MD&A and Financial Statements (PDF) - Banco Itaú

3 rd Quarter 2010 

Management Discussion & Analisys 

and Complete Financial Statements 

Itaú Unibanco Holding S.A.

Itaú Unibanco 

Contents 

Management Discussion and Analysis 1 

Complete Financial Statements 

49

ITAÚ UNIBANCO HOLDING S.A. 

RESULTS FOR THE PERIOD FROM JANUARY TO SEPTEMBER 2010 

We present below the main achievements of Itaú Unibanco Holding S.A. (Itaú Unibanco) in the period from 

January to September 2010. 

1. Net income for the period from January to September 2010 amounted to R$ 9.4 billion, with annualized 

return of 23.3% on average equity. Recurring net income was R$ 9.6 billion, with annualized return of 

23.8%. Consolidated stockholders’ equity totaled R$ 57.2 billion at the end of September 2010. 

2. Itaú Unibanco paid or provided for taxes and contributions in the amount of R$ 9.4 billion in the period from 

January to September 2010. The Bank also withheld and passed on taxes, which were directly levied on 

financial operations, in the amount of R$ 5.7 billion. 

3. Consolidated assets totaled R$ 686.2 billion at September 30. The loan portfolio, including endorsements 

and sureties, reached R$ 313.2 billion, an increase of 16.6% as compared to the balance at September 30, 

2009. In Brazil, the balance of loans to individuals reached R$ 118.8 billion, with a growth of 15.9% as 

compared to the same period of 2009. The balance of the large company portfolio reached R$ 104.4 billion, 

whereas the very small, small and middle-market company portfolio reached R$ 76.4 billion, a growth of 

30.0% as compared to the same period of 2009. In relation to the previously mentioned items, the real estate 

loan portfolio showed an outstanding performance, having reached R$ 12.0 billion, a growth of 52.7% as 

compared to the same period of 2009. 

4. Free, raised and managed assets totaled R$ 941.9 billion, an increase of 13.1% as compared to September 

30, 2009. The Basel ratio stood at 15.3% at the end of September 2010, based on economic-financial 

consolidated. 

5. Itaú Unibanco’s preferred shares rose 12.7%, as compared to the quotation of September 30, 2009. The 

market value at Stock Exchanges of Itaú Unibanco, calculated considering the average quotation of 

preferred shares outstanding at the last trading session of the period, reached R$ 182.2 billion at the end of 

September. According to the company Bloomberg, Itaú Unibanco ranked tenth among banks in the world at 

September 30, 2010, having market value as parameter. 

6. Itaú BBA took part in operations of debentures and promissory notes that totaled R$ 12.1 billion, and of 

securitization that totaled R$ 2.3 billion in the first nine months of 2010. In the Brazilian Financial and Capital 

Markets Association (ANBIMA) ranking, it occupied the first position regarding distribution of fixed income in 

September 2010, with a market share of 20.0%, and the second position in international issues, where it 

acted as joint bookrunner of offerings with total volume of US$ 11.6 billion. Noteworthy in the period was the 

offering of Brazilian sovereign bonds carried out by Itaú BBA, which became the first Brazilian bank to lead 

the funding for the National Treasury through Global 2041, with a total volume of US$ 500 million. In capital 

markets, in the first nine months it coordinated ten public offerings that totaled R$ 130.8 billion, consolidating 

its leadership position among the market leaders. In September 2010, it acted as coordinator in 61% of 

transactions, which accounted for 91% of the financial volume issued in this year, and it also provided 

financial advisory services to 26 merger and acquisition operations, closing the period in the second position 

of Thomson ranking in number of transactions. 

7. Itaú Unibanco completed on October 24, 2010, before two years have passed after the merger, the 

integration of the whole base of points of service throughout Brazil. In total, 998 branches and 245 banking 

service stations of Unibanco were fully redesigned and integrated to 3,900 points of Itaú, thus creating a 

network of approximately five thousand units in the whole country, all of which with the Itaú brand. 

8. Itaú Unibanco employed approximately 107 thousand people at the end of September, including 

approximately 6 thousand employees in foreign units. The employee’s fixed compensation plus charges and 

benefits totaled R$ 8.8 billion for the period from January to September 2010. Welfare benefits granted to 

employees and their dependants totaled R$ 1.3 billion. In addition, approximately R$ 147 million were 

invested in education, training and development programs.

9. For the eleventh consecutive year, Itaú Unibanco is the only Latin American financial institution in the Dow 

Jones Sustainability Index (DJSI) portfolio since it was created. In the 2010/2011 review, it achieved top 

score (100%) in the “Human Capital Development” criterion, and had a score above the average of the 

sector in all of the reviewed items. 

10. In the period, social and cultural investments of Itaú Unibanco reached R$ 137 million, of which we highlight 

the investments in education and culture. 

The complete financial statements and the Management’s Discussion & Analysis Report of Itaú Unibanco, 

which present further details on the results for the period, are available on the Itaú Unibanco website: www.itauunibanco.com.br/ri. 

São Paulo, November 1, 2010. 

Pedro Moreira Salles 

Chairman of the Board of Directors

3 rd quarter, 2010 

Management Discussion 

& Analysis

Contents 

Itaú Unibanco Holding S.A. 

Executive Summary 3 

Analysis of Net Income 10 

Managerial Financial Margin 11 

Results from Loan and Lease Losses 13 

Banking Service Fees and Banking Charge Revenues 14 

Non-interest Expenses 15 

Tax Expenses for ISS, PIS, Cofins and Others 18 

Income Tax and Social Contribution 18 

Balance Sheet 19 

Balance Sheet by Currency 24 

Value at Risk 25 

Ownership Structure 26 

Pro Forma Financial Statements by Segment 29 

Commercial Bank 34 

Itaú BBA 35 

Consumer Credit 35 

Insurance, Pension Plans and Capitalization 36 

Activities Abroad 41 

Report of Independent Accountants 47 

Complete Financial Statements 49 

The tables in this report show the figures in millions. Variations, however, are calculated in units. 

Future expectations arising from the reading of this analysis should take into consideration the risks and uncertainties that involve any activities and that are outside the 

control of the companies of the conglomerate (political and economic changes, volatility in interest and foreign exchange rates, technological changes, inflation, 

financial disintermediation, competitive pressures on products and prices, and changes in tax legislation). 

2 

Management Discussion & Analysis 3 rd Quarter, 2010

Executive Summary 

Third Quarter of 2010 


Information and financial indicators of Itaú Unibanco Holding S.A. (Itaú Unibanco) from the third quarter of 2010 are 

presented below. 

R$ million (except where indicated) 

Highlights 

Statements of Income 3 rd Q/10 2 nd Q/10 3 rd Q/09 jan-sep/10 jan-sep/09 

Net Income – Parent Company 3,034 3,165 2,268 9,433 6,854 

Recurring Net Income 3,158 3,298 2,687 9,624 7,677 

Managerial Financial Margin (1) 11,204 10,892 10,814 32,485 31,933 

Shares (R$) 

Consolidated Net Income per share (2) (3) 0.67 0.70 0.50 2.08 1.52 

Consolidated Recurring Net Income per share (2) (3) 0.70 0.73 0.60 2.12 1.70 

Number of Outstanding Shares – in thousands (2) 4,540,463 4,533,922 4,523,759 4,540,463 4,523,759 

Book Value per share 12.60 12.15 10.80 12.60 10.80 

Dividends/JCP net of taxes (4) (R$ Million) 964 973 806 2,887 2,303 

Dividends/JCP net of taxes (4) per share 0.21 0.21 0.20 0.64 0.53 

Market Capitalization (5) (R$ Million) 182,209 149,619 161,046 182,209 161,046 

Market Capitalization (5) (US$ Million) 107,549 83,053 90,572 107,549 90,572 

Performance Ratios (%) 

Return on Average Equity – Annualized (6) 21.6% 23.4% 18.9% 23.3% 19.8% 

Recurring Return on Average Equity – Annualized (6) 22.5% 24.4% 22.4% 23.8% 22.2% 

Return on Average Assets – Annualized (7) 1.8% 2.0% 1.5% 1.9% 1.5% 

Recurring Return on Average Assets – Annualized (7) 1.9% 2.1% 1.8% 2.0% 1.7% 

Solvency Ratio (BIS Ratio) 15.3% 15.7% 16.3% 15.3% 16.3% 

Annualized Net Interest Margin with clients (8) 12.2% 12.6% 12.6% 12.3% 11.8% 

Nonperforming Loans Index (NPL over 90 days) 4.3% 4.6% 5.9% 4.3% 5.9% 

Coverage Ratio (Provision for Loan Losses/Nonperforming Loans over 90 days) 196% 187% 172% 196% 172% 

Efficiency Ratio (ER) (9) 49.2% 47.3% 45.0% 46.9% 45.5% 

Risk Adjusted Efficiency Ratio (RAER) (10) 71.6% 70.8% 74.5% 70.4% 75.1% 

Balance Sheet Sep 30,10 Jun 30,10 Sep 30,09 

Total Assets 686,248 651,583 612,399 

Total Credit Portfolio, including Sureties, Endorsements and Guarantees 313,189 296,192 268,694 

Credit Operations (A) 279,035 263,498 237,099 

Sureties, Endorsements and Guarantees 34,155 32,694 31,594 

Deposits + Debentures + Borrowings and Onlending + Securities (B) (11) 366,833 340,559 308,019 

Credit Operations/Funding (A/B) 76.1% 77.4% 77.0% 

Stockholders' Equity of Parent Company 57,225 55,074 48,862 

Relevant Data 

Assets Under Management (AUM) 357,495 344,689 310,346 

Employees (Individuals) 106,879 105,847 102,754 

Number of Points of Service 34,991 35,267 35,435 

Branches (Units) 3,929 3,931 3,951 

CSBs (Units) 942 938 960 

Automated Teller Machines (Units) (12) 30,120 30,398 30,524 

(1) Described on page 11. 

(2) The number of shares outstanding was adjusted to reflect the 10% share bonus that occurred on August 28, 2009. 

(3) Calculated based on the weighted average of the number of outstanding shares. 

(4) JCP– Interest on Own Capital. Amounts paid/provisioned (Note 16 – b II to the Financial Statements). 

(5) Total number of shares outstanding (common shares and non-voting shares) multiplied by the average price of non-voting share on the last trading day in the period. 

(6) Annualized Return was calculated by dividing Net Income of the parent company by the Average Stockholders’ Equity of the parent company. The quotient of this division 

was multiplied by the number of periods of the year to derive the annualized index. 

(7) Annualized Return was computed by dividing Net Income of the parent company by Average Assets. The quotient of this division was multiplied by the number of periods 

of the year to arrive at the annual ratio. 

(8) Does not include Margin with Market. –See details of criteria change on page 12. 

(9) ER = Non-interest Expenses/(Managerial Financial Margin + Banking Fees and Charge Revenues + Result from Operations of Insurance, Pension Plans and Capitalization 

before Retained Claims + Other Operating Income – Tax Expenses for ISS/PIS/Cofins and Other). 

(10) RAER = (Non-interest Expenses + Results from Loan Losses + Retained Claims)/(Managerial Financial Margin + Banking Fees and Charge Revenues + Result from 

Operations of Insurance, Pension Plans and Capitalization before Retained Claims + Other Operating Income – Tax Expenses for ISS/PIS/Cofins and Other) . 

(11) As described on page 22. 

(12) Includes ESBs (electronic service branches) and service points in third-party establishments. 

3 





Net Income and Recurring Net Income 

Itaú Unibanco’s consolidated net income amounted to R$ 3,034 million in the third quarter of 2010. This figure 

incorporates the impact on income of the provision for contingencies – economic plans, as shown in the table below, 

leading to the recurring net income for the period. 

R$ million 

3 rd Q/10 2 nd Q/10 Jan-Sep/10 Jan-Sep/09 

Recurring Net Income 3,158 3,298 9,624 7,677 

Sale of investments - - - 212 

Program for Settlement or Installment Payment of Federal Taxes- Law No.11,941/09 - - 145 - 

Provision for contingencies – economic plans (124) (133) (335) (166) 

Amortization of goodwill (*) - - - (506) 

Itaú Unibanco Association with CBD - - - (363) 

Total non-recurring effects (124) (133) (190) (823) 

Net Income 3,034 3,165 9,433 6,854 

Note: 

The impacts of the non-recurring events described above are net of tax effects. (Further details are presented in Note 22-K of the Financial Statements). 

(*) For first nine months of 2009, refers basically to the Redecard operation. 

Managerial Statement of Income 

The Management Discussion and Analysis Report 

presented is based on the Managerial Statement of 

Income, which arises from reclassifications made in the 

accounting statement of income. Basically, the tax effects 

of hedge investments abroad, originally included in tax 

expenses (PIS and Cofins) and income tax and social 

contribution on net income, were reclassified to financial 

margin. 

Our strategy for management of exchange risk of capital 

invested abroad is intended to prevent effects on income 

from Exchange variation. For this purpose, the exchange 

risk is neutralized and the investments are remunerated in 

reais, through the use of derivative financial instruments. 

Our strategy to hedge investments abroad also considers 

the impacts of all related tax effects. In this third quarter, 

the Real appreciated 6.0% with respect to the U.S. dollar 

and depreciated 4.8% with respect to the euro. 

Macroeconomic Indices 

Sep 30,10 Jun 30,10 Sep 30,09 

EMBI Brazil Risk 203 248 234 

CDI (In the Quarter) 2.6% 2.2% 2.2% 

Dollar Exchange Rate (Quotation in R$) 1.6942 1.8015 1.7781 

Dollar Exchange Rate (Var. in the Quarter) -6.0% 1.2% -8.9% 

Euro Exchange Rate (Quotation in R$) 2.3104 2.2043 2.6011 

Euro Exchange Rate (Var. in the Quarter) 4.8% -8.4% -5.1% 

IGP-M (In the Quarter) 2.1% 2.8% -0.4% 

Savings Rate (In The Quarter) 1.8% 1.6% 1.6% 

4 




Reconciliation between Accounting and Managerial Statement of Income 


R$ million 


3 rd Quarter/10 

Accounting 

Non-recurring 

Effects 

Tax Effect of 

Hedge 

Managerial 

Managerial Financial Margin 11,972 - (768) 11,204 

Financial Margin with Clients 10,298 - - 10,298 

Financial Margin with Market 1,674 - (768) 906 

Result of Loan Losses (2,935) - - (2,935) 

Expense for Allowance for Loan Losses (4,069) - - (4,069) 

Recovery of Credits Written Off as Losses 1,134 - - 1,134 

Net Result from Financial Operations 9,037 - (768) 8,269 

Other Operating Income/(Expenses) (3,870) 188 89 (3,593) 

Banking Fees and Charge Revenues 4,451 - - 4,451 

Result from Insurance, Pension Plans and Capitalization Operations 685 - - 685 

Non-interest Expenses (8,162) 188 - (7,975) 

Tax Expenses for ISS, PIS, Cofins and Other Taxes (1,002) - 89 (913) 

Equity in earnings of affiliates and other investments 64 - - 64 

Other Operating Income 94 - - 94 

Operating Income 5,167 188 (679) 4,676 

Non-operating Income 3 - - 3 

Income before Tax and Profit Sharing 5,171 188 (679) 4,679 

Income Tax and Social Contribution (1,868) (64) 679 (1,253) 

Profit Sharing (52) - - (52) 

Minority Interests (216) - - (216) 

Net Income 3,034 124 - 3,158 

R$ million 


2 nd Quarter/10 

Accounting 

Non-recurring 

Effects 

Tax Effect of 

Hedge 

Managerial 

Managerial Financial Margin 10,874 - 18 10,892 

Financial Margin with Clients 10,001 - - 10,001 

Financial Margin with Market 873 - 18 891 

Result of Loan Losses (3,053) - - (3,053) 

Expense for Allowance for Loan Losses (4,019) - - (4,019) 

Recovery of Credits Written Off as Losses 967 - - 967 

Net Result from Financial Operations 7,822 - 18 7,839 

Other Operating Income/(Expenses) (3,325) 201 4 (3,121) 

Banking Fees and Charge Revenues 4,300 - - 4,300 

Result from Insurance, Pension Plans and Capitalization Operations 719 - - 719 

Non-interest Expenses (7,771) 201 - (7,570) 

Tax Expenses for ISS, PIS, Cofins and Other Taxes (974) - 4 (970) 

Equity in earnings of affiliates and other investments 45 - - 45 

Other Operating Income 357 - - 357 

Operating Income 4,497 201 21 4,719 

Non-operating Income (1) - - (1) 

Income before Tax and Profit Sharing 4,495 201 21 4,717 

Income Tax and Social Contribution (1,029) (68) (21) (1,119) 

Profit Sharing (54) - - (54) 

Minority Interests (247) - - (247) 

Net Income 3,165 133 - 3,298 

5 




Recurring Net Income (R$ million) and 

Annualized Recurring Return on Average 

Equity (%) 

3,168 3,298 3,158 

2,339 2,562 2,429 2,687 2,813 

Recurring Net Income 

Annualized Recurring ROE without Migration Expenses 

Annualized Recurring ROE 

Loan Portfolio (*) 

Foreign Currency 

Local Currency 

(*) Includes endorsements and sureties. 

Managerial Financial Margin 

3,207 

3,453 3,426 

24.8 25.6 24.4 

21.2 23.1 21.1 22.4 22.6 24.4 24.4 22.5 

4th 

Q/08 

Sep/10 

Jun/10 

Mar/10 

Dec/09 

Sep/09 

Jun/09 

Mar/09 

Dec/08 

1st 

Q/09 

2nd 

Q/09 

3rd 

Q/09 

4th 

Q/09 

1st 

Q/10 

2nd 

Q/10 

3rd 

Q/10 

Recurring Net Income without Migration Expenses 

42.5 

52.3 

54.3 

258.0 

247.3 

242.0 

231.5 

223.4 

220.4 

217.7 

R$ billion 

40.8 272.4 

313.2 

38.2 

37.5 

36.3 

37.2 

296.2 

284.7 

278.4 

268.7 

266.0 

272.7 

271.9 

R$ million 

Loan Portfolio with Endorsements and Sureties 


In the third quarter of 2010, the recurring net income added up to R$ 3,158 

million and on a year-to-date basis, the recurring net income totaled R$ 9,624 

million, corresponding to a 25.4% growth when compared to the prior period. 

On October 24, 2010, less than two years of the association, Itaú Unibanco 

completed the integration of its entire branch and sales network throughout 

Brazil. Unibanco branches and client service branches (CSBs) were fully renovated 

and integrated into Itaú’s service points. If migration expenses incurred in 2010 

had not been considered, the recurring net income for the third quarter would 

have been R$ 3,426 million. 

As of September 30, 2010, the parent company stockholders’ equity totaled R$ 

57,225 million and the annualized recurring return on average equity reached 

22.5% (without considering migration expenses, the recurring return would have 

been 24.4%). 

R$ million 

Variation (%) 

Sep 30,10 Jun 30,10 Dec 31,09 Sep 30,09 

Sep/10 – Sep/10 – Sep/10 – 

Jun/10 Dec/09 Sep/09 

Individuals 118,827 114,200 107,812 102,558 4.1% 10.2% 15.9% 

Credit Card 30,481 29,835 29,313 25,215 2.2% 4.0% 20.9% 

Personal Loans 23,686 22,538 20,627 21,297 5.1% 14.8% 11.2% 

Vehicles 57,334 55,165 52,276 50,670 3.9% 9.7% 13.2% 

Mortgage Loans 7,025 6,342 5,249 4,970 10.8% 33.8% 41.4% 

Rural Loans 302 320 348 407 -5.8% -13.3% -25.9% 

Companies 180,814 169,437 158,862 155,594 6.7% 13.8% 16.2% 

Corporate 104,411 98,643 95,832 96,833 5.8% 9.0% 7.8% 

Very Small, Small and Middle Market 76,402 70,794 63,030 58,761 7.9% 21.2% 30.0% 

Argentina/Chile/Uruguay/Paraguay 13,548 12,555 11,708 10,541 7.9% 15.7% 28.5% 

Total 313,189 296,192 278,382 268,693 5.7% 12.5% 16.6% 

Total Retail (*) 195,230 184,994 170,842 161,319 5.5% 14.3% 21.0% 

Endorsements and Sureties 34,155 32,694 32,431 31,594 4.5% 5.3% 8.1% 

Individuals 186 189 187 181 -1.9% -0.8% 2.5% 

Corporate 30,238 29,135 29,150 28,316 3.8% 3.7% 6.8% 

Very Small, Small and Middle Market 2,962 2,577 2,414 2,485 14.9% 22.7% 19.2% 

Argentina/Chile/Uruguay/Paraguay 769 792 680 611 -2.9% 13.2% 25.8% 

(*) Includes Credit Card, Personal Loans, Vehicles, Rural Loans (Individuals), Mortgage Loans (Individuals) and Very Small, Small and Middle Market. 

Note: The acquired payroll credit portfolio started to be considered as corporate risk, and to achieve comparability, the prior quarters were adjusted. 

Mortgage Loans and Rural Loans portfolios from the businesses segment are allocated according to the client’s size. For more details see page 21. 

At September 30, 2010, our loan and financing portfolio, including sureties and 

endorsements, added up to R$ 313,189 million, growing by 5.7% quarter-onquarter. 

When compared to the previous year, the portfolio increased by 16.6%. 

In the individual segment, the vehicles portfolio stands out with a 3.9% growth, 

reaching R$ 57,334 million, despite the end of the IPI tax benefit in April 2010. For 

the 12-month period, our main highlights were the credit card, vehicles and 

mortgage loans portfolios, which increased by 20.9%, 13.2% and 41.4%, 

respectively. In the companies segment, our mains highlights in the period ended 

September 30, 2010 were the turnaround of the corporate subsegment with a 

5.8% rise in the portfolio, which totaled R$ 104,411 million, as well as the 

maintenance of the good performance of the very small, small and middle 

market subsegment with a 7.9% increase, which reached R$ 76,402 million. 

Considering a 12-month period, the most significant increase was seen in the 

very small, small and middle market subsegment, with a 30.0% growth. 

3rd Q/10 

906 

10,298 

11,204 

2nd Q/10 

1st Q/10 

4th Q/09 

3rd Q/09 

2nd Q/09 

1st Q/09 

4th Q/08 

891 

1,019 

1,488 

1,456 

1,349 

1,329 

499 

10,001 

9,370 

9,324 

9,359 

9,247 

9,194 

9,416 

10,892 

10,388 

10,813 

10,814 

10,596 

10,523 

9,915 

The managerial financial margin for the third quarter of 2010 totaled R$ 11,204 

million, corresponding to a 2.9% rise quarter-on-quarter. The managerial financial 

margin with clients grew by 3.0%, reaching R$ 10,298 million, driven by the 

increase of the loan portfolio. With respect to the financial margin with the 

market, we observed a 1.7% increase from the prior period, totaling R$ 906 

million. 

6 

Financial Margin with Clients 

Financial Margin with Market 



NPL Ratio over 90 days (%) 

6.9% 

3rd Q/10 

2nd Q/10 

1st Q/10 

4th Q/09 

3rd Q/09 

2nd Q/09 

1st Q/09 

4th Q/08 

7,446 

7.9% 8.1% 8.1% 7.6% 

6.8% 

6.4% 

6.0% 

5.4% 5.9% 5.6% 

4.9% 

4.4% 

4.6% 

3.9% 

4.1% 4.0% 

4.3% 

3.1% 

3.3% 3.2% 2.9% 

1.9% 

1.3% 

Dec/08 Mar/09 Jun/09 Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 

Individuals Total Companies 

Banking fees and charge revenues 

Non-interest Expenses 

6,900 6,791 6,895 

7,397 

6,722 

6,663 

3,617 

3,526 

7,570 

3,853 

4,120 

4,063 

4,451 

4,300 

4,231 

7,975 

7,335 7,569 

4th Q/08 1st Q/09 2nd Q/09 3rd Q/09 4th Q/09 1st Q/10 2nd Q/10 3rd Q/10 


Non-interest Expenses without Branch Migration Expenses 

Efficiency Ratio (E.R) and Risk Adjusted 

Efficiency Ratio (R.A.E.R.) (%) (*) 

R$ million 

R$ million 


In the third quarter of 2010, the expense from provisions for loan and lease 

losses amounted to R$ 4,069 million, increasing by R$ 49 million when 

compared to the prior quarter. The 5.9% growth in the credit portfolio was 

the main driver of this increase. Once again, the positive evolution of the 

credit risk performance indicators can be seen in this regard. The total nonperforming 

ratio, considering the balance of transactions more than 90 days 

overdue, stood at 4.3% in September 2010, or a 130 basis points decrease 

from December 2009. Delinquency in the individual customer portfolio was 

6.0% in the quarter, versus 6.4% in the prior period. Similarly, delinquency in 

the company customer portfolio stood at 2.9% at the end of September 

2010, compared to 3.2% in the second quarter of the year. Revenues from 

the recovery of credits previously written off as losses totaled R$ 1,134 

million, representing a rise of R$ 167 million compared to the prior period. 

In the third quarter of 2010, revenues from banking service fees and charges 

totaled R$ 4,451 million, a R$ 152 million improvement quarter-on-quarter. 

During the period, the customer base grew and operating activities expanded, 

with impacts on revenues from current account services; revenues from credit 

transactions and sureties and endorsements provided also increased, driven by 

the higher volume of vehicle financing and leasing transactions; and finally, 

credit card revenues grew due to increased invoice discount services provided 

to merchants, as well as the expanded customer base. 

During the third quarter of 2010, non-interest expenses amounted to R$ 

7,975 million, corresponding to a 5.3% growth quarter-on-quarter. The 

growth was due to the migration of branches and expansion of the service 

network, higher personnel expenses on account of the Collective Labor 

Agreement, and the increase in other administrative expenses, driven by 

higher expenses relating to cards and expanded operating activities. 

Disregarding the branch migration expenses, the change in non-interest 

expenses would have been R$ 7,569 million in the quarter. 

71.7% 73.2% 74.8% 75.6% 74.7% 73.1% 71.9% 71.2% 

48.2% 

50.6% 

48.1% 47.8% 46.8% 46.1% 45.5% 46.0% 47.1% 

76.9% 75.5% 75.5% 74.5% 73.4% 

46.2% 45.4% 45.0% 47.7% 

68.9% 70.8% 71.6% 

44.0% 47.3% 49.2% 


Quarter E.R. 

E.R. Cumulative figure of the last 12 months 

Quarter R.A.E.R. 

R.A.E.R. Cumulative figure of the last 12 months 

(*) The criteria for calculating the efficiency ratio and the risk– 

adjusted efficiency ratio are detailed on page 17. 

The efficiency ratio stood at 49.2% in the third quarter of 2010, as a result of 

higher non-interest expenses, as described above. Disregarding expenses 

relating to branch migration, the ratio would have been 46.7%. In the past 

12 months, the efficiency ratio was 47.1%, compared to 46.8% in the same 

period ended September 2009. On the other hand, the risk-adjusted 

efficiency ratio declined by 440 basis points over the past 12 months, due to 

the improved quality of the credit portfolio. 

Unrealized Profits 

R$ million 

11,279 

11,676 

11,241 

10,427 

10,417 

8,792 

9,141 

9,225 


Unrealized profits in income totaled R$ 11,241 million in the third quarter of 

2010, representing a R$ 2,016 million increase when compared to the prior 

period. Such increase is basically associated with the appreciation of 

Redecard shares in the capital markets. 

Also, during the quarter, the balance of the additional balance of provision 

for loan and lease losses remained stable at R$ 6,104 million. It should be 

noted that this allowance is not taken into consideration to determine 

unrealized profits. 

7 




Balance Sheet 

ASSETS 

Sep 30,10 Jun 30,10 Sep 30,09 


Sep/10 – 

Jun/10 

Variation (%) 

Sep/10 – 

Sep/09 

Current and Long-term Assets 675,973 641,590 602,440 5.4% 12.2% 

Cash and Cash Equivalents 11,063 12,415 10,325 -10.9% 7.1% 

Short-term Interbank Investments 112,483 115,117 137,964 -2.3% -18.5% 

Securities and Derivative Financial Instruments 141,879 128,825 122,576 10.1% 15.7% 

Interbank and Interbranch Accounts 66,243 62,204 17,481 6.5% 278.9% 

Loans, Lease and Other Credits Operations 279,035 263,498 237,099 5.9% 17.7% 

(Allowance for Loan Losses) (23,284) (22,900) (24,068) 1.7% -3.3% 

Other Assets 88,554 82,430 101,062 7.4% -12.4% 

Foreign Exchange Portfolio 20,571 18,238 35,723 12.8% -42.4% 

Others 67,983 64,192 65,339 5.9% 4.0% 

Permanent Assets 10,275 9,993 9,959 2.8% 3.2% 

Investments 2,226 2,132 2,284 4.4% -2.5% 

Fixed and Operating Lease Assets 4,702 4,483 4,088 4.9% 15.0% 

Intangible Assets and Goodwill 3,347 3,378 3,588 -0.9% -6.7% 

TOTAL ASSETS 686,248 651,583 612,399 5.3% 12.1% 

R$ million 

Balance Sheet 

LIABILITIES AND EQUITY 

Sep 30,10 Jun 30,10 Sep 30,09 

Sep/10 – 

Jun/10 

Variation (%) 

R$ million 

Sep/10 – 

Sep/09 

Current and Long-term Liabilities 625,129 592,582 559,863 5.5% 11.7% 

Deposits 194,917 189,657 189,089 2.8% 3.1% 

Demand Deposits 29,052 26,398 23,742 10.1% 22.4% 

Savings Deposits 54,874 51,852 44,146 5.8% 24.3% 

Interbank Deposits 1,293 2,307 2,232 -44.0% -42.1% 

Time Deposits 109,697 109,099 118,969 0.5% -7.8% 

Deposits Received under Securities Repurchase Agreements 155,636 157,261 126,664 -1.0% 22.9% 

Funds from Acceptances and Issue of Securities 23,379 18,904 18,538 23.7% 26.1% 

Interbank and Interbranch Accounts 8,281 7,402 7,049 11.9% 17.5% 

Borrowings and Onlendings 43,259 38,071 32,808 13.6% 31.9% 

Derivative Financial Instruments 9,077 6,849 7,458 32.5% 21.7% 

Technical Provisions for Insurance, Pension Plans and Capitalization 58,490 56,001 49,978 4.4% 17.0% 

Other Liabilities 132,090 118,437 128,278 11.5% 3.0% 

Foreign Exchange Portfolio 33,017 28,255 22,773 16.9% 45.0% 

Subordinated Debt 21,399 18,793 36,722 13.9% -41.7% 

Others 77,674 71,388 68,784 8.8% 12.9% 

Deferred Income 237 187 232 26.6% 2.1% 

Minority Interest in Subsidiaries 3,658 3,740 3,443 -2.2% 6.3% 

Stockholders' Equity of Parent Company 57,225 55,074 48,862 3.9% 17.1% 

TOTAL LIABILITIES AND EQUITY 686,248 651,583 612,399 5.3% 12.1% 

8 




Income Statement 

3 rd Q/10 2 nd Q/10 jan-sep/10 jan-sep/09 


3 rd Q/10 – 

2 nd Q/10 

% 

Variation 

jan-sep/10 – 

jan-sep/09 % 

R$ million 

Managerial Financial Margin 11,204 10,892 32,485 31,933 312 2.9% 552 1.7% 

Financial Margin with Clients 10,298 10,001 29,669 27,800 297 3.0% 1,869 6.7% 

Financial Margin with Market 906 891 2,816 4,133 16 1.7% (1,317) -31.9% 

Result of Loan Losses (2,935) (3,053) (9,008) (10,942) 118 -3.9% 1,934 -17.7% 

Expenses for Allowance for Loan Losses (4,069) (4,019) (11,954) (12,383) (49) 1.2% 428 -3.5% 

Income from Recovery of Credits Written Off as Loss 1,134 967 2,946 1,440 167 17.3% 1,506 104.6% 

Net Result from Financial Operations 8,269 7,839 23,476 20,991 430 5.5% 2,486 11.8% 

Other Operating Income/(Expenses) (3,593) (3,121) (9,259) (9,571) (473) 15.2% 312 -3.3% 

Banking Service Fees and Income from Banking Charges 4,451 4,300 12,870 10,996 152 3.5% 1,874 17.0% 

Result from Insurance, Pension Plans and Capitalization Operations 685 719 2,051 1,721 (34) -4.7% 330 19.2% 

Non-interest Expenses (7,975) (7,570) (22,266) (20,586) (405) 5.3% (1,680) 8.2% 

Tax Expenses for ISS, PIS, Cofins and Other Taxes (913) (970) (2,749) (2,378) 57 -5.9% (371) 15.6% 

Equity in earnings of affiliates and Other investments 64 45 180 180 19 42.8% 0 0.1% 

Other Operating Income 94 357 654 496 (262) -73.6% 158 31.9% 

Operating Income 4,676 4,719 14,217 11,419 (43) -0.9% 2,798 24.5% 

Non-operating Income 3 (1) 21 53 5 -326.9% (31) -59.4% 

Income before Tax and Profit Sharing 4,679 4,717 14,239 11,472 (38) -0.8% 2,767 24.1% 

Income Tax and Social Contribution (1,253) (1,119) (3,733) (3,006) (134) 12.0% (728) 24.2% 

Profit Sharing (52) (54) (169) (166) 2 -3.2% (2) 1.3% 

Minority Interests in Subsidiaries (216) (247) (713) (623) 31 -12.4% (90) 14.5% 

Recurring Net Income 3,158 3,298 9,624 7,677 (140) -4.2% 1,946 25.4% 

We present below another perspective on the income statement, highlighting the Managerial Financial Margin plus 

Banking Service Fees, which is primarily derived from the sum of the main items composing revenues from the banking 

and insurance, pension plans and capitalization operations. 

Income Statement 

3 rd Q/10 2 nd Q/10 jan-sep/10 jan-sep/09 

3 rd Q/10 – 

2 nd Q/10 

Recurring Net Income 3,158 3,298 9,624 7,677 (140) -4.2% 1,946 25.4% 

Note: Other Results are composed of Equity in earnings of affiliates and other investments and Non-operating Income. 

% 

Variation 

jan-sep/10 – 

jan-sep/09 

R$ million 

Managerial Financial Margin Plus Banking Service Fees 17,124 16,959 50,241 47,594 166 1.0% 2,647 5.6% 



Banking Service Fees and Income from Banking Charges 4,451 4,300 12,870 10,996 152 3.5% 1,874 17.0% 

Result from Insurance, Pension Plans and Capitalization Operations 

Before Retained Claims 1,374 1,411 4,233 4,170 (36) -2.6% 63 1.5% 

Other Operating Income 94 357 654 496 (262) -73.6% 158 31.9% 

Loan Losses and Retained Claims (3,624) (3,745) (11,190) (13,391) 120 -3.2% 2,201 -16.4% 

Expenses for Allowance for Loan Losses (4,069) (4,019) (11,954) (14,070) (49) 1.2% 2,115 -15.0% 

Reversal (increase) of additional provision for loan losses - - - 1,687 - - (1,687) -100.0% 

Income from Recovery of Credits Written Off as Loss 1,134 967 2,946 1,440 167 17.3% 1,506 104.6% 

Retained Claims (689) (692) (2,181) (2,448) 3 -0.4% 267 -10.9% 

Operating Margin 13,500 13,214 39,052 34,204 286 2.2% 4,848 14.2% 

Other Operating Income/(Expenses) (8,820) (8,497) (24,813) (22,732) (324) 3.8% (2,082) 9.2% 

Non-interest Expenses (7,975) (7,570) (22,266) (20,586) (405) 5.3% (1,680) 8.2% 

Tax Expenses for ISS, PIS, Cofins and Other Taxes (913) (970) (2,749) (2,378) 57 -5.9% (371) 15.6% 

Other Results 67 43 202 233 24 55.4% (31) -13.4% 

Income before Tax and Profit Sharing 4,679 4,717 14,239 11,472 (38) -0.8% 2,767 24.1% 

Income Tax and Social Contribution (1,253) (1,119) (3,733) (3,006) (134) 12.0% (728) 24.2% 

Profit Sharing (52) (54) (169) (166) 2 -3.2% (2) 1.3% 

Minority Interests in Subsidiaries (216) (247) (713) (623) 31 -12.4% (90) 14.5% 

The recurring net income for the first nine months of 2010 

was R$ 9,624 million, up 25.4% from the same period of 

2009. This result is primarily attributable to a 6.7% increase 

in the financial margin with clients, 17.0% growth in 

revenues from banking service fees and charges, and a 

17.7% rise in the result of loan and lease losses. During the 

period, non-interest expenses increased by 8.2%, mainly 

due to the migration of Unibanco branches to the Itaú 

platform, completed in October 2010. 

% 

9 


Analysis of the Net Income

Analysis of the Net Income 


The managerial financial margin totaled R$ 11,204 

million in the third quarter of 2010, or a R$ 312 million 


increase from the second quarter of the year. The main 

drivers of such change are described below. 

R$ million 

Variation 

3 rd Q/10 2 nd Q/10 Jan-Sep/10 Jan-Sep/09 3 rd Q/10 – 

Jan-Sep/10 – 

% 

2 nd Q/10 

Jan-Sep/09 

% 


Interest Rate Sensitive 1,543 1,241 3,951 3,448 302 24.3% 503 14.6% 

Spread-Sensitive 8,756 8,761 25,718 24,352 (5) -0.1% 1,366 5.6% 


Treasury 906 891 2,816 4,133 16 1.7% (1,317) -31.9% 

Total 11,204 10,892 32,485 31,933 312 2.9% 552 1.7% 

Managerial Financial Margin with Clients 

The managerial financial margin comprises the use of 

financial products and services by our clients including 

account holders and non-account holders. 

In the third quarter of 2010, the managerial margin with 

clients totaled R$ 10,298 million, increasing by R$ 297 

million when compared to the prior period. In order to 

allow for a better understanding of changes in the 

financial margin, in this discussion the margin is divided 

into two different components: financial margin that are 

sensitive to interest rate changes, and financial margin 

that are sensitive to spreads. 

Interest Rate Sensitive Margin with Clients 

The financial margin on interest rate-sensitive operations 

amounted to R$ 1,543 million in the quarter, a 24.3% 

growth, or R$ 302 million, from the prior quarter. The 

increased volume of operations, particularly associated 

with the growth in the average balance of working 

capital, coupled with the impact from the increase in the 

basic interest rate, were the factors behind this change. 

Annualized Rate of Interest Rate Sensitive Banking Operations 

Performed with Clients 

R$ million 

Spread-Sensitive Margin with Clients 

The financial margin on spread-sensitive operations 

added up to R$ 8,756 million in the period, virtually 

stable when compared to the prior quarter. The criteria 

for spread-sensitive net interest margin was revised in 

this quarter, in which we excluded from the interestearning 

assets the amount of compulsory deposits and 

assets guaranteeing PGBL/VGBL technical provisions, 

since both are funded assets that do not generate 

financial margin for the bank. 

Annualized Rate of Spread-Sensitive Margin with Clients 

R$ million 

3 rd Q/10 2 nd Q/10 

Variation 

Balance % 

Average Balance 278,049 261,121 16,927 6.5% 

Financial Margin 8,756 8,761 (5) -0.1% 

Annualized Rate 12.6% 13.4% -80 bps 

11.4% 11.3% 12.1% 13.3% 13.5% 13.2% 13.4% 12.6% 

3 rd Q/10 2 nd Q/10 

Variation 

Balance % 

Average Balance 59,045 55,984 3,061 5.5% 

Financial Margin 1,543 1,241 302 24.3% 

Annualized Rate 10.4% 8.9% 160 bps 

13.3% 

11.5% 

9.5% 

8.7% 8.3% 8.1% 

8.9% 

10.4% 

4th 

Q/08 

1st 

Q/09 

2nd 

Q/09 

3rd 

Q/09 

4th 

Q/09 

1st 

Q/10 

2nd 

Q/10 

3rd 

Q/10 

Managerial Financial Margin with Market 

The financial margin with market basically comprises 

treasury operations. During the quarter, the financial 

margin with market totaled R$ 906 million, increasing by 

1.7% when compared to the prior quarter. Such increase 

was driven by better results on exchange and fixed 

income positions. 

4th 

Q/08 

1st 

Q/09 

2nd 

Q/09 

3rd 

Q/09 

4th 

Q/09 

1st 

Q/10 

2nd 

Q/10 

3rd 

Q/10 

11 




As a result of the changes previously described, and in 

the revised criteria illustrated in the previous page, the 

net interest margin – NIM (annualized rate of managerial 

financial margin, disregarding the financial margin with 

market) – dropped to 12.2% in the third quarter of 2010, 

compared to 12.6% in the prior period. When the 

Financial Margin Analysis 

Average 

Balance 

Financial 

Margin 

CDI (p.y.) 

Average 

Balance 


Margin 


expense from provisions for loan and lease losses, net of 

the recovery of credits previously written off as losses, is 

taken into account, the adjusted NIM rate reached at 

8.7%, virtually stable when compared to the prior period, 

due to the significant improvement in our loan and 

recovery indexes. 

3 rd Q/10 2 nd Q/10 Jan-Sep/10 

CDI (p.y.) 

Average 

Balance 

Demand Deposits + Floatings 36,933 35,713 36,581 

(-) Compulsory Deposits (11,922) (10,763) (11,410) 

Contingent Liabilities (-) Deposits in guarantee of Contingent Liabilities 900 1,357 1,066 

Tax and Social Security obligations (-) Deposits in guarantee 16,827 15,726 16,275 

(-) Tax Credits (27,659) (27,623) (27,390) 

Working Capital (Equity + Minority Interests - Permanent Assets - Capital 

Allocated to Treasury) 

43,966 41,575 41,252 

Interest Rate Sensitive Margin with Clients (A) 59,045 1,543 10.4% 55,984 1,241 8.9% 56,374 3,951 9.3% 


Margin 

R$ million 

CDI (p.y.) 

Average 

Balance 


Margin 

Spread 

(p.y.) 

Average 

Balance 


Margin 

Spread 

(p.y.) 

Average 

Balance 


Margin 

Spread 

(p.y.) 

Cash and Cash Equivalents + Interbank Deposits + Securities (*) 71,187 67,344 71,063 

Interbank and Interbranch Accounts 52,302 38,614 33,482 

Loans, Leasing and Other Credits 271,267 257,808 260,150 

(Allowance for Loan Losses) (23,092) (23,035) (23,351) 

Spread-Sensitive Margin with Clients - Prior Criteria 371,664 8,756 9.4% 340,731 8,761 10.3% 341,344 25,718 10.0% 

(-) Compulsory Deposits - Central Bank (51,086) (38,815) (35,653) 

(-) Assets Guaranteeing PGBL/VGBL Technical Provisions (42,529) (40,794) (40,959) 

Spread-Sensitive Margin with Clients (B) - Revised Criteria 278,049 8,756 12.6% 261,121 8,761 13.4% 264,732 25,718 12.1% 

Net Interest Margin with Clients (C= A+B) 337,094 10,298 12.2% 317,106 10,001 12.6% 321,107 29,669 12.3% 

Provision for Loan and Lease Losses (D) (4,069) (4,019) (11,954) 

Recovery of Credits Written Off as Losses (E) 1,134 967 2,946 

Net Interest Margin after Provision for Credit Risk (F = C+D+E) 337,094 7,363 8.7% 317,106 6,949 8.8% 321,107 20,661 8.6% 

Treasury Financial Margin (G) 906 891 2,816 

Net Result from Financial Operations (H= F+G) 8,269 7,839 23,476 

(*) Cash and Cash Equivalents + Interbank Deposits + Securities (-) Interbank Deposits related to Repurchase Liability (-) Derivative financial instruments. (-) Operations Sensitive to 

Variations in Interest Rate. 

Note: spread is the annualized difference between the earnings of assets and their opportunity costs. 

Net Interest Margin with Clients and Net Interest Margin with Clients after Provision for Credit Risk vs CDI 

13.3% 

11.7% 

10.3% 

7.5% 

11.5% 

11.7% 

11.1% 

10.1% 

9.8% 9.5% 

7.0% 6.9% 

12.6% 12.5% 12.3% 12.6% 

12.2% 

10.7% 10.6% 10.3% 10.1% 

10.4% 

8.7% 8.3% 8.1% 8.9% 

9.6% 

8.8% 8.7% 

8.2% 8.3% 

7.6% 

4thQ/08 1stQ/09 2ndQ/09 3rdQ/09 4thQ/09 1stQ/10 2ndQ/10 3rdQ/10 

12 

NIM with Clients 

Revised Criteria 

NIM with Clients 

Prior Criteria 

Management Discussion & Analysis 3 rd Quarter, 2010 

CDI 

NIM with Clients after Provision for Credit Risk


Results from Loan and Lease Losses 

8.3% 

5.1% 

3,430 

9.0% 

6.0% 

4,373 

539 

3,834 

9.8% 

7.0% 

10.2% 

7.6% 

5,027 

4,669 

775 373 

4,252 4,296 

1.5% 1.6% 1.8% 1.8% 

9.8% 

7.3% 

4,016 3,866 4,019 4,069 

1.7% 

9.2% 

6.8% 

8.7% 

8.3% 

6.4% 6.2% 

1.6% 1.6% 1.5% 

231% 

204% 

182% 


R$ million 

Expenses for Provision for Loan Losses and Recovery of Credits Written off as Losses 

Variation 

3 rd Q/10 2 nd Q/10 Jan-Sep/10 Jan-Sep/09 3 rd Q/10 – 


% 

2 nd Q/10 

Jan-Sep/09 

% 

Provision for Loan and Lease Losses (4,069) (4,019) (11,954) (12,383) (49) 1.2% 428 -3.5% 

Income from Recovery of Credits Written Off as Losses 1,134 967 2,946 1,440 167 17.3% 1,506 104.6% 

Result from Loan Losses (2,935) (3,053) (9,008) (10,942) 118 -3.9% 1,934 -17.7% 

Nonperforming Ratios 

R$ million 

The result from loan losses reached R$ 2,935 million in the 

third quarter of 2010, improving by R$ 118 million in 

comparison with the second quarter, due to a R$ 167 

million growth in income from the recovery of credits 

previously written off as losses. Expenses for the provision 

for loan and lease losses added up to R$ 4,069 million, a 

1.2% increase from the prior quarter. Such increase is mainly 

attributable to the R$ 15,536 million growth in the credit 

portfolio balance, not including endorsements and sureties. 

The improvement trend observed in our loan and financing 

portfolio performance indicators since the third quarter of 

2009 continued in the present quarter. Our non-performing 

loan ratio (credit transactions more than 90 days overdue) 

reached 4.3%, a 130 basis points improvement from 

December 2009. This ratio for credit transactions with both 

individuals and companies showed a positive variance of 40 

and 30 basis points, respectively, quarter-on-quarter. The 

reduced delinquency levels are directly associated with the 

improvement of the Brazilian economic cycle, as well as the 

more conservative credit policies adopted since the end of 

2008. 

The balance of the additional provision for loan and lease 

losses remained unaltered at R$ 6,104 million. 

Provision for Loan Losses and Credit Portfolio 

Sep 30, 10 Jun 30, 10 Sep 30, 09 

Nonperforming Loans over 60 days (a) 14,231 14,778 16,639 

Nonperforming Loans over 90 days (b) 11,902 12,224 14,018 

Credit Portfolio (c) 279,035 263,498 237,099 

NPL Ratio [(a)/(c)] x 100 over 60 5.1% 5.6% 7.0% 

NPL Ratio [(b)/(c)] x 100 over 90 4.3% 4.6% 5.9% 

(a) Loans overdue for more than 60 days and that do not accrue revenues. 

(b) Loans overdue for more than 90 days. 

(c) Endorsements and sureties not included. 

NPL Ratio – 90 days (%) 

7.9% 

8.1% 8.1% 

6.9% 

5.4% 

5.9% 

3.9% 

4.4% 

3.1% 

4.1% 

1.3% 

1.9% 

7.6% 

5.6% 

4.0% 


Individuals Total Companies 

Coverage Ratio – 90 days 

The 90-day coverage ratio increased from 187% in June 

2010 to 196% in September 2010, mainly driven by the 

2.6% reduction in the nonperforming loans over 90 days 

portfolio, while the balance of provisions for loan and lease 

losses grew by 1.7%. 

172% 174% 

6.8% 

4.9% 

3.3% 

188% 

6.4% 

187% 

6.0% 

4.6% 

4.3% 

3.2% 2.9% 

196% 


Result from Loan Losses 

2,971 

Reversal of additional provision for loan losses (R$ million) 

Expenses for Provisions for Loan Losses (R$ million). 

Expenses for Provisions for Loan Losses/Credit Portfolio (1). 

Provisions for Loan Losses Specific + Generic/Credit Portfolio 

Provisions for loan Losses Specific + Generic + Additional/Credit Portfolio 

3,976 

539 

3,437 

4,553 

4,100 

775 

373 

3,778 3,727 

1.3% 1.4% 1.6% 1.6% 

3,223 3,021 3,053 2,935 

1.3% 

1.2% 1.2% 1.1% 


Reversal of additional provision for loan losses (R$ million) 

Result from Loan Losses (R$ million) 

Result from Loan and Lease Losses/Loan Portfolio (1) 

(1) Average balance of the two previous quarters. 


Coverage ratio is derived from the division of the provisions for loans and lease losses 

balance by the balance of operations more than 90 days overdue. 

Overdue Loans 

During the quarter, the portfolio declined by 4.4% from 

the prior quarter. Also, the difference between the balance 

of provisions for loan and lease losses versus the overdue 

loans portfolio increased by R$ 1,390 million when 

compared to the previous quarter. 

R$ million 

Sep 30, 10 Jun 30, 10 Sep 30, 09 

Overdue Loans 21,870 22,876 24,297 

Balance of Provision for Loan and Lease Losses (23,284) (22,900) (24,068) 

Difference 1,414 24 (228) 

Overdue loans are credit operations having at least one installment more than 15 days 

overdue, irrespective of collateral provided. 

13 




Banking Fee Revenues and Banking Charge Revenues 

Banking fee revenues and Banking charge revenues 

3 rd Q/10 2 nd Q/10 Jan-Sep/10 Jan-Sep/09 

3 rd Q/10 – 

2 nd Q/10 

% 

Variation 


Jan-Sep/09 

Asset Management 654 615 1,869 1,629 39 6.4% 239 14.7% 

Current Account Services 641 608 1,829 1,722 33 5.5% 107 6.2% 

Loan Operations and Guarantees Provided 727 672 2,057 1,594 55 8.1% 463 29.0% 

Collection Services 336 317 976 886 18 5.7% 90 10.1% 

Credit Cards 1,706 1,639 4,898 4,233 67 4.1% 665 15.7% 

Other 386 447 1,242 932 (61) -13.6% 310 33.3% 

Total 4,451 4,300 12,870 10,996 152 3.5% 1,874 17.0% 

Banking service fees, including income from banking 

charges, grew by 3.5% quarter-on-quarter. The main 

drivers behind such increase were: 

Asset Management 

Increase in fund management revenues, as a result of a 

3.7% growth in the balance of assets under management 

to R$ 357,495 million. 

R$ million 

Credit Cards 

Credit Cards revenue increased by 4.1% when compared 

to the prior quarter, due to the higher volume of invoice 

discount services to merchants, as well as the expanded 

customer base. 

Other 

% 

R$ million 

Current Account Services 

Change of 5.5% in the quarter, arising from higher 

revenues from fee packages due to the growth in the 

customer base and activities. 

Loan Operations and Guarantees Provided 

Increase of 8.1% in the quarter, driven by the higher 

volume of credit operations, in particular vehicle financing 

and leasing. 

3 rd Q/10 2 nd Q/10 Variation 

Foreign Exchange Services 15 19 (4) 

Income from Brokerage and Securities 

Placement 

89 133 (44) 

Income from Custody Services and 

Management of Portfolio 

44 47 (3) 

Income from Economic and Financial 

Advisory Services 

60 79 (18) 

Other Services 178 170 9 

Total 386 447 (61) 

Revenues from economic and financial advisory services 

declined because of lower revenues from the investment 

bank area. 

Banking Fee Revenues and Banking Charge Revenues 

R$ million 

4,063 

3,526 3,617 

3,853 

4,231 4,120 

4,300 4,451 


14 





3 rd Q/10 2 nd Q/10 3 rd Q/09 Jan-Sep/10 Jan-Sep/09 3rd Q/10 – 

2 nd Q/10 


Variation 


% 

Jan-Sep/09 

Personnel Expenses (3,346) (3,186) (2,963) (9,414) (8,849) (160) 5.0% (566) 6.4% 

Other Administrative Expenses (3,738) (3,335) (2,774) (10,051) (8,431) (404) 12.1% (1,620) 19.2% 

Other Operating Expenses (804) (956) (1,051) (2,553) (3,047) 153 -16.0% 494 -16.2% 

Tax Expenses (86) (93) (106) (248) (260) 7 -7.3% 12 -4.4% 

Total (7,975) (7,570) (6,895) (22,266) (20,586) (405) 5.3% (1,680) 8.2% 

Non-interest expenses increased 5.3% in the third quarter 

of 2010 compared to the prior period. The main change 

relates to other administrative expenses, driven by a R$ 

287 million increase associated with the branch migration 

and service network expansion processes. 

Personnel Expenses 

R$ million 


Compensation (2,196) (2,089) (107) 

Charges (546) (506) (40) 

Social Benefits (423) (413) (11) 

Training (57) (53) (4) 

Employee Terminations and Labor Claims (123) (126) 2 

Total (3,346) (3,186) (160) 

Personnel expenses were 5.0% higher quarter-onquarter, 

as a result of the Collective Labor Agreement that 

adjusted salary levels, as well as the increase in the 

number of employees required by the expansion in 

operations. Overall, the impact of the Collective Labor 

Agreement on personnel expenses was R$ 93 million, of 

which R$ 44 million related to the adjustment of 

provisions for vacation and 13th salary. 

Other Administrative Expenses 

Other administrative expenses increased by 12.1% 

compared to the prior quarter, due to the growth in card 

expenses; increased operating activities; and branch 

migration processes, that resulted in the accelerated 

depreciation of assets from Unibanco, replacement of 

customer cards and renovation of facilities. 

Other Operating Expenses 

R$ million 

% 

R$ million 


Data Processing and Telecommunications (857) (762) (95) 

Depreciation and Amortization (393) (361) (32) 

Facilities (727) (588) (140) 

Third-Party Services (779) (695) (84) 

Financial System Services (90) (104) 14 

Advertising, Promotions and Publications (287) (308) 21 

Transportation (170) (147) (23) 

Materials (141) (109) (32) 

Security (115) (110) (5) 

Travel (45) (41) (4) 

Others (134) (109) (25) 

Total (3,738) (3,335) (404) 

R$ million 

Number of Employees (*) 

The number of employees in the third quarter increased as 

a result of organic growth, chiefly in connection with 

services to clients in the very small, small and mid-sized 

companies and consumer credit segments, in addition to 

units in Argentina, Uruguay, Paraguay and Chile. 

108,816 106,210 103,790 102,754 101,640 103,835 105,847 106,879 


Provision for contingencies (88) (237) 149 

Selling – Credit Cards (403) (377) (26) 

Claims (129) (153) 24 

Others (183) (189) 6 

Total (804) (956) 153 

Other operating expenses declined 16.0% from the prior 

quarter. 


(*) For companies under control of Itaú Unibanco, 100% of the number of employees are consolidated. For 

shared–control companies, 50% of the employees are consolidated. No employee is considered for 

companies which are not under Itaú Unibanco’s control. 

15 




Non-interest Expenses without Redecard, Porto Seguro, Migration and New Points of Sale Openings effects 

Excluding the effect of expenses associated with the 

migration of Unibanco branches to the Itaú platform, 

those associated with the opening of new points of sale, as 

well as expenses related to Redecard and Porto Seguro – 

consolidated companies whose cost management is not 

directly under our responsibility – non-interest expenses 

totaled R$ 20,108 million in the first nine months of 2010, 

growing by 1.1% from the same period of 2009. 

R$ million 

Non-interest Expenses without Redecard, Porto Seguro, New Points of Sale Openings and Branches’ Migration effects. 

Variation 

3 rd Q/10 2 nd Q/10 3 rd Q/09 

3 rd Q/10 – 


Jan-Sep/10 Jan-Sep/09 

2 nd % 

Q/10 

Jan-Sep/09 

% 

Non-interest Expenses (7,975) (7,570) (6,895) (22,266) (20,586) (405) 5.3% (1,680) 8.2% 

(+) Redecard Expenses 309 263 243 805 693 46 17.7% 112 16.1% 

(+) Porto Seguro Expenses 125 117 - 349 - 9 7.3% 349 - 

Non-interest Expenses without Redecard and Porto Seguro (7,540) (7,190) (6,652) (21,112) (19,893) (350) 4.9% (1,219) 6.1% 

(+) New Points of Sale Expenses 183 68 - 304 - 115 170.8% 304 - 

(+) Branches' Migration Expenses 406 235 - 700 - 171 72.9% 700 - 

Non-interest Expenses without Redecard, Porto Seguro, New 

Points of Sale Openings and Branches’ Migration effects. 

(6,951) (6,888) (6,652) (20,108) (19,893) (63) 0.9% (215) 1.1% 

Two years have not yet elapsed since the merger, and Itaú 

Unibanco completed on October 24, 2010 the integration 

of its base of points of service throughout Brazil. In total, 

998 branches and 245 client service branches (CSB) of 

Unibanco were fully redesigned and integrated into Itaú 

points, thus creating a network of almost five thousand 

units in the whole country. 

Performance of Non-Interest Expenses and Ratio of Non-Interest 

Expenses to Assets (*) 

4.9% 

4.4% 4.4% 4.6% 4.8% 4.3% 

(7,446) (6,900) (6,791) (6,895) (7,397) 

(6,722) 

4.7% 4.8% 

(7,570) (7,975) 

History of Numbers of Points of Service (**) 

35,820 35,949 35,606 35,435 35,589 35,565 35,267 34,991 

3,906 3,928 3,939 3,951 3,936 3,933 3,931 3,929 

999 989 978 960 948 946 938 942 


Non-Interest Expenses (R$ Million) Non-Interest Expenses/Assets (*) 

(*) Division of Non-Interest Expenses by the arithmetic average of total assets for the two 

previous quarters (annualized). 

30,915 

31,032 

30,689 

30,524 

30,705 30,686 30,398 30,120 

Dec/08 

Mar/09 Jun/09 Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 

ATM (***) Client Service Branches (CSB) Branches 

(**) Includes Banco Itaú Argentina, Banco Itaú BBA and Chile, Uruguay and Paraguay 

companies’ information. Does not include points of sale and ATMs of Banco 24h. 

(***) Includes ESBs (electronic service branches) and service points in third-party 

establishments. 

16 




Efficiency Ratio and Risk-Adjusted Efficiency Ratio 

The efficiency ratio and the risk-adjusted efficiency ratio, which includes the risk portions associated with banking 

operations (results from the provisions for loan and lease losses) and insurance and private pension operations (claims) are 

presented below. 

Efficiency Ratio 

In the third quarter, the efficiency ratio stood at 49.2%, 

representing a 180 basis points increase from the prior 

quarter, primarily due to the intensification of the branch 

migration process concluded in advance in October 2010. 

Should migration expenses be disregarded, the ratio 

would have been 46.7%. 

During the past 12 months, the efficiency ratio was 47.1%, 

practically stable from period to period. Should migration 

expenses be disregarded, the ratio during the past 12 

months would have been 46.0%. 

Efficiency Ratio (E.R.) and Risk-Adjusted Efficiency Ratio 

(R.A.E.R.) 

71.7% 73.2% 74.8% 75.6% 74.7% 73.1% 71.9% 71.2% 

48.2% 

50.6% 

48.1% 47.8% 46.8% 46.1% 45.5% 46.0% 47.1% 

76.9% 75.5% 75.5% 74.5% 73.4% 

46.2% 45.4% 45.0% 47.7% 

68.9% 70.8% 71.6% 

44.0% 47.3% 49.2% 


Quarter E.R. 

Quarter R.A.E.R. 

Risk-Adjusted Efficiency Ratio 

The risk-adjusted efficiency ratio reached 71.6% in the 

third quarter, or an 80 basis points increase compared to 

the prior quarter, chiefly as a result of higher expenses, as 

described above. 

E.R. Cumulative figure of the last 12 months 

R.A.E.R. Cumulative figure of the last 12 months 

In the past 12 months, the risk-adjusted efficiency ratio 

stood at 71.2%, declining by 440 basis points in comparison 

with the same period of the previous year, due to the 

improved quality of the credit portfolio. 

Risk Adjusted 

Efficiency = 

Ratio 

Non-Interest Expenses (Personnel Expenses + Other Administrative Expenses + 

Other Operating Expenses + Tax Expenses with Other Taxes) + Result from Loan Losses + Retained Claims 

(Managerial Financial Margin + Banking Service Fees and Charge Revenues + Operating Result of Insurance, Capitalization and Pension Plans 

before Retained Claims + Other Operating Income - Tax Expenses for ISS, PIS, Cofins and Other Taxes) 

Usage of Managerial Financial Margin Plus Banking Service Fees 

The chart below shows the portions of the Managerial Financial Margin Plus Banking Service Fees that are utilized to cover 

Non-interest Expenses, Result from Loan Losses and Retained Claims. 

Managerial Financial 

Margin Plus Banking 

Service Fees (*) 

(-) 

Efficiency 

Ratio 

(-) 

Loan Losses and Retained 

Claims/ Managerial Financial 

Margin Plus Banking Service 

Fees (*) 

= 

Income before Tax and Profit 

Sharing (**) / Managerial 

Financial Margin Plus Banking 


(+) 

Risk Adjusted 

Efficiency Ratio 

Managerial Financial 

Margin Plus Banking 


46.2% 45.4% 45.0% 47.7% 44.0% 

50.6% 

47.3% 49.2% 

25.0% 

29.2% 30.1% 29.5% 25.7% 

23.4% 22.4% 

26.3% 

E.R. 

R.A.E.R. 

24.5% 25.5% 26.6% 

31.1% 

23.1% 24.5% 29.2% 28.4% 


(*) Net of Tax Expenses for ISS, PIS and Cofins and Others. 

(**) Does not include Equity in Earnings of Affiliates and Other Investments and Non-operating Income. 

Income before 

Tax and Profit 

Sharing (**) 

17 



Income Tax and Social Contribution on Net Income 

In the third quarter of 2010, expenses from Income Tax 

and Social Contribution on Net Income reached R$ 1,253 

million, or a 12.0% increase from the previous quarter. 

Social Contribution on Net Income expense payable in the 

short term continues without the effect of the rate 

increase to 15% from 9%, as tax credits recorded are 

sufficient to counter this effect, considering that 

management believes that the National Federation of the 

Financial System (CONSIF) will prevail in its direct 

unconstitutionality lawsuit in this regard. 

As of September 30, 2010, the remaining unrecorded tax 

credit balance amounted to R$ 2,023 million. 


Tax Expenses for ISS, PIS, Cofins and Others 

Tax expenses amounted to R$ 913 million in the third 

quarter of 2010, a 5.9% decline compared to the second 

quarter of the year. 

18 


Balance Sheet 

Balance Sheet by Currency 

Value at Risk 

Ownership Structure

Balance Sheet 

Securities Portfolio 

Securities Portfolio History 


R$ million 

Sep 30,10 % Jun 30,10 % Sep 30,09 % 

Variation (%) 

Sep/10 –Jun/10 Sep/10 –Sep/09 

Total Public Securities 59,177 41.7% 52,055 40.4% 54,458 44.4% 13.7% 8.7% 

Government Securities – Domestic 51,585 36.4% 45,791 35.5% 45,011 36.7% 12.7% 14.6% 

Government Securities – Foreign 7,592 5.4% 6,264 4.9% 9,447 7.7% 21.2% -19.6% 

Portugal - 0.0% - 0.0% 27 0.0% - - 

Austria - 0.0% - 0.0% 453 0.4% - - 

Argentina 274 0.2% 224 0.2% 196 0.2% 22.6% 39.8% 

Denmark 1,534 1.1% 788 0.6% 1,851 1.5% 94.6% -17.1% 

Spain 836 0.6% 441 0.3% 1,874 1.5% 89.7% -55.4% 

Korea 2,043 1.4% 2,090 1.6% 1,503 1.2% -2.2% 35.9% 

Chile 1,382 1.0% 1,182 0.9% 1,463 1.2% 16.9% -5.5% 

Paraguay 267 0.2% 368 0.3% 282 0.2% -27.5% -5.3% 

Uruguay 855 0.6% 774 0.6% 457 0.4% 10.5% 87.0% 

United States 361 0.3% 391 0.3% 1,082 0.9% -7.7% -66.7% 

Others 40 0.0% 6 0.0% 258 0.2% 550.8% -84.6% 

Corporate Securities 28,180 19.9% 27,432 21.3% 23,230 19.0% 2.7% 21.3% 

PGBL/VGBL Fund Quotas 43,621 30.7% 41,436 32.2% 36,404 29.7% 5.3% 19.8% 

Derivative Financial Instruments 10,901 7.7% 7,901 6.1% 8,485 6.9% 38.0% 28.5% 

Total Securities 141,879 100.0% 128,825 100.0% 122,576 100.0% 10.1% 15.7% 

At September 30, 2010, the securities portfolio added up 

to R$ 141,879 million, representing a 10.1% increase from 

the prior quarter. The securities portfolio mix was changed 

in the period, with an increase in the exposure to 

government securities. On the other hand, the relative 

share of corporate securities decreased. 

Evolution of Securities Portfolio 

R$ million 

138,344 141,879 

136,248 

10,069 124,745 122,576 120,189 121,372 128,825 10,901 

17,605 

8,048 

7,901 

8,485 5,939 8,162 

30,024 

32,334 

43,621 

34,476 

41,436 

36,404 38,626 40,153 

25,774 27,998 

24,117 

28,180 

23,230 23,414 

13,888 

23,968 

27,432 

12,035 

9,440 

7,592 

9,447 8,319 7,993 

6,264 

52,907 51,958 48,664 45,011 43,889 41,097 45,791 51,585 

Derivative Financial Instruments 

PGBL/VGBL Fund Quotas 

Private Securities 

Public Securities – Foreign 

Public Securities – Domestic 


Credit Portfolio by Risk Level 

At September 30, 2010, the share of credits rated "AA" to 

"C" grew by 30 basis points compared to the prior quarter, 

accounting for 90.4% of the portfolio. The increased share 

was a result of the overall improvement in the portfolio 

profile, attested by the growth in “AA” and “A” portfolios, 

by 8.7% and 7.2%, respectively. Such growth was basically 

driven by the reduced risks associated with the corporate 

segment. At the same time, the credit portfolio rated “D-H” 

continues to lose share since September of last year, as a 

result of the improved economic scenario and the 

introduction since the end of 2008 of more conservative 

credit policies. 

Evolution of Credit Portfolio by Risk Level 

27.8% 26.1% 21.7% 21.2% 21.0% 21.4% 21.9% 22.6% 

42.0% 41.2% 

43.3% 44.2% 45.1% 44.3% 44.7% 45.3% 


AA 

A 

B 

C 

D-H 

Δ Balance 

Sep10 x 

Jun/10 

8.7% 

7.2% 

17.0% 

17.0% 17.8% 17.9% 17.7% 18.4% 18.2% 17.3% 0.4% 

5.2% 6.2% 6.4% 5.6% 5.8% 5.7% 5.3% 5.3% 5.5% 

8.0% 9.5% 10.8% 11.1% 10.5% 10.2% 9.9% 9.6% 0.0% 

20 


Balance Sheet 

Credit Portfolio by Product 

In this quarter, we introduced a new vision of the credit 

portfolio, that is now divided only into individuals and 

businesses. For a better understanding of the evolution of the 


two portfolios, the main product clusters for each one of 

them are presented in the next table. 

R$ million 

Variação (%) 

Sep 30,10 Jun 30,10 Dec 31,09 Sep 30,09 Sep/10 – Sep/10 – Sep/10 – 

Jun/10 Dec/09 Sep/09 

Individuals 123,282 118,105 111,635 106,251 4.4% 10.4% 16.0% 

Credit Card 30,481 29,835 29,313 25,215 2.2% 4.0% 20.9% 

Personal Loans 17,363 16,618 15,468 16,437 4.5% 12.2% 5.6% 

Vehicles 57,334 55,165 52,276 50,670 3.9% 9.7% 13.2% 

Own Payroll Loan 6,137 5,731 4,972 4,679 7.1% 23.4% 31.2% 


Rural Loans 302 320 348 407 -5.8% -13.3% -25.9% 


Companies 155,753 145,394 134,316 130,848 7.1% 16.0% 19.0% 

Working Capital (*) 83,070 77,902 71,310 68,655 6.6% 16.5% 21.0% 

BNDES/Onlending 31,799 27,170 25,379 24,534 17.0% 25.3% 29.6% 

Export / Import Financing 12,479 13,615 14,252 16,214 -8.3% -12.4% -23.0% 

Vehicles 8,699 8,580 7,171 6,763 1.4% 21.3% 28.6% 

Acquired Payroll Loan 1,662 1,604 1,127 1,242 3.6% 47.5% 33.8% 


Rural Loans 4,967 4,694 4,796 4,522 5.8% 3.6% 9.8% 


Total without Endorsements and Sureties 279,035 263,498 245,951 237,099 5.9% 13.5% 17.7% 

Endorsements and sureties 34,155 32,694 32,431 31,594 4.5% 5.3% 8.1% 

Private Securities (**) 13,419 12,720 10,535 11,467 5.5% 27.4% 17.0% 

Adjusted Total Risk 326,608 308,912 288,917 280,160 5.7% 13.0% 16.6% 

(*) It also includes Overdraft, Receivables, Hot Money, Leasing, among others. 

(**) Includes Debentures, CRI and Commercial Paper. 

The individuals portfolio grew by 4.4% at September 30, 2010 

compared to the prior quarter, reaching R$ 123,282 million. 

The improvement was primarily driven by increases of 3.9% in 

the vehicles portfolio, totaling R$ 57,334 million, 4.5% in the 

personal loans portfolio, reaching R$ 17,363 million, 10.8% in 

the mortgage loans portfolio, amounting to R$ 7,025 million, 

as well as the 13.4% growth in our operations in Southern 

Cone countries, for a total of R$ 4,640 million, and 2.2% in the 

credit card business, which added up to R$ 30,481 million. 

Also noteworthy was the growth in the own payroll loans 

portfolio, that reached R$ 6,137 million, increasing by 7.1% 

from the prior period. 

The companies portfolio increased by 7.1% in the quarter and 

totaled R$ 155,753 million. Changes seen in this portfolio are 

mainly due to the expansion in the working capital portfolio 

by 6.6%, for a total of R$ 83,070 million, and the BNDES/ 

Onlending portfolio, which grew by 17.0% to reach R$ 31,799 

million. 

Taking into consideration our private fixed-income securities 

portfolio, that is increasingly significant as a financing 

instrument for corporate companies, and the balance of 

sureties and endorsements, the total adjusted credit portfolio 

balance added up to R$ 326,608 million. 

Credit Portfolio by Industry 

The main increases in the portfolio during the quarter were 

seen in the following industries: Food and Beverage (up R$ 

2,497 million, or 18.6%), Apparel (up R$ 834 million, or 12.9%), 

Pulp and Paper (up R$ 819 million, or 37.5%), Agribusiness 

(up R$ 795 million, or 6.7%), Transportation (up R$ 787 

million, or 6.4%), Mining (up R$ 587 million, or 22.7%), 

Autoparts and Accessories (up R$ 545 million, or 15.2%), 

Electro-electronics (up R$ 506 million, or 6.6%), Metals and 

Steel (up R$ 353 million, or 4.7%), Construction Materials (up 

R$ 338 million, or 8.3%), as well as other less significant 

changes. The main reductions in the quarter were seen in the 

following portfolios: Tobacco (down R$ 73 million, or 12.8%), 

and Chemicals and Petrochemicals (down R$ 6 million, or 

0.1%). 

21 


Balance Sheet 

Funding 

Funding from Clients 


Sep 30, 10 Jun 30, 10 Sep 30, 09 

Sep/10 – 

Jun/10 

R$ million 

Sep/10 – 

Sep/09 

Demand Deposits 28,461 25,838 23,306 10.2% 22.1% 

Savings Deposits 54,858 51,836 44,132 5.8% 24.3% 

Time Deposits 106,011 104,750 105,896 1.2% 0.1% 

Debentures (Repurchase Agreements) and Mortgage – Backed Notes (*) 94,066 86,566 66,032 8.7% 42.5% 

(1) Funding from Account Holders 283,397 268,990 239,366 5.4% 18.4% 

Institutional Clients 14,104 13,583 20,007 3.8% -29.5% 

Onlending 28,862 24,749 20,661 16.6% 39.7% 

(2) Total – Funding from Institutional & Account Holders 326,363 307,322 280,035 6.2% 16.5% 

Assets Under Management 357,495 344,689 310,346 3.7% 15.2% 

Technical Provisions for Insurance, Pension Plan and Capitalization 58,490 56,001 49,978 4.4% 17.0% 

Deposits from Banks 1,293 2,307 2,232 -44.0% -42.1% 

Funds from Acceptance and Issuance of Securities Abroad 9,295 6,301 6,474 47.5% 43.6% 

Total Funds from Clients 752,935 716,620 649,064 5.1% 16.0% 

Ratio between Loan Portfolio and Funding 

(*) Includes funds from Real Estate, Mortgage, Credit and Similar Notes. 

(**) These are comprised of installments of subordinated debt that is not included in Tier II Reference Equity. 

(***) The credit portfolio balance does not include sureties and endorsements. 

Sep 30, 10 Jun 30, 10 Sep 30, 09 

Sep/10 – 

Jun/10 

Sep/10 – 

Sep/09 

Funding from Clients + Account Holders 326,363 307,322 280,035 6.2% 16.5% 

Funds from Acceptance and Issuance of Securities Abroad 9,295 6,301 6,474 47.5% 43.6% 

Borrowings 14,397 13,321 12,147 8.1% 18.5% 

Other (**) 16,779 13,614 9,364 23.2% 79.2% 

Total (A) 366,833 340,559 308,019 7.7% 19.1% 

(-) Compulsory Deposits (64,432) (61,585) (22,854) 4.6% 181.9% 

(-) Cash and Cash Equivalents (Currency) (11,063) (12,415) (10,325) -10.9% 7.1% 

Total (B) 291,338 266,558 274,840 9.3% 6.0% 

Loan Portfolio (C) (***) 279,035 263,498 237,099 5.9% 17.7% 

C/A 76.1% 77.4% 77.0% -131 bps -91 bps 

C/B 95.8% 98.9% 86.3% -308 bps 951 bps 

As of September 30, 2010, total funds from clients 

mounted R$ 752,935 million, or a 5.1% increase from the 

prior quarter. 

During the quarter, the funding mix was changed, as funds 

obtained through repurchase agreements and mortgage - 

backed notes grew by R$ 7,500 million, while savings 

deposits accounts increased by R$ 3,022 million. 

The ratio of credit portfolio to funding reached 95.8% in 

September 2010, versus 98.9% in June 2010. This 310 basis 

points improvement is primarily attributable to the rise in 

debentures, savings accounts and other liabilities along 

with the fall in cash and cash equivalents. Other liabilities 

were up due to the issue of Subordinated Notes of US$1 

billion, pending approval by the Brazilian Central Bank to 

be included in the Tier II Reference Equity. 

When compulsory deposits and cash and cash equivalents 

are disregarded, the ratio reached 76.1% in September, 

remaining stable in comparison with the past 12 months. 

Ratio between Loan Portfolio and Funding 

85.3% 85.4% 83.9% 86.3% 87.5% 92.3% 98.9% 95.8% 

74.9% 75.7% 79.0% 77.0% 77.8% 78.3% 77.4% 76.1% 

283 281 279 275 281 273 

291 

241 

267 

240 234 237 246 252 263 279 

dec/08 mar/09 jun/09 sep/09 dec/09 mar/10 jun/10 sep/10 

Funding from Clients (R$ billion) 

Loan Portfolio (R$ billion) 

Loan / Funding Loan / Funding (*) 

(*) Gross funding, disregarding the deduction of compulsory deposits and cash and 

cash equivalents. 

22 


Balance Sheet 


R$ million 

Total Funds 

Sep 30, 10 Jun 30, 10 Sep 30, 09 

Sep/10 – Sep/10 – 

Jun/10 Sep/09 

Funding from Clients 752,935 716,620 649,064 5.1% 16.0% 

Repurchase Agreements (1) 65,844 74,641 66,712 -11.8% -1.3% 

Borrowings 14,397 13,321 12,147 8.1% 18.5% 

Foreign Exchange Portfolio 21,399 18,793 36,722 13.9% -41.7% 

Subordinated Debt 33,017 28,255 22,773 16.9% 45.0% 

Collection and Payment of Taxes and Contributions 3,707 3,738 3,377 -0.8% 9.8% 

Free Assets (2) 50,608 48,821 42,346 3.7% 19.5% 

Free Assets and Other 188,972 187,570 184,076 0.7% 2.7% 

Total Funds 941,907 904,190 833,140 4.2% 13.1% 

(1) Does not include own issued Debentures. 

(2) Stockholders´ Equity + Minority Interests - Permanent Assets 

Total funds reached R$ 941,907 million at September 30, 

2010, growing by R$ 37,716 million and R$ 108,766 million 

compared to June 2010 and September 2009, respectively. 

External Funding 

The table below highlights the main issues abroad of Itaú Unibanco outstanding as of September 30, 2010. 

(1) Balance refers to principal amounts. 

(2) Amount in US$ equivalent on the dates shown to JPY 30 billion. 

(3) Perpetual Bonds. 

(4) and (5) Amounts in US$ equivalent on the issue dates shown to CHP 46.9 billion, and 

CHP 48.5 billion, respectively. 

(6) and (7) Amounts in US$ equivalent on the dates shown to € 200 million, € 100 million 

The highest improvement period-on-period was observed 

in funds obtained from clients. 

Main Issues in Effect (1) Balance at Exchange Balance at 

Instrument Coordinator Issues Amortization 

Jun 30, 10 Variation Sep 30, 10 

and € 300 million, respectively. 

(8) Amounts in US$ equivalent on the date to R$ 387 million. 

(9) Unidade Financeira de Fomento 

(10) 180–day Libor. 

(11) 90–day Euribor. 

(12) Structured Notes. 

US$ millions 

Fixed Rate Notes (2) Merrill Lynch 339 20 359 8/13/2001 8/15/2011 4.250% 

Fixed Rate Notes Merrill Lynch and Itaubank 100 100 8/13/2001 8/15/2011 10.000% 

Fixed Rate Notes Merrill Lynch and Itaubank 80 80 11/9/2001 8/15/2011 10.000% 

Fixed Rate Notes (3) UBS/Merrill Lynch 500 500 7/29/2005 Perpetual 8.700% 

Fixed Rate Notes (4) Itaú Chile 97 97 7/24/2007 7/24/2017 UF (9) + 3.79% 

Fixed Rate Notes (5) Itaú Chile 98 98 10/30/2007 10/30/2017 UF (9) + 3.44% 

Floating Rate Notes Itaubank 393 393 12/31/2002 3/30/2015 Libor (10) + 1.25% 

Floating Rate Notes (6) Itaú Europa, HypoVereinsbank and LB Baden Wuerttemberg 122 14 136 12/22/2005 12/22/2015 Euribor (11) + 0.55% 

Floating Rate Notes (7) Itaú Europa, UBS Inv. Bank/US and Natexis Banques Populaires 367 (67) 300 7/27/2006 7/27/2011 Euribor (11) + 0.32% 

Floating Rate Notes (8) HSBC 215 14 229 5/30/2007 5/30/2012 9.210% 

Medium Term Notes Banco Itaú Holding Cayman 1,000 1,000 4/15/2010 4/15/2020 6.200% 

Medium Term Notes Banco Itaú Holding Cayman 0 1,000 1,000 9/23/2010 1/22/2021 5.750% 

Other Notes (12) 2,244 587 2,831 

Total 5,556 1,587 (67) 48 7,123 

Issue 

Date 

Maturity 

Date 

Coupon % p.y. 

Equity 

At September 30, 2010, the stockholders’ equity totaled R$ 

57,225 million, an increase of R$ 2,151 million compared 

to June. In the same period, the Basel Ratio was 15.3%. 

Tangible Capital 

A breakdown of the Basel ratio is presented below in order 

to show the Tangible Common Equity (TCE) ratio, 

internationally defined as Stockholders’ Equity less 

intangible assets, goodwill and redeemable preference 

shares. This is a conservative performance indicator, as it 

R$ million 

Sep 30,10 Jun 30,10 

Stockholders´ Equity of Parent Company 57,225 55,074 

(-) Intangible (3,273) (3,378) 

(=) Tangible Equity (A) 53,953 51,696 

Risk-weighted Exposure 489,357 454,925 

(-) Intangible asset not eliminated from weighting (2,851) (2,914) 

(=) Adjusted Risk-weighted Exposure (B) 486,506 452,011 

Considering the issue of Subordinated Notes of U$1 

billion, the ratio would be 15.6%. 

shows the amount of hard equity held by a company. In 

Brazil, non-voting shares basically have an equity function 

and, for this reason, have not been excluded from Tangible 

Equity. 

BIS 

Tier I (Core Capital) 

Tangible Equity 

Capital Ratios 

15.7 15.3 

12.3 

11.4 

11.9 

11.1 

Ratios 

BIS 15.3% 15.7% 

Tier I (Core Capital) 11.9% 12.3% 

Tangible Equity (A/B) 11.1% 11.4% 

Jun/10 

Sep/10 

23 


Balance Sheet by Currency (*) 

Itaú Unibanco adopts an exchange rate risk management 

policy with respect to its assets and liabilities positions that 

is primarily intended to prevent impacts on consolidated 

results from fluctuations in exchange parities. 

The Brazilian tax legislation determines that exchange 

variation gains and losses on permanent foreign 

investments shall not be included in tax calculations. Gains 

and losses arising from financial instruments used to 

hedge such asset positions, however, are impacted by tax 

Balance Sheet 

Assets 


effects. Therefore, in order not to expose net income to 

exchange variations, a liability position should be built at a 

higher volume than the hedged assets. 

The Balance Sheet per Currencies shows assets and 

liabilities balances denominated in local and foreign 

currencies. As of September 30, 2010, the net exchange 

position, including investments abroad, was an liability of 

US$ 9,071 million. 

Consolidated 


Total 

Sep 30,10 

Business in Brazil 


Local Currency 

Foreign 

Currency 

R$ million 

Business 

Abroad 


Cash and Cash Equivalents 11,063 7,116 5,584 1,532 4,534 

Short Term Interbank Deposits 112,483 105,236 105,135 101 9,244 

Securities 141,879 124,538 124,183 355 31,740 

Loans 279,035 249,095 241,299 7,796 40,866 

(Allowance for Loan Losses) (23,284) (22,575) (22,575) 0 (709) 

Other Assets 154,796 148,374 136,220 12,154 26,479 

Foreign Exchange Portfolio 20,571 19,274 7,714 11,560 21,306 

Other 134,226 129,100 128,506 594 5,173 

Permanent Assets 10,275 30,418 8,992 21,426 1,283 

TOTAL ASSETS 686,248 642,202 598,838 43,364 113,438 

Derivatives – Purchased Positions 47,913 

Futures 20,451 

Options 11,509 

Swaps 6,436 

Other 

TOTAL ASSETS AFTER ADJUSTMENTS (a) 

9,517 

91,277 

Liabilities and Equity 

Consolidated 


Sep 30,10 

Business in Brazil 


Total Local Currency 

Foreign 

Currency 

Deposits 194,917 162,252 162,031 220 34,165 

Funds Received under Securities Repurchase Agreements 155,636 149,090 149,090 0 6,546 

Funds from Acceptances and Issue of Securities 23,379 28,205 13,972 14,234 8,746 

Borrowings and OnLendings 43,259 45,776 30,620 15,156 10,307 

Interbank and Interbranch Accounts 8,281 8,115 5,989 2,126 166 

Derivative Financial Instruments 9,077 7,388 7,388 0 1,905 

Other Liabilities 132,090 122,469 110,565 11,904 30,141 

Foreign Exchange Portfolio 21,399 20,154 8,853 11,301 21,254 

Other 110,691 102,315 101,712 603 8,887 

Technical Provisions of Insurance, Pension Plans 

and Capitalization 58,490 58,481 57,792 689 8 

Deferred Income 237 209 209 0 28 

Minority Interest in Subsidiaries 3,658 2,992 2,992 0 0 

Stockholders' Equity of Parent Company 57,225 57,225 57,225 0 21,426 

Capital Stock 47,792 47,792 47,792 0 20,194 

Net Income 9,433 9,433 9,433 0 1,232 

TOTAL LIABILITIES AND EQUITY 

686,248 642,202 597,872 44,330 113,438 

Derivatives – Sold Positions 62,315 

Futures 23,990 

Options 16,302 

Swaps 12,412 

Other 

TOTAL LIABILITIES AND EQUITY AFTER ADJUSTMENTS (b) 

9,611 

106,645 

Net Foreign Exchange Position Itaú Unibanco (c = a - b) (15,368) 

Net Foreign Exchange Position Itaú Unibanco (c) in US$ (9,071) 

(*) Does not consider eliminations of operations between local and foreign businesses. 

Business 

Abroad 


24 


Value at Risk (VaR) 

The table below shows the Consolidated Global VaR, 

comprising the portfolios of Itaú Unibanco, Itaú BBA, 

Banco Itaú Europa, Banco Itaú Argentina, Banco Itaú Chile, 

Banco Itaú Uruguay and Banco Itaú Paraguay. Itaú 

Unibanco’s and Itaú BBA’s portfolios are analyzed together 

and segregated by risk factor. 

On a consolidated basis, Itaú Unibanco continues to 

pursue its policy of operating within low limits in relation 


to its capital. Consolidated values at risk showed a slight 

fluctuation over the quarter, as evidenced by the Average 

Global VaR, essentially as a result of the conservative 

portfolio management. 

It may be seen that the diversification of risks from the 

business units is significant, enabling the conglomerate to 

maintain a reduced overall exposure to market risk when 

compared to its equity. 

VaR – Itaú Unibanco 

VaR by Risk Factor 

Sep 30, 10 Jun 30, 10 

Fixed Rate 73.0 62.6 

TR 25.6 22.2 

Inflation Indexes 17.3 16.4 

Dollar Linked Interest Rate 12.8 15.1 

Foreign Exchange Rate – US$ 4.8 11.4 

Foreign Sovereign and Private Securities 4.8 6.1 

Equities 18.0 21.1 

Foreign Interest Rate 8.7 3.6 

Commodities 16.0 2.5 

Other Foreign Exchange Rate 14.2 17.4 

Others 7.3 3.3 

Itaú Europa 2.1 0.7 

Itaú Argentina 1.0 0.8 

Itaú Chile 5.1 2.9 

Itaú Uruguay 0.2 0.4 

Itaú Paraguay 0.3 - 

Diversification Effect (91.9) (100.4) 

Global VaR 119.5 86.2 

Maximum VaR 138.7 118.3 

Average VaR 107.7 88.1 

Minimum VaR 78.6 61.6 

Itaú Unibanco + Itaú BBA 

R$ million 

Adjusted for tax effects. 

VaR refers to the maximum potential loss in one day, with a 99% confidence level. 

Evolution of Itaú Unibanco's Value at Risk (VaR) 

300 

250 

200 

150 

100 

50 

0 

209 

173 

158 

143 

242 

153 

87 

61 

123 

92 

77 

65 

118 139 

120 

88 

108 

86 

79 

sep/09 dec/09 mar/10 jun/10 sep/10 

Global Maximum Average Minimum 

62 

Find out more on risk management in 

Note 21 to the Financial Statements 

and in our Investor Relations website, 

www.itau-unibanco.com/ir, in the 

Corporate Governance/Risk 

Management section, and also in 

Form 20-F, available in the Financial 

Information/SEC Files section. 

25 


Ownership Structure 

Management of our ownership structure is mainly 

intended to optimize the capital allocation to the various 

segments comprising the conglomerate. 


The average acquisition cost of treasury shares, as well as 

the activity of options granted to conglomerate executives 

under the Option Plan, are set out in Note 16-f to the 

Complete Financial Statements. 

The table below shows the number of shares of capital stock and treasury shares as of September 30, 2010: 

In thousands 

ITAÚ UNIBANCO HOLDING S.A. Common Shares Non-voting Shares Total 

Balance of Shares 2,289,286 2,281,650 4,570,936 

Treasury Shares 2 30,472 30,474 

Total Shares (-) Treasury 2,289,284 2,251,178 4,540,462 

The organization chart below summarizes the current ownership structure: 

Moreira Salles 

Family 

Egydio Souza Aranha 

Family 

Free Float* 

100.00% Total 

61.08% Common Shares 

17.95% Non-voting Shares 

34.52% Total 



65.48% Total 

Cia. E. Johnston de 

Participações 


33.47% Total 

Itaúsa 


66.53% Total 


19.50% Total 

IUPAR 


Participações S.A. 


25.71% Total 

Free Float* 



54.01% Total 


Holding S.A. 


Non-voting Shares Mix 

Average Daily Trading Volume (BM&FBovespa+NYSE) 

CAGR: 31.12% 

874 

CAGR: 21.47% 

CAGR: 36.89% 

641 

242 

189 

319 

185 

95 

452 

632 

79 

106 

224 

R$ million 

670 

559 

199 

191 

471 

368 

2005 2006 2007 2008 2009 jan-sept/10 

Foreign Investor 

(BM&FBovespa) 

23% 

Foreign Investor in 

NYSE (ADR) 

39% 

Brazilian Investor 

(BM&FBovespa) 

38% 

NYSE 

BM&FBOVESPA (Non-voting+Common) 

*excluding Controlling stockholders and Treasury 

26 


Performance in the Stock Market 

3 rd Q/10 

Non-voting Common 

shares shares 

ADRs 

ITUB4 (R$) ITUB3 (R$) ITUB (US$) 

Closing quotation at 06/30/2010 32.50 25.80 18.01 

High for the quarter * 40.47 30.85 24.18 

Average for the quarter 37.67 29.16 21.68 

Low for the quarter ** 32.51 25.71 17.93 

Closing quotation at 09/30/2010 40.47 30.85 24.18 

Change in 3 rd Q/10 24.5% 19.6% 34.3% 

Average daily trading financial volume (million) 205 8 253 

* quotation at September 30 

**quotation at July 1 st 

1.000 

Evolution of R$ 100 invested on September 30, 2000 until September 30, 2010 

952 

900 

CAGR: 25.27% 

800 

CAGR: 21.11% 

700 

679 

CAGR: 15.86% 

600 

Baseline 100 = 09/30/00 

500 

400 

300 

200 

100 

- 

Sep-00 

Market Capitalization (*) x Bovespa Index 

At September 30, 2010, Itaú Unibanco’s market capitalization 

reached R$ 182,209 million, a 21.8% increase from June 30, 2010. 

According to Bloomberg, the Bank held the 10 th place in the 

worldwide bank ranking at the end of September. 

23.8 

11.3 

Mar-01 

Sep-01 

CAGR 2002-3rdQ/10 : 30.04% 

CAGR 2002-3rdQ/10 : 26.39% 

41.2 

22.2 

Mar-02 

54.5 

26.2 

Sep-02 

Mar-03 

80.8 

33.4 

Sep-03 

Mar-04 

115.3 

44.4 

140.5 

107.9 

63.9 

37.5 

175.1 

68.6 70.3 

176.2 

2002 2003 2004 2005 2006 2007 2008 2009 1st 

Q/10 

Sep-04 

Mar-05 

Bovespa Index (thousands points) 

Sep-05 

149.6 

60.9 

2nd 

Q/10 

182.2 

193.7 

69.4 71.7 

3rd 

Q/10 

Market Capitalization(R$ billion) 

Oct 18, 

2010 

(*) Average price of non-voting shares (the most liquid) on the last trading day of the period x total shares 

outstanding. 

Dow Jones Sustainability Index 2010 

For the 11 th consecutive year, Itaú Unibanco Holding S.A. was 

selected to constitute the Dow Jones Sustainability Index (DJSI) 

portfolio, 2010/2011 version -- the only Latin American bank to be 

part of DJSI since its inception in 1999. The new portfolio comprises 

318 companies from 27 countries in the Americas, Asia and Africa, 

of which only seven are Brazilian, including Itaúsa and Redecard. 

The companies that make up DJSI are well known for their 

commitment to social, environmental and cultural development. 

Agreement with China Unionpay 

At the end of September, Itaú Unibanco joined into a commercial 

and cooperation agreement with China Unionpay Co. Ltd (“CUP”), 

whereby customers of the Chinese company may withdraw funds 

at Itaú’s ATMs. Formed in 2002, CUP today has more than 400 

member institutions and has issued 2.2 billion credit and debit 

cards. Brazil is already a destination in high demand by the Chinese 

and is expected to be even more so due to the 2014 World Soccer 

Cup and 2016 Olympic Games. 

Mar-06 

Sep-06 

Mar-07 

Sep-07 

Mar-08 

Sep-08 

Itaú Unibanco's non-voting shares WITH reinvestment of dividends 

Itaú Unibanco's non-voting shares WITHOUT reinvestment of dividends 

São Paulo Stock Exchange Index (Bovespa Index) 

Mar-09 

Sep-09 

Mar-10 

Sep-10 

436 


2010 Apimec Cycle 

To complete the Apimec Cycle, 12 additional meetings were held 

in Brazil in the third quarter, for a total of 22 meetings in 2010. Total 

audiences in such meetings comprised approximately 2,400 

participants. It should be noted that six meetings were 

broadcasted via internet: Porto Alegre, Belo Horizonte, Fortaleza, 

Rio de Janeiro, Brasília and São Paulo, with 1,391 participants 

through webcast. 

To acknowledge the Bank’s commitment to continuing 

transparency with the capital markets, in 2010 Apimec awarded 

Itaú Unibanco with the Platinum frequency seal, following the 

holding of the 15 th consecutive meeting in São Paulo. The Bank 

was also awarded five Gold seals to acknowledge the holding of 

over 10 consecutive meetings in five different cities. To view the 

presentations and webcasts, please visit the Investor Relations 

website (www.itau-unibanco.com/ir > Presentations > Meetings 

Apimec). 

Expo Money 2010 

In August and September, Itaú Unibanco took part in Expo Money 

events in Brasília and São Paulo, with the presence of thousands of 

individuals who are interested in learning about finance and 

investments, or improving their understanding of the financial 

market. In October, the Bank took part in Expo Money events in 

Belo Horizonte and Vitória. You are invited to visit Itaú Unibanco’s 

stands at the Rio de Janeiro (November 10 and 11) and Porto 

Alegre (December 1 st and 2 nd ) events. 

Attendance to Investors 

During the third quarter, Itaú Unibanco took part in 

conferences and non-deal roadshows abroad: San 

Francisco (USA), Bogota (Colombia), London (England), 

and New York (USA). Overall, 15 conferences and 

roadshows have been carried out since early 2010. 

Additionally, the Investor Relations team assisted 291 

assistances to institutional investors via telephone, e-mail 

and personal meetings. Also, assistance was provided to 

284 individual investors by e-mail. 

Recognitions 

Itaú Unibanco is Brazil’s largest financial institution 

At the 2010 edition of Exame magazine’s Melhores & 

Maiores (list of top companies), Itaú Unibanco ranked first 

among the fifty largest Brazilian Banks, in terms of net 

equity. According to the annual survey conducted by this 

magazine, that specializes in economy and business, Itaúsa 

also ranked first among the country’s largest business 

groups in terms of revenues. 

Transparency Ranking 

For the 4 th consecutive year, Itaú Unibanco was considered 

the most transparent company among the institutions that 

comprise Ibovespa (the São Paulo Stock Exchange Index), 

in accordance with the 4 th edition of the Annual Study and 

Ranking disclosed in August by Management & Excellence 

(M&E), a reference in Latin America for the assessment of 

company sustainability levels. The Bank complied with 

95.93% of the criteria involved, while Itaúsa, the runner up, 

met 95.12% of such criteria. 

27 



(This page was left in blank intentionally) 

28 


Pro Forma Financial Statements 

by Segment



30 


Pro Forma Financial Statements by Segment 


Pro Forma Adjustments and Allocated Capital 

The pro forma financial information takes into account the 

impacts associated with the allocation of capital. To this 

end, adjustments were made to the financial statements, 

based on a proprietary model that considers the credit, 

market and operating risks, as well as the regulatory 

framework and the level of fixed asset formation. 

We determine the Risk Adjusted Return on Capital 

(RAROC), an operating performance indicator consistently 

adjusted to the capital required to support the risk of asset 

and liability positions taken. 

Adjustments made to the balance sheet and statement of 

income for the period are based on the business units’ 

managerial information. 

The Corporate+Treasury column shows the results 

associated with excess capital, excess subordinated debt 

and the carrying cost of the net balance of deferred taxes. 

It also shows the cost of the treasury operation, equity in 

the earnings of companies not yet linked to the different 

segments, as well as the adjustments for minority interests 

in subsidiaries and the market financial margin. 

Since the 4 th quarter of 2009, the Corporate+Treasury 

column also comprises the consolidation of 30% of Porto 

Seguro. 

Income Tax and Social Contribution on Net Income effects 

on the payment of Interest on Own Capital for each 

segment were reversed and subsequently reallocated to 

the individual segments in proportion to the amount of 

Tier I capital, while the financial statements were adjusted 

in order to replace net book value with market level 

funding. The financial statements were then adjusted to 

include revenues associated with the allocated capital. The 

cost of subordinated debt and the related remuneration at 

market prices were allocated to the segments on a pro rata 

basis, in accordance with the Tier I allocated capital. 

The diagram below shows the changes introduced in the 

financial statements to reflect the impacts of capital 

allocation in each segment. 

Return on 

Stockholders’ 

Equity 

Net Income 

Stockholders’ Equity 

Adjustments to the Financial Statements 

Adjustment in the 

Financial Statements to 

replace the net book 

value of Stockholders’ 

Equity and 

Subordinated Debt 

with funding at market 

prices. 

The financial 

statements were 

adjusted to include 

allocated capital based 

on proprietary models, 

as well as their 

respective revenues 

(CDI) and expenses 

(cost os subordinated 

debt). 

Return on 

Allocated 

Capital 

Pro Forma 

Net Income 

per segment 

Allocated Capital 

per segment 

31 




The pro forma financial statements of the Commercial Bank, Itaú BBA, Consumer Credit and Corporation+Treasury, 

presented below, are based on managerial information derived from internal models, so as to more accurately reflect the 

activities of the business units. 

On September 30, 2010 

R$ million 

Pro Forma Balance Sheet by Segment 

ASSETS Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 


Current and Long-Term Assets 480,921 196,205 84,493 58,269 675,973 

Cash and Cash Equivalents 9,468 1,354 - 8 11,063 

Short-term Interbank Investments 173,485 48,435 - 3,384 112,483 

Short-term Interbank Deposits in the Market 124,278 39 - 3,384 112,483 

Short-term Interbank Deposits in Intercompany* 49,207 48,396 - - - 

Securities and Derivative Financial Instruments 82,276 61,884 0 23,681 141,879 

Interbank and Interbranch Accounts 64,843 1,556 76 - 66,243 

Loans, Lease and Other Credits Operations 114,805 73,956 86,191 4,085 279,035 

(Allowance for Loan Losses) (11,388) (2,198) (7,243) (2,455) (23,284) 

Other Assets 47,433 11,217 5,468 29,567 88,554 

Foreign Exchange Portfolio 15,124 9,590 - - 20,571 

Others 32,308 1,628 5,468 29,567 67,983 

Permanent Assets 6,892 922 1,279 1,182 10,275 

TOTAL ASSETS 487,814 197,127 85,772 59,452 686,248 

LIABILITIES AND EQUITY Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 


Current and Long-Term Liabilities 467,522 184,816 78,428 38,278 625,129 

Deposits 198,405 76,072 13 1,129 194,917 

Deposits from Clients 170,511 26,865 13 1,129 194,917 

Deposits with Intercompany* 27,894 49,207 - - - 

Deposits Received under Securities Repurchase Agreements 68,481 48,210 65,201 6,551 155,636 

Securities Repurchase Agreements in the Market 47,979 36,234 65,201 6,551 155,636 

Securities Repurchase Agreements with Intercompany* 20,502 11,976 - - - 

Funds from Acceptances and Issue of Securities 40,193 5,050 - 26 23,379 


Borrowings and Onlendings 16,838 26,737 502 - 43,259 

Derivative Financial Instruments 5,437 6,909 - - 9,077 



Others 59,856 9,445 12,698 28,745 110,691 

Technical Provisions for Insurance, Pension Plans and Capitalization 56,662 - - 1,827 58,490 

Deferred Income 172 58 - 7 237 

Minority Interest in Subsidiaries (0) - - 3,658 3,658 

Allocated Tier I Capital 20,120 12,253 7,344 17,508 57,225 

TOTAL LIABILITIES AND EQUITY 487,814 197,127 85,772 59,452 686,248 

*The Intercompany were eliminated in the Consolidated. 

Pro Forma Income Statement by Segment 

3 rd Quarter/10 Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 

Note: Non-interest Expenses item is made up of Personnel Expenses, Other Administrative Expenses, Tax Expenses and Other Operating Expenses. 

The Consolidated figures do not represent the sum of the parts, because there are operations between the companies that were eliminated only in the Consolidated figures. 

R$ million 


Managerial Financial Margin 7,066 1,164 2,280 714 11,204 

Financial Margin with Clients 6,874 1,164 2,280 - 10,298 

Financial Margin with the Market - - - 906 906 

Financial Margin of the Corporation 192 - - (192) - 

Result of Loan Losses (2,119) 143 (955) (4) (2,935) 

Expenses for Allowance for Loan Losses (2,947) 110 (1,227) (4) (4,069) 

Income from Recovery of Credits Written Off as Loss 828 33 272 - 1,134 

Net Result from Financial Operations 4,946 1,307 1,326 710 8,269 

Other Operating Income/(Expenses) (2,888) (208) (423) (71) (3,593) 

Banking Service Fees and Income from Banking Charges 2,345 468 1,530 109 4,451 

Result from Insurance, Pension Plans and Capitalization Operations 474 (0) 72 140 685 

Non-interest Expenses (5,200) (533) (1,804) (437) (7,975) 

Tax Expenses for ISS, PIS and Cofins and Other Taxes (603) (107) (251) 48 (913) 

Equity in Earnings of Affiliates and Other Investments (0) (3) - 67 64 

Other Operating Income 97 (33) 29 3 94 

Operating Income 2,058 1,098 902 639 4,676 

Non-operating Income 12 (10) (0) 2 3 

Income Before Tax and Profit Sharing 2,070 1,088 902 642 4,679 

Income Tax and Social Contribution (566) (281) (264) (142) (1,253) 

Profit Sharing (21) (18) (6) (7) (52) 

Minority Interests in Subsidiaries - - - (238) (216) 

Recurring Net Income 1,483 789 631 255 3,158 

(RAROC) – Return on Average Tier I Allocated Capital 31.7% 26.1% 33.7% 5.7% 22.5% 

Efficiency Ratio 53.3% 35.7% 49.3% 33.0% 49.2% 

32 




The pro forma financial statements of the Commercial Bank, Itaú BBA, Consumer Credit and Corporation+Treasury, 

presented below, are based on managerial information derived from internal models, so as to more accurately reflect the 

activities of the business units. 

On June 30, 2010 

R$ million 

Pro Forma Balance Sheet by Segment 

ASSETS Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 


Current and Long-Term Assets 462,722 180,422 79,324 54,838 641,590 

Cash and Cash Equivalents 11,042 1,089 - 9 12,415 

Short-term Interbank Investments 173,320 46,592 - 3,169 115,117 

Short-term Interbank Deposits in the Market 125,498 32 - 3,169 115,117 

Short-term Interbank Deposits in Intercompany* 47,821 46,560 - - - 

Securities and Derivative Financial Instruments 79,066 54,174 0 20,410 128,825 


Loans, Lease and Other Credits Operations 109,122 69,064 80,978 4,336 263,498 

(Allowance for Loan Losses) (11,254) (2,142) (7,046) (2,458) (22,900) 

Other Assets 40,269 10,532 5,315 29,372 82,430 


Others 28,926 749 5,315 29,372 64,192 

Permanent Assets 6,906 525 1,380 1,182 9,993 

TOTAL ASSETS 469,628 180,947 80,704 56,020 651,583 

LIABILITIES AND EQUITY Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 


Current and Long-Term Liabilities 452,199 169,009 73,055 34,034 592,582 

Deposits 193,771 72,231 11 1,353 189,657 

Deposits from Clients 168,985 24,410 11 1,353 189,657 

Deposits with Intercompany* 24,785 47,821 - - - 

Deposits Received under Securities Repurchase Agreements 76,160 47,327 58,078 6,443 157,261 

Securities Repurchase Agreements in the Market 54,386 38,184 58,078 6,443 157,261 

Securities Repurchase Agreements with Intercompany* 21,774 9,144 - - - 

Funds from Acceptances and Issue of Securities 36,546 3,648 - 18 18,904 


Borrowings and Onlendings 14,215 23,268 575 13 38,071 

Derivative Financial Instruments 4,948 4,553 - - 6,849 



Others 55,204 5,864 14,383 24,460 99,644 

Technical Provisions for Insurance, Pension Plans and Capitalization 54,253 - - 1,748 56,001 

Deferred Income 128 51 - 7 187 

Minority Interest in Subsidiaries (0) - - 3,741 3,740 

Allocated Tier I Capital 17,301 11,887 7,649 18,238 55,074 


*The Intercompany were eliminated in the Consolidated. 

R$ million 

Pro Forma Income Statement by Segment 

2 nd Quarter/10 Commercial Bank Itaú BBA Consumer Credit 

Corporation + 

Treasury 


Managerial Financial Margin 6,441 1,108 2,442 899 10,892 

Financial Margin with Clients 6,450 1,108 2,442 - 10,001 

Financial Margin with the Market - - - 891 891 

Financial Margin of the Corporation (8) - - 8 - 

Result of Loan Losses (1,822) (156) (1,066) (8) (3,053) 

Expenses for Allowance for Loan Losses (2,482) (278) (1,251) (8) (4,019) 

Income from Recovery of Credits Written Off as Loss 660 122 185 - 967 

Net Result from Financial Operations 4,619 952 1,376 891 7,839 

Other Operating Income/(Expenses) (2,460) (180) (408) (61) (3,121) 

Banking Service Fees and Income from Banking Charges 2,264 487 1,480 82 4,300 

Result from Insurance, Pension Plans and Capitalization Operations 534 (0) 59 126 719 

Non-interest Expenses (4,932) (542) (1,720) (377) (7,570) 

Tax Expenses for ISS, PIS and Cofins and Other Taxes (572) (90) (238) (71) (970) 

Equity in Earnings of Affiliates and Other Investments (0) 1 - 44 45 

Other Operating Income 246 (36) 11 135 357 

Operating Income 2,159 772 968 830 4,719 

Non-operating Income (12) 11 0 (0) (1) 

Income Before Tax and Profit Sharing 2,147 783 968 830 4,717 

Income Tax and Social Contribution (633) (168) (284) (34) (1,119) 

Profit Sharing (20) (23) (4) (7) (54) 

Minority Interests in Subsidiaries - - - (257) (247) 

Recurring Net Income 1,494 592 679 532 3,298 

(RAROC) – Return on Average Tier I Allocated Capital 36.5% 19.9% 35.3% 11.8% 24.4% 


Note: Non-interest Expenses item is made up of Personnel Expenses, Other Administrative Expenses, Tax Expenses and Other Operating Expenses. 


33 



Commercial Bank 

The Commercial Bank result is derived in the offering of 

financial products and banking services to a diversified 

client base, including individuals and companies. The 

segment includes retail clients (individuals and very small 

companies), high-income clients, wealthy clients (private 

bank) and small and mid-size companies. 

In the third quarter of 2010, recurring net income of the 

Commercial Bank totaled R$ 1,483 million, remaining 

practically stable. In this quarter there was the 6.6% 

growth in financial margin with clients, mainly driven by 

growth in the loan portfolio. 

The non-interest expenses grew 5.4% over the previous 

quarter, mainly caused by the intensification of the 

migration process of Unibanco's branch platform to Itaú. 

The credit portfolio totaled R$ 114,805 million, or a 5% 

increase compared with the prior period. The commercial 

Bank return on allocated capital reached 31.7% per annum 

while the efficiency ratio stood at 53.3% in the period. 

Some Commercial Bank Highlights: 

Assets Under Management (AUM) 

R$ billion 


Quantity of Credit Card Accounts* 

in thousands 

25,707 

24,676 

23,520 23,280 23,800 

Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 

*Does not include additional and partnership cards 

Amount of Transactions 

R$ million 

26,303 

25,420 

24,154 24,719 

21,199 

20.1% 20.0% 20.1% 21.3% 20.8% 20.5% 20.2% 19.8% 19.4% 

265 258 269 

52 

58 61 

305 310 

59 61 

334 349 345 357 

76 79 82 86 

3rd Q/09 4th Q/09 1st Q/10 2nd Q/10 3rd Q/10 

214 200 208 

245 249 258 269 262 

Sep/08 Dec/08 Mar/09 Jun/09 Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 

Investment Funds Managed Portfolios Market Share * 

*Source: ANBIMA (Brazilian Association of Financial and Capital Market Entities) 

At the end of the third quarter of 2010, assets under 

management totaled R $ 357,495 million, a 3.7% growth 

from the previous quarter. 

Credit Cards 

Itaú Unibanco is the leader in the Brazilian credit card 

market. Itaucard, Unicard and Hipercard offer a wide range 

of products to 25.7 million clients, both account holders 

and non-account holders. In the third quarter of 2010, the 

volume of transactions on credit cards added up to 

R$26,303 million, equal to a 24.1% increase when 

compared to the same period of the prior year. 

272 

Mortgage Loans 

In the third quarter of 2010, the mortgage loans portfolio 

amounted to R$ 11,963 million, growing by 13.9% 

compared to the prior quarter, and maintaining the 

accelerated expansion rate that has characterized the real 

estate market in the most recent quarters. 

Between July and September 2010, the volume of new 

mortgage loans financing contracts to individuals 

amounted to R$ 1,099 million, while financing to 

companies added up to R$ 2,265 million, for a total of R$ 

3,364 million. 

R$ million 

Volume of contracts 

Variation 

3 rd Q/10 2 nd Q/10 

3 rd Q/10 – 

2 nd Q/10 

% 

Individuals 1,099 1,022 77 7.5% 

Companies 2,265 1,776 489 27.5% 

Total 3,364 2,798 566 20.2% 

34 



Itaú BBA 

Itaú BBA segment is responsible for banking operations 

with large companies and investment bank services. Itaú 

BBA’s net income added up to R$ 789 million in the third 

quarter of 2010, increasing by 33.2% compared to the 

prior quarter. Return on allocated capital stood at 26.1% 

per year, while the efficiency ratio reached 35.7% in the 

period. The financial margin with clients totaled R$ 1,164 

million, or a 5.0% rise from the prior quarter. 

The outstanding quality level of the credit portfolio must 

be highlighted, with 94.0% of the credits ascribed risk 

ratings “AA”, “A” and “B”, in accordance with the criteria set 

forth in the Brazilian Monetary Council Resolution 2,682. In 

this context, the result of loan losses ended the third 

quarter as R$ 143 million, mainly due to reversal of 

provisions amounting to R $ 110 million. 

In the third quarter, banking service fees totaled R$ 468 

million, declining by 3.9% when compared to the prior 

quarter, mostly as a result of the high volume of 

investment bank operations carried out in the second 

quarter of 2010. Non-interest expenses amounted R$ 533 

million, or a 1.7% decrease from the prior quarter. 

Consumer Credit 

The Consumer Credit segment result includes financial 

products and services offered to customers who are nonaccount 

holders. In the third quarter of 2010, net income 

of the segment was R$ 631 million, or a 7.0% decline in 

comparison with the second quarter of the year. Such 

variation is mainly related to the reduction in the financial 

margin with clients, since the willingness to make financed 

purchases on credit cards reduction on the this time of the 

year for seasonal reasons, and the increase in costs due to 

the expansion in the clients base and the replacement of 

cards under the migration from Unibanco to Itaú. Return 

on allocated capital was 33.7% per year, while the 

efficiency ratio reached 49.3% in the period. The credit 

portfolio totaled R$ 86,191 million, corresponding to a 

6.4% rise from the prior quarter balance. 


On September 30, 2010, the financing of new vehicles 

accounted for 56.8% of the total vehicle portfolio balance, 

versus 56.1% at the end of the prior quarter. As result of 

changes introduced in the collection policy during the 

second quarter, we continued good performance in the 

recovery of credits previously written off as losses in this 

quarter. 

Partnerships 

Our partnerships, in the form of joint ventures and 

operating agreements with major retailers present in the 

Brazilian market, are responsible for the offering of 

consumer credit to non-account holders. Our client base 

reached 15.8 million customers in the third quarter of 

2010, for total revenues of R$ 5,931 million, equal to a 26% 

rise compared to revenues in the same period of the prior 

year. 

Amount of Transactions 

4,709 

4,763 

5,363 

5,776 

5,931 

3rd Q/09 4th Q/09 1st Q/10 2nd Q/10 3rd Q/10 

R$ million 

Vehicle Financing 

During the third quarter of 2010, new operations for 

vehicle financing and leasing added up to R$ 8,298 million, 

or a 23.5% growth when compared to the prior quarter. 

Despite the end of the IPI tax benefit in April, financing 

continued at an accelerated pace and our market share 

reached 24.2%, representing a 70 basis points increase 

from the second quarter of 2010. As result of this growth, 

the vehicle portfolio reached R$ 57,334 million. 

35 


Insurance, Pension Plans and Capitalization 


The pro forma financial statements below were prepared based on Itaú Unibanco internal and managerial information and 

are intended to identify the performance of the insurance-related businesses. 

The numbers presented in this chapter are from the Commercial Bank segment and do not include results from the Porto 

Seguro association. 

On September 30, 2010 

Pro Forma Insurance, Pension Plans and Capitalization Balance Sheet 

Life and Pension 

ASSETS 

Insurance 

Plans 

Capitalization 

Consolidated 

Current and Long-Term Assets 8,719 52,713 2,871 64,279 

Cash and Cash Equivalents 71 13 5 89 

Securities 3,088 52,027 2,815 57,910 

Other Assets (mainly receivables from insurance) 5,560 673 51 6,279 

Permanent Assets 725 106 42 866 

TOTAL ASSETS 9,444 52,819 2,914 65,146 

R$ million 


Insurance 


Plans 


Consolidated 

Current and Long – Term Liabilities 8,447 50,089 2,696 61,200 

Technical Provisions – Insurance 4,806 921 - 5,727 

Technical Provisions – Pension Plans and VGBL 541 47,901 - 48,443 

Technical Provisions – Capitalization - - 2,500 2,484 

Other Liabilities 3,099 1,266 195 4,546 

Allocated Tier I Capital 997 2,731 218 3,945 

TOTAL LIABILITIES AND EQUITY 9,444 52,819 2,914 65,146 

Pro Forma Insurance, Pension Plans and Capitalization Income Statement 

3 rd Quarter/10 Insurance 


Plans 


Consolidated 

Earned Premiums (a) 901 199 0 1,095 

Result of Pension Plans and Capitalization (b) 1 (1) 112 112 

Retained Claims (c) (309) (67) - (376) 

Selling Expenses (d) (323) (21) (13) (357) 

Other Operating Income/(Expenses) of Insurance Operations (e) (49) (1) (0) (45) 

Underwriting Margin (f=a+c+d+e) 219 110 - 330 

Result from Insurance, Pension Plans and Capitalization (g=b+f) 220 109 99 428 

Managerial Financial Margin 73 174 33 263 

Banking fees and charge revenues - 153 - 153 

Non-interest Expenses (147) (68) (13) (233) 

Tax Expenses for ISS, PIS and Cofins and other taxes (26) (20) (6) (52) 

Equity in Earnings of Affiliates and Other Investments 0 (0) (0) 0 

Other Operating Income (15) (3) 2 3 

Operating Income 104 345 116 562 

Non-operating Income 9 (1) 2 10 

Income Before Income Tax and Social Contribution 113 344 118 572 

Income Tax/Social Contribution (33) (102) (39) (174) 

Profit Sharing 0 - - 0 

Recurring Net Income 80 242 79 399 

(RAROC) – Return on Average Tier I Allocated Capital 32.0% 35.5% 145.9% 40.4% 

Efficiency Ratio 55.7% 18.0% 18.1% 40.4% 

Note: The information on VGBL was classified together with the pension plan products. 

Non-interest Expenses comprise Personnel Expenses, Other Administrative Expenses, Tax Expenses, and Other Operating Expenses. 

The Underwriting Margin comprises insurance operations. 


36 




The pro forma financial statements below were prepared based on Itaú Unibanco internal and managerial information and 

are intended to identify the performance of the insurance-related businesses. 

The numbers presented in this chapter are from the Commercial Bank segment and do not include results from the Porto 

Seguro association. 

On June 30, 2010 

Pro Forma Insurance, Pension Plans and Capitalization Balance Sheet 


ASSETS 

Insurance 

Plans 


Consolidated 

Current and Long-Term Assets 8,595 50,183 2,760 61,509 

Cash and Cash Equivalents 124 16 7 148 

Securities 2,823 49,423 2,676 54,902 

Other Assets (mainly receivables from insurance) 5,648 743 76 6,460 

Permanent Assets 774 108 43 917 

TOTAL ASSETS 9,369 50,290 2,803 62,426 

R$ million 


Insurance 


Plans 


Consolidated 

Current and Long – Term Liabilities 8,494 47,708 2,592 58,759 

Technical Provisions – Insurance 4,788 867 - 5,655 

Technical Provisions – Pension Plans and VGBL 538 45,652 - 46,189 

Technical Provisions – Capitalization - - 2,420 2,402 

Other Liabilities 3,168 1,190 172 4,512 

Allocated Tier I Capital 875 2,582 211 3,668 

TOTAL LIABILITIES AND EQUITY 9,369 50,290 2,803 62,426 

Pro Forma Insurance, Pension Plans and Capitalization Income Statement 

2 nd Quarter/10 Insurance 


Plans 


Consolidated 

Earned Premiums (a) 900 193 (0) 1,089 

Result of Pension Plans and Capitalization (b) 1 17 133 151 

Retained Claims (c) (331) (56) 0 (387) 

Selling Expenses (d) (308) (20) (15) (342) 

Other Operating Income/(Expenses) of Insurance Operations (e) (54) (1) 1 (49) 

Underwriting Margin (f=a+c+d+e) 208 116 - 324 

Result from Insurance, Pension Plans and Capitalization (g=b+f) 209 133 119 461 

Managerial Financial Margin 31 117 23 168 

Banking fees and charge revenues - 142 - 142 

Non-interest Expenses (123) (49) (50) (217) 

Tax Expenses for ISS, PIS and Cofins and other taxes (29) (13) (7) (48) 

Equity in Earnings of Affiliates and Other Investments 0 0 - (0) 

Other Operating Income (2) 6 1 5 

Operating Income 88 336 87 510 

Non-operating Income (6) (0) 3 (3) 

Income Before Income Tax and Social Contribution 82 335 89 507 

Income Tax/Social Contribution (23) (100) (29) (152) 

Profit Sharing 1 - - 1 

Recurring Net Income 60 236 60 356 

(RAROC) – Return on Average Tier I Allocated Capital 25.0% 37.1% 114.7% 38.4% 

Efficiency Ratio 53.6% 15.2% 42.3% 40.4% 

Note: The information on VGBL was classified together with the pension plan products. 

Non-interest Expenses comprise Personnel Expenses, Other Administrative Expenses, Tax Expenses, and Other Operating Expenses. 

The Underwriting Margin comprises insurance operations. 


37 



Insurance 

Recurring net income of the Insurance segment added up 

to R$ 80 million, increasing by 32.3% when compared to 

the second quarter of 2010. 

The improvement is attributable to a 5.5% increase in the 

underwriting margin, driven by a 6.6% reduction in 

retained claims, particularly with respect to property risks. 

A further driver was a 7.6% decline in other operating 

expenses for insurance. 

On October 6, 2010, SUSEP (Brazilian Superintendent of 

Private Insurance) Ordinance 3771 approved the 

agreement for the acquisition, by Itaú Unibanco, of a 

shareholding in the subsidiary Itaú XL Seguros 

Corporativos S.A. Itaú Seguros will maintain its dedicated 

structure to meet the requirements of large industrial and 

commercial clients. 


Number of Contracts – Mass products 

4,126 

122 

3,957 

119 

4,004 3,838 

3,429 3,550 

103 99 

3,326 

3,451 

Dec/09 Mar/10 Jun/10 Sep/10 

Life and Personal Accidents 

Companies 

In thousands 

The number of insurance policies increased by 3.5% 

compared to the prior quarter, mainly driven by life and 

personal accident lines, under the influence of commercial 

initiatives carried out in August and September 2010. 

Composition of Earned Premiums 

23.7% 

15.7% 

5.5% 

5.5% 

3 rd Quarter/10 2 nd Quarter/10 

49.6% 

Life and Personal Accidents 

Transportation 

Others 

24.6% 

16.0% 

5.2% 6.2% 

Property Risk 

Extended Warranty 

48.0% 

Note: Insurance charts do not include the Itauseg Saúde companies and include the Life line 

of Itaú Vida e Previdência S.A. 

Earned premiums added up to R$ 901 million in the 

Insurance subsegment, in line with the performance in the 

second quarter of 2010, and R$ 199 million in the Life and 

Pension Plan subsegment, with a 3.0% increase when 

compared to the prior quarter. Highlights include the Life 

and Personal Accidents, and Property Risks lines, 

essentially made up of products intended for large 

companies, and the Extended Guarantee portfolio, where 

Itaú Unibanco is the market leader. 

Combined Ratio 

The combined ratio, which reflects the operating cost 

efficiency in relation to income from earned premiums, 

grew 410 basis points quarter-on-quarter, mainly due to 

reversals of provisions in other operating expenses in the 

second quarter of 2010, but that did not occur in the 

current quarter. 

In addition, drivers of this scenario include the 110 basis 

points increase in selling expenses, in particular for life and 

personal accident products, as well as a 370 basis points 

rise in administrative and other expenses. The 

underwriting margin increased by 1.85% when compared 

to the prior quarter. 

Combined Ratio and Underwriting Margin 

26.1% 

89.7% 87.8% 86.0% 

20.8% 

30.3% 27.8% 

Underwriting Margin/ Earned Premiums 

27.8% 31.2% 31.5% 

20.7% 22.3% 26.0% 

29.6% 

Combined Ratio 

90.1% 

30.7% 

38.5% 39.3% 34.1% 33.4% 

4th Q/09 1st Q/10 2nd Q/10 3rd Q/10 

Insurance Claims/Earned Premiums 

Administrative Expenses and 

Others/Earned Premiums 

Selling Expenses/Earned Premiums 

Underwriting Margin / Earned Premiums (%) 

Note: The combined ratio is the sum of the following indices: retained claims/ 

earned premiums, selling expenses/earned premiums and administrative 

expenses + other operating income and expenses/ earned premiums. 

The underwriting margin is the sum of: earned premiums, retained claims, selling 

expenses and other operating income (expenses) of insurance operations. 

Note: the chart does not include the Itauseg Saúde company and includes the 

Life line of Itaú Vida e Previdência S.A. 

38 



Insurance Technical Provisions 

As of September 30, 2010, insurance technical provisions 

amounted to R$ 5,727 million, growing by 1.3% when 

compared to the prior quarter. 

R$ million 


Pension Plan Technical Provisions 

Pension Plan technical provisions totaled R$ 48,443 million 

as of September 30, 2010, representing a 4.9% rise from 

the prior quarter, considering individual and company 

pension plans. 

R$ million 

5,238 5,425 

5,655 5,727 

43,176 44,766 46,189 

48,443 

27,016 

28,178 

29,208 30,777 

11,731 12,102 12,395 12,988 

4,430 4,486 4,586 4,678 



Traditional and other PGBL VGBL 

Life and Pension Plan 

In the third quarter of 2010, the recurring net income of 

the life and pension subsegment totaled R$ 242 million, 

increasing by 2.8% compared to the prior period. 

Drivers of this improvement include a 2.8% increase in 

operating income, influenced by a 48.7% growth in 

managerial financial margin, as well as a 7.8% increase in 

banking service fees and charges, mainly arising from 

private pension plan fund management. 

Underwriting margin decreased by 5.1% over the second 

quarter of 2010. The increase of 3% in earned premiums, 

especially for group life and personal accident lines, did 

not offset the 19.4% increase in retained claims. 

Contributions to pension plans amounted to R$ 2,048 

million, a 9.6% growth from the prior quarter. The major 

components were voluntary investments from a number 

of corporate clients, significant funds obtained in the 

Premium portfolio, and the portability program. 


Recurring net income of the Capitalization subsegment 

reached R$ 79 million, representing a 31.9% increase from 

the prior quarter, driven by managerial financial margin, 

which grew by 43.3%, and non-interest expenses, that 

declined by 74.8% as a result of the lower number of 

commercial campaigns run in the period. 

Capitalization results decreased by 16.9%, in the absence 

of the reversal of contingency technical provisions in the 

previous quarter. 

Overall, prizes for a total volume of R$ 13.5 million were 

distributed to 515 clients in the third quarter of 2010, 

representing a 40.7% increase when compared to the 

second quarter of the year. 

Itaú Unibanco takes part in social/environmental actions 

and social responsibility initiatives, by distributing funds 

from the Sales of various products, in particular 

capitalization bonds. 

Capitalization Technical Provisions 

At September 30, 2010, capitalization technical provisions 

added up to R$ 2,484 million, or a 3.4% growth quarteron-quarter. 

R$ million 

2,261 

2,351 

2,402 

2,484 


39 




40 


Activities Abroad

Activities Abroad 



Our operations are carried out mostly in Brazil. However, our footprint abroad includes strategically located units, in 

particular in Europe (Portugal, London, Luxembourg and Switzerland), and in Argentina, Chile, Uruguay and Paraguay. In 

these South American countries, our activities include retail banking. 

We present below information on our operations abroad (including net income, assets and liabilities of foreign branches): 

R$ million (except where indicated) 

Highlights 

Income Statement 3 rd Q/10 2 nd Q/10 

Net Income 428 328 

Net Result from Financial Operations 581 408 

Balance Sheet Sep 30, 10 Jun 30, 10 

Total Assets 114,282 99,089 

Loans, Lease and Other Credit Operations 41,000 40,633 

Deposits 34,165 33,093 

Stockholders' Equity 21,426 21,507 

Relevant Data Sep 30, 10 Jun 30, 10 

Employees (Individuals) 5,651 5,508 

Number of Points of Service 675 654 

Branches (Units) 215 211 

CSBs (Units) 30 31 

Automated Teller Machines (Units) 430 412 

42 



Europe 

Banking activities under Banco Itaú Europa S.A.’s structure are 

carried out in Portugal, Luxembourg, Miami, Cayman Islands 

and Nassau, and primarily focus on international activities 

including corporate banking, capital markets and private 

banking in close cooperation with the conglomerate 

institutions and areas which coordinate such activities in 

Brazil. In September 2010, the group started its operations in 

Switzerland, through Banco Itaú Suisse, headquartered in 

Zurich. This subsidiary will operate in the private banking 

segment, primarily to serve Brazilian and Latin-American 

customers. As of September 30, 2010, Itaú Europa’s 

consolidated assets totaled R$ 13,220 million, while assets 

under management, arising from the private banking 

segment, added up to R$ 20,285 million. Net income for the 

quarter was R$ 18 million, representing a R$ 3 million decline 

from the prior quarter, mainly a result of the reduction in the 

financial margin, partly offset by increased service revenues 

from the syndicated lons and private banking segments. 

Argentina 

Banco Itaú Argentina operates both in company (very small, 

small, mid-sized and large companies) and individual 

segments, with more emphasis on the latter, through an 81- 

branch network. The unit employs 1,501 people. The main 

products offered to individuals are savings accounts, personal 

loans and credit cards; for companies, services provided are 

financing, treasury products, including derivatives and 

foreign exchange, and syndicated loans. Total assets 

amounted to R$ 2,274 million at September 30, 2010, with 

net income of R$ 2 million for the third quarter of the year. 

The decrease in the requirement for the provisions for loan 

and lease losses in the period shall be highlighted. 

Chile 

Banco Itaú Chile is active in company (very small, small, midsized 

and large companies) and individual segments, with 

focus on medium and high-income customers, with the offer 

of a vast array of products. The unit has 2,031 employees. 

Noteworthy events in the quarter include the opening of two 

branches – the network now comprises 71 branches - and 

the A3 rating for foreign currency assigned by Moody’s to 

Banco Itaú Chile, thus improving its access to external 

financing. Also important was the launch of the student loan 

product that helped significantly grow the retail portfolio. 

At September 30, 2010, total assets reached R$ 11,699 

million, and credit assets stood at R$ 8,814 million, increasing 

by 11% compared to June 30, 2010. With net income of R$ 48 

million, highlights of the period include the growth in the 

loan portfolio, mostly in the retail and corporate segments, 

and the decline in delinquency levels. 


Uruguay 

Banco Itaú Uruguay operates in individual and company 

segments through 20 branches, of which two were opened 

in the third quarter of 2010. Main products include credit 

cards, cash management, trade financing, investment 

services, and pension funds. During the period, Banco Itaú 

became market leader in terms of Visa billings. Total assets 

amounted to R$ 3,507 million, and net income remained 

stable compared to the second quarter of the year, after 

adjustment for the impact of exchange variations associated 

with the capital hedge structure. Significant 

accomplishments include improved results from credit card 

and pension fund operations, and lower levels of the 

provisions for loan and lease losses. 

Additionally, Itaú Unibanco operates in the credit card market 

through the largest card company in the country (OCA). OCA 

carries out the three main operations: credit card acquirer, 

issuer and operation processing. Credit cards and consumer 

direct loans are the major products provided by OCA to 

approximately 360,000 customers as of September 30, 2010. 

Paraguay 

The Itaú brand has been present in Paraguay since July 12, 

2010, providing services to individuals and companies (small, 

mid-sized and large companies, agribusinesses and 

institutional clients), with 19 branches and 538 employees. 

Credit cards stand out among the products offered by the 

bank, as a significant revenue driver. At September 30, 2010, 

total assets amounted to R$ 2,177 million, with a significant 

growth in credit operations, in particular in the company 

portfolio. The net income of R$ 8 million for the quarter was 

helped by the portfolio growth but adversely impacted by 

non-recurring expenses associated with the change in its 

brand, and for this reason stood at a lower level than in the 

previous quarter. 

Products and Services to Foreign Institutional 

Customers 

The Itaú group provides foreign institutional customers with 

a comprehensive range of products and services, such as 

asset management, fund management, custody, alternative 

products, brokerage, fixed income, foreign exchange, 

endorsements and treasury products. 

Foreign institutional customers are served both by 

specialized teams and relationship managers based in units 

located at New York, London, Hong Kong, Tokyo and Dubai. 

43 



Below we present the financial statements of the South America and Europe units (*): 


On September 30, 2010 (*) 

R$ million 

Balance Sheet – Activities Abroad 

ASSETS 

Consolidated Consolidated Consolidated Itaú Consolidated Itaú Banco Itaú 

Itaú Europa Itaú Argentina 

Chile 

Uruguay 

Paraguay 

Current and Long-term Assets 12,665 2,218 11,497 3,487 2,162 

Cash and Cash Equivalents 1,488 111 354 447 159 

Short-term Interbank Deposits 2,409 161 39 599 62 

Securities and Derivative Financial Instruments 1,448 218 1,748 848 269 

Loans, Lease and Other Credit Operations 5,275 1,371 8,814 1,275 1,319 

(Allowance for Loan Losses) (15) (34) (198) (74) (39) 

Other Credits 1,939 105 608 90 85 

Other Assets 121 286 131 303 307 

Permanent Assets 555 56 203 20 15 

Investments 372 2 1 0 1 

Fixed and Operating Lease Assets 20 53 129 20 15 

Intangible Assets 163 1 73 0 - 

TOTAL ASSETS 13,220 2,274 11,699 3,507 2,177 




Chile 

Uruguay 

Paraguay 

Current and Long-term Liabilities 11,774 2,125 10,304 3,217 1,892 

Deposits 6,248 1,744 7,085 2,710 1,613 

Deposits Received under Securities Repurchase Agreements - 87 122 - - 

Funds from Acceptances and Issue of Securities 2,478 - 1,014 - - 

Borrowings and Onlendings 648 35 590 34 107 

Derivative Financial Instruments 220 0 199 7 - 

Other Liabilities 2,179 258 1,286 467 173 

Technical Provisions for Insurance, Pension Plans and Capitalization - - 8 - - 

Deferred Income 16 - 2 - 0 

Minority Interest in Subsidiaries 0 1 0 0 - 

Stockholders' Equity 1,431 149 1,393 290 285 


Income Statement – Activities Abroad 

3 rd Quarter/10 



Chile 

Uruguay 

Paraguay 

Financial Margin 16 38 125 16 32 

Result from Loan Losses - (1) (12) (3) (2) 

Expenses for Allowance for Loan Losses 3 (1) (18) (3) (2) 

Income from Recovery of Credits Written Off as Loss - 0 6 1 - 

Net Result from Financial Operations 19 37 113 13 30 

Other Operating Income/(Expenses) 20 (35) (51) (9) (19) 

Banking Service Fees and Income from Banking Charges 58 21 35 45 15 

Result from Insurance, Pension Plans and Capitalization Operations - - (0) - (0) 

Non-interest Expenses (54) (60) (97) (54) (33) 

Tax Expenses for ISS, PIS, Cofins and Other Taxes - - - - - 

Equity in Earnings of Affiliates and Other Investments 14 0 0 - - 

Other Operating Income 2 3 11 0 (0) 

Operating Income 39 2 62 4 12 

Non-operating Income (0) 0 (5) (0) (1) 

Income before Tax and Profit Sharing 39 2 57 4 11 

Income Tax and Social Contribution (17) - (9) (2) (3) 

Profit Sharing (3) - - - - 

Minority Interests in Subsidiaries 0 (0) (0) - - 

Recurring Net Income 18 2 48 2 8 

Return on Equity – Annualized (%p.y.) 5.3% 4.8% 13.6% 2.3% 11.2% 


Non-interest Expenses to total Assets (%p.y.) 1.6% 10.5% 3.3% 6.2% 6.1% 

(*) Does not include Foreign branches 

44 



Below we present the financial statements of the South America and Europe units (*): 


On June 30, 2010 (*) 

R$ million 

Balance Sheet – Activities Abroad 

ASSETS 



Chile 

Uruguay 

Paraguay 

Current and Long-term Assets 16,668 2,273 10,754 3,464 2,171 

Cash and Cash Equivalents 1,560 100 451 457 181 

Short-term Interbank Deposits 2,586 172 75 604 115 

Securities and Derivative Financial Instruments 1,388 201 1,569 765 369 

Loans, Lease and Other Credit Operations 5,216 1,394 7,944 1,282 1,146 

(Allowance for Loan Losses) (16) (39) (206) (75) (39) 

Other Credits 5,869 131 736 102 78 

Other Assets 67 315 186 330 321 

Permanent Assets 571 62 185 20 17 

Investments 373 2 1 0 1 

Fixed and Operating Lease Assets 18 58 120 20 16 

Intangible Assets 180 2 64 0 - 

TOTAL ASSETS 17,239 2,335 10,939 3,484 2,188 




Chile 

Uruguay 

Paraguay 

Current and Long-term Liabilities 15,848 2,177 9,512 3,170 1,896 

Deposits 7,296 1,793 7,280 2,719 1,720 

Deposits Received under Securities Repurchase Agreements - 66 218 - - 

Funds from Acceptances and Issue of Securities 1,714 - 313 - - 

Borrowings and Onlendings 619 35 665 3 24 

Derivative Financial Instruments 181 0 72 0 - 

Other Liabilities 6,038 283 957 447 151 

Technical Provisions for Insurance, Pension Plans and Capitalization - - 7 - - 

Deferred Income 12 - 0 - 0 

Minority Interest in Subsidiaries 0 1 0 0 - 

Stockholders' Equity 1,379 157 1,427 315 292 


Income Statement – Activities Abroad 

2 nd Quarter/10 



Chile 

Uruguay 

Paraguay 

Financial Margin 31 44 105 52 35 

Result from Loan Losses (1) (5) (28) (5) (2) 

Expenses for Allowance for Loan Losses (1) (6) (33) (6) (2) 

Income from Recovery of Credits Written Off as Loss - 0 5 1 - 

Net Result from Financial Operations 30 38 77 47 33 

Other Operating Income/(Expenses) 9 (48) (35) (7) (6) 

Banking Service Fees and Income from Banking Charges 48 22 34 51 16 

Result from Insurance, Pension Plans and Capitalization Operations - - 6 - - 

Non-interest Expenses (58) (71) (78) (57) (23) 

Tax Expenses for ISS, PIS, Cofins and Other Taxes - - - - - 

Equity in Earnings of Affiliates and Other Investments 12 (0) (0) - - 

Other Operating Income 7 1 3 (1) 0 

Operating Income 39 (10) 43 40 27 

Non-operating Income (0) 1 (0) (0) 1 

Income before Tax and Profit Sharing 39 (9) 43 40 28 

Income Tax and Social Contribution (18) 1 (8) (6) (3) 

Profit Sharing - - - - - 

Minority Interests in Subsidiaries (0) (0) (0) - - 

Recurring Net Income 21 (8) 34 34 25 

Return on Equity – Annualized (%p.y.) 5.8% -19.1% 9.8% 44.2% 35.1% 


Non-interest Expenses to total Assets (%p.y.) 1.3% 12.1% 2.8% 6.5% 4.1% 

(*) Does not include Foreign branches 

45 




46 


PricewaterhouseCoopers 

Av. Francisco Matarazzo, 1700 

Torre Torino 

Caixa Postal 61005 

05001-400 São Paulo, SP - Brasil 

Report of Independent Auditors on Supplementary Information 

To the Board of Directors and Stockholders 


1 In connection with our limited reviews of the financial statements Itaú Unibanco Holding S.A. (Bank) and 

Itaú Unibanco Holding S.A. and its subsidiary companies (consolidated) as of September 30, 2010 and 2009, on 

which we issued a review report without exceptions dated November 1, 2010, we performed a review of the 

supplementary information included in the Management Discussion and Analysis Report on the Consolidated 

Operations of Itaú Unibanco Holding S.A. and its subsidiaries for the third quarter of 2010. 

2 Our work was performed in accordance with specific rules set forth by the Institute of Independent 

Auditors of Brazil (IBRACON), in conjunction with the Federal Accountancy Council, for the purpose of reviewing 

the accounting information contained in the supplementary information of the Management Discussion and 

Analysis Report on the Consolidated Operations of Itaú Unibanco Holding S.A. and its subsidiary companies, and 

mainly comprised: (a) inquiry of, and discussion with, management responsible for the accounting, financial and 

operational areas of the Bank and its subsidiaries with regard to the main criteria adopted for the preparation of 

the accounting information presented in the supplementary information and (b) review of the significant 

information and of the subsequent events which have, or could have, significant effects on the financial position 

and the operations of the Bank and its subsidiaries. The supplementary information included in the 

Management Discussion and Analysis Report on the Consolidated Operations is presented to permit additional 

analysis. Notwithstanding, this information should not be considered an integral part of the financial 

statements. 

3 Based on our review, we are not aware of any material modifications that should be made to the 

accounting information contained in this supplementary information referred to above, in order for it to be 

adequately presented, in all material respects, in relation to the financial statements at September 30, 2010 

taken as a whole. 

São Paulo, November 1, 2010 


Auditores Independentes 

CRC 2SP000160/O-5 

Paulo Sergio Miron 

Contador CRC 1SP173647/O-5

September 30, 2010 

Complete Financial Statements 

Itaú Unibanco Holding S.A.

MANAGEMENT REPORT – January to September 2010 

To our Stockholders: 

We present the Management Report and financial statements of Itaú Unibanco Holding S.A. (Itaú Unibanco) 

and its subsidiaries for the period from January to September 2010, in accordance with the regulations 

established by the Brazilian Corporate Law, the National Monetary Council (CMN), the Central Bank of Brazil 

(BACEN), the Brazilian Securities and Exchange Commission (CVM), the Superintendency of Private Insurance 

(SUSEP), and the National Council of Private Insurance (CNSP). 

Highlights 

Two years have not yet elapsed since the biggest merger in the Brazilian financial system, and Itaú Unibanco 

completed on October 24, 2010 the integration of all of its points of service throughout Brazil. In total, 998 

branches and 245 banking service stations of Unibanco were fully redesigned and integrated into 3,900 points 

of Itaú, thus creating a network of approximately five thousand units in the whole country, all of which with the 

Itaú brand. 

Itaú Unibanco is one of the 318 companies from 27 countries that make up the Dow Jones Sustainability Index 

(DJSI), the main business sustainability index in the world. It is the only financial institution of Latin America 

included in the portfolio for 11 consecutive years, i.e., since its creation. In the 2010/2011 review, Itaú Unibanco 

achieved top score (100%) in the “Human Capital Development” criterion, and a score above the average of the 

sector in all of the assessed items. Redecard S.A., a company controlled by Itaú Unibanco Holding S.A., and 

Itaúsa – Investimentos Itaú S.A. are also in the index. 

Itaú Unibanco was authorized by the Swiss government to open its first unit in that country. Banco Itaú Suisse, 

located in Zurich, provides services to clients that seize opportunities for global investments. They count on the 

expertise and structure of the biggest private bank of the Southern Hemisphere and partnerships with top-level 

local financial institutions. 

A business and cooperation agreement was signed with China Unionpay Co. Ltd. (CUP), to enable the clients of 

he Chinese bank to carry out withdrawals in over 30 thousand ATMs of Itaú Unibanco. Headquartered in 

Shanghai, CUP has over 400 associate institutions and is present in over 90 countries. Redecard entered into 

an agreement in order to enable the merchants of its network in the country to accept the 2.2 billion debit and 

credit cards operated by CUP. 

Itaú Unibanco S.A. – - September0, 2010 51

Main Results 

Following are the main results of Itaú Unibanco for the period from January to September 2010, and the 

complete financial statements and the Management’s Discussion & Analysis Report of Itaú Unibanco, which 

present further details on the results for the period, are available on the Itaú Unibanco website (www.itauunibanco.com.br/ri). 

Jan to Set/10 Jan to Set/09 

Change (%) 

3rd Q/10 2nd Q/10 Change (%) 

Income – R$ billion (1) 

Gross income from financial operations 33.0 35.2 -6.3% 3.2 3.0 6.8% 

Expenses for allowance for loan losses (12.0) (12.4) -3.5% 4.1 4.0 1.2% 

Income from recovery of credits written off as loss 2.9 1.4 104.6% 1.8 0.8 114.3% 

Income from services and income from insurance, pension plan 

and capitalization 14.9 12.7 17.3% 5.1 5.0 2.3% 

Personnel, administrative and other operating expenses (22.2) (20.4) 8.7% (8.0) (7.5) 5.4% 

Income tax and social contribution (4.0) (5.8) (1.9) (1.0) 

Recurring net income 9.6 7.7 25.4% 3.2 3.3 -4.2% 

Net income 9.4 6.9 37.6% 3.0 3.2 -4.1% 

Results per share – R$ 

Recurring net income (2) 2.12 1.70 24.8% 0.70 0.73 -4.3% 

Net income (2) 2.08 1.52 37.1% 0.67 0.70 -4.2% 

Book value (2) 12.60 10.80 16.7% 12.60 12.15 3.8% 

Dividends and interest on capital (net of taxes) 0.64 0.53 19.2% 0.64 0.42 50.0% 

Price of preferred share (PN) (3) 40.13 35.60 12.7% 40.13 33.00 21.6% 

Market capitalization – R$ billion (4) 182.2 161.0 13.1% 182.2 149.6 21.8% 

Balance Sheet - R$ billion 

Total assets 686.2 612.4 12.1% 686.2 651.6 5.3% 

Total loans (including endorsements and sureties) 313.2 268.7 16.6% 313.2 296.2 5.7% 

Free, raised and managed own assets 941.9 832.6 13.1% 941.9 904.2 4.2% 

Subordinated debt 33.0 22.8 45.0% 33.0 28.3 16.9% 

Stockholders’ equity 57.2 48.9 17.1% 57.2 55.1 3.9% 

Referential equity (economic-financial consolidated) 75.1 68.6 9.4% 75.1 71.5 4.9% 

Financial ratios (%) 

Recurring return on average equity 23.8% 22.2% 22.5% 24.4% 

Return on average equity 23.3% 19.8% 21.6% 23.4% 

Return on average assets 1.9% 1.5% 1.8% 2.0% 

Efficiency ratio (5) 46.9% 45.5% 49.2% 47.3% 

Basel ratio (financial system consolidated) 15.3% 16.3% 15.3% 15.7% 

Fixed assets ratio (financial system consolidated) 37.8% 31.7% 37.8% 39.0% 

(1) 

(2) 

(3) 

(4) 

(5) 

Excludes the non-recurring effects of each period. 

Calculated based on the weighted average of the number of shares. 

Calculated based on the average quotation of preferred shares on the last day of the period. 

Calculated based on the average quotation of preferred shares on the last day of the period (quotation of average PN multiplied by the number of outstanding shares at the end of the period). 

Calculated based on international criteria defined in the Management’s Discussion & Analysis Report. 


BUSINESS PERFORMANCE 

We present below the main achievements of Itaú Unibanco in the period from January to September 2010. 

Net income for the first nine months of the year reached R$ 9.4 billion, with annualized return of 23.3% on 

average equity (19.8% for the same period of 2009). Recurring net income was R$ 9.6 billion, with annualized 

return of 23.8%. Itaú Unibanco paid or provided for its own taxes and contributions in the amount of R$ 9.4 

billion for the same period of 2010. The Bank also withheld and passed on taxes in the amount of R$ 5.7 billion, 

which were directly levied on financial operations. 

Total consolidated assets reached R$ 686.2 billion at September 30, 2010. 

Consolidated stockholders’ equity totaled R$ 57.2 billion at the end of September 2010. The loan portfolio, 

including endorsements and sureties, reached R$ 313.2 billion, an increase of 16.6% as compared to the 

balance at September 30, 2009. In Brazil, the balance of loans to individuals totaled R$ 118.8 billion. In the 

large company segment, the portfolio balance totaled R$ 104.4 billion, and the very small, small and middlemarket 

company portfolio reached R$ 76.4 billion, whereas the real estate loan portfolio reached R$ 12.0 billion 

at September 30, 2010, with a 52.7% increase in comparison with September 30, 2009. 

Free, raised and managed assets totaled R$ 941.9 billion, an increase of 13.1% as compared to September 30, 

2009. 

Basel ratio stood at 15.3% at the end of September 2010, based on economic-financial consolidated. 

Itaú Unibanco’s preferred shares rose 21.6% as compared to the quotation of June 30, 2010, and 12.7% as 

compared to the quotation of September 30, 2009. The market value at Stock Exchanges of Itaú Unibanco, 

calculated considering the average quotation of preferred shares outstanding in the last trading session of the 

period, reached R$ 182.2 billion at the end of September. According to the company Bloomberg, Itaú Unibanco 

ranked tenth among banks in the world at September 30, 2010, having market value as parameter. 

In the credit card market, Itaú Unibanco, the leader in the consumer credit segment in Brazil, by means of 

Itaucard, Unicard and Hipercard, offers a wide range of products to 40 million account-holders and non-account 

holders clients, originated in proprietary channels and through partnerships with companies that have 

outstanding performance in the markets they are engaged. From January through September, the transacted 

amount reached R$ 92.2 billion, a 26.9% increase in relation to the same period of the previous year. 

Insurance, pension plan and capitalization operations reached R$ 10.8 billion in the period from January to 

September 2010 in premium income. Technical provisions for these segments totaled R$ 58.5 billion at 

September 30, 2010. 

The vehicle segment of Itaú Unibanco remains by far in the leading position in this market and posted a good 

performance in the period from January to September 2010, reaching a portfolio balance of R$ 57.3 billion, 

13.2% higher than the same period of the prior year. 

In the investment banking area, Itaú BBA took part in operations of debentures and promissory notes that 

totaled R$ 12.1 billion, and of securitization that totaled R$ 2.3 billion in the first nine months of 2010. In the 

Brazilian Financial and Capital Markets Association (ANBIMA) ranking of fixed-income distribution, Itaú BBA 

was the first position in September 2010, with a market share of 20.0%. In the fixed-income international issues, 

Itaú BBA acted as joint bookrunner of offerings, with a total volume of US$ 11.6 billion, reaching the second 

position in this ranking until September 2010. Noteworthy in the period was the offering of Brazilian sovereign 

bonds carried out by Itaú BBA, which became the first Brazilian bank to lead the funding for the National 

Treasury through Global 2041, with a total volume of US$ 500 million. In capital markets, Itaú BBA coordinated 

in the first nine months of 2010 ten public offerings that totaled R$ 130.8 billion, consolidating its leadership 

position among the market leaders. In September 2010, Itaú BBA acted as global coordinator in the offering of 

Petrobras shares, the biggest public offering of shares in the world, which total funding reached R$ 120 billion. 

With the addition of this offering, Itaú BBA acted as coordinator in 61% of transactions, which represented 91% 

of the financial volume issued in this year. In this same period, Itaú BBA also provided financial advisory 

services to 26 merger and acquisition operations. With the completion of these operations, Itaú BBA closed the 

period occupying the second position in the Thomson ranking in number of transactions. 


People 

Training programs received investments of over R$ 147 million in the period from January to September 2010, 

an increase of about 85% in relation to the previous period, with the completion of almost 500 thousand courses 

by collaborators in attendance and computer-based training programs. 

Approximately 14,500 new collaborators were hired until September 2010 and about 5,500 collaborators were 

reallocated through internal recruitment. As formulated in the Policy on Diversity, 242 people with special needs 

were hired. In the following months, approximately 540 vacancies will be filled. 

Sustainability 

Launched on October 18, the new sustainability website introduced innovations in layout and contents. Its 

proposal is to operate as a new platform of relationship with the organization’s audiences, with a more 

interactive basis. Most of its contents focus on the theme of sustainability on an educative approach, 

highlighting the following sections: Virtual Library, Online Courses, and Sustainability in Practice. By 

reproducing a virtual city in the homepage, the new website takes sustainability to the daily life of people. The 

provision of quality service, creation of value and transparency are the assumptions of the new website 

(www.itau.com.br/sustentabilidade). 

Social and cultural investments 

In the period from January to September 2010, Itaú Unibanco’s social and cultural investments reached the 

approximate amount of R$ 137 million. 

The Olimpíada de Língua Portuguesa Escrevendo o Futuro (Portuguese Language Olympiad – writing the 

future), which phase of text creation by students of the 60 thousand enrolled schools was carried out from 

March to July, is going through the phase of selecting students and teachers who will participate in practical 

workshops in four cities, according to the literary genre in which they are enrolled. 

Instituto Unibanco promoted the solidarity competition “SuperAção na Escola” (super action at school), which 

encourages improvements through the mobilization of the entire community, and gathering approximately 21 

thousand people in 20 schools in the city of Belo Horizonte, in August. 

Itaú Cultural was visited by over 70,000 people in its headquarters. The Visual Arts, Art & Technology, Theater 

and Literature encyclopedias recorded approximately 1.5 million hits. A total of 65 events were held, of which 

we highlight the Emoção Art.ficial 5.0 (Art.ficial emotion 5.0) exhibition, visited by 57,832 people. Until 

September, 5,400 cultural products were distributed, with emphasis on books, DVDs and arts catalogs. In that 

same month Itaú Cultural signed a contract with six new TV partners, totaling 77 partners in the period from 

January to September 2010. 

Awards and Recognition 

Major awards and recognitions granted to Itaú Unibanco Holding S.A.: 

• Best Bank in Brazil for the 12th time, and Best Bank in Latin America, according to the Awards for 

Excellence of Euromoney magazine. Itaú BBA was acknowledged as the Best Bank in Cash Management 

in Brazil. 

• First bank of Brazil in the Top 1000 World Banks ranking, according to The Banker magazine. 

• Received the IR Magazine Awards Brazil 2010 in two categories: Grand Prix of the Best Investors Relations 

Program of Large Cap Companies and Best Performance in IR by a CEO or CFO with Roberto Setubal. 

• First place in the banking sector and also the best in Financial Sustainability management in the sector. The 

award is granted by Isto É Dinheiro magazine in partnership with Trevisan consulting company. 

• First in the list of the 50 largest banks in Brazil based on stockholders’ equity in the Melhores e Maiores 

(Best and Largest) of Exame magazine. Itaúsa ranked first in the list of the 200 major business groups in 

the country. 


• The team of analysts of Itaú Corretora was elected the best in Brazil by the Institutional Investor magazine. 

Itaú Corretora had 14 analysts in the ranking, with outstanding performance in all of the 13 sectors 

reviewed. 

• For the second time, Itaú Unibanco was considered one of the 100 Great Place to Work in Brazil, according 

to the survey conducted by the Great Place to Work Institute and Época Magazine. The same institute 

ranked Itaú Unibanco among the 50 best companies for executives to work. 

• For the fourth consecutive year, Itaú Unibanco led the ranking of the most transparent companies of 

Ibovespa, prepared by Management & Excellence (M&E). 

• Elected one of the leading companies in policies on climate of the Prêmio Época Mudanças Climáticas 2010 

(climate change Época award), which acknowledged the companies working harder to control and reduce 

greenhouse gas emissions. 

• Acknowledged for the second time as the most sustainable financial institution of all emerging markets and 

Latin America, according to the British newspaper Financial Times and the International Finance 

Corporation (IFC), the World Bank’s financial division for the private sector. 


Independent Auditors – CVM Instruction No. 381 

Procedures adopted by the Company 

The policy adopted by Itaú Unibanco Holding S.A., its subsidiaries and parent company, to engage non-audit 

related services from our independent auditors is based on the applicable regulations and internationally 

accepted principles that preserve the auditor’s independence. These principles include the following: (a) an 

auditor cannot audit his or her own work, (b) an auditor cannot function in the role of management in companies 

where he or she provides external audit services; and (c) an auditor cannot promote the interests of its client. 

During the period from January to September 2010, the independent auditors and related parties did not provide 

non-audit related services in excess of 5% of total external audit fees. 

According to CVM Instruction No. 381, we list below the engaged services and related dates: 

• February 5, 2010 – Service agreement for the limited assurance of the data of the inventory of greenhouse 

gas emissions – Itaú Unibanco Banco Múltiplo S.A. – Brazil; 

• March 3, 2010– Licenses for using an electronic library of international accounting standards (Comperio) – 

Itaú Unibanco Holding S.A. – Brazil; 

• June 2, 2010 – Participation in the “Mercado de Seguros” (insurance market) seminar: new accounting and 

actuarial dynamics of the market in 2010 – Itaú Unibanco Holding S.A. – Brazil; 

• June 23, 2010 – License for using an electronic library of international accounting standards (Comperio) – 

Banco Itaú Europa International – Miami; 

• July 12, 2010 – Service agreement related to tax advisory regarding the US legislation and review of the 

Schedule O Form - Itaú Unibanco Holding S.A – Brazil; 

• August 6, 2010 – Service agreement for reviewing aspects related to the Business Continuity Program.– 

Banco Itaú BBA S.A. – Brazil; 

• August 11, 2010 – Service agreement related to the examination of the differences between the 

performance of activities as subsidiary and as a Bank – Banco Itaú Europa International – Miami; 

• August 17, 2010 – Participation in the 10th Annual IFRS Presentation – Advanced Level – Itaú Unibanco 

S.A. – Brazil. 

Summary of the Independent Auditors’ justification - PricewaterhouseCoopers 

The provision of the above described non-audit related professional services do not affect the independence or 

the objectivity of the external audit of Itaú Unibanco, parent and its subsidiary/affiliated companies. The policy 

adopted for providing non-audit related services to Itaú Unibanco is based on principles that preserve the 

independence of Independent Auditors, all of which were considered in the provision of the referred services. 

Circular No. 3,068/01 of BACEN 

Itaú Unibanco hereby represents to have the financial capacity and the intention to hold to maturity securities 

classified under the line “held-to-maturity securities” in the balance sheet, in the amount of R$ 3.1 billion, 

corresponding to only 2.2% of total securities held. 

ACKNOWLEDGEMENTS 

We thank our employees for their determination and skills which have been essential to reaching consistent and 

differentiated results, and our stockholders and clients for the trust they put on us. 

(Approved at the Board of Directors' Meeting of November 1, 2010). 



BOARD OF DIRECTORS 

Chairman 

PEDRO MOREIRA SALLES 

EXECUTIVE BOARD 

Chief Executive Officer 

ROBERTO EGYDIO SETUBAL 

Vice-Chairmen 

Executive Vice-Presidents 

ALFREDO EGYDIO ARRUDA VILLELA FILHO ALFREDO EGYDIO SETUBAL (*) 


CANDIDO BOTELHO BRACHER 

Members 

ALCIDES LOPES TÁPIAS 

ALFREDO EGYDIO SETUBAL 


FERNANDO ROBERTO MOREIRA SALLES 

FRANCISCO EDUARDO DE ALMEIDA PINTO 

GUSTAVO JORGE LABOISSIÈRE LOYOLA 

HENRI PENCHAS 

ISRAEL VAINBOIM 

PEDRO LUIZ BODIN DE MORAES 

RICARDO VILLELA MARINO 

AUDIT COMMITTEE 

President 

GUSTAVO JORGE LABOISSIÈRE LOYOLA 

Members 

ALCIDES LOPES TÁPIAS 

ALKIMAR RIBEIRO MOURA 

EDUARDO AUGUSTO DE ALMEIDA GUIMARÃES 

GUY ALMEIDA ANDRADE 

Executive Directors 

CAIO IBRAHIM DAVID 

CLAUDIA POLITANSKI 

MARCOS DE BARROS LISBOA 

RICARDO BALDIN 

SÉRGIO RIBEIRO DA COSTA WERLANG 

Directors 

JACKSON RICARDO GOMES 

JOSÉ EDUARDO LIMA DE PAULA ARAUJO 

MARCO ANTONIO ANTUNES 

WAGNER ROBERTO PUGLIESE 

(*) Investor Relations Director 

FISCAL COUNCIL 

President 

IRAN SIQUEIRA LIMA 

Members 

ALBERTO SOZIN FURUGUEM 

ARTEMIO BERTHOLINI 

Accountant 

ADRIANA CRISTINA GARCIA TRAPP 

CRC - 1SP213412/O-0 


ITAÚ UNIBANCO S.A. 

Chief Executive Officer and General Manager 


Executive Vice-Presidents 

ALEXANDRE DE BARROS 


GERALDO JOSÉ CARBONE 

JOSÉ CASTRO ARAÚJO RUDGE 

MÁRCIO DE ANDRADE SCHETTINI 

MARCO AMBROGIO CRESPI BONOMI 


RICARDO VILLELA MARINO 

RUY VILLELA MORAES ABREU 



CAIO IBRAHIM DAVID 

CELSO SCARAMUZZA 

CLAUDIA POLITANSKI 

DEMOSTHENES MADUREIRA DE PINHO NETO 

FERNANDO MARSELLA CHACON RUIZ 

IVO LUIZ DE SÁ FREIRE VIEITAS JUNIOR 

JOÃO JACÓ HAZARABEDIAN 

JOSÉ ROBERTO HAYM 

LUÍS OTAVIO MATIAS 

OSVALDO DO NASCIMENTO 

RICARDO BALDIN 

SANDRA NUNES DA CUNHA BOTEGUIM 

Directors 

ADRIANO BRITO DA COSTA LIMA 

ANDRÉ SAPOZNIK 

ANDRÉA MATTEUCCI PINOTTI CORDEIRO 

ANTONIO CARLOS AZZI JÚNIOR 

ANTONIO CARLOS RICHECKI RIBEIRO 

ANTONIO SIVALDI ROBERTI FILHO 

ARNALDO PEREIRA PINTO 

AURÉLIO JOSÉ DA SILVA PORTELLA 

CARLOS AUGUSTO DE OLIVEIRA 

CARLOS EDUARDO DE CASTRO 

CARLOS EDUARDO DE SOUZA LARA 

CARLOS EDUARDO MACCARIELLO 

CARLOS EDUARDO MONICO 

CARLOS HENRIQUE DONEGÁ AIDAR 

CARLOS HENRIQUE ZANVETTOR 

CECÍLIA MARIA ARELLANO MISZPUTEN 

CESAR PADOVAN 

CÍCERO MARCUS DE ARAÚJO 

CLÁUDIO CESAR SANCHES 

CLAUDIO JOSÉ COUTINHO ARROMATTE 

COSMO FALCO 

CRISTIANE MAGALHÃES TEIXEIRA PORTELLA 

CRISTINA CESTARI SPADA 

DANIEL LUIZ GLEIZER 

EDUARDO ALMEIDA PRADO 

EDUARDO HIROYUKI MIYAKI 

ERNESTO ANTUNES DE CARVALHO 

FERNANDO DELLA TORRE CHAGAS 

FERNANDO JOSÉ COSTA TELES 

Directors (Continued) 

GILBERTO TRAZZI CANTERAS 

HENRIQUE RUTHER 


JASON PETER CRAUFORD 

JEAN MARTIN SIGRIST JÚNIOR 

JOÃO ANTONIO DANTAS BEZERRA LEITE 

JOÃO LUIZ DE MEDEIROS 

JORGE LUIZ VIEGAS RAMALHO 

LAVÍNIA MORAES DE ALMEIDA NOGUEIRA JUNQUEIRA 

LEILA CRISTIANE BARBOZA BRAGA DE MELO 

LINDA AGARINAKAMURA 

LUÍS ANTONIO RODRIGUES 

LUÍS EDUARDO GROSS SIQUEIRA CUNHA 

LUIS TADEU MANTOVANI SASSI 

LUIZ ANTONIO FERNANDES CALDAS MORONE 

LUIZ ANTONIO NOGUEIRA DE FRANÇA 

LUIZ EDUARDO LOUREIRO VELOSO 

LUIZ FERNANDO OLIVEIRA BARRICHELO 

LUIZ MARCELO ALVES DE MORAES 

MANOEL ANTONIO GRANADO 

MARCELO BOOCK 

MARCELO LUIS ORTICELLI 


MARCO ANTONIO SUDANO 

MARCOS ANTÔNIO VAZ DE MAGALHÃES 

MARCOS AUGUSTO CAETANO DA SILVA FILHO 

MARCOS BRAGA DAINESI 

MARCOS SILVA MASSUKADO 

MARCOS VANDERLEI BELINI FERREIRA 

MARIO LUIZ AMABILE 

MAURÍCIO FERREIRA DE SOUZA 

MAURO MORELLI 

NATALÍSIO DE ALMEIDA JÚNIOR 

OLIVIO MORI JÚNIOR 

OSMAR MARCHINI 

OSVALDO JOSÉ DAL FABBRO 

PAULO EIKIEVICIUS CORCHAKI 

PAULO MEIRELLES DE OLIVEIRA SANTOS 

PEDRO PAULO DE ALMEIDA CARNEIRO CUNHA 

PLÍNIO CARDOSO DA COSTA PATRÃO 

RENATA HELENA DE OLIVEIRA TUBINI 

RENÊ MARCELO GONÇALVES 

RICARDO LIMA SOARES 

RICARDO ORLANDO 

RICARDO RIBEIRO MANDACARU GUERRA 

RICARDO TERENZI NEUENSCHWANDER 

ROBERTO LAMY 

ROBERTO MASSARU NISHIKAWA 

ROGERIO CARVALHO BRAGA 

ROGÉRIO PAULO CALDERÓN PERES 

ROMILDO GONÇALVES VALENTE 

ROONEY SILVA 

SERGIO GUILLINET FAJERMAN 

SERGIO SOUZA FERNANDES JÚNIOR 

VILMAR LIMA CARREIRO 


BANCO ITAÚ BBA S.A. 

BOARD OF DIRECTORS 

Chairman 


Vice-Chairmen 

FERNÃO CARLOS BOTELHO BRACHER 

PEDRO MOREIRA SALLES 

Members 


ANTONIO CARLOS BARBOSA DE OLIVEIRA 


EDUARDO MAZZILLI DE VASSIMON 

HENRI PENCHAS 

JOÃO DIONÍSIO FILGUEIRA BARRETO AMOÊDO 


EXECUTIVE BOARD 



Managing Vice-Presidents 

ALBERTO FERNANDES 

DANIEL LUIZ GLEIZER 

JEAN-MARC ROBERT NOGUEIRA BAPTISTA ETLIN 

RODOLFO HENRIQUE FISCHER 


ALEXANDRE JADALLAH AOUDE 

ANDRÉ EMILIO KOK NETO 

ANDRÉ LUÍS TEIXEIRA RODRIGUES 

ELAINE CRISTINA ZANATTA RODRIGUES VASQUINHO 

FERNANDO FONTES IUNES 

MILTON MALUHY FILHO 

NICOLAU FERREIRA CHACUR 

Directors 

ADRIANO LIMA BORGES 

ALBERTO ZOFFMANN DO ESPÍRITO SANTO 

ALEXANDRE ENRICO SILVA FIGLIOLINO 

ALMIR VIGNOTO 

ÁLVARO DE ALVARENGA FREIRE PIMENTEL 

ANDRÉ FERRARI 

ANDRÉ LUIZ HELMEISTER 

ANTONIO JOSÉ CALHEIROS RIBEIRO FERREIRA 

ANTONIO SANCHEZ JUNIOR 

EDUARDO CARDOSO ARMONIA 

EDUARDO CORSETTI 

EMERSON SAVI JUNQUEIRA 

FABIO MASSASHI OKUMURA 

GILBERTO FRUSSA 

GUILHERME DE ALENCAR AMADO 

GUSTAVO HENRIQUE PENHA TAVARES 

HENRIQUE RUTHER 

ILAN GOLDFAJN 

JOÃO CARLOS DE GÊNOVA 

JOÃO MARCOS PEQUENO DE BIASE 

JORGE BEDRAN JETTAR 

JOSÉ AUGUSTO DURAND 

JOSÉ IRINEU NUNES BRAGA 

LILIAN SALA PULZATTO KIEFER 

LUÍS ALBERTO PIMENTA GARCIA 

LUIZ MARCELO ALVES DE MORAES 

MARCELO MAZIERO 

MARCO ANTONIO SUDANO 

MARCOS AUGUSTO CAETANO DA SILVA FILHO 

MARIO ANTONIO BERTONCINI 

MÁRIO LÚCIO GURGEL PIRES 

MÁRIO LUÍS BRUGNETTI 

PASCHOAL PIPOLO BAPTISTA 

PAULO DE PAULA ABREU 

PAULO ROBERTO SCHIAVON DE ANDRADE 

PEDRO REZENDE MARINHO NUNES 

RODRIGO PASTOR FACEIRO LIMA 

BANCO ITAUCRED FINANCIAMENTOS S.A. 


MARCO AMBROGIO CRESPI BONOMI 

Executive Vice-President 

MÁRCIO DE ANDRADE SCHETTINI 

Directors 

ADRIENNE PATRICE GUEDES DAIBERT 

CARLOS EDUARDO DE SOUZA LARA (*) 

CARLOS HENRIQUE ZANVETTOR 

CLÁUDIO JOSÉ COUTINHO ARROMATTE 

EVANIR COUTINHO USSIER 

FÁBIO MASSASHI OKUMURA 

FERNANDO JOSÉ COSTA TELES 

FLÁVIO KITAHARA SOUSA 


JASON PETER CRAUFORD 

LUÍS FERNANDO STAUB 

LUÍS OTÁVIO MATIAS 

LUIZ OTAVIO PINHO DO AMARAL 


MARCOS VANDERLEI BELINI FERREIRA 

ROBERTO LAMY 

ITAÚ SEGUROS S.A. 



Superintendent Director 

JOSÉ CASTRO ARAÚJO RUDGE 


ANDRÉ HORTA RUTOWITSCH 

ANTONIO EDUARDO MÁRQUEZ DE FIGUEIREDO TRINDADE 

Managing Directors 

LUIZ FERNANDO BUTORI REIS SANTOS 



NORBERTO GIL FERREIRA CAMARGO 

(*) Elected at the ESM of September 30, 2010. Awaiting approval from BACEN. 



Consolidated Balance Sheet (Note 2a) 

(In thousands of Reais) 

ASSETS 

09/30/2010 09/30/2009 

CURRENT ASSETS 

502,876,792 460,563,720 

CASH AND CASH EQUIVALENTS 

11,063,416 10,325,257 

INTERBANK INVESTMENTS (Notes 4b and 6) 

111,816,439 133,856,473 

Money market 95,757,805 117,443,167 

Money market – Assets Guaranteeing Technical Provisions – SUSEP (Note 11b) 3,397,239 666,155 

Interbank deposits 12,661,395 15,747,151 

SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (Notes 4c, 4d and 7) 

110,184,583 96,521,784 

Own portfolio 32,120,828 29,792,900 

Subject to repurchase commitments 10,578,242 6,516,093 

Pledged in guarantee 8,121,431 8,097,453 

Deposited with the Central Bank 2,254,705 5,271,926 

Derivative financial instruments 7,443,791 6,580,080 

Assets guaranteeing technical provisions - PGBL/VGBL fund quotas (Note 11b) 43,621,488 36,403,697 

Assets guaranteeing technical provisions – other securities (Note 11b) 6,044,098 3,859,635 

INTERBANK ACCOUNTS 

65,607,849 16,955,733 

Pending settlement 3,439,138 3,413,787 

Central Bank deposits 62,090,097 13,383,914 

National Housing System (SFH) 8,775 70,260 

Correspondents 69,839 82,505 

Interbank onlending - 5,267 

INTERBRANCH ACCOUNTS 

73,019 50,926 

LOAN, LEASE AND OTHER CREDIT OPERATIONS (Note 8) 

150,494,689 137,121,238 

Operations with credit granting characteristics (Note 4e) 163,803,876 151,641,187 

(Allowance for loan losses) (Note 4f) (13,309,187) (14,519,949) 

OTHER RECEIVABLES 

51,114,342 62,655,037 

Foreign exchange portfolio (Note 9) 20,183,399 33,368,298 

Income receivable 938,156 651,284 

Transactions with credit card issuers (Note 4e) 11,824,070 7,918,689 

Receivables from insurance and reinsurance operations (Notes 4nl and 11b) 3,775,196 3,317,136 

Negotiation and intermediation of securities 2,549,953 2,447,821 

Sundry (Note 13a) 11,843,568 14,951,809 

OTHER ASSETS (Note 4g) 

2,522,455 3,077,272 

Assets held for sale 196,132 407,275 

(Valuation allowance) (74,294) (104,852) 

Unearned premiums of reinsurance (Note 4nl) 563,900 645,531 

Prepaid expenses (Note 13b) 1,836,717 2,129,318 

LONG-TERM RECEIVABLES 

173,096,297 141,876,364 


666,968 4,107,734 

Money market 40,170 1,101,257 

Money market – Assets Guaranteeing Technical Provisions – SUSEP (Note 11b) 136,050 2,156,948 

Interbank deposits 490,748 849,529 


31,694,235 26,054,528 

Own portfolio 21,181,454 11,373,391 

Subject to repurchase commitments 3,955,759 2,210,081 

Pledged in guarantee 474,861 1,959,772 

Deposited with the Central Bank 86,793 4,197,841 

Derivative financial instruments 3,456,844 1,904,502 

Assets guaranteeing technical provisions – other securities (Note 11b) 2,538,524 4,408,941 

INTERBANK ACCOUNTS - National Housing System (SFH) 

561,839 474,568 

LOAN, LEASE AND OTHER CREDIT OPERATIONS (Note 8) 

105,256,300 75,909,821 

Operations with credit granting characteristics (Note 4e) 115,230,940 85,458,145 

(Allowance for loan losses) (Note 4f) (9,974,640) (9,548,324) 


33,927,377 33,782,734 

Foreign exchange portfolio (Note 9) 387,150 2,354,347 

Sundry (Note 13a) 33,540,227 31,428,387 

OTHER ASSETS – Prepaid expenses (Notes 4g and 13b) 

989,578 1,546,979 

PERMANENT ASSETS 

10,275,355 9,958,850 

INVESTMENTS (Notes 4h and 15a II) 

2,226,272 2,283,674 

Investments in affiliates 1,084,678 1,364,672 

Other investments 1,320,280 1,091,652 

(Allowance for loan losses) (178,686) (172,650) 

FIXED ASSETS (Notes 4i and 15b) 

4,697,805 4,072,414 

Real estate in use 4,451,695 4,373,680 

Other fixed assets 6,830,232 6,535,196 

(Accumulated depreciation) (6,584,122) (6,836,462) 

OPERATING LEASE ASSETS (Note 4j) 

4,241 15,231 

Leased assets 18,553 32,794 

(Accumulated depreciation) (14,312) (17,563) 

GOODWILL (Notes 4k and 15b) 

74,467 - 

INTANGIBLE ASSETS (Notes 4l and 15b) 

3,272,570 3,587,531 

Acquisition of rights to credit payroll 2,459,345 2,588,114 

Other intangible assets 2,691,118 2,291,588 

(Accumulated amortization) (1,877,893) (1,292,171) 

TOTAL ASSETS 

686,248,444 612,398,934 



Consolidated Balance Sheet (Note 2a) 


LIABILITIES 

09/30/2010 09/30/2009 

CURRENT LIABILITIES 

355,045,699 329,393,311 

DEPOSITS (Notes 4b and 10b) 

128,965,187 114,758,316 

Demand deposits 28,055,643 22,707,717 

Savings deposits 54,874,272 44,146,423 


Time deposits 43,836,288 44,851,975 

Other deposits 996,775 1,034,247 

DEPOSITS RECEIVED UNDER SECURITIES REPURCHASE AGREEMENTS (Notes 4b and 10c) 

87,383,466 86,178,324 

Own portfolio 47,160,396 32,371,661 

Third-party portfolio 39,331,135 53,635,480 

Free portfolio 891,935 171,183 

FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES (Notes 4b and 10d) 

15,325,610 10,970,048 

Real estate, mortgage, credit and similar notes 10,421,550 8,298,962 

Debentures 1,522,670 156,775 

Foreign borrowings through securities 3,381,390 2,514,311 

INTERBANK ACCOUNTS 

4,459,842 4,049,463 

Pending settlement 3,059,156 2,991,610 

Correspondents 1,400,686 1,057,853 

INTERBRANCH ACCOUNTS 

3,821,153 2,999,373 

Third-party funds in transit 3,766,515 2,848,971 

Internal transfer of funds 54,638 150,402 

BORROWINGS AND ONLENDING (Notes 4b and 10e) 

18,474,040 14,465,005 

Borrowings 11,565,391 8,492,236 

Onlending 6,908,649 5,972,769 

DERIVATIVE FINANCIAL INSTRUMENTS (Notes 4d and 7h) 

6,013,572 5,562,134 

TECHNICAL PROVISIONS FOR INSURANCE, PENSION PLAN AND CAPITALIZATION (Notes 4n II and 11a) 

10,247,038 8,803,153 

OTHER LIABILITIES 

80,355,791 81,607,495 

Collection and payment of taxes and contributions 3,706,816 3,377,497 

Foreign exchange portfolio (Note 9) 20,632,545 34,376,024 

Social and statutory (Note 16b II) 3,199,582 2,639,059 

Tax and social security contributions (Notes 4o, 4p and 14c) 8,695,368 6,693,219 

Negotiation and intermediation of securities 3,048,026 1,569,977 

Credit card operations (Note 4e) 29,237,982 21,045,977 

Subordinated debt (Note 10f) 963,023 1,174,634 

Sundry (Note 13c) 10,872,449 10,731,108 

LONG-TERM LIABILITIES 

270,082,941 230,469,394 

DEPOSITS (Notes 4b and 10b) 

65,951,463 74,331,076 

Interbank deposits 90,515 213,737 

Time deposits 65,860,948 74,117,339 

DEPOSITS RECEIVED UNDER SECURITIES REPURCHASE AGREEMENTS (Notes 4b and 10c) 

68,252,613 40,486,132 

Own portfolio 57,577,240 36,499,025 

Third-party portfolio 123,614 340 

Free portfolio 10,551,759 3,986,767 

FUNDS FROM ACCEPTANCES AND ISSUANCE OF SECURITIES (Notes 4b and 10d) 

8,053,711 7,567,557 

Real estate, mortgage, credit and similar notes 1,033,738 875,639 

Debentures 1,106,433 2,731,931 

Foreign borrowings through securities 5,913,540 3,959,987 

BORROWINGS AND ONLENDING (Notes 4b and 10e) 

24,785,011 18,343,079 

Borrowings 2,831,609 3,654,410 

Onlending 21,953,402 14,688,669 


3,063,328 1,896,269 

TECHNICAL PROVISIONS FOR INSURANCE, PENSION PLAN AND CAPITALIZATION (Notes 4n II and 11a) 

48,242,485 41,174,501 


51,734,330 46,670,780 

Foreign exchange portfolio (Note 9) 766,188 2,345,964 

Tax and social security contributions (Notes 4o, 4p and 14c) 12,637,200 16,667,342 

Credit card operations (Note 4e) 9,039 12,345 

Subordinated debt (Note 10f) 32,054,473 21,597,977 

Sundry (Note 13c) 6,267,430 6,047,152 

DEFERRED INCOME (Note 4q) 

236,560 231,773 

MINORITY INTEREST IN SUBSIDIARIES (Note 16e) 

3,658,172 3,442,862 

STOCKHOLDERS’ EQUITY (Note 16) 

57,225,072 48,861,594 

Capital 

45,000,000 45,000,000 

Capital reserves 

578,390 631,512 

Revenue reserves 

12,210,816 4,096,766 

Asset valuation adjustment (Notes 4c, 4d and 7d) 

156,846 246,828 

(Treasury shares) 

(720,980) (1,113,512) 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 

686,248,444 612,398,934 



Consolidated Statement of Income (Note 2a) 


01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

INCOME FROM FINANCIAL OPERATIONS 

58,399,028 58,331,333 

Loan, lease and other credit operations 

37,905,017 35,434,728 

Securities and derivative financial instruments 

13,697,814 18,929,553 

Financial income from insurance, pension plan and capitalization operations (Note 11c) 

3,345,086 3,549,287 

Foreign exchange operations 

833,829 (94,334) 

Compulsory deposits 

2,617,282 512,099 

EXPENSES OF FINANCIAL OPERATIONS 

(25,447,708) (23,176,914) 

Money market 

(21,916,832) (20,176,640) 

Financial expenses on technical provisions for pension plan and capitalization (Note 11c) 

(2,898,334) (3,089,433) 

Borrowings and onlending 

(632,542) 89,159 

INCOME FROM FINANCIAL OPERATIONS BEFORE LOAN LOSSES 

32,951,320 35,154,419 

RESULT OF LOAN LOSSES (Note 8d I) 

(9,008,144) (10,942,336) 

Expenses for allowance for loan losses 

(11,954,420) (12,382,541) 

Income from recovery of credits written off as loss 

2,946,276 1,440,205 

GROSS INCOME FROM FINANCIAL OPERATIONS 

23,943,176 24,212,083 

OTHER OPERATING REVENUES (EXPENSES) 

(9,691,126) (11,339,163) 

Banking service fees (Note 13d) 

10,496,088 8,966,016 

Asset management 1,868,658 1,629,437 

Current account services 441,433 335,799 

Credit cards 4,898,373 4,233,125 

Sureties and credits granted 1,069,946 950,175 

Receipt services 975,589 885,651 

Other 1,242,089 931,829 

Income from bank charges (Note 13e) 

2,374,095 2,029,971 

Result from insurance, pension plan and capitalization operations (Note 11c) 

2,051,389 1,721,411 

Personnel expenses (Note 13f) 

(9,414,166) (8,848,513) 

Other administrative expenses (Note 13g) 

(10,050,867) (8,430,816) 

Tax expenses (Notes 4p and 14a II) 

(3,065,836) (3,036,917) 

Equity in earnings of affiliates and other investments (Note 15a lII) 

180,481 180,369 

Other operating revenues (Note 13h) 

798,510 573,251 

Other operating expenses (Note 13i) 

(3,060,820) (4,493,935) 

OPERATING INCOME 

14,252,050 12,872,920 

NON-OPERATING INCOME (Note 13j) 

21,334 389,671 

INCOME BEFORE TAXES ON INCOME AND PROFIT SHARING 

14,273,384 13,262,591 

INCOME TAX AND SOCIAL CONTRIBUTION (Notes 4p and 14a I) (3,958,488) (5,619,665) 

Due on operations for the period 

(3,996,672) (6,210,205) 

Related to temporary differences 

38,184 590,540 

PROFIT SHARING – Management members - Statutory - Law No. 6,404 of 12/15/1976 

(168,500) (166,343) 

MINORITY INTEREST IN SUBSIDIARIES (Note 16e) 

(713,235) (622,763) 

NET INCOME 

9,433,161 6,853,820 

WEIGHTED AVERAGE OF THE NUMBER OF OUTSTANDING SHARES 

NET INCOME PER SHARE – R$ 

BOOK VALUE PER SHARE - R$ (OUTSTANDING AT 09/30) 

4,533,375,494 4,515,095,972 

2.08 1.52 

12.60 10.80 

EXCLUSION OF NONRECURRING EFFECTS (Notes 2a and 22k) 

NET INCOME WITHOUT NONRECURRING EFFECTS 


190,437 823,407 

9,623,598 7,677,227 

2.12 1.70 



Consolidated Statement of Cash Flows 


01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

ADJUSTED NET INCOME 

25,736,657 29,048,166 

Net income 

9,433,161 6,853,820 

Adjustments to net income: 

16,303,496 22,194,346 

Granted options recognized 82,494 85,644 

Adjustment to market value of securities and derivative financial instruments (assets/liabilities) (302,188) (2,573,210) 

Effects of changes in exchange rates on cash and cash equivalents 441,005 2,778,897 

Allowance for loan losses 11,954,420 12,382,541 

Results from operations with subordinated debt 1,833,246 833,532 

Results from securitization of foreign payment orders - (309,741) 

Financial expenses on technical provisions for pension plan and capitalization 2,898,334 3,089,433 

Depreciation and amortization (Note 15b) 1,669,292 1,640,143 

Adjustment to legal liabilities – tax and social security 98,898 1,809,860 

Adjustment to provision for contingent liabilities (762,828) (305,323) 

Deferred taxes (38,184) (590,540) 

Equity in earnings of affiliates and other investments (Note 15a III) (180,481) (180,369) 

Income from available-for-sale securities (1,894,680) 1,800,901 

Income from held-to-maturity securities (125,938) 508,736 

Amortization of goodwill - 556,576 

(Income) loss from sale of investments (160,205) (365,914) 

Minority interest 713,235 622,763 

Other 77,076 410,417 

CHANGE IN ASSETS AND LIABILITIES 

(42,539,714) (5,171,670) 

(Increase) decrease in interbank investments 

13,197,646 9,740,732 

(Increase) decrease in securities and derivative financial instruments (assets/liabilities) 

(16,360,120) 7,917,651 

(Increase) decrease in compulsory deposits with the Central Bank of Brazil 

(48,221,338) 23,833 

(Increase) decrease in interbank and interbranch accounts (assets/liabilities) 

1,752,071 803,321 

(Increase) decrease in loan, lease and other credit operations 

(45,903,066) (4,541,461) 

(Increase) decrease in other receivables and other assets 

3,169,906 2,932,181 

(Increase) decrease in foreign exchange portfolio and negotiation and intermediation of securities (assets/liabilities) 

612,848 605,584 

(Decrease) increase in deposits 

4,144,481 (17,100,006) 

(Decrease) increase in deposits received under securities repurchase agreements 

23,701,546 2,305,994 

(Decrease) increase in funds for issuance of securities 

6,059,702 (1,058,040) 

(Decrease) increase in borrowings and onlending 

8,566,880 (9,930,073) 

(Decrease) increase in credit card operations (assets/liabilities) 

768,169 (871,608) 

(Decrease) increase in securitization of foreign payment orders 

- (3,518,992) 

(Decrease) increase in technical provision for insurance, pension plan and capitalization 2,827,414 3,890,507 

(Decrease) increase in collection and payment of taxes and contributions 

3,233,845 2,711,712 

(Decrease) increase in other liabilities 

2,049,735 3,883,964 

(Decrease) increase in deferred income 42,826 668 

Payment of income tax and social contribution 

(2,182,259) (2,967,637) 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 

(16,803,057) 23,876,496 

Interest on capital / dividends received from affiliated companies 

Funds received from sale of available-for-sale securities 

Funds received from redemption of held-to-maturity securities 

Disposal of assets not for own use 

Disposal of investments 

Payment of income tax and social contribution from sale of investments 

Acquisition of minority interest in Itaú XL Seguros Corporativos S.A. (Note 2a) 

Acquisition of minority interest in Previtec – Previdência e Tecnologia Ltda. (Note 2a) 

Sale of fixed assets 

Write-offs of intangible assets 

Purchase of available-for-sale securities 

Purchase of held-to-maturity securities 

Net cash and cash equivalents of assets and liabilities arising from the purchase of Redecard S.A. 

Purchase of investments 

Purchase of fixed assets 

Purchase of intangible assets 

NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES 

85,374 63,152 

11,151,067 11,310,223 

532 47,471 

263,673 191,477 

189,189 384,145 

(56,511) (124,411) 

(157,299) - 

(32,000) - 

52,456 49,790 

70,931 - 

(9,878,320) (9,460,025) 

(514,403) - 

- (485,994) 

(22,585) (32,080) 

(1,344,097) (700,408) 

(321,832) (318,444) 

(513,825) 924,896 

Increase (decrease) in subordinated debt 9,146,034 (525,537) 

Change in minority interest (585,491) (458,314) 

Granting of stock options 303,927 218,010 

Purchase of treasury shares - (21) 

Dividends and interest on capital paid (4,152,051) (3,619,572) 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 4,712,419 (4,385,434) 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (12,604,463) 20,415,958 

Cash and cash equivalents at the beginning of the period 

65,917,455 37,182,300 

Effects of changes in exchange rates on cash and cash equivalents (441,005) (2,778,897) 

Cash and cash equivalents at the end of the period (Notes 4a and 5) 

52,871,987 54,819,361 



Consolidated Statement of Added Value 


01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

INCOME 

Financial operations 

Banking services 

Result from insurance, pension plan and capitalization operations 

Result of allowance for loan losses (Note 8d) 

Other 

EXPENSES 


Other 

INPUTS PURCHASED FROM THIRD PARTIES 

Materials, energy and others 

Third-party services 

Other 

65,495,840 61,368,738 

58,399,028 58,331,333 

12,870,183 10,995,987 

2,051,389 1,721,411 

(9,008,144) (10,942,336) 

1,183,384 1,262,343 

(28,508,528) (27,670,849) 

(25,447,708) (23,176,914) 

(3,060,820) (4,493,935) 

(8,363,896) (6,794,750) 

(336,585) (211,438) 

(2,137,807) (2,138,417) 

(5,889,504) (4,444,895) 

Data processing and telecommunications (Note 13g) (2,358,942) (1,851,804) 

Advertising, promotions and publication (Note 13g) (819,823) (641,529) 

Installations (1,178,689) (714,419) 

Transportation (Note 13g) (459,466) (280,324) 

Security (Note 13g) (326,537) (280,042) 

Travel expenses (Note 13g) (115,016) (87,280) 

Other (631,031) (589,497) 

GROSS ADDED VALUE 

DEPRECIATION AND AMORTIZATION (Note 13g) 

NET ADDED VALUE PRODUCED BY THE COMPANY 

ADDED VALUE RECEIVED FROM TRANSFER (Note 15 a III) 

TOTAL ADDED VALUE TO BE DISTRIBUTED 

DISTRIBUTION OF ADDED VALUE 

Personnel 

28,623,416 26,903,139 

(1,053,361) (990,457) 

27,570,055 25,912,682 

105,394 147,071 

27,675,449 26,059,753 

27,675,449 26,059,753 

8,720,466 8,165,019 

Compensation 6,954,310 6,715,770 

Benefits 1,330,910 1,075,005 

FGTS – government severance pay fund 435,246 374,244 

Taxes, fees and contributions 

8,174,977 9,772,542 

Federal 7,697,053 9,335,596 

State 842 25,471 

Municipal 477,082 411,475 

Return on third parties' assets - Rent 

633,610 645,609 

Return on own assets 

10,146,396 7,476,583 

Dividends and Interest on capital 3,310,811 2,630,440 

Retained earnings (loss) for the period 6,122,350 4,223,380 

Minority interest in retained earnings 713,235 622,763 



Balance Sheet 


ASSETS 

09/30/2010 09/30/2009 

CURRENT ASSETS 

1,663,874 7,817,727 

CASH AND CASH EQUIVALENTS 

312 197 


336,729 6,830,527 

Money market 336,729 142,686 

Interbank deposits - 6,687,841 


32,351 5,198 

Own portfolio 27,290 566 

Pledged in guarantee 5,061 4,632 


1,289,584 979,057 

Income receivable (Note 15a I) 188,792 30,432 

Sundry (Note 13a) 1,100,792 948,625 

OTHER ASSETS – Prepaid expenses (Note 4g) 

4,898 2,748 

LONG-TERM RECEIVABLES 

13,129,213 105,244 

INTERBANK INVESTMENTS – Interbank deposits (Notes 4b and 6) 

13,098,967 - 


6,227 24,749 

Own portfolio 13 24,749 

Pledged in guarantee 6,214 - 

OTHER RECEIVABLES - Sundry (Note 13a) 

24,019 80,495 

PERMANENT ASSETS 

62,031,310 57,436,916 

INVESTMENTS 

62,031,006 57,436,526 

Investments in subsidiaries (Notes 4h and 15a I) 62,030,599 57,436,119 

Other 407 407 

FIXED ASSETS (Note 4i) 

304 390 

TOTAL ASSETS 

76,824,397 65,359,887 

LIABILITIES 

CURRENT LIABILITIES 

1,892,970 1,519,525 


2,596 51 


1,890,374 1,519,474 

Social and statutory (Note 16b II) 1,828,452 1,473,205 

Tax and social security contributions (Note 14c) 3,963 34,323 

Subordinated debt (Note 10f) 50,600 - 

Sundry (Note 13c) 7,359 11,946 

LONG-TERM LIABILITIES 

7,103,554 1,184,072 

DEPOSITS – Interbank deposits (Notes 4b and 10b) 

3,260,392 880,795 


- 831 


3,843,162 302,446 

Tax and social security contributions (Note 14c) 412,183 302,443 

Subordinated debt (Note 10f) 3,364,059 - 

Sundry (Note 13c) 66,920 3 

STOCKHOLDERS’ EQUITY (Note 16) 

67,827,873 62,656,290 

Capital 

45,000,000 45,000,000 

Capital reserves 

578,390 631,512 


22,813,617 17,891,462 

Asset valuation adjustment (Notes 4c, 4d and 7d) 

156,846 246,828 

(Treasury shares) 

(720,980) (1,113,512) 


76,824,397 65,359,887 



Statement of Income 



01/01 to 09/30/2010 01/01 to 09/30/2009 

714,255 305,566 

Securities and derivative financial instruments 714,255 305,566 

EXPENSES OF FINANCIAL OPERATIONS 

(237,467) (51,227) 

Money market (237,467) (51,227) 



476,788 254,339 

5,947,991 4,433,968 

Personnel expenses (106,970) (167,316) 

Other administrative expenses (44,766) (34,769) 

Tax expenses (Note 14a II) (23,887) (14,757) 

Equity in earnings of subsidiaries (Note 15a I) 6,179,174 4,694,570 

Other operating revenues (expenses) (55,560) (43,760) 


NON-OPERATING INCOME 


INCOME TAX AND SOCIAL CONTRIBUTION (Note 4p) 

6,424,779 4,688,307 

9,207 9,639 

6,433,986 4,697,946 

789,730 776,955 

Due on operations for the period (14,776) 4,695 

Related to temporary differences 804,506 772,260 

PROFIT SHARING – Management members - Statutory - Law No. 6,404 of 12/15/1976 

NET INCOME 

(4,947) (3,278) 

7,218,769 5,471,623 

WEIGHTED AVERAGE OF THE NUMBER OF OUTSTANDING SHARES 4,533,375,494 4,515,095,972 

NET INCOME PER SHARE – R$ 1.59 1.21 

BOOK VALUE PER SHARE - R$ (OUTSTANDING AT 09/30) 14.94 13.85 

EXCLUSION OF NONRECURRING EFFECTS (Notes 2a and 22k) 

NET INCOME WITHOUT NONRECURRING EFFECTS 


190,437 316,924 

7,409,206 5,788,547 

1.63 1.28 


Itaú Unibanco S.A. – - September0, 2010 67 


Statement of Changes in Stockholders’ Equity (Note 16) 


BALANCES AT 01/01/2009 

Capital 

Capital 

reserves 


Asset valuation 

adjustment 

(Note 7d) 

Retained earnings 

(Treasury 

shares) 

29,000,000 597,706 31,192,635 (423,717) - (1,525,695) 58,840,929 

Capitalization through Reserves – A/ESM of 04/24/2009 

16,000,000 - (16,000,000) - - - - 

Treasury shares 

- (133,764) (60,430) - - 412,183 217,989 

Purchase of treasury shares - - - - - (21) (21) 

Granting of stock options – exercised options - (133,764) (60,430) - - 412,204 218,010 

Granting of options recognized 

Change in adjustment to market value 

Reversal of interest on capital and dividends paid on 03/17 and 04/08/2009 - Year 2008 

Net income 

Appropriations: 

- 167,570 (81,926) - - - 85,644 

- - - 670,545 - - 670,545 

- - 104 - - - 104 

- - - - 5,471,623 - 5,471,623 

Legal reserve - - 273,581 - (273,581) - - 

Statutory reserves - - 2,567,498 - (2,567,498) - - 

Dividends and Interest on capital - - - - (2,630,544) - (2,630,544) 


CHANGES IN THE PERIOD 


Granting of stock options – exercised options 


Change in adjustment to market value 

Addition to interest on capital and dividends paid on 03/01/2010 - Year 2009 

Net income 

Appropriations: 

45,000,000 631,512 17,891,462 246,828 - (1,113,512) 62,656,290 

16,000,000 33,806 (13,301,173) 670,545 - 412,183 3,815,361 

45,000,000 640,759 18,771,151 120,031 - (1,031,327) 63,500,614 

- (58,490) 52,070 - - 310,347 303,927 

- (3,879) 86,373 - - - 82,494 

- - (3,935) 36,815 - - 32,880 

- - (620) - - - (620) 

- - - - 7,218,769 - 7,218,769 

Legal reserve - - 360,939 - (360,939) - - 

Statutory reserves - - 3,547,639 - (3,547,639) - - 

Dividends and Interest on capital - - - - (3,310,191) - (3,310,191) 


CHANGES IN THE PERIOD 

45,000,000 578,390 22,813,617 156,846 - (720,980) 67,827,873 

- (62,369) 4,042,466 36,815 - 310,347 4,327,259 

Total


Statement of Cash Flows 


ADJUSTED NET INCOME (LOSS) 

Net income 

Adjustments to net income: 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

363,605 165,026 

7,218,769 5,471,623 

(6,855,164) (5,306,597) 

Granting of options recognized 82,494 85,644 

Deferred taxes (804,506) (772,260) 

Equity in earnings of subsidiaries (Note 15a I) (6,179,174) (4,694,570) 

Amortization of goodwill 43,308 43,308 

Effects of changes in exchange rates on cash and cash equivalents 2,628 31,145 

Other 86 136 

CHANGE IN ASSETS AND LIABILITIES 

(Increase) decrease in securities and derivative financial instruments (assets/liabilities) 

(Increase) decrease in other receivables and other assets 

Increase (decrease) in other liabilities 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 

577,842 165,211 

(9,155) (6,877) 

484,403 203,983 

102,594 (31,895) 

941,447 330,237 

Interest on capital/Dividends received 

(Increase) decrease in interbank investments 

(Purchase) sale of fixed assets 

NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES 

Increase (decrease) in deposits 

Increase (decrease) in subordinated debt 

Granting of stock options 

Purchase of treasury shares 

Dividends and interest on capital paid 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 

3,620,965 8,917,342 

(6,174,006) (6,378,518) 

(34) 25 

(2,553,075) 2,538,849 

2,361,168 534,798 

3,414,659 - 

303,927 218,010 

- (21) 

(4,152,051) (3,619,572) 

1,927,703 (2,866,785) 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 

316,075 2,301 

Cash and cash equivalents at the beginning of the period 

23,594 171,727 

Effects of changes in exchange rates on cash and cash equivalents 

(2,628) (31,145) 

Cash and cash equivalents at the end of the period (Notes 4a and 5) 337,041 142,883 



Statement of Added Value 


01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

INCOME 


Other 

EXPENSES 

INPUTS PURCHASED FROM THIRD PARTIES 


Advertising, promotions and publications 

Expenses for financial system services 

Insurance 

Other 

GROSS ADDED VALUE 

DEPRECIATION AND AMORTIZATION 

NET ADDED VALUE PRODUCED BY THE COMPANY 

ADDED VALUE RECEIVED FROM TRANSFER (Note 15 a I) 

1,619,104 1,185,726 

714,255 305,566 

904,849 880,160 

(237,467) (51,227) 

(44,106) (33,812) 

(16,728) (12,786) 

(879) (2,290) 

(4,589) (4,873) 

(4,413) (2,942) 

(17,497) (10,921) 

1,337,531 1,100,687 

(86) (150) 

1,337,445 1,100,537 

6,179,174 4,694,570 

TOTAL ADDED VALUE TO BE DISTRIBUTED 

DISTRIBUTION OF ADDED VALUE 

Personnel 

7,516,619 5,795,107 

7,516,619 5,795,107 

109,030 160,367 

Compensation 106,188 152,428 

Benefits 1,792 5,797 

FGTS – government severance pay fund 1,050 2,142 

Taxes, fees and contributions 

188,246 162,310 

Federal 188,185 162,204 

Municipal 61 106 

Return on third parties' assets - Rent 

Return on own assets 

574 807 

7,218,769 5,471,623 

Dividends and Interest on capital 3,310,811 2,630,440 

Retained earnings (loss) for the period 3,907,958 2,841,183 



NOTES TO THE FINANCIAL STATEMENTS 

FROM JANUARY 1 TO SEPTEMBER 30, 2010 AND 2009 


NOTE 1 - OPERATIONS 

Itaú Unibanco Holding S.A. (ITAÚ UNIBANCO HOLDING) is a publicly-held company which, together with its 

subsidiary and affiliated companies, operates in Brazil and abroad, with all types of banking activities, through 

its commercial, investment, consumer credit, real estate loan, finance and investment credit, and lease 

portfolios, including foreign exchange operations, and other complementary activities, with emphasis on 

Insurance, Private Pension Plans, Capitalization, Securities Brokerage and Administration of Credit Cards, 

Consortia, Investment Funds and Managed Portfolios. 


NOTE 2 – PRESENTATION OF THE FINANCIAL STATEMENTS 

a) Presentation of the Financial Statements 

The financial statements of ITAÚ UNIBANCO HOLDING and of its subsidiaries (ITAÚ UNIBANCO HOLDING 

CONSOLIDATED) have been prepared in accordance with accounting principles established by the Brazilian 

Corporate Law, including the amendments introduced by Laws No. 11,638, of December 28, 2007, and No. 

11,941, of May 27, 2009, in conformity, when applicable, with instructions issued by the Central Bank of 

Brazil (BACEN), the National Monetary Council (CMN), the Brazilian Securities and Exchange Commission 

(CVM) and the Superintendency of Private Insurance (SUSEP), and National Council of Private Insurance 

(CNSP), which include the use of estimates necessary to calculate accounting provisions. 

On May 12, 2010 SUSEP approved the contract signed on November 12, 2009 related to the acquisition by 

ITAÚ UNIBANCO HOLDING of a minority interest in the subsidiary company Itaú XL Seguros Corporativos 

S.A. for the amount of R$ 157,299, giving rise to a goodwill of R$ 24,700. The transaction was approved on 

October 6, 2010 by SUSEP. 

On September 20, 2010, ITAÚ UNIBANCO HOLDING purchased 50% of the quotas in the companies SFR 

Software and Análise de Sistemas LTDA and Previtec – Previdência e Tecnologia LTDA, according to the 

purchase agreement, for the amount of R$ 47,000, giving rise to a goodwill of R$ 42,530, and these 

companies became wholly-owned subsidiaries. 

In order to enable the proper analysis of the net income, the heading “Net income without nonrecurring 

effects” is presented below the Consolidated Statement of Income, and this effect is highlighted in a heading 

called “Exclusion of nonrecurring effects” (Note 22k). 

As set forth in the sole paragraph of article 7 of BACEN Circular No. 3,068, of November 8, 2001, securities 

classified as trading securities (Note 4c) are presented in the Balance Sheet under Current Assets 

regardless of their maturity dates. 

Lease Operations are presented, at present value, in the Balance Sheet, and the related income and 

expenses, which represent the financial result of these operations, are presented, grouped together, under 

loan, lease and other credit operations in the Statement of Income. Advances on exchange contracts are 

reclassified from Other Liabilities – Foreign Exchange Portfolio. The foreign exchange result is presented on 

an adjusted basis, with the reclassification of expenses and income, in order to represent exclusively the 

impact of variations and differences of rates on the balance sheet accounts denominated in foreign 

currencies. 

b) Convergence into international accounting standards 

The CMN Resolution No. 3,786, of September 24, 2009, and BACEN Circular No. 3,472, of October 23, 

2009, established that from December 31, 2010 the financial institutions shall prepare and annually report 

their consolidated financial statements adopting the international financial reporting standards according to 

the pronouncements issued by the International Accounting Standard Board (IASB), translated into the 

Portuguese language by a Brazilian company registered with the International Accounting Standards 

Committee Foundation (IASC Foundation). 

The accounting pronouncements issued by the Accounting Pronouncements Committee (CPC) and the 

respective international standards of IASB that will be adopted in the consolidated financial statements until 

the end of 2010 and may impact the stockholders’ equity and or results are as follows: 

• CPC 2 (IAS 21) - Effects on changes in foreign exchange rates and conversion of financial 

statements: Effect on results from January 1 to September 30, 2010 (without effect on stockholders' 

equity) for allocation of foreign exchange variation in the stockholders' equity related to controlled 

companies using functional currency other than Real, basically represented by the Itaú Europa, 

Chile, Argentina, Uruguay and Paraguay units (Note 20). 

• CPC 11 (IFRS 4) – Insurance contracts: Management does not expect significant effects; 

• CPC 15 (IFRS 3) – Business combinations: in the period from January 1 to September 30, 2010, 

there was not any transaction that could exert significant effects; 

• CPC 24 (IAS 10) – Subsequent events: dividends and interest on capital declared after the 

accounting period to which the financial statements refer, if these are above the minimum mandatory 

dividend they shall be reversed with effect on stockholders' equity (Note 16b I); 


• CPC 32 (IAS 12) – Taxes on income: recognition of a credit in the stockholders’ equity of the 

opening balance sheet of an amount of deferred tax assets not recorded according to Note 14b IV; 

• CPC 33 (IAS 19) – Employee benefits: recognition of a credit in the stockholders’ equity of the 

opening balance sheet of the surplus of benefit plans according to Note 19c; 

• CPC 38 (IAS 39) – Financial instruments: recognition and measurement – loss on recoverable 

amount and loss for not receiving financial assets: review of the procedures adopted for setting up 

the Allowance for Loan losses. The management does not expect an amount above that recorded in 

the allowance. 

The other pronouncements shall basically impact the information disclosure format. 

c) Consolidation 

As set forth in paragraph 1, article 2, of BACEN Circular Letter No. 2,804, of February 11, 1998, the financial 

statements of ITAÚ UNIBANCO HOLDING comprise the consolidation of its foreign branches and 

subsidiaries. 

Intercompany transactions and balances and results have been eliminated on consolidation. The 

investments held by consolidated companies in Exclusive Investment Funds are consolidated. The 

investments in these fund portfolios are classified by type of transaction and were distributed by type of 

security, in the same categories in which these securities had been originally allocated. The effects of the 

Foreign Exchange Variation on investments abroad are classified in the heading Securities and Derivative 

Financial Instruments in the Statement of Income. 

The difference of Net Income and Stockholders’ Equity between ITAÚ UNIBANCO HOLDING and ITAÚ 

UNIBANCO HOLDING CONSOLIDATED (Note 16d) results from the adoption of different criteria for the 

amortization of goodwill originated on purchase of investments, net of the respective deferred tax assets. 

In ITAÚ UNIBANCO HOLDING, the goodwill recorded in subsidiaries, mainly originated from the ITAÚ 

UNIBANCO merger, is being amortized based on the expected future profitability and appraisal reports or 

upon realization of the investment, according to the rules and guidance of CMN and BACEN. 

In ITAÚ UNIBANCO HOLDING CONSOLIDATED, this goodwill was fully amortized up to December 31, 

2009, in the periods when the investments were made, in order to: a) permit better comparability with 

previous periods’ consolidated financial statements; and b) permit measuring Net Income and Stockholders’ 

Equity based on conservative criteria. 

From January 1, 2010, the goodwill originated from the purchase of investments is no longer fully amortized 

in the consolidated financial statements, for purposes of compatibility of the current accounting practices with 

the international financial reporting standards (Note 4k). 


The consolidated financial statements comprise ITAÚ HOLDING HOLDING and its direct and indirect subsidiaries, among 

which we highlight: 

(1) 

(2) 

(3) 

(4) 

(5) 

09/30/2010 09/30/2009 

Afinco Americas Madeira, SGPS, Sociedade Unipessoal, Ltda. Portugal 100.00 100.00 

Banco Dibens S.A. Brazil 100.00 100.00 

Banco Fiat S.A. Brazil 99.99 99.99 

Banco Itaú Argentina S.A. Argentina 99.99 99.99 

Banco Itaú BBA S.A. Brazil 99.99 99.99 

Banco Itaú Chile S.A. Chile 99.99 99.99 

Banco Itaú Europa Luxembourg S.A. Luxembourg 99.99 99.98 

Banco Itaú Europa S.A. Portugal 99.99 99.99 

Banco Itaú Uruguay S.A. Uruguay 100.00 100.00 

Banco Itaucard S.A. Brazil 99.99 99.99 

Banco Itaucred Financiamentos S.A. Brazil 99.99 99.99 

Banco Itauleasing S.A. Brazil 99.99 99.99 

BIU Participações S.A. (1) Brazil 66.15 66.15 

Cia. Itaú de Capitalização Brazil 99.99 99.99 

Dibens Leasing S.A. - Arrendamento Mercantil Brazil 100.00 100.00 

FAI - Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento (2) Brazil 50.00 50.00 

Fiat Administradora de Consórcios Ltda. Brazil 99.99 99.99 

Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento (3) Brazil 50.00 50.00 

Hipercard Banco Múltiplo S.A. Brazil 99.99 99.99 

Itaú Administradora de Consórcios Ltda. Brazil 99.99 99.99 

Itau Bank, Ltd. (4) Cayman Islands 100.00 100.00 

Itaú Corretora de Valores S.A. Brazil 99.99 99.99 

Itaú Seguros S.A. Brazil 100.00 100.00 

Itaú Unibanco S.A. Brazil 100.00 100.00 

Itaú Vida e Previdência S.A. Brazil 100.00 100.00 

Itaú XL Seguros Corporativos S.A. (Note 2a) Brazil 100.00 50.00 

Itaúsa Export S.A. Brazil 100.00 100.00 

Oca Casa Financiera S.A. Uruguay 100.00 100.00 

Orbitall Serviços e Processamento de Informações Comerciais S.A. Brazil 99.99 99.99 

Porto Seguro S.A. (5) Brazil 30.00 - 

Redecard S.A. (6) Brazil 50.00 50.00 

Unibanco Cayman Bank Ltd. Cayman Islands 100.00 100.00 

Unibanco Participações Societárias S.A. Brazil 51.00 50.99 

Fully consolidated company from September 30, 2009; 

Company with shared control included proportionally in consolidation; 

Company with shared control, fully included in consolidation, as authorized by CVM, in view of the business management by ITAÚ UNIBANCO 

HOLDING; 

It does not include Redeemable Preferred Shares (Note 10f) 

Company controlled by Porto Seguro Itaú Unibanco Participações S.A. included proportionally in consolidation from December 31, 2009; 

(6) Fully consolidated company whose share capital is 50% plus 17 shares. 

Incorporation 

country 

Interest % 


NOTE 3 – REQUIREMENTS OF CAPITAL AND FIXED ASSET LIMITS 

a) Basel and Fixed Asset Ratios 

The main indicators at September 30, 2010, according to present regulation, are as follows: 

Financial system Economic-financial 

Consolidated (1) Consolidated (2) 

Referential equity (3) 

73,134,853 75,083,908 

Basel ratio 

15.5% 15.3% 

Tier I 11.9% 11.9% 

Tier II 3.6% 3.4% 

Fixed assets ratio (4) 

37.8% 15.8% 

Excess capital in relation to fixed assets 

8,915,316 25,709,479 

(1) 

(2) 

Consolidated financial statements including financial companies only; 

Consolidated financial statements comprising all subsidiary companies, including insurance, pension plan and capitalization 

companies, and those in which control is based on the sum of interests held by the institution, its managers, parent company and 

related companies, notwithstanding their percentage, as well as those directly or indirectly acquired, through investment funds; 

(3) 

(4) 

The CMN, through Resolution No. 3,444, of February 28, 2007, determined the Referential Equity (PR), for purposes of calculating 

operating limits, as being the sum of both Tier I and Tier II levels, following the international experience, each of them comprising 

items from stockholders' equity, as well as subordinated debt and hybrid capital and debt instruments. 

The difference between the fixed asset ratio of the financial system consolidated and the economic-financial consolidated arises from 

the inclusion of non-financial subsidiary companies, which provide high liquidity and low level of fixed asset ratio, with a consequent 

decrease in the fixed asset ratio of the economic and financial consolidated amounts, enabling, when necessary, the distribution of 

funds to the financial companies. 

An issue of subordinated debt is pending approval from the Central Bank of Brazil in order to comprise the Tier 

II of Referential Equity, which at September 30, 2010 represents the amount of R$ 1,694,438. Should we 

consider this issue, the Basel ratios would stand at 15.8% and 15.6% for the financial system and the economicfinancial 

consolidated, respectively. 

Management considers the current Basel ratio (15.3%, based on economic-financial consolidated) to be 

adequate, taking into account the following: 

a) It exceeds by 4.3 percent the minimum required by the authorities (11.0%); and 

b) In view of the realizable values of assets (Note 18), the additional provision exceeding the minimum required 

(Note 8c) and unrecorded deferred tax assets (Note 14b IV), the ratio would increase to 17.5%. 

CMN Resolution No. 3,490, of August 29, 2007, provides for the criteria for computation of the Required 

Referential Equity (PRE). For calculation of the risk portions, the procedures of Circular No. 3,360, of 

September 12, 2007 for credit risk, of Circulars Nos. 3,361, 3,362, 3,363, 3,364, 3,366 and 3,368, of September 

12, 2007, No. 3,388, of June 4, 2008, and 3,389, of June 25, 2008, and Circular Letters Nos. 3,309 and 3,310, 

of April 15, 2008 for market risk, and Circular No. 3,383 and Circular Letters Nos. 3,315 and 3,316, of April 30, 

2008, for operational risk were followed. For the operational risk portion, ITAÚ UNIBANCO HOLDING opted for 

the use of the Alternative Standardized Approach. 

From January 1, 2010, the operational risk portion started being considered at its full amount, pursuant to 

Circular No. 3.383. 

CMN Resolution No. 3,825, of December 16, 2009, revoked, to take effect from April 1, 2010, Resolution No. 

3,674, of December 30, 2008, which enabled fully adding to Tier I the amount of the additional provision to the 

minimum percentages required by Resolution No. 2,682 of December 21, 1999. 

Circular No. 3,476, of December 28, 2009, sets forth that, for the Economic-Financial Consolidated, from June 

30, 2010, an addition should be included in the Operational Risk Portion (POPR), through the use of a ratio 

based on the equity in earnings of subsidiary and affiliated companies. 

Circular No. 3,498, of June 28, 2010, changes the provisions mentioned in Circulars No. 3,361, 3,362, 3,363, 

3,364 and 3,366, of September 12, 2007, and No. 3,389, of June 25, 2008, which set forth the procedures for 

calculation of portions related to market risk. The new calculation method will be adopted gradually from 

January 1, 2012, taking into account that it shall be fully employed from June 30, 2012. Should the new rules 

already be applicable, the ratios would be reduced by about 0.9%. 


The Referential Equity used for calculation of ratios and composition of risk exposures at September 30, 2010, are as follows: 


Economic-financial 

system 

consolidated 

consolidated 

Stockholders' Equity Itaú Unibanco Holding S.A. (Consolidated) 57,225,072 57,225,072 

Minority interest in subsidiaries 934,791 2,912,727 

Consolidated stockholders’ equity (BACEN) 58,159,863 60,137,799 

Revaluation reserves excluded from Tier I (6) (7) 

Deferred tax assets excluded from Tier I (548,978) (573,855) 

Deferred permanent assets excluded from Tier I (417,457) (421,461) 

Adjustments to market value – securities and derivative financial Instruments 

excluded from Tier I 

(156,847) (157,040) 

Preferred shares with clause of redemption excluded from Tier I (665,974) (665,974) 

Tier I 56,370,601 58,319,462 

Subordinated debt 16,203,019 16,203,019 

Preferred shares with clause of redemption 532,779 532,779 

Revaluation reserves 6 7 

Adjustment to market value -securities and derivative financial instruments 156,847 157,040 

Tier II 16,892,651 16,892,845 

Tier I + Tier II 73,263,252 75,212,307 

Exclusions: 

Funding instruments issued by financial institutions (128,399) (128,399) 

Referential equity 73,134,853 75,083,908 

Risk exposure: 

Exposure weighted by credit risk (EPR) 436,754,318 449,521,318 

Portion required for credit risk coverage (PEPR) 48,042,975 92.3% 49,447,345 91.9% 

FPR at 20% 261,602 0.5% 281,300 0.5% 

FPR at 35% 12,502 0.0% 12,502 0.0% 

FPR at 50% 2,237,403 4.3% 2,834,433 5.3% 

FPR at 75% 12,358,175 23.7% 12,210,289 22.7% 

FPR at 100% 31,624,433 60.8% 32,492,073 60.4% 

FPR at 300% 1,324,179 2.5% 1,391,862 2.6% 

Derivatives – potential future gain 224,681 0.4% 224,886 0.4% 

Portion required for operational risk coverage (POPR) 2,745,478 5.3% 3,129,288 5.8% 

Retail 468,830 0.9% 468,830 0.9% 

Commercial 812,183 1.6% 812,183 1.5% 

Corporate finance 77,531 0.1% 77,531 0.1% 

Negotiation and sales 793,059 1.5% 793,059 1.5% 

Payments and settlements 259,124 0.5% 259,124 0.5% 

Financial agent services 112,659 0.2% 112,659 0.2% 

Asset management 199,118 0.4% 199,118 0.4% 

Retail brokerage 22,086 0.0% 22,086 0.0% 

Business plans 888 0.0% 888 0.0% 

Economic-financial consolidated (CONEF) addition - 0.0% 383,810 0.7% 

Portion required for market risk coverage: 1,250,357 2.4% 1,252,671 2.3% 

Gold, foreign currency and operations subject to foreign exchange 

variation (PCAM) 

- 0.0% - 0.0% 

Operations subject to interest rate variation (PJUR) 863,773 1.7% 866,087 1.6% 

Fixed rate denominated in Real (PJUR1) 140,574 0.3% 139,435 0.3% 

Foreign currency coupon (PJUR2) 245,644 0.5% 249,097 0.5% 

Price index coupon (PJUR3) 343,061 0.7% 343,061 0.6% 

Interest rate coupon (PJUR 4) 134,494 0.3% 134,494 0.2% 

Operations subject to commodity price variation (PCOM) 127,650 0.2% 127,650 0.2% 

Operations subject to stock price variation (PACS) 258,934 0.5% 258,934 0.5% 

Required Referential Equity 52,038,810 100.0% 53,829,304 100.0% 

Excess capital in relation to Required Referential Equity 21,096,043 40.5% 21,254,604 39.5% 

Total exposure weighted by risk [EPR + (1/0.11 X (POPR + PCAM + PJUR + 

PCOM + PACS) 

473,080,094 489,357,307 

Ratio (%) 15.5 15.3 

Referential equity calculated for covering the interest rate risk of operations 

not classified into the trading portfolio (RBAN) 

1,313,626 1,456,789 


During this period, the effects of the changes in legislation and balances were as follows: 

Changes in the Basel Ratio 

Financial system consolidated 

Referential 

equity 

Weighted 

exposure 

Effect 

Economic-financial consolidated 

Referential 

equity 

Weighted 

exposure 

Effect 

Ratio at 12/31/2009 

Result for the period 

Interest on capital and dividends 

Additional allowance for loan losses – added to the Tier I 

of Referential Equity 


Granting of stock options – exercised options in the period 

Asset valuation adjustment 

Subordinated debt and redeemable preferred shares 

Deferred assets excluded from Tier I of referential equity 

Other changes in referential equity 

Changes in risk exposure 

Ratio at 09/30/2010 

68,432,521 402,713,393 17.0% 70,514,408 422,840,336 16.7% 

9,499,718 2.4% 10,106,082 2.4% 

(3,310,811) -0.8% (3,310,811) -0.8% 

(6,107,459) (6,107,459) -1.2% (6,104,000) (6,104,000) -1.2% 

82,492 0.0% 82,492 0.0% 

301,162 0.1% 301,162 0.1% 

32,880 0.0% 32,880 0.0% 

4,018,833 1.0% 4,018,833 1.0% 

69,224 69,224 0.0% 70,301 70,301 0.0% 

116,293 0.0% (627,439) -0.2% 

76,404,936 -3.0% 72,550,670 -2.7% 

73,134,853 473,080,094 15.5% 75,083,908 489,357,307 15.3% 


) Capital for Insurance Activity 

SUSEP, following the worldwide trend towards the strengthening of the insurance market, disclosed on 

December 26, 2006 the Resolutions Nos. 155 and 158, amended by Resolutions No. 178, of December 28, 

2007, and No. 200, of December 16, 2008, and Circular No. 355, of December 14, 2007. The regulations 

provide for the rules on regulatory capital required for authorization and operation of insurance companies 

and rules for the allocation of capital from subscription risk for several insurance lines. 

Noteworthy is the fact that the adjusted stockholders’ equity of ITAU UNIBANCO HOLDING companies 

exclusively engaged in insurance activities is higher than the required regulatory capital. At September 30, 

2010, the required regulatory capital amounted to R$ 800,749 for an existing adjusted stockholders’ equity of 

R$ 3,232,630. 


NOTE 4 – SUMMARY OF THE MAIN ACCOUNTING PRACTICES 

a) Cash and cash equivalents - For purposes of Consolidated Statement of Cash Flows, it includes cash and 

current accounts in banks (considered in the heading cash and cash equivalents), interbank deposits and 

securities purchased under agreements to resell – funded position that have original maturities of up to 90 

days or less. 

b) Interbank investments, remunerated restricted credits – Brazilian Central Bank, remunerated 

deposits, deposits received under securities repurchase agreements, funds from acceptance and 

issuance of securities, borrowings and onlendings, subordinated debt and other receivables and 

payables – Transactions subject to monetary correction and foreign exchange variation and operations with 

fixed charges are recorded at present value, net of the transaction costs incurred, calculated “pro rata die” 

based on the effective rate of transactions, according to CVM Resolution No. 556 of November 12, 2008. 

c) Securities - Recorded at cost of acquisition restated by the index and/or effective interest rate and 

presented in the Balance Sheet, according to BACEN Circular No. 3,068, of November 8, 2001. Securities 

are classified into the following categories: 

• Trading securities – acquired to be actively and frequently traded, and adjusted to market value, with a 

contra-entry to the results for the period; 

• Available-for-sale securities – securities that can be negotiated but are not acquired to be actively and 

frequently traded. They are adjusted to their market value with a contra-entry to an account disclosed in 

stockholders’ equity; 

• Held-to-maturity securities – securities, except for non-redeemable shares, for which the bank has the 

financial condition and intends or is required to hold them in the portfolio up to their maturity, are recorded 

at cost of acquisition, or market value, whenever these are transferred from another category. The 

securities are adjusted up to their maturity date, not being adjusted to market value. 

Gains and losses on available-for-sale securities, when realized, are recognized at the trading date in the 

statement of income, with a contra-entry to a specific stockholders’ equity account. 

Decreases in the market value of available-for-sale and held-to-maturity securities below their related costs, 

resulting from non-temporary reasons, are recorded in results as realized losses. 

d) Derivative financial instruments - these are classified on the date of their acquisition, according to 

management's intention of using them either as a hedge or not, according to BACEN Circular No. 3,082, of 

January 30, 2002. Transactions involving financial instruments, carried out upon the client’s request, for their 

own account, or which do not comply with the hedging criteria (mainly derivatives used to manage the overall 

risk exposure), are stated at market value, including realized and unrealized gains and losses, which are 

recorded directly in the statement of income. 

The derivatives used for protection against risk exposure or to modify the characteristics of financial assets 

and liabilities, which have changes in market value highly associated with those of the items being protected 

at the beginning and throughout the duration of the contract, and which are found effective to reduce the risk 

related to the exposure being protected, are classified as a hedge, in accordance with their nature: 

• Market Risk Hedge – financial assets and liabilities, as well as their related financial instruments, are 

accounted for at their market value plus realized and unrealized gains and losses, which are recorded 

directly in the statement of income. 


• Cash Flow Hedge - the effective amount of the hedge of financial assets and liabilities, as well as their 

related financial instruments, are accounted for at their market value plus realized and unrealized gains 

and losses, net of tax effects, when applicable, and recorded in a specific account in stockholders’ equity. 

The ineffective portion of hedge is recorded directly in the statement of income. 

e) Loan, lease and other credit operations (Operations with credit granting characteristics) – these 

transactions are recorded at present value and calculated “pro rata die” based on the variation of the 

contracted index and interest rate, and are recorded on the accrual basis until the 60th day overdue in 

financial companies. After the 60th day, income is recognized upon the effective receipt of installments. 

Credit card operations include receivables arising from the purchases made by cardholders. The funds 

related to these amounts are recorded in Other Liabilities – Credit Card Operations, which also include funds 

arising from other credits related to transactions with credit card issuers. 

f) Allowance for loan losses - the balance of the allowance for loan losses was recorded based on the credit 

risk analysis, at an amount considered sufficient to cover loan losses according to the rules determined by 

CMN Resolution No. 2,682 of December 21, 1999, among which are: 

• Provisions are recorded from the date loans are granted, based on the client’s risk rating and on the 

periodic quality evaluation of clients and industries, and not only in the event of default; 

• Based exclusively on delinquency, write-offs of credit operations against loss may be carried out 360 

days after the due date of the credit or 540 days for operations that mature after a period of 36 months. 

g) Other assets - these assets are mainly comprised by assets held for sale relating to real estate available for 

sale, own real estate not in use and real estate received as payment in kind, which are adjusted to market 

value through the set-up of a provision, according to current regulations, reinsurance unearned premiums 

(Note 4n I); and prepaid expenses, corresponding to disbursements, the benefit of which will occur in future 

periods. 

h) Investments - in subsidiary and affiliated companies, investments are accounted for under the equity 

method. The consolidated financial statements of foreign branches and subsidiaries are adapted to comply 

with Brazilian accounting practices and converted into Reais. Other investments are recorded at cost and 

adjusted to market value by setting up a provision in accordance with current standards. 

i) Fixed assets - These assets are stated at cost of acquisition or construction, less accumulated depreciation, 

adjusted to market value until December 31, 2007, when applicable. For insurance, pension plan and 

capitalization operations, property and equipment are adjusted to market value supported by appraisal 

reports. They correspond to rights related to tangible assets intended for maintenance of the company’s 

operations or exercised for such purpose, including assets arising from transactions that transfer to the 

company their benefits, risks and controls. The items acquired through Lease contracts are recorded 

according to CVM Resolution No. 554, of November 12, 2008, as contra-entry to Lease obligations. 

Depreciation is calculated using the straight-line method, based on monetarily restated cost, at the following 

annual rates. 

Real estate in use 4 % to 8 % 

Leasehold improvements From 10% 

Installations, furniture, equipment and security, transportation and communication systems 10 % to 25 % 

EDP systems 20 % to 50 % 

j) Operating leases – leased assets are stated at cost of acquisition less accumulated depreciation. The 

depreciation of leased assets is recognized under the straight-line method, based on their usual useful lives, 

taking into account that the useful life shall be decreased by 30% should it meet the conditions provided for 

by Ordinance No. 113 of February 26, 1998 issued by the Ministry of Finance. Receivables are recorded in 

lease receivable at the contractual amount, with contra-entry to unearned income accounts. The recognition 

in income will occur on the due date of the installments. 


k) Goodwill – corresponds to the amount paid in excess for the purchase of investments arising from the 

expected future profitability. It does not have a defined useful life and is annually tested for impairment of 

assets. 

l) Intangible assets – correspond to rights acquired whose subjects are intangible assets intended for 

maintenance of the company or which are exercised for such purpose, according to the CMN Resolution No. 

3,642, of November 26, 2008. They are composed of rights acquired to credit payrolls and partnership 

agreements, amortized over the agreement terms, and software and customer portfolios, amortized over a 

term varying from five to ten years 

m) Impairment of assets – a loss is recognized when there are clear evidences that assets are stated at a nonrecoverable 

value. From 2008, this procedure started to be adopted annually, at the end of each year. 

n) Insurance, pension plan and capitalization operations - Insurance premiums, acceptance coinsurance 

and selling expenses are accounted for in accordance with the insurance effectiveness term, through the 

recognition and reversal of the provision for unearned premiums and deferred selling expenses. Interest 

arising from fractioning of insurance premiums is accounted for as incurred. Revenues from social security 

contributions, gross revenue from capitalization certificates and respective technical provisions are 

recognized upon receipt. 

I - Credits from operations and other assets related to insurance and reinsurance operations: 

• Insurance premiums receivable - Refer to installments of insurance premiums receivable, current and 

past due, in accordance with insurance policies issued; 

• Reinsurance recoverable amounts – Refer to claims paid to the insured party pending recovery from 

Reinsurer, installments of unsettled claims and incurred but not reported claims - Reinsurance (IBNR), 

classified in assets in accordance with the criteria established by CNSP Resolution No. 162, of 

December 26, 2006, as amended by CNSP Resolution No. 195, of December 16, 2008, and SUSEP 

Circular No. 379, of December 19, 2008. 

• Reinsurance unearned premiums – Recognized to determine the portion of reinsurance unearned 

premiums, calculated “pro rata die”, and for risks of policies not issued computed based on estimates, 

based on the actuarial technical study and in compliance with the criteria established by CNSP 

Resolution No. 162, of December 26, 2006, as amended by CNSP Resolution No. 195, of December 

16, 2008, and SUSEP Circular No. 379, of December 19, 2008. 

II - Technical provisions of insurance, pension plan and capitalization – provisions are recognized 

according to the technical notes approved by SUSEP and criteria established by CNSP Resolution No. 

162 of December 26, 2006 and the amendments introduced by CNSP Resolution No. 181, of December 

19, 2007, and CNSP Resolution No. 195, of December 16, 2008. 

II.I - Insurance: 

• Provision for unearned premiums – recognized to determine unearned premiums relating to the 

risk coverage period, calculated “pro rata die”, and relating to risks not yet issued, calculated 

based on estimates, according to an actuarial technical study; 

• Provision for premium deficiency – recognized according to the Technical Actuarial Note in case 

of insufficient Provision for unearned premiums; 

• Provision for unsettled claims - recognized based on claims of loss in an amount sufficient to 

cover future commitments, awaiting judicial decision, which amounts are determined by court 

appointed experts and legal advisors that make assessments based on the insured amounts and 

technical regulations, taking into consideration the likelihood of unfavorable outcome to the 

insurance company; 

• Provision for claims incurred but not reported (IBNR) – recognized for the estimated amount of 

claims occurred for risks assumed in the portfolio but not reported. 

II.II - Pension Plan and Individual life with living benefits – correspond to liabilities assumed such as 

retirement plans, disability, pension and annuity: 


• Mathematical provisions for benefits to be granted and benefits granted – correspond to 

commitments assumed with participants, but for which benefits are not yet due, and to those 

receiving the benefits, respectively; 

• Provision for insufficient contribution – recognized in case of insufficient mathematical provisions; 

• Provision for events incurred but not reported (IBNR) – recognized at the estimated amount of 

events occurred but not reported; 

• Provision for financial surplus – recognized by the difference between the contributions adjusted 

daily by the Investment Portfolio and the funds guaranteeing them, according to the plan's 

regulation; 

• Provision for financial variation – recognized according to the methodology provided for in the 

Technical Actuarial Note in order to guarantee that the financial assets are sufficient to cover 

mathematical provisions. 

II.III- Capitalization: 

• Mathematical provision for redemptions – represents capitalization certificates received to be 

redeemed; 

• Provision for raffle contingencies – recognized according to the methodology provided for in the 

Technical Actuarial Note to cover the Provision for raffles in the event of insufficient funds. 

o) Contingent assets and liabilities and legal liabilities – tax and social security - assessed, recognized 

and disclosed according to the provisions set forth in CMN Resolution No. 3,823 of December 16, 2009, and 

BACEN Circular Letter No. 3,429 of February 11, 2010. 

I - Contingent assets and liabilities 

Refer to potential rights and obligations arising from past events, the occurrence of which is dependent 

upon future events. 

• Contingent assets - not recognized, except upon evidence ensuring a high reliability level of 

realization, usually represented by claims awarded a final and unappealable judgment and 

confirmation of the recoverability of the claim through receipt of amounts or offset against another 

liability; 

• Contingent liabilities - basically arise from administrative proceedings and lawsuits, inherent in the 

normal course of business, filed by third parties, former employees and governmental bodies, in 

connection with civil, labor, tax and social security lawsuits and other risks. These contingencies are 

calculated based on conservative practices, being usually recorded based on the opinion of legal 

advisors and considering the probability that financial resources shall be required for settling the 

obligation, the amount of which may be estimated with sufficient certainty. Contingencies are classified 

either as probable, for which provisions are recognized; possible, which are disclosed but not 

recognized; and remote, for which recognition or disclosure are not required Any contingent amounts 

are measured through the use of models and criteria which allow their adequate measurement, in 

spite of the uncertainty of their term and amounts. 

Escrow deposits are restated in accordance with the current legislation. 

Contingencies guaranteed by indemnity clauses in privatization processes and with liquidity are only 

recognized upon judicial notification with simultaneous recognition of receivables, without any effect on 

results. 


II - Legal liabilities – tax and social security 

Represented by amounts payable related to tax liabilities, the legality or constitutionality of which are 

subject to administrative or judicial defense, recognized at the full amount under discussion 

Liabilities and related escrow deposits are adjusted in accordance with the current legislation. 

p) Taxes - these provisions are calculated according to current legislation at the rates shown below, using the 

related calculation bases. 

Income tax 

Additional income tax 

Social contribution (1) 

PIS (2) 

COFINS (2) 

ISS 

(1) 

15.00% 

10.00% 

15.00% 

0.65% 

4.00% 

up to 5.00% 

As from May 1, 2008, for financial subsidiaries and equivalent companies, the rate was changed from 9% to 15%, as provided for 

in articles 17 and 41 of Law No. 11,727, of June 24, 2008. For non-financial and social security subsidiaries, the rate remained at 

9%; 

(2) For non-financial subsidiaries that fall into the non-cumulative calculation system, the PIS rate is 1.65% and COFINS rate is 

7.6%. 

The changes introduced by Laws No. 11,638 and No. 11,941 (articles 37 and 38), which modified the 

criterion for recognizing revenues, costs and expenses, computed to determine the net income for the year, 

did not produce effects for purposes of determining the taxable income of companies that opt for the 

Transition Tax Regime (RTT), so for tax purposes the rules effective on December 31, 2007 were followed, 

The tax effect arising from the adoption of such rules is recorded, for accounting purposes, in the 

corresponding deferred assets and liabilities. 

q) Deferred income – this refers to unexpired interest received in advance that is recognized in income as 

earned, and the negative goodwill on acquisition of investments arising from expected future losses, which 

has not been absorbed in the consolidation process. 


NOTE 5 - CASH AND CASH EQUIVALENTS 

For purposes of Statement of Cash Flows, cash and cash equivalents of ITAÚ UNIBANCO HOLDING 

CONSOLIDATED are composed of the following: 

09/30/2010 09/30/2009 

Cash and cash equivalents 11,063,416 10,325,257 


Securities purchased under agreements to resell – Funded position 35,161,674 41,106,381 

TOTAL 52,871,987 54,819,361 

In ITAÚ UNIBANCO HOLDING it is composed of the following: 

09/30/2010 09/30/2009 

Cash and cash equivalents 312 197 

Securities purchased under agreements to resell – Funded position 336,729 142,686 

TOTAL 337,041 142,883 



NOTE 6 - INTERBANK INVESTMENTS 

Money market 

Funded position (*) 

Financed position 

09/30/2010 

09/30/2009 

0 - 30 31 - 180 181 - 365 Over 365 TOTAL % TOTAL % 

70,188,916 24,318,439 1,250,450 40,170 95,797,975 85.2 118,544,424 85.9 

35,921,274 7,785,734 1,250,450 40,170 44,997,628 40.0 60,475,139 43.8 

33,360,238 9,094,356 - - 42,454,594 37.8 54,678,211 39.6 

With free movement 6,577,016 7,613,827 - - 14,190,843 12.6 5,295,928 3.8 

Without free movement 26,783,222 1,480,529 - - 28,263,751 25.2 49,382,283 35.8 

Short position 

907,404 7,438,349 - - 8,345,753 7.4 3,391,074 2.5 

Money market – Assets Guaranteeing Technical Provisions - 

SUSEP 

1,546,754 383,775 1,466,710 136,050 3,533,289 3.1 2,823,103 2.0 

Interbank deposits 

6,958,410 2,960,086 2,742,899 490,748 13,152,143 11.7 16,596,680 12.0 

TOTAL 

78,694,080 27,662,300 5,460,059 666,968 112,483,407 137,964,207 

% per maturity term 

70.0 24.5 4.9 0.6 

TOTAL – 09/30/2009 

97,574,657 32,028,573 4,253,243 4,107,734 137,964,207 


70.7 23.2 3.1 3.0 

(*) Includes R$ 7,986,934 (R$ 12,239,299 at 09/30/2009) related to money market with free movement, in which securities are basically restricted to guarantee transactions at BM&FBovespa S.A. - Bolsa de Valores, 

Mercadorias e Futuros (Securities, Commodities and Futures Exchange) and the Central Bank of Brazil (BACEN). 

In ITAÚ HOLDING at 09/30/2010, portfolio is composed of Money market – funded position falling due in up to 30 days amounting to R$ 336,729 (R$ 142,686 at 09/30/2009) 

and Interbank deposits over 365 days amounting to R$ 13,098,967 (R$ 6,687,841 at 09/30/2009 maturing from 31 to 180 days).


NOTE 7 – SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS AND LIABILITIES) 

See below the composition by Securities and Derivatives type, maturity and portfolio already adjusted to their respective market values. 

a) Summary per maturity 

Results 

Stockholders' 

equity 

GOVERNMENT SECURITIES - DOMESTIC 

51,006,424 112,120 466,889 51,585,433 36.3 971,439 914,620 5,923,476 5,625,710 11,501,736 26,648,452 45,011,157 

Financial Treasury Bills 

16,586,592 (1,372) (3,197) 16,582,023 11.7 245,807 411,629 2,954,010 217,756 4,397,550 8,355,271 16,520,984 

National Treasury Bills 5,165,424 815 33 5,166,272 3.6 322,970 - 2,338,713 504,019 1,883,756 116,814 14,632,708 

National Treasury Bills 

23,338,210 91,636 110,620 23,540,466 16.6 9,698 14,412 473,009 4,733,559 4,935,214 13,374,574 10,509,060 

National Treasury/Securitization 

342,515 506 (14,711) 328,310 0.2 1,746 3,998 14,838 8,041 23,670 276,017 541,071 

Brazilian External Debt Bonds 

5,569,895 20,523 374,121 5,964,539 4.2 389,503 484,581 142,906 161,257 261,302 4,524,990 2,775,752 

Investment in Non-exclusive Funds 

1,715 - - 1,715 0,0 1,715 - - - - - 991 

Other 

2,073 12 23 2,108 0,0 - - - 1,078 244 786 30,591 

GOVERNMENT SECURITIES - ABROAD 

7,700,060 46,090 (154,600) 7,591,550 5.3 294,319 2,816,268 1,525,136 1,074,391 1,444,087 437,349 9,447,332 

Portugal 

- - - - - - - - - - - 27,415 

Austria 

- - - - - - - - - - - 452,754 

Argentina 

273,030 1,392 - 274,422 0.1 13,607 56,790 95,352 42,591 34,369 31,713 196,327 

Central Bank 66,757 (1,485) - 65,272 0,0 - - 49,233 - 14,744 1,295 71,397 

National Treasury 206,273 2,877 - 209,150 0.1 13,607 56,790 46,119 42,591 19,625 30,418 124,930 

Denmark 

1,605,389 - (71,768) 1,533,621 1.1 - 169,733 - 420,932 942,956 - 1,850,965 

Spain 

871,226 - (35,404) 835,822 0.6 - 82,891 - 339,585 413,346 - 1,874,129 

Korea 

2,089,210 - (45,917) 2,043,293 1.4 - 1,801,037 242,256 - - - 1,503,323 

Chile 

1,386,722 (509) (3,993) 1,382,220 1.0 192,932 347,389 657,258 119,333 32,737 32,571 1,463,372 

Paraguay 

267,123 - 1 267,124 0.2 21,142 33,966 81,482 78,725 329 51,480 282,159 

Uruguay 

852,232 346 2,170 854,748 0.6 66,585 270,914 443,032 55,863 1,041 17,313 457,112 

United States 

315,651 44,633 306 360,590 0.3 - 53,491 1,553 16,674 - 288,872 1,081,852 

Norway 

- - - - - - - - - - - 101,593 

Mexico 

12,663 47 - 12,710 0,0 - 7 4,039 - 462 8,202 8,580 

Italy 

- - - - - - - - - - - 132,584 

Other 

26,814 181 5 27,000 0,0 53 50 164 688 18,847 7,198 15,167 

CORPORATE SECURITIES 

27,504,679 282,566 392,467 28,179,712 19.8 6,104,598 1,239,331 846,537 1,409,927 2,804,813 15,774,506 23,229,544 

Eurobonds and other 

5,236,393 42,529 175,664 5,454,586 3.8 130,573 207,871 77,343 306,568 364,963 4,367,268 2,340,982 

Bank Deposit Certificates 

2,624,441 (1) 565 2,625,005 1.9 11,578 169,346 538,904 205,717 714,403 985,057 2,296,518 

Shares 

3,654,212 189,938 34,381 3,878,531 2.7 3,878,531 - - - - - 3,647,694 

Debentures 

6,989,108 927 32,918 7,022,953 4.9 705,432 79,116 33,230 763,795 1,511,970 3,929,410 5,979,485 

Promissory Notes 

999,852 - 535 1,000,387 0.7 98,134 750,724 151,529 - - - 2,786,385 

Quotas of funds 

1,220,461 35,157 13,376 1,268,994 0.9 1,265,145 - - - - 3,849 2,148,538 

Fixed Income 330,937 (541) 6,943 337,339 0.2 333,490 - - - - 3,849 886,516 

Credit Rights 680,112 - - 680,112 0.5 680,112 - - - - - 804,381 

Variable Income 209,412 35,698 6,433 251,543 0.2 251,543 - - - - - 457,641 

Securitized real estate loans 

6,748,822 14,016 135,020 6,897,858 4.9 15,205 32,274 45,528 133,847 190,362 6,480,642 4,011,005 

Other 

31,390 - 8 31,398 0,0 - - 3 - 23,115 8,280 18,937 

PGBL/VGBL FUND QUOTAS (1) 

43,621,488 - - 43,621,488 30.7 43,621,488 - - - - - 36,403,697 

SUBTOTAL - SECURITIES 

129,832,651 440,776 704,756 130,978,183 92.3 50,991,844 4,970,219 8,295,149 8,110,028 15,750,636 42,860,307 114,091,730 

Trading securities 

86,968,172 440,776 - 87,408,948 61.6 46,550,026 640,731 4,235,723 5,608,916 10,908,253 19,465,299 68,826,687 

Available-for-sale securities 

39,794,819 - 704,756 40,499,575 28.5 4,427,055 4,321,447 3,919,168 2,363,382 4,754,336 20,714,187 42,406,388 

Held-to-maturity securities (2) 

3,069,660 - - 3,069,660 2.2 14,763 8,041 140,258 137,730 88,047 2,680,821 2,858,655 

DERIVATIVE FINANCIAL INSTRUMENTS 

10,162,922 737,713 - 10,900,635 7.9 2,929,395 1,704,574 2,088,192 721,630 1,091,427 2,365,417 8,484,582 

TOTAL SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS 

(ASSETS) 

DERIVATIVE FINANCIAL INSTRUMENTS (LIABILITIES) 

(2) Unrecorded positive adjustment to market value in the amount of R$ 595,030 (R$ 403,366 at 09/30/2009), according to Note 7e. 

09/30/2010 

181 - 365 Provision for adjustment to 

Cost market value with impact on: 

Market value % 0 - 30 31 - 90 91 - 180 366 - 720 

09/30/2009 

139,995,573 1,178,489 704,756 141,878,818 100.0 53,921,239 6,674,793 10,383,341 8,831,658 16,842,063 45,225,724 122,576,312 

38.0% 4.7% 7.3% 6.2% 11.9% 31.9% 

(8,491,695) (530,540) (54,665) (9,076,900) 100.0 (2,618,571) (1,258,208) (1,219,864) (916,929) (1,057,770) (2,005,558) (7,458,403) 

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to long-term liabilities in Pension Plan Technical Provisions account, as determined by SUSEP. 

Over 720 days 

Market value


b) Summary by portfolio 

Own portfolio agreements guarantees (1) 

11b) 


23,778,235 12,053,093 7,780,285 2,341,498 - 5,632,322 51,585,433 


6,716,955 3,580,537 4,655,416 10,223 - 1,618,892 16,582,023 


2,521,239 1,342,090 313,641 495,848 - 493,454 5,166,272 

National Treasury Notes 

11,589,879 4,020,531 2,574,653 1,835,427 - 3,519,976 23,540,466 


328,310 - - - - - 328,310 


2,618,029 3,109,935 236,575 - - - 5,964,539 

Investments in Non-exclusive Funds 

1,715 - - - - - 1,715 

Other 

2,108 - - - - - 2,108 


6,331,915 446,025 807,832 - - 5,778 7,591,550 

Argentina 

225,719 48,703 - - - - 274,422 

Central Bank 16,569 48,703 - - - - 65,272 

National Treasury 209,150 - - - - - 209,150 

Denmark 

Spain 

Korea 

Chile 

Paraguay 

Uruguay 

United States 

Mexico 

Other 


Eurobonds and others 


Shares 

Debentures 


Repurchase 

1,533,621 - - - - - 1,533,621 

835,822 - - - - - 835,822 

1,254,175 - 789,118 - - - 2,043,293 

1,341,303 35,139 - - - 5,778 1,382,220 

267,124 - - - - - 267,124 

854,748 - - - - - 854,748 

2,223 339,653 18,714 - - - 360,590 

8,890 3,820 - - - - 12,710 

8,290 18,710 - - - - 27,000 

23,192,132 2,034,883 8,175 - - 2,944,522 28,179,712 

3,681,176 1,771,462 1,948 - - - 5,454,586 

645,191 88,907 2,085 - - 1,888,822 2,625,005 

3,809,613 66,074 2,844 - - - 3,878,531 

5,891,299 108,440 - - - 1,023,214 7,022,953 

1,000,387 - - - - - 1,000,387 

1,258,845 - 1,298 - - 8,851 1,268,994 


Fixed income 334,647 - 1,298 - - 1,394 337,339 

Credit rights 672,655 - - - - 7,457 680,112 

Variable income 251,543 - - - - - 251,543 


Other 

PGBL/VGBL FUND QUOTAS 

SUBTOTAL - SECURITIES 



Held-to-maturity securities 

DERIVATIVE FINANCIAL INSTRUMENTS 


(ASSETS) 


(ASSETS) – 09/30/2009 

(1) Represent securities deposited with Contingent Liabilities (Note 12b), Stock Exchanges and the Clearing House for the Custody and Financial Settlement of Securities. 

(2) Represent securities in compulsory deposits. 

09/30/2010 

Restricted to Assets 

Pledging of 

Central Bank (2) 

Derivative financial 

instruments 

guaranteeing 

technical 

provisions (Note 

6,874,223 - - - - 23,635 6,897,858 

31,398 - - - - - 31,398 

- - - - - 43,621,488 43,621,488 

53,302,282 14,534,001 8,596,292 2,341,498 - 52,204,110 130,978,183 

24,334,578 8,530,125 4,164,671 2,227,647 - 48,151,927 87,408,948 

28,826,519 5,698,223 4,400,080 113,851 - 1,460,902 40,499,575 

141,185 305,653 31,541 - - 2,591,281 3,069,660 

- - - - 10,900,635 - 10,900,635 

53,302,282 14,534,001 8,596,292 2,341,498 10,900,635 52,204,110 141,878,818 

41,166,291 8,726,174 10,057,225 9,469,767 8,484,582 44,672,273 122,576,312 

Total


c) Trading securities 

See below the composition of the portfolio of trading securities by type, stated at cost and market value and by maturity term. 

Cost 

Adjustment to 

market value (in 

results) 

Market value % 0 - 30 31 - 90 91 - 180 181 - 365 366 - 720 

09/30/2009 

Over 720 

days Market value 


34,831,993 112,120 34,944,113 40.1 909,493 363,810 3,466,313 5,165,585 9,830,529 15,208,383 24,865,477 


10,371,182 (1,372) 10,369,810 11.9 245,807 342,910 868,355 171,839 2,830,019 5,910,880 9,144,836 


5,115,395 815 5,116,210 5.9 322,970 - 2,288,651 504,019 1,883,756 116,814 10,805,244 

National Treasury Notes 

17,916,287 91,636 18,007,923 20.6 9,192 13,688 157,579 4,372,810 4,908,580 8,546,074 4,337,661 


64,707 506 65,213 0.1 1,746 3,998 14,838 8,041 23,670 12,920 284,479 


1,362,323 20,523 1,382,846 1.6 328,063 3,214 136,890 108,876 184,504 621,299 291,195 

Investments in Non-exclusive Funds 

1,715 - 1,715 0,0 1,715 - - - - - 991 

Other 

384 12 396 0,0 - - - - - 396 1,071 


807,197 46,090 853,287 0.9 54,988 115,641 231,968 60,048 54,718 335,924 1,520,897 

Argentina 

272,620 1,392 274,012 0.3 13,607 56,790 95,352 42,591 34,369 31,303 195,754 

Central Bank 66,757 (1,485) 65,272 0.1 - - 49,233 - 14,744 1,295 71,397 

National Treasury 205,863 2,877 208,740 0.2 13,607 56,790 46,119 42,591 19,625 30,008 124,357 

Chile 

180,190 (509) 179,681 0.2 41,240 4,137 126,995 6,918 - 391 229,684 

Uruguay 

15,919 346 16,265 0,0 88 1,166 3,967 9,851 1,040 153 8,291 

United States 

299,181 44,633 343,814 0.4 - 53,491 1,451 - - 288,872 1,063,637 

Mexico 

12,663 47 12,710 0,0 - 7 4,039 - 462 8,202 8,580 

Other 

26,624 181 26,805 0,0 53 50 164 688 18,847 7,003 14,951 


7,707,494 282,566 7,990,060 9.1 1,964,057 161,280 537,442 383,283 1,023,006 3,920,992 6,036,616 

Eurobonds and others 

1,892,442 42,529 1,934,971 2.2 30,466 23,577 41,305 11,436 110,025 1,718,162 476,243 


2,051,228 (1) 2,051,227 2.3 - 69,161 464,645 167,699 605,611 744,111 2,154,082 

Shares 

1,190,825 189,938 1,380,763 1.6 1,380,763 - - - - - 987,910 

Debentures 

1,511,263 927 1,512,190 1.8 30,854 68,277 31,101 203,389 305,937 872,632 1,473,755 


- - - - - - - - - - 18,211 


486,683 35,157 521,840 0.5 521,840 - - - - - 886,258 

Fixed income 303,841 (541) 303,300 0.3 303,300 - - - - - 729,159 

Credit rights 7,615 - 7,615 0,0 7,615 - - - - - 77,259 

Variable income 175,227 35,698 210,925 0.2 210,925 - - - - - 79,840 


575,053 14,016 589,069 0.7 134 265 391 759 1,433 586,087 40,157 

PGBL/VGBL FUND QUOTAS 

43,621,488 - 43,621,488 49.9 43,621,488 - - - - - 36,403,697 

Total 

86,968,172 440,776 87,408,948 100.0 46,550,026 640,731 4,235,723 5,608,916 10,908,253 19,465,299 68,826,687 


53.3% 0.7% 4.8% 6.4% 12.5% 22.3% 

Total – 09/30/2009 

68,496,050 330,637 68,826,687 100.0 41,025,062 930,209 6,612,395 3,194,402 5,133,382 11,931,237 


59.6% 1.4% 9.6% 4.6% 7.5% 17.3% 

09/30/2010 

At September 30, 2010, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Government Securities – Financial Treasury Bills amounting to R$ 5,679 (R$ 5.198 at 09/30/2009) with maturity over 365 days.


d) Available-for-sale securities 

See below the composition of the portfolio of available-for-sale securities by type, stated at cost and market value and by maturity term. 

Cost 

Adjustment to 

market value 

(in 

stockholders' 

equity) 

Market value % 0 - 30 31 - 90 91 - 180 181 - 365 366 - 720 

Over 720 

days 

09/30/2009 

Market value 


13,349,895 466,889 13,816,784 34.0 61,946 547,945 2,321,195 408,580 1,594,429 8,882,689 17,562,670 


6,215,410 (3,197) 6,212,213 15.3 - 68,719 2,085,655 45,917 1,567,531 2,444,391 7,376,148 

National Treasury Bills 50,029 33 50,062 0.1 - - 50,062 - - - 3,827,464 


2,826,734 110,620 2,937,354 7.3 506 724 179,462 360,749 26,634 2,369,279 3,830,454 


277,808 (14,711) 263,097 0.6 - - - - - 263,097 256,592 


3,978,225 374,121 4,352,346 10.7 61,440 478,502 6,016 836 20 3,805,532 2,242,492 

Other 

1,689 23 1,712 0,0 - - - 1,078 244 390 29,520 


6,876,712 (154,600) 6,722,112 16.6 239,331 2,700,627 1,293,026 1,014,343 1,389,369 85,416 7,909,471 

Portugal 

- - - - - - - - - - 27,415 

Austria 

- - - - - - - - - - 452,754 

Argentina - National Treasury 

410 - 410 0,0 - - - - - 410 573 

Denmark 

1,605,389 (71,768) 1,533,621 3.8 - 169,733 - 420,932 942,956 - 1,850,965 

Spain 

871,226 (35,404) 835,822 2.1 - 82,891 - 339,585 413,346 - 1,874,129 

Korea 

2,089,210 (45,917) 2,043,293 5.0 - 1,801,037 242,256 - - - 1,503,323 

Chile 

1,206,532 (3,993) 1,202,539 3.0 151,692 343,252 530,263 112,415 32,737 32,180 1,233,688 

Paraguay 

267,123 1 267,124 0.7 21,142 33,966 81,482 78,725 329 51,480 282,159 

Uruguay 

820,162 2,170 822,332 2.0 66,497 269,748 438,923 46,012 1 1,151 431,857 

United States 

16,470 306 16,776 0,0 - - 102 16,674 - - 18,215 

Norway 

- - - - - - - - - - 101,593 

Italy 

- - - - - - - - - - 132,584 

Other 

190 5 195 0,0 - - - - - 195 216 


19,568,212 392,467 19,960,679 49.4 4,125,778 1,072,875 304,947 940,459 1,770,538 11,746,082 16,934,247 


3,169,437 175,664 3,345,101 8.3 100,107 184,294 34,019 208,947 254,938 2,562,796 1,655,431 


573,213 565 573,778 1.4 11,578 100,185 74,259 38,018 108,792 240,946 142,436 

Shares 

2,463,387 34,381 2,497,768 6.2 2,497,768 - - - - - 2,659,775 

Debentures 

5,429,617 32,918 5,462,535 13.5 659,831 5,663 - 560,406 1,194,764 3,041,871 4,463,982 


999,852 535 1,000,387 2.5 98,134 750,724 151,529 - - - 2,768,174 


733,762 13,376 747,138 1.9 743,289 - - - - 3,849 1,262,279 

Fixed income 27,080 6,943 34,023 0.1 30,174 - - - - 3,849 157,357 

Credit rights 672,497 - 672,497 1.7 672,497 - - - - - 727,122 

Variable income 34,185 6,433 40,618 0.1 40,618 - - - - - 377,800 


Other 

TOTAL 

Adjustment of securities reclassified in prior years to the held-to-maturity category 

Accounting adjustment - hedge - Circular No. 3082 

Deferred taxes 

Minority interest in subsidiaries 

Adjustment of securities of unconsolidated affiliates 

ADJUSTMENT TO MARKET VALUE – SECURITIES – 09/30/2010 

TOTAL – 09/30/2009 

Adjustment of securities reclassified in prior years to the held-to-maturity category 

Accounting adjustment - hedge - Circular No. 3082 

Deferred taxes 


Adjustment of securities of unconsolidated affiliates 

ADJUSTMENT TO MARKET VALUE – SECURITIES – 09/30/2009 

6,167,554 135,020 6,302,574 15.5 15,071 32,009 45,137 133,088 188,929 5,888,340 3,963,412 

31,390 8 31,398 0.1 - - 3 - 23,115 8,280 18,758 

39,794,819 704,756 40,499,575 100.0 4,427,055 4,321,447 3,919,168 2,363,382 4,754,336 20,714,187 42,406,388 

13,449 10.9% 10.7% 9.8% 5.8% 11.7% 51.1% 

(144,650) 

(210,091) 

(3,529) 

(203,089) 

156,846 

41,692,904 713,484 42,406,388 100.0 7,240,060 4,090,072 4,326,419 5,410,713 6,013,380 15,325,744 

16,604 17.1% 9.6% 10.2% 12.8% 14.2% 36.1% 

(277,129) 

(170,370) 

17,005 

(52,766) 

246,828 

At September 30, 2010, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Government Securities in the amount of R$ R$ 32,899 (24,749 at 09/30/2009), of which the National Treasury Notes amount to R$ 26,672 (R$ 24,749 at 09/30/2009) with 

maturity between 181 and 365 days, and R$ 6,227 in Financial Treasury Bills, with maturity over 365 days. 

09/30/2010


e) 

f) 

g) 

Held-to-maturity securities 

See below the composition of the portfolio of held-to-maturity securities by type, stated at cost and by maturity term. In the carrying value, not considered in results, are the amounts of R$ 13,449 (R$ 16,604 at 

09/30/2009) included at 09/30/2009, relating to market adjustment of the reclassified securities at December 31, 2003. Securitities classified under this type, if stated at market value, would present a positive 

adjustment of R$ 595,030 (R$ 403,366 at 09/30/2009) at September 30, 2010. 


National Treasury Notes (*) 


GOVERNMENT SECURITIES - DOMESTIC - URUGUAY 



Debentures 

Quotas of funds - Fixed income 

Securitized real estate loans (*) 

Other 

Total 


Total 09/30/2009 


(*) Includes investments of Itaú Vida e Previdência S.A. in the amount of R$ 1.890.766 (R$ 1.259.140 at 09/30/2009). 

Realized and unrealized gain of securities portfolio 

Gain (loss) - Trading securities 

Gain (loss) – Available-for-sale securities 

Total realized gain 

Adjustment to market value of trading securities 

Total 

Reclassification of securities (article 5 of BACEN Circular No. 3,068, of 11/08/2001) 

No reclassifications or changes to the existing guidelines have been made in the period. 

09/30/2010 

09/30/2009 

Over 720 Carrying 

days value 

Carrying value % 0 - 30 31 - 90 91 - 180 181 - 365 366 - 720 

2,824,536 92.0 - 2,865 135,968 51,545 76,778 2,557,380 2,583,010 

2,595,189 84.5 - - 135,968 - - 2,459,221 2,340,945 

229,347 7.5 - 2,865 - 51,545 76,778 98,159 242,065 

16,151 0.5 - - 142 - - 16,009 16,964 

228,973 7.5 14,763 5,176 4,148 86,185 11,269 107,432 258,681 

174,514 5.7 - - 2,019 86,185 - 86,310 209,308 

48,228 1.6 14,747 5,176 2,129 - 11,269 14,907 41,748 

16 0,0 16 - - - - - 1 

6,215 0.2 - - - - - 6,215 7,436 

- - - - - - - - 188 

3,069,660 100.0 14,763 8,041 140,258 137,730 88,047 2,680,821 2,858,655 

0.4% 0.3% 4.6% 4.5% 2.9% 87.3% 

2,858,655 100.0 119 3,406 11,546 32,682 298,093 2,512,809 

0.0% 0.2% 0.4% 1.1% 10.4% 87.9% 

01/01 to 09/30/2010 01/01 to 

09/30/2009 

64,236 1,022,505 

361,524 324,296 

425,760 1,346,801 

115,782 (120,691) 

541,542 1,226,110 

Management sets forth guidelines to classify securities. The classification of the current portfolio of securities, as well as the securities purchased in the period, is periodically and systematically evaluated based 

on such guidelines. 

As set forth in Article 5 of BACEN Circular No. 3,068, of November 8, 2008, the revaluation regarding the classification of securities can only be made upon preparation of trial balances for six-month periods. In 

addition, the transfer from “held-to-maturity” to the other categories can only occur in view of an isolated, unusual, nonrecurring and unexpected reason, which has occurred after the classification date.

h) Derivative financial instruments 

The globalization of the markets in recent years has resulted in a high level of sophistication in the financial 

products used. As a result of this process, there has been an increasing demand for derivative financial 

instruments to manage market risks, mainly arising from fluctuations in interest and exchange rates, 

commodities and other asset prices. Accordingly, ITAU UNIBANCO HOLDING and its subsidiaries operate in 

the derivative markets for meeting the growing needs of their clients, as well as carrying out their risk 

management policy. Such policy is based on the use of derivative instruments to minimize the risks resulting 

from commercial and financial operations. 

The derivative financial instruments’ business with clients is carried out after the approval of credit limits. 

The process of limit approval takes into consideration potential stress scenarios. 

Knowing the client, the sector in which it operates and its risk appetite profile, in addition to providing 

information on the risks involved in the transaction and the negotiated conditions, ensures transparency in 

the relationship between the parties and the supply of a product that better meet the needs of the client in 

view of its operating characteristics. 

The derivative transactions carried out by ITAÚ UNIBANCO HOLDING and its subsidiaries with clients are 

neutralized in order to eliminate market risks. 

Most derivative contracts traded by the institution with clients in Brazil are swap, forward, option and futures 

contracts, which are registered at the BM&FBovespa or at the CETIP S.A. OTC Clearing House (CETIP). 

Overseas transactions are carried out with futures, forwards, options and swaps with registration mainly in 

the Chicago, New York and London Exchanges. It should be emphasized that there are over-the-counter 

operations, but their risks are low as compared to the institutions’ total. Noteworthy is also the fact that there 

are no structured operations based on subprime assets and all operations are based on risk factors traded at 

stock exchanges. 

The main risk factors of the derivatives, assumed at September 30, 2010, were related to the foreign 

exchange rate, interest rate, commodities, U.S. dollar coupon, Reference Rate coupon, Libor and variable 

income. The management of these and other market risk factors is supported by sophisticated statistical and 

deterministic models. Based on this management model, the institution, with the use of transactions involving 

derivatives, has been able to optimize the risk-return ratios, even under highly volatile situations. 

Most derivatives included in the institution’s portfolio are traded at stock exchanges. The prices disclosed by 

stock exchanges are used for these derivatives, except in cases in which the low representativeness of price 

due to illiquidity of a specific contract is identified. Derivatives typically precified like this are futures contracts. 

Likewise, there are other instruments whose quotations (fair prices) are directly disclosed by independent 

institutions and which are precified based on this direct information. A great part of the Brazilian government 

securities, highly-liquid international (public and private) securities and shares fit into this situation. 

For derivatives whose prices are not directly disclosed by stock exchanges, fair prices are obtained by 

pricing models which use market information, deducted based on prices disclosed for higher liquidity assets. 

Interest and market volatility curves which provide entry data for the models are extracted from those prices. 

Over-the-counter derivatives, forward contracts and securities without much liquidity are in this situation. 

The total value of margins pledged in guarantee was R$ 8,470,678 (R$ 15,513,710 at September 30, 2009) 

and was basically composed of government securities. 


I - Derivatives by index 

Memorandum account 

Notional amount 

Balance sheet 

account receivable / 

(received)(payable) / 

paid 

Adjustment to market 

value (in results / 

stockholders’ equity) 

Market value 

09/30/2010 09/30/2009 09/30/2010 09/30/2010 09/30/2010 09/30/2009 

Futures contracts 

337,880,058 196,897,503 29,520 (11,368) 18,152 117,394 

Purchase commitments 

85,324,326 94,894,623 (89,173) 23,807 (65,366) (41,116) 

Foreign currency 10,730,486 4,206,487 (44,481) 489 (43,992) (2,927) 

Interbank market 54,968,183 83,382,343 (1,377) 7,550 6,173 (1,279) 

Indices 16,675,882 6,669,056 (43,313) 1,670 (41,643) (28,433) 

Securities 2,471,584 578,393 - (36) (36) (3) 

Other 478,191 58,344 (2) 14,134 14,132 (8,474) 

Commitments to sell 

252,555,732 102,002,880 118,693 (35,175) 83,518 158,510 

Foreign currency 8,559,005 14,091,703 15,385 (28,747) (13,362) 10,984 

Interbank market 83,742,062 62,176,146 7,267 34 7,301 7,536 

Fixed rate 1,372,302 - - (6) (6) - 

Indices 152,264,118 23,445,816 95,776 (2,749) 93,027 129,141 

Securities 4,570,500 - - (16) (16) - 

Other 2,047,745 2,289,215 265 (3,691) (3,426) 10,849 

Swap contracts 

126,481 12,665 139,146 977,152 

Asset position 

66,205,809 81,227,999 2,146,926 789,187 2,936,113 3,280,613 

Foreign currency 8,816,913 8,526,966 20,325 84,855 105,180 182,137 

Interbank market 31,891,490 33,826,515 1,208,368 (4,892) 1,203,476 1,913,347 

Fixed rate 10,297,232 19,346,183 253,531 362,015 615,546 358,839 

Floating rate 1,182,195 6,757,409 - - - 589 

Indices 13,925,411 11,999,961 661,300 346,695 1,007,995 818,542 

Securities 3,021 14,131 1,388 35 1,423 5,801 

Other 89,547 756,834 2,014 479 2,493 1,358 

Liability position 

66,079,328 80,207,810 (2,020,445) (776,522) (2,796,967) (2,303,461) 

Foreign currency 15,272,578 12,107,980 (292,013) (35,226) (327,239) (288,395) 

Interbank market 21,300,719 21,077,109 (922,062) 97,205 (824,857) (733,833) 

Fixed rate 6,374,622 17,617,625 (125,107) (493,268) (618,375) (481,453) 

Floating rate 4,543,072 13,846,479 (6,481) 752 (5,729) (10,166) 

Indices 18,401,779 14,702,797 (657,514) (343,217) (1,000,731) (783,938) 

Other 186,558 855,820 (17,268) (2,768) (20,036) (5,676) 

Option contracts 

2,411,886,301 1,377,138,277 217,120 196,597 413,717 15,330 

Purchase commitments – long position 

648,922,728 453,889,168 1,137,214 (239,331) 897,883 882,986 

Foreign currency 31,362,772 25,179,137 545,486 (86,073) 459,413 209,362 

Interbank market 477,894,656 293,226,233 308,276 (139,729) 168,547 200,308 

Floating rate 236,604 33,322 1,372 (699) 673 84 

Indices 137,486,076 134,536,543 177,209 (56,710) 120,499 375,094 

Securities 1,187,999 803,095 76,176 29,766 105,942 85,470 

Other 754,621 110,838 28,695 14,114 42,809 12,668 

Commitments to sell – long position 

711,215,929 267,943,787 1,240,373 214,173 1,454,546 1,420,935 

Foreign currency 18,023,990 16,541,202 506,111 140,522 646,633 516,158 

Interbank market 587,135,669 154,907,306 138,339 47,145 185,484 159,177 

Floating rate 92,673 - 272 189 461 - 

Indices 103,827,378 94,960,017 97,875 (22,788) 75,087 340,589 

Securities 1,747,618 1,308,084 485,875 56,367 542,242 376,883 

Other 388,601 227,178 11,901 (7,262) 4,639 28,128 

Purchase commitments – short position 

425,663,770 341,033,653 (1,293,594) 350,303 (943,291) (924,806) 

Foreign currency 30,609,686 24,681,121 (729,281) 249,095 (480,186) (262,658) 

Interbank market 294,626,032 191,828,427 (111,975) 76,546 (35,429) (196,589) 

Indices 98,929,463 123,504,765 (377,069) 37,325 (339,744) (437,024) 

Securities 1,065,316 916,226 (43,835) (4,991) (48,826) (21,832) 

Other 433,273 103,114 (31,434) (7,672) (39,106) (6,703) 

Commitments to sell – short position 

626,083,874 314,271,669 (866,873) (128,548) (995,421) (1,363,785) 

Foreign currency 24,409,149 21,162,428 (501,561) (72,841) (574,402) (878,505) 

Interbank market 497,015,060 189,577,854 (169,039) (111,837) (280,876) (141,926) 

Indices 103,150,600 103,184,048 (85,863) 12,373 (73,490) (320,303) 

Securities 1,324,912 191,508 (94,474) 33,161 (61,313) (1,918) 

Other 184,153 155,831 (15,936) 10,596 (5,340) (21,133) 

Forward contracts 

4,198,059 1,563,600 954,994 1,201 956,195 542 

Purchases receivable 

1,720,959 297,902 1,622,896 (100) 1,622,796 297,694 

Foreign currency 79,187 - (18,342) - (18,342) - 

Fixed rate 1,189,787 174,691 1,189,196 16 1,189,212 174,726 

Floating rate 451,985 123,006 452,042 (116) 451,926 122,957 

Other - 205 - - - 11 

Purchases payable 

- 885 (1,641,238) 100 (1,641,138) (297,740) 

Fixed rate - - (1,189,196) (16) (1,189,212) (174,726) 

Floating rate - - (452,042) 116 (451,926) (122,957) 

Other - 885 - - - (57) 

Sales receivable 

2,477,100 1,264,813 2,379,725 812 2,380,537 1,264,454 

Foreign currency 79,187 - - - - - 

Fixed rate 1,235,286 1,190,661 1,235,645 (308) 1,235,337 1,190,389 

Floating rate 170,663 73,546 170,744 (81) 170,663 73,477 

Other 991,964 606 973,336 1,201 974,537 588 

Sales deliverable 

- - (1,406,389) 389 (1,406,000) (1,263,866) 

Fixed rate - - (1,235,645) 308 (1,235,337) (1,190,389) 

Floating rate - - (170,744) 81 (170,663) (73,477) 

Credit derivatives 

5,077,756 5,641,746 76,026 (7,445) 68,581 (101,436) 


1,928,965 3,185,191 224,118 (10,293) 213,825 22,782 

Foreign currency 27,957 197,430 71 613 684 3,118 

Fixed rate 1,730,688 2,954,838 224,103 (12,446) 211,657 17,947 

Securities 149,481 10,365 (62) 1,285 1,223 623 

Other 20,839 22,558 6 255 261 1,094 


3,148,791 2,456,555 (148,092) 2,848 (145,244) (124,218) 

Foreign currency 27,526 - (66) (570) (636) (3,004) 

Fixed rate 2,936,818 2,406,555 (147,908) 4,737 (143,171) (119,088) 

Securities 163,608 - (109) (1,064) (1,173) (580) 

Other 20,839 50,000 (9) (255) (264) (1,546) 


Balance sheet 

account receivable / 

(received)(payable) / 

paid 

Adjustment to market 

value (in results / 

stockholders’ equity) 

09/30/2010 09/30/2009 09/30/2010 09/30/2010 09/30/2010 09/30/2009 

Forwards operations 

20,416,765 12,710,194 96,487 1,433 97,920 (45,893) 


7,825,333 6,871,820 582,432 1,451 583,883 305,175 

Foreing currency 6,282,153 6,172,672 223,002 - 223,002 272,243 

Fixed rate 1,022,677 239,509 350,120 2,322 352,442 28,465 

Floating rate 517,578 432,967 8,871 (871) 8,000 3,496 

Indices - 26,672 - - - 971 

Other 2,925 - 439 - 439 - 


12,591,432 5,838,374 (485,945) (18) (485,963) (351,068) 

Foreing currency 12,231,422 5,231,692 (474,585) (18) (474,603) (334,895) 

Interbank market 15,915 1,632 (499) - (499) (143) 

Fixed rate 59,141 112,516 (6,292) - (6,292) (13,506) 

Floating rate 277,849 465,862 (3,301) - (3,301) (1,773) 

Indices 1,571 26,672 (90) - (90) (751) 

Other 5,534 - (1,178) - (1,178) - 

Swap with target flow 

286,262 2,617,827 (11,792) (2,110) (13,902) (41,770) 


137,235 1,314,275 - - - 47,211 

Foreing currency - 606,589 - - - 1,278 

Interbank market 137,235 602,491 - - - 45,933 

Fixed rate - 105,195 - - - - 


149,027 1,303,552 (11,792) (2,110) (13,902) (88,981) 

Foreing currency 149,027 983,649 (11,792) (2,110) (13,902) (59,138) 

Interbank market - 290,990 - - - (29,288) 

Fixed rate - 28,913 - - - (555) 

Target flow of swap – foreign currency 

1,313,749 3,746,618 130,165 241 130,406 48,589 


1,313,749 2,800,384 130,165 241 130,406 196,275 

Foreing currency 1,313,749 2,795,090 130,165 241 130,406 196,275 

Indices - 5,294 - - - - 

Liability position – Foreign currency 

Other derivative financial instruments (*) 

- 946,234 - - - (147,686) 

16,245,467 12,757,277 52,226 (38,706) 13,520 56,271 

10,387,039 7,570,264 669,553 (7,059) 662,494 649,063 


Foreing currency 7,421,868 4,939,085 414,327 21,241 435,568 578,167 

Interbank market - 745,908 - - - 302 

Fixed rate - 593 - - - 167 

Other 2,965,171 1,884,678 255,226 (28,300) 226,926 70,427 


5,858,428 5,187,013 (617,327) (31,647) (648,974) (592,792) 

Foreing currency 5,371,352 4,318,202 (597,895) (8,240) (606,135) (495,977) 

Interbank market - 765,525 - - - (268) 

Fixed rate 446 100,596 (485) 1 (484) (96,397) 

Other 486,630 2,690 (18,947) (23,408) (42,355) (150) 

ASSETS 10,162,922 737,713 10,900,635 8,484,582 

LIABILITIES (8,491,695) (585,205) (9,076,900) (7,458,403) 

TOTAL 1,671,227 152,508 1,823,735 1,026,179 

Derivative contracts mature as follows (in days): 

Clearing 

Futures 

Swaps 

Options 

Forwards 


Forwards 

Swaps with target flow 

Target flow of swap 

Other 

Memorandum account 

Notional amount 

Market value 

0 - 30 31 - 180 181 - 365 Over 365 09/30/2010 09/30/2009 

47,378,091 220,781,213 17,361,605 52,359,149 337,880,058 196,897,503 

5,522,914 18,019,065 9,552,512 30,964,392 64,058,883 78,540,063 

871,612,897 1,301,489,093 211,641,906 27,142,405 2,411,886,301 1,377,138,277 

2,208,064 870,905 15,226 1,103,864 4,198,059 1,563,600 

81,152 664,226 659,787 3,672,591 5,077,756 5,641,746 

7,280,725 9,163,778 2,762,790 1,209,472 20,416,765 12,710,194 

6,016 131,219 - - 137,235 1,218,751 

6,452 1,294,427 12,870 - 1,313,749 3,746,618 

2,225,707 6,747,758 3,430,002 3,842,000 16,245,467 12,757,277 

At September 30, 2010, ITAÚ UNIBANCO HOLDING had derivative operations in the swap with target flow and target forward with 2 clients; these products not being totally 

exposed to an exchange rate of R$ 1.69 per dollar, for settlement at maturity. These clients have AA, A or B risk rating. 



II - Derivatives by counterparty 

See below the composition of the Derivative Financial Instruments portfolio (assets and liabilities) by type of instrument, stated at cost, market value, and maturity term. 

Cost 

Adjustment to 

market value 

(in results / 

stockholders’ 

equity) 

Market value % 0 - 30 31 - 90 91 - 180 181 - 365 366 - 720 

09/30/2009 

Over 720 

days Market value 

ASSETS 

Futures 

29,520 (11,368) 18,152 0.2 (9,216) 44,133 1,054 9,360 (19,546) (7,633) 117,394 

BM&F Bovespa 29,520 (9,922) 19,598 0.2 (9,216) 45,677 667 9,324 (19,221) (7,633) 107,072 

Financial institutions - (1,446) (1,446) 0,0 - (1,544) 387 36 (325) - (306) 

Companies - - - - - - - - - - 10,628 

Option premiums 

2,377,587 (25,158) 2,352,429 21.8 369,354 216,517 1,026,690 171,144 31,805 536,919 2,303,921 

BM&F Bovespa 1,443,557 (139,957) 1,303,600 12.2 294,898 73,394 876,850 43,089 15,369 - 1,629,125 

Financial institutions 383,503 42,489 425,992 3.9 31,665 135,847 114,634 121,439 15,935 6,472 233,490 

Companies 549,810 72,098 621,908 5.7 42,280 6,858 35,206 6,616 501 530,447 441,306 

Individuals 717 212 929 0,0 511 418 - - - - - 

Forwards 

4,002,621 712 4,003,333 36.7 2,207,519 765,610 70,126 15,165 152,476 792,437 1,562,148 

BM&F Bovespa 973,337 1,200 974,537 8.9 119,546 783,952 70,126 913 - - 588 

Financial institutions 2,070,120 (489) 2,069,631 19.0 2,087,973 (18,342) - - - - 332,743 

Companies 959,164 1 959,165 8.8 - - - 14,252 152,476 792,437 1,228,806 

Individuals - - - - - - - - - - 11 

Swaps – Adjustment receivable 

2,146,926 789,187 2,936,113 26.9 139,238 308,816 513,275 287,511 903,955 783,318 3,280,613 

BM&F Bovespa 187,964 103,656 291,620 2.7 552 8,391 8,669 28,972 113,219 131,817 275,414 


Companies 1,452,697 315,782 1,768,479 16.2 73,771 176,956 202,139 180,535 616,077 519,001 2,025,860 

Individuals 14,110 1,634 15,744 0.1 1,053 1,669 7,886 997 2,916 1,223 9,997 


224,118 (10,293) 213,825 1.9 95,179 42,183 72,360 826 861 2,416 22,782 

Financial institutions 17,256 (3,969) 13,287 0.1 903 4,405 3,876 826 861 2,416 22,782 

Companies 206,862 (6,324) 200,538 1.8 94,276 37,778 68,484 - - - - 

Forwards 

582,432 1,451 583,883 5.3 69,760 265,439 193,011 43,073 5,408 7,192 305,175 


Companies 70,014 2 70,016 0.6 14,391 16,780 26,716 9,334 1,133 1,662 81,250 

Individuals 497 - 497 0,0 170 268 43 16 - - 106 

Swaps with target flow 130,165 241 130,406 1.2 - 4 130,234 168 - - 243,486 

Swaps – companies - - - - - - - - - - 47,211 

Target flow of Swap – Companies 130,165 241 130,406 1.2 - 4 130,234 168 - - 196,275 

Other 

669,553 (7,059) 662,494 6.0 57,561 61,872 81,442 194,383 16,468 250,768 649,063 

BM&F Bovespa - 286 286 0,0 286 - - - - - 301 

Financial institutions 440,674 (23,788) 416,886 3.8 7,721 5,137 6,480 140,307 6,882 250,359 201,843 

Companies 227,672 16,538 244,210 2.2 49,554 55,623 74,962 54,076 9,586 409 446,919 

Individuals 1,207 (95) 1,112 0,0 - 1,112 - - - - - 

TOTAL 10,162,922 737,713 10,900,635 100.0 2,929,395 1,704,574 2,088,192 721,630 1,091,427 2,365,417 8,484,582 

% per maturity term 26.9% 15.6% 19.2% 6.6% 10.0% 21.7% 

Total – 09/30/2009 7,868,729 615,853 8,484,582 100.0 2,313,244 1,303,992 1,648,058 1,314,786 661,634 1,242,868 


09/30/2010


Cost 

Adjustment to 

market value 

(in results / 

stockholders' 

equity) 

Market value % 0 - 30 31 - 90 91 - 180 181 - 365 366 - 720 

Over 720 

days 

09/30/2009 

Market value 

LIABILITIES 

Option premiums (2,160,467) 221,755 (1,938,712) 21.4 (248,422) (270,557) (924,209) (361,303) (130,135) (4,086) (2,288,591) 

BM&F Bovespa (1,561,725) 153,336 (1,408,389) 15.5 (224,205) (139,992) (757,255) (184,393) (102,216) (328) (1,772,048) 

Financial institutions (499,684) 40,468 (459,216) 5.1 (22,117) (109,296) (129,815) (172,704) (21,678) (3,606) (465,632) 

Companies (96,755) 27,915 (68,840) 0.8 (2,100) (21,149) (37,139) (2,059) (6,241) (152) (50,911) 

Individuals (2,303) 36 (2,267) 0,0 - (120) - (2,147) - - - 

Forwards (3,047,627) 489 (3,047,138) 33.6 (2,087,973) - - (14,252) (152,476) (792,437) (1,561,606) 

Financial institutions (2,088,463) 490 (2,087,973) 23.0 (2,087,973) - - - - - (332,743) 

Companies (959,164) (1) (959,165) 10.6 - - - (14,252) (152,476) (792,437) (1,228,806) 

Individuals - - - - - - - - - - (57) 

Swaps – difference payable (2,020,445) (776,522) (2,796,967) 30.8 (118,673) (762,894) (95,712) (193,295) (667,487) (958,906) (2,303,461) 

BM&F Bovespa (287,503) (172,575) (460,078) 5.1 (13,674) (9,630) (36,663) (41,923) (172,142) (186,046) (346,365) 

Financial institutions (415,871) (577,437) (993,308) 10.9 (41,263) (34,722) 4,520 (90,631) (214,311) (616,901) (875,547) 

Companies (1,253,570) (52,001) (1,305,571) 14.4 (63,511) (717,145) (52,757) (44,917) (272,102) (155,139) (1,028,862) 

Individuals (63,501) 25,491 (38,010) 0.4 (225) (1,397) (10,812) (15,824) (8,932) (820) (52,687) 

Credit derivatives (148,092) 2,848 (145,244) 1.6 (819) (7,579) (10,530) (1,589) (3,048) (121,679) (124,218) 

Financial institutions (148,070) 2,829 (145,241) 1.6 (819) (7,579) (10,527) (1,589) (3,048) (121,679) (124,182) 

Companies (22) 19 (3) 0,0 - - (3) - - - (36) 

Forwards (485,945) (18) (485,963) 5.3 (111,080) (114,296) (98,959) (118,656) (25,944) (17,028) (351,068) 

BM&F Bovespa (7) - (7) 0,0 - - (7) - - - - 

Financial institutions (364,426) - (364,426) 4.0 (68,399) (89,362) (76,268) (93,760) (21,509) (15,128) (108,501) 

Companies (120,797) (18) (120,815) 1.3 (42,681) (24,911) (22,684) (24,645) (4,354) (1,540) (241,579) 

Individuals (715) - (715) 0,0 - (23) - (251) (81) (360) (988) 

Swaps with target flow (11,792) (2,110) (13,902) 0.2 (93) - (13,809) - - - (236,667) 

Swaps (11,792) (2,110) (13,902) 0.2 (93) - (13,809) - - - (88,981) 

Companies (7) (86) (93) 0,0 (93) - - - - - (88,981) 

Individuals (11,785) (2,024) (13,809) 0.2 - - (13,809) - - - - 

Target flow of swap – foreign currency - - - - - - - - - - (147,686) 

Financial institutions - - - - - - - - - - (32,994) 

Companies - - - - - - - - - - (114,692) 

Other (617,327) (31,647) (648,974) 7.1 (51,511) (102,882) (76,645) (227,834) (78,680) (111,422) (592,792) 

BM&F Bovespa - (293) (293) 0,0 (105) (188) - - - - (422) 

Financial institutions (205,098) (57,463) (262,561) 2.9 (1,411) (20,852) (19,253) (110,697) (4,699) (105,649) (113,458) 

Companies (411,744) 26,108 (385,636) 4.2 (49,546) (81,842) (57,357) (117,137) (73,981) (5,773) (418,867) 

Individuals (485) 1 (484) 0,0 (449) - (35) - - - (60,045) 

TOTAL (8,491,695) (585,205) (9,076,900) 100.0 (2,618,571) (1,258,208) (1,219,864) (916,929) (1,057,770) (2,005,558) (7,458,403) 


Total – 09/30/2009 (6,704,725) (753,678) (7,458,403) 100.0 (2,222,490) (1,228,773) (1,255,194) (855,677) (813,505) (1,082,764) 


In ITAÚ UNIBANCO HOLDING recorded at market value swap contracts involving foreign currency, interbank market and indices totaling R$ (2,596) in liability position (R$ (881) at 09/30//2009), distributed as follows: R$ (2,596) from 31 to 180 

days (R$ (25) at 09/30//2009), (R$ (25) at 09/30//2009) from 181 to 365 day, and (R$ (831) over 365 days at 09/30//2009). 

09/30/2010


III- Derivatives by notional amount 

See below the composition of the Derivative Financial Instruments portfolio by type of instrument, stated at their notional amounts, per trading location (organized or over-the-counter market) and counterparties. 

BM&F Bovespa 

Over-the-counter market 

Financial institutions 

Companies 

Individuals 

Total 

Total – 09/30/2009 

Swap 09/30/2010 

Futures Swaps Options Forwards Credit derivatives Forwards 

with target flow 

Target flow of 

swap 

Other 

196,407,502 13,233,042 2,371,167,129 991,966 - 4,115 - - 54,125 

141,472,556 50,825,841 40,719,172 3,206,093 5,077,756 20,412,650 137,235 1,313,749 16,191,342 

141,472,556 22,934,285 36,310,642 2,246,346 4,311,978 16,158,290 - - 4,218,958 

- 26,816,110 4,293,809 959,747 765,778 4,225,023 6,016 1,313,749 11,967,447 

- 1,075,446 114,721 - - 29,337 131,219 - 4,937 

337,880,058 64,058,883 2,411,886,301 4,198,059 5,077,756 20,416,765 137,235 1,313,749 16,245,467 

196,897,503 78,540,063 1,377,138,277 1,563,600 5,641,746 12,710,194 1,218,751 3,746,618 12,757,277


IV - Credit derivatives 

See below the composition of Credit Derivatives (assets and liabilities) portfolio stated at notional amount, and effect on calculation of Required 

Referential Equity. 

Transferred 

Credit swaps whose underlying assets are: 

Securities 

Total return swaps whose underlying assets are: 

Securities 

Received 

Credit Risk Amount 

09/30/2010 09/30/2009 

(2,018,605) (2,331,167) 

(2,018,605) (1,165,992) 

- (1,165,175) 

3,059,153 2,686,908 

Credit swaps whose underlying assets are: 

Securities 

3,050,968 2,686,908 

Total return swaps whose underlying assets are: 

Securities 

8,185 - 

Total 1,040,548 355,741 

During the period, there was no occurrence of credit event related to those set forth in agreements. 

According to CMN Resolution No. 3,490, which became effective on July 1, 2008 (Note 3), the effect of the calculation of the Required Referential Equity amounts to R$ 170,950 at 

September 30, 2010 (R$ 139,366 at September 30, 2009).

V - Accounting hedge 

a) The purpose of the hedge relationship of the subsidiary ITAÚ UNIBANCO is to protect the cash flow of 

payment of debt interest (CDB / Redeemable preferred shares) related to its variable interest rate risk (CDI / 

LIBOR), making the cash flow constant (fixed rate) and regardless of the variations of DI Cetip Over and 

LIBOR. 

To protect the future cash flows of debt against exposure to variable interest rate (CDI), at September 30, 

2009 ITAÚSA CONSOLIDATED negotiated DI Futures agreements at BM&FBOVESPA with maturity 

between 2009 and 2017 in the amount of R$ 23,729,450 (R$ 10,099,463 at 09/302009). To protect the 

future cash flows of debt against exposure to variable interest rate (LIBOR), at September 30, 2009 ITAÚ 

UNIBANCO HOLDING negotiated SWAP contracts with maturity in 2015 in the amount of R$ 665,943 (R$ 

698,921 at 09/30/2009). These derivative financial instruments gave rise to adjustment to market value net of 

tax effects recorded in stockholders’ equity of (R$ 80,064) (R$ (170,867) at 09/30/2009), of which (R$ 

(49,807) R$ (158,850) at 09/30/2009), refers to CDB and R$ (30,257) (R$ 12,017 at 09/30/2009) refers to 

Redeemable Preferred shares. The hedged items total R$ 24,927,277 (R$ 10,366,649 at 09/30/2009), of 

which R$ 24,261,334 (R$ 9,667,728 at 09/30/2009) are CDB with maturities between 2010 and 2017 and R$ 

665,943 (R$ 698,921 at 09/30/2009) are SWAPS of redeemable preferred shares with maturity in 2015. 

The gains or losses related to the accounting hedge of cash flows that we expect be reclassified from 

Stockholders’ Equity into Results in the following 12 months amount to R$ 81,845 (R$ 116,567 at 

09/30/2009). 

The effectiveness computed for hedge portfolio was in conformity with the provisions of BACEN Circular No. 

3,082 of January 30, 2002. 

b) The swap operations contracted in a negotiation associated with the funding and/or investment in the 

amount of R$ 179,615 (R$ 603,612 at 09/30/2009) are recorded at amounts restated in accordance with 

variations occurred in respective ratios (“curve”) and are not valued at their market value, as permitted by 

BACEN Circular No. 3,150/02. 


VI - Realized and unrealized gain of the derivative financial instruments portfolio 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

Swap 116,370 1,836,657 

Forwards 25,173 (524,939) 

Futures 1,078,011 6,497,700 

Options 375,630 425,248 

Credit derivatives 48,542 75,691 

Foreign exchange variation on investments abroad (770,682) (4,659,887) 

Other (222,612) (158,306) 

Total 650,432 3,492,164 


i) Changes in adjustment to market value for the period 

Opening balance 

Adjustments with impact on: 

01/01 to 01/01 to 

09/30/2010 09/30/2009 

608,422 (2,799,446) 

Results 

302,188 2,573,210 


115,782 (120,691) 

Derivative financial instruments 

186,406 2,693,901 

Stockholders’ equity 

297,445 855,403 

Available-for-sale 288,896 872,841 

Accounting hedge - Derivative financial instruments 8,549 (17,438) 

Futures 56,304 (17,438) 

Swap (47,755) - 

Closing balance 

Adjustment to market value 



1,208,055 629,167 

1,208,055 629,167 

440,776 330,637 

704,756 713,484 

62,523 (414,954) 

Derivative financial instruments 


207,173 (137,825) 

Accounting hedge (144,650) (277,129) 

Futures (89,985) (258,925) 

Swap (54,665) (18,204) 

For better understanding, the following table shows the unrealized gains of available-for-sale securities and heldto-maturity 

securities: 

09/30/2010 09/30/2009 

Adjustment of available-for-sale securities – stockholders’ equity 

704,756 713,484 

Adjustment to held-to-maturity securities (*) 

608,479 419,970 

Total unrealized gain 

1,313,235 1,133,454 

(*) Includes the amount of R$ 13,449 (R$ 16,604 at 09/30/2009) regarding the adjustment to market value of securities reclassified up to 

December 31, 2003, not recognized in net income. 


j) Sensitivity analysis (TRADING AND BANKING PORTFOLIOS) 

According to the criteria for classification of operations provided for by BACEN Resolution No. 3,464/07 and Circular No. 3,354/07, and 

the New Capital Accord – Basel II, the financial instruments of ITAÚ UNIBANCO HOLDING S.A., included all transactions with 

derivatives, are separated in Trading and Banking portfolios. 

The sensitivity analyses shown below do not predict the dynamics of the operation of the risk and treasury areas, because once loss 

related to positions is found, risk mitigating measures are quickly taken, minimizing the possibility of significant losses. In addition, we 

point out that the presented results do not necessarily translate into accounting results, because the study's sole purpose is to disclose 

the exposure to risks and the respective protective actions, taking into account the fair value of financial instruments, irrespective of the 

accounting practices adopted by the institutions. 

The trading portfolio consists of all transactions, including those with derivatives, held with the intention of being traded or to provide 

hedge to the other financial instruments of this strategy. These are transactions for resale, obtaining benefits from price movements, 

actual or expected or conduction of arbitrage. This portfolio has strict limits set by the risk areas and is daily controlled. 

Tradíng portfolio 

Risk factors 

Amounts in R$ (000) 

09/30/2010 (*) 

Scenarios 

I II III 

Fixed rate Fixed rate in reais (500) (12,426) (24,721) 

Foreign exchange 

coupons 

Rates of foreign exchange coupon 

40 (734) (936) 

Foreign currency Exchange variation 3,781 (94,515) (189,030) 

Price indices Rates of price indices coupon (535) (13,230) (26,178) 

Long-term interest rate 

Rates of TJLP coupon 

85 (2,150) (4,249) 

Reference rate Rates of TR coupon 325 (8,200) (16,510) 

Variable income Share price 7,820 (195,505) (391,010) 

(*) Amounts net of tax effects. 

Risk of variation in: 

Total without correlation 11,016 (326,760) (652,634) 

Total with correlation 7,158 (212,329) (424,081) 

The banking portfolio comprises transactions that do not fit into the trading portfolio concept and are typically banking transactions of 

the institution’s business lines and their respective hedges, which may or not be carried our with derivative financial instruments. 

Accordingly, the derivatives of this portfolio are not used for speculation purposes, not generating significant economic risks to the 

institution. 

Amounts in R$ (000) 

Trading and Banking portfolio Exposures 09/30/2010 (*) 

Scenarios 

Risk factors Risk of variation in: 

I II III 

Fixed rate Fixed rate in reais (3,418) (85,153) (169,721) 

Foreign exchange 

coupons 

Rates of foreign exchange coupon 

1,765 (45,542) (94,037) 

Foreign currency Exchange variation 6,252 (156,301) (312,603) 

Price indices Rates of price indices coupon (1,335) (33,076) (65,548) 

Long-term interest rate Rates of TJLP coupon 83 (2,194) (4,337) 

Reference rate Rates of TR coupon 65 (13,805) (27,710) 

Variable income Share price 8,241 (206,036) (412,072) 

(*) Amounts net of tax effects. 

Total without correlation 11,653 (542,107) (1,086,027) 

Total with correlation 7,572 (352,261) (705,701) 

Scenario I: Addition of 1 base point to the fixed-rate curve, currency coupon, inflation and interest rate indices, and 1 percentage point in 

currency and share prices, which is based on market information (BM&F BOVESPA, Andima, etc); 

Scenario II: Shocks at approximately 25% in the portfolio of September 30, 2009, considering the largest resulting losses per risk factor; 

Scenario III: Shocks at approximately 50% in the portfolio of September 30, 2009, considering the largest resulting losses per risk 

factor. 

All derivative financial instruments engaged by ITAÚ UNIBANCO HOLDING S.A. are shown in Note 7. 



NOTE 8 - LOAN, LEASE AND OTHER CREDIT OPERATIONS 

a) Composition of the portfolio with credit granting characteristics 

I – By type of operations and risk level 

Loan operations 

AA A B C D E F G H 

Total Total 

41,963,399 94,542,765 35,688,901 11,272,827 7,043,276 3,395,479 1,983,783 1,223,791 6,498,740 203,612,961 157,378,959 

Loans and discounted trade receivables 21,016,528 43,397,467 23,045,745 8,943,489 6,405,406 2,864,931 1,776,130 1,072,200 5,925,149 114,447,045 99,193,601 

Financing 15,714,663 39,007,254 10,851,171 2,020,652 428,766 299,785 170,840 115,263 472,877 69,081,271 43,258,031 

Farming and agribusiness financing 1,876,662 2,172,762 939,980 61,508 79,468 99,791 3,560 1,889 32,937 5,268,557 4,928,730 

Real estate financing 3,355,546 9,965,282 852,005 247,178 129,636 130,972 33,253 34,439 67,777 14,816,088 9,998,597 

Lease operations 

Credit card operations 

Risk levels 

Advance on exchange contracts (1) 

Other sundry receivables (2) 

Total operations with credit granting characteristics 

Endorsements and sureties (3) 

Total with endorsements and sureties 

Total – 09/30/2009 

09/30/2010 

1,851,909 27,575,715 5,162,249 2,487,070 989,716 485,877 357,931 307,908 1,129,845 40,348,220 48,428,264 

- 11,841,741 10,659,719 2,437,064 2,239,708 672,888 417,659 360,489 2,615,923 31,245,191 26,013,935 

776,916 1,428,159 740,977 176,145 52,023 39,941 39,266 110 18,819 3,272,356 4,936,287 

15,045 81,349 342,294 16,804 12,421 1,980 1,340 1,682 83,173 556,088 341,887 

44,607,269 135,469,729 52,594,140 16,389,910 10,337,144 4,596,165 2,799,979 1,893,980 10,346,500 279,034,816 237,099,332 

34,154,632 31,594,253 

44,607,269 135,469,729 52,594,140 16,389,910 10,337,144 4,596,165 2,799,979 1,893,980 10,346,500 313,189,448 268,693,585 

35,269,634 111,687,620 45,737,598 14,762,212 8,963,073 4,533,960 2,640,263 1,920,021 11,584,951 237,099,332 

(1) Includes Advances on Exchange Contracts and Income Receivable from Advances Granted, reclassified from Liabilities – Foreign Exchange Portfolio/Other Receivables (Note 2a); 

(2) Includes Securities and Credits Receivable, Debtors for Purchase of Assets and Endorsements and Sureties paid; 

(3) Recorded in Memorandum Accounts. 

09/30/2009


II - By maturity and risk level 

AA A B C D E F G H Total Total 

OVERDUE OPERATIONS (1) (2) 

Falling due installments 

- - 2,488,274 2,104,619 1,565,649 1,170,668 1,047,634 579,860 2,523,714 11,480,418 11,900,857 

01 to 30 - - 111,317 103,038 90,745 62,008 48,862 38,673 184,382 639,025 708,580 

31 to 60 - - 95,874 92,006 76,598 54,731 43,214 32,454 147,061 541,938 598,557 

61 to 90 - - 100,859 93,165 77,346 56,642 42,869 32,823 146,153 549,857 603,332 

91 to 180 - - 299,994 260,944 211,386 152,654 115,153 89,920 394,772 1,524,823 1,661,010 

181 to 365 - - 495,599 452,962 335,958 255,257 187,759 145,574 602,586 2,475,695 2,705,580 

Over 365 - - 1,384,631 1,102,504 773,616 589,376 609,777 240,416 1,048,760 5,749,080 5,623,798 

Overdue installments 

- - 438,779 586,837 1,091,278 982,737 839,809 822,996 5,626,873 10,389,309 12,395,886 

01 to 14 - - 21,771 49,811 35,691 44,424 21,746 14,663 70,052 258,158 254,060 

15 to 30 - - 379,206 143,718 315,539 81,362 48,384 33,038 152,218 1,153,465 1,350,830 

31 to 60 - - 37,802 363,001 326,110 176,146 93,069 59,335 265,336 1,320,799 1,475,529 

61 to 90 - - - 21,089 377,523 133,810 121,400 69,344 260,969 984,135 1,256,282 

91 to 180 - - - 9,218 36,415 509,099 503,596 588,128 1,189,281 2,835,737 3,476,641 

181 to 365 - - - - - 37,896 51,614 58,488 3,478,549 3,626,547 4,403,816 

Over 365 - - - - - - - - 210,468 210,468 178,728 

SUBTOTAL 

SPECIFIC ALLOWANCE 

SUBTOTAL - 09/30/2009 

- - 2,927,053 2,691,456 2,656,927 2,153,405 1,887,443 1,402,856 8,150,587 21,869,727 24,296,743 

- - (29,270) (80,743) (265,693) (646,022) (943,722) (981,999) (8,150,587) (11,098,036) (12,817,853) 

- - 3,455,047 2,828,396 2,549,248 2,339,349 1,805,541 1,600,703 9,718,459 24,296,743 

NON-OVERDUE OPERATIONS 

Falling due installments 

44,510,069 134,932,404 49,189,044 13,504,429 7,458,156 2,388,437 891,119 483,514 2,144,847 255,502,019 211,011,876 

01 to 30 5,121,493 15,221,893 11,992,163 4,104,743 2,248,401 441,149 225,379 169,222 565,877 40,090,320 39,264,099 

31 to 60 2,909,133 10,470,576 5,521,951 1,443,533 745,372 150,852 76,903 31,412 237,805 21,587,537 18,693,193 

61 to 90 3,085,473 7,464,526 4,168,153 1,215,620 514,429 118,139 41,034 22,403 123,098 16,752,875 15,229,477 

91 to 180 5,150,002 15,206,368 6,506,714 1,457,168 843,447 277,775 117,147 30,236 243,866 29,832,723 25,250,492 

181 to 365 5,733,085 21,239,168 7,245,772 1,710,864 1,010,627 329,004 141,125 40,390 306,669 37,756,704 32,740,268 

Over 365 22,510,883 65,329,873 13,754,291 3,572,501 2,095,880 1,071,518 289,531 189,851 667,532 109,481,860 79,834,347 

Overdue up to 14 days 

SUBTOTAL 

GENERIC ALLOWANCE 

SUBTOTAL - 09/30/2009 

97,200 537,325 478,043 194,025 222,061 54,323 21,417 7,610 51,066 1,663,070 1,790,713 

44,607,269 135,469,729 49,667,087 13,698,454 7,680,217 2,442,760 912,536 491,124 2,195,913 257,165,089 212,802,589 

- (677,349) (496,671) (410,954) (768,021) (732,828) (456,268) (343,787) (2,195,913) (6,081,791) (5,146,420) 

35,269,634 111,687,620 42,282,551 11,933,816 6,413,825 2,194,611 834,722 319,318 1,866,492 212,802,589 

GRAND TOTAL 44,607,269 135,469,729 52,594,140 16,389,910 10,337,144 4,596,165 2,799,979 1,893,980 10,346,500 279,034,816 237,099,332 

EXISTING ALLOWANCE 

- (677,349) (1,371,397) (1,637,352) (3,100,109) (2,297,623) (1,959,706) (1,893,791) (10,346,500) (23,283,827) (24,068,273) 

Minimum allowance required (3) - (677,349) (525,941) (491,697) (1,033,714) (1,378,850) (1,399,990) (1,325,786) (10,346,500) (17,179,827) (17,964,273) 

Additional allowance (4) - - (845,456) (1,145,655) (2,066,395) (918,773) (559,716) (568,005) - (6,104,000) (6,104,000) 

GRAND TOTAL 09/30/2009 

EXISTING ALLOWANCE 

09/30/2010 09/30/2009 

35,269,634 111,687,620 45,737,598 14,762,212 8,963,073 4,533,960 2,640,263 1,920,021 11,584,951 237,099,332 

- (918,721) (1,367,554) (1,474,745) (2,688,025) (2,266,527) (1,847,921) (1,919,829) (11,584,951) (24,068,273) 

Minimum allowance required (3) - (558,438) (457,376) (442,866) (896,307) (1,360,188) (1,320,132) (1,344,015) (11,584,951) (17,964,273) 

Additional allowance (4) - (360,283) (910,178) (1,031,879) (1,791,718) (906,339) (527,789) (575,814) - (6,104,000) 

(1) (2) (3) (4) Operations with overdue installments for more than 14 days or under responsibility of bankruptcy or in process of bankruptcy companies; 

The balance of non-accrual operations amounts to R$ 14,231,336 (R$ 16,639,451 at 09/30/2009); 

The policy of not using "AA" for individuals was maintained. As a consequence, all loan operations with clients classified in these segments are charged by recording a provision upon the granting of loan; 

According to BACEN's request, it is classified into risk level to show the additional amounts found calculated to maintain the strength necessary for absorbing possible increases in default expected in history of scenarios of losses incurred.

III – By business sector 

09/30/2010 % 09/30/2009 % 

PUBLIC SECTOR 

1,423,049 0.5 1,486,427 0.6 

Generation, transmission and distribution of electric energy 649,446 0.2 876,812 0.4 

Chemical and petrochemical 301,988 0.1 166,320 0.1 

Other 471,615 0.2 443,295 0.2 

PRIVATE SECTOR 

277,611,767 99.5 235,612,905 99.4 

COMPANIES 

152,795,579 54.8 128,043,302 54.0 

INDUSTRY AND COMMERCE 

79,315,418 28.4 67,598,779 28.5 

Food and beverage 13,405,968 4.8 10,722,940 4.5 

Autoparts and accessories 3,568,298 1.3 2,531,191 1.1 

Agribusiness capital assets 793,234 0.3 671,833 0.3 

Industrial capital assets 4,694,063 1.7 3,771,061 1.6 

Pulp and paper 2,261,346 0.8 1,807,861 0.8 

Distribution of fuels 1,777,394 0.6 1,578,025 0.7 

Electrical and electronic 6,345,096 2.3 5,427,479 2.3 

Pharmaceuticals 1,806,438 0.6 1,567,394 0.7 

Fertilizers, insecticides and crop protection 1,244,590 0.4 1,409,618 0.6 

Tobacco 473,006 0.2 534,234 0.2 

Import and export 1,700,023 0.6 1,559,009 0.7 

Hospital care materials and equipment 878,414 0.3 680,852 0.3 

Construction material 4,220,424 1.5 3,278,437 1.4 

Steel and metallurgy 6,224,427 2.2 6,360,202 2.7 

Wood and furniture 2,581,537 0.9 2,335,818 1.0 

Chemical and petrochemical 5,590,130 2.0 5,110,302 2.2 

Supermarkets 1,004,776 0.4 1,006,068 0.4 

Light and heavy vehicles 5,793,034 2.1 5,458,407 2.3 

Clothing 6,962,277 2.5 5,438,869 2.3 

Other - Commerce 4,642,321 1.7 3,478,940 1.5 

Other - Industry 3,348,622 1.2 2,870,239 1.2 

SERVICES 

57,543,933 20.6 46,090,886 19.4 

Heavy construction (constructors) 3,297,010 1.2 2,952,008 1.2 

Financial 5,827,962 2.1 3,732,047 1.6 

Generation, transmission and distribution of electric energy 5,367,663 1.9 5,675,134 2.4 

Holding company 3,188,169 1.1 2,962,751 1.2 

Real estate agents 8,912,495 3.2 6,393,073 2.7 

Media 2,510,269 0.9 2,291,268 1.0 

Service companies 4,046,874 1.5 2,970,850 1.3 

Health care 1,549,605 0.6 1,244,393 0.5 

Telecommunications 792,166 0.3 1,208,221 0.5 

Transportation 11,602,885 4.2 9,737,555 4.1 

Other services 10,448,835 3.7 6,923,586 2.9 

PRIMARY SECTOR 

13,742,510 4.9 13,175,718 5.6 

Agribusiness 11,458,928 4.1 11,368,652 4.8 

Mining 2,283,582 0.8 1,807,066 0.8 

OTHER COMPANIES 

2,193,718 0.8 1,177,919 0.5 

INDIVIDUALS 

124,816,188 44.6 107,569,603 45.4 

Credit cards 30,992,638 11.1 25,775,281 10.9 

Consumer loans/overdraft 27,001,263 9.7 24,054,243 10.1 

Real estate financing 9,555,098 3.4 7,069,546 3.0 

Vehicles 57,267,189 20.5 50,670,533 21.4 

GRAND TOTAL 

279,034,816 100.0 237,099,332 100.0 


) Credit concentration 

09/30/2010 09/30/2009 

Loan, lease and other credit operations (*) 

% of 

% of 

Risk 

Total Risk Total 

Largest debtor 2,112,908 0.7 2,408,762 0.9 

20 largest debtors 27,499,407 9.0 24,765,087 9.2 



09/30/2010 09/30/2009 

Loan, lease and other credit operations and securities of companies and 

financial institutions (*) 

% of 

% of 

Risk 

Total Risk Total 

Largest debtor 4,283,282 1.2 3,847,132 1.3 




(*) The amounts include endorsements and sureties. 

c) Changes in allowance for loan losses 


Net increase for the period 

(24,051,873) (19,972,155) 

(11,954,420) (12,382,541) 

Required by Resolution No. 2,682/99 (11,954,420) (14,069,541) 

Additional (3) - 1,687,000 

Write-Off 

Closing balance 

12,722,466 8,286,423 

(23,283,827) (24,068,273) 

Specific allowance (1) (11,098,036) (12,817,853) 

Generic allowance (2) (6,081,791) (5,146,420) 

Additional allowance (3) (6,104,000) (6,104,000) 

(1) Operations with overdue installments for more than 14 days or under responsibility of bankruptcy or in process of bankruptcy 

companies; 

(2) 

(3) 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

For operations not covered in the previous item due to the classification of the client or operation; 

Refers to the provision in excess of the minimum required by CMN Resolution No.2,682, of December 12, 1999, recognized 

within the prudential criteria adopted by management in accordance with good banking practice, in order to enable the 

absorption of possible increases in default arising from a strong reversal of the economic cycle. 

As from December 31, 2008, considering the economic scenario and the uncertainties related to it, the criteria for recognition of 

the additional allowance for loan losses were revised, including the portion related to risks associated to a more pessimistic 

scenario. Over 2009, the effects of the crisis were partially consummated, giving rise to an increase in the required regulatory 

allowance and reduction in the additional allowances for loan losses regarding the portfolio. 

At September 30, 2010, the balance of the allowance in relation to the loan portfolio is equivalent to 8.3% 

(10.2% at 09/30/2009). 


d) Recovery and renegotiation of credits 

I - Composition of the result of allowance for loan losses 

01/01 to 01/01 to 

09/30/2010 09/30/2009 

Expenses for allowance for loan losses (11,954,420) (12,382,541) 

Income from recovery of credits written off as loss 2,946,276 1,440,205 

Result of allowance for loan losses (9,008,144) (10,942,336) 

II - Renegotiated credits 

09/30/2010 09/30/2009 

Renegotiated credits 8,514,497 7,277,785 

Allowance for loan losses (4,048,779) (3,855,718) 

(%) 47.6 53.0 


e) Restricted operations on assets 

We present below information related to the restricted operations on assets, in accordance with CMN Resolution No. 

2,921, of January 17, 2002. 

31 - 180 Over 365 Total 

Income 

(expenses) 

Restricted operations on assets 

Loan operations 814 156,753 157,567 596 

Liabilities - restricted operations on assets 

Foreign borrowings through securities 

Net revenue from restricted operations 

806 156,753 157,559 597 

1,193 

At 09/30/2010, there were no balances in default. 

f) Sales operations or transfers of financial assets 

09/30/2010 

01/01 to 

09/30/2010 

In compliance with Resolution No. 3,809, of October 28, 2009, the amount of sales operations or transfers of 

financial assets where the entity significantly retained the risks and benefits is R$ 38,560, composed exclusively of 

loan operations and receivables assigned with joint obligation. 


NOTE 9 - FOREIGN EXCHANGE PORTFOLIO 

09/30/2010 09/30/2009 

ASSETS – OTHER RECEIVABLES 

20,570,549 35,722,645 

Exchange purchase pending settlement – foreign currency 10,578,019 21,138,359 

Bills of exchange and term documents – foreign currency 507 952 

Exchange sale rights – local currency 10,474,794 14,906,180 

(Advances received) – local currency (482,771) (322,846) 

LIABILITIES – OTHER LIABILITIES (Note 2a) 

21,398,733 36,721,988 

Exchange sales pending settlement – foreign currency 10,406,177 15,819,821 

Liabilities from purchase of foreign currency – local currency 10,987,996 20,897,773 

Other 4,560 4,394 

MEMORANDUM ACCOUNTS 

500,428 381,844 

Outstanding import credits – foreign currency 474,912 342,561 

Confirmed export credits – foreign currency 25,516 39,283 



NOTE 10 – FUNDING AND BORROWINGS AND ONLENDING 

a) Summary 

0-30 31-180 181-365 Over 365 Total % Total % 

Deposits 101,225,589 13,923,586 13,816,012 65,951,463 194,916,650 43.2 189,089,392 48.5 

Deposits received under securities repurchase agreements 56,429,962 16,980,704 13,972,800 68,252,613 155,636,079 34.5 126,664,456 32.4 

Funds from acceptances and issuance of securities 4,651,467 8,585,692 2,088,451 8,053,711 23,379,321 5.2 18,537,605 4.7 

Borrowings and onlending 2,373,856 7,271,064 8,829,120 24,785,011 43,259,051 9.6 32,808,084 8.4 

Subordinated debt (2) 61,127 9,110 892,817 32,720,415 33,683,469 7.5 23,471,568 6.0 

TOTAL 164,742,001 46,770,156 39,599,200 199,763,213 450,874,570 390,571,105 

% per maturity term 36.5 10.4 8.8 44.3 

TOTAL – 09/30/2009 155,182,245 42,686,709 29,677,409 163,024,742 390,571,105 


(2) Includes R$ 665,973 (R$ 698,957 at 09/30/2009) of Redeemable Preferred Shares classified under Minority Interest in Balance Sheet. 

09/30/2010 

(1) Funds obtained abroad through the sales to Brazilian Diversified Payment Rights Finance Company of rights related to the payment orders receivable abroad; 

b) Deposits 

09/30/2009 

09/30/2010 

09/30/2009 


Demand deposits 28,055,643 - - - 28,055,643 14.4 22,707,717 12.0 

Savings accounts 54,874,272 - - - 54,874,272 28.2 44,146,423 23.3 

Interbank 426,577 486,765 288,867 90,515 1,292,724 0.7 2,231,691 1.2 

Time deposits 16,872,322 13,436,821 13,527,145 65,860,948 109,697,236 56.3 118,969,314 63.0 

Other deposits 996,775 - - - 996,775 0.5 1,034,247 0.5 

TOTAL 101,225,589 13,923,586 13,816,012 65,951,463 194,916,650 189,089,392 


TOTAL – 09/30/2009 87,280,017 15,823,478 11,654,821 74,331,076 189,089,392 


At September 30, 2010, ITAÚ UNIBANCO’s portfolio is composed of interbank deposits in the amount of R$ 3,260,392 (R$ 880,795 at September 30, 2009) with maturity over 365 days.


c) Deposits received under securities repurchase agreements 

09/30/2010 09/30/2009 

0 - 30 31 - 180 181 - 365 Over 365 Total % Total % 

Own portfolio 

16,981,230 16,444,853 13,734,313 57,577,240 104,737,636 67.3 68,870,686 54.4 

Government securities 8,468,726 330,512 9,072 4,511 8,812,821 5.7 6,029,555 4.8 

Private securities - - 108,596 - 108,596 0.1 - 0.0 

Own issue 2,778,280 16,069,319 13,608,054 57,336,553 89,792,206 57.6 59,952,498 47.3 

Foreign 5,734,224 45,022 8,591 236,176 6,024,013 3.9 2,888,633 2.3 

Third-party portfolio 

39,308,732 - 22,403 123,614 39,454,749 25.4 53,635,820 42.3 

Free portfolio 

140,000 535,851 216,084 10,551,759 11,443,694 7.4 4,157,950 3.3 

TOTAL 

56,429,962 16,980,704 13,972,800 68,252,613 155,636,079 126,664,456 


36.3 10.9 9.0 43.8 

TOTAL – 09/30/2009 

63,797,223 11,450,865 10,930,236 40,486,132 126,664,456 


50.4 9.0 8.6 32.0


d) Funds from acceptance and issuance of securities 

FUNDS FROM BILLS: 

Bills of real estate loans 

Bills of credit related to agribusiness 

Financial bills 

Mortgage notes 

Bills of exchange 

DEBENTURES 

FOREIGN BORROWINGS AND SECURITIES 

Trade Related – Issued abroad - Structure Note Issued 

Non-Trade Related 

TOTAL 

Issued abroad 


2,598,361 7,180,484 642,705 1,033,738 11,455,288 49.0 9,174,601 49.5 

809,927 6,279,969 126,982 94,600 7,311,478 31.3 6,225,168 33.6 

1,768,790 871,333 489,401 116,101 3,245,625 13.9 2,439,966 13.2 

- - - 555,074 555,074 2.4 - - 

10,258 12,514 26,322 267,963 317,057 1.3 509,467 2.7 

9,386 16,668 - - 26,054 0.1 - - 

1,149,147 322,133 51,390 1,106,433 2,629,103 11.2 2,888,706 15.6 

903,959 1,083,075 1,394,356 5,913,540 9,294,930 39.8 6,474,298 34.9 

78,015 410,107 396,810 744,270 1,629,202 7.0 771,287 4.1 

825,944 672,968 997,546 5,169,270 7,665,728 32.8 5,703,011 30.8 

825,944 672,968 997,546 5,169,270 7,665,728 32.8 5,703,011 30.8 

Brazil Risk Note Programme 87,928 269,873 345,090 3,128,539 3,831,430 16.4 2,419,223 13.1 

Fixed Rate Notes 515,050 28,763 564,759 444,260 1,552,832 6.6 1,086,052 5.9 

Euro Medium Term Note Programme 16 515 19,953 505,185 525,669 2.3 1,014,266 5.5 

Eurobonds 5,185 6,549 - 701,226 712,960 3.0 121,844 0.7 

Euro Certificates of Deposits 209,599 365,824 63,394 26,290 665,107 2.9 654,922 3.5 

Medium Term Note 268 991 41 142,801 144,101 0.6 194,121 1.0 

Structure Note Issued 7,898 453 3,214 220,969 232,534 1.0 - - 

Other - - 1,095 - 1,095 0.0 212,583 1.1 


TOTAL – 09/30/2009 


4,651,467 8,585,692 2,088,451 8,053,711 23,379,321 18,537,605 

19.9 36.7 8.9 34.4 

09/30/2010 09/30/2009 

2,131,716 7,024,990 1,813,342 7,567,557 18,537,605 

11.5 37.9 9.8 40.8


e) Borrowings and onlending 

BORROWINGS 

TOTAL 

Domestic 

Foreign (*) 

ONLENDING 

Domestic – official institutions 


1,761,687 4,441,338 5,362,366 2,831,609 14,397,000 33.3 12,146,646 37.0 

634,480 765,747 371,169 56,094 1,827,490 4.2 738,198 2.2 

1,127,207 3,675,591 4,991,197 2,775,515 12,569,510 29.1 11,408,448 34.8 

612,169 2,829,726 3,466,754 21,953,402 28,862,051 66.7 20,661,438 63.0 

612,169 2,823,833 3,461,809 21,884,366 28,782,177 66.5 20,391,819 62.2 

BNDES 244,333 1,019,410 1,322,800 7,555,065 10,141,608 23.4 9,608,599 29.3 

FINAME 362,082 1,700,308 2,077,134 14,006,488 18,146,012 41.9 10,207,460 31.1 

Other 5,754 104,115 61,875 322,813 494,557 1.1 575,760 1.8 

Foreign 


TOTAL – 09/30/2009 


09/30/2010 

- 5,893 4,945 69,036 79,874 0.2 269,619 0.8 

2,373,856 7,271,064 8,829,120 24,785,011 43,259,051 32,808,084 

5.5 16.8 20.4 57.3 

1,959,968 7,226,063 5,278,974 18,343,079 32,808,084 

6.0 22.0 16.1 55.9 

(*) Foreign borrowings are basically represented by foreign exchange transactions related to export pre-financing and import financing. 

09/30/2009

f) Subordinated debt 

Funding obtained through issuance of subordinated debt, in accordance with the conditions determined by CMN Resolution No. 3,444, of 

02/28/2007, and amendments established by CMN Resolution No. 3,532, of 01/31/2008, is as follows: 


CDB 

- - - 25,158,257 25,158,257 74.7 20,867,529 88.9 

Financial bills 

- - - 2,395,186 2,395,186 7.1 - - 

Euronotes 

48,435 9,110 893,608 3,386,473 4,337,626 12.9 899,943 3.8 

Bonds - - - 303,598 303,598 0.9 128,567 0.5 

Eurobonds 12,692 - - 847,100 859,792 2.6 902,371 3.8 

(-) Transaction costs incurred (Note 4b) - - (822) (36,141) (36,963) (0.1) (25,799) (0.1) 

TOTAL OTHER LIABILITIES 

61,127 9,110 892,786 32,054,473 33,017,496 22,772,611 

Redeemable preferred shares - - 31.0 665,942 665,973 2.0 698,957 3.1 

GRAND TOTAL 


TOTAL – 09/30/2009 


09/30/2010 

09/30/2009 

61,127 9,110 892,817 32,720,415 33,683,469 23,471,568 

0.2 0.0 2.7 97.1 

13,321 1,161,313 36 22,296,898 23,471,568 

0.1 4.9 0.0 95.0 

Description 

Name of security 

Issue Maturity Return p.a. Principal R$ 

Subordinated euronotes 2nd half of 2001 August 2011 10.00% 457,465 

Subordinated euronotes August 2001 August 2011 4.25% 625,008 

Subordinated CDB March 2007 April 2012 103.5% of CDI 5,000,000 

Subordinated CDB May 2007 May 2012 104% of CDI 1,406,000 

Subordinated CDB July 2007 July 2012 CDI + 0.38% 422,000 

Subordinated CDB August 2007 August 2012 CDI + 0.38% 200,000 

Subordinated CDB October 2007 October 2012 IGPM + 7.31% 160,850 


Subordinated CDB October 2007 October 2012 103.8% of CDI 93,000 

Subordinated CDB October 2007 October 2012 CDI + 0.45% 450,000 

Subordinated CDB November 2007 November 2012 CDI + 0.35% 300,000 

Subordinated CDB December 2002 December 2012 102.5% of CDI 200,000 

Subordinated CDB December 2002 December 2012 102% of CDI 20,000 

Subordinated CDB January 2008 February 2013 CDI + 0.50% 880,000 

Subordinated CDB February 2008 February 2013 CDI + 0.50% 1,256,000 

Subordinated CDB 1st quarter 2008 1st quarter 2013 CDI + 0.60% 817,310 

Subordinated CDB 2nd quarter 2008 2nd quarter 2013 106% of CDI 29,000 

Subordinated CDB 2nd quarter 2008 2nd quarter 2013 107% of CDI 19,401 

Subordinated CDB November 2003 November 2013 102% of CDI 40,000 

Subordinated CDB May 2007 May 2014 CDI + 0.35% 1,804,500 

Subordinated CDB August 2007 August 2014 CDI + 0.46% 50,000 


Subordinated CDB November 2008 October 2014 112% of CDI 1,000,000 

Subordinated CDB December 2007 December 2014 CDI + 0.60% 10,000 

Preferred shares December 2002 March 2015 3.04% 1,388,841 

Subordinated CDB January 2010 November 2015 113% of CDI 50,000 

Subordinated CDB December 2005 December 2015 1.42% 193,834 

Subordinated CDB 3rd quarter 2008 3rd quarter 2015 119.8% of CDI 400,000 

Subordinated CDB January 2010 January 2016 114% of CDI 500,000 

Subordinated CDB 1st quarter 2010 1st quarter 2016 110% of CDI 82,880 

Subordinated CDB 1st quarter 2010 1st quarter 2016 111% of CDI 33,400 

Subordinated CDB 1st quarter 2010 1st quarter 2016 113% of CDI 2,102,988 

Subordinated CDB March 2010 March 2016 IPCA + 7.33% 122,500 

Subordinated financial bills August 2010 August 2016 100% of CDI + 1.36% 365,000 

Subordinated financial bills September 2010 September 2016 112.5% of CDI 15,600 

Subordinated CDB (1) December 2006 December 2016 CDI + 0.47% 500,000 

Subordinated financial bills 3rd quarter 2010 3rd quarter 2016 112% of CDI 1,808,400 

Subordinated CDB March 2010 March 2017 IPCA + 7.45% 366,830 

Subordinated financial bills September 2010 September 2017 IPCA + 7.2% 160,000 

Subordinated financial bills September 2010 September 2017 IPCA + 7.0% 20,000 

Subordinated euronotes April 2010 April 2020 6.20% 1,730,600 

Subordinated euronotes September 2010 January 2021 5.75% 1,694,200 

Subordinated bonds April 2008 April 2033 3.50% 73,361 

Subordinated bonds October 2008 October 2033 4.50% 67,766 

Eurobonds -Perpetual Non-cumulative Junior 

Subordinated Securities (2) July 2005 Not determined 8.70% 1,195,250 

(1) 

(2) 

Subordinated CDBs may be redeemed from November 2011; 

The debt may be fully redeemed only at the option of the issuer from July 29, 2010 or at each subsequent payment. 

At September 30, 2010, ITAÚ UNIBANCO HOLDING’s portfolio is composed of Subordinated Euronotes with 

maturity from 0 to 30 days in the amount of R$ 48,435, from 91 to 180 in the amount of R$ 2,165, and over 365 

days in the amount of R$ 3,364,059, totaling R$ 3,414,659. 



NOTE 11 - INSURANCE, PENSION PLAN AND CAPITALIZATION OPERATIONS 

TOTAL 

a) Composition of the technical provisions 

INSURANCE PENSION PLAN 

CAPITALIZATION 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

Mathematical provision of benefits to be granted and ben 31,994 33,614 47,688,627 40,106,418 - - 47,720,621 40,140,032 

Unearned premiums 

3,443,351 3,258,870 - - - - 3,443,351 3,258,870 

Unsettled claims 

2,445,063 2,217,895 - - - - 2,445,063 2,217,895 

Financial surplus 

1,749 2,214 473,874 446,323 - - 475,623 448,537 

IBNR 

705,732 732,646 12,960 12,557 - - 718,692 745,203 

Financial variation 

458 494 124,492 110,475 - - 124,950 110,969 

Premium deficiency 

263,453 167,342 - - - - 263,453 167,342 

Insufficient contribution 

- - 548,756 438,884 - - 548,756 438,884 

Mathematical provision for redemptions 

- - - - 2,433,861 2,133,720 2,433,861 2,133,720 

Raffle contingency - - - - 21,709 36,489 21,709 36,489 

Other 

75,831 71,695 189,336 184,123 28,277 23,895 293,444 279,713 

TOTAL 

6,967,631 6,484,770 49,038,045 41,298,780 2,483,847 2,194,104 58,489,523 49,977,654


b) Assets Guaranteeing Technical Provisions - SUSEP 

Interbank investments – money market 


PGBL/VGBL fund quotas (1) 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

1,421,155 986,616 947,414 1,003,502 1,164,720 832,985 3,533,289 2,823,103 

2,700,305 2,959,487 48,143,031 40,311,622 1,360,774 1,401,164 52,204,110 44,672,273 

- - 43,621,488 36,403,697 - - 43,621,488 36,403,697 

Government securities - Domestic - - 31,435,519 23,444,190 - - 31,435,519 23,444,190 

National Treasury Bills - - 15,993,240 3,664,771 - - 15,993,240 3,664,771 

National Treasury Notes - - 13,336,217 7,951,760 - - 13,336,217 7,951,760 

Financial Treasury Bills - - 2,106,062 11,827,659 - - 2,106,062 11,827,659 

Corporate securities - - 11,818,124 12,447,524 - - 11,818,124 12,447,524 

Bank Deposit Certificates - - 5,203,676 7,549,666 - - 5,203,676 7,549,666 

Debentures - - 4,537,451 2,986,661 - - 4,537,451 2,986,661 

Shares - - 1,941,823 1,508,461 - - 1,941,823 1,508,461 

Quotas of funds - - 131,078 384,849 - - 131,078 384,849 

Promissory Notes - - 2,656 17,887 - - 2,656 17,887 

Securitized real estate loans - - 1,440 - - - 1,440 - 

PGBL/VGBL fund quotas - - 276,852 74,612 - - 276,852 74,612 

Derivative financial instruments - - 15,324 396,746 - - 15,324 396,746 

Accounts receivable / (payable) - - 75,669 40,625 - - 75,669 40,625 

Other assets 

2,700,305 2,959,487 4,521,543 3,907,925 1,360,774 1,401,164 8,582,622 8,268,576 

Government 1,905,335 2,285,508 3,584,073 3,001,287 148,692 739,727 5,638,100 6,026,522 

Private 794,970 673,979 937,470 906,638 1,212,082 661,437 2,944,522 2,242,054 

Receivables from insurance and reinsurance operations (2) 2,942,542 2,437,747 - - - 2,942,542 2,437,747 

Credit rights 1,207,524 952,351 - - - 1,207,524 952,351 

Reinsurance 1,735,018 1,485,396 - - - 1,735,018 1,485,396 

Escrow deposits for loss 44,706 109,796 - - - 44,706 109,796 

TOTAL 

7,108,708 6,493,646 49,090,445 41,315,124 2,525,494 2,234,149 58,724,647 50,042,919 

(1) The PGBL and VGBL plans securities portfolios, the ownership and embedded risks of which are the customer’s responsibility, are recorded as securities – trading securities, with a contra-entry to long-term liabilities in Pension Plan Technical Provisions account, as 

determined by SUSEP. 

(2) Recorded under Other receivables and Other assets. 

c) Results of Operations 

Income from financial operations 

Financial income from insurance, pension plan and capitalization operations 

Financial expenses from insurance, pension plan and capitalization operations 

Result from insurance, pension plan and capitalization operations 

TOTAL 

Premiums and contributions 

Changes in technical provisions 

Expenses for claims 

Selling expenses 

Expenses for benefits and raffles 

Other revenues and expenses 

INSURANCE PENSION PLAN CAPITALIZATION 

INSURANCE CAPITALIZATION 

TOTAL 

PENSION PLAN 

01/01 to 01/01 to 01/01 to 01/01 to 01/01 to 01/01 to 01/01 to 01/01 to 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

174,093 161,923 209,926 252,419 62,733 45,512 446,752 459,854 

218,041 245,036 2,955,551 3,159,018 171,494 145,233 3,345,086 3,549,287 

(43,948) (83,113) (2,745,625) (2,906,599) (108,761) (99,721) (2,898,334) (3,089,433) 

1,691,084 950,222 31,947 440,171 328,358 331,018 2,051,389 1,721,411 

5,373,172 4,728,653 5,930,201 6,469,521 1,276,598 1,201,215 12,579,971 12,399,389 

(310,168) (132,855) (5,870,968) (5,975,240) (911,529) (820,652) (7,092,665) (6,928,747) 

(2,181,314) (2,448,237) - - - - (2,181,314) (2,448,237) 

(1,038,711) (990,252) (4,829) (7,270) (5,612) (22,730) (1,049,152) (1,020,252) 

- - (26,271) (34,936) (31,023) (26,836) (57,294) (61,772) 

(151,895) (207,087) 3,814 (11,904) (76) 21 (148,157) (218,970) 

1,865,177 1,112,145 241,873 692,590 391,091 376,530 2,498,141 2,181,265 

TOTAL

NOTE 12 - CONTINGENT ASSETS AND LIABILITIES AND LEGAL LIABILITIES – TAX AND SOCIAL SECURITY 

ITAÚ UNIBANCO HOLDING CONSOLIDATED is involved in contingencies in the ordinary course of its 

businesses, as follows: 

a) Contingent Assets: there are no contingent assets recorded. 

b) Contingent Liabilities: These are estimated and classified as follows: 

- Calculation criteria: 

Civil lawsuits: Quantified upon judicial notification or individual execution when the claim is awarded a 

final and unappealable judgment regarding lawsuits filed by the Public Attorney’s Office or consumer 

protection associations, and monthly reviewed: 

- Collective (lawsuits related to claims considered similar and usual and the amounts of which are not 

considered significant): according to the statistical references per group of lawsuits, type of legal body 

(Small Claims Court or Regular Court) and claimant; or 

- Individual (lawsuits related to claims considered unusual and the amounts of which are considered 

significant): at the claimed indemnity amount, based on the evidence presented and on the evaluation 

of legal advisors – which considers case law, legal opinions raised, evidence produced in the records 

and the judicial decisions to be issued – relating to the risk level of loss of lawsuits. 

These are adjusted to the amounts deposited as guarantee for their execution or to the definitive 

execution amount (indisputable amount) when the claim is awarded a final and unappealable judgment. 

Labor claims: these are calculated upon judicial notification and adjusted monthly by the moving average 

of payment of lawsuits closed in the last 12 months plus the average cost of fees paid for lawsuits related 

to claims considered similar and usual and adjusted: to the amounts deposited in guarantee; to the 

execution amount (indisputable amount) when it is awarded a final and unappealable decision; or based 

on the individual analysis of the potential amount of probable loss for lawsuits with significant amounts. 

Tax and social security lawsuits: calculated upon judicial notification of administrative proceedings based 

on their monthly adjusted amounts. 

Other Risks: calculated mainly based on the assessment of credit risk on joint obligations. 

- Contingencies classified as probable: are recognized in the accounting books and comprise 

- Civil lawsuits: demanding compensation for property damage and pain and suffering, such as protest of 

bills, return of checks, and inclusion of information in the credit protection registry, most of these 

actions being filed in the Small Claims Court and therefore limited to 40 minimum monthly wages; The 

bank is also party to specific lawsuits over the charging of understated inflation adjustment to savings 

accounts in connection with economic plans. The case law at the Federal Supreme Court is favorable 

to banks in relation to an economic phenomenon similar to savings, as in the case of adjustment to 

time deposits and contracts in general. Additionally, the Superior Court of Justice has recently decided 

that the term for filing public civil actions over understated inflation is five years. In view of such 

decision, some of the lawsuits may be dismissed because they were filed after the five-year period. 

- Labor claims: seeking the recovery of alleged labor rights based on labor legislation specific to the 

related profession, such as overtime, salary equalization, reinstatement, transfer allowance, pension 

plan supplement and other; 

- Tax and social security lawsuits: represented mainly by lawsuits and administrative proceedings 

involving federal and municipal taxes; 

- Other Risks represented basically by the joint obligation for securitized rural loans. 


The table below shows the changes in the respective provisions for contingent liabilities and the respective escrow deposits balances: 


Change in provision for contingent liabilities 

(-) Contingencies guaranteed by indemnity clauses (Note 4o I) 

Subtotal 

Civil 

Labor 

01/01 to 09/30/2010 

Tax and social 

security 

01/01 to 

09/30/2009 

Other Total Total 

2,409,698 3,163,601 1,457,508 257,672 7,288,479 7,731,425 

(98,628) (573,261) (35,331) - (707,220) (692,451) 

2,311,070 2,590,340 1,422,177 257,672 6,581,259 7,038,974 

Restatement/Charges 128,199 53,923 19,078 - 201,200 346,711 

Changes in the period reflected in results (Notes 13f and 13i) 

926,865 364,052 156,449 2,639 1,450,005 1,467,591 

Increase (*) 1,200,576 421,748 296,946 2,639 1,921,909 1,791,306 

Reversal (273,711) (57,696) (140,497) - (471,904) (323,715) 

Payment 

Subtotal 

(+) Contingencies guaranteed by indemnity clauses (Note 4o I) 

Closing balance (Note 13c) 

Closing balance at 09/30/2009 (Note 13c) 

Escrow deposits at 09/30/2010 (Note 13a) 

Escrow deposits at 09/30/2009 (Note 13a) 

(718,278) (288,041) (97,306) - (1,103,625) (1,120,948) 

2,647,856 2,720,274 1,500,398 260,311 7,128,839 7,732,328 

119,290 552,815 51,009 - 723,114 763,858 

2,767,146 3,273,089 1,551,407 260,311 7,851,953 8,496,186 

2,484,325 3,097,143 2,658,351 256,367 8,496,186 

1,438,542 1,541,080 861,389 - 3,841,011 

1,017,249 1,403,107 937,621 - 3,357,977 

(*) Civil provisions include the provision for economic plans amounting to R$ 507,802 (R$ 250,874 from January 1 to September 30, 2009) (Note 22k). 


- Contingencies classified as possible: not recognized in the accounting books and comprise Civil 

lawsuits amounting to R$ 402,334 and Tax and Social Security Lawsuits amounting to R$ 4,597,502. The 

principal characteristics of these lawsuits are described below: 

• IRPJ, CSLL, PIS and COFINS – request for offset dismissed - R$ 496,679: cases in which the liquidity 

and the offset credit certainty are discussed. 

• ISS – Banking Institutions – R$ 482,540: we understand that the banking operation cannot be 

interpreted as a service and/or is not listed under Supplementary Law No. 116/03 or Decree-law No. 

406/68. 

• IRPJ/CSLL - losses on receipt of credits and discounts granted upon credit renegotiation – R$ 

448,133: we defend the deduction as an operating expense and necessary for the financial activity. 

• IRPJ, CSLL, PIS and COFINS – Usufruct of quotas and shares - R$ 349,243: we discuss the 

adequate accounting and tax treatment for the amount received due to the onerous recognition of 

usufruct. 

• IRPJ/CSLL – Taxation of profits abroad – R$ 299,020: we discuss the criteria for determination of 

calculation basis and taxable event. 

• IRPJ – Allowance for loan losses – R$ 279,676: we request the application of the 1.5% rate for 

measuring the expense in view of the non-retroactivity of the Federal Revenue Service Regulatory 

Instruction No. 80/93. 

• IRPJ/CSLL – Goodwill - R$ 236,661: we defend the deductibility of goodwill incurred upon acquisition 

of merged companies. 

• INSS – Non-compensatory amounts – R$ 230,498: we defend the non-taxation of these amounts, 

mainly transportation vouchers and sole bonus. 

• IRPJ/CSLL – Interest on capital – R$ 218,183: we defend the deductibility of interest on capital 

declared to stockholders based on the Brazilian long-term interest rate (TJLP) levied on the 

stockholders’ equity for the year and for prior years. 

• IRPJ/CSLL - Expenses on acquisition of customer portfolio – R$ 178,116: we defend its deduction as 

a required operating expense. 

• ISS – Lease operation R$ 147,910: we discuss the place of service provision and the calculation basis 

amount. 


In ITAÚ UNIBANCO HOLDING CONSOLIDATED, the following are in guarantee of voluntary resources restricted, 

deposited or recorded in the amounts below: 

Securities 

09/30/2010 09/30/2009 

1,430,050 834,732 

Deposits in guarantee 

3,286,141 3,484,817 

Permanent assets (*) 

725,093 771,371 

(*) As per article 32 of Law No. 10,522, of July 19, 2002. On April 4, 2007, in the unconstitutionality lawsuit No. 1.976, the Federal Supreme Court ruled 

unconstitutional the requirement of guarantees for considering voluntary appeals. The company is requesting the cancellation of the pledging of 

guarantees to the Federal Revenue Service. 

The Receivables balance arising from reimbursements of contingencies totals R$ 1,106,278 (R$ 1,024,929 at 

09/30/2009) (Note 13a), basically represented by the guarantee in the Banco Banerj S.A. privatization process 

occurred in 1997, in which the State of Rio de Janeiro created a fund to guarantee the equity recomposition of 

Civil, Labor and Tax Contingencies. 


c) 

Legal Liabilities – Tax and Social Security and Escrow Deposits for Filing Legal Processes – 

recognized at the full amount being questioned and respective escrow deposits, as follows: 

Change in legal liabilities 

01/01 to 01/01 to 

09/30/2010 09/30/2009 


6,821,027 9,082,558 

Charges on taxes 

272,879 673,065 

Changes in the period reflected in results 

88,539 2,097,356 

Increase 435,697 2,226,192 

Reversal (*) (347,158) (128,836) 

Payment (*) 

(1,917,790) (184,032) 

Closing balance (Note 14c) 

5,264,654 11,668,947 

(*) From 01/01 to 09/30/2010 refers basically to the effects arising from the adhesion to the Cash or Installment Payment of Federal Taxes 

(Note 12d). 


Change in escrow deposits 

01/01 to 01/01 to 

09/30/2010 09/30/2009 


3,695,827 4,422,972 

Appropriation of income 

179,436 403,185 

Changes in the period 

103,619 188,550 

Deposited 109,331 390,532 

Withdrawals (2,735) (17,188) 

Conversion into income (2,977) (184,794) 

Closing balance (Note 13a) 

3,978,882 5,014,707 


The main natures of processes are described as follows: 

• PIS and COFINS – R$ 2,669,311 – Revenue x Gross revenue: We request either the levy of taxes only on 

the revenue understood as income from sale of assets and services or the levy of PIS Repique (calculated 

on income tax payable) (at 5% of income tax due), in lieu of the levy on total revenues recorded, by alleging 

the unconstitutionality of paragraph 1 of article 3 of Law No. 9,718/98. The balance of the corresponding 

deposit in guarantee totals R$ 1,231,303. 

• CSLL – R$ 652,362 – Principle of equality: We request the levy of tax of 9%, in lieu of 15%, for financial and 

insurance companies, by alleging the unconstitutionality of article 41 of Law No. 11.727/08. The 

corresponding escrow deposit totals R$ 157,360. 

• IRPJ and CSLL – R$ 461,236 - Taxation of profits earned abroad: we defend the exemption of the positive 

equity in earnings from foreign investments. The corresponding escrow deposit totals R$ 448,664. 

• PIS – R$ 351,452 – Principles of anteriority, anteriority over 90 days and non-retroactivity: We request the 

rejection of Constitutional Amendments No. 10/96 and 17/97 in view of the principle of anteriority and nonretroactivity, 

aiming at making payments based on Supplementary Law No. 07/70. The corresponding 

escrow deposit totals R$ 60,607. 

• INSS – R$ 254,277 – Service providers that are individuals and management members: We request the nonlevy 

of taxes on payment to service providers that are individuals and management members, set forth by 

Supplementary Law No. 84/96, by alleging its unconstitutionality. The corresponding escrow deposit totals 

R$ 230,038. 

d) Program for Cash or Installment Payment of Federal Taxes - Law No. 11,941/09 

ITAÚ UNIBANCO HOLDING and its subsidiaries adhered to the Program for Cash or Installment Payment of 

Federal Taxes, established by Law No. 11,941, of May 27, 2009. The program included the debits 

administered by the Federal Revenue Service of Brazil and the General Attorney’s Office of the National 

Treasury past due before November 30, 2008. The main proposition included in this program was the 

increase in the PIS and COFINS calculation basis, as set forth by paragraph 1 of article 3 of Law No. 9,718 

of November 27, 1998, classified as Legal Liability. The net effect in Income was R$ 144,712, recorded in 

Other Operating Income (Note 22k). 


NOTE 13 - BREAKDOWN OF ACCOUNTS 

a) Other sundry receivables 

09/30/2010 09/30/2009 

Deferred tax assets (Note 14b I) 

26,573,620 27,426,884 

Social contribution for offset (Note 14b I) 

851,633 955,427 

Taxes and contributions for offset 

2,259,943 2,974,685 

Escrow deposits in guarantee of provision for contingent liabilities (Note 12b) 

7,127,152 6,842,794 

Escrow deposits for legal liabilities – tax and social security (Note 12c) 

3,978,882 5,014,707 

Escrow deposits for foreign fund raising program 

1,932,880 349,000 

Receivables from reimbursement of contingent liabilities (Note 12b) 

1,106,278 1,024,929 

Sundry domestic debtors 

861,725 768,652 

Sundry foreign debtors 

91,287 119,123 

Recoverable payments 

35,357 34,953 

Salary advances 

187,083 177,765 

Amounts receivable from related companies 

6,562 50,657 

Operations without credit granting characteristics 

219,795 498,110 

Securities and credits receivable 547,006 805,534 


Other 

151,598 142,510 

Total 

45,383,795 46,380,196 

At ITAÚ UNIBANCO HOLDING, Other Sundry Receivables are basically composed of Taxes and Contributions for 

Offset of R$ 122,637 (R$ 146,329 at 09/30/2009) and Deferred Tax Assets of R$ 953,492 (R$ 836,564 at 

09/30/2009) (Note 14b I). 


) Prepaid expenses 

Commissions 

09/30/2010 09/30/2009 

1,676,982 2,280,357 

Related to vehicle financing 981,497 1,622,283 

Related to insurance and pension plan 467,368 515,968 

Other 228,117 142,106 

Credit Guarantee Fund (*) 573,546 760,702 

Advertising 

331,100 384,314 

Other 

244,667 250,924 

Total 

2,826,295 3,676,297 

(*) Refers to spontaneous payment, equivalent to the prepayment of installments of the contribution to the Fundo Garantidor de Crédito 

(Brazilian deposit guarantee fund), according to BACEN Circular No. 3,416, of 10/24/2008. 


c) Other sundry liabilities 

09/30/2010 09/30/2009 

Provisions for contingent liabilities (Note 12b) 

7,851,953 8,496,186 

Provisions for sundry payments 

2,082,527 1,947,971 

Personnel provision 

1,437,445 1,273,277 

Sundry creditors - local 

845,072 765,496 

Sundry creditors - foreign 

610,562 208,288 

Liabilities for official agreements and rendering of payment services 

1,204,901 447,230 

Related to insurance operations 

994,966 1,110,943 

Liabilities for purchase of assets and rights 

55,435 13,182 

Creditors of funds to be released 

609,824 316,156 

Funds from consortia participants 

80,249 144,613 

Provision to cover actuarial deficit (Note 19c) 

135,987 121,674 

Provision for integration expenditures with ITAÚ UNIBANCO merger (1) 

312,335 978,978 

Provision for health insurance (2) 

603,841 540,808 

Expenses for lease interests (Note 4i) 

163,635 122,889 

Other 

151,147 290,569 

Total 

17,139,879 16,778,260 

(1) Provision set up at 12/31/2008 to cover expenditures on communication with customers, adequacy of systems and personnel; 

(2) 

Provision set up to cover possible future deficits up to the total discontinuance of the portfolio, arising from the difference of 

adjustments to monthly installments, authorized annually by the regulatory body, and the actual variation of hospital costs that 

affect the compensation of claims (Note 13i). 

In ITAÚ UNIBANCO HOLDING, Other Sundry Liabilities are basically composed of Liabilities for Share- 

Based Instruments. 


d) Banking service fees 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

Asset management 

1,868,658 1,629,437 

Funds management fees 

1,799,678 1,601,481 

Consortia management fee 68,980 27,956 

Current account services 

441,433 335,799 

Credit cards 

4,898,373 4,233,125 

Annual fees 

749,582 644,831 

Other services 

4,148,791 3,588,294 

Relationship with stores 3,795,637 3,292,224 

Credit card processing 353,154 296,070 

Sureties and credits granted 

Loan operations 

Guarantees provided 

Receipt services 

Collection fees 

Collection services 

Other 

Brokerage 

Custody services and management of portfolio 

Economic and financial advisory 

Foreign exchange services 

Other services 

Total 

1,069,946 950,175 

647,700 571,434 

422,246 378,741 

975,589 885,651 

790,854 731,381 

184,735 154,270 

1,242,089 931,829 

354,918 221,006 

134,593 114,848 

194,153 118,501 

51,427 50,045 

506,998 427,429 

10,496,088 8,966,016 


e) Income from bank charges 

Loan operations/registration 

Deposit account 

Transfer of funds 

Service package fees and other 

Total 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

995,081 760,911 

132,305 117,986 

91,802 84,726 

1,154,907 1,066,348 

2,374,095 2,029,971 


f) 

Personnel expenses 

Compensation 

Charges 

Welfare benefits 

Training 

Labor claims and termination of employees (Note 12b) 

Total 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

(6,114,510) (5,849,772) 

(1,535,991) (1,397,762) 

(1,248,648) (1,056,313) 

(146,810) (79,427) 

(368,207) (465,239) 

(9,414,166) (8,848,513) 

g) 

Other administrative expenses 

Data processing and telecommunications 

Depreciation and amortization 

Installations 


Financial system services 

Advertising, promotions and publications 

Transportation 

Materials 

Security 

Travel 

Other 

Total 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

(2,358,942) (1,851,804) 

(1,053,361) (990,457) 

(1,812,299) (1,360,028) 

(2,137,807) (2,138,417) 

(276,036) (260,860) 

(819,823) (641,529) 

(459,466) (280,324) 

(336,585) (211,438) 

(326,537) (280,042) 

(115,016) (87,280) 

(354,995) (328,637) 

(10,050,867) (8,430,816) 


h) Other operating revenues 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

Reversal of operating provisions 

439,307 191,703 

Contingent assets and liabilities and legal liabilities – tax and social security (Notes 12b, c and d) 390,104 128,836 

Other 49,203 62,867 

Recovery of charges and expenses 

55,608 223,940 

Other 

303,595 157,608 

Total 

798,510 573,251 

i) 

Other operating expenses 

Provision for contingencies (Note 12b) 

Civil 

Tax and social security 

Other 

Selling - Credit cards 

Claims 

Joint venture (*) 

Amortization of goodwill on investments (Notes 2k) 

Provision for health insurance (Note 13c) 

Refund of interbank costs 

Other 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

(984,791) (1,011,467) 

(926,865) (944,073) 

(55,287) (62,262) 

(2,639) (5,132) 

(1,110,841) (1,083,781) 

(405,146) (413,516) 

- (550,000) 

- (556,576) 

(7,850) (10,173) 

(139,920) (168,432) 

(412,272) (699,990) 

Total 

(3,060,820) (4,493,935) 

(*) Amount paid on August 28, 2009 to Companhia Brasileira de Distribuição S.A., in order to exclude the obligation of exclusivity of 

ITAÚ UNIBANCO in the joint venture agreement related to Financeira Itaú CDB S.A. Crédito, Financiamento e Investimento (Note 

22k). 

j) 

Non-operating income – from 01/01 to 09/30/2009 is basically composed of Sale of Visa Inc and Visa Net shares. 


NOTE 14 - TAXES 

a) 

Composition of expenses for taxes and contributions 

I - 

We show below the Income Tax and Social Contribution due on the operations for the period and on 

temporary differences arising from additions and exclusions: 


01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

Income before income tax and social contribution 14,273,384 13,262,591 

Charges (income tax and social contribution) at the rates in effect (Note 4p) (5,709,354) (5,305,036) 

Increase/decrease to income tax and social contribution charges arising from: 

Permanent additions (exclusions) 1,388,748 (578,472) 

Investments in affiliates 72,192 51,153 

Foreign exchange variation on investments abroad (345,559) (1,906,153) 

Interest on capital 1,139,226 1,118,381 

Dividends, interest on external debt bonds and tax incentives 243,041 370,970 

Other 279,848 (212,823) 

Temporary (additions) exclusions 1,137,919 500,651 

Allowance for loan losses (1,353,461) (2,112,519) 

Excess (insufficiency) of depreciation of leased assets 671,107 2,294,691 

Adjustment to market value of trading securities and derivative financial instruments and 

adjustments from operations in futures markets 12,288 165,538 

Legal liabilities – tax and social security, contingent liabilities and restatement of escrow 

deposits 694,121 (585,363) 

Realization of goodwill on purchase of investments 1,255,253 982,394 

Integration expenditures with ITAÚ UNIBANCO merger 213,494 141,536 

Other (354,883) (385,626) 

(Increase) offset of tax losses/social contribution loss carryforwards (813,985) (827,348) 

Expenses for income tax and social contribution (3,996,672) (6,210,205) 


Increase (reversal) for the period (323,934) 326,697 

Prior periods increase (reversal) 362,118 263,843 

Income (expenses) from deferred taxes 38,184 590,540 

Total income tax and social contribution (3,958,488) (5,619,665) 

II - Composition of tax expenses: 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

PIS and COFINS (2,260,105) (2,413,205) 

ISS (569,102) (363,813) 

Other (236,629) (259,899) 

Total (Note 4p) (3,065,836) (3,036,917) 

At ITAÚ UNIBANCO HOLDING tax expenses are basically composed of PIS and COFINS in the amount of R$ 

23,813 (R$ 14,623 from 01/01 to 09/30/2009). 


III- Tax effects on foreign exchange management of investments abroad 

In order to minimize the effects on income in connection with the foreign exchange variation on investments 

abroad, net of respective tax effects, ITAÚ UNIBANCO HOLDING carries out derivative transactions in 

foreign currency (hedge), as mentioned in Note 22b. 

Results of these transactions are considered in the calculation basis of income tax and social contribution, 

according to their nature, while the foreign exchange variation on investments abroad is not included therein, 

pursuant to tax legislation in force. 



b) Deferred taxes 

I - 

25,911,438 (5,980,777) 6,480,254 26,410,915 27,339,252 

2,989,576 (332,163) 1,519,463 4,176,876 3,658,757 

8,985,851 (2,840,142) 3,474,657 9,620,366 8,348,603 

7,827,348 (2,524,736) 3,230,706 8,533,318 7,156,709 

104,543 (104,543) 101,318 101,318 172,052 

81,012 (15,700) 49,546 114,858 73,549 

771,874 (143,893) 69,129 697,110 731,319 

201,074 (51,270) 23,958 173,762 214,974 

35,613,237 45,482,066 13,936,011 (2,808,472) 1,486,134 12,613,673 15,331,892 

29,509,237 39,378,066 11,860,651 (2,808,472) 1,486,134 10,538,313 13,113,884 

2,665,151 7,621,644 1,989,617 (660,937) 18,582 1,347,262 2,415,394 

Provision for contingent liabilities 

6,569,569 7,355,899 2,344,558 (424,632) 522,422 2,442,348 2,715,904 

Civil 2,647,856 2,311,990 899,984 (284,740) 413,208 1,028,452 903,373 

Labor 2,278,537 2,215,595 843,564 (27,466) 37,249 853,347 835,734 

Tax and social security 1,500,398 2,562,528 495,553 (62,719) 71,965 504,799 871,260 

Other 142,778 265,786 105,457 (49,707) - 55,750 105,537 

164,844 55,800 28,628 (411) 36,241 64,458 15,346 

13,868,124 17,441,924 5,721,535 (1,006,373) - 4,715,162 5,930,254 

367,544 978,978 286,806 (161,841) - 124,965 332,852 

603,841 540,808 238,396 - 3,141 241,537 216,323 

5,270,164 5,383,013 1,251,111 (554,278) 905,748 1,602,581 1,487,811 

6,104,000 6,104,000 2,075,360 - - 2,075,360 2,218,008 

436,756 219,080 72,677 (22,521) 112,549 162,705 87,632 

Total 36,049,993 45,701,146 25,984,115 (6,003,298) 6,592,803 26,573,620 27,426,884 

(*) 

The deferred tax asset balance and its changes, segregated based on its origin and disbursements incurred, are represented as follows: 

Reflected in income and expense accounts 

Related to income tax and social contribution loss carryforwards 

Related to disbursed provisions 

Allowance for loan losses 

Adjustment to market value of securities and derivative financial instruments 

(assets/liabilities) 

Allowance for real estate 

Goodwill on purchase of investments 

Other 

Related to non-disbursed provisions (*) 

Related to the operation 

Legal liabilities – tax and social security 

Adjustments from operations in futures settlement market 

Goodwill on purchase of investments 

Provision for integration expenditures with ITAÚ UNIBANCO merger 

Provision related to health insurance operations 

Other non-deductible provisions 

Related to additional provisions exceeding the minimum required not disbursed – 

allowance for loan losses 

Reflected in stockholders’ equity accounts – adjustment to market value of 

available-for-sale securities (Note 2b) 

Social contribution for offset arising from Option foreseen in article 8 of 

Provisional Measure No. 2,158-35 of 08/24/2001 

PROVISIONS DEFERRED TAX ASSETS 

09/30/2010 09/30/2009 12/31/2009 

Realization / 

Reversal 

Increase 09/30/2010 

09/30/2009 

- 933,723 (82,090) - 851,633 955,427 

From a financial point of view, rather than recording the provision of R$ 35,613,237 (R$ 45,482,066 at 09/30/2009) and deferred tax assets of R$ 12,613,673 (R$ 15,331,892 at 09/30/2009), only the net provisions of the 

corresponding tax effects should be considered, which would reduce the total deferred tax assets from R$ 26,573,620 (R$ 27,426,884 at 09/30/2009) to R$ 13,959,947 (R$ 12,094,992 at 09/30/2009). 

At ITAÚ UNIBANCO HOLDING, the deferred tax assets totaled R$ 953,492 (R$ 836,564 at 09/30/2009) and are basically represented by tax losses and social contribution loss carryforwards 

of R$ 795,195 (R$ 768,911 at 09/30/2009), which expected realization is up to one year.


II - Provision for Deferred Income Tax and Social Contribution balance and its changes are shown as follows: 

12/31/2009 

Realization / 

Reversal 

Increase 09/30/2010 09/30/2009 

Reflected in income and expense accounts 

8,552,838 (68,773) 959,786 9,443,851 8,099,693 

Depreciation in excess – leasing 7,567,878 - 759,170 8,327,047 7,172,323 

Restatement of escrow deposits and contingent liabilities 665,918 - 98,061 763,979 658,268 

Adjustment to market value of securities and derivative financial instruments 144,540 - 39,349 183,888 73,861 

Adjustments from operations in futures settlement market 42,463 (21,188) - 21,275 89,788 

Taxation of results abroad – capital gains 35,911 - 7,371 43,282 31,230 

Other 96,129 (47,585) 55,836 104,380 74,223 

Reflected in stockholders’ equity accounts – adjustment to market value of 

available-for-sale securities (Note 2b) 

141,521 - 189,553 331,074 254,501 

Total 

8,694,359 (68,773) 1,149,339 9,774,925 8,354,194

III- 

The estimate of realization and present value of deferred tax assets and social contribution for offset, arising from 

Provisional Measure No. 2,158-35 of August 24, 2001 and from the Provision for Deferred Income Tax and Social 

Contribution existing at September 30, 2010, in accordance with the expected generation of future taxable income, 

based on the history of profitability and technical feasibility studies, are: 

Temporary differences 

Deferred tax assets 

Tax loss/social 

contribution loss 

carryforwards 

Total 

Social 

contribution for 

offset 

Provision for 

deferred income 

tax and social 

contribution 

Net deferred 

taxes 

2010 4,295,227 - 4,295,227 21,963 (748,981) 3,568,209 

2011 4,997,768 637,546 5,635,314 153,464 (1,575,230) 4,213,548 

2012 4,596,799 996,073 5,592,872 239,564 (2,238,353) 3,594,083 

2013 3,419,341 535,734 3,955,075 119,910 (2,580,769) 1,494,216 

2014 2,118,661 381,147 2,499,808 119,686 (1,781,648) 837,846 

Over 2014 2,968,948 1,626,376 4,595,324 197,046 (849,944) 3,942,426 

Total 22,396,744 4,176,876 26,573,620 851,633 (9,774,925) 17,650,328 

Present value (*) 20,104,921 3,385,068 23,489,989 734,982 (8,535,207) 15,689,764 

(*) The average funding rate, net of tax effects, was used to determine the present value. 

The projections of future taxable income include estimates related to macroeconomic variables, exchange rates, 

interest rates, volume of financial operations and services fees and others, which can vary in relation to actual data 

and amounts. 

Net income in the financial statements is not directly related to taxable income for income tax and social 

contribution, due to differences existing between accounting criteria and tax legislation, besides corporate aspects. 

Accordingly, we recommend that the trend of the realization of deferred tax assets arising from temporary 

differences, income tax and social contribution loss carryforwards be not used as an indication of future net 

income. 

IV - 

In view of the unconstitutionality lawsuit related to the increase in the social contribution rate, established by 

Articles 17 and 41 of Law No. 11,727 of June 24, 2008, filed on June 26, 2008 by the National Confederation of the 

Financial System (CONSIF), deferred tax assets were recorded up to the amount added to the Tax Liabilities, while 

the amount of R$ 2,022,654 (R$ 2,372,366 at 09/30/2009) is unrecorded. 


c) Tax and social security contributions 

09/30/2010 09/30/2009 

Taxes and contributions on income payable 

Taxes and contributions payable 

Provision for deferred income tax and social contribution (Note 14b II) 

Legal liabilities – tax and social security (Note 12c) 

Total 

1,548,914 2,486,836 

4,744,075 850,584 

9,774,925 8,354,194 

5,264,654 11,668,947 

21,332,568 23,360,561 

At ITAÚ UNIBANCO HOLDING, the balance of Tax and Social Security Contributions totals R$ 416,146 (R$ 

336,766 at 09/30/2009) and is basically comprised of Legal Liabilities - Tax and Social Security of R$ 412,191 

(R$ 301,068 at 09/30/2009), whose nature refers Revenue x Gross revenue: We request either the levy of taxes 

only on the revenue understood as income from sale of assets and services or the levy of PIS Repique 

(calculated on income tax payable) (at 5% of income tax due), in lieu of the levy on total revenues recorded, by 

alleging the unconstitutionality of paragraph 1 of article 3 of Law No. 9,718/98. 


d) 

Taxes paid or provided for and withheld from third parties 

The amount of taxes paid or provided for is basically levied on income, revenue and payroll. In relation to 

the amounts withheld and collected from third parties, the Company started to take into consideration the 

interest on capital paid and on the service provision, in addition to that levied on financial operation. 

09/30/2010 09/30/2009 

Taxes paid or provided for 9,420,430 11,456,439 

Taxes withheld and collected from third parties 5,712,085 5,694,710 

Total 15,132,515 17,151,149 



NOTE 15 – PERMANENT ASSETS 

a) Investments 

I - 

Change of investments 

Companies 

Balances at 

12/31/2009 

Amortization of 

goodwill 

Dividends receivable 

(3) 

Equity in 

earnings of 

subsidiaries 

Adjustments in 

marketable 

securities of 

subsidiaries and 

Other 

Balances at 

09/30/2010 

Balances at 

09/30/2009 

Equity in earnings of 

subsidiaries from 01/01 

to 09/30/2009 

Domestic 54,439,465 (4,752) (501,764) 6,060,203 33,003 60,026,155 55,460,331 5,015,599 

Itaú Unibanco S.A. (1a)(5a)(5d)(6a)(7a) 42,161,903 (4,752) (457,459) 3,636,577 (7,457) 45,328,812 42,420,997 3,257,098 

Banco Itaú BBA S.A. (5b)(5e)(6b)(7b) 4,940,599 - (3,804) 693,914 34,449 5,665,158 5,073,233 1,210,357 

Itauseg Participações S.A. (7c)(8) 3,745,886 - - 159,105 (2,177) 3,902,814 3,748,117 249,134 

Banco Itaucard S.A. (2)(5c)(5f)(6c)(7d)(8) 1,810,386 - - 1,253,200 (1,089) 3,062,497 2,452,444 29,005 

Itaú BBA Participações S.A. 1,398,437 - (40,501) 185,216 9,282 1,552,434 1,400,209 322,696 

Itaú Corretora de Valores S.A. (2)(7e)(8) 382,254 - - 132,191 (5) 514,440 365,331 (52,691) 

Foreign 1,940,723 (38,556) (18,090) 118,971 1,396 2,004,444 1,975,788 (321,029) 

Itaú Chile Holdings, Inc. (1b) 1,618,072 (33,931) - 91,780 (329) 1,675,592 1,637,151 (295,169) 

Banco Itaú Uruguay S.A. (1c) 216,686 (3,534) - 12,144 1,725 227,021 219,904 (16,103) 

Oca S.A. (1d) 72,044 (939) (18,090) 14,612 - 67,627 85,494 (5,047) 

Oca Casa Financiera S.A. (1e) 31,539 (136) - 523 - 31,926 30,881 (4,460) 

Aco Ltda. (1f) 2,382 (16) - (88) - 2,278 2,358 (250) 

GRAND TOTAL 56,380,188 (43,308) (519,854) 6,179,174 34,399 62,030,599 57,436,119 4,694,570 

(1) Includes goodwill in the amounts of: (a) R$ 51,214; (b) R$ 282,760; (c) R$ 29,449; (d) R$ 7,826; (e) R$ 10,137 and (f) R$ 133; 

(2) The investment and the equity in earnings reflect the different interest in preferred shares, profit sharing and dividends; 

(3) Income receivable includes Dividends receivable; 

(4) Includes foreign exchange variation in the amounts of: (a) R$ (52,890) and (b) R$ (430,208); 

(5) Includes Unrealized results of operations in the amounts of: (a) R$ (1,478), (b) R$ 1,069 and (c) R$ 38,563 in investments in the amounts of: (d) R$ (4,599), (e) R$ (194) and (f) R$ (113,222); 

(6) Investments and Equity in earnings reflect adjustments, in order to standardize procedures under the scope of the investor, in the amounts of: (a) R$ 7,689 and R$ (13,412), (b) R$ (80,167) and R$ 8,980 and (c) R$ 4,916 and R$ (14,486); 

(7) Includes installments of dividends provided in the amounts of: (a) R$ 474,064, (b) R$ 75,812, (c) R$ 1,194, (d) R$ 241,036 and (e) R$ 29,580; 

(8) Equity in earnings does not reflect the current interest in results of subsidiary company, due to variation in interest for the period. 

Domestic 

Itaú Unibanco S.A. 

Banco Itaú BBA S.A. 

Itauseg Participações S.A. 

Banco Itaucard S.A. 

Itaú BBA Participações S.A. 

Itaú Corretora de Valores S.A. 

Foreign 

Itaú Chile Holdings, Inc. 

Banco Itaú Uruguay S.A. 

Oca S.A. 

Oca Casa Financiera S.A. 

Aco Ltda. 

Companies Capital 

Stockholders’ 

equity 

Net income (loss) for 

the period 

Number of shares owned by 

ITAÚ UNIBANCO HOLDING 

Common Preferred Quotas 

Statutory 

participation in 

income 

Voting capital 

(%) 

Equity share 

in capital 

(%) 

39,676,320 44,800,444 3,651,468 2,081,169,523 2,014,258,290 - 100.00 100.00 

4,224,086 7,197,465 868,139 3,041,104 5,284,526 - 57.55 78.77 

8,682,908 11,133,718 358,683 1,582,676,636 - - 35.04 35.04 

15,553,776 18,996,252 1,542,253 3,592,433,657 1,277,933,118 - 1.50 2.04 

797,900 1,552,435 185,216 170,647 341,294 - 100.00 100.00 

1,046,841 1,619,968 145,750 - 811,503 - - 1.94 

304,039 1,392,832 126,970 100 - - 100.00 100.00 

137,843 197,572 23,329 1,639,430,739 - - 100.00 100.00 

12,630 59,799 19,152 1,502,176,740 - - 100.00 100.00 

16,300 30,789 2,363 646 - - 100.00 100.00 

11 2,162 48 - - 131 99.24 99.24

II - 

Composition of investments 

09/30/2010 09/30/2009 

Investment in affiliates 

1,084,678 1,364,672 

Domestic 

358,727 438,079 

Allianz Seguros S.A. - 151,325 

Serasa S.A. 244,817 257,885 

Other 113,910 28,869 

Foreign - BPI 

725,951 926,593 

Other investments 1,320,280 1,091,652 

Investments through tax incentives 159,809 161,030 

Equity securities 9,579 8,099 

Shares and quotas 381,418 145,526 

Interest in Instituto de Resseguros do Brasil - IRB 229,699 227,170 

Other 539,775 549,826 


Total 2,226,272 2,283,674 

III- 

Equity in earnings of affiliates and other investments 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

Investment in affiliates - Domestic 

47,782 69,678 

Investment in affiliates - Foreign 

63,949 58,204 

Dividends received from Other investments 75,087 33,298 

Other 

(6,337) 19,189 

Total 180,481 180,369 



b) Fixed assets, goodwill and intangible assets 

REAL ESTATE IN USE 

ACQUISITION 

S 

DISPOSALS 

DEPRECIATION/ 

AMORTIZATION 

EXPENSES (3) 

OTHER COST 

ACCUMULATED 

DEPRECIATION/ 

AMORTIZATION 

NET BOOK 

AMOUNT 

09/30/2009 

NET BOOK 

AMOUNT 

4,353,175 1,344,097 (52,456) (907,382) (39,629) 11,281,927 (6,584,122) 4,697,805 4,072,414 

REAL ESTATE IN USE (1) 2,371,981 295,303 (4,245) (233,174) 45,795 4,451,695 (1,976,035) 2,475,660 2,288,651 

Land 935,492 93,495 (1,868) - (916) 1,026,203 - 1,026,203 821,949 

Buildings 844,565 82,940 (566) (77,397) 31,808 2,388,991 (1,507,641) 881,350 660,322 

Improvements 591,924 118,868 (1,811) (155,777) 14,903 1,036,501 (468,394) 568,107 806,380 

OTHER FIXED ASSETS 1,981,194 1,048,794 (48,211) (674,208) (85,424) 6,830,232 (4,608,087) 2,222,145 1,783,763 

Installations 379,576 147,409 (3,944) (173,012) 12,137 893,257 (531,091) 362,166 200,669 

Furniture and equipment 400,549 172,720 (1,773) (34,986) (161,093) 757,323 (381,906) 375,417 386,143 

EDP systems 968,429 664,767 (30,347) (430,816) 68,580 4,570,437 (3,329,824) 1,240,613 979,294 

Other (communication, security and transportation) 232,640 63,898 (12,147) (35,394) (5,048) 609,215 (365,266) 243,949 217,657 

GOODWILL (Notes 2a, b and 4k) 

INTANGIBLE ASSETS 

(1) 

(2) 

(3) 

- 74,467 - - - 74,467 - 74,467 - 

3,748,220 321,832 (70,931) (761,910) 35,359 5,150,463 (1,877,893) 3,272,570 3,587,531 

RIGHTS FOR ACQUISITION OF PAYROLLS (2) 1,684,190 120,718 (70,931) (496,345) - 2,459,345 (1,221,713) 1,237,632 1,856,805 

OTHER INTANGIBLE ASSETS 2,064,030 201,114 - (265,565) 35,359 2,691,118 (656,180) 2,034,938 1,730,726 

Association for the promotion and offer of financial products and 

services 

NET BALANCE 

AT 12/31/2009 

1,388,050 69,909 - (119,586) 1,255 1,382,136 (42,508) 1,339,628 1,135,790 

Expenditures on acquisition of software 477,691 130,457 - (124,011) 43,250 1,030,600 (503,213) 527,387 391,300 

Right to manage investment funds 190,505 - - (21,477) (4,432) 265,449 (100,853) 164,596 201,626 

Other intangible assets 7,784 748 - (491) (4,714) 12,933 (9,606) 3,327 2,010 

GRAND TOTAL 

CHANGES 

09/30/2010 

8,101,395 1,740,396 (123,387) (1,669,292) (4,270) 16,506,857 (8,462,015) 8,044,842 7,659,945 

Includes amounts pledged in guarantee of voluntary deposits (Note 12b); 

Represents the recording of amounts paid for acquisition of rights to provide services of payment of salaries, proceeds, retirement and pension benefits, and similar benefits; 

Amortization expenses of the rights for acquisition of payrolls and partnerships are disclosed in the expenses on financial operations.

NOTE 16 – STOCKHOLDERS’ EQUITY 

a) Shares 

Capital comprises 4,570,936,219 book-entry shares with no par value, of which 2,289,286,475 are common and 

2,281,649,744 are preferred shares without voting rights, but with tag-along rights, in the event of the public offer of common 

shares, at a price equal to 80% of the amount paid per share with voting rights in the controlling stake, as well as a dividend 

at least equal to that of the common shares. Capital stock amounts to R$ 45,000,000 (R$ 45,000,000 at 09/30/2009), of 

which R$ 31,376,430 (R$ 36,147,186 at 09/30/2009) refers to stockholders domiciled in the country and R$ 13,623,570 (R$ 

8,852,814 at 09/30/2009) refers to stockholders domiciled abroad. 

The table below shows the change in shares of capital stock and treasury shares during the period: 

NUMBER 

Common Preferred Total 

Amount 

Shares of capital stock at 12/31/2009 and 09/30/2010 

2,289,286,475 2,281,649,744 4,570,936,219 

Treasury shares at December 31, 2009 (*) 

2,202 43,588,307 43,590,509 (1,031,327) 

Exercised options - Granting of stock options – Simple and Bonus optio - (9,473,815) (9,473,815) 224,152 

Disposals – stock option plan - (3,643,051) (3,643,051) 86,195 

Treasury shares at September 30, 2010 (*) 

Outstanding shares at 09/30/2010 

2,202 30,471,441 30,473,643 (720,980) 

2,289,284,273 2,251,178,303 4,540,462,576 

Outstanding shares at 09/30/2009 

2,289,284,273 2,234,474,318 4,523,758,591 

(*) Own shares, purchased based on authorization of the Board of Directors, to be held in Treasury for subsequent cancellation of replacement in the 

market. 

We detail below the average cost of treasury shares and their market price at 09/30/2010: 

Cost/Market value 


Common 

Preferred 

Average cost 9.65 23.66 

Market value 30.85 40.47 


) Dividends 

Stockholders are entitled to a mandatory dividend of not less than 25% of annual net income, which is 

adjusted according to the rules set forth in Brazilian Corporate Law. Both types of shares participate equally, 

after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per 

share to be paid to preferred shares. 

The calculation of the monthly advance of mandatory minimum dividend is based on the share position on 

the last day of the prior month, taking into consideration that the payment is made on the first business day 

of the subsequent month, in the amount of R$ 0.012 per share. The value per share will be maintained 

according to resolution adopted at the A/ESM held on April 24, 2009, so that total amounts monthly paid by 

the Company to stockholders will be increased by 10%, from October 1, 2009, date the bonus shares are 

included in the share position. 

I - Calculation 

Net income 

Adjustments: 

(-) Legal reserve 

Dividend calculation basis 

Mandatory minimum dividends 

Dividends paid/provided for 

7,218,769 

(360,939) 

6,857,830 

1,714,457 

2,887,079 42.1% 

II – Payments/Provision of interest on capital and dividends 

Gross WTS Net 

Paid / Prepaid 

1,552,667 (167,648) 1,385,019 

Dividends - 8 monthly installments of R$ 0.012 per share paid from February to September 2010 435,011 - 435,011 

Interest on capital - R$ 0.2465 per share, paid on 08/20/2010 1,117,656 (167,648) 950,008 

Provided for (1) 

1,757,524 (255,464) 1,502,060 

Dividends - 1 monthly installment of R$ 0.012 per share, paid on 10/01/2010 54,427 - 54,427 

Interest on capital - R$ 0.3751 per share 1,703,097 (255,464) 1,447,633 

Total from 01/01 to 09/30/2010 - R$ 0.6363 net per share 

3,310,191 (423,112) 2,887,079 

Total from 01/01 to 09/30/2009 - R$ 0.5336 net per share (2) 

2,630,544 (327,377) 2,303,167 

(1) Recorded in Other Liabilities – Social and Statutory. 

(2) For better comparability, outstanding shares in the period of 06/30/2009 were adjusted by the bonus carried out on 08/28/2009. 


c) Capital and revenue reserves 

09/30/2010 09/30/2009 

CAPITAL RESERVES 

578,390 631,512 

Premium on subscription of shares 

283,512 283,512 

Granted options recognized – Law No. 11,638 293,773 346,895 

Reserves from tax incentives and restatement of equity securities and other 

REVENUE RESERVES 

Legal 

1,105 1,105 

22,813,617 17,891,462 

3,100,854 2,628,151 

Statutory: 

19,354,832 13,263,311 

Dividends equalization (1) 6,083,105 4,607,446 

Working capital increase (2) 5,369,356 3,447,900 

Increase in capital of investees (3) 7,902,371 5,207,965 

Unrealized profits (4) 

357,931 2,000,000 

(1) Reserve for Dividends Equalization – its purpose is to guarantee funds for the payment of advances of dividends, including interest on capital, to 

maintain the flow of the stockholders’ compensation; 

(2) 

(3) 

(4) 

Reserve for Working Capital Increase – its purpose is to guarantee funds for the company’s operations; 

Reserve for Increase in Capital of Investees – its purpose is to guarantee the preferred subscription right in the capital increases of investees; 

Refers to the excess portion of mandatory minimum dividend in relation to realized portion of net income for 2008, composed of in accordance 

with article 197 of Brazilian Corporate Law. 

d) Reconciliation of net income and stockholders’ equity (Note 2c) 

Net income 


01/01 to 01/01 to 

09/30/2010 09/30/2009 

09/30/2010 09/30/2009 

ITAÚ UNIBANCO HOLDING 7,218,769 5,471,623 67,827,873 62,656,290 

Amortization of goodwill 2,212,054 1,382,117 (10,602,801) (13,792,331) 

Unrealized income (loss) 2,338 80 - (2,365) 

ITAÚ UNIBANCO HOLDING CONSOLIDATED 9,433,161 6,853,820 57,225,072 48,861,594 


e) Minority interest in subsidiaries 


Results 

Unibanco Participações Societárias S.A. 

Itau Bank, Ltd. (*) 

09/30/2010 09/30/2009 

01/01 to 

09/30/2010 

01/01 to 

09/30/2009 

1,186,183 1,109,300 (72,967) (49,128) 

665,974 698,957 - - 

Redecard S.A. 538,693 527,301 (525,423) (504,284) 

Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento 216,246 104,092 (49,152) (2,475) 

Itaú XL Seguros Corporativos S.A.(Note 2a) 

- 122,218 (6,773) (18,281) 

Biu Participações S.A. 99,472 83,360 (15,600) (19,888) 

Itaú Gestão de Ativos S.A. 

Biogeração de Energia S.A. 

Investimentos Bemge S.A. 

Três "B" Empreendimentos e Participações Ltda. 

Investment funds 

Other 

Total 

(*) 

59,719 60,967 317 (1,148) 

27,369 28,796 464 (4,615) 

17,200 16,739 (762) (801) 

- 75,045 - (7,503) 

745,443 607,979 (40,314) (14,861) 

101,873 8,108 (3,025) 221 

3,658,172 3,442,862 (713,235) (622,763) 

Represented by redeemable preferred shares issued on December 31, 2002 by Itau Bank Ltd., in the amount of US$ 393,072 

thousand, with maturity on March 31, 2015 and semiannual dividends calculated based on LIBOR plus 1.25% p.a.. 


f) Stock Option Plan 

I – Purpose and Guidelines of the Plan 

Before the merger, Itaú and Unibanco had a Stock Option Plan. On April 24, 2009, Itaú’s plan was 

restructured, and a new program was launched for Itaú Unibanco, called Stock Option Plan – “PLAN”. From 

then on, no stock plan has been granted in the prior programs (Itaú Plan and Unibanco Plan), which exercise 

prices are adjusted until the month prior to the option exercise date based on the IGP-M or IPCA, according 

to series, until they are either exercised, cancelled or expire. 

This program aims at involving the management members in the medium and long-term corporate 

development process, through the granting of simple or bonus shares, personal, not pledged or transferable, 

which entitle to the subscription of one authorized capital share or, at the discretion of the management, one 

treasury share which is acquired for replacement purposes. 

Such options may only be granted in years in which there are sufficient profits to distribute mandatory 

dividends to stockholders and at a quantity that does not exceed the limit of 0.5% of the total shares held by 

the stockholders at the base date of the year-end balance sheet. The ITAÚ UNIBANCO HOLDING’s 

Personnel Committee is responsible for defining the total number of options to be granted, the eligible 

beneficiaries, the type of option, the validity of the option series, and the vesting and blackout periods for 

exercising the options. Options may be granted to directors and Board of Directors members of ITAÚ 

UNIBANCO HOLDING and to the management members of controlled companies (“MANAGEMENT 

MEMBERS”) or employees based on assessment of potential and performance. 

ITAÚ UNIBANCO HOLDING carries out the settlement of this PLAN by delivering its own shares held in 

treasury until the effective exercise of the options by the beneficiaries. 

II – Characteristics of the Plan 

II.I – Simple Options 

The exercise price will be calculated based on the average prices of preferred shares at the 

BM&FBOVESPA trading sessions over the period of at least one (1) and at the most three (3) months prior 

to the option issue date, being permitted a positive or negative adjustment of up to 20%, and restated until 

the last business day of the month prior to the option exercise date based on the IGP-M or, in its absence, on 

the index stipulated by the Committee. 

The vesting period will be from one (1) to seven (7) years, counted from the issuance date. 

II.II – Bonus Options 

The exercise price will be the performance of a positive covenant supported by the beneficiary’s obligation to 

invest in the shares of ITAÚ UNIBANCO HOLDING or instrument based on such shares, a part or the total 

amount of the bonus received in relation to the previous year, and keep the ownership of these shares 

unchanged and without any type of liens from the option granting date until the option exercise date. 

The purchase price of shares will be established every six months and it shall be equivalent to the average 

share quotation at the BM&FBOVESPA in the 30 days prior to the determination of said price. 

The vesting period will be from one (1) to seven (7) years, counted from the share purchase date. 


Summary of Changes in the Plan 

Vesting Restated Exercised options Number of shares 

Granting period Exercise Exercise Exercise price Market value Prior balance To be exercised 

Nº Date until Deadline Price (R$1) Weighted average Weighted average 12/31/2009 Granted Exercised Cancelled at 09/30/2010 

Simple Options 

9th 03/10/2003 12/31/2007 12/31/2010 - 7.84 38.54 570,500 - 570,500 - - 

9th 05/02/2005 12/31/2007 12/31/2010 8.11 - - 6,187 - - - 6,187 

10th 02/16/2004 12/31/2008 12/31/2011 12.26 12.12 39.15 1,886,792 - 1,089,975 - 796,817 

11th 02/21/2005 12/31/2009 12/31/2012 17.25 16.49 38.87 7,082,200 - 3,355,155 - 3,727,045 

11th 08/01/2005 12/31/2009 12/31/2012 17.25 - - 27,500 - - - 27,500 

11th 08/06/2007 12/31/2009 12/31/2012 17.25 - - 11,357 - - - 11,357 

12th 02/21/2006 12/31/2010 12/31/2013 25.66 25.33 38.21 9,579,384 - 806,100 - 8,773,284 

12th 08/06/2007 12/31/2010 12/31/2013 25.66 - - 15,867 - - - 15,867 

13th 02/14/2007 12/31/2011 12/31/2014 32.66 31.61 38.07 10,220,925 - 1,240,250 - 8,980,675 

13th 08/06/2007 12/31/2011 12/31/2014 32.66 - - 30,649 - - - 30,649 

13th 10/28/2009 12/31/2011 12/31/2014 32.66 - - 45,954 - - - 45,954 

14th 02/11/2008 12/31/2012 12/31/2015 37.67 - - 11,485,485 - - - 11,485,485 

14th 05/05/2008 12/31/2012 12/31/2015 37.67 - - 20,625 - - - 20,625 

14th 10/28/2009 12/31/2012 12/31/2015 37.67 - - 45,954 - - - 45,954 

15th 03/03/2009 12/31/2013 12/31/2016 24.64 24.36 37.77 16,829,780 - 359,020 - 16,470,760 

15th 10/28/2009 12/31/2013 12/31/2016 24.64 - - 45,954 - - - 45,954 

16th 09/02/2003 09/02/2008 02/25/2010 - 7.77 36.03 38,263 - 38,263 - - 

16th 08/10/2009 12/31/2010 12/31/2014 29.18 - - 874,167 - - - 874,167 

17th 09/23/2009 09/23/2012 12/31/2014 33.71 - - 29,551 - - - 29,551 

18th 04/17/2010 12/31/2014 12/31/2017 40.02 - - - 6,258,877 - 39,565 6,219,312 

18th 05/11/2010 12/31/2014 12/31/2017 40.02 - - - 1,290,289 - 48,904 1,241,385 

24th 07/19/2004 01/13/2009 05/05/2010 - 12.58 39.59 29,516 - 29,516 - - 

25th 08/04/2004 01/13/2009 05/05/2010 - 6.76 39.65 329,506 - 329,506 - - 

27th 02/01/2005 02/01/2009 05/05/2010 - 15.76 36.92 206,342 - 206,342 - - 

27th 02/01/2005 05/05/2009 01/31/2011 16.06 - - 12,650 - - - 12,650 

27th 02/01/2005 02/01/2010 01/31/2011 16.06 15.76 36.92 1,068,901 - 988,670 52,710 27,521 

29th 09/19/2005 09/19/2009 09/18/2010 - 20.14 38.33 12,650 - 12,650 - - 

29th 09/19/2005 09/19/2010 09/18/2011 20.38 20.14 38.33 25,300 - 12,650 - 12,650 

30th 07/04/2006 07/04/2009 07/03/2010 - 26.73 32.50 52,710 - 52,710 - - 

30th 07/04/2006 07/04/2010 07/03/2011 26.89 - - 52,710 - - - 52,710 

30th 07/04/2006 07/04/2011 07/03/2012 26.89 - - 52,707 - - - 52,707 

33rd 08/30/2006 08/30/2009 08/29/2010 - 29.62 38.45 21,084 - 21,084 - - 

33rd 08/30/2006 08/30/2010 08/29/2011 - 29.62 38.45 21,084 - 21,084 - - 

33rd 08/30/2006 08/30/2011 08/29/2012 29.78 - - 21,083 - - - 21,083 

34th 03/21/2007 03/21/2010 03/20/2011 33.93 - - 75,901 - - - 75,901 

34th 03/21/2007 03/21/2011 03/20/2012 33.93 - - 75,901 - - - 75,901 

34th 03/21/2007 03/21/2012 03/20/2013 33.93 - - 75,901 - - - 75,901 

35th 03/22/2007 03/22/2010 03/21/2011 33.89 - - 29,518 - - - 29,518 

35th 03/22/2007 03/22/2011 03/21/2012 33.89 - - 29,518 - - - 29,518 

35th 03/22/2007 03/22/2012 03/21/2013 33.89 - - 29,514 - - - 29,514 

36th 05/14/2008 05/14/2011 05/13/2012 42.16 - - 25,301 - - - 25,301 

36th 05/14/2008 05/14/2012 05/13/2013 42.16 - - 25,300 - - - 25,300 

36th 05/14/2008 05/14/2013 05/13/2014 42.16 - - 25,300 - - - 25,300 

TOTAL 18.21 38.40 61,145,491 7,549,166 9,133,475 141,179 59,420,003 

Bonus Options 

1st 09/03/2007 09/03/2010 - - - 37.85 342,502 - 340,340 2,162 - 

1st 09/03/2007 09/03/2012 - - - - 342,479 - - 7,572 334,907 

3rd 02/29/2008 09/03/2010 - - - - 33,474 - - 33,474 - 

3rd 02/29/2008 09/03/2012 - - - - 33,474 - - - 33,474 

4th 03/03/2008 03/03/2011 - - - - 423,212 - - 6,725 416,487 

4th 03/03/2008 03/03/2013 - - - - 423,190 - - 7,260 415,930 

5th 09/03/2008 09/03/2011 - - - - 502,189 - - 8,819 493,370 

5th 09/03/2008 09/03/2013 - - - - 502,164 - - 9,292 492,872 

6th 03/06/2009 03/06/2012 - - - - 769,830 - - 23,561 746,269 

6th 03/06/2009 03/06/2014 - - - - 769,807 - - 24,292 745,515 

7th 06/19/2009 03/06/2012 - - - - 79,446 - - - 79,446 

7th 06/19/2009 03/06/2014 - - - - 79,445 - - - 79,445 

8th 08/17/2010 08/16/2013 - - - - - 384,961 - - 384,961 

8th 08/17/2010 08/16/2015 - - - - - 384,920 - - 384,920 

9th 08/30/2010 08/16/2013 - - - - - 359,991 - - 359,991 

9th 08/30/2010 08/16/2015 - - - - - 359,962 - - 359,962 

10th 09/30/2010 09/29/2013 - - - - - 1,940,987 - - 1,940,987 

10th 09/30/2010 09/29/2015 - - - - - 1,940,951 - - 1,940,951 

11th 09/30/2010 08/16/2013 - - - - - 17,717 - - 17,717 

11th 09/30/2010 08/16/2015 - - - - - 17,712 - - 17,712 

TOTAL - 37.85 4,301,212 5,407,201 340,340 123,157 9,244,916 

TOTAL SIMPLE AND BONUS OPTIONS 18.21 38.38 65,446,703 12,956,367 9,473,815 264,336 68,664,919 


III – Fair Value and Economic Assumptions for Cost Recognition 

ITAÚ UNIBANCO HOLDING recognizes, at the granting date, the fair value of options through the Binomial method for 

simple options and the Black & Scholes method for bonus options. Economic assumptions used are as follows: 

Granting 

Nº Date 

Vesting 

period 

Exercise 

period until 

Fair value 

Expected 

dividends 

Risk-free 

interest rate 

Expected 

volatility 

Simple Options 

18th 04/17/2010 12/31/2014 12/31/2017 12.22 3.13% 5.94% 29.87% 

18th 5/11/2010 12/31/2014 12/31/2017 11.45 3.13% 5.98% 29.94% 

Bonus Options 

8th 08/17/2010 08/16/2013 - 34.72 3.13% - - 

8th 08/17/2010 08/16/2015 - 32.62 3.13% - - 

9th 08/30/2010 08/16/2013 - 33.49 3.13% - - 

9th 08/30/2010 08/16/2015 - 31.46 3.13% - - 

10th 09/30/2010 09/29/2013 - 36.85 3.13% - - 

10th 09/30/2010 09/29/2015 - 34.61 3.13% - - 

11th 09/30/2010 08/16/2013 - 36.99 3.13% - - 

11th 09/30/2010 08/16/2015 - 34.74 3.13% - - 


IV - Accounting Effects Arising from Itaú and Unibanco Options 

The exercise of stock options, pursuant to the Plan’s regulation, resulted in the sale of preferred shares held in 

treasury thus far. The accounting entries related to the plan are recorded during the vesting period, at the 

deferral of the fair value of options granted with effect on Income, and during the exercise of options, at the 

amount received from the option exercise price, reflected in Stockholders’ Equity. 

The effect on Income for the period from January 1 to September 30, 2010 amounted to R$ 82,494 (R$ 85,644 

from January 1 to September 30, 2009), as contra-entry to Capital Reserve - Granted Options Recognized - 

Law No. 11,638 (Note 16c). 

In the Stockholders' Equity, the effect was as follows: 

Amount received for the sale of shares – exercised options 

(-) Cost of treasury shares sold 

(+) Write-off of cost recognized of exercised options 

Effect on sale (*) 

(*) Recorded in revenue reserves. 

303,927 

(310,347) 

58,490 

52,070 


NOTE 17 – RELATED PARTIES 

a) Transactions between related parties are disclosed in compliance with CVM Resolution No. 560, of 

December 11, 2008, and CMN Resolution No. 3,750 of June 30, 2009. These transactions are carried out at 

amounts, terms and average rates in accordance with normal market practices during the period, as well as 

under reciprocal conditions. 

Transactions between companies included in consolidation were eliminated from the consolidated financial 

statements and take into consideration the lack of risk. 

The unconsolidated related parties are the following: 

• ITAÚSA, the main parent company of ITAÚ UNIBANCO HOLDING, its controlling companies and nonfinancial 

subsidiaries, especially: Itautec S.A., Duratex S.A., Elekeiroz S.A. and Itaúsa 

Empreendimentos S.A.; 

• Fundação Itaubanco, FUNBEP – Fundo de Pensão Multipatrocinado, Caixa de Previdência dos 

Funcionários do BEG (PREBEG), Fundação Bemgeprev, Itaubank Sociedade de Previdência Privada, 

UBB – Prev Previdência Complementar, and Fundação Banorte Manuel Baptista da Silva de 

Seguridade Social, closed-end private pension entities, that administer supplementary retirement plans 

sponsored by ITAÚ UNIBANCO HOLDING and/or its subsidiaries; and 

• Fundação Itaú Social, Instituto Itaú Cultural, Instituto Unibanco, Instituto Assistencial Pedro Di Perna, 

Instituto Unibanco de Cinema, and Associação Clube “A”, entities sponsored by ITAÚ UNIBANCO and 

subsidiaries to act in their respective areas of interest, as described in Notes 22e and 22j. 

The transactions with these related parties are basically characterized by: 


ITAÚ UNIBANCO HOLDING CONSOLIDATED 

ASSETS/ (LIABILITIES) REVENUE (EXPENSES) ASSETS/ (LIABILITIES) REVENUE (EXPENSES) 

09/30/2010 09/30/2009 

01/01 to 01/01 to 

01/01 to 01/01 to 

09/30/2010 09/30/2009 

09/30/2010 09/30/2009 

09/30/2010 09/30/2009 

Interbank investments 9,926,802 6,731,450 661,261 332,318 - - - - 

Itaú Unibanco S.A. 9,926,802 6,731,450 661,261 332,318 - - - - 

Derivative financial instruments (2,596) (881) (1,389) 575 - 639 - - 

Itaú Unibanco S.A. (2,596) (881) (1,389) 575 - - - - 

Itautec S.A. - - - - - 639 - - 

Deposits (3,260,392) - (186,792) - (114,423) (122,900) - (5,015) 

Itaú Unibanco S.A. (3,260,392) - (186,792) - - - - - 

Duratex S.A. - - - - (10,624) (22,084) 

Elekeiroz S.A. - - - - (13,120) (11,785) (1,561) 

ITH Zux Cayman Company Ltd. - - - - (39,481) (41,422) - - 

Itaúsa Empreendimentos S.A. - - - - (51,198) (47,609) - (3,454) 

Repurchase agreements - (880,795) - (51,227) (18,031) (64,719) - (13,132) 

Itaú Unibanco S.A. - (880,795) - (51,227) - - - - 

Intrag Part Administração e Participações Ltda. - - - - - (23,977) - (1,734) 

Duratex S.A. - - - - (8,931) (30,586) - (1,951) 

Elekeiroz S.A. - - - - - (9,015) - (7,554) 

Itautec S.A. - - - - (9,100) - - (1,893) 

Other - - - - - (1,141) - - 

Amounts receivable from (payable to) related companies (341) 1,155 - (3,548) (52,919) (17,955) 133,495 108,987 

Itaú Unibanco S.A. - 1,570 - 25 - - - - 

Itaú Corretora de Valores S. A. (341) (415) - (3,573) - - - - 

Itaúsa Investimentos S.A. - - - - 60,939 78,580 133,495 108,987 

Fundação BEMGEPREV - - - - (13,472) 8 - - 

UBB Prev Previdência Complementar - - - - (15,973) (13,909) - - 

Fundação Banorte Manuel Baptista da Silva de Seguridade Social - - - - (84,984) (82,819) - - 

Other - - - - 571 185 - - 

Banking service fees - - - - - - 9,390 8,059 

Fundação Itaubanco - - - - - - 2,015 2,930 

FUNBEP - Fundo de Pensão Multipatrocinado - - - - - - 2,076 1,789 

UBB Prev Previdência Complementar - - - - - - 2,967 2,247 

Other - - - - - - 2,332 1,093 

Rent expenses - - (317) (733) - - (23,604) (23,758) 

Fundação Itaubanco - - - - - - (15,898) (18,336) 

FUNBEP - Fundo de Pensão Multipatrocinado - - - - - - (4,266) (4,901) 

Other - - (317) (733) - - (3,440) (521) 

Donation expenses - - - - - - (37,511) (40,795) 

Instituto Itaú Cultural - - - - - - (36,917) (30,360) 

Fundação Itaú Social - - - - - - (194) (378) 

Instituto Unibanco de Cinema - - - - - - - (9,632) 

Associação Clube "A" - - - - - - (400) (425) 

Data processing expenses - - - - - - (212,112) (193,335) 

Itautec S.A. - - - - - - (212,112) (193,335) 

In addition to the aforementioned operations, ITAÚ UNIBANCO HOLDING and non-consolidated related parties, as an integral part of the Agreement for Apportionment of 

Common Costs of the Itaú Unibanco group, recorded, in Other Administrative Expenses, the amount of R$ 13,943 (R$ 7,197 from 01/01 to 09/30/2009) in view of the use 

of the common structure. 


) Compensation of the Management Key Personnel 

The fees attributed in the period to ITAÚ UNIBANCO HOLDING management members are as follows: 

Compensation 

Board of Directors 

Management members 

Profit sharing 



Contributions to pension plans 



Stock option plan – Management members 

Total 

09/30/2010 09/30/2009 

188,200 215,549 

2,480 10,700 

185,720 204,849 

168,500 166,343 

2,500 3,096 

166,000 163,247 

7,148 21,048 

455 945 

6,693 20,103 

80,192 85,140 

444,040 488,080 

Information related to the granting of stock option plan, benefits to employees and post-employment are detailed in 

Notes 16f IV, 19a and 19b, respectively. 



NOTE 18 - MARKET VALUE 

The financial statements are prepared in accordance with accounting principles which assume the normal continuity of the operations of ITAÚ UNIBANCO HOLDING and its subsidiaries. 

The book value of each financial instrument, whether included or not in the balance sheet, when compared to the value that might be obtained in an active market, or in the absence of such market, using the net 

present value of future cash flows adjusted based on the current market interest, is approximately equal to the market value, or does not have a market quotation available, except for the instruments in the table 

below: 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

Interbank deposits 

13,152,143 16,596,680 13,166,430 16,663,406 14,287 66,726 14,287 66,726 


141,878,818 122,576,312 142,473,848 122,979,678 1,313,235 1,133,454 595,030 403,366 

Adjustment of available-for-sale securities 704,756 713,484 - - 

Adjustment of held-to-maturity securities 608,479 419,970 595,030 403,366 


255,750,989 213,031,059 256,539,233 213,428,817 788,244 397,758 788,244 397,758 

Investments 

BM&FBovespa 58,107 74,572 637,045 783,872 578,938 709,300 578,938 709,300 

BPI 725,951 926,593 613,373 1,065,638 (112,578) 139,045 (112,578) 139,045 

Cetip S.A. 34,682 - 368,269 - 333,587 - 333,587 - 

Redecard S.A. 539,030 526,719 8,832,740 9,169,226 8,293,710 8,642,507 8,293,710 8,642,507 

Serasa S.A. 244,817 257,885 639,621 650,798 394,804 392,913 394,804 392,913 

Parent company 161,959 170,604 556,763 563,517 394,804 392,913 394,804 392,913 

Minority stockholders (1) 82,858 87,281 82,858 87,281 - - - - 

Funding and borrowings (2) 

148,766,281 151,885,256 149,000,900 151,974,846 (234,619) (89,590) (234,619) (89,590) 

Subordinated debt (Note 10f) 

33,683,469 23,471,568 33,812,224 23,584,436 (128,755) (112,868) (128,755) (112,868) 


720,980 1,113,512 1,233,247 1,684,226 - - 512,267 570,714 

Total unrealized 

11,240,853 11,279,245 11,034,915 11,119,871 

(1) The investment held by minority stockholders does not affect the result of ITAÚ UNIBANCO HOLDING; 

(2) Funding is represented by interbank and time deposits and funds from acceptance and issuance of securities; 

(3) It does not consider the corresponding tax effects. 

BOOK VALUE MARKET 

Unrealized income (loss) (3) 

Results 

Stockholders’ equity

To obtain the market values for these financial instruments, the following criteria were adopted: 

• Interbank investments were determined based on their nominal amounts, monetarily restated to maturity 

dates and discounted to present value using future market interest rates and swap market rates for fixed-rate 

securities and using market interest rates for fixed-rate securities, achieved at the closing of BM&F at the 

balance sheet date, for floating-rate securities; 

• Securities and derivative financial instruments, according to the rules established by Circulars No. 3,068 and 

3,082 of November 8, 2001 and January 30, 2002, respectively, issued by the Central Bank of Brazil 

(BACEN), are recorded at their market value, except for those classified as Held to Maturity. Government 

securities allocated in this category have their market value calculated based on the rates obtained in the 

market, and validated through the comparison with information provided by the National Association of 

Financial Market Institutions (ANDIMA). Private securities included in this category have their market value 

calculated using a criterion similar to the one adopted for Investments in Interbank Deposits, as described 

above; 

• Loans with maturity over 90 days, when available, were calculated based on their net present value of future 

cash flows discounted at market interest rates effective on the balance sheet date, taking into account the 

effects of hedges as well (swap contracts); 

• Investments - in BPI, Redecard S.A., BM&FBovespa and Visa Inc. are determined based on stock market 

quotations, and in Serasa S.A. are determined based on the last transaction prices; 

• Time and interbank deposits and funds from acceptance and issuance of securities and foreign borrowings 

through securities, when available, were calculated based on their present value determined by future cash 

flows discounted at market rates obtained at the closing of BM&F on the balance sheet date; 

• Subordinated debt, based on the net present value of future fixed or floating cash flows in foreign currency, 

net of the interest rates practiced in the market on the balance sheet date and considering the credit risk of 

the issuer. The floating cash flows are estimated as from the interest curves of the indexation market places; 

• Treasury shares are valued according to the average quotation available on the last trading day of the month 

or, if this is not available, according to the most recent quotation on prior trading days, published in the daily 

bulletin of each Stock Exchange. 


NOTE 19 – BENEFITS TO EMPLOYEES 

Under the terms of CVM Resolution No. 371, dated December 13, 2000, we present the policies adopted by 

ITAÚ UNIBANCO HOLDING and its subsidiaries regarding benefits to employees, as well as the accounting 

procedures adopted: 

a) Supplementary retirement benefits 

ITAÚ UNIBANCO HOLDING and its subsidiary companies sponsor the following supplementary retirement 

plans: 

Entity 

Benefit plan 

Supplementary Retirement Plan - Flexible Premium Annuity - ACMV 

Franprev Benefit Plan - PBF (1) 

002 Benefit Plan - PB002 (1) 

Fundação Itaubanco 

Itaulam Basic Plan - PBI (1) 

Itaulam Supplementary Plan - PSI (2) 

Itaubanco Defined Contribution plan (3) (4) 

Fundação BEMGEPREV Supplementary Retirement Plan - Flexible Premium Annuity (1) 

Funbep I Benefit Plan (1) 

Funbep Fundo de Pensão Multipatrocinado 

Funbep II Benefit Plan (2) 

Caixa de Previdência dos Funcionários do Banco Beg - Prebeg Prebeg Benefit Plan (1) 

Itaú Defined Benefit Plan (1) 

Itaú Fundo Multipatrocinado 

Itaú Defined Contribution Plan (2) 

Redecard Basic Retirement Plan (1) 

Múltipla - Multiempresas de Previdência Complementar 

Redecard Supplementary Retirement Plan (2) 

Itaubank Sociedade de Previdência Privada Itaubank Retirement Plan (3) 

Unibanco Retirement Plan (3) 

UBB-PREV - Previdência Complementar 

Basic Plan (1) 

IJMS Plan (1) 

Fundação Banorte Manoel Baptista da Silva de Seguridade Social 

II Benefit Plan (1) 

(1) Defined benefit plan; 

(2) Variable contribution plan; 

(3) Defined contribution plan; 

(4) The Itaubanco Defined Contribution Plan was set up as a result of the partial spin-off of the Supplementary retirement plan - PAC, and is being 

offered to former participants of the latter, including former employees still contributing to the plan and those employees who have opted for this plan, or 

when this option is presumed in view of the deferred proportional benefit, which is not receiving supplementary retirement by the PAC. Those 

participants who have not joined the Itaubanco Defined Contribution Plan, as well as those contributing to the PAC, will remain in this latter, without any 

continuity, and will have their vested rights guaranteed. As set forth in the Itaubanco Defined Contribution Plan regulation, the transaction and novation 

period ended on May 8, 2010. Accordingly, the effects arising from the partial spin-off of the PAC are presented in Note 19d. 

The basic purpose of the defined benefit and variable contribution plans is to grant a benefit that, in general, 

provide a life annuity benefit, and may be converted into survivorship annuities, according to the plan's 

regulation. In case of defined contribution plan, the benefit is calculated based on the accumulated balance 

at the eligibility date, according to the plan’s regulation, which does not require actuarial calculation. 

All of these plans are closed to new participants. As regards the new employees hired after the closing, they 

have the option to participate in a defined contribution plan (PGBL) managed by Itaú Vida e Previdência S.A. 

During the period, the contributions made totaled R$ 51,971 (R$ 35,247 from January 1 to September 30, 

2009). The contribution rate increases based on the beneficiary’s salary. 

b) Post-employment benefits 

ITAÚ UNIBANCO HOLDING subsidiaries do not offer other post-employment benefits, except in those cases 

arising from maintenance obligations according to the acquisition agreements signed by ITAÚ UNIBANCO, 

under the terms and conditions established, in which health plans are totally or partially sponsored for retired 

workers and beneficiaries. During the period, the contributions made totaled R$ 3,935 (R$ 4,323 from 

January 1 to September 30, 2009). The contribution rate increases based on the beneficiary’s age. 


c) 

Net amount of assets and actuarial liabilities of the benefit plans 

The net assets and actuarial liabilities, which consider the actuarial obligations, calculated in conformity with the 

criteria established by CVM Resolution No. 371 of December 13, 2000, are summarized below: 

09/30/2010 

(1) 

09/30/2009 

Net assets of the plans 10,450,063 13,829,203 

Actuarial liabilities (9,089,888) (12,011,119) 

Surplus (2) 1,360,175 1,818,084 

(1) Includes the effects of the partial spin-off of PAC (Note 19 a); 

(2) According to paragraph 49g of the attachment to CVM Resolution No. 371 of December 13, 2000, the net asset was not recognized. 

In addition to the reserves recorded by the plans, the sponsors record provisions in the amount of R$ 135,987 

(R$ 121,674 at September 30, 2009) (Note 13c) to cover possible insufficient actuarial liabilities. 

d) Change in net assets, actuarial liabilities, and surplus 

Present value – beginning of the period 

Adjustments in the period (1) 

Effects of the partial spin-off of PAC (3); 

Inclusion of Itaú Defined Benefit Plan (Credicard 

Itaú/Orbitall) 

Expected return on assets / Cost 

Current service + Interest 

Benefits paid 

Contributions of sponsors/participants 

Gains /(losses) in the period (2) 

Assets 

01/01 to 09/30/2010 

Actuarial 

liabilities 

Surplus 

Assets 

01/01 to 09/30/2009 

Actuarial 

liabilities 

Surplus 

14,536,891 (12,090,146) 2,446,745 12,775,978 (11,223,791) 1,552,187 

- - (127,661) (127,661) 

(5,143,981) 3,576,321 (1,567,660) - - - 

130,671 (123,330) 7,341 - - - 

1,039,700 (855,716) 183,984 1,157,681 (1,063,789) 93,892 

(402,983) 402,983 - (404,122) 404,122 - 

50,650 - 50,650 79,690 - 79,690 

239,115 - 239,115 219,976 - 219,976 

Present value – end of the period 

10,450,063 (9,089,888) 1,360,175 13,829,203 (12,011,119) 1,818,084 

(1) 

(2) 

Effect corresponding to the reclassification of the option of former employees; 

Losses in assets correspond to the actual earnings obtained below the expected return rate of assets. 

(3) Arising from the partial spin-off of Pac, with the resulting set-up of Itaubanco Defined Contribution Plan, according to Note 19a. Under Itaubanco Defined Contribution Plan, 

a Pension Fund was set up in the amount of R$ 1.540.202 to ensure the maintenance of future contributions to participants of that plan. 

e) 

Main assumptions used in actuarial valuation 

Itaú Unibanco Holding Redecard 

Discount rate 

10.24% p.a. 11.45% p.a. 

Expected return rate on assets 

12.32 % p.a. 12.92 % p.a. 

Mortality table (1) 

AT-2000 

AT-2000 

Turnover (2) 

Itaú Exp. 2003/2004 Exp. Towers Watson 

Future salary growth 

7.12 % p.a. 6,50 % p.a. 

Growth of the pension fund and social security benefits 

4.00 % p.a. 4.50 % p.a. 

Inflation 

4.00 % p.a. 4.50 % p.a. 

Actuarial method 

Projected Unit Credit (3) Projected Unit Credit (3) 

(1) The mortality tables adopted correspond to those disclosed by SOA – Society of Actuaries, the North-American Entity which 

corresponds to IBA – Brazilian Institute of Actuarial Science, which reflects a 10% increase in the probabilities of survival as 

compared to the respective basic tables; 

(2) The turnover assumption is based on the effective experience of ITAÚ UNIBANCO HOLDING, resulting in the average of 1.2 

% p.a. based on the 2003/2004 experience; 

(3) Using the Projected Unit Credit, the mathematical reserve is determined by the current projected benefit amount multiplied by 

the ratio between the length of service in the company at the assessment date and the length of service that will be reached at 

the date when the benefit is granted. The cost is determined taking into account the current projected benefit amount 

distributed over the years that each participant is employed. 



NOTE 20 – INFORMATION ON FOREIGN SUBSIDIARIES 

Assets 

Current assets and long-term receivables 

Cash and cash equivalents 

INTERBANK INVESTMENTS 

Securities 


Foreign exchange portfolio 

Other assets 

Itaú Argentina Consolidated 

Foreign branches (1) 

Itaú Europa Consolidated (3) Cayman Consolidated (4) Chile Consolidated (5) Uruguay Consolidated (6) Banco Itaú Paraguay (7) Other foreign companies (8) Foreign consolidated (9) 

(2) 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

1,183,248 1,022,460 111,374 89,813 1,488,384 2,051,800 2,883,370 2,312,314 353,917 358,275 446,614 456,094 158,695 128,942 1,705,101 195,857 4,533,963 4,873,173 

8,173,749 12,651,128 160,539 158,305 2,408,771 2,208,345 3,784,826 3,526,684 38,899 3,864 598,609 376,575 61,719 224,696 10,139 106,115 9,244,032 14,689,628 

23,348,788 18,492,493 217,922 221,525 1,448,330 1,611,048 5,821,801 3,975,853 1,748,280 1,796,581 848,010 447,348 269,225 285,412 1,278 177,158 31,740,441 24,487,254 

22,293,563 8,937,956 1,337,190 1,088,284 5,260,225 5,288,203 593,637 261,987 8,615,629 6,714,789 1,200,782 1,056,557 1,280,063 766,649 3,021 - 40,156,579 23,995,861 

18,789,211 3,371,710 53,957 26,010 1,847,018 27,068,313 623,379 550,709 449,259 116,715 19,989 23,831 56,887 18,848 - 388,693 21,306,222 30,242,912 

1,009,586 1,325,285 336,817 361,768 212,712 235,201 2,520,408 793,664 290,583 231,043 372,677 586,711 335,368 313,424 142,957 94,556 5,173,095 3,908,428 

Permanent assets 

Investments 714,137 - 2,346 1,997 372,339 477,908 38,812 39,107 1,087 955 351 326 732 508 386,884 493,463 766,508 935,940 

BPI - - - - 370,235 472,563 - - - - - - - - 355,716 454,031 725,951 926,594 

Other investments 714,137 - 2,346 1,997 2,104 5,345 38,812 39,107 1,087 955 351 326 732 508 31,168 39,432 40,557 9,346 

Fixed and intangible assets 22,188 28,002 53,982 63,638 182,615 214,036 2,201 170 201,837 149,356 20,121 22,958 14,648 15,011 19,281 4,420 516,914 497,653 

Total 

75,534,470 45,829,034 2,274,127 2,011,340 13,220,394 39,154,854 16,268,434 11,460,488 11,699,491 9,371,578 3,507,153 2,970,400 2,177,337 1,753,490 2,268,661 1,460,262 113,437,754 103,630,849 

Liabilities 

BIEL Holdings AG, IPI - Itaúsa Portugal Investimentos, SGPS Lda. (51%), Itaú Europa Luxembourg Advisory Holding Company S.A.,Itaúsa Europa - Investimentos, SGPS, Lda., Itaú Europa, SGPS, Lda., Itaúsa Portugal - SGPS, S.A.,Banco Itaú Europa, S.A., BIE - Bank & Trust, Ltd., Banco Itaú Europa Luxembourg S.A., BIE Cayman, Ltd., Banco Itaú Europa International, Bie Bank & Trust Bahamas Ltd., Itaú Europa Securities Inc., Itaú 

Madeira Investimentos, SGPS, Ltda, BIE Directors, Ltd, BIE Nominees, Lda, Fin Trade, Kennedy Director International Services S.A., Federal Director International Services, S.A., Bay State Corporation Limited and Cape Ann Corporation Limited; only at 09/30/2010, Banco Itau Suisse S.A. and only at 09/30/2009, Brazcomp Limited, Banco Itaú Europa Fund Management Company, S.A and BIEL Fund Management Company S.A. , ; 

BFB Overseas N.V., BFB Overseas Cayman, Ltd., Itau Bank Ltd., ITB Holding Ltd., Jasper International Investiment LLC, Unibanco Cayman Bank Ltd., Unicorp Bank & Trust Ltd., Unibanco Securities, Inc, UBB Holding Company, Inc., Uni-Investments Inter. Corp., Unipart Partic. Internac. Ltd., Rosefield Finance Ltd. and only at 09/30/2010, UBT Finance S.A. and UBB Delaware I LLC ; 

Itaú Chile Holdings, Inc., BICSA Holdings LTD., Banco Itaú Chile S.A., Itaú Chile Inversiones, Servicios Y Administración S.A., Itaú Chile Corredor de Bolsa Ltda., Itaú Chile Corredora de Seguros Ltda., Itaú Chile Administradora General de Fondos S.A., Itaú Chile Securitizadora S.A., Recuperadora de Créditos Ltda and Itaú Chile Compañia de Seguros de Vida S.A.; 

Current and long-term receivables 

Deposits 

22,504,545 17,256,615 1,744,432 1,522,101 6,248,228 6,979,171 1,628,653 1,860,591 7,085,322 6,134,721 2,709,817 2,317,106 1,612,810 1,428,502 18 37 34,165,269 30,510,790 

Demand deposits 7,573,842 3,254,429 469,999 400,405 2,621,268 2,664,051 1,043,086 1,271,611 1,273,840 1,088,116 1,490,834 1,201,207 561,895 426,979 - - 10,642,566 8,010,460 

Savings deposits - - 461,805 364,484 - - - - - - 838,648 713,030 795,189 673,317 - - 2,095,642 1,750,830 

Interbank deposits 2,556,857 1,226,482 58,874 5,323 1,464,557 1,251,907 256,473 338,396 6 12 9,617 38,428 - 87,591 - - 222,421 582,199 

Time deposits 12,373,846 12,775,704 753,754 751,889 2,162,403 3,063,213 329,094 250,584 5,811,476 5,046,593 370,718 364,441 255,726 240,615 18 37 21,204,640 20,167,301 

Deposits received under securities repurchase agreements 

5,958,351 2,273,013 87,301 94,068 - - 1,397,069 840,239 121,906 257,047 - - - - - 6,546,028 2,966,808 

Funds from acceptances and issuance of securities 

2,178,411 1,928,813 - - 2,478,028 2,026,701 3,095,879 2,346,329 1,013,984 365,759 - - - - - 8,746,068 6,554,266 

Borrowings and onlending 

8,837,395 8,826,996 34,879 12,011 647,856 916,341 55,748 23,821 589,873 748,898 33,725 6,081 106,558 4,852 375,792 57,311 10,306,614 10,402,692 

DERIVATIVE FINANCIAL INSTRUMENTS (LIABILITIES) 

1,592,617 958,617 480 663 220,337 251,460 1,234,578 788,055 198,889 112,065 6,503 - - - - - 1,904,760 1,014,383 

Foreign exchange portfolio 

18,784,176 3,380,787 53,935 26,019 1,798,913 27,051,215 623,670 552,299 447,183 124,900 22,200 25,991 57,618 17,978 - 396,855 21,254,217 30,254,129 

Other liabilities 

5,984,129 2,290,505 203,679 182,335 380,442 182,208 1,045,703 982,416 847,131 318,552 444,586 327,343 115,456 93,885 137,268 84,925 9,060,928 4,372,401 

Deferred income 

7,400 2,023 - - 15,942 13,136 244 386 2,236 380 - - 66 82 1,852 27,738 16,008 


- - 821 829 37 95 28 - 134 108 - - - - 8 10 274 280 


Capital and reserves 8,777,581 8,136,814 150,772 171,827 1,353,807 1,729,930 7,203,278 4,042,269 1,265,863 1,221,548 245,430 292,616 229,869 149,615 1,714,990 884,043 20,193,749 16,546,363 

Result for the period 909,865 774,851 (2,172) 1,487 76,804 4,597 (16,416) 24,083 126,970 87,600 44,892 1,263 54,960 58,576 38,733 37,081 1,232,109 992,729 

Total 

75,534,470 45,829,034 2,274,127 2,011,340 13,220,394 39,154,854 16,268,434 11,460,488 11,699,491 9,371,578 3,507,153 2,970,400 2,177,337 1,753,490 2,268,661 1,460,262 113,437,754 103,630,849 

Statement of Income 

Income from financial operations 1,407,962 1,911,848 177,259 206,178 248,650 569,709 161,121 173,905 530,990 460,498 111,109 63,223 123,311 117,684 (11,785) (8,860) 2,722,537 3,300,367 

Expenses on financial operations (435,301) (945,020) (51,004) (61,067) (168,036) (475,377) (158,809) (175,218) (176,140) (139,970) (7,945) (9,524) (22,251) (25,305) (4,879) (1,469) (982,857) (1,764,396) 

Result of allowance for loan losses (65,046) (151,891) (10,466) (21,413) 16,739 (6,388) - - (75,735) (117,670) (11,269) (2,190) (6,303) (10,634) (2,779) - (154,859) (310,186) 

Gross income from financial operations 907,615 814,937 115,789 123,698 97,353 87,944 2,312 (1,313) 279,115 202,858 91,895 51,509 94,757 81,745 (19,443) (10,329) 1,584,821 1,225,785 

Other operating revenues/expenses 14,351 (10,445) (124,994) (112,719) 21,285 (60,832) (17,669) 36,702 (120,672) (94,523) (28,964) (51,039) (31,613) (17,825) 73,467 61,164 (231,944) (120,724) 

Operating income 921,966 804,492 (9,205) 10,979 118,638 27,112 (15,357) 35,389 158,443 108,335 62,931 470 63,144 63,920 54,024 50,835 1,352,877 1,105,061 

Non-operating income (11,981) 3,136 7,217 721 (149) (438) - 136 (5,331) (1,019) (29) 7,741 314 1,018 (735) (197) (10,696) 10,627 

Income before taxes on income and profit sharing 909,985 807,628 (1,988) 11,700 118,489 26,674 (15,357) 35,525 153,112 107,316 62,902 8,211 63,458 64,938 53,289 50,638 1,342,181 1,115,688 

Income tax (120) (32,777) - (10,070) (38,775) (16,530) - (357) (26,128) (19,706) (18,010) (6,948) (8,498) (6,362) (14,557) (7,038) (106,087) (99,787) 

Statutory participation in income - - - - (2,911) (5,548) (1,061) (11,085) - - - - - - - (6,521) (3,972) (23,155) 

Minority interest in subsidiaries - - (184) (143) 1 1 2 - (14) (10) - - - - 1 2 (13) (17) 

Net income (loss) 

909,865 774,851 (2,172) 1,487 76,804 4,597 (16,416) 24,083 126,970 87,600 44,892 1,263 54,960 58,576 38,733 37,081 1,232,109 992,729 

(1) Itaú Unibanco S.A. - Grand Cayman, New York, Tokyo and Nassau Branches, Banco Itaú-BBA S.A. Nassau Branch, Banco Itaú-BBA S.A. Uruguay Branch, Itaú Unibanco Holding S.A. - Grand Cayman Branch and Unibanco Grand Cayman Branch; 

- - (2) Banco Itaú Argentina S.A,Itaú Asset Management S.A.Sociedad Gerente de Fondos Comunes de Inversión, Itrust Servicios Financieros S.A. and Itaú Sociedad de Bolsa S.A. 

(3) (4) (5) (6) ACO Ltda., Banco Itaú Uruguay S.A., OCA Casa Financiera S.A., OCA S.A, and Unión Capital AFAP S.A; 

(7) New company’s name of Interbanco S.A., approved by Banco Central Del 

(8) Afinco Americas Madeira, SGPS, Soc. Unipessoal Ltda., Zux Cayman Company Ltd., Zux SGPS, Lda., Agate SARL, Topaz Holding Ltd., Itaú USA Inc, Itaú International Investment LLC, Albarus S.A., Banco Del Paraná S.A., Amethyst Holding Ltd., Garnet Corporation, Itaú International Holding Limited, Spinel Corporation, Tanzanite Corporation, Mundostar S.A., Karen International Ltd., Nevada Woods S.A., Itaú Asia Securities Ltd., 

Líbero Trading International Ltd., IPI - Itaúsa Portugal Investimentos, SGPS Lda. (49%), Itaú USA Securities, Inc., Itaú Middle East Securities Limited, Unipart B2B Investments, S.L., Tarjetas Unisoluciones S. A. de Capital Variable, Proserv - Promociones Y Servicios S.A. de C. V, Itau UK Securities Ltd and, only at 09/30/2010, Itaú Japan Asset Management Ltd and Itaú Beijing Investment Consultancy Limited; 

(9) Foreign consolidated information presents balances net of eliminations from consolidation.

NOTE 21 – RISK MANAGEMENT 

Risk management is considered an essential tool for optimizing the use of capital and selecting the best 

business opportunities, in order to obtain the best risk and return ratio for its stockholders, being performed by 

ITAÚ UNIBANCO HOLDING through its Management Committees. The risk appetite management is centralized 

in one of these committees, being responsible for releasing general policies and the consolidated risk 

assessment, whereas the operational management is carried out by committees specific to each type of risk 

that establish parameters to be followed by the business areas, which in turn are independently monitored by 

the control area. 

This process is continuous, permanently reviewed and supports the Group’s strategies. 

Further details on the risk control process can be found on the website (www.itau-unibanco.com.br/ri), in the 

following route Corporate Governance/Risk Management. 

I - Market Risk 

Possibility of incurring losses arising from the variation in the market values of positions held by a financial 

institution, as well as from its financial margin, including risks of transactions subject to foreign exchange and 

interest rates, and share and commodities prices. 

The risk control process starts with the setting of limits, approved by the Management Committee 

responsible for the market risk management, based on the risk appetite and financial capacity of each main 

unit. The market risk is controlled by the centralized risk control area, which carries out daily measurement, 

assessment and report activities by way of control units set in the Legal Entities. 

Additionally, it carries out the consolidated monitoring, assessment and report of market risk information, 

aiming at providing input for the Management Committee’s follow-up and compliance with the Brazilian 

regulatory body. 

The market risk control and management process is submitted to periodic reviews aimed at keeping it 

aligned with the best market practices and adhering to the continuous improvement processes at ITAÚ 

UNIBANCO HOLDING. 

Value at Risk (VaR) 

The risk assessment process quantifies the exposure to and the appetite for risk using the risk limits based 

on statistical criteria (VaR Statistical: level of confidence at 99% - is a statistical measure that estimates the 

expected maximum potential economic loss under regular market conditions, taking into consideration the 

time period and confidence level), Stress simulations (Var Stress – is a measure that estimates the loss 

under extreme market conditions based on stress scenarios) and allocated economic capital. 

The transactions of commercial bank activities and strategic positions are managed using assessments of 

economic risk and simulations of accounting exposures. Directional trading operations (operations aimed at 

finding the best market options, in order to take advantage of imperfections in the definition of prices and 

rates, in relation to the company's expectations), performed by proprietary desks, are mainly controlled by 

VaR Stress measures and loss prevention limits. 

The limits and exposure to market risks are relatively low as compared to the company’s stockholders’ 

equity, according to the diversified management of risks. In September 2010 the Total VaR Global of ITAÚ 

UNIBANCO HOLDING was R$ 119.5 million (R$ 86.2 million in June 2010). 

Susceptibility of portfolio in relation to market risk factors 

In compliance with CVM Instruction No. 475 of December 17, 2008, Itaú Unibanco Holding carried out a 

sensitivity analysis by market risk factors considered relevant to which the group was exposed (Note 7j). 

Each market risk factor was subject to a sensitivity level, with shock applications in approximately 25% 

(scenario II) and approximately 50% (scenario III), and the biggest losses arising, by risk factor, in each 

scenario, were stated with impact on result, net of tax effects, by providing a vision of the ITAÚ UNIBANCO 

HOLDING exposure in derivatives under exceptional scenarios. 


In accordance with the operations classification criteria set forth in BACEN Resolution No. 3,464/07 and Circular 

No. 3,354/07 and in the New Capital Accord – Basel II, the analysis was fully applied to the trading and banking 

portfolios, which exposures will have significant impacts on the company’s current result. 

The outcome of the sensitivity analysis, with correlation effects among the risk factors in the trading portfolio and 

net of tax effects, points out to a mark-to-market sensitivity of R$ 212 million and R$ 424 million for those 

scenarios with variations of 25% and 50%, respectively. In the consolidated portfolio (trading + banking), 

sensitivity is R$ 352 million and R$ 705 million for those scenarios with variations of 25% and 50%, respectively. 

The sensitivity analyses shown in this report do not predict the dynamics of the operation of the risk and 

treasury areas, because once loss related to positions is found, risk mitigating measures are quickly taken, 

minimizing the possibility of significant losses. 

The method, parameters and assumptions are in the Management Discussion and Analysis Report (www.itauunibanco.com.br/ri). 

ITAÚ UNIBANCO HOLDING’s Market Risk Management Policy, based on BACEN’s guidelines and the Basel 

Committee’s concepts, is a set of principles that drive its strategy towards control and management of market 

risk of all Business Units and Legal Entities of the Group. It is on the website (www.itau-unibanco.com.br/ri) in 

the route: Corporate Governance/Regulations and Policies/Operational Risk Management Policy. 

II – Credit Risk 

Possibility of incurring losses in connection with the breach by the borrower or counterparty of the respective 

agreed-upon financial obligations, devaluation of loan agreement due to downgrading of the borrower’s risk 

rating, reduction in gains or compensation, advantages given upon renegotiation and recovery costs. 

ITAÚ UNIBANCO HOLDING’s management is performed with the objective of maximizing the risk and return 

ratio of its assets, maintaining the credit portfolio quality at levels appropriate to the market segments in which it 

is operating. The strategy is aimed at creating value to its stockholders at levels higher than the minimum return 

value adjusted to risk. 

ITAÚ UNIBANCO HOLDING establishes its credit policy based on internal factors, such as the client rating 

criteria and the portfolio development analysis, the registered default levels, the incurred return rates, the 

portfolio quality and the allocated economic capital; and external factors, related to the economic environment in 

Brazil and abroad, including market share, interest rates, market default indicators, inflation, consumption 

increase/decrease. 

ITAÚ UNIBANCO HOLDING’s centralized process for making decisions and establishing a credit policy 

guarantees the synchrony of credit actions and optimization of business opportunities. In retail, decisions are 

made based on scoring models that are continuously followed up by evaluating the result of their application in 

groups to which credits were granted. In wholesale, the several committees are subordinated to the 

Management Committee responsible for the credit risk management through a structure of approval levels that 

ensures the detailed observation of transaction risk, as well as the necessary timing and flexibility of its 

approval. 

To protect the institution against losses arising from loan operations, ITAÚ UNIBANCO HOLDING determines a 

provision level commensurate with the risk incurred in each operation through analyses that consider the 

aspects which determine the client’s credit risk. For each operation, the assessment and rating of the 

client/economic group, the operation rating, and status of the operation default are taken into account. 

Additionally, ITAÚ UNIBANCO HOLDING recognizes a provision to cover possible additional losses that may 

arise due to any reversal of the economic cycle. This provision is usually quantified based on the historic 

behavior of credit portfolios in economic crisis situations (Note 8c). 


The set of exposures, probabilities of default and the expected recovery of transactions are included in a 

capital model that calculates for extreme situations the Group’s capital requirement at a safety level of 

99.99%. 

III – Operational risk 

Possibility of incurring losses arising from failure, deficiency or inadequacy of internal processes, personnel 

and systems, or external events. Includes the legal risk, associated with the inadequacy or deficiency in 

agreements signed by the institution, as well as sanctions for failing to meet legal provisions and 

compensation for damages to third parties arising from activities performed by the institution. 

The increasing sophistication of banking business environment and the development of technology make the 

risk profiles of organizations more complex, clearly outlining this risk class, which management is not a new 

practice, but requires now a specific structure, different from those traditionally adopted for credit and market 

risks. 

In line with the principles of CMN Resolution No. 3,380, of June 29, 2006, ITAÚ UNIBANCO HOLDING 

formulated a policy on operational risk management, approved by its Audit Committee and ratified by its 

Board of Directors, to be followed by its local and foreign subsidiaries. 

The policy comprises a set of principles, procedures and tools to enable the company to make permanent 

adjustments to management in view of the nature and complexity of products, services, activities, processes 

and systems. 

The structure formalized in this policy establishes procedures for the identification, assessment, monitoring, 

control, mitigation and communications related to operational risks, and the roles and responsibilities of the 

bodies that participate in this structure. 

The Central Bank of Brazil's legislation compelling financial institutions to allocate capital for operational risk 

came into effect as from July 1, 2008. ITAÚ UNIBANCO HOLDING opted for the use of the Alternative 

Standardized Approach and intends to start using the Advanced Measurement Approach in conformity with 

BACEN regulatory schedule related to the adoption of the advanced method. 

In addition to statutory capital and with the purpose of preparing for the implementation of the advanced 

method, Itaú Unibanco Holding S. A. uses managerial models integrated to Management and also statistical 

models based on distribution of losses for the economic evaluation by business lines, thus enabling the 

allocation of capital for unexpected losses. 

The description of the structure for the operational risk management is available on the website (www.itauunibanco.com.br/ri), 

in the route: Corporate Governance/Regulations and Policies/Operational Risk 

Management Policy. 

IV – Liquidity Risk 

Possibility of occurring imbalances between tradable assets and falling due liabilities - "mismatching" 

between payments and receipts - which may affect the institution’s payment capacity, taking into 

consideration the different currencies and payment terms of their rights and obligations. 

For managing cash liquidity in local and foreign currency, the company makes assumptions about future 

disbursements and receipts, based on statistical and economic and financial models, daily monitored by the 

control and liquidity management areas. As part of the daily controls, limits for minimum cash and liabilities 

concentration are established to anticipate actions to ensure comfortable and profitable cash levels. 

V - Subscription Risk 

Risk arising from an adverse economic situation, which is contrary to the insurance company’s expectations 

when it establishes its subscription policy, and uncertainties existing in the estimate of reserves. 


Analogous to Basel II, the International Association of Insurance Supervisors (IAIS) instructs that insurance 

companies should have a risk management system to supplement the system of minimum capital and 

solvency margin. 

ITAÚ UNIBANCO HOLDING has been using models for managing its insurance operations since 2006 and 

anticipated the capital allocation legislation, SUSEP Resolution No. 178, which privileges institutions to adopt 

the internal models of risk management. The comprehensiveness of internal models goes beyond the lines 

set forth by the regulatory body, and practically includes the whole universe of insurance-related products. 


NOTE 22 – ADDITIONAL INFORMATION 

Insurance policy - ITAÚ UNIBANCO HOLDING and its subsidiaries, despite the low risk exposure due to a 

physical non-concentration of their assets, have the policy to guarantee its valuables and assets at amounts 

considered sufficient to cover possible claims. 

b) Foreign currency – the balances in Reais linked to foreign currency were: 

Permanent foreign investments 

Net amount of other assets and liabilities indexed to foreign currency, 

including derivatives 

Net foreign exchange position 

09/30/2010 09/30/2009 

21,425,858 17,539,092 

(36,793,638) (31,361,012) 

(15,367,780) (13,821,920) 

The net foreign exchange position, considering the tax effects on the net balance of other assets and liabilities 

indexed to foreign currency, reflects the low exposure to exchange variations. 

c) 

Investment funds and managed portfolios - ITAÚ UNIBANCO HOLDING, through its subsidiaries, manages the following 

types of funds: privatization, fixed income, shares, open portfolio shares, investment clubs, customer portfolios and group 

portfolios, domestic and foreign, classified in memorandum accounts, distributed as follows: 

Amount Amount (*) Number of funds 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 09/30/2010 09/30/2009 

Investment funds 

271,630,527 249,097,384 271,630,527 249,097,384 1,603 1,626 

Fixed income 246,470,926 221,461,429 246,470,926 221,461,429 1,362 1,329 

Shares 25,159,601 27,635,955 25,159,601 27,635,955 241 297 

Managed portfolios 

147,500,285 116,879,501 85,864,460 61,248,464 16,781 11,536 

Customers 79,850,022 55,514,586 70,295,110 48,421,433 16,705 11,454 

Itaú Group 67,650,263 61,364,915 15,569,350 12,827,031 76 82 

TOTAL 419,130,812 365,976,885 357,494,987 310,345,848 18,384 13,162 

(*) It refers to the distribution after elimination of double-counting of managed portfolios in investment funds. 

d) Funds of consortia 

09/30/2010 09/30/2009 

Monthly estimate of installments receivable from participants 48,930 37,651 

Group liabilities by installments 3,187,153 2,240,157 

Participants – assets to be delivered 2,972,975 2,082,671 

Funds available for participants 319,611 257,280 

(In units) 

Number of managed groups 664 649 

Number of current participants 150,512 119,787 

Number of assets to be delivered to participants 91,648 69,017 


e) Fundação Itaú Social - ITAÚ UNIBANCO HOLDING and its subsidiaries are the main sponsors of 

Fundação Itaú Social, the objectives of which are:1) managing the “Itaú Social Program”, which aims at 

coordinating the organization’s role in projects of interest to the community by supporting or developing 

social, scientific and cultural projects, mainly in the elementary education and health areas; 2) supporting 

projects or initiatives in progress, supported or sponsored by entities qualified to work in the ”Itaú Social 

Program”; and 3) providing food and other similar benefits to the employees of ITAÚ UNIBANCO HOLDING 

and other companies of the group. 

Donations made by the consolidated companies totaled R$ 194 (R$ 378 at 09/30/2009) in the period, and 

the Foundation’s social net assets totaled R$ 538,238 (R$ 481,634 at 09/30/2009). The income arising from 

its investments will be used to achieve the Foundation’s social purposes. 

f) Instituto Itaú Cultural – IIC - ITAÚ UNIBANCO HOLDING and its subsidiaries are supporters of Instituto 

Itaú Cultural - IIC, an entity formed to grant incentives, promote and preserve Brazil’s cultural heritage.During 

the period, the consolidated companies donated the amount of R$ 36,917 (R$ 30,360 from January 1 to 

September 30, 2009). 

g) Instituto Unibanco - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco, an 

institution whose objective is to support projects on social assistance, particularly education, culture, 

promotion of integration to labor market, and environmental protection, directly and/or supplementarily, 

through the civil society’s institutions. 

h) ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto Unibanco de Cinema, an entity whose 

objective is (i) the fostering of culture in general; and (ii) providing access of low-income population to 

cinematography, videography and similar productions, for which it shall maintain movie theaters owned or 

managed by itself, and theaters to screen art films, videos, video-laser discs and other related activities, as 

well as to screen and divulge films of great importance, especially those produced in Brazil.During the period 

from January 1 to September 30, 2010, the consolidated companies did not make any donation (R$ 9,632 

from January 1 to September 30, 2009). 

i) Associação Clube “A” - ITAÚ UNIBANCO HOLDING and is subsidiaries sponsor Associação Clube “A”, an 

entity whose objective is the provision of social services for the welfare of beneficiaries, in the way and 

conditions established by its Internal Rules, and according to the funds available.These services may 

include, among others, the promotion of cultural, educational, sports, entertainment and health care 

activities.During the period, the consolidated companies donated the amount of R$ 400 (R$ 425 from 

January 1 to September 30, 2009). 

j) Instituto Assistencial Pedro di Perna - ITAÚ UNIBANCO HOLDING and its subsidiaries sponsor Instituto 

Assistencial Pedro di Perna, an entity whose objective is the provision of social services, stimulate sport 

activities, and promote recreation, aimed at the welfare of its members, in the way and conditions 

established by its Internal Rules, and according to the funds available. 

k) 

Exclusions of nonrecurring effects net of tax effects 



CONSOLIDATED 

Sale of investments 

Program for Settlement or Installment Payment of Federal Taxes - 

Law No. 11,941/09 (Note 12d) 

Associação Itaú Unibanco x CBD joint venture 

Provision for contingencies – economic plans 

Amortization of goodwill (*) 

TOTAL 

(*) From 01/01 to 09/30/2009, refers basically to REDECARD operation. 

01/01 to 01/01 to 01/01 to 01/01 to 

09/30/2010 09/30/2009 09/30/2010 09/30/2009 

- 211,652 - 211,652 

144,712 - 144,712 - 

- (363,000) - (363,000) 

(335,149) (165,576) (335,149) (165,576) 

- - - (506,483) 

(190,437) (316,924) (190,437) (823,407) 


l) Reclassifications for comparison purposes – The Company reclassified the balances as of September 

30, 2009, for financial statements comparisons purposes, in view of the regrouping of the following headings: 

in the Balance Sheet, the reclassification of Other Liabilities – Tax and Social Security Contributions to 

Sundry; in the Statement of Income, the reclassification of Profit Sharing to Personnel Expenses and Income 

Tax and Social Contribution; and the reclassification of Dividends Received from Other Investments from 

Other Operating Revenues (Expenses) and Results from Securities and Derivative Financial Instruments to 

Equity in Earnings of Affiliates and Other Investments. 

Prior 

Reclassified 

Reclassification 

disclosure 

balances 

CURRENT AND LONG-TERM LIABILITIES 

559,862,705 - 559,862,705 


128,278,275 - 128,278,275 

Tax and social security 23,456,384 (95,823) 23,360,561 

Sundry 16,682,437 95,823 16,778,260 


612,398,934 - 612,398,934 

STATEMENT OF INCOME 


58,364,631 (33,298) 58,331,333 


18,962,851 (33,298) 18,929,553 

INCOME FROM FINANCIAL OPERATIONS BEFORE LOAN LOSSES 

35,187,717 (33,298) 35,154,419 


24,245,381 (33,298) 24,212,083 


(9,758,146) (1,581,017) (11,339,163) 

Personnel expenses 

(7,234,198) (1,614,315) (8,848,513) 

Equity in earnings of affiliates and other investments 

147,071 33,298 180,369 


14,487,235 (1,614,315) 12,872,920 


14,876,906 (1,614,315) 13,262,591 

INCOME TAX AND SOCIAL CONTRIBUTION (6,162,325) 542,660 (5,619,665) 



PROFIT SHARING 

Employees - Law No. 10,101 of 12/19/2000 

NET INCOME 

(6,770,364) 560,159 (6,210,205) 

608,039 (17,499) 590,540 

(1,237,998) 1,071,655 (166,343) 

(1,071,655) 1,071,655 - 

6,853,820 - 6,853,820 


Report of Independent Auditors 

To the Board of Directors and Stockholders 


1 We have carried out limited reviews of the balance sheets of Itaú Unibanco Holding S.A. (Bank) and Itaú 

Unibanco Holding S.A. and its subsidiary companies (consolidated) as of September 31, 2010 and 2009, 

and the related statements of income, of changes in stockholders´ equity, of cash flows and of added 

value, as well as the consolidated statements of income, of cash flows and of added value for the threemonth 

periods then ended. These financial statements are the responsibility of the Bank´s management. 

Our responsibility is to issue a report on these financial statements. 

2 Our reviews were conducted in accordance with specific standards established by the Institute of 

Independent Auditors of Brazil (IBRACON), in conjunction with the Federal Accounting Council (CFC), 

and mainly comprised: (a) inquiries of and discussions with management responsible for the accounting, 

financial and operating areas of the Bank and its subsidiaries with regard to the main criteria adopted for 

the preparation of the financial statements and (b) a review of the significant information and of the 

subsequent events which have, or could have, significant effects on the financial position and operations 

of the Bank and its subsidiaries. 

3 Based on our limited reviews, we are not aware of any material modifications that should be made to the 

financial statements referred to above for them to be stated in accordance with accounting practices 

adopted in Brazil applicable to financial institutions regulated by the Brazilian Central Bank. 

São Paulo, November 1, 2010 


Auditores Independentes 

CRC 2SP000160/O-5 

Paulo Sergio Miron 

Contador CRC 1SP173647/O-5 



CNPJ. 60.872.504/0001-23 Public company NIRE. 35300010230 

OPINION OF THE FISCAL COUNCIL 

The effective members of the Fiscal Council of ITAÚ UNIBANCO HOLDING S.A., having reviewed the financial 

statements for the period from January to September 2010, have verified the accuracy of all items examined 

and, in view of the unqualified opinion of PricewaterhouseCoopers Auditores Independentes, understand that 

they adequately reflect the company’s capital structure, financial position and the activities conducted during the 

period. 

São Paulo, November 1, 2010. 

IRAN SIQUEIRA LIMA 

President 

ALBERTO SOZIN FURUGUEM 

Member 

ARTEMIO BERTHOLINI 

Member

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