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

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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. Itaú Unibanco S.A. – - September0, 2010 156
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. Itaú Unibanco S.A. – - September0, 2010 157
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3 rd Quarter 2010 Management Discus
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ITAÚ UNIBANCO HOLDING S.A. RESULTS
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3 rd quarter, 2010 Management Discu
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Executive Summary Third Quarter of
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Executive Summary NPL Ratio over 90
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Analysis of the Net Income Manageri
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Analysis of the Net Income Results
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Analysis of the Net Income Non-inte
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Analysis of the Net Income Itaú Un
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Balance Sheet Balance Sheet by Curr
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Balance Sheet Credit Portfolio by P
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Balance Sheet Itaú Unibanco Holdin
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Value at Risk (VaR) The table below
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Performance in the Stock Market 3 r
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Pro Forma Financial Statements by S
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Insurance, Pension Plans and Capita
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Insurance, Pension Plans and Capita
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Activities Abroad
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Activities Abroad Europe Banking ac
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Activities Abroad Below we present
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PricewaterhouseCoopers Av. Francisc
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MANAGEMENT REPORT - January to Sept
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BUSINESS PERFORMANCE We present bel
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• The team of analysts of Itaú C
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ITAÚ UNIBANCO HOLDING S.A. BOARD O
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BANCO ITAÚ BBA S.A. BOARD OF DIREC
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ITAÚ UNIBANCO HOLDING S.A. Consoli
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ITAÚ UNIBANCO HOLDING S.A. Consoli
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ITAÚ UNIBANCO HOLDING S.A. Balance
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Itaú Unibanco S.A. - - September0
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ITAÚ UNIBANCO HOLDING S.A. Stateme
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NOTE 2 - PRESENTATION OF THE FINANC
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The consolidated financial statemen
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The Referential Equity used for cal
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) Capital for Insurance Activity SU
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• Cash Flow Hedge - the effective
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• Mathematical provisions for ben
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NOTE 5 - CASH AND CASH EQUIVALENTS
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I - Derivatives by index Memorandum
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V - Accounting hedge a) The purpose
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i) Changes in adjustment to market
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III - By business sector 09/30/2010
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Page 111 and 112: NOTE 9 - FOREIGN EXCHANGE PORTFOLIO
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Page 119 and 120: NOTE 12 - CONTINGENT ASSETS AND LIA
Page 121 and 122: - Contingencies classified as possi
Page 123 and 124: c) Legal Liabilities - Tax and Soci
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Page 127 and 128: ) Prepaid expenses Commissions 09/3
Page 129 and 130: d) Banking service fees 01/01 to 09
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Page 143 and 144: NOTE 16 - STOCKHOLDERS’ EQUITY a)
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Page 147 and 148: f) Stock Option Plan I - Purpose an
Page 149 and 150: III - Fair Value and Economic Assum
Page 151 and 152: NOTE 17 - RELATED PARTIES a) Transa
Page 155 and 156: NOTE 19 - BENEFITS TO EMPLOYEES Und
Page 159: In accordance with the operations c
Page 163 and 164: e) Fundação Itaú Social - ITAÚ
Page 165 and 166: Report of Independent Auditors To t
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MD&A and Financial Statements (PDF) - Banco Itaú

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