traders to promote the popular shares underlying our ADSs, on the worth and time they want. The funding in securities traded in rising markets continuously includes a danger greater than an funding in securities of issuers from the U.S. or different developed international locations, and these investments are typically thought of extra speculative. The Brazilian securities market is smaller, much less liquid, extra concentrated and may be extra risky than markets within the U.S. and different international locations. Thus, an investor’s skill to promote most well-liked shares underlying ADSs on the worth and time the investor needs could also be considerably restricted. The most well-liked shares underlying our ADSs shouldn’t have voting rights, besides in particular circumstances. Pursuant to our Bylaws, the holders of most well-liked shares and subsequently of our ADSs aren’t entitled to vote in our common stockholders’ conferences, besides in particular circumstances. Even in such circumstances, ADS holders could also be topic to sensible restrictions on their skill to train their voting rights as a result of further operational steps concerned in speaking with these stockholders, as talked about beneath. According to the provisions of the ADSs deposit settlement, within the occasion of a common stockholders’ assembly, we’ll present discover to the depositary financial institution, which can, to the extent practicable, ship such discover to ADS holders and directions on how such holders can take part in such common stockholders’ assembly, and ADS holders ought to instruct the depositary financial institution on methods to vote so as to train their voting rights. This further step of instructing the ADS depositary financial institution could make the method for exercising voting rights longer for ADS holders. Holders of ADSs could also be unable to train preemptive rights with respect to our most well-liked shares We could not be capable to provide the U.S. holders of our ADSs preemptive rights granted to holders of our most well-liked shares within the occasion of a rise of our share capital by issuing most well-liked shares until a registration assertion regarding such preemptive rights and our most well-liked shares is efficient or an exemption from such registration necessities of the Securities Act is accessible. As we’re not obligated to file a registration assertion regarding preemptive rights with respect to our most well-liked shares, we can’t guarantee that preemptive rights will likely be supplied to you. In the occasion such registration assertion shouldn’t be filed (or in case filed, not declared efficient) or if the exemption from registration shouldn’t be accessible, the U.S. holders of our ADSs could not obtain any worth from the granting of such preemptive rights and have their pursuits in us diluted. The give up of ADSs could trigger the lack of the flexibility to remit overseas forex overseas and of sure Brazilian tax benefits While ADS holders profit from the digital certificates of overseas capital registration obtained in Brazil by the custodian for our most well-liked shares underlying the ADSs, which allows the depositary financial institution to transform dividends and different distributions with respect to the popular shares underlying the ADSs into overseas forex and remit the proceeds overseas, the provision and necessities of such digital certificates could also be adversely affected by future legislative modifications. If an ADS holder surrenders the ADSs and, consequently, receives most well-liked shares underlying the ADSs, such holder must register its funding in the popular shares with the Central Bank both as (i) a Foreign Direct Investment, topic to Law No. 4,131/62, which would require an digital certificates of overseas capital registration, the Electronic Declaratory Registration of Foreign Direct Investment (RDE-IED), or (ii) as a Foreign Investment in Portfolio, topic to Resolution CMN No. 4,373/14, which amongst different necessities, requires the appointment of a monetary establishment in Brazil because the custodian of the popular shares (besides in case the overseas investor is a pure individual) and authorized consultant of the overseas investor within the Electronic Declaratory Registration of Portfolio (RDE – Portfolio). The failure to register the funding in the popular shares as overseas funding underneath one of many regimes talked about above (E.g. RDE – IED or RDE – Portfolio) will influence the flexibility of the holder non-resident in Brazil to get rid of the popular shares and to obtain dividends. Moreover, upon receipt of the popular shares underlying the ADSs, Brazilian laws require the investor to enter into corresponding trade fee transactions taxes could also be due on these trade fee transactions. The tax remedy for the remittance of distributions on, and the proceeds from any sale of, our most well-liked shares could also be much less favorable in case a holder of most well-liked shares obtains the RDE-IED as a substitute of the RDE-Portfolio. In addition, if a holder of most well-liked shares makes an attempt to acquire an digital certificates of overseas capital registration, such holder could incur bills or endure delays within the software course of, which might influence the investor’s skill to obtain dividends or distributions regarding our most well-liked shares or the return of capital on a well timed method. 25
The holders of ADSs have rights that differ from these of stockholders of firms organized underneath the legal guidelines of the U.S. or different international locations Our company affairs are ruled by our Bylaws and Brazilian Corporate Law, which can have authorized rules that differ from those who would apply if we have been included within the U.S. or overseas. Under Brazilian Corporate Law, the holders of ADSs and the holders of our most well-liked shares could have completely different rights with respect to the safety of investor pursuits, together with treatments accessible to traders in relation to any actions taken by our Board of Directors or the holders of our widespread shares, which can be completely different from what’s supplied in U.S. legislation or the legislation of one other nation. d) Its subsidiary and affiliated firms As we’re a holding firm, the danger components which will affect the choice to spend money on our securities come up primarily from the danger components to which our subsidiary and affiliated firms are uncovered, as described in Item 4.1. e) Its suppliers Operational danger issue Some components embrace occasions which might be totally or partially past our management, akin to energy outages, interruption of telecommunication companies, and generalized system failures, in addition to inner and exterior occasions which will have an effect on third events with which we do enterprise or which might be essential to our enterprise actions (together with inventory exchanges, clearing homes, monetary sellers or service suppliers). We have an ongoing provider evaluation course of that mitigates the danger of interruption of the supply of companies and supplies and of conditions which will influence the financial institution’s picture. The operational dangers reported within the letter “a” of this merchandise are the identical for this part. f) Its shoppers Credit dangers issue Past efficiency of our mortgage portfolio is probably not indicative of future efficiency, modifications within the profile of our enterprise could adversely have an effect on our mortgage portfolio. In addition, the worth of any collateral securing our loans is probably not ample, and we could also be unable to understand the total worth of the collateral securing our mortgage portfolio. Our historic mortgage loss expertise is probably not indicative of our future mortgage losses. While the standard of our mortgage portfolio is related to the default danger within the sectors wherein we function, modifications in our enterprise profile could happen due, amongst different components, to our natural progress, merger and acquisition exercise, modifications in native financial and political circumstances, a slowdown in buyer demand, a rise in market competitors, the outbreak of communicable illnesses akin to COVID-19, modifications in regulation and within the tax regimes relevant to the sectors wherein we function and different associated modifications in international locations wherein we function and within the worldwide financial surroundings, together with on account of escalating navy rigidity between Russia and Ukraine. Our outcomes of operations and monetary place rely on our skill to guage losses related to dangers to which we’re uncovered. We acknowledge an allowance for mortgage losses based mostly on our present evaluation and expectations concerning numerous components that have an effect on the standard of our mortgage portfolio. If we’re unable to manage or cut back the extent of nonperforming or low-high quality loans, we could also be adversely affected. For instance, traditionally, when Brazilian banks elevated their mortgage portfolio to shoppers, notably within the automotive sector, this elevated demand for car loans has been adopted by a major rise within the degree of client indebtedness, resulting in excessive nonperforming mortgage charges. As a outcome, many monetary establishments recorded greater mortgage losses as a result of an elevated quantity of provisions and a lower in loans for car acquisition. Any modifications affecting any of the sectors to which we’ve important lending publicity, and modifications within the worth of the collateral securing our loans, could lead to a discount within the worth we notice from collateral and in our mortgage portfolio. Consequentially, it might have an antagonistic influence on our outcomes of operations and monetary situation, and it might additionally adversely have an effect on the expansion fee and the combination of our mortgage portfolio. 26
In addition, if we’re unable to get well sums owed to us underneath secured loans in default by way of extrajudicial measures akin to restructurings, our final recourse with respect to such loans could also be to implement the collateral secured in our favor by the relevant borrower. Depending on the kind of collateral granted, we both should implement such collateral by way of the courts or by way of extrajudicial measures. However, even the place the enforcement mechanism is duly established by the legislation, Brazilian legislation permits debtors to problem the enforcement within the courts, even when such problem is unfounded, which might delay the belief of worth from the collateral. In addition, our secured claims underneath Brazilian legislation will in sure instances rank beneath these of most well-liked collectors akin to staff and tax authorities. As a outcome, we could not be capable to notice worth from the collateral or could solely give you the option to take action to a restricted extent or after a major period of time, thereby probably adversely affecting our monetary situation and outcomes of operations. g) Economic sectors wherein the issuer operates Macroeconomic Risk Factors International Scenario Changes in macroeconomic and geopolitical circumstances could adversely have an effect on us. Our operations are dependent upon the macroeconomic and geopolitical circumstances of a number of international locations, together with international locations wherein we and our shoppers do enterprise, particularly Latin American international locations. Crises and volatility within the monetary markets of nations apart from Brazil could have an effect on the worldwide monetary markets and the Brazilian economic system and should have a damaging influence on our operations. The demand for credit score and monetary companies, in addition to our shoppers’ skill to repay, is instantly impacted by macroeconomic variables, akin to financial progress, earnings, unemployment fee, inflation, and fluctuations in curiosity and overseas trade charges, in addition to by geopolitical variables. For instance, the current motion of Russian navy forces in Ukraine has escalated tensions between Russia and the United States, the North Atlantic Treaty Organization (“NATO”), the European Union and the United Kingdom (“U.Ok”). The United States has imposed, and is more likely to impose materials further, monetary and financial sanctions and export controls in opposition to sure Russian organizations and/or people, with comparable actions both carried out or deliberate by the EU and the U.Ok. and different jurisdictions. In addition, the navy battle between Russia and Ukraine has elevated many commodity costs, akin to the costs of power and oil. While the invasion continues towards main Ukrainian cities, the United States, the European Union and the U.Ok. and different jurisdictions are more likely to impose further materials, monetary and financial, sanctions and export controls, together with in opposition to the Russian power sector, wherein the nation is a vital international producer. Such actions and sanctions might have damaging impacts on regional and international monetary markets and financial circumstances, together with disruptions/ interruptions in distribution channels, new worth surges and will increase in inflation throughout international locations. Such occasions might have a fabric antagonistic impact on our enterprise and monetary efficiency, together with by way of elevated prices of compliance, restrictions on our and our shoppers´ skill to enter into transactions with counterparties in particular areas of the world, greater volatility in overseas forex trade charges, and elevated enter prices (akin to power). Moreover, disruptions and volatility within the international monetary markets could have important penalties within the international locations wherein we function, akin to volatility within the costs of securities, rates of interest and overseas trade charges. Higher uncertainty and volatility could lead to a slowdown within the credit score market and the economic system, which, in flip, might result in greater unemployment charges and a discount within the buying energy of shoppers. In addition, such occasions could considerably impair our shoppers’ skill to carry out their obligations and improve overdue or non-performing loans, leading to a rise within the danger related to our lending exercise. In addition, the financial and market circumstances of different international locations, together with the United States, international locations of the European Union, and rising markets, could have an effect on the credit score availability and the amount of overseas investments in Brazil and within the international locations wherein we do enterprise, to various levels. The robust and speedy rise in COVID-19 instances world wide means that the Omicron, the most recent variant of the virus, is extremely contagious. The Omicron wave has surpassed that of earlier variants in whole variety of infections, regardless of the excessive ranges of vaccination. However, hospitalizations have seen a way more modest improve, and deaths haven’t risen considerably in the previous couple of months. The present accessible data means that the Omicron variant might be much less deadly regardless of being extremely transmissible. Other than that, present excessive ranges of vaccination in a number of international locations and the distribution of booster doses can also be offering a protection in opposition to the illness. As a outcome, the Omicron-driven surge in instances has led to milder restrictions and have had a extra restricted influence on international financial exercise. The influence has been greater in China, which has adopted a zero-COVID-19 coverage. However, the danger of recent variants apart from the Omicron variant stays and reinforces the significance of booster pictures and of updating vaccines to battle virus mutations. A new surge in infections arising, for instance from new strains 27
of the virus and any occasion that may hinder governments additional controlling the unfold of COVID-19 could result in governments having to reimpose restrictions on mobility to attempt to comprise the additional unfold of the illness, thus resulting in a suppression of financial exercise. Although these dangers have decreased, their materialization would have an effect on international progress and should lower traders’ curiosity in belongings from Brazil and different international locations wherein we do enterprise, which might adversely have an effect on the market worth of our securities, probably making it tougher for us to entry capital markets and, in consequence, to finance our operations sooner or later. Additionally, inflation has been rising globally, which for developed markets will imply a quicker withdraw of financial stimulus that may have an effect on rising economies and thus our operations. Fed is more likely to elevate charges above impartial this yr and nearer to 4.0% in 2023, and to start a major stability sheet discount in May 2022. ECB can also be anticipated to maneuver towards coverage normalization. ECB is more likely to finish quantitative easing (QE) and to begin elevating charges in third quarter of 2022. A quicker withdrawal of financial stimulus in developed economies and the rise of rates of interest can have an effect on rising economies and thus have an effect on our operations. We are uncovered to sure dangers which might be explicit to rising and different markets In conducting our enterprise in Brazil, in addition to different rising markets, we’re topic to political, financial, authorized, operational and different dangers which might be inherent to working in these international locations. Banks that function in international locations thought of to be rising markets, together with us, could also be notably inclined to disruptions and reductions within the availability of credit score or will increase in financing prices, which can have a fabric antagonistic influence on our operations. In explicit, the provision of credit score to monetary establishments working in rising markets is considerably influenced by an aversion to international danger. In addition, any issue impacting investor confidence, akin to a downgrade in sovereign credit score scores (for the reason that scores of monetary establishments, akin to us, tends to be capped to the sovereign’s ranking) or an intervention by a authorities or financial authority in one in every of such markets, could have an effect on the worth or availability of assets for monetary establishments in any of those markets, which can have an effect on us. Political occasions will likely be key determinants of asset costs within the area as soon as once more. Elections in Brazil and Colombia will likely be main occasions, whereas in Chile the work of the constitutional meeting to jot down a brand new structure will likely be carefully watched, as markets anticipate extra coverage alerts from the just lately elected administration. The IMF accredited a brand new program with Argentina in March, amounting to USD 44 billion (whole disbursements over a interval of 30 months). But there are already new hurdles to the implementation of agreed insurance policies because of the new actuality of power commodity costs, which opens up the potential of waivers. Crises in these international locations could lower traders’ curiosity in Brazilian belongings, which can materially and adversely have an effect on the market worth of our securities, making it tougher for us to entry capital markets and, in consequence, to finance our operations sooner or later. Global monetary crises, along with the Brazilian macroeconomic and political surroundings, can also have an effect on the market worth of securities of Brazilian issuers in a fabric and antagonistic manner or result in different damaging results in Brazil and within the international locations wherein we function and have a fabric antagonistic impact on us. Domestic Scenario Brazilian authorities train affect over the Brazilian economic system. Changes in fiscal, financial and overseas trade insurance policies in addition to a deterioration of presidency fiscal accounts, could adversely have an effect on us. Our operations are extremely dependent upon the efficiency of the Brazilian economic system. The demand for credit score and monetary companies, in addition to our shoppers’ skill to make funds when due, is instantly impacted by macroeconomic variables, akin to financial progress, earnings, unemployment, inflation, and fluctuations in curiosity and overseas trade charges. Brazilian GDP grew 1.2% in 2019 and decreased 3.9% in 2020. In 2021, GDP elevated 4.6%. For 2022, we anticipate a slowdown within the Brazilian GDP progress to 1.0%, triggered primarily by the influence of excessive rates of interest on combination demand. Omicron turned the dominant variant after the 2021 vacation season, resulting in a pointy improve in COVID-19 instances and average stress on hospitals to start with of 2022. The variety of new instances has decreased sharply since February 2022, however the danger of recent COVID-19 variants stays and reinforces the significance of booster pictures and of updating vaccines to battle virus mutations. Moreover, there may be a substantial amount of political uncertainty across the consequence of the 2022 presidential elections in Brazil. In the long run, progress could also be restricted by a variety of components, together with structural components, akin to insufficient infrastructure, which entail dangers of potential power shortages and deficiencies within the transportation sector, amongst others, and an absence of certified professionals, which might cut back the nation’s productiveness and effectivity ranges. Low ranges of nationwide financial savings require comparatively massive monetary flows from overseas, which can falter if political and financial instability is perceived by overseas traders. Depending on their depth, these components might result in lowering employment charges and to decrease earnings and consumption ranges, which might lead to 28
elevated default charges on loans we grant for people and non-monetary companies and, subsequently, have a fabric antagonistic impact on us. Brazilian authorities intervene every now and then within the Brazilian economic system, by way of modifications in fiscal, financial, overseas trade insurance policies, and in state-owned public firms-which can adversely have an effect on us. These modifications could influence variables which might be essential for our progress technique (akin to overseas trade and rates of interest, liquidity within the forex market, tax burden, and financial progress), thus limiting our operations in sure markets, affecting our liquidity and our consumer’s skill to pay, the danger urge for food of overseas traders with respect to Brazil and, consequently, affecting our enterprise, outcomes of operations and monetary situation. Fiscal The consolidated public sector delivered a main funds surplus of 0.7% of GDP in 2021, marking the primary optimistic outcome since 2013. In 2022, we anticipate the first results of GDP to lower 0.2%. Public debt decreased from 88.8% in 2020 to 80.3% of GDP in 2021 and is predicted to stay steady 80% of GDP in 2022, however to extend once more in 2023. Structurally, excessive indebtedness and an unsure fiscal framework recommend a significant danger to Brazil’s fiscal path. If the federal government fails to stick with the fiscal adjustment agenda, the native economic system can be negatively impacted, with a depreciation of the Brazilian actual, a rise in inflation and rates of interest and a deceleration of financial progress, thus adversely affecting our enterprise, outcomes of operations and monetary situation. Monetary Sudden will increase in costs and lengthy intervals of excessive inflation could trigger, amongst different results, lack of buying energy and distortions within the allocation of assets within the economic system. Measures to fight excessive inflation charges embrace a tightening of financial coverage, with a rise within the SELIC, leading to restrictions on credit score and brief-time period liquidity, which can have a fabric antagonistic impact on us. Changes in rates of interest could have a fabric impact on our web margins, since they influence our prices of funding and granting credit score. In addition, will increase within the SELIC fee might cut back demand for credit score and improve the prices of our reserves and the danger of default by our shoppers. Conversely, decreases within the SELIC fee might cut back our good points from curiosity-bearing belongings, in addition to our web margins. The Central Bank’s Monetary Policy Committee (the “COPOM”) was created on June 20, 1996 and is chargeable for setting the SELIC fee. The COPOM meets eight instances a yr, each 45 days. The purpose in creating the COPOM was to reinforce financial coverage transparency and confer satisfactory regularity to the financial coverage determination-making course of. Currently, many central banks world wide observe comparable procedures, facilitating the choice-making course of, financial coverage transparency and communication with the general public. After reaching 2.0% every year in August 2020, the Central Bank started to extend rates of interest in March 2021. The SELIC fee reached 9.25% in December 2021 and 12.75% in May 2022. The improve within the SELIC fee all through 2021 and 2022 positioned actual rates of interest at a restrictive degree. The COVID-19 pandemic and the ensuing financial slowdown and volatility within the Brazilian and international monetary and capital markets had, and should sooner or later proceed to have, a fabric antagonistic impact on our enterprise, monetary situation, liquidity and outcomes of operations throughout our enterprise models. To the extent the COVID-19 pandemic adversely impacts our enterprise, liquidity, outcomes of operations and monetary situation, it would even have the impact of materially heightening lots of the different dangers described on this “Risk Factors” part. The COVID-19 pandemic and governmental responses thereto have had, and should proceed to have, a extreme influence on international and Brazilian macro-financial and monetary circumstances, together with the disruption of provide chains and the closures or interruptions of many companies, resulting in losses of revenues, elevated unemployment and financial stagnation and contraction. The COVID-19 pandemic has additionally resulted in materially elevated volatility in each Brazilian and worldwide monetary markets and financial indicators, together with trade charges, rates of interest and credit score spreads. For instance, on account of heightened volatility, the B3 Exchange’s circuit breaker was triggered eight instances within the month of March 2020 and the worth of belongings was negatively impacted. Any shocks or sudden actions in these market components might lead to monetary losses related to our buying and selling portfolio or monetary belongings, which might deteriorate our monetary situation. Furthermore, market considerations might translate into liquidity constraints and lowered entry to funding in each the native and the worldwide markets, negatively affecting our enterprise. Measures taken by governmental authorities worldwide, together with Brazil, to stabilize markets and assist financial progress is probably not ample to manage excessive volatility or to forestall severe and extended reductions in 29
financial exercise. In addition, the social distancing measures imposed by governmental authorities to comprise the unfold of the COVID-19 pandemic resulted in a pointy drop or perhaps a halt within the actions of firms in numerous sectors that we transact with and in any other case serve. While many of those restrictions have since been lifted, there isn’t a approach to predict whether or not new patterns of contagion, and the emergence of recent variants, growing illness severity or different components associated to the pandemic, together with entry to, or the effectivity of, vaccines and the provision of booster pictures, could lead to a renewed tightening of those insurance policies or the imposition of recent and completely different restrictions. These insurance policies and measures have influenced the conduct of the buyer market and the inhabitants generally, the demand for companies, merchandise and credit score. In addition, there may be no assurance that the restrictive measures imposed by sure Brazilian states and municipalities won’t worsen if Brazil faces new waves of COVID-19. For instance, in the beginning of 2021, a novel pressure of COVID-19 began circulating in Brazil, inflicting a rise within the variety of deaths and hospitalizations. On March 11, 2021, Brazil was thought of the epicenter of the COVID-19 pandemic by way of variety of confirmed instances and deaths. As a outcome, public authorities in Brazil reinstated extra extreme restrictive measures, together with social distancing, quarantine and lockdowns. However, even with these measures, financial exercise was considerably much less impacted in 2021, indicating that there was a studying course of in reference to the COVID-19 pandemic. The weakened macroeconomic fundamentals coupled with the market downturn attributable to the COVID-19 pandemic had, and should sooner or later have, a damaging influence on our efficiency throughout all our enterprise models. Impacts on our enterprise might be widespread, and materials impacts could also be doable, together with however not restricted to the next: Employees contracting COVID-19; Reductions in our working effectiveness as our staff make money working from home or catastrophe-restoration places; Unavailability of key personnel essential to conduct our enterprise actions, together with an absence of certified IT personnel to assist distant working or fight any cyber dangers; Unprecedented volatility in international monetary markets and trade markets; Reductions in income throughout our working companies and elevated buyer defaults; Closure of our places of work or the places of work of our shoppers; and Potential regulatory scrutiny of our skill to adequately supervise our actions in accordance with relevant regulatory necessities. The extent of the impacts of the COVID-19 pandemic on our enterprise, monetary situation, liquidity and outcomes will rely on future developments, that are extremely unsure, unpredictable and which rely on a number of components which might be past our management, together with the potential of further outbreaks, additional mutations and variants of the virus and the depth of the financial downturn ensuing from actions taken, or to be taken, by authorities authorities and the scientific group in response to the COVID-19 pandemic, together with in relation to the provision and effectivity of vaccines and different therapies. Consumers affected by the COVID-19 pandemic could proceed to indicate retraction behaviors, even after the top of the disaster, sustaining low ranges of discretionary spending in the long run, which is why sure sectors we serve could take longer to get well (notably sectors akin to resorts, civil aviation, buying facilities and wholesale retailers). Please see “Note 33 – Supplementary data” to our audited consolidated monetary statements. Ongoing excessive profile anti-corruption investigations in Brazil could have an effect on the notion of Brazil and home progress prospects. Certain related Brazilian firms within the power, infrastructure and oil and fuel sectors are dealing with investigations by the CVM, the SEC, the U.S. Department of Justice (DOJ), the Brazilian Federal Police and different Brazilian public entities who’re chargeable for corruption and cartel investigations, in reference to corruption allegations (so referred to as Lava Jato investigations) and, relying on the result of such investigations and the time it takes to conclude them, they could face (as a few of them already confronted) downgrades from credit standing businesses, expertise (as a few of them already skilled) funding restrictions and have (as a few of them already had) a discount in revenues, amongst different damaging results. Such damaging results could hinder the flexibility of these firms to well timed honor their monetary obligations bringing loses to us as a variety of them are our shoppers. The firms concerned within the Lava Jato investigations, a variety of that are our shoppers, can also be (as a few of them have already got been) prosecuted by traders on the grounds that they have been misled by the 30
data launched to them, together with their monetary statements. Moreover, the present corruption investigations have contributed to cut back the worth of the securities of a number of firms. The funding banks (together with Itau BBA Securities in NY) that acted as underwriters on public distributions of securities of such investigated firms, and Banco Itau International, our personal banking car in Miami, have been within the current previous additionally events to sure associated lawsuits within the U.S., that have been both settled or dismissed, and should turn into events to different authorized proceedings but to be filed. We can’t predict how lengthy the corruption investigations could proceed, or how important the results of the corruption investigations could also be for the Brazilian economic system and for the monetary sector which may be investigated for the business relationships it might have held with firms and individuals concerned in Lava Jato investigations. Another excessive profile investigation, apart from Lava Jato, ongoing in Brazil is the so-referred to as Zelotes operation. If the allegations of such investigations are confirmed they could additionally have an effect on a few of our shoppers and their credit score trustworthiness. In March 2016, the Brazilian Internal Revenue Services, or Brazilian IRS, summoned us to account for sure tax proceedings associated to BankBoston Brazil which got here underneath investigation in relation to the Zelotes operations. We acquired BankBoston Brazil’s operation from Bank of America in 2006. On December 1, 2016, the Brazilian Federal Police carried out searches at our premises, to search for paperwork associated to these proceedings, and paperwork associated to funds made to attorneys and consultants that acted on these proceedings. We make clear that the settlement with Bank of America for the acquisition of BankBoston Brazil’s operations included a provision whereby the vendor would stay liable and chargeable for the conduct of BankBoston’s tax proceedings, together with with regard to the retention of attorneys and consultants. Therefore, in line with such settlement, any and all funds made by us to attorneys and consultants have been made strictly on behalf of Bank of America. In July 2017, the Brazilian Federal Public Prosecutor indicted some attorneys and public brokers concerning this case, based mostly on their potential participation on the scheme. None of them was our staff or executives. We stay totally accessible and can cooperate with the authorities ought to any additional clarification be wanted. After reviewing our management procedures and our monitoring programs, we imagine we’re in compliance with the present requirements, particularly associated to anti-cash laundering requirements; however, because of the dimension and breadth of our operations and our business relationship with investigated firms or individuals, and because of the a number of banks, each publicly and privately owned, that we acquired all through the final fifteen years, we can also come inside the scope of investigations, which can finally lead to reputational harm, civil or felony legal responsibility. Negative results on a variety of firms can also influence the extent of investments in infrastructure in Brazil, which can additionally result in decrease financial progress. It was reported by the press that Antonio Palocci Filho and Eike Fuhrken Baptista da Silva, negotiated a plea discount with the Brazilian Public Ministry, the place they denounced alleged irregularities in electoral donations and market manipulation, respectively, carried out by some Brazilian banks, together with us and Itaú BBA After the investigation, the Federal Police didn’t indict any Itaú worker or govt member. On February 22, 2022, the investigation information have been filed by the Federal´s Court. h) Regulation of the sectors wherein the issuer operates Banking Regulation Risk Factors We are topic to regulation on a consolidated foundation and could also be topic to liquidation or intervention on a consolidated foundation. We function in a variety of credit score and monetary companies associated sectors by way of entities underneath our management. For functions of regulation and supervision, the Central Bank treats us and our subsidiaries and associates as a single monetary establishment. While our consolidated capital base gives monetary power and adaptability to our subsidiaries and associates, their particular person actions might not directly put our capital base in danger. Any investigation or intervention by the Central Bank, notably within the actions carried out by any of our subsidiaries and associates, might have a fabric antagonistic influence on our different subsidiaries and associates and, finally, on us. If we or any of our monetary subsidiaries turn into bancrupt, the Central Bank could perform an intervention or liquidation course of on a consolidated foundation quite than conduct such procedures for every particular person entity. In the occasion of an intervention or a liquidation course of on a consolidated foundation, our collectors would have claims on our belongings and the belongings of our consolidated monetary subsidiaries. In this case, claims of collectors of the identical nature held in opposition to us and our consolidated monetary subsidiaries would rank equally in respect of fee. If the Central Bank carries out a liquidation or intervention course of with respect to us or any of our monetary subsidiaries on a person foundation, our collectors wouldn’t have a direct declare on the belongings of such monetary subsidiaries, and the collectors of such monetary subsidiaries would have precedence in relation to our collectors in reference to such monetary subsidiaries’ belongings. The Central Bank additionally has the authority to hold out different company reorganizations or transfers of management underneath an intervention or liquidation course of. 31
Changes in relevant legislation or laws could have a fabric antagonistic impact on our enterprise. Changes within the legislation or laws relevant to monetary establishments in Brazil could have an effect on our skill to grant loans and gather money owed in arrears, which can have an antagonistic impact on us. Our operations may be adversely affected by different modifications, together with with respect to restrictions on remittances overseas and different trade controls in addition to by interpretations of the legislation by courts and businesses in a way that differs from our authorized advisors’ opinions. In addition, the charges charged to particular person prospects are regulated by the Central Bank, which can impose gratuities. For instance, the Central Bank prohibits the charging of charges for utilizing Pix, in addition to requires the supply of important banking companies by monetary establishments (e.g., ATMs and on-line banking), which tends to influence sources of our income. In the context of financial or monetary crises, the Brazilian authorities can also determine to implement modifications to the authorized framework relevant to the operation of Brazilian monetary establishments. For instance, in response to the worldwide monetary disaster which started in late 2007, Brazilian nationwide and intergovernmental regulatory entities, such because the BCBS, proposed regulatory reforms aiming to forestall the recurrence of comparable crises, which included a brand new requirement to extend the minimal regulatory capital (Basel III). Moreover, the Brazilian Congress is contemplating enacting new laws that, if signed into legislation as presently drafted, might have an antagonistic impact on our actions. In 2019, a number of payments sought to restrict rates of interest, notably for bank card amenities (rotativo do cartão) and overdrafts amenities (cheque especial) – the latter, with limits which might be extra restrictive than these just lately imposed by the Central Bank. Further caps on rates of interest could also be adopted. Furthermore, a proposed legislation to amend the Brazilian client safety code would enable courts to change phrases and circumstances of credit score agreements in sure circumstances, imposing sure difficulties for the gathering of quantities from remaining shoppers. In 2021, Law No. 14,183 was issued, which elevated the tax burden on the banking and monetary companies sectors. In 2022, Congress is predicted to vote on one other improve within the tax invoice. The publication of Law No.14,181/21 goals to assist shoppers in good religion who’re unable to pay their money owed with out compromising the minimal quantities they should survive. These parameters will likely be outlined by the regulator in 2022, being their standards for remedy of over-indebtedness and excellent money owed from the federal authorities, which might have a damaging influence on the granting of credit score and the renegotiation of money owed with our prospects. In addition, native or state legislatures could every now and then take into account payments desiring to impose safety measures and requirements for buyer companies, akin to setting department opening hours, requiring 24 hour armed guard personnel and specs on ATM functioning, amongst others, that, if signed into legislation, might have an effect on our operations. More just lately, sure payments have handed (and others have been proposed) in sure Brazilian states or municipalities that have an effect on our skill to guage credit score danger and gather excellent money owed. For instance, legislators usually impose, or purpose to impose, restrictions on the flexibility of collectors to incorporate the details about bancrupt debtors within the information of credit score safety bureaus. These forms of restrictions might additionally adversely have an effect on our skill to gather excellent credit score. We even have operations exterior of Brazil, together with Argentina, the Bahamas, the Cayman Islands, Chile, Colombia, Paraguay, Portugal, Switzerland, the United Kingdom, the United States and Uruguay. Changes within the legal guidelines or laws relevant to our enterprise within the international locations the place we function, or the adoption of recent legal guidelines, and associated laws, could have an antagonistic impact on us. Increases in obligatory deposit necessities could have a fabric antagonistic impact on us. Compulsory deposits are reserves that monetary establishments are required to take care of with the Central Bank. Compulsory deposits typically don’t present the identical returns as different investments and deposits as a result of a portion of those obligatory deposits doesn’t bear curiosity. The Central Bank has periodically modified the minimal degree of obligatory deposits reserves that monetary establishments are required to take care of with the Central Bank. Insurance Regulations Risk Factor Our insurance coverage operations are topic to oversight by regulatory businesses, akin to SUSEP and ANS. Therefore, we could also be affected negatively by thepenalties utilized by such regulators. Insurance firms are topic to SUSEP intervention and/or liquidation. In case of inadequate assets, technical reserves, or poor financial well being with respect to a regulated entity, SUSEP could appoint an inspector to behave inside the related firm. If such intervention doesn’t treatment the difficulty, SUSEP will ahead to CNSP a proposal to withdraw the relevant insurance coverage license. In addition, insurance coverage firms are topic 32
to pecuniary penalties, warnings, suspension of authorization of actions and disqualification to interact in enterprise actions as set in Law. Health insurance coverage firms are topic to ANS laws. With respect to firms which might be deemed to have monetary imbalances or severe financial, monetary or administrative irregularities, ANS could order the disposal of the relevant medical insurance firm’s portfolio, or take different measures, akin to fiscal or technical course regime for a interval not exceeding twelve months, or extrajudicial liquidation. The penalties established for violations dedicated by medical insurance firms and their administrators and officers are: (i) warnings; (ii) pecuniary penalties; (iii) suspension of firm’s actions; (iv) short-term disqualification for the train of administration positions in medical insurance firms; (v) everlasting disqualification for the train of administration positions in medical insurance firms in addition to in open personal pension funds, insurance coverage firms, insurance coverage brokers and monetary establishments; and (vi) the cancellation of the corporate’s authorization to function and sale of its portfolio. Accordingly, our insurance coverage operations could also be affected negatively by any penalties utilized by SUSEP or ANS, as described above. Capital Market and Tax Regulations Risk Factors Holders of our shares and ADSs could not obtain any dividends. Corporations in Brazil are legally required to pay their stockholders a minimal obligatory dividend not less than on a yearly foundation (besides in particular instances supplied for in relevant legislation). Our Bylaws decide that we should pay our stockholders not less than 25% of our annual web earnings calculated and adjusted pursuant to Brazilian Corporate Law. Applicable Brazilian laws additionally permits companies to contemplate the quantity of curiosity on shareholders’ fairness distributed to their stockholders for functions of calculating the minimal obligatory dividends. The calculation of web earnings pursuant to the Brazilian Corporate Law could considerably differ from our web earnings calculated underneath IFRS. Brazilian Corporate Law additionally permits the suspension of the fee of the obligatory dividends in any explicit yr if our Board of Directors informs our common stockholders’ assembly that such fee can be incompatible with our monetary situation. To droop the dividend funds, our Fiscal Council is required to furnish to the CVM an opinion on the matter together with an announcement by our executives. Therefore, upon the incidence of such occasion, the holders of our shares and ADSs could not obtain any dividends. If this occurs, the dividends that weren’t paid within the explicit fiscal yr shall be registered as a particular reserve and, if not used to cowl any losses of subsequent years, the quantities of unpaid dividends nonetheless accessible underneath such reserve shall be distributed when the monetary situation of the company permits for such fee. Furthermore, pursuant to its regulatory powers supplied underneath Brazilian legislation and banking laws, the Central Bank could at its sole discretion cut back the dividends or decide that no dividends will likely be paid by a monetary establishment if such restriction is critical to mitigate related dangers to the Brazilian monetary system or the monetary establishment. Tax reforms could adversely have an effect on our operations and profitability. The Brazilian authorities frequently amends tax legal guidelines and laws, together with by creating new taxes, which may be short-term, and altering tax charges, the premise on which taxes are assessed or the best way taxes are calculated, together with in respect of tax charges relevant solely to the banking trade. Currently, the Brazilian Congress is discussing completely different legislative proposals for a broad tax reform. Ongoing discussions embrace changing sure current taxes for brand new ones, the imposition of withholding tax over dividends distributions (presently exempt from earnings taxation), improve of sure taxes levied on monetary revenues, amongst different provisions. There is not any readability as to when or whether or not a tax reform could finally be enacted. If adopted, any such tax reform could have an effect on our enterprise by growing our prices, limiting our profitability or having different impacts. Litigation Risk Factors Unfavorable courtroom choices involving materials quantities for which we’ve no or partial provisions or within the occasion that the losses estimated develop into considerably greater than the provisions made, could adversely have an effect on our outcomes and monetary situation. 33
As a part of the extraordinary course of our enterprise, we’re topic to, and social gathering to numerous civil, tax and labor lawsuits, which contain monetary dangers. Our audited consolidated monetary statements solely embrace reserves for possible losses that may be fairly estimated and eventual bills that we incur in reference to litigation or administrative proceedings, or as in any other case required by Brazilian legislation. It is presently not doable to estimate the quantity of all potential prices that we could incur or penalties which may be imposed on us apart from these quantities for which we’ve reserves. In the occasion of unfavorable courtroom choices involving materials quantities for which we’ve no or partial provisions, or within the occasion that the losses estimated develop into considerably greater than the provisions made, the mixture price of unfavorable choices, could adversely have an effect on our outcomes and monetary situation. Decisions on lawsuits as a result of authorities financial stabilization plans could have a fabric antagonistic impact on us. We are a defendant in lawsuits for the gathering of understated inflation adjustment for financial savings ensuing from the financial plans carried out within the Nineteen Eighties and Nineteen Nineties by the Brazilian authorities as a measure to fight inflation. We are a defendant in lawsuits filed by people, in addition to class actions filed by (i) client safety associations; and (ii) the general public attorneys’ workplace (Ministério Público) on behalf of holders of financial savings accounts. In reference to these class actions, we established provisions upon service of the person declare requiring the enforcement of a judgment handed down by the judiciary, utilizing the identical standards used to find out the provisions of particular person actions. The STF has issued a variety of choices in favor of the holders of financial savings accounts however has not dominated concerning the constitutionality of financial plans and their applicability to financial savings accounts. Currently, the appeals on this challenge are suspended by order of the STF, till there’s a definitive determination by the STF concerning the constitutional challenge. In December 2017, underneath the mediation of the Advocacia-Geral da União (or AGU), the consultant entities of banks and the consultant entities of holders of financial savings accounts entered into an settlement with the target of ending the litigation associated to financial plans in opposition to the Brazilian banks. The settlement establishes the circumstances for the voluntary adhesion of the holders of financial savings accounts for the receiving of quantities and closure of processes. The settlement was ratified at a plenary session of the STF on March 1, 2018 and the holders of financial savings accounts have been in a position to adhere to its phrases for a interval of 24 months. As this era expired, the events signed an addendum to the instrument to increase the adhesion interval to incorporate a larger variety of saving account holders and, consequently, improve the termination of authorized actions. In May 2020, the STF accredited this addendum and granted a time period of thirty months for brand new adhesions, which can be prolonged for an additional thirty months, conditioned on the variety of account holders adhering all through the primary interval. As such, low adherence to the settlement and an eventual unfavorable judgment by the STF could lead to Brazilian banks incurring related prices, which might have an antagonistic impact on our monetary place. We are presently working with the courts to encourage adherence. Tax assessments could adversely have an effect on us. As a part of the traditional course of enterprise, we’re topic to inspections by federal, municipal, and state tax authorities. These inspections, arising from the divergence within the understanding of the applying of tax legal guidelines could generate tax assessments which, relying on their outcomes, could have an antagonistic impact on our monetary outcomes. Also as a result of such proceedings and for different causes we could also be thwarted by a courtroom determination to pay dividends and different distributions to our shareholders. i) Foreign international locations wherein the issuer operates The danger components associated to overseas international locations which will affect the choice to spend money on our securities are described in sub gadgets (a), (g), and (h) of this merchandise 4.1. j) Environmental and social (E&S) points Environmental and Social Risks Factors 34
We could incur monetary losses and damages to our fame from environmental and social dangers. Environmental and social danger is taken into account a fabric challenge for our enterprise, since it could actually have an effect on the creation of shared worth within the brief, medium and lengthy phrases, from the standpoint of our group and our principal stakeholders. Further, we perceive environmental and social danger as the potential of losses ensuing from occasions of environmental and social origin associated to our actions. We carried out a strategic evaluation of environmental and social dangers governance, so as to combine the administration of those dangers right into a transversal and unified mannequin, based mostly on the reputational danger dimension, in accordance with our danger urge for food. Additionally, new regulatory initiatives associated to ESG apply to us could expose us to elevated compliance prices, restrict our skill to pursue sure enterprise alternatives and supply sure services and products, every of which might adversely have an effect on our enterprise, monetary situation and outcomes of operations. For instance, CMN Resolution No. 4,327/2014 establishes necessities that should be noticed within the institution and implementation of the environmental and social duty insurance policies for monetary establishments. Accordingly, we’re required to evaluate environmental and social dangers and consider knowledge from environmental and social associated monetary losses. The Central Bank is chargeable for supervising the implementation of such regulation. Environmental and social points could have an effect on our day by day actions and the income of our shoppers, inflicting defaults, particularly in case of great environmental and social incidents, together with local weather danger as local weather change additionally poses related dangers for the entire monetary system. These dangers are extra pronounced after we present monetary assist for shoppers and initiatives, as we might be held not directly accountable for supporting such exercise in case of environmental or social harm, which might additionally topic us to additional reputational dangers. Climate change could have antagonistic results on our enterprise Risks related to local weather change are gaining growing social, regulatory, financial and political relevance, each nationally and internationally. New laws associated to local weather change could have an effect on our operations and enterprise technique, main us to include monetary prices ensuing from: (i) bodily local weather dangers; (ii) dangers arising from the transition to a low carbon economic system, and (iii) local weather litigation. Physical local weather dangers are associated to the projection that international local weather shall proceed to alter over this century and past, which is predicted to lead to elevated severity and frequency of maximum climate occasions. Despite the uncertainty part associated to the depth and site of those occasions, it’s anticipated that financial results shall be acuter sooner or later. Potential results on the economic system embrace, however aren’t restricted to, important modifications in asset costs and trade profitability. Damage to debtors’ properties and operations could impair asset values and credit score high quality of consumers, resulting in greater nonperformance loans, write-offs, and impairment prices in our portfolios. In addition, our amenities and resilience can also endure bodily harm as a result of climate occasions which can signify elevated prices for us. Regarding the transitional dangers, we acknowledge that financial shifts towards a low-carbon future are wanted. We anticipate that the market could face important and speedy developments by way of stakeholder expectations, coverage, authorized and regulatory dangers able to impacting our lending actions and the worth of our monetary belongings. In addition, we anticipate that we’ll face larger scrutiny of the enterprise we conduct and the shoppers we transact with. As a results of our practices and choices associated to local weather change or to the practices or involvement of our shoppers, in sure industries or initiatives related to inflicting or exacerbating local weather change, our fame and consumer relationships could also be broken, which can in flip influence buyer demand for our merchandise, returns on sure enterprise actions and the worth of sure belongings and buying and selling positions leading to impairment modifications. Effects from each bodily and transitional dangers can also signify losses for our shoppers, affecting firms´ profitability in addition to their skill to repay loans. Further, doable carbon pricing can have an effect on firms’ prices and compromise their skill to generate money flows. Any subsequent improve in defaults and rising unemployment might create recessionary pressures, which can result in wider deterioration within the creditworthiness of our shoppers, greater anticipated credit score loss, and elevated cost-offs and defaults amongst wholesale and retail prospects. If we don’t adequately embed dangers related to local weather develop into our danger framework to appropriately measure, handle and disclose the varied monetary and operational dangers which will outcome from local weather change, or if we fail to adapt our technique and enterprise mannequin to a altering regulatory and market surroundings, we could face an essential antagonistic influence on our enterprise progress charges, competitiveness, profitability, capital necessities, price of funding, and monetary situation. 35
Other potential danger arises from local weather-associated litigation claims, which is compelling governments and company actors to purse motion or higher practices to adapt to modifications so as to mitigate the impacts ensuing from loss and harm as a result of local weather change. Financial establishments are uncovered to the danger of being defendants in a local weather-associated swimsuit, and so they can also be not directly affected by way of their consumer’s portfolio. Clients may be instantly or not directly held legally accountable for a local weather-associated occasion or influence, which can lead to related repairment prices, potential influence on the worth of our consumer´s, and even leading to issue to get well after paying for damages. Litigation may trigger stranded belongings primarily within the carbon-intensive industries, as a result of unanticipated, untimely write-downs or devaluations attributable to local weather change. 4.2. Describe, on a quantitative and qualitative foundation, the primary market dangers to which the issuer is uncovered, together with these associated to overseas trade and rate of interest dangers. a. Our definition of market danger Market danger is the potential of losses ensuing from fluctuations out there worth of positions held by a monetary establishment, together with the danger of operations topic to variations in overseas trade charges, rates of interest, worth indexes, fairness and commodity costs. b. Our market danger governance Our insurance policies and common market danger administration framework are in keeping with the rules of CMN Resolution No. 4,557, and its subsequent amendments. These rules information our method to market danger management throughout our Itaú Unibanco Group. Our market danger administration technique is aimed toward balancing company enterprise targets, taking into consideration, amongst different components: Political, financial and market circumstances; The profile of our portfolio; and Capacity to behave in particular markets. The key rules underlying our market danger management construction are as follows: Provide visibility and luxury for all senior administration ranges that market dangers assumed should be in keeping with our danger-return targets; Provide disciplined and knowledgeable dialogue on the general market danger profile and its evolution over time; Increase transparency as to how the enterprise works to optimize outcomes; Provide early warning mechanisms to facilitate efficient danger administration, with out obstructing the enterprise targets; and Monitor and keep away from danger focus. Market danger is managed by an space impartial of the enterprise models, which is chargeable for the day by day actions: (i) measuring and assessing danger; (ii) monitoring stress eventualities, limits and alerts; (iii) making use of, analyzing and stress testing eventualities; (iv) reporting danger to the people accountable within the enterprise models, in compliance with our governance procedures; (v) monitoring the measures wanted to regulate positions and/or danger ranges to make them viable; and (vi) supporting the safe launch of recent monetary merchandise. The CMN has laws establishing the segregation of market danger publicity at a minimal into danger components, akin to: rates of interest, trade charges, shares and commodities. Brazilian inflation indexes are additionally handled as a bunch of danger components and observe the identical construction. Our construction of limits and alerts follows the Board of Directors pointers, that are reviewed and accredited by our Board of Directors on an annual foundation. This construction extends to particular limits and is aimed toward enhancing the method of danger monitoring and understanding in addition to stopping danger focus. Limits and alerts are calibrated based mostly on projections of future stability sheets, stockholders’ fairness, liquidity, complexity and market volatility, in addition to our danger urge for food. c. Our market danger procedures and metrics 36
In an try to suit the transactions into the outlined limits, we hedge transactions with shoppers and proprietary positions, together with investments abroad. Derivatives are probably the most generally used devices for finishing up these hedging actions, and may be characterised as both accounting or financial hedge, each of that are ruled by our institutional laws. Our market danger framework categorizes transactions as ‘Trading Book’ or ‘Banking Book’, in accordance with common standards established by particular regulation. Our Trading Book consists of all trades with monetary and commodity devices (together with derivatives) undertaken with the intention of buying and selling. Our Banking Book is predominantly characterised by portfolios originated from the banking enterprise and operations associated to stability sheet administration, and supposed to be both held to maturity, or offered within the medium or long run. Market danger administration is predicated on the next key metrics: Value at Risk (VaR): a statistical metric that quantifies the utmost potential financial loss anticipated in regular market circumstances, contemplating an outlined holding interval and confidence interval; Losses in Stress Scenarios (Stress Testing): a simulation approach to guage the influence, within the belongings, liabilities and derivatives of the portfolio, of varied danger components in excessive market conditions (based mostly on potential and historic eventualities); Stop Loss: metrics that set off a administration evaluation of positions, if the amassed losses in a given interval attain specified ranges; Concentration: cumulative publicity of sure monetary devices or danger components calculated at market worth (mark to market); and Stressed VaR: a statistical metric derived from VaR calculation, aimed toward capturing the largest danger in simulations of the present portfolio, considering the observable returns in historic eventualities of maximum volatility. In addition to the danger metrics described above, sensitivity and loss management measures are additionally analyzed. They embrace: Gap Analysis: amassed publicity of money flows by danger issue, that are marked-to-market and positioned by settlement dates; Sensitivity (DV01 – Delta Variation Risk): influence in the marketplace worth of money flows when a one foundation level change is utilized to present rates of interest or on the index charges; and Sensitivities to Various Risk Factors (Greek): partial derivatives of a portfolio of choices on the costs of the underlying belongings, implied volatilities, rates of interest and time. Please see “Note 32 – Risk and Capital Management” to our audited consolidated monetary statements for additional particulars about market danger. VaR – Consolidated Itaú Unibanco Holding Our consolidated VaR is calculated by way of the Historical Simulation. The assumption underlying Historical Simulation is that the anticipated distribution for the doable good points and losses (P&Ls-Profit and Loss Statement) for a portfolio over a desired time horizon may be estimated based mostly on the historic conduct of the returns of the market danger components to which this portfolio is uncovered. For the VaR calculation of non-linear devices, a full re-pricing is carried out (full valuation), with none potential simplifications within the calculation. The VaR is calculated with a confidence interval of 99%, a historic interval of 4 years (1000 working days) and a holding interval that varies in accordance with the portfolio’s market liquidity, contemplating a minimal horizon of 10 working days. Also, underneath a conservative method, the VaR is calculated every day with and with out volatility weighting, with the ultimate VaR being probably the most restrictive worth between the 2 methodologies. As from the third quarter of 2016, we’ve been calculating VaR for the regulatory portfolio (publicity of the buying and selling portfolio and publicity to overseas forex and commodities of the banking portfolio) in line with inner fashions accredited by the Central Bank. The Consolidated Total VaR desk gives an evaluation of our portfolio publicity to market danger. 37
Consolidaded VaR Consolidaded (Historical Simulation VaR method) (1) Average Minimum Maximum December 31, 2021 Average (In thousands and thousands Minimum of R$) Maximum De (1) (In thousands and thousands of R$) (Historical Simulation method) Average Minimum Maximum December 31, 2021 Average Minimum Maximum December 31, 2020 Group of Risk Factor Group of Risk Factor Interest fee 937 425 1,411 1,257 614 292 1,961 Interest Currencies fee 937 425 18 1,411 10 1,257 37 614 292 13 1,961 20 431 9 71 Currencies Equities 18 10 42 37 17 13 98 20 9 24 71 23 24 9 49 Equities Commodities 42 17 4 98 1 24 8 23 9 4 49 2 30 1 4 Commodities Diversification impact (2) 4 1 8 4 2 (602) 1 4 1 Diversification impact (2) –(602) –(263) Total 441 198 707 696 282 166 763 Total 441 198 707 696 282 166 763 223 (1) Determined in native forex and transformed into Brazilian reais on the closing worth on the reporting date. (2) Reduction of danger because of the mixture of all danger components. As of December 31, 2021, our common international VaR (Historical Simulation) was R$441 million, or 0.3% of our consolidated stockholders’ fairness as of December 31, 2021, in comparison with our common international VaR (Historical Simulation) of R$282 million as of December 31, 2020 or 0.2% of our consolidated stockholders’ fairness as of December 31, 2020. VaR – Trading Book The desk beneath presents dangers arising from all positions with the intention of buying and selling, following the factors outlined above for our Trading Book. Our whole common Trading Book VaR was R$48.7 million as of December 31, 2021, in comparison with R$42.0 million as of December 31, 2020 and to R$44.0 million as of December 31, 2019. Trading Book VaR(1) Average Minimum Maximum December 31, 2021 Average Minimum (In thousands and thousands Maximum of R$) December 31, Trading 2020 Book VaR (1) Average Minimum Maximum December 31, 2021 Average Minimum Maximum December 31, 2020 (In thousands and thousands of R$) Group Group of Risk of Risk Factor Factor InInterests raterate 39.4 11.39.94 80.11.8 9 80.40.86 38.40.0 6 12.338.0 146.6 12.3 20.146.7 6 20 CuCurrenciesencies 12.1 12.5.11 50.25.1 50.6.2 14.56.2 6.0 14.5 61.4 6.0 14.61.5 4 14 EquitiesEquities 24.4 10.24.14 57.10.6 1 57.10.63 19.10.7 3 5.8 19.7 61.4 5.8 15.61.4 4 15 Commodities Commodities 4.2 1.1 4.2 7.6 1.1 7.6 3.1 1.8 3.1 0.7 1.8 5.8 0.7 1.1 5.8 1 Diversification Diversification impact impact(2) (2) –(26.7)-(26.7) – (8.2) (8 Total Total 48.7 21.4 48.7 106.8 21.4 106.8 33.5 42.0 33.5 20.9 42.0 138.2 20.9 43.5 138.2 43 Determined in native forex and transformed into Brazilian reais on the closing worth on the reporting date. Reduction of danger because of the mixture of all danger components. Sensitivity Analysis (Trading and Banking Portfolios) We conduct sensitivity evaluation for market danger components thought of essential. The highest ensuing losses are introduced beneath, with influence on outcome, by danger issue, in every such situation and are calculated web of tax results, offering a view of our publicity underneath completely different circumstances. The sensitivity evaluation of the buying and selling portfolio and banking portfolio introduced listed here are based mostly on a static evaluation of the portfolio publicity. Therefore, such analyses don’t take into account the dynamic response capability of administration (e.g., treasury and market danger management unit) to provoke mitigating measures, each time a scenario of excessive loss or danger is recognized, minimizing the potential of important losses. In addition, the evaluation is meant to evaluate danger publicity and the respective protecting actions, taking into consideration the truthful worth of monetary devices, no matter whether or not or not monetary devices are accounted for on an accrual foundation. (In thousands and thousands of R$) Trading Portfolio (1) Trading and Banking Portfolios (1) Exposures December 31, 2021 December 31, 2021 Scenario Scenario Scenario Scenario Scenario Scenario Risk Factors Risk of varitions in: I II III I II III Interest Rate Fixed Income Interest Rates in reais (0.3) (86.5) (167.4) (12.8) (3,447.2) (6,666.7) Foreign Exchange Linked Foreign Exchange Linked Interest Rates (0.1) (42.7) (78.2) (3.2) (304.5) (575.4) Foreign Exchange Rates Prices of Foreign Currencies (3.1) (13.2) (38.7) 1.6 (110.4) (236.2) Price Index Linked Interest of Inflation coupon-(37.3) (80.5) (0.3) (183.7) (473.8) TR TR Linked Interest Rates –1.1 (243.8) (535.0) Equities Prices of Equities 0.2 56.5 169.7 6.0 (89) (121.3) Other Exposures that don’t fall underneath the definitions above (0.1) 5.4 15.4 – 1.8 0.8 Total (3.4) (117.8) (179.7) (7.6) (4,376.8) (8,607.6) Scenario I: Addition of 1 foundation level to fastened rates of interest, forex coupon, inflation and rate of interest indexes and one share level to forex and fairness costs; 38
Scenario II: Shocks of 25% in fastened rates of interest, forex coupon, inflation, rate of interest indexes and forex and share costs, each for progress and fall, contemplating the biggest ensuing losses per danger issue; and Scenario III: Shocks of fifty% in fastened rates of interest, forex coupon, inflation, rate of interest indexes and forex and share costs, each for progress and fall, contemplating the biggest ensuing losses per danger issue. Interest Rate Sensitivity Interest fee sensitivity is the connection between market rates of interest and web curiosity earnings arising from the maturity or the renegotiation of costs of curiosity-bearing belongings and liabilities. Our technique for rate of interest sensitivity considers the return charges, the underlying danger degree and the liquidity necessities, together with our minimal regulatory money reserves, obligatory liquidity ratios, withdrawals and maturity of deposits, capital prices and extra demand for funds. The pricing construction is matched when equal quantities of those belongings or liabilities mature or are renegotiated. Any mismatch of curiosity-bearing belongings and liabilities is named a spot place. The rate of interest sensitivity could fluctuate within the renegotiation intervals introduced because of the completely different renegotiation dates inside the interval. Also, variations among the many completely different currencies wherein the rate of interest positions are denominated could come up. These relationships are materials for a selected date, and important fluctuations could happen every day on account of each market forces and administration choices. Our “CSRML” analyzes Itaú Unibanco Group’s hole place on a month-to-month foundation and establishes limits for market danger publicity, rate of interest positions and overseas forex positions. Please see “Note 32 – Risk and Capital Management, 2. Market Risk” of our audited consolidated monetary statements for additional particulars concerning the place of our curiosity-bearing belongings and liabilities as of December 31, 2021. This notice gives a snapshot view, and accordingly, doesn’t replicate the rate of interest gaps which will exist at different instances, as a result of altering asset and legal responsibility positions, and administration’s actions to handle danger in these altering positions. LIBOR Transition In 2018 we assembled a working group to observe up on the worldwide monetary markets discussions concerning the substitute of the IBOR charges by new reference charges. The principal objective of this working group was, and nonetheless is, to assist our senior executives within the determination-making course of on this topic. In order to realize that, this group is comprised of a number of areas of the financial institution, together with representatives from Treasury, Risk, Accounting, Legal, Compliance, External Units, and so on., and is being led by the Products workforce on the head workplace in Brazil. Among its actions over the previous three years, we will spotlight the next: (i) evaluation of the financial institution’s publicity to IBORs; (ii) the modification of fallback clauses within the contracts of belongings, liabilities and derivatives transactions listed to IBORs; (iii) monitoring and energetic participation in market consultations held by ISDA and the Fed on the subject of new substitute charges and its methodologies; (iv) observe up reviews for the Senior Management in a number of committees (Products, Accounting, Audit and Market Risk Committees); (v) evaluation of accounting impacts and new procedures to be utilized to the transactions in our portfolios, in addition to monitoring any bulletins of the primary international accounting our bodies (IASB and FASB) and participation in discussions held in particular worldwide boards; (vi) mapping out the operational influence of the transition to the brand new charges; and (vii) communications to shoppers concerning the discontinuity of IBOR charges, along with discussions with overseas banks which might be members of the Alternative Reference Rate Committee to additional monitor the topic. Throughout 2021, the working group continued to observe market pointers and acted within the implementation of beforehand outlined motion plans, together with programs modifications to the brand new fee methodologies for each new transactions and for the present portfolio, that are nonetheless pending. We have additionally adhered, on February 2021, to the IBOR Fallbacks Protocol of the International Swaps and Derivatives Association printed on October 23, 2020, which can allow market individuals to include the revisions into their legacy non-cleared derivatives trades with different counterparties as a part of IBOR transition. Our Group will sustain with the periodic reviews to Senior Management and shoppers each time it deems essential. Backtesting The effectiveness of the VaR mannequin is validated by way of backtesting strategies that evaluate hypothetical and efficient day by day outcomes with the estimated day by day VaR. The variety of exceptions to the VaR pre- 39
established limits needs to be constant, inside a suitable margin, with the speculation of 99% confidence degree contemplating a interval of 250 enterprise days. Confidence ranges of 97.5% and 95%, and intervals of 500 and 750 enterprise days are additionally thought of. The backtesting evaluation introduced beneath considers the ranges urged by the Basel Committee on Banking Supervision. The ranges are divided into: Green (0 to 4 exceptions): corresponds to backtesting outcomes that don’t recommend any issues with the standard or accuracy of the adopted fashions; Yellow (5 to 9 exceptions): refers to an intermediate vary group, which signifies an early warning and/or monitoring and should point out the necessity to evaluation the mannequin; and Red (10 or extra exceptions): demonstrates the necessity for enchancment motion. According to Central Bank Circular No. 3,646, hypothetical testing consists of making use of market worth variations for a particular day to the portfolio stability on the finish of the previous enterprise day. The efficient check is the variation within the portfolio worth as much as the top of the day, together with intraday transactions and excluding quantities not associated to market worth variations, akin to charges, brokerage charges and commissions. The hypothetical and precise P&L exceeded the VaR estimate on two days over the previous 250 enterprise days ended December 31, 2021. 4.3. Describe any authorized, administrative or arbitration proceedings to which the issuer or its subsidiaries are a celebration, specifying labor, tax, civil and different claims: (i) that aren’t confidential, and (ii) which might be materials for the enterprise of the Issuer or its subsidiaries, indicating: For functions of this merchandise, we adopted as materiality criterion operations involving quantities greater than R$822.4 million, which accounts for 0.5% of Itaú Unibanco Holding’s Equity underneath IFRS (R$164,476 million on December 31, 2021). Civil, tax and labor contingencies are the topic-matter of a provision each time loss is assessed as possible. Provisions are additionally acknowledged, no matter the occasion of an unfavorable consequence to the corporate, for tax contingencies wherein the result of the case relies on the popularity of unconstitutionality of laws in power. Management believes that the provisions for authorized and administrative contingencies in place are ample to cowl possible losses and that these could also be fairly estimated. We imagine that any losses arising from different administrative or judicial contingencies can have no materials antagonistic impact on our enterprise, monetary place or outcomes of operations. 40
Civil Proceedings Case No. 2000.51.01.030509-7 Court: 2nd Federal Lower Court of the Judiciary District of Rio de Janeiro (State of Rio de Janeiro) Jurisdiction: Federal Regional Court (TRF) of the 2nd Region Filing date: 11.21.2000 Parties to the proceedings: Federal Public Prosecution Office vs Itaú Unibanco S.A., Banco Banerj S.A. (“Banerj”), State of Rio de Janeiro, and Caixa Econômica Federal Amounts, belongings or rights concerned: R$942,399,095.28 (historic quantity of the “B Account” arrange on June 10, 1997). Main information: This is a public curiosity civil motion involving facets of Banerj’s privatization course of. The so referred to as “B Account” (an escrow account) was arrange via a financial institution mortgage between Caixa Econômica Federal and the State of Rio de Janeiro within the quantity of R$942,399,095.28. The objective of the account is to make sure the refund to the purchaser of Banerj, which was awarded in lawsuits based mostly on occasions that passed off earlier than the privatization cut-off date. In these proceedings, the Federal Public Prosecution Office requires the partial nullity of the settlement that licensed the switch of the quantity to the “B Account”, in addition to the joint obligation of the defendants to refund the quantities unduly withdrawn by way of allegedly illegal procedures adopted for the settlements of labor claims filed by Banerj’s former staff. The case was dismissed, recognizing the legality of the “B Account” arrange and of the settlements signed. The TRF has dominated to uphold the judgment for defendant. This ruling was later annulled as a result of the Public Prosecution Office had not been served with discover. The TRF would retrial the case. After retrying the case, the TRF has determined to declare the judgment null because of the failure to serve the Federal Government with discover. The enchantment filed by the banks to the Higher Courts to implement the judgment for defendant is pending trial. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: To refund the quantities of the labor settlements, which have been paid with funds from the “B Account”, and to forestall any new withdrawals from the “B Account”. Case No. 2003.51.01.028514-2 Court: 2nd Federal Lower Court of the Judiciary District of Rio de Janeiro (State of Rio de Janeiro) Jurisdiction: Federal Regional Court (TRF) of the 2nd Region Filing date: 12.05.2003 Parties to the proceedings: Federal Public Prosecution Office, Public Prosecution Office of the State of Rio de Janeiro and Labor Public Prosecution Office vs Itaú Unibanco S.A., Banco Banerj S.A. (“Banerj”), Gilberto Carlos Frizão, Manoel Antonio Granado, and Otávio Aldo Ronco. Amounts, belongings or rights concerned: R$942,399,095.28 (historic quantity of the “B Account” arrange on June 10, 1997). Main information: This is a public curiosity civil motion based mostly on alleged administrative improbity, involving facets of Banerj’s privatization course of, associated to the setup and use of the so-referred to as “B Account”. In these proceedings, the plaintiffs declare that there was an undue withdrawal of funds deposited within the “B Account” by way of allegedly illegal procedures adopted in labor claims filed by Banerj’s former staff (i.e. the failure to file the relevant appeals). This is the explanation why they’ve requested that any withdrawal from the “B Account” be beforehand submitted to the Finance Secretary of the State of Rio de Janeiro for approval, and demand the joint obligation of the defendants to refund the quantities unduly withdrawn and to be sentenced underneath the penalties set forth within the Brazilian Improbity Law (Law No. 8,429/1992), because of the administrative improbity of the charged people. The case was dismissed, recognizing the legality of the “B Account” arrange and of the settlements signed. The TRF has dominated to uphold the judgment for defendant. This ruling was later annulled as a result of the Public Prosecution Office had not been served with discover. The TRF would retrial the case. After retrying the case, the TRF has determined to declare the judgment null because of the failure to serve the Federal Government with discover. An enchantment filed by the banks to the Higher Courts to implement the judgment for defendant is pending trial. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: To refund the quantities unduly withdrawn from the “B Account. 41
Case No. 0003056-02.2003.8.26.0200 Court: 2nd Civil Lower Court of Itapira (State of São Paulo) Jurisdiction: Appellate Court – Appellate Court of the State of São Paulo (TJSP) Filing date: 08.06.2003 Parties to the proceedings: KVA Engenharia Elétrica Ltda. vs Itaú Unibanco Amounts, belongings or rights concerned: R$11,566,202,688.37 (December 2021). Main information: This is a lawsuit to evaluation present account, mortgage and renegotiation agreements, wherein the financial institution was ordered in decrease courtroom to exclude curiosity capitalization and refund overpaid quantities, adjusted to incorporate curiosity in the identical proportion because it had been charged by the financial institution. Regarding the calculation of the liquid quantity, the decrease courtroom, taking into consideration the capitalized curiosity criterion, accredited the quantity of roughly R$7.6 billion to be refunded to the plaintiff. The Appellate Court of the State of São Paulo (TJSP) overturned this judgment and excluded capitalization, decreasing the award quantity. Plaintiff filed a movement for clarification, which was denied. Plaintiff and its former lawyer filed particular appeals, which have been granted by the TJSP. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: In August 2019, the financial institution paid the award in impact within the quantity of R$5.9 million. The remaining distant danger of loss is R$11.5 billion. Cases No. 0012488-09.2002.8.14.0301 and 0035211-78.2002.8.14.0301 Court: fifth Civil Lower Court of Belém (State of Pará) Jurisdiction: Appellate Court – Court of Justice of the State of Pará (TJPA) Filing date: 03/18/2002 and 10/14/2002 Parties to the proceedings: Rondhevea Administração e Participações Ltda. vs Itaú Unibanco and Itaú Corretora de Valores Mobiliários e Câmbio Amounts, belongings or rights concerned: R$7,130,043,710.63 (December 2021). Main information: Itaú is a defendant in two lawsuits filed by Mr. Antonio Cabral (later succeeded by Rondhvea Adm. e Participações). Itaú would allegedly have offered 6,360 shares issued by Itaú and 5,000 shares issued by Banco União Comercial (succeeded by Itaú) in 1985, with out the plaintiff’s authorization. In a remaining and unappealable determination, Itaú was ordered to award the plaintiff in an quantity comparable to the share values and respective accent obligations. Upon calculating the variety of shares, the professional appraiser disregarded the reverse cut up of shares as set forth by CVM Instruction No. 56/87, which passed off in March 1987, at 1,000 for 1 share, and thus decided the worth of R$4 billion. Although the professional appraisal report was accredited, the Appellate Court (TJPA) has suspended this determination and now the method awaits the recalculation of the successfully due quantities. Also pending is the trial of claims by the Bank on the Disciplinary Board of Courts, the National Council of Justice (CNJ), along with the trial of a movement to recuse the decide. Itaú has deposited in courtroom the quantity it understands as successfully due, which corresponds to the worth of shares and accent obligations taking into consideration the reverse cut up in March 1987 (R$895,004.60 – October 2020). Chance of loss: Probable (R$1,062,012.49) and Remote (R$7,128,981,698.14) Analysis of the influence within the occasion of an unfavorable determination: To pay award comparable to the worth of shares and corresponding accent obligations. Tax Claims Case No.16327.720661/2021-45 Court: Administrative – Federal Revenue Service Jurisdiction: Federal Revenue Service Office of Financial Institutions (DEINF) Filing date: 09.22.2021 Parties to the proceedings: Federal Government vs Banco Itaucard S/A Amounts, belongings or rights concerned: R$880,068,014.49 (December 2021). Main information: On September 22, 2021, a tax evaluation discover was acquired aimed on the assortment of social contribution on the grounds of the Company’s alleged failure so as to add, in Part A of LACS guide, the debit balances associated to counterparts of surplus and deficit of depreciation in 2017, as 42
tax authorities take into account them nondeductible. The objection filed by the Company has been awaiting trial since October 21, 2021. Chance of loss: Possible Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 004P2019 Court: Finance Office of the Municipality of Mogi Mirim (State of São Paulo) Jurisdiction: Lower courtroom Filing date: 07.23. 2019 Parties to the proceedings: Municipality of Mogi Mirim vs Itaú Unibanco SA Amounts, belongings or rights concerned: R$886,113,493.15 (December 2021). Main information: Tax evaluation discover levied by the Municipality of Mogi Mirim (SP) for the gathering of municipal companies tax (ISS) on the alleged provision of information processing service (price sharing-CRCC), as supplied for in sub merchandise 1.03 of the checklist of companies of Municipal Law No. 192/05, by the infrastructure of the Data Center of Mogi Mirim (CTMM) to different Conglomerate firms, from January 2015 to September 2017, within the quantity of R$328,964,705.63. The Bank has filed a primary objection, which was partially granted solely to recalculate the debit to R$327,944,483.01. This is the explanation why it has filed a second objection, and because it was in flip dismissed, the Bank has filed a voluntary enchantment. As decided by the right authority, as a substitute of coming into trial, the decide ordered the manufacturing of extra proof to revise the information, which has resulted within the debit being recalculated to R$201,230,390.17. After the Bank was served discover, a 3rd objection was filed, which is presently pending trial. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: Possible have to safe debit on the judicial courts. Case No. 16327.721221/2019-91 Court: Federal Revenue Service Jurisdiction: Administrative appellate courtroom Filing date: 12.30.2019 Parties to the proceedings: Federal Revenue Service vs Banco Itaucard S/A Amounts, belongings or rights concerned: R$918,876,440.62 (December 2021). Main information: Tax evaluation discover for fee of company earnings tax (IRPJ) and social contribution (CSLL) for calendar yr 2014 and 2015 on the grounds of disallowance of losses incurred by Banco Itaucard in spinoff operations with Itaú Unibanco S/A, along with aggravated fantastic (150%). The Federal Revenue Service Judgment Office (DRJ) dismissed the voluntary enchantment filed by the corporate, we await the choice of the Voluntary Appeal within the CARF. Chance of loss: Possible (R$675,960,443.42) and Remote (R$242,915,997.20 – associated to share of aggravated fantastic exceeding 75% of fantastic on evaluation). Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 16327.721172/2019-96 Court: Federal Revenue Service Jurisdiction: Administrative decrease courtroom Filing date: 12.16.2019 Parties to the proceedings: Federal Government vs Itaú Unibanco S.A. Amounts, belongings or rights concerned: R$1,063,358,164.27 (December 2021). Main information: Tax evaluation discover for social safety tax due and third events on funds made in 2015 in reference to revenue sharing, hiring bonus, meal voucher and meals allowance. Voluntary Appeal and Mandatory Review filed have been pending trial since February 2, 2022, after a ruling by the Federal Revenue Service Judgment Office (DRJ) had partially granted the objection to cut back the revenue sharing evaluation quantity to R$247 million from R$343 million (as a result of miscalculation). 43
Chance of loss: Possible (R$371,917.27) and Remote (R$1,062,986,247.00) Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 16327.721239/2019-92 Court: Federal Revenue Service Jurisdiction: Administrative appellate courtroom Filing date: 12.30.2019 Parties to the proceedings: Federal Government vs Banco Itaucard S.A. Amounts, belongings or rights concerned: R$1,137,023,870.03 (December 2021). Main information: Tax evaluation discover in reference to PIS/Cofins on the grounds of alleged failure to submit for taxation the financial-monetary results of leasing operations carried out, with a 150% fantastic levied. Lawsuit hooked up to Case No. 16327.721239/2019-92 about the identical material challenged. The Federal Revenue Service Judgment Office (DRJ) dismissed the objection filed by the corporate. We await CARF’s ruling on the voluntary enchantment filed. Chance of loss: Possible (R$126,912,123.56) and Remote (R$1.010.111.746,47) Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 16327.720188/2019-81 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 02.27.2019 Parties to the proceedings: Federal Government vs Itaú Unibanco S/A Amounts, belongings or rights concerned: R$1,232,068,219.99 (December 2021). Main information: Tax evaluation discover aimed on the fee of social safety tax due on funds of worker and administration revenue sharing, meal voucher and meals allowance paid in tickets and hiring bonus. After the ruling that partially granted the objection (as a result of miscalculation), a Voluntary Appeal was filed on March 18, 2021, which is presently awaiting trial. Chance of loss: Probable (R$45,048,695.76), Possible (R$562,271,950.75) and Remote (R$624,747,573.47). Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No.5015701-60.2019.4.03.6100 Court: tenth Civil Lower Court of the Judiciary District of São Paulo (State of São Paulo) Jurisdiction: Lower courtroom (JFSP) Filing date: 12.22.2015 Parties to the proceedings: Federal Revenue Service vs Itaú Unibanco S.A. Amounts, belongings or rights concerned: R$1,240,381,250.32 (December 2021). Main information: Tax evaluation discover associated to Corporate Income Tax (IRPJ) and Social Contribution (CSLL) for calendar years 2010, 2011 and 2012, on the grounds of disallowance of working bills (bills on interbank deposits associated to investments in ID/Fixed fee funds made by Unibanco, whose invested funds derived from the total subscription of capital improve carried out by Itaú). The voluntary enchantment and obligatory evaluation filed have been denied. Final administrative ruling was issued on June 21, 2019. In relation to deserves, Action for Annulment No. 5015701-60.2019.4.03.6100 was filed on August 27, 2019, and is presently pending trial on the tenth Lower Court of the JFSP. An interlocutory reduction was granted on October 3, 2020. The professional proof section started on September 2, 2021. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: Loss of the quantity challenged 44
Case No. 5000150-69.2021.403.6100 Court: eleventh Civil Lower Court of São Paulo Jurisdiction: Lower courtroom Filing date: 01.06.2021 Parties to the proceedings: Federal Revenue Service vs Itaú Unibanco S/A Amounts, belongings or rights concerned: R$1,251,002,195.94 (December 2021). Main information: Tax evaluation discover aimed on the fee of social safety contribution (employers’ and third events’ shares) on funds made as revenue sharing and hiring bonus in 2009 and 2010. On April 14, 2020 the Bank was served discover of the CSRF’s ruling dismissing the particular enchantment filed by the Bank. The portion of the bonus-associated debit is being challenged underneath the Action for Annulment No. 5010871- 512019.403.6100 filed on June 17, 2019, whose declare was granted on February 7, 2020. The enchantment filed by the Federal Government is presently pending trial. Regarding the dispute involving revenue sharing, we’ve filed a writ of mandamus and have been granted a preliminary injunction to droop the fee, which is presently awaiting the associated judgment. On July 20, 2021 the judgment granting the preliminary injunction was issued. The Federal Government then filed an enchantment, which has been pending trial since November 21, 2021. Chance of loss: Possible (R$1,178,200,037.71) and Probable (R$72,802,158.23) Analysis of the influence within the occasion of an unfavorable determination: Loss of the quantity challenged. Case No.5013052-25.2019.403.6100 Court: twenty fifth Civil Lower Court of the Judiciary District of São Paulo (State of São Paulo) Jurisdiction: Lower courtroom (JFSP) Filing date: 12.05.2014 Parties to the proceedings: Federal Revenue Service vs Itaú Unibanco S.A. Amounts, belongings or rights concerned: R$1,340,585,539.51 (December 2021). Main information: Tax evaluation discover requiring the fee of Corporate Income Tax (IRPJ) and Social Contribution (CSLL) on the grounds {that a} portion of the goodwill decided within the operation for the merger of the Itaú and Unibanco teams would have been irregularly amortized from a fiscal standpoint. A separate fantastic is being claimed on the grounds of non-fee of month-to-month quantities. With respect to deserves, the Action for Annulment No. 5013052-25.2019.403.6100 filed on July 27, 2019, was pending on the twenty fifth Federal Civil Court of São Paulo (JFSP). Secured by a financial institution warranty, it was within the professional proof section. After the top of the professional proof section, the information have been awaiting a judgment since December 15, 2021. With respect to the separate fantastic, after being served with the sentence that dismissed the particular enchantment, the Company filed Lawsuit No. 5002388- 95.2020.403.6100 on February 14, 2020, with a preliminary injunction granted on March 4, 2020 to droop the credit score enforceability, upheld by the judgment granting the reduction on June 8, 2020. The Federal Government has then filed an enchantment, which is presently pending trial. Chance of loss: Possible. Analysis of the influence within the occasion of an unfavorable determination: Loss of the quantity challenged. Case No. 16327.720004/2018-01 Court: Administrative continuing (pending on the Federal Revenue Service) Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 01/18/2018 (date the evaluation discover was acquired) Parties to the proceedings: Federal Government vs Banco Itaucard S/A Amounts, belongings or rights concerned: R$1,572,432,181.03 (December 2021). Main information: Tax evaluation discover in reference to PIS/Cofins on the grounds of alleged failure to submit for taxation the financial-monetary results of leasing operations carried out. A 150% fantastic was levied. CARF had partially granted the voluntary enchantment filed by the corporate, because it cancelled the aggravated fantastic and upheld the expiration of the preemptive interval, though it upheld the gathering with respect to deserves. The Federal Government then filed a particular enchantment, which was partially granted with respect to the expiration of the preemptive interval. Banco Itaucard had additionally filed a particular enchantment to debate the deserves. We are awaiting CSRF’s ruling on the matter. Chance of loss: Possible (R$1,233,813,143.01) and Remote (R$338,619,038.02) 45
Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 16327.720945/2018-36 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 12.21.2018 Parties to the proceedings: Federal Government vs Itaú Unibanco S/A. Amounts, belongings or rights concerned: R$2,053,938,682.27 (December 2021). Main information: Tax evaluation discover for assortment of company earnings tax, social contribution, PIS and Cofins (taxes on earnings) and fines (2012 to 2015) arising from disallowance of working bills (interbank deposits) associated to funds capitalized among the many Group firms. The Federal Revenue Service Judgment Office (DRJ) dismissed the objection filed by the corporate. We await CARF’s ruling on the voluntary enchantment filed. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No.16327.720965/2021-11 Court: Federal Revenue Service Jurisdiction: Administrative decrease courtroom Filing date: 10.18.2021 Parties to the proceedings: Federal Government vs Itaú Unibanco S/A Amounts, belongings or rights concerned: R$2,140,638,294.43 (December 2021). Main information: Tax evaluation discover requiring the fee of social safety contribution (employers’ and third events’ shares) on funds made as revenue sharing, companions’ program, hiring bonus, meal vouchers and meals allowance in tickets and hiring bonus in 2017. On November 16, 2021 the Company filed an objection, which is pending trial on the administrative decrease courtroom (DRJ). Chance of loss: Possible (R$1,575,142,155.92) and Remote (R$565,496,138.51) Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No.16327.721356/2020-90 Court: Administrative – Federal Revenue Service Jurisdiction: Lower Court – Federal Revenue Service Judgment Office (DRJ) Filing date: 12.10.2020 Parties to the proceedings: Itaú Unibanco vs Federal Government Amounts, belongings or rights concerned: R$2,428,000,525.55 (December 2021). Main information: Tax evaluation discover acquired on December 10, 2020 requiring the fee of social safety contributions and third events on funds made as revenue sharing, companions’ program, hiring bonus, meal vouchers and meals allowance in tickets in 2016. On January 11, 2021, the corporate filed an objection, which is pending trial at DRJ. On July 23, 2021, the Federal Revenue Service Judgment Office (DRJ) issued an appellate determination dismissing the Objection. The Bank filed an enchantment on August 24, 2021, which is presently pending trial. Chance of loss: Probable (R$70,086,310.46), Possible (R$1.631.894.017,29) and Remote (R$726,020,197.80). Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. 46
Case No. 16327.720774/2018-45 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 10.26.2018 Parties to the proceedings: Federal Government vs Itaú Unibanco S/A Amounts, belongings or rights concerned: R$2,889,867,698.60 (December 2021). Main information: Tax evaluation discover for assortment of company earnings tax, social contribution, PIS and Cofins (taxes on earnings) and fines (2012 to 2013) arising from disallowance of working bills (interbank deposits) associated to funds capitalized among the many Group firms. The Federal Revenue Service Judgment Office (DRJ) dismissed the objection filed by the corporate. We await CARF’s ruling on the voluntary enchantment filed. Chance of loss: Possible (R$981,659,868.64) and Remote (R$1,908,207,829.97) Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No.5026528-67.2018.4.03.6100 Court: seventh Civil Lower Court of the Judiciary District of São Paulo (State of São Paulo) Jurisdiction: Lower courtroom Filing date: 11.14.2013 Parties to the proceedings: Federal Revenue Service vs Itaú Unibanco S/A Amounts, belongings or rights concerned: R$3,000,488,496.32 (December 2021). Main information: Collection of Corporate Income Tax (IRPJ) and Social Contribution (CSLL) required as a result of alleged capital acquire arising from the merger between the Itaú and Unibanco conglomerates, attributed to firm E. Johnston Representação e Participações. A voluntary enchantment was filed by the taxpayer, which was dismissed by CARF. The case was terminated with an unfavorable determination rendered by CSRF on September 28, 2018. Therefore, on October 22, 2018 the corporate filed Action for Annulment No. 5026528- 67.2018.4.03.6100, which is presently pending on the Federal Court of São Paulo. Interlocutory reduction was granted in reference to this Action on October 26, 2018, the judgment was issued on October 2, 2020. The Federal Government then filed an enchantment, which is presently pending trial. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: Loss of the quantity challenged. Case No. 0204699-55.0500.8.26.0090 (204.699/05) Court: Municipal Tax Foreclosure Court of São Paulo Jurisdiction: Lower Court – Municipal Tax Foreclosure Court of São Paulo Assignment date: 11.30.2005 Parties to the proceedings: Municipality of São Paulo vs Banco Itauleasing S/A (previously Cia Itauleasing de Arrendamento Mercantil) Amounts, belongings or rights concerned: R$3,963,361,703.36 (December 2021). Main information: Tax foreclosures filed by the City of São Paulo for assortment of service tax (ISS) on lease operations. The movement to remain execution filed by the Bank, which challenges the place the place the service was supplied, the calculation foundation, and the truth that quantities due have been paid to the municipality the place the Bank has its head workplace (municipality of Poá/State of São Paulo), was denied. The Appellate Court of the State of São Paulo (TJSP) granted the enchantment filed by the Bank to annul the appealed judgment because of the denial of a good alternative to be heard (remaining and unappealable determination on June 16, 2014). The case was remanded to the unique courtroom in order that the professional proof required by the Bank be produced and a brand new judgment be rendered. Expert proof submitted. Lower courtroom ruling is pending. Chance of loss: Remote. 47
h. Analysis of the influence within the occasion of an unfavorable determination: Payment of the quantity challenged. Case No. 1000510-36.2021.8.26.0462 Court: 2nd Civil Lower Court of Poá (State of São Paulo) Jurisdiction: Lower Court Filing date: 02.22.2021 Parties to the proceedings: Municipality of São Paulo vs Banco Itaucard S/A and Municipality of Poá Amounts, belongings or rights concerned: R$5,371,200,428.90 (December 2021). Main information: Tax evaluation notices levied by the Municipality of São Paulo to problem the place of assortment of service tax (ISS) on bank card and lease operations. The administrative objections and administrative appeals filed by the financial institution have been dismissed. In February 2021, the dispute was taken to courts, with the submitting of an motion for annulment aiming to acknowledge the tax-authorized relationship between Banco Itaucard and the Municipality of Poá and the ensuing cancellation of the fees or, alternatively, the restoration of undue fee made. This motion stays pending trial on deserves on the decrease courtroom. Chance of loss: Possible (R$2,685,067,922.50) and Remote (R$2,686,132,506.40) Analysis of the influence within the occasion of an unfavorable determination: Loss of the quantity challenged. Case No. 16561.720011/2020-46 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 04.15.2020 Parties to the proceedings: Federal Government vs Redecard S.A. and others Amounts, belongings or rights concerned: R$6,690,569,031.73 (December 2021). Main information: Tax evaluation discover levied on Redecard arising from disallowance of goodwill on acquisition of Redecard’s shares by Banestado by way of a public providing of shares, and a 150% fantastic and one other separate fantastic have been levied on the grounds of non-fee of month-to-month estimates. Objection was filed and partially granted on the Federal Revenue Service Judgment Office (DRJ) to exclude the aggravated fantastic and presumed joint and several other legal responsibility. The voluntary enchantment and obligatory evaluation are presently pending trial. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No. 16561.720086/2018-11 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 11.14.2018 Parties to the proceedings: Federal Revenue Service vs Redecard S/A Amounts, belongings or rights concerned: R$7,636,945,700.02 (December 2021). Main information: Tax evaluation discover levied on Redecard arising from disallowance of goodwill on acquisition of Redecard’s shares by Banestado by way of a public providing of shares, and a 150% fantastic and one other separate fantastic have been levied on the grounds of non-fee of month-to-month estimates for the 2013-2015 interval. The Administrative decrease courtroom has partially granted the objection filed, and Redecard has filed a voluntary enchantment difficult the upheld portion of the evaluation discover and the obligatory evaluation associated to the portion discharged. The voluntary enchantment and obligatory evaluation filed are presently pending trial. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. 48
Case No. 16327.720946/2018-81 Court: Federal Revenue Service Jurisdiction: Administrative appellate court-Administrative Board of Tax Appeals (CARF) Filing date: 12.21.2018 Parties to the proceedings: Federal Government vs Banco Itaucard S/A Amounts, belongings or rights concerned: R$11,652,795,366.95 (December 2021). Main information: Tax evaluation discover for assortment of company earnings tax, social contribution, PIS and Cofins (taxes on earnings) and fines (2012 to 2015) arising from disallowance of working bills (interbank deposits) associated to funds capitalized among the many Group firms. The Federal Revenue Service Judgment Office (DRJ) dismissed the objection filed by the corporate. We await CARF’s ruling on the voluntary enchantment filed. Chance of loss: Remote (R$8,310,929,306.84) and Possible (R$3.341.866.060,11) Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Case No.16327.720680/2013-61 Court: Federal Revenue Service Jurisdiction: Administrative greater court-Higher Chamber of Tax Appeals (CSRF) Filing date: 06.25.2013 Parties to the proceedings: Federal Revenue Service vs Itaú Unibanco Holding S/A Amounts, belongings or rights concerned: R$29,594,488,330.50 (December 2021). Main information: Tax evaluation discover requiring the gathering of Corporate Income Tax (IRPJ) and social contribution (CSLL) for fiscal yr 2008, arising from the transaction that led to the merger of Itaú Holding and Unibanco Holdings S.A. On April 10, 2017, CARF rendered a choice for the Company by cancelling the tax evaluation discover. The particular enchantment filed by the Federal Revenue Service was suspended by CARF till the trial of Writ of Mandamus No. 1017987-56.2017.4.01.3400 filed in opposition to the admissibility of the particular enchantment lodged by the Federal Revenue Service. A preliminary injunction was granted on December 14, 2017. The Writ of Mandamus was granted on July 18, 2018 recognizing the illegality of the particular enchantment associated to the admissibility order. The enchantment filed by the Federal Government is awaiting trial. Note: In August 2018, the Request for Suspending Preliminary Injunction/Judgment-SLAT No. 1019448- 44.2018.4.01.0000, filed by the Federal Government, was granted. Against this determination, an inner interlocutory enchantment was filed with a request for reduction with suspensive results, which was entertained by the Chairman of the Federal Regional Court of the first Region (TRF 1) on October 17, 2018. It was scheduled to go for trial by the Special Court on April 29, 2021, but it surely was withdrawn from the agenda. The trial of the inner interlocutory enchantment started on May 6, 2021, but it surely was adjourned as a result of a request by a decide to see the file and resumed on July 1, 2021, at which era the interlocutory enchantment filed by Itaú Holding was granted, dismissing the suspension of the injunction filed by the Federal Government. The associated appellate determination awaits formalization. On October 11, 2021, Writ of Mandamus No. 1017987-56.2017.4.01.3400 filed by the Federal Government was dismissed by majority of votes (2×1). Trial was then adjourned in order that the broader trial set forth in Article 942 of the Code of Civil Procedure (CPC) might be held. Chance of loss: Remote. Analysis of the influence within the occasion of an unfavorable determination: In the occasion of an unfavorable consequence at administrative degree, the case will likely be taken to the judicial courts. Labor claims No labor claims within the interval, underneath the materiality standards set for this doc. Administrative Proceeding Case No. 08700.008182/2016-57 Court: Brazilian Antitrust Agency (CADE) Jurisdiction: Administrative Lower Court – General Superintendency of the Brazilian antitrust company (CADE) Filing date: Published within the Diário Oficial da União (Federal Official Gazette) on December 8, 2016. 49
Parties to the proceedings: CADE ex-officio vs Banco Itaú BBA S.A. and others. Amounts, belongings or rights concerned: In accordance with Law No. 12529/11, Article 37, merchandise I, any violation of the financial order topics the corporate to a fantastic starting from one-tenth p.c (0.1%) to twenty p.c (20%) of gross income of such firm, group or conglomerate, earned within the final yr previous to the submitting of the executive continuing, within the enterprise exercise area wherein the alleged violation was dedicated, which can by no means be decrease than the alleged benefit gained each time such calculation is feasible. On the grounds of lack of definition of the calculation foundation to be relevant, in addition to of the numerous big selection of percentages relevant, it isn’t doable to calculate the fantastic quantities within the occasion of an unfavorable determination. Main information: Administrative continuing filed to analyze alleged cartel within the Brazilian onshore overseas trade market involving the Brazilian forex (actual). These presumed anti-competitors conducts would have been engaged primarily within the FX spot and futures (derivatives) markets. The practices underneath investigation would have been engaged in Brazil by monetary establishments (Banco Itaú BBA S.A., amongst them) and people positioned within the Brazilian territory. The protection was well timed filed on January 8, 2018. Chance of loss: Possible evaluation of influence within the occasion of an unfavorable determination: Payment of a fantastic. Case No. 08700.002066/2019-77 Court: Brazilian antitrust company (CADE) Jurisdiction: GENERAL SUPERINTENDENCY Filing date: April 18, 2019 (inquiry filed) Parties to the proceedings: CADE ex-officio vs Itaú Unibanco S.A and Redecard S.A Amounts, belongings or rights concerned: Not relevant. Main information: In April 2019, the General Superintendency of CADE filed an administrative continuing in opposition to Itaú Unibanco and Redecard to analyze an alleged anti-aggressive observe within the bank card receivables market. Redecard had launched a program underneath which it could settle/clear bank card receivables in mere two days in an account held at Itaú Unibanco. CADE filed a preliminary injunction requesting this system to be suspended, which was dismissed as this system was upheld by advantage of a preliminary determination issued by the Federal Courts. In December 2019, Redecard determined to clear all financial institution accounts inside two days, no matter whether or not they have been held at Itaú Unibanco, and in consequence the lawsuit that upheld this system misplaced its objective. The case is presently awaiting a ruling after Redecard and Itaú Unibanco having filed their defenses, together with authorized and financial opinions, to proof the inexistence of anti-aggressive practices. Chance of loss: Possible evaluation of influence within the occasion of an unfavorable determination: Administrative fantastic (not doable to estimate) and reputational harm. Arbitration proceedings The Issuer shouldn’t be a celebration to any arbitration proceedings in progress on December 31, 2021 which might be materials by way of the issues or quantities concerned. 4.3.1. State the full quantity of provision, if any, of the proceedings described in merchandise 4.3 The whole quantity supplied for the claims described in merchandise 4.3. is R$187,937,164.45 for tax claims and R$1,062,012.49 for civil proceedings. 4.4 Describe the authorized, administrative or arbitration proceedings that aren’t confidential to which the issuer or its subsidiaries are a celebration and to which the opposing events are administration members or former administration members, dad or mum firms or former dad or mum firms, or traders of the issuer or its subsidiaries, informing: The Issuer shouldn’t be a celebration to any proceedings filed both by its present or former administration members or by its present or former controlling stockholders. Additionally, the Issuer and its subsidiaries perform company transactions which might be at instances challenged by minority stockholders who primarily disagree with the quantity paid for his or her shares. We describe beneath the civil lawsuits filed by traders of the Issuer and its subsidiaries: 50
Case No. 51718900-0 Court: thirty ninth Civil Lower Court of the Central Court House of the Judicial District of the capital metropolis of São Paulo (State of São Paulo) Jurisdiction: Superior Court of Justice (STJ) Filing date: 02.17.2000 Parties to the proceedings: Estate of Yerchanik Kissajikian vs Banco Bandeirantes S/A Amounts, belongings or rights concerned: R$0.00 Main information: Action whereby the plaintiffs search adjudication on the precise to subscribe R$300,000.00 and the judgment in opposition to the defendants to compensate plaintiffs for harm sustained because of the unjustified dilution of their possession curiosity. The declare was dismissed by the decrease courtroom. The Appellate Court of the State of São Paulo (TJSP) upheld the dismissal and the trial of the Special Appeal filed by Plaintiff is pending. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: Illiquid Case No. 583.00.2001.076875-7 Court: third Civil Lower Court of the Central Court House of the Judicial District of the capital metropolis of São Paulo (State of São Paulo) Jurisdiction: Superior Court of Justice (STJ) Filing date: 07.05.2001 Parties to the proceedings: Antranik Kissajikian, André Kissajikian, Suely Kissajikian, Vanda Kissajikian Mordjikian, and Companhia Iniciadora Predial e Comercial Empreendimentos Brasil S.A. vs Unibanco – União de Bancos Brasileiros S/A, Caixa Geral de Depósitos S/A, and Caixa Brasil Participações S/A Amounts, belongings or rights concerned: R$0.00 Main information: This lawsuit alleges abuse of energy by the controlling stockholder, contemplating the dilution of the possession curiosity in Banco Bandeirantes and its subsequent delisting with no prior public providing. The declare was dismissed by the decrease courtroom. The Appellate Court of the State of São Paulo (TJSP) upheld the dismissal and the trial of the Special Appeal filed by Plaintiffs is pending. Chance of loss: Remote Analysis of the influence within the occasion of an unfavorable determination: Illiquid 4.4.1. Indicate the quantity supplied for, if any, for the lawsuits described in merchandise 4.4 No provision is acknowledged for the lawsuits described in merchandise 4.4, since their probability of loss is classed as doable or distant. 4.5. With respect to the numerous confidential proceedings to which the issuer or its subsidiaries are a celebration and which haven’t been reported in gadgets 4.3 and 4.4 above, analyze the influence within the occasion of an unfavorable determination and inform the quantities concerned. The Issuer and subsidiaries aren’t social gathering to any confidential proceedings which might be thought of important. 4.6. Describe any repetitive or associated authorized, administrative or arbitration proceedings based mostly on comparable authorized information or causes that aren’t confidential and which might be collectively important, to which the issuer or subsidiaries are social gathering, specifying labor, tax and civil claims, amongst others, and indicating: Amounts concerned Action carried out by the issuer or its subsidiary that gave rise to this contingency 4.6.1. Indicate the full quantity supplied for, if any, for the lawsuits described in merchandise 4.6 51
The Issuer shouldn’t be a celebration to any repetitive or associated authorized, administrative or arbitration proceedings which might be collectively important. In the traditional course of enterprise, the Issuer’s subsidiaries are social gathering to authorized and administrative proceedings which might be collectively important and whose forms of contingency are detailed within the desk beneath: R$ million AMOUNT AREA TYPE OF CONTINGENCY PROVIDED FOR Contingencies are associated to particular person or collective lawsuits in Labor 8,219 which alleged labor rights based mostly on labor laws particular to the associated career are mentioned, akin to additional time, wage equalization, reinstatement, switch allowances, amongst others. Civil contingencies are normally associated to calls for associated to the revision of contracts and compensation for harm and ache Civil 3,317 and struggling, along with particular lawsuits for the gathering of understated inflation adjustment for financial savings accounts in reference to financial plans carried out within the Nineteen Eighties and Nineteen Nineties as a measure to fight inflation¹. Tax provisions are associated to lawsuits wherein the legality and unconstitutionality of laws in power are mentioned. These lawsuits, which the conglomerate classifies as authorized liabilities, primarily seek advice from challenges to the calculation foundation of PIS and Tax2 6,310 COFINS contributions. The conglomerate can also be a celebration to tax and social safety lawsuits labeled as contingent liabilities, which probability of loss is classed as possible, with principal discussions concerning the non-levy of social safety contributions on revenue sharing and of tax service (ISS) on sure revenues. ¹Although ITAÚ UNIBANCO HOLDING has complied with the principles then in impact, the corporate is a defendant in lawsuits filed by people that deal with this subject, in addition to in school actions filed by: (i) client safety associations; and (ii) the Public Prosecution Office on behalf of financial savings account holders. With respect to those lawsuits, ITAÚ UNIBANCO HOLDING acknowledges provisions when it’s summoned and in addition when people apply to implement the choice rendered by the Judicial Branch, utilizing the identical standards adopted to find out provisions for particular person lawsuits. The Federal Supreme Court (STF) has issued a variety of choices favorable to financial savings account holders, however has not consolidated its understanding concerning the constitutionality of financial plans and its applicability to financial savings accounts. The ruling of appeals involving this matter is presently suspended by the STF, till it palms down a remaining ruling on the rights underneath dialogue. In December 2017, by way of mediation of the Federal Attorney’s Office (AGU) and supervised by the Central Bank of Brazil, savers (represented by two civil associations, FEBRAPO and IDEC) and FEBRABAN entered into an instrument of settlement aimed toward settling lawsuits associated to financial plans, and Itaú has already adhered to its phrases. Said settlement was accredited on March 1, 2018 by the Plenary Session of the Federal Supreme Court (STF) and, as from May 22, 2018, savers could adhere to its phrases for a 24-month interval, with the following settlement of lawsuits. As this era has come to an finish, the events have entered into an modification to the settlement to increase the adherence interval so {that a} bigger variety of savers can take part and, in consequence, the variety of lawsuits finally settled will increase. In May 2020, STF accredited this modification and granted a thirty (30) month interval for brand new adherences, and this era could also be prolonged for different thirty (30) months, conditioned on the accountability of the variety of adherences over the primary interval. 2 The quantities supplied for in reference to the tax contingencies acknowledged herein don’t embrace quantities for the instances with possible probability of loss already acknowledged in merchandise 4.3 of this Form. 4.7. Describe different related contingencies that aren’t included within the earlier gadgets No quantities concerned in tax and social safety lawsuits whose probability of loss is feasible are supplied for. The quantities concerned in key Tax and Social Security Lawsuits whose probability of loss is feasible, whose whole danger is estimated at R$35,855 million, are as follows: 52
R$ million Tax Issue Amount Non-compensatory quantities: We defend the non-levy of INSS contribution on non-wage quantities, and amongst them we 8,119 spotlight: revenue sharing and inventory choice plans. Funding bills: We problem the deductibility of IRPJ/CSLL/PIS/COFINS funding bills (DI) associated to funds capitalized amongst 4,923 the Group firms. Banking actions: We problem the levy and/or place of ISS 4,680 fee of ISS for sure banking revenues. Goodwill-Deduction: We problem the deductibility of IRPJ and CSLL goodwill on acquisition of investments with anticipated future 3,479 profitability. Reversal of revenues from extra depreciation: The PIS and COFINS accounting and tax remedy granted to PIS and COFINS 2,428 upon settlement of lease operations is mentioned. Request for Offset Rejected: Cases wherein liquidity and IRPJ/CSLL/PIS/COFINS 1,517 certainty of offset credit score are analyzed. Disallowance of Losses: The quantity of tax loss and/or tax loss carryforwards utilized by the Federal Revenue Service IRPJ and CSLL 1,233 in tax evaluation notices, that are nonetheless pending a remaining determination, is challenged. 4.8. For the principles of the overseas issuer’s nation and the principles of the nation wherein the overseas issuer’s securities are held in custody, if completely different from the unique nation, please determine: a) Restrictions imposed on the train of political and financial rights Not relevant. Brazil is the Issuer’s nation of origin. b) Restrictions on excellent securities and their switch Not relevant. Brazil is the Issuer’s nation of origin. c) Cases for the cancellation of registration, in addition to of rights of the holders of securities on this scenario Not relevant. Brazil is the Issuer’s nation of origin. d) Cases the place the holders of securities have the preemptive proper to subscribe shares, inventory backed securities or securities convertible into shares, and the respective circumstances to train this proper, or instances the place this proper shouldn’t be assured, if relevant Not relevant. Brazil is the Issuer’s nation of origin. e) Other problems with curiosity to traders Not relevant. Brazil is the Issuer’s nation of origin. 53
– RISK MANAGEMENT AND INTERNAL CONTROL POLICY In relation to the dangers indicated in merchandise 4.1, inform: Whether the issuer has a proper danger administration coverage, informing, in that case, the approving physique and the date of approval, and, if not, the explanation why the issuer has not adopted such a coverage We have a governance course of set for coverage evaluation relevant to Brazil and our worldwide models. Policies mainly set out institutional pointers, methodologies and processes, deal with regulatory necessities and the very best market practices. The establishment has inner insurance policies that present pointers and set out danger administration governance, as follows: Policies(1) Approving physique Date of approval Capital Management 08/30/2021 Credit Risk Management and Controls 08/30/2021 Integrated Management of Operational 08/30/2021 Risk and Internal Controls Board of Directors Liquidity Risk Management and Control 03/18/2021 Market Risk Management and Control 03/07/2022 Compliance Policy 05/31/2021 Available for session on web site www.itau.com.br/investor-relations > Itaú Unibanco > Corporate Governance > Rules and Policies > Policies. The targets and methods of the danger administration coverage, if any, together with: i. Risks which might be supposed to be hedged Risk Description Credit Risk Risk of loss related to: (i) failure by a borrower, issuer or counterparty to satisfy their respective monetary obligations as outlined within the contracts; (ii) worth lack of a credit score settlement ensuing from a deterioration of the borrower’s, issuer’s or counterparty’s credit standing; (iii) discount of income or earnings; and (iv) advantages granted upon subsequent renegotiation; or debt restoration prices. Operational Risk Possibility of losses arising from failure, deficiency or inadequacy of inner processes, folks or programs or from exterior occasions that have an effect on the achievement of strategic, tactical or operational targets. It consists of authorized danger related to inadequacy or deficiency in contracts signed by us, in addition to penalties as a result of noncompliance with relevant legal guidelines and damages to 3rd events arising from the actions undertaken by us. Internally, we classify these exposures to danger inside the following classes: Internal fraud; External fraud; Labor claims and poor safety within the office; Inadequate practices associated to shoppers, services and products; Damage to our personal bodily belongings or belongings in use; Interruption of our actions; Failures in data expertise programs; and Failures within the efficiency, compliance with deadlines and administration of our actions. Liquidity Risk Likelihood that an establishment will be unable to successfully honor its anticipated and sudden obligations, present and future, together with these from ensures dedication, with out affecting its day by day operations or incurring important losses. 54
Market Risk Possibility of losses ensuing from fluctuations out there worth of positions held by a monetary establishment, together with the danger of operations topic to variations in overseas trade charges, rates of interest, worth indexes, fairness and commodity costs. Other dangers Description Insurance, Products that compose portfolios of our insurance coverage firms are associated to life Pension Plan and and elementary insurance coverage, in addition to pension plans and premium bonds. Accordingly, we perceive that the primary dangers inherent to those merchandise are: Premium Bond • Underwriting danger: the potential of losses arising from insurance coverage Risks merchandise, pension plans and premium bonds that go in opposition to our expectations, instantly or not directly related to technical and actuarial bases used for calculating premiums, contributions and technical provisions; • Market danger; • Credit danger; • Operational danger; and • Liquidity danger. Environmental Possibility of losses ensuing from occasions of environmental and/or social origin and Social Risk associated to the actions developed by us. Regulatory or Risk related to any nature, monetary losses or harm to fame, arising Compliance Risk from non-compliance with exterior or inner requirements, commitments to regulators, codes of self-regulation, strategies or codes of conduct associated to our actions. Model Risk Risk that arises from the inaccurate growth or upkeep of fashions, akin to mistaken assumptions and inappropriate use or software of the mannequin. Country Risk Risk of losses arising from noncompliance with obligations in reference to debtors, issuers, counterparties or guarantors on account of political, financial and social occasions or actions taken by the federal government of the nation the place the borrower, issuer, counterparty or guarantor is positioned. Business and Risk of a damaging influence on our monetary outcomes or capital as a consequence of Strategy Risk defective strategic planning, making antagonistic strategic choices, and our incapability to implement the right strategic plans and/or modifications in its enterprise surroundings. Reputational Risk Risk arising from inner practices, danger occasions and exterior components which will generate a damaging notion of us amongst shoppers, counterparties, stockholders, traders, supervisors and business companions, amongst others, which might have an effect on the worth of our model and monetary losses, along with adversely affecting {our capability} to take care of our current business relations, begin new companies and proceed to have entry to financing sources. ii. Instruments used for hedging functions Taking on and managing dangers is one in every of our actions and, to this finish, we will need to have effectively-established danger administration targets. In this context, the danger urge for food defines the character and degree of acceptable dangers to us and the danger tradition guides the attitudes essential to handle them. We spend money on strong danger administration processes which might be the premise for our strategic choices to make sure the sustainability of the enterprise and to maximise the creation of shareholder worth. These processes are aligned with the rules of the Board of Directors and the Executives who, by way of collegiate, outline the worldwide targets, expressed in targets and limits for the danger administration enterprise models. The management and capital administration models, in flip, assist our administration via danger and capital monitoring and evaluation processes. The rules that present the foundations of danger administration, the danger urge for food, and the rules for a way our staff act of their day-to-day determination-making are: Sustainability and buyer satisfaction: our imaginative and prescient is to be the main financial institution in efficiency and buyer satisfaction and is subsequently involved with producing shared worth for workers, prospects for workers, prospects, shareholders and society, making certain the perpetuity of our 55
enterprise. We are involved with doing enterprise that’s good for the consumer and for us. Risk tradition: our danger tradition goes past insurance policies, procedures and processes, strengthening the person and collective duty of all staff to handle and mitigate dangers mitigate the dangers in a aware method, respecting the best way enterprise is completed in an moral method. Risk pricing: we act and assume dangers in companies we all know and perceive, and keep away from these we have no idea or for which we’ve no aggressive benefit, fastidiously evaluating the relation between danger and return. Diversification: we’ve a low urge for food for volatility in outcomes and, because of this, we function in a diversified base of shoppers, merchandise and companies, searching for the diversification of dangers, along with prioritizing decrease danger enterprise. Operational excellence: we need to be an agile financial institution, with a strong and steady infrastructure, so as to provide a top quality service. Ethics and respect for laws: for us ethics is non-negotiable. For this cause, we promote an institutional surroundings of integrity, educating our staff to domesticate moral relationships and companies, in addition to respecting the norms, and subsequently taking care of fame. CMN Resolution No 4,557, of February 23, 2017, gives for the construction of danger and capital administration framework. The Resolution highlights the implementation of a steady and built-in danger built-in danger administration framework, the necessities for outlining the Risk Appetite Statement (RAS) and the stress check program, the structure of a Risk Committee and the appointment, earlier than BACEN, of the Risk Management Officer (CRO), with the attribution of roles tasks and independence necessities. Our danger urge for food establishes the categories and ranges of danger acceptable to us: 56
In addition to the adoption of danger administration, danger urge for food and danger tradition rules, we describe beneath the procedures used particularly to guard in opposition to the dangers talked about in merchandise above 5.1.b.i. Credit Risk The key assignments of the enterprise models are (i) monitoring the portfolios underneath their duty, (ii) granting credit score, contemplating approval ranges, market circumstances, macroeconomic prospects, modifications in markets and merchandise, and (iii) credit score danger administration aimed toward making the enterprise sustainable. Our credit score coverage is predicated on inner components, akin to: consumer ranking standards, efficiency and evolution of our portfolio, default ranges, return charges and allotted financial capital, amongst others; and in addition takes under consideration exterior components akin to: rates of interest, market default indicators, inflation and modifications in consumption, amongst others. With respect to our people, small and medium firms, credit score scores are assigned based mostly on statistical fashions (within the early phases of our relationship with a buyer) and conduct rating fashions (used for patrons with whom we have already got a relationship). For massive firms, classification is predicated on data such because the counterparty’s financial and monetary scenario, its money-producing capability, and the enterprise group 57
to which it belongs, the present and potential scenario of the financial sector wherein it operates. Credit proposals are analyzed on a case-by-case foundation by way of the approval governance. The concentrations are constantly monitored for financial sectors, and largest debtors, permitting preventive measures to be taken to keep away from the violation of the established limits. We additionally strictly management our credit score publicity to shoppers and counterparties, performing to reverse occasional restrict breaches. We could use contractual covenants for these functions, akin to the precise to demand early fee or require further collateral. To measure credit score danger, we take into consideration the likelihood of default by the borrower, issuer or counterparty, the estimated quantity of publicity within the occasion of default, previous losses from default and focus of debtors. Quantifying these danger parts is a part of the lending course of, portfolio administration and definition of limits. The fashions utilized by us are independently validated, to make sure that the databases utilized in establishing the fashions are full and correct, and that the strategy of estimating parameters is satisfactory, in order to cut back the modeling danger and maintain the fashions calibrated, in order that they replicate danger parameters extra precisely. In compliance with the rules of the CMN Resolution No 3,721, our credit score danger administration construction and institutional coverage are accredited by our Board of Directors and are relevant to all firms and subsidiaries in Brazil and overseas. Please see “Note 32 – Risk and Capital Management” to our audited consolidated monetary statements for additional particulars about credit score danger. Loan Approval Process Extensions of credit score are accredited based mostly on insurance policies on the enterprise unit degree, decided in accordance with the factors of every division and our financial institution’s danger urge for food. The determination to increase credit score could also be granted via a pre-approval course of or the standard approval mechanism, which is utilized on a consumer by consumer foundation. In each instances, choices are made based mostly on rules of credit score high quality akin to credit standing supported by statistical fashions, share of earnings dedicated by/leverage of the consumer and credit score restrictions decided by us and the market. The enterprise models put together and keep the insurance policies and procedures of the credit score cycle. The credit score granting course of contemplates using credit score safety companies with the aim of checking whether or not a consumer’s credit score historical past consists of data that might be thought of an impediment to granting a mortgage, akin to belongings blocked by courtroom orders, invalid tax payer identification numbers, prior or pending debt restructuring or renegotiation processes and checks not honored as a result of inadequate funds. 58
The coverage evaluation course of permits for the identification of potential dangers and is meant to make sure that credit score choices make sense from each an financial and a danger perspective. Internal cr«nts”in<:ome · Oient’s • Pff’SONJ • Proof”‘ one ,. O fltlltlon of <1111om•u wf,owHIMgnntttdl()oant-” 1’1-.apprO’o”ldcrodll for rkkpof1lewftl.,_the Ast.a~tACntboMdon: · l~Jmount st•llmnon-account holdlng shoppers oocu~nti!ltlon: fl’criOM!Iclrntiflc t,on Pooaf or P•Yroll l’foafor rM~IICt • l’foaf of the b.lnk “‘”””” whttc d.:-cl~t r~ poyrcll bfnofiu Vehicle fiiiiUICing PclllMrtar de.~tk-rs er•IICioesanddlgotal channels Fbt~ lnt~t rat~! Is s.t based mostly on the cre.-ol· -., ,_,. • ~lhoUdbt-OlftiW.’Oiytocr
Please see “Note 32 – Risk and Capital Management, 1.1 Collateral and insurance policies for mitigating credit score danger”, to our audited consolidated monetary statements for additional particulars about our danger mitigating devices. Operational Risk Operational danger administration consists of conduct danger, which is topic to mitigating procedures to evaluate product design (suitability) and incentive fashions. The inspection space is chargeable for fraud prevention. Irrespective of their origin, particular instances could also be dealt with by danger committees and integrity and ethics committees. We have a governance course of in place, structured by way of boards and company our bodies composed of senior administration, which report back to the Board of Directors, with effectively-outlined roles and tasks so as to segregate the enterprise and administration and management actions, making certain independence between the areas and, consequently, effectively-balanced choices with respect to dangers. This is mirrored within the danger administration course of carried out on a decentralized foundation underneath the duty of the enterprise areas and by a centralized management carried out by the operational danger, via established methodologies and procedures, trainings, danger assessments and monitoring of the management surroundings in an impartial manner. Within the governance of the danger administration course of, reporting on danger monitoring, controls effectiveness, remediation motion plans and operational losses are frequently introduced to the enterprise areas executives in particular boards. Procedures and Key Indicators Crisis Management and Business Continuity The objective of our Business Continuity Program is to guard our staff, make sure the continuity of the vital features of our enterprise strains, safeguard income and maintain each a steady monetary market wherein we function and the belief of our shoppers and strategic companions in offering our companies and merchandise. 60
Our Business Continuity Program consists of procedures for relocating and/or recovering operations in response to a wide range of interruption ranges and may be divided into 4 key parts: Disaster Recovery Plan: targeted on the restoration of our main knowledge heart, making certain the continuity of the processing of vital programs inside minimal pre-established intervals; Workplace Contingency Plan: staff chargeable for performing vital enterprise features have options to carry out their actions within the occasion of unavailability of the buildings wherein they normally work. Remote work can also be accessible actions are carried out from distant work (dwelling workplace); Emergency Plan: procedures aimed toward minimizing the results of emergency conditions which will influence our amenities, with a preventive focus; and Processes Contingency Plan: options (Plan B) to hold out the vital processes recognized within the enterprise areas. In order to maintain the continuity options aligned with the enterprise necessities this system applies the next instruments to know theinstitution: Business Impact Analysis (BIA): evaluates the criticality and resumption requirement of the processes that assist the supply of services and products. Through this evaluation the companies’ resumption priorities are outlined; and Threats and Vulnerabilities Analysis (AVA): identification of threats to the places the place our buildings are positioned. In addition, we’ve a company-large Crisis Management Program, which is aimed toward managing enterprise interruption occasions, pure disasters, impacts of an environmental, social, and infrastructural/operational (together with data expertise) nature or of another nature that jeopardize the picture and fame and/or viability of Itaú Unibanco’s processes with its staff, shoppers, strategic companions and regulators, with well timed and built-in responses. Our Corporate Business Continuity Policy is accessible on our web site > https://www.itau.com.br/investor-relations > Itaú Unibanco > company governance > guidelines and insurance policies > insurance policies. Liquidity Risk Our liquidity danger management is managed by an impartial space and is chargeable for figuring out the composition of our reserve, estimating money stream and publicity to liquidity danger over a number of time horizons, and monitoring the minimal limits of the danger urge for food in international locations wherein we function. All actions are topic to evaluation by an impartial validation, inner controls and audit departments. Procedures and Key Indicators In accordance with the necessities of Central Bank laws, we report month-to-month our Liquidity Risk Statements (DLR and DLP). Besides, the next gadgets are periodically produced and submitted to the senior administration for monitoring and determination assist: Different eventualities for liquidity projections to determination assist, additionally utilizing careworn macroeconomics eventualities and reversed stressaccording to danger urge for food; Contingency plans for potential disaster, which incorporates procedures ordered by ranges of execution, contemplating every international locations’ traits; Reports of danger indicators; and Tracking, and monitoring of funding sources contemplating counterparty kind, maturity and different facets, contemplating the danger urge for food. 61
Liquidity Ratios (LCR)1 Our common liquidity protection ratio (LCR) as of December 31, 2021 was 159.1%, above the minimal restrict of 100%, pursuant to Central Bank laws, efficient as of January 1, 2019. Net Stable Funding Ratio (NSFR)2 Our common web steady funding ratio (NSFR) as of December 31, 2021 was 121.1%, above the minimal restrict of 100%, pursuant to Central Bank laws, efficient as of October 1, 2018. Market Risk Our insurance policies and common market danger administration framework are in keeping with the rules of CMN Resolution No. 4,557, and its subsequent amendments. These rules information our method to market danger management throughout our Itaú Unibanco Group. Our market danger administration technique is aimed toward balancing company enterprise targets, taking into consideration, amongst different components: Political, financial and market circumstances; The profile of our portfolio; and Capacity to behave in particular markets. The key rules underlying our market danger management construction are as follows: Provide visibility and luxury for all senior administration ranges that market dangers assumed should be in keeping with our danger-return targets; Provide disciplined and knowledgeable dialogue on the general market danger profile and its evolution over time; Increase transparency as to how the enterprise works to optimize outcomes; Provide early warning mechanisms to facilitate efficient danger administration, with out obstructing the enterprise targets; and Monitor and keep away from danger focus. Market danger is managed by an space impartial of the enterprise models, which is chargeable for the day by day actions: (i) measuring and assessing danger; (ii) monitoring stress eventualities, limits and alerts; (iii) making use of, analyzing and stress testing eventualities; (iv) reporting danger to the people accountable within the enterprise models, in compliance with our governance procedures; (v) monitoring the measures wanted to regulate positions and/or danger ranges to make them viable; and (vi) supporting the safe launch of recent monetary merchandise. The CMN has laws establishing the segregation of market danger publicity at a minimal into danger components, akin to: rates of interest, trade charges, shares and commodities. Brazilian inflation indexes are additionally handled as a bunch of danger components and observe the identical construction. Our construction of limits and alerts follows the Board of Directors pointers, that are reviewed and accredited by our Board of Directors on an annual foundation. This construction extends to particular limits and is aimed toward enhancing the method of danger monitoring and understanding in addition to stopping danger focus. Limits and alerts are calibrated based mostly on projections of future stability sheets, stockholders’ fairness, liquidity, complexity and market volatility, in addition to our danger urge for food. 1 The LCR measures the brief-time period resistance of a financial institution’s liquidity danger profile. It is the ratio of the inventory of excessive-high quality liquid belongings to anticipated web money outflows over the subsequent 30 days, assuming a situation of idiosyncratic or systemic liquidity stress. We calculate our LCR in line with the methodology established in Central Bank Circular No. 3,749/2015. We measure our whole excessive liquidity belongings for the top of every interval to money outflows and inflows because the day by day common worth for every interval. We have diversified sources of funds, with a good portion coming from the retail phase. The principal sources assets are deposits, financial savings, issuance of bonds and acceptance assets. 2 The NSFR measures lengthy-time period liquidity danger. It is the ratio of obtainable steady funding to required steady funding over a one-yr time interval, assuming a careworn situation. We calculate our NSFR in line with the methodology established in Central Bank Circular No. 3,869/2017. The NSFR corresponds to the ratio of our accessible steady funds (ASF) for the top of every interval to our required steady funds (RSF) for the top of every interval. 62
Additional data concerning market danger safety devices are described in merchandise 5.2.b.iii of this Reference Form. Other Risks Business and Strategy Risk We have carried out many mechanisms to make sure that each the enterprise and the strategic determination-making processes observe correct governance requirements, have the energetic participation of executives and the Board of Directors, are based mostly on market, macroeconomic and danger data and are aimed toward optimizing the danger-return ratio. Decision-making and the institution of enterprise and technique pointers, depend on the total engagement of the Board of Directors, primarily by way of the Strategy Committee, and of the executives, by way of the Executive Committee. In order to deal with danger adequately, we’ve governance and processes that contain the Risks and Finance Area in enterprise and technique choices, in order to make sure that danger is managed and choices are sustainable in the long run. They are: (i) the {qualifications} and incentives of board members and executives; (ii) the budgetary course of; (iii) product evaluation; (iv) the analysis and prospecting of proprietary mergers and acquisitions; and (v) a danger urge for food framework which, for instance, restricts the focus of credit score and publicity to particular and materials dangers. Regulatory or Compliance Risk The regulatory or compliance danger is managed by way of a structured course of aimed toward figuring out modifications within the regulatory surroundings, analyzing their impacts on the establishment and monitoring the implementation of actions directed at adherence to the regulatory necessities. This structured course of consists of the next actions: (i) to know the modifications within the regulatory surroundings; (ii) to observe regulatory tendencies; (iii) to take care of the connection between the establishment and the regulator, self-regulatory our bodies and the illustration entity; (iv) to observe motion plans on regulatory or self-regulatory compliance; (v) to coordinate a program to adjust to important norms, akin to Integrity and Ethics; and (vi) to report regulatory points in Operational and Compliance Risk boards, in line with the construction of committees established in inner insurance policies. Insurance Products, Pension Plan and Premium Bonds Risks In line with home and worldwide practices, we’ve a danger administration construction which ensures that dangers ensuing from insurance coverage, pension and particular financial savings merchandise are correctly assessed and reported to the related boards. The technique of danger administration for insurance coverage, pensions and premium bond plans is impartial and focuses on the particular nature of every danger. As a part of the danger administration course of, there’s a governance construction the place choices could also be escalated to sub-committees, thus making certain compliance with a number of regulatory and inner necessities, in addition to balanced choices relative to dangers. Our goal is to make sure that belongings serving as collateral for lengthy-time period merchandise, with assured minimal returns, are managed in line with the traits of the liabilities, in order that they’re actuarially balanced and solvent over the long run. Model Risk The use of fashions can result in choices which might be extra correct and subsequently it’s a main observe. The fashions have supported strategic choices in a number of contexts, akin to credit score approval, pricing, volatility curve estimation, calculation of capital, amongst others. Due to the growing use of fashions, pushed by the applying of recent applied sciences and the growth of information use, we’ve improved our governance in relation to the event and monitoring, by way of the definition of pointers, insurance policies and procedures aimed toward assuring the standard and mitigation of the related dangers. Step-in Risk Step-in Risk is the potential of losses occurring for entities which might be a part of the Prudential Conglomerate on account of monetary assist to unconsolidated entities, in a aggravating scenario, within the absence or along with the obligations supplied for within the contract. We have a construction for danger administration and management, a devoted workforce and a coverage that defines roles and tasks. This construction covers (i) the identification of entities in relation to the potential technology of step- 63
in Risk, (ii) the evaluation of dangers in relationships, (iii) the monitoring, management and mitigation of step-in Risk, (iv) the evaluation of influence on capital and liquidity and (v) reviews. The scope of Step-in Risk governance is: Related Party audiences, primarily composed of controllers, managed and associated entities (as outlined in Central Bank Resolution No. 4,693/18), investments in non-consolidated entities, suppliers of vital services and products, consumers and sellers of related belongings, third events with merchandise distributed by us and third events to whom we distribute merchandise. Cybersecurity Management and Processes We take into account cybersecurity and knowledge safety on the highest strategic degree. Our Information Security division contributes to the safety pillar by dealing with data and knowledge. The objective of this division is to safeguard our and our shoppers’ knowledge and to protect the integrity, availability, and confidentiality of data, thus mitigating monetary losses and reputational danger. Our cybersecurity data technique is designed to forestall and detect safety incidents, reduce unavailability, defend integrity and forestall knowledge leakage. It is predicated on strict management processes aimed toward stopping, detecting, and instantly responding to assaults and makes an attempt to hack our infrastructure, thus making certain the safety danger is managed and a secure basis is constructed for an more and more digital future. The data safety technique has been developed contemplating the worldwide situation, laws and finest practices and requirements, so as to give attention to establishing knowledge safety for our prospects. We additionally keep an efficient safety governance by way of govt committees and a set of data safety insurance policies. Our infrastructure defenses are structured to guard our group in opposition to exterior and inner assaults, with instruments akin to community behavioral evaluation, intrusion prevention programs (IPS), firewalls, antiviruses, antispam programs, amongst others. In order to succeed in this objective, we use the technique of defending an expanded perimeter. Under this idea, data should be protected no matter the place it’s positioned, inside our infrastructure, in a cloud supplier, at a 3rd social gathering or a overseas unit. This technique additionally takes under consideration all the data lifecycle, from assortment to processing, transmission, storage, evaluation and destruction. We have a specialised monitoring workforce, able to figuring out potential threats and establishing an energetic and efficient protection (SOC – Security Operational Centers). Additionally, we’ve a cyber-intelligence workforce working to determine threats and handle any essential counter measures. In order to achieve success in our data safety protection technique, we take into account the tradition of safety as the premise to enhance our data safety program in addition to the funding in consciousness campaigns for workers and prospects so they continue to be ready to determine and deal with inherent dangers and threats. Environmental and Social Risk Social and environmental danger mitigation actions are carried out by way of mapping of processes, dangers and controls, monitoring of recent guidelines associated to the theme and recording of occurrences in inner programs. In addition to identification, the phases of prioritization, danger response, monitoring and reporting of the assessed dangers complement the administration of this danger at Itaú Unibanco. Governance for local weather-associated dangers is embedded into our current governance construction and is complementary to governance of our sustainability technique. We publish our Sustainability and Social Environmental Responsibility Policy (PRSA) on our web site at Investors Relations web site (see – “Menu -Itaú Unibanco-Corporate Governance-Regulations and Policies-Policies-Policy For Sustainability And Social Environmental Responsibility”), which isn’t included by reference into this annual report. Environmental and social danger administration is carried out by our enterprise areas (i.e. first line of protection), which perform the administration of their day by day actions, following the rules of PRSA, particular manuals and procedures, with specialised assist and analysis by devoted technical groups positioned within the Corporate Compliance, Credit Risk and Modeling and Institutional Legal groups, which act in an built-in method within the administration of all dimensions of social and surroundings danger linked to the actions of the conglomerate As an instance of particular pointers for the administration of this danger, the governance for approval of recent services and products relevant to our enterprise models embrace environmental and social dangers of their evaluation, making certain compliance with this requirement within the technique of approving new merchandise in addition to with particular environmental and social processes relevant to our operations (fairness, department infrastructure and expertise), suppliers, credit score, investments and key subsidiaries. The second line of protection, in flip, is represented by Credit and Modeling Risk, by Internal Controls, and by Compliance, by way of the Corporate Social and Environmental Risk 64
Management, which helps and ensures the governance of the actions of the primary line. The third line of protection, composed of Internal Audit, acts independently, finishing up the mapping and evaluation of danger administration, controls and governance. The governance of Environmental and Social Risk additionally counts on the Environmental and Social Committee, whose principal function is to guage and deliberate on institutional and strategic issues, in addition to deliberate on merchandise, operations, companies, amongst others that contain the theme of environmental and social danger, together with Climate Risk as local weather change additionally poses related dangers for the entire monetary system. Climate dangers embody each bodily dangers, arising from modifications in local weather patterns akin to rainfalls and temperature rise and excessive climate occasions; and transition dangers arising from financial shifts occurred as a consequence of local weather motion akin to carbon pricing, local weather regulation, market dangers and fame dangers. Given its relevance, local weather danger has turn into one in every of our principal priorities: we’ve supported the Task Force on Climate-related Financial Disclosures (TCFD) since 2017 and we’re dedicated to implementing its suggestions by 2022. With this goal we’re strengthening our local weather danger governance and technique and growing instruments and methodologies to evaluate and handle local weather dangers. Given the rising significance of an built-in method for environmental and social danger administration, in 2019, we elevated our governance creating a brand new construction underneath the Compliance division: the Corporate Environmental and Social Risk Management unit. Such space has the mandate to strengthen the environmental and social danger governance, counsel on associated issues, and to guide built-in reviews to the excessive administration. We persistently pursue to evolve in environmental and social danger administration, all the time attentive to challenges together with these arising from laws and from modifications in stakeholders’ expectations. We have assumed and included a number of nationwide and worldwide voluntary commitments into our governance aiming at constantly enhancing our built-in environmental and social danger administration. We have dedicated with the Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), the Charter for Human Rights – Ethos, Equator Principles (EP), Global Impact, Carbon Disclosure Project (CDP), Brazilian GHG Protocol Program, National Pact for Eradicating Slave Labor (Pacto Nacional para Erradicação do Trabalho Escravo), amongst others. Our efforts to extend data and governance of environmental and social danger have been acknowledged in Brazil and overseas, as proven by our recurring presence in sustainability indexes, akin to Dow Jones Sustainability Index, Euronext Vigeo – Emerging 70, and in B3’s Corporate Sustainability Index, in addition to quite a few prizes and recognitions which we’ve been awarded. Country Risk We have a particular construction for the administration and management of nation danger, consisting of company our bodies and devoted groups, with tasks outlined in insurance policies. The establishment has a structured and constant process for managing and controlling nation danger, together with: (i) the institution of nation scores; (ii) the dedication of limits for international locations; and (iii) the monitoring of limits. Reputational Risk We imagine that our fame is extraordinarily essential for reaching our lengthy-time period targets. As a outcome, we attempt to align our speech with moral and clear practices and work, which is crucial to lift the arrogance of our stakeholders. Our fame relies on our technique (imaginative and prescient, tradition and abilities) and derives from direct and oblique relationship between us and our stakeholders. Since reputational danger instantly or not directly permeates all of our operations and processes, we’ve governance procedures which might be structured in a manner to make sure that potential reputational dangers be recognized, analyzed and managed within the preliminary phases of our operations and the evaluation of recent merchandise. The remedy given to reputational danger is structured via many processes and inner initiatives, which, in flip, are supported by our inner insurance policies. Their principal objective is to offer mechanisms for the monitoring, administration, management and mitigation of the primary reputational dangers. Among these processes and inner initiatives are (i) danger urge for food assertion; (ii) processes to forestall and fight using Itaú Unibanco in illegal acts; (iii) disaster administration processes and enterprise continuity procedures; (iv) processes and pointers with respect to governmental and institutional relations; (v) company communication processes; (vi) model administration processes; (vii) ombudsman places of work initiatives and dedication to buyer satisfaction; and (viii) ethics and corruption prevention pointers. Money Laundering Prevention Financial establishments play a key function in stopping and combating illicit acts, which incorporates cash laundering, terrorism financing and fraud. 65
The problem is to determine and forestall more and more refined operations that search to hide the supply, possession and switch of products and belongings, derived from unlawful actions. We have established a company coverage to forestall our involvement in illicit actions, defending our fame and picture amongst staff, prospects, strategic companions, suppliers, service suppliers, regulators and the society. Our coverage is predicated on a governance construction targeted on transparency, strict compliance with the principles and laws and cooperation with enforcement and judicial authorities. We additionally try to conduct our enterprise in accordance with the native and worldwide finest practices to forestall and battle illicit acts, by way of investments and coaching our staff on an ongoing foundation. In order to adjust to our company coverage, we’ve established a program to forestall and battle illicit acts, which incorporates the next pillars: Policies and Procedures; Customer Identification Process; Know Your Customer-KYC; Know Your Partner-KYP; Know Your Supplier-KYS; Know Your Employee-KYE; Evaluation of New Products and Services; Sanctions Compliance; Monitoring, Selection and Analysis pf Suspicious Operations or Situations; Reporting Suspicious Transactions to Regulators and Authorities; and Training. This program is relevant to us and our entities in Brazil and overseas. The oversight of prevention and detection of unlawful actions is carried out by the Board of Directors, the Audit Committee, Compliance and Operational Risk Committees, Risks and Capital Management Committee and the Anti-Money Laundering Committee. Our Illicit Acts Prevention and Combat Corporate Policy is posted on our Investors Relation web site (see: “Itaú Unibanco -Corporate Governance-Regulations and Policies-Policies-Corporate Policy for Prevention and Fight Against Illegal Acts”). Politically Exposed Persons (“PEPs”) Our dedication to compliance with relevant legislation and to the adoption of the very best practices for prevention and detection of cash laundering exercise can also be mirrored within the identification, evaluation and monitoring of PEPs, whether or not as people or entities. As per our insurance policies, we conduct enhanced due diligence with respect to PEPs, in keeping with our danger-based mostly method. We require the next degree ofapproval previous to establishing any relationship with a PEP. iii. danger administration organizational construction Our danger administration organizational construction complies with Brazilian and relevant worldwide laws presently in place and is aligned with finest market practices. There is a construction in place for coordination and consolidation of data and associated processes, that are all topic to verification by impartial validation, inner controls and audit areas. The following committees are a part of our danger and capital administration governance construction: 66
Risk & Capital Management Committee (CGRC): helps our Board of Directors in performing its duties associated to our danger and capital administration by assembly, not less than, 4 instances yearly, and submitting reviews and suggestions to help the Board of Directors in its determination-making with respect to: Decisions concerning our danger urge for food, by way of capital, liquidity, outcomes, operational danger and fame, making certain these facets are in alignment with our technique, and together with acceptable capital and liquidity ranges and forms of dangers to which we could also be uncovered, in addition to total limits for every kind of danger, tolerance for volatility of outcomes and danger focus, and common pointers about tolerance for dangers which will influence our model (e.g., model danger). Supervision of our danger administration and management actions so as to guarantee their suitability to the danger ranges assumed and to the complexity of the operations in addition to compliance with regulatory necessities; Review and approval of insurance policies and methods for capital administration, to determine mechanisms and procedures aimed toward protecting capital in step with the dangers we incur; Establishing our minimal anticipated return on capital as a complete and for our strains of enterprise, in addition to monitoring efficiency; Supervision of our incentive buildings, together with compensation, aimed toward making certain its alignment with danger management and worth creation targets; and Fostering enchancment in our Risk Culture. Superior Market Risk and Liquidity Committee (CSRML): meets on a month-to-month foundation and is chargeable for setting pointers and governance for investments and market and liquidity dangers concerning our consolidated positions and enterprise strains. Superior Operational Risk Committee (CSRO): meets on a bimonthly foundation and is chargeable for understanding the dangers of our processes and enterprise, defining pointers for operational dangers administration and assessing the outcomes achieved by our Internal Controls and Compliance System. The CSRO is our principal determination-making committee for all operational danger administration issues. It is chargeable for defining our operational danger framework and construction and associated insurance policies for identification, measurement, evaluation, reporting and monitoring of operational danger. Superior Products Committee (CSP): meets on a weekly foundation and is chargeable for evaluating merchandise, operations, companies and processes which might be past the authority of our Products Committees that report back to it or that contain picture danger to us. 67
Superior Credit Committee (CSC): meets on a weekly foundation and is chargeable for analyzing and deciding on credit score proposals which might be past the authority of the credit score committees that report back to the CSC. It can also be chargeable for analyzing choices which can haven’t been taken as a result of an absence of consensus on the committee instantly subordinate to it or instances the place, because of the relevance or traits of the subject or different options, such Credit Committees determine to undergo the CSC’s evaluation. Superior Retail Credit and Collection Committee (CSCCV): meets on a month-to-month foundation and is chargeable for approving credit score insurance policies and assessing the efficiency of Retail Credit and Collection portfolios and methods. Superior Wholesale Credit and Collection Committee (CSCCA): meets on a month-to-month foundation and is chargeable for approving credit score insurance policies and assessing the efficiency of Wholesale Credit and Collection portfolios and methods. Superior Committee on Prevention of Money Laundering (CSPLD): summoned on demand, the Committee goals to research and deliberate on claims involving the opening / upkeep of transfers and different companies / operations (M&A, credit score granting, KYC trade validation, amongst others) to bidders with larger publicity to cash laundering danger. Superior Commission for Corporate Investment (CSIS): assembly on demand, its objective is to guage short-term company investments of curiosity to the Investment Bank (DGA – Departamento Geral de Atacado). Additionally, we’ve sub-committees, chaired by our chief danger officer and CFO, that are additionally chargeable for danger and capital administration. Any such sub-committee could report on to the Risk and Capital Management Committee or to the sub-committees talked about above. Standards Committee (CN): meets not less than quarterly (could also be by way of Fast Track) and goals to approve / validate requirements with the scope of the Standards Committee, being the minimal scope for approval of insurance policies. Higher-level insurance policies should be accredited by the Normative Committee earlier than continuing to different boards. Technical Commission for Model Evaluation (CTAM): CTAM-Market: meets bimonthly or on demand, for approval and evaluation of market danger fashions and pricing, based mostly on the impartial opinion of the mannequin validation space, in addition to suggesting and monitoring motion plans for the validated fashions. Its principal tasks are: to approve fashions associated to the calculation of market danger and pricing, to determine whether or not or to not use market danger and pricing fashions, to approve, advocate, recommend and monitor the proposed motion plans for the validated fashions and monitor the efficiency of the market danger mannequin over time, figuring out new developments, if essential. CTAM-Credit: advocate or veto using credit score danger fashions based mostly on an impartial opinion from the mannequin validation space, inform any danger factors and monitor motion plans. Its tasks are divided into Director Alçada (which meets month-to-month or on demand) and Superintendent Alçada. Capital Committee (CCAP): assembly not less than bimonthly, it goals to observe the capital adequacy of the Holding and International Units, the capital projections in regular and antagonistic eventualities, along with reviewing the evaluation of the materiality of the dangers, the necessity for added capital for materials dangers and the quantification methodologies for calculating capital for dangers whose want has been accomplished for the needs of the Internal Capital Adequacy Assessment Process (ICAAP). International Units Risk Committee (CRUI): held on a quarterly foundation, it goals to current and focus on the primary dangers of International Units and the corresponding methods and motion plans proposed to mitigate the recognized dangers. It displays the danger indicators and danger urge for food of International Units, in addition to the measures for upkeep at acceptable ranges, contemplating the particularities of every nation or area. Deliberates on conditions that require mobilization of Units and respective administration areas in Brazil, together with monitoring of danger occasions, notes from regulators, outcomes of inner and exterior audits, danger maps and regulatory calls for. Evaluates the evolution of maturity within the danger administration of the Units and within the governance and supervision exercised by the ARF danger areas, making certain alignment with our technique. Promotes the Risk Culture Program in International Units and its dissemination. To assist this construction, we’ve the Risks & Finance Control and Management Area, structured with specialised departments and subordinated to our chief danger officer and CFO, desiring to independently and in a centralized method to make sure that the establishment’s dangers and capital are managed in accordance with established insurance policies and procedures. 68
Risk governance at overseas subsidiaries Our overseas subsidiaries observe the danger administration and governance mannequin established by the holding in its insurance policies and pointers, protecting an efficient stream of data on danger ranges between headquarters and every subsidiary and alignment of methods for sustaining such dangers at a suitable degree. To guarantee the continual enchancment of the models in danger administration and controls, a maturity program was established, comprising the definition and periodic evaluation of finest practices of danger administration and controlling carried out in every location as additionally the supervision and governance actions carried out by the holding. The proximity within the monitoring of our models permits us to higher perceive the peculiarities of every nation and area the place we do enterprise with and to shortly adapt to modifications in numerous regulatory, social, and financial environments the place we function, even in stress eventualities as noticed with COVID-19 pandemic. In this regard, there was a rise of quantity and frequency of data shared between models and holding when associated to prospects and staff’ security and effectively-being preservation, the provision of banking channels, services and products, the regulatory modifications instituted in numerous international locations and their impacts within the models. Finally, advances in actions to strengthen the Risk Culture on overseas subsidiaries have fostered particular person and collective tasks of all our staff, empowering them to do the precise factor, on the proper time, and in the precise manner respecting the moral and sustainable manner of doing enterprise. Internal Audit The Internal Audit Department is subordinated, on the administrative degree, to the Chairmen of the Board of Directors of Itaú Unibanco Holding S.A. Its actions are supervised by the Audit Committee of Itaú Unibanco Holding S.A. The Internal Audit illustration places of work positioned in Foreign Units report, at a technical degree, to the Executive Audit Office of Itaú Unibanco S.A., and their actions are supervised by the Audit Committee of Itaú Unibanco Holding S.A., in addition to by native Audit Committees. The inner audit actions carried out and using the identify “inner audit” within the Conglomerate are unique to Itaú Unibanco’s Executive Audit Board. The Internal Audit Department adopts a proprietary methodology obligatory for the Conglomerate’s all Internal Audit models. This methodology is in keeping with the worldwide requirements for the inner auditor’s career disclosed by The Institute of Internal Auditors (The IIA). Every time this system is revised, modifications are submitted for approval from the Executive Audit Office and the Audit Committee. The Internal Audit Department will report any noncompliance with requirements to the Audit Committee. The Internal Audit Department has an agenda to report back to the Governance, which incorporates conferences with the Audit Committee, Executive Committee, Board Chairmanship, and the Board of Directors. c) The adequacy of working construction and inner controls to confirm the effectiveness of the coverage adopted The construction adopted is satisfactory and in a position to monitor market dangers in accordance with insurance policies set and the danger urge for food assertion. The built-in administration of operational danger, inner controls and compliance is structured in three strains of protection: 1st line: represented by the enterprise and again workplace areas, it’s chargeable for figuring out, measuring, assessing, understanding and managing occasions of operational danger, in addition to protecting an efficient management surroundings (together with compliance with inner and exterior guidelines). 2nd line: represented by the operational danger division, its tasks embrace disclosing and making certain the applying of choices, insurance policies and methods with respect to operational danger administration, in addition to validating insurance policies and processes on an impartial foundation. third line: represented by the Internal Audit division, it’s accountable, amongst others, for independently and periodically verifying the adequacy of danger identification and administration processes and procedures. The actions of the second line of protection are carried out by the, Compliance and Operational Risk division, that are structurally segregated from the enterprise and again workplace departments, thus making certain its independence. 69
Furthermore, the second line of protection validates the method targeted on figuring out, measuring, assessing, monitoring and responding to the group’s operational dangers, thus making certain that any losses and dangers are stored inside the limits set by the establishment and adherent to insurance policies and procedures. With respect to the market dangers indicated in merchandise 4.2, please inform: Whether the issuer has a proper market danger administration coverage, specifying, in that case, the physique that accredited it and the approval date and, if not, the explanation why the issuer has not adopted a coverage Our institutional market danger administration coverage is a set of rules contained in CMN (National Monetary Council) laws relevant to all enterprise models and authorized entities of the Itaú Unibanco Group. Our market danger administration course of is topic to the governance and hierarchy of councils, with particular limits assigned to completely different portfolios and ranges (e.g., Banking Portfolio, Trading Portfolio) and a few forms of market danger (akin to rate of interest and overseas trade dangers). Daily danger reviews, utilized by the enterprise and management departments, are additionally despatched to senior administration. In addition, the market danger management and administration course of is submitted to periodic opinions. Our market danger management framework is chargeable for: offering visibility and assurance for all senior administration ranges that market dangers assumed are in keeping with our danger-return targets; selling a disciplined and knowledgeable dialogue concerning the total market danger profile and its evolution over time; growing transparency as to how the enterprise seeks to optimize outcomes; offering early warning mechanisms to facilitate efficient danger administration, with out obstructing the enterprise targets; and monitoring and stopping danger focus. The market danger is managed by a division impartial from the enterprise models and that’s chargeable for performing the day by day actions of (i) danger measurement and evaluation; (ii) monitoring stress eventualities, limits and warnings; (iii) software of stress eventualities, and associated evaluation and checks; (iv) reporting danger findings to the in-cost people inside the related enterprise models in accordance with our governance necessities; (v) monitoring any actions required to regulate danger positions and/or ranges to make them viable; and (vi) offering assist for the launch of recent monetary merchandise: To this finish, we’ve a structured communication and knowledge stream course of that gives data to our Superior Councils and displays compliance with the necessities of Brazilian and overseas regulatory businesses. Our construction of limits and warnings follows the Board of Directors’ pointers and is accredited by the Superior Market and Liquidity Risk Council (CSRML) or correct authority degree, which meets not less than as soon as a month. This construction promotes management effectiveness and protection and is reviewed not less than yearly. It additionally maps from aggregated danger indicators (portfolio ranges) to granular limits (particular person desk ranges). The construction of market danger limits extends to the danger issue degree, with particular limits aimed toward enhancing danger monitoring and understanding, in addition to at avoiding danger focus. These limits are decided based mostly on projected stability sheet outcomes, dimension of fairness, liquidity, market complexity and volatility, and our danger urge for food. The technique of setting these restrict ranges and breach reporting follows the governance of approval from our monetary conglomerate´s institutional insurance policies. The data stream goals at offering data for the group’s a number of govt ranges, together with Board of Directors members by way of the CGRC, which meets each two months. Risk limits are monitored day by day and any extra and potential breaches of limits are reported and mentioned at correct authority ranges. Within one enterprise day, to the administration of the related enterprise models and the danger management division and enterprise unit executives; and inside one month, to the Superior Market and Liquidity Risk Council (CSRML) each time that is the right authority degree. Market danger administration is ruled by the inner insurance policies beneath, accredited by the respective correct our bodies: Re Policy Revised on PS-17 MARKET RISK MANAGEMENT AND CONTROL POLICY (GLOBAL) 03.31.2021 RG-23 CLASSIFICATION OF OPERATIONS 05.31.2021 DATABASE OF MARKET AND LIQUIDITY RISKS, RESULTS AND PR-100 09.30.2021 OPERATIONS (BRAZIL) 70
PR-97 MARKET RISK LIMIT MANAGEMENT (GLOBAL) 03.31.2021 PR-121 PRICING PROCESS (GLOBAL) 03.31.2021 PR-122 MARKET RISK BACKTESTING TESTING (GLOBAL) 05.31.2021 PR-98 MARKET RISK STRESS TESTING (GLOBAL) 04.30.2021 PR-55 PREPARATION OF MARKET RISK MODELS 03.31.2021 PR-123 PRUDENTIAL ADJUSTMENTS CALCULATION PROCESS (GLOBAL) 06.30.2021 PR-126 MARKET RISK CONTROL PROCEDURES FOR TREASURY (GLOBAL) 06.30.2021 EFFECTIVENESS OF ECONOMIC HEDGING OF FOREIGN INVESTMENTS PR-123 06.30.2021 (BRAZIL) PR-124 MARKET RISK STATEMENT (GLOBAL) 06.30.2021 PR-47 GOVERNANCE INTERNAL MARKET RISK MODELS (BRAZIL) 03.31.2021 Approval authority ranges: CN – Policies Council and the Board of Directors, for PS/RG reference code insurance policies. Market and Liquidity Risk Officer, for PR reference code procedures. b) The targets and methods of the market danger administration coverage, if any, together with: i. the market dangers which might be supposed to be hedged Hedges are primarily used in opposition to dangers posed by fluctuations in curiosity, inflation and overseas trade charges. ii. the fairness hedging technique The hedging technique is aimed toward adjusting earnings from overseas trade variation after taxes on overseas investments (accounting foundation) and its hedges. An financial hedge consists of positions aimed toward hedging earnings from overseas trade variation on overseas investments. Economic hedges could also be traded on spinoff inventory or over-the-counter markets and thru overseas forex liabilities. Market danger administration is aimed toward mapping and controlling dangers of mismatches. The Market and Liquidity Risk Control Office is chargeable for mapping, calculating and informing market dangers and mismatching of phrases, currencies and indices, in addition to using limits accredited by correct committees or authorities. The Treasury division makes use of hedging transactions to mitigate and handle dangers of mismatches, complying with the bounds of publicity and dangers accredited by correct committees or authorities. For managing these dangers, it analyzes the data acquired and financial knowledge for hedging functions. So-called hedge accounting derivatives are monitored based mostly on their effectiveness and accounting impacts. iii. fairness hedging devices When required, the Issuer operates out there with spinoff monetary devices. The Bank makes use of a variety of monetary devices for danger administration, which embrace securities and derivatives traded over-the-counter or on inventory exchanges. Derivatives primarily embrace: Interest fee and overseas trade futures contracts; Non-Deliverable Forward – NDF; Interest fee and overseas trade swap contracts; and Options. Transactions with spinoff monetary devices are labeled in accordance with their traits: danger administration or money stream hedge. 71
iv. danger administration parameters Risk administration parameters utilized by the Issuer embrace market danger measures, akin to: Value at Risk (VaR): a statistical measure that quantifies potential financial losses anticipated in regular market circumstances, contemplating an outlined holding interval and confidence degree; Losses in Stress Scenarios (Stress Testing): a simulation approach to guage the influence on belongings, liabilities and derivatives portfolios of varied danger components in excessive market conditions (based mostly on potential and historic eventualities); Stop Loss: a measure aimed toward reviewing positions, if amassed losses in a given interval attain specified ranges; Expected Shortfall: a statistical measure that quantifies anticipated potential financial loss, contemplating a given time horizon and confidence interval, capturing the importance of loss within the occasion of a breach of the VaR “barrier”; One-day stress: common of losses that exceed VaR 97.5% with a one-day holding interval. Maximum drawdown (MDD): an efficient loss indicator that exhibits the largest loss occurred from a excessive level (peak) of the amassed outcome to a low level (trough) of a portfolio in a particular time interval. Concentration: the cumulative publicity of sure monetary devices or danger components calculated at market worth (MtM – Mark to Market); Stressed VaR: a statistical measure derived from VaR calculation, aimed toward capturing the biggest danger in simulations of the present portfolio, contemplating observable returns in very long time horizons. Corporate | Internal EVE (Delta Economic Value of Equity): distinction between the current worth of the sum of repricing flows of devices topic to IRRBB (rate of interest danger within the banking guide) in a base situation, and the current worth of the sum of repricing flows of the identical devices in an curiosity-fee shock situation; NII (Delta Net Interest Income): distinction between the results of monetary intermediation of devices topic to IRRBB (rate of interest danger within the banking guide) in a base situation, and the results of monetary intermediation of the identical devices in an curiosity-fee shock situation. Average megawatt (MWm): an publicity measure used to manage focus within the Energy enterprise Sensitivity and loss management measures are additionally analyzed. They embrace: Gap Analysis: amassed publicity of money flows by danger issue, expressed at market worth and allotted by settlement dates; Sensitivity (DV01- Delta Variation): influence in the marketplace worth of money flows when a one-foundation level change is utilized to present curiosity or index charges; Sensitivities to Various Risk Factors (Greek): partial derivatives of a portfolio of choices in reference to costs of underlying belongings, implied volatilities, rates of interest and time. Itaú Unibanco manages its danger publicity based mostly on the web of hedging and hedging objects. Controls utilizing web publicity limits are utilized in accordance with the danger urge for food decided by the financial institution. v. If the Issuer carries out transactions involving monetary devices for various fairness hedging functions, state what these functions are The Issuer hedges transactions with shoppers and proprietary positions to make the most of market alternatives, searching for to mitigate dangers arising from fluctuations in costs of market danger components and mismatches, and sustaining the classification of operations inside publicity limits in impact accredited by correct committees/authorities. Derivatives are used for these hedging actions and treasury proprietary transactions. For conditions wherein these are hedge accounting transactions, each hedge effectiveness and any accounting impacts are monitored. Accounting and financial hedging procedures are ruled by institutional insurance policies. vi. organizational construction for market danger administration management Market danger Senior administration is instantly concerned in market danger administration, carried out on an ongoing foundation with councils and committees assembly frequently in order that the danger evaluation and its influence on capital have an efficient influence on the choice-making course of in any respect ranges, whether or not associated to Itaú Unibanco’s merchandise, actions, processes or programs. 72
The organizational construction for danger administration management, together with market danger, is described in merchandise 5.1.b.iii of this Reference Form. In addition to the outline in stated merchandise, we element beneath the governance course of structured particularly to handle market and liquidity dangers. Superior Market and Liquidity Risk Council (CSRML) The CSRML is aimed toward setting pointers and governance necessities for investments and market and liquidity dangers in reference to the Bank’s consolidated positions and enterprise strains. Accordingly, the CSRML is principally chargeable for: Market and liquidity danger strategic administration; Analyzing present and future liquidity ranges and taking actions to advertise the secure, environment friendly administration of the Holding Company’s money flows; Discussing and deciding on further liquidity and market danger limits, inside the authority assigned by the CGRC, and: pointers on actions and determination-making powers assigned to the CGRML (Market and Liquidity Management Committee); retention intervals for principal forms of dangers, taking into consideration the scale of positions and market liquidity; issues and limits associated to treasury operational danger; cease loss insurance policies; compensation insurance policies; most ranges of liquidity mismatch (GAP) for numerous phrases and currencies, minimal ranges of reserves in native and foreign currency echange, subordinated to these outlined by the CGRC, which can even decide further or supplementary controls and limits, if required; funding and funding coverage in home and overseas monetary markets; standards and guidelines for figuring out inner switch pricing of funds within the conglomerate’s firms; methods for financing the group portfolios; standards and fashions for assessing liquidity danger; contingency liquidity plans; setting out pointers and governance for market and liquidity dangers to handle funds from technical reserves and Insurance, pension plan and premium bonds fairness; monitoring the right Asset Liability Management (AML) of personal pension plan entities (foundations) linked to the Itaú Unibanco Group; monitoring the right administration of targets and governance of outlined investments and dangers. Members of this council are as follows: President General Director Chief Risk Officer (CRO) 73
Chief Financial Officer (CFO) Executive Officer, Global Markets, Treasury and Latam Executive Officer, IBBA Executive Officer, Vehicles, Itaú Correspondents, Real Estate and Iti Executive Internal Audit Officer Risk Officers Finance Officers Institutional Treasury Officers; and Chief Economist. Frequency of conferences: month-to-month. Market and Liquidity Risk Management Committee (CGRML) This Committee is principally chargeable for: Discussing proposals for altering greater authority limits;-Defining and monitoring limits to authority limits; Monitoring the influence of regulatory modifications within the group liquidity and market dangers. Members of the committee are as follows: Secretary: Finance Risk Analysis Manager. Chief Risk Officer (CRO) Chief Financial Officer (CFO) Executive Officer, Global Markets, Treasury and Latam Trading Officer Banking Officer Capital, Market and Liquidity Risk Officer Chief Economist. Frequency of conferences: month-to-month. Meetings could also be referred to as off as a result of conflicting agendas and be held at any time if requested by members. Policies Council (CN) CN is aimed toward enhancing governance and revising financial institution’s insurance policies. CN is principally chargeable for: Revising and approving, by consensus, the financial institution’s insurance policies and guidelines (with degree of authority of the Council or Board of Directors). Evaluating and validating the insurance policies and guidelines to be submitted for approval from the Board of Directors or reporting Committees. Validating insurance policies and guidelines that don’t embrace materials modifications and have been accredited by e-mail by the officer in cost. Members of this council are as follows: Risk Officers Officers from the proposing departments Legal Officer Audit Officer Frequency: 4 instances a yr. The Policies Unit could exceptionally submit insurance policies for approval from the members by e-mail – in these instances not less than three “agreed” are required. Market Model Assessment Technical Council (CTAM Market) The Market Model Assessment Technical Council (CTAM Market) is principally chargeable for: 74
CTAM is chargeable for evaluating market danger fashions, pricing and liquidity, based mostly on the impartial opinion of the mannequin validation division. The group is principally chargeable for: approving market, pricing and liquidity danger calculation fashions; deciding on whether or not to make use of market, pricing and liquidity danger fashions; approving, recommending, suggesting and monitoring motion plans proposed for the validated fashions; monitoring the efficiency of market danger fashions over time, figuring out new developments, if required; monitoring, at least agenda, the careworn VaR (sVaR) interval used to calculate market danger capital by inner fashions. Studies needs to be submitted by the market danger management division. Decisions made by this council will likely be legitimate after being reported to the Risk Officer. Models disapproved to be used needs to be monitored, at least agenda. Decisions made by this council will likely be legitimate after being reported to the Risk Officer. Members of this council are as follows: Operational Risk Officer Market and Liquidity Risk Control Officer Operational Risk Superintendent chargeable for mannequin validation Superintendent of the Development Unit associated to the Model in query Superintendent of the Implementation Unit associated to the Model in query In case of absence, the Market and Liquidity Risk Control Officer could assign determination energy to respective superintendents. The Operational Risk Officer, chargeable for mannequin validation, could not assign determination-making powers. Frequency of conferences: Every 45 days or upon demand. c) The adequacy of working construction and inner controls to confirm the effectiveness of the coverage adopted The adequacy of the working construction and inner controls to confirm the effectiveness of the coverage adopted for market dangers is similar to the one acknowledged in merchandise 5.1.c of this Reference Form. The adopted construction is satisfactory and in a position to monitor market dangers in accordance with the rules of insurance policies and the danger urge for food assertion. 5.3. With respect to the controls adopted by the issuer to make sure the preparation of dependable monetary statements, point out: a) The principal inner management practices and the effectivity degree of such controls, indicating any imperfections and measures adopted to right them. The administration of Itaú Unibanco Holding S.A. is chargeable for establishing and sustaining inner controls associated to the corporate’s consolidated monetary statements. The Internal management associated to monetary statements is a course of developed to offer affordable assurance as to the reliability of accounting data and the preparation of monetary statements disclosed in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The inner controls associated to the monetary statements embrace insurance policies and procedures that (i) are associated to the upkeep of information that, in affordable element, precisely and pretty replicate the transactions and write-offs of the Company’s belongings; (ii) present affordable assurance that transactions are recorded as essential to allow the preparation of the monetary statements underneath the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and that the Company’s receipts and funds are solely being made as licensed by the Company’s administration and officers; and (iii) present affordable assurance as to the well timed prevention or detection of unauthorized acquisition, use or allocation of the Company’s belongings that would have a fabric impact on our monetary statements. Due to their inherent limits, the inner controls associated to the monetary statements could not keep away from or detect errors. Therefore, even the programs decided to be efficient could solely present affordable assurance as to the preparation and presentation of the monetary statements. Likewise, projections of any analysis on their 75
effectiveness for future intervals could also be topic to the danger that the controls could turn into insufficient as a result of modifications in circumstances, or deterioration could happen within the degree of conformity with practices or procedures. Management evaluated the effectiveness of the inner controls associated to the Company’s consolidated monetary statements on December 31, 2021 in accordance with the factors outlined by the Committee of Sponsoring Organization of the Treadway Commission in line with in Internal Control (“COSO”) – Integrated Framework (2013). The administration’s analysis consists of the documentation, evaluation and checks of the design and effectiveness of the inner controls associated to the monetary statements. Based on this analysis, administration concluded that the inner controls associated to the consolidated monetary statements are efficient with respect to December 31, 2021. b) the organizational buildings concerned Itaú Unibanco Holding’s inner controls and operational danger administration framework is in conformity with the definitions established by worldwide our bodies Committee of Sponsoring Organizations of the Treadway Commission (COSO-2013), Information Systems Audit and Control Association (ISACA) and Control Objectives for Information and Related Technology (COBIT). It additionally adheres to the suggestions urged by the Basel Committee and the provisions of home and overseas regulatory our bodies, and it’s in keeping with institutional coverage “Integrated Operational Risk and Internal Controls Management” as a main means to function its Operational Risk and Internal Controls administration framework and to make sure compliance with outlined pointers by means of an built-in method. Main parts of this framework are: Board of Directors (CA):-Approving pointers, methods and insurance policies associated to operational danger and inner controls, making certain a transparent understanding of the roles and tasks by all the degrees within the conglomerate. Audit Committee (CAUD):-Supervising the inner controls and danger administration processes. Superior Operational Risk Committee (CSRO):-Understanding the dangers of Itaú Unibanco’s processes and enterprise, defining pointers for operational dangers administration and assessing the outcomes of the work carried out. Compliance and Operational Risk Committee (CCRO):-Monitoring and selling the event and implementation of pointers accredited and outlined by the CSRO, discussing principal current and potential dangers in place on the Business Departments, in addition to the motion plans proposed for mitigation functions. Internal Operational Risk Committee (CIRO):-Discussing operational dangers and inner controls associated matters of every Business Unit, which will likely be reported to the next determination-making degree of authority on the Compliance and Operational Risk Committees (CCRO). Chief Risk Officer (CRO):-Responsible for managing the group’s operational danger. Internal Controls and Operational Risk: Operating within the second line of protection, this framework is represented by superintendents working as Internal Controls and Risks Officials (OCIRs) who, along with their groups, are chargeable for: Supporting the primary line of protection when finishing up its direct duties. Developing and offering methodologies, instruments, programs, infrastructures and governance required to assist the built-in operational danger and inner controls administration within the important conglomerate and outsourced firm actions; Coordinating the operational danger and inner controls actions with the Business and BackOffice departments, being impartial when exercising its features and having direct communication with any administration member or worker, in addition to entry to any data required underneath the scope of its tasks. Accordingly, this division is barred from finishing up any enterprise that may compromise its Independence. 76
Business/Back-Office Departments:-Primarily chargeable for figuring out, prioritizing, responding to danger, monitoring and reporting operational danger occasions which will influence the achievement of strategic and operational targets set. Internal Audit:-Checking, on an impartial and periodic foundation, the adequacy of processes and procedures for danger identification and administration, in accordance with the rules set forth within the Internal Audit Policy. c) whether or not and the way the effectivity of inner controls is overseen by the issuer’s administration, indicating the place of the folks chargeable for such monitoring Management has established governance mechanisms akin to periodic certification of controls and verification of adherence to insurance policies and procedures. To be sure that the danger administration course of is disclosed and reported to the establishment’s senior administration, along with the respective standing of motion plans, the group counts on the assist of the Committees listed in merchandise b) above, as outlined within the Integrated Operational Risk and Internal Control Management Policy. d) deficiencies in and suggestions on the inner controls included within the detailed report ready and forwarded to the issuer by the impartial auditor, in accordance with the CVM regulation addressing the registration and exercising of the impartial audit exercise We famous no important deficiencies in inner controls associated to the monetary statements within the impartial auditor’s report. However, we must always emphasize that motion plans for different deficiencies and suggestions indicated by the impartial auditor are monitored and reported to the senior administration by multidisciplinary committees, with the presence of representatives of the Internal Audit and Internal Controls. Additionally, the outcomes of this monitoring are periodically reported to the Company’s Executive Committee and Audit Committee. e) officers’ feedback on the deficiencies acknowledged within the detailed report ready by the impartial auditor and on any corrective measures adopted We famous no important deficiencies in inner controls within the impartial auditor’s report. 5.4. In relation to the integrity mechanisms and inner procedures adopted by the issuer to forestall, detect and treatment misconduct, frauds, irregularities and illicit acts in opposition to nationwide or overseas public administration, inform: a). whether or not the issuer has guidelines, insurance policies, procedures or practices aimed to forestall, detect and treatment frauds and illicit acts in opposition to the general public administration, and determine, if relevant: i. key integrity mechanisms and procedures adopted and its adequacy to the profile and dangers recognized by the issuer, and inform how usually dangers are reassessed and insurance policies, procedures and practices are adjusted Itaú Unibanco has a sequence of company insurance policies, such because the Anti-Corruption Corporate Policy, Corporate Integrity, Ethics and Conduct Policy, Government and Institutional Relations Policy, Code of Ethics, and Supplier Relationship Code, along with inner procedures, which assist forestall frauds and illicit acts in opposition to the general public administration. These Policies can be found on web site www.itau.com.br/investor-relations > Itau Unibanco > Corporate Governance > Regulations and Policies > Policies, and are revisited on an annual foundation. Itaú Unibanco’s Integrity and Ethics Program is structured by way of procedures and controls within the following dimensions: i) Senior Management Commitment, ii) Policies and Procedures, iii) Education and Communication, iv) Monitoring, and v) Channels for Reporting Unethical Misconduct, Questions, and Illicit Acts. Risks are reassessed every now and then and the Program is improved on an ongoing foundation. These assessments could also be carried out in a variety of methods, akin to indicators, key management checks, danger analysis or research of processes, audit work, exterior assessments, and monitoring of requirements and tendencies. 77
Itaú Unibanco’s Integrity and Ethics Program is assessed by the Internal Audit division every now and then with passable outcomes. This Program can also be evaluated biennially by the Federal Government, by way of the General Controllership of the Union, (List of Pro-Ethics firms) and third-social gathering firms are additionally employed to research Program-related processes and determine steady enhancements. Our efforts to battle and forestall corruption and fraud have been publicly acknowledged by the Office of the Federal Controller General (CGU) in partnership with the Ethos Institute for the popularity of Itaú Unibanco as a Pro-Ethics Company for the fourth consecutive yr. In this newest version, out of the 327 collaborating firms within the 2020-2021 biennial interval, 67 firms have been accredited and acknowledged in a CGU ceremony in Brasilia in December 2021. It is value mentioning that Itaú Unibanco has set a company coverage to forestall its involvement in wrongdoings, defend its fame and picture with staff, shoppers, strategic companions, suppliers, service suppliers, regulators and society via a governance construction targeted on transparency, strict compliance with guidelines and laws, together with Circular No. 3,978/2020 of the Central Bank of Brazil, and cooperation with the police and judicial authorities. It additionally goals to be in line always with the very best home and worldwide practices to forestall and battle illicit acts by making investments and frequently coaching its eligible staff. For Itaú Unibanco to adjust to the rules of this company coverage, a program to forestall and fight illicit acts was arrange based mostly on the next pillars: Policies and procedures; Customer identification course of; Know Your Customer (KYC); Know your Partner (KYP); Know your Supplier (KYS); Know your Employee (KYE); Risk evaluation on new services and products; Sanctions Compliance; Monitoring; choice and evaluation of suspicious conditions; Reporting suspicious transactions to regulators and authorities; and Training. These packages are relevant to the Itaú Unibanco Conglomerate and its firms in Brazil and overseas. The Prevention of Illicit Acts coverage is reviewed each two years and dangers and procedures are always reassessed in accordance with finest practices and market dynamics. For additional data, please see part Risk Management of the Integrated Annual Report 2021, accessible on the Investor Relations web site. The Illicit Acts Prevention and Anti-Corruption Policies can be found on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores > Itaú Unibanco > Corporate Governance > Regulations and Policies > Policies. ii. the organizational buildings concerned in monitoring the operation and effectivity of the integrity mechanisms and inner procedures, to point its duties, whether or not their institution was formally accredited, the issuer’s our bodies to which they report, and mechanisms to make sure the independence of members, if relevant The Corporate Compliance Office (DCC) is the supervisor of the Integrity and Ethics Program and chargeable for coordinating the identification of main dangers related to corruption and required changes of the Program processes, with the assist of different departments, such because the Corporate Security Office and the Operational Risk Office. As outlined within the Compliance Policy accredited by the Board of Directors, the Compliance division is impartial to train its duties and has direct communication with any administration member or worker and entry to any data required inside the scope of its tasks. This independence is strengthened by the framework of the Integrity and Ethics joint our bodies coordinated by the DCC and the Program reporting to a variety of Senior Management joint our bodies (Superior ESG Council, Audit Committee, and Board of Directors). 78
DCC has, amongst its tasks, along with danger evaluation targeted on integrity and ethics; the creation of insurance policies and procedures associated to the Integrity and Ethics Program; alignment with the opposite departments of the Conglomerate for implementation and upkeep of controls aimed toward minimizing dangers; setting and implementing a communication and coaching plan; and monitoring. These tasks are formalized within the Integrity, Ethics and Conduct Policy and the Corporate Anti-Corruption Policy. DCC additionally make efforts to share the Integrity and Ethics Program within the Conglomerate’s International Units, evaluating and supporting communication, consciousness-elevating and coaching initiatives. The Program for Brazil and International Units initiatives are mentioned and accredited within the Integrity and Ethics committees. Furthermore, the actions to forestall and fight cash laundering and the financing of terrorism, together with its monitoring, are carried out by Itaú Unibanco’s Corporate Compliance Office (DCC) with the tasks as follows: AML/CTF Officer: Manages Itaú Unibanco’s Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) Program by way of data acquired by committees and, relying on the danger, instances submitted to its authority degree; approves Itaú Unibanco’s Internal Risk Assessment; approves the principles aimed to know shoppers, staff, companions and outsourced service suppliers, in addition to these aimed toward monitoring, choice and evaluation; and receives, for data functions, partnership contracts with monetary establishments headquartered overseas, in addition to with third events collaborating in fee preparations of which Itaú Unibanco can also be a participant, as set forth in laws in power; Ensures the implementation of the AML/CTF Program of Itaú Unibanco Conglomerate and its subsidiaries and associates in Brazil and overseas; Prepares Itaú Unibanco’s inner danger evaluation; improves the standard and effectiveness of its processes and tasks over Itaú Unibanco’s AML/CTF processes, checking the compliance with this coverage, in addition to fixing any weaknesses discovered; Performs a previous evaluation of the dangers of cash laundering and terrorism financing in new services and products, together with using new applied sciences; Defines pointers and minimal standards for danger ranking in reference to cash laundering and terrorism financing of consumers, staff, enterprise companions, suppliers, and repair suppliers; Prepares and displays the implementation of a danger-based mostly method in processes, formalizing them into inner procedures, along with standards set for producing effectiveness indicators; Monitors and diagnoses various kinds of cash laundering, so as to anticipate tendencies and suggest preventive and countering options; Validates Itaú Unibanco’s AML/CTF procedures talked about within the enterprise models’ paperwork; Periodically reviews to the Audit Committee any materials information regarding Itaú Unibanco’s AML/CTF program. iii. whether or not the issuer has a code of ethics or conduct formally accredited, indicating: • whether or not it applies to all officers, members of the supervisory council, members of the board of administrators, and staff, in addition to to 3rd events, akin to suppliers, service suppliers, intermediaries and associates Itaú Unibanco’s Code of Ethics applies indiscriminately to all administration members and staff of the Itaú Unibanco Conglomerate in Brazil and overseas. The Corporate Integrity, Ethics and Conduct Policy enhances the Code of Ethics, setting a sequence of procedures to make sure the sharing of moral behaviors and the adoption of correct conduct by all coverage addressees. Also complementing the Code of Ethics is the Supplier Relationship Code that’s to be utilized to all administration members and staff of Itaú Unibanco and its direct and oblique suppliers. Additionally, the Corporate Anti-Corruption Policy applies to all administration members, staff and controlling stockholders of the Conglomerate in Brazil and overseas, in addition to to nonprofit organizations linked to the Conglomerate in Brazil, and to any relationship the Conglomerate has with shoppers, companions, suppliers and different stakeholders. In 2020, we launched the Environmental and Social and Positive Impact Guide for Suppliers, aimed to complement the Supplier Relationship Code, which in the meantime is aimed toward sharing our pointers and good moral practices throughout our provide chain. • whether or not and the way usually officers, members of the supervisory council, members of the board of administrators, and staff bear coaching within the code of ethics or code of conduct and different associated guidelines Senior administration members attend integrity and ethics coaching by means of particular lectures and e-studying programs. Officers and staff attend e-studying programs (enterprise ethics, anti-corruption, compliance, data safety, AML, provider relations, and so on.) every now and then. Board members additionally attend illicit acts 79
prevention and AML lectures each two years. Furthermore, everybody receives periodic company communications on Code of Ethics associated matters (by way of company portal, e-mail and different accessible media) and should adhere to the company integrity insurance policies yearly by signing an digital obligatory assertion. • any sanctions relevant for breaching the code or different associated guidelines, figuring out the doc wherein these sanctions are supplied Any noncompliance with the rules of the Code of Ethics, the Supplier Relationship Code, the Corporate Integrity Ethics and Conduct Policy, the Corporate Anti-Corruption Policy and different company integrity insurance policies, is topic to administrative sanctions set forth in Itaú Unibanco’s inner guidelines. Sanctions relevant in confirmed breaches of such insurance policies embrace: disciplinary actions on staff (which can vary from receiving suggestions or warning to termination with or without trigger in line with the seriousness of the misconduct); and penalties as set forth in legislation, motion for damages, decreasing scope, and terminating contracts for suppliers. • the physique approving the code, date of approval, and, if the issuer discloses the code of conduct, the place within the internet this doc could also be discovered Itaú Unibanco’s Code of Ethics was accredited by the Board of Directors of Itaú Unibanco Holding S.A. on November 30, 2019. This doc is accessible on the financial institution’s intranet and on the Internet at www.itau.com.br/investor-relations > Menu > Itaú Unibanco > Corporate Governance > Regulations and Policies > Code of Ethics and Conduct, and in addition at our Integrity and Ethics web page at: https://www.itau.com.br/investor-relations /integrity/. This doc will likely be revisited in 2022. b) whether or not the issuer has a whistleblowing channel, indicating, if relevant: I) whether it is both an inner channel or it’s answerable for third events Itau Unibanco has an unique Whistleblowing channel for receiving reviews of illicit acts in compliance with Central Bank Regulation No. 4,859. The denunciation channel is underneath Itaú Unibanco’s administration, from the reception, screening, investigation and eventual measures as to the manifestations acquired. II) whether or not the channel is open to obtain reviews from third events or solely from staff A whistleblowing channel for dealing with conditions with indications of illegality of kind involving administration members, staff or service suppliers is accessible to all inner and exterior stakeholders, akin to shoppers, non-shoppers, suppliers, companions and staff. It could also be accessible as follows: External channels: company web site: https://www.itau.com.br/atendimento-itau/para-voce/denuncia/ telephone quantity: 0800-723-0010 – enterprise days-from 08:30 am to 7:00 pm; e-mail: inspetoria@itau-unibanco.com.br e fornecedores_relatos@itau-unibanco.com.br Internal channels: e-mail: Inspection field Online Inspector Office: https://intranetpre.itau/Web1/PB4/PA III) whether or not mechanisms are in place to offer anonymity and defend whistleblowers in good religion The Code of Ethics and the Integrity, Ethics and Conduct Policy gives whistleblowers with confidentiality and safety, and any acts of retaliation, revenge or persecution should be barred in opposition to any one who, in an recognized method and in good religion: reviews or brings to gentle any criticism, suspicion, query or concern associated to moral or different misbehavior; gives data or assists in inquiries associated to moral and different misbehaviors. Management members or staff who try to or really retaliate in opposition to those that, in good religion, report moral and different behavioral deviations are topic to particular investigation and doable consequence administration. 80
IV) issuer’s physique chargeable for investigating whistleblowing reviews The Corporate Security Office is devoted to receiving and verification reviews of wrongdoings by way of the so-referred to as “Inspetoria” company reporting channel. In the case it isn’t doable to verify a particular criticism, as a result of a doable battle of curiosity involving the Corporate Security Office, the Inspector Office should notify the Executive Internal Audit Office to take over accordingly. Furthermore, for governance causes, the inner guidelines outline the next areas to handle the difficulty in line with the individual concerned: Involved in reporting illicit acts Up to superintendent degree Officers and govt officers Members of the Executive Committee or Audit Committee or Board Members different members of committees reporting to the Board of Directors Audit Officers Responsible for the evaluation and dealing with Corporate Security Office Executive Internal Audit Office and Corporate Security Office Executive Internal Audit Office Board of Directors, Audit Committee, and Corporate Security Office c) whether or not the issuer adopts any procedures in mergers, acquisitions or company reorganizations to determine weaknesses and dangers of undue practices within the firms concerned in these processes In mergers, acquisitions, and company restructuring, Itaú Unibanco, by way of its proprietary M&A division, adopts the procedures accessible to determine any weaknesses and materials undue practices in reference to the counterparties concerned in such processes. This process is carried out by means of a radical diligence course of on firms topic to a merger or acquisition, in addition to by together with particular contractual clauses within the devices that formalize every operation within the occasion the transaction is accomplished. A diligence course of is the in-depth evaluation and evaluation of publicly and non-publicly data and paperwork of an entity and/or a enterprise as a part of a M&A operation. It is an extended-operating, advanced investigation course of aimed toward figuring out weaknesses and/or materials undue practices within the firm concerned within the course of and validating the info made accessible to potential consumers. This course of includes monetary, accounting, fiscal, expertise, authorized, company, labor, social safety, E&S, actual property, mental property, compliance, AML, anti-corruption, amongst different points, in order to guarantee whether or not the corporate has carried out enterprise in compliance with relevant laws and whether or not it’s frequently organized, along with whether or not it holds all authorizations and permits required for operation functions. In addition to the proprietary M&A division and the exterior advisors engaged with exclusivity to this finish, the diligence course of includes different departments of the financial institution to assist the evaluation course of, such because the Compliance, Audit and Internal Controls, Corporate Legal and Litigation, Business and Products, Finance, Tax, Treasury, Human Resources, Technology and Information Security. Notwithstanding all affordable measures taken to determine weaknesses and undue practices, there may be all the time the danger that we, our authorized or monetary advisors could not detect them. Should this happen and Itaú Unibanco incur losses on account of these weaknesses and undue practices after the completion of course of, the indemnity guidelines supplied for in agreements associated to every operation will likely be utilized. Regarding contractual provisions, Itaú Unibanco calls for that its counterparties present a variety of representations and warranties concerning themselves and the entities and/or enterprise concerned within the operation. These representations and warranties cowl, for instance, the common group of firms and compliance with laws relevant to those firms, together with particular anti-corruption and anti-cash laundering laws. Any breach of those representations and warranties by counterparties could trigger completely different penalties to befall these counterparties, together with the early termination of the contract or operation in query and the fee of compensation to the customer for the harm suffered. 81
After finishing this course of, the ensuing evaluation is submitted to and mentioned by the manager workforce concerned within the enterprise and later forwarded for approval by the Strategy Committee, the Executive Committee and/or the Board of Directors, if relevant. d) whether or not the issuer has no guidelines, insurance policies or practices to forestall, detect and treatment frauds and illicit acts carried out in opposition to public administration, determine the explanation why the issuer has did not undertake any controls accordingly Not relevant. 5.5. State whether or not, within the earlier yr, there have been important modifications in the primary dangers to which the issuer is uncovered or within the danger administration coverage adopted, and touch upon any anticipated improve or lower within the issuer’s publicity to such dangers In the final fiscal yr there have been no important modifications in the primary dangers to which we’re uncovered or within the danger administration coverage adopted. We imagine that managing dangers is the essence of our exercise and a duty of all staff. Therefore, we face the problem of following up and monitoring conventional danger areas (market, credit score and operational dangers), and search, based mostly on our danger tradition, to contain all our staff within the danger administration day-to-day. With respect to any anticipated improve or lower in danger publicity, along with these declared in conventional danger administration, we additionally purpose to observe the next points as we take into account them to be rising dangers: (i) expertise options changing mainstream banking companies or (ii) the results of contrasts between the demographic transition of shoppers and technological improvements. 5.6 Supply different data that the issuer could deem related Additional data on gadgets 5.1 and 5.5 COVID-19 reduction efforts “Coronavírus” Itaú Unibanco Holding displays the financial results of this COVID-19 pandemic in Brazil and the opposite international locations the place it operates, which can adversely have an effect on its Profit or Loss. At the start of the COVID-19 outbreak, the Institutional Crisis Management Committee was arrange. The Executive Committee established an intensified agenda to handle the disaster, which is chargeable for the monitoring the pandemic and its impacts on its operations, along with the federal government actions to mitigate the results of this pandemic. In Brazil, measures have been taken to mitigate the impacts attributable to COVID-19 all through 2020 and 2021, by the Federal Government, the National Monetary Council (CMN) and the Central Bank of Brazil (BACEN), notably: i) CMN Resolution No. 4,782/20, and amendments made by CMN Resolutions No. 4,791/20 and No. 4,856/20, which established, for a decided time period, standards for characterization of restructuring of mortgage operations; ii) CMN Resolution No. 4,838/20, which regulates the Working Capital Program for Business Preservation (CGPE), which contracting time period ended within the fourth quarter of 2020; iii) CMN Resolution No. 4,846/20 which gives for mortgage operations for financing of payroll carried out by monetary establishments, underneath the Emergency Employment Support Program (PESE); iv) CMN Resolution No. 4,937/21 which regulates the Credit Incentive Program (PEC) established by Provisional Measure No. 1,057/21, with circumstances just like these of the CGPE and contracting time period scheduled till December 31, 2021; v) Law No. 13,999/20, and amendments made by Law No. 14,161/21, that instituted the National Support Program for Micro and Small Companies (PRONAMPE) with the aim of growing and strengthening small companies; vi) Law No. 14,042/20 that established the Emergency Program for Access to Credit (PEAC), with the aim of creating simpler the entry to credit score and preserving firms, for the safety of jobs and earnings. The PEAC has two modalities: Emergency Program for Access to Credit within the modality of assure (PEAC-FGI) and Emergency Program for Access to Credit within the modality assure of receivables (PEAC-Maquininha); vii) Law No. 14,148/21 which established the Emergency Program for the Recovery of the Events Sector (PERSE), which goals at creating circumstances for the occasions sector to mitigate losses arising from the state of calamity and the Guarantee Program for Critical Sectors (PGSC), guaranteeing mortgage operations contracted inside 180 days after the legislation turns into efficient; and viii) BACEN Circular No. 3,990/20 and amendments made by BACEN Circular 3,992/20 which allows to hold out repurchase agreements in overseas forex by BACEN. 82
Itaú Unibanco Holding recognized the next impacts on its outcomes, in addition to results on estimates and significant judgments for the preparation of the Consolidated Financial Statements: (a) improve in 2020 and 2021 in mortgage and financing operations, particularly for micro, small and mediumsized firms because of the measures adopted for mitigation of the impacts of COVID-19 by the authorities with the creation of packages akin to PESE, PRONAMPE, PEAC-FGI and CGPE, which stability in December 2021 is R$ 21,492 million. Through well timed monitoring of credit score requirements and conduct of shoppers, Itaú Unibanco Holding maintained the regularity of its operations, regardless of the antagonistic circumstances, and helped shoppers within the sustainable seek for their monetary rebalancing; (b) with the aim of treating indebtedness in a structured manner and giving monetary impetus to shoppers, initiatives have been established that allowed the extension of grace intervals, phrases and higher rate of interest circumstances for people, and micro and small enterprise shoppers. In March 2020, the Program 60+ was established, which, amongst different measures, allowed a 60-day grace interval for defaulting agreements and in mid-April the Travessia (Crossing) Program. Travessia allowed the extension of grace intervals between 120 and 180 days and phrases of operations between 5 and 6 years, respectively, for particular person and micro and small firms shoppers, underneath higher rate of interest circumstances; (c) 5.4% lower on the present interval in purposes of renegotiation and extension of phrases for mortgage operations because the financial scenario modified; (d) the allowance for mortgage losses within the quantity of R$ 44,316 million was affected because of the degree of danger and default, because of the modifications within the monetary views of shoppers and the seen deterioration of macroeconomic variables. To totally replicate the danger of its mortgage operations, Itaú Unibanco Holding adopts the anticipated loss mannequin for provisioning of operations for the reason that second they’re granted and it’s periodically up to date in line with the macroeconomic variables and circumstances of the consumer, and in 2020, in view of the pandemic, a weighting within the financial eventualities was added. In December 2021, the extent of protection of provisions within the mortgage portfolio of Itaú Unibanco Holding accounted for 193% as in comparison with 255% in December 2020. Specifically for the anticipated lack of operations that haven’t proven any indicators of decay thus far (default or downgrading of the consumer’s ranking), provisioning introduced a lower of 8.3% on the present interval. The credit score danger governance allowed Itaú Unibanco Holding a fast response for monitoring the impacts of the COVID-19 pandemic on the mortgage portfolio, allowing fast entry to the data wanted for discussions and actions of the disaster administration day by day boards; (e) the mark-to-market part of the securities portfolio was -1.3% within the first quarter of 2020, partially as a result of fee fluctuations and excessive worth volatility within the markets to start with of the pandemic, influencing the measurement of things acknowledged at truthful worth of their completely different ranges. In subsequent intervals, variations noticed within the mark-to-market part aren’t essentially associated to the results of the pandemic; (f) because of the COVID-19 pandemic, throughout 2020, instability within the variable earnings market was famous inflicting a migration to fastened earnings devices with liquidity. This motion resulted within the improve within the Bank Deposit Certificates portfolio; nevertheless, over 2021, variation within the portfolio was famous, with modifications not essentially associated to the results of the pandemic. With the aim of mitigating the system’s liquidity danger, BACEN made accessible in 2020 to monetary establishments credit score strains by way of repurchase agreements in overseas forex and buy of monetary payments with assure, and operations within the whole quantity of R$ 30,547 million have been contracted through the interval of life of those strains; (g) improve within the recognition of deferred earnings tax and social contribution in 2020 because of the larger quantity of deductible short-term variations recorded for the interval. The pandemic lowered the projections of taxable earnings, nevertheless, it was not chargeable for the technology of tax loss and social contribution loss carry forwards in Itaú Unibanco Holding. In the interval, there have been no important impacts of the pandemic within the recognition of deferred earnings tax and social contribution in Itaú Unibanco Holding; and (h) improve in bills with claims associated to COVID-19 of R$ 361 million within the interval, primarily associated to credit score life and life insurance coverage. There was a discount within the face-to-face service workers and a rise within the spacing between folks in name facilities to cut back the circulation of individuals and the chances of contagion. The common variety of folks circulating in administrative facilities was lowered, since they began to work remotely. Employees within the central administration, service facilities and digital branches are considerably working from dwelling. It needs to be famous that regardless of the aforementioned measures, Itaú Unibanco Holding maintains its working actions. In order to cut back the results of the disaster and make sure the worker’s well being and security, self-declaration was inspired for workers who take into account themselves in danger and those that can’t work remotely have been placed on trip. In 2020, with the aim of supporting those that probably had further bills because of the present 83
disaster, the thirteenth wage was superior in full. Additionally, a technique of communication and transparency with staff was established by way of e-mails, inner worker’s portal and periodic movies ready by our Chief Executive Officer speaking information associated to COVID-19. At the branches, masks have been delivered to all staff who work in customer support, acrylic protections have been carried out, and cleansing protocols have been reviewed. The adaptation of Itaú Unibanco Holding within the disaster is the outcome not solely of investments in expertise, which permits for these digital interactions, but additionally of investments in flexibility within the work surroundings, akin to make money working from home, communities built-in between completely different areas of the financial institution and new layouts within the administrative facilities that promote the staff’ mobility. In 2020, Itaú Unibanco Holding created the initiative “Todos pela Saúde” from the donation of R$ 1 billion, with the aim of combating the brand new Coronavirus and its results on Brazilian society. “Todos Pela Saúde” is carried out based mostly on 4 axes: Informing, Protecting, Caring, and Resuming. In February 2021, the “Todos pela Saúde” initiative was formalized as an Institute, and ongoing actions are being maintained. The mission of the “Todos pela Saúde” Institute is to contribute to strengthening and innovation within the well being surveillance space in Brazil. The actions to be developed embrace each analysis funding and genomic (or metagenomic) surveys, along with the coaching of area epidemiologists. In April 2021, Itaú Unibanco Holding labored along with rivals to battle starvation ensuing from the pandemic and the financial disaster. Itaú Unibanco Holding contributed for the acquisition and distribution of basket of meals staples. 84
HISTORY OF THE ISSUER 6.1 / 6.2 / 6.4 – Issuer’s incorporation, time period of period and date of registration with CVM Date of issuer’s incorporation 09/09/1943 Type of enterprise group Corporation Country of incorporation Brazil Term of period Undetermined Date of registration with CVM 12/30/2002 6.3. Brief historical past of the Issuer Overview Our company identify is Itaú Unibanco Holding S.A. Our basis was on September 9, 1943. We are organized as a publicly-held firm for an indeterminate time period underneath Brazil’s legal guidelines. We are headquartered at Praça Alfredo Egydio de Souza Aranha, 100, Torre Olavo Setubal, Piso Itaú Unibanco, CEP 04344-902, São Paulo, SP, Brazil, and our phone quantity is +55 11 2794-3547. Our Corporate Taxpayer’s Registry of the Ministry of Finance (CNPJ/MF) No. 60.872.504/0001-23 is registered on the Board of Trade of the State of São Paulo underneath NIRE No. 35300010230. Our company objective, as set forth in Article 2 of our Bylaws, is to undertake the banking exercise in all licensed kinds, together with overseas trade operations. Our historical past goes manner again to 1924, when the banking division of Casa Moreira Salles began to function within the State of Minas Gerais. It would later turn into União dos Bancos Brasileiros, extensively generally known as Unibanco. Two a long time later, in 1943, Itaú was based by Alfredo Egydio de Souza Aranha as Banco Central de Crédito S.A. with its first department within the metropolis of São Paulo. In their first a long time of operation, mergers led to the creation of Banco Itaú América and the ensuing consolidation of the Itaú model. Since 1973, we’ve operated underneath the identify Banco Itaú S.A., presently Itaú Unibanco. Over the years, we’ve grown, modified our names at instances, gone by way of mergers and acquisitions, skilled Brazil’s financial miracle, hyperinflation, the rise of the center class and a few world crises. We have witnessed Brazil’s progress and numerous histories of staff and shoppers who’ve helped us develop and inspired our growth. In 2008, we entered into the biggest merger ever in Brazil’s historical past. The spotlight of this occasion is principally because of the delicate time we have been going by way of in 2008, when the world witnessed a extreme monetary disaster within the worldwide market. The partnership between Itaú and Unibanco meant the union of complementary mindsets, of two banks with main breakthroughs in using expertise and leaders in Brazil’s monetary sector, sharing widespread histories. This merger has given rise to the biggest personal monetary conglomerate of the southern hemisphere. In 2018, we celebrated ten years of the merger between Itaú and Unibanco, including a brand new chapter to our historical past, which has enabled us to turn into the biggest personal financial institution in Latin America. Since the creation of the Itaú Unibanco group, we’ve carried out the next mergers and acquisitions: 2009: Partnership with Porto Seguro to distribute automobile and residential insurance coverage merchandise. 2012: Itaú Unibanco takes over the management of Redecard and delists its capital on Bovespa. In the next yr, the corporate modifications its identify to Rede. 2013: Acquisition of Credicard, which was collectively created by Citibank, Itaú and Unibanco in 1970. 2014: Sale of the massive danger insurance coverage portfolio to Chubb. 2015: Acquisition of a 50% curiosity in ConectCar, with administration shared between Itaú Unibanco and the Ultra Group (which subsequently offered its curiosity to Porto Seguro). In the identical yr, it additionally acquires Recovery, an asset restoration firm of BTG Pactual. 2016: Merger of Itaú Chile and financial institution CorpBanca, giving rise to Itaú CorpBanca, which then turned Chile’s fourth largest financial institution. 2016: Acquisition of Itaú BMG Consignado. 2017: Acquisition of Citibank’s retail operations in Brazil. 2017: Sale of the group life insurance coverage portfolio to Prudential. 2018: Acquisition of a 49.9% curiosity in XP Investimentos, one in every of Brazil’s largest impartial funding brokers. 85
2019: Sales of the curiosity held in Cibrasec – Companhia Brasileira de Distribuição to ISEC Securitizadora S.A. 2020: Seeking to hurry up its digital transformation, Itaú purchases Zup, a expertise companies firm. Acquisition of the shares of Pravaler S.A., an organization that provides pupil financing, growing its curiosity to 47.66% within the firm’s capital. 2020: Acquisition of an curiosity in Fintech Quanto. 2020: Sale of a part of the bank card portfolio acquired from Citi to Safra. 2021: Sale of an curiosity in Itaú Administração Previdenciária Ltda. 2021: Acquisition of the Verbank Securities brokerage (Paraguay). Acquisition of the Providencia S.A. de Seguros insurance coverage firm (Paraguay). 2022: Acquisition of a 15% curiosity in Asset 1 Investimentos Ltda; 2022: Acquisition of fifty.1% of the capital and voting capital of Ideal Corretora de Títulos e Valores Mobiliários S.A After 5 years Itaú could train the precise to buy the remaining share (49.9%) of the corporate’s capital inventory; and • 2022: Constitution of a three way partnership with TOTVS S.A, referred to as TOTVS Techfin S.A After the operation is accomplished, Itaú will maintain 50% of the full voting capital of the corporate. Finally, we search to make headway on a strong journey, based mostly on the dedication to selling social transformation. Our historical past is marked by our valuing of tradition, training, sport and concrete mobility by way of the packages sponsored by Fundação Itaú para a Educação e Cultura (Itaú Foundation for Education and Culture), Instituto Unibanco (Unibanco Institute), and Espaço Itaú de Cinema (Itaú Movie Theater Complex). Our concern with social points has enormously elevated within the face of the biggest well being disaster ever led to by the Covid-19 pandemic. Faced with this problem, in 2020 we created the Todos pela Saúde (All for Health) program, funded by the biggest philanthropic donation ever made by a non-public entity in Brazil. We imagine that, as a financial institution, we must always encourage folks to develop and corporations to maneuver ahead. The duty we’ve taken for the event of Brazil is on the core of our actions and is a trademark of our complete historical past. 6.5. Indicate whether or not there was any petition for chapter, supplied that it was based mostly on a major quantity, or for judicial or extrajudicial restoration from the issuer, and the present standing of such petitions: Not relevant. 6.6. Other related data Not relevant. 86
ACTIVITIES OF THE ISSUER 7.1 Briefly describe the actions carried out by the issuer and its subsidiaries We are a holding firm whose principal exercise is to carry fairness pursuits within the capital of monetary establishments that, in flip, have been included for the aim of growing all licensed forms of banking actions. Additionally, we additionally maintain investments in firms that perform actions associated to the insurance coverage and capital markets. 7.1-A. If the issuer is a semi-public company, please determine: a) the general public curiosity that justified its incorporation Not relevant. Issuer’s operations in compliance with public insurance policies, together with universalization targets, figuring out: • authorities packages carried out within the earlier yr, these established for the present yr, and people decided for the subsequent fiscal years, the factors adopted by the issuer to categorise these operations as being developed to satisfy the general public curiosity talked about in “a” • with respect to the above-talked about public insurance policies, the investments made, price incurred and the origin of funds concerned – personal money technology, switch of public funds and financing, together with funding sources and circumstances • estimated impacts of the above-talked about public insurance policies on the issuer’s monetary efficiency or state that no evaluation was carried out of the monetary influence of the above-talked about public insurance policies Not relevant. c) Pricing course of and guidelines relevant to establishing charges Not relevant. 7.2. With respect to every working phase disclosed within the newest monetary statements for yr-finish or, the place relevant, within the consolidated monetary statements, please point out the next data: a) Marketed services and products Our Business Operations Overview We report the next segments for the yr 2021: (i) Retail Banking, (ii) Wholesale Banking, and (iii) Activities with the Market and Corporation. Through these operational segments, we offer a broad vary of banking companies to a various consumer base that features people and company shoppers, on an built-in foundation as follows: 87
The values talked about above for people seek advice from month-to-month earnings and the values for firms seek advice from annual income, besides when indicated. The Retail Banking phase gives companies to a diversified base of account holders and non-account holders, people and corporations in Brazil. The phase consists of retail prospects, mass prosperous shoppers (Itaú Uniclass and Personnalité) and really small and small firms. Our providing of services and products on this phase consists of: private loans, bank cards, payroll loans, car financing, mortgage loans, insurance coverage, pension plan and premium bond merchandise, and buying companies, amongst others. The Retail Banking phase represents an essential funding supply for our operations and generates important monetary earnings and banking charges. The Wholesale Banking phase is chargeable for our personal banking shoppers, the actions of our Latin America models, our center-market banking enterprise, asset administration, capital market options, company and funding banking actions. Our wholesale banking administration mannequin is predicated on constructing shut relationships with our shoppers by acquiring an in-depth understanding of our shoppers’ wants and providing personalized options. Corporate actions embrace offering banking companies to massive companies and funding banking actions embrace providing funding assets to the company sector, together with fastened and variable earnings devices. The Activities with the Market and Corporation phase manages curiosity earnings related to our capital surplus, subordinated debt surplus and the web stability of tax credit and debits. This phase additionally manages web curiosity earnings from the buying and selling of monetary devices by way of proprietary positions, forex rate of interest gaps and different danger components, arbitrage alternatives within the overseas and Brazilian home markets, and mark-to-market of monetary devices. It additionally consists of our curiosity in Porto Seguro S.A. For extra data 88
on our curiosity in Porto Seguro S.A., see “-Insurance.” We perform a variety of operations exterior of Brazil with models strategically positioned within the Americas, Europe and Asia. Our worldwide presence creates important synergies in overseas commerce finance, within the placement of Eurobonds and within the providing of extra refined monetary transactions to our shoppers. Please see “Note 30 – Segment Information” to our audited consolidated monetary statements for additional particulars. The diversification of our enterprise is mirrored within the altering composition of our mortgage portfolio over the previous couple of years, specializing in origination in decrease danger segments with enhanced ensures. We constantly search to implement and give attention to providing new services and products that add worth to our shoppers and diversify our earnings sources. This permits for the expansion of our non-monetary earnings arising primarily from banking service charges, earnings from financial institution prices and from insurance coverage, pension plan and capitalization operations. Our enterprise shouldn’t be materially affected by seasonality. Retail Banking Retail banking is one in every of our core companies, by way of which we provide a devoted service construction to client shoppers all through Brazil. We have a big and numerous portfolio of services and products to handle our shoppers’ wants akin to credit score merchandise, mortgage, investments, insurance coverage, funds and different banking companies. Our customer support construction is focused to providing the very best monetary options for every consumer. Our retail banking enterprise is segmented in line with buyer profiles, permitting us to attach with and to higher perceive every one in every of our prospects. This technique permits us to supply appropriate merchandise to satisfy their calls for. The principal actions underneath the retail banking enterprise are the next: Itaú Retail Banking (people) Mass Segment: This phase serves people with a month-to-month earnings of as much as R$4,000. Mass Affluent Segment (Itaú Uniclass): Itaú Uniclass is accessible at our branches and digital channels for shoppers who earn greater than R$4,000 and fewer than R$15,000 per thirty days. We provide unique companies to Itaú Uniclass’ shoppers, together with funding advisory companies, unique tellers, greater credit score limits and a workforce of devoted relationship managers. For shoppers preferring a extra digital/distant relationship, Itaú Uniclass gives a “digital financial institution platform” the place relationship managers service shoppers by way of phone, e-mail, SMS, videoconference, chat and even WhatsApp from 9 a.m. to six p.m. on enterprise days, at no further price. For the previous couple of years, we’ve been specializing in enhancing buyer expertise and transforming the worth proposition of our companies. We imagine that, so as to keep a aggressive technique, it’s essential to extend our Phygital and Omnichannel approaches. “Phygital” means to enhance our capability to serve our shoppers as they like, utilizing their channel of selection. “Omnichannel” refers to an elevated degree of integration amongst our channels permitting us to supply higher companies and merchandise to our shoppers. Through Phygital and Omnichannel, we’re in a position to implement O2O (“Online to Offline”) capabilities, a two-manner stream between the digital and the bodily worlds, not solely producing leads and gross sales, but additionally growing client satisfaction by way of frictionless flows. These enhancements have already been acknowledged by shoppers, as proven in our satisfaction scores (i.e., Net Promoter Score). Our Mobile App achieved an NPS of 71 factors on December 31, 2021. Our digital channels represented 27.8% and 24.6% of our income earnings for the yr ended December 31, 2021 and December 31, 2020, respectively. Our goal is to succeed in 50% within the subsequent couple of years. Itaú Personnalité (banking for top-earnings people) We started offering personalized companies to excessive-earnings people in 1996 with the creation of the Itaú Personnalité phase, which presently serves people who earn greater than R$15,000 per thirty days or have investments in extra of R$250,000. Itaú Personnalité is concentrated on offering (i) monetary advisory companies by managers who perceive the precise wants of our greater-earnings shoppers, (ii) a big portfolio of unique services and products and (iii) particular advantages based mostly on the sort and size of relationship with the consumer, together with reductions on numerous services and products. Itaú Personnalité companies its shoppers by way of a devoted community of 230 branches, positioned in the primary Brazilian cities. Itaú Personnalité shoppers even have entry to our retail banking community of branches and ATMs 89
all through the nation and may entry our web, phone and cellular banking. For shoppers preferring distant companies, Itaú Personnalité gives a “digital financial institution platform” the place relationship managers service shoppers by way of phone, e-mail, SMS, WhatsApp, and videoconference. We additionally developed apps for smartphones and tablets that allow our shoppers to make investments, purchase merchandise akin to credit score and insurance coverage, make verify deposits, transfers and funds, verify account balances and discover close by branches and ATMs utilizing GPS options. Itaú Empresas (very small and small firms) To meet and fulfill the wants of our company prospects, we focus on providing personalized options and detailed recommendation on all services and products for: Microenterprises: buyer base consisting of firms with annual revenues of as much as R$ 0.8 million, served by 2,686 financial institution branches and 1,359 relationship managers and 423 managers targeted on buying new prospects as of December 31, 2021; and Small companies: buyer base consisting of firms with annual revenues between R$0.8 million and R$60 million, served by 309 financial institution branches and a pair of,118 relationship managers as of December 31, 2021. ANBIMA certifies all our relationship managers, who’re educated and expert to supply an acceptable resolution for every buyer, based mostly on their wants. Our prospects depend on our principal technique of capturing market alternatives and assembly their wants, notably concerning money stream administration, credit score amenities, funding and banking companies. In 2021 we started to implement a brand new retail technique, referred to as iVarejo 2030, with the target of providing a greater expertise to our prospects, with full, sustainable and more and more digital options. We are turning into a “Phygital” financial institution, which stands for a digital financial institution with the comfort of the bodily community. To assist this transformation, we restructured and expanded our digital branches, developed new companies and instruments utilized by our gross sales and relationship groups, aiming for larger effectivity in enterprise technology and customer support. In order to develop our consumer base we created a brand new technique for consumer acquisition based mostly on the ‘buying supervisor’, an expert that’s totally devoted to consumer looking and enterprise growth. As a primary results of the implementation of iVarejo2030, we additionally elevated in 120 foundation factors our NPS rating for micro firms through the yr of 2021. We periodically monitor the shoppers’ satisfaction so as to accomplish the mission of more and more exceeding their expectations. Also as part of iVarejo2030, for small companies we launched in 2021 a brand new expertise for our prospects with the creation of Business Centers. These facilities will provide our prospects a wide range of consultants in the identical bodily house. Besides housing a number of branches in the identical constructing, these facilities additionally provide product, credit score and debt restructuring specialists, who will likely be accessible to assist each prospects and our relationship managers to make sure an entire banking surroundings. These Business Centers will likely be accessible in main cities across the nation, with three already opened in 2021. Credit Cards and Commercial Agreements We are the chief within the Brazilian bank card phase with a market share by way of buy quantity of 28.9% within the fourth quarter of 2021, in line with ABECS. The relationship with our shoppers is completed by way of our proprietary segments and partnerships with main retailers, phone firms, automakers and airways established in Brazil. We are based mostly on three principal enterprise segmentations: Account Holders, Non-Account Holders and Retail Partnerships and we provide a variety of credit score and debit playing cards shelf to every kind of account and non-account holders. Our objective is to offer the very best buyer expertise and satisfaction. In order to realize this, we established the “Customer First” as one in every of our high priorities. Our international NPS, a measure of buyer satisfaction, signifies that our rating improved six foundation factors in December 2021 when in comparison with December 2020. Our purpose is to constantly develop our bank card portfolio growing digitalization, profitability and the standard of our belongings. Accordingly, our bank card division is devoted to growing the very best fee options for our shoppers, new merchandise and new digital companies whereas managing the credit score high quality of our portfolio. In 2021, we redesigned our bank card product shelf and targeted the gross sales efforts on the digital channel growing our gross sales in thrice when in comparison with 2020. 90
The digital channel was chargeable for 55% of all gross sales within the final quarter of 2021. Besides the good contribution on gross sales progress, the digital channel acquired a lot of our technological investments. Our apps have a number of functionalities wanted by our clients- restrict elevate, recurring digital card, open finance, amongst others. The digital card, for instance, was created to carry comfort and security not solely to at least one time, but additionally to recurring on-line buying. The adoption by our shoppers was so essential that the variety of digital playing cards greater than doubled in 2021 when in comparison with 2020. The Account Holders companies – Itaú Agências, Itaú Uniclass and Personnalité – redesigned the product shelf and launched quick rising gross sales merchandise. The Uniclass Signature was launched in two variations relying on prospects´ wants: (i) no annual payment model and (ii) with loyalty plus annual payment model. The Black and Infinite playing cards for Itau Uniclass and Personnalite strengthen the segments worth proposition and lowered the investments threshold to exempt shoppers from annual charges. The Personnalite Black and the Uniclass Signature have been launched to non-account holders prospects, however with the choice of further advantages to these shoppers who additionally opened their checking account. In the Non-Account Holders phase our focus was on redesigning the worth proposition of our Click product. It turned 100% exempted from annual payment with no minimal spending goal. The product was supplied to new and current shoppers. We have additionally launched the brand new Black and Infinite playing cards to our most engaged and most worth producing prospects and our NPS within the Non-Account Holders phase elevated by six foundation factors in December 2021 when in comparison with December 2020. In 2021, the airline cobranded playing cards, elevated whole accounts by 54% when in comparison with 2020. Our Retail Partnerships enterprise is one in every of our quickest rising companies within the bank card division. We have partnerships with the primary nationwide retail manufacturers, akin to Magazine Luiza, Ponto Frio, Pão de Açúcar, Assai, Extra and Big Group. By the top of 2021, retail partnerships elevated buy quantity ranges by 26% when in comparison with 2020. For our partnership with Magazine Luiza, we continued to bolster our technique of rising buy quantity and new accounts, launching the Magalu card. The Magalu card is obtainable within the digital channel, it has no annual payment and it gives a 2% cashback in all buy achieved instore at Magazine Luiza. We have been in a position to develop bank cards gross sales by 3 instances yr over yr because it´s launch in April, 2021. Payroll Deducted Loans In Brazil, a payroll deducted mortgage is a particular kind of mortgage entered into by salaried staff or pensioners of the Brazilian social safety system, as debtors, and banks, as lenders, wherein fastened month-to-month installments are deducted instantly from the borrower’s payroll or pension, because the case could also be, for the fee of the quantity owed to the lender. Our technique is directed primarily to the pensioners of the Brazilian social safety system and staff of private and non-private firms. We provide payroll deducted loans in Brazil primarily by way of two gross sales channels: (i) our department community and our distant service channels, specializing in retail account holders, and (ii) the community of acquisition companions, specializing in non-account holders. This technique permits us to broaden our enterprise actions with traditionally decrease credit score danger, reaching a aggressive place within the provide, distribution and sale of payroll deducted loans in Brazil and enhancing the danger profile of our loans portfolio to people. Mortgage We help our shoppers with their monetary growth, as we assist them with their private belongings. Mortgage financing merchandise enable us to create lengthy-lasting relationships with our shoppers, as mortgage financing merchandise are of an extended-time period nature. Since 2008, we’ve been the market leaders amongst Brazilian personal banks in mortgage loans to people by way of the full dimension of our portfolio. This is a results of our enterprise focus, which is in keeping with our technique to migrate to decrease-danger portfolios. We have a number of gross sales channels which might be utilized for functions of mortgage financing merchandise: (i) department community and web & cellular banking, (ii) building and growth firms, (iii) mortgage businesses, and (iv) strategic partnerships with mortgage financing firms akin to CrediPronto. We prioritize buyer satisfaction by offering our shoppers with a specialised mortgage financing advisor to assist them through the mortgage course of. Our course of is expeditious and environment friendly, and it takes us lower than one hour to get again to the consumer for loans as much as R$1.5 million. This financing course of may be totally digital. 91
In line with our strategic give attention to digital processes, our simulator is included on the web sites of companion growth firms and actual property businesses, putting our model nearer to shoppers after they wish to purchase actual property. Our companies are personalized for each second of the consumer’s digital journey, from web banking companies to social networks, offering us with growing consumer publicity ranges. In 2019 and 2018 we have been awarded the “Best Digital Mortgage Bank Brazil” by Global Finance. The variety of mortgages we supplied on to people in 2021 was 135 thousand, for an combination worth of R$45 billion through the yr. In 2021 our portfolio had a median Loan to Value (LTV) of 44.6%, in comparison with 39.5% in 2020. In business loans, we financed 168 new actual property models throughout 2021, with an combination worth of R$7.9 billion. Another optimistic function of the Brazilian market is the fixed amortization system pursuant to which lowering installments present quicker amortization of a contract, decreasing our mortgage-to-worth indicator at a quicker fee than different amortization programs. Merchant Acquirer Rede is without doubt one of the main firms within the digital fee options trade in Brazil. It is a multi-model service provider acquirer of credit score, debit and profit playing cards. Rede’s actions embrace service provider buying, capturing, transmission, processing and settlement of credit score and debit card transactions, prepayment of receivables to retailers (ensuing from bank card transactions), rental of level of sale (POS) terminals, e-commerce options, e-pockets and verify verification by way of POS terminals. In 2021, we continued to restructure our enterprise mannequin, specializing in the next priorities: (1) integration of our banking operations; (2) strengthening of direct gross sales channels; and (3) digital transformation. We acquired R$ 617.7 billion in transactions with respect to credit score and debit playing cards in 2021, a rise of 21.9% in comparison with the identical interval in 2020. The following desk units forth the monetary quantity of credit score and debit card transactions processed by us in 2021, 2020 and 2019: (In billions of R$) Financial Volume 2021 2020 2019 Credit playing cards 384.6 308.8 312.7 Debit playing cards 233.1 197.8 172.3 Total 617.7 506.6 485.0 Private Pension Plans We provide personal pension plans to our shoppers as an choice for wealth, inheritance planning and earnings tax functions (these merchandise are tax-deferred). We present our shoppers with an answer to make sure the upkeep of their high quality of life by way of lengthy-time period investments, as a complement to authorities common social safety system plans. Product innovation has been essential for the sustainable progress of our personal sector pension operations. For authorized entities, we provide specialised recommendation and develop personalized options for every firm. We set up lengthy-time period partnerships with our company shoppers, sustaining a detailed relationship with their human assets departments and adopting a communication technique targeted on our staff’ monetary training. According to the FENAPREVI, contributions to Itaú Private Pension Plans reached R$14.3 billion through the yr ended December 31, 2021, a lower of R$ 1.1 billion when in comparison with December 31, 2020. 92
Vehicle Financing We developed and launched a number of services and products in 2021. Some of those merchandise are: Dealer’s New Experience – this product renewed the Credline software (which retailers use to submit proposals to us) based mostly on an intense discovery course of carried out with prospects. The expertise turned a lot less complicated and extra clear for the seller’s efficiency, along with incorporating new features that assist them transact extra enterprise. Speed Program – this can be a loyalty program for storeowners, which goals to accentuate their relationship with Itaú. End-to-finish digital contracting on our digital channels – we launched the expertise of digital financing by way of our digital channels. Account holders begin the simulation course of, credit score approval, formalization and contracting of financing in a 100% digital journey, which may be very easy and doesn’t require any bodily paperwork. Floorplan – line of credit score for sellers to buy new and used automobiles for his or her inventory. The product expertise may be very easy and quick, with a completely digital stream. VEC – Our shared electrical car service, developed in an surroundings of collaborative innovation with ecosystem companions, corresponds to a brand new sustainable mobility resolution, akin to Bike Itaú. It will enable customers to unlock automobiles at stations instantly from the app and return them to the identical place or one other charging station. Thus, we reinforce our presence and place within the journey of sustainable city mobility. Today we’ve 1,124 customers in testing, and we proceed to broaden. iCarros Products – Our options assist sellers make their gross sales course of extra digital and environment friendly, and so they proceed to broaden. iPeças is a market resolution for the sale of elements for assemblers, sellers and resellers. Garagem do Conhecimento is an academic platform with distance courses to organize professionals within the automotive sector. The iCarros Check-up is an software for monitoring the journey of the shopper with their automobiles, targeted on companies and comfort for the consumer. The Easy Delivery product is an answer that permits sellers to ship the automobile on to the customer’s dwelling, both for a test- drive or for finalizing the acquisition. iCarros Club is a B2B commerce-in platform designed to assist our prospects improve gross sales safely and shortly. Itaú Tag in partnership with ConectCar, we’ve launched the Itaú Tag, an computerized toll and parking payment fee resolution exempt from month-to-month charges, unique to our shoppers. The month-to-month payment exemption profit has been accessible for the reason that second fortnight of September, initially included into the ConectCar tags. We provide our personal tag for all shoppers, as we’ve used the rollout to strengthen the technique of producing loyalty by offering advantages that extrapolate banking companies. As of December 31, 2021, our particular person and company car financing portfolio (not contemplating Finame) totaled R$47.9 billion, an 34.3% improve from the earlier yr. The common mortgage to worth ratio of our particular person car portfolio (the ratio of a mortgage to the worth of an asset bought) was 60.4% as of December 31, 2021, a -2% lower in comparison with 2020. Since 2012, we’ve lowered our danger publicity within the sector and targeted on shoppers with higher danger profiles, which has allowed us to enhance the credit score high quality of our car mortgage portfolio. As of December 31, 2021, our new particular person and company car financing operations reached R$ 33.7 billion, a 50% progress in comparison with 2020. As of December 31, 2021, the common car mortgage time period was 46 months, with 29% of the transactions carried out with phrases as much as 36 months. Insurance Our insurance coverage enterprise gives a variety of life and private accident merchandise, vehicle and property insurance coverage, credit score insurance coverage and journey insurance coverage. Our insurance coverage core actions, which embrace our 30% stake in Porto Seguro S.A, encompass mass-market insurance coverage merchandise associated to life, property and credit score. These merchandise are supplied in synergy with retail channels – our department community, partnerships with retailers, bank card shoppers, actual property and car financing, private loans – and the wholesale channel. These merchandise have traits akin to a low mixed ratio, low volatility in outcomes and fewer use of capital, making them strategic and more and more related within the diversification of our Group’s revenues. Our insurance coverage merchandise have been receiving updates on protection and help, bringing extra worth to those prospects. In order to broaden our insurance coverage merchandise portfolio, we’re concentrating on our personal current 93
distribution channels in addition to increasing our insurance coverage brokerage actions and offering third-social gathering insurance coverage insurance policies from companion insurers to our shoppers by way of an open platform. There was a rise in gross sales quantity in 2021 when in comparison with 2020. However, there was additionally a considerable influence on loss of life, unemployment and hospitalization protection because of the COVID-19 pandemic. Premium Bonds (capitalization bonds or capitalization plans) Premium bonds are fastened deposit merchandise pursuant to which a consumer makes a one-time deposit or month-to-month deposits of a set sum that will likely be returned on the finish of a delegated time period. Ownership of premium bonds robotically qualifies a buyer to take part in periodic raffles, every time with the chance to win a major money prize. We presently market our premium bonds merchandise portfolio by way of our department community, digital channels and ATMs, and we’re presently growing new applied sciences for channel diversification. The web assortment, taking into consideration the deduction of redemptions, from capitalization plans decreased 42.0% within the yr ended December 31, 2021 when in comparison with the identical interval of 2020. Consortia A consortium is a pool of individuals and/or authorized individuals in a bunch with the aim of permitting their members, on an equal foundation, to amass belongings, akin to automobiles, properties, or companies, by way of self-financing. The funds made by the group individuals are utilized to a typical fund, utilized by a number of members of the consortium at a time, to amass the belongings elected by the members when the product was contracted. The individuals obtain the belongings through the validity of the contract by way of the next strategies: (i) random drawing and (ii) bid gives. There are three various kinds of bid gives which may be mixed: (a) bid provide with personal assets; (b) a part of the letter of credit score; and (c) FGTS tax (just for properties consortium). The monetary calculation for the formation of teams ensures that everybody can have the precise to purchase the products till the top of the group. As the funds utilized by a participant to amass belongings are assets from the individuals, the administration of consortia doesn’t give rise to default danger or regulatory capital necessities for us. Consortia don’t cost rates of interest and our revenues come primarily from the administration payment charged to shoppers. Given these traits, this enterprise is strategic to us, contributing to income diversification and to a extra full product portfolio providing to our shoppers. As of December 31, 2021, we achieved the next outcomes: Average of R$1.48 billion of gross sales per thirty days within the yr ended December 31, 2021; New merchandise carried out: vans and bikes; New function carried out: Customers can contract consortia at Itaú app by their-personal. In addition prospects preferring to purchase consortia with a specialist can press a button and obtain a name from our promote workforce. Further prospects who personal a couple of car consortia can now be a part of the quotas to purchase a single good. Microcredit Our Microcredit unit gives entry to credit score to small, formal, particular person, self-employed entrepreneurs and low-earnings authorized entities who want to begin, broaden and leverage their companies. As a member of the “National Program for Oriented and Productive Microcredit” (PNMPO) and being an essential incentive software for social growth, our Microcredit unit is concentrated on entrepreneurs with annual revenues of as much as R$360,000.00. In 2021, we elevated our gross sales power and reached extra shoppers, reaching a complete portfolio of 25,807 folks. In addition, our product was built-in with ITI, our digital Itaú Bank. 94
Public Sector Group The Public Sector Group is tasked with consumer protection and enterprise growth efforts for Brazil’s Federal, State and Municipal authorities branches in addition to choose State Owned Enterprises. Its worth proposition entails offering monetary companies and choose merchandise to shoppers within the Public Sector from its 12 regional places of work throughout Brazil by way of a workforce of seasoned professionals proficient within the specifics of this phase. A complete array of Transaction Services, Asset Management, Foreign Exchange, Payroll Services, Payment Solutions and Credit Products goals to offer a extra encompassing and Full Bank Experience for our clientele. As of December 31, 2021, alongside its consumer protection mandate, the Public Sector Group was answerable for Sales and Product Development for Taxes Collection and Utilities Billing for 1,525 entities in Brazil. During 2021 the Public Sector Group consolidated a restructuring effort began in 2020 aimed toward streamlining operations and reinforcing its product portfolio. As of December 31, 2021, the Public Sector Group was chargeable for managing 7,407 consumer relationships. Wholesale Banking Wholesale Banking is the phase chargeable for banking operations of center-market, agribusiness, massive and extremely-massive firms (these with annual revenues from R$30 million) and funding banking companies. Our Wholesale Banking phase gives a variety of services and products to the biggest financial teams of Brazil. Our actions on this enterprise vary from typical operations of a business financial institution to capital markets operations and advisory companies for mergers and acquisitions. These actions are totally built-in, which permits us to realize a efficiency tailor-made to our shoppers’ wants. One of an important options of our technique for our Wholesale Banking phase is the set of initiatives linked to enhancing effectivity in our operations. These ongoing actions, that are anticipated to proceed to develop within the coming years, are designed to extend revenues, enhance processes and cut back prices. Investment Banking Our funding banking enterprise carried out by way of Itau BBA, assists firms elevating capital by way of fastened earnings and fairness devices in private and non-private capital markets, and gives advisory companies in mergers and acquisitions. We advise firms, personal fairness funds and traders within the structuring of variable earnings merchandise and in mergers and acquisitions. We imagine we provide a large portfolio of funding banking companies starting from analysis to Brazilian and different Latin American firms. Our fastened earnings division acts as bookrunner or supervisor within the issuance of debentures, promissory notes and securitization transactions on the funding banking phase. Asset Management With greater than 60 years of expertise in funding administration, as of December 31, 2021, Itau Asset Management has R$ 786.5 billion in belongings underneath administration (together with our and Intrag’s belongings) in line with ANBIMA and recorded a 449 foundation factors improve of belongings underneath administration in 2021 as in comparison with 2020. Itau Asset Management ranked as the biggest non-authorities owned asset supervisor in Brazil, with a 11.4% market share as of December 31, 2021, in line with ANBIMA. In 2021, we have been elected for the thirteenth time the very best fund supervisor by “Guia de Fundos FGV”.Moreover, in 2021, we have been thought of the very best supervisor in all funds classes (fastened earnings, equities, cash market and hedge funds) and traders segments (excessive web value, retail and company). Kinea Investimentos LTDA., another investments administration firm managed by us, held R$ 55.8 billion in managed belongings as of December 31, 2021, in comparison with R$ 56.26 billion as of December 31, 2020, in line with ANBIMA. Investment Services Itaú Investment Services enterprise models present native custody and fiduciary companies, worldwide custody companies, and 95
(iii) company options the place we act as switch agent and stockholder servicer for Brazilian firms issuing fairness, company bonds, promissory and financial institution credit score notes. We additionally work as guarantor on mission financings, escrow accounts and mortgage and financing contracts. We present the technological instruments to carry out day by day actions of every service and depend on compliance and contingency procedures. Thus, our shoppers can direct the give attention to their enterprise administration. Pension funds, insurance coverage firms, asset managers, worldwide international custodians and fairness and debt issuers are our main shoppers in these companies, representing roughly 1,104 teams of shoppers, that reached R$3.7 trillion of belongings underneath service as of December 31, 2021, which incorporates funding funds, underwriting, pension funds, trustee and brokerage companies. We proceed to enhance our technological platform concerning securities companies and investing in new options for our shoppers. Itaú Private Bank With a full international wealth administration platform, we’re one of many personal financial institution market leaders in Brazil and one of many principal personal financial institution gamers in Latin America. Our multidisciplinary workforce, which is supported by a workforce of funding advisers and product consultants, gives complete monetary companies to shoppers, understanding and addressing their wants from our eight places of work in Brazil and in our places of work positioned in Zurich, Miami, New York, Santiago, Lisboa and Nassau. Our shoppers have entry to a whole portfolio of services and products, starting from funding administration to wealth planning, in addition to credit score and banking options. In addition to our in-home personalized services and products, we provide our shoppers entry to a large-open platform with of different merchandise together with third-social gathering suppliers. Aligned with our imaginative and prescient to be the main financial institution in sustainable efficiency and buyer satisfaction, we determined to focus our strategic priorities on the next Itaú Private Bank initiatives: Staying near our prospects, listening to them and striving to anticipate their wants; Our steerage is Positive Impact Commitments, which direct our determination-making and assist us combine ESG into our enterprise practices, operations and stakeholder relations; Adding worth to shoppers and stockholders with an entire providing of lengthy-time period proactive advisory companies; Continuing to spend money on our worldwide platforms to reinforce Brazilian shoppers’ expertise; Improving our operational effectivity with digital options; and Maintaining a give attention to danger administration and regulatory issues. As of December 31, 2021, we had a market share of 29.3% by way of distribution on personal financial institution phase, a rise of two.0 share factors since December 31, 2020, largely defined by the advance of the financial situation and non-present influx. Itaú Corretora (Brokerage) Itaú Corretora has been offering brokerage companies since 1965. We present retail brokerage companies in Brazil to over 291 thousand shoppers with positions within the fairness and glued earnings markets, accounting for R$167.5 billion in buying and selling quantity in 2021. The brokerage companies are additionally supplied to worldwide shoppers by way of our dealer-seller in New York. International Operations We need to obtain, within the international locations the place we function, the identical administration high quality and degree of outcomes we’ve in Brazil. Through our internationalization technique, we search to know completely different markets, enterprise, services and products, figuring out alternatives to combine our models and to broaden our operations to new international locations. The desk beneath exhibits a few of our operations in Latin America, excluding Brazil, as of December 31, 2021: 96
Countries Branches & CSBs ATMs Employees Argentina 78 175 1,554 Chile 188 402 5,214 Colômbia(1) 104 121 2,691 Paraguay 37 308 1,007 Uruguay(2) 23 62 1,079 Includes staff in Panama. Does not embrace the 34 OCA factors of service. Overview Latin America is a precedence in our worldwide growth because of the geographic and cultural proximity to Brazil. Our objective is to be acknowledged because the “Latin American Bank”, turning into a reference within the area for all monetary companies supplied to people and corporations. Over the previous years, we consolidated our presence in Argentina, Chile, Paraguay and Uruguay. In these international locations, we function within the retail, firms, company and treasury segments, with business banking as our principal focus. With the current merger between Banco Itaú Chile and CorpBanca, which assured our presence in Colombia and Panama, we expanded our operations within the area even additional. In Mexico, we’re current by way of an workplace devoted to fairness analysis actions. As of December 31, 2021 we had a community of 430 branches, together with 12 digital branches, and consumer service branches in Latin America (excluding Brazil). In Paraguay, we had 61 non-financial institution correspondent places, that are factors of service with a simplified construction, strategically positioned in supermarkets to offer companies to our shoppers in that nation. As of December 31, 2021, we additionally had 34 factors of service by way of OCA S.A., our bank card operator in Uruguay. Please see “Distribution Channels”, for additional particulars about our distribution community in Latin America. Banco Itaú Argentina We have operated in Argentina since 1979, the place we started with a give attention to massive firms with enterprise ties to Brazil. In 1995, we started our retail operations in Buenos Aires. In 1998, we elevated our presence by way of the acquisition of Buen Ayre Bank, subsequently renamed Banco Itaú Argentina. Through Banco Itaú Argentina we provide services and products in company banking, small and center-market firms and retail banking. Our company banking enterprise focuses on massive and institutional shoppers, offering lending, structured finance, funding and money administration companies. Our small and center-market operations present credit score for working capital and investments in manufacturing capability will increase. Our retail banking enterprise focuses on center and higher-earnings shoppers, and our companies choices embrace present and financial savings accounts, private loans and bank cards. In 2019 Banco Itaú Argentina opened two digital branches enhancing its presence in Argentina’s monetary market. Itaú Corpbanca In April 2016, we closed the merger of Banco Itau Chile into CorpBanca and, in consequence, acquired management of the ensuing entity (Itau Corpbanca). On the identical date, we entered into the Shareholders’ Agreement of Itaú Corpbanca, or Itau Corpbanca’s Shareholders’ Agreement, which entitles us to level, along with the Corp Group, the previous controlling stockholder of Corpbanca, nearly all of the members of Itaú Corpbanca’s Board of Directors. In 2021, we’ve elevated our fairness stake to 56.60%, pursuant to the train of put choices by Corp Group, as set out in Itau Corpbanca´s Shareholder´s Agreement, and the train of our subscription rights, arising from Itau Corpbanca’s capital improve. Itau Corpbanca gives a broad vary of wholesale and retail banking companies to prospects in Chile and Colombia. In addition, it gives monetary advisory companies, mutual fund administration, insurance coverage brokerage and securities brokerage companies by way of subsidiaries, and banking companies. It operates in two principal geographic 97
areas: Chile and Colombia. The Chile phase additionally consists of operations carried out by Itau Corpbanca New York Branch and the Colombia phase additionally consists of the operations carried out by Itau S.A. (Panama). Business actions in Chile have been strategically aligned onto three areas instantly associated not solely to our medium-time period technique however to prospects’ wants: (1) Wholesale Banking: (a. Corporate, b. Large firms and c. Real Estate and Construction); (2) Retail Banking (a. Itau Personal Bank, b. Itau, c. Itaú Private Bank, d. Midsize Companies, e. SMEs and f. Banco Condell, a Consumer Finance Division); and (3) Treasury. Itau Corpbanca Colombia gives a broad vary of economic and retail banking companies to its prospects in Colombia, working principally within the cities of Bogotá, Medellín, Cali, Bucaramanga, Cartagena and Barranquilla. Banco Itaú Paraguay Our operations in Paraguay started in 1978 and comprise retail and wholesale banking, by way of Interbanco, which was acquired in 1995 by Unibanco. In 2010, the Itaú model was launched and our financial institution’s identify was modified to Banco Itaú Paraguay. Banco Itaú Paraguay distributes services and products to small and center market firms, agribusiness, massive firms, institutional shoppers and client shoppers. The retail phase additionally focuses on payroll shoppers. Under company banking, Banco Itaú Paraguay has a effectively-established presence within the agribusiness sector. Banco Itaú Paraguay’s qualification is predicated on its robust positioning, with management in a number of segments, reflecting excessive returns. In 2019 Banco Itau Paraguay opened its first digital department enhancing its presence in Paraguay’s monetary market. Banco Itaú Uruguay Our banking operations in Uruguay embrace Banco Itaú Uruguay, OCA (the biggest bank card issuer in Uruguay, in accordance with knowledge from Uruguay’s central financial institution) and the pension fund administration firm Unión Capital. Our technique in Uruguay is to serve a broad vary of shoppers by way of personalized banking options. Our retail banking enterprise is concentrated on people and small enterprise shoppers. Retail services and products give attention to the center and upper- earnings segments, and in addition embrace present and financial savings accounts, payroll fee, self-service areas and ATMs in all branches, and telephone and web banking. The wholesale banking division is concentrated on multinational firms, monetary establishments, massive and center market firms and the general public sector, offering lending, money administration, treasury, commerce and funding companies. In 2019 Banco Itaú Uruguay opened its first digital department enhancing its presence in Uruguay’s monetary market. Itau BBA International Our banking actions carried out underneath the company construction of Itau BBA International are primarily targeted on two enterprise strains: Corporate and Investment Banking: by way of Itau BBA International, headquartered within the United Kingdom, and its subsidiary Itaú Europe, headquartered in Portugal, with a department in Luxembourg and enterprise platforms in Madrid and Paris, this phase helps the monetary wants of firms with worldwide presence and operations, specializing in transactions associated to financing and funding relationships between firms in Latin America and the Northern Hemisphere. The companies supplied embrace the origination of structured financing, hedging, commerce financing and advisory to Latin American and U.S. firms endeavor enterprise within the Northern Hemisphere and enormous financial teams investing into Latin America. Private Banking: underneath the company construction of Itau BBA International, we handle personal banking actions in Miami and Zurich, providing specialised monetary and asset administration companies for Latin American shoppers with excessive web value by offering a diversified and specialised foundation of funding funds, buying and selling and managing on their account securities and different monetary devices, in addition to by managing trusts and funding firms on behalf of consumers. Other International Operations Our different worldwide operations have the next targets: 98
Support our shoppers in cross-border monetary transactions and companies, our worldwide models are energetic in offering our shoppers with a wide range of monetary merchandise, akin to commerce financing, loans from multilateral credit score businesses, off-shore loans, worldwide money administration companies, overseas trade, letters of credit score, ensures required in worldwide bidding processes, derivatives for hedging or proprietary buying and selling functions, structured transactions and worldwide capital markets choices. Our worldwide models provide a wide range of monetary merchandise by way of their branches. Manage proprietary portfolios and lift funds by way of the issuance of securities within the worldwide market. Fundraising by way of the issuance of securities, certificates of deposit, business paper and commerce notes may be carried out by our branches positioned within the Cayman Islands, the Bahamas and the United States, in addition to by way of Itaú Bank Ltd., a banking subsidiary included within the Cayman Islands. Our proprietary portfolios are primarily held by Itaú Bank and our Nassau and Cayman Islands branches. These places of work additionally improve our skill to handle our worldwide liquidity. Through our worldwide operations, we set up and monitor commerce-associated strains of credit score from overseas banks, keep correspondent banking relationships with cash facilities and regional banks all through the world and oversee our different overseas forex-elevating actions. Revenues from Operations in Brazil and Abroad We conduct most of our enterprise actions in Brazil, however we don’t break down our revenues by geographic markets inside Brazil. Our curiosity earnings from loans and leases, banking service charges and earnings from insurance coverage, personal pension plans and premium bonds transactions are divided between revenues earned in Brazil and out of doors of Brazil. The following data is introduced in IFRS, after eliminations on consolidation. The following desk units forth the consolidated assertion of earnings with respect to our revenues from operations in Brazil and overseas for the years ended December 31, 2021, 2020 and 2019: (In thousands and thousands of R$, besides percentages) For the Year Ended December 31, Variation Revenues from operations in Brazil and overseas 2021 2020 2019 2021-2020 2020-2019 Income associated to monetary operations (1) (2) 144,514 123,611 145,308 20,903 16.9% (21,697) (14.9)% Brazil 107,741 102,016 117,541 5,725 5.6% (15,525) (13.2)% Abroad 36,773 21,595 27,767 15,178 70.3% (6,172) (22.2)% Commissions and Banking Fees 42,324 38,557 39,032 3,767 9.8% (475) (1.2)% Brazil 37,635 34,533 35,283 3,102 9.0% (750) (2.1)% Abroad 4,689 4,024 3,749 665 16.5% 275 7.3% Income from insurance coverage and personal pension operations earlier than 5,354 4,488 4,553 866 19.3% (65) (1.4)% declare and promoting bills earlier than declare and promoting bills Brazil 5,332 4,488 4,423 844 18.8% 65 1.5% Abroad 22 – 130 22 – (130) (100)% Distribution Channels As a common financial institution, we offer a variety of monetary companies and merchandise to our shoppers, from business banking to asset administration and funding banking. Those merchandise are distributed by way of two principal channels: conventional and digital. The conventional channels are composed of brick & mortar branches – which might be both full-service branches or in-home company service facilities – and ATMs. The digital channels are operated remotely, by way of the web or cell phones. Our community of three,244 branches, which incorporates bodily and digital branches, as of December 31, 2021, distributes all of services and products in Brazil. ATMs, each our personal proprietary community of machines and extra 24,255 by way of partnership with Tecban, (as of December 31, 2021) are a really handy and environment friendly manner of serving shoppers, as a result of its low working prices, 24/7 availability and really full companies providing. Clients preferring to make use of digital channels, akin to web and cellular banking, are served remotely by our relationship managers based mostly on one in every of our 223 digital branches in Brazil. 99
Standard channels Branches CSBs ATMs 2021 2020 2019 2021 2020 2019 2021 2020 2019 Brazil 3,244 3,231 3,347 656 656 671 20,006 20,687 21,384 Abroad 399 413 448 36 36 37 1,068 1,071 1,107 Argentina 65 71 74 13 13 13 175 175 176 Chile and Uruguay 207 208 219 4 1 1 464 470 486 Colombia 93 101 117 11 10 11 121 125 147 Paraguay 29 28 32 8 12 12 308 301 298 Other 5 5 6 – – – – – – Total in Brazil and overseas 3,643 3,644 3,795 692 692 708 21,074 21,758 22,491 Digital Channels (web and cellular banking) In 2021, we continued to give attention to investments in our digital channels to make sure a optimistic buyer expertise. Improvements within the regulatory and competitors situation bolstered the commitments that we made a few years in the past to our prospects and stakeholders, have been of utter significance and resulted in essential achievements. Digital channels are already our principal distribution channels. Basis Growth-The variety of accounts opened digitally was roughly 3.1 million within the yr ended December 31, 2021, 58% greater when in comparison with the identical interval from the earlier yr, and already represents 55.5% of all our accounts opened in 2021. All these outcomes exemplify the significance of our operation, which continues to turn into extra consultant every day. Costumer Engagement-We have elevated our buyer entry foundation by 2.2 million within the yr ended December 31, 2021, a 16% progress when in comparison with the yr ended December 31, 2020. 88% of all our prospects interactions have been achieved digitally, contemplating all purchases, transfers, and funds. Purchase-We turned a one cease store. In 2021, we began to supply 100% of our product portfolio digitally. In addition, the variety of contracts bought on-line represented 56% of the full quantity we offered within the yr ended December 31, 2021. Satisfaction-In addition to creating our digital channels extra full by way of services and products, we advanced in using knowledge and experimentation with our prospects, investing within the yr ended December 31, 2021 greater than 5,000 hours in conversations and interactions with prospects, enhancing and enhancing our digital journeys. Such enhancements have already been acknowledged by our prospects, as proven in our satisfaction scores (i.e., Net Promoter Score or “NPS”). Our Mobile App achieved an NPS of 71 factors on December 31, 2021. Security-This is a matter of maximum significance to us, and it’s current in all of our journeys. In 2021, we launched the itoken (our safety system), by way of using facial recognition expertise, accessed remotely. As of December 31, 2021, we had greater than 6 million prospects who’ve enabled itoken with facial recognition expertise. Lead time and availability – Our common time between modifications was two instances quicker within the yr ended December 31, 2021 when in comparison with the yr ended December 31, 2020, growing higher options and delivering them to our prospects. All these modifications have been carried out contemplating all high quality requirements, guaranteeing greater than 99.6% of availability of companies in digital channels. Our communications channel turned extra environment friendly yearly, and as we’re nearer to our prospects, we will perceive the very best course to observe, not solely by way of service evolution, but additionally in additional environment friendly methods to assist folks handle their monetary life. Another essential level is that the whole lot that’s developed in digital channels, shouldn’t be solely constructed for, however with our prospects, considering their day by day routine, ache factors and wishes. This is a good differential – we’ve the data and the instruments to make our journeys less complicated and extra intuitive, contemplating every buyer profile. To point out a number of merchandise, we’ve funding suggestions in line with particular targets, on-line verify deposit, overseas forex buy, bank card restrict improve and on-line renegotiation. Our Brand and Marketing Channels Our model proposition goes past the banking actions. Our model objective is to “stimulate folks’s energy to rework their lives”. We ship that proposition by offering full options by way of services and products, by way of monetary intelligence and an ecosystem of partnerships, totally attending the wants of our
prospects, from people and micro firms to massive organizations, offering the very best buyer expertise each digitally and bodily. Our model is dedicated to encouraging folks to have a neater and nearer relationship with their funds of their day by day lives. To replicate our consumer-centric method, in 2021 we reviewed our lengthy-time tagline “Feito pra Você” (made to you) and adopted a brand new assertion “Feito com você” (made with you), which is rather more aligned with our manner of working. Besides our monetary options, in 2021 we’ve invested in creating a strong content material technique by way of our social media channels, specializing in offering fixed publications concerning the financial surroundings and tutorials. In December 2021, we reached over 1.1 billion views on our YouTube channel and over 9.2 million followers on Facebook. In the identical interval, our Twitter and Instagram profiles had over 652 thousand and 685 thousand followers, respectively. We have additionally launched a TikTookay channel, in March 2021, which already has greater than 575,000 followers. This technique reinforces our dedication to method and keep related for the brand new generations. We proceed to observe all of our social media profiles 24 hours a day, seven days every week. We have 150 devoted staff to work together with the general public on all issues associated to Itaú Unibanco Group in Brazil, together with questions, solutions, feedback, and complaints. We acquired greater than 2.6 million mentions on social media in 2021, in line with Oliver, the in-home [marketing/ advertisement] company that assists us within the evaluation of social media knowledge. Social media is a pillar in participating folks in our function past banking, however it isn’t the one one. In July 2021, we and Central Única das Favelas (CUFA), an NGO with greater than 20 years selling social and cultural actions in Brazilian slums (favelas), began a pilot mission in 4 Brazilian favelas with the purpose of serving to residents and small entrepreneurs to hitch the monetary system. The partnership includes microcredit, a product that goals to assist entrepreneurs develop by way of credit score, and a free digital account that meets on a regular basis banking wants, akin to funds, bank card, account card, amongst others. Brazilian slums already transfer greater than R$119 billion per yr, and with this credit score line, we hope to encourage productive exercise for sectors which might be usually uncared for. We additionally spend money on a number of initiatives that target essential environmental and social causes, akin to training, tradition, mobility, and sport. As one of many pioneering monetary establishments in adopting the ESG agenda in Brazil, in 2021, we’ve dedicated to contributing R$400 billion, by 2025, by way of enterprise initiatives that promote a sustainable and more and more greener and extra inclusive economic system. This quantity consists of three principal areas of motion: (i) granting credit score in sectors with a optimistic influence on society; (ii) structuring ESG transactions with shoppers, akin to ESG bonds, ESG loans and inexperienced debentures; and (iii) offering ESG retail merchandise akin to electrical/hybrid automobile finance, photo voltaic panels, and microcredit. With this, we reinforce our function as one of many principal brokers of financial and social transformation within the nation. Our city mobility platform contributes to boosting the circulation of bicycles in cities which is aligned with the sharing economic system rules. Until 2020 our city mobility platform targeted solely on bike leases, headed by our model Bike Itaú. In 2021, we’ve additionally expanded our operation to electrical bikes, with velocity restricted to 25 km/h, and electrical automobiles (together with electrical automobiles)- our new mobility initiative headed by VEC Itaú, which stands for shared electrical car, in Portuguese “Veículo Elétrico Compartilhado”. Bike Itaú has greater than 1,400 bike stations and is current in 5 cities in Brazil in addition to in Santiago (Chile) and Buenos Aires (Argentina). According to the operator TemBici, in 2021 a median of greater than 1.5 million journeys have been made every month utilizing bikes from our city mobility platform. This is because of the variety of bikes we provide folks: there are over 14,000 laranjinhas (a nickname that stands for orange bikes) accessible for rental. These numbers additionally signify an influence on folks’s carbon footprint, because it saves of greater than 4,000 tons of carbon dioxide per yr. VEC Itaú, nevertheless, continues to be in a check stage. We provided 4 automobile fashions to 700 staff for them to check at stations put in at our administrative facilities within the metropolis of São Paulo. The expectation is that, to start with of 2022, this service will likely be expanded, and extra automobiles and stations will likely be accessible. We imagine that VEC Itaú will enhance the chain of electrical automobiles in Brazil and contribute to increasing the accessible infrastructure, together with charging factors, that are nonetheless scarce all through the nation. Also, after a yr of use, the electrical automobiles will likely be put on the market on iCarros, a used automobile market owned by us. Our objective is to speed up the acquisition of electrical automobiles whose costs are nonetheless thought of excessive for the Brazilian market. Moreover, we’ve been providing financing taxes at completely different decrease charges for electrical and hybrid automobiles to encourage folks to purchase a lot of these automobiles. In training, our packages are equally highly effective. Since we’ve launched the “Leia para uma criança” (Read for a kid) program, in 2010, greater than 61 million printed books have been distributed to folks and 38 thousand braille books have been supplied to visually impaired youngsters. Three million books have already been despatched to public 101
libraries, civil society organizations, and faculties. In 2021, the “Read for a Child” program distributed 2 million youngsters’s books freed from cost. The donation was made solely to public faculties and day care facilities, group libraries, civil society organizations (CSOs), and different public amenities aimed toward guaranteeing the rights of kids aged 0 to six years. This exhibits our dedication to mobilize shoppers and non-shoppers to make a distinction in Brazil. In tradition, Itaú Cultural – which is concentrated on analysis, content material manufacturing, mapping, incentivization and diffusion of inventive and cultural manifestations – in addition to Espaço Itaú de Cinema – eight complexes all through Brazil – re-opened their doorways to the general public in 2021 after a yr of digital actions because of the COVID-19 pandemic. As a model with a powerful objective, we additionally advanced our worker worth proposition by investing in range and inclusion packages all through 2021. We promoted a number of hiring packages specializing in PWD and the LGBT+ group, and bootcamps for minority teams of builders – PWD and trans. In 2021, we have been acknowledged by the worldwide consultancy Great Place to Work (GPTW) as one of many ten finest firms for professionals with disabilities to work in Brazil. The survey evaluated the hiring, communication, growth, budgeting, inclusive actions, and particular points associated to folks with disabilities. In addition to the initiatives to encourage inclusion internally, our Costumer Experience space works to make sure that all its channels are accessible to the general public, from its conception to the ultimate product – each bodily and digital – and maintains a sequence of packages and partnerships with establishments devoted to the event and inclusion of PWD. In the general GPTW rank, we have been the second-finest firm to work in Brazil, among the many class of massive firms. All our model efforts in 2021 have paid-off, as we have been ranked for the 18th consecutive yr on the high of the Interbrand rating of Most worthy Brazilian manufacturers with an estimated worth of R$40,534 million, an 8% of progress yr on yr. The evaluation is predicated on the model’s skill to generate monetary outcomes, affect the shoppers’ choice course of, guarantee lengthy-time period demand, and ship revenue and social influence. b) Revenues by phase and their share within the issuer’s web revenues 102
Activities Our phase data is predicated on reviews utilized by senior administration to evaluate the monetary efficiency of our segments and to make choices concerning the allocation of funds for funding and different functions. Segment data is ready in accordance with accounting practices adopted in Brazil (BRGAAP) however consists of the next professional forma changes: (i) the popularity of the influence associated to allotted capital by utilizing a proprietary mannequin; (ii) using funding and value of capital, in line with market costs, by utilizing sure managerial standards; (iii) the exclusion of non-recurring occasions from our outcomes; (iv) the reclassification of the tax results from hedging transactions we enter into for investments overseas; and (v) IFRS changes. The desk beneath presents our revenues per phase for the years ended December 31, 2021, 2020 and 2019. (In R$ million) Year ended December 31 2021 2020 2019 Retail Banking 75,443 72,680 79,227 Financial margin (1) 43,042 41,818 46,764 Revenues from banking companies 25,169 23,918 25,411 Income from insurance coverage, personal pension and capitalization operations earlier than declare and promoting bills 7,232 6,944 7,052 Wholesale Banking 38,228 32,187 30,650 Financial margin (1) 24,005 19,883 18,778 Revenues from banking companies 13,817 11,911 11,306 Income from insurance coverage, personal pension and capitalization operations earlier than declare and promoting bills 406 393 566 Activities with the Market and Corporation 11,930 9,918 9,913 Financial margin (1) 11,099 8,394 9,088 Revenues from banking companies 884 1,401 590 Income from insurance coverage, personal pension and capitalization operations earlier than declare and promoting bills (53) 123 235 IFRS changes 773 (14,586) (2,711) Total (2) 126,374 100,199 117,079 Financial margin (1) 75,209 50,053 69,350 Revenues from banking companies 42,324 38,557 39,032 Capitalization operations earlier than declare and promoting bills 5,354 4,488 4,553 Other revenues 3,487 7,101 4,144 (1) Includes curiosity and comparable earnings and bills R$59,948, earnings and monetary liabilities at truthful worth by way of earnings R$16,678 and earnings from overseas trade transactions and overseas trade belongings from transactions overseas R$ (1,417). (2) The IFRS Consolidated figures don’t signify the sum of the segments as a result of there are intercompany transactions that have been eradicated solely within the consolidated monetary statements. Segments are assessed by high administration, web of earnings and bills betw een associated events. We conduct most of our enterprise actions in Brazil, however we don’t break down our revenues by geographic markets inside Brazil. Our revenues come up from earnings from monetary operations earlier than allowance for mortgage losses, banking service charges and earnings from insurance coverage premiums, and earnings from pension and capitalization operations. These revenues are introduced individually for these accrued in Brazil and overseas. The desk beneath presents data on our revenues for the years ended December 31, 2021, 2020 and 2019 after the eliminations from consolidation. (In R$ million) 2021 2020 2019 Income from monetary operations (1) (2) 144,514 123,611 145,308 Brazil 107,741 102,016 117,541 Abroad 36,773 21,595 27,767 Revenues from banking companies 42,324 38,557 39,032 Brazil 37,635 34,533 35,283 Abroad 4,689 4,024 3,749 Income from insurance coverage and personal pension operations earlier than declare and promoting bills 5,354 4,488 4,553 Brazil 5,332 4,488 4,423 Abroad 22-130 (1) Includes curiosity and comparable earnings, dividend earnings, changes to truthful worth of monetary belongings and liabilities, and overseas trade outcomes and trade variations on transactions overseas. (2) ITAÚ UNIBANCO HOLDING doesn’t have shoppers representing 10% or greater of its revenues. 103
c) Income or loss arising from the phase and its share within the issuer’s web earnings We current beneath a abstract of the outcomes of our working segments, the place the full can’t signify the sum of the events as a result of operations between segments have been eradicated solely in consolidated. 01/01 to 12/31/2021 Activities with the Retail Wholesale ITAU IFRS Market + Adj ustments 3 Banking Banking UNIBANCO consolidated t l Corporation Operating revenues 75,443 38,228 11,930 125,601 773 126,374 Interest margin (l ) 43,042 24,005 11,099 78,146 (2,937) 75,209 Revenues from banking companies and financial institution prices 25, 169 13,817 884 .39,870 2,454 42,324 lnoome from insurance coverage and personal pension operations earlier than declare and promoting e>:penses 7,232 406 (53) 7,565 (2,231 ) 5,354 Other re¥’enues 3,487 3,467 Costof Credit (18.278) (1.956) (20.234) 7,455 (12.779) Cla ims (1,591) (9) (1,600) (1,600) Operating margin 55,574 36,263 11,930 103,767 8,228 111,995 Other working earnings / (bills) (40,116) (17,743) (1,055) (58,914) (10,850) (69,764) Non.fnterest bills C2) (35,031) (15,699) (478) (51 ,208) (11,341 ) (62,549) Tax ex~nses for ISS, PIS and COFINS and Other (5,085) (2,044) (577) (7,706) (673) (8,379) Share ofprofrt or (loss) in associates and jointventures 1,164 1, 164 Income earlier than earnings tax and socia l contribution 15,458 18,520 10,875 44,853 (2,622) 42,231 Income taK and social contribution (5,593) (6,799) (3,997) (t6,389) 2,542 (13,847) Non -control ling curiosity in subsidiaries (330) (59 t ) (664) ( 1,565) (39) ( 1,624) Net earnings 9,535 11,130 6,214 26,879 (119) 26,760 (1) lndudes curiosity and comparable earnings and bills of RS 59,948, outcome offinancial belongings and liabilities at truthful worth by way of revenue or lack of R$ 16.678 and foteign trade tesuits ano trade variations in forejgn transactions ofR$ (1,417). Re’ers to generaland administraffve bills inclvding depreciation and amortization expe~s ofR$(5,548). TtJ. IFRS Consolidated figures don’t signify the sumofthe par6es as a result of there are intm:ompany transadions that have been eradicated solely inthe consolidated statements. Segmem are assessed by high administration, web of earnings andexpenses between relatedparties. 01/01 to 12/31/2020 Activ~ies with the Retail Wholesale ITAU IFRS Market+ Adj ustments Banking Banking UNIBANCO consolidated Pl Cor oration Operating revenues 72,680 32,187 9,918 114,785 (14,586) 100,199 Interest margin ( 1 ) 4t ,8 t 8 t9,883 8,394 70,095 (20,042) 50,Q53 Commissions and Banking Fees 23,9 t 8 t t ,9t t t ,40 t 37,230 1,327 38,557 Income from in surance and personal pension operations earlier than declare and ~elling expen~e~ 6,944 :l9:l 12:l 7,460 (2,972) 4,400 Other revenues 7,101 7,10 t Cost of Credit (21,247) (8,968) 6 (30,209) 5,583 (24,626) Claims (1 ,345) (8) (1 ,353) (1) (1,354) Operating margin 50,088 23,211 9,924 83,223 (9,004) 74,219 Other working earnings I (bills) (40,221) (16,133) (650) (57,004) (11,985) (68,989) Non-interest bills (2) (35,3t0) (t4,592) (287) (SO,t89) ( t 4,0 t 8) (64,207) Tax bills for ISS, PIS and COFtNS and Other (4,9 t 1) ( t ,54 t ) (383) (6,8 t 5) 634 (6,18 t ) Share ofprofit or (loss) in associates and joint ventures 1 399 1.399 tncome earlier than earnings tax and social contribution 9,867 7,078 9,274 26,219 (20,989) 5,230 tncome tax and social contribution (3,071) ( t ,893) (3,099) (8,063) t 7,897 9,834 Non-controlling curiosity in subsidiaries (t75) 60 t (46) 380 3,452 3,832 Net earnings 6,621 5,786 6,129 18,536 360 18,896 (f) Includes curiosity and comparable earnings and bills ofR$ 40,811. te”Suit offinancial belongings and liabilities at truthful worth by way of profir or loss ofRS 6.553 and overseas ex chang’ outcomes and I!Xchange variations in foteign transactioos dR$2.689. (2) Reftm to gMeral and adrrMistrab’ve eX{H!nses inclvdinp depreciation and amortizab’m bills ofR$ (5,064). (3) The IFRS Consolidated figures don’t signify the sum ofthe segmMts as a result of thl!fe are intercompany transactions that have been eradicated solely within the consolidate1 monetary statements. SegnMts are assessed by high maMgl!mMt. web of earnings and bills betw’N’n associated events. 01/01 to 12131/2019 Activities with Retail Wholesale ITAU IFRS the Market + Adjustments Banking Banking UNIBANCO consolidated Pl Corporation Operating revenues 79,227 30,650 9,913 119,790 (2,711) 117,079 Interest margin 1 ‘1 46,764 18.778 9.088 74.630 (5,280) 69,350 Commissions and Banking Fees 25,411 11,306 590 37,307 1,725 39,032 Income from insurance coverage and personal pension operations earlier than declare and promoting bills 7,052 566 235 7,853 (3,300) 4,553 Other revenues 4,144 4,144 Cost o f Credit (1 6,072) (2,082) (18,154) 882 (17,272) Claims (1,206) (59) (1,265) (30) (1 ,295) Operating margin 61,949 28,509 9,913 100,371 (1,859) 98,512 Other working Income I (bills) (41,430) (15,403) (986) (57,819) (9,450) (67,269) Non-Interest bills ~~ (36,346) (13.940) (365) (50.651 ) (10.361 ) (61 ,012) Tax bills for ISS. PIS and COFINS and Other (5,084) (1.463) (621 ) (7.168) (404) (7,572) Share of revenue or (loss) in associates and jon! ventures 1,315 1,315 Net Income earlier than 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) (1 3,496) 10,066 (3,430) Non-controlling Int erest In subsidiaries (198) (444) (51 ) (693) (7) (700) Net Income 13,226 8,806 6,331 28,363 (1,250) 27,113 (1) Includes it’lterest and sJm;Jar incane afld bills of RS 42.193. rasuJr of ISnandal belongings and liabiilies 61 lair worth t/’II’OI.It;l’f proM or loss ofRS 26.230 and overseas trade outcomes and u.change variations in knign transactions dRS 927. (2} Re~rs to gtJt’H!Inlland admini.strative bills inciuding ~lionartd amottm/Jl:lon bills ofRS (4.630}. (3) The IFRS Consolidated 6gures don’t reptaSent the sum d the .segments as a result of there are .inte/eOnl*Jy ttansactions tllat have been elimnated solely within the 001’1$01idated ISttanc:ial statements. Segments are asussed by bp administration. Mt d n:::ome arrdexpe.Mitl$ betw!Mn associated partitts. 104
7.3. With respect to the services and products that correspond to the working segments disclosed in merchandise 7.2, describe: a) The traits of the manufacturing course of Not relevant. b) The traits of the distribution course of Not relevant. c) The traits of the markets wherein it operates, particularly: i. Share in every of the markets Title Product/Service Market Additional Source Position Information and Main Competitors Itaú Retail Banking As of December 31, 2021, We have a number one Itaú Unibanco Personnalité (Including Itaú we reached a market share place in lots of Holding and (banking for Personnalité) of 12.3% based mostly on whole sectors of the the Central excessive-earnings excellent mortgage stability in Brazilian home Bank. people) reais. According to the monetary market. newest knowledge base of Based on Central rivals, in December Bank knowledge and 2021 we achieved the publicly accessible third largest place on this phase in Brazil. monetary data, our principal rivals are Caixa Econômica Federal, Banco do Brasil, Banco Bradesco and Banco Santander (Brazil). Credit Cards Credit Cards We are the leaders in Our conventional Itaú Unibanco and phrases of transaction rivals on this Holding and Commercial buy quantity of playing cards enterprise are Banco ABECS. Agreements in Brazil, with 28.9% Bradesco, Banco market share within the interval Santander (Brazil), from January to December Banco do Brasil and 2021. Caixa Econômica Federal. However, in recent times an growing variety of small and new digital rivals has entered this market, amongst which we spotlight Nubank, Banco Inter and Banco Original. 105
Payroll Payroll Deducted As of December 31, 2021, Our principal rivals Itaú Unibanco Deducted Loans we obtained a market on this enterprise are Holding and Loans share of 12.3% by way of Banco do Brasil, the Central payroll deducted loans. In Caixa Econômica Bank. December 2021 we Federal, Banco maintained the Bradesco and Banco fourth place on this Santander phase in Brazil. (Brazil). Mortgage Real Estate In the interval from January Our principal rivals Itaú Unibanco Financing and to December 2021, we on this enterprise are Holding and Mortgages have been the second in new Caixa Econômica ABECIP. loans to people amongst Federal, Banco Bradesco, Banco Brazilian banks, with Santander (Brazil), 27.7% market and Banco do share as of December 31, Brasil. 2021. Merchant Merchant In the interval from January Our conventional Itaú Unibanco Acquirer Acquirer to December 2021 we rivals on this Holding and reached a market share of enterprise are Cielo ABECS. 33.7% by way of whole and GetNet. In current transaction quantity (credit score years, modifications in . and debit) generated by laws made by the buying companies, the Central Bank positioning us because the mixed with the second largest participant in rising variety of this phase in Brazil. fintechs, contributed to a rise in competitors within the phase. Among non-conventional gamers, we spotlight PagSeguro and Stone. Private Private pension In December 2021 our Our principal rivals FENAPREVI Pension Plans plans stability of provisions in personal pension plan (Balance of represented 19.6% of the merchandise are provisions- market share for personal managed by massive Pension Plans pension plans, positioning business banks, for Individuals us because the third largest akin to Banco and pension supplier in Brazil. Bradesco and Banco Companies). Considering solely do Brasil, which, like Individuals plans, our us, make the most of market share reached their department community 18.9%, positioning us as to realize entry to the the third largest personal retail market. Other financial institution. gamers, akin to XP and Icatu, have reached related quantity of pension plans. Together each have been chargeable for 7.4% of market share by the top of 2021. Vehicle Vehicles As of December 31, 2021, Our principal financial institution Itaú Unibanco Financing we reached a market share rivals on this Holding and of 12.3% by way of loans enterprise are Banco the Central to people amongst Santander (Brazil), Bank. 106
banks, positioning us as Banco BV and Banco fourth on this Bradesco. phase. Insurance Insurance Giving impact to our 30% Our principal rivals SUSEP. possession curiosity in Porto are managed by or Recurring Seguro S.A., we reached have partnerships with insurance coverage 8.1% of market share massive business actions based mostly on earned banks, akin to Banco embrace: premiums, excluding VGBL Bradesco, Banco Personal (Redeemable Life Santander (Brazil) and Insurance (Life, Insurance), from January Banco do Brasil Personal to December 2021, which, like us, take Accidents, positioning us because the benefit of their Credit fourth largest insurance coverage department community to Insurance, supplier on this phase in acquire entry to the Travel, Brazil. Considering solely retail market. Despite Unemployment, our recurring insurance coverage the excessive focus Funeral actions, our market share of Brazilian banks in Allowance, reached 10.3% in the identical the market, the Serious interval. rising variety of Diseases, Insurtechs (startup Random firms targeted on Events), insurance coverage) has Housing, facilitated buyer Multiple Peril entry to insurance coverage and corporations, making Homeowners. this market Health much more Insurance and aggressive. VGBL- Redeemable Life Insurance merchandise aren’t included. Premium Premium Bonds In the interval from January Our principal rivals SUSEP. Bonds to December 2021, we had in premium bonds are (capitalization a market share of 10.9% in managed by or have bonds or phrases of revenues from partnerships with capitalization gross sales of premium bonds, massive business plans) positioning us because the banks, akin to Banco fourth largest supplier of Bradesco, Banco do such merchandise on this Brasil and Banco phase in Brazil. Santander (Brazil) which, like us, make the most of their department community to realize entry to the retail market. Consortia Consortia In the interval from January Considering solely Central Bank. Services Fees to December 2021, we had banks, our principal a market share of 6.7% in rivals within the whole consortia companies Brazilian consortia charges. Considering solely market are Bradesco banks, we’re the third Consortia and BB largest supplier of such Consortia. companies by way of charges in Brazil. Investment Investment As of December 31, 2021, In funding banking, (1) Dealogic. Banking Banking Itaú BBA ranked first in Itau BBA’s principal (2) ANBIMA mergers and acquisitions rivals embrace rating in and equities markets Santander, Credit phrases of offers(1). Itaú BBA additionally Suisse (Brazil) S.A., quantity. ranked first in origination Merrill Lynch S.A. and in distribution in debt (Brazil), Morgan 107
capital markets Stanley S.A. (Brazil), transactions(2). JP Morgan S.A. (Brazil), Bradesco BBI and BTG Pactual S.A. Asset Asset As of December 31, 2021, According to ANBIMA, ANBIMA. Management Management we had a market share of the asset 11.4% by way of belongings administration trade underneath administration, in Brazil held belongings positioning us because the totaling R$6,879 second asset supervisor in billion as of December Brazil. 2021 and with 801 Financial Institutions and Assets Managers, amongst them, XP Investimentos. The competitors is concentrated amongst massive and well- established retail banks. Our principal rivals are Banco do Brasil, Banco Bradesco and Caixa Econômica Federal. Investment Local Custody As of December 31, 2021, According to ANBIMA, Itaú Unibanco Services we had a market share of the native custody in Holding, 21.4% based mostly on whole Brazil held belongings ANBIMA and belongings underneath native custody, totaling R$6,810 B3. positioning us because the billion as of December second place Local 2021. Custodian. Our principal rivals are Banco Bradesco S.A. and Banco do Brasil S.A. International Our market share as of Based on ANBIMA, Custody December 31, 2021 was the worldwide 5.9% by way of whole custody service in belongings underneath worldwide Brazil totaled R$1,996 custody, positioning us as billion of belongings as of the fourth largest December 2021. Our International Custodian. principal rivals are Banco Citibank S.A., JP Morgan’s Securities Services and Banco Bradesco S.A. Corporate As of December 31, 2021, Our principal rivals Solutions we had a number one place within the equities market as agent and register and debentures is supplier to 230 firms Banco Bradesco S.A. listed on B3, which represents 58.4% of firms listed on that trade. Moreover, we have been the second largest switch agent with 392 debentures choices within the Brazilian market, representing 25.5% of the debentures market in Brazil. Itaú Corretora Retail Brokerage Ranked fourth in Retail Main rivals: XP (1) Source: (Brokerage) Services(1) Brokerage Services by Investimentos, Ágora CBLCnet 108
fairness buying and selling quantity in Corretora de Títulos e (2) Includes the yr ended December Valores Mobiliários shoppers from 31, 2021(2). S.A., Rico Corretora Itaú Private de Títulos e Valores Bank phase. Mobiliários S.A., Nu Invest Título Corretora de Valores S.A., BTG Pactual Corretora de Títulos e Valores Mobiliários S.A., Bradesco S.A. Corretora de Títulos e Valores Mobiliários, Santander Corretora de Câmbio e Valores Mobiliários S.A. and Safra Corretora de Títulos e Valores Mobiliários S.A. Banco Itaú Total Loan As of September 30, 2021, Our principal rivals Central Bank of Argentina Portfolio we had a market share of are Banco Santander Argentina. (consists of 2.2% by way of whole Río, Banco de Galicia privately-owned excellent mortgage stability in y Buenos Aires, BBVA banks solely) Argentine pesos, Banco Argentina, positioning us because the Banco Macro, HSBC, eleventh largest personal Industrial, Patagonia, financial institution in Argentina. Supervielle e Credicoop. Itaú Total Loan As of December 31, 2021, Our principal rivals Chilean CorpBanca Portfolio our market share was are Banco Santander- Commission for (consists of 11.1% based mostly on whole Chile, Banco de Chile, the Financial privately-owned excellent mortgage stability in Scotiabank Chile and Market (CMF). banks solely) Chilean pesos, positioning Banco de Crédito e us because the fifth Inversiones. largest personal financial institution in Chile. Banco Itaú Total Loan As of December 31, 2021, Our principal rivals Central Bank of Paraguay Portfolio we had a market share of are Banco Paraguay. (consists of 14.4% by way of whole Continental, Banco privately-owned excellent mortgage stability in Regional, Sudameris banks solely) guaranis, positioning us as and BBVA Paraguay. the second largest personal financial institution in Paraguay. Banco Itaú Total Loan As of December 31, 2021, Our principal rivals Central Bank of Uruguay Portfolio we had a market share of are Banco Santander Uruguay. (consists of 25.7% based mostly on whole Uruguay, BBVA privately-owned excellent mortgage stability in Uruguay and banks solely) Uruguay pesos, positioning Scotiabank Uruguay. us because the second largest personal financial institution in Uruguay. ii. State of competitors within the markets Competition The final a number of years have been characterised by elevated competitors and consolidation within the monetary companies trade in Brazil. According to the Central Bank, as of September 30, 2021, there have been 139 109
conglomerates, business banks and a number of-service banks, growth banks and Caixa Econômica Federal, amongst a complete of 1,319 establishments in Brazil. We, along with Banco Bradesco S.A. and Banco Santander Brasil S.A., are the leaders within the privately-owned a number of-companies banking sector. As of September 30, 2021, these three banks accounted for 36.4% of the Brazilian banking sector’s whole belongings, in line with the Central Bank. We additionally face competitors from state-owned banks. According to the Central Bank, as of September 30, 2021, Banco do Brasil S.A., Caixa Econômica Federal, and Banco Nacional de Desenvolvimento Econômico e Social (BNDES) accounted for 34.5% of the banking system’s whole belongings. The following desk units for the full belongings of the ten principal banks in Brazil, labeled in line with their curiosity within the whole belongings of the Brazilian banking sector: (In billions of R$) Position Banks by whole belongings (1) Control Type As of September 30, 2021 % of Total 1st Itaú Unibanco Holding S.A. privately-owned 1,973.7 16.2 2nd Banco do Brasil S.A. (2) state-owned 1,960.2 16.1 third Caixa Econômica Federal state-owned 1,485.1 12.2 4th Banco Bradesco S.A. privately-owned 1,471.6 12.1 fifth Banco Santander Brasil S.A. privately-owned 989.2 8.1 sixth Banco Nacional de Desenvolvimento Econômico e Social state-owned 755.7 6.2 seventh Banco BTG Pactual S.A. privately-owned 395.2 3.2 eighth Banco Safra S.A. privately-owned 238.6 2.0 ninth Banco Citibank S.A. privately-owned 137.5 1.1 tenth J.P. Morgan S.A privately-owned 103.8 0.9 n.a. Others n.a. 2,673.9 21.9 Total (3) 12,184.5 100.00 Even amid continued uncertainty in markets, in 2021 conventional chief banks have been in a position to get well and improve their outcomes in contrast with 2019, supported by the economic system’s gradual return and provision of digital companies. In addition to conventional rivals, regulatory necessities (eg. PIX, Open Banking) and expertise-pushed monetary establishments are disrupting the Brazilian monetary trade. In common, expertise-pushed rivals act in particular enterprise strains akin to bank cards (e.g Nubank), funding companies (e.g XP Investimentos), buying companies (e.g StoneCo, Pagseguro), banking companies (e.g Banco Inter, BTG Pactual), and others. Although a lot of our non-conventional rivals are nonetheless within the early phases of growth, so as to turn into extra resilient, they’ve progressively elevated the variety of services and products supplied. The consciousness that even firms exterior of the monetary trade might develop superior applied sciences to offer monetary companies, retains bigger establishments in a state of fixed alert to disrupt companies. As expertise advances quickly and consumer’s preferences and expectations change, boosted by improvements launched by the brand new competitors, conventional rivals are additionally altering and redesigning their merchandise, distribution, and communication channels. d) Possible seasonality Our enterprise shouldn’t be materially affected by seasonality. Main inputs and uncooked supplies, informing: i. Description of relationships established with suppliers, together with whether or not they’re topic to authorities management or regulation, indicating the our bodies and relevant laws The procurement of products and companies in our provide chain is carried out in a centralized manner by the Procurement Department, with the involvement of the procuring and authorized departments, amongst different again-workplace departments. However, there are classes the place business and contractual negotiation phases are assigned 110
to their technical supervisors. Other procurement phases are carried out in a centralized manner by the Procurement Department, making certain the executive evaluation of suppliers and that signed contracts are registered within the administration system. We have a structured provider evaluation course of aimed toward mitigating dangers in our provide chain. This course of begins with the provider accessing the web site www.itau.com.br/fornecedores to register within the institutional system the place the Code of Ethics, Supplier Relationship Code, Sustainability Policy and Minimum Information Security Requirements are printed for acknowledgment and acceptance functions. After registering in our system, the provider goes by way of an administrative approval course of, consisting of an evaluation of the provider’s adherence to environmental and social duty practices, in addition to compliance with its company obligations concerning fiscal, tax and labor laws. This course of is predicated on three danger evaluation pillars and features a particular view based mostly on the dangers related to the kind of the services or products provided. Reputational/Regulatory: evaluation of the dangers related to picture and compliance with present laws; Financial: evaluation of dangers related to the provider’s monetary well being; and Labor: evaluation of dangers related to the provider’s compliance with labor obligations. In addition to this administrative evaluation, in accordance with established inner standards, suppliers undergo a technical approval course of aimed toward reviewing their technical data and their services and products, figuring out whether or not what they provide is in keeping with the establishment’s wants and necessities. For these suppliers that assist the financial institution’s vital operations, the procurement of services and products is assessed and addressed in specialised negotiation channels. The provider will likely be eligible to participate in procurement processes if they’re accredited within the aforementioned analyses. Once the procurement course of is accomplished, the connection with suppliers should be environment friendly, moral, and respectful over the entire time period of the contract. To this finish, Itaú Unibanco has its enterprise relations formalized in accordance with inner procedures and authorized necessities. During the time period of the contract, the events should monitor and guarantee adherence to the contractual clauses, efficiency and high quality of the companies engaged. The accredited suppliers are periodically monitored based mostly on the identical dangers noticed within the approval course of so as to verify the preliminary situation assessed and so they could, within the occasion of identification of fabric information, be barred from new contracts at any time and even have their contracts terminated. As an Institution that’s a part of the National Financial System, our operations are regulated and observe the rules issued by regulation, self-regulation and inspection our bodies, such because the Central Bank of Brazil (BACEN), National Monetary Council (CMN), Brazilian Securities and Exchange Commission (CVM), Superintendency of Private Insurance (SUSEP), and the Ministry of Labor, amongst others. ii. Possible dependence on few suppliers The seek for suppliers for the Bank needs to be an ongoing and everlasting exercise, searching for to maintain the provider base robust, guarantee competitiveness and higher costs and alternatives and overcome vital provide points. The individuals answerable for procuring or contracting out companies on the Bank ought to all the time encourage free competitors and perform, each time doable, procurement processes involving not less than two suppliers. Possible dependence could come up on account of a provider offering companies on an unique foundation. iii. Possible volatility in suppliers’ costs Price volatility associated to agreements with suppliers is affected by modifications in macroeconomic parameters akin to curiosity and overseas trade charges, equities, commodities, indexes (e.g., inflation), amongst others. 7.4. Identify whether or not there are shoppers chargeable for greater than 10% of the issuer’s web revenues, stating: a) Total quantity of revenues arising from the consumer No shoppers account for greater than 10% of the Issuer’s income. b) Operating segments affected by the income arising from the consumer 111
The desk beneath exhibits the focus of mortgage and lease operations: (In R$ million) December 31, By focus 2021 2020 2019 Largest debtor 6,414 7,243 5,389 10 largest debtors 33,694 37,863 29,340 20 largest debtors 49,541 54,812 44,712 50 largest debtors 79,403 83,438 71,965 100 largest debtors 111,116 112,333 97,695 7.5. Describe the fabric results of state regulation on the issuer’s actions, particularly commenting on: a) The want for presidency authorization for the efficiency of actions and the historical past of the Issuer’s relationship with the general public authorities in acquiring such permits In order to conduct its actions, the Issuer relies on prior authorization from the Central Bank of Brazil. Incorporated on September 9, 1943, underneath the identify Banco da Metrópole de São Paulo S.A., registered with the São Paulo State Trade Board (JUCESP) underneath No. 20,683 on May 22, 1944, the Issuer obtained a allow to function as a monetary establishment on July 24, 1944. However, its historical past goes again to Itaú’s and Unibanco’s journeys. On September 27, 1924, the banking division of Casa Moreira Salles began to function, and in a while it turned Banco Moreira Salles. The establishment, which might pioneer an ongoing technique of mergers and acquisitions, adopted the identify Unibanco in 1975. The Itaú Group’s actions return so far as 1944, when the members of the Egydio de Souza Aranha household based Banco Federal de Crédito S.A. in São Paulo, presently Itaú Unibanco S.A. In relation to capital markets, the Issuer’s shares have been admitted for buying and selling on B3 – Brasil, Bolsa, Balcão (B3 – Brazilian Exchange and OTC) (“B3”) in March 2003, changing the shares of the establishment presently named Itaú Unibanco S.A., which have been admitted for buying and selling on B3 (then named Bolsa Oficial de Valores de São Paulo) on October 20, 1944. Supervision and Regulation We are topic to regulation by, and supervision of, a number of entities, within the international locations and for the segments wherein we function. The supervisory actions of those entities are important to the construction of our enterprise, and so they instantly influence our progress methods. Below we describe the primary entities that regulate and supervise our actions in Brazil: CMN the best authority of the Brazilian National Financial System (SFN) chargeable for the forex and credit score coverage in Brazil to ensure stability and social and financial growth. Its main objective is to reveal the overall guidelines for the operation of all the monetary market. Banco Central autonomous authority chargeable for regulating and overseeing all the National Financial System (SFN), making certain the steadiness of the buying energy of the forex and a strong and environment friendly monetary system and for implementing the insurance policies established by the CMN, authorizing the institution of monetary establishments and supervising them. CVM a authorities company linked to the Ministry of the Economy with objective of regulating, supervising and growing the securities market. CNSP chargeable for establishing the rules and directives for insurance coverage and premium bond firms and open personal pension entities. SUSEP chargeable for regulating and supervising the insurance coverage, open personal pension funds and capitalization markets in Brazil and their individuals. ANS chargeable for regulating and supervising the medical insurance market in Brazil and its individuals. 112
Our principal operations exterior of Brazil are topic to oversight by native regulatory authorities within the following jurisdictions: Noteworthy regulatory necessities and restrictions on monetary establishments: prohibition in opposition to working in Brazil with out prior approval of the Central Bank; prohibition in opposition to buying actual property that isn’t for the monetary establishment’s personal use, besides these acquired for settlement of mortgage losses or as expressly licensed by the Central Bank, pursuant to CMN regulation; prohibition in opposition to buying pursuits in firms with out prior approval of the Central Bank, apart from possession curiosity typical of funding portfolios held by funding banks; prohibition in opposition to granting loans that signify greater than 25% of the monetary establishment’s regulatory capital to just one individual or group; restrictions on credit score transactions to sure associated people and authorized entities; obligation to deposit a portion of the deposits acquired from shoppers with the Central Bank (obligatory deposit); obligation to take care of sufficient capital reserves to soak up sudden losses, pursuant to the principles proposed by the Basel Committee and carried out by the Central Bank; obligation to organize and submit, by December 31, annual restoration plans that purpose to re-set up satisfactory ranges of capital and liquidity and to protect the viability of the establishment underneath stress eventualities; obligation to create, in respect to monetary ensures, particular accounting procedures for the evaluation and registration of passive provisions (provisão passiva); prohibition in opposition to holding, on a consolidated foundation, everlasting belongings, together with investments in unconsolidated subsidiaries, actual property, tools and intangible belongings, exceeding 50.0% of the adjusted regulatory capital; prohibition in opposition to granting loans or advances, and ensures, together with spinoff transactions, underwriting or holding of their funding portfolio securities of any shoppers or group of affiliated shoppers that, within the combination, give rise to publicity to such consumer or group of affiliated shoppers that exceeds the brink decided by the Central Bank. Regulations on ESG necessities relevant to monetary establishments Commitments: • Partnership for Carbon Accounting Financials – PCAF: We are dedicated to measure and report the greenhouse fuel (GHG) emissions related to our portfolio of loans and investments, utilizing carbon estimation methodologies developed along with PCAF, so as to allow alignment of our portfolio with the Paris Agreement. • Net-Zero Banking Alliance – NZBA: We are dedicated to determine targets for the transition of our operation and our credit score portfolio to a web Zero Carbon economic system by 2050, with intermediate targets, reaching a 50% discount in our financed emissions by 2030 – a situation in step with the utmost improve in international common temperature of as much as 1.5°C above pre-industrial ranges by 2100, in line with the IPCC. Regulations: • CMN Resolution No. 4,327/2014: Requires monetary establishments to determine an environmental and social duty coverage. 113
• CMN Resolution No. 4,943/2021: Amends the CMN Resolution No. 4,557, which gives a danger administration construction, the capital administration construction and the data disclosure coverage for Financial Institutions, so as to combine social, environmental and local weather facets on the FI’s danger administration construction. This rule will enter into impact in July 2022. • CMN Resolution No. 4,945/2021: Determines that Financial Institutions should set up, by July 2022 a Social, Environmental and Climate Responsibility Policy and implement actions aimed toward its effectiveness. This Resolution revokes CMN Resolution No. 4,327/2014 from December 2022. • CMN Resolution No. 139/2021: Provides the disclosure data of the Social, Environmental and Climate Risks and Opportunities Report (GRSAC Report), which needs to be printed by the Financial Institutions in 2023. The GRSAC Report should comprise data concerning the next matters related to social, environmental and local weather dangers: governance of danger administration; precise and potential impacts of dangers within the methods adopted by the Institution of their enterprise and danger and capital administration; and danger administration processes. This rule will enter into impact in December 2022. • Central Bank Instruction No. 153/2021: Establishes the requirements for the Social, Environmental and Climate Risks and Opportunities Report (GRSAC Report). This rule will enter into impact in December 2022. • CVM Instruction No. 480/2009: Provides instruction for the registration of issuers of securities admitted to buying and selling on securities markets, together with facets of social, environmental and local weather danger that should be noticed by firms. Supplementary legislation establishing the independence of the Central Bank accredited by the Brazilian Congress On February 25, 2021, Supplementary Law No. 179 of February 24, 2021 (“Supplementary Law No. 179”) was printed, establishing the needs of the Central Bank and its autonomy, in addition to regulating the appointment and elimination of its president and administrators. Among different issues, Supplementary Law No. 179 units forth that the Central Bank shall get hold of the standing of “particular autarchy” characterised by the absence of ties to a Ministry, guardianship or hierarchical subordination, with technical, operational, administrative and monetary autonomy. Additionally, the legislation additionally units forth that, whereas the President of Brazil will nonetheless be chargeable for appointing the president and the board of administrators of the Central Bank (with the Brazilian Senate’s approval of their names), their phrases of workplace will now not coincide, which can additional assure the independence of the Central Bank from political choices. Supplementary Law No. 179 got here into impact on the date of its publication. Basel III Framework On December 16, 2010, the Basel Committee issued its Basel III framework, which was revised and republished on June 1, 2011. The Basel III framework will increase minimal capital necessities, creates new conservation and countercyclical buffers, modifications danger-based mostly capital measures, and introduces a brand new leverage restrict and new liquidity requirements compared to the previous framework. The guidelines have been phased in progressively and have been totally carried out by January 1, 2019. The Basel III framework requires banks to take care of minimal capital ranges comparable to the next percentages of danger-weighted belongings: (i) a minimal widespread fairness capital ratio of 4.5% composed of widespread shares; (ii) a minimal Tier 1 Capital ratio of 6.0%; and (iii) a minimal whole capital ratio of 8.0%. In addition to the minimal capital necessities, Basel III requires a “capital conservation buffer” of two.5% and every nationwide regulator is given discretion to institute a “countercyclical buffer” if it perceives a larger system-large danger to the banking system as the results of a construct-up of extra credit score progress in its jurisdiction. Further, Basel III introduces a brand new leverage ratio, outlined as Tier 1 Capital divided by the financial institution’s whole danger weighted publicity. Basel III carried out a liquidity protection ratio (“LCR”), which requires affected banks to take care of ample excessive-high quality liquid belongings to cowl the web money outflows that would happen underneath a possible liquidity disruption situation over a thirty-day interval; and carried out a web steady funding ratio (“NSFR”), which establishes a minimal quantity of steady sources of funding that banks will likely be required to take care of based mostly on the liquidity profile of the banks’ belongings, in addition to the potential for contingent liquidity wants arising from off-stability sheet commitments over a one-yr interval. Additional necessities apply to further widespread fairness Tier 1 Capital or Tier 2 Capital devices issued by internationally energetic banks. To be included in Additional Tier 1 Capital or Tier 2 Capital, an instrument should comprise a provision that requires that, on the discretion of the related authority, such instrument be both 114
written-off or transformed into widespread shares upon a “set off occasion”. A “set off occasion” is the choice of a reliable authority pursuant to which, for a financial institution to stay a possible monetary establishment, it’s essential (i) to jot down-off an instrument, or (ii) to inject authorities funds, or equal assist, into such financial institution, whichever happens first. The necessities are relevant to all devices issued after January 1, 2013 and people devices certified as capital issued earlier than that date that don’t adjust to these necessities will likely be phased out of banks’ capital over a ten-yr interval, starting on January 1, 2013. Additional regulatory capital necessities apply to international systemically essential banks (“G-SIBs”). The Basel Committee’s evaluation methodology to find out which monetary establishments are G-SIBs is predicated on indicators that replicate the next facets of G-SIBs: (i) dimension; (ii) interconnectedness; (iii) substitutability/ monetary establishment infrastructure; (iv) cross-jurisdictional exercise; and (v) complexity. Each of those components receives an equal weight of 20.0% within the evaluation. The Basel Committee has additionally issued a framework for the regulation of home systemically essential banks (“D-SIBs”), which dietary supplements the G-SIBs framework by specializing in the influence that the misery or failure of systemically essential banks would have on the home economic system of every nation. Implementation of Basel III in Brazil Financial establishments based mostly in Brazil are topic to capital measurement and requirements based mostly on a weighted danger-asset ratio, in line with CMN Resolutions No. 4,955/2021 and No. 4,958/2021. Brazilian banks’ minimal whole capital ratio is calculated because the sum of two parts: Regulatory Capital (Patrimônio de Referência); and Additional Core Capital (Adicional de Capital Principal), each aligned to the rules of the Basel III framework. Brazilian banks’ Regulatory Capital is comprised of Tier 1 Capital and Tier 2 Capital. Tier 1 Capital is additional divided into two parts: Common Equity Tier 1 Capital (widespread fairness capital and revenue reserves after changes, or Capital Principal) and Additional Tier 1 Capital (hybrid debt and fairness devices licensed by the Central Bank, or Capital Complementar). In order to qualify as Additional Tier 1 Capital or Tier 2 Capital, in line with CMN Resolution No. 4,955/21, all devices issued by a Brazilian financial institution should comprise loss-absorbency provisions, together with a requirement that such devices be robotically written off or transformed into fairness upon a “set off occasion”. A “set off occasion” is the sooner of: (i) Common Equity Tier 1 Capital being lower than 5.125% of the danger-weighted belongings for Additional Tier 1 Capital devices and 4.5% for Tier 2 Capital devices; (ii) the execution of a agency irrevocable written settlement for the federal government to inject capital within the monetary establishment; (iii) the Central Bank declaring the start of a particular administration regime (Regime de Administração Especial Temporária, the “RAET”) or intervention within the monetary establishment; or (iv) a choice by the Central Bank, in line with standards established by the CMN, that the write-off or conversion of the instrument is critical to take care of the financial institution as a viable monetary establishment and to mitigate related dangers to the Brazilian monetary system. Specific procedures and standards for the conversion of shares and the write-off of excellent debt associated to funding devices eligible to qualify as regulatory capital are established by CMN regulation. The authorized framework relevant to monetary payments (letras financeiras) was tailored to permit Brazilian monetary establishments to challenge Basel III-compliant debt devices within the Brazilian market. Existing hybrid devices and subordinated debt beforehand accredited by the Central Bank as eligible capital devices could proceed to qualify as Additional Tier 1 Capital or Tier 2 Capital, because the case could also be, supplied that they adjust to the above necessities and a brand new authorization from the Central Bank is obtained. Instruments that didn’t adjust to these necessities have been phased out as eligible capital devices by deducting 10% of their guide worth per yr from the quantity that qualifies as Additional Tier 1 Capital or Tier 2 Capital. The first deduction occurred on October 1, 2013, and the final one occurred on January 1, 2022. The Additional Core Capital requirement is subdivided into three parts: the capital conservation buffer (Adicional de Conservação de Capital Principal), the countercyclical capital buffer (Adicional Contracíclico de Capital Principal) and the upper loss absorbency requirement for home systemically essential banks (Adicional de Capital Principal Sistêmico). The capital conservation buffer is aimed toward growing the loss absorption skill of monetary establishments. The countercyclical capital buffer may be imposed inside a variety by the Central Bank if it judges that credit score progress is growing systematic danger. The greater loss absorbency requirement for home systemically essential banks seeks to handle the influence that the misery or failure of Brazilian banks could have on the native economic system. In the occasion of non-compliance with the Additional Core Capital requirement, sure restrictions will apply, together with the shortcoming of the monetary establishment to: (i) pay officers and administrators their share of variable compensation; (ii) distribute dividends and curiosity on fairness to stockholders; and (iii) repurchase its personal shares and impact reductions in its share capital. We are thought of home systemically essential monetary establishment, therefore having to satisfy the 1% Additional Core Capital for greater loss absorbency (Adicional de Capital Principal Sistêmico). The Central Bank’s implementation of the capital adequacy 115
necessities underneath Basel III was phased-in from 2013 to 2019. In 2020, in response to the financial disaster associated to the Covid-19 pandemic, the CMN quickly eased the capital conservation buffer, which have been progressively returned to the totally carried out degree in April 1, 2022. Also, since October 1, 2018, a minimal LCR in a standardized liquidity stress situation requirement applies to banks with whole belongings which might be equal or superior to 10% of the Brazilian GDP or to banks with related worldwide exercise (in such case, no matter whole belongings). The calculation of the LCR follows the methodology set forth by the Central Bank which is aligned with the worldwide pointers. During intervals of elevated want for liquidity, banks could report a decrease LCR than the minimal required ratio, supplied that in addition they report back to the Central Bank the causes for not assembly the minimal requirement, the contingent sources of liquidity it has accessible, and the measures it plans to undertake to be in compliance with the LCR requirement. Since April 1, 2016, banks should additionally publicly disclose their LCR on a quarterly foundation. The following desk units forth the minimal capital ratios and liquidity protection ratio necessities underneath Basel III carried out by the Central Bank, as relevant to us on December 31, 2021. The figures introduced beneath seek advice from the proportion of our danger-weighted belongings: Basel III Requirements 2021 Common Equity Tier I 4.5% Tier l 6.0% Total Capital 8.0% Additional Capital Buffers (ACP) 3.0% conservation (1) 2.0% countercyclical (2) 0.0% systemic 1.0% Common Equity Tier I + ACP 7.5% Total Capital + ACP 11.0% Prudential changes deductions 100.0% Limit to be noticed 2021 (1) Liquidity Coverage Ratio (LCR) 100.0% Since October 1, 2015, banks are required to organize public disclosures of their leverage ratios (Razão de Alavancagem, the “RA”) on a quarterly foundation. In November 2017, the CMN established the minimal restrict for the Net Stable Funding Ratio (Índice de Liquidez de Longo Prazo, the “NSFR”) and the Leverage Ratio (Razão de Alavancagem, the “RA”) to be noticed by sure Brazilian Financial establishments, together with these labeled as Segment 1 pursuant to CMN regulation (akin to us-please seek advice from merchandise “Segmentation for the proportional software of the prudential regulation” for extra data), and the phrases for compliance with such necessities. The NSFR corresponds to the ratio between the Available Stable Funds (Recursos Estáveis Disponíveis), (“ASF”) and the Required Stable Funds (Recursos Estáveis Requeridos), (“RSF”) of the monetary establishment. This rule for NSFR, which got here into impact on October 1, 2018, determines that the minimal restrict for the NSFR for Segment 1 monetary establishments is 100%. The RA, which calculation methodology was established by the Central Bank in 2015, consists of the ratio between the sum of the Common Equity Tier 1 Capital and the Additional Tier 1 Capital and the full publicity of the monetary establishment ascertained as established by the relevant regulation. The RA rule enacted in November 2017 got here into impact on January 1, 2018 and decided the brink of three% because the minimal requirement for the RA for Segment 1 monetary establishments (which is our case). CMN regulation additionally defines the entities that compose the regulatory conglomerate (conglomerado prudencial) of Brazilian monetary establishments and establishes the requirement {that a} monetary establishment put together and file with the Central Bank month-to-month consolidated monetary statements on the regulatory conglomerate (conglomerado prudencial) pursuant to the parameters outlined therein. Such monetary statements also needs to be 116
audited by exterior auditors on a semi-annual foundation. Since January 1, 2015, minimal capital and ratio necessities apply on the regulatory conglomerate (conglomerado prudencial). Brazilian monetary establishments are additionally required to implement a capital administration construction suitable with the character of their transactions, the complexity of the services and products it gives, in addition to with the extent of its publicity to dangers. In February 2017, the CMN enacted a rule that unified and expanded Brazilian regulation on danger and capital administration. Such regulation gives that danger administration should be carried out by way of an built-in effort by the related entity and units out completely different buildings for danger and capital administration, that are relevant for various danger profiles. According to such regulation, capital administration is outlined as a course of that features: (i) monitoring and controlling the monetary establishment’s capital; (ii) assessing capital wants in gentle of the dangers to which the monetary establishment is topic; and (iii) setting targets and conducting capital planning so as to meet capital wants as a result of modifications in market circumstances. Financial establishments ought to publish a report describing the construction of their capital administration not less than on an annual foundation. Disclosure and reporting of danger administration issues, danger-weighted asset calculation, and satisfactory compliance with regulatory capital necessities are regulated by the Central Bank and replicate the so-referred to as “Pillar 3” of regulatory capital really helpful underneath Basel III, aimed toward enhancing governance and disclosure. Pillar 3 Report Since January 1, 2020, the Central Bank requires sure monetary establishments to furnish a Pillar 3 Report. We are required to publish this report on a consolidated foundation overlaying the next matters: • prudential indicators and danger administration; • comparability between accounting and prudential data; • capital composition; • macroprudential indicators; • leverage ratio (RA); • liquidity indicators; • credit score danger; • counterparty credit score danger (CCR); • securitization exposures; • market danger; • danger of rate of interest fluctuation in devices • remuneration of directors. labeled within the banking guide (IRRBB); The Pillar 3 Report should be furnished on a quarterly, biannual or annual foundation, in line with the kind of data being disclosed. In addition to the principles issued in accordance with the factors set forth in Basel III, in July, 2013, Law No. 12,838 was enacted, permitting the dedication of deemed credit score based mostly on deferred tax belongings arising from short-term variations ensuing from allowances for mortgage losses, which, in observe, exempts monetary establishments from deducting this sort of credit score from its core capital. The legislation additionally modifications the principles for the difficulty of subordinated debt, requiring the inclusion of clauses for the suspension of the stipulated compensation and the extinction of the credit score proper or its conversion into shares, and circumstances stockholders’ remuneration to compliance with the prudential necessities established by the CMN. Global Systemically Important Banks (G-SIBs) Assessment in Brazil The Central Bank has adopted the identical indicators set out by the Basel Committee to find out if Brazilian monetary establishments qualify as G-SIBs. Please see “Basel III” for additional particulars. This evaluation is required of banks with whole publicity – the denominator for the leverage ratio – in extra of EUR 200 billion, individually. However, no further loss absorbency necessities for Brazilian G-SIBs have been established. We weren’t included on the most recent checklist of G-SIBs issued on November 23, 2021, by the Financial Stability Board. The subsequent replace is predicted in November 2022. Recovery Plans for Systematically Important Financial Institutions On June 30, 2016, the CMN issued a rule offering stricter pointers for restoration plans (Planos de Recuperação) for Brazil’s systemically essential monetary establishments. The rule which included suggestions from the Financial Stability Board, requires monetary establishments to organize restoration plans that purpose to re-set up satisfactory ranges of capital and liquidity and to protect the viability of such establishments underneath stress eventualities. 117
The pointers require, amongst different issues, that topic monetary establishments should determine their vital features for the National Financial System (Sistema Financeiro Nacional) and their core enterprise strains, monitor indicators and their vital ranges, undertake stress-testing eventualities, predict restoration methods, assess doable dangers and limitations associated to the methods and outline clear and clear governance procedures, in addition to efficient communication plans with key stakeholders. The rule gives for the submission of such restoration plans by December 31, yearly. More particulars on our restoration plan may be discovered at “https://www.itau.com.br/investor-relations“, part Results and Reports / Regulatory Reports / Pillar 3 / Risk and Capital Management – Pillar 3. Segmentation for the Proportional Application of the Prudential Regulation On January 30, 2017, the CMN issued a decision establishing segmentation for monetary establishments, monetary establishment teams and different establishments licensed to function by the Central Bank for proportional software of the prudential regulation, contemplating the scale, worldwide exercise and danger profile of members of every phase. According to such decision, out of the 5 doable segments, we’re labeled as Segment 1, which consists of common banks, business banks, funding banks, overseas trade banks and federal saving banks that (a) have a dimension equal or superior to 10% of the Brazilian GDP; or that (b) carry out related worldwide actions, independently from the magnitude of the establishment. Foreign Currency Transactions and Exposure Transactions involving the sale and buy of overseas forex in Brazil could solely be carried out by establishments licensed to take action by the Central Bank. There are not any limits for lengthy or brief positions in overseas forex for banks licensed to hold out transactions on the overseas trade market. Currently there isn’t a obligatory deposit requirement fee on the overseas forex brief place held by monetary establishments. In accordance with CMN regulation, monetary establishments in Brazil could elevate funds overseas, both by way of direct loans or by way of the issuance of debt securities. Funds raised accordingly could also be freely invested in Brazil, together with however not restricted to on-lending to Brazilian firms and monetary establishments. Brazilian banks licensed to function in overseas forex markets which maintain regulatory capital greater than R$5 billion can also use these funds to grant loans overseas to Brazilian firms, their offshore subsidiaries and to overseas firms managed by Brazilians or to amass securities issued or assured by such firms within the main market. Cross-border loans, wherein one social gathering is in Brazil and the opposite social gathering is overseas, require earlier registration with the Central Bank, which can set up limits on the circumstances of such overseas forex mortgage transactions. Financial establishments can also grant loans in or listed to a overseas forex to their shoppers’ commerce-associated actions, akin to by granting advances on overseas trade contracts (Adiantamento sobre Contrato de Câmbio), advances on delivered export register (Adiantamento sobre Cambiais Entregues) or export or import prepayment agreements (Pré-Pagamento de Exportação e Financiamento à Importação), all in accordance with Brazilian laws on overseas trade markets and worldwide capital flows. The Central Bank and the Brazilian authorities continuously change guidelines and laws relevant to overseas forex borrowing and loans in accordance with the financial situation and Brazilian financial coverage. In addition, the laws units forth that the full publicity in gold and different belongings and liabilities listed or linked to the overseas trade fee variation undertaken by monetary establishments (together with their offshore branches), and their direct and oblique subsidiaries, on a consolidated foundation, could not exceed 30.0% of their regulatory capital. New Foreign Exchange Law On December 29, 2021, the President of Brazil sanctioned Law No. 14,286, which was accredited by the Brazilian Senate on December 8, 2021. The new legislation is an initiative of the Central Bank introduced by the President of Brazil to the Congress aiming to overtake the Brazilian overseas trade market. The new legislation additionally consists of provisions concerning Brazilian capital held overseas and overseas capital held in Brazil. Law No. 14,286 modernizes, simplifies, and will increase authorized certainty related to the present regulatory framework for Brazilian overseas trade laws. The principal facets of Law No. 14,286 are: (i) affirmation, from a authorized perspective, that overseas trade transactions could also be carried out freely (supplied that these are carried out by way of entities licensed to function on this market and topic to relevant guidelines); (ii) granting of broad powers to the CMN and the Central Bank to control the overseas trade market and its operations; (iii) growth of the worldwide correspondence exercise of Brazilian banks; (iv) the potential of Brazilian banking establishments to take a position and lend overseas funds raised in Brazil or overseas; (v) the exclusion of overseas forex buy and sale transactions as much as an quantity of US$500, carried out between people on an occasional and non-skilled foundation; and (vi) granting of 118
powers to the financial authorities to determine conditions wherein the prohibition of personal offsetting of credit between residents and nonresidents, in addition to the fee in overseas forex in Brazil, wouldn’t apply. Law No. 14,286 will come into impact on the primary enterprise day after one yr of the date it was printed (which was December 30, 2021). The Central Bank and the CMN modernize guidelines regarding worldwide funds and transfers The CMN and the Central Bank issued new guidelines (CMN Resolution No. 4,942 and Central Bank Resolution No. 137, each issued on September 9, 2021) so as to improve overseas trade and worldwide capital regulation, contemplating technological improvements and new enterprise fashions regarding worldwide funds and transfers. The new guidelines search to advertise a extra aggressive, inclusive, and modern surroundings for offering companies to residents and corporations that ship or obtain funds from overseas. The just lately enacted guidelines will enable: (i) licensed fee establishments to function within the overseas trade market, working solely by way of digital means; (ii) non-banking establishments licensed to function within the overseas trade market (akin to securities brokerage and dealership firms, overseas trade brokerage firms and fee establishments) to instantly use their overseas forex accounts held overseas to settle transactions carried out within the overseas trade market; (iii) Brazilian exporters to additionally obtain export revenues in a fee account held of their identify not solely with a monetary establishment overseas but additionally by way of an account overseas of a non-banking establishment licensed to function within the overseas trade market; (iv) the receipt or supply of reais in overseas trade transactions, with out limitation of worth, to additionally happen from the shoppers’ fee accounts held in monetary establishments and different establishments licensed to function by the Central Bank or in fee establishments collaborating within the PIX; and (v) pay as you go fee accounts in reais to be held by residents, domiciled or headquartered overseas. The regulation of worldwide fee or switch companies within the overseas trade market may even be consolidated and modernized, offering an equal remedy for purchases of products and companies carried out with the participation of worldwide card issuers, worldwide fee facilitators and intermediaries/representatives in worldwide deliverables acquisitions. Such companies will likely be labeled within the overseas trade laws by the time period “eFX.”. Moreover, it would even be allowed, by way of the eFX system, to hold out present unilateral transfers and funds transfers between accounts held by the shopper in Brazil and overseas, as much as US$10,000. CMN Resolution No. 4,942 and Central Bank Resolution No. 137 got here into impact on October 1st, 2021, apart from the permission for fee establishments to function in overseas trade markets, which can come into impact on September 1st, 2022. Large Exposure Limits We are legally prevented from granting loans or advances, and ensures, together with spinoff transactions, underwriting or holding in our funding portfolio securities of any shoppers or group of affiliated shoppers that, within the combination, exceeds the brink decided by the Central Bank. On July 31, 2018, the CMN launched a decision so as to adjust to the Basel III reforms, introducing a brand new foundation for calculating the publicity limits relevant to monetary establishments labeled as Segment 1 to their Tier 1 Regulatory Capital and growing the scope of transactions that improve publicity to shoppers topic to the restrict, together with publicity from securities and derivatives held in our funding portfolio. The most publicity to any particular person counterparty or group of linked counterparties of a Segment 1 monetary establishment is 25% of its Tier 1 Regulatory Capital, and to concentrated particular person shoppers or group of linked shoppers of such Segment 1 monetary establishment is 600% of its Tier 1 Regulatory Capital (a concentrated particular person consumer means, for the aim of the rule, anyone consumer to which publicity is the same as or greater than 10% of its Tier 1 Regulatory Capital). Under this publicity limits, the next entities are thought of to be completely different shoppers: (i) the Brazilian authorities, together with the Central Bank; (ii) an entity which 50% or extra of its voting capital is held instantly by the Brazilian Government, collectively with its managed entities; (iii) a State of the Federative Republic of Brazil or the Federal District, collectively with its managed entities and with entities that are financially depending on a State, the Federal District or their managed entities; (iv) every Brazilian municipal district, collectively with its managed entities and with entities that are financially depending on a municipality or its managed entities; (v) every central authorities of a overseas jurisdiction; (vi) every central financial institution of a overseas jurisdiction, if this entity shouldn’t be included within the central authorities; (vii) every entity which 50% or extra of its voting capital is held instantly by a central authorities of a overseas jurisdiction, collectively with its managed entities and with entities which might be financially depending on it; (viii) a governmental physique of a overseas jurisdiction, collectively with its managed entities and with entities which might be financially depending on it or its managed entities; and (ix) another entity, public or personal, which share the credit score danger calculated by the monetary establishment in line with CMN laws. 119
The rule gives that, for sure monetary establishments (together with these labeled as Segment 1, akin to ourselves), particular person exposures to the Brazilian Federal Union (together with the Central Bank) in addition to to central governments or to central banks of overseas jurisdictions aren’t topic to the observance of the massive publicity limits. Banks should determine doable associated counterparties, contemplating its financial interdependence in all instances the place the sum of all exposures to at least one particular counterparty exceeds 5% of the eligible capital base. Two or extra counterparties have an financial interdependence relationship each time one experiences monetary difficulties and the opposite, in consequence, would even be more likely to encounter monetary difficulties, together with these associated to funding, fee of obligations and insolvency. Counterparties recognized as economically interdependent should be handled as a single counterparty that’s topic to the aforementioned necessities. Risk Weighted Asset Calculation The calculation of danger publicity is predicated on a number of components set forth by the Central Bank laws and impacts the capital necessities. The parts consider the kind of danger and embrace the parameters and procedures for calculation of the danger weighted asset (“RWA”), to find out the capital necessities ensuing from every danger publicity. The Central Bank has been continuously altering and updating the principles and laws for the RWA calculation. Financial Bills (“Letras Financeiras”) According to Law No. 12,249 of June 11, 2010, as amended, Brazilian monetary establishments can challenge monetary payments (letras financeiras), a monetary establishment debt funding instrument aimed toward bigger volumes and longer phrases. The regulatory framework of monetary payments permits monetary establishments to challenge such devices with subordination clauses as Basel III-compliant. As per the CMN Resolutions No. 4,733 of 2019, and 4,955 of 2021, the primary traits of the Basel III-compliant monetary payments are: The chance of issuance of monetary payments convertible into fairness. The conversion is probably not requested by the investor or the issuer monetary establishment; The suspension of pursuits’ funds in case of non-compliance with capital requirement guidelines. Additionally, so as to protect the common functioning of the Brazilian monetary system, the Central Bank could decide that monetary payments be transformed into fairness or be written-off. These determinations won’t be thought of as a monetary establishment’s default and won’t speed up the maturity of its different money owed; The chance of issuance of perpetual monetary payments, which can solely mature in case of default curiosity’s funds or on the time of the dissolution of the monetary establishment; and In addition, CMN Resolution No. 4,733 of 2019 establishes essential provisions on the issuance of monetary payments akin to: The establishment of due diligence obligations to be noticed by the issuer or any middleman establishments concerned within the distribution, placement and buying and selling of the monetary payments, so as to guarantee the supply of data concerning the funding and its suitability to the investor’s profile; and The flexibilization of the charges that can be utilized within the remuneration of monetary payments, permitting using floating charges no matter a mixture with a set fee or another fee (fastened or floating) that’s publicly identified and frequently calculated. On August 2, 2021, the Central Bank issued Resolution No. 122 changing the common authorization process which issuing establishments have been subjected for the monetary invoice to compose its Regulatory Capital for a broadly regulatory authorization, which is robotically given if the monetary invoice strictly observe the circumstances established for the registration of such monetary payments in licensed central depositary entities. Resolution No. 122 additionally establishes the content material of the subordination clauses that should be included in monetary payments issued to compose the issuer’s Regulatory Capital. 120
Establishment of a Succession Policy Financial establishments and different establishments licensed to function by the Central Bank are required to take care of a succession coverage for its administration, which shall cowl recruiting, promotion, election and retention processes, based mostly on guidelines that regulate the identification, analysis and coaching of senior administration positions. Our Board of Directors accredited our Manager’s Succession Policy in accordance with CMN’s decision. Our succession coverage goals to consolidate the inner procedures and practices of the Itaú Unibanco Group concerning the succession of our administration workforce. Code of Corporate Governance The Brazilian Corporate Governance Code for publicly-held firms (Código Brasileiro de Governança Corporativa – Companhias Abertas) units forth company governance-associated rules, pointers and actions relevant to publicly-held firms and determines that firms undertake the “apply or clarify” mannequin in respect of its rules, pointers and actions. Pursuant to this code, firms should furnish to CVM a report concerning their adherence to the Brazilian Corporate Governance Code inside seven months of the cut-off date of the fiscal yr. The implementation of the Corporate Governance Code was built-in within the native regulatory framework via the CVM Ruling No. 586/17. In addition, the CMN has included the rules and standards of company governance of monetary establishments established by the Basel Committee into the Brazilian regulatory framework, by way of the “Core Principles for Effective Banking Supervision”. CMN guidelines set up the phrases for the remittance of data on the administration of monetary establishments to the Central Bank, controlling group and related shareholders, together with the duty to speak to the regulator any data which will have an effect on the fame of any individual labeled in one in every of such classes. For this objective, monetary establishments should present a communication channel which permits staff, contributors, shoppers, customers, associates, or companies suppliers to anonymously report conditions indicating unlawful acts of any nature associated to the establishment. The monetary establishments should additionally decide the inner physique chargeable for receiving the data and complying with the reporting obligations. Anti-Corruption Law The Brazilian anti-corruption legislation establishes that authorized entities can have strict legal responsibility (no matter fault or willful misconduct) if they’re concerned in any type of bribery. The legislation additionally encompasses different injurious acts opposite to the Brazilian or overseas public administration, together with bid rigging and obstruction of justice. The legislation gives for heavy penalties, each by way of administrative and judicial proceedings together with dedication of dissolution of an organization, prohibition in opposition to endeavor to finance with public entities and prohibition in opposition to collaborating in public biddings. In addition, the legislation authorizes the general public administrative authorities chargeable for the investigation to enter into leniency agreements. The self-disclosure of violations and cooperation by authorized entities could outcome within the discount of fines and different sanctions. The regulation additionally gives parameters for the applying of the anti-corruption legislation, together with with respect to penalties and compliance packages. Please refer: To our Investor Relations web site (see “Menu Itaú Unibanco-Corporate Governance-Regulations and Policies – Policies-Anti- corruption Corporate Policy”) from which you’ll be able to electronically entry additional particulars about our Anti-corruption Corporate Policy. To our Investor Relations web site (see “Menu Itaú Unibanco-Corporate Governance-Regulations and Policies – Policies-Corporate Conduct, Integrity and Ethics Policy”) from which you’ll be able to electronically entry additional particulars about our Integrity and Ethics Program and pointers for conditions of conflicts of pursuits. To our Investor Relations web site (see “Menu Itaú Unibanco-Integrity and Ethics”) from which you’ll be able to electronically entry additional particulars about our Integrity and Ethics Program. Compensation of Directors and Officers of Financial Institutions According to guidelines set forth by the CMN, Brazilian monetary establishments are required to have a compensation coverage. If variable compensation is to be paid to administration, not less than 50% of the full compensation needs to be paid in shares or share-based mostly devices, and not less than 40% of the full compensation needs to be deferred for future fee for not less than three years. If the establishment information a major lower in 121
the realized recurring revenue or a damaging outcome through the deferral interval, the deferred and unpaid parts of the compensation could also be lowered or not paid as a result of a doable important discount in our Recurring Net Income or damaging outcome within the relevant enterprise space within the deferral interval (Malus) so as to reduce the loss incurred by the monetary establishments and their stockholders, besides when the discount or damaging outcome arises from extraordinary, unpredictable and exterior occasions to the Itaú Unibanco Conglomerate, which additionally have an effect on different monetary establishments and aren’t associated to administration actions or omissions. The Compensation Committee could determine to use the Malus even in these instances. Our compensation coverage, relevant to administrators and officers in Brazil (constituting the most important a part of the administration inhabitants of the Itaú Unibanco Group), complies with CMN’s regulatory necessities. Our compensation rules and practices worldwide adjust to every native regulation and search to extend alignment between the pursuits of our stockholders and our administration. Antitrust Regulation The Brazilian Antitrust Law requires that transactions leading to financial focus needs to be submitted to CADE, the Brazilian antitrust authority, for prior approval within the occasion these transactions meet the next standards: (i) the financial group of any of the events to a transaction recorded, within the fiscal yr previous to that of the transaction, minimal gross revenues of R$750 million; and (ii) not less than one of many different financial teams concerned within the transaction recorded, for a similar time interval, minimal gross revenues of R$75 million. The closing of a transaction previous to CADE’s approval topics the events to fines starting from R$60,000 to R$60 million, the nullity of the related settlement, and potential administrative proceedings. In addition to submitting such transactions to CADE’s approval, monetary establishments are required by Circular No. 3,590/2012 of the Central Bank (up to date by Circulars Nos. 3,800/2016; 3,922/2018 and 4,013/2020) to undergo the Central Bank’s antitrust approval any focus acts involving two or extra monetary establishments licensed to function by the Central Bank within the following instances: (i) acquisition of company management, (ii) a merger, (iii) switch of the enterprise to a different monetary establishment, (iv) contracts or authorized entities, aimed toward cooperation within the monetary sector; and (v) acquisition of a minority stake of not less than 5% of the voting shares of a monetary establishment. Legislation in power in different jurisdictions could require that focus acts be submitted to the related antitrust authority. On the opposite hand, the Brazilian antitrust legislation gives for penalties within the occasion of violations of the financial order. Accordingly, an endeavor in a dominant place (because the legislation assumes of 1 holding over 20% curiosity) in a sure market wherein it operates, which, irrespective thereof, carries out an unlawful interplay with rivals, together with by way of skilled associations, could also be topic to an administrative fantastic of 0.1% to twenty% of the gross revenues of the group working within the trade affected by such violation and to the divestiture of belongings, amongst different penalties. Additionally, the antitrust laws of different jurisdictions, such because the U.S. (Sherman Act and Clayton Antitrust Act) and the European (Articles 101 and 102 of the Treaty on the Functioning of the European Union), can also be relevant to firms each time these perform alleged anticompetitive practices with results within the aforementioned jurisdictions. Our Antitrust Corporate Policy is accessible on our Investors Relations web site. Treatment of Past Due Debts Brazilian monetary establishments are required to categorise their credit score transactions (together with leasing transactions and different transactions characterised as credit score advances) at completely different ranges and acknowledge provisions in line with the extent attributed to every such transaction. The classification is predicated on the monetary situation of the shoppers, the phrases and circumstances of the transaction and the time period throughout which the transaction is overdue, if any. For functions of Central Bank necessities, transactions are labeled as degree AA, A, B, C, D, E, F, G or H, with AA being the best classification. Credit classifications should be reviewed on a month-to-month foundation and, aside from further provisions required by the Central Bank that are deemed essential by the administration of monetary establishments, every degree has a particular allowance share that’s utilized to it and which we use to calculate our allowance for mortgage losses, as laid out in extra element within the desk beneath: Classification (1) AA A B C D E F G H Allowance (%) 0 0.5 1 3 10 30 50 70 100 Past due (in days) – 15 to 30 31 to 60 61 to 90 91 to 120 121 to 150 150 to 180 Over 180 (1) Our credit score classification additionally takes under consideration the consumer’s credit score profile, which can negatively influence the overdue classification. 122
Under IFRS, the allowance for mortgage losses is predicated on our internally developed incurred loss fashions, which calculate the allowance for mortgage losses by multiplying the likelihood of default by the shoppers or counterparty, or PD, by the potential for restoration on defaulted credit (LGD) for every transaction, as described in Note 2.4 (d) I -Classification and measurement of monetary belongings and Note 32 Risk and capital administration, of our audited consolidated monetary statements. The danger ranges are categorized as: Lower danger: PD decrease or equal than 4.44% Satisfactory: PD from 4.44% as much as 25.95% Higher danger: PD greater than 25.95% Credit-Impaired: loans labeled in Stage 3 Bank insolvency The insolvency of monetary establishments is dealt with pursuant to relevant legal guidelines and laws by the Central Bank, which initiates and displays all relevant administrative proceedings. There are three forms of particular regimes which may be imposed to both privately-held monetary establishments or state-owned (apart from federal authorities-owned) monetary establishments or comparable establishments: (i) Temporary particular administration regime or a much less extreme particular regime with restricted period RAET: which permits monetary establishments to proceed to function – the entire administration loses its places of work and is changed by a steering committee appointed by the Central Bank with broad administration powers, which can undertake of measures aimed on the resumption of the monetary establishment’s common actions. If resumption shouldn’t be doable, this regime could also be became an extrajudicial liquidation. (ii) Intervention: a time-restricted regime wherein the Central Bank appoints an intervenor that takes cost of the monetary establishment’s administration, suspending its common actions and dismissing the monetary establishment’s administration, with the primary objective of stopping the continuation of sure irregularities and the aggravation of the monetary scenario of the monetary establishment, which might put belongings in danger and hurt the monetary establishment’s collectors – it suspends all actions associated to fee obligations of the monetary establishment, prevents the early settlement or maturity of its obligations and freezes pre-current deposits. (iii) Extrajudicial liquidation: technique of dissolution of the corporate in instances of unrecoverable insolvency or extreme violations of the principles that regulate the monetary establishment’s actions. The extrajudicial liquidation goals at selling the liquidation of the present belongings for the fee of collectors, with the return of any quantity left to stockholders. Controlling stockholders could also be held chargeable for remaining liabilities. In the course of the particular regimes described above, the steering committee, the intervenor, and the liquidator could, when licensed by the Central Bank: (i) get rid of belongings and rights of the monetary establishment to 3rd events, and (ii) proceed with company restructuring processes within the monetary establishment or its subsidiaries, amongst different doable measures of comparable impact. Financial establishments can also be topic to the chapter regime. On December 24, 2020, the President of Brazil sanctioned Law No. 14,112 (“Law 14,112”), which overhauls the present Brazilian Bankruptcy and Reorganization Law (Law No. 11,101/05) in a number of materials facets. Law No. 14,112 got here into impact on January 23, 2021. It is feasible that sure modifications will probably have an effect on materials issues regarding enforcement and precedence rankings, akin to: (i) the potential of collectors placing ahead another judicial reorganization plan; (ii) new guidelines on the approval of submit-petition loans in judicial reorganization and on precedence claims in case of conversion to chapter liquidation; (iii) extra versatile quorum and 123
mechanics of the extrajudicial reorganization course of; (iv) new guidelines to expedite the chapter liquidation course of; (v) new strategies for restructuring of the debtor’s tax liabilities and installment funds, in addition to new taxation schemes; and (vi) incorporation of guidelines on cross-border insolvency proceedings into the Brazilian framework. Law No. 14,112 replicates, with some changes, the provisions of the UNCITRAL Model Law on Cross-Border Insolvency. As a outcome, Law No. 14,112 units out some guidelines on entry of overseas representatives to courts in Brazil, the strategy and necessities for recognition of overseas principal and ancillary proceedings, authorization for the debtor and his representatives to behave in different international locations, strategies of communication and cooperation between overseas authorities and representatives and the Brazilian jurisdiction, and the processing of concurrent proceedings. Law No. 14,112 additionally units forth, amongst different measures, (i) safety for collectors that agree on the conversion of debt into fairness in opposition to potential switch of legal responsibility with regard to the debtor’s obligations; (ii) the keep interval and constraints on the belongings of the debtor underneath judicial reorganization; (iii) conciliation and mediation measures earlier than and through judicial reorganization proceedings; and (iv) the principles on procedural and substantive consolidation. Law No. 14,112 additionally units out {that a} chapter decree doesn’t attain past the bankrupt itself, save when the disregard doctrine is to use. Deposit Insurance In the occasion of intervention, extrajudicial liquidation or liquidation of a monetary establishment in a chapter continuing, the Credit Insurance Fund, (“FGC”), a deposit insurance coverage system, ensures the utmost quantity of R$250,000 for sure deposits and credit score devices held by a person, an organization or one other authorized entity with a monetary establishment (or monetary establishments of the identical financial group). Such deposits and credit score devices contracted as of December 22, 2017, are topic to a further restrict: the full protection of the referred assure is R$1,000,000 per investor whatever the variety of accounts held in numerous monetary teams and such restrict is legitimate for a interval of 4 years. The assets of the FGC come primarily from obligatory contributions from all Brazilian monetary establishments that obtain deposits from shoppers, presently at a month-to-month fee of 0.01% of the quantity of the balances of accounts comparable to the monetary devices which might be the subject material of the extraordinary assure, even when the associated credit aren’t totally lined by FGC, and sure particular contributions. Deposits and funds raised overseas aren’t assured by the FGC. Credits of monetary establishments and different establishments licensed to function by the Central Bank, complementary welfare entities, insurance coverage firms, capitalization firms, funding golf equipment and funding funds, in addition to these representing any curiosity in or monetary instrument held by such entities, aren’t protected by the extraordinary assure of FGC. Payment of Creditors in Liquidation In the occasion of extrajudicial liquidation of a monetary establishment or liquidation of a monetary establishment in a chapter continuing, the salaries of staff and the associated labor claims as much as a specific amount, secured credit and tax prices have precedence in any claims in opposition to the entity in liquidation. The fee of unsecured credit, together with deposits from common retail shoppers that aren’t assured by the FGC, is topic to the prior fee of most well-liked credit. Additionally, upon the fee of the deposits assured by the FGC, the FGC turns into an unsecured creditor of the property in liquidation. Insurance Regulation With governmental approval, insurance coverage firms in Brazil could provide all forms of insurance coverage (apart from staff’ compensation insurance coverage) on to shoppers or by way of certified brokers. Insurance firms should put aside reserves to be invested in particular forms of securities. As a outcome, insurance coverage firms are among the many principal traders within the Brazilian securities market and topic to CMN laws concerning the funding of technical reserves. In the occasion an insurance coverage firm is asserted bankrupt, the insurance coverage firm will likely be topic to a particular process administered by SUSEP or by ANS. If an insurance coverage firm is asserted bankrupt and (i) its belongings aren’t ample to ensure not less than half of the unsecured credit or (ii) procedures regarding acts which may be thought of chapter-associated crimes are in place, the insurance coverage firm will likely be topic to extraordinary chapter procedures. There is presently no restriction on overseas investments in insurance coverage firms in Brazil. Brazilian laws establishes that insurance coverage firms should purchase reinsurance to the extent their liabilities exceed their technical limits underneath the principles of the regulatory our bodies (CNSP and SUSEP), and 124
reinsurance contracts could also be entered into by way of a direct negotiation between the insurance coverage and reinsurance firms or by way of a reinsurance dealer licensed to function in Brazil. Anti-Money Laundering Regulation The Brazilian anti-cash laundering legislation (Law No. 9,613, as amended) establishes the fundamental framework to forestall and punish cash laundering as against the law. It prohibits the concealment or dissimulation of origin, location, availability, dealing with or possession of belongings, rights or monetary assets instantly or not directly originated from crimes, subjecting the brokers of those unlawful practices to imprisonment, short-term disqualification from managing enterprises for as much as ten years and financial fines. The Brazilian anti-cash laundering legislation additionally created the Council for Financial Activities Control (COAF), which is subordinated to the Central Bank and performs a key function within the Brazilian system of stopping and combating cash laundering, financing of terrorism and the proliferation of weapons of mass destruction. In compliance with the Brazilian anti-cash laundering legislation and associated laws enacted by the Central Bank, together with the principles relevant to procedures that should be adopted by monetary establishments to forestall and fight cash laundering and terrorism financing, in addition to in response to the advice of Financial Action Task Force (FATF) and United Nations Security Council (UNSC), monetary establishments in Brazil should set up inner management and procedures aiming at: figuring out and understanding their shoppers, which incorporates figuring out if they’re PEPs, and in addition figuring out Ultimate Beneficial Owners (UBOs). These information needs to be stored up-to-date; checking the origin of funds of a consumer, in addition to the compatibility between the motion of its funds and its financial and monetary capability; finishing up a previous evaluation of recent services and products, together with using new applied sciences, if relevant, underneath the attitude of cash laundering prevention; protecting information of all transactions carried out or monetary companies supplied on behalf of a sure consumer or for that consumer; reporting to COAF, inside one enterprise day, any transaction deemed to be suspicious by the monetary establishment, in addition to all transactionsin money equal to or greater than R$50,000, with out informing the concerned individual or any third social gathering; making use of particular consideration to (i) uncommon transactions or proposed transactions with no obvious financial or authorized bases; (ii) transactions involving PEPs, (iii) indication of evading consumer identification and transaction registering procedures; (iv) shoppers and transactions for which the UBO can’t be recognized; (v) transactions originated from or destined to international locations that don’t totally adjust to the suggestions of the FATF; and (vi) conditions wherein it isn’t doable to maintain the shoppers’ identification information duly up to date; figuring out standards for hiring personnel and providing anti-cash laundering coaching for workers; establishing procedures to be complied with by all branches and subsidiaries of Brazilian monetary establishments positioned overseas with respect to anti-cash laundering; establishing that any establishments licensed to function within the Brazilian overseas trade market with monetary establishments positioned overseas should confirm whether or not the overseas monetary establishment is bodily positioned within the jurisdiction the place it was included and licensed, and that it’s topic to efficient supervision; monitoring transactions and conditions which might be thought of suspicious for anti-cash laundering functions; reporting to COAF the incidence of suspicious transactions, as required underneath relevant laws, and in addition, not less than yearly, whether or not or not suspicious transactions are verified, so as to certify the non-incidence of transactions topic to reporting to COAF (damaging report); requiring shoppers to tell the monetary establishment, not less than three enterprise days upfront, of their intention to withdraw quantities equal to or exceeding R$50,000; sustaining particular information of all operations carried out, services and products contracted by monetary establishments, together with deposit, contribution, withdrawal, funds, receipts and transfers of funds; making certain that insurance policies, procedures and inner controls are commensurate with its dimension and quantity of transactions; and 125
unavailability, at once, of products, values and rights of possession or possession, and all different rights, actual or private, owned, directlyor not directly, of pure or authorized individuals topic to sanctions by the resolutions of the UNSC. Non-compliance with any of the obligations above topics the monetary establishment and its officers to penalties starting from: (i) formal discover, (ii) fines (from 1.0% to 200.0% of the quantity of the transaction, 200.0% of the revenue generated thereby, or a fantastic of as much as R$20,000,000), (iii) rendering govt officers ineligible for holding any administration place in monetary establishments, to (iv) the cancellation of the monetary establishment’s license to function. Central Bank Circular No. 3,978 of 2020, which got here into power on October 1st, 2020, additionally requires that monetary establishments keep Anti-Money Laundering Program (in compliance with regulatory requirements) and conduct periodic Internal Risk Assessments. On July 27, 2021, the Central Bank printed Resolution No. 119, introducing some modifications to Circular No. 3,978/2020, which establishes the principles and procedures associated to combating cash laundering and combating terrorist financing relevant to entities topic to Central Bank regulation and supervision. Among different modifications launched by the brand new rule, monetary establishments (and different entities regulated by the Central Bank) now not get hold of buyer location data within the identification course of and begin acquiring this data as a part of the consumer’s qualification process. The want for verification and validation of the shopper’s location data, supplied by the shopper, needs to be assessed by the establishments in line with the shopper’s danger profile and the character of the enterprise relationship, contemplating a danger-based mostly method. Resolution No. 119 entered into power on September 1st, 2021. Finally, CVM Resolution No. 50, of August 31, 2021, which got here into power on October 1st, 2021, establishes, amongst different obligations, that individuals who have interaction in, on a everlasting or occasional foundation, as a principal or ancillary exercise, cumulatively or not, the custody, issuance, distribution, settlement, commerce, intermediation, consultancy or administration of bonds or securities, and impartial audit inside the scope of the inventory trade market should undertake guidelines, procedures and inner controls, additionally taking a danger-based mostly method, in accordance with beforehand and expressly established procedures to verify the registration data of its prospects, maintain such data up to date and monitor the transactions carried out thereby, in order to forestall using the account by third events and determine the top beneficiaries of the transactions. These entities are additionally required to determine insurance policies of anti-cash laundering, terrorism financing and the financing of the proliferation of mass destruction weapons (PLD/FTP), of inner danger evaluation and of inner guidelines, procedures and controls. Moreover, alongside the identical strains of the provisions of the laws of the Central Bank, such entities shall additionally determine and carefully monitor the enterprise relations maintained with politically uncovered individuals. We adhere to all present laws and finest market practices. Politically Exposed Persons (“PEPs”) According to the Central Bank, PEPs are public brokers who maintain or have held a related public place, in addition to their representatives, relations or different shut associates, over the previous 5 years, in Brazil or different international locations, territories and overseas jurisdictions. Financial establishments should develop and implement inner procedures to determine PEPs and procure greater degree of approval than the individual chargeable for contracting, in line with Risk-Based Approach, previous to establishing any relationship with these people. They also needs to undertake bolstered and steady surveillance actions concerning transactions with PEPs and report all suspicious transactions to COAF. Leasing Regulation Although leasing transactions aren’t labeled as credit score transactions underneath Brazilian laws, the Central Bank regulates and oversees leasing transactions. The events concerned in a leasing transaction are the “lessor” (the financial institution) and “lessee” (our consumer). The leased asset, owned by the lessor, is delivered for use by the lessee till the top of the contract, when the lessee could choose to both purchase it or return it to the lessor or renew the contract for a brand new interval. Brazilian laws establishes a particular methodology to account for the income or losses in leasing transactions and all data that needs to be included in a lease settlement. The assured residual quantity paid by a lessee ought to correspond to a minimal return required for the transaction to be viable for the lessor, whether or not the acquisition choice is exercised or not. The legal guidelines and laws relevant to monetary establishments, akin to these associated to reporting necessities, capital adequacy and leverage, belongings composition limits and allowance for losses, are additionally typically relevant to leasing firms. 126
On November 25, 2021, and January 5, 2022, the CMN issued Resolution No. 4,966 and Resolution No. 4,975, respectively, which set up new accounting ideas and standards relevant to monetary devices, in addition to for the designation and recognition of hedge accounting relationships, and monetary leasing transactions contracted by monetary establishments and different establishments licensed to function by the Central Bank. The new guidelines align the accounting standards relevant to monetary devices and leasing agreements held by monetary establishments and different entities licensed to function by the Central Bank with the very best worldwide practices, particularly with the “IFRS 9 – Financial Instruments” and “IFRS 16 – Leases” requirements, issued by the International Accounting Standards Board (IASB). The new guidelines will enter into impact on January 1st, 2025, in order to make sure a transition interval for establishments affected by the modifications. Correspondent Agents We could have interaction different entities to offer sure companies to our shoppers, together with customer support. These entities are typically referred to as correspondents, and our relationship with correspondents is regulated by the Central Bank. Among different necessities, the Central Bank establishes that staff of all correspondent brokers should maintain a technical certification authorizing them to serve prospects concerned in credit score and leasing operations. On July 29, 2021, the Central Bank printed CMN Resolution No. 4.935, which got here into power on February 1, 2022 and brings essential modifications within the laws relevant to correspondents, together with the creation of particular guidelines for correspondents that act by way of an digital platform; the inclusion of the exercise of opening a fee account within the checklist of companies that may be carried out by correspondents; the requirement that the certification of correspondents deal with the LGPD; the requirement that banks create an institutional coverage for working and hiring their correspondents; and the prerogative of the Central Bank to situation the hiring of recent correspondents to the correction of deficiencies recognized within the institutional coverage of the banks. Regulation of the Brazilian Securities Market According to the Brazilian Corporate Law, an organization is taken into account publicly-traded or carefully-held relying on whether or not the securities issued by it are accepted for buying and selling within the securities market or not. All publicly-held firms, akin to our firm, are registered with the CVM, are topic to particular laws and are additionally topic to data disclosure and reporting necessities. Disclosure Requirements Under CVM guidelines, publicly-traded firms are topic to disclosure necessities and guidelines governing using materials data. Any determination which will fairly affect the worth of the securities issued by a publicly-held firm or the choice of traders to purchase, promote, or maintain these securities, is taken into account materials. The CVM improved the standard of the data that should be introduced in periodic filings by securities issuers by requiring such issuers to file a “Reference Form” with the CVM. This kind was modeled after IOSCO’s shelf registration system in gathering the entire issuer’s data in a single doc. Since 2018, the publicly-held firms, like us, should current a kind a couple of “Brazilian Corporate Governance Code” within the “apply or clarify” format. Asset Management Regulation The Brazilian asset administration regulation requires a earlier registration with the CVM to carry out the companies of portfolio administration and fund administration. We present a number of companies within the capital markets and, particularly, performs actions associated to fund administration and portfolio administration underneath CVM registration and in accordance with CVM regulation. By offering these companies, our entities engaged within the asset administration enterprise may be held civilly and administratively liable in sure circumstances for losses arising from both intentional acts or negligence in conducting their actions. The CVM has regulator powers to supervise these actions, together with powers to impose fines and different sanctions on registered asset managers. Investments of Non-Resident Investors 127
Individuals or authorized entities domiciled exterior Brazil could spend money on firms or different belongings in Brazilian monetary and capital markets, topic to the restrictions and necessities set forth within the native regulation. All overseas investments in Brazil shall be registered with the Central Bank and/or CVM, relying on the kind of the funding. The overseas direct funding (RDE-IED) permits the non-resident traders to carry inventory of firms in Brazil, whereas the portfolio funding (RDE – Portfolio) entitles the funding in virtually all monetary belongings and transactions accessible within the Brazilian monetary and capital markets, being topic to some restrictions set forth in Brazilian regulation. In order to spend money on the Brazilian monetary and capital markets, traders non-resident in Brazil should have interaction a monetary establishment licensed to behave as authorized consultant and, until the investor is a pure individual, a custodian of their investments in Brazil. Such investments are regulated by CMN Resolution No.4,373/14 and CVM Resolution No. 13/20. The transactions carried out by non-resident traders should be carried out within the markets organized by entities licensed by CVM (akin to B3, for instance) and securities should be held in custody with depositary and registration programs licensed by CVM and/or Central Bank (akin to SELIC and B3). The guidelines set up sure exceptions which permit transactions exterior of the organized markets akin to subscription of securities in preliminary public choices, tender choices of securities and fee of dividends in form. Brazilian guidelines additionally enable the issuance overseas of depositary receipts based mostly on (i) any safety issued by Brazilian publicly owned firms, (ii) credit score devices issued by monetary establishments and different forms of publicly owned establishments licensed by the Central Bank of Brazil, and eligible to be included within the monetary establishment’s regulatory capital (Patrimônio de Referência), and (iii) Letras Imobiliárias Garantidas, that are a sort of actual property notice issued within the Brazilian market. Open Banking The Central Bank introduced the preliminary pointers for open banking regulation in Brazil by way of Notice No. 33,455 on April 24, 2019. On November 28, 2019, the Central Bank launched Public Consultation No. 73/2019, which disclosed the draft decision to implement open banking in Brazil to the general public. The interval for commenting the Public Consultation ended on January 31, 2020 and the Central Bank acquired contributions kind market brokers. On May, 4, 2020, a regulation setting out the framework for the implementation of open banking was printed by the Central Bank and CMN (Joint Resolution No. 1/2020). From that date on, CMN and the Central Bank have issued complementing laws along with the Joint Resolution No. 1/2020. Among different matters, the set of laws for open banking element the collaborating establishments (obligatory and voluntary), the info and companies lined, the necessities for sharing, the tasks for sharing, the implementation schedule and the conference to be concluded between the collaborating establishments. The Central Bank has checked out open banking as an essential software for innovation within the monetary market, making the banking trade extra environment friendly and aggressive. The Brazilian open banking mannequin includes monetary establishments, fee establishments and different Central Bank-licensed entities by making it doable to share, in a phased-in method and thru a safe, immediate, correct and handy method, knowledge on services and products, buyer file knowledge and buyer transaction knowledge upon buyer’s authorization, by way of integration of data programs. Open banking additionally covers the supply of initiation fee companies and forwarding mortgage proposals by way of digital correspondent brokers. The open banking in Brazil is being carried out progressively, from February 2021 as much as 2022, pursuant to the dates established by the Central Bank, as follows: Stage I – public entry to data from collaborating establishments concerning their customer support channels and their services and products associated to demand deposit or financial savings accounts, fee accounts or credit score transactions; Stage II – sharing of consumers’ or their representatives’ registry data, and the shoppers’ transactional knowledge associated to services and products listed in Stage I; Stage III – sharing of companies of initiating fee transactions and forwarding mortgage proposals; and Stage IV – growth of the scope of lined knowledge, so as to embrace overseas trade operations, investments, insurance coverage, and open pension funds, amongst different monetary merchandise. 128
Stages I and II have already been accomplished in 2021 and Stages III and IV are anticipated to be carried out all through 2022. Regulation on Payment Agents and Payment Arrangements A Brazilian legislation enacted in October 2013 establishes the authorized framework for “fee preparations” (i.e. the algorithm governing a fee scheme, akin to a credit score or debit card transaction), and “fee brokers” (i.e., any agent that points a fee instrument or acquires a service provider for fee acceptance), which turned a part of the Brazilian Payments System and topic to oversight by the Central Bank. Payment brokers, regardless of being regulated by the Central Bank, aren’t deemed to be monetary establishments and are prohibited from participating in actions which might be unique of monetary establishments. The CMN and the Central Bank printed guidelines in November 2013 regulating fee preparations and fee brokers. This regulation establishes, amongst different issues: (i) client safety and anti-cash laundering compliance and loss prevention guidelines that needs to be adopted by all entities supervised by the Central Bank when performing as fee brokers and fee arrangers; (ii) the procedures for the incorporation, group, authorization and operation of fee brokers, as effectively for the switch of management, topic to the Central Bank’s prior approval; (iii) capital necessities; (iv) definition of preparations excluded from the Brazilian Payments System; (v) fee accounts, that are divided into pay as you go and submit-paid accounts; and (vi) a liquidity requirement for pay as you go accounts that calls for the allocation of their stability to a particular account on the Central Bank or to be invested in authorities bonds, beginning at 20% in 2014 and rising progressively as much as the totality of the full account stability in 2019. On March 26, 2018, the Central Bank enacted Circular No. 3,887 establishing limitations to the interchange payment for debit transactions, which is the remuneration of the issuer paid by the service provider for every transaction. The common payment for the interchange is 0.5% and the utmost payment is 0.8%. As of the date of this annual report, the Central Bank was debating, by way of a public session, whether or not it would broaden these identical interchange limitations to pay as you go fee transactions (which haven’t any limitations on the charged interchange payment). These limitations aren’t relevant to non-face-to-face transactions and to company playing cards. On November 28, 2018, the Central Bank enacted Circular No. 3,918, which modified Circular No. 3.691, concerning the worldwide use of bank cards. Effective as of March 1, 2020, bank cards issuers provide prospects the choice to pay bank card invoices in Reais, changing the quantities due on the date that such bills have been incurred. This choice should be adopted for all bank cards issued, until the shopper waives changing overseas quantities on the day that the expense was incurred and chooses to have all quantities transformed on the bill due date. On June 27, 2019, the CMN and the Central Bank printed Resolution No. 4,734 and Circular No. 3,952, which got here into impact on June 7, 2021, and impose new laws concerning (i) the low cost and prepayment operations of receivables from credit score and debit fee devices issued underneath the Brazilian Payment System; (ii) credit score operations assured by such receivables; and (iii) the structure of liens and encumbrances on these. With the brand new regulation, the Central Bank intends to offer larger effectivity and safety to the low cost, prepayment and credit score operations linked to receivables from fee preparations by retailers, growing competitors and thus decreasing the price of credit score. In March, 2021, the Central Bank revoked Circular No. 3,885 and printed the Resolution No. 80, concerning to company, compliance and governance facets of fee establishments, in addition to parameters for submitting requests for working authorization. Also in March 2021, the Resolution No. 81 was printed to explain the method of requesting approval from the Central Bank by funds establishments. On May 19, 2021, the Central Bank issued Resolution No. 96, which modified and consolidated guidelines concerning the opening of submit-fee (bank card) and pay as you go accounts, in addition to made the onboarding standards suitable with the principles relevant to the opening of present accounts. The principal modifications launched by Resolution No. 96 embrace: (i) elimination of the checklist of minimal registration knowledge essential to open pay as you go and postpaid accounts, being the establishment’s obligation to outline the data required, relying on the shopper’s profile; (ii) including new procedures to shut such accounts; (iii) modifications on the data that should be disclosed in bank card invoices, akin to the general stability of future obligations contracted; (iv) the definition of the account opening settlement’s minimal provisions; and (v) the compulsory referral or availability of the bank card and its respective bill to the customers, in line with the shape and manner chosen by the consumer and accessible to the establishment. Resolution No. 96 will enter into impact on March 1, 2022. In October, 2021, the Central Bank printed the decision No. 150 so as to consolidate the principles about fee preparations. This decision redefined the factors relevant for funds preparations which might be a part of the Brazilian Payment System, in order that solely fee preparations with values of greater than R$ 20 billion of whole transaction worth and R$100 million in transactions, in a consolidated and amassed kind within the 129
final 12 months, are topic to authorization, regulation and supervision by the Central Bank. This identical decision modified the interoperability guidelines between open and closed funds preparations, defining that closed funds preparations should turn into individuals in open funds preparations and obey the centralized clearing course of. On May 24, 2021, the Central Bank, aiming to advertise innovation within the technique of fee market, introduced that it has been discussing the Central Bank Digital Currencies (“CBDCs”) internally and with different central banks internationally. According to the Central Bank, the target is to develop CBDCs that: (i) sustain with the Brazilian technological growth dynamics; (ii) improve the effectivity of retail fee programs; (iii) contribute to the emergence of recent enterprise fashions and improvements based mostly on the technological developments; and (iv) foster Brazilian participation on regional and international markets, growing the effectivity of cross-border transactions. On August 19, 2021, the Central Bank, as licensed by Law No. 14,185 of July 14, 2021, printed Resolution No. 129, which regulates the receipt of voluntary time deposits by the Central Bank from monetary and fee establishments, for financial coverage functions. The new rule establishes the operational facets of the voluntary time deposits, together with: (i) strategies of structure and launch of the deposit devices by the Central Bank; (ii) eligibility standards of the depositing establishments; (iii) necessities concerning the remuneration charges of the deposit devices; (iv) standards for the early launch of the funds, in addition to (v) variations to the regulation of the SELIC, which is the central depository for many securities issued by the National Treasury and/or negotiated with the Central Bank, so as to set up the operational registration pointers and messaging associated to those devices. The adoption of voluntary deposits by the Central Bank will likely be preceded by checks within the SELIC programs, aimed toward making the brand new instrument operational. Resolution No. 129 entered into impact on the date of its publication. Additionally, the Central Bank has printed a set of recent guidelines defining the prudential laws relevant to fee establishments, or conglomerates lead by funds establishments. This set of recent laws consists of Resolutions No. 197, 198, 199, 200, 201 and 202, all dated March 11, 2022. In order to facilitate the applying of the respective prudential frameworks, prudential conglomerates have been labeled into 3 varieties. Pursuant to the brand new prudential framework, the idea of regulatory capital relevant to fee establishments has been modified to make sure a larger capability to soak up sudden losses. These new prudential laws will likely be carried out progressively, ranging from January 2023 to January 2025. Instant Payments Central Bank approves regulation of its Instant Payment Arrangement (“PIX System”) On August 13, 2020, the Central Bank issued Central Bank Resolution No. 1 (“Central Bank Resolution 1/2020”), establishing the PIX System fee scheme and approving its regulation (the “PIX Regulation”). Central Bank Resolution 1/2020 got here into impact on September 1, 2020. PIX System transactions will function on a restricted foundation by way of November 3, 2020 and will likely be totally operational after November 16, 2020. Pursuant to Central Bank Resolution 1/2020, the participation within the PIX System is obligatory for monetary establishments and fee brokers licensed to function by the Central Bank which have greater than 500,000 energetic buyer accounts, contemplating money deposit accounts, financial savings deposit accounts and pay as you go fee accounts. Participation within the PIX System is non-obligatory for monetary establishments and fee brokers that don’t meet this threshold, in addition to the National Treasury Secretariat. The PIX Regulation applies to all individuals within the PIX System. According to the PIX Regulation, there are three participation varieties: (i) transactional account supplier, which is a monetary establishment or a fee establishment that provides deposit accounts or fee accounts to finish customers; (ii) authorities entity, which is the National Treasury Secretariat, with the unique objective of creating collections and funds associated to its actions; and (iii) particular clearing homes, which might be the monetary establishments and fee brokers that (a) inside the scope of the PIX System have the unique objective of offering settlement companies to different individuals, (b) meet the necessities to behave as settlement individuals within the Central Bank’s Instant Payments System (“SPI”), and (c) don’t meet the factors of obligatory participation within the PIX System. Central Bank enhances safety mechanisms for PIX and different digital technique of fee 130
On September 23, 2021, the Central Bank issued Resolution No. 142, introducing safety measures to be adopted by regulated and supervised establishments to forestall fraud within the provision of fee companies. Resolution No. 142 establishes that monetary and fee establishments should restrict fee companies between pure individuals from 8 pm to six am to a most of R$ 1,000 per deposit or pay as you go fee account, as relevant. This restrict could also be elevated on the consumer’s request, upon submitting a proper request by way of the related digital channels, however the establishment should maintain a minimal delay of 24 hours for the change to take impact. Resolution No. 142 required fee service suppliers to implement the brand new transaction limits by October 4, 2021. Pursuant to Resolution No. 142, by November 16, 2021, monetary and fee establishments will need to have carried out the next: procedures aimed toward evaluating the shopper previous to enabling identical-day settlement of fee receivables in opposition to fee transactions inside the limits of the related fee schemes wherein the establishments take part; and day by day registration of fraud or tried fraud in instances associated to the rendering of fee companies, together with corrective measures adopted by the establishment. Based on these information, the establishments should put together a month-to-month report consolidating instances and preventive and corrective measures adopted. This report should be forwarded to the establishment audit and danger committees (if accessible), inner audit models, the supervisory board (if accessible) and the board of administrators. Furthermore, on September 28, 2021, the Central Bank issued Resolution No. 147, which established safety mechanisms particular to PIX transactions. The decision additionally units out and gives additional particulars (inside the scope of PIX) on the measures established by Resolution No. 142, which applies to all digital fee strategies (together with different forms of digital transfers accessible in Brazil, akin to Transferência Eletrônica Disponível – TED or Documento de Ordem de Crédito – DOC). The safety measures introduced by the Central Bank got here into impact on November 16, 2021, aside from the brand new transaction limits, which took in impact from October 4, 2021. Central Bank Resolution No. 177 got here into impact on the date of its publication. The earlier PIX Sanctions Manual, as set out by Central Bank Resolution No. 31, applies solely to infractions that passed off earlier than the entry into impact of the most recent PIX Sanctions Manual, save for procedural provisions and instances the place the brand new guidelines are extra useful to offenders. Provision of Financial Services by way of Electronic Channels The CMN regulation establishes that monetary establishments aren’t required to offer shoppers entry to conventional banking companies channels for assortment and receipt companies based mostly on agreements that demand solely digital channels. Credit Performance Information The CMN regulates a database generally known as Credit Information System (Sistema de Informações de Crédito, or SCR), which includes data concerning credit score operations despatched to the Central Bank. SCR’s objective is to offer data for the Central Bank to observe and supervise credit score within the monetary system, and in addition to allow data trade amongst monetary establishments. New guidelines relevant to Brazilian capital overseas and non-resident accounts in Brazil On July 30, 2020, the CMN enacted Resolution No. 4,841 and Resolution No. 4,844, which give new guidelines associated to the presentation of the Declaration of Brazilian Capital Abroad (“DCBE”), in addition to the supply of data concerning non-resident accounts (conta de não-residente – “CNR”) in Brazil, each of which give for the modernization and value discount of the compliance and supervision course of within the National Financial System. According to Resolution No. 4,841, solely Brazilian residents who keep capital overseas above US$ 1 million by December 31 of every yr are required to submit the DCBE, a declaration of belongings overseas, to the Central Bank. Nevertheless, the principles for the supply of data to the Brazilian Tax Authority (Receita Federal do Brasil or “RFB”) have been stored unchanged. In addition, Resolution No. 4,844 alters the minimal threshold for the obligatory registration of transactions in CNRs from R$10,000 to R$100,000, which has the aim of simplifying the monitoring procedures by Brazilian monetary establishments. 131
Consumer Protection Code The Brazilian Consumer Protection Code, or CDC, which is relevant to monetary establishments in line with Brazilian greater courts, units forth client protection and safety guidelines relevant to shoppers’ relationships with suppliers of services or products. Reverse burden of proof in courtroom; Proper and clear data supplied with respect to the services and products supplied (e.g.; amount, traits,composition, high quality, worth and dangers such merchandise pose); Basic Proportional discount of curiosity charged in reference to private credit score and client directed credit score client transactions incase of early fee of money owed; rights dealing In restricted circumstances, quantities charged improperly could should be returned in an quantity equal to twice with what was paid in extra of due quantities, besides in instances of justifiable errors (e.g.; systemic failure or monetary operational error); establishments Collection of credit can’t expose the consumer to embarrassment or be carried out in a threatening method; Prohibition on the discharge of deceptive or abusive publicity or details about contracts or companies, in addition to on thepromoting of overbearing or disloyal business practices; and Liability for any damages triggered to shoppers by misrepresentations of their publicity or data supplied. Law No. 14,181 of 2021 Known because the “over-indebtedness” legislation, Law No. 14,181 amended the CDC to offer for preventive rights and obligations in opposition to extreme client indebtedness reinforcing ideas and guidelines on transparency and safety in credit score contracting, together with related provisions on indebtedness avoidance. Moreover, Law No. 14,181 introduced the idea of existential minimal, which is the minimal quantity of earnings {that a} client ought to have for his subsistence, and that can’t be compromised with the fee of credit score contracts. The definition of the Existential Minimum is but to be regulated. Law No. 14,181 additionally included a brand new chapter within the CDC devoted to the conciliation of people who’re over-indebted, giving these people the chance for a judicial debt conciliation course of, which might carry collectively all collectors in a single settlement, in line with guidelines established by Law No. 14,181. Consumer relations guidelines relevant to monetary establishments, consortium directors and fee establishments On September 30, 2021, the CMN printed Resolution No. 4,949. The rule gives the rules and procedures to be adopted within the relationship with shoppers and customers of services and products of monetary establishments and different establishments licensed to function by the Central Bank. On October 14, 2021, the Central Bank printed Resolution No. 155, which establishes virtually similar rules and procedures to be adopted by fee establishments and consortium directors, that are regulated and supervised solely by the Central Bank. CMN Resolution No. 4,949 and Central Bank Resolution No. 155 set forth new guidelines primarily with the objective of making certain truthful and equitable remedy in any respect phases of the connection with establishments offering monetary and funds companies, in addition to a convergence of the pursuits of such establishments with these of their shoppers. Under CMN Resolution No. 4,949 and Central Bank Resolution No. 155, establishments licensed to function by the Central Bank shall put together and implement an institutional coverage for the relation with shoppers and customers. Such new coverage ought to consolidate pointers, strategic targets and organizational values, in order that the conduct of the establishment’s actions is guided by the rules of ethics, duty, transparency and diligence. CMN Resolution No. 4,949 and Central Bank Resolution No. 155 additionally gives that establishments licensed to function by the Central Bank should point out to such regulatory company the officer chargeable for complying with the obligations supplied underneath the brand new guidelines. The guidelines additionally impose different obligations to the regulated entities inside their scope, such because the compliance with transparency and suitability guidelines. CMN Resolution No. 4,949 entered into impact on March 1, 2022, and Central Bank Resolution No. 155 entered into impact on the identical date. However, most of those guidelines will take impact on October 1,2022. 132
Late fee and default CMN Resolution No. 4,882 gives that in case of delay or non-fee of credit score operations, monetary leasing and bank card and different post- paid fee devices, the monetary establishments could solely cost prospects the next: (i) the rate of interest established within the settlement; and (ii) default curiosity and late fee fines in accordance with the legislation. Limitation to the charges and rates of interest on overdraft-secured checks On November 27, 2019, the CMN issued Resolution No. 4,765 (“Resolution No. 4,765/2019”), offering for brand new guidelines on the overdraft granted by monetary establishments in checking accounts held by people and particular person micro entrepreneurs (MEI). The new rule limits the charging of charges on overdraft-secured checks to: (i) 0% for the opening credit score amenities of as much as R$ 500.00; and (ii) 0.25% for the opening of credit score amenities bigger than R$500.00, calculated with the quantity of the ability that exceeds R$500.00. Resolution No. 4,765/2019 additionally limits rates of interest over the overdraft-secured verify to as much as 8% per thirty days, to which should be added a reduction of the overdraft charges already charged month-to-month by the monetary establishment. According to the brand new rule, if the curiosity is lower than or equal to the overdraft charges, such rates of interest should be equal to zero. In addition, Resolution No. 4,765/2019 establishes that the overdraft-secured verify should be suitable with the shopper’s danger profile. Resolution No. 4,765/2019 has come into power on January 6, 2020, for agreements executed after the referred date, and can come into power on June 1, 2020, for agreements executed previous to such date. Regarding the 8% limitation the rule applies to all contracts from 06 January 2020 whatever the date of contracting. Data Protection The LGPD got here into impact in September 2020 (apart from administrative sanctions, which got here into impact on August 1, 2021, in line with Law No. 14,010/2020). The LGPD brings a algorithm to be noticed in actions akin to assortment, processing, storage, use, switch, sharing and erasure of data regarding recognized or identifiable pure individuals. The software of the LGPD will apply no matter trade or enterprise when coping with private knowledge. The LGPD additionally created the Brazilian. National Data Protection Authority (the “ANPD”), which is chargeable for exercising the triple function of investigation, enforcement and training. More importantly, it is ready to challenge norms and procedures, deliberate on the interpretation of the act, request data to controllers and processors and, in instances of noncompliance with the legislation, implement the legislation by way of an administrative course of. The ANPD has been assured technical independence, although it’s subordinated to the Presidency of the Republic. Cybersecurity We adjust to the necessities of the LGPD, particularly in relation to the safety and safety of non-public knowledge, in addition to CMN Resolution No. 4,893/2021 and of Central Bank Resolution No 85/2021, which require monetary establishments to institute a Cybersecurity Policy, in addition to regulates the outsourcing of related knowledge processing and storage and cloud computing companies. We additionally adjust to CVM Resolution No. 35/2021, which units forth the requirements and procedures to be noticed in safety transactions carried out in regulated securities markets requiring the implementation of cybersecurity controls and knowledge safety and the brand new SUSEP Circular No. 638/2021, which gives for cyber safety necessities to be noticed by insurance coverage firms, open entities pension funds (EAPCs), capitalization and native reinsurers. Automatic debit of banking accounts On March 26, 2020, the CMN issued Resolution No. 4,790, which units forth new guidelines for the automated debit funds from checking account and accounts designated for the fee of a person’s wages. In order to foster the transparency on the connection between the monetary establishments and their shoppers, this rule units forth that monetary establishments ought to solely course of computerized debit funds upon prior and categorical authorization of the consumer. Resolution No. 4,790 gives the procedures for the authorization and cancellation of computerized debit funds. 133
On December 20, 2020, the Central Bank additionally printed Resolution No. 51, setting the identical guidelines for computerized debit funds for pay as you go accounts and procedures to be obeyed by funds establishments and consortium directors. Resolutions No. 4,790 and No. 51 got here into power on May 1, 2021. Regulation of Independent Auditors In accordance with CMN laws establishing the principles that govern exterior audit companies supplied to monetary establishments, the monetary statements and monetary data of monetary establishments should be audited by impartial auditors who’re (i) duly registered with the CVM; certified as specialists in audit of banks by the CFC and the IBRACON; and (iii) meet the necessities that guarantee auditor independence. After issuing audit reviews for 5 consecutive fiscal years, the accountable audit companion and audit workforce members with administration tasks should rotate-off and can’t be a part of the audit workforce of such establishment for 3 consecutive fiscal years. CMN laws additionally prohibit the engagement and upkeep of impartial auditors by monetary establishments within the occasion that: (i) any of the circumstances of obstacle or incompatibility for the supply of audit companies supplied for within the guidelines and laws of the CVM, CFC or IBRACON come up; (ii) possession of shares of or coming into into monetary transactions (both asset or legal responsibility) with the audited monetary establishment by the audit agency or members of the audit workforce concerned within the audit work of the monetary establishment; and (iii) charges payable by the establishment signify 25% or extra of the full annual charges of the audit agency. Additionally, the audited monetary establishment is prohibited from hiring companions and members of the audit workforce with managerial tasks who have been concerned within the audit work on the monetary establishment through the previous 12 months. In addition to the audit report, the impartial auditor should put together the next reviews, as required by CMN regulation. An evaluation of the inner controls and danger administration procedures of the monetary establishment, together with its digital knowledge processing system; A description of non-compliance with authorized and regulatory provisions which have, or could have, a major influence on the audited monetary statements or operations of the audited monetary establishment; and Others reviews required by the Central Bank. These reviews, in addition to working papers, correspondence, service agreements and different paperwork associated to the audit work should be retained andmade accessible to the Central Bank for not less than 5 years. Under Brazilian legislation, our monetary statements should be ready in accordance with the accounting practices adopted in Brazil relevant to establishments licensed to function by the Central Bank. We additionally put together monetary statements in accordance with the IFRS as issued by IASB. Please see “Presentation of Financial and Other Information-About our Financial Information” for additional particulars. Financial establishments will need to have their monetary statements audited each six months. Quarterly monetary statements filed with the CVM should be reviewed by impartial auditors of the monetary establishments. CVM guidelines require publicly-held firms, together with monetary establishments, to reveal data associated to non-audit companies supplied by impartial auditors after they signify greater than 5% of the charges for audit companies. Such data ought to embrace the sort ofservice, the quantity paid and the proportion that they signify of the charges for the audit of monetary statements. Self-Regulators We are signatories of self-regulation codes that set up rules, guidelines and suggestions of finest company governance practices and decided actions, as relevant. Some of the self-regulatory entities that we’re topic to are the ABRASCA, ABECS, ANBIMA, and FEBRABAN, amongst others. Portability of Credit Transactions Regulated by the Central Bank since 2013, portability of credit score transactions consists of the switch of a credit score transaction from the unique creditor to a different establishment, on the request of the debtor, sustaining the identical excellent stability and remaining time period. The regulation establishes commonplace procedures and deadlines for the trade of data and the obligatory use of an digital system licensed by the Central Bank 134
for the switch of funds between monetary establishments, prohibiting using any various process to provide the identical results of the portability, together with so-referred to as “debt purchases”. Rules Governing the Charging of Fees on Banking and Credit Card Operations Banking charges and bank card operations are extensively regulated by the CMN and the Central Bank. According to Brazilian laws, we should classify the companies we offer to people underneath pre-decided classes and are topic to limitations on the gathering of charges for such companies. Brazilian monetary establishments are typically not licensed to cost charges from people for offering companies labeled as “important” with respect to checking and financial savings accounts, akin to supplying debit playing cards, verify books, withdrawals, statements and transfers, amongst others. Brazilian laws additionally authorizes monetary establishments to cost charges associated to “precedence companies”, an ordinary set of companies outlined by Central Bank regulation. Financial establishments should provide to their particular person shoppers “commonplace packages” of precedence companies. Clients can also select between these or different packages supplied by the monetary establishment, or to make use of and pay for companies individually as a substitute of choosing a package deal. Current guidelines additionally authorize monetary establishments to cost charges for particular companies referred to as “further companies” (serviços diferenciados), supplied that the account holder or consumer is knowledgeable of the use and fee circumstances regarding such companies, or that charges and assortment strategies are outlined within the contract. The CMN additionally establishes guidelines relevant to bank cards, figuring out the occasions that enable for the gathering of charges by issuers, in addition to the data that should be disclosed in bank card statements and within the bank card settlement. There can also be a listing of precedence companies. The guidelines outline two forms of bank cards: (i) fundamental bank cards, with less complicated companies, with out rewards packages and (ii) “particular bank cards”, with advantages and reward packages. A minimal of 30-days’ prior discover to the general public should precede the creation or improve of a payment. In addition, charges associated to precedence companies could solely be elevated 180 days after the date of a earlier improve (the discount of a payment can happen at any time). With respect to bank cards, a 45- days’ prior discover to the general public is required for any improve or creation of charges and such charges could solely be elevated twelve months after the earlier improve. The interval of twelve months can also be topic to modifications within the guidelines relevant to profit or reward packages. At the top of 2016 and the start of 2017, two main modifications occurred within the Brazilian fee market. In December 2016 a provisional measure was printed authorizing the surcharge by fee instrument as a approach to stimulate retail gross sales, permitting retailers to cost completely different costs relying on the fee technique. In January 2017 the CMN printed a brand new decision establishing that revolving credit score for the financing of bank card payments could solely be prolonged to shoppers till the due date of the next bank card invoice. After such time period, the credit score supplier should provide the consumer one other kind of financing with circumstances extra favorable than those which might be supplied within the bank card market. In addition, the credit score supplier shall now not provide this sort of credit score to shoppers that already contracted revolving credit score for the financing of bank card payments which weren’t repaid on time. In 2018, the CMN issued a brand new decision establishing that the next charges could also be collected within the occasion of late fee or settlement of obligations associated to bank card payments and different postpaid fee devices: (i) compensatory curiosity, per day of delay, on overdue installments or on unpaid debtor balances; (ii) a fantastic and (iii) curiosity for late fee. The identical decision additionally established that the change in credit score limits, if not carried out on the request of the shopper, ought to, within the case of: (i) discount, be preceded by not less than 30-days’ advance discover to the consumer, besides if there’s a deterioration of the shopper’s credit score danger profile, in line with the factors outlined within the credit score danger administration coverage, wherein case discover could also be made at any time previous to the discount; and (ii) improve, be conditioned upon the shopper’s prior acquiescence. In 2019, the CMN issued an ordinary setting rule for the gathering of curiosity and tariff on overdraft for people and Individual Microentrepreneurs (entrepreneurs with annual revenues of R$81,000 and topic to particular laws). According to the brand new regulation, can solely be charged to be used of overdraft restrict exceeding R$500.00. Brazilian monetary establishments should keep the secrecy of banking transactions and companies supplied to their shoppers. Except as permitted underneath Brazilian laws or by judicial order, a breach of financial institution secrecy is a 135
felony offense. The solely circumstances wherein details about shoppers, companies or transactions by Brazilian monetary establishments or bank card firms could also be disclosed to 3rd events are the next: the disclosure of data with the categorical consent of the events; the disclosure of data to credit score reference businesses based mostly on knowledge from the information of subscribers of checks drawn on accounts with out ample funds and defaulting debtors; the disclosure of some data established by legislation to tax authorities. the trade of data between monetary establishments for file functions; the disclosure of data to the competent authorities regarding the precise or suspected incidence of felony acts or administrative wrongdoings, together with the disclosure of data on transactions involving funds associated to any illegal actions; the disclosure of data in compliance with a judicial order. Digitalization of Documents and Record Keeping According to CMN’s decision on the digitalization of paperwork with respect to transactions carried out by monetary establishments and different establishments licensed to function by the Central Bank, these establishments are licensed to take care of digital paperwork, as a substitute of paper paperwork, for recordkeeping functions, if sure necessities to make sure the paperwork authenticity, validity and safety are met. The decision additionally permits the disposal of unique paper paperwork supplied that this measure won’t prejudice the establishment’s skill to train any rights or to begin any continuing or train any protecting treatment associated to the related doc. Public Consultations to Amend and Replace Prudential Regulation Referring to Credit and Market Risk On December 11, 2020, the Central Bank launched a public session on a proposal for a regulation that implements the minimal commonplace of the BCBS for calculating the capital requirement associated to credit score danger in line with standardized method (RWACPAD). This new regulation will substitute Central Bank Circular No. 3,644, of March 4, 2013, pursuant to “Basel III” necessities. The proposal will increase the granularity of the weights relevant to exposures, bringing refinements within the differentiation in credit score danger to the prudential framework. The proposal is addressed to monetary establishments labeled in Segments 1 (S1) to Segment 4 (S4), which presently go for the standardized method for credit score danger. The session ended on February 23, 2021 and the ultimate rule continues to be pending issuance. On December 11, 2020, the Central Bank additionally launched a public session on a proposal for a rule considering the primary section – of a complete of 4 deliberate phases – of the method of reviewing the prudential commonplace for figuring out the capital requirement associated to market danger, as supplied for in Basel III. This first section incorporates the necessities associated to the danger administration course of, together with enhancements in governance and the identification of monetary devices labeled within the buying and selling portfolio. Under the phrases proposed within the session, the primary section would have come into impact on January 1, 2022, by way of amendments to Resolution 4,557, of February 23, 2017, and the publication of a brand new rule that might have changed Circular No. 3,354, of 27 June 2007. The session ended on February 9, 2021 and the ultimate rule continues to be pending issuance. Further, on July 6, 2021, the Central Bank launched a brand new public session considering the modification of CMN Resolution No. 4,193, of March 1, 2013, and the of a brand new BCB decision (not but printed) establishing the procedures for calculating the portion of danger-weighted belongings (RWA) associated to the calculation of the capital required for exposures to credit score danger of monetary devices labeled within the buying and selling guide (RWADRC). The proposed modifications relate to the native adoption of the brand new regulatory framework for market danger, also called the Fundamental Review of the Trading Book (FRTB), a part of the Basel III set of measures. The new set of laws will apply to establishments labeled in Segments S1 (akin to us) to S4, in line with Resolution No. 4,553, of January 30, 2017. The modification to Resolution No. 4,193, of March 1, 2013, goals to create a brand new portion of danger-weighted belongings (RWA), referred to as RWADRC, particularly for calculating the capital required for exposures to credit score danger of monetary devices labeled within the buying and selling guide. The modification to Circular No. 3,644, of March 4, 2013, promotes the exclusion of those identical exposures from the scope of software of the standardized method for calculating the portion of the RWA referring to credit score danger (RWACPAD). Under the phrases proposed within the session, the brand new guidelines would take impact on July 1, 2022. The session ended on September 6, 2021 and, up to now, solely the proposed amendments to CMN Resolution No. 4,193, of March 1, 2013 have been included into CMN Resolution No. 4,958, of October 21, 2021, which repealed and changed it. The different proposed guidelines and amendments are nonetheless pending issuance. 136
Proceedings for Administrative Sanctions within the Brazilian National Financial System, the SPB and Capital Markets Law No. 13,506 gives for administrative sanctioning procedures by the Central Bank and the CVM. Some of the important thing facets of Law No. 13,506 are: (i) it will increase the utmost fantastic relevant by the Central Bank from R$250 thousand to R$2 billion or 0.5% of the revenues of the corporate arising from companies and monetary merchandise within the yr previous to the violation; (ii) it will increase the utmost fantastic relevant by the CVM from R$500 thousand to R$50 million; (iii) it units forth new forms of violations and topic to penalties; (iv) it will increase the utmost penalty with respect to disqualification to a interval of twenty years; (v) it gives that the Central Bank could enter into stop-and-desist commitments; and (vi) it gives that the Central Bank and the CVM could enter into administrative agreements just like leniency agreements. Centralized Registration and Deposit of Financial Assets and Securities Law No. 13,476/2017 altered Law No. 12,810/2012 and consolidated the provisions on the creation of liens over monetary belongings and securities requiring that the structure of liens on monetary belongings and securities topic to registration or centralized deposit be carried out solely on the registering entities or on the central depositories the place such monetary belongings or securities are registered or deposited, whatever the nature of the authorized transaction to which they relate to, together with for functions of publicity and effectiveness with third events. The CMN issued a rule to control the provisions of Law No. 13,476/2017 and to consolidate the regulation on centralized deposit and the registry of monetary belongings and securities issued or owned by establishments licensed to function by the Central Bank, requiring, amongst different provisions, that such establishments be typically, topic to restricted exceptions, obligated to: (i) register and deposit, in registration and/or centralized deposit programs licensed to function by the Central Bank or the CVM, all monetary belongings and securities they’re obligated or co-obligated to pay; and (ii) solely maintain of their asset portfolio securities which might be registered and/or deposited within the phrases of the CMN rule. On September 5, 2018, the Central Bank issued a brand new rule amending the present procedural rule on centralized registration and deposit of monetary belongings and securities and the creation of liens on deposited monetary belongings and established the phrases for the creation of liens over monetary belongings registered with registering entities. The referred rule established, amongst different modifications, that such liens are efficient within the second that the central depositary accepts the command from its participant, pursuant to its inner laws. Taxes on Transactions entered into by the Itaú Unibanco Group We summarize beneath the primary taxes levied on the transactions entered into by entities within the Itaú Unibanco Group in Brazil. This description doesn’t signify a complete evaluation of all tax issues relevant to the Itaú Unibanco Group. For a extra in-depth evaluation, we advocate that potential traders seek the advice of their very own tax advisors. The principal taxes we’re topic to, with their respective charges, are as follows: Tax Rate Tax calculati on foundation Net earnings with changes (exclusions, IRPJ 15.0% plus a ten.0% surtax additions, anddeductions) 25.0% (banking establishments) and 20.0% (different establishments licensed to function by the Central Bank and insurance coverage and capitalization firms) till December 31, 2021. Net earnings with changes (exclusions, CSLL From January 2022 onwards, the relevant CSLL additions, anddeductions) fee is 20.0% (banking establishments) and 15.0% (different establishments licensed to function by the Central Bank and insurance coverage and capitalization firms). 9.0% (different Itaú Unibanco Group firms) as of January 1, 2022. 4.0% (monetary establishments, insurance coverage firms, COFINS Gross income minus particular deductions capitalization and comparable entities) or 7.6% (different Itaú Unibanco Group firms) 0.65% (monetary establishments, insurance coverage firms, PIS capitalization and comparable entities) or 1.65% (different Gross income minus particular deductions Itaú Unibanco Group firms) ISS 2.0% to five.0% Price of service rendered 137
IOF Depends on the kind of the transaction, as Transaction nominal worth described beneath. Corporate Income Tax and Social Contribution on Net Income In accordance with relevant laws, company earnings tax (Imposto de Renda da Pessoa Jurídica) (“IRPJ”), and social contribution on income (Contribuição Social Sobre o Lucro Líquido) (“CSLL”) are decided by the taxable earnings regime. Under this regime, our taxable earnings, on which IRPJ and CSLL will likely be levied, should be adjusted by additions, deductions, and exclusions, akin to nondeductible bills, working prices and fairness accounting, respectively. The IRPJ is levied at a fundamental 15.0% fee, and a ten.0% surtax is relevant when the full quantity of revenue for the fiscal interval exceeds R$20,000 per thirty days or R$240,000 per yr. In different phrases, any portion of our revenue exceeding this restrict is taxed at an efficient 25.0% fee. The CSLL is levied on our taxable earnings at a 20.0% fee, for banks. The CSLL fee relevant to different monetary establishments is mostly 15%, whereas non-monetary authorized entities are normally topic to this tax at a 9.0% fee. As different Brazilian authorized entities, our firms could offset the historic nominal quantity of tax losses decided in prior years in opposition to outcomes of subsequent years at any time (i.e., with no limitations with respect to time intervals), supplied that such offsetting doesn’t exceed 30.0% of the annual taxable earnings of such future yr. For functions of IRPJ and CSLL taxation, firms ought to take into account their earnings overseas as effectively quite than earnings solely from Brazilian operations. Therefore, income, capital good points and different earnings earned overseas by Itaú Unibanco Group entities in Brazil, their branches, representations, associates or subsidiaries, may even be computed for dedication of the entities taxable earnings. However, Brazilian laws gives the potential of deducting the quantities paid as company earnings tax overseas in opposition to the IRPJ and CSLL due in Brazil, supplied sure limits are noticed. Contribution on Social Integration Program and Social Security Financing Contribution In addition to IRPJ and CSLL, Brazilian authorized entities are topic to the next taxes on income: PIS and COFINS. According to relevant laws, monetary establishments are topic to the cumulative regime for calculation of those taxes. Under the cumulative regime, monetary establishments are required to pay PIS at a 0.65% fee and COFINS at a 4.0% fee. The cumulative regime gives for charges decrease than these levied underneath the non-cumulative regime, which is defined beneath, but it surely prevents using tax credit, however in some exclusions for monetary establishments are allowed, akin to these linked with monetary intermediation. Service Tax The ISS is mostly levied on the worth of companies rendered (e.g., banking companies) and is charged by the municipality the place our department or workplace rendering the service is positioned. The tax charges fluctuate from 2.0% as much as the utmost fee of 5.0%, relying on the municipality wherein the service is supplied and its respective nature. A new tax legislation enacted on December 30, 2016, triggered a variety of modifications with respect to Brazilian Tax on Service, (“ISS”). Among these modifications, the brand new legislation launched a minimal tax fee of two%. The unique proposed laws accredited by the Brazilian Congress supplied modifications associated to ISS evaluation on actions akin to bank card and leasing operations however former President Temer vetoed these modifications. However, on May 30, 2017, the Brazilian Congress overturned the presidential veto. As a outcome, starting on January 1, 2018, ISS levied on the companies of leasing, playing cards administration, funds administration and consortium administration can be charged by the municipality the place the consumer is positioned. Due to this transformation, in November 2017, a lawsuit was filed by CONSIF and CNSEG within the Federal Supreme Court, and, on March, 23, 2018, the required preliminary injunction was granted, so as to droop the modification launched by the brand new legislation and to renew the earlier remedy of ISS assortment within the Municipality the place the institution is positioned. However, you will need to point out that this isn’t a remaining determination, as it’s nonetheless pending the ultimate pronouncement by the Federal Supreme Court. A legislation was printed in September 2020 which gives for modifications in relation to the Services Tax which might be just like these supplied for within the laws printed in December 2016. Considering the injunction obtained in 138
the Supreme Federal Court, on March 23, 2018, which suspended the amendments launched by the legislation printed in December 2016, the brand new legislation printed in September 2020 has its applicability suspended till the Supreme Court guidelines on the injunction, as it’s associated to the earlier legislation. Tax on Financial Transactions The tax on monetary transactions is levied at particular charges in line with the transaction in query, and could also be modified by a decree from the Executive Branch (which can turn into efficient as of its publication date), quite than by a legislation enacted by the Brazilian Congress. For instance, on September 16, 2021, Decree No. 10.797 elevated the IOF/Credit day by day charges from 0.0082% (particular person) or 0.0041% (authorized entities) to 0,01118% (particular person) or 0,00559% (authorized entities) between September 20, 2021, and December 31, 2021. The flat 0,38% fee and the restrict of twelve months weren’t modified (see desk beneath for extra particulars). Decree No. 10.997, enacted on March 15, 2022, established a schedule to progressively cut back to zero IOF levied on all overseas trade transactions. Reduction relies on the character of the overseas trade transaction and the measure will solely be totally carried out on January 2, 2029. The desk beneath summarizes the primary IOF charges levied on our transactions. Notwithstanding, we notice that IOF is a really complete tax. Therefore, for a extra in-depth evaluation, we advocate that tax advisors be consulted accordingly. Type of transaction Applicable Rates (Rates could also be modified by a decree enacted by the Brazilian authorities as much as a most fee, asdescribed beneath, which can turn into efficient as of its publication date) Foreign IOF/FX: zero to six.38% (relying on the trade transaction)Maximum fee: 25% transactio ns IOF/Insurance: zero Insurance transactions to 7.38%Maximum fee: 25% IOF/Credit: 0.0082% (particular person) or 0.0041% (authorized entities) per day, till it reaches twelve months, plus a flat 0.38percentrate. Loans Between September 20, 2021, and December 31, 2021: 0,01118% (particular person) or and 0,00559% (authorized entities) per day,till it reaches twelve months, plus a flat 0.38% fee. credit score Maximum fee: 1.5% per day transacti ons Securities IOF/Securities: zero to 1.5% as a common rule Maximum fee: 1.5% per day IOF/Securities – Securities – Derivatives: zero Derivatives Maximum fee: 25% U.S. Foreign Account Tax Compliance Act (FATCA) FATCA makes an attempt to reduce tax avoidance by U.S. individuals investing in overseas belongings each by way of their very own accounts and thru their investments in overseas entities. FATCA requires U.S. withholding brokers akin to Itaú to offer data to the IRS concerning their U.S. account holders together with substantial U.S. house owners of sure non-monetary overseas entities, (“NFFEs”), and specified U.S. individuals having an curiosity in sure professionally managed funding automobiles and trusts generally known as proprietor-documented overseas monetary establishments, (“FFIs”). To the extent a U.S. withholding agent shouldn’t be in a position to correctly doc an account, it typically will likely be required to deduct 30% FATCA withholding on sure funds of U.S. supply earnings. U.S. federal earnings tax legislation has detailed guidelines for figuring out the supply of earnings. Different guidelines apply for every kind of earnings. Interest and dividends, two of the most typical forms of earnings for traders, are typically sourced by reference to the residence of the obligor. Specifically, dividends are typically handled as S. supply earnings when paid by a U.S. company with respect to its inventory, and curiosity is mostly handled as S. supply earnings when paid by a U.S. borrower of cash. 139
The United States collaborated with different governments to develop Intergovernmental Agreements, (“IGAs”), to implement FATCA. IGAs with companion jurisdictions facilitate the efficient and environment friendly implementation of FATCA. The objective of those agreements is basically to take away home authorized impediments to compliance with FATCA and sharing of data and to cut back burdens on FFIs positioned in companion jurisdictions. More than 70 jurisdictions have signed an IGA, together with Brazil, the Cayman Islands, Switzerland and United Kingdom. In addition, roughly 30 different jurisdictions are deemed as having an IGA in impact. Some international locations signed a reciprocal settlement, which means that the nation (akin to Brazil) and the U.S. will robotically trade yearly, on a reciprocal foundation, particular account holder data. There are two forms of IGAs – Model 1 IGA, the place native FFIs are required to implement account opening and due diligence procedures to determine U.S. accounts and report them to the native tax authority for trade with the IRS (examples of Model 1 IGA international locations are Brazil, Cayman Islands, The Bahamas, Peru and Colombia), and Model 2 IGA, the place native FFIs are required to implement account opening and due diligence procedures to determine U.S. accounts, however report such data on to the IRS (examples of Model 2 IGA international locations are Switzerland, Chile, Paraguay and Japan). The governments of Brazil and the United States entered a Model 1 IGA on September 23, 2014, which got here into impact in Brazil on August 24, 2015, after the approval by the Brazilian Congress, ratification by the President and enactment of Decree 8,506 (IGA-BR). Under the IGA-BR, Brazilian monetary establishments and different entities topic to FATCA disclosure necessities are typically required to offer sure data on account holders to the Brazilian tax authorities, which can share this data with the IRS. Furthermore, Normative Ruling No. 1,680, dated December 28, 2016, was enacted to introduce the Common Reporting Standard, (“CRS”), in Brazil, which seeks to implement a system of reporting monetary accounts in a way just like FATCA. CRS is the results of discussions on the need of exchanging data between tax authorities of many international locations within the context of the Base Erosion and Profit Shifting, (“BEPS Project”), coordinated by the Organization for Economic Co-operation and Development, or (“OECD”). In connection therewith, an ancillary obligation referred to as “e- Financeira” supplied by Normative Ruling No. 1,571, dated July 2, 2016, was created to be the obligatory report filed by monetary establishments so as to fulfill FATCA and CRS obligations. Moreover, on May 6, 2016, Brazilian tax authorities issued the Normative Ruling No. 1,634, efficient as of January 1, 2017, that amended the regulation relevant to the National Registry of Legal Entities, (“CNPJ”). This regulation launched a brand new rule offering an ancillary obligation by which sure entities have to point the “Final Beneficiary” in every CNPJ, which is outlined because the pure one who finally, instantly or not directly, owns, controls or considerably influences a selected entity or on whose behalf a transaction is carried out. Currently, this topic is regulated by Normative Ruling No. 1,863, dated December 27, 2018. In addition, Normative Ruling No. 1,681 was enacted on December 28, 2016 offering the duty to yearly ship the so-referred to as Country- by-Country Statement, an ancillary obligation additionally arising from the discussions underneath the BEPS Project, earlier than the Brazilian Federal Revenue Service (RFB), which in its flip can also be anticipated to trade such data with different international locations’ tax authorities. Pursuant to FATCA, the issuer, another monetary establishment or different entities topic to FATCA disclosure necessities to or by way of which any fee with respect to the popular shares or ADSs is made could also be required, pursuant to the IGA-BR or underneath relevant legislation, to (i) request sure data from holders or useful house owners of our most well-liked shares or ADSs, whose data could also be supplied to the IRS; and (ii) withhold U.S. federal tax at a 30.0% fee on some portion or the entire funds thought of “passthrough funds” made after December 31, 2018, with respect to the popular shares or ADSs if such data shouldn’t be duly supplied by such a holder or useful proprietor (referred to underneath FATCA as a “recalcitrant account holder”). If the issuer or another individual is required to withhold quantities underneath or in reference to FATCA from any funds made in respect of the popular shares or ADSs, holders and useful house owners of the popular shares or ADSs won’t be entitled to obtain any gross up or different further quantities to compensate them for such withholding. The above description is predicated on steerage issued up to now by the U.S. Treasury Department, together with the ultimate U.S. Treasury laws and IGA-BR. Future steerage could have an effect on the applying of FATCA to the popular shares or ADSs. b) The issuer’s environmental coverage and prices incurred in complying with environmental regulation and, if relevant, different environmental practices, together with adherence to worldwide environmental safety requirements. 140
1. Sustainability and Environmental and Social Responsibility Policy (PRSA) Our coverage establishes the rules, methods and rules which might be basic for the establishment, and is aimed toward integrating the very best sustainability practices and environmental, social and local weather danger administration into our actions, operations and relations with stakeholders which may be impacted. The Environmental and Social Risk, in addition to the opposite dangers of the Institution, is topic to mitigation actions carried out based mostly on mapping processes, dangers and controls, monitoring new guidelines and recording occasions in inner programs, and it might affect the establishment’s conventional dangers. Climate danger is a part of the environmental and social danger governance. In addition to the identification course of described above, the phases of prioritization, response to danger and monitoring and reporting of assessed dangers complement the administration of this danger at Itaú Unibanco. The Chief Risk Officer (CRO) is the manager chargeable for environmental, social and local weather danger governance, whose administration covers completely different danger areas and consists of joint decision committees. Additionally, we’re attentive to essential regulatory developments, such because the inclusion of local weather points in Resolution No. 4,945/2021 and Resolution No. 4,943/2021 of the National Monetary Commission (CMN), in SARB Self-Regulation No. 14 and within the launch of the BC# Sustainability Agenda by the Central Bank of Brazil (BACEN), along with the developments in different jurisdictions, such because the “Supervisory Statement 3/19” publication of the Prudential Regulation Authority, within the United Kingdom, and the discussions on local weather finance on the Network for Greening the Financial System (NGFS) and at Bank for International Settlements (BIS). Climate danger administration In order to determine and assess the primary local weather dangers which will have an effect on our enterprise and have an effect on conventional danger classes, we developed an inner methodology, which is utilized on an annual foundation, that identifies the primary local weather dangers based mostly on the evaluation of scientific reviews and paperwork of organizations from the monetary market, such because the Financial Stability Board, World Economic Forum, International Monetary Fund, Bank for International Settlements, NGFS, amongst others. Our evaluation was carried out based mostly on a broad bibliographic evaluation for the aim of starting the identification and prioritization of the potential dangers labeled with respect to their nature – bodily or transition dangers – and doable qualitative materialization eventualities, specifically: Scenario 1: orderly transition Scenario 2: disorderly transition Scenario 3: materialization of bodily dangers We have additionally been contemplating dangers which will come up from local weather litigation, based mostly on each bodily and transition facets, which can have an effect on our enterprise and shoppers. Our Chief Risk Officer (CRO) is the manager chargeable for the governance of local weather danger and this subject, in flip, is an integral a part of environmental and social danger governance. Accordingly, the Environmental and Social Risk Committee (CRSA) additionally resolves upon local weather danger and it might carry probably the most related issues to the eye, and even determination, of the manager committee by way of the Superior Environmental and Social Risk Committee (Superior CRSA). Other senior committees additionally monitor this subject, such because the Audit Committee and Superior ESG Council. To see the PRSA coverage, please entry: https://www.itau.com.br/relacoes-com- investidores/Download.aspx?Arquivo=0ked1WCTo+RMW2iGKSkXUg==&IdCanal=jjCFHS5IadmGCLdvw2zIdg == 2. Sustainability Strategy In order to make sure the soundness of our dedication to sustainable growth, our company governance is built-in with sustainability and institutional insurance policies accredited by the Board of Directors, which align the operation and the relationships with the identical rules. Additionally, for the dedication to permeate everybody’s work, we search to broaden the data of staff about sustainability, together with the subject within the obligatory integrity coaching program and providing a data path, overlaying institutional ESG and sustainable product matters. 141
Our sustainability technique consists of ten Positive Impact Commitments which might be in keeping with the UN’s Sustainable Development Goals, which information the seek for a extra sustainable efficiency within the environmental, social, local weather and governance matters which might be related for the enterprise and our stakeholders. The building technique of the sustainability technique was carried out by the Sustainability Department and concerned many stakeholders – staff, executives, shoppers, stockholders, suppliers and representatives from civil society – along with the participation of specialised consulting corporations. Based on the Positive Impact Commitments launched in 2019 and yearly up to date, we developed a broader view of the alternatives and dangers in every subject, enhancing our determination-making processes, initiatives and initiatives so as to create sustainable worth for the enterprise and contribute to the world and folks generally. Taking into consideration the good significance of Brazilian biodiversity to the world and the situation of leveraging damaging influence dangers by many industries within the Amazon, we additionally included in our technique in 2021 the “Amazon” Positive Impact Commitment in order to give attention to and speed up this agenda. To this finish, we designed new targets that permeate our Positive Impact Commitments in order that our complete construction is in keeping with, dedicated to and lined by a single governance construction that is ready to drive and guarantee compliance with the Commitments. The Positive Impact Commitments assumed by Itaú Unibanco are: Transparency in reporting and communication, Responsible funding, Positive influence financing, Inclusion and entrepreneurism, Financial citizenship, Ethics in relations and enterprise, Responsible administration, Inclusive administration, Private social funding and the Amazon. 3. Climate change We have a giant duty for and affect on the manufacturing chains of all financial sectors with respect to the event of a low-carbon economic system whether or not by way of mitigating the dangers within the companies that intensify local weather change or by way of selling companies that carry new fashions and options to cut back GHG emissions. For this cause, the subject is current on a cross-chopping foundation in our optimistic influence dedication. Since 2018, we’ve been engaged on the transition to a low-carbon economic system, together with the definition of insurance policies and motion plans and the measurement of efficiency in view of the challenges of combating local weather change. We have already offset 100% of our emissions in scopes 1 and a pair of.And, in October 2021, we disclosed our dedication to cut back our scopes 1, 2 and three emissions by 50% by 2030 and turn into a “Net Zero Carbon” financial institution by 2050. In line with our optimistic influence commitments, we joined the Net-Zero Banking Alliance, which presents us with the problem of zeroing greenhouse fuel (GHG) emissions by 2050, and we assumed the Net-Zero Banking Commitment established by the United Nations (UNEP FI) for its signatories to current mortgage portfolios with zero web emissions by 2050. To this finish, our plan encompasses the next actions: incentives for the voluntary offset market assist to shoppers within the transition provide of monetary devices for the transition validation of the emission discount goal with the Science Based Target Initiative (SBTi) promotion of consciousness campaigns creation of agribusiness alternatives incentive to entrepreneurship discount of personal emissions funding in forest conservation and restoration initiatives, in keeping with the Amazon Plan 4. Biodiversity The monetary system is ready to instantly and not directly contribute to the sustainable use of Brazilian biomes based mostly on its operations with retail prospects or by financing firms and their manufacturing chains. Accordingly, in view of the significance of the Amazon biome for the planet’s local weather and of a vital situation with consecutive and expressive will increase in deforestation, we added a brand new optimistic influence dedication to our Amazon-aimed technique. The Amazon plan has three strategic focuses: 142
Support to environmental conservation and growth of bioeconomy; Investment in sustainable infrastructure; and Contribution to the assure of the inhabitants’s fundamental rights. And is concentrated on ten measures in direction of the preservation and prosperity of the area, inhabitants and economic system: chilly storage trade and deforestation Bioeconomy monetary and non-monetary assist to sustainable cultures land regularization inexperienced infrastructure social infrastructure environmental asset markets local weather change inclusion and monetary steerage incentive to native growth initiatives The biodiversity can also be addressed by way of completely different environmental and social evaluation methodologies in our mortgage portfolio and the subject is monitored on an annual and individualized foundation with our extra inclined shoppers. Our ESG danger software utilized to massive firms that function in delicate sectors takes biodiversity into consideration for each personal consumer operations and their provide chain. Criteria such because the existence of deforested areas, forest certification and guarded areas are assessed for shoppers from the Wood and Pulp and Paper industries. Accordingly, we adopted new initiatives to battle deforestation inside credit score task in 2020. First, with the assist and engagement of our business and credit score departments, we created an inner danger evaluation methodology that may classify our shoppers by way of the evaluation of environmental and social practices utilized to each their very own land and their provide chain. The methodology consists of the evaluation of environmental liabilities and rewards the adoption of fine environmental and social administration and deforestation prevention practices, such because the monitoring and traceability of direct and oblique provide chain and using sustainable manufacturing applied sciences, such because the Crop-Livestock-Forest integration. Additionally, it permits us to quantify impacts arising from ESG matters on shoppers’ monetary efficiency. Through this annual evaluation, we search to encourage our shoppers to enhance their ESG conduct by providing advantageous credit score pricing to shoppers which have the very best environmental and social administration and deforestation practices from these that don’t. Additionally, the evaluation of the biodiversity subject can also be current in our environmental and social danger software, which is instantly utilized to agricultural producers, together with cattle breeders. Through the geo-referenced evaluation of their properties, we assess the existence of deforestation areas and the preservation of biodiversity conservation areas, in addition to data on the existence of areas embargoed as a result of irregular deforestation. 5. Sustainable finance As a part of the evolution of our ESG technique, Itaú Unibanco signed a dedication to contribute with R$ 400 billion by 2025 – increasing our optimistic influence dedication that was signed in 2019 to take a position R$ 100 billion by 2025 via enterprise initiatives that promote a sustainable and more and more greener and extra inclusive economic system. The quantities will likely be allotted to: Credit task to sectors and industries with a optimistic influence on society Renewable power, well being and training, infrastructure, pulp and paper and agribusiness ESG retail merchandise Electric/hybrid automobile financing, photo voltaic panels, microcredit, amongst others Structuring of market operations with ESG seal for our shoppers Operations within the home and overseas markets, akin to ESG bonds, ESG loans and inexperienced debentures The “optimistic influence” classification takes into consideration the ideas which might be being mentioned on the planet by the European Union, Climate Bonds Initiative, United Nations (UN), International Capital Market Association (ICMA) and Brazilian Federation of Banks (Febraban) and we’ve elected six massive optimistic influence industries and sectors for financing: renewable power power companies 143
well being and training pulp and paper agribusiness infrastructure works Structuring of market operations with ESG seal for our shoppers In January 2021, we additionally issued Itaú Unibanco’s first proprietary sustainable bond within the quantity of R$ 500 million. This was the primary Sustainability Bond (which mixes inexperienced and social facets) of a Brazilian issuer and Latin America’s first Tier 2 sustainable bond. The funds from this sort of proprietary challenge should be allotted to the financing or refinancing of eligible inexperienced and/or social investments¹ from our mortgage portfolio, as described in our “Sustainability Finance Framework”2. This challenge is instantly associated to the financial institution’s optimistic influence commitments, extra exactly to the financing of optimistic influence industries and sectors, inclusion and entrepreneurship. In addition to our first Sustainable Bond, we had two essential ESG-associated transactions with official businesses in 2021. In March, we raised US$ 400 million with United States International Development Finance Corporation (DFC) within the overseas market. This funding is aimed toward growing the credit score to small and center-market firms, with a give attention to economically susceptible areas, such because the North and Northeast of Brazil, and corporations which might be largely managed or led by ladies. Credit task to sectors and industries with a optimistic influence on society We additionally established an ESG enterprise space with a workforce that’s totally devoted to alternatives of structuring inexperienced, social and sustainable operations or operations with traits linked to sustainability targets (“ESG-linked”). In addition to offering specialised advisory companies to shoppers when essential. We additionally established a partnership with IFC, a member of the World Bank, for the launch of the Plano Empresário Verde (Green Entrepreneur Plan) to encourage the Brazilian market to develop an funding pipeline within the sustainable building phase, working along with contractors and actual property builders which might be shoppers with developments that obtain not less than 20% in water, power or power embedded in supplies with the EDGE certificates, an IFC initiative, which is predicated on a platform that gives technical options to regulate the mission to extra sustainable building, with environmental and monetary outcomes. We additionally built-in ESG points into the evaluation of firms for fastened earnings and variable earnings, into the voting processes on the common stockholders’ conferences of investees “Proxy voting”) ( and into the person and collective engagements that we set up with the investees. Funded credit score granting operations that don’t outcome from onlending. The Framework had a Second Party Opinion given by a specialised consulting agency confirming its adherence to market practices. c) Dependence on related patents, logos, licenses, concessions, franchises, and royalty contracts for growing actions Trademarks Trademarks owned by the Issuer and subsidiaries have an essential function within the efficiency of actions; nevertheless, no dependence on such belongings exists for the efficiency of the Issuer’s and subsidiaries’ actions. Patents Patents owned by the Issuer and subsidiaries have an essential function within the efficiency of actions; nevertheless, no dependence on such belongings exists for the efficiency of the Issuer’s and subsidiaries’ actions. 7.6. With respect to the international locations wherein the issuer generates substantial income, please determine: a) Revenue arising from shoppers from the nation the place the issuer is headquartered and their share within the issuer’s whole web income, b) Revenue arising from shoppers from every overseas nation and their share within the issuer’s whole web income, c) The whole income arising from overseas international locations and their share within the issuer’s whole web income Not relevant, as our revenues are strongly concentrated in Brazil (they account for roughly 78% of whole income) and no particular person nation has a share deemed important by the Issuer. The share of revenues earned within the 17 international locations overseas account for roughly 22% of Itaú Unibanco Holding’s whole income. For 144
additional data, please see Note 30 “Segment Information” to the Financial Statements underneath IFRS. 7.7. With respect to the overseas international locations disclosed in merchandise 7.6, please state the extent to which the issuer is topic to regulation in these international locations and the way this regulation impacts the issuer’s enterprise The Issuer has not had substantial revenues from international locations apart from Brazil. With respect to environmental and social insurance policies, please point out: a) whether or not the issuer discloses environmental and social data We disclose environmental, social and Governance data in our ESG Report and Integrated Annual Report, in addition to in supplementary and regulatory paperwork. In addition to following the primary worldwide pointers, our reviews are based mostly on practices established by market references within the evaluation of company transparency, together with market tendencies obtained via ESG scores and sustainability indexes. Our dedication is to strengthen transparency in our companies and the monetary outcomes, displaying worth to our stakeholders in a good method and in keeping with the very best market practices. Our Sustainability, Environmental and Social Responsibility Policy units out the rules, methods and rules which might be basic to the establishment, and is aimed toward integrating the very best sustainability practices and Environmental and Social Risk administration into our actions, operations and relations with stakeholders which may be impacted. To see this coverage, please entry: https://www.itau.com.br/relacoes-com-investidores/Download.aspx?Arquivo=0ked1WCTo+RMW2iGKSkXUg==&IdCanal=jjCFHS5IadmGCLdvw2zIdg == b) the methodology adopted within the preparation of this data Itaú Unibanco’s ESG Report and Integrated Annual Report current the environmental, social and governance data that’s related for the group and its stakeholders. The reviews observe the reporting pointers of the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC). Additionally, they’re in keeping with the Sustainable Development Goals (SDGs) and the Principles for Responsible Banking. We perceive that materials matters are these that may have an effect on our price creation within the short-, medium- and lengthy-phrases from the point of view of our administration of our principal stakeholders. To this finish, our sustainability technique, generally known as “Positive Impact Commitments” guides our enterprise within the seek for a extra sustainable efficiency within the important ESG points. Based on the Positive Impact Commitments, we developed a broader view of the alternatives and dangers in every subject, enhancing our determination-making processes, initiatives and initiatives so as to create sustainable worth for the enterprise and contribute to the world and folks generally. The building technique of the sustainability technique was carried out by the Sustainability Department and concerned many stakeholders – staff, executives, shoppers, stockholders, suppliers and representatives from civil society – along with the participation of specialised consulting corporations. The opinions and expectations of our stakeholders have been considered instantly (at public conferences, relationship channels and directed surveys) and not directly (akin to declarations of traders’ pursuits, the sector materiality map of SASB, suggestions from ranking businesses and company indexes, public opinion and an inner ESG administration software). c) whether or not this data is audited or reviewed by an impartial entity Itaú Unibanco’s Integrated Annual Report and ESG Report are assured by impartial auditors. This assurance consists of the compilation of environmental and social data contained within the reviews, in accordance with the factors of the Global Reporting Initiative (GRI-Standards) and compliance with the rules outlined within the AA1000 AccountAbility Principles 2018 – “AA1000AP (2018)” commonplace. PricewaterhouseCoopers Auditores Independentes (PwC) is chargeable for the restricted assurance of those reviews and its conclusions on the work carried out may be discovered within the respective reviews. d) the Internet pages on which this data may be discovered The Integrated Annual Report, the ESG Report, the extra insurance policies and publications of Itaú Unibanco can be found on our Investor Relations web site: https://www.itau.com.br/relacoes-com-investidores/ On our sustainability web site, we additionally spotlight the primary initiatives, companies and operations associated to environmental and social points. https://www.itau.com.br/sustentabilidade/ 145
7.9. Supply different data that the issuer could deem related We disclose environmental, social and Governance data in our ESG* Report and Integrated Annual Report, in addition to in supplementary and regulatory paperwork. In addition to following the primary worldwide pointers, our reviews are based mostly on practices established by market references within the evaluation of company transparency, together with market tendencies obtained via ESG scores and sustainability indexes. Our dedication is to strengthen transparency in our companies and the monetary outcomes, displaying worth to our stakeholders in a good method and in keeping with the very best market practices. Itaú Unibanco’s ESG Report and Integrated Annual Report current the environmental, social and governance data that’s related for the group and its stakeholders. The reviews observe the reporting pointers of the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC). Additionally, they’re in keeping with the Sustainable Development Goals (SDGs) and the Principles for Responsible Banking. To entry the data for 2021, please entry https://www.itau.com.br/relacoes-com-investidores/relatorio-anual/2021/en/. Additional data on merchandise 7 The monetary data introduced in merchandise 7 (Activities of the Issuer) adopts the IFRS accounting commonplace. *Environmental, Social and Corporate Governance. 146
EXTRAORDINARY BUSINESS 8.1. Indicate the acquisition or disposal of any related asset that isn’t labeled as a daily transaction within the issuer’s enterprise (interval of previous three years) All disposals and acquisitions of great belongings associated to 2021, 2020 and 2019 have been duly described in gadgets 10.3 and 15.7 of this Reference Form. 8.2. Indicate important modifications within the conduction of the issuer’s enterprise (interval of previous three years) Management construction for Itaú Unibanco The Ordinary General Meeting, on April 26, 2022 accredited to compose the Board of Administration, the reelection of Alfredo Egydio Setubal, Ana Lúcia de Mattos Barretto Villela, Candido Botelho Bracher, Fábio Colletti Barbosa, Frederico Trajano Inácio Rodrigues, João Moreira Salles, Maria Helena dos Santos Fernandes de Santana, Pedro Luiz Bodin de Moraes, Pedro Moreira Salles, Ricardo Villela Marino and Roberto Egydio Setubal, in addition to the election of Cesar Nivaldo Gon, all for the annual time period that can stay in power till the Annual General Meeting of 2023. The Ordinary General Meeting, on April 27, 2021 accredited to compose the Board of Administration, the election of Candido Botelho Bracher and Maria Helena dos Santos Fernandes de Santana and the reelection of Alfredo Egydio Setubal, Ana Lúcia de Mattos Barretto Villela, Fábio Colletti Barbosa, Frederico Trajano Inácio Rodrigues, João Moreira Salles, Marco Ambrogio Crespi Bonomi, Pedro Luiz Bodin de Moraes, Pedro Moreira Salles, Ricardo Villela Marino and Roberto Egydio Setubal. On October 29, 2020, the Company introduced to the market modifications in its Board of Officers as Candido Botelho Bracher has reached the age restrict for exercising the duties of his place. Accordingly, Milton Maluhy Filho was introduced to succeed Candido Botelho Bracher as CEO after the due transition course of between November 2020 and January 2021. Therefore, Milton Maluhy Filho was successfully invested on February 2, 2021. Additionally, on December 11, 2020, the Company introduced to the market modifications in its Executive Committee. The new configuration goals to carry the Executive Committee nearer to enterprise and, thus, simplify the Company’s operation and administration mannequin, permitting larger autonomy and velocity in determination-making. Therefore, the Executive Committee is now made up of Alexandre Grossmann Zancani, Alexsandro Broedel Lopes, André Luis Teixeira Rodrigues, André Sapoznik, Carlos Fernando Rossi Constantini, Flávio Augusto Aguiar de Souza, Leila Cristiane Barboza Braga de Mello, Matias Granata, Milton Maluhy Filho, Pedro Paulo Giubbina Lorenzini, Ricardo Ribeiro Mandacaru Guerra and Sergio Giullinet Fajerman. In line with the aforementioned bulletins to the market, on January 28, 2021 the Board of Directors recorded that Candido Botelho Bracher had quickly left the place of CEO as from February 2, 2021.In the identical assembly, the next was accredited: (i) switch of Milton Maluhy Filho to take over as CEO, additionally as from February 2, 2021; (ii) the elections of Alexandre Grossmann Zancani, André Luis Teixeira Rodrigues, Carlos Fernando Rossi Constantini, Flávio Augusto Aguiar de Souza, and Ricardo Ribeiro Mandacaru Guerra, all of them to the place of Executive Officer; and (iii) the elections of José Geraldo Franco Ortiz and Matias Granata to the place of Officer. The Annual General Stockholders’ Meeting held on April 28, 2020 accredited the election of Frederico Trajano Inácio Rodrigues and the re-election of Alfredo Egydio Setubal, Ana Lúcia de Mattos Barretto Villela, Fábio Colletti Barbosa, Gustavo Jorge Laboissière Loyola, João Moreira Salles, José Galló, Marco Ambrogio Crespi Bonomi, Pedro Luiz Bodin de Moraes, Pedro Moreira Salles, Ricardo Villela Marino and Roberto Egydio Setubal to the Issuer’s Board of Directors. The Annual General Stockholders’ Meeting held on April 24, 2019 accredited the re-election of Alfredo Egydio Setubal, Ana Lúcia de Mattos Barretto Villela, Fábio Colletti Barbosa, Gustavo Jorge Laboissière Loyola, João Moreira Salles, José Galló, Marco Ambrogio Crespi Bonomi, Pedro Luiz Bodin de Moraes, Pedro Moreira Salles, Ricardo Villela Marino and Roberto Egydio Setubal to the Board of Directors. 8.3. Identify any important agreements entered into by the issuer and its subsidiaries that aren’t instantly associated to its working actions (interval of previous three years) In 2021, 2020 and 2019 we didn’t enter into agreements value greater than 0.5% Itaú Unibanco Holding’s stockholders’ fairness underneath IFRS (Calculation based mostly on the Financial Statements in IFRS of 12/31/2021: R$822.4 million) that aren’t instantly associated to the operational actions. 147
8.4. Supply different data that the issuer could deem related Not relevant. 148
RELEVANT ASSETS 9.1. Describe the non-present belongings which might be important for the event of the issuer’s actions, indicating particularly: a) Property, plant and tools, together with these rented or leased, figuring out their location Property, Plant and Equipment As of December 31, 2021, we owned and leased our principal administrative places of work, which embrace workplace buildings in 7 completely different addresses, comprising a complete space of 348,730 sq. meters, positioned primarily in São Paulo, Brazil. Such places of work embrace our head workplace, and a variety of different administrative buildings, the place administrative features are carried out, akin to business departments, again places of work, wholesale and funding financial institution actions, and in addition our knowledge processing heart. We lease most of our financial institution branches at aggressive market costs by way of renewable leases that expire from the second half of 2021 (presently underneath renewal underneath comparable phrases and circumstances) till the second half of 2048. As of December 31, 2021, we owned roughly 33% of our branches (together with digital service factors, banking websites and parking heaps) and leased roughly 67%. b) intangible belongings, akin to patents, logos, permits, concessions, franchises, and expertise switch agreements, domains on the Internet, informing: period occasions which will trigger the lack of rights to such belongings doable penalties of the Issuer’s lack of such rights Intangible belongings are non-bodily belongings, embrace software program and different belongings, and are initially acknowledged at acquisition price. Intangible belongings are acknowledged when derived from authorized or contractual rights, its price could also be fairly measured, and, for intangible belongings not derived from separate acquisitions or enterprise mixtures, it’s possible that future financial advantages will come up from their use. The stability of intangible belongings refers to internally acquired or produced belongings. Intangible belongings could have a particular or indefinite helpful life. Intangible belongings with particular helpful lives are amortized on a straight-line foundation over their estimated helpful lives. Intangible belongings with indefinite helpful lives aren’t amortized, however quite examined on a semi-annual foundation to determine any impairment. On December 31, 2021, intangible belongings are as follows. i. period Software is acknowledged when acquired by contractual rights or produced in firm. In-company developed software program consists of prices related to staff allotted and/or bills incurred in hiring outsourced workers to develop software program. In-company developed software program is accounted for as intangible 149
belongings provided that its objective is to satisfy a requirement of a enterprise space (retail or wholesale) with future financial advantages technology. This kind of software program has a particular helpful life of 5 years and is amortized on a straight-line foundation. ii. occasions which will trigger the lack of rights to such belongings Non-renewal of the associated license/contract inside deadline or doable litigation. iii. doable penalties of the Issuer’s lack of such rights Possible penalties and options are assessed individually, with doable substitute of the software program, provider, internalization of operations, and/or different contingency measures. Domains These are the domains deemed probably the most important for the Issuer’s and its subsidiaries’ actions. i. period Domain names and period Domain names Duration itau 2 years itau.com 2 years itau.com.br 2 years itaucard.com.br 2 years itaucustodia.com.br 2 years itaupersonnalite.com.br 2 years itauri.com.br 2 years itau-unibanco.com.br 2 years ii. occasions which will trigger the lack of rights to such belongings Non-renewal inside the deadline or doable litigation. iii. doable penalties of the Issuer’s lack of such rights The area could also be acquired by one other social gathering, both a person or a authorized entity, harm to the corporate picture, and doable monetary losses in relation to rivals and shoppers. Trademarks The Issuer and its subsidiaries maintain a number of logos registered in Brazil and overseas, which can or is probably not a part of non-present belongings. Significant manufacturers for the actions of the issuer and its subsidiaries are “ITAÚ”; “ITAÚ PERSONNALITÉ”; “UNICLASS”; “ITAÚ BBA”; “ITAUCARD”; “HIPERCARD”; “UNIBANCO”; “ITAÚ UNIBANCO”, “REDECARD”, “REDE”, “CREDICARD”, “ITI”, “ITI ITAÚ”, “IUPP ITAÚ” and “ÍON ITAÚ”. i. period In Brazil, the possession of a trademark is obtained by way of a sound registration issued by the National Institute of Industrial Propriety (INPI) and its unique nationwide use is assured to the property proprietor. This trademark registration is legitimate for ten (10) years from the date it’s granted by INPI, and could also be prolonged for equal successive intervals. The phrases and necessities for extending logos overseas rely on the legal guidelines of every nation or area the place the trademark is deposited or registered. ii. occasions which will trigger the lack of rights to such belongings In Brazil, registration purposes could also be rejected by INPI in these instances supplied for by Law No. 9,279/96. Trademark registrations terminate upon (i) the expiration of its time period with out due extension, (ii) a waiver by the trademark’s proprietor, and (iii) its lapse. Another chance is a declaration of nullity for a trademark registration already granted, by means of an administrative continuing filed with the trademark registration physique or by means of a lawsuit. 150
iii. doable penalties of the Issuer’s lack of such rights In the occasion the Issuer and/or its subsidiaries lose the rights to all or any logos listed above, they need to use different trademark(s) of their actions as they might now not be capable to forestall third events from utilizing the identical or comparable logos, notably in the identical market phase. In the occasion the Issuer and/or its subsidiaries fail to show to be the house owners of the logos they use, they could be topic to litigation on the grounds of alleged violation of third events’ rights for misuse of logos. Patents The Issuer and/or its subsidiaries maintain patents and patent purposes which will or is probably not a part of non-present belongings. There are patents and patent purposes overseas for a way to generate a digital keyboard the place customers could kind in a safety password or PIN (private identification quantity). In Brazil there are patents for a way to determine passwords to entry an establishment and for a way to generate a digital keyboard for customers to kind in a safety password or PIN, in addition to a patent software for a way, a consumer system, and a system to submit monetary operation data. i. period In Brazil, the time period of effectiveness of invention patents is twenty (20) years from the date when the patent software is made. The phrases of effectiveness and the necessities for the extension of patents overseas rely on the legal guidelines of every nation or area the place the patent is registered. ii. occasions which will trigger the lack of rights to such belongings The occasions which will trigger the lack of the rights to those belongings are supplied for by legislation. At the executive degree, patent purposes could also be rejected by the INPI within the conditions supplied for by Law No. 9,279/96. The patent registration terminates upon: (i) the expiration of its phrases, (ii) a waiver by the patent’s proprietor with out prejudice to the precise of third events, (iii) lack of fee of annual consideration, and (iv) lapse. Additionally, if a patent registration has been granted in non-conformity with authorized provisions, it’s doable {that a} declaration of nullity is issued for a patent registration already granted, by means of an administrative continuing filed earlier than the trademark registration physique or a lawsuit. iii. doable penalties of the Issuer’s lack of such rights Depending on the explanation for the doable lack of rights over the patents listed above, the subject material of the patent will fall in public area and could also be freely explored by third events or the Issuer and its subsidiaries could should cease utilizing the subject material of the patent. 151
9.1-Non-current belongings / 9.1.c-Ownership curiosity in firms Corporate identify CNPJ CVM Code Type of firm Country of State of City of Description of actions Issuer’s possession headquarters headquarters headquarters developed curiosity (%) Fiscal yr Book value-Market worth Amount of dividends Date Amount (Brazilian variation % variation % acquired (Brazilian reais) reais) Multiple-service financial institution with Banco Itaú BBA S.A. 17.298.092/0001-30-Subsidiary Brasil SP São Paulo funding portfolio 99,99 Market worth 12/31/2021 31.1612210 0.000000 146,999,985.08 Book worth 12/31/2021 2,553,731,427.86 12/31/2020 -33.4569810 0.000000 348,555,293.48 12/31/2019 32.7728790 0.000000 121,464,986.43 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Multiple-service financial institution with Banco Itaú Uruguay S.A. 11.929.613/0001-24-Subsidiary Uruguai Montevidéu business portfolio 100,00 Market worth 12/31/2021 17.239829 0.000000-Book worth 31/12/2021 2,752,550,015.26 12/31/2020 27.968213 0.000000 288,709,200.00 12/31/2019 9.737457 0.000000 227,506,086.00 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Multiple-service financial institution with Banco Itaucard S.A. 17.192.451/0001-70-Subsidiary Brasil SP Poá business portfolio 99.99 Market worth 12/31/2021 11.499868 0.000000 324,340,596.85 Book worth 31/12/2021 10,798,523,155.78 12/31/2020 -13.544134 0.000000 738,763,900.85 12/31/2019 20.527313 0.000000 860,625,000.00 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Holding firm of BICSA Holdings LTD 08.993.702/0001-25-Subsidiary Ilhas Cayman George Town nonfinancial establishments 100,00 Market worth 12/31/2021 -13.429069 0.000000-Book worth 31/12/2021 600,708,972.88 12/31/2020 -66.621567 0.000000 933,460,000.00 12/31/2019 3.363908 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Holding firm of Itaú Consultoria de Valores Imobiliários e Participações S.A. 58.851.775/0001-50-Subsidiary Brasil SP São Paulo monetary establishments 100,00 Market worth 12/31/2021 -50.633115 0.000000 701,056,688.65 Book worth 31/12/2021 1,080,069,015.55 12/31/2020 -17.178680 0.000000 818,288,310.67 12/31/2019 13.903722 0.000000 2,665,749.22 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Itaú Corretora de Valores S.A. 61.194.353/0001-64-Subsidiary Brasil SP São Paulo Securities dealer 99.99 Market worth 12/31/2021 21.225573 0.000000 55,046,744.36 Book worth 31/12/2021 2,271,275,963.64 12/31/2020 23.802050 0.000000 158,540,295.05 12/31/2019 19.950657 0.000000 83,299,997.05 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Insurance dealer for the private and casualty strains, Itaú Corretora de Seguros S.A. 43.644.285/0001-06-Subsidiary Brasil SP São Paulo as outlined by legislation. 10.75 Market worth 12/31/2021 0.000000 0.000000-Book worth 31/12/2021 85,596,586.13 12/31/2020 0.000000 0.000000-12/31/2019 0.000000 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Multiple-service financial institution with Itaú Corpbanca 12.262.596/0001-87-Subsidiary Brasil SP São Paulo business portfolio 26.30 Market worth 12/31/2021 53.084303 0.000000-Book worth 31/12/2021 5,668,603,576.90 12/31/2020 -3.236895 0.000000 149,992,427.23 12/31/2019 -5.434745 0.000000 59,131,816.00 Reasons for the acquisition and upkeep of such possession curiosity 152 These are strategic for the Issuer’s enterprise efficiency
Corporate identify CNPJ CVM Code Type of firm Country of State of City of headquarters Description of actions Issuer’s possession headquarters headquarters developed curiosity (%) Fiscal yr Book value-Market worth Amount of dividends Date Amount (Brazilian variation % variation % acquired (Brazilian reais) reais) Participation in different firms, within the nation and overseas; administration of personal belongings and earnings and export, by itself Itaú Rent Administração e Participações Ltda. 02.180.133/0001-12-Subsidiary Brasil SP São Paulo account and for third events. 12.65 Market worth 12/31/2021 0.000000 0.000000-Book worth 31/12/2021 53,914,105.60 12/31/2020 0.000000 0.000000-12/31/2019 0.000000 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Insurance operations within the private and property harm strains, as outlined Itaú Seguros S.A. 61.557.039/0001-07-Subsidiary Brasil SP São Paulo by legislation. 0.00 Market worth 12/31/2021 -26.969465 0.000000 1,493.72 Book worth 31/12/2021 3,364.21 12/31/2020 37.194100 0.000000 614.07 12/31/2019 -32.500879 0.000000 4,888.09 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Multiple-service financial institution with Itaú Unibanco S.A. 60.701.190/0001-04-Subsidiary Brasil SP São Paulo business portfolio. 100.00 Market worth 12/31/2021 3.352558 0.000000 3,941,209,789.62 Book worth 31/12/2021 115,552,708,637.80 12/31/2020 27.848315 0.000000 3,650,750,000.00 12/31/2019 0.334456 0.000000 18,813,826,289.23 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Holding firm of nonfinancial IGA Participações S.A. 04.238.150/0001-99-Subsidiary Brasil SP São Paulo establishments. 79.07 Market worth 12/31/2021 0.000000 0.000000-Book worth 31/12/2021 351,859,330.57 12/31/2020 0.000000 0.000000-12/31/2019 0.000000 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Holding firm of nonfinancial ITB Holding Brasil Participações Ltda 04.274.016/0001-43-Subsidiary Brasil SP São Paulo establishments. 0.00 Market worth 12/31/2021 -14.300101 0.000000 Book worth 31/12/2021 59.57 12/31/2020 -18.185028 0.000000-12/31/2019 62.509564 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Representation of overseas Oca S.A. 08.988.128/0001-17-Subsidiary Uruguai Montevideo banks. 100.00 Market worth 12/31/2021 23.866244 0.000000 191,123,325.36 Book worth 31/12/2021 371,500,287.39 12/31/2020 0.696619 0.000000 157,148,096.64 12/31/2019 -6.195169 0.000000 139,189,566.00 Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency Holding firm of nonfinancial Topaz Holding Ltd doesn’t have-Subsidiary Ilhas Cayman Grand Cayman establishments. 0.00 Market worth 12/31/2021 4.115492 0.000000-Book worth 31/12/2021 48.32 12/31/2020 28.880866 0.000000-Book worth 12/31/2019 -87.810575 0.000000-Reasons for the acquisition and upkeep of such possession curiosity These are strategic for the Issuer’s enterprise efficiency 153
9.2. Supply different data that the issuer could deem related Additional data on merchandise 9.1c Information disclosed in merchandise 9.1c is acknowledged in accordance with BRGAAP. 154
– EXECUTIVE OFFICERS’ COMMENTS Executive officers ought to touch upon: a) Financial and fairness positions generally The monetary data present in merchandise 10 (Executive Officers’ Comments) has been ready in accordance with the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and relevant to operations and enterprise. On January 1, 2018 accounting commonplace IFRS 9 turned efficient changing IAS 39 within the remedy of monetary devices. This new commonplace is structured to ponder the pillars of classification, measurement and impairment of monetary belongings and has been retrospectively utilized by Itaú Unibanco Holding. One of the important thing factors considerations the method to losses occurred. On IFRS 9, credit score losses acknowledged are these anticipated quite than incurred. Balance Sheet We current beneath our summarized stability sheet as of December 31, 2021 and December 31, 2020. Please see our audited consolidated monetary statements for additional particulars about our Consolidated Balance Sheet. Asof December 31, Variation Summarized Balance Sheet-Assets 2021 2020 R$ million % (In millionsof R$) Cash 44,512 46,224 (1,712) (3.7) Financial assetsat amortized price 1,375,782 1,275,799 99,983 7.8 Compulsory depositsin the Central Bank of Brazil 104,592 90,059 14,533 16.1 Interbank deposits, securitiespurchased underneath agreementsto resell, securities 393,206 425,432 (32,226) (7.6) at amortized price and Voluntary Investmentswith the Central Bank of Brazil Loan and lease operationsportfolio 822,590 714,104 108,486 15.2 Other monetary belongings 96,473 93,255 3,218 3.5 (-) Provision for Expected Loss (41,079) (47,051) 5,972 (12.7) Financial assetsat truthful worth by way of different complete earnings 105,622 109,942 (4,320) (3.9) Financial assetsat truthful worth by way of revenue or loss 434,169 465,581 (31,412) (6.7) Investmentsin associatesand be a part of ventures, Fixed belongings, Goodwill and Intangible 50,688 55,610 (4,922) (8.9) belongings, assetsheld on the market and different belongings Tax belongings 58,433 66,095 (7,662) (11.6) Total belongings 2,069,206 2,019,251 49,955 2.5 December 31, 2021 in comparison with December 31, 2020. Total belongings elevated by R$49,955 million, or 2.5%, as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a rise in monetary belongings at amortized price. This result’s additional described beneath: Financial belongings at amortized price elevated by R$99,983 million, or 7.8%, as of December 31, 2021, in comparison with December 31, 2020, primarily as a result of a rise in our mortgage and lease operations portfolio, partially offset by a lower in interbank deposits, securities bought underneath agreements to resell and securities at amortized price. Interbank deposits, securities bought underneath agreements to resell, securities at amortized price and Voluntary Investments with the Central Bank of Brazil decreased by R$32,226 million, or 7.6%, as of December 31, 2021 in comparison with December 31, 2020, primarily because of the lower of R$70,225 million in securities bought underneath agreements to resell as a result of a rise in our mortgage portfolio, particularly in mortgage loans. Please see “Note 4-Interbank Deposits and Securities Purchased Under Agreements to Resell” to our audited consolidated monetary statements for additional particulars. Loan and lease operations portfolio elevated by R$108,486 million, or 15.2%, as of December 31, 2021, in comparison with December 31, 2020, primarily because of the following will increase: (i) 30.2% in our people mortgage portfolio. We reached a historic excessive in mortgage loans, which elevated by 55.6% for the person’s phase. There was additionally a rise in our bank card portfolio, pushed by the upper family consumption, along with the business technique that gives a card for every consumer’s profile, thus offering a full shelf of playing cards, which elevated by 29.6%. Credit origination elevated by (i) 30.2% within the particular person’s portfolio through the yr ended December 31, 2021 in comparison with the yr ended December 31, 2020; and 155
(ii) 23.0% in our micro/small and medium companies mortgage portfolio, primarily as a result of a rise in demand from our prospects for working capital loans. As of December 31, 2021 2020 2019 2021 X 2020 2020 X 2019 (R$ million) Individuals 332,536 255,483 240,490 30.2% 6.2% Credit card 112,809 87,073 91,676 29.6% (5.0%) Personal mortgage 42,235 35,346 34,892 19.5% 1.3% Payroll loans 63,416 55,508 49,608 14.2% 11.9% Vehicles 29,621 23,290 18,968 27.2% 22.8% Mortgage loans 84,455 54,266 45,346 55.6% 19.7% Credit for authorized entities 285,004 256,476 191,522 11.1% 33.9% Corporate 135,034 134,521 105,302 0.4% 27.7% Micro / Small and Medium Businesses 149,970 121,955 86,220 23.0% 41.4% Foreign Loans Latin America 205,050 202,145 153,779 1.4% 31.5% Total Loan operations and lease operations portfolio 822,590 714,104 585,791 15.2% 21.9% Please see “Note 10 – Loan and Lease Operations” to our audited consolidated monetary statements for additional particulars. Financial belongings at truthful worth by way of different complete earnings decreased by R$4,320 million, or 3.9% as of December 31, 2021 in comparison with December 31, 2020, primarily because of the lower of R$4,208 million in overseas authorities securities, particularly in Latin American international locations apart from Brazil. Please see “Note 8 – Financial Assets at Fair Value Through Other Comprehensive Income – Securities” to our audited consolidated monetary statements for additional particulars. Investments in associates and joint ventures, fastened belongings, goodwill and intangible belongings, belongings held on the market and different belongings decreased by R$4,922 million, or 8.9%, as of December 31, 2021 in comparison with December 31, 2020, primarily because of the R$9,449 million lower in investments in associates and joint ventures pushed by the results of the partial spin-off of our curiosity in XP Inc. into a brand new firm, XPart. XPart was included on May 31, 2021, and in consequence we now not maintain any fairness curiosity in XP Inc. or in XPart, partially offset by the impact of R$2,422 million associated to the acquisition of payroll administration contracts of the Government of the State of Minas Gerais in July 2021. Cash decreased by R$1,712 million, or 3.7%, as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a lower in demand for liquidity, in addition to the fee of R$6,267 million in dividends and curiosity on capital within the interval. We current beneath our summarized Balance Sheet – Liabilities and Stockholders’ Equity as of December 31, 2021 and December 31, 2020. Please see our audited consolidated monetary statements for additional particulars about our Consolidated Balance Sheet. 156
Summarized Balance Sheet-Liabilitiesand Asof December 31, Variation Stockholders’ Equity 2021 2020 R$ million % (In thousands and thousands of R$) Financial Liabilities 1,621,786 1,579,686 42,100 2.7 At Amortized Cost 1,553,107 1,495,641 57,466 3.8 Deposits 850,372 809,010 41,362 5.1 Securitiessold underneath repurchase agreements 252,848 273,364 (20,516) (7.5) Interbank market funds, Institutional market fundsand 449,887 413,267 36,620 8.9 different monetary liabilities At Fair Value Through Profit or Loss 63,479 79,653 (16,174) (20.3) Provision for Expected Loss 5,200 4,392 808 18.4 Provision for insurance coverage and personal pensions 214,976 221,000 (6,024) (2.7) Provisions 19,592 19,819 (227) (1.1) Tax liabilities 6,246 5,710 536 9.4 Other liabilities 42,130 38,511 3,619 9.4 Total liabilities 1,904,730 1,864,726 40,004 2.1 Total stockholders’ fairness attributed to the house owners of the 152,864 142,993 9,871 6.9 dad or mum firm Non-controlling pursuits 11,612 11,532 80 0.7 Total stockholders’ fairness 164,476 154,525 9,951 6.4 Total liabilitiesand stockholders’ fairness 2,069,206 2,019,251 49,955 2.5 Total liabilities and stockholders’ fairness elevated by R$49,955 million, or 2.5%, as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a rise in monetary liabilities at amortized price. These outcomes are detailed as follows: Deposits elevated by R$41,362 million as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a rise of R$ 23,311 million in demand deposits, R$11,131 million in financial savings deposits, and R$5,817 million in time deposits. Please see “Note 15 – Deposits” to our audited consolidated monetary statements for additional particulars. Securities offered underneath repurchase agreements decreased by R$20,516 million, or 7.5.%, as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a R$46,334 million lower in belongings acquired as collateral and R$22,637 million lower in securities with proper to promote. This outcome was partially offset by a rise of R$48,455 million in belongings particularly authorities securities. Please see “Note 17 – Securities Sold Under Repurchase Agreements and Interbank and Institutional Market Funds” to our audited consolidated monetary statements for additional particulars. Interbank market funds, institutional market funds and different monetary liabilities elevated by R$36,620 million, or 8.9 %, as of December 31, 2021 in comparison with December 31, 2020, primarily because of the following will increase: (i) R$26,427 million in actual property payments, primarily as a result of tax exemptions for people, and (ii) R$15,478 million in import and export financings, as this line merchandise is instantly affected by trade fee fluctuations. This improve was partially offset by a lower of R$19,530 million in monetary payments as of December 31, 2021 in comparison with December 31, 2020. Please see “Note 17 – Securities Sold Under Repurchase Agreements and Interbank and Institutional Market Funds” to our audited consolidated monetary statements for additional particulars. Financial liabilities at truthful worth by way of revenue and loss decreased by R$16,174 million, or 20.3%, as of December 31, 2021, in comparison with December 31, 2020, primarily as a result of a R$16,301 million lower within the stability of derivatives, each for our proprietary hedging technique and that for our shoppers’ operations. This lower is said to a discount in market volatility in 2021. Please see “Note 6 – Derivatives” to our audited consolidated monetary statements for additional particulars. Total Stockholders’ fairness attributable to the house owners of the dad or mum firm elevated by 6.9% as of December 31, 2021 in comparison with December 31, 2020, primarily as a result of a R$7,864 million improve within the web earnings attributable to house owners of the dad or mum firm within the interval on account of the web earnings of R$26,760 million as of December 31, 2021, partially offset by the damaging impact of R$9,985 million from the partial spinoff of our curiosity in XP Inc. into a brand new firm, XPart, in May 2021 and the fee of R$6,267 million in dividends and curiosity on capital through the yr ended December 31, 2021. 157
b) Capital construction On December 31, 2021, capital inventory is represented by 9,804,135,348 (9,804,135,348 on December 31, 2020) portfolio-entry shares with no par worth, of which 4,958,290,359 (4,958,290,359 on December 31, 2020) are widespread and 4,845,844,989 (4,845,844,989 on December 31, 2020) are most well-liked shares with no voting rights however entitled to tag-alongside rights, within the occasion of a switch of management, within the occasion of a public providing of shares, at a worth equal to eighty p.c (80%) of the quantity paid per share with voting rights within the controlling stake, in addition to a dividend not less than equal to that of the widespread shares. Capital inventory totals R$90,729 million (R$97,148 million on December 31, 2020). In the previous three fiscal years, Itaú Unibanco has stored the stake of third-social gathering capital at ranges deemed satisfactory, as follows: % of Total liabilities % of Total liabilities % of Total liabilities In R$ Millions 12/31/2021 12/31/2020 12/31/2019 and stockholders’ fairness and stockholders’ fairness and stockholders’ fairness Stockholder´s fairness (1) 164,476 7.9% 154,525 7.7% 149,465 9.1% Third events’ capital (2) 1,904,730 92.1% 1,864,726 92.3% 1,488,016 90.9% Total fairness 2,069,206 100% 2,019,251 100,0% 1,637,481 100,0% Includes minority curiosity in subsidiaries Total liabilities excluding stockholders’ fairness Capital-to-danger-weighted belongings ratio As of December 31, 2021, our Total Capital1 reached R$169,797 million, a rise of R$18,553 million in comparison with December 31, 2020. Our Basel Ratio (calculated because the ratio between our Total Capital and the full quantity of RWA) reached 14.7%, as of December 31, 2021, a rise of 20 foundation factors in comparison with 14.5% as of December 31, 2020, primarily because of the improve in web earnings for the interval offset by the rise in our mortgage portfolio. Additionally, the Fixed Assets Ratio (Índice de Imobilização) signifies the extent of whole capital dedicated to adjusted everlasting belongings. We are inside the most restrict of fifty% of the adjusted whole capital, as established by the Central Bank. As of December 31, 2021, our Fixed Assets Ratio reached 16.9%, which presents a buffer of R$56,280 million. Our Tier I ratio elevated 10 foundation factors in relation to September 30, 2021 primarily as a result of a rise in web earnings within the interval, partially offset by the rise in our mortgage portfolio. Please see “Note 32 – Risk and Capital Management” of our audited consolidated monetary statements for additional particulars about regulatory capital. ¹ The Total Capital consists of the sum of three gadgets, named: (i). Main Capital: the sum of capital inventory, reserves and retained earnings, much less deductions and prudential changes; (ii). Complementary Capital: composed of perpetual devices that meet the eligibility necessities. Added to Main Principal, it makes up Level I; and (iii). Level II: composed of subordinated debt devices with outlined maturity that meet the eligibility necessities. Added to Main and Complementary Capital, it makes up Total Capital. c) Payment capability in relation to monetary commitments assumed We guarantee our full capability to honor funds with respect to monetary commitments assumed and we handle liquidity reserves by means of estimates of funds that will likely be accessible for investments, taking into consideration enterprise continuity underneath regular circumstances. 158
Liquidity danger is managed by a division impartial from the enterprise departments, and is chargeable for defining the set-up of the reserve by proposing assumptions for the conduct of money flows in numerous intervals, proposing and monitoring liquidity danger limits in step with the establishment’s danger urge for food, informing about any noncompliance, contemplating liquidity dangers individually in international locations the place we function, simulating the conduct of money flows underneath stress circumstances, assessing and reporting dangers inherent in new merchandise and transactions on a well timed foundation, and reporting data required by regulatory our bodies. All actions are assessed by impartial validation, inner controls and audit departments. Furthermore, and in accordance with CVM necessities and guidelines of the Central Bank of Brazil, we month-to-month ship our Liquidity Risk Statements (DLR) to the Central Bank of Brazil, and the next gadgets are frequently ready and submitted to senior administration for monitoring and determination assist: Different initiatives for the evolution of capability; Contingency plans for disaster conditions; Reports and graphs that describe danger positions; Assessment of funding price and various funding sources; Monitoring the diversification of funding by way of fixed management of funding sources, contemplating the kind of investor and time period, amongst different components. The desk beneath presents belongings and liabilities based mostly on remaining contractual phrases, contemplating nondiscounted flows: Undiscounted future flows apart from derivatives* In R$ Million Over Financial Assets (1) 0-30 days 31-twelve months 366-720 days Total 720 days 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 Cash and deposits on demand 44,512 46,224 30,367 – – – –44,512 46,224 30,367 Interbank investments 195,260 234,755 69,756 32,238 43,276 151,497 4,535 6,273 1,444 1,670 1,092 1,191 233,703 285,396 223,888 Securities bought underneath agreements to resell – Funded place (2) 32,435 44,743 26,797 – – – –32,435 44,743 26,797 Securities bought underneath agreements to resell – Financed place 105,875 150,474 17,871 19,355 31,561 144,234 – – – 125,230 182,035 162,105 Interbank deposits (4) 56,950 39,538 25,088 12,883 11,715 7,263 4,535 6,273 1,444 1,670 1,092 1,191 76,038 58,618 34,986 Securities 158,915 239,964 131,195 30,191 16,348 17,669 45,156 17,144 19,846 223,244 101,908 108,011 457,506 375,364 276,721 Government securities-accessible 145,989 226,615 111,487 453 393 300 483 379 302 6,737 5,779 4,763 153,662 233,166 116,852 Government securities – topic to repurchase commitments 1,337 93 7,744 13,446 3,905 6,616 27,132 6,749 12,445 35,575 15,132 25,366 77,490 25,879 52,171 Private securities-accessible 11,247 13,256 11,964 13,349 11,113 10,181 12,062 8,352 4,967 133,385 51,927 56,839 170,043 84,648 83,951 Private securities – topic to repurchase commitments 342 – 2,943 937 572 5,479 1,664 2,132 47,547 29,070 21,043 56,311 31,671 23,747 Derivative monetary devices 15,492 17,634 6,998 17,924 17,502 10,959 8,826 6,478 5,355 26,803 34,890 18,542 69,045 76,504 41,854 Net Position 15,492 17,634 6,998 17,924 17,502 10,959 8,826 6,478 5,355 26,803 34,890 18,542 69,045 76,504 41,854 Swaps 1,820 4,064 107 3,803 2,952 4,039 7,341 5,117 4,464 25,050 33,886 17,848 38,014 46,019 26,458 Option 10,599 10,103 4,696 9,216 8,783 3,043 683 992 500 754 540 21,252 20,418 8,456 Forward operations (onshore) 1,595 1,323 940 1,513 757 1,207 3 5 15 – 3,111 2,085 2,162 Other spinoff monetary devices 1,478 2,144 1,255 3,392 5,010 2,670 799 364 376 999 464 477 6,668 7,982 4,778 Loan and lease operations portfolio (3) 77,663 60,896 63,401 282,913 236,173 197,090 135,840 114,523 93,203 315,004 317,492 236,982 811,420 729,084 590,676 Other monetary belongings –144 6-5 – 8 – 157 6-Total monetary belongings 491,842 599,473 301,717 363,410 313,305 377,215 194,362 144,418 119,848 566,729 455,382 364,726 1,616,343 1,512,578 1,163,506 (1) The belongings portfolio doesn’t embrace the stability of obligatory deposits in Central Bank, amounting to R$ 104,592 (R$ 90,059 at 12/31/2020) which launch of funds is linked to the maturity of the legal responsibility portfolios.The quantities of PGBL and VGBL aren’t included within the belongings portfolio as a result of they’re lined in Note 26 of the Consolidated Financial Statements. Net of R$ 9,266 (R$ 11,119 at 12/31/2020), which securities are restricted to ensure transactions at B3 S.A. and the Central Bank of Brazil. Net of fee to retailers of R$ 92,011 (R$ 71,820 at 12/31/2020) and the quantity of liabilities from transactions associated to credit score task R$ 1,004 (R$ 1,623 at 12/31/2020) . Includes R$ 40,221 (R$ 32,477 at 12/31/2020) associated to Compulsory Deposits w ith Central Banks of different international locations. 159
Undiscounted future flows apart from derivatives* In R$ Million 0-30 31-365 365-720 Over Financial Liabilities Total days days days 720 days 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 Deposits 397,416 369,957 266,690 96,669 145,085 69,367 95,397 36,258 20,555 350,792 344,261 211,531 940,274 895,561 568,143 Demand deposits 158,116 134,805 82,306 – – – –158,116 134,805 82,306 Savings deposits 190,601 179,470 144,558 – – – –190,601 179,470 144,558 Time deposits 46,938 53,978 37,570 94,040 143,446 68,757 95,149 36,182 20,502 350,791 343,974 211,395 586,918 577,580 338,224 Interbank deposits 933 1,633 2,247 2,629 1,639 610 248 76 53 1 287 136 3,811 3,635 3,046 Other deposits 828 71 9 – – – –828 71 9 Compulsory deposits (44,124) (36,337) (38,576) (12,461) (16,874) (14,067) (11,797) (4,412) (4,110) (36,210) (32,436) (34,495) (104,592) (90,059) (91,248) Demand deposits (12,012) (6,926) (4,412) – – – –(12,012) (6,926) (4,412) Savings deposits (25,807) (22,672) (26,234) – – – –(25,807) (22,672) (26,234) Time deposits (6,305) (6,739) (7,930) (12,461) (16,874) (14,067) (11,797) (4,412) (4,110) (36,210) (32,436) (34,495) (66,773) (60,461) (60,602) Securities offered underneath repurchase agreements (1) 265,184 260,846 246,499 5,615 5,024 6,509 7,020 5,183 5,218 5,943 22,591 17,585 283,762 293,644 275,811 Funds from acceptances and issuance of securities (2) 2,986 2,391 4,335 35,346 40,463 47,697 30,927 35,189 39,505 83,967 68,573 67,435 153,226 146,616 158,972 Borrowings and onlending (3) 9,875 11,891 6,368 71,278 64,735 65,182 9,491 6,239 6,259 12,868 6,388 7,462 103,512 89,253 85,271 Subordinated Debt (4) 55 6,797 251 27,857 8,428 6,594 16,282 28,994 11,794 48,969 45,762 53,745 93,163 89,981 72,384 Derivative monetary devices 7,153 16,791 6,653 23,799 19,674 12,196 8,596 6,895 9,458 23,656 36,145 19,521 63,204 79,505 47,828 Net Position 7,153 16,791 6,653 23,799 19,674 12,196 8,596 6,895 9,458 23,656 36,145 19,521 63,204 79,505 47,828 Swaps 1,562 7,344 326 3,970 3,612 5,218 6,944 5,573 8,349 22,170 35,260 19,034 34,646 51,789 32,927 Option 4,086 6,355 3,668 16,896 12,381 4,567 786 998 571 779 528 255 22,547 20,262 9,061 Forward operations (onshore) 762 892 753-13 1 – – – 762 905 754 Other spinoff monetary devices 743 2,200 1,906 2,933 3,668 2,410 866 324 538 707 357 232 5,249 6,549 5,086 Other monetary liabilities –158 5 – – 3 – 161 5-Total monetary liabilities 638,545 632,336 492,220 248,261 266,540 193,478 155,916 114,346 88,679 489,988 491,284 342,784 1,532,710 1,504,506 1,117,161 Includes personal and third events’ portfolios. Includes mortgage notes, actual property credit score payments, agribusiness, monetary payments and structured operations certificates recorded in interbank and institutional market funds and liabilities for issuance of debentures and overseas securities recorded in funds from institutional markets. Recorded in funds from interbank markets. Recorded in funds from institutional markets. 160
d) Sources of financing used for working capital and investments in non-present belongings The desk beneath presents our common deposits and borrowings for the 12-month intervals ended December 31, 2021 and 2020: 12/31/2021 12/31/2020 Deposits and Average Loans Average % of whole Average % of whole stability funding stability funding (In thousands and thousands of R$, besides percentages) Interest-bearing liabilities 1,557,003 77.3% 1,487,359 78.4% Interest-bearing deposits 667,407 33.1% 569,449 30.0% Savings deposits 184,469 9.2% 161,226 8.5% Deposits from banks and time deposits 482,938 24.0% 408,223 21.5% Securities offered underneath repurchase agreements 249,691 12.4% 287,212 15.1% Interbank market debt and Institutional market debt 299,712 14.9% 307,600 16.2% Interbank market debt 161,931 8.0% 174,466 9.2% Institutional market debt 137,781 6.8% 133,135 7.0% Reserves for insurance coverage and personal pension and Liabilities for capitalization plans 221,084 11.0% 220,274 11.6% Other curiosity-bearing liabilities 119,109 5.9% 102,824 5.4% Non-interest bearing liabilities 300,039 14.9% 261,483 13.8% Non-interest bearing deposits 145,306 7.2% 262,081 13.8% Other non-curiosity-bearing liabilities 154,733 7.7% 112,519 5.9% Total stockholders’ fairness attributed to the house owners of the dad or mum firm 146,678 7.3% 135,087 7.1% Non-controlling pursuits 11,577 0.6% 12,552 0.7% Total 2,015,297 100.0% 1,897,080 100.0% Our principal sources of funding are curiosity-bearing deposits, deposits acquired underneath repurchase agreements, on-lending from authorities monetary establishments, strains of credit score with overseas banks and the issuance of securities overseas. Please see “Note 15 – Deposits” to our audited consolidated monetary statements for additional particulars about funding. We could every now and then search to retire or buy our excellent debt, together with our subordinated notes (topic to the approval of the Central Bank), and senior notes, by way of money purchases within the open market purchases, privately negotiated transactions or in any other case. Such repurchases, if any, will rely on prevailing market circumstances, our liquidity necessities, contractual restrictions and different components. Notes repurchased could also be held, cancelled or resold and any resale thereof might want to adjust to relevant necessities or exemptions underneath the related securities legal guidelines. Some of our lengthy-time period debt gives for acceleration of the excellent principal stability upon the incidence of specified occasions, that are occasions ordinarily present in lengthy-time period financing agreements. Up to December 31, 2021, none of those occasions, together with any occasions of default or failure to fulfill monetary covenants, have occurred. Under Brazilian legislation, money dividends could solely be paid if the subsidiary paying such dividends has reported a revenue in its monetary statements. In addition, subsidiaries which might be monetary establishments are prohibited from making loans to Itaú Unibanco Holding, however they’re allowed to make deposits in Itaú Unibanco Holding, which signify interbank certificates of deposit (Certificado de Depósito Interbancário). These restrictions haven’t had, and aren’t anticipated to have, a fabric influence on our skill to satisfy our money obligations. The desk beneath presents the breakdown of our sources of funding on December 31, 2021, 2020 and 2019: 161
% of whole % of whole % of whole Breakdown of our sources of funding 2021 2020 2019 funding funding funding (In million of R$, besides percentages) Deposits 850,372 59.9 809,010 58.8 507,060 48.6 Demand deposits 158,116 11.1 134,805 9.8 82,306 7.9 Saving deposits 190,601 13.4 179,470 13.0 144,558 13.9 Time deposits 497,051 35.0 491,234 35.7 277,166 26.6 Interbank deposits 3,776 0.3 3,430 0.2 3,021 0.3 Other 828 0.1 71 0.0 9 0.0 Securities offered underneath repurchase settlement 252,848 17.8 273,364 19.9 256,583 24.6 Interbank market debt 177,145 12.5 156,035 11.3 174,862 16.8 Mortgage notes 30,998 2.2 11,029 0,8 4,320 0.4 Real property credit score payments 10,663 0.8 4,205 0,3 7,635 0.7 Agribusiness credit score payments 13,701 1.0 14,285 1.0 21,204 2.0 Financial credit score payments 24,059 1.7 43,589 3,2 65,433 6.3 Import and export financing 86,948 6.1 71,470 5,2 64,622 6.2 On lending-home 10,776 0.8 11,457 0.8 11,648 1.1 Institucional market debt 138,636 9.8 138,308 10.0 104,244 10.0 Subordinated debt 75,036 5.3 74,916 5.4 59,462 5.7 Foreign borrowings by way of securities 62,843 4.4 62,433 4,5 43,672 4.2 Structured Operations Certificates 757 0.1 959 0.1 1,110 0.1 Total 1,419,001 100.0 1,376,717 100.0 1,042,749 100.0 e) Sources of financing for working capital and investments in noncurrent belongings supposed for use to cowl liquidity deficiencies Our Board of Directors determines our coverage concerning liquidity danger administration and establishes broad quantitative liquidity danger administration limits in keeping with our danger urge for food. The CSRML (Comitê Superior de Risco de Mercado e Liquidez), composed of members of senior administration, is chargeable for strategic liquidity danger administration in keeping with the board-accredited liquidity danger framework and danger urge for food. In establishing our pointers, the CSRML considers the liquidity implications of every market phase and product. Our institutional treasury unit is chargeable for the day-to-day administration of the Itaú Unibanco Group’s liquidity profile, inside the parameters set by our Board of Directors and the CSRML. This consists of an oversight duty with respect to all enterprise models working exterior of Brazil. We keep separate liquidity swimming pools at our Brazilian operations and at every of our subsidiaries exterior of Brazil. Our Brazilian operations embrace monetary establishments in Brazil and the entities utilized by the Brazilian operations for funding and serving their shoppers overseas. Each of our subsidiary has its personal treasury operate with acceptable autonomy to handle liquidity in line with native wants and laws, whereas remaining in compliance with the liquidity limits established by our senior administration. In common, there are hardly ever liquidity transfers between subsidiaries or between the pinnacle workplace and a subsidiary, besides underneath very particular circumstances (e.g., focused capital will increase). National Monetary Council (“CMN”) laws set up capital conservation and countercyclical buffers for Brazilian monetary establishments akin to ourselves, and determines their minimal percentages in addition to which sanctions and limitations will apply in case of non-compliance with such further necessities. We outline our consolidated group operational liquidity reserve as the full quantity of belongings that may be quickly became money, based mostly on native market practices and authorized restrictions. The operational liquidity reserve typically consists of money and deposits on demand, funded positions of securities bought underneath agreements to resell and unencumbered authorities securities. The following desk presents our operational liquidity reserve as of December 31, 2021, 2020 and 2019: 162
Asof December 31, 2021Average Operational Liquidity Reserve (1) Balance 2021 2020 2019 (In millionsof R$) Cash 44,512 46,224 30,367 42,433 Securitiespurchased underneath agreementsto resell – Funded place (2) 32,436 44,743 26,797 38,095 Unencumbered authorities securities (3) 152,099 232,245 115,774 193,130 Operational reserve 229,047 323,212 172,938 273,658 Average calculated based mostly on audited interim monetary statements. Net(1)of R$ Average9.266 in 12/31/2021calculated(R$11.119batsed12/31/2020on auditedand R$8.quarter544 at 12/31/2019),financialwhichstatements.securities are restricted to ensure transactions at B3S.A.- Brasil,Bolsa,Balcão (B3) and the Central (2) Bank. Net of R$ 9,266 in 12/31/2021 (R$ 11,119 at 12/31/2020 and R$ 8,544 at 12/31/2019), which securities are restricted to (3) Present val gues ar are ntee included transactions on account of a the B3 change S.A. in – the Brasil, reporting Bolsa, of future Balcão flows (B3) of belongings and that the are Central now reported Bank. as future worth as of September 2016. Presente values are included as a outcomes of the change within the reporting od future flows of belongings that at the moment are reported as future worth as of September 2016. Our administration controls our liquidity reserves by projecting the assets that will likely be accessible for funding by our treasury division. The approach we make use of includes the statistical projection of eventualities for our belongings and liabilities, contemplating the liquidity profiles of our counterparties. Short-term minimal liquidity limits are outlined in line with pointers set by the CSRML. These limits purpose to make sure that the Itaú Unibanco Group all the time has ample liquidity accessible to cowl unexpected market occasions. These limits are revised periodically, based mostly on the projection of money wants in a typical market conditions (i.e., stress eventualities). Management of liquidity makes it doable for us to concurrently meet our working necessities, defend our capital and exploit market alternatives. Our technique is to take care of satisfactory liquidity to satisfy our current and future monetary obligations and to capitalize on enterprise alternatives as they come up. We are uncovered to results of the disruptions and volatility within the international monetary markets and the economies in these international locations the place we do enterprise, particularly Brazil. However, as a result of our steady sources of funding, which embrace a big deposit base, the massive variety of correspondent banks with which we’ve lengthy-standing relationships, in addition to amenities in place which allow us to entry additional funding when required, we’ve not traditionally skilled liquidity challenges, even during times of disruption within the worldwide monetary markets. Liquidity Ratios The Basel III Framework launched international liquidity requirements, offering for minimal liquidity necessities and goals to make sure that banks can depend on their very own sources of liquidity, leaving central banks as a lender of final resort. Basel III gives for 2 liquidity ratios to make sure that monetary establishments have ample liquidity to satisfy their brief-time period and lengthy-time period obligations: (i) the liquidity protection ratio, or LCR, and (ii) the web steady funding ratio, or NSFR. We imagine that the LCR and NSFR present extra related data than an evaluation of summarized money flows. We current beneath a dialogue of our LCR for the three-month interval ended on December 31, 2021 and NSFR for the yr ended on December 31, 2021. Liquidity Coverage Ratio The LCR measures the brief-time period resistance of a financial institution’s liquidity danger profile. It is the ratio of the inventory of excessive-high quality liquid belongings to anticipated web money outflows over the subsequent 30 days, assuming a situation of idiosyncratic or systemic liquidity stress. We calculate our LCR in line with the methodology established in Central Bank Circular No. 3,749/2015. We measure our whole excessive liquidity belongings for the top of every interval to money outflows and inflows because the day by day common worth for every interval. Pursuant to Central Bank laws, efficient as of January 1, 2019, the minimal LCR is 100%. 163
Our common LCR as of December 31, 2021 was 159.1% and, accordingly, above Central Bank necessities. Net Stable Funding Ratio The NSFR measures lengthy-time period liquidity danger. It is the ratio of obtainable steady funding to required steady funding over a one-yr time interval, assuming a careworn situation. We calculate our NSFR in line with the methodology established in Central Bank Circular No. 3,869/2017. The NSFR corresponds to the ratio of our accessible steady funds (ASF) for the top of every interval to our required steady funds (RSF) for the top of every interval. Pursuant to Central Bank laws, efficient as of October 1, 2018, the minimal NSFR is 100%. Asof December 31, Net Stable Funding Ratio 2021 2020 Total Ajusted Value (In thousands and thousands of R$) Total Available Stable Funding (ASF)¹ 1,016,989 956,033 Total Required Stable Funding (RSF)² 839,830 758,907 NSFR(%) 121.1% 126.0% (1) ASF – Available Stable Funding – refers to liabilities and fairness weighted by a reduction issue in line with their stability, pursuant to Central Bank Circular 3,869/2017. (2) RSF – Required Stable Funding – refers to belongings and off-stability exposures weighted by a reduction issue to their necessity, pursuant to Central Bank Circular 3,869/2017. As of December 31, 2021, our ASF totaled R$1,017.0 billion, primarily as a result of capital and Retail Banking and Wholesale Banking funding, and our RSF totaled R$839.8 billion, notably as a result of loans and financing with Wholesale Banking and Retail Banking prospects, central governments and transactions with central banks. As of December 31, 2021, our NSFR was 121.1% and, accordingly, above Central Bank necessities. f) Indebtedness ratios and traits of those money owed, additionally describing: I-Relevant mortgage and financing agreements II-different lengthy-time period relationships with monetary establishments The Issuer has funding, borrowings and onlending as its principal sources of financing, and a good portion comes from the retail banking phase. Total funds from shoppers reached R$1,068.6 billion (R$1,022.5 billion on December 31, 2020 and R$715.3 billion on December 31, 2019), and noteworthy have been time deposits. A good portion of those funds – 37.9% of whole or R$405.2 billion – is straight away accessible to the consumer. However, the historic conduct of the amassed stability of the 2 largest gadgets-demand deposits and financial savings-is comparatively constant: the sum of their balances grows over time and there may be an extra of money inflows over outflows when evaluating the month-to-month averages of the flows. 164
The desk beneath exhibits the breakdown of funding with maturities of as much as 30 days and whole funds from shoppers. R$ million 12/31/2021 12/31/2020 12/31/2019 Funding from shoppers 0-30 days Total % 0-30 days Total % 0-30 days Total % Deposits 402,930 850,372-370,604 809,010 0 272,447 507,060-Demand deposits 158,116 158,116 14.8 134,805 134,805 13.2 82,306 82,306 11.5 Saving deposits 190,601 190,601 17.9 179,470 179,470 17.5 144,558 144,558 20.1 Time deposits 52,563 497,051 46.5 55,778 491,234 48.0 44,855 277,166 38.8 Other 1,650 4,604 0.4 551 3,501 0.3 728 3,030 0.4 Fund from acceptances and issurance of securities (1) 2,310 143,138 13.4 1,978 136,638 13.4 4,293 143,569 20.2 Funds from personal challenge (2)-21-218 1,985 0.2 235 5,258 0.7 Subordinated Debt-75,036 7.0 6,657 74,916 7.3 2 59,462 8.3 Total 405,240 1,068,567 100.0 379,457 1,022,549 100.0 276,977 715,349 100.0 (1) Includes mortgage notes, actual property credit score payments, agribusiness, monetary and structured operations certificates recorded in interbank market and money owed and liabilities for issuance of debentures and overseas borrowing and securities recorded in funds from institutional markets. Refer to deposits acquired underneath repurchase agreements with securities from personal challenge. III-Level of subordination between money owed In the case of judicial or extrajudicial liquidation of the Issuer, the a number of bankrupt property collectors are paid in line with precedence. Particularly in relation to debt that comprise the Issuer’s indebtedness, the next precedence should be adopted: secured money owed, unsecured money owed, subordinated debt eligible to make up Tier II of the Issuer’s preferential Equity, and subordinated debt eligible to make up Tier I of the Issuer’s Referential Equity. It is value mentioning that collectors with secured money owed are given precedence in relation to others, as much as the restrict of the asset pledged in assure, however they’re deemed unsecured collectors in relation to the quantity exceeding such restrict. Although no subordination exists between the numerous unsecured collectors or between the collectors of the identical kind of subordinated debt likewise, collectors with subordinated debt eligible to make up Tier II of the Issuer’s Referential Equity are given precedence in relation to collectors with subordinated debt eligible to make up Tier I of the Issuer’s Referential Equity. Funds raised with the issuance of subordinated debt securities are as follows: 165
Account stability Principal quantity Name of safety / forex Issue Maturity Return p.a (unique forex) 12/31/2021 Subordinated monetary payments-BRL 6 2011 2021 109.25% to 110.5% of CDI-2313 2012 2022 IPCA + 5.15% to five.83% 6,380 20 2012 2022 IGPM + 4.63% 44 2146 2019 perpetual 114% of SELIC 2,187 935 2019 perpetual SELIC + 1.17% to 1.19% 976 50 2019 2028 CDI + 0.72% 55 2281 2019 2029 CDI + 0.75% 2,502 450 2020 2029 CDI + 2% 481 106 2020 2030 IPCA + 4.64% 125 1556 2020 2030 CDI + 2% 1,664 5488 2021 2031 CDI + 2% 5,651 Total 20,065 Subordinated euronotes-USD 1,000 2010 2021 5.75%-1,042 2011 2021 5.75% to six.2%-550 2012 2021 6.2%-2,592 2012 2022 5.5% to five.65% 14,742 1,858 2012 2023 5.13% 10,432 1,250 2017 perpetual 6.13% 6,997 750 2018 perpetual 6.5% 4,262 750 2019 2029 4.5% 4,205 700 2020 perpetual 4.6% 3,967 500 2021 2031 3.9% 2,804 Total 47,409 Subordinated bonus-CLP 27,776 1997 2022 7.45% to eight.30% 36 180,351 2008 2033 3.50% to 4.92% 1,423 97,962 2009 2035 4.75% 1,079 1,060,250 2010 2032 4.35% 106 1,060,250 2010 2035 3.90% to three.96% 244 1,060,250 2010 2036 4.48% 1,160 1,060,250 2010 2038 3.93% 845 1,060,250 2010 2040 4.15% to 4.29% 651 1,060,250 2010 2042 4.45% 317 57,168 2014 2034 3.80% 414 Total 6,275 Subordinated bonus-COP 104,000 2013 2023 IPC + 2% 145 146,000 2013 2028 IPC + 2% 203 648,171 2014 2024 LIB 939 Total 1,287 Total 75,036 IV-Any restrictions imposed on the issuer, notably in relation to indebtedness limits and elevating of recent debt, distribution of dividends, disposal of belongings, challenge of recent securities and disposal of stockholding management, and whether or not the issuer complies with these restrictions. Itaú Unibanco Holding S.A. (or Issuer) arrange a program to challenge and distribute notes by way of sure monetary intermediaries (“Program”) in March 2010. This Program, as presently current, establishes that the Issuer itself, or its Cayman Islands department, could challenge senior or subordinated notes, the latter of that are eligible, in line with its phrases, to make up Tier I or Tier II of the Issuer’s Referential Equity (“Notes”) as much as the restrict of 100 billion U.S. {dollars} (US$100,000,000,000.00). This Program incorporates monetary covenants that decide the acceleration of the unpaid principal quantity of the Notes upon the incidence of sure occasions, also called Events of Default, as it’s ordinarily included in lengthy-time period financing contracts. The Events of Default relevant to the Senior Notes issued underneath the Program are: (i) nonpayment of monetary obligations (principal and curiosity) due with respect of the Notes (nonpayment); (ii) noncompliance with different materials obligations assumed underneath the corresponding Note apart from a monetary obligation to pay any quantities underneath the Notes (breach of different obligations); (iii) default of different money owed assumed by Itaú Unibanco Holding S.A. or acceleration of different money owed assumed by Itaú Unibanco Holding S.A. or its related subsidiaries (understood as these accounting for not less than 10% of whole consolidated belongings disclosed within the newest annual stability sheet) at an quantity equal to or larger than 0.8% of Itaú Unibanco Holding S.A’s regulatory capital (cross default); (iv) dissolution (supplied that not associated to a company transaction wherein all Itaú Unibanco Holding’s obligations underneath the Senior Notes are assumed by the successor), insolvency or chapter of Itaú Unibanco Holding S.A. (dissolution and insolvency); and (v) any occasions that underneath Brazilian legislation have results just like these described in merchandise (iv). The Events of Default relevant to the Subordinated Notes issued 166
underneath the Program as much as August 4, 2016 are as follows: (i) nonpayment of monetary obligations (non-fee); (ii) dissolution (supplied that not associated to a merger, takeover or restoration not involving chapter or insolvency, wherein all Itaú Unibanco Holding’s obligations are assumed by the successor), insolvency or chapter of Itaú Unibanco Holding (dissolution and insolvency); and (iii) any occasions that underneath Brazilian legislation have results just like these described in merchandise (ii). The Events of Default relevant to the Subordinated Notes issued underneath the Program after August 4, 2016 are described beneath. On August 4, 2016, the Program was amended to adapt to the provisions of National Monetary Council (CMN) Resolution No. 4,192, of March 1, 2013 (revoked and changed, as from January 2, 2022, by CMN Resolution No. 4,955, of October 21, 2021, however with no influence on the phrases of the Program described beneath). Any Subordinated Notes issued after that date are topic to everlasting termination within the following occasions: (i) the Issuer disclosing that its Core Capital is at a degree decrease than 5.125% (for Subordinated Notes eligible to make up Tier I of the Issuer’s Referential Equity) or 4.5% (for Subordinated Notes eligible to make up Tier II of the Issuer’s Referential Equity) of their danger-weighted belongings (RWA); (ii) execution of a dedication to contribute funds to the Issuer, if the exception supplied for within the heading of Article 28 of Supplementary Law No. 101, of May 4, 2000, happens; (iii) the Central Bank of Brazil decides on both a particular short-term administration or intervention within the Issuer; or (iv) the Central Bank of Brazil decides on the expiration of Subordinated Notes, in line with the factors set forth by the National Monetary Council. Additionally, the Subordinated Notes eligible to make up the Tier I of the Issuer’s Referential Equity gives for (i) the fee of associated curiosity earned solely by way of funds from income and income reserves topic to distribution within the final calculation interval; and (ii) the suspension of fee of any associated curiosity earned (a) exceeding the quantities accessible for this objective; (b) in the identical proportion of the restriction imposed by the Central Bank of Brazil to the dividend distribution or different outcomes associated to shares eligible to the Issuer’s Core Capital; (c) in the identical percentages of retention as the quantity payable or distributable as (x) variable compensation to administration members; and (y) dividends and curiosity on capital, in view of any insufficiency of Additional Core Capital. Regarding the aforementioned occasions, any curiosity of which fee is suspended will likely be deemed terminated. None of conditions described above will likely be deemed an Event of Default or one other issue giving rise to debt acceleration in any authorized enterprise wherein the Issuer takes half. The Events of Default relevant to Subordinated Notes eligible to make up the Issuer’s Referential Equity issued after August 4, 2016 are as follows: (i) nonpayment of monetary obligations (non-fee), regardless that its incidence causes no acceleration of the excellent stability of those Notes; (ii) dissolution (supplied that not associated to a company transaction wherein all Itaú Unibanco Holding S.A.’s obligations underneath the Senior Notes are assumed by the successor), insolvency or chapter of Itaú Unibanco Holding S.A. (dissolution and insolvency) and (iii) any occasions that underneath the Brazilian legislation have results just like these described in merchandise (ii). By December 31, 2021, not one of the aforementioned monetary covenants have been breached nor there was any noncompliance with any monetary obligation assumed underneath the Program. To date, the next issuances (the “Issuances”) have been accomplished in accordance with the Program: (i) First Issuance: Subordinated Notes amounting to at least one billion U.S. {dollars} (US$1,000,000,000.00) issued on April 15, 2010, settled on April 15, 2020, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (ii) Second Issuance: Subordinated Notes amounting to at least one billion U.S. {dollars} (US$1,000,000,000.00) issued on September 23, 2010, settled on January 22, 2021, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (iii) Third Issuance: Senior Notes amounting to 5 hundred million Reais (R$500,000,000.00) issued on November 23, 2010, settled on November 23, 2015; (iv) Reopening of the Second Issuance: Subordinated Notes amounting to 2 hundred and fifty million U.S. {dollars} (US$250,000,000.00) issued on January 31, 2011, settled on January 22, 2021, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange. The Subordinated Notes described herein have been issued and distributed by way of the reopening the second issuance of Subordinated Notes and are the second sequence of the second issuance of the Subordinated Notes underneath the Program. The Subordinated Notes issued within the first sequence and the Subordinated Notes issued within the second sequence of the second issuance share the identical ISIN and CUSIP code and are fungible with one another; (v) Fourth Issuance: Subordinated Notes amounting to 5 hundred million U.S. {dollars} (US$500,000,000.00) issued on June 21, 2011, settled on December 21, 2021, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (vi) Reopening of the Fourth Issuance: Subordinated Notes amounting to 5 hundred fifty million U.S. {dollars} (US$550,000,000.00) issued on January 24, 2012, settled on December 21, 2021, which have been accepted 167
for itemizing and buying and selling on the Luxembourg Stock Exchange. The Subordinated Notes described herein have been issued and distributed by way of the reopening the fourth issuance of Subordinated Notes and are the second sequence of the fourth issuance of the Subordinated Notes underneath the Program. The Subordinated Notes issued within the first sequence and the Subordinated Notes issued within the second sequence of the Fourth Issuance share the identical ISIN and CUSIP code and are fungible with one another; (vii) Fifth Issuance: Subordinated Notes amounting to at least one billion, 2 hundred fifty million U.S. {dollars} (US$1,250,000,000.00) issued on March 19, 2012, with maturity on March 19, 2022, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (viii) Sixth Issuance: Subordinated Notes amounting to at least one billion, 300 seventy-5 million U.S. {dollars} (US$1,375,000,000.00) issued on August 6, 2012, with maturity on August 6, 2022, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (ix) Seventh Issuance: Subordinated Notes amounting to at least one billion, eight hundred seventy million U.S. {dollars} (US$1,870,000,000.00) issued on November 13, 2012, with maturity on May 13, 2023, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (x) Eighth Issuance: Senior Notes amounting to at least one billion, fifty million U.S. {dollars} (US$1,050,000,000.00) issued on May 26, 2015, settled on May 26, 2018; (xi) Ninth Issuance: Perpetual Subordinated Notes amounting to at least one billion, 2 hundred fifty million U.S. {dollars} (US$1,250,000,000.00) issued on December 12, 2017, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xii) Tenth Issuance: Perpetual Subordinated Notes amounting to seven hundred fifty million U.S. {dollars} (US$750,000,000.00) issued on March 19, 2018, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xiii) Eleventh Issuance: Tier 2 Subordinated Notes amounting to seven hundred fifty million U.S. {dollars} (US$750,000,000.00) issued on November 21, 2019, with maturity on November 21, 2029, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xiv) Twelfth Issuance: Senior Notes amounting to at least one billion U.S. {dollars} (US$1,000,000,000.00) issued on January 24, 2020, with maturity on January 24, 2023, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xv) Thirteenth Issuance: Senior Notes amounting to 5 hundred million U.S. {dollars} (US$500.000.000,00) issued on January 24, 2020, with maturity on January 24, 2025, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xvi) Fourteenth Issuance: Perpetual Subordinated Notes amounting to seven hundred million U.S. {dollars} (US$700,000,000.00) issued on February 27, 2020, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange; (xvii) Fifteenth Issuance: Tier 2 Subordinated Notes amounting to 5 hundred million U.S. {dollars} (US$500.000.000,00) issued on January 15, 2021, with maturity on April 15, 2031, which have been accepted for itemizing and buying and selling on the Luxembourg Stock Exchange. The Program and the Issuances place sure circumstances and restrictions on the Issuer, as follows: Disposal of Assets and Stockholding Control. The Issuer is allowed to get rid of all or a considerable portion of its belongings, together with by way of company restructuring (akin to merger and spin-off processes) with out the consent of the house owners of the Notes, supplied that, on account of the transactions beneath: (i) the entity receiving these belongings or succeeding the Issuer undertakes to adjust to all compensation obligations of the principal and curiosity arising from any notes issued underneath this Program, in addition to to imagine all different obligations imposed on the Issuer; no occasion of default happens by finishing up these transactions; and based mostly any public announcement of the transaction and earlier than its completion, the Issuer’s administration signify to the trustee that the asset disposal is in compliance with the obligations and restrictions imposed on the Issuer, and the Issuer’s authorized advisors ship a authorized opinion to the trustee on the belief of obligations arising from the Program by the brand new entity taking on the belongings or succeeding the Issuer. 168
g) Limits on financing already contracted and percentages used Itaú Unibanco Holding is topic to parameters required by financial authorities, in accordance with the Basel rules. Management considers the present Basel ratio to be acceptable (14.7% based mostly on the Prudential Conglomerate, of which 13.0% of Tier I and 1.7% of Tier II). Furthermore, Itaú Unibanco Holding exceeds the minimal Referential Equity required by R$77,490 million (R$67,867 million on December 31, 2020), greater than the Additional Core Capital of R$34,615 million (R$23,450 million on December 31, 2020), extensively lined by accessible capital. h) Significant modifications in every merchandise of the monetary statements 169
Assets 12/31/2021 % 12/31/2020 % 12/31/2019 % 2021 x 2020 2020 X 2019 Cash 44,512 2.2% 46,224 2.3% 30,367 1.9% (3.7%) 52.2% Financial Assets 1,915,573 92.6% 1,851,322 91.7% 1,501,481 91.7% 3.5% 23.3% At Amortized Cost 1,375,782 66.5% 1,275,799 63.2% 1,101,892 67.3% 7.8% 15.8% Compulsory deposits within the Central Bank of Brazil 104,592 5.1% 90,059 4.5% 91,248 5.6% 16.1% (1.3%) Interbank deposits 69,942 3.4% 55,685 2.8% 34,583 2.1% 25.6% 61.0% Securities bought underneath agreements to resell 169,718 8.2% 239,943 11.9% 198,428 12.1% (29.3%) 20.9% Voluntary Investments on the Central Bank of Brazil 5,800 0.3% – – – Securities 147,746 7.1% 129,804 6.4% 133,119 8.1% 13.8% (2.5%) Loan and lease operations 822,590 39.8% 714,104 35.4% 585,791 35.8% 15.2% 21.9% Other monetary belongings 96,473 4.7% 93,255 4.6% 94,752 5.8% 3.5% (1.6%) (-) Provision for Expected Loss (41,079) -2.0% (47,051) -2.3% (36,029) -2.2% (12.7%) 30.6% At Fair Value Through Other Comprehensive Income 105,622 5.1% 109,942 5.4% 76,660 4.7% (3.9%) 43.4% Securities 105,622 5.1% 109,942 5.4% 76,660 4.7% (3.9%) 43.4% At Fair Value Through Profit or Loss 434,169 21.0% 465,581 23.1% 322,929 19.7% (6.7%) 44.2% Securities 364,967 17.6% 389,071 19.3% 281,075 17.2% (6.2%) 38.4% Derivatives 69,045 3.3% 76,504 3.8% 41,854 2.6% (9.7%) 82.8% Other monetary belongings 157 0.0% 6 0.0%-0.0% 2516.7% 0.0% Tax belongings 58,433 2.8% 66,095 3.3% 48,960 3.0% (11.6%) 35.0% Income tax and social contribution-present 1,636 0.1% 3,547 0.2% 1,644 0.1% (53.9%) 115.8% Income tax and social contribution-deferred 50,831 2.5% 56,583 2.8% 38,914 2.4% (10.2%) 45.4% Other 5,966 0.3% 5,965 0.3% 8,402 0.5% 0.0% (29.0%) Other belongings 16,494 0.8% 15,773 0.8% 14,691 0.9% 4.6% 7.4% Investments in associates and joint ventures 6,121 0.3% 15,570 0.8% 15,097 0.9% (60.7%) 3.1% Fixed belongings, web 6,963 0.3% 6,937 0.3% 7,166 0.4% 0.4% (3.2%) Goodw sick and Intangible belongings, web 21,110 1.0% 17,330 0.9% 19,719 1.2% 21.8% (12.1%) Total belongings 2,069,206 100.0% 2,019,251 100.0% 1,637,481 100.0% 2.5% 23.3% Liabilities and stockholders’ fairness 12/31/2021 % 12/31/2020 % 12/31/2019 % 2021 x 2020 2020 X 2019 Financial Liabilities 1,621,786 78.4% 1,579,686 78.2% 1,211,999 74.0% 2.7% 30.3% At Amortized Cost 1,553,107 75.1% 1,495,641 74.1% 1,159,830 70.8% 3.8% 29.0% Deposits 850,372 41.1% 809,010 40.1% 507,060 31.0% 5.1% 59.5% Securities offered underneath repurchase agreements 252,848 12.2% 273,364 13.5% 256,583 15.7% (7.5%) 6.5% Interbank market funds 177,145 8.6% 156,035 7.7% 174,862 10.7% 13.5% (10.8%) Institutional market funds 138,636 6.7% 138,308 6.8% 104,244 6.4% 0.2% 32.7% Other monetary liabilities 134,106 6.5% 118,924 5.9% 117,081 7.2% 12.8% 1.6% At Fair Value Through Profit or Loss 63,479 3.1% 79,653 3.9% 48,029 2.9% (20.3%) 65.8% Derivatives 63,204 3.1% 79,505 3.9% 47,828 2.9% (20.5%) 66.2% Structured notes 114 0.0% 143 0.0% 201 0.0% (20.3%) (28.9%) Other monetary liabilities 161 0.0% 5 0.0%-0.0% 3120.0% 0.0% Provision for Expected Loss 5,200 0.3% 4,392 0.2% 4,140 0.3% 18.4% 6.1% Loan commitments 4,433 0.2% 3,485 0.2% 3,303 0.2% 27.2% 5.5% Financial ensures 767 0.0% 907 0.0% 837 0.1% (15.4%) 8.4% Provision for insurance coverage and personal pensions 214,976 10.4% 221,000 10.9% 218,334 13.3% (2.7%) 1.2% Provisions 19,592 0.9% 19,819 1.0% 21,454 1.3% (1.1%) (7.6%) Tax liabilities 6,246 0.3% 5,710 0.3% 7,891 0.5% 9.4% (27.6%) Income tax and social contribution-present 2,450 0.1% 2,878 0.1% 3,997 0.2% (14.9%) (28.0%) Income tax and social contribution-deferred 280 0.0% 421 0.0% 1,058 0.1% (33.5%) (60.2%) Other 3,516 0.2% 2,411 0.1% 2,836 0.2% 45.8% (15.0%) Other liabilities 42,130 2.0% 38,511 1.9% 28,338 1.7% 9.4% 35.9% Total liabilities 1,904,730 92.1% 1,864,726 92.3% 1,488,016 90.9% 2.1% 25.3% Total stockholders’ fairness attributed to the ow ners of the dad or mum 152,864 7.4% 142,993 7.1% 136,925 8.4% 6.9% 4.4% Capital 90,729 4.4% 97,148 4.8% 97,148 5.9% (6.6%) 0.0% Treasury shares (528) 0.0% (907) 0.0% (1,274) -0.1% (41.8%) (28.8%) Capital reserves 2,250 0.1% 2,326 0.1% – (3.3%)-Profit reserves 66,161 3.2% 47,347 2.3% – 39.7%-Other complete earnings (5,748) -0.3% (2,921) -0.1% (3,950) -0.2% 96.8% (26.1%) Non-controlling pursuits 11,612 0.6% 11,532 0.6% 12,540 0.8% 0.7% (8.0%) Total stockholders’ fairness 164,476 7.9% 154,525 7.7% 149,465 9.1% 6.4% 3.4% Total liabilities and stockholders’ fairness 2,069,206 100.0% 2,019,251 100.0% 1,637,481 100.0% 2.5% 23.3% 170
The evaluation of the asset and monetary operation highlights is introduced in gadgets 10.1 a) and 10.2 a), respectively, of this kind. Executive officers ought to touch upon: a) Results of operations, particularly: I-Description of any essential parts of income II-Factors that materially affected working earnings and bills Results of Operations for the Years Ended December 31, 2021, 2020 and 2019 Highlights The desk beneath units forth our summarized consolidated assertion of earnings for the years ended December 31, 2021, 2020 and 2019. Please see our audited consolidated monetary statements for additional details about our Consolidated Statement of Income. Summarized Consolidated Statement of Income For the years ended December 31 Variation 2021-2020 Variation 2020-2019 2021 2020 2019 R$ million % R$ million % (In thousands and thousands of R$) Operating revenues 126,374 100,199 117,079 26,175 26.1 (16,880) (14.4) Net curiosity earnings (1) 75,209 50,053 69,350 25,156 50.3 (19,297) (27.8) Non-interest earnings (2) 51,165 50,146 47,729 1,019 2.0 2,417 5.1 Expected loss from monetary belongings and claims (14,379) (25,980) (18,567) 11,601 (44.7) (7,413) 39.9 Other working earnings (bills) (69,764) (68,989) (67,269) (775) 1.1 (1,720) 2.6 Net earnings earlier than earnings tax and social contribution 42,231 5,230 31,243 37,001 707.5 (26,013) (83.3) Current and deferred earnings and social contribution taxes (13,847) 9,834 (3,430) (23,681) (240.8) 13,264 (386.7) Net earnings 28,384 15,064 27,813 13,320 88.4 (12,749) (45.8) Net earnings attributable to house owners of the dad or mum firm 26,760 18,896 27,113 7,864 41.6 (8,217) (30.3) (1) Includes: (i) curiosity and comparable earnings (R$129,253 million, R$114,369 million e R$118,151 million within the years ended December 31, 2021, 2020 and 2019, respectively); (ii)curiosity and comparable bills (R$(69,305) million, R$(73,558) million and R$(75,958) million for the years ended December 31, 2021, 2020 and 2019, respectively); (iii) earnings from monetary belongings and liabilities at truthful worth by way of revenue or loss (R$16,678 million, R$6,553 million and R$26,230 million within the years ended December 31, 2021, 2020 and 2019, respectively); and (iv) results of overseas trade transactions and trade variation of transactions overseas (R$(1,417) million, R$2,689 million and R$927 million within the years ended December 31, 2021, 2020 and 2019, respectively). (2) Includes commissions and banking charges, earnings from insurance coverage and personal pension operations earlier than declare and promoting bills and different earnings. Year ended December 31, 2021 in comparison with December 31, 2020. Net earnings attributable to stockholders of the dad or mum firm elevated by 41.6% to R$26,760 million for the yr ended December 31, 2021 from R$18,896 million for a similar interval of 2020. This result’s primarily as a result of a 26.1% improve in working revenues and a 44.7% lower in anticipated loss from monetary belongings and claims. The lower in present and deferred earnings and social contribution taxes by R$23,681 million had a damaging impact on our web earnings attributable to house owners of the dad or mum firm. These line gadgets are additional described beneath: Net curiosity earnings elevated by R$25,156 million, or 50.3%, for the yr ended December 31, 2021 in comparison with the identical interval of 2020, primarily as a result of (i) a rise of R$14,884 million in curiosity and comparable earnings, because of the improve of R$13,286 million in mortgage operations earnings; (ii) a rise of R$10,125 million in earnings of monetary belongings and liabilities at truthful worth by way of revenue or loss, because of the decrease damaging impact through the yr ended December 31, 2021, in comparison with the identical interval of 2020, of hedging devices for our investments overseas, which was partially offset by a lower of R$4,106 million in overseas trade outcomes and trade variations in overseas transactions, because of the trade fee variations through the interval; and (iii) a lower of R$4,253 million in curiosity and comparable bills, particularly as a result of a lower in interbank market fund bills. Brazilian tax laws gives for good points and losses arising from trade fee variations on everlasting overseas investments should be included within the tax calculation foundation, based mostly on their nature, in addition to overseas-trade variations on the hedged parts of overseas investments which, in line with the brand new guidelines supplied by Law No. 14,031 of July 28, 2020, should be included within the proportion of fifty% in 2021 and 100% from 2022 on. Our investments overseas with danger protection had their hedges 100% adjusted on December 31, 2021, in accordance 171
with Law No. 14,031 of July 28, 2020. Accordingly, the depreciation of the true in opposition to foreign currency echange, particularly the U.S. greenback, generates losses on our hedging devices overseas. Conversely, the appreciation of the true in opposition to foreign currency echange, generates good points on our hedging devices overseas. This impacts our tax bills recorded within the line gadgets “present and deferred earnings and social contribution taxes” and “different working earnings (bills)”. The nominal depreciation of the true in opposition to the U.S. greenback was 7.4% from December 31, 2021 in comparison with December 31, 2020, and a depreciation of 28.9% from December 31, 2020 in comparison with December 31, 2019. The fiscal impact on the hedging devices for our investments overseas resulted in a acquire of R$2,838 million for the yr ended December 31, 2021, in comparison with a acquire of R$17,701 million for a similar interval of 2020. Considering the fiscal impact on the hedging devices for our investments overseas talked about above in present and deferred earnings and social contribution taxes and tax bills, web curiosity earnings elevated by R$10,293 million for the yr ended December 31, 2021 in comparison with the identical interval of 2020. Interest and comparable earnings elevated by 13.0% for the yr ended December 31, 2021 in comparison with the identical interval of 2020, as a result of greater revenues from credit score transactions, given the optimistic impact of the expansion of the portfolio related to the gradual change within the portfolio combine to retail sector- associated lending, the spotlight being the expansion noticed within the three months interval ended December 31, 2021 in bank card financing amenities, overdraft accounts and private loans, merchandise that carry higher spreads. In addition, greater rates of interest through the yr ended December 31, 2021 had a optimistic impact on the return on our personal working capital and on the liabilities margin. These optimistic results have been partially offset by decrease spreads on credit score merchandise. As of December 31, 2021, the SELIC fee was 9.25% every year in comparison with 2.0% every year as of December 31, 2020. Interest and comparable bills decreased by 5.8% for the yr ended December 31, 2021 in comparison with the identical interval of 2020, as a result of: (i) a lower of R$3,949 million in bills from interbank market funds, primarily as a result of a lower within the quantity of monetary payments; (ii) a lower of R$2,775 million in bills from technical provisions for insurance coverage and personal pension, as a result of a lower within the outcomes of funding funds linked to personal pension plans; and (iii) a lower of R$2,055 million in bills from securities offered underneath repurchase agreements, primarily on account of a lower of R$46,334 million within the stability of belongings acquired as collateral associated to voluntary investments with the Central Bank. Please see “Note 21-Interest and comparable earnings and bills and Income of monetary belongings and liabilities at truthful worth by way of revenue or loss” to our audited consolidated monetary statements for additional particulars on curiosity and comparable bills. Non-interest earnings elevated by 2.0% to R$51,165 million for the yr ended December 31, 2021 in comparison with the identical interval of 2020. This improve was primarily as a result of a 16.2%, or R$2,238 million, improve in income from credit score and debit playing cards, pushed by greater revenues from the issuance of playing cards, as a consequence of upper earnings from debit and bank cards, partially offset by decrease revenues on account of the lower of the annual fee charges and credit score restrict charges, in comparison with the identical interval in 2020. In addition, we had a 23.8%, or R$688 million, improve in earnings from financial monetary advisory companies and brokerage companies, pushed by greater volumes within the capital markets. There was additionally a 9.3%, or R$213 million, improve in earnings from credit score operations and monetary ensures supplied. These will increase have been partially offset by lower of R$3,614 million in different earnings, pushed by the acquire from the spin-off of our curiosity in XP Inc. in 2020. The following chart exhibits the primary parts of our banking service charges for the years ended December 31, 2021, 2020 and 2019: 172
Please see “Note 22 – Commissions and Banking Fees” to our audited consolidated monetary statements for additional particulars on banking service charges. Expected Loss from Financial Assets and Claims Our anticipated loss from monetary belongings and claims decreased by R$11,601 million, or 44.7%, for the yr ended December 31, 2021 in comparison with the identical interval of 2020, primarily as a result of a lower in anticipated loss with mortgage and lease operations of R$10,451 million for the yr ended December 31, 2021 in comparison with the identical interval of 2020. This variation was as a result of macroeconomic impacts of the COVID-19 pandemic in March 2020, which impacted the monetary prospects of people and corporations, and which we mirrored in our anticipated loss provisioning mannequin, offering for a rise within the mortgage losses in 2020. Considering provisions with operations with out credit score granting traits, anticipated loss on monetary belongings and claims decreased by 40.1% within the yr ended December 31, 2021 in comparison with the identical interval of 2020. Please see “Note 10- Loan and Lease operations” to our audited consolidated monetary statements for additional particulars on our mortgage and lease operations portfolio. Non-performing loans: We calculate our 90-daynon-performing mortgage (“NPL”) ratio as the worth of our 90-daysnon-performing loans to our mortgage portfolio. As of December 31, 2021, our 90-day NPL ratio was 2.8%, a rise of 10 foundation factors in comparison with December 31, 2020. This improve was because of the improve of 60 foundation factors within the 90-day NPL ratio in respect of our firms’ mortgage portfolio, on account of the pure resumption of enterprise, provided that on the finish of 2020 our 90-day NPL reached a traditionally low degree because of the fee flexibility initiatives we carried out through the COVID-19 pandemic. This impact was partially offset by a lower of fifty foundation within the people 90-day NPL ratio, primarily because of the improve within the mortgage portfolio of this phase. We calculate our 15 to 90 days non-performing mortgage ratio as the worth of our 15 to 90 days non- performing loans to our mortgage portfolio. The 15 to 90 days NPL ratio is an indicator of early delinquency. As of December 31, 2021, our 15 to 90 days NPL ratio was 1.7%, a lower of 10 foundation factors when in comparison with December 31, 2020. During this era our 15 to 90-day NPL ratio decreased by 60 foundation factors in respect of our firms mortgage portfolio, which was primarily because of the improved credit score high quality of current vintages, partially offset by a rise of 30 foundation factors within the 15 to 90-day NPL ratio in respect of our people mortgage portfolio as of December 31, 2021 in comparison with December 31, 2020 primarily because of the improve in our bank cards and automobiles loans portfolios. 173
The chart beneath exhibits a comparability of each NPL ratios for every quarter as of December 31, 2020 by way of December 31, 2021: Coverage ratio (90 days): We calculate our protection ratio as provisions for anticipated losses to 90-daynon-performing loans. As of December 31, 2021, our protection ratio in BRGAAP was 241% in comparison with a ratio of 320% as of December 31, 2020. This lower was primarily as a result of (i) a rise in our portfolio of loans overdue for over 90 days, and (ii) decrease want for provision, indicated by our fashions, each in Latin America and in our Wholesale enterprise phase in Brazil. The chart beneath exhibits a comparability within the protection ratios for every quarter as of December 31, 2020 by way of December 31, 2021: 174
Other Operating Income (Expenses) elevated by 1.1 % to an expense of R$ 69,764 million for the yr ended December 31, 2021 from an expense of R$68,989 million for a similar interval of 2020. Disregarding the influence of different bills not associated to prices, consisting primarily of provision from operations apart from loans, and the primary extraordinary gadgets (such because the impairment of internally developed software program, regarding amortizations of this software program in 2021 and the impairment recorded by Itaú Corpbanca in 2020), our different working earnings (bills) elevated by 5.8% to an expense of R$66,315 million for yr ended December 31, 2021 from an expense of R$62,681 million for a similar interval of 2020. In addition, this improve in different working earnings (bills) was primarily because of the R$2,198 million, or 35.6%, improve in our tax bills, partially offset by a R$1,658 million, or 2.6%, lower in our common and administrative bills for the yr ended December 31, 2021. Please see “Note 23 – General and Administrative Expenses” to our audited consolidated monetary statements for additional particulars. Current and deferred earnings and social contribution taxes amounted to an expense of R$13,847 million for the yr ended December 31, 2021, from a advantage of R$9,834 million within the yr ended December 31, 2020. This was partially because of the fiscal impact on the hedging devices for our investments overseas, as talked about in “Net curiosity earnings”, which amounted to a acquire of R$2,838 million for the yr ended December 31, 2021 in comparison with a acquire of R$17,701 million for a similar interval of 2020. Disregarding this fiscal impact, present and deferred earnings and social contribution taxes elevated by R$10,133 million throughout this era. Since March 1, 2020, the statutory tax fee was 45%, and as from July 1, 2021 to December 31, 2021, the statutory tax fee quickly elevated to 50%. During the yr ended December 31, 2021, there was additionally a rise in earnings earlier than tax and social contribution, in comparison with the identical interval of 2020. Please see “Note 24 – Taxes” to our audited consolidated monetary statements for additional particulars. b) Changes in income arising from modifications in costs, overseas trade charges, inflation, volumes and the introduction of recent services and products Our operations rely on the efficiency of the economies of the international locations the place we do enterprise, primarily the Brazilian economic system. The demand for credit score, monetary companies and our consumer’s creditworthiness are instantly impacted by macroeconomic variables, such because the financial exercise, earnings, unemployment, inflation, and modifications in curiosity and overseas trade charges. Changes in rates of interest could considerably have an effect on our web margins since they affect funding and lending prices. The principal change in earnings are outlined in merchandise 10.2a of this Manual. c) Impact of inflation, modifications within the costs of principal inputs and merchandise, overseas trade charges and rates of interest on working and monetary earnings and bills of the Issuer, if related We carried out a sensitivity evaluation per market danger components thought of materials. Resulting highest losses, per danger consider every situation, are outlined with their influence on earnings, web of tax results, to offer a view of our publicity in distinctive eventualities. The market danger construction segregates operations between buying and selling and banking portfolios, in line with the overall standards set out by CMN Resolution No. 4557 of February 23, 2017, and Circular No. 3354 of June 27, 2007 of the Central Bank of Brazil. The sensitivity analyses of the buying and selling and banking portfolios, proven beneath, signify a gradual evaluation of the portfolio publicity and subsequently don’t consider administration’s dynamic response capability (treasury and management departments) to implement mitigating measures each time a scenario of loss or excessive danger is recognized to reduce doable important losses. Moreover, it needs to be famous that precise outcomes don’t essentially translate into accounting outcomes, as the only objective of the examine is to reveal danger publicity and respective hedging actions, taking into consideration the truthful worth of monetary devices, no matter the accounting practices adopted by the Company. The buying and selling portfolio consists of all transactions with monetary devices and commodities, together with derivatives, that are held with a buying and selling intention. 175
Banking portfolio Exposure 12/31/2021 (*) 12/31/2020 (*) 12/31/2019 (*) Risk Factors Risk Variation in: Scenarios Scenarios Scenarios I II III I II III I II III Fixed fee Fixed fee on Brazilian reais (0.3) (86.5) (167.4)-(12.6) (24.7) (0.7) (86.4) (215.0) Foreign trade coupons Rates of forex coupons (0.1) (42.7) (78.2) 0.5 0.6 4.0 (0.3) (21.9) (42.3) Foreign currencies Exchange variation charges (3.1) (13.2) (38.7) (3.8) (69.4) 112.6 (0.3) 80.1 427.6 Price indices Rates of worth index coupons-(37.3) (80.5) (0.7) (36.7) (72.7) (0.2) (3.0) (4.5) Reference fee Rates of TR coupons – – – –Shares Share worth 0.2 56.5 169.7 0.7 16.4 3.3 2.1 2.6 185.0 Others Exposures that don’t fall underneath the definitions above (0.1) 5.4 15.4-(11.0) (33.3)-(2.2) (6.9) TOTAL (3.4) (117.8) (179.7) (3.3) (112.7) (10.8) 0.6 (30.8) 343.9 (*) Amounts web of tax results. The banking portfolio is mainly characterised by transactions from the banking enterprise and transactions associated to the administration of the Company’s stability sheet. It has no intention of resale and medium- to longterm time horizons as common pointers. Trading and banking Exposure 12/31/2021 (*) 12/31/2020 (*) 12/31/2019 (*) portfolios Risk Factors Risk Variation in: Scenarios Scenarios Scenarios I II III I II III I II III Fixed fee Fixed fee on Brazilian reais (12.8) (3,447.2) (6,666.7) (7.4) (731.9) (1,435.6) (11.6) (1,383.8) (2,776.9) Foreign trade coupons Rates of forex coupons (3.2) (304.5) (575.4) (5.4) (224.6) (430.0) (2.9) (196.4) (377.4) Foreign currencies Exchange variation charges 1.6 (110.4) (236.2) (0.7) (49.3) 123.9 2.2 47.2 322.3 Price indices Rates of worth index coupons (0.3) (183.7) (473.8) (0.9) (215.3) (516.2) (6.5) (460.7) (868.8) Reference fee Rates of TR coupons 1.1 (243.8) (535.0) 1.1 (67.9) (161.9) 0.5 (65.9) (159.1) Shares Share worth 6.0 (89.0) (121.3) 9.3 (197.7) (425.2) 6.0 (94.5) (9.3) Others Exposures that don’t fall underneath the definitions above-1.8 0.8 (0.1) (11.3) (34.4)-(8.6) (26.2) TOTAL (7.6) (4,376.8) (8,607.6) (4.1) (1,498.0) (2,879.4) (12.3) (2,162.7) (3,895.4) (*) Amounts web of tax results. To measure these sensitivities, we use the eventualities beneath and estimate the influence of every danger issue alone, excluding any results that offset or underline these results, amongst many components: Scenario I: Addition of 1 foundation level to fastened rates of interest, forex coupon, inflation and rate of interest indices and one share level to forex and share costs; Scenario II: Shocks at 25 per cent in fastened rates of interest, forex coupon, inflation, rate of interest indices and forex and share costs, each upwards and downwards, contemplating the biggest ensuing losses per danger issue; Scenario III: Shocks at 50 per cent in fastened rates of interest, forex coupon, inflation, rate of interest indices and forex and share costs, upwards and downwards, contemplating the biggest ensuing losses per danger issue. Consolidated Value at Risk (VaR) is calculated utilizing the historic simulation methodology. This methodology totally reprices all positions by utilizing the precise historic distribution of belongings. From January 1 to December 31, 2021, whole common Value at Risk (VaR) underneath historic simulation amounted to R$441 million, or 0.3% of whole stockholders’ fairness (for the entire of 2020 it was R$282 million or 0.2% of whole stockholders’ fairness). Structural hole, composed of economic transactions and corresponding monetary devices, has traditionally remained steady with small variations, being primarily composed of belongings and liabilities of our retail banking actions and derivatives used as hedge in opposition to the market danger of those transactions. Most of our banking operations are denominated in or listed to Brazilian reais. We even have belongings and liabilities denominated in overseas forex, primarily in U.S. {dollars}, in addition to belongings and liabilities that, though denominated in Brazilian reais, are listed to U.S. {dollars} and, subsequently, expose us to trade fee danger. The Central Bank regulates our overseas forex positions. Please see part “Currency danger” of the Complete Financial Statements (IFRS), Note 32 – Risk and capital administration for additional data. The hole administration coverage adopted by the Superior Market Risk and Liquidity Committee (CSRML) takes under consideration tax results associated to our overseas trade positions. Since good points from overseas trade fee variation on overseas investments are given a particular remedy, we’ve arrange hedge (a legal responsibility in overseas forex spinoff devices) in quantity ample in order that our whole overseas trade publicity, web of tax results, is in step with our low-danger publicity technique. Our overseas trade place on the legal responsibility aspect consists of varied parts, together with the issuance of securities in worldwide capital markets, credit score from overseas banks used to finance import and export transactions, greenback-linked onlendings from authorities monetary establishments and deposits in currencies from Latin America international locations. The proceeds of those monetary operations are normally invested in loans and buy of greenback-linked securities. The data beneath has been ready on a consolidated foundation, eliminating associated-social gathering transactions. Foreign investments, eradicated through the consolidation course of, amounted to R$73.6 billion on December 31, 2021, underneath the hole administration coverage adopted, as talked about above. Note that the financial institution applies both financial hedge or accounting hedge to web overseas investments. 176
R$ million As of December 31, 2021 % of quantities Exchange Rate Sensitivity Denominated in Indexed to overseas denominated in and Brazilian forex Total overseas forex (1) forex (1) listed to overseas forex of whole (In thousands and thousands of R$, besides percentages) Assets 1,481,363 532,460 55,383 2,069,206 28.4 Cash 7,383 33,709 3,420 44,512 83.4 At Amortized Cost 986,464 351,422 37,896 1,375,782 28.3 Compulsory deposits within the Central Bank of Brazil 104,592 – 104,592-Interbank deposits 17,795 52,147-69,942 74.6 Securities bought underneath agreements to resell 159,974 9,744-169,718 5.7 Voluntary investments with the Central Bank of Brazil 5,800 – 5,800-Securities 114,498 21,871 11,377 147,746 22.5 Loan operations and lease operations portfolio 535,453 260,173 26,964 822,590 34.9 Other monetary belongings 81,519 14,954 (0) 96,473 15.5 (-) Provision for Expected Loss (33,167) (7,467) (445) (41,079) 19.3 At Fair Value Through Other Comprehensive Income 42,485 60,974 2,163 105,622 59.8 Securities 42,485 60,974 2,163 105,622 59.8 (-) Provision for Expected Loss – – At Fair Value Through Profit or Loss 348,226 74,057 11,886 434,169 19.8 Securities 338,358 21,628 4,981 364,967 7.3 Derivatives 9,711 52,429 6,905 69,045 85.9 Other monetary belongings 157 – 157-Investments in associates and joint ventures 6,119 2 0 6,121-Fixed belongings, web 5,794 1,169 (0) 6,963 16.8 Goodwill and Intangible belongings, web 16,138 4,972 0 21,110 23.6 Tax belongings 54,776 3,657 0 58,433 6.3 Other belongings 13,978 2,498 18 16,494 15.3 Percentage of whole belongings 71.6 25.7 2.7 100.0 Liabilities and Stockholders’ Equity 1,488,684 563,654 16,868 2,069,206 28.1 At Amortized Cost 1,037,825 502,199 13,083 1,553,107 33.2 Deposits 593,057 256,654 661 850,372 30.3 Securities offered underneath repurchase agreements 209,552 43,296 0 252,848 17.1 Interbank market debt 92,568 79,106 5,471 177,145 47.7 Institutional market debt 20,823 112,146 5,667 138,636 85.0 Other monetary liabilities 121,825 10,997 1,284 134,106 9.2 At Fair Value Through Profit or Loss 8,002 51,880 3,597 63,479 87.4 Derivatives 7,841 51,766 3,597 63,204 87.6 Structured notes-114-114 100.0 Other monetary liabilities 161 – 161-Provision for Expected Loss 4,516 657 27 5,200 13.2 Loan Commitments 4,093 318 22 4,433 7.7 Financial Guarantees 423 339 5 767 44.9 Reserves for insurance coverage and personal pension 214,971 5-214,976-Provisions 19,487 105 0 19,592 0.5 Tax liabilities 4,865 1,381 (0) 6,246 22.1 Other liabilities 34,542 7,427 161 42,130 18.0 Non-controlling pursuits 11,612 – 11,612-Total stockholders’ fairness attributed to the house owners of the dad or mum firm 152,864 – 152,864-Percentage of whole liabilities and stockholders’ fairness 72.0 27.2 0.8 100.0 (1) Predominantly U.S. greenback. 177
10.3. Executive officers ought to touch upon the fabric results that the occasions beneath could have triggered or could trigger sooner or later on the issuer’s monetary statements and outcomes a) Introduction or disposal of working segments Disclosure of outcomes per phase The present enterprise segments of Itaú Unibanco are described beneath: Retail Banking: retail banking gives services and products to account holders and non-account holders, which embrace: private credit score, bank cards, payroll loans, car financing, mortgage loans, insurance coverage, pension plan and capitalization, and buying companies, amongst others. Account holders are segmented into: (i) Retail; (ii) Uniclass; (iii) Personnalité; and (iv) very small and small firms. Wholesale Banking: wholesale banking consists of: (i) Itaú BBA’s operations, the unit chargeable for enterprise with massive firms and funding banking operations; (ii) the operations of our overseas models; (iii) Itaú Asset Management, a enterprise specialised in fund administration; and (iv) services and products supplied to excessive web value shoppers (Private Banking), center-market firms, and institutional shoppers. Activities with the Market + Corporation: consists of (i) outcomes of capital surplus, subordinated debt surplus and web stability of tax credit and debits; (ii) the monetary margin with the market; (iii) treasury working prices; and (iv) fairness in earnings of firms not related to both retail banking or wholesale banking. b) Incorporation, acquisition or disposal of possession curiosity TOTVS S.A. On April 12, 2022, by way of Itaú Unibanco S.A. (“ITAÚ”), we entered right into a Partnership and Investment Agreement and Other Covenants (“Investment Agreement”) with TOTVS S.A. (“TOTVS”) to arrange a partnership to be developed by way of an organization named TOTVS Techfin S.A. (“Company”), which would be the car for the implementation of a partnership aimed toward distributing and increasing the provide of monetary companies built-in into TOTVS’s administration programs targeted on company shoppers and their complete provide chain, shoppers and staff. Upon completion of the operation, ITAÚ will maintain 50% of the Company’s whole voting capital, whereas TOTVS will maintain the remaining 50%. Each stockholder will likely be entitled to appoint half of the members of the Board of Directors and Board of Officers, which will likely be composed on an equal foundation, as effectively to different rights and obligations supplied for within the stockholders’ settlement to be entered into on the cut-off date of the operation. In consideration of this share in capital, ITAÚ can pay R$610 million, divided into one main installment of 2 hundred million Brazilian reais (R$200,000,000.00) paid to the Company and one secondary installment of 4 hundred ten million Brazilian reais (R$410,000,000.00) paid to TOTVS. Also, after 5 years from the completion of the operation supplied for within the Investment Agreement, we could pay to TOTVS as much as R$450 million as earn-out, topic to the achievement, by the Company, of the targets aligned with its progress and efficiency targets. Additionally, ITAÚ will contribute to funding the Company’s present and future operations, in addition to with its credit score experience and growth of recent merchandise. TOTVS, in flip, will switch the belongings of its present TECHFIN operation to the Company. The operation will arrange an organization that can merge expertise and monetary options, including the supplementary experience of the stockholders, to supply to company shoppers, in an expeditious and built-in method, the very best experiences in shopping for merchandise instantly from the platforms already supplied by TOTVS. The skills of ITAÚ and TOTVS collectively may even allow the Company to make the most of alternatives in a personalized and contextualized method, anticipating shoppers’ wants, and already totally aligned with the Open Finance technique and evolution to firms. Furthermore, this partnership strengthens the main place of ITAÚ and TOTVS in digital transformation and disruption of the monetary trade. The completion of this operation is topic to the regulatory approvals from CADE (the Brazilian antitrust authority) and the Central Bank of Brazil, in addition to to the compliance with different circumstances set forth in negotiations of this nature. 178
IDEAL On January 12, 2022, we entered right into a Share Investment, Purchase and Sale Agreement and Other Covenants with José Carlos Benfati, Vinicius Gonçalves Dalessandro, Gregorio Lara dos Santos Matai, Leandro Bolsoni, Lucas Namo Cury, amongst others (“Sellers”), for the acquisition of a controlling curiosity in Ideal Holding Financeira S.A. and, not directly, its wholly-owned subsidiary, Ideal Corretora de Títulos e Valores Mobiliários S.A. (“Ideal”). The acquisition will likely be carried out in two tranches over 5 years. In the primary tranche, we’ll purchase 50.1 per cent of the capital inventory and voting shares of Ideal by way of a main contribution and secondary acquisition of shares totaling roughly R$650 million, on account of which we’ll acquire management of Ideal. In the second tranche, after 5 years, we could train the decision choice to amass the remaining share (49.9 per cent) of Ideal’s capital. This acquisition strengthens our funding ecosystem and can enable us to (i) rely, particularly, on the expertise and experience of Ideal’s workers, who’re acknowledged for his or her excessive capability to innovate on this trade; (ii) to supply of monetary services and products (dealer as a service) underneath a B2B2C mannequin, utilizing a white label platform; (iii) the doable acceleration of the entry into the market of self-employed merchants; and (iv) enhance dealing funding merchandise to particular person shoppers. The operation and administration of Ideal will proceed to be separate from Itaú Unibanco. In this context, Ideal will proceed to serve its shoppers and we won’t have exclusivity within the provision of companies. The completion of this transaction is topic to acquiring regulatory approvals, together with approvals from the CADE (Brazilian antitrust company) and the Central Bank of Brazil. XP INVESTIMENTOS S.A. On May 11, 2017, we entered right into a Share Purchase Agreement with XP Controle Participações S.A., G.A. Brasil IV Fundo de Investimento em Participações, and Dyna III Fundo de Investimento em Participações, amongst others ( the “Sellers”), to amass 49.9% of the capital inventory (comparable to 30.06% of the widespread shares) of XP Investimentos S.A., a holding firm that consolidates all of the investments of the XP group, together with XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A. within the first tranche, we contributed to a capital improve of R$600 million and purchased of XP Investimentos S.A.’s shares from the Sellers for R$5.7 billion, supplied that such quantities are topic to contractual changes. The worth attributed to 100% of the full capital inventory of XP Investimentos S.A. (earlier than the primary tranche) was roughly R$12 billion. In August 2018, we closed the First Tranche and, along with a number of the Sellers, entered right into a shareholders’ settlement which incorporates, amongst others, provisions with respect to our rights as a minority shareholder, together with our proper to nominate two out of the seven members of the Board of Directors of XP Investimentos S.A. On November 29, 2019, there was a company reorganization of XP Investimentos S.A., wherein the shareholders of XP Investimentos S.A., together with us, exchanged their shares of XP Investimentos S.A., included in Brazil, for Class A widespread shares and Class B widespread shares of XP Inc., included within the Cayman Islands, remaining with the chances within the capital inventory. Each Class A widespread share entitles its holder to at least one vote and every Class B widespread share entitles its holder to 10 votes in all shareholders’ resolutions of XP Inc. As a results of the contribution talked about above, XP Inc. issued to us 792,861,320 Class A widespread shares and 223,595,962 Class B widespread shares, which signify 49.9% of the full capital of XP Inc. and 30.06% of its voting rights. XP Inc. turned the only shareholder of XP Investimentos S.A., proudly owning 100% of its whole and voting capital. Subsequently, on November 30, 2019, XP Inc. carried out a reverse inventory cut up of 1 share for every 4 shares and, in consequence, the variety of shares held by us was adjusted to 198,215,329 Class A widespread shares and 55,898,991 Class B widespread shares. In December 2019, XP Inc., an organization wherein we held 49.9% of capital inventory, accomplished its preliminary main provide (IPO) and itemizing on Nasdaq. We didn’t promote XP Inc. shares in such provide and instantly after the completion of the IPO, we now maintain 46.05% of XP Inc.’s capital inventory. Additionally, on November 29, 2019, the stockholders of XP Inc. entered right into a shareholder settlement considerably just like the present shareholder settlement of XP Investimentos S.A. XP Inc. has a board of administrators composed of 13 members, of which XP Controle Participações S.A. appointed 7 members, we appointed 2 members, the General Atlantic (XP) Bermuda, LP (successor to GA Brasil IV Fundo de lnvestimento em Participações) appointed 1 member, and the three remaining members are 179
impartial administrators. These impartial administrators are additionally members of the audit committee of XP lnc., which consists of three members appointed as follows: we appointed 2 members, and XP Controle Participações SA appointed one member of the audit committee. On November 26, 2020, we introduced that the Board of Directors accredited the partial spin-off of the funding in XP INC for a brand new firm (XPart S.A.). In December 2020 XP Inc. held a observe-on on Nasdaq, whereby we offered roughly 4.51% of XP Inc.’s capital. In that very same providing, XP Inc. issued new shares, ensuing within the dilution of our stake to 41% of its share capital. At the Extraordinary Stockholders’ Meeting held on January 31, 2021, the company reorganization was determined so as to segregate the enterprise line associated to curiosity in XP Inc’s capital to the brand new firm that will likely be named XPart S.A., which will likely be constituted by part of the funding presently owned by us at XP Inc. and money value R$10 million. The objective of the segregation of the enterprise line represented by our funding in XP Inc. into a brand new firm (XPart SA) is that our stockholders will likely be entitled to fairness curiosity in XPart SA in the identical quantity and proportion of the shares they maintain in Itaú Unibanco, as per the Material Fact disclosed on December 31, 2020. Therefore, the primary advantage of the transaction is worth creation for our stockholders. The completion of this transaction was topic to regulatory approval to be obtained by our controlling shareholders. On May 28, 2021, the favorable approval of the Federal Reserve Board (“FED”) was obtained, efficient on May 31, 2021, the date from which the authorized and accounting segregation of Itaú Unibanco Holding and XPart materialized. Consequently, XP Inc’s capital inventory held by XPart S.A. is now 40.52%, totaling R$9,371 million, as of December 31, 2020. On July 27, 2021, after the receipt of the approval of the operation by the Central Bank of Brazil, on that very same date, XPart S.A. had its articles of affiliation registered with the JUCESP (São Paulo state’s Board of Trade). XP Inc. has expressed its curiosity in merging XPart and, accordingly, XP Inc. and Itaúsa introduced to the market on May 28, 2021, that they’ve reached a remaining understanding concerning the merger, to be determined generally conferences of XP Inc. and XPart. Soon after XPart S.A. was registered with São Paulo state’s Board of Trade on August 20, 2021, XP and XPart introduced that the General Meetings of those firms to resolve on the merger of XPart into XP Inc. have been referred to as to be held on October 1, 2021. The merger was accredited by the stockholders of XPart and by the stockholders of XP, on the corresponding Merger Extraordinary Stockholders’ Meetings, and in consequence the inventory issued by Itaú Unibanco and our American Depositary Receipts (ADRs), which have been being traded with the precise to obtain securities issued by XPart till the closing of the buying and selling session on October 1, 2021, gave them the precise to obtain (a) as for the Company’s controlling stockholders, IUPAR – Itaú Unibanco Participações S.A. and Itaúsa, and the holders of American Depositary Receipts (ADRs), Class A shares issued by XP Inc.; and (b) as for the remaining stockholders of XPart shareholders, Level I sponsored Brazilian Depositary Receipts (BDRs), backed by Class A XP shares. With regards to Itaú Unibanco ADRs, the Bank of New York, the depositary financial institution for these securities, suspended the difficulty and cancellation of Itaú Unibanco ADRs from the shut of buying and selling on September 28, 2021, till the opening of the October 6, 2021 buying and selling session, in order that it could be doable to roll out the supply of Class A XP shares to holders of Itaú Unibanco ADRs, because of the approval of the merger. During this era, the holders of Itaú Unibanco ADRs couldn’t obtain the Itaú Unibanco shares underlying the ADRs, nor might holders of Itaú Unibanco’s most well-liked shares deposit their shares so as to obtain ADRs. However, the closing of the difficulty and cancellation books didn’t have an effect on buying and selling in Itaú Unibanco ADRs, which continued to happen usually throughout this era. Details on the train of the withdrawal proper in relation to the XPart shares, because of the merger with and into XP, please seek advice from its Stockholders’ Meeting Manual. This proper doesn’t prolong to holders of Itaú Unibanco ADRs.0} Finally, in line with the acquisition and sale settlement entered into in 2017, on April 29, 2022, we bought a further stake comparable to roughly 11.36% of the inventory capital of XP Inc., after acquiring the regulatory approvals relevant. 180
ZUP On October 31, 2019, we entered right into a Share Purchase Agreement with ZUP LLC, and Bruno Cesar Pierobon, Gustavo Henrique Cunha Debs, Felipe Liguabue Almeida, Flavio Henrique Zago, amongst others (“Sellers”), for the acquisition of 100% of the voting share capital of Zup I.T. Serviços em Tecnologia e Inovação Ltda (“Zup”) for R$575 million, and such quantity is topic to contractual changes. This acquisition will likely be carried out in three tranches over 4 years. In the primary tranche, accomplished in March 31, 2020, Itaú acquired 52.96% of the full voting share capital of Zup (on totally diluted foundation) for roughly R$293 million to realize management of the corporate. In the third yr after the completion of the transaction, Itaú will purchase a further 19.6% stake, and within the fourth yr, Itaú will purchase the remaining stockholders’ curiosity, holding, subsequently, 100% of the voting share capital by 2024. This acquisition is linked to our digital transformation course of. ZUP is a benchmark firm in digital transformation, which has boosted our growth of our IT programs. The operation and administration of enterprise affairs of Zup will proceed to be completely impartial and self-governing in relation to Itaú, preserving its present rules and values. IRB In July 2017, IRB-Brasil Resseguros S.A. (IRB) made an preliminary public providing of its widespread shares, which consisted of a public providing at a worth of R$27.24 per share, and a secondary providing by its controlling shareholders of 63,960,000 non-par guide-entry widespread shares to (i) the general public in Brazil; (ii) sure certified institutional consumers within the United States (as outlined in Rule 144A, underneath the U.S. Securities Act of 1933, as amended, or the Securities Act), and (iii) institutional and different traders elsewhere exterior the United States and Brazil that aren’t U.S. individuals (as outlined in Regulation S underneath the Securities Act, or Regulation S). As a results of the preliminary public providing, Itaú Vida e Previdência S.A. offered 677,400 widespread shares, representing the full curiosity held by Itaú Vida e Previdência S.A. in IRB’s capital inventory, and Itaú Seguros S.A. offered 9,618,600 widespread shares, representing 3.1% of IRB’s capital inventory, decreasing our curiosity in IRB to 11.64% of IRB’s capital inventory, whereas remaining amongst within the controlling block pursuant to the IRB’s stockholders’ settlement. The proceeds acquired by Itaú Seguros S.A. and Itaú Vida e Previdência S.A. within the preliminary public providing totaled R$280,463,040.00. In accordance with Article 24 of CVM Normative Rule No. 400, the variety of widespread shares initially supplied might be elevated by as much as 9,594,000 widespread shares, representing as much as 15% of the widespread shares initially supplied, if the stabilizing agent (or any individual performing on behalf of the stabilizing agent) workouts the over-allotment choice. As a results of the train of the over-allotment choice by the stabilizing agent on August 28, 2017, Itaú Seguros S.A. turned the proprietor of 11.14% of IRB’s capital inventory. On July 10, 2019, IRB carried out a secondary public providing of its widespread shares. With the sale of all the participation held by the Federal Government and BB Seguros in IRB besides within the case of the Federal Government, utilizing its golden share, the beforehand current management block of the Company was dissolved, and its share capital was pulverized. c) Unusual occasions or operations In addition to the gadgets underlined in merchandise 10.3 b right here of, we spotlight the next uncommon occasions: In line with IFRS accounting standards, there have been no materials uncommon occasions in 2021, 2020, and 2019. In line with BRGAAP accounting standards, the non-recurring regulatory results web of tax results have been: In 2021: (i) the results of the rise within the social contribution fee within the quantity of R$(233) million; (ii) provision for restructuring within the quantity of R$(747) million; and (iii) impairment, provision for the return of properties and amortization within the quantity of R$(445) million. In 2020: (i) donations made for the Todos pela Saúde (All for Health) program within the whole quantity of R$(834) million; (ii) the mark-to-market impact of securities pledged as collateral of R$(1,031) million; (iii) the adjustment to market worth of IRB shares within the quantity of R$379 million; and (iv) the supply for restructuring within the quantity of R$(220) million, primarily associated to closing branches, returning administrative buildings, amongst others. 181
In 2019: (i) Revaluation of stock of deferred tax belongings, together with the annual revaluation of balances, and the results of Constitutional Amendment No. 103/2019 on Social Contribution on Net Income (CSLL) fee, which elevated from 15% to twenty%, in conformity with the provisions of merchandise I, paragraph 1 of Article 1 of Supplementary Law No. 105 of January 10, 2001, totaling R$2,303 million, and (ii) the impact of the Voluntary Severance Program, with the adherence of roughly 3,500 staff, the web impact of which was R$(1,431) million. This severance program is aimed to: (i) present the chance of a safe and voluntary profession transition for workers enthusiastic about leaving the financial institution, benefiting staff who meet sure established stipulations, and (ii) alter our buildings to the market actuality. 10.4. Executive officers ought to touch upon: a) Significant modifications in accounting insurance policies In 2021 and 2020 there have been no important modifications within the accounting insurance policies. In 2019, IFRS 16 – Leases was adopted. This pronouncement has changed IAS 17 – Leases in addition to associated interpretations (IFRIC 4, SIC 15, and SIC 27). The principal modifications launched by the IFRS 16 have been the elimination of the necessity for lessees to account for working leases with the development of a single lease mannequin, consisting of: (a) initially accounting for all leases in belongings (proper-of-use asset) and liabilities (different liabilities) at current worth; and (b) accounting for depreciation of proper-of-use-belongings and lease curiosity individually in revenue or loss. We have adopted the IFRS 16 by way of the modified retrospective transition mannequin, utilizing the factors as follows: a single low cost fee to be utilized to a portfolio of lease contracts with comparable traits; lease legal responsibility and proper-of-lease belongings are measured at current worth of remaining lease funds; and • evaluation of contracts and lease phrases. Furthermore, no new finance subleases have been recorded. Please see the Complete Financial Statements (IFRS), Note 2 – Significant accounting insurance policies for additional details about modified insurance policies. b) Significant results from modifications in accounting insurance policies In 2021, 2020, and 2019, there have been no results from modifications in accounting insurance policies. c) Qualifications and emphases introduced within the auditor’s report There have been no {qualifications} or emphases introduced by the auditor for 2021, 2020, and 2019. 10.5. Executive officers ought to point out and touch upon the vital accounting insurance policies adopted by the issuer, particularly, accounting estimates made by administration on unsure and related points for describing the monetary place and outcomes of operations that require subjective or advanced judgment, akin to: provisions, contingencies, income recognition, tax credit, lengthy-lived belongings, helpful lifetime of noncurrent belongings, pension plans, overseas forex translation changes, environmental restoration prices, standards for asset and monetary instrument impairment checks. Overview Our principal accounting insurance policies are described in Note 2 to the consolidated monetary statements for the years ended December 31, 2021, 2020, and 2019. The preparation of the consolidated monetary statements includes sure estimates and assumptions derived from previous expertise and numerous different components that we deem affordable and related. While we constantly evaluation these estimates and assumptions within the extraordinary course of enterprise, the portrayal of our monetary place and outcomes of operations usually requires our administration to make judgments on issues which might be inherently unsure. The following dialogue describes the areas that require probably the most judgment or contain the next diploma of complexity within the software of the accounting insurance policies that presently have an effect on our monetary place and outcomes of operations. 182
Use of estimates and assumptions The preparation of consolidated monetary statements underneath IFRS requires Management to make estimates and assumptions that have an effect on the quantities of belongings, liabilities, and contingent belongings reported on the date of the consolidated monetary statements, in addition to the reported quantities of income, bills, good points, and losses over the reporting and subsequent intervals, as precise outcomes could differ from these decided based mostly on such estimates and assumptions. The consolidated monetary statements embrace a wide range of estimates and assumptions. The vital accounting estimates and assumptions that considerably influence belongings’ and liabilities’ carrying quantities are described beneath: Expected credit score losses The measurement of anticipated credit score losses requires the applying of great assumptions, akin to: Term: we take into account the utmost contractual interval wherein we will likely be uncovered to the credit score danger of monetary devices. However, the estimated helpful lifetime of belongings with no decided maturity time period is predicated on the interval of publicity to credit score danger. Additionally, all contractual phrases are included within the calculation of anticipated life, together with prepayment and rollover choices. Forward-looking data: IFRS 9 requires a weighted and unbiased estimate of credit score losses that includes forecasts of future financial circumstances. We use ahead-trying macroeconomic data and public data with internally-ready projections to find out the influence of those estimates upon calculation of anticipated credit score losses. The principal ahead-trying data utilized in figuring out the anticipated loss is said to the Selic Rate, Credit Default Swap (CDS), unemployment fee, Gross Domestic Product (GDP), payroll, industrial manufacturing and prolonged retail gross sales. Macroeconomic situation: This data includes inherent dangers, market uncertainties and different components which will generate completely different outcomes than these anticipated. Probability-weighted loss eventualities: we use likelihood-weighted eventualities to find out the anticipated credit score loss over an statement horizon acceptable for staged classification, contemplating the projection from financial variables. Determining standards for important improve or lower in credit score danger: in every interval of the consolidated monetary statements, we assess whether or not the credit score danger of a monetary asset has elevated considerably from preliminary recognition by utilizing relative and absolute triggers (indicators). The migration of the monetary asset to an earlier stage happens with a major discount within the credit score danger, characterised primarily by the non-activation of credit score impairment triggers for not less than 6 months. The particulars on the methodology and assumptions utilized by Management are included in Note 2.3f and Note 32. The breakdown of the supply for anticipated credit score losses is disclosed in Note 10. Deferred earnings tax and social contribution Deferred tax belongings are acknowledged solely in relation to deductible short-term variations and offsetable tax loss carryforwards to the extent that it’s possible that future taxable income will likely be generated for his or her utilization. The anticipated realization of deferred tax belongings is predicated on projected future taxable income and different technical research, as disclosed in Note 24. Fair worth of monetary devices not traded in energetic markets, together with derivatives The truthful worth of monetary devices, together with derivatives, not traded in energetic markets, is calculated by way of valuation strategies. This calculation is predicated on assumptions that take into account Management’s judgments based mostly on market data. The principal assumptions are: historic knowledge, data from comparable transactions, and pricing strategies. For extra advanced or illiquid devices, important judgment is required to find out the mannequin utilized by deciding on particular inputs and in some instances, valuation changes are utilized to the mannequin worth or quoted worth for monetary devices that aren’t actively traded. The methodologies used to measure the truthful values of sure monetary devices are described in Note 28. Defined profit pension plan The present quantity of pension plan liabilities is obtained from actuarial calculations that use a number of assumptions, such because the low cost fee, which is allotted on the finish of the reporting interval to find out the current worth of the estimated future money flows. To decide the suitable low cost fee, we take into consideration the rates of interest of National Treasury bonds, with maturities near the phrases of associated liabilities. 183
Key assumptions for pension plan obligations are partially based mostly on present market circumstances. Further data is disclosed in Note 26. Provisions, contingencies and authorized liabilities We periodically revise our contingencies. These contingencies are evaluated based mostly on Management’s finest estimates, factoring within the opinion of authorized counsel each time it’s seemingly that monetary assets will likely be required to settle obligations and quantities could also be fairly estimated. Contingencies labeled as possible losses are acknowledged within the Balance Sheet underneath Provisions. Contingent quantities are measured utilizing fashions and standards that enable for its correct measurement regardless of uncertainties inherent in timing and quantities. Provisions, contingencies, and authorized liabilities are detailed in Note 29. Technical provisions for insurance coverage and pension plan Technical provisions are liabilities arising from obligations to our policyholders and plan individuals. These obligations could also be brief-time period liabilities (property and casualty insurance coverage) or medium- and lengthy-time period liabilities (life insurance coverage and pension plans). The dedication of the actuarial legal responsibility is topic to numerous uncertainties inherent within the protection of insurance coverage and pension contracts, akin to assumptions associated to persistence, mortality, incapacity, life expectancy, morbidity, bills, frequency and severity of claims, conversion of advantages into annuities, redemptions and return on belongings. Estimates for these assumptions are based mostly on macroeconomic projections, our historic expertise, benchmarks, and the actuary’s expertise, aimed toward the very best market practices and ongoing evaluation of the actuarial legal responsibility. Adjustments ensuing from these steady enhancements, when required, are acknowledged within the assertion of earnings for the corresponding interval. Further data is disclosed in Note 27. Goodwill impairment The revision of goodwill for impairment displays administration’s finest estimate of future money flows of Cash Generating Units (CGUs), with the identification of CGUs and the estimation of their truthful worth much less prices to promote and/or worth in use. To decide this estimate, we used the discounted money stream methodology for a interval of 5 years, macroeconomic, progress fee and low cost fee assumptions. The low cost fee normally displays monetary and financial variables akin to the danger-free rate of interest and a danger premium. CGUs or teams of CGUs are recognized on the lowest degree the place goodwill is monitored for inner administration functions. Goodwill shouldn’t be amortized, however its recoverable quantity is assessed each six months or when there is a sign that it could be impaired, utilizing an method that includes figuring out the money-producing models (CGUs) and estimating their truthful worth much less their prices to promote and/or their worth in use. In 2021, we didn’t determine an impairment loss for goodwill. According to Note 23 to the Full Financial Statements (IFRS), in 2020 we acknowledged changes to the recoverable quantity of goodwill and intangible belongings of Itaú Corpbanca, web of tax results and non-controlling pursuits, totaling R$(1,452) million. In 2019, we didn’t determine an impairment loss for goodwill. 10.6. Executive officers ought to describe related gadgets that aren’t evidenced within the issuer’s monetary statements, describing: 184
a) Assets and liabilities instantly or not directly held by the issuer that aren’t introduced in its stability sheet (off-stability sheet gadgets), akin to: I-Operating leases, belongings and liabilities Not relevant, apart from what was already disclosed within the IFRS Financial Statements. II-Written-off portfolios of receivables for which the entity has dangers and tasks, indicating the associated liabilities Not relevant, apart from what was already disclosed within the IFRS Financial Statements. III-Agreements for future buy and sale of services or products Not relevant, apart from what was already disclosed within the IFRS Financial Statements. IV-Agreements for building in progress (CIP) Not relevant, apart from what was already disclosed within the Financial Statements underneath IFRS. V-Agreements for future receipt of financing Not relevant, apart from what was already disclosed within the Financial Statements underneath IFRS. b) Other gadgets that aren’t introduced within the monetary statements Off-balance sheet commitments are disclosed in Note 32 (Risk and capital administration) to the Financial Statements underneath IFRS, as follows: 12/31/2021 12/31/2020 12/31/2019 Off stability commitments Over 720 Over 720 Over 720 0-30 31-365 366-720 Total 0-30 31-365 366-720 Total 0-30 31-365 366-720 Total days days days Financial Guarantees 3,742 28,530 11,046 39,592 82,910 2,859 24,491 6,428 35,155 68,933 1,286 19,447 9,359 36,628 66,720 Commitments to be launched 151,235 35,605 18,541 185,634 391,015 128,792 27,144 11,776 153,193 320,905 125,664 22,818 7,064 149,876 305,422 Letters of credit score to be launched 45,773 –45,773 41,477 –41,477 15,013 –15,013 Contractual commitments-Fixed and Intangible belongings (Notes 13 and 14)-3 – 3-36 – 36-273 – 273 Total 200,750 64,138 29,587 225,226 519,701 173,128 51,671 18,204 188,348 431,351 141,963 42,538 16,423 186,504 387,428 10.7. With respect to every of the gadgets that aren’t introduced within the monetary statements indicated in merchandise 10.6, govt officers ought to touch upon: a) How these things change or could change revenues, bills, working earnings and bills, monetary bills or different gadgets of the issuer’s monetary statements Not relevant. b) The nature and objective of the operation Not relevant. c) The nature and quantity of liabilities assumed and rights generated in favor of the issuer on account of the operation Not relevant. 10.8. Executive officers ought to point out and touch upon the primary parts of the issuer’s marketing strategy, describing, particularly, the next matters: a) Investments, together with: I-Quantitative and qualitative description of the investments in progress and anticipated investments-Sources of funding financing-Relevant divestitures in progress and anticipated divestitures 185
Actual and anticipated investments and divestitures in 2021 and are described in merchandise 10.3b. At the top of 2021, we had 4,112 branches and buyer web site branches in Brazil and overseas, 29 much less from the top of 2020, when our service community had 4,141 models. This drop within the variety of bodily branches and the bigger variety of digital branches are in step with our shoppers’ profile, who more and more demand companies by way of digital channels, aligned with our effectivity pushed actions. In the yr 2021, we had a 14.4% improve within the variety of digital branches, totaling 223 in opposition to 195 in 2020. We continued to massively spend money on expertise in 2021 to modernize our platform and develop options and companies to enhance our consumer expertise. During 2021 we employed 3,047 extra staff to our expertise workforce. This strengthens our dedication to ramping up expertise funding and transferring ahead in our digital transformation journey. The supply of funding for these investments is the Issuer’s personal working capital, represented by the stockholders’ fairness of the dad or mum firm and minority pursuits in subsidiaries. b) Provided that it has already been disclosed, point out the acquisition of plant, tools, patents or different belongings which might be anticipated to have a fabric influence on the issuer’s manufacturing capability. Not relevant. c) New services and products, indicating: I-Description of the analysis in progress that has already been disclosed-Total quantities spent by the issuer in analysis to develop new merchandise and services-Projects in progress which have already been disclosed-Total quantities spent by the issuer in growing new services and products Not relevant. 10.9. Comment on different components which have considerably affected the working efficiency and that weren’t recognized or commented on within the different gadgets of this part The full consolidated monetary statements underneath IFRS for 2021 can be found on our web site: www.itau.com.br/investor-relations > Results and Reports > Results Center > Complete Financial Statements (IFRS) – 4Q21. Other components impacting operational efficiency (not talked about in different gadgets of this part) The advertising and marketing division is chargeable for defining and managing Itaú Unibanco’s advertising and marketing technique, in Brazil and overseas, oriented to the market, shoppers, companions, suppliers and staff. Commercial and institutional priorities are outlined yearly, in addition to the general advertising and marketing quantity for the yr. Financial sponsorships are outlined in accordance with Itaú Unibanco’s inner coverage, which units out the principles, procedures and tasks of the financial institution’s inner departments in relation to such sponsorships. As disclosed in our monetary statements (Note 23 – General and administrative bills), bills on promoting, promotions and publications totaled R$(1,389) million in 2021, R$(1,095) million in 2020, and R$(1,325) million in 2019. 186
PROJECTIONS 11.1. Projections should determine: Information supplied on this merchandise on enterprise prospects, projections and operational and monetary targets is solely forecasts based mostly on Management’s present expectations in relation to the Bank’s future. These prospects are extremely depending on market circumstances and on the overall financial efficiency of Brazil, the sector, and worldwide markets. Therefore, our precise outcomes and efficiency could differ considerably from these on this ahead-trying data. This merchandise incorporates data that’s or might be construed as ahead-trying data based mostly largely on our present expectations and projections with respect to future occasions and monetary tendencies that have an effect on our actions. Due to those dangers and uncertainties, the data, circumstances, and potential information talked about on this merchandise could not happen. Our precise outcomes and efficiency could differ considerably from these on this ahead-trying data. Words akin to “imagine”, “could”, “ought to”, “estimate”, “proceed”, “anticipate”, “intend”, “anticipate” and others alike are used to determine ahead-trying statements however aren’t the one approach to determine such statements. a) material of the projection Projections are disclosed based mostly on the Managerial Result, contemplating: 1) Accumulated variation within the 12-month interval: Total mortgage portfolio, together with monetary ensures supplied and company securities; Financial margin with shoppers; Commissions and charges and outcome from insurance coverage operations; and Non-interest bills. 2) Accumulated quantity within the 12-month interval: Financial margin with the market; and Cost of credit score, which incorporates outcome from mortgage losses, impairment, and reductions granted. 3) Expected earnings and social contribution tax fee. 4) Recurring managerial ROE. 5) Expectation of the effectivity ratio in Brazil. 6) Expectation of the Tier I capital ratio. projected interval and the interval for which the projection is legitimate Projected interval: Fiscal yr 2022; Period for which the projection is legitimate: present yr or till Management states in any other case. assumptions thought of indicating which of them could also be influenced by the issuer´s administration and people that are past its management c.1) Assumptions underneath Management management for fiscal yr 2022 The steerage disclosed to the market is predicated on the assumptions used for the financial institution’s 2021 funds. The budgets for earnings outcomes, mortgage operations stability and fairness account balances are evaluated to make sure this alignment. The vary disclosed is outlined in line with administration’s expectations. It is value mentioning that periodical analyzes are undertaken to verify for the adherence between the steerage disclosed and doable funds revisions which may be carried out over the yr as a result of modifications within the macroeconomic outlook and within the aggressive or regulatory environments. Therefore, the steerage could also be revised. The steerage doesn’t embrace any doable acquisitions or partnerships which will happen sooner or later. 187
c.2) Assumptions past Management management for fiscal yr 2022 This trying-ahead data is topic to uncertainties and assumptions, together with, amongst different danger components: General financial, political, and enterprise circumstances in Brazil and modifications in inflation, curiosity, and overseas trade charges, in addition to the efficiency of monetary markets; General financial and political circumstances overseas, notably within the international locations the place we function; Disruptions and volatility within the international monetary markets; Increases in obligatory deposits and reserve requirement; Changes in Government laws and tax legal guidelines; Regulation and settlement of our enterprise on a consolidated foundation; Developments of investigations and its influence on shoppers and our fiscal publicity; Holders of our shares and ADRs could face difficulties to obtain dividends; Failure or hacking of our safety and operational infrastructure or programs; Our skill to guard private or different knowledge; Fiercer competitors and sector consolidation; Changes in our mortgage portfolios and the worth of our securities and derivatives ; Losses related to counterparty publicity; Our publicity to the Brazilian public debt; Inaccurate pricing methodologies for insurance coverage, pension plan and premium bonds merchandise, and understated reserves; Efficiency of our danger administration insurance policies; Damage to our fame; Ability of our controlling stockholder to run our enterprise; Difficulties to combine new or merged enterprise; Impact of environmental and social points; The influence of the coronavirus (Covid-19) pandemic or of different illness pandemic may adversely have an effect on the longer term outcomes of our operations and should proceed to influence the market worth of our securities; and Other danger components which might be listed on merchandise “4.1-Risk Factors” of this Reference Form. d) steerage data Projections for fiscal yr 2022 The desk beneath presents the revised projections for the yr 2022, in line with materials truth disclosed on February 10, 2022 and we inform that we’ve stored the ranges of our projections for 2022 unchanged. (1)Includes models overseas ex-Latin America; (2) Includes monetary ensures supplied and company securities; (3) Composed of outcome from mortgage losses, impairment and reductions granted; (4) commissions and charges (+) earnings from insurance coverage, pension plan and premium bonds operations (-) bills for claims (-) insurance coverage, pension plan and premium bonds promoting bills. 188
It’s value mentioning that the corporate considers, for administration functions, a price of capital of round 14.0% per yr. 11.2. If the issuer has disclosed steerage during the last three fiscal years: a) Inform which of them are being changed by new projections and which of them are the identical The indicators introduced and monitored for the 2022 steerage stay unchanged in comparison with those introduced in 2021 and 2019. For the 2022 projections, there was the inclusion of the views of recurring managerial ROE, Brazil’s effectivity ratio, and Tier I capital ratio. It’s value mentioning that, in line with Material Fact disclosed on May 4, 2020, 2020 steerage was suspended because of the lack of visibility concerning COVID-19 crises impacts. These indicators: (i) whole mortgage portfolio, (ii) monetary margin with shoppers, (iii) monetary margin with the market, (iv) price of credit score, (v) commissions and charges and outcome from insurance coverage operations, (vi) non-curiosity bills, and (vii) efficient earnings and social contribution tax fee. b) with respect to the projections associated to intervals which have already elapsed, evaluate the info projected with the efficient efficiency of the indications, clearly presenting the explanation for any variations in projections Projections for fiscal yr 2021 (1) Includes models overseas ex-Latin America; (2) Includes monetary ensures supplied and company securities; (3) Composed of outcome from mortgage losses, impairment and reductions granted; (4) commissions and charges (+) earnings from insurance coverage, pension plan and premium bonds operations (-) bills for claims (-) insurance coverage, pension plan and premium bonds promoting bills. Reasons that led to deviations within the projections Total mortgage portfolio: the upper-than-anticipated progress each in Consolidated and in Brazil was primarily pushed by the next credit score demand from people and small and center-market firms and by the elevated company securities portfolio within the company phase. Financial margin with shoppers: the upper-than-anticipated progress each in Consolidated and in Brazil was primarily pushed by the rise in mortgage portfolio and the influence of the upper rate of interest situation on our return on working capital. Effective earnings tax/social contribution fee: the upper-than-anticipated efficient fee in Brazil is pushed by the write-off of tax credit carried out within the first quarter of 2021 on account of their revaluation. Additionally, the upper revenue within the interval finally ends up economically diluting the tax advantage of curiosity on capital. 189
Projections for fiscal yr 2020 In accordance with the Material Fact disclosed on May 4, 2020, Itaú Unibanco knowledgeable its stockholders and the overall market that it determined to droop its projections for the yr 2020, disclosed by way of a Material Fact on February 10, 2020. Projections for fiscal yr 2019 (1) Includes models overseas ex-Latin America; (2) Includes monetary ensures supplied and company securities;(3) Includes Result from Loan Losses, Impairment and Discounts Granted; (4) Commissions and Fees (+) Income from Insurance, Pension Plan and Premium Bonds Operations (-) Expenses for Claims (-) Insurance, Pension Plan and Premium Bonds Selling Expenses. Explanation for any distinction in projections: Total mortgage portfolio: the upper-than-anticipated progress in Brazil was primarily pushed by the next credit score demand from people and small and center-market firms and by the elevated company securities portfolio. Financial margin with shoppers: the decrease-than-anticipated consolidated progress was primarily pushed by the overseas trade variation in our Latin American operations. Cost of credit score: the upper-than-anticipated consolidated degree was primarily as a result of the next improve in mortgage portfolio in Brazil and better-than-anticipated ranges of provision for the Latin America portfolio, pushed by macroeconomic uncertainties in Chile within the fourth quarter of 2019. Commissions and charges and outcome from insurance coverage operations: the upper-than-anticipated consolidated progress and in Brazil was primarily pushed by greater revenues from financial and monetary advisory, brokerage and fund administration companies. Non-interest bills: the decrease-than-anticipated consolidated progress and in Brazil was because of the environment friendly price administration. c) with respect to the present interval steerage, state whether or not the projections are nonetheless legitimate on the date the shape is submitted and, when relevant, clarify why they have been deserted or changed The projections stay true. 190
-GENERAL STOCKHOLDERS’ MEETINGS AND MANAGEMENT 12.1 Describe the issuer’s administrative construction, as established in its Bylaws and inner guidelines, figuring out: a) The features of the board of administrators and the everlasting our bodies and committees reporting to the previous, indicating: whether or not they have their very own inner laws and, if relevant, the physique chargeable for the approval, date of approval, and, within the occasion the issuer discloses these laws, the place these paperwork may be discovered on the Web whether or not the issuer has a statutory audit committee and, if it does, its principal features, the way it works and whether or not it complies with relevant laws issued by CVM 1 Board of Directors The Board of Directors, which is a joint determination-making physique, is obligatory as we’re a publicly-held firm. It is incumbent on the Board of Directors to: set up common enterprise pointers; elect and take away officers and set up their features; nominate officers to comprise the Board of Officers of managed firms as specified; supervise the efficiency of the officers and look at, at any time, books and information, request data on contracts already entered into or to be entered into, and take another actions; name the General Stockholders’ Meeting not less than twenty-one (21) days upfront and the variety of days will likely be counted from the publication of the primary name; categorical an opinion on the administration report, the accounts of the Board of Officers and the monetary statements for every fiscal yr to be submitted to the General Stockholders’ Meeting; resolve on estimates of outcome and funding budgets and respective motion plans; have interaction and take away impartial auditors, with out prejudice to the provisions in Article 7 of the Issuer’s Bylaws; resolve on the distribution of interim dividends, together with to retained earnings or income reserve accounts within the final annual or semi-annual stability sheet; resolve on fee of curiosity on capital; resolve on share buyback, on a non-everlasting foundation, to be held in treasury or on its cancellation or disposal; resolve on the acquisition and entry of put and name choices supported by its personal shares issued for functions of being cancelled, held in treasury or offered, topic to CVM Instruction No. 567/15, as amended; resolve on the arrange of committees to handle particular issues inside the scope of the Board of Directors; elect and take away members of the Audit Committee and Compensation Committee; approve the working guidelines that the Audit and Compensation committees could set up for their very own operations and acknowledge the committees’ actions by way of their reviews; assess and disclose on an annual foundation who the impartial members of the Board of Directors are, in addition to look at any circumstances which will compromise their Independence; approve direct or oblique investments and divestitures in fairness pursuits value greater than fifteen per cent (15%) of the Issuer’s guide worth registered within the final audited stability sheet; 191
state a place on the general public choices of shares or different securities issued by the Company; revolve, inside licensed capital restrict, on capital improve and issuance of negotiable and different convertible devices; and evaluation associated-social gathering transactions based mostly on materiality standards supplied for in its personal coverage, by itself or by one in every of its committees, supplied {that a} report is submitted to the Board of Directors within the latter situation. The Board of Directors consists of a minimal of ten (10) and a most of fourteen (14) members. At the primary assembly after the Annual General Stockholders’ Meeting electing the Board, the latter will select, amongst its friends, its chairperson or two co-chairpersons, and it might even have as much as three vice chairpersons. A member who’s 70 (seventy) years of age on the date of the election is probably not elected. The construction, composition and powers of the Board of Directors are included within the Bylaws and its working guidelines are included in its personal inner constitution, accredited by the Board of Directors, final up to date on April 26, 2018 and disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investor-relations> Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Internal Charter of the Board of Directors. a.2 Board of Officers Operational and govt duties are the duty of the Board of Officers, topic to the rules set out by the Board of Directors. The Board of Officers is the physique chargeable for managing and representing the Issuer, and it might have from 5 (05) to thirty (30) members, in compliance with the rules set out by the Board of Directors for filling these positions. The time period of workplace for Officers is one (01) yr, their reelection being permitted, and they’re going to stay in place till their replacements take workplace, and (i) those that are already 62 years of age on the election date is probably not elected for the place of Chief Executive Officer, and (ii) those that are already 60 years of age on the election date is probably not elected for different positions within the Board of Officers. Two officers collectively can have powers to (i) assume obligations, exercising rights underneath any act, settlement or doc that suggests duty, together with providing ensures for third-social gathering obligations; (ii) waive rights, encumber and get rid of fastened asset gadgets; (iii) appoint attorneys-in-truth for finishing up sure acts, and it’s sure that each time the worth value is greater than R$500 million, not less than one of many officers should be the Chief Executive Officer or an officer who’s a member of the Executive Committee. The Issuer will likely be represented by two officers collectively to resolve on the institution, closing and transfer of amenities. In the occasions above, apart from merchandise (iii), the Issuer can also be collectively represented by (i) one officer and one lawyer-in-truth or (ii) two attorneys-in-truth. The Issuer could also be exceptionally represented by a single lawyer-in-truth: (i) earlier than any direct or oblique physique of the general public administration, in acts that don’t suggest the belief or waiver of rights and obligations; (ii) with energy of lawyer with advert judicia clause; (iii) at common stockholders’ conferences, and stockholders’ or quotaholders’ conferences of firms or funding funds wherein we’ve pursuits. In the occasion of things (i) and (iii), the Company can also be represented by one officer solely. The construction, composition and powers of the Board of Officers are included within the Bylaws and its inner constitution, accredited by the Board of Directors on July 28, 2021, and disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investor-relations> Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Internal Charter of the Board of Officers. a.3 Committees reporting to the Board of Directors Each committee reporting to the Board of Directors has its personal inner constitution considering its construction, composition, powers and working guidelines. All laws are disclosed on the Investor Relations web site. a.3.1 Strategy Committee The Strategy Committee is chargeable for selling discussions on issues that materially influence us. It is incumbent upon the Strategy Committee, amongst different duties, to assist the selections of the Board of Directors, proposing funds pointers and issuing opinions and suggestions on strategic pointers and funding alternatives. The Strategy Committee has its personal inner constitution, accredited by the Board of Directors on June 24, 2016, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores 192
www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Strategy Committee Internal Charter. a.3.2 Nomination and Corporate Governance Committee The Nomination and Corporate Governance Committee is chargeable for selling and overseeing discussions on our governance. Its duties embrace, however aren’t restricted to: analyzing and issuing opinions on potential conflicts of curiosity between the members of the Board of Directors and the Conglomerate firms; offering methodological and procedural assist to the analysis of the Board of Directors, its members, committees and the Chief Executive Officer, and discussing the succession of members of the Board of Directors and the Chief Executive Officer, in addition to making suggestions on this matter. The Committee has its personal inner constitution, accredited by the Board of Directors on August 30, 2018, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Nomination and Corporate Governance Committee Internal Charter. a.3.3 Personnel Committee The Personnel Committee is chargeable for setting the primary pointers on folks. Its duties embrace, however aren’t restricted to, setting pointers on expertise attraction and retention, in addition to recruitment and coaching, and our lengthy-time period incentive packages. The Personnel Committee has its personal inner constitution, accredited by the Board of Directors on July 28, 2016, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Personnel Committee Internal Charter. a.3.4 Compensation Committee It is incumbent upon the Compensation Committee to advertise discussions on administration compensation-associated issues. Its duties embrace, however aren’t restricted to: growing a compensation coverage for our administration members, proposing to the Board of Directors the completely different manners of fastened and variable compensation, along with particular advantages and recruitment and termination packages; discussing, analyzing and overseeing the implementation and operation of current compensation fashions, discussing common rules of compensation for our staff, and recommending changes or enhancements to the Board of Directors. The Compensation Committee has its personal inner constitution, accredited by the Board of Directors on August 29, 2018, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Compensation Committee Internal Charter. a.3.5 Capital and Risk Management Committee The Capital and Risk Management Committee is chargeable for supporting the Board of Directors to carry out capital and danger administration-associated duties, submitting reviews and suggestions on these matters to the Board’s approval. Its duties embrace, however aren’t restricted to: defining our danger urge for food, anticipated minimal return on capital, and overseeing danger administration and management actions, aimed toward making certain their adequacy to the danger ranges assumed and the complexity of operations, along with assembly regulatory necessities. The Capital and Risk Management Committee can also be chargeable for enhancing our danger tradition. The Committee has its personal inner constitution, accredited by the Board of Directors on August 31, 2017, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Capital and Risk Management Committee Internal Charter. a.3.6 Audit Committee The Issuer has an Audit Committee that complies with the principles issued by the National Monetary Council (CMN) for audit committees of monetary establishments. The Audit Committee is chargeable for overseeing the standard and completeness of monetary statements; compliance with authorized and regulatory necessities; efficiency, independence and high quality of companies supplied by impartial auditors and the Internal Audit operate; and the standard and effectiveness of inner management and danger administration programs. Set up in April 2004 by the Annual General Stockholders’ Meeting, it’s the solely audit committee for establishments licensed to function by the Central Bank of Brazil and for firms overseen by SUSEP which might be a part of the Conglomerate. The members of the Audit Committee are yearly elected by the Board of Directors from amongst its members or professionals with famend competence and excellent data, considering that 193
not less than one of many members of this Committee will likely be a delegated Financial Expert and will need to have confirmed data within the accounting and auditing areas. All members of the Audit Committee are impartial, in accordance with CMN regulation, and the Board of Directors will terminate the time period of workplace of any Audit Committee member if their independence is affected by any precise or potential battle of curiosity. The evaluations of the Audit Committee are based mostly on data acquired from administration, exterior auditors, inner auditors, departments chargeable for danger administration and inner controls, and on analyses made by the Committee members on account of direct statement. The Committee has its personal inner constitution, accredited by the Board of Directors on August 26, 2021, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investor-relations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Audit Committee Internal Charter. a.3.7 Related Parties Committee The Related Parties Committee is chargeable for analyzing associated-social gathering transactions, within the conditions laid out in our Related Party Transactions Policy, aimed toward making certain that these transactions are carried out with transparency and at arm’s size. The Related Parties Committee is totally composed of impartial members. The Committee has its personal inner constitution, accredited by the Board of Directors on August 29, 2018, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Related Parties Committee Internal Charter. a.3.8 Social Responsibility Committee The Social Responsibility Committee is chargeable for defining methods to strengthen the Company’s company social duty and monitoring the efficiency of social establishments associated thereto, in addition to initiatives carried out instantly by the Company. The Committee has its personal inner constitution, accredited by the Board of Directors on January 31, 2019, disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores www.itau.com.br/investorrelations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Social Responsibility Committee Internal Charter. a.4. Internal Audit The Internal Audit is an impartial and goal assurance and advisory operate, designed so as to add worth and enhance the group’s operations, as set forth by the International Professional Practices Framework-IPPF) of The Institute of Internal Auditors – The IAA. It helps the group obtain its targets by way of a systematized and controlled method to guage and enhance the effectivity of danger administration, management and governance processes. In Itaú Unibanco’s governance, Internal Audit is the third line of protection. The Executive Areas are the primary line, and the Risks and Internal Controls Area make up the second line. The objective of the Internal Audit Department is to guage the actions carried out by the Conglomerate by way of audit strategies, thus enabling administration to evaluate the effectiveness of the danger administration and operation of the evaluated enterprise, effectiveness and adequacy of controls, effectiveness of danger administration, reliability of monetary statements and compliance with guidelines and laws, reliability and compliance with administration data. The Executive Audit Officer yearly reviews on the Internal Audit’s objective, degree of authority and duty and confirms its impartial efficiency to the Co-chairmen of the Board of Directors and to the Audit Committee. Any precise or obvious obstacle to the independence or objectivity recognized will likely be reported to the Co-chairmen of the Board of Directors and the Audit Committee. iii. how the board of administrators assesses the work of the impartial audit, indicating whether or not the issuer has a coverage to interact non-associated audit companies with the impartial auditor, and informing the physique chargeable for the approval, the date of approval and, within the occasion the issuer discloses these laws, the place these paperwork may be discovered on the internet The Audit Committee is chargeable for assessing the work carried out by the impartial auditors of the Conglomerate on an annual foundation. This evaluation course of features a questionnaire, up to date yearly, crammed 194
out by the Committee based mostly on its direct statement, interviews with Officers who’ve a relationship with the impartial auditors, in addition to on the result of the qualitative and quantitative survey with the departments which have a direct relationship with the impartial auditors and the CFOs of overseas models. The Audit Committee formally submits the result of this evaluation in writing to the engagement companion of the impartial auditors, with whom it’s mentioned at an in-individual assembly, and to the Board of Directors. The firm has a coverage to interact companies supplied by impartial auditors, together with non-audit companies (Policy for participating the companies to be supplied by the impartial auditors of the Conglomerate), accredited by the Audit Committee on June 15, 2020. b. in relation to members of the board of statutory officers, state its features and particular person powers, indicating whether or not this board has an inner constitution and, if relevant, the physique chargeable for the approval, the date of approval, and, within the occasion the issuer discloses this regulation, the place this doc may be discovered on the internet The Board of Directors accredited the revision of the Internal Charter of the Board of Officers on April 27, 2021. In accordance with this Internal Charter, the operational or govt features associated to administration and illustration of the Company would be the duty of the Board of Officers elected by the Board of Directors. The Chief Executive Officer is chargeable for overseeing the efficiency of the Board of Officers, construction the Company’s companies and arrange inner and working guidelines. The inner constitution of the Board of Officers could also be accessed on the Company’s web site at www.itau.com.br/investor-relations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules > Internal Charter of the Board of Officers. c. the date of set-up of the Supervisory Council, if not everlasting, indicating whether or not the council has an inner constitution and, if relevant, the date it was accredited by the Supervisory Council, and, within the occasion the issuer discloses this regulation, the place this doc may be discovered on the internet Set up on a everlasting foundation by the Extraordinary General Stockholders’ Meeting of July 27, 2018, the Supervisory Council is an impartial physique, yearly elected by the General Stockholders’ Meeting, and its duties are to supervise the actions of our administration, evaluation our monetary statements for the fiscal yr, and challenge an opinion on these monetary statements, amongst different duties supplied for by Brazilian laws. It consists of three (03) to 5 (05) members and the identical variety of alternates. The Supervisory Council should work independently from administration, exterior auditors and the Audit Committee. The Supervisory Council has its personal inner constitution, up to date on July 29, 2019, disclosed on the Investor Relations web site: www.itau.com.br/investor-relations > Menu > Itaú Unibanco > Corporate Governance > Rules and Policies > Rules >Rules of the Supervisory Council, together with its construction, composition, duties and working guidelines. d) whether or not mechanisms are in place to guage the efficiency of the board of administrators and every physique or committee reporting to the board of administrators, informing, if relevant: the frequency of analysis and its scope, stating whether or not it’s only of the precise physique or it additionally consists of the person analysis of its members; the methodology adopted and the primary standards used within the analysis; how the outcomes of the analysis are utilized by the issuer to enhance the operation of that physique; whether or not exterior consulting or advisory companies have been engaged. The Board of Directors, its members and Chairperson (or Co-chairpersons), in addition to of the committees reporting thereto, is evaluated on an annual foundation for the efficiency of administration members in compliance with the very best company governance practices. The Secretary to the Board of Directors is evaluated as effectively. 195
The reelection of members of the Board of Directors and of committees components of their good efficiency within the interval and the common attendance to conferences through the earlier time period of workplace, in addition to their expertise and degree of independence. The analysis course of consists of the next phases: self-analysis of the members of the Board of Directors, cross-analysis of the members of the Board of Directors (members consider one another), analysis of the Board of Directors itself by its members, analysis of the Board Chairperson (or Co-chairpersons) by its members and analysis of the committees by their members. The analysis course of is structured contemplating the precise traits/tasks of the Board of Directors, its members, its Chairperson (or Co-persons) and every committee, because it seeks to succeed in a excessive degree of specialization through the analysis. In the analysis course of, particular questionnaires are handed out to the Board of Directors and every committee, and every member of the Board of Directors and committees is interviewed on a person foundation. Responses are analyzed and in comparison with the outcomes of earlier years, to determine and deal with any gaps associated to the Board of Directors and the committees which may be unveiled within the course of. The Nomination and Corporate Governance Committee gives methodological and procedural assist to the analysis course of. This Committee additionally discusses the outcomes of the analysis, in addition to the composition and succession plan of the Board of Directors. Evaluation of the Board of Officers Our officers bear a radical and complete annual analysis, wherein the next efficiency indicators are thought of: monetary, processes, buyer satisfaction, folks administration and crosswise targets with different departments. 12.2. Describe the principles, insurance policies and practices associated to common stockholders’ conferences, indicating: a) Call discover phrases According to Article 124, merchandise II of Brazilian Corporate Law, the time period for the primary name for the stockholders’ conferences of publicly-held firms is twenty-one (21) days earlier than the date of the assembly and, for the second name, eight (08) days. The Annual General Stockholders` Meeting of April 26, 2022 was referred to as with over 30 days upfront. Duties It is incumbent upon the General Stockholders’ Meeting to: resolve on the monetary statements and the distribution and allocation of income; resolve on the administration report and the accounts of the Board of Officers; set up the annual total compensation of the members of the Board of Directors and Board of Officers; appoint, elect and take away members of the Board of Directors; approve modifications to capital, topic to the authority of the Board of Directors to alter capital as much as the licensed capital restrict, no matter a statutory reform; resolve on mergers, takeovers, spin-offs or another types of company restructuring; resolve on retained earnings or allocation to reserves; and resolve on inventory choice plans or inventory grant plans for shares issued by the Issuer or its subsidiaries. Addresses (avenue or digital) the place the paperwork associated to the overall stockholders’ assembly will likely be accessible to stockholders for evaluation Documents to be analyzed at common stockholders’ conferences can be found to stockholders on the Issuer’s Investor Relations web site (www.itau.com.br/investor-relations), in addition to on the web site of CVM 196
(http://www.cvm.gov.br) or on the web site of B3 (www.b3.com.br). Stockholders can also request a duplicate of stated paperwork by e-mail at investor-relations@itau-unibanco.com.br. d) Identification and administration of conflicts of curiosity According to paragraphs 1 and 4 of Article 115 of Brazilian Corporate Law, stockholders can’t vote at stockholders’ conferences supposed to resolve on appraisal reviews on belongings used to kind the capital, approval of their accounts as administration members or another decision that would notably profit them, or the place their pursuits are in battle with these of the Issuer, underneath penalty of: (i) the decision being voided, (ii) being held accountable for any harm triggered, and (iii) being obliged to switch to the Issuer any benefits obtained. Furthermore, whereas the General Stockholders’ Meeting is being held, attending stockholders are to talk up on any doable conflicts of curiosity over any matter underneath dialogue or decision, wherein their independence could also be compromised accordingly, as it’s achieved at conferences of the Company’s administration and inspection our bodies. Any attending stockholder conscious of any conflicting scenario concerning one other stockholder and the matter topic to decision should communicate up thereon. When a battle of curiosity is introduced into gentle, the conflicted stockholder ought to abstain from collaborating within the decision of the associated matter. If the conflicted stockholder refuses to abstain from collaborating within the decision, the Chairperson of the General Stockholders’ Meeting will decide that any conflicted votes solid be annulled, even whether it is to happen after the assembly. e) Request for proxies by administration for the train of voting rights We make proxies accessible, in line with Attachment 23 to CVM Instruction No. 481/09, for the aim of providing a further mechanism to facilitate the attendance of stockholders at common conferences. The Proxy request is totally funded by the Issuer. f) Formalities essential for accepting proxy devices granted by stockholders, indicating whether or not the issuer requires or waives notarized signatures, notarization, consularization and sworn translation and whether or not the Issuer accepts proxies granted by stockholders by way of digital means Stockholders could also be represented at common stockholders’ conferences by a proxy, underneath the phrases of Article No. 126 of Brazilian Corporate Law 6,404/76, supplied that the proxy is bearing an id doc and the paperwork listed beneath that proof the validity of the proxy. The Issuer requests for any paperwork issued overseas to be consularized, apostilled and accompanied by the respective sworn translation. It shouldn’t be obligatory that the consultant of the Legal Entity Stockholder be a Stockholder, a member of the Company’s administration or a lawyer. Legal Entities in Brazil: a licensed copy of the articles of affiliation/Bylaws of the represented authorized entity, proof of election of administration and the corresponding proxy with signature notarized by a notary public; Individuals in Brazil: a proxy with signature notarized by a public notary’s workplace. In order to facilitate the work of the General Stockholders’ Meeting, the Company means that stockholders represented by proxy holders submit, as much as two (2) days upfront, a duplicate of the paperwork listed above by mail drinvest@itau-unibanco.com.br or by messenger to: Itaú Unibanco-Gerência Paralegal de Assuntos Corporativos Praça Alfredo Egydio de Souza Aranha, 100 Torre Conceição, 1º andar-Parque Jabaquara São Paulo (SP)-CEP 04344-902 g) formalities essential for accepting a distant voting kind, when despatched on to the Company, indicating whether or not the issuer requires or waives notarized signatures, notarization and consularization Any stockholders selecting to train their distant voting proper could accomplish that on to the Company by forwarding the documentation beneath to e-mail drinvest@itau-unibanco.com.br: a tough copy of the voting kind duly crammed, initialized and signed (consularization and sworn translation of paperwork in overseas languages not required); and 197
ID doc-for Legal Entities: a licensed copy of the articles of affiliation/Bylaws, proof of election of administration members, and licensed copy of the ID documentation of those representatives; and for Individuals: a licensed copy of the ID doc bearing the Stockholders’ image. The Issuer requests for any paperwork issued overseas to be consularized, apostilled and accompanied by the respective sworn translation. Documents can also be despatched to: Itaú Unibanco-Gerência Paralegal de Assuntos Corporativos Praça Alfredo Egydio de Souza Aranha, 100, Torre Conceição, 1º andar Parque Jabaquara, São Paulo (SP)-CEP 04344-902 Upon receipt of the paperwork referred to in (i) and (ii) above, the Issuer will notify the stockholder that it has acquired and accepted them, in accordance with CVM Instruction No. 481/09. This data will likely be despatched to the stockholder on the digital deal with acknowledged within the voting kind. h) whether or not the corporate makes accessible an digital system to obtain distant voting kinds or distant participation. Stockholders could ahead the digitalized copies of the distant voting kind and different documentation to drinvest@itau-unibanco.com.br or to: Itaú Unibanco-Gerência Paralegal de Assuntos Corporativos Praça Alfredo Egydio de Souza Aranha, 100, Torre Conceição, 1º andar Parque Jabaquara, São Paulo (SP)-CEP 04344-902 From 2020 on, the Issuer broadcasts its common stockholders’ conferences on-line as effectively. i) directions for the stockholder or group of stockholders to incorporate proposals for decision, slates or candidates to members of the board of administrators and Supervisory Council within the distant voting kind. Stockholders representing the minimal percentages set forth in Attachments 21-L-I and 21-L-II to CVM Instruction No. 481/09 could request the inclusion within the distant voting kind, respectively, of (i) candidates to the Board of Directors and the Supervisory Council or (ii) proposed resolutions for the Issuer’s common stockholders’ conferences. In accordance with the phrases set forth in Article 21-L to CVM Instruction No. 481/09, proposals needs to be forwarded to: Itaú Unibanco – Gerência Paralegal de Assuntos Corporativos Praça Alfredo Egydio de Souza Aranha, 100, Torre Conceição, 1º andar-Parque Jabaquara São Paulo (SP)-CEP 04344-902 or by way of e-mail to: drinvest@itau-unibanco.com.br Stockholders prepared to appoint candidates to the Board of Directors or the Supervisory Council ought to submit proof required to satisfy the minimal eligibility necessities relevant to the place, in accordance with the Brazilian Corporate Law, Regulation Attachment II to Resolution No. 4,122/12 of the National Monetary Council and CVM Instruction No. 367/02. The Issuer will present suggestions to stockholders in as much as three (3) enterprise days after receiving the inclusion request, in accordance with Article 21-N of CVM Instruction No. 481/09. j) whether or not the corporate makes accessible boards and pages on the Internet designed for receiving and sharing feedback of stockholders on the stockholders’ conferences’ agendas. The Issuer has no discussion board designed for receiving and sharing stockholders’ feedback on the stockholders’ conferences’ agenda. However, it gives a channel on the Investor Relations web site (www.itau.com.br/investor-relations) in order that stockholders can ship solutions, criticisms or questions on to the Board of Directors by way of the hyperlink “Contact IR” on the Investor Relations web site (www.itau.com.br/investor-relations) deciding on 198
the choice “Investor Services” > Contact IR. In the topic area, the stockholder ought to choose choice “Recommendations to the Board of Directors to Stockholders’ Meeting. The Annual General Stockholders’ Meeting Manual, printed on March 25, 2022, is accessible on our Investor Relations web site: www.itau.com.br/relacoes-com-investidores > Results and Reports > Regulatory Reports > CVM > General Meetings > Information on the Annual General Stockholders’ Meeting of April 26, 2022. okay) Other data essential for distant attendance and train of the distant voting proper All data required for stockholders to train their distant voting proper is included on this Reference Form and within the General Stockholders’ Meeting Manual, corroborating the Issuer’s dedication to advertise the very best company governance practices, encouraging all stockholders to train their voting proper, and transparency of the market. 12.3. Describe the principles, insurance policies and practices associated to the Board of Directors, indicating a) variety of conferences held within the final fiscal yr, specifying the variety of extraordinary and extraordinary conferences In 2021, the Board of Directors held twelve (12) extraordinary conferences and two (2) seminars. b) If relevant, the provisions within the shareholders’ settlement that place restrictions or circumstances on the train of the voting rights of the board members The Shareholders’ Agreement units forth that the members nominated as established therein will all the time vote collectively on sure issues: www.itau.com.br/relacoes-com-investidores Itaú Unibanco > Corporate Governance > Rules and Policies > Others > Shareholders’ Agreement – IUPAR. c) The guidelines for figuring out and managing conflicts of curiosity According to the Internal Charter of the Board of Directors, its members could not participate in resolutions on issues wherein their pursuits battle with the Issuer’s. Each member should inform the Board of Directors of any battle of curiosity as quickly because the matter is included within the agenda or proposed by the Board Chairperson and, in any case, earlier than the beginning of any dialogue on every subject. In the primary assembly after the act of their election, the elected member should inform the opposite Board members of: (a) the primary actions they perform exterior the Issuer; (b) participation within the boards of different firms; and (c) enterprise relationships with Conglomerate firms, together with the supply of companies to those firms. Board members can solely take part in as much as 4 (4) boards of administrators of firms that aren’t owned by a single financial group. For functions of this restrict, the train of this responsibility in philanthropic entities, golf equipment or associations won’t be considered. This restrict may be exceeded upon the approval of the Nomination and Corporate Governance Committee. If a member of the Board or firm managed or managed by them carries out a transaction with firms of the Itaú Unibanco Conglomerate, the next guidelines should be adopted: (a) the transaction will likely be carried out on an arm’s size foundation; (b) if it isn’t a ordinary transaction or service provision, appraisal reviews should be issued by respected firms confirming that the transaction was carried out on an arm’s size foundation; and (c) the transaction should be reported to and carried out by the Related Parties Committee or by the channels normally incumbent within the hierarchy of the Itaú Unibanco Conglomerate, supplied that the principles and circumstances within the Related Party Transactions Policy are met. d. whether or not the issuer has a coverage for nominating and filling the positions of the board of administrators formally accredited, informing, if relevant: i. the physique chargeable for approving the coverage, date of approval, and if the issuer discloses the coverage, the place on the Web this doc may be discovered. ii. principal traits of this coverage, together with guidelines on the nomination of members to the board of administrators, composition of the physique and number of members. The Company has a coverage for the nomination of members to the Board of Directors, committees reporting to the Board of Directors and the Board of Officers, accredited by the Board of Directors on January 31, 2019 and 199
disclosed on the Investor Relations web site: www.itau.com.br/relacoes-com-investidores > Itaú Unibanco > Corporate Governance > Rules and Policies > Policies. The members nominated to the Board of Directors should be extremely certified professionals, with respected (technical, skilled, tutorial) expertise and aligned with Itaú Unibanco’s values and tradition. The nomination course of should additionally embrace folks with completely different profiles and options, aimed toward complementing duties and offering range, akin to gender, race and age group. According to the Nomination Policy, the composition of the Board of Directors needs to be assessed on an annual foundation to make sure the complementary duties of its members. Accordingly, the proposal for reelection of members of the Board of Directors ought to take into account their good efficiency through the interval, expertise and common attendance on the conferences within the earlier time period of workplace. A member who’s 70 (seventy) years of age on the date of the election is probably not elected. The Board of Directors needs to be made up of not less than 1/3 of impartial members and, within the occasion the variety of members is a fraction quantity, it will likely be rounded to (i) the closest greater integer, when the fraction is equal or greater than 5 tenths (0.5), and (ii) the closest decrease integer, when the fraction is decrease than 5 tenths (0.5). The calculation of vacancies for impartial members will embrace all members certified in accordance with the Company’s Corporate Governance Policy, no matter their nomination by controlling or minority stockholders. 12.4 If relevant, describe the dedication clause contained within the Bylaws for settling conflicts between stockholders and between stockholders and the issuer via arbitration Not relevant.
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12.5/6 – Composition {and professional} expertise of the board of administrators and financial council Profissional expertise / Statement of any conviction / Independence standards Pedro Paulo Giubbina Lorenzini-103.594.548-79 Pedro Paulo Giubbina Lorenzini, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2021. He is presently chargeable for the Treasury, Client and Product Desks and Macroeconomics departments and for the financial institution’s operations in South America (Argentina, Paraguay, Uruguay and Itaú CorpBanca), having held the place of Executive Officer (2021). He is a Member of the Board of Directors and a Member of the Risk and Financial Committee at B3 S.A. – Brasil, Bolsa, Balcão (2021/2023 two-yr interval). Mr. Lorenzini was chargeable for the Markets, Securities Services and Treasury (2008 to 2021); Sales and Structuring, ALM Management (2004 to 2008); Trading and Currency Management (2000 to 2004); Management of the ALM Department (1997 to 2000); a number of departments of the Treasury Products Sales to Corporate Clients (1995 to 1997); Structuring and Development of Treasury Products (1993 to 1995); Product and Risk Management Manager (1992 to 1993); and chargeable for Controllership and Management of Managerial Results from Corporate Products (1991 to 1992) at Citigroup Brazil, and was a Trainee (1989 to 1991) at Citibank Brazil. He was Chairman of the Treasury Committee (2010 to 2013) and Citibank’s consultant on the Board of Executive Officers on the Federação Brasileira de Bancos (FEBRABAN) (2013 to 2021), and Chairman of the Treasury Committee (2010 to 2012),and Vice President of the Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais (ANBIMA) (2010 to 2021). He holds a Bachelor’s diploma in Business Administration from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil. Carlos Fernando Rossi Constantini-166.945.868-76 Carlos Fernando Rossi Constantini, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2021. He is presently chargeable for the Wealth Management & Services division, which addresses consumer’s funding journeys, from providing and expertise to fund distribution and administration, having held the place of Executive Officer (2019 to 2021). In 2017, Mr. Constantini turned the CEO at Itaú Unibanco within the United States and the Head of International Private Banking in Miami (2017 to 2018). He has held a number of positions on the Itaú Unibanco Group, together with Officer (2009 to 2017). He joined the Itaú Unibanco Group in 2007 as a Deputy Officer (2007 to 2009). He holds a Bachelor’s diploma in Production Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil. Flávio Augusto Aguiar de Souza-747.438.136-20 Flávio Augusto Aguiar de Souza, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group and CEO of Banco Itaú BBA since 2021, being chargeable for the Corporate & Investment Banking, Commercial Banking, Distribution and Research departments, in addition to for the credit score evaluation, granting, restoration and restructuring actions of the Wholesale Banking division. He joined the Itaú Unibanco Group in 2009 and has held main positions in a number of departments of the conglomerate, having served as Executive Commercial Banking Officer, Global Head of Wealth Management & Services, Global Head of Private Banking, and CEO of Banco Itaú International in Miami, U.S. Mr. Souza was Vice President of the Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais (ANBIMA) (2015 to 2019), and Chairman of the Board of Directors on the banks Itaú International (Miami, U.S.) and Itaú Suisse (Zurich, Switzerland) (2015 to 2018). He holds a Bachelor’s diploma in Business Administration from the Universidade Federal de Minas Gerais, Belo Horizonte, Minas Gerais, Brazil, and a postgraduate diploma in Finance from the Fundação Dom Cabral, São Paulo, Brazil. Ricardo Ribeiro Mandacaru Guerra-176.040.328-85 Ricardo Ribeiro Mandacaru Guerra, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2021, chargeable for the expertise division within the place of CIO since 2015. He has held a number of positions on the Itaú Unibanco Group, together with Executive Officer (2014 to 2021), Channels Officer (2008 to 2014); Financing Products Superintendent-Individuals 209 (2007 to 2008); Credit Policies Superintendent (2006 to 2007); Electronic Channels Management Superintendent (2002 to 2006), and Internet Project Leader (1996 to 2000).
He joined the Itaú Unibanco Group in 1993 as a System Analyst. He holds a Bachelor’s levels in Civil Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil, and in Business Administration from the Faculdade de Economia, Administração, Contabilidade e Atuária da Universidade de São Paulo (FEA-USP), São Paulo, Brazil, and an MBA from the Kellogg School of Management at Northwestern University, Illinois, U.S. José Geraldo Franco Ortiz Junior-290.270.568-97 José Geraldo Franco Ortiz Junior, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2021. He joined the Itaú Unibanco Group in 2003 as an intern, and has served in a variety of positions, akin to: Legal Assistant (2003 to 2004); Lawyer (2004 to 2006); Senior Lawyer (2006 to 2008); Legal Manager (2009 to 2013), and Legal Superintendent (2013 to 2020). Mr. Ortiz Junior additionally labored as Non-US Legal Intern at legislation agency Jones Day of New York (2009) and as an intern at IBM Brasil (2001 to 2003). He holds a Bachelor’s diploma in Law from the Faculdade de Direito da Universidade de São Paulo (USP), São Paulo, Brazil, and a Master’s diploma (LL.M) from the Columbia University Law School, New York, U.S. Matias Granata-228.724.568-56 Matias Granata, a Partner, has been an Officer of the Executive Committee on the Itaú Unibanco Group chargeable for the dangers division (CRO) since 2021. He has held a number of positions on the Itaú Unibanco Group, together with Officer (2014 to 2021), chargeable for AML, Credit Risk, Modeling and Market and Liquidity Risks. He holds a Bachelor’s diploma in Economics from the Universidad de Buenos Aires (UBA), Buenos Aires, Argentina, a postgraduate diploma in Economics from the Universidad Torcuato Di Tella (UTDT), Buenos Aires, Argentina, and a Master’s diploma in International Economic Policy from the University of Warwick, British Chevening Scholarship, United Kingdom. Sergio Guillinet Fajerman-018.518.957-10 Sergio Guillinet Fajerman, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2021. He is presently chargeable for the Personnel division. He has held a number of positions on the Itaú Unibanco Group, together with Executive Officer (2017 to 2021) and Corporate Personnel Management Officer and Personnel Officer on the General Wholesale Banking Office (2010 to 2017). He is a consultant of the Itaú Unibanco Group within the Human Resources Committee (CHR) of FEBRABAN. He holds a Bachelor’s diploma in Economics from the Universidade Federal do Rio de Janeiro (UFRJ), Rio de Janeiro, Brazil; MBA in Corporate Finance from the Instituto Brasileiro de Mercado de Capitais (IBMEC), Brazil; MBA from INSEAD, Fontainebleau, France and has attended the Advanced HR Executive Program from the University of Michigan, Michigan, U.S. Andre Balestrin Cestare-213.634.648-25 Andre Balestrin Cestare, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2017. He is presently chargeable for the Financial Planning of the Wholesale Banking and Technology and Operations division. He has held a number of positions on the Itaú Unibanco Group, together with Financial Planning Officer-Retail Banking (2017 to 2019) and Finance Superintendent (2010 to 2017). Mr. Cestare was additionally a Member of the Board of Directors at Financeira Itaú CBD and ConectCar from 2017 to 2019. He holds a Bachelor’s diploma in Mechanical Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil; a Postgraduate diploma in Business Administration and a Professional Master’s diploma in Finance and Economics, each from the Fundação Getulio Vargas (FGV), São Paulo, Brazil. He additionally attended the Executive Qualification Program from the Fundação Dom Cabral, São Paulo, Brazil. Renato Barbosa do Nascimento-161.373.518-90 Renato Barbosa do Nascimento, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2017, chargeable for the inner audit operate of the funding banking, WMS, monetary crimes, M&A, Treasury, Risks, Accounting, Fiscal, Finance departments and overseas models. He held a number of positions inside PricewaterhouseCoopers Auditores Independentes (PwC) (São Paulo, Brazil), together with Audit Partner from 2009 to 2017. He took half in a 3-yr skilled trade program at PwC in Mexico City, Mexico, as audit officer main exterior audits in subsidiaries of worldwide entities of the monetary trade in Mexico (2014 to 2017). His principal duty as Audit Partner was to guide exterior audits in entities of the monetary trade in São Paulo (2009 to 2014). In that interval, Mr. Nascimento was additionally chargeable for monitoring exterior audits carried out by the PwC groups of the United States, United Kingdom, Switzerland, Portugal, Chile, Argentina, Paraguay and Uruguay in subsidiaries of Brazilian monetary establishments in these international locations. Also at PwC (São Paulo, Brazil) he was Audit Senior Manager of the monetary trade (2008 to 2009), and his principal duty was to handle groups answerable for finishing up audits of entities of the monetary trade, regulated by the Banco Central do Brasil. Between 2006 and 2008, Mr. Nascimento took half in a two-yr skilled trade program at PwC in London, United Kingdom, and his principal tasks have been managing exterior audits of British monetary establishments in England, managing exterior audits of subsidiaries of worldwide banks, in addition to the ensuing growth of data on the applying of the International Financial Reporting Standards (IFRS), Sarbanes Oxley (SOx) guidelines and insurance policies issued by the Public Company Accounting Oversight Board (PCAOB). Additionally, he took half in a two-yr skilled trade program at PwC in Montevideo, Uruguay, managing exterior audits of native banks, worldwide establishments, and offshore entities, amongst others. He holds a Bachelor’s levels in Accounting and in Business Administration, each from the Universidade Paulista, São Paulo, Brazil and Master’s diploma in Business Administration (MBA) from Fundação Getulio Vargas (FGV), São Paulo, Brazil. In 2021, Mr. Nascimento attended the manager coaching course Fintech Revolution:Transformative Financial Services and Strategies, organized by the Wharton School of the University of Pennsylvania. André Sapoznik-165.085.128-62 André Sapoznik, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2016, having held the place of Vice President (2016 to 2021). He joined the Itaú Unibanco Group in 1998 and was elected Officer in 2004. 210 He holds a Bachelor’s diploma in Production Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and MBA from Stanford Graduate School of Business, California, U.S.
Álvaro Felipe Rizzi Rodrigues-166.644.028-07 Álvaro Felipe Rizzi Rodrigues, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2014. He is presently chargeable for the Legal Wholesale Banking Department (funding banking, treasury, wealth administration companies, banking merchandise, allotted funds and onlending, worldwide loans and overseas trade), the Tax Department, the Proprietary M&A Legal Matters Department and the Anti-Trust, Corporate and International Legal Matters Departments. Mr. Rodrigues had been beforehand chargeable for the Legal Retail Banking Department (chargeable for authorized points associated to services and products of the retail banking, insurance coverage and pension plan enterprise) and the Institutional Legal Department (Corporate and Corporate Governance, Contracts, Intellectual Property and Corporate Paralegal Matters). He joined the Itaú Unibanco Group in 2005, serving as Legal Manager and Legal Superintendent (2005 to 2014). He additionally labored within the Corporate Law and Contract Law departments (1998 to 2005) at Tozzini Freire Advogados. He holds a Bachelor’s diploma in Law from the Faculdade de Direito da Universidade de São Paulo (USP), São Paulo, Brazil. He has additionally attended a specialization course in Corporate Law from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil, and holds a Master of Laws (L.L.M.) from Columbia University Law School, New York, U.S. Emerson Macedo Bortoloto-186.130.758-60 Emerson Macedo Bortoloto has been an Officer on the Itaú Unibanco Group since 2011. He joined the Itaú Unibanco Group in 2003, taking on a variety of positions within the Internal Audit division. He is presently the Internal Audit Officer, chargeable for managing the Audit division, whose mission is to plan, perform and report on audits in Itaú Unibanco Group Retail processes and enterprise, in addition to in processes of the Information Technology, Information Security and Cybersecurity space. Mr. Bortoloto was chargeable for evaluating processes associated to Market, Credit and Operational Risks, along with Project Auditing and Continuous Auditing. Also on the Itaú Unibanco Group, he was chargeable for auditing within the Information Technology and Retail Credit Analysis and Granting processes. He has been a Member of the Audit Committees of Itaú Unibanco’s managed firms and associates, akin to: Banco Itaú Paraguay, Banco Itaú Uruguay, CIP – Câmara Interbancária de Pagamentos and Tecban-Tecnologia Bancária. Mr. Bortoloto labored at Ernst & Young Auditores Independentes (2001 to 2003) and at Banco Bandeirantes (1992 to 2001), being chargeable for auditing IT and operational processes. He holds a Bachelor’s diploma in Data Processing Technology, a Postgraduate diploma in Audit and Consulting in Information Security from the Faculdades Associadas de São Paulo (FASP), São Paulo, Brazil, and an MBA in Internal Auditing from the Fundação Instituto de Pesquisas Contábeis, Atuariais e Financeiras (FIPECAFI), Brazil. He is CISA licensed by the Information Systems Audit and Control Association (ISACA). Tatiana Grecco-167.629.258-63 Tatiana Grecco, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2017. She has labored on the monetary and capital markets since 1994, when she joined the Capital Markets Department. She has constructed a constant and profitable profession over time inside the agency, beginning as a Back-Office Analyst of institutional and personal banking traders’ portfolios. In 1998, she turned a Fund Portfolio Manager at Itaú Asset Management. After that, she labored as a Senior Portfolio Manager of fastened earnings and technical provision portfolios for 5 years and later turned the Superintendent of Technical Provision Portfolio Management. In 2009, Ms. Grecco commenced the listed fund enterprise at Itaú Asset Management, by way of mutual funds and ETFs – Exchange Traded Funds. In 2014, she additionally turned the Superintendent of Solutions for Asset Allocation and Quantitative Funds. She has coordinated the ETF Committee and the ESG Workgroup at ANBIMA for a number of years. She was additionally Vice President of the Fixed Income and Multimarket Funds Committee on the identical Association, contributing to the event of Brazilian Mutual Funds. Since 2017, she has been chargeable for the market and liquidity danger management on the Itaú Unibanco, Itaú Asset Management and Itaú Corretora de Valores models. She holds a Bachelor’s diploma in Civil Construction with main in Technology from the Universidade Estadual Paulista (UNESP), São Paulo, Brazil, a Postgraduate diploma in Finance from the Instituto Brasileiro de Mercado de Capitais (IBMEC), Brazil, a Master’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil, and is licensed by the Executive Education Program on Asset Management from the Yale University, Connecticut, U.S. She has additionally been a Certified Financial Planner (CFP) since 2009 and is Asset Manager licensed by ANBIMA (CGA). Leila Cristiane Barboza Braga de Melo-153.451.838-05 Leila Cristiane Barboza Braga de Melo has been a Partner of Itaú Unibanco since 2008 and an Officer of the Executive Committee since 2021. She is presently chargeable for all the Legal, External Ombudsman’s Office, Government Relations, Corporate Communication and Sustainability departments. She joined the Itaú Unibanco Group in 1997, working at Unibanco’s Legal Advisory Department, the place she carried out authorized companies in any respect enterprise and institutional departments. Ms. Melo was elected Deputy Officer in 2008. She has held a number of positions on the Itaú Unibanco Group, together with Officer (2009 to 2015) and Executive Officer (2015 to 2021). She can also be an Officer and a Member of the Board of Directors at W.I.L.L. – Women in Leadership in Latin America (a nongovernmental group with worldwide protection targeted on enhancing the person and collective worth of girls in management positions in Latin America). In 2000 and 2001, Ms. Melo labored within the Project Finance and Securities Departments of the Debevoise & Plimpton agency in New York. She holds a Bachelor’s diploma in Law from the Universidade de São Paulo (USP), São Paulo, Brazil, and attended a Specialization course on Financial Law and Capital Markets from the Instituto Brasileiro de Mercado de Capitais (IBMEC), Brazil, and on Fundamentals of Business Law from the New York University, New York, U. S., and attended the Fellows Program from the IWF World Leadership Conference and Gala, Atlanta, Georgia, U.S., from the Harvard Business School, Cambridge, Massachusetts, U.S. and from the INSEAD, Fontainebleau, France. Adriano Cabral Volpini-162.572.558-21 Adriano Cabral Volpini, a Partner of Itaú Unibanco, has been Corporate Security Officer and Chief Security Officer (CSO) on the Itaú Unibanco Group since 2012. He has held a number of positions on the Itaú Unibanco Group, together with Superintendent of Prevention of Unlawful Acts (2005 to 2012); Manager of Prevention of Unlawful Acts (2004 to 2005); Inspection Manager (2003); Inspector (1998 to 2003); Auditor (1996 to 211 997) and within the Branch Operation Department (1991 to 1996). He additionally holds administration positions in a number of firms of the Itaú Unibanco Group.
He holds a Bachelor’s diploma in Social Communication and a postgraduate diploma in Accounting and Financial Administration, each from the Fundação Armando Álvares Penteado (FAAP), São Paulo, Brazil and an MBA in Finance from the Instituto Brasileiro de Mercado de Capitais (IBMEC), Brazil. Luciana Nicola Scheneider-270.049.978-63 Luciana Nicola Schneider, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2022. She has held a number of positions on the Itaú Unibanco Group, together with Superintendent of Institutional Relations, Sustainability and New Business (2018 to 2021) and Superintendent of Government and Institutional Relations (2009 to 2018). She labored as a Social Responsibility Manager (2004 to 2009) at Instituto Unibanco S.A. and on the Endomarketing division at Unibanco S.A. (1997 to 2004). Ms. Schneider was additionally a Member of the Steering Committee (2005 to 2007) at Associação Junior Achievement of the São Paulo State. She holds a Bachelor’s diploma in Law from the Universidade São Judas Tadeu, São Paulo, Brazil, and postgraduate levels in Semiotics from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil and in Leadership and Public Management from the Centro de Liderança Pública – CLP and Center on the Legal Profession at Harvard Business School, Cambridge, Massachusetts, USA. Alexsandro Broedel-031.212.717-09 Alexsandro Broedel, a Member of the Partners Program, has been an Officer of the Executive Committee and CFO since 2021, having held the place of Group Executive Finance Director (2015 to 2020) and Head of Investor Relations (2017 to 2020) on the Itaú Unibanco Group. He joined the Itaú Unibanco Group in 2012 because the Finance and Control Officer. Mr. Broedel has beforehand served as an Officer on the Comissão de Valores Mobiliários (CVM). He is a Full Professor at FEA-USP and Trustee of the IFRS Foundation. He holds a Bachelor’s levels in Accounting and Law from the Universidade de São Paulo (USP), São Paulo, Brazil. He holds a Ph.D. in Accounting and Finance from the Manchester Business School, Manchester, United Kingdom, and is a Chartered Management Accountant (FCMA, CGMA), London, United Kingdom. Renato Lulia Jacob-118.058.578-00 Renato Lulia Jacob has been a Partner and an Officer on the Itaú Unibanco Group, concurrently performing because the Group Head of Investor Relations and Market Intelligence since 2020. He has been a Member of the Disclosure and Trading Committee since 2019, having served as its Chairman since 2020. Mr. Jacob has been on the Itaú Unibanco Group for 19 years, having held a number of positions, together with CEO and Member of the Board of Directors at Itau BBA International plc, within the United Kingdom, and Member of the Boards of Directors at Itau International, within the U.S., and Itau Suisse, in Switzerland (2016 to 2020), a Managing Director of Banco Itau Argentina S.A. (2006 to 2010) and a Managing Director, Head of CIB Europe (2011 to 2015). He has been an Independent Member of the Boards of the Royal Institution of Great Britain, Fight For Peace International, and the Brazilian Chamber of Commerce in Great Britain, within the United Kingdom. He holds a Bachelor’s diploma in Civil Engineering from the Universidade de São Paulo (USP), São Paulo, Brazil, and has attended the Advanced Management Program and brought half within the CEO Academy, each from The Wharton School of the University of Pennsylvania, Philadelphia, U.S. Milton Maluhy Filho-252.026.488-80 Milton Maluhy Filho, a Partner, has been a Chief Executive Officer on the Itaú Unibanco Group since 2021, having served as a CFO and a CRO as effectively. Mr. Maluhy has held a number of positions on the Itaú Unibanco Group, together with Vice President (2019 to 2020) and CEO of Itaú CorpBanca (Chile) (2016 to 2018), being chargeable for the merger of two banks, CorpBanca and Banco Itaú Chile. He joined the Itaú Unibanco Group in 2002 and was elected Officer in 2007. He holds a Bachelor’s diploma in Business Administration. Alexandre Grossmann Zancani-288.246.148-84 Alexandre Grossmann Zancani, a Member of the Partners Program, has been an Officer of the Executive Committee on the Itaú Unibanco Group since 2021, having held the place of Executive Officer on the Itaú Unibanco Group (2019 to 2021). He was a Digital Business, Data, New Undertakings and Innovation Officer (2017 to 2019), a Risk Officer – Individuals and Consumers (2015 to 2017), an Executive Credit Superintendent at Santander – Individuals and Financing Companies (2013 to 2015), an Executive Credit Superintendent at Santander – Individuals (2012 to 2013) at Santander (Brazil), an Executive Credit and Collection Superintendent (2009 to 2012) at Santander Cards and a Member of the Board of Directors (2017 to 2018) at Banco PSA Finance Brasil S.A. He holds a Bachelor’s diploma in Computer Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and an MBA from the INSEAD, Fontainebleau, France. André Luís Teixeira Rodrigues-799.914.406-15 André Luís Teixeira Rodrigues has been a Partner since 2010 and a Member of the Executive Committee on the Itaú Unibanco Group since 2021. He is presently chargeable for the Retail Banking phase, which incorporates Itaú Branches, Uniclass, Personnalité, Companies departments, Government and Payroll segments, and can also be chargeable for the Insurance, Products and Strategic Planning – Individuals and Companies, CRM, Digital Channels and User Experience (UX) departments. He joined the Itaú Unibanco Group in 2000 and has been an Officer since 2005. He was an Executive Officer from 2008 and 2020, having labored at Banco Itaú BBA from its creation in 2003 to 2018 and on the Retail Banking phase as from 2019. He holds a Bachelor’s diploma in Mechanical Engineering with main in Automation and Systems (“Mechatronics”) from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil. Renato da Silva Carvalho-033.810.967-61 Renato da Silva Carvalho, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2020. He is presently chargeable for the Wholesale Banking’s Financial Planning division. 212 Mr. Carvalho has held a number of positions on the Itaú Unibanco Group, together with Finance Superintendent, Wholesale Banking (2017 to 2020) and Market and Liquidity Risk Superintendent/Manager (2010 to twenty 7).
He labored as Investment Market Risk Associate Director (2008 to 2010) at Fidelity International LTD (London, United Kingdom), Market Risk Associate Director (2006 to 2008) at Mizuho International LTD (London, United Kingdom), and Market and Liquidity Risk Analyst (1998 to 2006) at Banco Brascan S.A. (Rio de Janeiro, Brazil). He holds a Bachelor’s diploma in Production Engineering from the Universidade Federal do Rio de Janeiro (UFRJ), Rio de Janeiro, Brazil; an Executive MBA in Finance from the Instituto Brasileiro de Mercado de Capitais (IBMEC), Brazil; an MBA in System Analysis, Project and Management from the Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ), Rio de Janeiro, Brazil; and a M.Sc.in Production Engineering from the Universidade Federal do Rio de Janeiro (UFRJ), Rio de Janeiro, Brazil; and he has attended the Executive Program from the Fundação Dom Cabral, Minas Gerais, Brazil. He is a licensed Professional Risk Manager (PRM) by the Professional Risk Management International Association (PRMIA) and a Financial Risk Manager (FRM) by the Global Association of Risk Professionals (GARP). Paulo Sergio Miron-076.444.278-30 Paulo Sergio Miron, a Member of the Partners Program, has been the Officer chargeable for inner audit (CAE – statutory audit committee) on the Itaú Unibanco Group since 2015. He has been an Officer on the Instituto Unibanco and the Fundação Itaú para Educação e Cultura, a Member of the Fiscal Council on the Fundação Maria Cecilia Souto Vidigal, of the Fiscal Council at Instituto Lemann and of the Fiscal Council on the Fundação Nova Escola, and a Coordinator of the Audit Committee at Zup Tecnologia. Mr. Miron has served as a monetary specialist on the Audit Committee of Porto Seguro and XP. With over 28 years of expertise in impartial auditing, he was a companion at PricewaterhouseCoopers (PwC)-Brazil (1996 to 2014) chargeable for the audit work at massive Brazilian monetary conglomerates, the Brasília workplace in Distrito Federal (DF), and each the federal government companies and the banking departments. Mr. Miron additionally coordinated the PwC Brazil’s division of coaching at monetary establishments for over ten years, and labored as a school professor instructing monetary market-associated programs. He is a speaker at many seminars on governance, auditing and monetary market points. He holds a Bachelor’s levels in Economics from the Universidade Presbiteriana Mackenzie, São Paulo, Brazil and in Accounting from the Universidade São Judas Tadeu, São Paulo, Brazil. Teresa Cristina Athayde Marcondes Fontes-307.447.828-48 Teresa Cristina Athayde Marcondes Fontes, a Member of the Partners Program, joined the Itaú Unibanco Group in 2003. She labored till 2017 on the authorized advisory to institutional and enterprise departments and, from 2017 to 2019, she was chargeable for the Conglomerate’s Compliance, Retail Banking and Labor segments, together with as a liaison with a variety of regulatory our bodies. She was elected Officer in 2019 and has been chargeable for the Civil Litigation Office. She holds a Bachelor’s diploma in Law from the Faculdade de Direito da Universidade de São Paulo (USP), São Paulo, Brazil; a submit-graduate diploma in Commercial Law from the University of Paris, Panthéon Sorbonne, Paris, France; an MBA from the Fundação Dom Cabral, São Paulo, Brazil; a submit-MBA from the Kellogg School of Management at Northwestern University, Illinois, U.S., and has attended the Executive Education Program from the Fundação Dom Cabral, São Paulo, Brazil. Daniel Sposito Pastore-283.484.258-29 Daniel Sposito Pastore, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2020. He has held a number of positions on the Itaú Unibanco Group, together with Legal Superintendent working on the labor, felony, union relations, greater courts, labor advisory and WMS areas (2012 to 2020); Legal Manager, WMS, working on the International, Asset and Brokerage departments (2008 to 2011), Legal Lawyer, WMS (2004 to 2008); Lawyer, Banking Law (2002 to 2003), and Legal Assistant (M&A Legal) (2000 to 2002). Mr. Pastore served on the Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais (ANBIMA) as an efficient Member of the Legal Committee (2012 to 2016), having served as Vice President (2015 to 2016); Coordinator and Liaison on behalf of ANBIMA with the Comissão de Valores Mobiliários (CVM) for issuing and implementing new guidelines on suitability, asset administration and belief administration and funding funds (2014 to 2016), and Coordinator of the revision of self-regulation codes for belief administration, asset administration and funding funds (2015 to 2016). He has been a Member of the authorized labor committee (since 2017) and a Member of the union negotiation committee (since 2020) on the Federação Brasileira de Bancos (FEBRABAN). He holds a Bachelor’s diploma in Law from the Universidade Presbiteriana Mackenzie, São Paulo, Brazil, and a submit-graduate diploma in Financial and Capital Markets Law from the Instituto de Ensino e Pesquisa (INSPER), São Paulo, Brazil. José Virgilio Vita Neto – 223.403.628-30 José Virgilio Vita Neto, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2011, being presently chargeable for Tax Advisory and Litigation, Corporate Legal departments, along with the Legal Advisory of all Business departments of the General Retail Banking Office. He joined the Itaú Unibanco Group in 2000, working as a lawyer till 2003, being chargeable for the Wholesale Banking Legal Consulting division, notably structured operations and actual property loans. Mr. Vita Neto labored as Legal Manager (2003 to 2008), being chargeable for the Wholesale Banking Legal division, notably structured operations, actual property loans, overseas trade, derivatives and mission finance, retail authorized advisory and administrative and investigative proceedings, together with these associated to client safety our bodies. He additionally acted as Legal Superintendent (2008 to 2011), chargeable for retail authorized advisory, administrative and investigative proceedings, litigation for main instances and public-curiosity civil actions. He holds a Bachelor’s diploma in Law from the Universidade de São Paulo (USP), São Paulo, Brazil; Master’s diploma in Civil Law – Contracts from the Universidad de Salamanca – Spain; Ph.D. in Civil Law – Contracts from the Universidade de São Paulo (USP), São Paulo, Brazil, and has attended the Authentic Leadership Development Program from the Harvard Business School, Boston, U.S. Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2021. He has held a number of positions on the Itaú Unibanco Group, together with 213 CEO (2017 to 2021), Wholesale Banking Senior Vice President (“Diretor Geral”) (2015 to 2017) and Vice President (2004 to 2015).
Mr. Bracher has been a Member of the Board of Directors of Mastercard Incorporated since 2021 and was a Member of the Board of Directors (2009 to 2014) of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (presently B3 S.A. – Brasil, Bolsa, Balcão), an Alternate Member of the Board of Directors (1999 to 2005), and a Member of the Board of Directors (2005 to 2013) of Pão de Açúcar – Companhia Brasileira de Distribuição. He holds a Bachelor’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil. Frederico Trajano Inácio Rodrigues-253.929.608-47 Frederico Trajano Inácio Rodrigues (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2020. He has been the Chief Executive Officer (CEO) of Magazine Luiza S.A. since 2016, having been an Executive Sales and Marketing Officer (2010 to 2015), a Commercial Officer, and was additionally answerable for the Marketing Office (2004 to 2010). He began his profession in 2000, being chargeable for the E-Commerce division. Mr. Rodrigues has been an Effective Member of the Board of Directors of Luizaseg Seguros S.A. since 2005, and labored within the retail and client items departments at Deutsche Bank Securities (1998 to 1999). He holds a Bachelor’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil, and attended the Program for Executives from the University of California, Stanford, U.S. Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2015. He has been a Member of the Board of Directors of Natura Group since 2017; a Member of the Board of Directors of Companhia Brasileira de Metalurgia e Mineração (CBMM) since 2015; and a Member of the Board of Directors of Ambev since 2021. He was CEO (2011 to 2014) at Abril Comunicações S.A.; Chairman of the Board of Directors (2011) at Banco Santander (Brazil) S.A.; CEO (2008 to 2010) at Banco Santander S.A.; and CEO (1996 to 2008) at Banco ABNAMRO/Real S.A. Mr. Barbosa additionally served as Chairman of the Board of Directors of Fundação OSESP (2012 to 2019), and is presently a Board Member at UN Foundation (U.S.) since 2011; a Member of the Board of Directors of Instituto Empreender Endeavor since 2008 (Chairman since 2015); and a Member of the Investment Committee of Gávea Investimentos since 2015. He holds a Bachelor’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil and a Master’s diploma in Business Administration from the Institute for Management Development (IMD), Lausanne, Switzerland. Pedro Luiz Bodin de Moraes-548.346.867-87 Pedro Luiz Bodin de Moraes (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2003. He has been a companion at Cambuhy Investimentos Ltda. since 2011 and at Ventor Investimentos Ltda. since 2009. He was an Officer (2002 to 2003) and a Partner (2005 to 2014) at Icatu Holding S.A.; and an Officer and a Partner (1993 to 2002) at Banco Icatu S.A. Mr. Bodin de Moraes additionally served as a Monetary Policy Officer on the Banco Central do Brasil (1991 to 1992) and as an Officer at Banco Nacional de Desenvolvimento Econômico e Social (BNDES) (1990 to 1991). He holds a Bachelor’s and Master’s levels in Economics from the Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ), Rio de Janeiro, Brazil, and a Ph.D. in Economics from the Massachusetts Institute of Technology (MIT), Cambridge, Massachusetts, U.S. Maria Helena dos Santos Fernandes de Santana-036.221.618-50 Maria Helena dos Santos Fernandes de Santana (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2021. She was a Member of the Audit Committee between 2014 and 2020. She has been a Member of the Board of Directors and Coordinator of the People, Appointment and Governance Committee at Oi S.A. since 2018, a Member of the Board of Directors and Chairwoman of the Audit Committee at CI&T Inc., and a Member of the Board of Directors at Fortbras S.A. She was a Member of the Board of Directors (2018 to 2019) and the Chairwoman of the Audit Committee at XP Inc. between 2019 and 2021, having beforehand served because the Chairwoman of the Audit Committee at XP Investimentos S.A. (2018 to 2019). Ms. Santana served as a Member of the Board of Directors at Bolsas y Mercados Españoles (BME) (2016 to 2020), a Member of the Board of Trustees on the IFRS Foundation (2014 to 2019), a Member of the Board of Directors and Chairwoman of the Corporate Governance Committee at Companhia Brasileira de Distribuição S.A. (2013 to 2017), a Member of the Board of Directors and Audit Committee Coordinator at Totvs S.A. (2013 to 2017), a Member of the Board of Directors at CPFL Energia S.A. (2013 to 2015), Chairwoman (2007 to 2012) and Officer (2006 to 2007) of the Brazilian Securities and Exchange Commission (CVM). She represented CVM on the Financial Stability Board (FSB) (2009 to 2012). She was Chairwoman of the Executive Committee on the International Organization of Securities Commissions (IOSCO) (2011 to 2012), and in addition a Member of the International Integrated Reporting Committee (IIRC) in the identical interval. She labored on the Bolsa de Valores de São Paulo (presently B3 S.A. – Brasil, Bolsa, Balcão) (1994 to 2006), the place she was concerned within the set-up and was chargeable for the implementation of the New Market and different company governance segments. Ms. Santana was Vice President of the Instituto Brasileiro de Governança Corporativa (IBGC) (2004 to 2006), having been a Member of its Board of Directors between 2001 and 2006. She has been a Member of the Latin-American Roundtable on Corporate Governance (OECD) (since 2000). She holds a Bachelor’s diploma in Economics from the Faculdade de Economia, Administração, Contabilidade e Atuária of the Universidade de São Paulo (FEA-USP), São Paulo, Brazil. 214
Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles (Non-ExecutiveCo-Chairman) has been a Co-Chairman of the Board of Directors on the Itaú Unibanco Group since 2017, and he was additionally the Chairman of the Board of Directors (2009 to 2017) and Executive Vice President (2008 to 2009). He has held a number of positions on the Itaú Unibanco Group, together with CEO (2004 to 2008). He serves because the Chairman of the Board of Directors at Instituto Unibanco; Board of Directors on the Federação Brasileira de Bancos (FEBRABAN); Board of Directors at Companhia Brasileira de Metalurgia e Mineração (CBMM); and Board of Directors at Alpargatas S.A. He can also be a Member of the Decision-Making Council, the INSPER’s Board of Associates, and the Board of Directors at Fundação Osesp. He holds a Bachelor’s diploma, magna cum laude, in Economics and History from the University of California, Los Angeles (UCLA), U.S. He holds a Master’s diploma in International Relations from the Yale University and he has attended the OPM – Owner/President Management Program on the Harvard University, each within the United States. Ricardo Villela Marino-252.398.288-90 Ricardo Villela Marino (Non-Executive Vice President) has been a Vice President of the Board of Directors on the Itaú Unibanco Group since 2020. He was additionally a Member of the Board of Directors (2008 to 2020) and the Chairman of the financial institution’s Latin America Strategic Council since 2018. He has held a number of positions on the Itaú Unibanco Group since 2002, together with Vice President (2010 to 2018). He has additionally been an Alternate Member of the Board of Directors of Itaúsa S.A. since 2011; a Member of the Strategy and New Business Committee since 2021; a Member of the Sustainability Council since 2019, and he was a Member of the Investment Policies Committee (2008 to 2011); an Alternate Member of the Board of Directors of Dexco S.A. since 2009; an Alternate Member of the Board of Directors of Itautec S.A. (2009 to 2019) and an Alternate Member of the Board of Directors of Elekeiroz S.A. (2009 to 2018). He holds a Bachelor’s diploma in Mechanical Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and a Master’s diploma in Business Administration from the MIT Sloan School of Management, Cambridge, Massachusetts, U.S. Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2007. He has held a number of positions on the Itaú Unibanco Group, together with Vice President (1996 to 2015), Investor Relations Officer (1995 to 2015), Executive Officer (1993 to 1996), and Managing Director (1988 to 1993). He has been a Member of the Nomination and Corporate Governance Committee since 2009, a Member of the Personnel Committee and the Risk and Capital Management Committee since 2015, a Member of the Social Responsibility Committee since 2019, and he was a Member of the Accounting Policies Committee (2008 to 2009). He has been the CEO and Investor Relations Officer at Itaúsa S.A. since 2015, Vice Chairman of the Board of Directors since 2008, a Member of the Disclosure and Trading Committee since 2009, having been Coordinator to this Committee since 2015, a Member of the Investment Policies Committee (2008 to 2011), Coordinator of the Investment Committee and a Member of the Finance, the Personnel and Ethics, and the Sustainability and Risks committees since 2017. Mr. Setubal has been a Member of the Board of Directors and of the Strategy Committee at Alpargatas S.A. since 2017, a Member of the Board of Directors since 2015, Co-chairman of the Board since 2017 and a Member of the Personnel, Governance and Nomination Committee since 2015 at Duratex S.A. He has been Chairman of the Board of Trustees since 2008 on the Fundação Itaú para Educação, a Member of the Board of Directors of the Museu de Arte Moderna de São Paulo (MAM) since 1992 and of the Instituto de Arte Contemporânea. He has been Vice Chairman of the Board of Directors on the Fundação Bienal de São Paulo since 2017 (and a Member since 2009) and Chairman of the Decision-Making Council on the Museu de Arte de São Paulo (MASP) since 2018. He has a Member of the Superior Guidance, Nomination and Ethics Committee since 2010 on the Instituto Brasileiro de Relações com Investidores – IBRI, having been Chairman of the Board of Directors (1999 to 2009). Mr. Setubal additionally served as a Member of the Board of Directors on the Associação Brasileira das Companhias Abertas (ABRASCA) (1999 to 2017) and Vice Chairman of the Board of Directors on the Instituto Itaú Cultural (2005 to 2019), having labored as a Board Member (1993 to 2005), Executive Vice President (2005 to 2019) and an Executive Officer (1996 to 2005). He holds Bachelor’s and Postgraduate levels in Business Administration, each from the Fundação Getulio Vargas (FGV), São Paulo, Brazil, with specialization from INSEAD, Fontainebleau, France. Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal (Non-ExecutiveCo-Chairman) has been a Co-Chairman of the Board of Directors on the Itaú Unibanco Group since 2017. He was additionally the Vice Chairman of the Board of Directors (2003 to 2017) and CEO (1994 to 2017). He has held a number of positions on the Itaú Unibanco Group, together with Senior Vice President (“Diretor Geral”) (1990 to 1994). He has served as Vice Chairman of the Board of Directors and a Member of the Strategy and New Business Committee of Itaúsa S.A. since 2021 and was Managing Vice President (1994 to 2021) and Chairman of the Accounting Policies Committee (2008 to 2011). Since 1994 he has been a Member of the Board of the International Monetary Conference. He was President of the Federação Nacional dos Bancos (FENABAN) and of the Federação Brasileira de Bancos (FEBRABAN) (1997 to 2001) and President of the Advisory Board of the Federação Brasileira de Bancos (FEBRABAN) (2008 to 2017). In 2000, Mr. Setubal turned a Member of the Trilateral Commission and the International Board of the NYSE and in 2002 he turned a Member of the International Advisory Committee of the Federal Reserve Bank of New York. In 2010, he turned a Member of the China Development Forum. He holds a Bachelor’s diploma in Production Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and a Master of Science diploma in Engineering from the Stanford University, California, U.S. 215
João Moreira Salles-295.520.008-58 João Moreira Salles (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2017. He has held a number of positions on the Itaú Unibanco Group, together with Officer at IUPAR – Itaú Unibanco Participações S.A. since 2018, and he was a Member of the Board of Directors (2015 to 2018). He was a Member of the Board of Directors at XP Investimentos S.A. (2018 to 2019). Mr. Moreira Salles is presently an Officer of Brasil Warrant Administração de Bens e Empresas S.A. (BWSA), the place, since 2013, he has been overseeing the administration of BW Gestão de Investimentos (BWGI) as a member of the Investment, Risk and Operational Committees of the agency, and has been chargeable for the monitoring of different BWSA subsidiaries. He has been a Partner and a Member of the Investment Committee of Cambuhy Investimentos Ltda. since 2013, and was a Member of the Board of Directors of investee Parnaíba Gás Natural (2014 to 2017). He has additionally been a Member of the Board of Directors of Verallia, a glass packaging firm listed on the Euronext Paris since 2019, in addition to a Member of the Board of Directors’ Finance Committee of Alpargatas. Before becoming a member of BWSA and Cambuhy, he had been an Investment Banker at J. P. Morgan Chase, New York, U.S. He holds a Bachelor’s diploma in Economics from the Instituto de Ensino e Pesquisa (INSPER), São Paulo, Brazil, a Master’s diploma in Economics from the Columbia University, GSAS, New York, U.S., a Master’s diploma in Finance from the Columbia University, GSB, New York, U.S. and a Ph.D. in Economic Theory from the Universidade de São Paulo (FEA-USP), São Paulo, Brazil. Ana Lúcia de Mattos Barretto Villela-066.530.828-06 Ana Lúcia de Mattos Barretto Villela (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2018. She has held a number of positions on the Itaú Unibanco Group, together with Member of the Board of Directors (1996 to 2001). Ms. Villela has additionally been an Alternate Member of the Board of Directors of IUPAR – Itaú Unibanco Participações S.A. since 2018; Vice Chairman of the Board of Directors (Non-Executive Member) of Itaúsa S.A. since 2017; a Member of the Personnel Committee at Itaú since 2018; a Member of the Nomination and Corporate Governance at Itaú since 2018; a Member of the Social Responsibility Committee at Itaú since 2019; a Member of the Sustainability and Risks Committee at Itaúsa since 2021; Vice President of the Board of Trustees on the Fundação Itaú para Educação e Cultura since 2020; a Member of the Guiding Board on the Itaú Social since 2017; a Member of the Advisory Board on the Itaú Cultural since 1995; a Member of the Executive Board on the Itaú Cultural since 2017; Co-Founder of AlanaLab (Maria Farinha Filmes and Flow) since 2014; Founding President of Alana Foundation since 2012; CEO of Instituto Alana since 2002; a Member of the Advisory Board at Instituto Brincante since 2001 and Fellow Ashoka since 2010. She has been a Member of the Innovation Board of XPRIZE since 2018. First consultant from Latin America on the Innovation Board of XPRIZE, a non-revenue group created by Peter Diamandis, who designs and manages international competitions to encourage the event of recent applied sciences which will assist resolve a few of mankind’s main challenges. She was a Member of the Advisory Board at Instituto Akatu (2013 to 2017); a Member of the Advisory Board at Organização Fairplay (2015 to 2017); a Member of the Advisory Board at Conectas (2003 to 2018), a Member of the Sustainability Committee at Duratex S.A. (2015 to 2018) and an Alternate Member of the Board of Directors of Duratex S.A. (2018 to 2020). She holds a Bachelor’s diploma in Teaching with main in School Administration and a Master’s diploma in Educational Psychology, each from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil and took graduate research in Business Administration from the Fundação Armando Álvares Penteado (FAAP), São Paulo, Brazil (incomplete), and postgraduate research in Administration within the Third Sector from the Fundação Getulio Vargas (FGV), São Paulo, Brazil (incomplete). Cesar Nivaldo Gon-154.974.508-57 Cesar Nivaldo Gon (Independent Member) has been a Member of the Board of Directors since 2022 and Member of the Personnel Committee (2021 to 2022) on the Itaú Unibanco Group. He is the founder and has been the CEO at CI&T since 1995, performing because the figurehead for matters on management growth and digital transformation. Mr. Gon has been a Member of the Board of Directors of Sensedia since 2012, a Tech Advisor to the Boticário Group since 2020 and is a Member of the Board of Directors of Fundo Patrimonial Lumina Unicamp. In 2021, he joined the Boards of Directors of Raia Drogasil and of Lean Enterprise Institute (LEI), headquartered in Boston. In 2019, he was acknowledged because the Entrepreneur of the Year in Brazil by Ernst & Young (EY). Mr. Gon has co-authored the guide “Faster, Faster: The Dawn of Lean Digital” (2020) and is a MIT Sloan Management Review columnist. He holds a Bachelor’s diploma in Computer Engineering (CoE) and a Master’s diploma in Computer Science from the Universidade de Campinas (UNICAMP), Campinas, São Paulo, Brazil. Rene Guimarães Andrich-709.926.659-49 Rene Guimarães Andrich has been an Alternate Member of the Fiscal Council on the Itaú Unibanco Group since 2020. He is the Chairman of the Audit Committee at Companhia Paranaense de Gás (COMPAGÁS); Chairman of the Audit Committee at Hospital de Clínicas de Porto Alegre (HCPA), a Member of the Audit Committee of the Casa da Moeda do Brasil (CMB) and Companhia de Trens Urbanos (CBTU) and an Independent Member of the Disciplinary Measures Committee of Petrobrás Transportes S.A. (TRANSPETRO). He is a Professor, Mentor, and Instructor in Inspection and Controls programs. He was Head of Internal Audit – Latin America at Electrolux do Brasil S.A.; External Auditor at Ernst & Young and at Paraná Auditores, and Audit Supervisor at Spaipa S.A. Indústria Brasileira de Bebidas. He holds certifications from CCA+ – Director with Experience (IBGC); CCF-Fiscal Advisor (IBGC) and CCoAud – Member of the Audit Committee with Experience (IBGC); CIA – Certified Internal Auditor (The IIA); CRMA – Certified Risk Management Assurance (The IIA); CCSA – Certificate in Control Self-Assessment (The IIA); QA – Accreditation in QA Assessment/Validation (The IIA), and the Conselho Regional de Contabilidade (CRC/SP). He holds a Master’s diploma in Management from the Pontifícia Universidade Católica do Paraná (PUC-PR), Curitiba, Brazil, a Postgraduate diploma in Controllership from the Fundação Getulio Vargas (FGV), Rio de Janeiro, Brazil, and a Bachelor’s diploma in Accounting from the FAE Business School, Curitiba, Brazil. 216
Reinaldo Guerreiro-503.946.658-72 Reinaldo Guerreiro has been an Alternate Member of the Fiscal Council on the Itaú Unibanco Group since 2017. He has been a Member of the Board of Directors since 2007, an Independent Member of the Audit Committee (2007 to 2017) and since 2020 on the Cia. de Saneamento Básico do Estado de São Paulo (SABESP), and a Member of the Fiscal Council of the FEA-USP Endowment Fund since 2016. Mr. Guerreiro has been the Chairman of the Audit Committee at Petrobrás Gas S.A.(GASPETRO) since 2018, and was a Member of the Board of Directors (2016 to 2018) and Member of the Financial and Risks Committee (2016 to 2018) at Petrobrás Distribuidora S.A.; and a Member of the Strategic Committee (2016 to 2018) at Petróleo Brasileiro S.A. He can also be the Chairman of the Board of Trustees of Fundação Instituto de Pesquisas Contábeis, Atuariais e Financeiras (FIPECAFI). He is a Full Professor of FEA-USP; Head of the Accounting Department in two phrases of workplace, Principal (2010 to 2014) and the present Vice Head of the Accounting and Actuarial Science Department on the Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo (FEA-USP). He holds a Bachelor’s diploma in Accounting, a Master’s diploma and a Ph.D. in Controllership and Accounting, and Habilitation diploma (“livre-docência”) in Controllership and Accounting from the Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo (FEA-USP), São Paulo, Brazil. Eduardo Hiroyuki Miyaki-159.822.728-92 Eduardo Hiroyuki Miyaki has been a Member of the Fiscal Council on the Itaú Unibanco Group since 2022. Has held a number of positions on the Itaú Unibanco Group, together with Internal Audit Officer (2010 to 2017) and Operational Risk and Internal Control Officer (2017 to 2021). He has beforehand served as Internal Audit Superintendent (2005 to 2010) within the Capital Markets, Insurance, Pension Plan and Securities departments. Mr. Miyaki was the supervisor chargeable for the Internal Audit Department within the Asset Management and Treasury departments (2003 to 2004) and Supervisor of the Anti-Money Laundering and Fraud Prevention Program (1996 to 2003). He holds a Bachelor’s diploma in Civil Engineering from the Universidade de São Paulo (USP), São Paulo, Brazil; a Master’s diploma in Sanitation from the Gunma University, Japan; a Master’s diploma in Business Administration from CEAG, Fundação Getulio Vargas (FGV), São Paulo, Brazil; and an MBA in International Finance and Business from the Leonard N. Stern School of Business, New York University, New York, U.S. Artemio Bertholini-095.365.318-87 Artemio Bertholini has been a Member of the Fiscal Council on the Itaú Unibanco Group since 2021. He has held a number of positions on the Itaú Unibanco Group, together with Member of the Fiscal Council at Itaúsa S.A. (2006 to 2008) and at Itaú Unibanco (2009 to 2011). He has been a Member of the Audit Committee of BB Seguridade S.A. since 2015, Cia. de Saneamento do Paraná (SANEPAR) since 2017, Cia. de Saneamento de Minas Gerais (COPASA) since 2018, and a Member of the Fiscal Council of Investimentos e Participações em Infraestrutura S.A. (INVEPAR) since 2021. He has additionally been chargeable for the Audit and Accounting modules of submit-commencement programs on Controllership on the Universidade Estadual de Campinas (UNICAMP) since 2015, and an invited Lecturer at Accounting, Audit, Arbitration and Corporate Governance-related occasions on the Regional Accounting Council (CRC/SP) and at a variety of universities. Mr. Bertholini served as a Member of the Board of Directors at Americel S.A. (2000 to 2001), Telet S.A. (2000 to 2001), Petrobrás Distribuidora S.A. (2018 to 2019), as a Member of the Audit Committee at Petrobrás Distribuidora S.A. (2018 to 2019), as a Member of the Fiscal Council at Banco do Brasil S.A. (2001 and 2003 to 2005), Indústrias Romi S.A. (2009) and Tekno S.A. Ind. e Comércio (2018 to 2020). He was additionally CEO and Vice Chairman of the Board of Directors at Grant Thornton Brasil (2013 to 2015), Managing Partner at Grupo Directa Auditores (1978 to 2013), and Audit Manager at Arthur Andersen & Co. (1969 to 1978), and a bookkeeper at Banco do Brasil (1965 to 1969). He holds a Bachelor’s levels in Accounting and Economics and a Master’s diploma in Accounting and Finance from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil, and a Ph.D. in Business Administration from the Florida Christian University, Orlando, Flórida, U.S. João Costa-476.511.728-68 João Costa has been an Alternate Member of the Fiscal Council on the Itaú Unibanco Group since 2009. He has held a number of positions on the Itaú Unibanco Group, together with Managing Director (1997 to 2008). He has been an Alternate Member of the Fiscal Council of Itaúsa S.A. since 2009 and of the Fiscal Council of Dexco S.A. since 2021. He was an Effective Member of the Fiscal Councils of the Federação Brasileira de Bancos (FEBRABAN), Federação Nacional dos Bancos (FENABAN), Instituto Brasileiro de Ciência Bancária (IBCB), and of the Sindicato dos Bancos do Estado de São Paulo (1997 to 2008). He holds a Bachelor’s diploma in Economics from the Faculdade de Economia São Luiz, São Paulo, Brazil; Continuing training in Business Administration from the Faculdade de Economia, Administração, Contabilidade e Atuária of the Universidade de São Paulo (FEA-USP), São Paulo, Brazil and attended a Management Program for Executives from the University of Pittsburgh, Pennsylvania, U.S. Gilberto Frussa-127.235.568-32 Gilberto Frussa has been a Member of the Fiscal Council on the Itaú Unibanco Group since 2022. Has held a number of positions on the Itaú Unibanco Group, together with Officer of the Corporate Compliance Department (2017 to 2021); Legal Officer for Products and Business – Retail Business (2015 to 2017) and Legal Officer at Banco Itaú BBA S.A. (2006 to 2015), the place he served as a lawyer from 1995 to 2006. Has been an External Member of the Risk and Solvency Committee at IRB – Brasil Resseguros S.A. since January/2022. Mr. Frussa was a Partner at Carvalho Pinto, Monteiro de Barros, Frussa & Bohlsen – Advogados, chargeable for the banking legislation division (1993 to 1995). He was additionally a Lawyer (1989 to 1993) at Banco BBA-Creditanstalt S.A. and a Law trainee and authorized assistant (1986 to 1989) at Pinheiro Neto – Advogados. Mr. Frussa was additionally an Effective Director of the Conselho de Recursos do Sistema Financeiro Nacional (CRSFN) (2000 to 2003 and 2011 to 2013). He was additionally Chairman of the Legal Affairs Committee of the Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais (ANBIMA) (2012 to 2015). Additionally, he was a Director at Fundação Itaú Unibanco Previdência Complementar (2017 to 2021). He has been an Alternate Member of the Committee for Evaluation and Selection (CAS) of the Conselho de Recursos do Sistema Financeiro Nacional (CRSFN) since 2018, and an affiliate of Instituto Brasileiro de Governança 217 Corporativa (IBGC) since 2021.
He holds a Bachelor’s diploma in Law from the Universidade de São Paulo (USP), São Paulo, Brazil. Type of Conviction Description of the conviction Pedro Paulo Giubbina Lorenzini-103.594.548-79 N/A Carlos Fernando Rossi Constantini-166.945.868-76 N/A Flávio Augusto Aguiar de Souza-747.438.136-20 N/A Ricardo Ribeiro Mandacaru Guerra-176.040.328-85 N/A José Geraldo Franco Ortiz Junior-290.270.568-97 N/A Matias Granata-228.724.568-56 N/A Sergio Guillinet Fajerman-018.518.957-10 N/A Andre Balestrin Cestare-213.634.648-25 N/A Renato Barbosa do Nascimento-161.373.518-90 N/A André Sapoznik-165.085.128-62 N/A Álvaro Felipe Rizzi Rodrigues-166.644.028-07 N/A Emerson Macedo Bortoloto-186.130.758-60 N/A Tatiana Grecco-167.629.258-63 N/A Leila Cristiane Barboza Braga de Melo-153.451.838-05 N/A Adriano Cabral Volpini-162.572.558-21 N/A Luciana Nicola Scheneider-270.049.978-63 N/A Alexsandro Broedel-031.212.717-09 N/A 218
Renato Lulia Jacob-118.058.578-00 N/A Milton Maluhy Filho-252.026.488-80 N/A Alexandre Grossmann Zancani-288.246.148-84 N/A André Luís Teixeira Rodrigues-799.914.406-15 N/A Renato da Silva Carvalho-033.810.967-61 N/A Paulo Sergio Miron-076.444.278-30 N/A Teresa Cristina Athayde Marcondes Fontes-307.447.828-48 N/A Daniel Sposito Pastore-283.484.258-29 N/A José Virgilio Vita Neto-223.403.628-30 N/A Candido Botelho Bracher-039.690.188-38 N/A Frederico Trajano Inácio Rodrigues-253.929.608-47 N/A Fábio Colletti Barbosa-771.733.258-20 N/A Pedro Luiz Bodin de Moraes-548.346.867-87 N/A Maria Helena dos Santos Fernandes de Santana-036.221.618-50 N/A Pedro Moreira Salles-551.222.567-72 N/A Ricardo Villela Marino-252.398.288-90 N/A Alfredo Egydio Setubal-014.414.218-07 N/A 219
Roberto Egydio Setubal-007.738.228-52 N/A João Moreira Salles-295.520.008-58 N/A Ana Lúcia de Mattos Barretto Villela-066.530.828-06 N/A Cesar Nivaldo Gon-154.974.508-57 N/A Rene Guimarães Andrich-709.926.659-49 N/A Reinaldo Guerreiro-503.946.658-72 N/A Eduardo Hiroyuki Miyaki-159.822.728-92 N/A Artemio Bertholini-095.365.318-87 N/A João Costa-476.511.728-68 N/A Gilberto Frussa-127.235.568-32 N/A 220
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Profissional expertise / Statement of any conviction / Independence standards Ricardo Baldin-163.678.040-72 Ricardo Baldin (Independent Member and Financial Expert) has been a Member of the Audit Committee on the Itaú Unibanco Group since 2021. He has held a number of positions on the Itaú Unibanco Group, together with Executive Officer, Internal Audit at Itaú Unibanco S.A. (2009 to 2015). He has been the Audit Committee Coordinator at Alpargatas S.A. since 2018 and at Eneva S.A. since 2019; a Member of the Fiscal Council at Metalúrgica Gerdau S.A. since 2020; a Member of the Governance of Financial Institutions Committee at IBGC since 2021; and a Business Consultant at RMB Assessoria e Consultoria Empresarial e Contábil EIRELI. He served as a Member of the Board of Directors and a Member of the Audit Committee at XP Investimentos S.A. (2020 to 2021); a Member of the Audit Committee at Totvs S.A. (2020); a Member of the Board of Directors and Audit Committee Coordinator at Ecorodovias (2018 to 2020); a Member of the Fiscal Council on the Fundo Garantidor de Crédito (FGC) (2018 to 2019); a Member of the Audit Committee at Câmara Interbancária de Pagamentos (CIP) (2014) and Tecnologia Bancária (TECBAN) (2015) and Audit Committee Coordinator at Redecard S.A. (2013 to 2014). He was Controllership, Technology and Internal Controls and Risks Officer at Banco Nacional de Desenvolvimento Econômico e Social (BNDES) (2016 to 2017). Mr. Baldin has labored as an impartial auditor for 31 years and was a former Partner at PricewaterhouseCoopers Auditores Independentes and the companion in cost for the Financial Institutions Group at PwC in South America, having coordinated a variety of engagements on this area, together with the evaluation of the Ecuadorian Financial System and the evaluation of the Brazilian Public Financial System, along with having participated in a variety of due diligence initiatives in reference to this method. He holds a Bachelor’s diploma in Accounting from the Universidade do Vale do Rio dos Sinos, São Leopoldo, Rio Grande do Sul, Brazil, and has attended a variety of specialization programs in company governance, administration and finance from IBGC, the Fundação Dom Cabral, São Paulo, Brazil, and the Fundação Getulio Vargas (FGV), São Paulo, Brazil, and from different entities, along with a number of inner programs at PwC. Alexandre de Barros-040.036.688-63 Alexandre de Barros (Independent Member) has been a Member of the Audit Committee on the Itaú Unibanco Group since 2021. He has held a number of positions on the Itaú Unibanco Group, together with Executive Vice President of the Technology Department (2011 to 2015), Executive Officer (2005 to 2010), Senior Managing Officer (2004 to 2005), and Managing Officer (1994 to 2004). He has been an alternate Member of Duratex’s Board of Directors since 2020 and Chairman of the IT and Digital Innovation Committee since 2020, having been a specialist Member since 2017 and a Member of the Board of Directors since 2015 at Diagnósticos da América S.A. (DASA). Mr. de Barros was a member of the Board of Directors (2003 to 2007) at Serasa S.A., the place he additionally served because the Chairman (2006 to 2007). He holds a Bachelor’s diploma in Aeronautics Infrastructure Engineering from the Instituto Tecnológico de Aeronáutica (ITA), São José dos Campos, São Paulo, Brazil, a specialization in Risk Management from INSEAD, Fontainebleau, France, and an MBA from the New York University, New York, U.S. Gustavo Jorge Laboissière Loyola-101.942.071-53 Gustavo Jorge Laboissière Loyola (Independent Member) has been a Chairman of the Audit Committee on the Itaú Unibanco Group since 2017, having been a Member of the Board of Directors (2006 to 2021) and a Member of the Fiscal Council (2003 to 2006). He has been a companion at Tendências Consultoria Integrada S/S Ltda. since 2002 and at Tendências Conhecimento Assessoria Econômica Ltda. since 2003 and a Managing Partner at Gustavo Loyola Consultoria S/C since 1998. Mr. Loyola was President (1992 to 1993 and 1995 to 1997) of the Banco Central do Brasil and Governor of the National Financial System Regulation and Organization (1990 to 1992). He holds a Bachelor’s diploma in Economics from the Universidade de Brasília, Distrito Federal, Brazil and a Ph.D. in Economics from the Fundação Getulio Vargas (FGV), Rio de Janeiro, Brazil. Luciana Pires Dias-251.151.348-02 Luciana Pires Dias (Independent Member) has been a Member of the Audit Committee on the Itaú Unibanco Group since 2020. She has been a Partner at L. Dias Advogados since 2016, the place she serves as an Advisor, Arbitrator and Opinion Giver in monetary and capital market points. She is a Professor on the Escola de Direito da Fundação Getulio Vargas (FGV) since 2008. She has been a Member of the Audit Committee at Vale S.A. since 2020 and a Member of the Board of Directors and Coordinator of the Audit Committee at XP Inc. since 2021. She was an Officer on the Comissão de Valores Mobiliários (CVM) (2011 to 2015) and Market Development Superintendent at CVM (2007 to 2010). Ms. Dias was a consultant of CVM on the Corporate Governance Committee of the Organization for Economic Co-operation and Development – OCDE (2011 to 2015) and at OCDE’s Latin-American Roundtable on Corporate Governance (2009 to 2015). She served in legislation corporations in São Paulo and Rio de Janeiro, Brazil, and in New York, U.S. (1998 to 2006). She holds a Bachelor’s and Master’s levels and a Ph.D. in Business Law from the Escola de Direito da Universidade de São Paulo (USP), São Paulo, Brazil, and a Master of the Science of Law (J.S.M) from the Stanford Law School, Stanford University, California, U.S. Rogério Carvalho Braga-625.816.948-15 Rogério Carvalho Braga (Independent Member) has been a Member of the Audit Committee on the Itaú Unibanco Group since 2021. He has held a variety of positions on the Itaú Unibanco Group, together with Officer (2020) and Corporate Manager of Marketing, Franchise and Products at Itaú CorpBanca (2016 to 2018). He joined the Itaú Unibanco Group in 1999 and was elected Officer in 2000. 231 He holds a Bachelor’s diploma in Law from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil, and an MBA from the Pepperdine University, Malibu, California, U.S.
Geraldo José Carbone-952.589.818-00 Geraldo José Carbone (Non-Management Member) has been a Member of the Compensation Committee on the Itaú Unibanco Group since 2019. He has held a number of positions on the Itaú Unibanco Group, together with Director Vice President (2008 to 2011) and Member of the Board of Directors (2006 to 2008) and (2017 to 2018). He has been an Officer Partner of G/xtrat Consultoria Econômica Ltda. and GC/Capital Empreendimentos e Participações Ltda. since 2011. Mr. Carbone was the CEO (1997 to 2006); Vice Chairman of the Asset Management Division (1994 to 1997) and Director of the Economics division and the Investment Research Unit in Brazil (1991 to 1994) of Bank Boston and Chief Economist of Bunge y Born (1982 to 1987). He holds a Bachelor’s diploma in Economics from the Universidade de São Paulo (USP), São Paulo, Brazil. Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal (Non-ExecutiveCo-Chairman) has been a Co-Chairman of the Board of Directors on the Itaú Unibanco Group since 2017. He was additionally the Vice Chairman of the Board of Directors (2003 to 2017) and CEO (1994 to 2017). He has held a number of positions on the Itaú Unibanco Group, together with Senior Vice President (“Diretor Geral”) (1990 to 1994). He has served as Vice Chairman of the Board of Directors and a Member of the Strategy and New Business Committee of Itaúsa S.A. since 2021 and was Managing Vice President (1994 to 2021) and Chairman of the Accounting Policies Committee (2008 to 2011). Since 1994 he has been a Member of the Board of the International Monetary Conference. He was President of the Federação Nacional dos Bancos (FENABAN) and of the Federação Brasileira de Bancos (FEBRABAN) (1997 to 2001) and President of the Advisory Board of the Federação Brasileira de Bancos (FEBRABAN) (2008 to 2017). In 2000, Mr. Setubal turned a Member of the Trilateral Commission and the International Board of the NYSE and in 2002 he turned a Member of the International Advisory Committee of the Federal Reserve Bank of New York. In 2010, he turned a Member of the China Development Forum. He holds a Bachelor’s diploma in Production Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and a Master of Science diploma in Engineering from the Stanford University, California, U.S. Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2021. He has held a number of positions on the Itaú Unibanco Group, together with CEO (2017 to 2021), Wholesale Banking Senior Vice President (“Diretor Geral”) (2015 to 2017) and Vice President (2004 to 2015). Mr. Bracher has been a Member of the Board of Directors of Mastercard Incorporated since 2021 and was a Member of the Board of Directors (2009 to 2014) of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (presently B3 S.A. – Brasil, Bolsa, Balcão), an Alternate Member of the Board of Directors (1999 to 2005), and a Member of the Board of Directors (2005 to 2013) of Pão de Açúcar – Companhia Brasileira de Distribuição. He holds a Bachelor’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil. João Moreira Salles-295.520.008-58 João Moreira Salles-295.520.008-58 João Moreira Salles (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2017. He has held a number of positions on the Itaú Unibanco Group, together with Officer at IUPAR – Itaú Unibanco Participações S.A. since 2018, and he was a Member of the Board of Directors (2015 to 2018). He was a Member of the Board of Directors at XP Investimentos S.A. (2018 to 2019). Mr. Moreira Salles is presently an Officer of Brasil Warrant Administração de Bens e Empresas S.A. (BWSA), the place, since 2013, he has been overseeing the administration of BW Gestão de Investimentos (BWGI) as a member of the Investment, Risk and Operational Committees of the agency, and has been chargeable for the monitoring of different BWSA subsidiaries. He has been a Partner and a Member of the Investment Committee of Cambuhy Investimentos Ltda. since 2013, and was a Member of the Board of Directors of investee Parnaíba Gás Natural (2014 to 2017). He has additionally been a Member of the Board of Directors of Verallia, a glass packaging firm listed on the Euronext Paris since 2019, in addition to a Member of the Board of Directors’ Finance Committee of Alpargatas. Before becoming a member of BWSA and Cambuhy, he had been an Investment Banker at J. P. Morgan Chase, New York, U.S. He holds a Bachelor’s diploma in Economics from the Instituto de Ensino e Pesquisa (INSPER), São Paulo, Brazil, a Master’s diploma in Economics from the Columbia University, GSAS, New York, U.S., a Master’s diploma in Finance from the Columbia University, GSB, New York, U.S. and a Ph.D. in Economic Theory from the Universidade de São Paulo (FEA-USP), São Paulo, Brazil. Álvaro Felipe Rizzi Rodrigues-166.644.028-07 Álvaro Felipe Rizzi Rodrigues, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2014. He is presently chargeable for the Legal Wholesale Banking Department (funding banking, treasury, wealth administration companies, banking merchandise, allotted funds and onlending, worldwide loans and overseas trade), the Tax Department, the Proprietary M&A Legal Matters Department and the Anti-Trust, Corporate and International Legal Matters Departments. Mr. Rodrigues had been beforehand chargeable for the Legal Retail Banking Department (chargeable for authorized issues232 associated to services and products of the retail banking, insurance coverage and pension plan enterprise) and the Institutional Legal Department (Corporate and Corporate Governance, Contracts, Intellectual Property and
Corporate Paralegal Matters). He joined the Itaú Unibanco Group in 2005, serving as Legal Manager and Legal Superintendent (2005 to 2014). He additionally labored within the Corporate Law and Contract Law departments (1998 to 2005) at Tozzini Freire Advogados. He holds a Bachelor’s diploma in Law from the Faculdade de Direito da Universidade de São Paulo (USP), São Paulo, Brazil. He has additionally attended a specialization course in Corporate Law from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil, and holds a Master of Laws (L.L.M.) from Columbia University Law School, New York, U.S. Maria Helena dos Santos Fernandes de Santana-036.221.618-50 Maria Helena dos Santos Fernandes de Santana (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2021. She was a Member of the Audit Committee between 2014 and 2020. She has been a Member of the Board of Directors and Coordinator of the People, Appointment and Governance Committee at Oi S.A. since 2018, a Member of the Board of Directors and Chairwoman of the Audit Committee at CI&T Inc., and a Member of the Board of Directors at Fortbras S.A. She was a Member of the Board of Directors (2018 to 2019) and the Chairwoman of the Audit Committee at XP Inc. between 2019 and 2021, having beforehand served because the Chairwoman of the Audit Committee at XP Investimentos S.A. (2018 to 2019). Ms. Santana served as a Member of the Board of Directors at Bolsas y Mercados Españoles (BME) (2016 to 2020), a Member of the Board of Trustees on the IFRS Foundation (2014 to 2019), a Member of the Board of Directors and Chairwoman of the Corporate Governance Committee at Companhia Brasileira de Distribuição S.A. (2013 to 2017), a Member of the Board of Directors and Audit Committee Coordinator at Totvs S.A. (2013 to 2017), a Member of the Board of Directors at CPFL Energia S.A. (2013 to 2015), Chairwoman (2007 to 2012) and Officer (2006 to 2007) of the Brazilian Securities and Exchange Commission (CVM). She represented CVM on the Financial Stability Board (FSB) (2009 to 2012). She was Chairwoman of the Executive Committee on the International Organization of Securities Commissions (IOSCO) (2011 to 2012), and in addition a Member of the International Integrated Reporting Committee (IIRC) in the identical interval. She labored on the Bolsa de Valores de São Paulo (presently B3 S.A. – Brasil, Bolsa, Balcão) (1994 to 2006), the place she was concerned within the set-up and was chargeable for the implementation of the New Market and different company governance segments. Ms. Santana was Vice President of the Instituto Brasileiro de Governança Corporativa (IBGC) (2004 to 2006), having been a Member of its Board of Directors between 2001 and 2006. She has been a Member of the Latin-American Roundtable on Corporate Governance (OECD) (since 2000). She holds a Bachelor’s diploma in Economics from the Faculdade de Economia, Administração, Contabilidade e Atuária of the Universidade de São Paulo (FEA-USP), São Paulo, Brazil. Alexsandro Broedel-031.212.717-09 Alexsandro Broedel, a Member of the Partners Program, has been an Officer of the Executive Committee and CFO since 2021, having held the place of Group Executive Finance Director (2015 to 2020) and Head of Investor Relations (2017 to 2020) on the Itaú Unibanco Group. He joined the Itaú Unibanco Group in 2012 because the Finance and Control Officer. Mr. Broedel has beforehand served as an Officer on the Comissão de Valores Mobiliários (CVM). He is a Full Professor at FEA-USP and Trustee of the IFRS Foundation. He holds a Bachelor’s levels in Accounting and Law from the Universidade de São Paulo (USP), São Paulo, Brazil. He holds a Ph.D. in Accounting and Finance from the Manchester Business School, Manchester, United Kingdom, and is a Chartered Management Accountant (FCMA, CGMA), London, United Kingdom. Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2007. He has held a number of positions on the Itaú Unibanco Group, together with Vice President (1996 to 2015), Investor Relations Officer (1995 to 2015), Executive Officer (1993 to 1996), and Managing Director (1988 to 1993). He has been a Member of the Nomination and Corporate Governance Committee since 2009, a Member of the Personnel Committee and the Risk and Capital Management Committee since 2015, a Member of the Social Responsibility Committee since 2019, and he was a Member of the Accounting Policies Committee (2008 to 2009). He has been the CEO and Investor Relations Officer at Itaúsa S.A. since 2015, Vice Chairman of the Board of Directors since 2008, a Member of the Disclosure and Trading Committee since 2009, having been Coordinator to this Committee since 2015, a Member of the Investment Policies Committee (2008 to 2011), Coordinator of the Investment Committee and a Member of the Finance, the Personnel and Ethics, and the Sustainability and Risks committees since 2017. Mr. Setubal has been a Member of the Board of Directors and of the Strategy Committee at Alpargatas S.A. since 2017, a Member of the Board of Directors since 2015, Co-chairman of the Board since 2017 and a Member of the Personnel, Governance and Nomination Committee since 2015 at Duratex S.A. He has been Chairman of the Board of Trustees since 2008 on the Fundação Itaú para Educação, a Member of the Board of Directors of the Museu de Arte Moderna de São Paulo (MAM) since 1992 and of the Instituto de Arte Contemporânea. He has been Vice Chairman of the Board of Directors on the Fundação Bienal de São Paulo since 2017 (and a Member since 2009) and Chairman of the Decision-Making Council on the Museu de Arte de São Paulo (MASP) since 2018. He has a Member of the Superior Guidance, Nomination and Ethics Committee since 2010 on the Instituto Brasileiro de Relações com Investidores – IBRI, having been Chairman of the Board of Directors (1999 to 2009). Mr. Setubal additionally served as a Member of the Board of Directors on the Associação Brasileira das Companhias Abertas (ABRASCA) (1999 to 2017) and Vice Chairman of the Board of Directors on the Instituto Itaú Cultural (2005 to 2019), having labored as a Board Member (1993 to 2005), Executive Vice President (2005 to 2019) and an Executive Officer (1996 to 2005). He holds Bachelor’s and Postgraduate levels in Business Administration, each from the Fundação Getulio Vargas (FGV), São Paulo, Brazil, with specialization from INSEAD, Fontainebleau, France. 233
José Virgilio Vita Neto-223.403.628-30 José Virgilio Vita Neto, a Member of the Partners Program, has been an Officer on the Itaú Unibanco Group since 2011, being presently chargeable for Tax Advisory and Litigation, Corporate Legal departments, along with the Legal Advisory of all Business departments of the General Retail Banking Office. He joined the Itaú Unibanco Group in 2000, working as a lawyer till 2003, being chargeable for the Wholesale Banking Legal Consulting division, notably structured operations and actual property loans. Mr. Vita Neto labored as Legal Manager (2003 to 2008), being chargeable for the Wholesale Banking Legal division, notably structured operations, actual property loans, overseas trade, derivatives and mission finance, retail authorized advisory and administrative and investigative proceedings, together with these associated to client safety our bodies. He additionally acted as Legal Superintendent (2008 to 2011), chargeable for retail authorized advisory, administrative and investigative proceedings, litigation for main instances and public-curiosity civil actions. He holds a Bachelor’s diploma in Law from the Universidade de São Paulo (USP), São Paulo, Brazil; Master’s diploma in Civil Law – Contracts from the Universidad de Salamanca – Spain; Ph.D. in Civil Law – Contracts from the Universidade de São Paulo (USP), São Paulo, Brazil, and has attended the Authentic Leadership Development Program from the Harvard Business School, Boston, U.S. Ana Lúcia de Mattos Barretto Villela-066.530.828-06 Ana Lúcia de Mattos Barretto Villela-066.530.828-06 Ana Lúcia de Mattos Barretto Villela-066.530.828-06 Ana Lúcia de Mattos Barretto Villela (Non-Executive Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2018. She has held a number of positions on the Itaú Unibanco Group, together with Member of the Board of Directors (1996 to 2001). Ms. Villela has additionally been an Alternate Member of the Board of Directors of IUPAR – Itaú Unibanco Participações S.A. since 2018; Vice Chairman of the Board of Directors (Non-Executive Member) of Itaúsa S.A. since 2017; a Member of the Personnel Committee at Itaú since 2018; a Member of the Nomination and Corporate Governance at Itaú since 2018; a Member of the Social Responsibility Committee at Itaú since 2019; a Member of the Sustainability and Risks Committee at Itaúsa since 2021; Vice President of the Board of Trustees on the Fundação Itaú para Educação e Cultura since 2020; a Member of the Guiding Board on the Itaú Social since 2017; a Member of the Advisory Board on the Itaú Cultural since 1995; a Member of the Executive Board on the Itaú Cultural since 2017; Co-Founder of AlanaLab (Maria Farinha Filmes and Flow) since 2014; Founding President of Alana Foundation since 2012; CEO of Instituto Alana since 2002; a Member of the Advisory Board at Instituto Brincante since 2001 and Fellow Ashoka since 2010. She has been a Member of the Innovation Board of XPRIZE since 2018. First consultant from Latin America on the Innovation Board of XPRIZE, a non-revenue group created by Peter Diamandis, who designs and manages international competitions to encourage the event of recent applied sciences which will assist resolve a few of mankind’s main challenges. She was a Member of the Advisory Board at Instituto Akatu (2013 to 2017); a Member of the Advisory Board at Organização Fairplay (2015 to 2017); a Member of the Advisory Board at Conectas (2003 to 2018), a Member of the Sustainability Committee at Duratex S.A. (2015 to 2018) and an Alternate Member of the Board of Directors of Duratex S.A. (2018 to 2020). She holds a Bachelor’s diploma in Teaching with main in School Administration and a Master’s diploma in Educational Psychology, each from the Pontifícia Universidade Católica de São Paulo (PUC-SP), São Paulo, Brazil and took graduate research in Business Administration from the Fundação Armando Álvares Penteado (FAAP), São Paulo, Brazil (incomplete), and postgraduate research in Administration within the Third Sector from the Fundação Getulio Vargas (FGV), São Paulo, Brazil (incomplete). Carlos Henrique Donegá Aidar-076.630.558-96 Carlos Henrique Donegá Aidar, a Member of the Partners Program, has been an Officer since 2008 and a Member of the Disclosure and Trading Committee on the Itaú Unibanco Group since 2015. Mr. Aidar is presently answerable for the Financial Control Office and his principal duties are: getting ready the conglomerate’s particular person and consolidated monetary statements, contacting with regulatory our bodies, auditors and the Federal Revenue Service; getting ready monetary statements underneath IFRS; finishing up Tax and Corporate Management of all firms in Brazil and overseas and the Conglomerate’s Accounting Policies. He joined the Itaú Unibanco Group in 1986 as a Controllership Officer (2008 to 2014), being chargeable for the Financial Planning and Managerial Control Office, answerable for the conglomerate’s funds planning in its managerial, accounting and tax facets, the management and dedication of outcomes of the numerous conglomerate’s departments, gross sales channels, merchandise, branches and shoppers, enterprise monetary planning assist and administration of the departments comprising the conglomerate, granting assist to the conglomerate price system administration, and evaluation and submission of outcomes to the manager committees. He holds a Bachelor’s diploma in Economics from the Faculdade de Ciências Econômicas de São Paulo da Fundação Escola de Comércio Álvares Penteado (FECAP), São Paulo, Brazil and a postgraduate diploma in Finance from the Universidade de São Paulo (USP), São Paulo, Brazil. Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 234
Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2015. He has been a Member of the Board of Directors of Natura Group since 2017; a Member of the Board of Directors of Companhia Brasileira de Metalurgia e Mineração (CBMM) since 2015; and a Member of the Board of Directors of Ambev since 2021. He was CEO (2011 to 2014) at Abril Comunicações S.A.; Chairman of the Board of Directors (2011) at Banco Santander (Brazil) S.A.; CEO (2008 to 2010) at Banco Santander S.A.; and CEO (1996 to 2008) at Banco ABNAMRO/Real S.A. Mr. Barbosa additionally served as Chairman of the Board of Directors of Fundação OSESP (2012 to 2019), and is presently a Board Member at UN Foundation (U.S.) since 2011; a Member of the Board of Directors of Instituto Empreender Endeavor since 2008 (Chairman since 2015); and a Member of the Investment Committee of Gávea Investimentos since 2015. He holds a Bachelor’s diploma in Business Administration from the Fundação Getulio Vargas (FGV), São Paulo, Brazil and a Master’s diploma in Business Administration from the Institute for Management Development (IMD), Lausanne, Switzerland. Pedro Luiz Bodin de Moraes-548.346.867-87 Pedro Luiz Bodin de Moraes-548.346.867-87 Pedro Luiz Bodin de Moraes (Independent Member) has been a Member of the Board of Directors on the Itaú Unibanco Group since 2003. He has been a companion at Cambuhy Investimentos Ltda. since 2011 and at Ventor Investimentos Ltda. since 2009. He was an Officer (2002 to 2003) and a Partner (2005 to 2014) at Icatu Holding S.A.; and an Officer and a Partner (1993 to 2002) at Banco Icatu S.A. Mr. Bodin de Moraes additionally served as a Monetary Policy Officer on the Banco Central do Brasil (1991 to 1992) and as an Officer at Banco Nacional de Desenvolvimento Econômico e Social (BNDES) (1990 to 1991). He holds a Bachelor’s and Master’s levels in Economics from the Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ), Rio de Janeiro, Brazil, and a Ph.D. in Economics from the Massachusetts Institute of Technology (MIT), Cambridge, Massachusetts, U.S. Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles (Non-ExecutiveCo-Chairman) has been a Co-Chairman of the Board of Directors on the Itaú Unibanco Group since 2017, and he was additionally the Chairman of the Board of Directors (2009 to 2017) and Executive Vice President (2008 to 2009). He has held a number of positions on the Itaú Unibanco Group, together with CEO (2004 to 2008). He serves because the Chairman of the Board of Directors at Instituto Unibanco; Board of Directors on the Federação Brasileira de Bancos (FEBRABAN); Board of Directors at Companhia Brasileira de Metalurgia e Mineração (CBMM); and Board of Directors at Alpargatas S.A. He can also be a Member of the Decision-Making Council, the INSPER’s Board of Associates, and the Board of Directors at Fundação Osesp. He holds a Bachelor’s diploma, magna cum laude, in Economics and History from the University of California, Los Angeles (UCLA), U.S. He holds a Master’s diploma in International Relations from the Yale University and he has attended the OPM – Owner/President Management Program on the Harvard University, each within the United States. Ricardo Villela Marino-252.398.288-90 Ricardo Villela Marino (Non-Executive Vice President) has been a Vice President of the Board of Directors on the Itaú Unibanco Group since 2020. He was additionally a Member of the Board of Directors (2008 to 2020) and the Chairman of the financial institution’s Latin America Strategic Council since 2018. He has held a number of positions on the Itaú Unibanco Group since 2002, together with Vice President (2010 to 2018). He has additionally been an Alternate Member of the Board of Directors of Itaúsa S.A. since 2011; a Member of the Strategy and New Business Committee since 2021; a Member of the Sustainability Council since 2019, and he was a Member of the Investment Policies Committee (2008 to 2011); an Alternate Member of the Board of Directors of Dexco S.A. since 2009; an Alternate Member of the Board of Directors of Itautec S.A. (2009 to 2019) and an Alternate Member of the Board of Directors of Elekeiroz S.A. (2009 to 2018). He holds a Bachelor’s diploma in Mechanical Engineering from the Escola Politécnica da Universidade de São Paulo (USP), São Paulo, Brazil and a Master’s diploma in Business Administration from the MIT Sloan School of Management, Cambridge, Massachusetts, U.S. Renato Lulia Jacob-118.058.578-00 Renato Lulia Jacob has been a Partner and an Officer on the Itaú Unibanco Group, concurrently performing because the Group Head of Investor Relations and Market Intelligence since 2020. He has been a Member of the Disclosure and Trading Committee since 2019, having served as its Chairman since 2020. Mr. Jacob has been on the Itaú Unibanco Group for 19 years, having held a number of positions, together with CEO and Member of the Board of Directors at Itau BBA International plc, within the United Kingdom, and Member of the Boards of Directors at Itau International, within the U.S., and Itau Suisse, in Switzerland (2016 to 2020), a Managing Director of Banco Itau Argentina S.A. (2006 to 2010) and a Managing Director, Head of CIB Europe (2011 to 2015). He has been an Independent Member of the Boards of the Royal Institution of Great Britain, Fight For Peace International, and the Brazilian Chamber of Commerce in Great Britain, within the United Kingdom. He holds a Bachelor’s diploma in Civil Engineering from the Universidade de São Paulo (USP), São Paulo, Brazil, and has attended the Advanced Management Program and brought half within the CEO Academy, each from The Wharton School of the University of Pennsylvania, Philadelphia, U.S. 235
Type of Conviction Description of the conviction Ricardo Baldin-163.678.040-72 N/A Alexandre de Barros-040.036.688-63 N/A Gustavo Jorge Laboissière Loyola-101.942.071-53 N/A Luciana Pires Dias-251.151.348-02 N/A Rogério Carvalho Braga-625.816.948-15 N/A Geraldo José Carbone-952.589.818-00 N/A Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal-007.738.228-52 Roberto Egydio Setubal-007.738.228-52 N/A Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher-039.690.188-38 Candido Botelho Bracher-039.690.188-38 N/A João Moreira Salles-295.520.008-58 João Moreira Salles-295.520.008-58 N/A Álvaro Felipe Rizzi Rodrigues-166.644.028-07 N/A Maria Helena dos Santos Fernandes de Santana-036.221.618-50 N/A Alexsandro Broedel-031.212.717-09 N/A Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 Alfredo Egydio Setubal-014.414.218-07 N/A 236
José Virgilio Vita Neto-223.403.628-30N/A Ana Lúcia de Mattos Barretto Villela -066.530.828-06 Ana Lúcia de Mattos Barretto Villela-066.530.828-06 Ana Lúcia de Mattos Barretto Villela-066.530.828-06 N/A Carlos Henrique Donegá Aidar-076.630.558-96N/A Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 Fábio Colletti Barbosa-771.733.258-20 N/A Pedro Luiz Bodin de Moraes-548.346.867-87 Pedro Luiz Bodin de Moraes-548.346.867-87 N/A Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 Pedro Moreira Salles-551.222.567-72 N/A Ricardo Villela Marino-252.398.288-90 N/A Renato Lulia Jacob-118.058.578-00N/A 237
12.11. Describe the supply in any agreements, together with insurance coverage insurance policies, which give for the fee or reimbursement of bills incurred by administration members arising from indemnity for harm triggered to 3rd events or to the issuer, from penalties imposed by state brokers, or from agreements supposed to resolve administrative or authorized proceedings because of the efficiency of their features The Issuer has a civil legal responsibility insurance coverage coverage in impact for Directors and Officers (D&O), aimed toward indemnifying administration members of the Issuer and its subsidiaries, underneath the coverage, within the occasion of attribution of non-public, joint or subsidiary legal responsibility on account of any lawsuit, administrative or arbitration proceedings, or as a result of disregarding of authorized id associated to the actions of the Issuer or its subsidiaries, on account of any written declare or civil lawsuit, administrative continuing, or regulatory or arbitration process associated to the noncompliance of legal guidelines and guidelines. Risks excluded from this insurance coverage coverage are claims arising from willful misconduct, or gross negligence equal to willful misconduct practiced by a administration member or any third social gathering to the advantage of that member. The present coverage establishes a most indemnity restrict of 100 and fifty million U.S. {dollars} (US$150,000,000.00), topic to particular sub-limits and deductibles for every merchandise lined. The D&O insurance coverage premium paid on January 6, 2022 and maturing in January 6, 2023 amounted to eight million, seven hundred eighty-eight thousand eight hundred 13, forty-six US {dollars} (US$8,788,829), together with monetary operations tax (IOF). Considering the publication of CVM Guidance Opinion No. 38 of September 25, 2018 concerning the indemnity contracts entered into by publicly-held firms and their administration members, the Annual General Stockholders’ Meeting held on April 28, 2020 accredited the inclusion of things 5.3 and 5.3.1 within the Bylaws to formalize the potential of the Issuer’s taking out civil legal responsibility insurance coverage or coming into into an indemnity contract in favor of its administration members, administration members of its managed firms, staff who maintain a administration place within the Issuer or its managed firms, in addition to these people formally nominated to carry administration positions in different entities. The Issuer could enter into an indemnity contract, as much as the indemnity restrict of 100 and fifty million U.S. {dollars} (US$150,000,000.00), with members of the Board of Directors, Executive Board, Audit Committee and Compensation Committee, with any staff who maintain a administration place within the Issuer or its managed firms, in addition to with these people formally nominated to carry administration positions in different firms or entities (collectively “Beneficiaries”), aimed to reimburse bills as a result of claims, inquiries, investigations, arbitration, administrative or authorized procedures and proceedings, in Brazil or another jurisdiction aimed toward holding the Beneficiary insured accountable for the common efficiency of their managerial duties, till the later of the next occasions: (i) the expiration of the interval required for remaining and unappealable determination regarding a Beneficiary’s size of service on the Issuer; or (ii) the expiration of the statute of limitations set forth by legislation for occasions which will outcome within the indemnification obligations for the Issuer. To keep away from conflicts of curiosity, the reimbursement of any and all bills should be reviewed and accredited by the Issuer’s Audit Committee, a physique consisting totally of impartial members, in accordance with National Monetary Council laws, which is competent to evaluate whether or not the bills quantity is reimbursable by the Issuer. Accordingly, the Audit Committee will assess whether or not the Beneficiary’s act falls underneath any of the exclusionary circumstances supplied for within the indemnity contract, specifically: (i) the act carried out was not a part of the Beneficiary’s duties; (ii) there may be confirmed dangerous religion, willful misconduct, gross negligence, or fraud on the a part of the Beneficiary; or (iii) the Beneficiary acts in their very own curiosity or within the curiosity of third events, to the detriment of the curiosity of Itaú Unibanco. In the instances the place a Beneficiary is a member of Itaú Unibanco’s Audit Committee, any compensation ensuing from proceedings filed in opposition to such Beneficiary should be submitted to, reviewed, and accredited by the Issuer’s Related Parties Committee, a physique consisting solely of impartial Board members. Additionally, Beneficiaries who could profit from the decision or dialogue on the fee of bills will likely be barred from attending any Audit Committee or Related Parties Committee conferences, as relevant, held to resolve or focus on on such fee. Ultimately, the issuer clarifies that Beneficiaries won’t be entitled to the indemnification each time it might come up from confirmed illicit acts and when any of the next occasions demonstrably happen: (i) the act carried out was not a part of the Beneficiary’s duties; (ii) there may be confirmed dangerous religion, willful misconduct, gross negligence, or fraud on the a part of the Beneficiary; or (iii) the Beneficiary acts in their very own curiosity or within the curiosity of third events, to the detriment of the curiosity of Itaú Unibanco. 238
12.12. OTHER SIGNIFICANT INFORMATION Addition Information of things 12.5/6, 12.7/8, 12.9 and 12.10 A-Total Number of Meetings Held by Body: Body Meetin gs Board of Directors (1) 12 Fiscal Council (1) 4 Audit Committee (2) 49 Disclosure and Trading Committee (3) 4 Strategy Committee (4) 6 Capital and Risk Management Committee (4) 12 Nomination and Corporate Governance Committee (4) 1 Related Parties Committee (4) 9 Personnel Committee (4) 5 Compensation Committee (4) 4 Social Responsibility Committee (4) 2 interval from June 15, 2021 to February 25, 2022 interval from June 16, 2021 to February 25, 2022 interval from April 19, 2021 to January 28, 2022 interval from April 29, 2021 to February 25, 2022 B – Consecutive Terms of Office: For the variety of consecutive phrases of workplace: 1) of the members of the Board of Directors, Fiscal Council, Audit Committee, different committees and Executive Board, the next standards have been adopted: (a) counting as from ltaú Unibanco merger on November 3, 2008; (b) inclusion of phrases of workplace with intervals shorter than one yr in case a member joins the physique after the start of a time period of workplace; and (c) inclusion of present phrases of workplace. For the variety of consecutive phrases of workplace of the members of the Disclosure and Trading Committee, the next standards have been adopted: (a) counting as from ltaú Unibanco Merger on November 3, 2008; (b) inclusion of present phrases of workplace. C-Meeting Attendance Percentage: For calculation of the assembly attendance share: (a) of the members of the Board of Directors and Fiscal Council, the conferences held from the second members took workplace on June 15, 2021 till February 25, 2022 have been thought of; (b) of the members of the Audit Committee, conferences held from the second the members took workplace on June 16, 2021 till February 25, 2022 have been thought of; (c) of the members of the opposite committees, conferences held from the second the members took workplace on April 29, 2021 till February 25, 2022 have been thought of; (d) of the members of the Disclosure and Trading Committee, conferences held within the interval from April 19, 2021 to January 28, 2022 have been thought of; (e) there isn’t a calculation of the assembly attendance share of the administration member Cesar Nivaldo Gon as a result of the conferences don’t contain her reelection to the Company’s Board of Directors; (f) there isn’t a calculation of the assembly attendance share of the administration members Eduardo Hiroyuki Miyaki and Gilberto Frussa as a result of the conferences don’t contain his reelection to the Company’s Fiscal Council; (g) there isn’t a calculation of the assembly attendance share of the administration members Reinaldo Guerreiro, João Costa and Rene Guimarães Andrich as alternate members weren’t required to attend the conferences of the Company’s Fiscal Council; (h) there isn’t a calculation of the assembly attendance share of the administration member Álvaro Felipe Rizzi Rodrigues as a result of it was formalized that he turned a part of the Disclosure and Trading Committee on April 27, 2022; (i) there isn’t a calculation of the assembly attendance share of members of the Executive Board, and the proportion is zero as a result of the sector to be crammed within the Empresas-Net system is disabled. D-Independence Criterion for the Members of the Board of Directors and of the Audit Committee: The members of the Board of Directors Cesar Nivaldo Gon, Fábio Colletti Barbosa, Frederico Trajano 239
lnácio Rodrigues, Maria Helena dos Santos Fernandes de Santana and Pedro Luiz Bodin de Moraes are deemed impartial. An impartial member is a member who has no business or different relationship with the Company, with an organization underneath the identical management, with the controlling stockholder or with member of a administration physique which will (i) give rise to a battle of pursuits; or (ii) impair its capability and exemption from evaluation and evaluation. All members of the Audit Committee are deemed impartial, in conformity with relevant regulation and underneath the phrases and circumstances of the Bylaws: a) to not be, or to not have been, prior to now (12) twelve months: (i) an officer of the corporate, its controlling firm or associates, managed or collectively-managed firms, instantly or not directly; (ii) an worker of the corporate, its controlling firm or associates, managed or collectively-managed firms, instantly or not directly; (iii) a accountable technician, officer, supervisor, supervisor or another member, with a managerial operate, of the workforce concerned within the audit work of the corporate; or (iv) a member of the Supervisory Council of the corporate, its controlling firm or associates, managed or collectively-managed firms, instantly or not directly; b) to not be a partner, a companion or member of the family in a direct or a collateral line or by affinity, as much as twice eliminated, of the stated individuals in sections “a”, “(i)” and “(iii)”; and c) to not maintain positions, particularly in advisory boards, boards of administrators or supervisory councils in firms which may be deemed as rivals out there or the place a battle of pursuits could come up. E – Type of Audit Committee lt is clarified that, pursuant to article 22, paragraph 2 from the Law nº 6,385/76, the Audit Committee adheres to the Resolution 4,910/21 of the National Monetary Council, which explains the explanation why it isn’t compliant with the CVM Resolution 23 (former CVM Instruction No. 308/99). F – POLITICALLY EXPOSED PERSONS (PEP): Regarding the members of the Board of Directors, Board of Officers, Supervisory Council and different Committees, we classify as politically uncovered individuals: Alfredo Egydio Setubal (member of the Board of Directors); Leila Cristiane Barboza Braga de Melo (member of the Board of Officers), Reinaldo Guerreiro (member of the Supervisory Council) and Ricardo Baldin (member of the Audit Committee), on account of: Alfredo Egydio Setubal being characterised as a Related PEP contemplating the connection with a member of Liquigás Distribuidora S.A. Leila Cristiane Barboza Braga de Melo being characterised as a Related PEP contemplating the connection with members of Central Bank of Brazil, Banco do Brasil and Caixa Econômica Federal, Reinaldo Guerreiro being characterised as a Related PEP contemplating the connection with members of the Ministry of Cities, Caixa Econômica Federal, Caixa Participações, Government of the Federal District and Government of the State of Rio Grande do Sul (RS), Ricardo Baldin being characterised as a Holder PEP contemplating a administration place at Finame. G-ADDITIONAL INFORMATION: We inform you that the inauguration of these elected within the Annual General Stockholders’ Meeting of April 26, 2022 and assembly of the Board of Directors of April 28, 2022, is pending approval of their election by the Central Bank of Brazil. Below we current the hierarchy flowchart of stated Bodies: 240
12.5/6 – Composition {and professional} expertise of the board of administrators and financial council With respect to every member, see beneath details about merchandise 12.5 “m”: I – Main skilled expertise for the previous 5 years, indicating: Company’s identify and exercise sector. Position and roles inherent within the place. Whether the corporate is a part of (i) the Issuer’s financial group or (ii) is managed by an Issuer’s direct or oblique stockholder with an curiosity equal to or greater than 5% in the identical class or kind of the Issuer’s securities. II-All administration positions they maintain in different firms or third sector organizations: Company is a part of (ii) is managed by an Issuer’s direct or oblique (i) the stockholder Company’s identify Company’s exercise sector Issuer’s with an Other curiosity financial firms or equal to or group third sector greater than 5% within the organizations identical class or kind of the Issuer’s securities. Printing of books, magazines and Abril Comunicações S.A. x different periodicals Alana Foundation Charitable group x AlanaLab Communication of influence x Holding firm of non-monetary Alpargatas S.A. x establishments Ambev Drinks x Americel S.A. Telephony Equipment x Arthur Andersen & Co. Advocacy x 241
Associação Brasileira das Companhias Abertas (ABRASCA-Brazilian Non-profit civil affiliation x Association of Publicly-Held Companies) Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais Non-profit civil affiliation x (ANBIMA-Brazilian Association of Financial and Capital Market Entities) Associação Junior Achievement do Estado de Entrepreneurial Education x São Paulo Multiple-service banking, with Banco ABNAMRO/Real S.A. x business portfolio Multiple-service banking, with Banco Bandeirantes S.A. x business portfolio Banco BBA-CreditanstaltMultiple-service banking, with x S.A. business portfolio Banco Brascan S.A. Investment Bank x Banco Central do Brasil (BACEN-Central Bank of Federal authorities company x Brazil) Multiple-service banking, with Banco do Brasil S.A. x business portfolio Multiple-service banking, with Banco Icatu S.A. x business portfolio Holding firm of non-monetary Banco Itaú Argentina S.A. x establishments Banco Itaú BBA S.A. Multiple-service x Holding firm of non-monetary Banco Itaú Chile x establishments Holding firm of non-monetary Banco Itaú International x establishments Holding firm of non-monetary Banco Itaú Paraguai x establishments Holding firm of non-monetary Banco Itaú Suisse x establishments Holding firm of non-monetary Banco Itaú Uruguai x establishments Banco Nacional de Desenvolvimento Econômico e Social (BNDES – Brazilian Social Development financial institution x and Economic Development Bank) Banco PSA Finance Brasil Multiple-service banking, with S.A. business portfolio x Banco Santander (Brasil) Multiple-service banking, with x S.A. business portfolio Multiple-service banking, with Banco Santander S.A. x business portfolio Multiple-service banking, with Bank Boston x business portfolio BB Seguridade S.A. Insurance and pension plan x BM&FBOVESPA S.A. – Bolsa de Valores, Management of organized Mercadorias e Futuros securities markets and provision of (presently B3 S.A. – Brasil, companies of registration, clearing and x Bolsa, Balcão (B3 S.A. – settlement, and assist to financing Brazilian Exchange and operations OTC)) Bolsas y Mercados Administration of organized Españoles (BME) securities markets x Brasil Warrant Holding firm of non-monetary Administração de Bens e x Empresas S.A (BWSA) establishments Brazilian Chamber of Commerce in Great Britain Non revenue group x Bunge y Born Food trade x 242
BW Gestão de Management of restricted public Investimentos (BWGI) funds x Câmara Interbancária de Brazilian Payment System x Pagamentos (CIP) Cambuhy Investimentos Consultancy in company x Ltda. administration Carvalho Pinto, Monteiro de Accounting and tax consulting and Barros, Frussa & Bohlsen – x Advogados auditing Casa da Moeda do Brasil Manufacture of paper cash x (CMB) CI&T Inc. Digital options x Cia. de Saneamento Básico do Estado de São Paulo Water assortment, remedy and (SABESP-Basic Sanitation x Company of the State of distribution São Paulo) Cia. de Saneamento de Minas Gerais (COPASA-Water assortment, remedy and x Minas Gerais Sanitation distribution Company) Cia. de Saneamento do Water assortment, remedy and Paraná (SANEPAR-Paraná x Sanitation Company) distribution Citibank Brazil Financial Conglomerate x Citigroup Brasil Financial Conglomerate x Comissão de Valores Mobiliários (CVM – Brazilian Public administration generally x Securities and Exchange Commission) Comissão Trilateral do Conselho Internacional da Private Discussion Forum x NYSE Companhia Brasileira de Distribuição S.A. Retail gross sales x Companhia Brasileira de Metalurgia e Mineração (CBMM-Brazilian Metallurgy and expertise x Metallurgy and Mining Company) Companhia de Trens Urbanos (CBTU) Rail transport x Companhia Paranaense de Gás (COMPAGÁS-Natural fuel distributor x Paranaense Gas Company) Conectas Non-governmental group x ConectCar Soluções de Payment Institution x Mobilidade Eletrônica S.A. Conferência Monetária Internacional International Organization x Conselho de Recursos do Sistema Financeiro Nacional Self-Regulatory Entity x (CRSFN) Conselho Regional de Contabilidade (CRC/SP-Regional Council of Self-Regulatory Entity x Accounting) CPFL Energia S.A. Energy Distribution x Debevoise & Plimpton Advocacy x Deutsche Bank Securities Investment Bank x Manufacturing, sale, import, and export of wooden by-merchandise, Dexco S.A. x toilet fittings, and ceramics and plastic supplies Diagnósticos da América S.A. (DASA) Clinical Diagnostics x Directa Auditores Advocacy x Manufacturing, sale, import, and export of wooden by-merchandise, Duratex S.A. x toilet fittings, and ceramics and plastic supplies 243
Concession of Public Works and Ecorodovias x Services Manufacture and advertising and marketing of Electrolux do Brasil S.A. family and industrial home equipment x generally Manufacturing of intermediate Elekeiroz S.A. merchandise for plasticizers, resins and x fibers Eneva S.A. Electricity x Accounting and tax audit and Ernst & Young x consulting companies Faculdade de Economia, Administração e Contabilidade de São Paulo (FEA-USP-School of Higher training – undergraduate x Economics, Business and graduate programs Administration and Accounting of the Universidade de São Paulo) Production and group of Fairplay x company occasions Federação Brasileira de Bancos (FEBRABAN – Organization of commerce and enterprise x Brazilian Federation of affiliation actions Banks) Federação Brasileira de Bancos (FENABAN – National Federation of Employers’ union x Banks) Federal Reserve Bank Federal Agency x Fellow Ashoka Non-profit group x Fidelity International Ltd. Investment administration x Fight For Peace Non revenue group x International Financeira Itaú CBD S.A. Credit, Financing and Investment Crédito, Financiamento e Society x Investimento Financial Stability Board Financial Stability Board x (FSB) Fortbras S.A. Automotive aftermarket x Fundação Bienal de São Restoration and conservation of Paulo (São Paulo Art x Biennial Foundation) historic websites and buildings Fundação das Nações Unidas (EUA) International Organization x Fundação Instituto de Pesquisas Contábeis, Atuariais e Financeiras Higher training – undergraduate (FIPECAFI – Institute for x Accounting, Actuarial and and graduate programs Financial Research Foundation) Fundação Itaú para Activities of membership organizations associated to tradition and x Educação e Cultura artwork Fundação Itaú Unibanco Supplementary Pension x Previdência Complementar Fundação Maria Cecilia Non-profit group x Souto Vidigal Fundação Nova Escola Non-profit group x Fundação OSESP (OSESP Music instructing x Foundation) Fundo Garantidor de Crédito Non-profit group x (FGC) Fundo Patrimonial da FEA- Raising and funding of funds to USP (FEA-USP Endowment x Fund) assist FEA-USP G/xtrat Consultoria Consultancy in company x Econômica Ltda. administration Fund administration companies by Gávea Investimentos x contract or fee 244
GC/Capital Holding firm of non-monetary Empreendimentos e x Participações Ltda. establishments Accounting and tax consulting and Grant Thornton Brasil x auditing Grupo Boticário Cosmetics x Grupo Itaú Unibanco (Itaú Financial Conglomerate x Unibanco Group) Grupo Natura (Natura Financial Conglomerate x Group) Gustavo Loyola Consultoria S/C Consultancy in economics x Hospital de Clínicas de Hospital care, first-assist and x Porto Alegre (HCPA) emergency care unit actions IBM Brasil Machinery and Services Industry x Icatu Holding S.A. Holding firm x IFRS Foundation Production of Accounting Standards x Indústrias Romi S.A. Machinery x Instituto Akatu (Akatu Non-governmental group x Institute) Instituto Alana (Alana Institute) Non-governmental group x Instituto Brasileiro de Ciência Bancária (IBCB – Institutes and Foundations x Brazilian Institute of Banking Science) Instituto Brasileiro de Governança Corporativa Activities of associations for x (IBGC – Brazilian Institute of safety of social rights Corporate Governance) Instituto Brasileiro de Relações com Investidores Self-Regulation Entity x (IBRI) Instituto Brincante (Brincante Institute) Non-governmental group x Instituto de Arte Contemporânea Works of artwork x Instituto de Ensino e Education establishment x Pesquisa (INSPER) Instituto Empreender Organization that helps Endeavor entrepreneurship and entrepreneurs x Activities of associative Instituto Itaú Cultural organizations associated to tradition and x artwork Instituto Lemann Pedagogical administration x Activities of membership Instituto Unibanco organizations associated to tradition and x artwork Global authority and central International Integrated coordinating physique for issues x Reporting Committee (IIRC) associated to Integrated Accounting Reporting Investimentos e Participações em Infraestrutura S.A. Urban mobility x (INVEPAR) IRB – Brasil Resseguros Reinsurance x S.A. Itaú Asset Management S.A. Fund administration x Other actions of companies rendered Itau BBA International plc primarily to the businesses not x talked about beforehand Itaú Corretora de Valores Securities brokerage x S.A. Multiple-service banking, with Itaú CorpBanca (Chile) x business portfolio Other service actions supplied Itaú International Holding primarily to firms not beforehand x Limited specified Associations for the protection of Itaú Social x social rights 245
Itaú Unibanco Holding S.A. Holding firm x Multiple-service banking, with Itaú Unibanco S.A. x business portfolio Itaúsa S.A. Holding firm x Investment in different firms in Brazil and overseas, notably in these engaged within the manufacture Itautec S.A. x and sale of banking and business automation tools and provision of companies IUPAR-Itaú Unibanco Holding firm x Participações S.A. J. P. Morgan Chase Holding firm x Jones Day Consulting service x L. Dias Advogados Advocacy x Lean Enterprise Institute Educational Institution x (LEI) Luizaseg Seguros S.A. Property and casualty insurance coverage x Magazine Luiza S.A. Retail gross sales x Multiple-service banking, with Mizuho International Ltd. x business portfolio Mastercard Incorporated Payment Institution x Metalúrgica Gerdau S.A. Steel mill x Museu de Arte de São Paulo (MASP – São Paulo Non-profit personal museum x Art Museum) Museu de Arte Moderna de São Paulo (MAM-São Non-profit civil affiliation x Paulo Museum of Modern Art) Oi S.A. Telecommunications x Ordem dos Advogados do Brasil Self-Regulatory Entity x Organização Internacional das Comissões de Valores Non-profit group x (IOSCO) Pão de Açúcar – Companhia Brasileira de Retail gross sales x Distribuição Accounting and tax audit and Paraná Auditores x consulting companies Parnaíba Gás Natural Extraction of oil and pure fuel x Wholesaling of alcohol gas, biodiesel, fuel and different oil by- Petrobrás Distribuidora S.A. merchandise, apart from lubricants, x which isn’t carried out by a retail transportation firm Petrobrás Gás S.A. Oil exploration, extraction and (GASPETRO) refining x Petrobrás Transportes S.A. (TRANSPETRO) Maritime Transport x Oil exploration, extraction and Petróleo Brasileiro S.A. x refining Accounting and tax audit and Pinheiro Neto Advogados x consulting companies Porto Seguro S.A. Insurance x Accounting and tax audit and PricewaterhouseCoopers x consulting companies Raia Drogasil Pharmaceutical x Redecard S.A. Payment Institution x RMB Assessoria e Consultoria Empresarial e Business consulting x Contábil EIRELI Royal Institution of Great Britain Education and scientific analysis x Sensedia Integration Solutions x Serasa S.A. Information Services x Sindicato dos Bancos no Estado de São Paulo (Union Union x of Banks of the State of São Paulo) 246
Spaipa S.A. Indústria Beverage Manufacturing and Brasileira de Bebidas Distribution x Tecnologia Bancária ATM’s x (TECBAN) Tekno S.A. Indústria e Metal Product Manufacturing x Comércio Telet S.A. Telephone firm x Tendências Conhecimento Consultancy x Assessoria Econômica Ltda. Tendências Consultoria Consultancy x Integrada S/S Ltda. Tozzini Freire Advogados Advocacy x Totvs S.A. Technology x Unibanco – União de Multiple-service banking, with x Bancos Brasileiros business portfolio Universidade Estadual de Education establishment x Campinas (UNICAMP) Vale S.A. Mining firm x Verallia Glass packaging producer x Fund administration companies by Ventor Investimentos Ltda. x contract or fee W.I.L.L. – Women in International non-revenue group x Leadership in Latin America XP Inc. Holding firm x Holding firm of non-monetary XP Investimentos S.A. x establishments XPRIZE Non-profit group x Zup Tecnologia Technological consultancy x 12.9. Existence of a conjugal relationship, steady union or kinship of as much as second diploma between: Issuer’s administration members; (i) Issuer’s administration members and (ii) administration members of the issuer’s direct or oblique subsidiaries; (i) Management members of the issuer or of its direct or oblique subsidiaries and (ii) Issuer’s direct or oblique dad or mum firms; d) (i) Issuer’s administration members and (ii) administration members of the Issuer’s direct or oblique dad or mum firms; a) Issuer’s administration members: • Alfredo Egydio Setubal (Member of the Board of Directors) is brother of Roberto Egydio Setubal (Co-chairman of the Board of Directors). • João Moreira Salles (Member of the Board of Directors) is son of Pedro Moreira Salles (Co-chairman of the Board of Directors). • Ana Lúcia de Mattos Barretto Villela (Member of the Board of Directors) is cousin of Ricardo Villela Marino (Vice Chairman of the Board of Directors). b) (i) Issuer’s administration members and (ii) administration members of the issuer’s direct or oblique subsidiaries: • Not relevant. c) (i) Management members of the issuer or of its direct or oblique subsidiaries and (ii) issuer’s direct or oblique dad or mum firms: • Pedro Moreira Salles (Co-chairman of the Board of Directors), along with siblings Fernando Roberto Moreira Salles, João Moreira Salles and Walther Moreira Salles Júnior, is within the Issuer’s controlling group; • Brothers Roberto Egydio Setubal (Co-chairman of the Board of Directors) and Alfredo Egydio Setubal (Member of the Board of Directors), along with siblings José Luiz Egydio Setubal, Maria Alice Setubal, Olavo Egydio Setubal Júnior, Paulo Setubal Neto and Ricardo Egydio Setubal, are within the Issuer’s controlling group; • Ricardo Villela Marino (Vice Chairman of the Board of Directors), along with brother Rodolfo Villela Marino, is within the Issuer’s controlling group; • Ana Lúcia de Mattos Barreto Villela (Member of the Board of Directors), along with brother Alfredo Egydio Arruda Villela Filho, is within the Issuer’s controlling group. 247
d) (i) Issuer’s administration members and (ii) administration members of the issuer’s direct or oblique dad or mum firms: • Pedro Moreira Salles (Co-chairman of the Board of Directors), along with siblings Fernando Roberto Moreira Salles, João Moreira Salles and Walther Moreira Salles Júnior, is within the administration of dad or mum firms IUPAR – Itaú Unibanco Participações S.A. and Cia. E. Johnston de Participações; • João Moreira Salles (Member of the Board of Directors), along with father Pedro Moreira Salles (Co-chairman of the Board of Directors), is within the administration of dad or mum firm IUPAR – Itaú Unibanco Participações S.A.; • Brothers Roberto Egydio Setubal (Co-chairman of the Board of Directors) and Alfredo Egydio Setubal (Member of the Board of Directors), along with brother Ricardo Egydio Setubal, are within the administration of dad or mum firms IUPAR – Itaú Unibanco Participações S.A. and Itaúsa S.A.; • Ricardo Villela Marino (Vice Chairman of the Board of Directors), along with brother Rodolfo Villela Marino, is within the administration of dad or mum firm Itaúsa S.A.; • Ricardo Villela Marino (Vice Chairman of the Board of Directors), along with mom Maria de Lourdes Egydio Villela and brother Rodolfo Villela Marino, is within the administration of dad or mum firm Rudric Ith Participações Ltda., and Rodolfo Villela Marino can also be a administration member of the controlling firm Companhia Esa; • Ana Lúcia de Mattos Barretto Villela (Member of the Board of Directors), along with brother Alfredo Egydio Arruda Villela Filho, is within the administration of dad or mum firms IUPAR – Itaú Unibanco Participações S.A. and Itaúsa S.A.; • Alfredo Egydio Setubal (Member of the Board of Directors), along with brother Ricardo Egydio Setubal, is within the administration of dad or mum firm Companhia Esa. 12.10. Inform on the subordination, service provision or management relationships maintained for the final three years between the issuer’s administration members: a) Issuer’s direct or oblique subsidiary, apart from these wherein the Issuer holds, instantly or not directly, the full capital inventory; Issuer’s direct or oblique dad or mum firm; If related, provider, consumer, debtor or creditor of the issuer, its subsidiaries or dad or mum firms or subsidiaries of any of those folks a) Issuer’s direct or oblique subsidiary, apart from these wherein the issuer holds, instantly or not directly, the full capital inventory: Management member Ricardo Villela Marino holds a administration place in subsidiaries. b) Issuer’s direct or oblique dad or mum firm: Management members Alfredo Egydio Setubal, Ana Lúcia de Mattos Barretto Villela, Pedro Moreira Salles, Ricardo Villela Marino and Roberto Egydio Setubal are a part of the controlling group of Itaú Unibanco. c) If related, provider, consumer, debtor or creditor of the issuer, its subsidiaries or dad or mum firms or subsidiaries of any of those folks: Not relevant. Other related data of Item 12.12 a) Regarding stockholders’ conferences held prior to now three (3) years, we inform as follows: Year Type of Date/Time Quorum Stockholders’ Meeting 2022 Annual 04.26.2022 – 11:00am 92.09% of widespread shares and 41.35% of most well-liked shares 2022 Extraordinary 04.26.2022 – 11:10am 92.09% of widespread shares and 41.35% of most well-liked shares 2021 Annual and 04.27.2021 – 11:00am and 91.96% of widespread Extraordinary 11:10am shares and 31.67% of 248
most well-liked shares 2021 Extraordinary 01.31.2021 – 11:00am More than 90% of widespread shares 2020 Annual 04.28.2020 – 11:00am More than 90% of widespread shares and 31.75% of most well-liked shares 2019 Annual 04.24.2019 – 11:00am More than 90% of widespread shares and 29.08% of most well-liked shares b) Audit Committee: The Audit Committee has independence to set and have interaction coaching actions. In 2016, the Audit Committee began defining, twice a yr, the necessity for coaching recognized as important for its efficiency. Once it identifies a division in want of coaching, it engages coaching companies to satisfy a particular want for this division or its members. Another coaching part of the Audit Committee for matters underneath its duty it understands as important is benchmarking with different organizations, together with overseas, or with the very best practices recognized by consultants. In 2019, the Audit Committee promoted particular anti-cash laundering (AML) coaching with the attendance of members of the Committee and visitors representing the Internal Audit (Brazil and Latam) and Operating Risk Offices. Talks got by consultants in Brazil and overseas on (i) Anti cash laundering and combating terrorism financing (AML/CFT) and Anti-bribery and corruption (AB&C); and (ii) The Evolving Landscape of AML/CFT Management. In 2019, 2020 and 2021, a few of its members, individually, additionally participated in coaching periods on accounting, company governance, ethics, monetary and exterior audit associated matters. c) Relationship among the many Audit Committee, the Board of Officers, and the Co-chairpersons of the Board of Directors Based on the tasks set out in its Regulations and the evaluation of principal dangers of the Itaú Unibanco Conglomerate, the Audit Committee yearly defines its assembly schedule, together with with the Board of Officers. This annual planning is constantly revised by the Audit Committee, which can change its assembly planning at any time. Throughout 2019, 2020 and 2021, the Audit Committee held conferences not less than on a month-to-month foundation with the executives answerable for the Internal Audit, Compliance and Operating Risk and Internal Control departments, to observe the outcomes of the work carried out by these departments, in addition to bimonthly conferences to observe the operation of Itaú CorpBanca in Chile and its subsidiaries. Also throughout these years, the Audit Committee held conferences with the next departments: Finance, Corporate Security, Retail Banking, Wholesale Banking, Technology and Operations, Credit Risk, Market and Liquidity Risk, Legal, External Ombudsman’s Office, Internal Ombudsman’s Office, and with these chargeable for a variety of enterprise of Itaú Unibanco Conglomerate, together with overseas, overlaying Itaú Unibanco’s models in Latin America and within the Northern hemisphere (the U.S. and the Caribbean, Europe, Asia and Middle East). At least quarterly, since 2021 the Audit Committee has held a non-public assembly with the CEO of Itaú Unibanco Holding S.A., and has continued to carry, likewise for a variety of years, a joint assembly with the with the Co-chairpersons of the Board of Directors and with the CEO of Itaú Unibanco Holding S.A., wherein the Audit Committee submits its findings and suggestions and displays the progress of beforehand submitted suggestions. Relationship among the many Audit Committee, the Board of Directors and the Supervisory Council The Audit Committee reviews to the Board of Directors of Itaú Unibanco Holding S.A. On a quarterly foundation, the Chairperson of the Audit Committee submits to the Board of Directors a abstract of probably the most 249
important matters mentioned on the conferences held within the interval. On a semi-annual foundation, the Audit Committee submits its suggestions on the monetary statements, and it yearly submits the result of the analysis by the exterior auditor, inner auditor and working danger division, which can also be chargeable for the inner controls. The Audit Committee holds a joint assembly with the members of the Supervisory Council of Itaú Unibanco Holding SA not less than yearly, wherein it submits its findings on Itaú Unibanco’s consolidated monetary statements for the yr resulted in December of every yr or different matters of curiosity of the Supervisory Council. Relationship between the Board of Directors and the Supervisory Council The Supervisory Council attends the Board of Directors’ assembly wherein the Issuer’s annual monetary statements are examined (subsequently, yearly). Relationship between the Supervisory Council and the Board of Officers The Supervisory Council meets the Board of Officers of Itaú Unibanco Holding S.A. when the Issuer’s monetary statements are introduced (subsequently, 4 instances a yr). Relationship between the Board of Directors and the Investor Relations Officer The principal relationship channel between the Board of Directors and the Investor Relations Officer is the Disclosure and Trading Committee. This committee meets each quarter on a compulsory foundation, along with approving Material Facts and Announcements to the Market, amongst different supplies, on a well timed foundation. The composition of the Disclosure and Trading Committee strengthens the connection with the Board of Directors, since it’s composed of members of the Board of Directors, the Executive Committee, and the Board of Officers. Noteworthy is that the matters included within the agenda of the Disclosure and Trading Committee’s conferences could also be instantly associated to the Board of Directors or the Statutory Committees reporting to the Board of Directors, akin to: Management Report, Form 20-F, Reference Form, and Integrated Annual Report; Changing and creating new insurance policies; Opinions on the efficiency of Itaú Unibanco’s securities and the very best practices from market individuals, together with traders, ESG* and credit standing businesses, company governance, analysts, and commerce associations; Share bonus and share splits; Analyzing the trades made by the events adhering to the Securities Trading Policy. The Itaú Unibanco’s Investor Relations Officer additionally prepares supplies to the Board of Directors, evaluating the monetary efficiency of Itaú Unibanco with that of its principal rivals, along with calculating the market share of the important thing merchandise of the Bank and its subsidiaries. *Stands for Environmental, Social and Corporate Governance 250
d)In 2021, we developed the next coaching actions: Training Audience Frequency Adherence Ethics and Up to Biennial 93% Compliance officers Up to Anti-corruption Biennial 95% officers Adherence to Up to Board of Annual 96% Code of Ethics Directors Anti-Money Laundering and Up to officers Biennial 96% Counter Terrorist Financing E-studying on the Up to govt theme of Biennial 91.55% sustainability officers E-studying targeted on the rules of the Supplier Up to govt Relationship Biennial 93.12% Code, which is officers a part of the Integrity and Ethics Program. Online occasion “Meeting Itaú + Suppliers” overlaying the matters: ethics and corruption prevention, prevention of Critical suppliers Annual 51.11% cash laundering and combating the financing of terrorism, relationship conflicts and ombudsman. Note: biannually a lecture on the Prevention of Illicit Acts is given to the Board of Directors, in addition to reinforcement of the corruption prevention coaching to particular areas. 251
e) In 2021, the Internal Ombudsman’s Office acquired 2,211 calls associated to inter-private conflicts and conflicts of curiosity within the office involving the group’s staff. In order to information and self-discipline any staff who present conduct opposite to the rules of the Company’s Code of Ethics and requirements, and to reduce any associated dangers, the Company has carried out guiding/disciplinary measures to these concerned in calls investigated and deemed as authentic. Additionally, a variety of monitoring actions and motion and growth plans have been really helpful to any reported staff. f) Supporting documentation for the conferences of the Board of Directors: The members of the Board of Directors obtain, not less than 5 (5) days earlier than the assembly, each time doable, supporting paperwork for the matters that will likely be mentioned, so that every Director could also be correctly conscious of those matters and be ready for a productive cooperation in these debates. g) Information associated to the analysis technique of the Board of Directors, Committees and Executive Board is described in merchandise 12.1.c 252
REMUNERATION OF DIRECTORS 13.1. Describe the coverage or observe for the compensation of the Board of Directors, statutory and non-statutory govt board, supervisory council, statutory committees and audit, danger, monetary and compensation committees, addressing the next facets: a) the targets of the compensation coverage or observe, stating whether or not the compensation coverage was formally accredited, the physique chargeable for its approval, approval date and, if the issuer discloses the coverage, the place this doc may be consulted on the internet: Compensation governance Our compensation technique adopts clear and clear processes, aimed toward complying with the relevant regulation and the very best native and worldwide practices, in addition to at making certain consistency with our danger administration coverage. Formally accredited on February 23, 2021 by the Board of Directors, our compensation coverage is aimed toward consolidating our compensation rules and practices in order to draw, reward, retain and encourage administration members and staff within the sustainable operating of the enterprise, topic to correct danger limits and all the time in keeping with the stockholders’ pursuits. The pointers within the Compensation Policy additionally apply to firms of the Itaú Unibanco Conglomerate overseas, adjusted to the precise legal guidelines and markets, on the discretion of the personnel division. In 2017, the Extraordinary General Stockholders’ Meeting accredited the formalization and ratification of the Stock Grant Plan (“Stock Grant Plan”) so as to consolidate common guidelines in reference to lengthy-time period incentive packages involving inventory grants to administration members and staff of the Issuer and of its direct and oblique managed firms, in accordance with Instruction No. 567/15 of the Brazilian Securities and Exchange Commission (CVM). Among the packages talked about within the Stock Grant Plan, managed by the Compensation Committee, and with the Issuer’s administration members as goal audiences, are: the Variable Stock-Based Compensation (merchandise 5.1.1. of the doc), the Fixed Stock-Based Compensation (merchandise 5.1.2 of the doc, for members of the Board of Directors solely), and the Partners Program (merchandise 5.1.4 of the doc), additionally included within the data supplied on this merchandise 13. The Stock Grant Plan is accessible on: https://www.itau.com.br/investor-relations/ > Itaú Unibanco > Corporate Governance > Rules and Policies > Grant Plan. Additionally, so as to additional improve the transparency of our compensation mannequin, in 2020 we began to reveal a doc that consolidates the primary practices and rules underlying the fee of our administration members’ compensation. This doc, known as the Compensation Policy, discloses to the general public generally compensation mannequin bases and is accessible on https://www.itau.com.br/investor-relations/ > Itaú Unibanco > Corporate Governance > Rules and Policies > Policies > Management Members’ Compensation Policy. Additionally, in 2019 the Compensation Committee decided that the Executive Committee members ought to retain the possession of a minimal variety of the Issuer’s shares equal to 10 instances the annual fastened compensation of the CEO and to 5 instances the annual fastened compensation of the opposite members. By December 31, 2021, the CEO and nearly all of the members of the Executive Committee complied with the minimal possession requirement, which should be complied with inside as much as 5 years after the members take workplace. For 2022, the requirement stays the identical. The new members of the Executive Committee and the CEO have a interval of 5 years to adjust to this requirement. The Issuer additionally has a Stock Option Granting Plan (“Stock Option Plan”) for its administration members and staff, in addition to for the administration members and staff of its managed firms, permitting the alignment of the curiosity of administration members to these of the stockholders, as they share the identical dangers and good points supplied by the appreciation of their shares. No choice has been granted underneath our Stock Option Plan since 2012. For additional data on Changes within the Plan, please see Note 20 to the Financial Statements underneath IFRS. For additional data on the Stock Option Plan, please see subitems 13.4, 13.5, 13.6, 13.7, and 13.8. The Personnel Committee is chargeable for making institutional choices and supervising the implementation and operation of the Stock Option Plan. For additional data on the tasks and duties of the Personnel Committee and the Compensation Committee, please see merchandise 12.1 of the Reference Form accessible on the web site https://www.itau.com.br/investor.relations > Reports > CVM > Reference Form. 253
For illustrative functions, the yr to which the compensation refers will likely be thought of whatever the yr wherein it was successfully assigned, paid or acknowledged within the monetary statements. b) compensation composition, indicating: i-description of the compensation parts and the targets of every one In addition to the annual variable compensation, which seeks to bind members receiving this compensation to the Issuer’s initiatives and outcomes, the Issuer establishes a Partners Program supposed to align danger administration within the short-, medium- and lengthy-phrases, in addition to align the pursuits of the individuals of this system with these of our stockholders offering them with advantages which might be proportional to the good points obtained by the Issuer and its stockholders. Stock-based fee fashions are in accordance with the rules sought by the Issuer, since they function as instruments to encourage growth, particular person dedication and retention of administration members since inventory-based mostly funds are made in the long run. ii – with respect to the previous three years, state the proportion of every component to whole compensation 254
Monthly fastened Annual fastened Annual Year variable Benefits compensation compensation compensation 2021 25% 20% 53% 2% Board of 2020 27% 30% 41% 2% Directors 2019 22% 23% 53% 2% 2021 8% 0% 91% 1% Board of 2020 14% 0% 83% 3% Officers 2019 8% 0% 91% 1% 2021 100% 0% 0% 0% Supervisory 2020 100% 0% 0% 0% Council 2019 100% 0% 0% 0% 2021 100% 0% 0% 0% Audit 2020 100% 0% 0% 0% Committee 2019 100% 0% 0% 0% iii-calculation and adjustment methodology for every of the compensation parts The fastened compensation of members of the Board of Directors and Board of Officers, in addition to the profit plan granted to officers, shouldn’t be impacted by efficiency indicators. Board of Directors: The compensation to members of the Board of Directors is in keeping with market practices and takes under consideration the members’ résumés, their historical past on the Issuer and the actions they perform inside the scope of the Board of Directors itself, their service as Chair of the Board and another duties they could carry out. Accordingly, completely different compensation could also be paid to those members, and it might even differ in relation to members of the Board of Officers. This observe is in keeping with the Issuer’s objective of attracting excellent professionals from completely different fields with distinct experience {and professional} experiences. Monthly fastened compensation: it’s in keeping with market practices and revised continuously sufficient to draw certified professionals. Annual fastened compensation in shares: the annual fastened compensation because of the members of the Board of Directors is paid in most well-liked shares of the Issuer. Annual variable compensation in shares: for variable compensation in shares paid to members of the Board of Directors, the compensation follows the identical deferral phrases, circumstances and calculation of the worth of the shares introduced in merchandise “b) ii” beneath, which describes the supply of most well-liked shares of the annual variable compensation. To guarantee its compatibility with the worth creation, this compensation takes under consideration Itaú Unibanco Holding’s outcomes and could also be adjusted by the Compensation Committee. Board of Officers: Monthly fastened compensation: it’s established in accordance with the place held and based mostly on the inner equality precept, since all officers holding the identical place earn the identical month-to-month fastened compensation quantity, additionally offering mobility throughout our completely different companies. Fixed compensation quantities are outlined taking into consideration market competitiveness. Annual variable compensation(1) 255
(1) Within the bounds established by laws, the compensation of the Officers answerable for inner management and danger departments shouldn’t be associated to the efficiency of the enterprise areas they management and assess in order to keep away from any conflicts of curiosity. However, regardless that the compensation shouldn’t be impacted by the outcomes of the enterprise areas, it’s nonetheless topic to the influence arising from the Company’s outcomes. b) i. Distribution of annual variable compensation(2): (2) In accordance with Resolution No. 3,921 of the National Monetary Council (CMN), a portion of the variable compensation should be deferred. b) ii. Delivery of most well-liked shares associated to the annual variable compensation of the Board of Officers: 256
Supervisory Council: the members of the Supervisory Council are paid solely a month-to-month fastened compensation quantity and aren’t entitled to the profit plan. In accordance with relevant laws, compensation to every performing member of the Supervisory Council can’t be decrease than 10% of the fastened compensation assigned to every officer (i.e., not together with advantages, illustration allowances and revenue sharing). Audit Committee: the members of the Audit Committee are paid solely a month-to-month fastened compensation quantity and aren’t entitled to the profit plan. For these members of the Audit Committee who’re additionally members of the Board of Directors, the compensation coverage of the Board of Directors is adopted. iv-causes that justify the composition of compensation In addition to the annual variable compensation, which seeks to bind members receiving this compensation to the Issuer’s initiatives and outcomes, the Issuer has established a Partners Program supposed to align danger administration within the short-, medium- and lengthy-phrases, in addition to align the pursuits of the individuals of this system with these of our stockholders offering them with advantages which might be proportional to the good points obtained by the Issuer and its stockholders. Stock-based fee fashions are in accordance with the rules sought by the Issuer, since they function as instruments to encourage growth, particular person dedication and retention of administration members since inventory-based mostly funds are made in the long run. v-variety of members who aren’t compensated There are not any members who aren’t compensated. c) principal efficiency indicators which might be considered in figuring out every compensation component: i) Board of Directors 257
The fastened compensation of the Board of Directors shouldn’t be impacted by efficiency indicators. For fee of variable inventory-based mostly compensation to members of the Board of Directors, to make sure its compatibility with lengthy-time period worth creation, this compensation takes under consideration Itaú Unibanco Holding’s outcomes, and could also be adjusted by the Compensation Committee. ii) Officers The fastened compensation of officers shouldn’t be impacted by efficiency indicators. On the opposite hand, the variable compensation is topic to a efficiency evaluation carried out by the supervisor based mostly on the priorities for the yr mentioned along with the officer who’s being assessed. d) how the compensation is structured to replicate the evolution of efficiency indicators A good portion of the full quantity paid to officers is within the type of variable compensation, which is instantly affected by efficiency indicators. Therefore, the higher the indications, the upper the compensation and vice versa. e) how the compensation coverage or observe is in keeping with the issuer’s short-, medium- and lengthy-time period pursuits 258
The administration members’ compensation should be suitable with the danger administration coverage and formulated in order to not encourage behaviors that improve danger publicity above the degrees thought of prudent within the short-, medium- and lengthy-time period methods adopted by the establishment. The annual variable compensation takes under consideration three components: the administration member’s efficiency; the outcomes of the enterprise space; and/or the Issuer’s outcomes, and is paid as follows: 30% in money on demand and 70% within the Issuer’s most well-liked shares or inventory-based mostly devices, deferred for fee inside three years, within the proportion of 1/3 of the quantity due per yr. Additionally, the Issuer has an institutional program known as the Partners Program, by way of which administration members and staff with a historical past of excellent contribution and distinctive efficiency are entitled to make use of half or their whole annual variable compensation to buy the Issuer’s most well-liked shares (“Own Shares”). If they maintain the possession of those Own Shares, freed from any liens or encumbrances and of different suspensive circumstances supplied for within the Program Regulation, for three- and 5-yr phrases as from the preliminary funding, the return on funding will likely be by way of the receipt of the Issuer’s most well-liked shares (“Partners Shares”) additionally for three- and 5-yr phrases. These Partner’s Shares acquired as a consideration will stay underneath a lock-up for a 5-yr interval as from the preliminary funding within the Own Shares. Therefore, variable compensation is paid inside not less than three and on the most 5 years, and through this era it’s topic to a doable discount as a result of important decreases in realized recurring web earnings of the Issuer or to a damaging results of the relevant enterprise space, besides when the discount or damaging outcome arises from extraordinary, unpredictable occasions exterior the Itaú Unibanco Conglomerate, which additionally have an effect on different monetary establishments and aren’t associated to actions or omissions of administration members. The Compensation Committee could determine to use a malus even in these instances. On the opposite hand, within the Partners Program, the shares acquired within the aforementioned intervals, along with remaining topic to a lower in recurring web earnings, are additionally topic to the danger of worth variations within the Issuer’s most well-liked shares for as much as 5 years. This construction displays the intention of aligning danger administration over time, along with offering advantages to administration members based mostly on efficiency in the identical proportion because it advantages the Issuer and its stockholders. f) the existence of compensation supported by direct or oblique subsidiaries, managed firms or controlling stockholders: The compensation of many members of the Board of Officers is supported by managed firms (please see subitem 13.15), and the quantities indicated on this merchandise 13 already embrace the full compensation paid by the Issuer and its managed firms. g) the existence of any compensation or profit associated to the incidence of a given company occasion, such because the disposal of the Issuer’s stockholding management: There is not any compensation or profit associated to the incidence of a company occasion, regardless that it’s doable on the Issuer’s discretion. h) the practices and procedures adopted by the board of administrators to find out the person compensation of the board of administrators and board of officers, indicating: i. the issuer’s our bodies and committees that participate within the determination-making course of, figuring out how they accomplish that We have a statutory Compensation Committee that reviews to the Board of Directors, and its duties embrace: 259
Another physique concerned within the governance of administration compensation is the Personnel Committee, which additionally reviews to the Board of Directors and its duties embrace: i. In relation to the Stock Option Plan: being chargeable for institutional choices and overseeing their implementation and operation; and approving grants of Simple Options. ii. In relation to the Partners Program: being chargeable for the principles associated to the nomination and elimination of beneficiaries. the factors and methodology used to find out particular person compensation, indicating whether or not research are used to verify market practices and, in that case, the comparability standards and the scope of those research We undertake compensation and profit methods that adjust in line with the world of exercise and market parameters. We periodically verify these parameters by way of: • commissioning wage surveys carried out by specialised consultants; • collaborating in surveys carried out by different banks; and • collaborating in specialised boards on compensation and advantages. iii. how usually and the way the board of administrators assesses the adequacy of the issuer’s compensation coverage The Board of Directors assesses the adequacy of the Issuer’s compensation coverage not less than yearly. The Compensation Committee beforehand assesses and proposes enhancements within the compensation coverage, if relevant. After this detailed evaluation by the Compensation Committee, the coverage is submitted to the Board of Directors for appreciation. 13.2- With respect to the compensation of the Board of Directors, Board of Statutory Officers, and Fiscal Council for the previous three years and to that decided for the present yr, please put together a desk containing: Total compensation predicted for 2022-Annual Amounts Statutory Board of Board of Directors Officers Fiscal Council Total (R$) Number of members 12.00 25.00 6.00 43.00 Number of compensated members 12.00 25.00 6.00 43.00 Annual fastened compensation, comprising: 29,165,325 36,626,545 1,116,000 66,907,870 Salary or administration charges 15,960,000 35,040,000 1,116,000 52,116,000 Direct and oblique advantages 485,325 1,586,545 n/a 2,071,870 Compensation for participation in committees n/a n/a n/a n/a Other (particular charges) 12,720,000 0 0 12,720,000 Annual variable compensation, comprising: 0 0 n/a 0 Bonuses (1) (1) (1) (1) Profit sharing (2) (2) (2) (2) Compensation for attending conferences n/a n/a n/a n/a Commissions n/a n/a n/a n/a Description of different variable compensation (particular charges) n/a n/a n/a n/a Post-employment advantages 740,875 2,864,883 0 3,605,757 Benefits arising from termination of mandate n/a n/a n/a n/a Stock-based compensation together with choices 45,093,801 385,508,573 n/a 430,602,373 Total compensation 75,000,000 425,000,000 1,116,000 501,116,000 The 2022 Annual General Stockholders’ Meeting accredited an combination compensation quantity of R$500 million for the members of the administration our bodies, whatever the yr wherein these quantities are successfully assigned or paid. For the Supervisory Council, the proposal is for the Annual General Stockholders’ Meeting to approve a month-to-month particular person compensation of R$22,000 for the efficient members and of R$9,000 for the alternate members. The accredited compensation quantities could also be paid both in native forex, the Issuer’s shares or another method administration finds handy. The quantities will likely be paid within the proportions described within the desk above. In addition to the quantities accredited by the Annual General Stockholders’ Meeting, the members of the administration our bodies will obtain statutory revenue sharing, in line with paragraph 1, Article 152, of Brazilian 260
Corporate Law, restricted to the annual compensation of administration members accredited at Annual General Stockholders’ Meeting or to 10% of the Issuer’s revenue, whichever is decrease. Notes: 1. (1) As talked about in merchandise 13.1 and proven within the desk above, the annual variable compensation mannequin needs to be recorded in “Profit sharing” (paid in money) and “Stock-based compensation” (paid in shares). Therefore, the bonus merchandise is zero. 2. (2) “Profit sharing” quantities (paid in money) aren’t included within the desk above, which solely exhibits the estimated breakdown of the mixture compensation quantities to be accredited by stockholders on the Annual General Stockholders’ Meeting. 3. We wish to make clear that, in line with the steerage of the CVM/SEP/CIRCULAR LETTER No. 1/2021, the quantities introduced within the desk above don’t embrace quantities associated to Social Security (INSS), in another way from what was reported in earlier years, in line with particular notes. 13.2- With respect to the compensation of the Board of Directors, Board of Statutory Officers, and FiscalCouncil for the previous three years and to that decided for the present yr, please put together a desk containing: Total compensation for 2021-Annual Amounts Statutory Board of Board of Directors Officers Fiscal Council Total (R$) Number of members 12.50 25.50 6.00 44.00 Number of compensated members 12.50 25.50 6.00 44.00 Annual fastened compensation, comprising: 26,958,355 36,307,678 749,000 64,015,033 Salary or administration charges 14,793,167 34,786,961 749,000 50,329,127 Direct and oblique advantages 465,188 1,520,717 n/a 1,985,906 Compensation for participation in committees n/a n/a n/a n/a Other (particular charges) 11,700,000 0 0 11,700,000 Annual variable compensation, comprising: 5,294,693 83,533,379 n/a 88,828,072 Bonuses (1) (1) (1) (1) Profit sharing 5,294,693 83,533,379 n/a 88,828,072 Compensation for attending conferences n/a n/a n/a n/a Commissions n/a n/a n/a n/a Description of different variable compensation (particular charges) n/a n/a n/a n/a Post-employment advantages 727,905 3,067,495 n/a 3,795,400 Benefits arising from termination of mandate n/a n/a n/a n/a Stock-based compensation together with choices 25,515,769 302,633,438 n/a 328,149,207 Total compensation 58,496,721 425,541,991 749.000 484,787,712 The 2021 Annual General Stockholders’ Meeting accredited an combination compensation quantity of R$450 million for the members of the administration our bodies, whatever the yr wherein these quantities are successfully assigned or paid. The Annual General Stockholders’ Meeting accredited the month-to-month particular person compensation of R$15,000 for the efficient members and of R$6,000 for the alternate members of the Supervisory Council. The accredited compensation quantities could also be paid both in native forex, the Issuer’s shares or another method administration finds handy. The quantities will likely be paid within the proportions described within the desk above. In addition to the quantities accredited by the Annual General Stockholders’ Meeting, the members of the administration our bodies will obtain statutory revenue sharing, in line with paragraph 1, Article 152, of Brazilian Corporate Law, restricted to the annual compensation of administration members accredited on the Annual General Stockholders’ Meeting or to 10% of the Issuer’s revenue, whichever is decrease. Notes: 1. (1) As talked about in merchandise 13.1 and proven within the desk above, the annual variable compensation mannequin needs to be recorded in “Profit sharing” (paid in money) and “Stock-based compensation” (paid in shares). Therefore, the bonus merchandise is zero. 2. The parts in shares or inventory-based mostly devices have been proven within the “Stock-based compensat