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

Analysis of the Net Income
Non-interest Expenses
Non-interest Expenses
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
Itaú Unibanco Holding S.A.
Variation
Jan-Sep/10 –
%
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
3 rd Q/10 2 nd Q/10 Variation
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
3 rd Q/10 2 nd Q/10 Variation
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
3 rd Q/10 2 nd Q/10 Variation
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.
Dec/08 Mar/08 Jun/09 Sep/09 Dec/09 Mar/10 Jun/10 Sep/10
(*) 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
Management Discussion & Analysis 3 rd Quarter, 2010