As filed with the Securities and Exchange Commission on April 02, 201529, 2016

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 20-F

OR

For the fiscal year ended December 31, 20142015

OR

OR

Commission file number: 001-15276

ITAÚ UNIBANCO HOLDING S.A.

(Exact name of Registrant as specified in its charter)

Federative Republic of Brazil

(Jurisdiction of incorporation or organization)

Praça Alfredo Egydio de Souza Aranha, 100

04344-902 São Paulo, SP, Brazil

(Address of principal executive offices)

Marcelo Kopel

Investor Relations Officer

Itaú Unibanco Holding S.A.

Praça Alfredo Egydio de Souza Aranha, 100

04344-902 São Paulo, SP, Brazil

+55 11 2794 3547

drinvest@itau-unibanco.com.br

(Name, Telephone, E-mail and/or Facsimilie number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

(*) Not for trading purposes, but only in connection with the listing of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

2,770,034,0033,047,037,403 Common Shares, no par value

2,706,967,5862,874,313,101 Preferred Shares, no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

xYes   ¨ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

¨Yes   xNo

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

xYes   ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨Yes   ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

x Large accelerated filer     ¨ Accelerated filer     ¨ Non-accelerated filer

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

¨Item 17¨ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨Yes   x No

 

 

 

INTRODUCTION

 

The information presented in this annual report on Form 20-F is accurate only as of the date of this annual report on Form 20-F and information incorporated by reference in this annual report on Form 20-F is accurate only as of the date of the document in which such incorporated information is contained. Our activities, thebusiness, our financial condition of our finances and assets, the results of transactionsoperations, our assets and our prospects may have changed since that date.those dates.

 

Information contained in or accessible through the websites mentionedreferred to in this annual report on Form 20-F is not part of this annual report unless we specifically state that it is incorporated by reference and is part of this report. All references in this annual report on Form 20-F to websites are inactive textual references and are for information only.

 

 

 

FORM 20-F CROSS-REFERENCE INDEX

(for the purpose of fillingfiling with the United States Securities and Exchange Commission)

 

20-F item number and description	Page
Part I
Item 1. Identity of Directors, Senior Management and Advisers	Not applicable
Item 2. Offer Statistics and Expected Timetable	Not applicable
Item 3. Key Information
3A. Selected financial data	A-13A-15 to A-14,A-16,
	A-138A-160 to A-161
3B. Capitalization and indebtedness	Not applicable
3C. Reasons for the offer and use of proceeds	Not applicable
3D. Risk factors	A-60A-70 to A-66,A-77,
	A-140A-163 to A-141A-164
Item 4. Information on the Company
4A. History, highlights and developmentrecents developments of the company	A-14A-17 to A-20,A-21,
	A-41A-47
4B. Business overview	A-9A-10 to A-10,A-11,
	A-14A-22 to A-18,A-41,
	A-20A-78 to A-36,A-111,
	A-66A-149 to A-94,
	A-130 to A-135A-157
4C. Organizational structure	A-22A-26 to A-23,A-27,
	F-13 to F-14F-17
4D. Property, plant and equipment	A-119A-140
Item 4A. Unresolved Staff Comments	None
Item 5. Operating and Financial Review and Prospects
5A. Operating results	A-97A-4 to A-98,A-7,
	A-119A-114 to A-135A-117,
	A-141 to A-157,
5B. Liquidity and capital resources	A-71A-83 to A-81,A-95,
	A-114A-134 to A-115,A-136,
	A-117A-138 to A-118,A-141,
	A-133A-154 to A-135A-157
5C. Research and development, patents and licenses, etcetc.	A-21A-25
5D. Trend information	A-135A-156 to A-157
5E. Off-balance sheet arrangements	A-119,A-141,
	F-92F-146 to F-93,F-147
	F-103
5F. Tabular disclosure of contractual obligations	A-118A-139
Item 6. Directors, Senior Management and Employees
6A. Directors and senior management	A-44A-50 to A-56A-65
6B. Compensation	A-56,A-65 to A-67,
	F-55F-84 to F-58F-87
6C. Board practices	A-44A-50 to A-48A-57
6D. Employees	A-20A-23 to A-21A-24

6E. Share ownership	A-22A-25 to A-23,A-27,
	A-56
Item 7. Major Shareholders and Related Party Transactions
7A. Major shareholders	A-21A-25 to A-23A-27,
7B. Related party transactions	A-47,A-54,
	A-86,
	F-90F-143 to F-91F-144
7C. Interests of experts and counsel	Not applicable

Item 8. Financial Information
8A. Consolidated Statements and Other Financial Information	A-11,A-13
	A-13A-15 to A-14,A-16,
	F-1 to F-104F-165
8B. Significant Changes	None
Item 9. The Offer and Listing
9A. Offer and listing details	A-37A-42 to A-42A-43
9B. Plan of distribution	Not applicable
9C. Markets	A-37A-42 to A-38A-43,
9D. Selling shareholders	Not applicable
9E. Dilution	Not applicable
9F. Expenses of the issue	Not applicable
Item 10. Additional Information
10A. Share capital	Not applicable
10B. Memorandum and articles of association	A-22 to A-23,A-27,
	A-39A-43 to A-42,A-44,
	A-44A-46 to A-50,A-47
	A-56A-50 to A-58A-57,
	A-65 to A-68.
10C. Material contracts	None
10D. Exchange controls	A-94A-111
10E. Taxation	A-140A-164 to A-146A-169
10F. Dividends and paying agents	Not applicable
10G. Statement by experts	Not applicable
10H. Documents on display	A-10A-12
10I. Subsidiary information	F-13 to F-14
	Not required
Item 11. Quantitative and Qualitative Disclosures About Market Risk	A-71A-83 to A-76A-90,
	A-138
Item 12. Description of Securities Other Than Equity Securities
12A. Debt Securities	Not applicable
12B. Warrants and Rights	Not applicable
12C. Other Securities	Not applicable
12D. American Depositary Shares	A-39A-42 to A-42A-47
Part II
Item 13. Defaults, Dividend Arrearages and Delinquencies	None
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	None
Item 15. Controls and Procedures	A-146A-169 to A-170
Item 16. [Reserved]
16A. Audit committee financial expert	A-45 to A-46A-52

16B. Code of Ethics	A-58A-68
16C. Principal Accountant Fees and Services	A-46A-53
16D. Exemptions from the Listing Standards for Audit Committees	A-57A-68
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	A-118A-139 to A-140
16F. Change in Registrant’s Certifying Acountant	None
16G. Corporate Governance	A-56A-67 to A-58A-68
16H. Mine Safety Disclosure	Not applicable
Part III
Item 17. Financial Statements	F-1 to F-104F-165
Item 18. Financial Statements	Not applicable
Item 19. Exhibits	B-1

 

 

 

GUIDE 3 CROSS-REFERENCE INDEX

(for the purpose of fillingfiling with the United States Securities and Exchange Commission)

 

GUIDE 3 item number and description	Page
Part I Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates andInterest Differential
Average balance sheets	A-138A-160 to A-161
Analysis of net interest earnings	A-139A-160 to A-162
Volume and rate movement	A-139A-161
Part II Investment Portfolio
Book value of investments	A-98A-114 to A-100A-122
Maturity profile	A-101 to A-102A-120
Book value and market value exceeding 10% of stockholders’ equity	A-98A-117 to A-99A-118
Part III Loan Portfolio
Types of Loans	A-104A-123
Maturities and Sensitivities of Loans to Changes in Interest Rates	A-104A-124 to A-107A-126
Risk Elements
Nonaccrual, Past Due and Restructured Loans	A-104A-123 to A-108,A-134
	A-110 to A-113
Potential Problem Loans	A-108A-128 to A-110A-130
Foreign Outstandings	A-113 to A-114A-134
Loan Concentrations	A-107 to A-108A-127
Other Interest Bearing Assets	A-138A-160
Part IV Summary of Loan Loss Experience
Analysis of the Allowance for Loan Losses	A-97A-129
	A-109 to A-110
Allocation of the Allowance for Loan Losses	A-110A-130
Part V Deposits	A-114A-134 to A-115A-136
Part VI Return on Equity and Assets	A-139A-162
Part VII Short-Term Borrowings	A-114A-134

 

 

 

Annex A – Annual Report

 

Index

	ContextIndex
	A-4	Macroeconomic context
	A-7	Context of Itaú Unibanco Holding
	A-10	Context of this report
	Context
	A-04	Macroeconomic context
	A-08	Context of Itaú Unibanco Holding
	A-11	Context of this report
	Our profile
	A-13A-15	In numbers
	A-14A-17	20142015 highlights
	A-19A-21	Our history
	A-24A-28	Our business
	A-36A-41	Competitive strengths
	A-37A-42	Our shares
	Our governance
	A-44A-50	Our practices
	A-44A-51	Management structure
	A-56A-67	Main differences between Brazilian and U.S. corporate governance practices
	Our risk management
	A-60A-70	Risk factors
	A-66A-77	Risk and capital management
	A-81A-96	Regulatory environment
	Performance
	A-97A-114	Financial performance
	A-136A-158	Consolidated Financial Statements (IFRS)
	Attachments
	A-138A-160	Selected statistical information
	A-140A-162	Exchange rates
	A-140A-163	Considerations for ADS holders
	A-146A-169	Controls and procedures
	A-146A-170	Sustainability
	A-147A-171	Glossary

 

Annual Report20142015

Context

Macroeconomic context

Global context

The 2008 crisis in the global financial markets significantly affected the world economy. The crisis led to: (i) recession and increasedhigher unemployment in the world’s leading economies; (ii) a reductiondecrease in investment on a global scale; (iii) a decline in credit availability and liquidity; and (iv) a general reductiondecrease in the levelnumber of transactions in capital markets worldwide. The world economy, as well as the credit and capital markets, havehas recovered substantially since 2008, but2008. However, the overall condition of the global financial markets is still relatively fragile.

The world economy is currently characterized by divergentrecovering from the 2008 crisis, but global GDP growth prospects. While theis still below potential. As noted below, U.S. economyreal GDP grew 2.4% in 2015 and is expected to expand at ratesa rate of 3.2% in 2015 and 2.9%2.6% in 2016 (according to the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters), the. The Eurozone and Japan will likely struggleare still struggling to improve their modest economic growth.growth rates. Meanwhile, growth in China is decelerating, and growth in other emerging markets has been slow.

Growth inIn the Eurozone, growth resumed in the second halfquarter of 2013 and continued at a moderate pace through 2014.2014 and 2015. More fundamentally, fiscal reforms have been implemented in European countries, and both confidence and financial conditions have improved when compared with 2013,recent years, creating conditions to sustain that support moderate growth. Modest growth,In January 2015, the still-large output gap and lower commodity prices pushed inflation down in the Eurozone to a negative level: -0.2% year over year as of December 2014. The European Central Bank (ECB) responded to falling inflation and subdued growth overinflation expectations by announcing a quantitative easing program (in addition to the courseinterest rate cuts and other measures introduced in the second half of 2014) that included the year by cutting interest rates in June and September 2014, announcing targeted longer-term refinancing operations, adopting measures to increase liquidity and establishingpurchasing of a program for the purchasetarget amount of certain types of privately issued assets. The ECB has also announced it will purchase €60 billion per month in assets, including government bonds, from Marchbonds. In December 2015, untilthe minimum length of the quantitative easing program was extended by an additional 6 months, meaning that it will run through at least September 2016.March 2017. In March 2016, the European Central Bank increased the purchasing of assets in an additional amount of €20 billion per month.

TheGiven the unprecedented monetary policy measures implemented by developed countries since 2008, have created a period of significantly increased liquidity has been available for investment in emerging markets, which has in turn boosted asset prices.prices in those markets. As the U.S. economiceconomy has continued its recovery progresses and its outlook improves,remains positive, the U.S. Federal Reserve is expectedhas begun to begin anraise interest rate hiking cycle. According to the minutes from the December meeting ofrates, as announced at the Federal Open Market Committee (FOMC), most committee members indicated thatDecember 2015 meeting. The U.S. Federal Reserve currently anticipates it wouldmay well be appropriate to start raisingcontinue gradually increasing the target range for interest rates in 2015.rates.

EngineeringSignificant amounts of financial resources have been withdrawn from investments in the emerging markets and other high-yield investments in anticipation of the gradual monetary tightening that is likely to occur in years ahead. However, engineering a smooth exitwithdrawal of funds from investments in emerging markets from a period of extraordinary liquidity remains a challenge for the years ahead. We believe that this transition is likely to be gradual, but may still result in more volatile asset prices in emerging markets and could affect our operational results.

U.S. economic activity strengthened in 2014, with real GDP growinggrew 2.4% in 2015, according to U.S. Bureau of Economic Analysis advanced estimates, the same growth rate as in 2014. The economic expansion is expected to continue at a moderate pace in 2016 (according to the Survey of Professional Forecasters issued by 2.4%the Federal Reserve Bank of Philadelphia), an improvement comparedsustained by a solid domestic demand. Domestic demand should be supported by: (i) accommodative monetary and financial conditions; (ii) optimism among consumers and businesses, according to January 2016 survey data published by The Conference Board and the Institute for Supply Management, respectively; and (iii) a healthy labor market, with the 2.2%net job growth in 2013. After a sharp slowdown in the first quarter, when U.S. GDP declined by 2.1% on an annualized basis, GDP grew at annualized rates of 4.6%, 5.0% and 2.2% in the second, third and fourth quarters of 2014, respectively. Job creation averaged 260,000 positionsaveraging 229,000 per month in 2015 and a decline in the 12-month period ended December 31, 2014. The U.S. unemployment rate declined to 5.6%5.0% in December 2014, the lowest level since June 2008. Survey data has indicated that business and consumer confidence remained at high levels.2015.

United States Job Creation – Nonfarm Payroll

(seasonally adjusted , thousands)

Source: Itaú Unibanco Holding and U.S. Bureau of Labor Statistics

China’s GDP grew by 7.3%increased 6.8% year over year in the fourth quarter of 2014,2015, continuing its slowing trend. Chinese policymakers are showing signs of a renewed signs that they are committedcommitment to medium-term reforms to improve overall productivity, and are acceptingappear willing to accept slower but more balanced GDP growth. This is expected to help the ongoing rebalance the economyfrom investment led growth towards consumption and sustainservices growth, in the medium term, although some implementation risks remain. More balanced growth means that growth in demand for industrial metals may continue to decelerate more than overall economic growth.

Latin America context

In Latin America, the commodity-exporting economies continue to grow at a slower rate than they did over the previous decade, as lower commodity prices weigh down investment, confidence and national income. Mexico has not fully benefited from the recovery of the U.S. economy, and the drop in oil prices has been an obstacle to the implementation of energy reform in the country. Low oil prices have generally shown lower growth ratesalso hurt Colombia’s GDP growth. After growing by 4.6% in 2014, thanColombia’s GDP grew by only 3.1% in 2015. A potential peace agreement with FARC leaders may improve the business environment in Colombia in the previous year.coming years. Low copper prices have had a negative effect on the Chilean economy. In 2015 Chile’s GDP grew by only 2.1%.

Due to weaker currencies, inflation has been high in most of the region, with a number of central banks raising policy rates despite slow economic growth. Furthermore, the economic slowdown and lower commodity-linked fiscal revenues have led some governments to cut expenditures.

Solid fundamentals built over the past decade have helped Chile, Colombia, Peru and Mexico is an exception. While domestic policies and higher global growth will likely lead to recovery in many Latin American countries, we now anticipate a weaker rebound than we were previously expecting, due to lower commodity prices.avoid recession.

The table below shows the real GDP growth rates in seven Latin American countries as of and for the years (ending onended December 31)31, 2015, 2014, (except2013, 2012 and 2011, except as otherwise indicated), 2013, 2012, 2011 and 2010.indicated.

(1) IGA (Indice General de Actividad), a GDP proxy. Source: OJF (Orlando J. Ferreres & Asociados S.A.).

(2) Source:Banco Central de Chile.

(3) Source:Banco de la República.

(4) Source:Instituto Nacional de Estadística y Geografía.

(5) Source:Banco Central del Paraguay.

(6) Source:Banco Central de Reserva del Perú.

(7) Source:Banco Central delde Uruguay.

Fiscal problems in advanced economies, sluggishnessSluggish economic growth in developed countries and inflation and other issues in developing economies and in particular– particularly in Latin America – may have an impact on our future growth in Brazil and other places where we operate, and therefore, also on the results from our operations.

Brazilian context

As a Brazilian bank with most of our operations in Brazil, we are significantly affected by the economic, political and social conditions in the country. In recent years,From 2004 to 2011, we have benefited from Brazil’s generally stable economic environment, with average annual GDP growth of approximately 4.4% from 2004 to 2011,, which led to increased bank lending and deposits. However, Brazil’s GDP growth rates were 1.8%rate declined to 1.9% in 2012, 2.7%3.0% in 2013 and 0.1% in 2014, with last year’s economic slowdown partly reflecting a deceleration in potential growth. In 2015, GDP decreased by 3.8%.

GDP growth

(%)

Source: Itaú Unibanco Holding and IBGE.

In April 2013, the Central Bank initiated a monetary tightening cycle, increasingcycle. The Central Bank gradually increased the benchmark interest rate payable to holders of securities issued by the Brazilian government and traded through the Special Clearing and Settlement System (Sistema Especial de Liquidação e Custódia, or Selic) from a low of 7.25% in March 2013 to a high of 11.00%14.25% in April 2014. In October 2014, the Central Bank resumed the monetary tightening cycle. In December 2014, the Selic rate reached 11.75%.July 2015, with no further increases since then. The recent increase in interest rates has also triggered an increase in the reference interest rate (Taxa Referencial, or TR), which rosehas risen from approximately 0.05% per month in December 2013 to approximately 0.11% per month inat the end of July 2014 to approximately 0.23% per month at the end of December 2014.2015. Bank lending as a proportion of GDP increased to 58.9%54.2% in December 20142015 from 56.1%53.1% in December 2013.2014.

Selic

(nominal interest rate)

Consumer price inflation remained at high levelsSource: Itaú Unibanco Holding and Central Bank

Bank Lending

(as % of GDP)

Source: Itaú Unibanco Holding and Central Bank

Inflation reached 10.7% in 2015, up from 6.4% in 2014. The 12-month IPCA (Índice de Preços ao Consumidor Amplo) inflation rate reached 6.41%Government-regulated prices (such as electric power prices, water and sewage tariffs and fuel prices) increased by 18.1% in 2015 due to a decrease in government subsidies and higher taxes on December 31, 2014, above the target of 4.5%.some key regulated prices.

12-month IPCA inflation rate

Source: Itaú Unibanco Holding and IBGE

The monetary tightening cycle implemented by the Central Bank since April 2013 is expected to keep inflation under control but also to affecthas affected domestic economic activity. If inflation persists or economic activity declines, family incomescontinues to decline, families income may decreasekeep decreasing in real terms,terms. In 2015, real wages decreased by 3.7% compared with 2014, which could eventually lead toresult in higher delinquency rates for loans in the Brazilian banking system. The non-performing rate for household loans has increased recently, rising from 3.7% in June 2015 to 4.2% in December 2015.

ForThe Brazilian primary public budget result continued on a downward trend in 2015. Cuts in discretionary spending and tax hikes were insufficient to offset the past three years,drop in tax revenues and growth in mandatory expenditures. The Brazilian primary public budget balance ended the Brazilian government adopted an expansionary fiscal stance, with the result that the primary surplus in the public sector fell from 3.1%year at -1.9% of GDP (-0.9% excluding payment of delayed expenses), after a deficit of 0.6% of GDP in 2011 to -0.6% of GDP for the 12-month period ended December 2014. The reductiondecrease in the primary surplus, combined with the recent increase in the Brazilian government’s debt-financing costs, has contributedadded to the relative pressure on public debt. ConsideringThe outlook for 2016 remains challenging, given the need fortrend of falling revenues and rising mandatory expenses will likely continue, since the fiscal adjustment as well asprogram faces political challenges at the National Congress. Standard & Poor’s cited these challenges associated with implementing it, we believe that a fiscal consolidation trend is likelyin explaining its decision to emerge overlower the next few years, which we expectrating of the Brazilian sovereign debt to have positive effectsbelow investment grade on confidence and growth.September 9, 2015. Fitch also downgraded Brazil’s sovereign rating to non-investment grade on December 16, 2015. On February 25, 2016, Moody’s downgraded Brazil’s sovereign debt rating to non-investment grade.

In addition, Brazil has in recent years implemented a large number of regulatory changes, such as changes in banks’ reserve and capital requirements for financial institutions, as well as other macro-prudential policies, (suchsuch as capital controls). In September 2012, the additional reserve requirement for demand deposits was reduced from 6.0%controls. Please refer to zero,section Our Risk Management, item Regulatory Environment, Implementation of Basel III in Brazil and in March 2013, the additional reserve requirement for time deposits was reduced from 12.0% to 11.0%. In March 2014,section Performance, item Required Reserve Deposits with the Central Bank, revoked rules that reduced the interest applicable to required reserves for time deposits. The reduction of interest applicable to required reserves for time deposits was intended to stimulate the transfer of liquidity from larger to smallerfurther information.

Outstanding loans provided by Brazilian financial institutions and resulteddecreased in more than R$46 billion being2015 adjusted for inflation. Year-to-year total bank loans fell by 3.7% as of December 2015 in real terms, compared with an expansion of 4.6% as of December 2014. New loans decreased, in all sectors, by 11.1%, as of December 2015 compared with a decline of 1.1% in December 2014, both on an annualized basis. Non-performing household loans increased 0.5 p.p. to 4.2% as of December 2015 when compared with the same month in 2014. Non-performing loans to non-financial corporations have increased since January 2015, reaching 2.6% in December 2015, compared with 1.9% in December 2014.

injected into smaller financial institutions. In June 2014, the reserve requirement for demand deposits was increased from 44% to 45%.

More recently, in August 2014, the Central Bank made certain changes to capital requirements in another step toward Basel III standards. The risk weight of 150% and 300% applicable to consumer loans with maturities longer than 36 and 60 months, respectively, were reduced to 75%. In addition, the Central Bank changed certain classification criteria whereby a larger number of companies now fall under the retail segment, which has a lower required risk weight.

The Central Bank also changed the rules for required reserves for time deposits. For the 12-month period starting in August 2014, 60% of required reserves for time deposits will not be remunerated (previously, 100% of these reserves were remunerated at the Selic rate). Banks can use these deposits to provide vehicle loans and, since October, working capital financing. The use of these deposits is allowed only when the amount exceeds the average of loans granted in the first six months of 2014. These deposits can also be used for motorcycle financing or to acquire loan portfolios from eligible financial institutions. Furthermore, the eligibility rules for these institutions are now less restrictive.

The Brazilianreal has depreciated against the U.S. dollar, with the exchange rate reaching R$3.96 per US$1.00 as of December 31, 2015, compared with R$2.66 per US$1.00 as of December 31, 2014, compared with R$2.39 per US$1.00 as of January 2, 2014. The strengthening of the U.S. dollar across theagainst major currencies wasand the main driver behinddrop in commodity prices have been important drivers of the depreciation of the Brazilianreal in dollar terms. On March 24, 2015,Economic and political uncertainties, as well as the downgrading of Brazil’s sovereign rating to speculative grade by Standard & Poor’s and Fitch, have affected the country’s foreign exchange market. In an attempt to contain excess volatility, the Central Bank announced that will discontinueintervened in the foreign exchange swap program (which started on August 22, 2013). The Central Bank also indicated that it will seek to fully rollovermarket through the sale of foreign exchange swaps maturingderivatives from May 1,January to March 2015 onwards.and in September 2015.

Following the Central Bank’s revision of its methodology for calculating Brazil’s external accounts in March 2015, Brazil’s current account deficit (the net balance from the trade of goods and services and international transfers) was 4.2%4.3% of GDP asfor December 2014. By December 2015 the deficit decreased to 3.3% of December 2014, up from 3.6% as of December 2013. However,GDP. Brazil has maintained its external solvency, with US$374369 billion in international reserves and US$348.5335 billion in external debt as of December 2014.

The credit market continued to slow down in 2014. Real year over year total loan growth in Brazil slowed to 4.6% as of December 2014 from 8.1% as of December 2013. Total new loan growth declined to a real annual average of -0.9% in December 2014 from 5.1% in December 2013. The growth rate of non-earmarked credit transactions has continued to decline. Non-performing household loans in Brazil have decreased as a share of total household loans, falling to 3.7% in December 2014 from 4.1% in December 2013. The non-performing share of loans to non-financial corporations has remained at around 2.0% for the past year.2015.

General elections were held in Brazil in October 2014 to elect the president, senators and representatives for the presidency, the national congress,National Congress, state governorshipsgovernors and state legislatures. A run-off election for the Brazilian presidency occurred on October 26, 2014, pursuantAfter failing to whichwin a majority in a first round of voting, Dilma Rousseff was re-elected as president of Brazil.Brazil in a runoff. The government has since initiated a fiscal adjustment process, announcing austerity measures aimed at improving fiscal conditions and reducing lagsnext general elections will be in regulated prices.October 2018.

The table below shows real GDP growth, the inflation rate, exchange rate variation and interest rates in Brazil as of and for the years ending onended December 31, 2015, 2014, 2013, 2012 2011 and 2010.2011.

Nominal exchange rate

(R$/US$)

Source: Itaú Unibanco Holding and Central Bank.

Central Bank exchange rate swaps

(total outstanding, US$ billions)

Source: Itaú Unibanco Holding and Central Bank.

Context of Itaú Unibanco Holding

Message from the Chairman of the Board of Directors

Dear Stakeholder,Stockholders,

In 2014, we celebrated nine decades since the foundinglast years, our institution was able to generate consistent results at levels that increasingly outdid the performance of Casa Moreira Salles, our first financial company that later became Itaú Unibanco. History shows how tied we areprevious records. In addition to Brazil’s development and how our desire to grow together with the country has made us an institution that has gone far beyond the dreamsquality of our founders. Sinceteams, working in an environment driven by a unique corporate culture and based on meritocracy, this development may be explained by strategic decisions proven right to the point, such as strong technology investments, our inceptionadequate appetite for risk in increasingly challenging scenarios, diversified sources of income, focus on service provision and a strong-willed search for higher management efficiency. Accordingly, Itaú Unibanco’s net income reached R$12.6 billion in 2012, R$16.4 billion in 2013, R$21.6 billion in 2014, and R$25.7 billion in 2015, thus showing that the strategies adopted were adequate, even under rather volatile macro-economic circumstances.

In spite of a substantial reduction in Brazil’s GDP in 2015 and a new massive fall expected for this year, we continue to invest and carry out changes in our bank to make it increasingly simpler, easier to understand and able to serve clients with quality and whenever they need it most. Accordingly, we expanded the number of digital branches and developed new channels for our millions of clients, such as a correspondent bank inapplications and communications tools for the city of Poços de Caldas, which counted on a few more than 200 clients inmost diverse interfaces. Noteworthy is the early 1920’s, steady investments in the organic growthopening of our operations and the dozens of mergers and acquisitions have created the formidable organization we are today. In 2014,new Data Center in 2015, a more energy efficient center able to increase our assets exceeded R$1.1 trillion.processing capacity 25-fold.

We are currently the largest private bank in Brazil and in Latin America, we have established a presence in over 18 countries around the world and we continue to expand our operations outside of Brazil. The merger of our business in Chile with CorpBanca, which is pending relevant approvals, will elevate us from the seventh to the fourth largest bank in Chile, creating a platform for growth and seeking new business opportunities in the financial sectors in Chile, Colombia, and Central America.

In order to support our business, in early March we opened our new data center, one of the largest and most modern in the world.

The strategy we have adopted since 2011 of expanding our loan portfolio with lower risk operations, focusing on insurance and services, and seeking the ongoing improvement of our efficiency indexes, has proved to be successful. We have recorded sound results and embraced principles that ensure our sustainability. In 2014, our net income reached R$21.9 billion, with a 24.3% return on equity⁽¹⁾.

Our expenses for allowance for loan losses decreased in 2014, despite the 9.9% growth of our loan portfolio. Payroll and real estate loans, which provide for less defaults and for a more secure portfolio, were the products with the greatest growth over the year, increasing 79.5% and 18.8%, respectively over the previous year. In December, our 90-day non-performing loan ratio reached 3.1%, the lowest since the Itaú and Unibanco merger.

Our income from insurance and service fees also experienced growth. These products have become increasingly important to our institution, contributing to less volatility in our results since they are less impacted by economic cycles when compared to credit activities. Our insurance operation is based on the bancassurance model, which prioritizes products that may be offered through a number of our banking channels. In line with this strategy, in October 2014 we consummated the sale of our large risk insurance operation, whose clients are middle-market and large companies with high-insured amounts. The impact of this sale was recorded in the fourth quarter results of 2014.

The increase in our income from insurance and service fees and the controlled increase of our expenses caused our efficiency ratio to improve by 190 basis points in 2014. We are constantly reviewing our processes and seeking opportunities to do more with less.

Even after 90 years, we are extremely proud of being a modern, agile company, that possesses a strong culture, an engaging purpose and continuing care with respect to our reputation. We had the most valuable brand in Brazil for the past 11 years, and our shares are included in the portfolios of the world’s major sustainability indexes. And what do we want today? We want to continue growing, as a result of a very clear vision: to satisfy our clients and achieve high sustainable performance in our business.

In line with this vision, in February 2015 we implemented a new organizational structure for our management. These changes are aimed at ensuring preparation for a seamless and secure transitioncarried out significant advancements in connection with our institution’s corporate culture by revisiting our Way of Making it Happen, with the succession processpurpose of Mr. Roberto Setubal,reinforcing attitudes that will be defining in the present moment of our CEO, who will reachhistory and ought to guide the age limit for holding his current positionactions of all of us in 2017, as well as addressing more pressing challengesface of new arising challenges. Among other things, the attitudes of our Way of Making it Happen seek to establish high standards we must adopt in view ofour relationships with clients, employees, stockholders, competitors, suppliers, governments and society in general. These attitudes reflect the current economic climate. Accordingly,way we intend to proceed towards our vision: being the leading bank in addition to the position of CEO, our executive committee is now made up of three General Managers and two Vice Presidents: General Manager of Retail, General Manager of Wholesale, General Manager of Technology and Operations, Vice President of the Finance and Risk areas, and Vice President of the Legal and Human Resources areas. It is a more streamlined and agile structure, which will focus on the bank’s priorities of efficiency, simplificationsustainable performance and client satisfaction.

Yours faithfully.Early 2015 we announced a significant change in our management structure, which is now composed of three general directors and two vice-presidents. In addition to making the organization ready for the succession process of our CEO, Mr. Roberto Setubal, with this new governance, our decision making became more standardized and expeditious, and we could create more synergy among teams, as well as improve the internal dialogue.

(1) AttributedIn the international front, noteworthy is the merger of Itaú Chile with Corpbanca on April 1^st, 2016, creating one of the most important financial institutions in Latin America. Itaú Corpbanca strengthens our credit portfolio in Chile from the 7^th to the owners4^th position, and places us in the 5^th position in Colombia.

In 2015, we expanded our repurchases of preferred shares in the capital markets – and, in line with this, we canceled 100 million treasury shares, assuring stockholders an increased stake in the institution’s earnings per share. These repurchases are also important to optimize the bank’s use of capital and make shares available for our executive’s long-term compensation programs.

I invite everyone to know more about Itaú Unibanco by reading this report. Here we talk about our history, we present details of operations, strategies, results and corporate governance practices, sustainability and risk management, among other matters.

I wish you all a good reading.

Cordially,

Pedro Moreira Salles

Chairman of the parent company.Board of Directors

Message from the Chief Executive Officer

Dear Reader,reader,

The year 2015 was characterized by major challenges in the political and economic scenario. While we observed recovery movements in the economies of the United States and Euro Zone, the Brazilian GDP posted a reduction for the second consecutive year.

A few years ago we began to prepare for a less favorable scenario, adopting a strategy based on investments in technology, appetite for credit with lower risk profile, expansion of our capabilities as a provider of insurance, pension plan and premium bonds products and services, as well as discipline in the control over operating costs, and international expansion in Latin America.

These medium and long- term decisions enabled us to be a more efficient institution and less exposed to macroeconomic risks in Brazil. With discipline and focus on the implementation of this strategy, the trust of our clients and efforts of our employees, we were able to close another year with record results: our net income in 2015 reached R$25.7 billion, a 19.4% increase as compared to 2014. Our annualized recurring profitability on average stockholders’ equity was 24.8%. Earnings per share grew additionally 2.3% due to the repurchase, in 2015, of 1.9% of own shares issued.

Value added to the economy reached R$ 59.5 billion, a 7.6% increase in relation to the previous year, distributed among employees (30%), taxes (24%), reinvestment of profit (34%), stockholders (10%) and rents (2%). Our efficiency ratio, which represents the relation between the bank’s expenses and revenues, reached 44.0%, with improvement of 3 percentage points. The Basel ratio was 17.8%, above that required by the Central Bank of Brazil, showing soundness and capital availability. Our expanded total credit portfolio posted a 4.2% growth in 12 months, reaching R$ 548.5 billion.

The year 2015 was also characterized by our continuous work to become an increasingly Digital Bank, expanding the number of digital branches to 94, an addition of 63 in relation to 2014, and by the development of new channels for the client, such as applications and digital communication mechanisms. Last year, 67% of the transactions carried out in the bank, equivalent to 8.9 billion operations, originated from internet and mobile phones. In addition to this initiative, noteworthy are the opening of our new Data Center, more efficient in energy consumption, and that will increase by 25 times our processing capacity, and the reorganization of our Executive Committee, which expedited our decision making process.

In 2014, our profit was R$21.9 billion, an increasethe international area, in the beginning of 32.3% from 2013, and our annualized return on average equity⁽¹⁾ was 24.3%, oneApril of the best results sincethis year, we carried out the merger of Itaú Chile with Corpbanca, giving rise to Itaú Corpbanca. This operation significantly increases our presence in Latin America and Unibanco, reflecting the on-going improvement of our bank’s operational quality. Our capital base increased in 2014, our BIS ratio reached 16.9% in December 2014, 30 basis points higher than in December 2013. These results are the consequence of a reduction in our risk appetite, a focus on the expansion of client services and strict controls over expenses. These initiatives, which we commenced in 2011, allowed us to reduce our allowance for loan losses, increase revenues from insurance & services and increase expenses in line with inflation, leading to the subsequent improvement of our efficiency ratio.

Our total loan portfolio was R$452.4 billion,represents an increase of 9.9% from December 31, 2013. Our lower risk portfolios, such as the payroll and real estate loan portfolios, grew and, as a consequence, the delinquency reached 3.1%, the lowest level since the merger of Itaú and Unibanco. It is worth noting that in 2014, our loan portfolio alone reached a return that is equivalent to the bank’s capital cost, a fact that was only possible due to the review of the risk appetite in 2011. In 2014, our profit⁽²⁾from loan operations was R$9.3 billion.

Banking service fees and revenues from insurance, the key componentimportant step of our strategy grew 13.2% in 2014 over 2013. Our acquisition of REDE in 2012,to regionalize the integration of Credicard’s operation and the salebank. Currently, approximately 13.1% of our large risk insurance operationloans are strategic initiatives focusedmade to clients in Latin America (excluding Brazil). During the next 2 to 3 years, we will be integrating these operations. The organization resulting from the merger will be one of the most robust financial institutions in Latin American, and it will be benefited by synergy gains, lower funding costs and a larger customer service network.

We expect once again a challenging scenario in 2016; thus, we will maintain our strategy of managing risks very carefully, keeping the high capitalization level of the bank, focusing on operations efficiency and services quality.

Good reading to you all.

Cordially,

Roberto Setubal 

Executive President & CEO

A bank made for people and, above all, by people

We have 91 years of history, we are the growthlargest private bank in Latin America in terms of total assets, and we are present in 19 countries. In spite of becoming increasingly international, our non-interest incomeroots are yellow and mass-market insurance activities, typically relatedgreen. We were started by five people who dared to retail banking. The significant return of financial services and insurance are relateddream big. Five visionaries who were committed to the strong market presence of our retail bankbusiness, the country and, our abilityabove all, to offer servicespeople. From the very beginning, we have always sought to think ahead and insurance to the bank’s clients. In 2014, our profit⁽²⁾ from insurance & services activities amounted to R$11.4 billion.

During 2014, our expenses grew only 6.6% over 2013 and we reached a morepromote positive risk-adjusted efficiency ratio of 64.3%, the best such ratiochanges in our history. Our investments and efforts are focused on the development of platforms and services that use state-of-the-art technology focusing on mobility and convenience, with a view to simplifying and making easier the lives of people. Therefore, we place our clients. The construction workstructure and our intellectual and technology skills at their service.

Back in 1960, when no one could imagine that technology would one day be an integral part of our lives, we were guided by the vision that technology would be the only way to keep us going on in an ever-changing world. We started up from the principle that technology would not only make the banking activity easier, but also that it would be at its core. Therefore, in 1970, Itaú built up one of the four largest data processing centers in Brazil. Still back in the 1970s, Unibanco was the first bank to adopt the IBM 3600 processing system. And so, with this emphasis on innovation we have proceeded, to go along with the world as it progressed.

Over the years, we have thought about and revised our newsolutions, our branches, our customer service model, and the way we work. We progressed by bringing the client into the core of our operation, working to strengthen the bank’s availability and the client’s experience. For instance, in 1983, we implemented the first ATM in Brazil, and, in 1991 we created the “Banco 30 Horas”, pioneering a service that made the bank available to clients around the clock, for 30 hours, six hours at the branches and the other 24 hours on the phone.

This is the way we have carried on until now, by looking ahead and focused on people. In 2015, we opened the most state-of-the-art data center in the interior of the State of São Paulo, which required investments ofbanking sector. This infrastructure provides for our ongoing growth towards the next decade, by expanding our capacity to serve clients with more than R$3 billion, was completed as plannedquality, speed and security. This is the basis we successfully implementedhave built upon for the facility’s environment infrastructure. We started the process of migrating our systems and services to the new data center and expect to complete the process during the second half of 2016. As a result, our processing capacity for data allocation will be multiplied 25 times.future.

In Latin America, we obtained someToday over 67% of the regulatory approvals necessary for the merger of Banco Itaú Chileour operations are conducted via digital channels (internet and CorpBanca and wemobile banking). We expect it to complete the merger beforegrow even more by the end of 2015.2016. This is a reflection of people’s behaviors. We are also increasingly getting ready to serve this new customer profile with excellence – the same excellence that has characterized us over our whole history.

In 2015, weThe world is increasingly changing, faster and faster. Continuing to be alert to changes is an assumption of ours; nevertheless, thinking ahead of our time is what will maintainensure our relevance to people. We have the strategy commencedongoing challenge to be the driving force to change society, to be agile and to prize excellence in 2011 which has been bringing us positive results asour services and experience wherever people are and want to be. It is an integral part of our culture. We believe that it is less cyclical givengood for us only if it is good for the levels of revenues derived from insurance & services.client. We are well placed to facepeople serving people. We are over 90 thousand people building up this bank every day, people who go beyond, who build up an increasingly relevant and changing bank for all those who have a challenging environment in 2015.

I invite you to read our Consolidated Annual Report which, for the second consecutive year, integrates our Form 20-F and the prospectus for the issue of debt securities, which this year includes more objective language, thus reducing the size of the report while maintaining a comprehensive level of content.

We thank all our shareholders and clients for the trust they have placed in us.

Enjoy your reading!

(1) Attributed to the owners of the parent company.

(2) Net income attributable to owners of the parent company.

relationship with Itaú Unibanco.

Business Strategy

Our boardBoard of directorsDirectors is the body responsible for definingestablishing the general guidelines of our strategy.business. Strategic decisions taken by our board of directors are supported by the Strategy Committee, which provides data and information about critical strategic business issues.matters. The Strategy Committee’s activities and responsibilities range from evaluating investment opportunities and budget guidelines to providing adviceissuing opinions and recommendations in order to support the decisions of the Board of Directors. The Economic Scenarios Sub-Committee supplies macroeconomic data to our chief executive officer for the monitoring of our consolidated strategy. The Strategy Committee, is supported by the economic scenarios sub-committee, which provides macroeconomic data for discussions on strategies, investments and budgets.supporting its discussions. Please refer to section Our Governance, item Our Management Structure, Committees of the Board of Directors, Strategy Committee for further information.

Expand our operations in Brazil and abroad

We intendcontinue to expandexamine potential business operations which would create additional value to our operationsstockholders, in Brazil and abroad. In January 2014,line with our Latin America expansion strategy, and with a vision to create value and sustainable performance in 2015, the merger between Itaú Chile and CorpBanca was approved by the respective stockholders' meetings as well as by the regulatory authorities in Chile, Brazil, Colombia and Panama. As provided in the amendment to the Transaction Agreement dated of June 2, 2015, the merger of Itaú Chile with and into CorpBanca occurred on April 1, 2016.

In March 2015, we entered into an agreement with CorpBancaMasterCard Brasil Soluções de Pagamento Ltda. to establish an alliance for a 20-year term, in the payment solutions market in Brazil. This alliance will operate a new electronic payments network through a company controlled by MasterCard, in which we will have certain veto and its controlling stockholders for the merger of Banco Itaú Chile and CorpBanca. Some of theapproval rights. This alliance is subject to approval by regulatory approvals required for the conclusion of this operation have already been obtained. authorities in Brazil.

In August 2014, reaffirming our commitment to the Chilean market and the vision of being the largest private bank in the Latin American market, we expandedin furtherance of the joint venture agreement entered into in 2011 with Munita, Cruzat & Claro S.A. Corredores de Bolsa, a brokerage house, andwe obtained 100% of the ownership interest in MCC Securities Inc. (MCC), obtaining 100% interestan investment advisory financial services firm based in MCC.Chile.

In 2013, we carried out a series of transactions aimed at expanding our operations in Brazil. In December 2013, we concluded the acquisition of 100% of the shares of Banco Citicard S.A. and Citifinancial Promotora de Negócios S.A., for approximately R$2.8 billion in cash, including the “Credicard” brand. In Latin America, we acquired Citibank Uruguay on June 28, 2013, including both retail banking and credit card operations. In addition, in order to consolidate and expand our operations in Europe, in 2013 we completed the transfer of the central administration and registered offices of our corporate banking unit in Europe by means of a cross-border merger of Banco Itaú BBA International S.A., a bank headquartered in Portugal into Itau BBA International plc (formerly Itau BBA International Limited). Please refer to section Our Profile, item Our Business, Our International Business, ItaúItau BBA International for further details about ItaúItau BBA International’s business.

In 2012, we successfully acquired the remaining 49.9% interest of REDE from minority shareholders for R$11.8 billion by means of a tender offer. On July 9, 2012, we entered into an association agreement with Banco BMG S.A., focusing on the offering, distribution and commercialization of payroll loans. We were also authorized by the Colombian regulatory authorities to structure our wholesale and investment banking operations in Colombia through Itaú BBA S.A. Colombia.

Focus on Non-Interest Income

We constantly seek, implement andhave continued to focus on the saleoffer of new products and services which, we believe add value to our customers and, at the same time, allow us to increase our fee-based income. This increase is mainly due to an increased volume of account service packages and services. New subscriptions to current account service packages and the adjustment of services provided to our higher-income Uniclass clients and by our Itaú Empresas business unit also contributed to this growth.

In addition, we continue to focus on our insurance services by operating under the bancassurance model, with a focus on the sale of massive personal and property insurance services, largely provided through our retail banking. As part of this strategy, in October 2014 we announced the sale of our large risks operations to the ACE group and the early termination of operating agreements between Via Varejo S.A. and our subsidiary Itaú Seguros S.A. for the offer of extended warranty insurance in “Ponto Frio” and “Casas Bahia” stores.

Please refer to section Our Profile, item 2014 highlights, for further details about Large Corporate P&C Insurance Business and Via Varejo S.A.

Continue to improve efficiency

In 2010, we established an Efficiency Program aimed at identifying, implementing, and monitoring costs and revenues, in addition to promoting a strong culture of operational efficiency. In 2012, 2013 and 2014,the years thereafter, we focused on increasing cost savings by reducing unnecessary costs, promoting the simplification and centralization of processes and job descriptions, promoting synergy gains and combining the management of certain business units.

We alsoIn February 2015, we created the Technology and Operations executive area with the aim at simplifyingof optimizing our structure in order to sustain growth. This executive structure, will enable us to organize our operations in a simpler and more efficient manner. We are committed to improve processes, to streamline operations and to be more efficient in everything we do with the clear purpose of client satisfaction. As

Throughout 2015, we increased the number of our digital branches in response to the profile of our customers, which includes an exampleincreasing demand for services through digital channels. The clients of how we proposeour digital branches can be in contact with their relationship managers from 7:00 am to meet these expectations, in the beginningmidnight, from Monday to Friday through a variety of 2013 we announced changes to our executive structure, which have enableddigital channels. This allows us to organizestrengthen our operations in a simplerrelationship with clients and more efficient manner. These changes helped us improve the efficiency and profitability of our efficiency ratio and risk-adjusted efficiency ratio in 2014.operations.

GrowMaintain asset quality in our loan portfolio while maintaining asset quality

The growth of our loan portfolio and the maintenance of asset quality are central aspects of our strategy. We are constantly seeking to improve our models for risk management and our economic forecasts and scenario modeling. We intend to increase the average volume of loan operations to maintain and even grow our market share, depending on product, market and client type, including through the development of new products for specific client demographics.

In the last three years, we focused on the improvement of our asset quality by increasing credit selectivity, by changing our loan portfolio mix, and prioritizing the saleoffer of less risky products, such as real estate and payroll loans, reducing the origination of higher risk portfolios, such as vehicle loans.

Develop strong relationships with our clients based on client segmentation

We will continue to work on our client segmentation strategy in order to identify our clients’ needs and enhance our relationship with our client base, as well as to increase market penetration. We believe that our client segmentation tools and strategies provide us with an important competitive advantage developed over the course of more than 25 years. We aim to fulfill clients’ financial needs through a wide product portfolio by cross-selling banking and insurance products and making sales through a variety of channels. We are focused on delivering “best-in-class” client service, in order to maintain and increase client satisfaction and increase portfolio profitability.

In 2013,an effort to continuously improve our segmentation strategy, in 2015 we moved our middle-market banking business (companies with an annual revenue between R$30 million and R$300 million) frommerged our Commercial Bank – Retail segment with our Consumer Credit – Retail segment and created the Retail Banking segment. We also migrated our Private Banking, Asset Management and Latin America Activities to our Wholesale segment. Starting in the first quarter of 2013, we began to transition and service these clients through Itaú BBA. Commencing in 2014, we started developing a differentiated business model, which enables us to provide higher quality services and sustainable growth in order to achieve a prominent market position. Please refer to section Performance, item Consolidated Financial Statements (IFRS), Note 34 – Segment Information, for further details.

Context of this report

This edition of our annual report reflects structural and conceptual changes from thesince our 2013 annual report, for 2013. We undertook such changes in 2014 in a search for innovation, transparency, and efficiency in obtaining information and in the communication with the public of interest. This report unifies the content of our major annually released reports, such as the annual report on Form 20-F, the Annual Report, and the Offering Memorandum for the Medium-Term Note Program, or MTN Program. The annual report on Form 20-F, filed with the U.S. Securities and Exchange Commission, or SEC, has served as the reference for the content of this report.

The annual report describes our strategy, structure, activities and operations, using plain and straightforward language to be clear to all audiences who may consult this annual report.

The information presented is aligned with Pronouncement 13 of the Market Information Disclosure Steering Committee (Comitê deOrientação para Divulgação de Informações ao Mercado, or CODIM),a Brazilian joint initiative of entitiesofentities representing the capital markets, focused on improving transparency and information reporting in the Brazilian capital markets.

This annual report contains data from January 1 to December 31, 2014,2015, presenting our corporate and business structure, governance and financial performance, among other matters. The description of our challenges for 2015 in the medium and long term results from interviews carried out with our executives and are aligned with our quarterly conference calls on results. It also includes information on all entities subject to the significant influence or control of Itaú Unibanco Holding S.A.Holding. Any potential changes or impacts on the data collected as a result of certain transactions, the acquisition or sale of assets, or any important change for the business is indicated throughout this report. The annual report is divided into the following sections: (i) Context, (ii) Our Profile,profile, (iii) Our Governance,governance, (iv) Our Risk Management,risk management, (v) Performance, and (vi) Attachments.

The audit of our financial statements in IFRSInternational Financial Reporting Standards as adopted by the International Accounting Standards Board, or IASB, is carried out by PricewaterhouseCoopers Auditores Independentes, or PwC.

Documents on display

We are subject to the informational requirements under the U.S. Securities Exchange Act of 1934, as amended, for foreign private issuers of the Exchange Act.issuers. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.W., Washington D.C. 20549 and at the SEC’s regional offices at 500 West Madison Street, Suite 1400, Chicago Illinois 60661, and 233 Broadway, New York, New York 10279.20549. Copies of the materials may be obtained by mail from the Public Reference Room of the SEC at 100 F Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website atwww.sec.gov,, from which you can electronically access those materials, including this annual report and the accompanying exhibits. We also file financial statements and other periodic reports with the CVM located at Rua Sete de Setembro, 111, Rio de Janeiro, Rio de Janeiro 20050-901, Brazil. The CVM maintains an Internet website atwww.cvm.gov.br. www.cvm.gov.br.

Copies of our annual report on Form 20-F will be available for inspection upon request to the Investor Relations department at our office at Praça Alfredo Egydio de Souza Aranha 100, Torre Conceição, 9º andar – São Paulo – SP – 04344-902 – Brazil.

Investors may receive a hard copy of this annual report, including our complete audited financial statements offor the last fiscal year, free of charges, by requesting a copy from our Investor Relations department, by e-mail, at investor.relations@itau-unibanco.com. br,investor.relations@itau-unibanco.com.br, indicating their contact information and their complete mailing address. Comments and suggestions regarding this report may be sent to the same e-mail.

Reading this Report

In this report, the terms:

Additionally, acronyms used repeatedly, technical terms and specific market expressions in this annual report will be explained or detailed in the section Attachments, item Glossary, as well as the full name of our main subsidiaries and other entities referenced in this annual report.

The reference date for the quantitative information for balances found in this annual report is as of December 31, 20142015 and for results is for the year ended December 31, 2014,2015, except where otherwise stated. Without prejudice to the foregoing, information contained in or accessible through the websites mentioned in this annual report is not part of this document or incorporated by reference herein.

Our fiscal year ends on December 31 and, in this annual report, any mention to any specific fiscal year refers to the 12-month period ended on December 31 of that year.

The information found in this annual report is accurate only as of the date of such information or as of the date of this annual report, according to the situation. Our activities, the situation of our finances and assets, the results of transactions and prospects may have changed since that date.

This document contains information, including statistical data, about certain markets and our competitive position. Except as otherwise indicated, this information is taken or derived from external sources. We indicate the name of the external source in each case where industry data is presented in this annual report. We cannot guarantee the accuracy of information taken from external sources, or that, in respect of internal estimates, a third party using different methods would obtain the same estimates as us.we have.

Information contained in or accessible through the websites mentioned in this annual report does not form part of this report unless we specifically state that it is incorporated by reference and forms part of this report. All references in this report to websites are inactive textual references and are for information only.

Forward-Looking Information

This annual report contains statements that are or may constitute forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business. These forward-looking statements are subject to risks, uncertainties and assumptions including, among other risks:

The words “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar words are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. We undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise. In light of these risks and uncertainties, the forward-looking information, events and circumstances discussed in this annual report might not occur. Our actual results and performance could differ substantially from those anticipated in such forward-looking statements.

About our financial information

Our consolidated financial statements, included elsewhere in this annual report, are prepared in accordance with the International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. We first adopted IFRS on January 1, 2010, and our consolidated financial statements for the periods ended December 31, 2011 and 2010 were our first consolidated financial statements presented in accordance with IFRS. All consolidated financial information related to 2015, 2014, 2013, 2012 2011 and 20102011 included in this report were prepared in accordance with IFRS.

We use accounting practices adopted in Brazil and applicable to institutions authorized to operate by the Central Bank for our reports to Brazilian shareholders,stockholders, filings with the CVM, and calculation of payments of dividends and tax liabilities.

The CMN establishes that financial institutions meeting certain criteria, such as Itaú Unibanco Holding, are required to present consolidated financial statements in accordance with IFRS.

The segment-related data have been derived from our management reporting systems and are not based on IFRS, nor were they prepared in accordance with these accounting standards.

Please refer to section Performance, item Consolidated Financial Statements (IFRS), Note 34 – Segment Information for further details about a discussion on the main differences between our management reporting systems and the consolidated financial statements according to IFRS.

Our consolidated financial statements as of December 31, 20142015 and 20132014 and for the twelve-month periods ended December 31, 2015, 2014 2013 and 20122013 were audited by PricewaterhouseCoopers Auditores Independentes, an independent audit firm, as stated in its report in section Performance, item Financial Performance in this report.

Please refer to section Performance, item Consolidated Financial Statements (IFRS), Note 2 – Significant Accounting Policies for further details about the significant accounting policies applied in the preparation of our consolidated financial statements according to IFRS.

Our Profile

In numbers

Selected Financial Data – IFRS

The following selected financial data must be read in conjunction with the section Performance, item Results and Consolidated Financial Statements (IFRS) included in this annual report.

The data presented in the tables below have been derived from our audited consolidated financial statements for the years presented, which have been prepared in accordance with IFRS as issued by IASB, unless otherwise indicated.

(1) The average balances are calculated on a monthly basis. Please refer to section Attachments – Selected Statistical Information, item Average Balance Sheet for further details.