UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2015
Commission File Number: 001-34476
BANCO SANTANDER (BRASIL) S.A.
(Exact name of registrant as specified in its charter)
Avenida Presidente Juscelino Kubitschek, 2041 and 2235
Bloco A – Vila Olimpia
São Paulo, SP 04543-011
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:Form 20-F ___X___ Form 40-F _______ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes _______ No ___X____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes _______ No ___X____
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes _______ No ___X____
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
| CONTENTS |
CONTENTS
MANAGERIAL ANALYSIS OF RESULTS – BR GAAP
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KEY CONSOLIDATED DATA | 03 |
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sTRATEGY | 04 |
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EXECUTIVE SUMMARY | 05 |
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SANTANDER BRASIL RESULTS | |
MANAGERIAL INCOME STATEMENT | 06 |
BALANCE SHEET | 10 |
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OUR SHARES | 19 |
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RATINGS | 20 |
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ADDITIONAL INFORMATION – BALANCE SHEET AND MANAGERIAL FINANCIAL STATEMENTS | 21 |
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIANTION | 24 |
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KEY CONSOLIDATED DATA |
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KEY CONSOLIDATED DATA
This quarter, there were two non-recurring events that generated revenues of R$1,516 million before taxes, fully offset by non-recurring expenses. In order to ensure a better understanding of the analysis, these and other events in the comparison period have been excluded from the managerial results and indicators presented herein. The reconciliation with the accounting result can be found on pages 24 and 25.
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MANAGERIAL¹ ANALYSIS - BR GAAP | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
| | | 9M15x9M14 | | | 3Q15x2Q15 |
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RESULTS (R$ million) | | | | | | | |
Net interest income | | 22,251 | 20,667 | 7.7% | 7,631 | 7,480 | 2.0% |
Fee and commission income | | 8,657 | 8,081 | 7.1% | 2,919 | 2,910 | 0.3% |
Allowance for loan losses | | (6,898) | (7,263) | -5.0% | (2,448) | (2,338) | 4.7% |
General Expenses² | | (12,691) | (12,309) | 3.1% | (4,288) | (4,300) | -0.3% |
Managerial net profit³ | | 5,016 | 4,328 | 15.9% | 1,708 | 1,675 | 2.0% |
Accounting net profit ¹² | | 5,831 | 1,583 | 268.4% | 1,266 | 3,881 | -67.4% |
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BALANCE SHEET (R$ million) | | | | | | | |
Total assets | | 702,407 | 514,938 | 36.4% | 702,407 | 605,290 | 16.0% |
Securities | | 154,262 | 102,175 | 51.0% | 154,262 | 145,900 | 5.7% |
Loan portfolio | | 261,980 | 234,516 | 11.7% | 261,980 | 254,402 | 3.0% |
Individuals | | 82,786 | 76,683 | 8.0% | 82,786 | 81,534 | 1.5% |
Consumer finance | | 34,057 | 36,530 | -6.8% | 34,057 | 35,338 | -3.6% |
Small and Medium Enterprises | | 31,632 | 31,034 | 1.9% | 31,632 | 31,352 | 0.9% |
Corporate | | 113,505 | 90,268 | 25.7% | 113,505 | 106,179 | 6.9% |
Expanded Credit Portfolio4 | | 332,340 | 293,138 | 13.4% | 332,340 | 321,592 | 3.3% |
Funding from Clients5 | | 287,660 | 243,181 | 18.3% | 287,660 | 275,524 | 4.4% |
Equity6 | | 52,976 | 50,496 | 4.9% | 52,976 | 56,665 | -6.5% |
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PERFORMANCE INDICATORS (%) | | | | | | | |
Return on average equity excluding goodwill6,11 - annualized | 12.8% | 11.4% | 1.5 p.p. | 12.8% | 12.8% | 0.1 p.p. |
Return on average asset excluding goodwill6,11 - annualized | | 1.1% | 1.2% | -0.1 p.p. | 1.1% | 1.1% | -0.1 p.p. |
Efficiency Ratio7 | | 49.3% | 49.8% | -0.5 p.p. | 48.0% | 50.1% | -2.2 p.p. |
Recurrence Ratio8 | | 68.2% | 65.7% | 2.6 p.p. | 68.1% | 67.7% | 0.4 p.p. |
BIS ratio9,12 | | 15.8% | 18.8% | -2.9 p.p. | 15.8% | 18.1% | -2.2 p.p. |
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PORTFOLIO QUALITY INDICATORS (%) | | | | | | | |
Delinquency (over 90 days) | | 3.2% | 3.7% | -0.5 p.p. | 3.2% | 3.2% | 0.0 p.p. |
Delinquency (over 60 days) | | 4.0% | 4.4% | -0.4 p.p. | 4.0% | 4.1% | -0.1 p.p. |
Coverage ratio (over 90 days)¹² | | 185.1% | 170.2% | 14.9 p.p. | 185.1% | 184.7% | 0.4 p.p. |
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OTHER DATA | | | | | | | |
Assets under management - AUM (R$ million)10 | | 187,085 | 161,484 | 15.9% | 187,085 | 178,318 | 4.9% |
Branches | | 2,255 | 2,243 | 12 | 2,255 | 2,255 | - |
PABs (mini branches) | | 1,181 | 1,184 | (3) | 1,181 | 1,181 | - |
Own ATMs | | 14,231 | 14,309 | (78) | 14,231 | 14,338 | (107) |
Shared ATMs | | 17,912 | 16,143 | 1,769 | 17,912 | 17,539 | 373 |
Total Customers (thousand) | | 32,054 | 30,779 | 1,275 | 32,054 | 31,798 | 256 |
Employees | | 50,519 | 49,481 | 1,038 | 50,519 | 50,245 | 274 |
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1. Excludes 100% of the goodwill amortization expense, the tax hedge effect and others as mentioned on pages 24 and 25. |
2. Administrative Expenses exclude 100% of the goodwill amortization expense and personnel expenses include profit sharing. |
3. Managerial net profit corresponds to the accounting net profit, excluding estraordinary results and considering 100% of reversal of goodwill amortization expense ocurred in the period. The expense of goodwill amortization in 9M15 was R$ 2,342million, in 9M14 was R$2,745 million, 3Q15 was R$ 442 million and in the 2Q15 was 951 million. |
4. Includes other Credit Risk Transactions with clients ("Debenture", FIDC, CRI, Floating Rate Notes, Promissory Notes, Acquiring activities related assets and Guarantees). |
5. Includes savings, demand deposits, time deposits, debenture, LCA, LCI, Treasury Notes (Letras Financeiras - LFT) and Certificates of Structured Operations (COE) |
6. Excludes 100% of the goodwill that in 3Q15 was 4,625 million, 3Q14 was R$ 7,817 million and in the 2Q15 was R$ 5,067 million. |
7. Efficiency Ratio: General Expenses / (Net Interest Income + Fee and Commission Income + Tax Expenses + Other Operating Income/Expense) |
8. Recurrence: Fee and Commission Income / General expenses. |
9. BIS Ratio as of Brazilian Central Bank. From 2015 on, considers the prudential conglomerate. |
10. According to Anbima (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais) criterion. |
11.Excludes the impact of the 2Q15 extraordinary results from the balance accounts. |
12.Includes the impact of the 2Q15 extraordinary results. |
STRATEGY
Santander Brasil is a universal bank focused on retail activities. Certainly, the only path to grow on a recurring and sustainable basis is providing excellence services to increase satisfaction levels and getting more linked customers. Thus, the priority is working as a simple, personal and fair bank. Our strategy is defined according to a long-term scenario and is mainly focused on an efficient execution of the following priorities: § Increase customers’ preference and linkage with segmented, simple, modern and efficient products and services that, through a multi-channel platform, seek to maximize our customer satisfaction. § Improve recurrence and sustainability growing in business with greater revenue diversification, considering balanced credit, funding and services and, at the same time, maintaining an efficient management of expenses and a strict control of risks. § Capital discipline and liquidity to maintain the soundness of the balance sheet, to face regulatory changes and to take advantages of growth opportunities. § Increase productivity through an intense agenda of productive transformation allowing us to offer a complete services portfolio. Our strategy prioritizes selective growth, close and long-lasting relations with our shareholders, and alignment with the country’s social and economic development agenda. The latter is achieved based on a sustainable credit expansion model, strong support for private sector and education. We are currently undergoing a commercial transformation agenda focused on customer satisfaction, which includes modernizing, simplifying and improving the supply of products, services and processes. This agenda is based on multiple offers of services channels together with a segmented offering. | | In the third quarter of 2015, we highlight the following advances: - Re-launch of the Van Gogh segment aligning it to a profile of people more connected. We deliver a competitive offering to our customers with products, services and benefits as well as increased financial guidance. - Campaign to digitize our customers, "Vale a Pena Ser Digital". On this campaign we have managed to increase the registration and the use of the digital channels: "Minha Conta" (Mobile) and Internet Banking. - We continue advancing in the transformation process started previously, as improvements in tools and commercial incentives, opening processes accounts more quickly, seeking greater simplicity and accessibility in digital channels, strengthening Acquiring activity, push the payroll business, consolidation of financial and non-financial offers to "Santander Negócios e Empresas", among others. |
EXECUTIVE SUMMARY
The total net profit¹ totaled R$ 5,016 million in the first nine months of 2015, up 15.9% in twelve months and 2.0% in the quarter. In the third quarter of 2015, there were two non-recurring events², one related to a favorable court ruling obtained by the Bank related to Cofins reimbursement, totaling R$ 765 million, recognized in the other operating income line, and the other related to the completion of the sale of the custody business, totaling R$ 751 million, recognized in the non-operating income line. Together, these events generated gains of R$ 1,516 million, before taxes, which were fully offset by non-recurring expenses, recorded in net interest income, allowance for loan losses and other operating expenses lines, with no impact on net profit (for further information, please refer to the reconciliation with the accounting result on pages 24 and 25). Total revenues reached R$ 30,908 million in the first nine months of 2015, an increase of 7.5% (or R$ 2,160 million) in twelve months and 1.5% in the quarter. The allowance for loan losses amounted to R$ 6,898 million, down 5.0% (or R$ 365 million) in twelve months and up 4.7% in the quarter. Revenues net of allowance for loan losses moved up by 11.8% in twelve months and 0.6% in the quarter. General expenses totaled R$ 12,691 million in the first nine months of 2015, up 3.1% (or R$ 382 million), in twelve months, lagging inflation evolution in the period. In the quarter there was a decrease of 0.3%, mainly by the new level of amortization and depreciation expenses due to impairment of intangible assets made in the previous quarter. The efficiency ratio stood at 49.3% in the first nine months of 2015, an improvement of 0.5 p.p. in twelve months and 2.1 p.p. in the quarter. The total credit portfolio came to R$ 261,980 million in September 2015, up 11.7%in twelve months and 3.0% in the quarter. Excluding the effect of the exchange rate variation, total credit portfolio would have grown by 3.4% in twelve month and would have decreased 1.4% in three months. The expanded credit portfolio totaledR$ 332,340 million in September 2015, up 13.4% intwelve months and 3.3% in the quarter. Excluding the effect of the exchange rate variation, the expanded credit portfolio would have grown by 6.7% in twelve months and would have decreased 0.1% in three months. Loans to individuals closed September 2015 atR$ 82,786 million up 8.0% (or R$ 6,103 million) in 12 months and 1.5% in the quarter. The growth in the both periods of comparisonwas fueled mainly by mortgage and payroll loans. | | The consumer finance portfolio, totaledR$ 34,057 million in September 2015,down6.8% (or R$ 2,473 million) in twelve months and 3.6% in the quarter. The SMEs’ portfolio closed September 2015 atR$ 31,632 million, up 1.9% (or R$ 598 million) in twelve months and 0.9% in the quarter. The Large Corporates portfolio came toR$ 113,505 million, up 25.7% (or R$ 23,237) in twelve months and 6.9% in the quarter. This portfolio’s evolution was positively affected by the exchange rate variation. Excluding said effect,this credit portfolio would have grown by5.5% in 12 months and would have decreased 2.9% in the quarter. Total funding from clients reached R$ 287,660 million in September 2015, up 18.3% in twelve months and 4.4% in the quarter.Total funding, that includes, among others, funding from clients and assets under management, came toR$ 512,317 million, 17.5%higher than in September2014 and 3.7% up in the quarter. Total equity, excluding R$ 4,625 million related to goodwill, came to R$ 52,976 million in September 2015 (the goodwill amortization curve related to the acquisition of Banco Real³ was revised in July). Return on average equity (ROAE), adjusted for goodwill and extraordinary results, reached 12.8% in the first nine months of 2015, up 1.5 p.p. in twelve months and remained stable in the quarter. The BIS ratio stood at 15.8% in September 2015. Tier I capital reached 14.4% and Tier II capital was 1.4%. The coverage ratio (over 90 days) closed September 2015 at 185.1%. RECENT EVENTS Ø From September 2015, the social contribution rate for financial institutions increased from 15% to 20%. (For further details, please refer to note 3s in the Financial Statements) Ø Agreement for the acquisition of part of the financial operations of the PSA Group in Brazil and formation of a joint venture, and completion of the sale of the custody business. (For further details, please refer to note 37, letters “a” e “g”, in the Financial Statements). 1. Accounting net profit excluding extraordinary events and considering 100% of the reversal of goodwill amortization expenses. 2. For further details, please refer to notes 31, 33 and 37g in the Financial Statements 3. For further information, please refer to the accounting practices in the financial statements – intangible item. |
| SANTANDER BRASIL RESULTS |
MANAGERIAL ANALYSIS OF RESULTS
Next, we present the analysis of the managerial results.
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MANAGERIAL FINANCIAL STATEMENT¹ (R$ Million) | | | | | | | |
| 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
| | | 9M15x9M14 | | | 3Q15x2Q15 |
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NET INTEREST INCOME | | 22,251 | 20,667 | 7.7% | 7,631 | 7,480 | 2.0% |
Allowance for Loan Losses | | (6,898) | (7,263) | -5.0% | (2,448) | (2,338) | 4.7% |
NET INTEREST INCOME AFTER LOAN LOSSES | | 15,353 | 13,403 | 14.5% | 5,183 | 5,142 | 0.8% |
Fee and commission income | | 8,657 | 8,081 | 7.1% | 2,919 | 2,910 | 0.3% |
General Expenses | | (12,691) | (12,309) | 3.1% | (4,288) | (4,300) | -0.3% |
Personnel Expenses + Profit Sharing | | (5,877) | (5,411) | 8.6% | (2,054) | (1,962) | 4.7% |
Administrative Expenses2 | | (6,813) | (6,898) | -1.2% | (2,234) | (2,337) | -4.4% |
Tax Expenses | | (2,588) | (2,317) | 11.7% | (770) | (889) | -13.4% |
Investments in Affiliates and Subsidiaries | | 1 | 1 | 96.5% | 0 | 0 | 2.8% |
Other Operating Income/Expenses | | (2,571) | (1,731) | 48.6% | (844) | (925) | -8.7% |
OPERATING INCOME | | 6,161 | 5,129 | 20.1% | 2,201 | 1,938 | 13.5% |
Non Operating Income | | 138 | 113 | 22.5% | 21 | 39 | -46.0% |
NET PROFIT BEFORE TAX | | 6,299 | 5,242 | 20.2% | 2,222 | 1,977 | 12.4% |
Income Tax and Social Contribution | | (1,132) | (781) | 44.9% | (431) | (293) | 47.1% |
Minority Interest | | (151) | (133) | 13.7% | (82) | (9) | na |
NET PROFIT | | 5,016 | 4,328 | 15.9% | 1,708 | 1,675 | 2.0% |
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1. Excludes 100% of the goodwill amortization expense, the tax hedge effect and others as mentioned on pages 24 and 25. |
2. Administrative Expenses exclude 100% of the goodwill amortization expense. |
NET INTEREST INCOME Net interest income, including income from financial operations, totaled R$ 22,251 millionin the first nine months of 2015, up 7.7% year on year and 2.0% quarter on quarter. Revenues from loan operations were flat in twelve months and grew 0.7% in the quarter. In the same periods, the average volume of the loan portfolio grew by 12.9% and 0.5% respectively. The yearly revenue evolution reflects the reduction in the average loan portfolio spread, in turn essentially due to the change in the mix of products/segments. In the quarter, the spreads remained stable. Revenues from deposits increased by 17.6% in twelve months and 5.0% in the quarter, partly due to the increase in the Selic interest rate in both periods of comparison. The “Others” line, which includes the result of the structural interest rate gap, revenue from customers in treasury activities and others, moved up by 37.7% (or R$ 1,408 million) in twelve months and 5.7% in the quarter. | |  |
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NET INTEREST INCOME | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
(R$ Million) | | | | 9M15x9M14 | | | 3Q15x2Q15 |
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Net Interest Income | | 22,251 | 20,667 | 7.7% | 7,631 | 7,480 | 2.0% |
Loans | | 15,971 | 15,965 | 0.0% | 5,435 | 5,399 | 0.7% |
Average volume | | 251,599 | 222,844 | 12.9% | 254,687 | 253,469 | 0.5% |
Spread (Annualized) | | 8.5% | 9.6% | -1.09 p.p. | 8.5% | 8.5% | -0.08 p.p. |
Deposits | | 1,134 | 965 | 17.6% | 392 | 374 | 5.0% |
Average volume | | 135,648 | 128,245 | 5.8% | 140,084 | 136,065 | 3.0% |
Spread (Annualized) | | 1.1% | 1.0% | 0.11 p.p. | 1.1% | 1.1% | 0.01 p.p. |
Others¹ | | 5,146 | 3,737 | 37.7% | 1,805 | 1,708 | 5.7% |
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1. Includes Gains (Losses) on financial transactions and other net interest income. |
FEE AND COMMISSION INCOME
Fee and commission income totaled R$ 8,657 million in the first nine months of 2015, up 7.1% (or R$ 576 million) in twelve months and 0.3% in the quarter. The positive evolution, in twelve months, is mainly explained by the growth in the “Insurance fees”,“Current account services” and “Lending operations”.
Credit card commissions amounted toR$ 2,546 millionin the first nine months of 2015, up 1.7% (or R$ 44 million) in 12 months and 6.6% in the quarter.
Insurance fees totaled R$ 1,400 million in the first nine months of 2015, up 11.40% (or R$ 143 million) in twelve months and down 13.1% in the quarter.
Current account services fees totaled R$ 1,496 million in the first nine months of 2015, up 8.7% (or R$ 120 million) in twelve months and 5.9% in the quarter.
Asset management fees totaled R$ 781 million in the firstnine months of 2015, up 5.3% (or R$ 39 million) intwelve months and 7.3% in the quarter.
Additionally,income from lending operations came to R$ 1,019millionin thefirstnine monthsof 2015, up 12.6% (or R$ 114 million)intwelve months and down4.3% in the quarter.
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FEE AND COMMISSION INCOME | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
(R$ Million) | | | | 9M15x9M14 | | | 3Q15x2Q15 |
| | | | | | | |
Cards | | 2,546 | 2,502 | 1.7% | 881 | 827 | 6.6% |
Insurance fees | | 1,400 | 1,257 | 11.4% | 432 | 497 | -13.1% |
Current Account Services | | 1,496 | 1,377 | 8.7% | 530 | 501 | 5.9% |
Asset Management | | 781 | 742 | 5.3% | 270 | 251 | 7.3% |
Lending Operations | | 1,019 | 905 | 12.6% | 338 | 353 | -4.3% |
Collection Services | | 749 | 676 | 10.8% | 263 | 252 | 4.1% |
Securities Brokerage, Custody and Placement Services | | 383 | 398 | -3.6% | 97 | 146 | -33.5% |
Others | | 283 | 225 | 25.9% | 108 | 83 | 29.7% |
Total | | 8,657 | 8,081 | 7.1% | 2,919 | 2,910 | 0.3% |
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| SANTANDER BRASIL RESULTS |
GENERAL EXPENSES (ADMINISTRATIVE + PERSONNEL) Administrative and personnel expenses (excluding depreciation and amortization) totaled R$ 11,194 millionin the first nine months of2015, up 2.6% (or R$ 279 million) in 12 months and 4.2% in the quarter. It is worth noting that the merger of Getnet and the partnership with Bonsucesso affected the 12-month comparison. Personnel expenses, including profit sharing, came toR$ 5,877 millionin the first nine months of2015, an increase of 8.6% (or R$ 467 million) year on year and 4.7% quarter on quarter.The quarterly increase reflects higher expenses with compensation due to collective bargaining. | |  |
Administrative expenses, excluding depreciation and amortization, amounted toR$ 5,317 millioninthe first nine months of 2015, a 3.4% (or R$ 188 million) decline intwelve months. In the quarter, the 3.7% increase was mainly due to higherexpenses from “Security and Surveillance“ and “Advertising, promotion and publicity”that together were responsible for 85% of the variation in this period.Depreciation and amortization totaled R$ 1,496 millionin the first nine months of2015, up 7.4% (or R$ 103 million) intwelve months and down 29.9% in the quarter.The reduction observed in the quarter was chiefly due to the impairment of intangible assets in the second quarter of 2015.
General expenses, including depreciation and amortization, grew by3.1% (or R$ 382 million)intwelve monthsand down 0.3% in the quarter.The efficiency ratio stood at48.0% in this quarter, an improvement of 2.1 p.p. over the previous quarter.
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EXPENSES' BREAKDOWN (R$ Million) | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
| | | 9M15x9M14 | | | 3Q15x2Q15 |
| | | | | | | |
Outsourced and Specialized Services | | 1,577 | 1,833 | -14.0% | 521 | 522 | -0.2% |
Advertising, promotions and publicity | | 262 | 280 | -6.5% | 118 | 87 | 35.2% |
Data processing | | 1,052 | 989 | 6.4% | 366 | 354 | 3.4% |
Communications | | 382 | 421 | -9.1% | 128 | 135 | -5.8% |
Rentals | | 542 | 545 | -0.6% | 179 | 181 | -1.1% |
Transport and Travel | | 158 | 144 | 9.3% | 57 | 56 | 1.5% |
Security and Surveillance | | 487 | 455 | 6.9% | 175 | 150 | 16.8% |
Maintenance | | 171 | 156 | 9.9% | 57 | 56 | 0.9% |
Financial System Services | | 181 | 284 | -36.3% | 68 | 61 | 11.9% |
Water, Electricity and Gas | | 156 | 121 | 29.4% | 51 | 55 | -8.3% |
Material | | 58 | 60 | -3.5% | 18 | 22 | -16.2% |
Others | | 292 | 217 | 34.6% | 99 | 91 | 8.8% |
Subtotal | | 5,317 | 5,504 | -3.4% | 1,837 | 1,771 | 3.7% |
Depreciation and Amortization1 | | 1,496 | 1,394 | 7.4% | 397 | 567 | -29.9% |
ADMINISTRATIVE EXPENSES | | 6,813 | 6,898 | -1.2% | 2,234 | 2,337 | -4.4% |
| | | | | | | |
Compensation² | | 3,689 | 3,485 | 5.9% | 1,310 | 1,212 | 8.1% |
Charges | | 1,121 | 964 | 16.3% | 381 | 386 | -1.1% |
Benefits | | 969 | 887 | 9.2% | 327 | 328 | -0.4% |
Training | | 68 | 54 | 25.5% | 24 | 26 | -7.7% |
Others | | 31 | 20 | 50.1% | 11 | 10 | 10.6% |
PERSONNEL EXPENSES | | 5,877 | 5,411 | 8.6% | 2,054 | 1,962 | 4.7% |
| | | | | | | - |
ADMINISTRATIVE + PERSONNEL EXPENSES (excludes deprec. and amortization) | | 11,194 | 10,915 | 2.6% | 3,891 | 3,733 | 4.2% |
| | | | | | - | |
TOTAL GENERAL EXPENSES | | 12,691 | 12,309 | 3.1% | 4,288 | 4,300 | -0.3% |
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1. Excludes the expenses of goodwill amortization, which in 9M15 was R$ 2,342 million, in 9M14 was 2,745 million, 3Q15 was 442 million and 2Q15 was R$ 951 million. |
2. Includes Profit Sharing |
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses totaled R$ 6,898 million in the first nine months of 2015, down 5.0% intwelve months and up 4.7% in the quarter.
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ALLOWANCE FOR LOAN LOSSES | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
(R$ Million) | | | | 9M15x9M14 | | | 3Q15x2Q15 |
| | | | | | | |
Gross allowance for loan losses | (8,510) | (9,114) | -6.6% | (2,975) | (2,967) | 0.3% |
Income from recovery of written off loans | 1,611 | 1,851 | -12.9% | 527 | 628 | -16.2% |
Total | | (6,898) | (7,263) | -5.0% | (2,448) | (2,338) | 4.7% |
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OtHER OPERATING INCOME (EXPENSES)
Other operating income (expenses) came to R$ 2,571 million in the first nine months of 2015, an increase of 48.6% (or R$ 840 million) intwelve months and decrease 8.7% in the quarter.
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OTHER OPERATING INCOME (EXPENSES) (R$ Million) | | 9M15 | 9M14 | Var. | 3Q15 | 2Q15 | Var. |
| | | 9M15x9M14 | | | 3Q15x2Q15 |
| | | | | | | |
Other operating income (expenses) | | (2,571) | (1,731) | 48.6% | (844) | (925) | -8.7% |
Expenses from cards | | (1,053) | (1,150) | -8.4% | (349) | (365) | -4.5% |
Net Income Capitalization | | 191 | 190 | 0.4% | 70 | 61 | 13.4% |
Provisions for contingencies¹ | | (1,572) | (1,370) | 14.8% | (661) | (576) | 14.7% |
Others | | (137) | 599 | n.a. | 96 | (45) | n.a. |
| | | | | | | | |
1. Includes fiscal, civil and labor provisions. | | | | | | | |
INCOME TAX expenses
Taxes totaled R$ 1,132 million in the first nine months of 2015, with an effective tax rate of 18.0%, up 3.1 p.p. in 12 months and 4.6 p.p. in the quarter. In the quarter, income tax expenses outgrew profit before taxes, which climbed by 12%, leading to an increase in the effective tax rate. This increase resulted from a 5 p.p. upturn in the statutory CSLL tax rate as of September, the reduced deduction of Banco Real goodwill amortization, and the profit before tax increase. However, the impact on the effective tax rate was mitigated by the remeasurement of deferred tax assets’ stock, due to: the impact of the new statutory CSLL rate, the deferred tax assets not registered in the quarter and the write-off of tax loss carry forwards deferred tax assets.
| SANTANDER BRASIL RESULTS |
balance sheet
At the close of September 2015, total assets reached R$ 702,407 million, up 36.4% intwelve months and 16.0% in the quarter. In the same period, total equity came to R$ 57,602 million, or R$ 52,976 million excluding goodwill.
| | | | | | | |
ASSETS (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Current Assets and Long Term Assets | | 689,054 | 497,162 | 38.6% | 591,269 | 16.5% |
Cash and Cash Equivalents | | 6,928 | 5,050 | 37.2% | 5,525 | 25.4% |
Interbank Investments | | 59,264 | 56,077 | 5.7% | 56,850 | 4.2% |
Money Market Investments | | 29,933 | 50,028 | -40.2% | 32,452 | -7.8% |
Interbank Deposits | | 2,341 | 2,804 | -16.5% | 2,270 | 3.2% |
Foreign Currency Investments | | 26,989 | 3,244 | n.a | 22,129 | 22.0% |
Securities and Derivative Financial Instrument | | 154,262 | 102,175 | 51.0% | 145,900 | 5.7% |
Own Portfolio | | 29,891 | 41,198 | -27.4% | 38,403 | -22.2% |
Subject to Repurchase Commitments | | 72,895 | 34,438 | 111.7% | 70,536 | 3.3% |
Posted to Central Bank of Brazil | | 8,541 | 9,318 | -8.3% | 9,991 | -14.5% |
Pledged in Guarantees | | 16,330 | 10,654 | 53.3% | 13,930 | 17.2% |
Others | | 26,604 | 6,567 | 305.1% | 13,039 | 104.0% |
Interbank Accounts | | 52,224 | 33,554 | 55.6% | 34,689 | 50.5% |
Interbranch Accounts | | 0 | 2 | n.a. | 0 | n.a. |
Lending Operations | | 246,648 | 219,890 | 12.2% | 239,445 | 3.0% |
Lending Operations | | 262,050 | 234,583 | 11.7% | 254,523 | 3.0% |
Lending Operations Related to Assignment | | 203 | 10 | n.a | 2 | n.a |
(Allowance for Loan Losses) | | (15,605) | (14,704) | 6.1% | (15,080) | 3.5% |
Others Receivables | | 167,419 | 78,263 | 113.9% | 106,410 | 57.3% |
Others Assets | | 2,310 | 2,152 | 7.3% | 2,449 | -5.7% |
Permanent Assets | | 13,353 | 17,776 | -24.9% | 14,021 | -4.8% |
Investments | | 38 | 44 | -13.5% | 38 | 1.6% |
Fixed Assets | | 6,733 | 6,499 | 3.6% | 6,707 | 0.4% |
Intangibles | | 6,581 | 11,233 | -41.4% | 7,276 | -9.5% |
Goodwill | | 27,527 | 27,433 | 0.3% | 27,527 | 0.0% |
Intangible Assets | | 6,934 | 7,363 | -5.8% | 6,940 | -0.1% |
(Accumulated Amortization) | | (27,881) | (23,564) | 18.3% | (27,192) | 2.5% |
Total Assets | | 702,407 | 514,938 | 36.4% | 605,290 | 16.0% |
| | | | | | | |
| | | | | | | |
Goodwill (net of the amortization) | | 4,625 | 7,817 | -40.8% | 5,067 | -8.7% |
Total Assets (excluding goodwill) | | 697,782 | 507,122 | 37.6% | 600,223 | 16.3% |
| | | | | | | |
LIABILITIES (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Current Liabilities and Long Term Liabilities | | 642,458 | 455,129 | 41.2% | 541,233 | 18.7% |
Deposits | | 145,585 | 135,286 | 7.6% | 143,787 | 1.2% |
Demand Deposits | | 18,521 | 14,084 | 31.5% | 14,842 | 24.8% |
Savings Deposits | | 35,540 | 36,627 | -3.0% | 36,595 | -2.9% |
Interbank Deposits | | 3,402 | 3,764 | -9.6% | 3,008 | 13.1% |
Time Deposits | | 88,121 | 80,810 | 9.0% | 89,342 | -1.4% |
Money Market Funding | | 138,758 | 101,545 | 36.6% | 126,218 | 9.9% |
Own Portfolio | | 110,909 | 76,915 | 44.2% | 104,145 | 6.5% |
Third Parties | | 11,605 | 12,138 | n.a. | 6,300 | 84.2% |
Free Portfolio | | 16,243 | 12,493 | 30.0% | 15,774 | 3.0% |
Funds from Acceptance and Issuance of Securities | | 99,202 | 75,214 | 31.9% | 90,496 | 9.6% |
Resources from Real Estate Credit Notes, Mortgage Notes, Credit and Similar | | 81,786 | 60,401 | 35.4% | 77,129 | 6.0% |
Securities Issued Abroad | | 15,778 | 13,502 | 16.9% | 11,910 | 32.5% |
Others | | 1,639 | 1,310 | 25.0% | 1,457 | 12.4% |
Interbank Accounts | | 1,626 | 1,523 | 6.8% | 1,573 | n.a. |
Interbranch Accounts | | 2,617 | 1,458 | 79.5% | 2,229 | 17.4% |
Borrowings | | 39,384 | 21,853 | 80.2% | 29,567 | 33.2% |
Domestic Onlendings -Official Institutions | | 14,767 | 14,031 | 5.2% | 15,737 | -6.2% |
Foreign Onlendings | | 0 | - | n.a. | - | n.a. |
Derivative Financial Instruments | | 29,870 | 5,525 | n.a. | 12,676 | n.a. |
Other Payables | | 170,650 | 98,694 | 72.9% | 118,948 | 43.5% |
Deferred Income | | 396 | 341 | 16.1% | 419 | -5.4% |
Minority Interest | | 1,951 | 1,155 | 68.9% | 1,906 | 2.3% |
Equity | | 57,602 | 58,313 | -1.2% | 61,732 | -6.7% |
Total Liabilities | | 702,407 | 514,938 | 36.4% | 605,290 | 16.0% |
| | | | | | | |
| | | | | | | |
Equity (excluding goodwill) | | 52,976 | 50,496 | 4.9% | 56,665 | -6.5% |
| | | | | | | |
SECURITIES
Securities totaled R$ 154,262 million in September 2015, up 51.0% in twelve months and 5.7% in the quarter. The variation in the financial instruments line is mainly explained by the exchange rate variation.
| | | | | | | |
SECURITIES (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Public securities | | 108,204 | 76,762 | 41.0% | 114,062 | -5.1% |
Private securities, funds quotas / others | | 19,457 | 18,848 | 3.2% | 18,802 | 3.5% |
Financial instruments | | 26,601 | 6,564 | n.a. | 13,036 | 104.1% |
Total | | 154,262 | 102,175 | 51.0% | 145,900 | 5.7% |
| | | | | | �� | |
| SANTANDER BRASIL RESULTS |
CREDIT PORTFOLIO
The total credit portfolio totaled R$ 261,980 million at the close of September of 2015, up 11.7% in twelve months and 3.0% in the quarter. In both comparisons (twelve months and quarterly), the foreign currency credit portfolio, which also includes dollar-indexed loans, was impacted by the variation of the Real against the Dollar. Thus, excluding this effect and the exchange rate variation impact, the credit portfolio would have grown 3.4% and would have decreased 1.4% in twelve months and in the quarter, respectively.
The foreign currency credit portfolio, including dollar-indexed loans, totaled R$ 50.7 billion in September of 2015, up 72.5% on the R$ 29.4 billion recorded in September 2014 and 28.8% higher than previous quarter.
The expanded credit portfolio, which includes other credit risk transactions, acquiring activities and guarantees, ended September 2015 at R$ 332,340 million, up 13.4% in 12 months and 3.3% in the quarter. Excluding the exchange rate variation impact, the expanded credit portfolio would have grown 6.7% in twelve months and would have decreased 0.1% in the quarter.
| | | | | | | |
MANAGERIAL BREAKDOWN OF CREDIT | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
BY SEGMENT (R$ Million) | | | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Individuals | | 82,786 | 76,683 | 8.0% | 81,534 | 1.5% |
Consumer Finance | | 34,057 | 36,530 | -6.8% | 35,338 | -3.6% |
SMEs | | 31,632 | 31,034 | 1.9% | 31,352 | 0.9% |
Corporate | | 113,505 | 90,268 | 25.7% | 106,179 | 6.9% |
Total portfolio | | 261,980 | 234,516 | 11.7% | 254,402 | 3.0% |
Other credit related transactions¹ | | 70,359 | 58,622 | 20.0% | 67,190 | 4.7% |
Total expanded credit portfolio | | 332,340 | 293,138 | 13.4% | 321,592 | 3.3% |
| | | | | | | |
| | | | | | | |
1 - Includes Debenture, FIDC, CRI , Floating Rate Notes, Promissory Notes, acquiring activities related assets and guarantees. |
LOANS TO INDIVIDUALS Loans to individuals closed September 2015 at R$ 82,786 million, up 8.0% (or R$ 6,103 million) in twelve months and 1.5% in the quarter. The evolution in twelve months was positively impact by the conclusion ofpartnership with Bonsucesso, in February 2015,operation thatstrengthening the payroll business. Excluding this impact, the individual’s loan portfolio would have grown 3.7% in twelve months. The yearly increase is driven by mortgage, payroll and credit card loans. The balance of mortgages ended September 2015 at R$ 25,157 million, up 29.3% (or R$ 5,700 million) intwelve months and 3.8% in the quarter. Payroll loans totaled R$ 13,886 million, up 16.9% (or R$ 2,012 million) intwelve months and 5.3% in the quarter. Excluding the effect of Bonsucesso, this loan portfolio would have decreased 10.6% in twelve months and 2.3% in the quarter. | |  |
CONSUMER FINANCE The consumer finance portfolio, which is originated outside the branch network, closed September 2015 at R$ 34,057 million, down 6.8% (or R$ 2,473 million) intwelve months and 3.6% in the quarter. Of this total, R$ 28,415 million refers to vehicle financing for individuals. Therefore, the total vehicle portfolio for individuals, including operations originated through car dealers and Santander’s branch network, amounted to R$ 31,128 million in September 2015, down 6.7% in 12 months and 2.8% in the quarter. | |  |
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CORPORATE AND SMEs Corporate and SME loans closed September2015 at R$ 145,137 million, up 19.6% (or R$ 23,835 million) intwelve months and down 5.5% in the quarter. The Corporate loan portfolio came toR$ 113,505 million, up 25.7% (or R$ 23,237 million) intwelve months and down 6.9% in the quarter, positively impacted by the exchange rate variation in twelve months. In the quarter, the impact was negative. Excluding the impact, the portfolio would have grown5.5% in twelve months and would have decreased 2.9% in the quarter. Loans to SMEs totaled R$ 31,632 million in September 2015, up 1.9% (or R$ 598 million) intwelve months and 0.9% in the quarter | |  |
| SANTANDER BRASIL RESULTS |
INDIVIDUALS AND CORPORATE LOAN PORTFOLIO BY PRODUCT
| | | | | | | |
BREAKDOWN OF MANAGERIAL CREDIT | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
PORTFOLIO BY PRODUCT (R$ Million) | | | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Individuals | | | | | | |
Leasing / Auto Loans¹ | | 2,714 | 3,206 | -15.4% | 2,942 | -7.8% |
Credit Card | | 17,453 | 16,854 | 3.6% | 17,339 | 0.7% |
Payroll Loans² | | 13,886 | 11,874 | 16.9% | 13,193 | 5.3% |
Mortgages | | 25,157 | 19,457 | 29.3% | 24,235 | 3.8% |
Agricultural Loans | | 3,475 | 3,379 | 2.9% | 3,423 | 1.5% |
Personal Loans / Others | | 20,101 | 21,913 | -8.3% | 20,402 | -1.5% |
Total Individuals | | 82,786 | 76,683 | 8.0% | 81,534 | 1.5% |
| | | | | | | |
Consumer Finance | | 34,057 | 36,530 | -6.8% | 35,338 | -3.6% |
| | | | | | | |
Corporate and SMEs | | | | | | |
Leasing / Auto Loans | | 3,006 | 3,116 | -3.5% | 3,060 | -1.8% |
Real Estate | | 10,784 | 10,237 | 5.3% | 10,531 | 2.4% |
Trade Finance | | 23,436 | 18,681 | 25.5% | 19,249 | 21.8% |
On-lending | | 11,853 | 11,477 | 3.3% | 12,711 | -6.8% |
Agricultural Loans | | 2,546 | 2,458 | 3.6% | 2,042 | 24.7% |
Working capital / Others | | 93,511 | 75,335 | 24.1% | 89,938 | 4.0% |
Total Corporate and SMEs | | 145,137 | 121,303 | 19.6% | 137,530 | 5.5% |
| | | | | | | |
Total Credit | | 261,980 | 234,516 | 11.7% | 254,402 | 3.0% |
Other Credit Risk Transactions with clients³ | | 70,359 | 58,622 | 20.0% | 67,190 | 4.7% |
| | | | | | | |
Total Expanded Credit Portfolio | | 332,340 | 293,138 | 13.4% | 321,592 | 3.3% |
| | | | | | | |
1. Including the loans to individual in the consumer finance segment, auto loan portfolio totaled R$ 31,128 MM in Sep/15, R$ 32.039 MM in Jun/15 and R$ 33.363 MM in Sep/14. |
2. Includes acquired payroll loan portfolio. |
3. Includes "Debenture", FIDC, CRI, Floating Rate Notes, Promissory Notes, Acquiring activities related assets and guarantees. |
BALANCE OF ALLOWANCE FOR LOAN LOSSES / COVERAGE RATIO The balance of allowance for loan losses totaled R$ 15,605 million in September 2015, up 6.1% in 12 months and 3.5% in the quarter. The BR GAAP coverage ratio is obtained by dividing the balance of the allowance for loan losses by loans overdue by more than 90 days. At the close of September 2015, it stood at 185.1%, up 14.9 p.p. in twelve months and 0.4 p.p. in the quarter. | |  |
RENEGOTIATED PORTFOLIO
Credit renegotiations came to R$ 12,760 million in September 2015, down 11.3% intwelve months. These operations include loan agreements that were extended and/or amended to enable their receipt under conditions agreed upon with the customers, including the renegotiation of previously written-off loans. In the quarter, this portfolio remained stable.
In September 2015, 55.4% of the portfolio was provisioned, versus 48.1% in September 2014. These levels are considered adequate, given the nature of the operations involved.
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RENEGOTIATED PORTFOLIO | | 9M15 | 9M14 | Var. | 2Q15 | Var. |
(R$ Million) | | | | 9M15x9M14 | | 3Q15x2Q15 |
| | | | | | |
Renegotiated Portfolio | 12,760 | 14,391 | -11.3% | 12,775 | -0.1% |
Allowance for loan losses over renegotiated portfolio | (7,067) | (6,926) | 2.0% | (6,976) | 1.3% |
Coverage % | | 55.4% | 48.1% | 7.3 pp | 54.6% | 0.8 pp |
| SANTANDER BRASIL RESULTS |
DELINQUENCY RATIO (OVER 90 DAYS) The over-90-day delinquency ratio reached 3.2% of the total credit portfolio, down 0.5 p.p. in 12 months and remains stable in the quarter. The delinquency ratio of the individual segment stood at 4.6%, down 0.6 p.p. in 12 months and up 0.2 p.p. in the quarter. Delinquency in the corporate segment came to 2.2%, down 0.2 p.p. year on year and 0.1 p.p. quarter on quarter. | |  |
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DELINQUENCY RATIO (15-90 DAYS) The 15-90 day delinquency ratio came to 4.3% in September 2015, flat in twelve months and 0.2 p.p. lower than previous quarter. The individual delinquency ratio came to 6.7%, flat intwelve months and 0.1 lower than previous quarter. The corporate ratio up 0.2 p.p. intwelve months and down 0.2 p.p. in the quarter, reaching 2.4%. | |  |
FUNDING
Funding from clients closed September 2015 at R$ 287,660 million, up 18.3% (or R$ 44,479 million) intwelve months and 4.4% in the quarter. In both periods of comparison, the highlights were treasury notes, debenture, real estate credit notes (LCI), agribusiness credit notes (LCA) and demand deposits.
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FUNDING (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Demand deposits | | 18,521 | 14,084 | 31.5% | 14,842 | 24.8% |
Saving deposits | | 35,540 | 36,627 | -3.0% | 36,595 | -2.9% |
Time deposits | | 88,121 | 80,810 | 9.0% | 89,342 | -1.4% |
Debenture/LCI/LCA¹ | | 88,855 | 74,864 | 18.7% | 83,729 | 6.1% |
Treasury Notes (Letras Financeiras)² | | 56,622 | 36,796 | 53.9% | 51,015 | 11.0% |
Funding from clients | | 287,660 | 243,181 | 18.3% | 275,524 | 4.4% |
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1. Debentures repurchase agreement, Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA). |
2. Includes Certificates of Structured Operations. |
CREDIT/FUNDING RATIO
The credit/funding ratio reached 91.1% in September 2015, down 5.4 p.p. in 12 months and 1.3 p.p. in the quarter.
The liquidity metric adjusted for the (high) reserve requirements and medium/long term funding stood at 80.6% in September 2015, down 4.9 p.p. in 12 months.
The bank has a comfortable liquidity position and a stable and adequate funding structure.
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FUNDING VS. CREDIT (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Funding from clients (A) | | 287,660 | 243,181 | 18.3% | 275,524 | 4.4% |
(-) Reserve Requirements | | (50,221) | (31,536) | 59.2% | (32,687) | 53.6% |
Funding Net of Reserve Requirements | | 237,439 | 211,645 | 12.2% | 242,837 | -2.2% |
Borrowing and Onlendings | | 14,859 | 14,162 | 4.9% | 15,826 | -6.1% |
Subordinated Debts | | 17,864 | 13,477 | 32.6% | 15,460 | 15.6% |
Offshore Funding | | 55,070 | 35,224 | 56.3% | 41,387 | 33.1% |
Total Funding (B) | | 325,232 | 274,508 | 18.5% | 315,510 | 3.1% |
Assets under management¹ | | 187,085 | 161,484 | 15.9% | 178,318 | 4.9% |
Total Funding and Asset under management | | 512,317 | 435,992 | 17.5% | 493,828 | 3.7% |
Total Credit (C) | | 261,980 | 234,516 | 11.7% | 254,402 | 3.0% |
C / B (%) | | 80.6% | 85.4% | | 80.6% | |
| | | | | | | |
C / A (%) | | 91.1% | 96.4% | | 92.3% | |
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1 - According to Anbima criterion. |
| SANTANDER BRASIL RESULTS |
BIS RATIO¹ The BIS ratio reached 15.8% in September 2015, a decrease of 2.2 p.p. on the quarter and 2.9 p.p. in the 12-month variation. The fluctuation on the quarter was due to extraordinary dividends declaration and the increase on the loan portfolio and deferred tax assets, due to the devaluation of the Brazilian currency on the quarter. On the 12-month variation, the impacts on the ratio were due to exchange rate fluctuation on the period, change in the amount of capital deductions of the BIS III Phase In from 20% to 40% and growth of the portfolio. | |  |
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OWN RESOURCES AND BIS (R$ Million) | | Sep/15 | Sep/14 | Var. | Jun/15 | Var. |
| | | Sep/15xSep/14 | | Sep/15xJun/15 |
| | | | | | |
Tier I Regulatory Capital | | 55,960 | 59,088 | -5.3% | 61,411 | -8.9% |
CET1 | | 50,931 | 55,985 | -9.0% | 57,483 | -11.4% |
Additional Tier I | | 5,030 | 3,103 | 62.1% | 3,928 | 28.1% |
Tier II Regulatory Capital | | 5,612 | 4,995 | 12.4% | 5,573 | 0.7% |
Adjusted Regulatory Capital (Tier I and II) | | 61,573 | 64,083 | -3.9% | 66,984 | -8.1% |
Risk Weighted Assets (RWA) | | 389,030 | 341,587 | 13.9% | 370,864 | 4.9% |
Required Regulatory Capital | | 42,793 | 37,575 | 13.9% | 40,795 | 4.9% |
Adjusted Credit Risk Capital requirement | | 36,979 | 32,866 | 12.5% | 35,517 | 4.1% |
Market Risk Capital requirement | | 3,940 | 3,034 | 29.9% | 3,229 | 22.0% |
Operational Risk Capital requirement | | 1,874 | 1,674 | 11.9% | 2,049 | -8.5% |
Basel Ratio | | 15.8% | 18.8% | -2.9 p.p. | 18.1% | -2.2 p.p. |
Tier I | | 14.4% | 17.3% | -2.9 p.p. | 16.6% | -2.2 p.p. |
- CET1 | | 13.1% | 16.4% | -3.3 p.p. | 15.5% | -2.4 p.p. |
Tier II | | 1.4% | 1.5% | 0.0 p.p. | 1.5% | -0.1 p.p. |
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*For more details, see pages 24 and 25 of this report.
CORPORATE GOVERNANCE
With a free-float of 10.7%, Santander Brasil is listed on the traditional trading segment of Bolsa de Valores, Mercadorias e Futuros S.A. (BM&F Bovespa). Despite the lower level of requirements of this segment, the Bank maintains the best practices of corporate governance.
SIMPLIFIED OWNERSHIP STRUCTURE
Santander’s ownership structure on September 30st, 2015 was as follows:
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OWNERSHIP STRUCTURE | Common shares | % | Preferred share | % | Total share capital (thousand) | Total % |
(thousand) | (thousand) |
| | | | | | | |
Santander Group ¹ | 3,441,781 | 88.9% | 3,275,118 | 87.8% | 6,716,899 | 88.4% |
Treasury Shares | 34,156 | 0.9% | 34,156 | 0.9% | 68,311 | 0.9% |
Free Float | 393,913 | 10.2% | 421,718 | 11.3% | 815,631 | 10.7% |
Total | 3,869,850 | 100.0% | 3,730,991 | 100.0% | 7,600,840 | 100.0% |
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1- Includes shareholding of Grupo Empresarial Santander, S.L. ; Sterrebeeck B.V. and Santander Insurance Holding, S.L., as well the administrators. |
In the first nine months of 2015 Santander Brasil declared R$ 3,200 million in dividends. Of this total, R$ 150 million were paid from August 28 and R$ 3,050 million from October 5, 2015. | |  |
PERFORMANCE
Regarding to stock performance, it is important to mention that the annualized net income per unit of R$ 1.77 and R$ 1.78 in 9M15 and 2Q15, respectively, not include the extraordinary gain of R$ 0.84 per unit registered in the previous quarter. In this quarter, the non-recurring events not impacted the net profit.
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SANB11 | | 9M15 | 9M14 | Var. 9M15x9M14 | 3Q15 | 2Q15 | Var. 3Q15x2Q15 |
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Earnings (annualized) per unit ¹ (R$) | | 1.77 | 1.53 | 15.9% | 1.81 | 1.78 | 2.0% |
Dividend + Interest on capital per unit (R$) | | 0.81 | 0.06 | n.a. | 0.81 | 0.00 | n.a. |
Closing price (R$)² | | 12.6 | 15.8 | -20.2% | 12.6 | 16.9 | -25.5% |
Book Value per unit (R$)3 | | 14.0 | 13.4 | 4.9% | 14.0 | 15.0 | -6.5% |
Market Capitalization(R$ bi)4 | | 47.6 | 59.6 | -20.2% | 47.6 | 63.8 | -25.5% |
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1- Calculation does not consider the fact that the dividends attributed to the preferred shares are 10% higher than those attributed to the common shares. |
2- Closing price refers to historical serie. |
3- Book Value calculation excludes the goodwill. |
4-Market capitalization: total Units (Unit = 1 ON + 1 PN) x last Unit's price. |
19
| RATINGS |
RATINGS AGENCIES
Santander is rated by international ratings agencies and the ratings assigned reflect many factors including management quality, operating performance and financial strength,as well as other factors related to the financial sector and economic environment in which the Company is inserted.The table below presents the ratings assigned by the main rating agencies.
| | | Global Scale | | National Scale |
| RATINGS | | |
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| | | | Local Currency | Foreign Currency | | National |
| Rating Agency | | Long Term | Short Term | Long Term | Short Term | | Long Term | Short Term |
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| Fitch Ratings (outlook) | | BBB+ (negative) | F2 | BBB (negative) | F3 | | AAA (bra) (stable) | F1+ (bra) |
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| Standard & Poor’s (outlook) | | BB+ (negative) | B | BB+ (negative) | B | | brAA+ (negative) | brA-1 |
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| Moody's (outlook) | | Baa2 (stable) | Prime-2 | Baa3 (stable) | Prime-3 | | Aaa.br (stable) | Br-1 |
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Ratings assigned according published reports by Rating Agencies. |
ADDITIONAL INFORMATION – BALANCE SHEET AND MANAGERIAL FINANCIAL STATEMENTS |
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BALANCE SHEET
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ASSETS (R$ Million) | | Sep/15 | Jun/15 | Mar/15 | Dec/14 | Sep/14 |
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Current Assets and Long Term Assets | | 689,054 | 591,269 | 596,216 | 572,730 | 497,162 |
Cash and Cash Equivalents | | 6,928 | 5,525 | 4,964 | 5,075 | 5,050 |
Interbank Investments | | 59,264 | 56,850 | 48,736 | 39,809 | 56,077 |
Money Market Investments | | 29,933 | 32,452 | 36,619 | 24,704 | 50,028 |
Interbank Deposits | | 2,341 | 2,270 | 2,952 | 4,036 | 2,804 |
Foreign Currency Investments | | 26,989 | 22,129 | 9,166 | 11,068 | 3,244 |
Securities and Derivative Financial Instrument | | 154,262 | 145,900 | 131,493 | 132,271 | 102,175 |
Own Portfolio | | 29,891 | 38,403 | 31,313 | 53,217 | 41,198 |
Subject to Repurchase Commitments | | 72,895 | 70,536 | 57,922 | 49,171 | 34,438 |
Posted to Central Bank of Brazil | | 8,541 | 9,991 | 9,965 | 9,286 | 9,318 |
Pledged in Guarantees | | 16,330 | 13,930 | 17,992 | 12,231 | 10,654 |
Others | | 26,604 | 13,039 | 14,301 | 8,366 | 6,567 |
Interbank Accounts | | 52,224 | 34,689 | 34,291 | 30,308 | 33,554 |
Restricted Deposits: | | 50,392 | 32,856 | 32,837 | 30,270 | 31,705 |
Others | | 1,832 | 1,833 | 1,455 | 38 | 1,849 |
Interbranch Accounts | | 0 | 0 | 0 | 0 | 2 |
Lending Operations | | 246,648 | 239,445 | 244,162 | 231,021 | 219,890 |
Lending Operations | | 262,050 | 254,523 | 258,236 | 245,596 | 234,583 |
Lending Operations Related to Assignment | | 203 | 2 | 4 | 6 | 10 |
(Allowance for Loan Losses) | | (15,605) | (15,080) | (14,078) | (14,582) | (14,704) |
Other Receivables | | 167,419 | 106,410 | 130,277 | 131,892 | 78,263 |
Foreign Exchange Portfolio | | 101,360 | 55,772 | 75,696 | 81,041 | 33,007 |
Tax Credits | | 32,457 | 23,308 | 26,689 | 21,972 | 21,060 |
Others | | 33,601 | 27,330 | 27,891 | 28,879 | 24,196 |
Others Assets | | 2,310 | 2,449 | 2,292 | 2,355 | 2,152 |
Permanent Assets | | 13,353 | 14,021 | 16,075 | 17,226 | 17,776 |
Investments | | 38 | 38 | 38 | 38 | 44 |
Fixed Assets | | 6,733 | 6,707 | 6,783 | 6,923 | 6,499 |
Intangibles | | 6,581 | 7,276 | 9,253 | 10,265 | 11,233 |
Goodwill | | 27,527 | 27,527 | 27,531 | 27,428 | 27,433 |
Intangible Assets | | 6,934 | 6,940 | 7,693 | 7,594 | 7,363 |
(Accumulated Amortization) | | (27,881) | (27,192) | (25,971) | (24,757) | (23,564) |
Total Assets | | 702,407 | 605,290 | 612,291 | 589,956 | 514,938 |
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| ADDITIONAL INFORMATION – BALANCE SHEET AND MANAGERIAL INCOME STATEMENTS |
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LIABILITIES (R$ Million) | | Sep/15 | Jun/15 | Mar/15 | Dec/14 | Sep/14 |
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Current Liabilities and Long Term Liabilities | | 642,458 | 541,233 | 553,030 | 531,085 | 455,129 |
Deposits | | 145,585 | 143,787 | 140,580 | 143,632 | 135,286 |
Demand Deposits | | 18,521 | 14,842 | 15,255 | 16,049 | 14,084 |
Savings Deposits | | 35,540 | 36,595 | 37,569 | 37,939 | 36,627 |
Interbank Deposits | | 3,402 | 3,008 | 3,748 | 3,776 | 3,764 |
Time Deposits | | 88,121 | 89,342 | 84,008 | 85,867 | 80,810 |
Money Market Funding | | 138,758 | 126,218 | 117,102 | 110,353 | 101,545 |
Own Portfolio | | 110,909 | 104,145 | 89,866 | 87,305 | 76,915 |
Third Parties | | 11,605 | 6,300 | 10,400 | 11,851 | 12,138 |
Free Portfolio | | 16,243 | 15,774 | 16,836 | 11,197 | 12,493 |
Funds from Acceptance and Issuance of Securities | | 99,202 | 90,496 | 83,722 | 74,952 | 75,214 |
Resources from Real Estate Credit Notes, Mortgage Notes, Credit and Similar | | 81,786 | 77,129 | 69,457 | 61,893 | 60,401 |
Securities Issued Abroad | | 15,778 | 11,910 | 12,911 | 11,796 | 13,502 |
Others | | 1,639 | 1,457 | 1,354 | 1,263 | 1,310 |
Interbank Accounts | | 1,626 | 1,573 | 1,284 | 14 | 1,523 |
Interbranch Accounts | | 2,617 | 2,229 | 2,025 | 2,678 | 1,458 |
Borrowings | | 39,384 | 29,567 | 29,274 | 24,444 | 21,853 |
Domestic Onlendings -Official Institutions | | 14,767 | 15,737 | 15,987 | 15,614 | 14,031 |
National Economic and Social Development Bank (BNDES) | | 6,367 | 6,817 | 6,887 | 7,484 | 6,748 |
National Equipment Financing Authority (FINAME) | | 8,064 | 8,646 | 8,774 | 7,788 | 6,976 |
Other Institutions | | 337 | 274 | 326 | 342 | 307 |
Foreign Onlendings | | 0 | 0 | 0 | 0 | 0 |
Derivative Financial Instruments | | 29,870 | 12,676 | 15,247 | 8,813 | 5,525 |
Other Payables | | 170,650 | 118,948 | 147,808 | 150,587 | 98,694 |
Foreign Exchange Portfolio | | 99,537 | 54,993 | 76,831 | 80,297 | 33,264 |
Tax and Social Security | | 10,695 | 10,776 | 17,706 | 17,431 | 17,051 |
Subordinated Debts | | 7,818 | 7,546 | 7,520 | 7,294 | 7,279 |
Debt Instruments Eligible to Compose Capital | | 10,046 | 7,914 | 8,114 | 6,777 | 6,198 |
Others | | 42,552 | 37,718 | 37,639 | 38,788 | 34,903 |
Deferred Income | | 396 | 419 | 408 | 409 | 341 |
Minority Interest | | 1,951 | 1,906 | 1,449 | 1,141 | 1,155 |
Equity | | 57,602 | 61,732 | 57,403 | 57,321 | 58,313 |
Total Liabilities | | 702,407 | 605,290 | 612,291 | 589,956 | 514,938 |
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ADDITIONAL INFORMATION – BALANCE SHEET AND MANAGERIAL FINANCIAL STATEMENTS | |
SUMMARIZED MANAGERIAL FINANCIAL STATEMENT
MANAGERIAL FINANCIAL STATEMENT¹ (R$ Million) | | | | | | | | |
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q14 | 1Q14 |
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NET INTEREST INCOME | | 7,631 | 7,480 | 7,140 | 6,983 | 6,980 | 6,686 | 7,000 |
Allowance for Loan Losses | | (2,448) | (2,338) | (2,112) | (2,128) | (2,466) | (2,451) | (2,346) |
NET INTEREST INCOME AFTER LOAN LOSSES | | 5,183 | 5,142 | 5,028 | 4,854 | 4,514 | 4,235 | 4,654 |
Fee and commission income | | 2,919 | 2,910 | 2,828 | 2,977 | 2,765 | 2,683 | 2,633 |
General Expenses | | (4,288) | (4,300) | (4,103) | (4,440) | (4,303) | (4,032) | (3,974) |
Personnel Expenses + Profit Sharing | | (2,054) | (1,962) | (1,861) | (1,976) | (1,863) | (1,788) | (1,760) |
Administrative Expenses² | | (2,234) | (2,337) | (2,242) | (2,464) | (2,439) | (2,244) | (2,214) |
Tax Expenses | | (770) | (889) | (929) | (822) | (768) | (782) | (767) |
Investments in Affiliates and Subsidiaries | | 0 | 0 | 1 | 2 | 0 | 0 | (0) |
Other Operating Income/Expenses | | (844) | (925) | (802) | (850) | (481) | (444) | (806) |
OPERATING PROFIT | | 2,201 | 1,938 | 2,022 | 1,721 | 1,728 | 1,661 | 1,741 |
Non Operating Income | | 21 | 39 | 78 | 28 | 67 | 37 | 9 |
NET PROFIT BEFORE TAX | | 2,222 | 1,977 | 2,100 | 1,749 | 1,795 | 1,697 | 1,749 |
Income Tax and Social Contribution | | (431) | (293) | (408) | (162) | (282) | (230) | (269) |
Minority Interest | | (82) | (9) | (60) | (66) | (50) | (30) | (53) |
NET PROFIT | | 1,708 | 1,675 | 1,633 | 1,521 | 1,464 | 1,437 | 1,428 |
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1. Excludes 100% of the goodwill amortization expense, the tax hedge effect and others as mentioned on pages 24 and 25. |
2. Administrative Expenses exclude 100% of the goodwill amortization expense. |
Under Brazilian income tax rules, gains (losses) resulting from the exchange rate variation on foreign currency investments are not taxable (tax deductible). This tax treatment leads to foreign exchange rate exposure in the tax line. A hedge position was set up in order to immunize the net profit from the impact of the foreign exchange variation on the income tax and tax expenses lines.
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FISCAL HEDGE (R$ Million) | | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q14 | 1Q14 |
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Net Interest Income | | (8,358) | 882 | (4,721) | (1,166) | (1,368) | 380 | 486 |
Tax Expenses | | 871 | (96) | 513 | 107 | 131 | (57) | (68) |
Income Tax | | 7,487 | (786) | 4,208 | 1,059 | 1,237 | (323) | (419) |
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| ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION |
ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION
In order to ensure a better understanding of the results in BR GAAP, we present below the reconciliation of the managerial result with the accounting result. It is worth noting that these adjustments, with the exception of the amortization of goodwill and the extraordinary items,have no effect on net profit. All information, indicators and comments relating to the Income Statement in this report consider the managerial results, except where indicated otherwise.
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION (R$ Million) | | 9M15 | Reclassifications | Others4 | 9M15 |
| | Accounting | Tax Effect of Hedge¹ | Credit Recovery² | Amortization of goodwill³ | Profit Sharing | Foreign exchange variation | Managerial |
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NET INTEREST INCOME | | 12,885 | (12,197) | 1,611 | - | - | 1,970 | (750) | 22,251 |
Allowance for Loan Losses | | (10,216) | - | (1,611) | - | - | (804) | (902) | (6,898) |
NET INTEREST INCOME AFTER LOAN LOSSES | | 2,669 | (12,197) | - | - | - | 1,165 | (1,652) | 15,353 |
Fee and commission income | | 8,657 | - | - | - | - | - | - | 8,657 |
General Expenses | | (14,239) | - | - | (2,342) | 793 | - | - | (12,691) |
Personnel Expenses + Profit Sharing | | (5,084) | - | - | - | 793 | - | - | (5,877) |
Administrative Expenses | | (9,155) | - | - | (2,342) | - | - | - | (6,813) |
Tax Expenses | | (1,021) | 1,288 | - | - | - | - | 278 | (2,588) |
Investments in Affiliates and Subsidiaries | | 1 | - | - | - | - | - | - | 1 |
Other Operating Income/Expenses | | 2,240 | - | - | - | - | (1,165) | 5,977 | (2,571) |
OPERATING INCOME | | (1,693) | (10,908) | - | (2,342) | 793 | - | 4,603 | 6,161 |
Non Operating Income | | 889 | - | - | - | - | - | 751 | 138 |
NET PROFIT BEFORE TAX | | (804) | (10,908) | - | (2,342) | 793 | - | 5,354 | 6,299 |
Income Tax | | 7,579 | 10,908 | - | - | - | - | (2,197) | (1,132) |
Profit Sharing | | (793) | - | - | - | (793) | - | - | 0 |
Minority Interest | | (151) | - | - | - | - | - | - | (151) |
NET PROFIT | | 5,831 | - | - | (2,342) | - | - | 3,157 | 5,016 |
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION (R$ Million) | | 9M14 | Reclassifications | Others4 | 9M14 |
| | Accounting | Tax Effect of Hedge¹ | Credit Recovery² | Amortization of goodwill³ | Profit Sharing | Foreign exchange variation | Managerial |
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NET INTEREST INCOME | | 22,015 | (502) | 1,851 | - | - | - | - | 20,667 |
Allowance for Loan Losses | | (9,114) | - | (1,851) | - | - | - | - | (7,263) |
NET INTEREST INCOME AFTER LOAN LOSSES | | 12,902 | (502) | - | - | - | - | - | 13,403 |
Fee and commission income | | 8,081 | - | - | - | - | - | - | 8,081 |
General Expenses | | (14,245) | - | - | (2,745) | 809 | - | - | (12,309) |
Personnel Expenses + Profit Sharing | | (4,602) | - | - | - | 809 | - | - | (5,411) |
Administrative Expenses | | (9,644) | - | - | (2,745) | - | - | - | (6,898) |
Tax Expenses | | (2,431) | 7 | - | - | - | - | (122) | (2,317) |
Investments in Affiliates and Subsidiaries | | 1 | - | - | - | - | - | - | 1 |
Other Operating Income/Expenses | | (1,731) | - | - | - | - | - | - | (1,731) |
OPERATING INCOME | | 2,576 | (494) | - | (2,745) | 809 | - | (122) | 5,129 |
Non Operating Income | | 113 | - | - | - | - | - | - | 113 |
NET PROFIT BEFORE TAX | | 2,689 | - 494 | - | (2,745) | 809 | - | (122) | 5,242 |
Income Tax | | (164) | 494 | - | - | - | - | 122 | (781) |
Profit Sharing | | (809) | - | - | - | (809) | - | - | 0 |
Minority Interest | | (133) | - | - | - | - | - | - | (133) |
NET PROFIT | | 1,583 | - | - | (2,745) | - | - | (0) | 4,328 |
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION |
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION (R$ Million) | | 3Q15 | Reclassifications | Others4 | 3Q15 |
| | Accounting | Tax Effect of Hedge¹ | Credit Recovery² | Amortization of goodwill³ | Profit Sharing | Foreign exchange variation | Managerial |
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NET INTEREST INCOME | | 856 | (8,358) | 527 | - | - | 1,395 | (339) | 7,631 |
Allowance for Loan Losses | | (3,892) | - | (527) | - | - | (567) | (350) | (2,448) |
NET INTEREST INCOME AFTER LOAN LOSSES | | (3,036) | (8,358) | - | - | - | 828 | (689) | 5,183 |
Fee and commission income | | 2,919 | - | - | - | - | - | - | 2,919 |
General Expenses | | (4,469) | - | - | (442) | 261 | - | - | (4,288) |
Personnel Expenses + Profit Sharing | | (1,793) | - | - | - | 261 | - | - | (2,054) |
Administrative Expenses | | (2,676) | - | - | (442) | - | - | - | (2,234) |
Tax Expenses | | 101 | 871 | - | - | - | - | - | (770) |
Investments in Affiliates and Subsidiaries | | 0 | - | - | - | - | - | - | 0 |
Other Operating Income/Expenses | | (1,734) | - | - | - | - | (828) | (62) | (844) |
OPERATING INCOME | | (6,218) | (7,487) | - | (442) | 261 | - | (751) | 2,201 |
Non Operating Income | | 772 | - | - | - | - | - | 751 | 21 |
NET PROFIT BEFORE TAX | | (5,447) | (7,487) | - | (442) | 261 | - | - | 2,222 |
Income Tax | | 7,056 | 7,487 | - | - | - | - | - | (431) |
Profit Sharing | | (261) | - | - | - | (261) | - | - | 0 |
Minority Interest | | (82) | - | - | - | - | - | - | (82) |
NET PROFIT | | 1,266 | - | - | (442) | - | - | - | 1,708 |
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ACCOUNTING AND MANAGERIAL RESULTS RECONCILIATION (R$ Million) | | 2Q15 | Reclassifications | Others4 | 2Q15 |
| | Accounting | Tax Effect of Hedge¹ | Credit Recovery² | Amortization of goodwill³ | Profit Sharing | Foreign exchange variation | Managerial |
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NET INTEREST INCOME | | 8,540 | 882 | 628 | - | - | (39) | (411) | 7,480 |
Allowance for Loan Losses | | (3,464) | - | (628) | - | - | 54 | (552) | (2,338) |
NET INTEREST INCOME AFTER LOAN LOSSES | | 5,075 | 882 | - | - | - | 15 | (963) | 5,142 |
Fee and commission income | | 2,910 | - | - | - | - | - | - | 2,910 |
General Expenses | | (4,982) | - | - | (951) | 269 | - | - | (4,300) |
Personnel Expenses + Profit Sharing | | (1,693) | - | - | - | 269 | - | - | (1,962) |
Administrative Expenses | | (3,288) | - | - | (951) | - | - | - | (2,337) |
Tax Expenses | | (707) | (96) | - | - | - | - | 278 | (889) |
Investments in Affiliates and Subsidiaries | | 0 | - | - | - | - | - | - | 0 |
Other Operating Income/Expenses | | 5,099 | - | - | - | - | (15) | 6,039 | (925) |
OPERATING INCOME | | 7,397 | 786 | - | (951) | 269 | - | 5,354 | 1,938 |
Non Operating Income | | 39 | - | - | - | - | - | - | 39 |
NET PROFIT BEFORE TAX | | 7,436 | 786 | - | (951) | 269 | - | 5,354 | 1,977 |
Income Tax | | (3,277) | (786) | - | - | - | - | (2,197) | (293) |
Profit Sharing | | (269) | - | - | - | (269) | - | - | 0 |
Minority Interest | | (9) | - | - | - | - | - | - | (9) |
NET PROFIT | | 3,881 | - | - | (951) | - | - | 3,157 | 1,675 |
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1.Fiscal Hedge: See more details on page 23.
2.Credit Recovery:Reclassified from revenue from loan operations to the allowance for loan losses.
3.Amortization of Goodwill:Reversal of goodwill amortization expenses.
4.Others:
a) Net interest income: adjustment to the appreciation of assets corresponding to the impairment of securities.
b) Allowance for loan losses: complementary provisions recorded
c)Tax expenses: In 2Q15, reversal of the restatement of the Cofins provision related to 2015. In the 9M14,there is r$ 122 million that refers to the deferred tax assets registered as a result of the election made according to the Law 12,996/2014
d)Other operating income/expenses: In the 2Q15, reversal of Cofins tax provisions totaling R$7.7 billion; the impairment of software, amounting to R$363 million, due to systems obsolescence and discontinuity; the impairment of payroll assets totaling R$534 million; and provisions for civil and tax contingencies amounting to R$735 million. In the 3Q15, the gain regarding to Cofins reimbursement, totaling R$ 765 million; impairment of assets totaling R$ 312 million; and others provisions totaling R$ 515 million.
e)Non-operating income: Sale of the custody business.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: October 29, 2015
Banco Santander (Brasil) S.A. |
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| By: | /S/ Amancio Acurcio Gouveia
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| | Amancio Acurcio Gouveia
Officer Without Specific Designation
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| By: | /S/ Carlos Rey de Vicente
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| | Carlos Rey de Vicente
Vice - President Executive Officer
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