(1) Source:Instituto Nacional de Estadística y Censos.

(2) Source:Banco Central de Chile.

(3) Source:Banco de la República.

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

(5) Source:BancoCentral del Paraguay. GDP growth rate in 2017 as of and for the twelve-month period ended September 30.

(6) Source:BancoCentral de Reserva del Perú.

(7) Source:BancoCentral de Uruguay.

Conventions

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. From 2004 to 2013, we benefited from Brazil’s generally stable economic environment, with average annual GDP growth of approximately 4.0% during that period, which led to increased bank lending and deposits. The following years were less favorable, as GDP growth slowed to 0.5% in 2014 then decreased by 3.5% in both 2015 and 2016. The Brazilian economy showed signs of a recovery in 2017, as GDP rose 1.0%.

The widespread decline in inflation, due to the high level of idle capacity in the Brazilian economy and anchored inflation expectations, created an opportunity for the Central Bank to start a monetary easing cycle. After reaching 14.25% per annum at the end of 2015, the Central Bank began to cut interest rates in October 2016. In March 2018, the SELIC rate reached 6.5%. Bank lending as a proportion of GDP decreased to 47.1% in December 2017 from 49.6% in December 2016.

Inflation reached 2.9% over the twelve months ending in December 2017, down from 6.3% in the calendar year 2016. Government-regulated prices (such as gasoline, health insurance, medicines, electricity, urban bus and others) increased by 8.0% over the twelve months ending in December 2017 (from 5.5% in the calendar year 2016), while market-set prices increased by 1.3% in the same period (from 6.6% in the calendar year 2016).

The Brazilian primary public budget result has been in deficit since 2014. Cuts in discretionary spending and tax hikes proved insufficient to offset the drop in tax revenues and growth in mandatory expenditures. The twelve-month Brazilian primary public budget balance deficit was at 1.7% of GDP in 2017, after closing with deficits of 2.5% of GDP in 2016, 1.9% of GDP in 2015 and 0.6% of GDP in 2014. To tackle the structural fiscal imbalance, the Brazilian Congress approved a ceiling on government spending that will limit primary public expenditure growth to the prior year’s inflation for a period of at least 10 years, representing a structural reform for the Brazilian economy. Social security reform and other reforms are essential to ensure that the spending ceiling remains feasible in the years ahead, but their approval by the Brazilian Congress is uncertain. These reforms are important steps towards returning to primary surpluses and stabilizing public debt in the medium-term.

In addition, Brazil has implemented a large number of regulatory changes, such as changes in reserve and capital requirements for financial institutions, as well as other macro-prudential policies. Please refer to the section “Our risk management, item Regulatory environment, Implementation of Basel III in Brazil” and to the section “Performance, item Required Reserve Deposits with the Central Bank”, for further information.

Total outstanding loans provided by Brazilian financial institutions continued to decrease in year-over-year real terms in December 2017, by 3.3%, albeit to a lesser degree than in December 2016 (-9.2%). Total new loans remained almost stable in 2017, when compared to 2016, on an annualized basis. The same comparison in the previous year showed a decrease of 15.7%. The rate of non-performing household loans decreased by 0.5 percentage points to 3.5% as of December 2017 when compared with the same month in 2016. The rate of non-performing loans to non-financial corporations reached 2.9% in December 2017, below the level observed in December 2016 (3.5%).

The Brazilian real slightly depreciated against the U.S. dollar, with the exchange rate reaching R$3.31 per US$1.00 as of December 29, 2017, compared to R$3.26 per US$1.00 as of December 30, 2016. Despite uncertainties surrounding adjustments and reforms, the international context has been more benign for risky assets, implying lower risk premiums.

Brazil’s current account deficit (comprised of the net balance from the trade of goods and services and international transfers) totaled 0.5% of GDP as of December 2017. Brazil has maintained its external solvency, with US$382 billion in international reserves and US$310 billion in external debt as of December 2017.

The table below shows real GDP growth, the inflation rate, exchange rate variation and interest rates in Brazil as of and for the twelve-month period ended December 31, 2017, 2016, 2015, 2014 and 2013, except as otherwise indicated.

(1) Source:Instituto Brasileiro de Geografia e Estatística,or IBGE.

(2) Source: General Price Index – Internal Supply (Índice Geral de Preços – Disponibilidade Interna,or IGP-DI) published by theFundação Getulio Vargas.

(3) Source: Extended National Consumer Price Index (Índice de Preços ao Consumidor Amplo,or IPCA) published by IBGE.

(4) Source: Bloomberg (cumulative rates for the period); positive numbers mean depreciation of the Brazilianreal.

(5) Source: Mortgage reference rate (Taxa Referencial, or TR) published by the Central Bank. Data presented in percentage per year.

(6) Source: Central Bank. Data presented in percentage per year.

(7) Source: Bloomberg (period-end). Sovereign credit default swaps or CDS is a measure of country risk (and is measured using basis points).

Context of Itaú Unibanco Holding

Message from the Co-Chairmen of the Board of Directors

Dear Reader,

The year of 2017 was defined by significant changes in Brazil and Itaú Unibanco.

We have detected signs pointing out the commencement of the recovery from the greatest economic crisis in Brazil in the last 100 years, with GDP growing 1% after three years of recession in a low inflation and lower interest rates scenario. We believe that Brazil is ready to overcome these economic and political crises, and to create jobs and grow at sustainable levels again.

This change in the economic scenario was evidenced in our operations, with the last quarter of 2017 defined by the growth of our loans portfolio to individuals and very small, small and middle-market companies. Customer default rates have declined and,All references in this lower risk scenario, our cost of credit¹ was down by 29.6% compared to 2016. Together with other significant achievements, such as the control of operating costs, this fact has enabled us to post recurring net income of R$23.9 billion², up 2.6% from the previous year. We kept the recurring return on equity going at a high level, recording 20.1% in 2017.

These results were achieved in the first year we had Mr. Candido Bracher acting as our CEO. The beginning of his term of office also stood out by the advancements in our strategic agenda, based on six fronts of action widely disclosed to the market, as follows: (i) Customer Centricity, (ii) Digital Transformation, (iii) People Management, (iv) Risk Management, (v) Internationalization; and (vi) Sustainable Profitability. We believe the first three fronts of action are in need of deep changes in the organization over the coming years, whereas the last three are in the ongoing improvement side. Worth mentioning is the fact that Corporate Governance and Sustainability have permeated all these efforts.

We strongly believe that our goals will not be reached unless we address people management, since it is the foundation for a great power of transformation, as people are what makes us advance, ensure sustainable results and make our capacity to create value to society and Brazil come into being. Therefore, we face the challenge of becoming increasingly attractive to all generations and engaging, developing and retaining talents. That is why we have consistently invested in the disclosure of our goals and of what we call Our Way, that is, a strong culture based on cooperation, ethics and the utmost and unrelenting respect.

In 2017, the Board of Directors has made important decisions, as it defined strategic guidelines for Itaú Unibanco, of which we highlight the ones concerning risk appetite. We also defined a new payout practice, according to which the target is to keep our CET1³ ratio at 13.5%, and distribute the entire remaining amount. Accordingly, based on the growth of our risk-weighted assets and return on equity, we paid out the equivalent to 83% of our recurring net income⁴ in 2017, including own shares buybacks carried out, a record-breaking amount in our history. This payout was made possible because we issued for the first time perpetual securities that will make up our Common Equity Tier 1, thus reducing our cost of capital and favoring the creation of value to stockholders.

We continue to make headway in our corporate governance practices by adjusting them to a new business scenario. On that account, in 2017 we set up the Digital Advisory Board, which has now a major role in proposing technology development, assessing client experience, and allowing us to keep up with the world trends. Ms. Ana Lúcia de Mattos Barretto Villela will become a member of the Board of Directors, bringing about a new viewpoint into our management, and also evidencing our commitment to ensure diversity in the organization even more.

We would like to extend our invitation to read this Consolidated Annual Report. We highlight sections “Our governance” and “Our risk management”, which were redesigned from the last editions and now introduce information organized in a more objectively and easier to understand way.

Best regards,

Roberto Setubal & Pedro Moreira Salles

Co-chairmen of the Board of Directors

1 In accordance with the rules established by the Central Bank of Brazil - BRGAAP.

2 Net income attributable to Owners of the parent company under IFRS.

3 Common Equity Tier I.

4 Payout considers recurring net income calculated in accordance with the rules established by the Central Bank of Brazil - BRGAAP.

Message from the Chief Executive Officer

Dear Reader,

2017 was defined by the start of Brazil’s economic recovery. We witnessed the fall of inflation and interest rates, in addition to GDP resuming growth, even though at a modest pace. These developments have broken off a long-lasting period of recession, which had significant effects on our loan portfolio over 2015 and 2016.

On the other hand, local markets were also subject to accentuated volatility levels, driven by the political instability and uncertainties in connection with the approval of the reforms so needed in Brazil.

Under this scenario, our revenues were impacted by falling interest rates and a somewhat slight recovery of demand. This fact was more than made up for by a welcomed reduction in default levels and our maintaining strict control over the volume of expenses. The resulting bottom line was a net income of R$23.9 billion¹, up 2.6% compared to 2016.

I would like to draw your attention to the impact created by the bank through the value added² to the economy, which totaled R$67.2 billion in 2017. This amount was shared out among the many segments of society, by way of the compensation granted to our employees, the payment of taxes and rents, the reinvestment of profits in our activities, and the return on investment to our over 120,000 stockholders. The impact created by this value added makes our purpose, which is encouraging the power of transformation of people, come into being.

It is worth mentioning that our performance in 2017 is the result of strategic decisions we had made in 2012. We decided then to focus on three major fronts of action – services and insurance, credit, and treasury – to reduce the volatility of our results by increasingly diversifying our revenues.

Like in 2012, last year we made decisions that helped the good performance in 2017, although these are expected to bring about more significant effects in the medium term. After deeply and collectively reflecting on our key strategic challenges, we set off a process to structure our priority fronts of action, which is aimed at providing more consistency and quality to our results in the coming years. These new fronts of action were divided into two major groups:Transformation and Ongoing Improvement.

Fronts of actionCustomer Centricity,Digital Transformation, andPeople Management are part of the first group. We want to devise a service culture focused on what clients need and have them indeed at the center of our decisions. We believe we should do that under our digital transformation scenario, which will enable us to offer clients better experiences and continuously improve our processes. All of this will fit within a highly cooperative work dynamics, which will change dramatically our employees’ experience in their day-to-day.

We find the other three strategic fronts of action in the Ongoing Improvement group. With front of actionRisk Management, we will be able to identify threats and work to prevent them or change course expeditiously whenever needed. The major challenge of front of actionSustainable Profitability is to provide the bank with more sustainable results. At last, we have ourInternationalization agenda, through which we will pursue profitability levels close to those of Brazil’s and will also work towards synergies and learning experiences made possible by cultural and operational exchanges.

These priority fronts of action will enable Itaú Unibanco to continue growing at a sustainable level in this and the coming years, and over time build up a bank increasingly better to our clients, employees and stockholders and, as a result, to society itself. You will find further details on our priority fronts of action in section “Business Strategy”.

I thank you for your trust and support we had over 2017 and wish you all a memorable 2018.

I wish you all a pleasant reading!

Best regards,

Candido Bracher

Executive President & CEO

(1) Net income attributable to owners of the parent company under IFRS.

(2) Includes recurring net income and the reclassification of tax effects of hedging foreign investments to the financial margin under BRGAAP.

A bank with a purpose

In 2017, we unveiled Itaú Unibanco’s purpose to our employees and highlighted the values that are part of our essence and have brought us here.

In our 93 years of history, we have become the largest private bank in Brazil⁽¹⁾ and are deemed Brazil’s most valued brand by publications such as Interbrand, among other relevant recognitions. These achievements are the result of the way we conduct business, by always placing ethics ahead of results and consistently seeking innovation and excellence.

We have grown by helping people and our country to grow, by encouraging the progress of those who are by our side. We work to make dreams come true, to boost development, and to awaken the will to do increasingly more and to do it better. This is what our journey means and this is our purpose:empowering people to change.

There are people behind everything we do. People who have ideas, who become the solutions, and who change the lives of other people. Unveiling Itaú Unibanco’s purpose is part of the reaffirmation of our reason to exist, by increasing the power every person has to invent and reinvent themselves. For this end, we need to have the engagement of all employees towards the same pathway.

In line with this purpose, the arrival of Itaú Unibanco’s new Executive President was marked by this purpose being integrated into the organization, which led to the development of thesix strategic priorities that will guide our actions in the coming years:Client Centricity, Digital Transformation, People Management, Risk Management, Sustainable Profitability, and Internationalization.

These priorities were developed based on the perception shared by the Executive Committee of market trends and the challenges faced by the institution, as they organize initiatives that have been in progress throughout the bank already, reinforcing our commitment to employees, clients, stockholders and society.

Itaú Unibanco’s purpose was not born in 2017, but rather has always existed within all people who were part of this organization and within those who now keep this legacy alive. We arepeople who move people.

⁽¹⁾In terms of total assets, according to Central Bank.

Context of this report

This consolidated annual report unifies the content of our major annually released reports, such as Form 20-F, the annual report, and the Offering Memorandum for the Medium-Term Note Program (MTN Program). The consolidated annual report on Form 20-F, filed with the U.S. Securities and Exchange Commission (SEC), has served as the basis for the content of this report.

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

The information presented is aligned with Pronouncement 13 of the Market Information Disclosure Steering Committee (Comitê de Orientação para Divulgação de Informações ao Mercado – CODIM), a Brazilian joint initiative of entities representing the capital markets, and focused on improving transparency and information reporting in the Brazilian capital markets.Thisconsolidatedannual report contains data from January 1, 2017 to December 31, 2017, except when otherwise indicated presenting our corporate and business structure, governance and financial performance, among other matters. It also includes information on all entities subject to the significant influence or control of Itaú Unibanco 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 are indicated throughout this report. Theconsolidatedannual report is divided into the following sections: (i) Context, (ii) Our profile, (iii) Our governance, (iv) Our risk management, (v) Performance, and (vi) Attachments.

The audit of our financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), has been conducted by PricewaterhouseCoopers Auditores Independentes (PwC).

Documents on display

We are subject to informational requirements under the U.S. Securities Exchange Act of 1934, as amended, for foreign private issuers. Accordingly, we are required to file reports and other information with SEC, includingconsolidatedannual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with SEC at the public reference facilities maintained by SEC at 100 F Street, N.W., Washington D.C. 20549. Copies of the materials may be obtained by mail from the Public Reference Room of SEC at 100 F Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of 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 thisconsolidatedannual report and the accompanying exhibits. We also file financial statements and other periodic reports with 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.

Copies of our consolidated 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 thisconsolidatedannual report, including our complete audited

financial statements for the last fiscal year, free of charge, by requesting a copy from our Investor Relations department, by email, atinvestor.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 email.

Business strategy

Medium and long-term strategic agenda

With medium to long-term prospects, our six strategic priorities have guided our management. Our activity was organized into various fronts, with responsibilities separated by working groups involving various organizational levels, with clear purposes to be achieved and indicators selected for monitoring this process. We have already achieved some results and expect to add even more value to society and our stockholders in the coming years.

We segregated our six strategic priorities into two groups: Transformation and Continuous Improvement.

In the first group, we included the priorities that we believe we need to truly transform within the organization: Client Centricity, Digital Transformation and People Management.

In the Continuous Improvement group, we included Risk Management, Internationalization and Sustainable Profitability. They are priorities already broadly embraced by the organization, but which require further effort for their continuous improvement.

Permeating all those challenges are our corporate governance and sustainability.

Corporate governance plays a vital role in ensuring stakeholders’ interests and is a key to achieving long-term sustainable growth. It is embedded not only in the challenges described here, but also in each part of our daily business activities, from remuneration practices to risk management.

Sustainability needs to be fully integrated within our business, from the operational to the commercial aspects, making environmental and social issues part of our everyday activities. Its variables need to be incorporated and measured into each of our diverse processes, such as granting credit, investments, insurance activities, contracting with suppliers and wealth management.

Our priority topics are detailed below:

1.1 Transformation

1.1.1 Client Centricity:

Our vision isto be the leading bank in sustainable performance and customer satisfaction. Today, clients play a leading role and are therefore at the core of our organizational culture. In the current market environment, businesses have stood out when they offer new and differentiated experiences to clients. Therefore, our actions, including digital transformation and efforts aimed at people management, are directed towards client satisfaction, a key measure for the entire organization. We have established indicators to monitor client satisfaction on a timely and ongoing basis, which are directly related to incentives provided to our employees.

We will build a culture focused on client satisfaction and long-term relationships. Thus, our efforts will be directed to communicate, encourage and capacitate our employees around the pillars of this culture.

Client satisfaction opinion surveys and our monitoring of data with respect to complaints evidence that we stand above the market average. We believe however that we can do more and, to this end, we are adopting the Net Promoter Score (NPS), which will be used in every stage of our processes.

Our goal is to build a bank with the client and for the client. We are even more dedicated to listening to what clients have to say so that we may identify the attributes they value the most in their relationships and develop products and services that exceed their expectations. Accordingly, we work to improve the client’s experience, by evolving and eliminating red tape in our processes.

Some of the initiatives to improve client satisfaction are as follows:

1.1.2 Digital Transformation:

Our challenge is to speed up our digital transformation process continually increasing the productivity of the IT department and to foster a digital mindset throughout the bank, so as to gain efficiency and improve user experience and client satisfaction.

Technology today epitomizes the backbone of Itaú Unibanco’s evolution.

Some of the rewards of this digital transformation include: (i) developing over 1,000 APIs (application programming interfaces) that allow the creation of reusable apps; (ii) being involved in 100% of blockchain applications in progress in Brazil to advance the financial market; (iii) consolidating a private cloud, which already runs dozens of the bank’s applications (internal systems); and (iv) using artificial intelligence and machine learning to gain operational efficiency. The rewards of this digital transformation come into being through a seamless integration of three essential elements.

The first element ispeople with digital expertise. These are experts in design, user experience, data sciences, digital media, Web analytics and cyber security, who add to our professionals coming from traditional backgrounds (engineering, administration, economics and accounting). This evolution has taken place at an exponential rate within the organization. In the last two years, the presence of professionals with digital profiles in Itaú Unibanco increased 13 fold.

The second element is atechnology-businesssymbiosis, since we recognize that the technology department is essential for the creation of transformational solutions. It is therefore possible to take advantage of the exponential evolution of technologies, accelerating the frequency of innovations and disruptions, and promoting shorter cycles of value deliveries (weeks, even days).

This integration of efforts is already a reality at our bank. At the end of 2017 we completed the second phase of strengthening technical expertise (technology architecture, distribution engineering, banking and data systems, system development, among others) and integrating teams (over 5,000 employees engaged in the process) by creating delivery communities and multidisciplinary teams that work collaboratively based on Lean¹ and Agile² principles to rise to business challenges. Notable for providing quick decisions share among people with different expertise and autonomy, this new working model is responsible for generating increasingly sustainable results, as follows:

(*) Refers to the second half of 2017 over the same period of the previous year.

The last element isclient centricity, also construed as a new bank concept. Today we live in an era of experiences, where companies and clients create solutions together. Therefore, our bank performance has been driven by placing the customer at the heart of our strategy. To this end, we seek to understand everything the client says, analyzing, for instance,hundreds of thousands of pieces of feedback received in social networks or provided by our beta testers (technologically engaged clients who test new versions of the bank apps). We also make use of technology (such as big data, machine learning and cloud computing) foroperational efficiency, such as an application of artificial intelligence in our credit models, and tounderstand the client's behavior in all points of contact with the bank. This is because these interactions are important inputs for creating products and services more connected to the clients’ actual needs.

The following are some of our 2017 highlights:

1 Lean: Process structure in which an attempt is made to minimize risks and waste while maximizing value to the client.

2 Agile: A philosophy focused on the time it takes to build a product step by step, delivering it through smaller parts.

1.1.3 People Management:

At Itaú Unibanco we have always had a strong belief that people have the greatest transformative power. People foster our progress, ensure sustainable results and drive our capacity of generating value to society and the country.

We are challenged to become even more attractive to all generations and engage and develop our talents. For this end, we consistently invest in spreading our purpose and the so called “Our Way” – a strong culture, based on collaboration, meritocracy, ethics and total and unrestricted respect to individuals.

Considering that the bank is comprised of human capital, providing the best experience to our employees so as to promote their development is essential. With this in mind, the priority people frontline is reviewing incentive models and encouraging people’s autonomy and mobility in order to make them increasingly feel as if they are owners of the business and their own careers. 

Accordingly, in line with all the transformations happening in the world, the priority of people frontline also seeks inspiration in the most innovative practices currently used and is focused on constructing an organization that increasingly promotes diversity and inclusion. 

1.2 Continuous Improvement

1.2.1 Risk Management:

Managing risks is the essence of our activity and a responsibility of all of our employees. Our management activities include proactively taking actions to be in compliance the Risk Apetite guidelines set out by our Board of Directors. Additionally, we will focus on addressing our priorities for 2018 - Business, Technology, People and Regulatory risks.

With respect toRisk Appetite,our challenge is to monitor the progress of traditional risk areas (market risk, credit risk and operational risk), and seek, through risk culture tools, to engage all employees in the risk management day-to-day and, consequently, to comply with our Risk Appetite.

RegardingBusiness Risk, client centricity focus is a principle of ours, prioritizing the sustainability of our relationships. We monitor the evolving profile of our clients and competition and create new products and services focused on client satisfaction.

To address the challenges with respect toTechnology Risk, we are committed to managing our the digital transformation process, preventing platforms or systems from becoming obsolete and failing to meet the business needs, in addition to increasing the productivity of our IT department.

ConcerningPeople Risk,we are committed to improving mechanisms to attract, motivate and retain the best professionals, in addition to preventing teams with knowledge concentrated on key personnel. We seek to continuously improve our evaluation models to be increasingly perceived as fair and meritocratic.  

Concerning theRegulatory Risk, we understand that we should always be attentive to specific changes in laws and regulations that may affect our business and the products or services that we offer. Therefore, we are committed to having a proactive attitude and monitoring regulatory changes.

1.2.2 Sustainable Profitability:

Our challenge is to continuously improve the efficiency of our operations, maintain our capacity of identifying opportunities to reduce costs and manage investments to gain agility, as well as to efficiently manage capital allocation and our cost of capital.

Adopted since 2012, ourbusiness modelis based on the fundamental concept of value creation, which includes not only our operating or financial expenses, but also the cost of capital allocated to each activity, in order to obtain fair returns.

This vision with respect to results guides our operations towards business that effectively creates value for stockholders, establishing a minimum return required for our operations.

Under this model,we have reviewed the mix of our loan portfolio,which, in a context of economic crisis, has increased the share of our portfolio made up of lower-risk products, such as mortgage loans, which involve the pledge of collateral, and payroll loans where installments are deducted from payroll and concentrated on clients with stable incomes, such as retirees and federal public officers.

We detail below the change in the composition of our loan portfolio by segment* in Brazil:

We also give priority to ourServices and Insurance, Pension Plan and Premium Bonds,which require less capital allocation and results and value creation of which are less volatile in relation to economic cycles. In addition, our business strategy for this operation is to focus on mass-market products, traditionally sold through our network of branches and digital channels. Accordingly, operations such as life group, large risks and extended warranty insurance lines were either sold or discontinued over last years. Even in this context, we have increased the operating revenues¹ from insurance, pension plan and premium bonds and services.

In view of the growth, even if moderate, of Brazil's GDP during 2017, and together with the tools developed by our efforts towards risk management, our business model will enable us to identify granular opportunities to diversify and expand operations to meet the need to create value for our stockholders within the limits established by our risk appetite.

Focuson efficiency is a very significant topic in our Sustainable Profitability strategy and has been addressed as a top priority by the bank for some years. We have developed some initiatives, from reducing the waste of resources and energy and reviewing department structures to designing projects to increasing productivity and the digital transformation, and therefore we expect to increase gains of scale and ensure business synergy.

The digital transformation process we are going through has given rise to a numbers of gains, since we are able to redesign processes and offer quality products at a lower cost.

1.2.3 Internationalization:

We have operated in Brazil for over 90 years and, throughout this period, have achieved a high level of maturity in management, have made our culture known and have consistently recorded profitability levels that create value for our stockholders.

Our strategy in other Latin America countries foresees that we will achieve, in this region, the same management standards Itaú Unibanco enjoys in Brazil, homogenizing practices and setting up conditions to take on even more leading positions. These objectives apply to our operations in the Southern Cone, and are particularly relevant in the Itaú CorpBanca integration process a result from the merger between Itaú Chile and CorpBanca (a significant competitor in the banking markets in Chile and Colombia).

We also seek to strengthen our operations in the Northern hemisphere, where we have the primary objective of simplifying and optimizing our operations. In Latin America, we always seek to improve client satisfaction, as well as develop products and services with digital solutions and bases. The main challenge is to accelerate the the digital transformation in all our external units.

Finally, Itaú Unibanco continuously monitors the international scenario, seeking to understand different markets, businesses, products and services, identifying opportunities to expand operations and to integrate our units.

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In this report, the terms: