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

Analysis of the Net Income
Managerial Financial Margin
The managerial financial margin totaled R$ 11,204
million in the third quarter of 2010, or a R$ 312 million
Itaú Unibanco Holding S.A.
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
%
Financial Margin with Clients 10,298 10,001 29,669 27,800 297 3.0% 1,869 6.7%
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%
Financial Margin with Market 906 891 2,816 4,133 16 1.7% (1,317) -31.9%
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
Management Discussion & Analysis 3 rd Quarter, 2010