UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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 April, 2019
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
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
SUMMARY |
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| Pages |
Performance Review | 1 | |
Financial Statements | ||
Balance Sheets | 19 | |
Income Statements | 23 | |
Statements of Changes in Stockholders' Equity – Bank | 24 | |
Statements of Changes in Stockholders' Equity - Consolidated | 27 | |
Cash Flows Statements | 30 | |
Statements of Value Added | 31 | |
Notes to the Financial Statements | ||
Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security | ||
| ||
Executive’s Report of Financial Statements | 113 | |
Executive’s Report of Independent Auditors' Report | 114 | |
Individual and Consolidated Financial Statements – March 31, 2019
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
PERFORMANCE REVIEW | |
In thousands of Brazilian Real - R$, unless otherwise stated | |
Dear Stockholders:
We present the Performance Review to Individual and Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Bank) related to the period ended March 31, 2019, prepared in accordance with accounting practices set by Brazilian Corporate Law, the standards of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and document template provided by the Accounting National Financial System Institutions (Cosif) and the Brazilian Exchange Commission (CVM), that does not conflict with the rules issued by Bacen.
The Condensed Financial Statements in accordance with the International Accounting Standards Board (IASB) for the period ended March 31, 2019, will be disclosed simultaneously, on the website www.santander.com.br/ri.
1) Macroeconomic Environment
In general, prices of Brazilian financial assets ended the first quarter of 2019 at better levels than the ones registered at the end of 2018. The exception was the exchange rate, which weakened marginally versus the US dollar (approximately0.6%). However, it is important to notice that price dynamics of all assets followed a similar pattern during the period, as they reached levels that were more favorable in the beginning of first quarter than the ones in its end. That is, the year started with a generalized improvement trend in prices of Brazilian financial assets, which was followed by some profit-taking moves as months went by. In most cases – as stated before – the price correction was not enough to reverse the improvement observed in early 2019. Nonetheless, the performance of Brazilian financial asset prices could have been better than the one registered. Santander considers that both domestic and international factors influenced such a trajectory recorded by the Brazilian financial asset prices in the first three months of 2019.
From the international standpoint, the Bank understands that the aggravation of tensions derived from the so-called “Trade War” between China and the US played an important role in the reversal of Brazilian financial asset prices – as the imbroglio may bring collateral damage to all economies in the globe, including the Brazilian one. Besides, Santander remembers that additional evidences indicating that both Chinese and US economies may go through a more intense economic slowdown than previously anticipated by market participants raised concerns among international investors and increased their levels of risk aversion – a backdrop that put pressure over both the Brazilian exchange rate as well prices of its credit-default-swaps. The Bank also thinks it is important to highlight that two developments reinforced the general perception that world economy should face a protracted period of slow economic growth. Namely, a) the imbroglio related to the conclusion of the Brexit – the process of departure of United Kingdom from the European Union – and; b) signals conveyed by the European Central Bank that it would push forward the deadline for granting monetary stimulus to that economy. According to Santander’s appraisal, less auspicious perspectives for the world economy also contributed to the reversal of Brazilian financial asset prices.
As for the domestic environment, the beginning of 2019 was marked by the inauguration of a new federal administration, a factor that reinforced the process of recovery in confidence indicators – both entrepreneurs and consumer ones – which nurtured a climate of optimism among market participants regarding the approval of structural reforms the country needs. In the Bank’s view, these were the reasons behind the substantial improvement observed in the Brazilian financial asset prices in the beginning of the first quarter of 2019. However, as the complexity to get reforms in place became clearer and clearer – difficult negotiations with a very fragmented Congress, difficulties in the initial organization of the new Government, people’s anxiety with fast and concreted deeds, etc – the enthusiasm dwindled and was replaced by caution. In the wake of this mood change, Santander understands that the unfolding of a profit-taking process was something natural, but the Bank considers that the magnitude of price changes should not be considered as an indication of a critical situation.
On top of the on the political front observed, the Bank also verified a new round of frustration with regard to the performance of activity indicators, which provoked a wave of downward reviews in the forecasts for the GDP growth for 2019. Santander ended up recalculating its own projection for the performance of the Brazilian economy during this year and, instead of counting on a 3.0% expansion for the GDP in 2019, now the Bank considers that the most likely scenario is for a 2.3% growth this year. The maintenance of a gradual recovery reinforced favorable dynamics for price indices, with underlying inflation gauges signaling at plenty of room for the Brazilian Central Bank to meet the targets set by the National Monetary Council for the coming years. Consequently, the Bank believed it was created additional maneuvering-room for the Brazilian monetary authority to keep the base interest rate unchanged at the current level of 6.50% pa, without jeopardizing its duty of keeping inflation dynamics compatible with the convergence of current inflation toward targeted levels. As a result, Santander thinks the Selic target rate is likely to remain unchanged until the end of 2020 – previously the expectation was that the base interest rate would stay put until mid-2020.
These forecasts for economic growth, inflation and low interest rate that Santander works with are based upon the assumption that the country will continue to pursue an agenda of structural reforms, mainly on the fiscal front. The Santander restates that the willingness and commitment of the newly-instated administration in pursuing the improvement of the fiscal balance, as well as in keeping sustainable and sensible economic policy guidelines are going to be crucial for allowing the country to reach out social and economic development over time.
2) Performance
2.1) Corporate Net Income
Individual and Consolidated Financial Statements – March 31, 2019 1
CONSOLIDATED INCOME STATEMENTS |
|
|
| 1Q19 | 1Q18 | annual changes% |
Financial Income |
|
|
| 20,550.5 | 19,190.3 | 7.1 |
Financial Expenses |
|
|
| (12,556.6) | (11,932.5) | 5.2 |
Gross Profit From Financial Operations (a) |
|
|
| 7,993.9 | 7,257.8 | 10.1 |
Other Operating (Expenses) Income (b) |
|
|
| (2,642.4) | (2,416.1) | 9.4 |
Operating Income |
|
|
| 5,351.5 | 4,841.7 | 10.5 |
Non-Operating Income |
|
|
| 0.5 | 12.6 | -96.2 |
Income Before Taxes on Income and Profit Sharing |
|
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| 5,352.0 | 4,854.2 | 10.3 |
Income Tax and Social Contribution (a) |
|
|
| (1,376.1) | (1,484.9) | -7.3 |
Profit Sharing |
|
|
| (468.4) | (466.3) | 0.5 |
Non-Controlling Interest |
|
|
| (92.0) | (83.3) | 10.5 |
Consolidated Net Income |
|
|
| 3,415.4 | 2,819.7 | 21.1 |
Excludes goodwill amortizations expenses |
|
|
| 69.8 | 69.4 | 0.6 |
Net Income Excluding Goodwill Amortization |
|
|
| 3,485.2 | 2,889.1 | 20.6 |
For a better understanding of the results in BRGAAP, below is the Gross Profit from Financial Operations, disregarding the hedge effect (according to item 1):
ADJUSTED GROSS PROFIT FROM FINANCIAL OPERATIONS |
|
|
| 1Q19 | 1Q18 | annual changes% |
Gross Profit From Financial Operations |
|
|
| 7,993.9 | 7,257.8 | 10.1 |
Income Tax and Social Contribution (hedge) |
|
|
| 152.8 | 150.5 | 1.6 |
Adjusted Gross Profit From Financial Operations |
|
|
| 8,146.7 | 7,408.3 | 10.0 |
INCOME TAX AND SOCIAL CONTRIBUITION |
|
|
| 1Q19 | 1Q18 | annual changes% |
Income Tax and Social Contribution |
|
|
| (1,376.1) | (1,484.9) | -7.3 |
Income Tax and Social Contribution (hedge) |
|
|
| (152.8) | (150.5) | 1.6 |
Adjusted Income Tax and Social Contribution |
|
|
| (1,528.9) | (1,635.4) | -6.5 |
a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches and the Subsidiary Santander Brasil EFC
Banco Santander operates branches in the Cayman Islands and Luxembourg and the subsidiary Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” which are used, mainly, to raise funds in the capital and financial foreign markets, providing credit lines that are extended to clients for trade-related financings and working capital. To protect the exposures to foreign exchange rate variations, the Bank uses derivatives. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (Real) in foreign investments are nontaxable to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives is to protect the after-tax net income.
The different tax treatment of such foreign exchange rate differences results in a volatility on the operational earnings or losses and on the gross revenue tax expense (PIS/Cofins) and income taxes (IR/CSLL), as demonstrated below:
FOREIGN EXCHANGE HEDGE OF THE GRAND CAYMAN AND LUXEMBOURG BRANCHS |
|
|
| 1Q19 | 1Q18 | annual changes% |
Exchange Variation - Profit From Financial Operations |
|
|
| 225.5 | 183.9 | 22.6 |
Derivative Financial Instruments - Profit From Financial Operations |
|
|
| (396.8) | (350.7) | 13.1 |
Income Tax and Social Contribution |
|
|
| 152.8 | 150.5 | 1.6 |
PIS/Cofins - Tax Expenses |
|
|
| 18.4 | 16.3 | 13.1 |
b) Other Operating (Expenses) Income
Fees - The highlights are: (a) credit/debit card commission and Acquiring Services, with growth of 20.0% in relation to the same period of the previous year, mainly due to the increase in both card and acquirer services; (b) Current Account Services, an increase of 14.0% in relation to the same period of the previous year, influenced by the increase in the number of active account holders, which grew 43 consecutive months ; and (c) Insurance Commissions, with an increase of 11.6% in relation to the same period of the previous year, following the credit dynamics.
Individual and Consolidated Financial Statements – March 31, 2019 2
Fees |
|
|
| 1Q19 | 1Q18 | annual changes% |
Asset Management |
|
|
| 250.8 | 251.6 | -0.3 |
Checking Account Services |
|
|
| 909.5 | 797.6 | 14.0 |
Lending Operations and Income from Guarantees Provided |
|
|
| 324.3 | 385.5 | -15.9 |
Lending Operations |
|
|
| 189.6 | 229.0 | -17.2 |
Income Guarantees Provided |
|
|
| 134.7 | 156.5 | -13.9 |
Insurance Fees |
|
|
| 739.2 | 662.1 | 11.6 |
Cards (Debit and Credit) and Acquiring Services |
|
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| 1,608.9 | 1,340.2 | 20.0 |
Collection |
|
|
| 375.4 | 373.4 | 0.5 |
Brokerage, Custody and Placement of Securities |
|
|
| 191.7 | 161.5 | 18.7 |
Others |
|
|
| 129.0 | 162.4 | -20.6 |
Total |
|
|
| 4,528.8 | 4,134.3 | 9.5 |
General Expenses - Total expenses, which include expenses with personnel, other administrative expenses and expenses with profit sharing, excluding the effects of goodwill amortization, increased by 6.2%, and personnel expenses and profit sharing, increased by 0.4% and other administrative expenses increased by 11.5%, all compared to same period of 2017. Changes in administrative expenses are mainly due to the increase in expenses with data processing, associated with greater transactionality and growth in the customer base and expenses with specialized technical services and third parties, mainly through the contracting of technology services.
General Expenses |
|
|
| 1Q19 | 1Q18 | annual changes% |
Personnel Expenses |
|
|
| (2,319.0) | (2,308.9) | 0.4 |
Other Administrative Expenses, excluding the effects of goodwill amortization |
|
|
| (2,783.1) | (2,496.5) | 11.5 |
General Expenses, excluding the effects of goodwill amortization |
|
|
| (5,102.1) | (4,805.4) | 6.2 |
2.2) Assets and Liabilities
CONSOLIDATED BALANCE SHEETS |
|
| Mar/19 | Dec/18 | mar/19 vs. dec/18 changes % |
Current and Long-Term Assets |
|
| 791,370.8 | 794,664.0 | -0.4 |
Permanent Assets |
|
| 12,308.3 | 11,155.3 | 10.3 |
TOTAL ASSETS |
|
| 803,679.2 | 805,819.3 | -0.3 |
Current and Long-Term Liabilities |
|
| 733,277.6 | 738,178.6 | -0.7 |
Deferred Income |
|
| 318.8 | 337.0 | -5.4 |
Non-Controlling Interest |
|
| 1,883.3 | 2,069.9 | -9.0 |
Stockholders' Equity |
|
| 68,199.5 | 65,233.7 | 4.5 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
| 803,679.2 | 805,819.3 | -0.3 |
Total assets are mainly represented:
(R$ Millions) |
|
| Mar/19 | Dec/18 | mar/19 vs. dec/18 changes % |
Loan Portfolio |
|
| 310,714.3 | 305,259.7 | 1.8 |
Securities and Derivative Financial Instruments (1) |
|
| 195,477.2 | 194,464.7 | 0.5 |
Interbank Investments |
|
| 33,631.7 | 56,812.2 | -40.8 |
Interbank Accounts |
|
| 91,670.8 | 92,442.6 | -0.8 |
(1) Given the provisions of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity, securities classified as held-to-maturity, in the amount of R$11,301.9 million onMarch 31, 2019 (12/31/2018 - R$11,256.3 million).
2.3) Loan Portfolio
MANAGEMENT DISCLOSURE OF LOAN PORTFOLIO BY SEGMENT |
|
| Mar/19 | Dec/18 | mar/19 vs. dec/18 changes % |
Individuals (1) |
|
| 136,555.8 | 132,564.9 | 3.0 |
Consumer Finance |
|
| 51,421.3 | 50,066.4 | 2.7 |
Individuals (1) |
|
| 45,263.8 | 43,785.4 | 3.4 |
Corporate |
|
| 6,157.5 | 6,281.0 | -2.0 |
Small and Medium-sized Entities |
|
| 35,839.1 | 35,770.0 | 0.2 |
Large-sized Entity |
|
| 86,898.1 | 86,858.4 | 0.0 |
Total Loan portfolio (gross) |
|
| 310,714.3 | 305,259.7 | 1.8 |
Other Operations with Credit Risk |
|
| 76,189.5 | 81,476.1 | -6.5 |
Total Extended Portfolio (gross) |
|
| 386,903.8 | 386,735.8 | 0.0 |
Allowance for Loan Losses (2) |
|
| (18,700.0) | (18,789.1) | -0.5 |
Total Loan portfolio (net) |
|
| 368,203.8 | 367,946.7 | 0.1 |
(1) Including the loans to individual in the consumer finance segment, the individual portfolio reached R$181,819.6 on March 31, 2019 (12/31/2018 – R$176,350.3).
(2) Includes debentures, FIDC, CRI, promissory notes, promissory notes for placement abroad, assets related to acquiring activities and sureties and sureties.
Individual and Consolidated Financial Statements – March 31, 2019 3
On March 31, 2019, the main highlights were the following segments: (a) "Individuals", which presented growth in both comparison periods, 3.0% compared to December 31, 2018, influenced mainly by the payroll growth, due to the good adherence of the digital channels by the customers and strong commercial dynamics of the network; (b) "Consumer Finance", also with growth in both periods, being 2.7% compared to December 2018; (c) “Small and Medium Companies”, with decrease of 4.5% compared to December 2018, relating to balance transfer onportfolio between the segments small and medium companies and large companies, according with the income adjustment of certain customers, and the seasonality period. The performance of this portfolio can be attributed in parts by platform + Business, focused on vehicles segment.
Delinquency
The over-90 delinquency ratio reached 3.1% of the total credit portfolio on March 31, 2019, remaining stable in relation to December 31, 2018 (3.1%). The ratio remains at a controlled level, as a result of the risk management and assertive models of Banco Santander.
Allowance for loan losses represents 6.0% of the loan portfolio on March 31, 2019, 6.2% on December 31, 2018.
The allowance for loan losses expenses, net of revenues with recovery of loans previously written off for the period ended on March 31, 2019 isR$2,567.7 million andR$2,738.7 million in 2018, increasing 6.2%.
2.4) Funding by Customers
FUNDING BY CUSTOMERS |
|
| Mar/19 | Dec/18 | mar/19 vs. dec/18 changes % |
Demand Deposits |
|
| 17,939.8 | 18,831.6 | -4.7 |
Saving Deposits |
|
| 46,211.2 | 46,068.3 | 0.3 |
Time Deposits |
|
| 185,095.9 | 184,098.3 | 0.5 |
Debentures/LCI/LCA/LIG (1) |
|
| 48,954.5 | 46,366.1 | 5.6 |
Treasury Bills/Structured Operations Certificates |
|
| 38,080.5 | 36,889.3 | 3.2 |
Total Funding |
|
| 336,281.9 | 332,253.7 | 1.2 |
(1) Debentures repurchase agreement, Real Estate Credit Notes (LCI), Agribusiness Credit Notes (LCA) and Guaranteed Real State Credit Notes (LIG).
The total funding resources increased 1.2%, compared toDecember 2018, with steady and more pronounced Time Deposit growth in Debentures.
2.5) Issuance of Debt Instruments Eligible to Compose Capital
On November 5, 2018, the Board of Directors approved the issuance of the equity instruments, which was held on November 8, 2018. Such issuance was in the form of Notes issued in US dollars, US$2,5 Billion, for payment in Tier I and Tier II of Reference Equity. The offer of these notes was made outside Brazil and the United States of America, for non-US Persons, based on Regulation S under the Securities Act, and was fully paid in by SantanderSpain, controlling shareholder of Banco Santander Brasil. On the same date, the Board of Directors approved the redemption of the Tier I and Tier II notes issued on January 29, 2014, in the total amount of U$ 2,5 billion.
The specific characteristics of Notes issued to make up Tier I are: (a) Principal: US$1,250 Billion (b) Interest Rate: 7.25% p.a; (c) no maturity (perpetual); (d) Periodicity of payment of interest: semiannually from May 8, 2019.
The specific characteristics of Notes issued to make up Tier II are: (a) Principal: US $ 1,250 Billion; (b) Interest Rate: 6.125% p.a.; (c) Maturity Term: on November 8, 2028; and (d) Periodicity of payment of interest: semiannually, as of May 8, 2019.
Notes have the following common characteristics:
(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand in excess of such minimum value.
Individual and Consolidated Financial Statements – March 31, 2019 4
(b) The Notes may be repurchased or redeemed by Banco Santander after the fifth anniversary as of the date of issue of the Notes, at the sole discretion of the Company or as aresult of changes in the tax legislation applicable to the Notes; or at any time, due to the occurrence of certain regulatory events.
On December 18, 2018, the Bank issued an approval for the Notes to comprise Tier I and Tier II of Banco Santander's Referential Equity, as of that date, as well as the repurchase of the notes issued on January 29, 2014.
2.6) Stockholders’ Equity
On March 31, 2019, Banco Santander consolidated stockholders’ equity presented an increase of 4.5% compared to December, 2018.
The variation in the Stockholders' Equity balance between March 31, 2019 and 2018 was, mainly, due to the negative variation of the asset valuation adjustment (securities and derivative financial instruments) in the amount of R$648.3 million and the net income for the period in the amount of R$3,514.4 million and reduced, mainly, by the established of Interest on Capital in the amount of R$1 billion.
Treasury Shares
In the meeting held on November 1, 2018, the Bank’s Board of Directors approved, in continuation of the buyback program that expired on November 1, 2017, the buyback program of its Units and ADRs, by the Bank or its agency in Cayman, to be held in treasury or subsequently sold.
The Buyback Program will cover the acquisition up to 37,753,760 Units, representing 37,753,760 common shares and 37,753,760 preferred shares, or the ADRs, which, on December 31, 2018, corresponded to approximately 1% of the Bank’s share capital. On December 31, 2018, the Bank held 362,227,661 common shares and 390,032,076 preferred shares being traded.
The Buyback has the purpose to (1) maximize the value creation to stockholders by means of an efficient capital structure management; and (2) enable the payment of officers, management level employees and others Bank’s employees and companies under its control, according to the Long Term Incentive Plans. The term of the Buyback Program is 12 months counted from November 6, 2018, and will expire on November 5, 2019.
|
|
|
| Mar/19 | Dec/18 |
|
|
|
| Quantity | Quantity |
|
|
|
| Units | Units |
Treasury shares at beginning of the fiscal year |
|
|
| 13,317 | 1,773 |
Shares Acquisitions |
|
|
| 3,338 | 15,816 |
Payment - Share-based compensation |
|
|
| (3,026) | (4,272) |
Treasury shares at end of the fiscal year |
|
|
| 13,629 | 13,317 |
Subtotal - Treasury Shares in thousands of reais |
|
|
| R$ 520,267 | R$ 460,550 |
|
|
|
| R$ 2,410 | R$ 882 |
Balance of Treasury Shares in thousands of reais |
|
|
| R$ 522,677 | R$ 461,432 |
Cost/Share price |
|
|
| Units | Units |
Minimum cost |
|
|
| R$ 7.55 | R$ 7.55 |
Weighted average cost |
|
|
| R$ 30.69 | R$ 28.59 |
Maximum cost |
|
|
| R$ 49.55 | R$ 43.84 |
Share price |
|
|
| R$ 43.97 | R$ 42.70 |
In the period ended March 31, 2019 and 2018, there were highlights of Interest on Capital, as below:
DIVIDENDS AND INTEREST ON CAPITAL |
|
|
| Mar/19 | Mar/18 |
Interest on capital |
|
|
| 1,000.0 | 600.0 |
Total |
|
|
| 1,000.0 | 600.0 |
2.7) Basel Index
Financial institutions are required by Bacen to maintain Regulatory Capital (PR), Tier I and Principal Capital consistent with their risk activities, higher than the minimum requirement of the Regulatory Capital Requirement, represented by the sum of the partial credit risk, market risk and operational risk.
As required by Resolution CMN 4,193/2013, the requirement for PR in 2018 was 11.0%, composed of 8.625% of Reference Equity Minimum plus 1.875% of Capital Conservation Additional. Considering this additional, PR Level I increased to 8.375% and Minimum Principal Capital to 6.875%.
Individual and Consolidated Financial Statements – March 31, 2019 5
For the base year 2019, the PR requirement remains at 10.5%, including 8.0% of Minimum of Reference Equity and a further 2.5% of Capital Conservation Additional. The PR Level I reaches 8.5% and the Principal Capital Minimum 7.0%.
The Basel ratio is determined in accordance with the Financial Statements of the Prudential Conglomerate prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen, as shown bellow:
BASEL INDEX % |
|
|
| Mar/19 | Dec/18 |
Tier I Regulatory Capital |
|
|
| 65,272.2 | 61,476.7 |
Principal Capital |
|
|
| 60,261.0 | 56,581.5 |
Supplementary Capital |
|
|
| 5,011.1 | 4,895.2 |
Tier II Regulatory Capital |
|
|
| 4,989.4 | 4,887.2 |
Regulatory Capital (Tier I and II) |
|
|
| 70,261.6 | 66,363.9 |
Credit Risk |
|
|
| 368,652.7 | 358,955.6 |
Market Risk |
|
|
| 40,200.4 | 39,231.8 |
Operational Risk |
|
|
| 46,527.0 | 42,375.6 |
Total RWA |
|
|
| 455,380.1 | 440,563.0 |
Basel I Ratio |
|
|
| 14.3 | 14.0 |
Basel Principal Capital |
|
|
| 13.2 | 12.8 |
Basel Regulatory Capital |
|
|
| 15.4 | 15.1 |
2.8) Main Subsidiaries
The table below presents the balances of total assets, net assets, net income and credit operations for the period ended March 31, 2019 for the main subsidiaries of Banco Santander portfolio:
SUBSIDIARIES | Total Assets | Stockholders' Equity | Net | Loan | Ownership / Interest (%) |
Aymoré Crédito, Financiamento e Investimento S.A. | 45,513.2 | 2,450.4 | 369.3 | 40,453.5 | 100.00% |
Getnet Adquirência e Serviços para Meios de Pagamento S.A. | 24,749.4 | 2,296.6 | 131.2 | 0.0 | 100.00% |
Santander Leasing S.A. Arrendamento Mercantil | 7,132.9 | 5,790.0 | 46.3 | 1,882.0 | 99.99% |
Banco Bandepe S.A. | 5,219.0 | 4,165.8 | 124.9 | 0.0 | 100.00% |
Santander Brasil, Establecimiento Financiero de Credito, S.A. | 3,597.3 | 3,432.3 | -0.5 | 1,570.5 | 100.00% |
Santander Corretora de Seguros, Investimento e Serviços S.A. | 2,830.9 | 2,665.7 | 107.9 | 0.0 | 100.00% |
Santander Corretora de Câmbio e Valores Mobiliários S.A. | 1,012.7 | 617.8 | 22.2 | 0.0 | 100.00% |
(1) Includes Leasing portfolio and other loans. ��
Balances reported above are in accordance with accounting practices established by Brazilian Corporate Law and standards established by the CMN, the Bacen and document template provided in the Accounting National Financial System Institutions (Cosif) and theCVM that does not conflict with the rules issued by Bacen, without disposal related party transactions.
3) Other Events
3.1) Post-employment Benefit Plan
On June 30, 2018, there was an increase in the cost contribution established in the Post-Employment Benefit Plan, which is calculated as a percentage of the total monthly compensation of members. The increase in the contribution resulted in a decrease in the past service cost, due to changes in the plan. The changes proposed in the Post-Employment Benefit imply a reduction in the present value of the obligations of the defined benefit plan, which is supported by actuarial valuations.
3.2) Recoverable Value Assessment
In the first half of 2018, Banco Santander recognized impairment losses in the amount of R$341 million on intangible assets in the acquisition and development of systems. The loss was recorded based on the performance of technical analysis, which demonstrated a significant reduction in expected future economic benefits on these assets.
3.3) Opening of the branch in Luxembourg
On June 9, 2017, Banco Santander obtained authorization from the Central Bank to set up an agency in Luxembourg with a capital of US $ 1 billion, with the objective of complementing the foreign trade strategy for corporate clients (large Brazilian companies and their operations abroad) and offer financial products and services through an offshore entity that is not established in a jurisdiction with favored taxation and that allows for the increase of funding capacity. The opening of the agency was authorized by the Luxembourg Minister of Finance on March 5, 2018. On April 3, 2018, after the reduction of the capital of the Cayman agency in the equivalent amount, the value of US$1 billion was allocated to capital of the Luxembourg branch.
Individual and Consolidated Financial Statements – March 31, 2019 6
3.4) Adhesion to Tax Debt Installment Programs
In October2017, the Bank also joined the Incentive Payment Programs and Installments issued by the cities Rio de Janeiro and São Paulo. Accessions to the programs include lawsuits and administrative proceedings related to ISS of the periods from 2005 to 2016, in the total amount of R$293 million. As a consequence were registered income of R$435 million.
Adherence to the program included administrative proceedings related to IRPJ, CSLL and Social Security Contributions referring to the base periods from 1999 to 2005, in the total of R$534 million, after the benefits of the installment program, ofwhich R$192 million was paid in August 2017 and R$300 million in January 2018.
3.5) Corporate Restructuring
Several social movements were implemented in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander.
a) Put option of equity interest in Banco Olé Bonsucesso Consignado S.A.
On March 14, 2019, the minority shareholder of Banco Olé Bonsucesso Consignado S.A. (Olé Consignado) formalized its interest to exercise the put option right provided in the Investment Agreement, executed on July 30, 2014, to sell its 40% equity interest in the capital stock of Olé Consignado to Aymoré CFI. The closing of the transaction is conditioned to implementation of the proceedings set forth in the Investment Agreement.
b) Acquisition of residual equity interest in Getnet S.A.
On December 19, 2018, Banco Santander and the Minority shareholders of Getnet S.A. executed an amendment to the Shares’ Sale and Purchase Agreement and Other Covenants of Getnet S.A., in which Banco Santander commits to acquire all of the Minority shareholders’ shares, corresponding to 11.5% of Getnet S.A. capital stock, per the amount of R$1,431,000. The acquisition was approved by Bacen on February 18, 2019 and closed on February 25, 2019, asa consequence, Santander Brasil has become the holder of 100% of the shares representatives of the capital stock of Getnet S.A.
c) Formation of Esfera Fidelidade S.A.
On August 14, 2018, Esfera Fidelidade was incorporated, with equity fully owned by Banco Santander. Esfera Fidelidade will act in the development and management of customer loyalty programs. On November 26, 2018, Esfera Fidelidade had its capital stock increased in the amount of R$10,000, amounting the full share capital of R$10,000, divided into 10,001,000 (ten million and one thousand) nominative common shares without par value, entirely held by Banco Santander. The company started its operation in November 2018.
d) Investment in Loop Gestão de Pátios S.A.
On June 26, 2018, Webmotors S.A., company with 70% interest indirectly owned by Banco Santander, signed an investment agreement with Allpark Empreendimentos, Participações e Serviços S.A. and Celta LA Participações S.A., in order to acquire an equity interest corresponding to 51% of the capital stock of Loop Gestão de Pátios S.A., through capital increase and issuance of new shares of Loop to be fully subscribed and paid-in by Webmotors. Loop operates in the segment of commercialization and physical and virtual auction of motor vehicles. On September 25, 2018, the transaction was completed with increase of the capital stock, in the amount of R$23,900, through issuance of shares representing 51% of equity interest in Loop, which were fully subscribed and paid-in by Webmotors.
e) Formation of BEN Benefícios e Serviços S.A.
On June 11, 2018,BEN Benefícios,with equity fully owned by Banco Santander,was incorporated, toact in the supply and administration of meal, food, transportation, cultural and similar vouchers, via printed or electronic and magnetic cards.
In the EGM held on August 1, 2018, BEN Benefícios had its capital increased in R$ 45,000, passing the capital stock to the amount of R$ 45,001, divided into 45,001,000 (forty-five million and one hundred thousand) registered common shares without par value, fully owned by Banco Santander.
In the EGM held on March 27, 2019, Santander Brasil approved the capital increase in the amount of R$44,999, totalizing R$90,000 of capital stock distributed into 90,000,000 (ninety million) common shares without par value, fully held by Santander Brasil.
BEN Benefícios started its activities in the first quarter of 2019.
f) Acquisition of Isban Brasil S.A. and Produban Serviços de Informática S.A.
On February 19 and 28, 2018, Banco Santander purchased, respectively, the totality of shares of Isban Brasil, formerly held by Ingeniería de Software Bancário, S.L., and of Produban Serviços de Informática, formerly held by Produban Servicios Informáticos Generales, S.L., for the amount of R$61,078 and R$42,731, respectively. The parties involved in the transactions had Banco Santander, S.A. (Santander Spain) as common indirect controller, being such transactions carried-out under market conditions. At the EGM held on February 19, 2018, was approved the capital increase of Isban Brasil in the amount of R$33,000, through the issuance of 11,783,900 (eleven million, seven hundred and eighty-three thousand and nine hundred) shares, without par value, entirely subscribed and paid in by Banco Santander. On February 28, 2018, the company Isban Brasil was merged into Produban Serviços de Informática S.A. and on the same date, Produban Serviços de Informática had its corporate name changed to Santander Brasil Tecnologia S.A. In continuity, on February 28, 2018, Produban Servicios Informáticos Generales, S.L. (currently named Santander Global Technology, S.L.) approved the merger of the spin-off share of Produban Serviços de Informática into Produban Brasil Tecnologia e Serviços de Informática Ltda. (currently named Santander Global Technology Brasil Ltda.).
Individual and Consolidated Financial Statements – March 31, 2019 7
g) Sale of equity interest in BW Guirapá I S.A.
On December 22, 2017, Santander Corretora de Seguros, Cia. de Ferro Ligas da Bahia - Ferbasa SA and Brazil Wind S.A. executed agreement for the sale of 100% of the shares issued by BW Guirapá I S.A. held by Santander Corretora de Seguros and Brazil Wind to Ferbasa. The basic price of the total sale was R$414,000, and an additional amount of up to R$35,000 may be paid if future targets stipulated in the Contract are met. As of January 1, 2018, this investment was written-off and, as a consequence, the assets and liabilities of BW Guirapá I and its subsidiaries were no longer consolidated by Banco Santander. On April 2, 2018, the transaction was concluded(Note 36).
h) Formation of Santander Auto S.A.
On December 20, 2017, Banco Santander and HDI Seguros S.A. (HDI Seguros), executed documents to form a partnership for the issuance, offering and sale of auto insurance, in a 100% digital way, through creation of a new insurance company - Santander Auto, to be held 50% by Sancap, a company controlled by Banco Santander, and 50% by HDI Seguros. On February 2, 2018 the partnership was approved by the Administrative Council of Economic Defense (Conselho Administrativo de Defesa Econômica – CADE), on April, 30, 2018, was approved by the Brazilian Central Bank and, on May, 15, 2018, SUSEP's prior approval was obtained. On October 9, 2018, through transformation of the corporate vehicle L.G.J.S.P.E. Investments and Participations S.A., Sancap and HDI Seguros formed Santander Auto S.A., with capital of R$15,000. On January 9, 2019, Susep granted to Santander Auto the authorization to operate insurance throughout national territory.
i) Formation of Gestora de Inteligência de Crédito S.A.
On April 14, 2017, the definitive documents necessary for the creation of a new credit bureau, Gestora de Inteligência de Crédito, were signed by the stockholders, whose control will be shared among the stockholders who will hold 20% of the its share capital each. In the EGM held on October 5, 2017, the capital increase of Gestora de Crédito was approved in the total amount of R$285,205, so that the capital stock increased from R$65,823 to R$351,028. The Company will develop a database with the objective of aggregating, reconciling and processing registration and credit information of individuals and legal entities, in accordance with the applicable standards, providing a significant improvement in the processes of granting, pricing and directing credit lines. The Bank estimates that the Company will be fully operational in 2019.
j) Formation of Banco Hyundai Capital Brasil S.A.
On April 28, 2016, Aymoré CFI and Banco Santander executed with Hyundai Capital Services, Inc. (Hyundai Capital) the necessary documents for the formation of Banco Hyundai and an insurance brokerage company with the purpose to provide, respectively, auto finance and financial and insurance brokerage services to clients and dealers of Hyundai in Brazil.
On April 11, 2018, the parties incorporated, with an equity interest of 50% held by Aymoré CFI and 50% held by Hyundai Capital, a non-operational entity named BHJV Assessoria e Consultoria em Gestão Empresarial Ltda. On May 8, 2018, Aymoré CFI and Hyundai Capital took resolution on the conversion of BHJV Assessoria into the non-operational joint-stock corporation named Banco Hyundai Capital Brasil S.A., as well as the capital stock increase in R$99,995, passing to the amount of R$100,000, divided into 100,000,000 (one hundred million) nominative common shares without par value. On December 13, 2018, the incorporation procedure of Banco Hyundai Capital Brasil S.A. was concluded.
In the EGM held on February 19, 2019, the shareholders of Banco Hyundai approved the capital increase in the amount of R$200,000, summing the total value of R$300,000 distributed into 300,000,000 (three hundred million) common shares without par value, held in the proportion of 50% by Aymoré CFI and 50% by Hyundai Capital.
On February 21, 2019, the authorization to operate granted by Bacen for the functioning of Banco Hyundai was published in the Federal Official Gazette. The expectation is that Banco Hyundai will start to operate in the first semester of 2019, being set that Aymoré CFI holds the effective operational control of this entity.
k) Creation of PI Distribuidora de Títulos e Valores Mobiliários S.A.
On May 3, 2018, Santander Finance Arrendamento Mercantil S.A., an indirectly controlled subsidiary of Banco Santander, was converted into a distribution company of bonds and securities and had its corporate name changed to SI Distribuidora de Títulos e Valores Mobiliários S.A. The conversion process of approved by Bacen on November 21, 2018. On December 17, 2018, SI Distribuidora de Títulos e Valores Mobiliários S.A. had its corporate name changed to PI Distribuidora de Títulos e Valores Mobiliários S.A., being the corporate name change process approved by Bacen on January 22, 2019. The company started its operations on March 14, 2019.
Individual and Consolidated Financial Statements – March 31, 2019 8
4) Strategy
Banco Santander Brasil is the only international bank with scale in the country. The Bank is convinced that the best way to grow in a profitable, recurring and sustainable manner is by providing excellent services to enhance customer satisfaction levels and attract more customers, making them more loyal. Our actions are based on establishing close and long-lasting relationships with customers, suppliers and shareholders. To accomplish that goal, our purpose is to help people and businesses prosper by being a Simple, Personal and Fair Bank, guided by the following strategic priorities:
· Increase customer preference and loyalty by offering targeted, simple, digital and innovative products and services through a multi-channel platform.
· Generate results in a sustainable and profitable manner, with greater revenue diversification, aiming to strike a balance between loans, funding and services, while maintaining a preemptive risk management approach and rigorous cost control.
· Be disciplined with capital and liquidity to preserve our solidity, face regulatory changes and seize growth opportunities.
· Achieve profitable market share gains through our robust portfolio, optimize the ecosystem and launch new ventures consistently improving the customer experience.
In the first quarter of 2019, the Bank was able to maintain recurring earnings generation, with outstanding profitability. The customer base continued to show steady growth, thanks to improved service to our customers, thereby allowing us to achieve profitable market share gains. At the same time, the Bank reached the highest level of engagement among our employees, which contributes to the sustainability of our business. These factors, allied to our strong capital and liquidity base, place us in a prime position to capture market opportunities.
People
The Bank continue to work on our strategic fronts, such as promoting collaboration, encouraging employee empowerment and horizontal management. The Bank highlight the following accomplishments in the past quarter:
The Bank reached the highest level of engagement, 92%, an increase of 4 p.p. compared to the previous year. In addition, 96% of employees feel proud to work at Santander.
Elected Company of the Year for Diversity by “Exame” magazine at the 2019 Diversity Forum, in partnership with the Ethos institute.
2nd place on LinkedIn’s Top Companies which ranks the most sought-after places to work for professionals in Brazil. The rise of 19 spots in the ranking over twelve months reflects the effectiveness of our talent attraction and retention strategies.
Our first blood donation campaign of 2019: The Bank hit 88% of the donation volume of the country's main blood bank, with the potential to save more than 33,000 lives.
My Place: internal mobility program with the purpose of encouraging employees to take charge of their careers and stimulating meritocracy. In its first year, the portal had more than 500,000 views.
Customer loyalty:
Our customers have acknowledged the enhancements in service and experience, which has led our NPS (Net Promoter Score) to remain on an upward trend, reaching 59 points this quarter, up 10 points YoY.
For the first time, the Bank was recognized by the EXAME/IBRC customer service ranking, reaching 1st place in customer service in the banking sector in 2018.
The customer base continues to enjoy solid expansion, highlighted by active account holders, who have been growing for the last 46 consecutive months.
Retail
Cards: our robust portfolio enables us to keep gaining market share in the loan portfolio, which reached 13.3%¹ in the quarter (+1.0 p.p. YoY - Source: Brazilian Central Bank, as of February/19), while our total card turnover expanded by 20% YoY. We launched Santander's credit plan for card customers, who can choose to make installment payments directly in the POS in as many as 36 installments, at competitive interest rates. The ability to purchase goods and services in installment payments aims to stimulate card turnover and foster customer loyalty. Santander Pass, our wristband for contactless payments using NFC technology, is now also available with the Visa brand and, in partnership with fashion retailer Osklen, we introduced Santander Pass Osklen. It is also worth mentioning that we have strengthened the Way app with: (i) the account opening functionality for single-product retailers; (ii) the possibility to pay the card bill in installments for current account holders; and (iii) the release of Santander ID for single-products retailers, thus reinforcing security.
Individual and Consolidated Financial Statements – March 31, 2019 9
Payroll Loans: our market share in the loan portfolio climbed by 10.2%, +1.4 p.p. YoY (Source: Brazilian Central Bank, as of February/19). Digital channels are one of our main credit origination vehicles. This quarter, the number of contracts generated via these channels saw a 27% QoQ rise.
Real Estate: the real estate portal provides more efficiency and agility. An example of that is the reduction in the average lead time for contracts by 43% compared to the previous year. This product remains one of the highlights in Retail, contributing to expand our loan portfolio.
Agro:our service model, with specialized Agro stores and managers exclusively dedicated to rural producers, has proven to be an important strategic component to maximize our role in the sector. This countryside expansion process is in line with our goal of being the best agribusiness bank in the country. Thanks to the increased number of account openings and loan portfolio growth, the Bank has experienced stronger results. In the issuance of agribusiness credit notes (“LCA”), our market share hit 8.5%, +2.8 p.p. YoY (Source: Brazilian Central Bank, as of February/19).
Getnet:The Bank continues with the strategy of offering physical and digital services, including for the e-commerce segment. This quarter, the Bank initiated an unprecedented offering for SuperGet, focused on individuals and individual microentrepreneurs, which includes payment of receivables in two business days and unification of debit and credit transaction fees. This innovative offering brings more transparency to our customer relationships and puts us in a competitive position to increase our presence in this dynamic market. It is worth noting that this product has the option of integrating with Superdigital, our digital account, to facilitate the payment of receivables. Our market share reached 12.3%² (+1.3 p.p. YoY), while total revenue climbed by 16% YoY in 1Q19, maintaining a double-digit growth rate. (Source: ABECS – “Monitor Bandeiras”, as of 4Q18).
SME:The Bank launched the “MEI” account for individual microentrepreneurs, a value offer that includes opening a business current account, access to credit, including the possibility of obtaining microcredit through Prospera, and acquisition of SuperGet at competitive prices. This is an example of integration and cross-selling between businesses that, together with other offers, places us in a good spot to capture opportunities in this segment. The market share in the loan portfolio reached 8.1%¹ (+ 0.3 p.p.), driven by customer base growth and greater loyalty.
Strengthening leading businesses
Consumer Finance: the Bank is the leaders in the sector, with a market share of 23.5%, +0.1 p.p. in twelve months (Source: Brazilian Central Bank, as of February/19. Total market share in vehicles (considering individuals and companies). The Bank attributes this performance to the innovations, partnerships and commercial service. As of this quarter, the Bank is also analyzing the financing documentation on weekends, with the possibility of clearing the vehicle on the same day, providing agile payment to dealerships.
Webmotors: The first phase of the Cockpit tool, which took place primarily in 2018, achieved good results, with high adherence of our dealership base. Now, our actions are focused on fine-tuning the tool and its integration with the bank. With this in mind, the Bank held the first edition of the “Mega Sale” promoted by Webmotors, in partnership with Santander Financiamentos, which generated 40% more leads for participating dealerships. Moreover, the Bank started the “autoguru” pilot, which already includes pricing in inventory acquisition, as well as quality rating alongside suggested sales prices.
Santander Corporate & Investment Banking (SCIB) – The Bank is still recognized as leaders:
Financial advisory for financing and concession auctions and finance structuring, according to Anbima (Financial Advisory – leadership since 2008, ANBIMA 2017) advisor in Americas and Project Finance (MLA) in LATAM according to Dealogic (Dealogic as of 2018).
In the foreign exchange market according to the Brazilian Central Bank (Cumulative figures from January to March 2019).
Innovations
Natura partnership:The Bank partnered with the country's first direct sales company to offer fully digital banking services to its sales consultants. In addition to traditional services, such as current account, cash transfer and withdrawal, it includes SuperGet with special conditions and access to the Prospera microcredit program via the app itself. This initiative is in line with our commitment to financial education, stimulating social transformation in the areas where the Bank operates through innovative solutions (SuperGet, Superdigital and Prospera Microcredit).
Santander Box: a new, more compact store model for high-flow locations, focusing primarily on potential customers in the Special segment. The objective is to offer fast financial solutions, such as account opening, card sales and SuperGet, among others. In this phase of the pilot program, the Bank inaugurated the first Santander Box in downtown Rio de Janeiro, with extended hours – and it is already showing significant results. This initiative contributes to increase our customer base in an innovative way.
Individual and Consolidated Financial Statements – March 31, 2019 10
New Ventures
Ben, which operates in the benefits industry, continued to make progress partnering with establishments. The proposal is to offer a better experience for end-customers, in addition to making partnerships with companies’ HR departments and commercial establishments. The Bank see potential synergies with the wholesale, SME and individuals segments, as well as with Getnet.
Pi, our digital investment platform, was made available to the general public this quarter, and the Bank expects to capture investors looking for more autonomy and practicality in the purchase of investment products.
Sustainability
The Bank continues to hold the leadership in microcredit through the the Prospera program, whose loan portfolio grew 63% YoY in March 2019 and reached R$ 730 million.
Volunteering financial guidance: on Saturdays, at our branches, the Bank will promote lectures and individual service for customers and non-customers, as the Bank believe that he can help people prosper. There will be no commercial activity in this action, and it will be executed through our network of volunteer employees.
In Higher Education, which is an important lever for our customer base, the Bank has, in addition to the financial offer, a non-financial offer based on training, employment and entrepreneurship. The Bank has already awarded over 14,200 scholarships in Brazil since 2015.
The Bank introduced the #Desplastify commitment to eliminate, still this year, tons of fast-use plastic across the Bank.
The Bank received AA rating in the MSCI ESG Ratings assessment.
5) Rating Agencies
Banco 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 Bank is inserted, having the long-term foreign currency rating limited to the sovereign rating. The table below presents the ratings assigned by the rating agencies Standard & Poor's and Moody's:
1) Last updated November 29, 2018.
2) Last updated February 18, 2019.
6) Corporate Governance
The Board of Directors of Banco Santander has met and resolved:
On April29, 2019, to approve the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the Consolidated Financial Statements of Banco Santander, prepared in accordance with the International Financial Reporting Standards (IFRS), respect to the period ended March 31, 2019.
On March 27, 2019, to approve the proposal for declaration and payment of interest on equity, in the gross amount of R$1 billion, for payment as of April 29, 2019, without any indexation.
On March 27, 2019, to acknowledge the resignation of Mr. Fernando Carvalho Botelho de Miranda to the position of Officer without specific designation, as well as to approve the appointment of the following member to be part of the Board of Officers, as Officers without specific designation: Mr. Daniel Fantoni Assa; Mrs. Elita Vechin Pastorelo Ariaz; Mr. Franco Luigi Fasoli; Mr. Jran Paulo Kambourakis and Mr. Roberto Alexandre Borges Fischetti.
Individual and Consolidated Financial Statements – March 31, 2019 11
On March 20, 2019, to approve the 20-F Form of Banco Santander referred to the fiscal year ended December 31, 2018.
On February 25, 2019, to approve the Consolidated Financial Statements of Banco Santander referred to the fiscal year ended December 31, 2018, prepared in accordance with the International Financial Reporting Standards (IFRS).
On January 29, 2019, to approve the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen, respect to the fiscal year ended December 31, 2018.
7) Risk Management
On February 23, 2017, Bacen published CMN Resolution 4,557, which provides for the risk and capital management structure (GIRC) and entered into force 180 days from the date of its publication. The resolution highlights the need to implement an integrated risk and capital management framework, definition of integrated stress testing program and Risk Appetite Statement (RAS), constitution of Risk Committee and appointment of director for management and director of capital. Banco Santander is continuously and progressively developing necessary actions aiming at adherence to the resolution. We haven´t identified relevant impacts resulting from this standard up to the date of publication of this note.
For further information, see explanatory note nº 35 of this publication.
Structure of Capital Management
Banco Santander’s structure of capital management has a robust governance framework that supports the process related to this theme and establishes the attributions of each teams involved. Furthermore, there is a clear definition that should be adopted to effective capital management. More details can be consult in “Structure Capital and Risk Management”, available on Investor Relations website.
Internal Audit
Internal Audit reports directly to the Board of Directors, whose activities are supervised by the Audit Committee.
Internal Audit is a permanent function, independent of any other functions or units, whose objective is to provide the Management Body and the senior management with independent assurance on the quality and effectiveness of internal control, risk management (current or emerging) and governance processes and systems, thereby helping to protect the company’s value, solvency and reputation. The Internal Audit has quality certificate issued by the Institute of Internal Auditors (IIA).
In order to perform its duties and reduce coverage risks inherent to Banco Santander's activities, the Internal Audit area has internally developed tools that are updated when necessary. These include the risk matrix, used as a planning tool, prioritizing each unit’s risk level, considering, among others, its inherent risks, the last audit rating, level of compliance with recommendations and their size. The work programs, which describe the audit tests to be performed, are reviewed periodically.
The Audit Committee and the Board of Directors favorably reviewed and approved the work plan of the Internal Audit for the year 2019
In the first quarter of 2019, internal control procedures and controls on the information systems of the selected units were evaluated according to the work plan for the year, considering the effectiveness of the design and its operation. The Internal Audit informed the Audit Committee and the Board of Directors about the conclusions of the works done during that period, according to its annual plan.
8) People
When the discussion is about the growth and development of Banco Santander, a force stands out: the People. Having a motivated and dedicated employees is a decisive factor in making the Bank in the best bank for clients and the best company for employees.
Employees are the strongest link between the Bank and clients and so, day after day, Banco Santander enhances their management practices because it knows that only with dedicated employees, well trained and with full professional development, the Bank will manage to get more and better clients, satisfied, proud to do business with Banco Santander and the Santander brand.
The daily performance of Banco Santander with clients, employees, stockholders and society is guided by the purpose of the Bank to contribute to people and businesses to prosper and their way of act.
Individual and Consolidated Financial Statements – March 31, 2019 12
The Bank has a talented team of 48,232 employees only in Brazil. The Bank seeks professionals who identified with the Corporate Culture, to be a Simple Bank (with uncomplicated and easy services to operate), Personal (with solutions and channels that meet client’s needs and preferences) and Fair (promoting business and relationships that are good for clients, stockholders, employees and society). In addition to identifying with the culture, the Banco Santander's employees act in their day to day aligned to it.
9) Sustainable Development
Santander’s Sustainability Strategy is based on three pillars: (i) Efficient and strategic use of Natural Capital, (ii) Potential Development and (iii) Resilient and Inclusive Economy. The Bank's vision of the future, through these pillars, is to support Brazilian society in its transformation to Brazil of the 21st Century, maintaining excellence and responsibility in internal management, with ethical values as the basis and technology at the service of people and business.
We remained for the ninth consecutive year in the portfolio of the Corporate Sustainability Index (ISE) of B³ and in 2019; the Guia EXAME of Diversity as the company of the year and the financial institution with the best practices of inclusion and diversity of the national market recognized us. Also in 2019, we received a rating of AA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.
In Social and Environmental Business, we disbursed R$340,5 million in the first quarter of 2019. With Prospera Santander Microcredit we generated approximately R$396 million of production (69% more than the same period of 2018).
Through Santander Universities, we have awarded more than 440 study grants in the first quarter, from the Santander University-Business Program, where Banco Santander contributes a scholarship of R$700 to help the student in the payment of monthly fees and/or related costs, and of own programs, carried out directly with the University.
The Amigo de Valor Program allows Banco Santander, as well as our employees and clients, to direct part of the income tax due directly to the Funds for the Rights of Children and Adolescents. In 2018, this program raised funds totaling more than R$13 million, which were directed to 67 projects in Brazil.
We also launched the Plastic Free project whose initial goal is to reduce the consumption of single use plastic (cups and bottles) in our administrative buildings and until 2020 to impact all bank agencies.
We publish the Bank's Non-Financial Indicators Section that follows local and international guidelines, such as the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Brazilian Association of Public Held Companies (ABRASCA). The main purpose of the Section is to highlight our responsible internal management and the way in which we promote the transformation of society by the business.
10) Independent Audit
Banco Santander's policy of including its subsidiaries in contracting services not related to the external audit of its independent auditors is based on Brazilian and international auditing standards that preserve the auditor's independence. This reasoning provides as follows: (i) the auditor should not audit his own work, (ii) the auditor should not perform managerial duties on his client, (iii) the auditor should not promote the interests of his client, and (iv) need for approval of any services by the Bank's Audit Committee.
In compliance with the Instruction of the Securities Commission 381/2003, Banco Santander informs that in the period ended March 31, 2019, PricewaterhouseCoopers did not provide services not related to the independent audit of the Financial Statements of Banco Santander and subsidiaries above 5% of total fees related to independent auditing services.
In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls to ensure its independence, which include an evaluation of the work performed, covering any service that is not independent of the Financial Statements of Banco Santander and its subsidiaries. This evaluation is based on the applicable regulations and accepted principles that preserve the independence of the auditor. The acceptance and provision of professional services not related to the external audit in the period ended March 31, 2019 did not affect the independence and objectivity in conducting the external audits carried out in Banco Santander and other entities of the Group, since the above principles were observed.
The Board of Directors
The Executive
(Authorized at the Meeting of the Board of April 29, 2019).
Individual and Consolidated Financial Statements – March 31, 2019 13
Independent auditor's report
To the Board of Directors and Stockholders
Banco Santander (Brasil) S.A.
Introduction
We have reviewed the interim balance sheets ofBanco Santander (Brasil) S.A.("Bank") as at March 31, 2019, and the related income statements, statements of changes in stockholders’ equity and cash flows statements for the quarter then ended, as well as the interim consolidated balance sheets ofBanco Santander (Brasil) S.A. and its subsidiaries ("Consolidated") as at March 31, 2019, and the related consolidated income statements, statements of changes in stockholders’ equity and cash flows statements for the quarter then ended, and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these interim financial statements in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).Our responsibility is to express a conclusion on these interim financial statements based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements referred to above do not present fairly, in all material respects, the financial position of Banco Santander (Brasil) S.A., and Banco Santander (Brasil) S.A. and its subsidiaries as at March 31, 2019, their financial performance and its cash flows for the quarter then ended, as well as their consolidated financial performance and its cash flows for the quarter then ended, in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).
Other Matters
Statements of value added
We have also reviewed the parent company and consolidated statements of value added for the quarter ended March 31, 2019, prepared under the responsibility of the Management, whose presentation is required by Brazilian Corporate Law by publicly-held companies. These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the interim financial statements taken as a whole.
São Paulo, April 29, 2019
PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5
Edison Arisa Pereira
Accountant CRC 1SP127241/O-0
PricewaterhouseCoopers, Av. Francisco Matarazzo 1400, Torre Torino, São Paulo, SP, Brasil 05001-903, Caixa Postal 61005 T: (11) 3674-2000, www.pwc.com/br
Individual and Consolidated Financial Statements – March 31, 2019 14
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
| Consolidated | ||||
|
| Notes |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
| 487,967,086 |
| 495,071,546 |
| 515,322,355 |
| 523,287,889 |
Cash |
| 4 |
| 9,278,518 |
| 11,358,459 |
| 9,516,113 |
| 11,629,112 |
Interbank Investments |
| 5 |
| 62,238,480 |
| 86,464,685 |
| 33,195,821 |
| 56,375,289 |
Money Market Investments |
|
|
| 27,291,708 |
| 45,325,687 |
| 27,291,708 |
| 44,825,827 |
Interbank Deposits |
|
|
| 32,800,445 |
| 33,270,931 |
| 3,756,928 |
| 3,680,810 |
Foreign Currency Investments |
|
|
| 2,146,327 |
| 7,868,067 |
| 2,147,185 |
| 7,868,652 |
Securities and Derivative Financial Instruments |
| 6 |
| 72,086,326 |
| 77,244,185 |
| 86,864,883 |
| 90,103,130 |
Own Portfolio |
|
|
| 32,460,022 |
| 36,212,955 |
| 40,821,271 |
| 41,916,648 |
Subject to Repurchase Commitments |
|
|
| 33,946,676 |
| 36,382,807 |
| 28,459,466 |
| 32,252,210 |
Derivative Financial Instruments |
|
|
| 4,243,413 |
| 4,109,455 |
| 12,354,970 |
| 12,206,228 |
Deposited in the Central Bank |
|
|
| 4,665 |
| 5,071 |
| 4,665 |
| 103,604 |
Privatization Currencies |
|
|
| 586 |
| 667 |
| 586 |
| 667 |
Pledged in Guarantees |
|
|
| 1,430,964 |
| 533,230 |
| 5,223,925 |
| 3,623,773 |
Interbank Accounts |
| 7 |
| 82,395,760 |
| 79,563,879 |
| 91,389,482 |
| 92,161,239 |
Payments and Receipts Pending Settlement |
|
|
| 10,990,112 |
| 9,902,862 |
| 19,514,567 |
| 22,036,377 |
Restricted Deposits: |
|
|
| 71,372,600 |
| 69,625,970 |
| 71,853,739 |
| 70,103,002 |
Central Bank Deposits |
|
|
| 71,369,878 |
| 69,625,795 |
| 71,851,017 |
| 70,102,827 |
National Housing System (SFH) |
|
|
| 2,722 |
| 175 |
| 2,722 |
| 175 |
Interbank Transfers |
|
|
| 11,872 |
| 13,187 |
| - |
| - |
Correspondents |
|
|
| 21,176 |
| 21,860 |
| 21,176 |
| 21,860 |
Lending Operations |
| 8 |
| 81,251,086 |
| 74,689,851 |
| 107,077,421 |
| 100,432,401 |
Public Sector |
|
|
| 27,737 |
| 162 |
| 27,737 |
| 162 |
Private Sector |
|
|
| 84,798,595 |
| 78,890,129 |
| 111,588,448 |
| 105,386,559 |
Lending Operations Assignment |
|
|
| - |
| - |
| 13,972 |
| 17,912 |
(Allowance for Loan Losses) |
| 8.f |
| (3,575,246) |
| (4,200,440) |
| (4,552,736) |
| (4,972,232) |
Leasing Operations |
| 8 |
| - |
| - |
| 1,213,595 |
| 1,215,740 |
Private Sector |
|
|
| - |
| - |
| 1,237,673 |
| 1,239,421 |
(Allowance for Lease Losses) |
| 8.f |
| - |
| - |
| (24,078) |
| (23,681) |
Other Receivables |
|
|
| 179,040,871 |
| 164,105,338 |
| 183,902,218 |
| 169,226,857 |
Credits for Avals and Sureties Honored |
|
|
| 173,505 |
| 57,723 |
| 173,505 |
| 57,723 |
Foreign Exchange Portfolio |
| 9 |
| 123,463,842 |
| 105,683,300 |
| 123,463,842 |
| 105,683,300 |
Income Receivable |
|
|
| 2,454,777 |
| 2,112,919 |
| 2,147,333 |
| 1,927,635 |
Trading Account |
| 10 |
| 1,759,785 |
| 1,628,363 |
| 2,064,176 |
| 1,910,791 |
Deferred Taxes |
| 11 |
| 6,861,633 |
| 7,502,420 |
| 7,738,256 |
| 8,372,900 |
Others |
| 12 |
| 45,130,661 |
| 47,846,548 |
| 49,186,396 |
| 52,068,793 |
(Allowance for Other Receivables Losses) |
| 8.f |
| (803,332) |
| (725,935) |
| (871,290) |
| (794,285) |
Other Assets |
|
|
| 1,676,045 |
| 1,645,149 |
| 2,162,822 |
| 2,144,121 |
Other Assets |
|
|
| 1,226,809 |
| 1,235,921 |
| 1,582,593 |
| 1,601,986 |
(Allowance for Valuation) |
|
|
| (170,000) |
| (161,942) |
| (223,408) |
| (217,497) |
Prepaid Expenses |
|
|
| 619,236 |
| 571,170 |
| 803,637 |
| 759,632 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 15
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
| Notes |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Long-Term Assets |
|
|
| 258,278,352 |
| 253,043,465 |
| 276,048,494 |
| 271,376,071 |
Interbank Investments |
| 5 |
| 27,538,067 |
| 28,031,980 |
| 435,845 |
| 436,942 |
Interbank Deposits |
|
|
| 27,538,067 |
| 28,031,980 |
| 435,845 |
| 436,942 |
Securities and Derivative Financial Instruments |
| 6 |
| 105,382,601 |
| 98,229,938 |
| 108,612,268 |
| 104,361,551 |
Own Portfolio |
|
|
| 27,840,113 |
| 22,599,399 |
| 29,052,181 |
| 26,253,702 |
Subject to Repurchase Commitments |
|
|
| 56,898,392 |
| 53,815,465 |
| 56,735,237 |
| 53,601,206 |
Derivative Financial Instruments |
|
|
| 6,891,850 |
| 5,782,175 |
| 6,925,818 |
| 5,820,767 |
Deposited with the Central Bank |
|
|
| 614,477 |
| 1,444,136 |
| 614,477 |
| 1,444,136 |
Privatization Currencies |
|
|
| 688 |
| 779 |
| 688 |
| 779 |
Pledged in Guarantees |
|
|
| 10,510,929 |
| 12,511,388 |
| 12,657,715 |
| 15,164,365 |
Securities Obtained from Commitments with Free Mover |
|
|
| 2,626,152 |
| 2,076,596 |
| 2,626,152 |
| 2,076,596 |
Interbank Accounts |
| 7 |
| 281,332 |
| 281,332 |
| 281,332 |
| 281,332 |
Restricted Deposits: |
|
|
| 281,332 |
| 281,332 |
| 281,332 |
| 281,332 |
National Housing System (SFH) |
|
|
| 281,332 |
| 281,332 |
| 281,332 |
| 281,332 |
Lending Operations |
| 8 |
| 94,943,351 |
| 94,654,519 |
| 129,256,089 |
| 127,327,245 |
Public Sector |
|
|
| 23,971 |
| 583,968 |
| 23,971 |
| 583,968 |
Private Sector |
|
|
| 106,686,537 |
| 105,266,028 |
| 141,867,556 |
| 138,961,203 |
Lending Operations Related to Assignment |
|
|
| - |
| - |
| - |
| 4,880 |
(Allowance for Loan Losses) |
| 8.f |
| (11,767,157) |
| (11,195,477) |
| (12,635,438) |
| (12,222,806) |
Leasing Operations |
| 8 |
| - |
| - |
| 1,366,200 |
| 1,287,060 |
Public Sector |
|
|
| - |
| - |
| 274 |
| 156 |
Private Sector |
|
|
| - |
| - |
| 1,412,049 |
| 1,333,502 |
(Allowance for Lease Losses) |
| 8.f |
| - |
| - |
| (46,123) |
| (46,598) |
Other Receivables |
|
|
| 29,901,360 |
| 31,426,963 |
| 35,735,962 |
| 37,146,216 |
Receivables for Guarantees Honored |
|
|
| 344,787 |
| 486,323 |
| 344,787 |
| 486,323 |
Foreign Exchange Portfolio |
| 9 |
| - |
| 1,690,088 |
| - |
| 1,690,088 |
Income Receivable |
|
|
| 117,446 |
| 146,813 |
| 117,446 |
| 146,813 |
Deferred Taxes |
| 11 |
| 16,489,059 |
| 16,945,139 |
| 18,932,033 |
| 19,291,180 |
Others |
| 12 |
| 13,409,972 |
| 12,770,902 |
| 16,911,998 |
| 16,261,333 |
(Allowance for Other Receivables Losses) |
| 8.f |
| (459,904) |
| (612,302) |
| (570,302) |
| (729,521) |
Other Assets |
|
|
| 231,641 |
| 418,733 |
| 360,798 |
| 535,725 |
Temporary Assets |
|
|
| 1,622 |
| 1,622 |
| 1,631 |
| 1,631 |
(Allowance for Losses) |
|
|
| (1,622) |
| (1,622) |
| (1,631) |
| (1,631) |
Prepaid Expenses |
|
|
| 231,641 |
| 418,733 |
| 360,798 |
| 535,725 |
|
|
|
|
|
|
|
|
|
|
|
Permanent Assets |
|
|
| 33,010,393 |
| 30,896,503 |
| 12,308,333 |
| 11,155,329 |
Investments |
|
|
| 23,595,551 |
| 21,491,544 |
| 348,941 |
| 337,589 |
Investments in Affiliates and Subsidiaries: |
| 14 |
| 23,574,784 |
| 21,470,777 |
| 328,104 |
| 316,752 |
Domestic |
|
|
| 20,142,494 |
| 17,939,824 |
| 328,104 |
| 316,752 |
Foreign |
|
|
| 3,432,290 |
| 3,530,953 |
| - |
| - |
Other Investments |
|
|
| 45,064 |
| 45,064 |
| 50,717 |
| 50,717 |
(Allowance for Losses) |
|
|
| (24,297) |
| (24,297) |
| (29,880) |
| (29,880) |
Fixed Assets |
| 15 |
| 5,916,949 |
| 5,825,407 |
| 6,577,992 |
| 6,498,492 |
Real Estate in Use |
|
|
| 2,470,204 |
| 2,470,204 |
| 2,670,807 |
| 2,670,804 |
Others Fixed Assets |
|
|
| 12,827,531 |
| 12,491,165 |
| 14,141,153 |
| 13,816,379 |
(Accumulated Depreciation) |
|
|
| (9,380,786) |
| (9,135,962) |
| (10,233,968) |
| (9,988,691) |
Intangible Assets |
| 16 |
| 3,497,893 |
| 3,579,552 |
| 5,381,400 |
| 4,319,248 |
Goodwill |
|
|
| 26,419,016 |
| 26,419,016 |
| 29,147,852 |
| 27,889,870 |
Others Intangible Assets |
|
|
| 9,724,588 |
| 9,633,082 |
| 10,394,655 |
| 10,264,830 |
(Accumulated Amortization) |
|
|
| (32,645,711) |
| (32,472,546) |
| (34,161,107) |
| (33,835,452) |
Total Assets |
|
|
| 779,255,831 |
| 779,011,514 |
| 803,679,182 |
| 805,819,289 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 16
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
| Notes |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Current Liabilities |
|
|
| 528,106,931 |
| 525,480,510 |
| 544,476,413 |
| 543,486,150 |
Deposits |
| 17.a |
| 190,523,071 |
| 199,067,946 |
| 187,146,304 |
| 193,424,668 |
Demand Deposits |
|
|
| 18,144,081 |
| 20,531,035 |
| 17,939,781 |
| 18,831,579 |
Savings Deposits |
|
|
| 46,211,153 |
| 46,068,346 |
| 46,211,153 |
| 46,068,346 |
Interbank Deposits |
|
|
| 5,846,886 |
| 6,208,067 |
| 2,824,191 |
| 2,693,812 |
Time Deposits |
|
|
| 120,320,951 |
| 126,260,498 |
| 120,165,266 |
| 125,822,325 |
Other Deposits |
|
|
| - |
| - |
| 5,913 |
| 8,606 |
Money Market Funding |
| 17.b |
| 98,137,497 |
| 105,464,821 |
| 92,681,666 |
| 100,334,226 |
Own Portfolio |
|
|
| 89,933,274 |
| 89,125,774 |
| 84,477,443 |
| 84,995,177 |
Third Parties |
|
|
| 4,527,820 |
| 15,200,913 |
| 4,527,820 |
| 14,200,914 |
Linked to Trading Portfolio Operations |
|
|
| 3,676,403 |
| 1,138,134 |
| 3,676,403 |
| 1,138,135 |
Funds from Acceptance and Issuance of Securities | 17.c |
| 42,194,327 |
| 38,392,230 |
| 44,423,500 |
| 40,623,092 | |
Exchange Acceptances |
|
|
| - |
| - |
| 539,295 |
| 563,848 |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 39,069,481 |
| 33,309,287 |
| 40,759,359 |
| 34,976,301 | |||
Securities Issued Abroad |
|
|
| 1,873,041 |
| 3,594,692 |
| 1,873,041 |
| 3,594,692 |
Funding by Structured Operations Certificates |
|
|
| 1,251,805 |
| 1,488,251 |
| 1,251,805 |
| 1,488,251 |
Interbank Accounts |
| 7 |
| 1,656,598 |
| 50,347 |
| 1,934,499 |
| 284,373 |
Receipts and Payments Pending Settlement |
|
|
| 1,523,057 |
| - |
| 1,800,958 |
| 234,026 |
Correspondents |
|
|
| 133,541 |
| 50,347 |
| 133,541 |
| 50,347 |
Interbank Accounts |
|
|
| 2,954,939 |
| 3,465,767 |
| 2,954,939 |
| 3,465,767 |
Third-Party Funds in Transit |
|
|
| 2,953,418 |
| 3,390,759 |
| 2,953,418 |
| 3,390,759 |
Internal Transfers of Assets |
|
|
| 1,521 |
| 75,008 |
| 1,521 |
| 75,008 |
Borrowings |
| 17.e |
| 42,977,535 |
| 31,997,566 |
| 41,318,488 |
| 30,317,989 |
Local Borrowings - Other Institutions |
|
|
| - |
| - |
| 46,735 |
| 51,048 |
Foreign Borrowings |
|
|
| 42,977,535 |
| 31,997,566 |
| 41,271,753 |
| 30,266,941 |
Domestic Onlendings - Official Institutions |
| 17.e |
| 3,992,726 |
| 4,242,194 |
| 3,992,726 |
| 4,242,194 |
National Economic and Social Development Bank (BNDES) |
| 1,669,624 |
| 1,880,962 |
| 1,669,624 |
| 1,880,962 | ||
Federal Savings and Loan Bank (CEF) |
|
|
| 69,975 |
| 52,523 |
| 69,975 |
| 52,523 |
National Equipment Financing Authority (FINAME) |
|
| 1,955,893 |
| 1,964,224 |
| 1,955,893 |
| 1,964,224 | |
Other Institutions |
|
|
| 297,234 |
| 344,485 |
| 297,234 |
| 344,485 |
Derivative Financial Instruments |
| 6 |
| 3,865,565 |
| 3,161,676 |
| 12,050,685 |
| 11,233,680 |
Derivative Financial Instruments |
|
|
| 3,865,565 |
| 3,161,676 |
| 12,050,685 |
| 11,233,680 |
Other Payables |
|
|
| 141,804,673 |
| 139,637,963 |
| 157,973,606 |
| 159,560,161 |
Collected Taxes and Other |
|
|
| 2,113,423 |
| 113,263 |
| 2,149,512 |
| 139,628 |
Foreign Exchange Portfolio |
| 9 |
| 116,845,768 |
| 98,835,635 |
| 116,845,768 |
| 98,835,635 |
Social and Statutory |
|
|
| 1,128,015 |
| 4,885,255 |
| 1,180,974 |
| 5,023,519 |
Tax and Social Security |
| 18 |
| 910,529 |
| 1,370,300 |
| 1,701,762 |
| 2,353,531 |
Trading Account |
| 10 |
| 403,630 |
| 833,498 |
| 928,837 |
| 1,720,297 |
Subordinated Debt |
| 19 |
| - |
| 9,885,608 |
| - |
| 9,885,608 |
Debt Instruments Eligible to Compose Capital |
| 20 |
| 165,283 |
| - |
| 165,283 |
| - |
Others |
| 21 |
| 20,238,025 |
| 23,714,404 |
| 35,001,470 |
| 41,601,943 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 17
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
| Notes |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Long-Term Liabilities |
|
|
| 182,719,343 |
| 188,036,778 |
| 188,801,199 |
| 194,692,422 |
Deposits |
| 17.a |
| 66,469,185 |
| 60,018,496 |
| 65,216,126 |
| 58,647,576 |
Interbank Deposits |
|
|
| 297,524 |
| 371,457 |
| 285,469 |
| 371,594 |
Time Deposits |
|
|
| 66,171,661 |
| 59,647,039 |
| 64,930,657 |
| 58,275,982 |
Money Market Funding |
| 17.b |
| 16,640,760 |
| 31,485,359 |
| 16,609,381 |
| 31,485,358 |
Own Portfolio |
|
|
| 87,526 |
| 183,048 |
| 56,147 |
| 183,048 |
Linked to Trading Portfolio Operations |
|
|
| 16,553,234 |
| 31,302,311 |
| 16,553,234 |
| 31,302,310 |
Funds from Acceptance and Issuance of Securities | 17.c |
| 38,245,710 |
| 38,879,874 |
| 41,423,475 |
| 41,490,139 | |
Exchange Acceptances |
|
|
| - |
| - |
| 782,077 |
| 755,047 |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 33,637,605 |
| 36,799,955 |
| 36,033,293 |
| 38,655,173 | |||
Securities Issued Abroad |
|
|
| 3,133,147 |
| 921,955 |
| 3,133,147 |
| 921,955 |
Funding by Structured Operations Certificates |
|
|
| 1,474,958 |
| 1,157,964 |
| 1,474,958 |
| 1,157,964 |
Borrowings |
| 17.e |
| 2,565,802 |
| 2,308,035 |
| 2,600,891 |
| 2,353,557 |
Local Borrowings - Other Institutions |
|
|
| - |
| - |
| 35,089 |
| 45,522 |
Foreign Borrowings |
|
|
| 2,565,802 |
| 2,308,035 |
| 2,565,802 |
| 2,308,035 |
Domestic Onlendings - Official Institutions |
| 17.e |
| 8,953,243 |
| 9,025,052 |
| 8,953,243 |
| 9,025,052 |
National Economic and Social Development Bank (BNDES) |
| 5,486,145 |
| 5,527,075 |
| 5,486,145 |
| 5,527,075 | ||
Federal Savings and Loan Bank (CEF) |
|
|
| 75,167 |
| 77,152 |
| 75,167 |
| 77,152 |
National Equipment Financing Authority (FINAME) |
|
| 3,391,931 |
| 3,419,497 |
| 3,391,931 |
| 3,419,497 | |
Other Institutions |
|
|
| - |
| 1,328 |
| - |
| 1,328 |
Derivative Financial Instruments |
| 6 |
| 8,522,402 |
| 7,522,291 |
| 8,690,879 |
| 7,666,723 |
Derivative Financial Instruments |
|
|
| 8,522,402 |
| 7,522,291 |
| 8,690,879 |
| 7,666,723 |
Other Payables |
|
|
| 41,322,241 |
| 38,797,671 |
| 45,307,204 |
| 44,024,017 |
Foreign Exchange Portfolio |
| 9 |
| 1,255,283 |
| 1,509,828 |
| 1,255,283 |
| 1,509,828 |
Tax and Social Security |
| 18 |
| 2,987,314 |
| 2,792,194 |
| 3,407,287 |
| 3,290,899 |
Debt Instruments Eligible to Compose Capital |
| 20 |
| 9,835,249 |
| 9,782,372 |
| 9,835,249 |
| 9,782,372 |
Others |
| 21 |
| 27,244,395 |
| 24,713,277 |
| 30,809,385 |
| 29,440,918 |
|
|
|
|
|
|
|
|
|
|
|
Deferred Income |
|
|
| 252,279 |
| 264,977 |
| 318,786 |
| 337,045 |
Deferred Income |
|
|
| 252,279 |
| 264,977 |
| 318,786 |
| 337,045 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
| 23 |
| 68,177,278 |
| 65,229,249 |
| 68,199,454 |
| 65,233,743 |
Capital: |
|
|
| 57,000,000 |
| 57,000,000 |
| 57,000,000 |
| 57,000,000 |
Brazilian Residents |
|
|
| 4,808,186 |
| 4,808,186 |
| 4,808,186 |
| 4,808,186 |
Foreign Residents |
|
|
| 52,191,814 |
| 52,191,814 |
| 52,191,814 |
| 52,191,814 |
Capital Reserves |
|
|
| 111,431 |
| 140,707 |
| 113,874 |
| 142,414 |
Profit Reserves |
|
|
| 9,620,554 |
| 9,620,554 |
| 9,620,553 |
| 9,623,341 |
Adjustment to Fair Value |
|
|
| (431,264) |
| (1,070,580) |
| (431,264) |
| (1,070,580) |
Retained Earnings |
|
|
| 2,399,234 |
| - |
| 2,418,968 |
| - |
(-) Treasury Shares |
|
|
| (522,677) |
| (461,432) |
| (522,677) |
| (461,432) |
|
|
|
|
|
|
|
|
|
|
|
Non Controlling Interest |
| 23.f |
| - |
| - |
| 1,883,330 |
| 2,069,929 |
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Equity |
|
|
| 68,177,278 |
| 65,229,249 |
| 70,082,784 |
| 67,303,672 |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
| 779,255,831 |
| 779,011,514 |
| 803,679,182 |
| 805,819,289 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 18
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
|
|
| Bank |
| Consolidated |
| Notes | 01/01 to | 01/01 to | 01/01 to | 01/01 to |
Income Related to Financial Operations |
| 18,380,444 | 17,285,636 | 20,550,513 | 19,190,275 |
Loan Operations |
| 9,554,596 | 9,160,963 | 12,616,182 | 12,111,896 |
Leasing Operations |
| - | - | 69,151 | 87,204 |
Securities Transactions | 6.a | 6,451,053 | 7,321,538 | 5,555,919 | 6,158,336 |
Derivatives Transactions |
| (989,676) | (751,777) | (1,081,401) | (726,662) |
Foreign Exchange Operations |
| 2,382,490 | 661,977 | 2,402,302 | 660,125 |
Operations of Sale or Transfer of Financial Assets |
| - | 3,362 | - | 4,148 |
Compulsory Deposits |
| 981,981 | 889,573 | 988,360 | 895,228 |
Expenses on Financial Operations |
| (12,162,902) | (11,583,546) | (12,556,615) | (11,932,452) |
Funding Operations Market | 17.d | (7,441,606) | (8,037,702) | (7,389,930) | (7,650,287) |
Borrowings and Onlendings Operations |
| (2,151,813) | (730,567) | (2,105,802) | (991,014) |
Operations of Sale or Transfer of Financial Assets |
| (41,497) | - | (47,437) | - |
Allowance for Loan Losses | 8.f | (2,527,986) | (2,815,277) | (3,013,446) | (3,291,151) |
Gross Income Related to Financial Operations |
| 6,217,542 | 5,702,090 | 7,993,898 | 7,257,823 |
|
|
|
|
|
|
Other Operating Revenues (Expenses) |
| (1,497,193) | (1,419,645) | (2,642,398) | (2,416,132) |
Banking Service Fees | 26 | 2,509,472 | 2,250,750 | 3,316,307 | 2,969,908 |
Income Related to Bank Charges | 26 | 1,047,261 | 972,837 | 1,212,552 | 1,164,359 |
Personnel Expenses | 27 | (1,625,276) | (1,674,231) | (1,850,550) | (1,842,605) |
Other Administrative Expenses | 28 | (2,446,989) | (2,201,416) | (2,852,908) | (2,565,888) |
Tax Expenses | 29 | (761,626) | (713,603) | (1,029,187) | (947,883) |
Investments in Affiliates and Subsidiaries | 14 | 890,864 | 601,257 | 11,352 | 2,516 |
Other Operating Revenues | 30 | 1,029,180 | 977,364 | 1,163,963 | 1,075,545 |
Other Operating Expenses | 31 | (2,140,079) | (1,632,603) | (2,613,927) | (2,272,084) |
Operating Income |
| 4,720,349 | 4,282,445 | 5,351,500 | 4,841,691 |
|
|
|
|
|
|
Non-Operating Income | 32 | 663 | 2,227 | 481 | 12,555 |
|
|
|
|
|
|
Income Before Taxes on Income and Profit Sharing |
| 4,721,012 | 4,284,672 | 5,351,981 | 4,854,246 |
Income Tax and Social Contribution | 33 | (895,478) | (1,027,651) | (1,376,082) | (1,484,923) |
Provision for Income Tax |
| 18,627 | (221,705) | (385,287) | (519,667) |
Provision for Social Contribution Tax |
| (4,554) | (166,331) | (187,905) | (375,557) |
Deferred Tax Credits |
| (909,551) | (639,615) | (802,890) | (589,699) |
Profit Sharing |
| (426,990) | (438,265) | (468,440) | (466,304) |
Non Controlling Interest | 23.f | - | - | (92,042) | (83,286) |
Net Income |
| 3,398,544 | 2,818,756 | 3,415,417 | 2,819,733 |
|
|
|
|
|
|
Number of Shares (Thousands) | 23.a | 7,498,531 | 7,492,865 |
|
|
Net Income per Thousand Shares (R$) |
| 453,23 | 376,19 |
|
|
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 19
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
|
|
|
|
|
|
| Profit Reserves |
| Adjustment to Fair Value |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| Reserve for |
|
|
|
|
| Others |
|
|
|
|
|
|
|
|
|
|
| Capital |
| Legal |
| Dividend |
| Own |
| Affiliates and |
| Adjustment |
| Retained |
| (-)Treasury |
|
|
| Notes |
| Capital |
| Reserves |
| Reserve |
| Equalization |
| Position |
| Subsidiaries |
| to Fair Value |
| Earnings |
| Shares |
| Total |
Balances as of December 31, 2017 |
|
| 57,000,000 |
| 172,398 |
| 2,505,285 |
| 1,548,875 |
| 1,030,563 |
| 89,648 |
| (2,704,383) |
| - |
| (148,440) |
| 59,493,946 |
Employee Benefit Plans |
|
| - |
| - |
| - |
| - |
| - |
| - |
| (5,594) |
| - |
| - |
| (5,594) |
Treasury Shares |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 45,737 |
| 45,737 |
Result of Treasury Shares | 23.d |
| - |
| 4,016 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 4,016 |
Reservations for Share - Based Payment |
|
| - |
| (64,419) |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (64,419) |
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
|
| - |
| - |
| - |
| - |
| 559,910 |
| (10,666) |
| - |
| - |
| - |
| 549,244 |
Restructuring of Capital |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (12) |
| (12) |
Net Income |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 2,818,756 |
| - |
| 2,818,756 |
Allocations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on Capital | 23.b |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (600,000) |
| - |
| (600,000) |
Balances as of March 31, 2018 |
|
| 57,000,000 |
| 111,995 |
| 2,505,285 |
| 1,548,875 |
| 1,590,473 |
| 78,982 |
| (2,709,977) |
| 2,218,756 |
| (102,715) |
| 62,241,674 |
Changes in the Period |
|
| - |
| (60,403) |
| - |
| - |
| 559,910 |
| (10,666) |
| (5,594) |
| 2,218,756 |
| 45,725 |
| 2,747,728 |
|
|
|
|
|
|
| Profit Reserves |
| Adjustment to Fair Value |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| Reserve for |
|
|
|
|
| Others |
|
|
|
|
|
|
|
|
|
|
| Capital |
| Legal |
| Dividend |
| Own |
| Affiliates and |
| Adjustment |
| Retained |
| (-)Treasury |
|
|
| Notes |
| Capital |
| Reserves |
| Reserve |
| Equalization |
| Position |
| Subsidiaries |
| to Fair Value |
| Earnings |
| Shares |
| Total |
Balances as of December 31, 2018 |
|
| 57,000,000 |
| 140,707 |
| 3,113,605 |
| 6,506,949 |
| 1,885,972 |
| 114,491 |
| (3,071,043) |
| - |
| (461,432) |
| 65,229,249 |
Employee Benefit Plans |
|
| - |
| - |
| - |
| - |
| - |
| - |
| (8,968) |
| - |
| - |
| (8,968) |
Treasury Shares |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (59,717) |
| (59,717) |
Treasury Shares Result | 23.d |
| - |
| 3,121 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 3,121 |
Reservations for Share - Based Payment |
|
| - |
| (32,397) |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (32,397) |
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
|
| - |
| - |
| - |
| - |
| 693,730 |
| (45,446) |
| - |
| - |
| - |
| 648,284 |
Restructuring of Capital |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (1,528) |
| (1,528) |
Net Income |
|
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 3,398,544 |
| - |
| 3,398,544 |
Interest on Capital | 23.b |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (1,000,000) |
| - |
| (1,000,000) |
Others | 23.c |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 690 |
| - |
| 690 |
Balances as of March 31, 2019 |
|
| 57,000,000 |
| 111,431 |
| 3,113,605 |
| 6,506,949 |
| 2,579,702 |
| 69,045 |
| (3,080,011) |
| 2,399,234 |
| (522,677) |
| 68,177,278 |
Changes in the Period |
|
| - |
| (29,276) |
| - |
| - |
| 693,730 |
| (45,446) |
| (8,968) |
| 2,399,234 |
| (61,245) |
| 2,948,029 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 20
|
|
|
| Profit Reserves | Adjustment to Fair Value |
|
|
|
|
| |||
|
|
|
|
| Reserve for |
|
| Others |
|
|
|
| Total |
|
|
| Capital | Legal | Dividend | Own | Affiliates and | Adjustment | Retained | (-)Treasury | Stockholders' | Minority | Stockholders' |
| Notes | Capital | Reserves | Reserve | Equalization | Position | Subsidiaries | to Fair Value | Earnings | Shares | Equity | Interest | Equity |
Balances as of December 31, 2017 |
| 57,000,000 | 174,616 | 2,505,286 | 1,552,664 | 1,030,563 | 89,648 | (2,704,383) | - | (148,440) | 59,499,954 | 1,896,692 | 61,396,646 |
Employee Benefit Plans |
| - | - | - | - | - | - | (5,594) | - | - | (5,594) | - | (5,594) |
Treasury Shares |
| - | - | - | - | - | - | - | - | 45,737 | 45,737 | - | 45,737 |
Result of Treasury Shares |
| - | 4,016 | - | - | - | - | - | - | - | 4,016 | - | 4,016 |
Reservations for Share - Based Payment |
| - | (65,112) | - | - | - | - | - | - | - | (65,112) | - | (65,112) |
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | 559,910 | (10,666) | - | - | - | 549,244 | - | 549,244 | |
Restructuring of Capital |
| - | - | - | - | - | - | - | - | (12) | (12) | - | (12) |
Net Income |
| - | - | - | - | - | - | - | 2,819,733 | - | 2,819,733 | - | 2,819,733 |
Interest on Capital | 23.b | - | - | - | - | - | - | - | (600,000) | - | (600,000) | - | (600,000) |
Reserve for Dividend Equalization | 23.c | - | - | - | (3,790) | - | - | - | 3,036 | - | (754) | - | (754) |
Non Controlling Interest Results | 23.f | - | - | - | - | - | - | - | - | - | - | 83,286 | 83,286 |
Others |
| - | - | - | - | - | - | - | - | - | - | 21,720 | 21,720 |
Balances as of March 31, 2018 |
| 57,000,000 | 113,520 | 2,505,286 | 1,548,874 | 1,590,473 | 78,982 | (2,709,977) | 2,222,769 | (102,715) | 62,247,212 | 2,001,698 | 64,248,910 |
Changes in the Period |
| - | (61,096) | - | (3,790) | 559,910 | (10,666) | (5,594) | 2,222,769 | 45,725 | 2,747,258 | 105,006 | 2,852,264 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 21
|
|
|
| Profit Reserves | Adjustment to Fair Value |
|
|
|
|
| |||
|
|
|
|
| Reserve for |
|
| Others |
|
|
|
| Total |
|
|
| Capital | Legal | Dividend | Own | Affiliates and | Adjustment | Retained | (-)Treasury | Stockholders' | Minority | Stockholders' |
| Notes | Capital | Reserves | Reserve | Equalization | Position | Subsidiaries | to Fair Value | Earnings | Shares | Equity | Interest | Equity |
Balances as of December 31, 2018 |
| 57,000,000 | 142,414 | 3,113,606 | 6,509,735 | 1,885,972 | 114,491 | (3,071,043) | - | (461,432) | 65,233,743 | 2,069,929 | 67,303,672 |
Employee Benefit Plans |
| - | - | - | - | - | - | (8,968) | - | - | (8,968) | - | (8,968) |
Treasury Shares |
| - | - | - | - | - | - | - | - | (59,717) | (59,717) | - | (59,717) |
Result of Treasury Shares |
| - | 3,121 | - | - | - | - | - | - | - | 3,121 | - | 3,121 |
Reservations for Share - Based Payment |
| - | (31,661) | - | - | - | - | - | - | - | (31,661) | - | (31,661) |
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | 693,730 | (45,446) | - | - | - | 648,284 | - | 648,284 | |
Restructuring of Capital |
| - | - | - | - | - | - | - | - | (1,528) | (1,528) | - | (1,528) |
Net Income |
| - | - | - | - | - | - | - | 3,415,417 | - | 3,415,417 | - | 3,415,417 |
Interest on Capital | 23.b | - | - | - | - | - | - | - | (1,000,000) | - | (1,000,000) | - | (1,000,000) |
Non Realized Gains |
| - | - | - | (2,788) | - | - | - | 3,025 | - | 237 | - | 237 |
Non Controlling Interest Results | 23.f | - | - | - | - | - | - | - | - | - | - | (92,042) | (92,042) |
Others |
| - | - | - | - | - | - | - | 526 | - | 526 | (94,557) | (94,031) |
Balances as of March 31, 2019 |
| 57,000,000 | 113,874 | 3,113,606 | 6,506,947 | 2,579,702 | 69,045 | (3,080,011) | 2,418,968 | (522,677) | 68,199,454 | 1,883,330 | 70,082,784 |
Changes in the Period |
| - | (28,540) | - | (2,788) | 693,730 | (45,446) | (8,968) | 2,418,968 | (61,245) | 2,965,711 | (186,599) | 2,779,112 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 22
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
|
| Bank | Consolidated | ||
| Notes | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
Operational Activities |
|
|
|
|
|
Net Income |
| 3,398,544 | 2,818,756 | 3,415,417 | 2,819,733 |
Adjustment to Net Income |
| 3,709,555 | 3,799,330 | 5,233,301 | 5,090,706 |
Allowance for Loan Losses | 8.f | 2,527,986 | 2,815,277 | 3,013,446 | 3,291,151 |
Provision for Legal Proceedings and Administrative and Legal Obligations | 22.c | 33,049 | 243,499 | 100,335 | 282,718 |
Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations | 22.c | 125,453 | 255,098 | 152,943 | 297,129 |
Deferred Tax Credits and Liabilities |
| 982,626 | 743,588 | 897,629 | 719,024 |
Equity in Affiliates and Subsidiaries | 14 | (890,864) | (601,257) | (11,352) | (2,516) |
Depreciation and Amortization | 28 | 514,079 | 487,637 | 649,632 | 617,341 |
Recognition (Reversal) Allowance for Other Assets Losses | 33 | 8,056 | 3,675 | 5,895 | (681) |
Gain (Loss) on Sale of Other Assets | 32 | 3,855 | (1,705) | 6,470 | 2,979 |
Gain (Loss) on Sale of Investments | 32 | - | - | (2,467) | (6,265) |
Provision for Financial Guarantees | 30 and 31 | 2,903 | (86,797) | 2,903 | (86,797) |
Monetary Adjustment of Escrow Deposits | 30 | (109,296) | (107,068) | (131,041) | (140,595) |
Recoverable Taxes | 30 | (20,718) | (37,880) | (30,129) | (51,015) |
Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents | 6.429 | 114 | 6,429 | 114 | |
Effects of Changes in Foreign Exchange Rates on Assets and Liabilities |
| 494,682 | 86,199 | 494,682 | 86,199 |
Others |
| 31,315 | (1,050) | 77,926 | 81,920 |
Changes on Assets and Liabilities |
| (1,061,625) | (5,717,223) | (2,239,590) | (6,717,336) |
Decrease (Increase) in Interbank Investments |
| 18,689,433 | (1,260,891) | 17,903,640 | 2,494,690 |
Decrease (Increase) in Securities and Derivative Financial Instruments |
| 913,226 | (4,597,390) | 2,032,076 | (20,022,753) |
Decrease (Increase) in Lending and Leasing Operations |
| (9,460,067) | (8,976,860) | (11,764,258) | (12,504,161) |
Decrease (Increase) in Deposits on Central Bank of Brazil |
| (1,744,083) | 1,199,550 | (1,748,190) | 1,180,497 |
Decrease (Increase) in Other Receivables |
| (14,014,033) | (11,796,366) | (13,938,378) | (12,761,633) |
Decrease (Increase) in Other Assets |
| 139,026 | (410,121) | 130,922 | (441,003) |
Net Change on Other Interbank and Interbranch Accounts |
| 7,625 | (1,791,781) | 3,659,245 | (537,722) |
Increase (Decrease) in Deposits |
| (2,094,186) | (3,566,295) | 290,186 | 17,735,941 |
Increase (Decrease) in Money Market Funding |
| (22,171,923) | 11,902,999 | (22,528,537) | 4,871,947 |
Increase (Decrease) in Borrowings |
| 10,639,619 | (2,416,278) | 10,649,716 | (2,455,929) |
Increase (Decrease) in Other Liabilities |
| 18,756,426 | 16,610,161 | 14,565,269 | 17,153,396 |
Increase (Decrease) in Change in Deferred Income |
| (12,697) | (28,783) | (18,259) | (41,223) |
Income Tax Recovered/(Paid) |
| (709,991) | (585,168) | (1,473,022) | (1,389,383) |
Net Cash Provided by (Used in) Operational Activities |
| 6,046,474 | 900,863 | 6,409,128 | 1,193,103 |
Investing Activities |
|
|
|
|
|
Increase in Equity at Affiliates and Subsidiaries | 14 | (144,999) | (187,000) | - | - |
Purchase of Investment |
| - | (38) | - | (38) |
Purchase of Fixed Assets |
| (343,422) | (171,404) | (397,758) | (210,073) |
Purchase of Intangible Assets |
| (187,091) | (157,557) | (226,160) | (176,379) |
Net Cash Received on Sale/Reduction of Investments |
| - | - | 2,467 | 6,265 |
Acquisition of Minority Residual Interest in Subsidiary | 36.b | (1,291,630) | - | (1,291,630) | - |
Acquisition of Affiliates, less Net Cash in acquisition | 36.f | - | (111,224) | - | (111,224) |
Proceeds from Assets not in Use |
| 119,079 | 39,575 | 116,458 | 48,757 |
Proceeds from Property for Own Use |
| 10,496 | 1,240 | 14,202 | 20,771 |
Dividends and Interest on Capital Received |
| 77,790 | 591,984 | 3,609 | 14,961 |
Net Cash Provided by (Used in) Investing Activities |
| (1,759,777) | 5,576 | (1,778,812) | (406,960) |
Financing Activities |
|
|
|
|
|
Purchase of Own Share | 23.d | (59,717) | 45,737 | (59,717) | 45,737 |
Issuance of Long - Term Emissions |
| 12,365,304 | 17,228,812 | 13,260,546 | 17,562,956 |
Long - Term Payments |
| (10,429,727) | (13,904,931) | (10,839,268) | (14,263,409) |
Subordinated Debts - Payments |
| (9,924,747) | - | (9,924,747) | - |
Debt Instruments Eligible to Compose Capital - Payments |
| - | (224,053) | - | (224,053) |
Dividends and Interest on Capital Paid |
| (4,342,007) | (4,427,452) | (4,419,230) | (4,453,220) |
Increase (decrease) in Minority Interest |
| - | - | (131,395) | (9,397) |
Capital Increase in Controlled Companies Held by Minority Interest |
| - | - | 100,000 | 48,000 |
Net Cash Provided by (Used in) Financing Activities |
| (12,390,894) | (1,281,887) | (12,013,811) | (1,293,386) |
Exchange Variation on Cash and Cash Equivalents |
| (6,429) | (114) | (6,429) | (114) |
Increase (Decrease) in Cash and Cash Equivalents |
| (8,110,626) | (375,562) | (7,389,924) | (507,357) |
Cash and Cash Equivalents at the Beginning of Period | 4 | 25,854,948 | 22,664,381 | 25,285,982 | 22,513,317 |
Cash and Cash Equivalents at the End of Period | 4 | 17,744,322 | 22,288,819 | 17,896,058 | 22,005,960 |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 23
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
|
| Bank |
| Consolidated | ||||||||||||
|
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 | ||||||||
| Notes |
|
|
| ||||||||||||
Income Related to Financial Operations |
| 18,380,444 |
|
|
| 17,285,636 |
|
|
| 20,550,513 |
|
|
| 19,190,275 |
|
|
Income Related to Bank Charges and Banking Service Fees | 26 | 3,556,733 |
|
|
| 3,223,587 |
|
|
| 4,528,859 |
|
|
| 4,134,267 |
|
|
Allowance for Loans Losses | 8.f | (2,527,986) |
|
|
| (2,815,277) |
|
|
| (3,013,446) |
|
|
| (3,291,151) |
|
|
Other Revenues and Expenses |
| (1,110,236) |
|
|
| (653,012) |
|
|
| (1,449,483) |
|
|
| (1,183,984) |
|
|
Financial Expenses |
| (9,634,916) |
|
|
| (8,768,269) |
|
|
| (9,543,169) |
|
|
| (8,641,301) |
|
|
Third-party Input |
| (1,744,723) |
|
|
| (1,538,663) |
|
|
| (2,008,874) |
|
|
| (1,767,931) |
|
|
Materials, Energy and Others |
| (67,074) |
|
|
| (60,897) |
|
|
| (69,691) |
|
|
| (62,620) |
|
|
Third-Party Services | 28 | (473,603) |
|
|
| (416,274) |
|
|
| (588,927) |
|
|
| (515,193) |
|
|
Others |
| (1,204,046) |
|
|
| (1,061,492) |
|
|
| (1,350,256) |
|
|
| (1,190,118) |
|
|
Gross Added Value |
| 6,919,316 |
|
|
| 6,734,002 |
|
|
| 9,064,400 |
|
|
| 8,440,175 |
|
|
Retentions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization | 28 | (514,079) |
|
|
| (487,637) |
|
|
| (649,632) |
|
|
| (617,341) |
|
|
Added Value Produced Net |
| 6,405,237 |
|
|
| 6,246,365 |
|
|
| 8,414,768 |
|
|
| 7,822,834 |
|
|
Added Value Received from Transfer Investments in Affiliates and Subsidiaries | 14 | 890,864 |
|
|
| 601,257 |
|
|
| 11,352 |
|
|
| 2,516 |
|
|
Added Value to Distribute |
| 7,296,101 |
|
|
| 6,847,622 |
|
|
| 8,426,120 |
|
|
| 7,825,350 |
|
|
Added Value Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee |
| 1,886,178 |
| 25.8% |
| 1,879,262 |
| 27.4% |
| 2,120,353 |
| 25.2% |
| 2,050,414 |
| 26.2% |
Compensation | 27 | 925,238 |
|
|
| 925,206 |
|
|
| 1,050,063 |
|
|
| 1,022,260 |
|
|
Benefits | 27 | 328,245 |
|
|
| 331,709 |
|
|
| 371,345 |
|
|
| 361,630 |
|
|
Government Severance Indemnity Funds for Employees - FGTS | 108,325 |
|
|
| 97,205 |
|
|
| 123,918 |
|
|
| 109,472 |
|
| |
Others |
| 524,370 |
|
|
| 525,142 |
|
|
| 575,027 |
|
|
| 557,052 |
|
|
Taxes and Contributions |
| 1,823,192 |
| 25.0% |
| 1,974,488 |
| 28.8% |
| 2,603,906 |
| 30.9% |
| 2,691,301 |
| 34.4% |
Federal |
| 1,638,147 |
|
|
| 1,807,730 |
|
|
| 2,363,681 |
|
|
| 2,475,999 |
|
|
State |
| 32 |
|
|
| 190 |
|
|
| 48 |
|
|
| 208 |
|
|
Municipal |
| 185,013 |
|
|
| 166,568 |
|
|
| 240,177 |
|
|
| 215,094 |
|
|
Compensation of Third-Party Capital - Rental | 28 | 188,187 |
| 2.6% |
| 175,116 |
| 2.6% |
| 194,402 |
| 2.3% |
| 180,616 |
| 2.3% |
Remuneration of Interest on Capital |
| 3,398,544 |
| 46.6% |
| 2,818,756 |
| 41.2% |
| 3,507,459 |
| 41.6% |
| 2,903,019 |
| 37.1% |
Interest on Equity | 23.b | 1,000,000 |
|
|
| 600,000 |
|
|
| 1,000,000 |
|
|
| 600,000 |
|
|
Profit Reinvestment |
| 2,398,544 |
|
|
| 2,218,756 |
|
|
| 2,599,501 |
|
|
| 2,386,305 |
|
|
Participation Results of Non-Controlling Stockholders | 23.f | - |
|
|
| - |
|
|
| (92,042) |
|
|
| (83,286) |
|
|
Total |
| 7,296,101 |
| 100.0% |
| 6,847,622 |
| 100.0% |
| 8,426,120 |
| 100.0% |
| 7,825,350 |
| 100.0% |
The accompanying notes from Management are an integral part of these financial statements.
Individual and Consolidated Financial Statements – March 31, 2019 24
(Free Translation into English from the Original Previously Issued in Portuguese). | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
NOTES TO THE FINANCIAL STATEMENTS | |
In thousands of Brazilian Real - R$, unless otherwise stated. | |
1. General Information
Banco Santander (Brasil) S.A. (Banco Santander or Bank), directly and indirectly controlled by Banco Santander, S.A., headquartered in Spain (Banco Santander Spain), is the lead institution of the Financial and Prudential Conglomerates (Conglomerate Santander) towards the Central Bank of Brazil (Bacen), established as a joint-stock corporation, with head office at Avenida Presidente Juscelino Kubitschek, 2041 and 2235 - A Block - Vila Olímpia, in the City of São Paulo, State of São Paulo. Banco Santander operates as a multiple service bank, conducting its operations by means of its commercial, investment, loans and advances, mortgage loans, leasing and foreign exchange portfolios. Through its subsidiaries, also operates on the segments of payment industry, shares club management, securities and insurance brokerage operations, capitalization, consumer finance, payroll credit, digital platforms, management and recovery of non-performing loans and private pension. The Bank's activities are conducted within the context of a group of institutions that operate on an integrated basis in the financial market. The corresponding benefits and costs of providing services are absorbed between them and are conducted in the normal course of business and under commutative conditions.
2. Presentation of Financial Statements
The financial statements of Banco Santander (Brasil) S.A., which include its dependence abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with accounting practices adopted in Brazil, established by the Brazilian Corporation Law, National Monetary System (CMN), Central Bank of Brazil (Bacen) and the model of the document provided for in the Accounting Plan of the Institutions of the National Financial System (COSIF) of the Brazilian Securities and Exchange Commission (CVM), in which they do not conflict with the standards issued by the Central Bank and show all information relevant to the financial statements, which are consistent with those used by management in its management. The consolidated financial statements include the Bank and its subsidiaries indicated in Note 14 and investment funds, where Santander Conglomerate companies are the main beneficiaries or holders of the main obligations. The portfolios of these investment funds are classified by type of operation and are distributed in the same categories in which they were originally allocated.
All the relevant information related to Banco Santander's financial statements, and only them, are being evidenced, and correspond to those used by Banco Santander´s management.
Investment Funds Consolidated
· Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior (Santander FI Amazonas);
· Santander Fundo de Investimento Diamantina Multimercado Crédito Privado de Investimento no Exterior (Santander FI Diamantina);
· Santander Fundo de Investimento Guarujá Multimercado Crédito Privado de Investimento no Exterior (Santander FI Guarujá);
· Santander Fundo de Investimento Unix Multimercado Crédito Privado (Santander FI Unix);
· Santander Fundo de Investimento SBAC Referenciado DI Crédito Privado (Santander FI SBAC);
· Santander Paraty QIF PLC (Santander Paraty)(5);
· Venda de Veículos Fundo de Investimento em Direitos Creditórios (Venda de Veículos FIDC);(1)
· Fundo de Investimento em Direitos Creditórios RCI Brasil I - Financiamento de Veículos (FI Direitos Creditórios RCI Brasil I)(2);
· Fundo de Investimento em Direitos Creditórios RN Brasil - Financiamento de Veículos (FI RN Brasil - Financiamento de Veículos)(3);
· Prime 16 – Fundo de Investimento Imobiliário (current name of BRL V - Fundo de Investimento Imobiliário - FII (Fundo de Investimento Imobi)(4);
· Santander FI Hedge Strategies Fund (Santander FI Hedge Strategies)(5);
· Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema VI - Não Padronizado (Fundo Investimento Ipanema NPL VI)(6);
· Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema V - Não Padronizado (Fundo Investimento Ipanema NPL V)(7); and
· Santander Hermes Multimercado Crédito Privado Infraestrutura Fundo de Investimentos(8).
(1) The carmaker Renault (not belonging to the Conglomerate Santander) sells its trade receivables to the Fund. This Fund buys only trade receivables from Renault carmaker. In turn, the Banco RCI Brasil S.A. (Note 14) owns 100% of its subordinated shares.
(2) Banco RCI Brasil S.A. (company belonging to the Conglomerate Santander) sell its product portfolio floorplan to the Fund, and holds 100% of its subordinated shares. This Fund buys exclusively credit portfolio from Banco RCI Brasil S.A.
(3) Banco RCI Brasil S.A. sold receivables (CDC portfolio) to FI RN Brasil – Financiamento de Veículos.The senior shares will have only one investor. Banco RCI Brasil S.A. holds 100% of subordinated shares.
(4) Banco Santander figured as lender of certain delayed debts (loans) for which had real assets as guarantees. The process of credit recovery consists in converted into capital contributions by the Real Estate Fund in conjunction transfer of the same shares to Banco Santander through the process of payment in kind of the above credit operations payments.The Extraordinary General Meeting held on October 30, 2018 approved the change of the name of BRL V - Fundo de Investimento Imobiliário – FII to Prime 16 – Fundo de Investimento Imobiliário.
(5) Banco Santander, through its subsidiaries, holds the risks and benefits of Santander Paraty and the Santander FI Hedge Strategies Subfund, resident in Ireland, and both are fully consolidated in its Consolidated Financial Statements. In the Irish market, an investment fund cannot act directly and, for that reason, it was necessary to create another structure (a sub-fund), Santander FI Hedge Strategies. Santander Paraty does not have a financial position, and all position is derived from the financial position of Santander FI Hedge Strategies.
Individual and Consolidated Financial Statements – March 31, 2019 25
(6) This investment fund was formed and started to be consolidated in September of 2017. It refers to a structure where the Bank has sold certain loans agreements which were already written-off (agreements matured over 360 days) and transferred to this fund. The Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. (Atual Securitizadora) (Note 14), company controlled by the Bank, holds 100% of the fund´s shares.
(7) This fund started to be consolidated in October 2017 and is indirectly controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. (Note 14).
(8) This fund started to be consolidated in November 2018 and is controlled by Banco Bandepe S.A. (Note 14).
During the preparation of the consolidated financial statements the information regarding equity in subsidiaries, significant receivable and payable balances, revenues and expenses arising from transactions between domestic branches, foreign branches and subsidiaries, unrealized profits between these entities and non-controlling stockholders participation are stated separately in stockholders’ equity and in the income statements.
Leasing operations have been reclassified in order to reflect its financial position according to the financial method.
The preparation of financial statements requires Management estimates that affect the reported amounts of assets and liabilities, disclosure of provision and contingent liabilities and the reported amounts of revenues and expenses for the reporting periods. Since Management’s judgment involves making estimates concerning the probability of future events, actual amounts could differ from those estimates. The main estimates are provision of allowance for loan losses, realization of the tax credit, contingent liabilities, pension plan and the fair value of financial assets.
The Board of Directors authorized the issuance of the Financial Statements of the period ended March 31, 2019 at the meeting held on April 29, 2019.
The interim consolidated financial statements based on international accounting standards issued by the International Accounting Standards Board (IASB) for the period ended on March 31, 2019 were disclosed simultaneously, at the website www.santander.com.br/ri.
3. Significant Accounting Practices
a) Income Statement
The income statement accounting method is determined based on the accrual method and include income, charges, monetary adjustment and exchange rate changes, calculated at official rates and rates, pro rata on assets and liabilities adjusted up to the balance sheet date.
b) Functional Currency
Functional Currency and Presentation Currency
CMN Resolution 4,524 of September 29, 2016, with prospective application as of January 1, 2017, established accounting procedures for recognition by financial institutions and other institutions authorized to operate by the Central Bank that hold investments abroad: I - effects of exchange rate variations resulting from the conversion of transactions carried out in foreign currency by investees abroad to the respective functional currencies; II - the effects of exchange rate variations resulting from the translation of the balances of the financial statements of investees abroad of the respective functional currencies into the national currency; and III - of operations for hedge purposes of foreign exchange variation of investments abroad. These changes did not impact the financial statements Banco Santander in the year 2019. The functional currency is considered the currency of the main economic environment in which the entity operates.
The financial statements are presented in Brazilian Real (R$), which is the functional and presentation currency of Banco Santander and its subsidiaries, including its overseas subsidiary and branch.
Assets and liabilities of foreign branchs and subsidiary are converted in real as follows:
· Assets and liabilities are converted at the exchange rate on the balance sheet date; and
· Revenues and expenses are converted at the monthly average exchange rates.
c) Current and Long-Term Assets and Liabilities
They are stated at their realizable and/or settlement amounts and they include income, charges, monetary adjustments or changes in exchange rates earned or incurred through the end of the reporting period, calculated on a daily pro rata basis and, when applicable, the effect of adjustments to decrease the cost of assets at their market values or realization.
Receivables and payables up to 12 months are classified in current assets and liabilities, respectively. Trading securities that, regardless of their maturity date, are classified in current asset, according to the Bacen rule Circular 3,068/2001.
Individual and Consolidated Financial Statements – March 31, 2019 26
d) Cash and Cash Equivalents
For the cash flows statement purposes, cash and cash equivalents correspond to the balances of cash and interbank investments immediately convertible into cash, with insignificant risk of change in its value or with original maturity equal to ninety days or less.
e) Interbank Investments and Credits Related to Bacen
They are stated at their settlement amounts and include income, charges, monetary adjustments or changes in exchange rates earned or incurred through the end of the reporting period, calculated on a daily pro rata basis.
e.1) Repurchase Agreement
Repurchase Agreement (Repo)
The bank’s own fixed income securities used as ballast in the repurchasing agreement are highlighted in specific accounts of the asset (linked securities), on transaction date, by the updated accounting average, by type and maturity of the security. The difference between the repurchase value and the sale is the expense of the operation.
To perform sales transactions with repurchase agreements the Bank also uses third-party securities as ballast. Those operations are registered as advance in the balance sheet.
Reverse Repurchase Agreement (Reverse Repo)
The financing granted by ballast with fixed-income securities (third-parties) are recorded on the financed position at liquidation value. The difference between the resale value and the purchase is recognized as the income of the operation. The securities acquired in a reverse repurchase agreement are transferred to the funded status when used as ballast for the sale transactions with repurchase agreements.
Repurchasing Performed With Free Movement Agreements
For the operations with free movement agreements, at the moment of the definitive sale of the securities acquired with resale agreement, the liability account referred to this operation must be evaluated by the securities' market value.
f) Securities
Securities are stated and classified into the following categories and accounting evaluation:
I. Trading securities;
II. Available-for-sale securities; and
III. Held-to-maturity securities.
Trading securities include securities purchased for the purpose of being actively and frequently traded while held-to-maturity securities include those for which the Bank has intention and financial capacity to hold to maturity. Available-for-sale securities include those which cannot be classified in categories I (trading) and III (held-to-maturity). Securities classified into categories I and II are stated at acquisition cost plus income earned through the balance sheet date, calculated on a daily pro rata basis, and adjusted to fair value, with gains or losses on such adjustment being recorded against:
(1) The corresponding income or expense account, net of tax effects, in income statement for the period, when relating to securities classified into the trading category; and
(2) A separated account in stockholders’ equity, net of taxes effects, when related to securities classified into the available-for-sale category. The adjustments to market value recorded on sale of these securities are transferred to the income statement for the period.
Securities classified into the held-to-maturity category are stated at acquisition cost plus income earned through the balance sheet, calculated on a daily pro rata basis.
Any permanent losses recorded on the sale value of securities classified into available-for-sale and held-to-maturity are recognized in the income statement of the period.
g) Derivatives Financial Instruments
Derivatives are classified according to Management's intent to use them for hedging purposes or not. Transactions made by customers' request, by Bank´s will, or that are not qualify as hedge accounting, especially derivatives used to manage the global risk exposure, are recorded at market value, with realized and unrealized gains and losses recorded in the income statement for the period.
Individual and Consolidated Financial Statements – March 31, 2019 27
Derivative financial instruments designated as part of a framework of protection against risks (hedge) can be classified as:
I. Fair value hedge; and
II. Cash flow hedge.
Derivatives designated as hedge and the respective hedged items are adjusted to market value, considering the following:
(1) For those classified in category I, the valuation or devaluation is recorded as a counterpart to the appropriate income or expense account, net of tax effects, in the income for the period; and
(2) For those classified in category II, the increase or decrease in their amount of the effective portion is recorded against a separated account in stockholders’ equity, net of tax effects.
Some hybrid financial instruments contain both derivative financial instrument and non-derivative asset or liability. In these cases, the derivative financial instrument represents an embedded derivative. Embedded derivatives are recorded separately from the host contracts.
h) Minimum Requirements in the Process of Financial Instruments Valuation (Securities and Derivatives Financial Instruments)
The CMN Resolution 4,277 of October 31, 2013 (required since June 30, 2015) provides the minimum requirements to be observed in the process of financial instruments valuation measured at market value and on the adoption of prudential adjustments by financial institutions. The financial instruments mentioned in the Resolution includes:
a) Securities classified as trading and available-for-sale, according to the Central Bank´s Circular 3,068 of November 8, 2001;
b) Derivatives Financial Instruments, according to the Central Bank Letter 3,082; of January 30, 2002; and
c) Other financial instruments at fair value, regardless of their classification in the trading portfolio, established in CMN Resolution 3,464 of June 26, 2007.
According to this resolution, the Bank has established procedures to assess the need for adjustments in the value of financial instruments mentioned above, observing the prudential, relevance and reliability criteria. This review includes, among other factors, the credit risk spread in the registration of the market value of these instruments.
i) Loan Portfolio and Allowance for Losses
The loan portfolio includes lending, leasing, advances on exchange contracts and other loans with credit characteristics. It is stated at present value, considering the indexes, interest rates and charges agreed, calculated on a daily pro rata basis through the end of the reporting period. The revenue recognition only occurs when it is actually received for lending operations past due over 60 days.
Normally, the Bank writes off loans losses when they are past due over 360 days. In the case of long-term credit operations (over 3 years) their losses are written off when they complete 540 days late. Credit operations written of as loss are recorded in a compensation account for a minimum of five years and while not exhausted all procedures for collection.
The financial assets involved in credit operations sold without risk retention are written off from the balance sheet, which are now kept in the compensation account. The results of these sales are fully recognized when they are realized.
Since January 2012, as required by CMN Resolution 3,533/2008 and Resolution 3,895/2010, all credit operations sold withsubstantial risk retention will have their results (profit or loss) recognized by the remaining terms of operations, and financial assets involved in these sales shall remain registered as loans and the amount received as obligations for sale operations or transfer of financial assets.
Allowances for loan losses are recognized based on the analysis of outstanding loans and advances (past-due and current), past experience, future expectations, specific portfolio risks, and Management´s risk assessment policy for recognizing allowances, as established by CMN Resolution 2,682/1999.
j) Non-Current Assets Held for Sale and Other Assets
Non-current assets held for sale includes the carrying amount of individual items, disposal groups, or items forming part of a business unit earmarked for disposal (“discontinued operations”), whose sale in their present condition is highly probable and is expected to occur within one year.
Other assets refer mainly to assets not for own use, being composed basically of properties and vehicles received as payment.
Non-current assets held for sale and assets not for own use are generally recorded at the lower amount between the fair value less sale costs and their carrying amount at the date of classification in this category, and they are not depreciated.
Individual and Consolidated Financial Statements – March 31, 2019 28
k) Prepaid Expenses
Funds used in advance payments, whose benefits or services will be provided in future years, are allocated to profit in accordance to the terms of the related agreements.
k.1) Commissions Paid to Banking Correspondents
In accordance with CMN Resolution 4,294 and Central Bank Circular 3,693 issued in December 2013, from January 2015 the commissions paid to intermediate agents responsible for origination of new credit operations are limited to maximum percentages of: (i) 6% of the value of new credit operation originated and (ii) 3% of the transferred value (portability).
Such commissions must be fully recognized as expenses when they are incurred.
l) Permanent Assets
They are stated at acquisition cost, are tested for impairment annually or more frequently if the conditions or circumstances indicate that assets may be impaired, and evaluated considering the following aspects:
l.1) Investments
Adjustments to investments in affiliates and subsidiaries are measured by equity method of accounting and recorded as investments results in affiliates and subsidiaries. Other investments are stated at cost, method reduced to their recoverable value, when applicable.
Change in Scope of Consolidation - Consists of the disposal, acquisition or change of control of an investment.
l.2) Fixed Assets
The depreciation of fixed assets is determined under the straight-line method, based on the following annual rates: buildings - 4%, facilities, furniture, equipment in use, security systems and communications - 10%, data processing systems and vehicles - 20%, and leasehold improvements - 10% or through the maturity of the rental contracts.
l.3) Intangible Assets
Goodwill on acquisition of subsidiaries is amortized until 10 years, based on expected future earnings and it is tested for impairment annually or more frequently if conditions or circumstances indicate that the asset may be impaired.
The rights over the acquisition of payroll services are registered by the amount paid. Those services are related to payroll processing and payroll loans, maintenance of collection portfolio, supplier payment services and other banking services. The amount paid is allocated to income statement according to the terms of the respective agreements.
Software acquisition and development expenses are amortized over a maximum of 5 years.
m) Technical Reserves Related to the Activities of Pensions and Capitalization
Technical reserves are recognized and calculated in accordance with the provisions and criteria established in the National Council of Private Insurance (CNSP) and Superintendence of Private Insurance (Susep).
Technical Reserves to Pensions
Technical provisions are recognized in accordance with the criteria below:
• Mathematical Provisions for Benefits to Grant and Granted (PMBaC and PMBC)
The PMBaC are estimated based on the contributions collected through the financial regime of capitalization. The PMBC represents obligations taken in the form of continued income plans, being constituted based on the actuarial calculations for traditionals types of plans.
• Provision of Related Expenses (PDR)
The PDR is estimated in order to cover expected values related to claims expenses. For structured plans in the financial regime of simple sharing and allocation of cover capital, the provision covers the expenses, applicable and not applicable, related to the settlement of claims or benefits, due to claims incurred, warned or not.
• Provision of Financial Surplus (PEF)
The PEF covers the financial surplus values provisioned, to be used in accordance with the rules of each plan. This provision is calculated considering the return on investments held versus the guaranteed profitability in each plan.
Individual and Consolidated Financial Statements – March 31, 2019 29
• Provision for Redemptions and/or Other Amounts to Regulate (PVR)
It covers the values relating to redemption to regularize, the return of contributions, awards or the requested portability that for whatever reason have not been made yet.
• Complementary Coverage Provision (PCC)
The PCC shall be estimated when the insufficiency is detected in the technical provisions due to the Test of Adequacy of Liabilities (TAP).
Technical Provisions for Capitalization
Technical provisions are elaborated according to the following criteria:
· Mathematical provisions for redemption results from the accumulation of percentages applicable on payments made, capitalized with the interest rate predicted in the plan and updated through the basic yield rate of savings account - Basic Reference Rate (TR);
· Provision for redemption of anticipated securities is estimated from the cancellation for non-payment or redemption request, based on the value of the mathematical provision of redemption estimated at the time of securities cancellation and the provision for redemption of the matured securities is estimated after the end of the securities validity;
· Provision for raffles to be held is estimated based on a percentage of the installment paid and it aims to cover the raffles which the securities will compete, but that they have not been carried out yet. The provision of raffles payable is estimated for the securities raffled, but which have not been paid yet; and
· Administrative expenses provision aims to reflect the present value of future expenses of capitalization securities whose duration extends from the date of its constitution.
n) Employees Benefit Plans
Post-employment benefit plans include the following commitments taken by the Bank: (i) addition to the benefits of public pension plan; and (ii) medical assistance in case of retirement, permanent disability or death of eligible employees, and their direct beneficiaries.
Defined Contribution Plans
Defined benefit plans is the post-employment benefit plan which the Bank and its subsidiaries, as the sponsoring entity pays fixed contributions to a pension fund, not having a legal or constructive obligation to pay additional contributions if the fund does not hold sufficient assets to pay all benefits relating to services provided in the current and in previous periods.
The contributions made in this connection are recognized under personnel expenses in the income statement.
Defined Benefit Plans
Defined benefit plan is the post-employment benefit plan which is not a defined contribution plan and is showed in Note 34. For this type of plan, the sponsoring entity's obligation is to provide the employees with the agreed benefits, assuming the potential actuarial risk that benefits will cost more than expected.
Since January 2013, Banco Santander applies the CPC 33 (R1) which establishes the full recognition in a liability account when actuarial losses recognized (actuarial deficit) will not occur, with the counterpart in a equity´s account (other valuation adjustments).
Main Definitions
- The present value of the defined benefit obligation is the present value of expected future payments required to settle the obligation resulting from employee´s service in the current and past periods, without deducting any plan´s assets.
- Deficit or surplus is: (a) the present value of the defined benefit obligation, minus (b) the fair value of plan´s assets.
- The sponsoring entity may recognize the plan's assets in the balance sheet when they meet the following characteristics: (i) the assets of the fund are sufficient to pay all benefits for plan´s employees or a sponsoring entity´s obligations; or (ii) the assets are returned to the sponsoring entity in order to reimburse it for employee benefits already paid.
- Actuarial gains and losses are changes in present value of defined benefit obligation resulting from: (a) adjustments by experience (the effects of differences between the actuarial assumptions adopted and what has actually occurred); and (b) effects of changes in actuarial assumptions.
Individual and Consolidated Financial Statements – March 31, 2019 30
- Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the current period.
- The past service cost is the change in present value of defined benefit obligation for employee service in prior periods resulting from a change in the plan or reductions in the number of employees covered.
Post-employment benefits are allocated to the income statement in the lines of other operating expenses - actuarial losses - retirement plans (Note 31) and personnel expenses (Note 27).
The defined benefit plans are recorded based on an actuarial study, conducted annually by an external specialized consulting entity and approved by Management at the end of each year to be effective for the subsequent period.
o) Share Based Compensation
The Bank has compensation plans with long-term conditions for acquisition. The main conditions for acquisition are: (1) conditions of service, provided if the participant remains employed during the period of the Plan to acquire a position to exercise their rights; (2) performance conditions, the amount of investment in Certificates of Deposit Shares (Units) exercisable by the participants will be determined according to the result of a performance measurement parameter of the Bank: Total Shareholder Return (TSR) and it may be reduced, if it does not achieve the goals of the Return on Risk Weighted Assets (RoRWA) modifier, comparison between realized and budgeted in each year, as determined by the Board of Directors and (3) market conditions, since some parameters are conditioned to the value of the shares of the Bank. The Bank measures the fair value of the services rendered by reference to the fair value of the equity instruments granted at the grant date, taking into consideration the market conditions for each plan when the fair value is estimated.
Settlement in Share
The fair value of services is measured by reference to the fair value of the equity instruments granted at the grant date, taking into consideration the market conditions for each plan when the fair value is estimated. In order to recognize the staff costs in contrast with the capital reserves during the period covered, as the services are received, it is considered the treatment of conditions of service and the amount recognized for services received over the period of assessment based on the best estimative for the number of equity instruments expected to grant.
Settlement in Cash
For share-based payments settled in cash (in the form of share appreciation), the Bank measures the services rendered and the corresponding liabilities incurred in the fair value appreciation of the shares at grant date and until the liability is settled. The fair value of liability is revaluated at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in the income statement. In order to recognize the staff costs with the counterparty on the wages payable provisions throughout the validity period, reflecting how the services are rendered, the Bank registers the total liability measurement based on the best estimative of the right of the shares appreciation that will be acquired at the end of the validity period and recognizes the value of the services rendered during the validity period based on the best available estimative. Periodically, the Bank evaluates its estimative over the number of stock appreciation rights to be acquired at the end of the grace period.
p) Funding, Notes Issued and Other Liabilities
Financial liabilities instruments are recognized initially at fair value, considered as the trade price. They are subsequently measured at amortized cost with expenses recognized as a financial cost (Note 17.d).
Among the liabilities initial recognition methods, it is important to emphasize those compound financial instruments which are recognized as such due to the fact that they contain both a debt instrument (liability), and an equity component (embedded derivative).
The recognition of a compound instrument consists in a combination of (i) a main instrument, which is recognized as an entity’s genuine liability (debt) and (ii) an equity component (derivative convertible into common shares).
In accordance to the COSIF, the hybrid capital and debt instruments represents obligations of issuers (financial institutions) and should be recorded in specific accounts of the liabilities adjusted according for the effect of exchange rate variation, when denominated in foreign currency. All the yield related to these instruments, such as interest and exchange variation (difference between the functional currency and the currency in which the instrument was denominated) shall be accounted as expenses of the period, in compliance with the accrual basis method.
Related to the stockholders' equity component, your registration occurs at the initial moment based in its fair value, if it is different from zero.
The relevant details of the nature of these compound instruments issued are described in Note 20.
Individual and Consolidated Financial Statements – March 31, 2019 31
q) Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security
Banco Santander and its subsidiaries are involved in judicial and administrative lawsuits related to tax, labor and civil, in the normal course of their activities.
The provisions include legal obligations, judicial and administrative lawsuits related to tax and social security obligations, whose matter is to challenge their legality or constitutionality where, regardless the assessment of their loss probability, the amounts are fully recognized in the financial statements.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate and may be fully or partially reversed or reduced when the financial outflows and obligations relevant to the process are no longer probable, including decay of legal deadlines, among others.
Judicial and administrative provisions are constituted when the risk of loss of the judicial or administrative action is assessed as probable and the amounts involved are measurable with sufficient security, based on the nature, complexity, and history of the actions and the opinion of the internal legal counsel and the best information available. For lawsuits for which the risk of loss is possible, provisions are not recorded and the information is disclosed in the notes to the financial statements (Note 22.h) and for proceedings for which the risk of loss is remote, no disclosure is made.
Contingent assets are not recognized, except when there are guarantees or favorable judicial decisions in lawsuits from the past with the same matter, when no further claims are applicable, characterizing the success in such litigation. Contingent assets with the risk of success as probable, if any, are only disclosed in the financial statements.
In lawsuits with favorable decisions to Santander, the counterparty has the right, in the event of specific legal requirements attended, to file a rescission action within a period determined by current legislation. Rescission actions are considered new lawsuits and will they be evaluated for contingent liability purposes if and when they are filed.
r) Social Integration Program (PIS) and Contribution for the Financing of Social Security (Cofins)
The PIS (0.65%) and COFINS (4.00%) are calculated on the gross revenue related to the main activity of the legal entity. The financial institutions may deduct funding expenses in the establishment of the amount base for calculation. PIS and COFINS expenses are recorded in tax expenses. For non-financial companies the rates are 1.65% for PIS and 7.6% for COFINS.
s) Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)
IRPJ is calculated at the rate of 15% plus a surtax of 10% applied on profit, after adjustments determined by tax legislation. The Social Contribution Tax on Net Profit (CSLL) is calculated at the rate of 15% for financial institutions, insurance and capitalization companies and 9% for other companies, applied on profit, after adjustments required by tax legislation.
Deferred tax credits and liabilities are basically calculated on the temporary differences between the accounting and taxable income, tax losses, negative basis of social contribution and adjustments to market value of securities and derivative financial instruments. The recognition of deferred tax credits and liabilities is made at the rates applicable to the period in which the asset is realized and / or the liability is settled.
According to the current regulation, the tax credits are recognized to the extent that it is probable its recovery with the base of future taxable income generation. The expected realization of the tax credits according to Note 11.b is based on the projections of future earnings supported by a technical study.
t) Interest on shareholders' equity
Published on December 19, 2018, effective as of January 1, 2019, Resolution 4,706 has prospective application and determines procedures for the accounting of capital remuneration. The Resolution decides that Interest on Shareholders 'Equity should be recognized as soon as they are declared or proposed and thus constitute a present obligation at the balance sheet date and, in compliance with this determination, this capital remuneration must be recorded in a specific account in Shareholders' Equity.
u) Impairment
The financial and non-financial assets are measured at the end of each exercise in order to identify evidence of impairment in its accounting value. If there is any indication, the entity shall estimate the recoverable amount of the asset and that loss shall be recognized immediately in the income statement. The recoverable amount of an asset is defined as the highest amount between its fair value net of selling expenses and its value in use.
v) Deferred Income
It refers to income received before the maturity of the underlying obligation and include non-refundable income, primarily related to guarantees provided and credit card annual fees. The allocation to income statement is made in accordance with the terms of the agreements.
Individual and Consolidated Financial Statements – March 31, 2019 32
w) Non-Controlling Interest - Consolidated Stockholders' Equity
The non-controlling interests (minority interests) are reported and highlighted in a separate stockholders' equity of the parent.
x) Financial Guarantees
Resolution CMN 4,512 of July 28, 2016 and Circular Letter Bacen 3,782 of September 19, 2016 established accounting procedures to be applied, determining on the constitution of a provision to cover losses associated with financial guarantees provided in any form, applied prospectively as from January 1, 2017. Losses associated with the likelihood of future disbursements linked to financial guarantees provided are measured in accordance with recognized credit risk management models and practices and based on consistent information and criteria, verifiable. The provision should be sufficient to cover probable losses over the term of the guarantee provided and are evaluated periodically. Provisions related to financial guarantees rendered before January 1, 2017 were recorded as a counterpart to the stockholders' equity account, in accordance with the Resolution and Circular Letter mentioned above.
4. Cash and Cash Equivalents
|
|
| Bank | |||
|
|
| 03/31/2019 | 12/31/2018 | 03/31/2018 | 12/31/2017 |
Cash |
|
| 9,278,518 | 11,358,459 | 10,513,279 | 11,148,561 |
Interbank Investments |
|
| 8,465,804 | 14,496,489 | 11,775,540 | 11,515,820 |
Money Market Investments |
|
| 5,686,619 | 4,925,769 | 7,453,407 | 603,408 |
Interbank Deposits |
|
| 632,858 | 1,702,653 | 1,490,626 | 1,498,280 |
Foreign Currency Investments |
|
| 2,146,327 | 7,868,067 | 2,831,507 | 9,414,132 |
Total |
|
| 17,744,322 | 25,854,948 | 22,288,819 | 22,664,381 |
|
|
|
|
|
|
|
|
|
| Consolidated | |||
|
|
| 03/31/2019 | 12/31/2018 | 03/31/2018 | 12/31/2017 |
Cash |
|
| 9,516,113 | 11,629,112 | 10,658,307 | 11,234,369 |
Interbank Investments |
|
| 8,379,945 | 13,656,870 | 11,347,653 | 11,278,948 |
Money Market Investments |
|
| 5,686,619 | 4,925,769 | 7,523,406 | 673,426 |
Interbank Deposits |
|
| 546,141 | 862,449 | 992,152 | 1,190,802 |
Foreign Currency Investments |
|
| 2,147,185 | 7,868,652 | 2,832,095 | 9,414,720 |
Total |
|
| 17,896,058 | 25,285,982 | 22,005,960 | 22,513,317 |
5. Interbank Investments
Bank | ||||||||||||
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
| Up to |
| From 3 to |
| Over |
|
|
|
|
|
|
|
| 3 Months |
| 12 Months |
| 12 Months |
| Total |
| Total |
Money Market Investments |
| 19,229,771 |
| 8,061,937 |
| - |
| 27,291,708 |
| 45,325,687 | ||
Own Portfolio |
|
|
| 5,686,620 |
| - |
| - |
| 5,686,620 |
| 2,335,670 |
Financial Treasury Bills - LFT |
| 2,400,389 |
| - |
| - |
| 2,400,389 |
| 9,017 | ||
National Treasury Bills - LTN |
| 2,143,678 |
| - |
| - |
| 2,143,678 |
| 703,522 | ||
National Treasury Notes - NTN |
| 1,142,553 |
| - |
| - |
| 1,142,553 |
| 1,623,131 | ||
Third-party Portfolio |
|
| 2,473,381 |
| 2,125,148 |
| - |
| 4,598,529 |
| 14,673,484 | |
National Treasury Bills - LTN |
| 206,548 |
| 150,718 |
| - |
| 357,266 |
| 3,787,598 | ||
National Treasury Notes - NTN |
| 2,266,833 |
| 1,974,430 |
| - |
| 4,241,263 |
| 10,885,886 | ||
Sold Position |
|
|
| 11,069,770 |
| 5,936,789 |
| - |
| 17,006,559 |
| 28,316,533 |
National Treasury Bills - LTN |
| 3,170,866 |
| 181,382 |
| - |
| 3,352,248 |
| 10,073,521 | ||
National Treasury Notes - NTN |
| 7,898,904 |
| 5,755,407 |
| - |
| 13,654,311 |
| 18,243,012 | ||
Interbank Deposits |
|
| 9,514,240 |
| 23,286,205 |
| 27,538,067 |
| 60,338,512 |
| 61,302,911 | |
Foreign Currency Investments |
| 2,146,327 |
| - |
| - |
| 2,146,327 |
| 7,868,067 | ||
Total |
|
|
| 30,890,338 |
| 31,348,142 |
| 27,538,067 |
| 89,776,547 |
| 114,496,665 |
Individual and Consolidated Financial Statements – March 31, 2019 33
Consolidated | ||||||||||||
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
| Up to |
| From 3 to |
| Over |
|
|
|
|
|
|
|
| 3 Months |
| 12 Months |
| 12 Months |
| Total |
| Total |
Money Market Investments |
| 19,229,770 |
| 8,061,938 |
| - |
| 27,291,708 |
| 44,825,827 | ||
Own Portfolio |
|
|
| 5,686,620 |
| - |
| - |
| 5,686,620 |
| 2,835,809 |
Financial Treasury Bills - LFT |
| 2,400,389 |
| - |
| - |
| 2,400,389 |
| 9,017 | ||
National Treasury Bills - LTN |
| 2,143,678 |
| - |
| - |
| 2,143,678 |
| 1,703,521 | ||
National Treasury Notes - NTN |
| 1,142,553 |
| - |
| - |
| 1,142,553 |
| 1,123,271 | ||
Third-party Portfolio |
|
| 2,473,381 |
| 2,125,148 |
| - |
| 4,598,529 |
| 13,673,485 | |
National Treasury Bills - LTN |
| 206,548 |
| 150,718 |
| - |
| 357,266 |
| 2,787,599 | ||
National Treasury Notes - NTN |
| 2,266,833 |
| 1,974,430 |
| - |
| 4,241,263 |
| 10,885,886 | ||
Sold Position |
|
|
| 11,069,769 |
| 5,936,790 |
| - |
| 17,006,559 |
| 28,316,533 |
National Treasury Bills - LTN |
| 3,170,865 |
| 181,382 |
| - |
| 3,352,247 |
| 10,073,521 | ||
National Treasury Notes - NTN |
| 7,898,904 |
| 5,755,408 |
| - |
| 13,654,312 |
| 18,243,012 | ||
Interbank Deposits |
|
| 1,217,940 |
| 2,538,988 |
| 435,845 |
| 4,192,773 |
| 4,117,752 | |
Foreign Currency Investments |
| 2,147,185 |
| - |
| - |
| 2,147,185 |
| 7,868,652 | ||
Total |
|
|
| 22,594,895 |
| 10,600,926 |
| 435,845 |
| 33,631,666 |
| 56,812,231 |
6. Securities and Derivatives Financial Instruments
a) Securities
I) By Category
Bank | ||||||
|
|
|
|
| 03/31/2019 | 12/31/2018 |
| Amortized | Effect of Adjustment to | Carrying | Carrying | ||
|
| Cost | Income | Equity | Amount | Amount |
Trading Securities |
| 34,270,409 | 165,643 | - | 34,436,052 | 47,827,195 |
Government Securities |
| 33,726,864 | 157,391 | - | 33,884,255 | 47,282,124 |
Private Securities |
| 543,545 | 8,252 | - | 551,797 | 545,071 |
Available-for-Sale Securities |
| 116,380,224 | 1,042,214 | 3,173,249 | 120,595,687 | 106,498,971 |
Government Securities |
| 91,753,904 | 1,001,383 | 2,718,648 | 95,473,935 | 82,478,707 |
Private Securities |
| 24,626,320 | 40,831 | 454,601 | 25,121,752 | 24,020,264 |
Held-to-Maturity Securities |
| 11,301,925 | - | - | 11,301,925 | 11,256,327 |
Government Securities |
| 11,301,925 | - | - | 11,301,925 | 11,256,327 |
Total Securities |
| 161,952,558 | 1,207,857 | 3,173,249 | 166,333,664 | 165,582,493 |
Consolidated | ||||||
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
| Amortized | Effect of Adjustment to | Carrying | Carrying | |
|
| Cost | Income | Equity | Amount | Amount |
Trading Securities |
| 39,940,623 | 587,833 | - | 40,528,456 | 54,001,557 |
Government Securities |
| 37,381,647 | 524,854 | - | 37,906,501 | 51,909,118 |
Private Securities |
| 2,558,976 | 62,979 | - | 2,621,955 | 2,092,439 |
Available-for-Sale Securities |
| 119,929,567 | 1,256,673 | 3,179,742 | 124,365,982 | 111,179,802 |
Government Securities |
| 96,850,463 | 1,215,842 | 2,725,054 | 100,791,359 | 88,337,847 |
Private Securities |
| 23,079,104 | 40,831 | 454,688 | 23,574,623 | 22,841,955 |
Held-to-Maturity Securities |
| 11,301,925 | - | - | 11,301,925 | 11,256,327 |
Government Securities |
| 11,301,925 | - | - | 11,301,925 | 11,256,327 |
Total Securities |
| 171,172,115 | 1,844,506 | 3,179,742 | 176,196,363 | 176,437,686 |
Individual and Consolidated Financial Statements – March 31, 2019 34
II) Trading Securities
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
| Consolidated | ||
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
| Adjustment |
|
|
|
|
|
|
| Adjustment |
|
|
|
|
|
|
| Amortized |
| to Fair Value - |
| Carrying |
| Carrying |
| Amortized |
| to Fair Value - |
| Carrying |
| Carrying |
Trading Securities |
|
| Cost |
| Income |
| Amount |
| Amount |
| Cost |
| Income |
| Amount |
| Amount |
Government Securities |
|
| 33,726,864 |
| 157,391 |
| 33,884,255 |
| 47,282,124 |
| 37,381,647 |
| 524,854 |
| 37,906,501 |
| 51,909,118 |
Financial Treasury Bills - LFT | 1,085,729 |
| 238 |
| 1,085,967 |
| 2,158,662 |
| 3,102,315 |
| 153,339 |
| 3,255,654 |
| 5,070,617 | ||
National Treasury Bills - LTN | 10,244,245 |
| 10,011 |
| 10,254,256 |
| 15,633,571 |
| 10,244,245 |
| 10,011 |
| 10,254,256 |
| 15,633,571 | ||
National Treasury Notes - NTN | 21,894,520 |
| 143,089 |
| 22,037,609 |
| 28,976,194 |
| 23,532,717 |
| 357,451 |
| 23,890,168 |
| 30,691,233 | ||
Agricultural Debt Securities - TDA | 112,478 |
| 3,315 |
| 115,793 |
| 126,519 |
| 112,478 |
| 3,315 |
| 115,793 |
| 126,519 | ||
Brazilian Foreign Debt Notes | 389,892 |
| 738 |
| 390,630 |
| 387,178 |
| 389,892 |
| 738 |
| 390,630 |
| 387,178 | ||
Private Securities |
|
| 543,545 |
| 8,252 |
| 551,797 |
| 545,071 |
| 2,558,976 |
| 62,979 |
| 2,621,955 |
| 2,092,439 |
Shares |
|
| 6 |
| - |
| 6 |
| 4,211 |
| 182,703 |
| 53,731 |
| 236,434 |
| 589,647 |
Investment Fund Shares |
|
| - |
| - |
| - |
| 130,528 |
| 769,616 |
| - |
| 769,616 |
| - |
Investment Fund Real Estate | - |
| - |
| - |
| - |
| 54,306 |
| 996 |
| 55,302 |
| 625 | ||
Debentures (1) |
|
| 364,445 |
| 7,773 |
| 372,218 |
| 274,988 |
| 1,372,496 |
| 7,773 |
| 1,380,269 |
| 1,161,466 |
Eurobonds |
|
| 3,978 |
| 121 |
| 4,099 |
| - |
| 3,978 |
| 121 |
| 4,099 |
| - |
Certificates of Real Estate Receivables - CRI | 20,552 |
| 22 |
| 20,574 |
| - |
| 20,552 |
| 22 |
| 20,574 |
| - | ||
Certificates of Agribusiness Receivables - CRA | 132,483 |
| 333 |
| 132,816 |
| 135,344 |
| 132,483 |
| 333 |
| 132,816 |
| 135,344 | ||
Financial Bills |
|
| 22,081 |
| 3 |
| 22,084 |
| - |
| 22,081 |
| 3 |
| 22,084 |
| - |
Certificates of Time Deposits - CDB | - |
| - |
| - |
| - |
| 239 |
| - |
| 239 |
| 205,357 | ||
Others |
|
| - |
| - |
| - |
| - |
| 522 |
| - |
| 522 |
| - |
Total |
|
| 34,270,409 |
| 165,643 |
| 34,436,052 |
| 47,827,195 |
| 39,940,623 |
| 587,833 |
| 40,528,456 |
| 54,001,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
Trading Securities |
|
|
|
|
|
| Without |
| Up to |
| From 3 to |
| From 1 to |
| Over |
|
|
by Maturity |
|
|
|
|
|
| Maturity |
| 3 Months |
| 12 Months |
| 3 Years |
| 3 Years |
| Total |
Government Securities |
|
|
|
|
|
| - |
| 9,806,502 |
| 1,767,942 |
| 8,192,726 |
| 14,117,085 |
| 33,884,255 |
Financial Treasury Bills - LFT |
|
|
|
| - |
| - |
| 227,866 |
| 171,249 |
| 686,852 |
| 1,085,967 | ||
National Treasury Bills - LTN |
|
|
|
| - |
| 5,022,289 |
| 1,231,373 |
| 3,108,546 |
| 892,048 |
| 10,254,256 | ||
National Treasury Notes - NTN |
|
|
|
| - |
| 4,621,892 |
| 20,259 |
| 4,879,908 |
| 12,515,550 |
| 22,037,609 | ||
Agricultural Debt Securities - TDA |
|
|
| - |
| 6,719 |
| 53,837 |
| 33,020 |
| 22,217 |
| 115,793 | |||
Brazilian Foreign Debt Securities |
|
|
|
| - |
| 155,602 |
| 234,607 |
| 3 |
| 418 |
| 390,630 | ||
Private Securities |
|
|
|
|
|
| 6 |
| 3,330 |
| 157 |
| 10,553 |
| 537,751 |
| 551,797 |
Shares |
|
|
|
|
|
| 6 |
| - |
| - |
| - |
| - |
| 6 |
Investment Fund Shares |
|
|
|
|
|
| - |
| - |
| - |
| - |
| - |
| - |
Certificates of Real Estate Receivables - CRI |
|
|
| - |
| 200 |
| - |
| - |
| 20,374 |
| 20,574 | |||
Eurobonds |
|
|
|
|
|
| - |
| - |
| - |
| 4,099 |
| - |
| 4,099 |
Financial Bills |
|
|
|
|
|
| - |
| - |
| - |
| 2,014 |
| 20,070 |
| 22,084 |
Debentures (1) |
|
|
|
|
|
| - |
| - |
| - |
| 647 |
| 371,571 |
| 372,218 |
Certificates of Agribusiness Receivables - CRA |
| - |
| 3,130 |
| 157 |
| 3,793 |
| 125,736 |
| 132,816 | |||||
Total |
|
|
|
|
|
| 6 |
| 9,809,832 |
| 1,768,099 |
| 8,203,279 |
| 14,654,836 |
| 34,436,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
Trading Securities |
|
|
|
|
|
| Without |
| Up to |
| From 3 to |
| From 1 to |
| Over |
|
|
by Maturity |
|
|
|
|
|
| Maturity |
| 3 Months |
| 12 Months |
| 3 Years |
| 3 Years |
| Total |
Government Securities |
|
|
|
|
|
| - |
| 9,806,502 |
| 1,782,254 |
| 11,188,747 |
| 15,128,998 |
| 37,906,501 |
Financial Treasury Bills - LFT |
|
|
|
| - |
| - |
| 242,178 |
| 1,314,710 |
| 1,698,766 |
| 3,255,654 | ||
National Treasury Bills - LTN |
|
|
|
| - |
| 5,022,289 |
| 1,231,373 |
| 3,108,546 |
| 892,048 |
| 10,254,256 | ||
National Treasury Notes - NTN |
|
|
|
| - |
| 4,621,892 |
| 20,258 |
| 6,732,468 |
| 12,515,550 |
| 23,890,168 | ||
Agricultural Debt Securities - TDA |
|
|
| - |
| 6,719 |
| 53,837 |
| 33,020 |
| 22,217 |
| 115,793 | |||
Brazilian Foreign Debt Notes |
|
|
|
| - |
| 155,602 |
| 234,608 |
| 3 |
| 417 |
| 390,630 | ||
Private Securities |
|
|
|
|
|
| 772,375 |
| 3,852 |
| 396 |
| 10,553 |
| 1,834,779 |
| 2,621,955 |
Shares |
|
|
|
|
|
| 236,434 |
| - |
| - |
| - |
| - |
| 236,434 |
Investment Fund Real Estate |
|
|
|
| 55,302 |
| - |
| - |
| - |
| - |
| 55,302 | ||
Investment Fund Shares |
|
|
|
|
|
| 480,639 |
| - |
| - |
| - |
| 288,977 |
| 769,616 |
Debentures (1) |
|
|
|
|
|
| - |
| - |
| - |
| 647 |
| 1,379,622 |
| 1,380,269 |
Certificates of Agribusiness Receivables - CRA |
| - |
| 3,130 |
| 157 |
| 3,793 |
| 125,736 |
| 132,816 | |||||
Certificates of Real Estate Receivables - CRI |
|
|
| - |
| 200 |
| - |
| - |
| 20,374 |
| 20,574 | |||
Financial Bills |
|
|
|
|
|
| - |
| - |
| - |
| 2,014 |
| 20,070 |
| 22,084 |
Eurobonds |
|
|
|
|
|
| - |
| - |
| - |
| 4,099 |
| - |
| 4,099 |
Others |
|
|
|
|
|
| - |
| 522 |
| - |
| - |
| - |
| 522 |
Certificates of Time Deposits - CDB |
|
|
| - |
| - |
| 239 |
| - |
| - |
| 239 | |||
Total |
|
|
|
|
|
| 772,375 |
| 9,810,354 |
| 1,782,650 |
| 11,199,300 |
| 16,963,777 |
| 40,528,456 |
Individual and Consolidated Financial Statements – March 31, 2019 35
III) Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| Amortized |
|
|
| Fair Value on: |
| Carrying |
| Carrying |
Available-for-Sale Securities |
|
|
|
|
|
| Cost |
| Income |
| Equity |
| Amount |
| Amount | ||
Government Securities |
|
|
|
|
|
|
|
| 91,753,904 |
| 1,001,383 |
| 2,718,648 |
| 95,473,935 |
| 82,478,707 |
Treasury Certificates - CFT |
|
|
|
|
|
| 848 |
| - |
| 194 |
| 1,042 |
| 1,007 | ||
Securitized Credit |
|
|
|
|
|
|
|
| 1,173 |
| - |
| 101 |
| 1,274 |
| 1,446 |
Financial Treasury Bills - LFT |
|
|
|
|
|
| 10,675,654 |
| - |
| 5,822 |
| 10,681,476 |
| 9,390,914 | ||
National Treasury Bills - LTN |
|
|
|
|
|
| 33,712,969 |
| 302,796 |
| 570,127 |
| 34,585,892 |
| 36,883,802 | ||
National Treasury Notes - NTN A |
|
|
|
|
| 37,786,907 |
| 698,587 |
| 2,098,449 |
| 40,583,943 |
| 32,338,196 | |||
Mexican Foreign Debt Bonds |
|
|
|
|
|
| 1,912,227 |
| - |
| 79,069 |
| 1,991,296 |
| - | ||
Spanish Foreign Debt Bonds |
|
|
|
|
|
| 7,664,126 |
| - |
| (35,114) |
| 7,629,012 |
| 3,863,342 | ||
Private Securities |
|
|
|
|
|
|
|
| 24,626,320 |
| 40,831 |
| 454,601 |
| 25,121,752 |
| 24,020,264 |
Shares |
|
|
|
|
|
|
|
| 46 |
| - |
| - |
| 46 |
| 50 |
Investment Fund Shares in Participation - FIP (2) |
|
|
| 23,084 |
| - |
| - |
| 23,084 |
| 23,074 | |||||
Investment Fund Shares |
|
|
|
|
|
|
| 965,956 |
| - |
| - |
| 965,956 |
| 1,332,021 | |
Investment Fund Real Estate |
|
|
|
|
|
| 403,461 |
| - |
| (11,831) |
| 391,630 |
| - | ||
Debentures (1) |
|
|
|
|
|
| 9,634,439 |
| 40,831 |
| 490,468 |
| 10,165,738 |
| 9,871,056 | ||
Eurobonds |
|
|
|
|
|
|
|
| 2,690,674 |
| - |
| 24,983 |
| 2,715,657 |
| 2,331,017 |
Promissory Notes - NP |
|
|
|
|
|
|
|
| 6,007,005 |
| - |
| (8,016) |
| 5,998,989 |
| 6,625,314 |
Financial Bills - LF |
|
|
|
|
|
|
|
| 238,162 |
| - |
| 1,348 |
| 239,510 |
| 236,368 |
Certificates of Real Estate Receivables - CRI |
|
|
|
|
| 135,394 |
| - |
| (11,366) |
| 124,028 |
| 151,618 | |||
Rural Product Note - CPR |
|
|
|
|
|
| 4,528,099 |
| - |
| (30,985) |
| 4,497,114 |
| 3,449,746 | ||
Total |
|
|
|
|
|
|
|
| 116,380,224 |
| 1,042,214 |
| 3,173,249 |
| 120,595,687 |
| 106,498,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| Amortized |
|
|
| Fair Value on: |
| Carrying |
| Carrying |
Available-for-Sale Securities |
|
|
|
|
|
| Cost |
| Income |
| Equity |
| Amount |
| Amount | ||
Government Securities |
|
|
|
|
|
|
|
| 96,850,463 |
| 1,215,842 |
| 2,725,054 |
| 100,791,359 |
| 88,337,847 |
Treasury Certificates - CFT |
|
|
|
|
|
| 848 |
| - |
| 194 |
| 1,042 |
| 1,007 | ||
Securitized Credit |
|
|
|
|
|
|
|
| 1,173 |
| - |
| 101 |
| 1,274 |
| 1,446 |
Financial Treasury Bills - LFT (3) |
|
|
|
|
|
| 12,770,144 |
| 97 |
| 6,783 |
| 12,777,024 |
| 12,180,134 | ||
National Treasury Bills - LTN |
|
|
|
|
|
| 34,776,727 |
| 302,796 |
| 570,127 |
| 35,649,650 |
| 37,855,695 | ||
National Treasury Notes - NTN |
|
|
|
|
|
| 39,725,218 |
| 912,949 |
| 2,103,894 |
| 42,742,061 |
| 34,436,223 | ||
Mexican Foreign Debt Bonds |
|
|
|
|
|
| 1,912,227 |
| - |
| 79,069 |
| 1,991,296 |
| - | ||
Spanish Foreign Debt Bonds |
|
|
|
|
|
| 7,664,126 |
| - |
| (35,114) |
| 7,629,012 |
| 3,863,342 | ||
Private Securities |
|
|
|
|
|
|
|
| 23,079,104 |
| 40,831 |
| 454,688 |
| 23,574,623 |
| 22,841,955 |
Shares |
|
|
|
|
|
|
|
| 5,393 |
| - |
| - |
| 5,393 |
| 5,398 |
Investment Fund Shares in Participation - FIP (2) |
|
|
| 23,084 |
| - |
| - |
| 23,084 |
| 23,074 | |||||
Investment Fund Shares |
|
|
|
|
|
|
| 304,970 |
| - |
| - |
| 304,970 |
| 156,306 | |
Investment Fund Real Estate |
|
|
|
|
|
| 61,603 |
| - |
| (11,744) |
| 49,859 |
| 65,983 | ||
Debentures (1) |
|
|
|
|
|
|
|
| 9,038,932 |
| 40,831 |
| 490,468 |
| 9,570,231 |
| 9,792,922 |
Eurobonds |
|
|
|
|
|
|
|
| 2,690,673 |
| - |
| 24,983 |
| 2,715,656 |
| 2,331,017 |
Promissory Notes - NP |
|
|
|
|
|
|
|
| 6,007,005 |
| - |
| (8,016) |
| 5,998,989 |
| 6,625,314 |
Foreign Exchange Bills - LC |
|
|
|
|
|
| - |
| - |
| - |
| - |
| - | ||
Financial Bills - LF |
|
|
|
|
|
|
|
| 238,162 |
| - |
| 1,348 |
| 239,510 |
| 236,368 |
Certificates of Real Estate Receivables - CRI |
|
|
|
|
| 135,395 |
| - |
| (11,366) |
| 124,029 |
| 151,618 | |||
Certificates of Time Deposits - CDB |
|
|
|
|
| 45,788 |
| - |
| - |
| 45,788 |
| 4,209 | |||
Rural Product Note - CPR |
|
|
|
|
|
| 4,528,099 |
| - |
| (30,985) |
| 4,497,114 |
| 3,449,746 | ||
Total |
|
|
|
|
|
|
|
| 119,929,567 |
| 1,256,673 |
| 3,179,742 |
| 124,365,982 |
| 111,179,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
Available-for-Sale Securities |
|
|
|
| Without |
| Up to |
| From 3 to |
| From 1 to |
| Over |
|
| ||
by Maturity |
|
|
|
|
|
| Maturity |
| 3 Months |
| 12 Months |
| 3 Years |
| 3 Years |
| Total |
Government Securities |
|
|
|
|
|
| - |
| 9,227,907 |
| 14,051,925 |
| 26,693,443 |
| 45,500,660 |
| 95,473,935 |
Treasury Certificates - CFT |
|
|
|
| - |
| - |
| - |
| 1,042 |
| - |
| 1,042 | ||
Securitized Credit |
|
|
|
|
|
| - |
| 179 |
| 408 |
| 687 |
| - |
| 1,274 |
Financial Treasury Bills - LFT |
|
|
|
| - |
| - |
| - |
| 2,992,866 |
| 7,688,610 |
| 10,681,476 | ||
National Treasury Bills - LTN |
|
|
|
| - |
| 9,227,728 |
| 4,431,209 |
| 20,926,955 |
| - |
| 34,585,892 | ||
National Treasury Notes - NTN |
|
|
|
| - |
| - |
| - |
| 2,771,893 |
| 37,812,050 |
| 40,583,943 | ||
Mexican Foreign Debt Bonds |
|
|
|
| - |
| - |
| 1,991,296 |
| - |
| - |
| 1,991,296 | ||
Spanish Foreign Debt Bonds |
|
|
|
| - |
| - |
| 7,629,012 |
| - |
| - |
| 7,629,012 | ||
Private Securities |
|
|
|
|
|
| 1,380,716 |
| 1,839,994 |
| 6,473,850 |
| 7,525,421 |
| 7,901,771 |
| 25,121,752 |
Shares |
|
|
|
|
|
| 46 |
| - |
| - |
| - |
| - |
| 46 |
Investment Fund Shares in Participation - FIP (2) |
| 23,084 |
| - |
| - |
| - |
| - |
| 23,084 | |||||
Investment Fund Shares |
|
|
|
|
| 965,956 |
| - |
| - |
| - |
| - |
| 965,956 | |
Investment Fund Real Estate |
|
|
|
| 391,630 |
| - |
| - |
| - |
| - |
| 391,630 | ||
Debentures (1) |
|
|
|
|
|
| - |
| 53,543 |
| 890,083 |
| 3,062,713 |
| 6,159,399 |
| 10,165,738 |
Eurobonds |
|
|
|
|
|
| - |
| 329,430 |
| 2,385,916 |
| - |
| 311 |
| 2,715,657 |
Promissory Notes - NP |
|
|
|
|
|
| - |
| 1,031,372 |
| 1,168,170 |
| 3,338,979 |
| 460,468 |
| 5,998,989 |
Financial Bills - LF |
|
|
|
|
|
| - |
| - |
| 55,086 |
| 184,424 |
| - |
| 239,510 |
Certificates of Real Estate Receivables - CRI |
|
|
| - |
| - |
| - |
| 117,264 |
| 6,764 |
| 124,028 | |||
Rural Product Note - CPR |
|
|
|
| - |
| 425,649 |
| 1,974,595 |
| 822,041 |
| 1,274,829 |
| 4,497,114 | ||
Total |
|
|
|
|
|
| 1,380,716 |
| 11,067,901 |
| 20,525,775 |
| 34,218,864 |
| 53,402,431 |
| 120,595,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
Available-for-Sale Securities |
|
|
|
| Without |
| Up to |
| From 3 to |
| From 1 to |
| Over |
|
| ||
by Maturity |
|
|
|
|
|
| Maturity |
| 3 Months |
| 12 Months |
| 3 Years |
| 3 Years |
| Total |
Government Securities |
|
|
|
|
|
| - |
| 10,272,021 |
| 14,534,029 |
| 29,221,303 |
| 46,764,006 |
| 100,791,359 |
Treasury Certificates - CFT |
|
|
|
| - |
| - |
| - |
| 1,042 |
| - |
| 1,042 | ||
Securitized Credit |
|
|
|
|
|
| - |
| 179 |
| 408 |
| 687 |
| - |
| 1,274 |
Financial Treasury Bills - LFT (3) |
|
|
|
| - |
| 1,044,114 |
| 271,061 |
| 3,221,645 |
| 8,240,204 |
| 12,777,024 | ||
National Treasury Bills - LTN |
|
|
|
| - |
| 9,227,728 |
| 4,603,574 |
| 21,483,924 |
| 334,424 |
| 35,649,650 | ||
National Treasury Notes - NTN |
|
|
|
| - |
| - |
| 38,678 |
| 4,514,005 |
| 38,189,378 |
| 42,742,061 | ||
Mexican Foreign Debt Bonds |
|
|
|
| - |
| - |
| 1,991,296 |
| - |
| - |
| 1,991,296 | ||
Spanish Foreign Debt Bonds |
|
|
|
| - |
| - |
| 7,629,012 |
| - |
| - |
| 7,629,012 | ||
Private Securities |
|
|
|
|
|
| 383,306 |
| 1,839,994 |
| 6,519,638 |
| 6,929,914 |
| 7,901,771 |
| 23,574,623 |
Shares |
|
|
|
|
|
| 5,393 |
| - |
| - |
| - |
| - |
| 5,393 |
Investment Fund Shares in Participation - FIP (2) |
| 23,084 |
| - |
| - |
| - |
| - |
| 23,084 | |||||
Investment Fund Shares |
|
|
|
|
| 304,970 |
| - |
| - |
| - |
| - |
| 304,970 | |
Investment Fund Shares |
|
|
|
|
| 49,859 |
| - |
| - |
| - |
| - |
| 49,859 | |
Debentures (1) |
|
|
|
|
|
| - |
| 53,543 |
| 890,083 |
| 2,467,206 |
| 6,159,399 |
| 9,570,231 |
Eurobonds |
|
|
|
|
|
| - |
| 329,430 |
| 2,385,916 |
| - |
| 310 |
| 2,715,656 |
Promissory Notes - NP |
|
|
|
|
|
| - |
| 1,031,372 |
| 1,168,170 |
| 3,338,979 |
| 460,468 |
| 5,998,989 |
Financial Bills - LF |
|
|
|
|
|
| - |
| - |
| 55,086 |
| 184,424 |
| - |
| 239,510 |
Certificates of Real Estate Receivables - CRI |
|
|
| - |
| - |
| - |
| 117,264 |
| 6,765 |
| 124,029 | |||
Certificates of Time Deposits - CDB |
|
|
| - |
| - |
| 45,788 |
| - |
| - |
| 45,788 | |||
Rural Product Note - CPR |
|
|
|
| - |
| 425,649 |
| 1,974,595 |
| 822,041 |
| 1,274,829 |
| 4,497,114 | ||
Total |
|
|
|
|
|
| 383,306 |
| 12,112,015 |
| 21,053,667 |
| 36,151,217 |
| 54,665,777 |
| 124,365,982 |
Individual and Consolidated Financial Statements – March 31, 2019 36
(1) In the Bank and Consolidated, includes securities issued by mixed-capital companies in the amount of R$0 (12/31/2018 - R$7) in securities for trading and R$613,046 (12/31/2018 - R$548,743) in available-for-sale securities.
(2) Investments are carried out at the fair value of the resources Investments that should reflect as market conditions, it is not a moment of their measurement, it is not an initial process of adhesion, presentation of the financial statements or information on the equity of the Fund are disclosed. For the market, the measurement of the fair value of the investments must be established in a consistent and verifiable manner. In cases where you are the investment trustee, the fair value of an entity is not reliably measurable, the cost value can be used until it is practicable to measure the fair value on a reliable basis, and must be disclosed in Note explanatory statement, the reasons that led to the conclusion of the fair value are not reliably measurable, together with a summary of the condensed financial statements of these funds.
(3) On December, 2018, management decided to change the classification of Financial Treasury Bills – LFT, of the securities portfolio of Getnet Adquirência e Serviços para Meios de Pagamento S.A. (Getnet SA), Banco Bandepe SA and Santander Corretora de Cambio e Valores Mobiliários S.A. (Santander CCVM). The securities were transferred from the Trading to Available for Sale category, in the amounts of R$739,430, R$14,099 and R$375,488, respectively. Such transfers did not impact the amounts of Consolidated and also did not generate effect on the result. The change in the category occurred due to the revaluation of the recent trading history of these assets.
(4) On March 31, 2019, the quantity of 1,040,000 in the amount of R$1,235,908 (12/31/2018 - 1,040,000 in the amount of R$1,244,672) Notes National Treasury - NTN are bound by the obligation assumed by Banco Santander to hedge the unamortized reserves Plan V of the Social Security Fund (Banesprev).
IV) Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
|
|
| Bank/Consolidated | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| By Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortized Cost |
|
|
|
|
| From 1 to |
| Over |
|
|
Held-to-Maturity Securities (1) |
|
| 03/31/2019 |
| 12/31/2018 |
| Up to 3 Months |
| From 3 to 12 Months | 3 Years |
| 3 Years |
| Total | |||
Government Securities |
|
|
|
| 11,301,925 |
| 11,256,327 |
| - |
| 432,469 |
| 1,368,931 |
| 9,500,525 |
| 11,301,925 |
National Treasury Notes - NTN |
|
| 3,385,172 |
| 3,336,462 |
| - |
| - |
| - |
| 3,385,172 |
| 3,385,172 | ||
Brazilian Foreign Debt Bonds |
|
| 7,916,753 |
| 7,919,865 |
| - |
| 432,469 |
| 1,368,931 |
| 6,115,353 |
| 7,916,753 | ||
Total |
|
|
|
| 11,301,925 |
| 11,256,327 |
| - |
| 432,469 |
| 1,368,931 |
| 9,500,525 |
| 11,301,925 |
Individual and Consolidated Financial Statements – March 31, 2019 37
(1) The fair value of held to maturity securities is R$12,460,004 (12/31/2018 - R$12,131,544).
For the first quarter of 2019, there were no changes in the federal public securities and other securities classified as held to maturity.
Given the provisions of Article 5 of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity securities classified as held-to-maturity.
The market value of securities is estimated based on the average quotation on organized markets and their estimated cash flows, discounted to present value using the applicable interest rate curves, considered as representative of market conditions at the end of balance.
V) Financial Income - Securities Transactions
|
| Bank |
| Consolidated |
| 01/01 to | 01/01 to | 01/01 to | 01/01 to |
| ||||
Income From Fixed-Income Securities (1) | 4,404,244 | 5,230,481 | 4,678,639 | 5,039,908 |
Income From Interbank Investments | 2,220,160 | 2,293,488 | 1,125,857 | 1,236,106 |
Income From Variable-Income Securities | 14,852 | (34,347) | (79,737) | 12,926 |
Financial Income of Pension and Capitalization | - | - | 33,339 | 32,846 |
Provision for Impairment Losses (2) | (54,854) | (51,348) | (54,854) | (51,348) |
Others (3) | (133,349) | (116,736) | (147,325) | (112,102) |
Total | 6,451,053 | 7,321,538 | 5,555,919 | 6,158,336 |
(1) Includes exchange variation income in the amount of R$473,791 in the Bank and Consolidated (2018 – expense of R$343,715 in the Bank and R$360,303 in the Consolidated).
(2) Includes exchange variation expense in the amount of R$1,074 in the Bank and Consolidated.
(3) Corresponds to the permanent loss record, referring to securities classified as available for sale.
(4) Includes exchange variation expense in the amount of R$144,262 in the Bank and Consolidated (2018 - expense of R$143,888 in the Bank and Consolidated), and net valuation of quotas of investment funds and participation.
b) Derivatives Financial Instruments
The main risk factors associated to derivatives contracted are related to exchange rates, interest rates and stocks. To manage these and other market risk factors the Bank uses practices which include the measurement and follow up of the limit´s usage previously defined on internal committees, as well as the daily follow up of the portfolios values in risk, sensitivities and changes in the interest rate and exchange exposure, liquidity gaps, among other practices which allow the control and follow up on the main risk metrics that can affect the Bank´s position in the several markets which it acts. Based on this management model, the Bank has accomplished its goal, using operations with derivatives, in optimize the relation risk/benefits even in situation with great volatility.
The derivatives fair value is determined through quotation of market prices. The swaps contracts fair value is determined using discounted cash flow modeling techniques, reflecting suitable risk factors. The fair value of NDF and Future contracts are also determined based on the quotation of market prices for derivatives traded in specific chamber or using the same methodology applied for swap contracts. The fair value of options derivatives is determined based on the mathematical models, such as Black & Scholes, using yield rates, implied volatilities and the fair value of the corresponding asset. The current market prices are used to price the volatilities. For the derivatives which do not have prices directly disclosed by specific chamber, their fair values are obtained through pricing models which use market information, based on disclosed prices of more liquid assets. Interest rate curves and market volatilities are extracted from theses prices to be used as first input in these models.
Individual and Consolidated Financial Statements – March 31, 2019 38
I) Summary of Derivative Financial Instruments
The composition of the Derivative Financial Instruments portfolio (Assets and Liabilities) by type of instrument, at market value:
|
|
|
|
| Bank | Consolidated | |
|
|
|
| 03/31/2019 | 12/31/2018 | 03/31/2019 | 12/31/2018 |
Assets |
|
|
|
|
|
|
|
Swap Differentials Receivable |
| 7,306,652 | 6,806,838 | 15,186,543 | 14,730,123 | ||
Option Premiums to Exercise |
| 431,556 | 558,123 | 650,440 | 716,936 | ||
Forward Contracts and Others |
| 3,396,950 | 2,526,669 | 3,443,700 | 2,579,936 | ||
Total |
|
|
| 11,135,158 | 9,891,630 | 19,280,683 | 18,026,995 |
Liabilities |
|
|
|
|
|
| |
Swap Differentials Payable |
| 8,863,695 | 8,038,706 | 17,069,290 | 16,180,410 | ||
Option Premiums Launched |
| 391,307 | 489,055 | 542,102 | 563,787 | ||
Forward Contracts and Others |
| 3,132,326 | 2,156,206 | 3,129,534 | 2,156,206 | ||
Total |
|
|
| 12,387,329 | 10,683,967 | 20,740,926 | 18,900,403 |
II) Derivatives Recorded in Memorandum Accounts and Balance Sheets
|
|
|
|
| Bank | ||
|
|
|
| 03/31/2019 |
|
| 12/31/2018 |
|
|
|
| Trading |
|
| Trading |
|
| Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value |
Swap |
| - | (938,934) | (1,556,510) | - | 1,246,249 | (1,230,580) |
Assets |
| 320,478,336 | 205,474,256 | 205,149,856 | 134,091,933 | 47,175,506 | 46,930,074 |
CDI (Interbank Deposit Rates) | 49,466,696 | 16,040,489 | 15,930,539 | 42,836,808 | 21,809,496 | 23,240,349 | |
Fixed Interest Rate - Real | 45,579,929 | - | - | 30,281,235 | - | - | |
Indexed to Price and Interest Rates | 1,943,458 | - | - | 2,581,215 | - | - | |
Foreign Currency | 223,434,853 | 189,433,767 | 189,219,317 | 58,339,275 | 25,366,010 | 23,689,725 | |
Others |
| 53,400 | - | - | 53,400 | - | - |
Liabilities | 321,417,270 | (206,413,189) | (206,706,366) | 133,093,551 | (45,929,257) | (48,160,654) | |
CDI (Interbank Deposit Rates) | 33,426,207 | - | - | 19,350,927 | - | - | |
Fixed Interest Rate - Real | 68,288,576 | (22,708,647) | (23,207,220) | 53,540,823 | (23,316,075) | (25,573,015) | |
Indexed to Price and Interest Rates | 184,570,962 | (182,627,504) | (182,511,826) | 24,308,601 | (21,727,386) | (21,775,017) | |
Foreign Currency | 34,001,087 | - | - | 34,954,004 | - | - | |
Others |
| 1,130,438 | (1,077,038) | (987,320) | 939,196 | (885,796) | (812,622) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank | ||
|
|
|
| 03/31/2019 |
|
| 12/31/2018 |
|
|
|
| Trading |
|
| Trading |
|
| Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value |
Options |
| 445,607,052 | (6,174) | 40,248 | 330,078,421 | 1,303 | 69,068 |
Purchased Position | 208,391,715 | 567,107 | 431,556 | 146,586,573 | 528,822 | 558,123 | |
Call Option - Foreign Currency | 10,979,184 | 266,093 | 223,821 | 14,518,058 | 268,629 | 239,079 | |
Put Option - Foreign Currency | 10,145,197 | 145,253 | 58,063 | 8,893,620 | 135,576 | 90,736 | |
Call Option - Other | 10,498,379 | 36,799 | 26,633 | 1,313,613 | 25,710 | 7,378 | |
Interbank Market | 10,252,624 | 21,497 | 16,677 | 639,488 | 10,543 | 4,537 | |
Others (2) | 245,755 | 15,302 | 9,956 | 674,125 | 15,167 | 2,841 | |
Put Option - Other | 176,768,955 | 118,962 | 123,038 | 121,861,282 | 98,907 | 220,930 | |
Interbank Market | 176,510,283 | 113,983 | 118,143 | 121,800,897 | 90,997 | 217,726 | |
Others (2) | 258,672 | 4,979 | 4,895 | 60,385 | 7,910 | 3,204 | |
Sold Position | 237,215,337 | (573,282) | (391,307) | 183,491,848 | (527,519) | (489,055) | |
Call Option - Foreign Currency | 7,610,083 | (117,754) | (79,631) | 7,615,856 | (124,442) | (101,034) | |
Put Option - Foreign Currency | 12,189,300 | (311,236) | (160,744) | 12,160,912 | (276,500) | (169,431) | |
Call Option - Other | 54,079,533 | (35,348) | (44,002) | 29,907,415 | (21,381) | (22,063) | |
Interbank Market | 53,876,398 | (21,146) | (31,602) | 29,609,298 | (10,574) | (13,195) | |
Others (2) | 203,135 | (14,202) | (12,400) | 298,117 | (10,807) | (8,868) | |
Put Option - Other | 163,336,421 | (108,944) | (106,930) | 133,807,665 | (105,196) | (196,527) | |
Interbank Market | 163,083,686 | (95,983) | (94,839) | 133,719,046 | (93,269) | (179,841) | |
Others (2) | 252,735 | (12,961) | (12,091) | 88,619 | (11,927) | (16,686) | |
Futures Contracts | 401,217,114 | - | - | 368,013,784 | - | - | |
Purchased Position | 111,665,561 | - | - | 86,230,249 | - | - | |
Exchange Coupon (DDI) | 47,520,763 | - | - | 20,590,068 | - | - | |
Interest Rates (DI1 and DIA) | 48,815,741 | - | - | 32,831,028 | - | - | |
Foreign Currency | 15,133,060 | - | - | 32,456,813 | - | - | |
Indexes (3) | 176,654 | - | - | 352,340 | - | - | |
Treasury Bonds/Notes | 19,343 | - | - | - | - | - | |
Sold Position | 289,551,553 | - | - | 281,783,535 | - | - | |
Exchange Coupon (DDI) | 166,957,225 | - | - | 193,087,449 | - | - | |
Interest Rates (DI1 and DIA) | 88,524,468 | - | - | 76,642,545 | - | - | |
Foreign Currency | 33,211,011 | - | - | 11,401,281 | - | - | |
Indexes (3) | 712,206 | - | - | 652,259 | - | - | |
Forward Contracts and Others | 100,844,250 | 416,504 | 264,624 | 90,906,932 | 1,907,981 | 370,463 | |
Purchased Commitment | 44,776,483 | 325,457 | 439,280 | 38,662,360 | (3,569,322) | 618,568 | |
Currencies | 44,064,835 | 324,982 | 453,659 | 38,095,625 | (3,569,571) | 618,980 | |
Others |
| 711,647 | 475 | (14,378) | 566,735 | 249 | (412) |
Sell Commitment | 56,067,767 | 91,047 | (174,656) | 52,244,572 | 5,477,303 | (248,105) | |
Currencies | 54,999,542 | 91,647 | (183,717) | 51,958,529 | 5,470,937 | (252,160) | |
Others |
| 1,068,225 | (600) | 9,061 | 286,043 | 6,366 | 4,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | |
|
|
|
| 03/31/2019 |
|
| 12/31/2018 |
|
|
|
| Trading |
|
| Trading |
|
| Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value |
Swap |
| - | (1,096,085) | (1,882,213) | - | 975,044 | (1,448,999) |
Assets |
| 368,104,161 | 226,315,728 | 206,815,664 | 188,308,664 | 77,483,490 | 51,550,122 |
CDI (Interbank Deposit Rates) | 47,756,905 | 24,184,981 | 24,641,566 | 42,586,951 | 34,115,674 | 29,330,484 | |
Fixed Interest Rate - Real | 62,610,360 | - | - | 47,968,999 | - | - | |
Indexed to Price and Interest Rates | 1,905,698 | - | - | 2,581,215 | - | - | |
Foreign Currency | 255,831,199 | 202,130,748 | 182,174,097 | 95,118,099 | 43,367,816 | 22,219,638 | |
Others |
| - | - | - | 53,400 | - | - |
Liabilities | 369,200,246 | (227,411,813) | (208,697,877) | 187,444,210 | (76,508,446) | (52,999,121) | |
CDI (Interbank Deposit Rates) | 23,571,924 | - | - | 13,512,485 | - | - | |
Fixed Interest Rate - Real | 106,226,471 | (43,616,110) | (25,104,250) | 94,666,073 | (53,624,364) | (30,156,111) | |
Indexed to Price and Interest Rates | 184,570,962 | (182,665,264) | (182,552,907) | 24,308,601 | (21,727,386) | (21,775,017) | |
Foreign Currency | 53,700,451 | - | - | 53,746,955 | - | - | |
Others |
| 1,130,438 | (1,130,438) | (1,040,720) | 1,210,096 | (1,156,696) | (1,067,993) |
Options |
| 456,138,351 | (11,588) | 108,338 | 335,073,080 | 2,863 | 153,149 |
Purchased Position | 213,570,985 | 564,401 | 650,440 | 149,076,796 | 514,907 | 716,936 | |
Call Option - Foreign Currency | 10,979,184 | 266,093 | 223,821 | 14,518,058 | 268,629 | 239,079 | |
Put Option - Foreign Currency | 10,145,197 | 145,253 | 58,063 | 8,893,620 | 135,576 | 90,736 | |
Call Option - Other | 14,981,884 | 36,799 | 252,793 | 3,118,344 | 25,710 | 131,297 | |
Interbank Market | 10,252,624 | 21,497 | 16,677 | 639,488 | 10,543 | 4,537 | |
Others (2) | 4,729,260 | 15,302 | 236,116 | 2,478,856 | 15,167 | 126,760 | |
Put Option - Other | 177,464,720 | 116,255 | 115,763 | 122,546,774 | 84,992 | 255,824 | |
Interbank Market | 176,510,283 | 113,983 | 118,143 | 121,782,816 | 77,082 | 217,726 | |
Others (2) | 954,437 | 2,273 | (2,380) | 763,958 | 7,910 | 38,098 | |
Sold Position | 242,567,366 | (575,988) | (542,102) | 185,996,284 | (512,044) | (563,787) | |
Call Option - Foreign Currency | 7,610,083 | (117,754) | (79,631) | 7,615,856 | (124,442) | (101,034) | |
Put Option - Foreign Currency | 12,189,300 | (311,236) | (160,744) | 12,160,912 | (276,500) | (169,431) | |
Call Option - Other | 56,831,426 | (38,055) | (132,697) | 31,679,919 | (21,381) | (66,002) | |
Interbank Market | 53,876,398 | (21,146) | (31,602) | 29,609,298 | (10,574) | (13,195) | |
Others (2) | 2,955,028 | (16,909) | (101,095) | 2,070,621 | (10,807) | (52,807) | |
Put Option - Other | 165,936,557 | (108,944) | (169,030) | 134,539,597 | (89,721) | (227,320) | |
Interbank Market | 163,083,686 | (95,983) | (94,839) | 133,703,672 | (77,794) | (179,841) | |
Others (2) | 2,852,871 | (12,961) | (74,191) | 835,925 | (11,927) | (47,479) | |
Futures Contracts | 401,703,526 | - | - | 368,013,784 | - | - | |
Purchased Position | 111,955,845 | - | - | 86,230,249 | - | - | |
Exchange Coupon (DDI) | 47,520,763 | - | - | 20,590,068 | - | - | |
Interest Rates (DI1 and DIA) | 48,991,117 | - | - | 32,831,028 | - | - | |
Foreign Currency | 15,133,060 | - | - | 32,456,813 | - | - | |
Indexes (3) | 291,562 | - | - | 352,340 | - | - | |
Treasury Bonds/Notes | 19,343 | - | - | - | - | - | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | |
|
|
|
| 03/31/2019 |
|
| 12/31/2018 |
|
|
|
| Trading |
|
| Trading |
Sold Position | 289,747,682 | - | - | 281,783,535 | - | - | |
Exchange Coupon (DDI) | 166,957,225 | - | - | 193,087,449 | - | - | |
Interest Rates (DI1 and DIA) | 88,545,267 | - | - | 76,642,545 | - | - | |
Foreign Currency | 33,211,011 | - | - | 11,401,281 | - | - | |
Indexes (3) | 887,536 | - | - | 652,259 | - | - | |
Forward Contracts and Others | 100,612,727 | 276,664 | 314,166 | 90,910,841 | 1,911,891 | 423,730 | |
Purchased Commitment | 44,686,352 | 329,401 | 494,611 | 38,666,269 | (3,565,412) | 671,835 | |
Currencies | 44,060,587 | 325,094 | 455,385 | 38,095,625 | (3,569,571) | 618,980 | |
Others |
| 625,765 | 4,307 | 39,226 | 570,644 | 4,159 | 52,855 |
Sell Commitment | 55,926,375 | (52,737) | (180,445) | 52,244,572 | 5,477,303 | (248,105) | |
Currencies | 54,947,921 | 45,291 | (181,105) | 51,958,529 | 5,470,937 | (252,160) | |
Others |
| 978,453 | (98,029) | 660 | 286,043 | 6,366 | 4,055 |
Individual and Consolidated Financial Statements – March 31, 2019 39
(1) Nominal value of the updated contracts.
(2) Includes options of indexes, mainly being options involving US treasury, shares and stock indexes.
(3) Includes Bovespa and S&P indexes.
III) Derivatives Financial Instruments by Counterparty
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Related | Financial |
|
|
|
|
| Customers | Parties | Institutions (1) | Total | Total |
Swap |
|
| 32,210,122 | 54,089,795 | 234,178,419 | 320,478,336 | 134,091,933 |
Options |
|
| 13,897,848 | 968,622 | 430,740,581 | 445,607,052 | 330,078,421 |
Futures Contracts |
| - | - | 401,217,114 | 401,217,114 | 368,013,784 | |
Forward Contracts and Others | 42,748,057 | 53,971,771 | 4,124,421 | 100,844,250 | 90,906,932 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Related | Financial |
|
|
|
|
| Customers | Parties | Institutions (1) | Total | Total |
Swap |
|
| 32,210,122 | 52,799,751 | 283,094,288 | 368,104,161 | 188,308,664 |
Options |
|
| 13,897,848 | 968,622 | 441,271,880 | 456,138,351 | 335,073,080 |
Futures Contracts |
| - | - | 401,703,526 | 401,703,526 | 368,013,784 | |
Forward Contracts and Others | 42,748,057 | 53,971,771 | 3,892,898 | 100,612,727 | 90,910,841 | ||
(1) Includes operations that have counterpart B3 S.A. - Brazil, Stock Exchange, Counter (B3) and other stock and commodity exchanges.
IV) Derivatives Financial Instruments by Maturity
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
| Up to | From 3 to | Over |
|
|
|
|
| 3 Months | 12 Months | 12 Months | Total | Total |
Swap |
|
| 22,691,187 | 203,428,935 | 94,358,214 | 320,478,336 | 134,091,933 |
Options |
|
| 48,952,410 | 387,752,909 | 8,901,733 | 445,607,052 | 330,078,421 |
Futures Contracts |
| 158,182,076 | 150,232,068 | 92,802,970 | 401,217,114 | 368,013,784 | |
Forward Contracts and Others | 55,443,999 | 24,845,700 | 20,554,551 | 100,844,250 | 90,906,932 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
| Up to | From 3 to | Over |
|
|
|
|
| 3 Months | 12 Months | 12 Months | Total | Total |
Swap |
|
| 22,925,943 | 248,478,792 | 96,699,426 | 368,104,161 | 188,308,664 |
Options |
|
| 56,170,210 | 390,559,095 | 9,409,046 | 456,138,351 | 335,073,080 |
Futures Contracts |
| 158,408,898 | 150,414,503 | 92,880,125 | 401,703,526 | 368,013,784 | |
Forward Contracts and Others | 55,408,938 | 24,699,446 | 20,504,343 | 100,612,727 | 90,910,841 | ||
Individual and Consolidated Financial Statements – March 31, 2019 40
V) Derivatives Financial Instruments by Trade Market
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Exchange (1) | Over the | Total | Total |
Swap |
|
|
| 205,952,536 | 114,525,800 | 320,478,336 | 134,091,933 |
Options |
|
|
| 425,354,880 | 20,252,172 | 445,607,052 | 330,078,421 |
Futures Contracts |
|
| 401,217,114 | - | 401,217,114 | 368,013,784 | |
Forward Contracts and Others |
| 2,360,259 | 98,483,991 | 100,844,250 | 90,906,932 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated | |
|
|
|
|
|
|
| Notional |
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Exchange (1) | Over the | Total | Total |
Swap |
|
|
| 205,952,536 | 162,151,625 | 368,104,161 | 188,308,664 |
Options |
|
|
| 425,354,880 | 30,783,471 | 456,138,351 | 335,073,080 |
Futures Contracts |
|
| 401,703,526 | - | 401,703,526 | 368,013,784 | |
Forward Contracts and Others |
| 2,360,259 | 98,252,468 | 100,612,727 | 90,910,841 | ||
|
|
|
|
|
|
|
|
(1) Includes amount traded with the B3.
(2) Composed by operations that are included in Clearing Houses, according to the regulation of the Bacen.
VI) Information on Credit Derivatives
Banco Santander uses credit derivatives with the objectives of performing counterparty risk management and meeting its customers' demands, performing protection purchase and sale transactions through credit default swaps and total return swaps, primarily related to Brazilian sovereign risk securities.
TotalReturn Swaps – TRS
Credit derivatives are where the exchange of the return of the reference obligation occurs through a cash flow and where, in the event of a credit event, the protection buyer is usually entitled to receive from the protection seller the equivalent of the difference between the and the fair value (market value) of the reference obligation on the settlement date of the contract.
Credit Default Swaps – CDS
These are credit derivatives where, in the event of a credit event, the protection buyer is entitled to receive from the protection seller the equivalent of the difference between the face value of the CDS agreement and the fair value (market value) of the reference obligation on the settlement date of the contract. In return, the seller receives compensation for the sale of the protection.
Below, the composition of the Credit Derivatives portfolio shown by its reference value and effect in the calculation of Required Stockholders' Equity.
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
| Nominal Value |
|
|
| Nominal Value |
|
|
| Retained Risk |
| Nominal Value |
| Retained Risk |
| Nominal Value |
| Total Rate of Return Swap |
| Transferred Risk - |
| Total Rate of Return Swap |
| Transferred Risk - |
|
| Credit Swap |
|
| Credit Swap | ||
Credit Swaps | 2,354,899 |
| 584,505 |
| 1,959,128 |
| 584,505 |
Total | 2,354,899 |
| 584,505 |
| 1,959,128 |
| 584,505 |
Individual and Consolidated Financial Statements – March 31, 2019 41
Value referring to the premium paid on CDS for use as collateral (transfer of risks) in the amount of R$533.
The effect in the Required Stockholders' Equity of the risk received was R$94,196 (12/31/2018 -R$84,487).
During the period there was no occurrence of credit event related to the events generated by the contracts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| Over |
|
|
Maximum Potential for Future Payments - Gross |
|
|
|
| 12 Months |
| Total |
Per Instrument |
|
|
|
|
|
|
|
CDS |
|
|
|
| 2,354,899 |
| 2,354,899 |
Per Risk Classification |
|
|
|
|
|
|
|
Below Investment Grade |
|
|
|
| 2,354,899 |
| 2,354,899 |
Per Reference Entity |
|
|
|
|
|
|
|
Brazilian Government |
|
|
|
| 2,354,899 |
| 2,354,899 |
VII) Hedge Accounting
The effectiveness determined for the hedge portfolio is in accordance with Bacen Circular 3,082 / 2002 and the following hedge accounting structures were established:
VII.I) Market Risk Hedge
The Bank's market risk hedging strategies consist of a hedge of exposure to variation in market risk, in receipts and interest payments related to assets and liabilities recognized.
The Bank's market risk hedging methodology segregates transactions by risk factor (eg, real / dollar exchange rate risk, fixed interest rate risk in Reais, dollar exchange rate risk, inflation, interest rate risk, etc.). Transactions generate exposures that are consolidated by risk factor and compared to pre-established internal limits.
To protect the market risk variation in the receipt and payment of interest, the Bank uses swap contracts and interest rate futures contracts relating to fixed assets and liabilities.
The Bank applies the market risk hedge as follows:
• Designates Foreign Currency + Coupon Versus% CDI and Pre - Real Interest Rate as a derivative instrument in Hedge Accounting structures, with foreign currency loan operations being the object of such transactions.
• The Bank has a portfolio of credit assets denominated in US dollars at the fixed rate in the balance sheet of Santander EFC, whose operations are recorded in Euro. As a way of managing this mismatch, the Bank designates each Euro Floating Foreign Currency swap versus Fixed Dollar as the market risk hedge of the corresponding loan.
• The Bank has a portfolio of assets indexed to the Euro and traded at the Cayman branch. In the transaction, the value of the asset in Euro will be converted to the Dollar by the rate of the exchange contract of the transaction. As from the conversion, the principal amount of the funding, already expressed in US dollars, will be adjusted by the CDI or Pre-Fixed rate. The assets will be covered with Swap Cross Currency in order to cross the risk in Euro for LIBOR + Coupon.
Individual and Consolidated Financial Statements – March 31, 2019 42
• The Bank has a pre-fixed interest rate risk generated by government securities (NTN-F and LTN) in the portfolio of available-for-sale securities. In order to manage this mismatch, it contracts DI Futures in the Exchange and designates them as a derivative instrument in a Hedge Accounting structure, having as an object item in this relation fixed-rate government securities (NTN-F and LTN).
• The Bank has a risk to the IPCA index generated by debenture in the portfolio of securities available for sale. To manage this mismatch, it contracts IPCA (DAP) futures on the Stock Exchange and designates them as a derivative instrument in a Hedge Accounting structure.
• Santander Leasing has a pre-fixed interest rate risk generated by government securities (NTN-F) in the portfolio of available-for-sale securities. To manage this mismatch, the Entity contracts interest swaps and designates them as a derivative instrument in an Accounting Hedge structure.
In market risk hedging, the results, both on hedging instruments and on the objects (attributable to the type of risk being hedged) are recognized directly in the income statement.
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
| Hedge Instruments |
|
|
|
|
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
| to Fair Value (1) |
| Fair Value |
Swap Contracts | 2,036,587 |
| 95,333 |
| 2,131,920 |
| 2,044,317 |
| 49,179 |
| 2,093,495 | |
| 1,279,132 |
| 78,440 |
| 1,357,572 |
| 1,194,130 |
| 78,211 |
| 1,272,341 | |
Securities Hedge | 757,455 |
| 16,893 |
| 774,348 |
| 850,187 |
| (29,032) |
| 821,154 | |
| 38,929,340 |
| - |
| 38,929,340 |
| 41,578,133 |
| 1,042,213 |
| 42,620,346 | |
Securities Hedge | 38,929,340 |
| - |
| 38,929,340 |
| 41,578,133 |
| 1,042,213 |
| 42,620,346 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
| Hedge Instruments |
|
|
|
|
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
| to Fair Value (1) |
| Fair Value |
Swap Contracts | 2,244,803 |
| 111,801 |
| 2,356,604 |
| 2,082,613 |
| 120,074 |
| 2,202,687 | |
| 1,438,991 |
| 92,095 |
| 1,531,086 |
| 1,281,525 |
| 89,478 |
| 1,371,003 | |
Securities Hedge | 805,812 |
| 19,706 |
| 825,519 |
| 801,088 |
| 30,596 |
| 831,684 | |
| 34,513,381 |
| - |
| 34,513,381 |
| 35,749,521 |
| 940,705 |
| 36,690,226 | |
Securities Hedge | 34,513,381 |
| - |
| 34,513,381 |
| 35,749,521 |
| 940,705 |
| 36,690,226 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
| Hedge Instruments |
|
|
|
|
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
| to Fair Value (1) |
| Fair Value |
Swap Contracts | 4,071,264 |
| 155,791 |
| 4,227,055 |
| 4,118,778 |
| 90,235 |
| 4,209,014 | |
| 1,753,552 |
| 96,655 |
| 1,850,208 |
| 1,705,017 |
| 80,592 |
| 1,785,609 | |
Securities Hedge | 2,317,712 |
| 59,135 |
| 2,376,847 |
| 2,413,761 |
| 9,643 |
| 2,423,405 | |
| 38,929,340 |
| - |
| 38,929,340 |
| 41,578,133 |
| 1,042,213 |
| 42,620,346 | |
Securities Hedge | 38,929,340 |
| - |
| 38,929,340 |
| 41,578,133 |
| 1,042,213 |
| 42,620,346 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
| Hedge Instruments |
|
|
|
|
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
| to Fair Value (1) |
| Fair Value |
Swap Contracts | 4,321,435 |
| 175,439 |
| 4,496,874 |
| 4,250,400 |
| 84,344 |
| 4,334,743 | |
| 1,914,152 |
| 113,617 |
| 2,027,768 |
| 1,770,107 |
| 90,858 |
| 1,860,965 | |
Securities Hedge | 2,407,283 |
| 61,822 |
| 2,469,105 |
| 2,480,293 |
| (6,515) |
| 2,473,778 | |
| 34,513,381 |
| - |
| 34,513,381 |
| 35,749,521 |
| 940,705 |
| 36,690,226 | |
Securities Hedge | 34,513,381 |
| - |
| 34,513,381 |
| 35,749,521 |
| 940,705 |
| 36,690,226 | |
Individual and Consolidated Financial Statements – March 31, 2019 43
(1) Registered in the operations of securities and derivative financial instruments.
VII.II) Cash Flow Hedge
The Bank's cash flow hedging strategies consist of a hedge of exposure to changes in cash flows, interest payments and exchange rate exposure, which are attributable to changes in interest rates on recognized assets and liabilities and changes of unrecognized assets and liabilities.
The Bank applies the cash flow hedge as follows:
• It contracts fixed and floating dollar indexed swaps in Reais / Euro floating and designates them as a derivative instrument in a Cash Flow Hedge structure, with the purpose of protecting floating rate indexed loans and negotiated with third parties through agency in Cayman and securities held to maturity of Brazilian foreign debt securities.
• Contracts DDI + DI Futures (DIY Futures) and designates them as a derivative instrument in a Cash Flow Hedge structure, the object of which in this relation is part of the Bank's credit portfolio in Dollars and Promissory Notes in the portfolio of securities available for sale.
• The Bank has post-fixed interest rate risk generated by public securities (LFT) in the portfolio of available-for-sale securities, which present expected cash flows subject to Selic variations over their duration. To manage these oscillations, it contracts DI futures on the Stock Exchange and designates them as a derivative instrument in a Hedge Accounting structure.
• The Bank has a portfolio of credit assets denominated in US dollars at the fixed rate in the balance sheet of Santander EFC, whose operations are recorded in Euro. As a way of managing this mismatch, the Bank designates each Euro Floating Foreign Currency swap versus Fixed Dollar as the market risk hedge of the corresponding loan. Hedge operations were designated between May 2016 and December 2017 and maturities of related swaps will occur between May 2021 and September 2022.
• Banco RCI Brasil S.A., has hedge operations whose purpose is funding with financial letters (LF), bills of exchange (LC) and Interbank Deposit Certificates (CDI).
In cash flow hedge, the effective portion of the variation in the hedging instrument is temporarily recognized in shareholders' equity under the heading of equity valuation adjustments until the forecasted transactions occur, when that portion is recognized in the statement of income. The non effective portion of the variation in the value of exchange rate hedge derivatives is recognized directly in the statements of income. In the first quarter of 2019 and 2018, no result was recorded relating to ineffective portion.
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
| Hedge Instruments |
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
Swap Contracts |
|
|
|
| 1,646,894 |
| (107,753) |
| 1,539,141 |
| 1,459,552 | |
Credit Operations Hedge |
|
|
|
|
| 481,116 |
| 3,509 |
| 484,625 |
| 458,742 |
Securities Hedge |
|
|
|
| 1,165,778 |
| (111,262) |
| 1,054,516 |
| 1,000,811 | |
|
|
|
|
| 46,950,299 |
| - |
| 46,950,299 |
| 16,669,425 | |
Credit Operations Hedge (2) |
|
|
|
| 46,950,299 |
| - |
| 46,950,299 |
| 16,669,425 | |
Securities Hedge |
|
|
|
| - |
| - |
| - |
| - | |
Individual and Consolidated Financial Statements – March 31, 2019 44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Hedge Instruments |
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
Swap Contracts |
|
|
|
| 1,225,045 |
| (91,980) |
| 1,133,065 |
| 1,436,356 | |
Credit Operations Hedge |
|
|
|
|
| 30,324 |
| 955 |
| 31,279 |
| 211,599 |
Securities Hedge |
|
|
|
| 1,194,721 |
| (92,936) |
| 1,101,786 |
| 1,224,757 | |
Future Contracts |
|
|
|
| 44,541,938 |
| - |
| 44,541,938 |
| 17,224,115 | |
Credit Operations Hedge (2) |
|
|
|
| 44,000,952 |
| - |
| 44,000,952 |
| 16,910,915 | |
Securities Hedge |
|
|
|
| 540,987 |
| - |
| 540,987 |
| 313,200 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
| Hedge Instruments |
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
Swap Contracts |
|
|
|
| 7,337,600 |
| 25,452 |
| 7,363,052 |
| 7,606,138 | |
Credit Operations Hedge |
|
|
|
| 834,220 |
| 44,705 |
| 878,925 |
| 847,867 | |
Securities Hedge |
|
|
|
| 1,165,778 |
| (111,262) |
| 1,054,516 |
| 1,000,811 | |
Funding Hedge |
|
|
|
| 5,337,602 |
| 92,009 |
| 5,429,611 |
| 5,757,460 | |
Future Contracts |
|
|
|
| 46,950,299 |
| - |
| 46,950,299 |
| 16,669,425 | |
Credit Operations Hedge (2) |
|
|
|
| 46,950,299 |
| - |
| 46,950,299 |
| 16,669,425 | |
Securities Hedge |
|
|
|
| - |
| - |
| - |
| - | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Hedge Instruments |
| Hedge Objects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
| Cost |
| to Fair Value (1) |
| Fair Value |
| Cost |
Swap Contracts |
|
|
|
| 7,496,337 |
| 85,440 |
| 7,581,777 |
| 8,159,832 | |
Credit Operations Hedge |
|
|
|
| 1,032,283 |
| 68,730 |
| 1,101,012 |
| 1,198,921 | |
Securities Hedge |
|
|
|
| 1,194,721 |
| (92,936) |
| 1,101,786 |
| 1,224,757 | |
Funding Hedge |
|
|
|
| 5,269,333 |
| 109,646 |
| 5,378,979 |
| 5,736,154 | |
Future Contracts |
|
|
|
| 44,541,938 |
| - |
| 44,541,938 |
| 17,224,115 | |
Credit Operations Hedge (2) |
|
|
|
| 44,000,952 |
| - |
| 44,000,952 |
| 16,910,915 | |
Securities Hedge |
|
|
|
| 540,987 |
| - |
| 540,987 |
| 313,200 | |
(1) Recorded in shareholders' equity under the equity valuation adjustments heading.
(2) The restated amount of the instruments as of March 31, 2019 is R$15,859,857 (12/31/2018 - R$16,738,641).
In the Bank and Consolidated, the mark-to-market effect of swap contracts and future assets corresponds to a credit in the amount of R$193,295 (12/31/2018 - R$76,534) and is recorded in shareholders' equity , net of tax effects, of which R$29,670 will be debited and will be incurred against expenses in the next twelve months.
Individual and Consolidated Financial Statements – March 31, 2019 45
VIII) Derivative Financial Instruments - Margin Given in Guarantee
The margin given as collateral for transactions traded on B3 with its own and third party derivative financial instruments is composed of federal government securities.
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Financial Literature of the Treasury - LFT |
|
|
| 7,067,142 |
| 6,974,085 |
| 7,608,108 |
| 7,552,926 | ||
National Treasury Bills - LTN |
|
|
|
| 2,130,069 |
| 3,392,893 |
| 2,130,069 |
| 3,392,886 | |
|
|
|
| 722,167 |
| 682,240 |
| 908,136 |
| 873,134 | ||
Total |
|
|
|
|
| 9,919,379 |
| 11,049,218 |
| 10,646,314 |
| 11,818,946 |
c) Financial Instruments - Sensitivity Analysis
The risk management is focused on portfolios and risk factors pursuant to Bacen’s regulations and good international practices.
The new rules of Basel III follow a phase in schedule, thus enabling the application of the rules gradually until 2019.
Financial instruments are segregated into trading and banking portfolios, as in the management of market risk exposure, according to the best market practices and the transaction classification and capital management criteria of Bacen´s Basileia Standard Method. The trading portfolio consists of all transactions with financial instruments and products, including derivatives, held for trading. The banking portfolio consists of core business transactions arising from the different Banco Santander business lines and their possible hedges. Therefore, based on the nature of Banco Santander’s activities, the sensitivity analysis was divided by both trading and banking portfolios.
Banco Santander performs the sensitivity analysis of the financial instruments in accordance with requirements of CVM Instruction 475/2008, considering the market information and scenarios that would adversely affect the positions of the Bank.
The table below summarizes the stress test amounts generated by Banco Santander’s corporate systems, related to the trading and banking portfolio, for each one of the portfolio scenarios as of March 31, 2019.
Trading Portfolio |
|
|
|
|
|
|
|
| Consolidated | |||||
Risk Factor |
|
|
| Description |
|
|
|
|
| Scenario 1 |
| Scenario 2 |
| Scenario 3 |
Interest Rate - Real |
|
|
| Exposures subject to Changes in Interest Fixed Rate | (5,474) |
| (84,745) |
| (169,490) | |||||
Coupon Interest Rate |
|
|
| Exposures subject to Changes in Coupon Rate of Interest Rate | (1,249) |
| (15,878) |
| (31,757) | |||||
Coupon - US Dollar |
|
|
| Exposures subject to Changes in Coupon US Dollar Rate | (7,271) |
| (5,711) |
| (11,421) | |||||
Coupon - Other Currencies |
|
|
| Exposures subject to Changes in Coupon Foreign Currency Rate | (5,927) |
| (2,408) |
| (4,816) | |||||
Foreign Currency |
|
|
| Exposures subject to Foreign Exchange |
|
|
|
| (3,346) |
| (83,638) |
| (167,275) | |
Eurobond/Treasury/Global |
|
|
| Exposures subject to Changes in Interest Rate Negotiated Roles in International Market | (84) |
| (457) |
| (914) | |||||
Inflation |
|
|
| Exposures subject to Change in Coupon Rates of Price Indexes | (3,452) |
| (19,103) |
| (38,205) | |||||
Shares and Indexes |
|
|
| Exposures subject to Change in Shares Price | (237) |
| (5,929) |
| (11,857) | |||||
Commodities |
|
|
| Exposures subject to Change in Commodity Price | (4) |
| (89) |
| (179) | |||||
Total (1) |
|
|
|
|
|
|
|
|
| (27,044) |
| (217,958) |
| (435,914) |
(1) Amounts net of taxes.
Scenario 1: a shock of +10 and -10 base points on the interest curves and 1% to price changes (currency and share), are considered the greatest losses per risk factor.
Scenario 2: a shock of +25% and -25% in all risk factors, are considered the greatest losses per risk factor.
Scenario 3: a shock of +50% and -50% in all risk factors, are considered the greatest losses per risk factor.
Banking Portfolio |
|
|
|
|
|
|
|
| Consolidated | |||||
Risk Factor |
|
|
| Description |
|
|
|
|
| Scenario 1 |
| Scenario 2 |
| Scenario 3 |
Interest Rate - Real |
|
|
| Exposures subject to Changes in Interest Fixed Rate |
| (46,577) |
| (814,281) |
| (1,628,237) | ||||
TR and Long-Term Interest Rate - (TJLP) | Exposures subject to Change in Exchange TR and TJLP |
| (24,184) |
| (400,839) |
| (601,897) | |||||||
Inflation |
|
|
| Exposures subject to Change in Coupon Rates of Price Indexes |
| (48,682) |
| (374,069) |
| (737,994) | ||||
Coupon - US Dollar |
|
|
| Exposures subject to Changes in Coupon US Dollar Rate |
| (9,671) |
| (55,575) |
| (95,768) | ||||
Coupon - Other Currencies |
|
|
| Exposures subject to Changes in Coupon Foreign Currency Rate |
| (5,474) |
| (69,925) |
| (140,701) | ||||
Interest Rate Markets International | Exposures subject to Changes in Interest Rate Negotiated Roles in International Market |
| (3,915) |
| (92,492) |
| (160,447) | |||||||
Foreign Currency |
|
|
| Exposures subject to Foreign Exchange |
| (1,326) |
| (33,151) |
| (66,301) | ||||
Total (1) |
|
|
|
|
|
|
|
|
| (139,829) |
| (1,840,332) |
| (3,431,345) |
Individual and Consolidated Financial Statements – March 31, 2019 46
(1) Amounts net of taxes.
Scenario 1: a shock of +10 and -10 base points on the interest curves and 1% to price changes (currency and share), are considered the greatest losses per risk factor.
Scenario 2: a shock of +25% and -25% in all risk factors, are considered the greatest losses per risk factor.
Scenario 3: a shock of +50% and -50% in all risk factors, are considered the greatest losses per risk factor.
7. Interbank Accounts
The amount of interbank accounts is composed of restricted deposits with the Bacen to meet compulsory obligations for demand deposits, savings deposits and time deposits, and payments and receipts pending settlement, represented by checks and other documents sent to clearinghouses payment transactions (assets and liabilities position).
8. Loan Portfolio and Allowance for Loan Losses
a) Loan Portfolio
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Lending Operations |
|
|
|
|
| 191,536,840 |
| 184,740,287 |
| 253,521,684 |
| 244,954,684 | ||
Loans and Discounted Titles |
|
|
|
|
|
|
| 102,662,667 |
| 98,499,318 |
| 116,340,621 |
| 111,862,168 |
Financing |
|
|
|
|
|
|
| 40,069,810 |
| 37,823,329 |
| 88,362,727 |
| 84,652,084 |
Rural and Agroindustrial - Financing |
|
|
|
|
|
|
| 11,724,072 |
| 11,875,591 |
| 11,724,072 |
| 11,875,591 |
Real Estate Financing |
|
|
|
|
|
|
| 37,080,291 |
| 36,542,049 |
| 37,080,292 |
| 36,542,049 |
Lending Operations Related to Assignment |
|
|
|
|
|
| - |
| - |
| 13,972 |
| 22,792 | |
Leasing Operations |
|
|
|
|
|
|
| - |
| - |
| 2,649,996 |
| 2,573,079 |
Advances on Foreign Exchange Contracts (Note 9) (1) | 5,907,588 |
| 6,125,308 |
| 5,907,588 |
| 6,125,308 | |||||||
Other Receivables (2) |
|
|
|
|
|
|
| 45,305,441 |
| 48,120,998 |
| 48,715,634 |
| 51,696,570 |
Total |
|
|
|
|
|
|
| 242,749,869 |
| 238,986,593 |
| 310,794,902 |
| 305,349,641 |
(1) Advance on foreign exchange contracts are classified as a reduction of other obligations.
(2) Comprise receivables for guarantees honored other receivables - others (granted to borrowers to purchase securities, assets, notes and receivable - Note 12) and income receivable on foreign exchange contracts (Note 9).
Sale or Transfer Operations of Financial Assets
According to Resolution CMN 3,533/2008 updated with later norms, the lending operations with substantial retention of risks and benefits, started from January 1, 2012 to remain registered in the loan portfolio. For lending operations made until December 31, 2011, regardless of the retention or transfer of substantial risks and benefits, financial assets were written off from the record of the original operation and the result recorded in the transfer to the appropriate result.
(i) With Substantial Transfer of Risks and Benefits
In the Bank and Consolidated, during the first quarter of 2019, operations were carried out credit assignment without co-obligation in the amount of R$19,960 (12/31/2018 - R$688,854) and were recorded substantially in loans and discounted securities, classified as F risk level.
During the first quarter of 2019, credit assignments without co-obligation, the amount of R$121,633 in the Bank and Consolidated relating to credit losses.
(ii) With Substantial Retention of Risks and Benefits
Since August 2016, in the Consolidated, the amount referring to the loan portfolio assigned with co-obligation started to include the operations coming from Banco PSA Finance Brasil S.A. (Banco PSA). On March 31, 2019, the present value of the operations assigned to Banco PSA is R$13,642 (12/31/2018 - R$22,792).
In September 2015, the Bank carried out assignment of credits with co-obligation related to the operations of Funded Participation (Export) in the amount of R$201,706, due in April 2019. In 2018, the loan assignment was settled.
Individual and Consolidated Financial Statements – March 31, 2019 47
On December 2011, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$688,821, which fall due until October 2041. On March 31, 2019, the present value of the divested operations is R$90,686 (12/31/2018 - R$97,104).
These assignment operations were carried out with a co-obligation clause, and compulsory repurchase is envisaged in the following situations:
- Contracts in default for a period exceeding 90 consecutive days;
- Contracts subject to renegotiation;
- Contracts subject to portability in accordance with CMN Resolution 3,401/2006; and
- Contracts subject to intervention.
The compulsory repurchase price will be calculated by unpaid balance of the loan due date at the time of its repurchase.
From the date of transfer, cash flows from operations will be paid directly to the assignee entity.
b) Loan Portfolio by Maturity
|
|
|
|
|
|
|
| Bank |
| Consolidated | ||||
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Overdue |
|
|
|
|
|
|
| 8,323,843 |
| 7,851,837 |
| 9,520,062 |
| 9,513,579 |
Due to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Up to 3 Months |
|
|
|
|
|
|
| 74,241,345 |
| 74,904,261 |
| 84,659,248 |
| 85,909,980 |
From 3 to 12 Months |
|
|
|
|
|
|
| 57,263,614 |
| 55,405,909 |
| 76,712,437 |
| 75,610,894 |
Over 12 Months |
|
|
|
|
|
|
| 102,921,067 |
| 100,824,586 |
| 139,903,155 |
| 134,315,188 |
Total |
|
|
|
|
|
|
| 242,749,869 |
| 238,986,593 |
| 310,794,902 |
| 305,349,641 |
c) Lease Portfolio Operations
|
|
|
|
|
|
|
| Bank |
| Consolidated | ||||
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Gross Investment in Leasing Operations |
|
|
|
|
|
|
| - |
| - |
| 3,176,937 |
| 3,089,417 |
Lease Receivables |
|
|
|
|
|
|
| - |
| - |
| 2,024,018 |
| 1,975,231 |
Unrealized Residual Values (1) |
|
|
|
|
|
|
| - |
| - |
| 1,152,919 |
| 1,114,186 |
Unearned Income on Lease |
|
|
|
|
|
|
| - |
| - |
| (2,005,631) |
| (1,955,086) |
Offsetting Residual Values |
|
|
|
|
|
|
| - |
| - |
| (1,152,919) |
| (1,114,186) |
Leased Assets |
|
|
|
|
| 58,257 |
| 58,307 |
| 6,661,541 |
| 6,536,478 | ||
Accumulated Depreciation |
|
|
|
|
|
|
| (58,257) |
| (58,307) |
| (3,332,280) |
| (3,365,576) |
Excess Depreciation |
|
|
|
|
|
|
| 22,039 |
| 22,059 |
| 1,227,273 |
| 1,240,627 |
Losses on Unamortized Lease |
|
|
|
|
|
|
| - |
| - |
| 182,204 |
| 190,790 |
Advances for Guaranteed Residual Value |
|
|
|
|
|
|
| (22,039) |
| (22,059) |
| (2,109,439) |
| (2,051,422) |
Other Assets |
|
|
|
|
|
|
| - |
| - |
| 2,310 |
| 2,037 |
Total of Lease Portfolio at Present Value |
|
|
|
|
|
|
| - |
| - |
| 2,649,996 |
| 2,573,079 |
(1) Guaranteed residual value of lease agreements, net of advances.
Leasing unrealized financial income (lease income to appropriate related to minimum payments to receive, which is the difference between the gross investment and the total present value of the portfolio) in the Consolidated is R$526,941 (12/31/2018 - R$516,338).
On March 31, 2019 and December 31, 2018, there were no individually material agreements or commitments for lease contracts considered relevant.
Report per Lease Portfolio Maturity of Gross Investment
|
|
|
|
|
|
|
| Bank |
| Consolidated | ||||
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Overdue |
|
|
|
|
|
|
| - |
| - |
| 19,871 |
| 9,371 |
Due to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Up to 1 Year |
|
|
|
|
|
|
| - |
| - |
| 1,321,533 |
| 1,336,888 |
From 1 to 5 Years |
|
|
|
|
|
|
| - |
| - |
| 1,832,273 |
| 1,740,022 |
Over 5 Years |
|
|
|
|
|
|
| - |
| - |
| 3,260 |
| 3,136 |
Total |
|
|
|
|
|
|
| - |
| - |
| 3,176,937 |
| 3,089,417 |
Report per Lease Portfolio Maturity at Present Value
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Overdue |
|
|
|
|
|
|
| - |
| - |
| 8,399 |
| 8,912 |
Due to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Up to 1 Year |
|
|
|
|
|
|
| - |
| - |
| 1,237,673 |
| 1,239,421 |
From 1 to 5 Years |
|
|
|
|
|
|
| - |
| - |
| 1,402,244 |
| 1,323,324 |
Over 5 Years |
|
|
|
|
|
|
| - |
| - |
| 1,680 |
| 1,422 |
Total |
|
|
|
|
|
|
| - |
| - |
| 2,649,996 |
| 2,573,079 |
Individual and Consolidated Financial Statements – March 31, 2019 48
d) Loan Portfolio by Business Sector
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Private Sector |
|
|
|
|
|
|
|
|
| 242,698,161 |
| 238,402,463 |
| 310,742,920 |
| 304,765,355 |
Industry |
|
|
|
|
|
|
|
|
| 51,962,673 |
| 50,869,652 |
| 54,101,373 |
| 52,541,944 |
Commercial |
|
|
|
|
|
|
|
|
| 29,496,810 |
| 29,132,915 |
| 33,770,850 |
| 33,979,959 |
Financial Institutions |
|
|
|
|
|
|
|
|
| 1,243,762 |
| 1,578,981 |
| 1,343,510 |
| 1,585,364 |
Services and Other (1) |
|
|
|
|
|
|
|
|
| 31,035,594 |
| 33,881,582 |
| 34,173,425 |
| 37,053,132 |
Individuals |
|
|
|
|
|
|
|
|
| 125,698,603 |
| 119,869,007 |
| 184,078,471 |
| 176,520,693 |
Credit Cards |
|
|
|
|
|
|
|
|
| 30,630,517 |
| 30,892,254 |
| 31,778,045 |
| 30,892,254 |
Mortgage Loans |
|
|
|
|
|
|
|
|
| 33,283,106 |
| 32,438,358 |
| 33,283,106 |
| 32,438,358 |
Payroll Loans |
|
|
|
|
|
|
|
|
| 22,481,190 |
| 20,976,692 |
| 35,630,378 |
| 33,782,238 |
Financing and Vehicles Lease |
|
|
|
|
|
|
|
|
| 2,290,854 |
| 2,213,470 |
| 43,976,803 |
| 43,528,359 |
Others (2) |
|
|
|
|
|
|
|
|
| 37,012,936 |
| 33,348,233 |
| 39,410,139 |
| 35,879,484 |
Agricultural |
|
|
|
|
|
|
|
|
| 3,260,719 |
| 3,070,326 |
| 3,275,291 |
| 3,084,263 |
Public Sector |
|
|
|
|
|
|
|
|
| 51,708 |
| 584,130 |
| 51,982 |
| 584,286 |
State (3) |
|
|
|
|
|
|
|
|
| 7,513 |
| 560,482 |
| 7,513 |
| 560,482 |
Municipal |
|
|
|
|
|
|
|
|
| 44,195 |
| 23,648 |
| 44,469 |
| 23,804 |
Total |
|
|
|
|
|
|
|
|
| 242,749,869 |
| 238,986,593 |
| 310,794,902 |
| 305,349,641 |
(1) Includes the activities of mortgage companies - business plan, transportation services, health, personal and others.
(2) Includes personal loans, overdraft among others.
(3) Mainly includes working capital operations.
e) Classification of Loan Portfolio and Respective Allowance for Loan Losses by Risk Level
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
| Minimum Allowance |
|
|
|
|
| Loan Portfolio |
|
|
|
|
| Allowance |
Risk Level | Required (%) |
| Current |
| Past Due (1) |
| Total (3) |
| Required |
| Additional (2) |
| Total | |
AA |
| - |
| 99,447,125 |
| - |
| 99,447,125 |
| - |
| - |
| - |
A |
| 0.5% |
| 69,835,909 |
| - |
| 69,835,909 |
| 349,180 |
| 259,235 |
| 608,415 |
B |
| 1% |
| 20,780,133 |
| 2,389,569 |
| 23,169,702 |
| 231,697 |
| 412,562 |
| 644,259 |
C |
| 3% |
| 20,250,450 |
| 1,995,123 |
| 22,245,573 |
| 667,367 |
| 914,799 |
| 1,582,166 |
D |
| 10% |
| 8,655,200 |
| 1,972,109 |
| 10,627,309 |
| 1,062,731 |
| - |
| 1,062,731 |
E |
| 30% |
| 2,162,066 |
| 1,437,865 |
| 3,599,931 |
| 1,079,979 |
| - |
| 1,079,979 |
F |
| 50% |
| 2,059,824 |
| 1,134,074 |
| 3,193,898 |
| 1,596,949 |
| - |
| 1,596,949 |
G |
| 70% |
| 685,096 |
| 1,051,799 |
| 1,736,895 |
| 1,215,827 |
| - |
| 1,215,827 |
H |
| 100% |
| 3,059,195 |
| 5,756,119 |
| 8,815,314 |
| 8,815,314 |
| - |
| 8,815,314 |
Total |
|
|
| 226,934,998 |
| 15,736,658 |
| 242,671,656 |
| 15,019,043 |
| 1,586,596 |
| 16,605,639 |
Individual and Consolidated Financial Statements – March 31, 2019 49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
| Minimum Allowance |
|
|
|
|
| Loan Portfolio |
|
|
|
|
| Allowance |
Risk Level | Required (%) |
| Current |
| Past Due (1) |
| Total (3) |
| Required |
| Additional (2) |
| Total | |
AA |
| - |
| 97,577,221 |
| - |
| 97,577,221 |
| - |
| - |
| - |
A |
| 0.5% |
| 70,680,546 |
| - |
| 70,680,546 |
| 353,403 |
| 263,816 |
| 617,219 |
B |
| 1% |
| 17,262,081 |
| 3,256,203 |
| 20,518,284 |
| 205,183 |
| 355,940 |
| 561,123 |
C |
| 3% |
| 19,236,302 |
| 2,331,011 |
| 21,567,313 |
| 647,019 |
| 1,051,658 |
| 1,698,677 |
D |
| 10% |
| 8,418,782 |
| 2,552,645 |
| 10,971,427 |
| 1,097,143 |
| - |
| 1,097,143 |
E |
| 30% |
| 2,368,666 |
| 1,656,361 |
| 4,025,027 |
| 1,207,508 |
| - |
| 1,207,508 |
F |
| 50% |
| 1,567,663 |
| 1,388,291 |
| 2,955,954 |
| 1,477,977 |
| - |
| 1,477,977 |
G |
| 70% |
| 598,233 |
| 1,160,961 |
| 1,759,194 |
| 1,231,436 |
| - |
| 1,231,436 |
H |
| 100% |
| 3,126,714 |
| 5,716,357 |
| 8,843,071 |
| 8,843,071 |
| - |
| 8,843,071 |
Total |
|
|
| 220,836,208 |
| 18,061,829 |
| 238,898,037 |
| 15,062,740 |
| 1,671,414 |
| 16,734,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
| Minimum Allowance |
|
|
|
|
| Loan Portfolio |
|
|
|
|
| Allowance |
Risk Level | Required (%) |
| Current |
| Past Due (1) |
| Total (3) |
| Required |
| Additional (2) |
| Total | |
AA |
| - |
| 118,752,650 |
| - |
| 118,752,650 |
| - |
| - |
| - |
A |
| 0.5% |
| 107,089,347 |
| - |
| 107,089,347 |
| 535,447 |
| 280,251 |
| 815,698 |
B |
| 1% |
| 24,578,045 |
| 4,125,414 |
| 28,703,459 |
| 287,035 |
| 412,562 |
| 699,597 |
C |
| 3% |
| 21,617,570 |
| 3,329,576 |
| 24,947,146 |
| 748,414 |
| 914,799 |
| 1,663,213 |
D |
| 10% |
| 9,064,436 |
| 2,604,868 |
| 11,669,304 |
| 1,166,930 |
| - |
| 1,166,930 |
E |
| 30% |
| 2,226,811 |
| 1,809,903 |
| 4,036,714 |
| 1,211,014 |
| - |
| 1,211,014 |
F |
| 50% |
| 2,149,952 |
| 1,419,657 |
| 3,569,609 |
| 1,784,804 |
| - |
| 1,784,804 |
G |
| 70% |
| 701,395 |
| 1,256,503 |
| 1,957,898 |
| 1,370,529 |
| - |
| 1,370,529 |
H |
| 100% |
| 3,175,370 |
| 6,812,812 |
| 9,988,182 |
| 9,988,182 |
| - |
| 9,988,182 |
Total |
|
|
| 289,355,576 |
| 21,358,733 |
| 310,714,309 |
| 17,092,355 |
| 1,607,612 |
| 18,699,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
| Minimum Allowance |
|
|
|
|
| Loan Portfolio |
|
|
|
|
| Allowance |
Risk Level | Required (%) |
| Current |
| Past Due (1) |
| Total (3) |
| Required |
| Additional (2) |
| Total | |
AA |
| - |
| 115,358,812 |
| - |
| 115,358,812 |
| - |
| - |
| - |
A |
| 0.5% |
| 107,768,431 |
| - |
| 107,768,431 |
| 538,842 |
| 281,900 |
| 820,742 |
B |
| 1% |
| 21,289,830 |
| 4,838,249 |
| 26,128,079 |
| 261,281 |
| 355,940 |
| 617,221 |
C |
| 3% |
| 20,577,623 |
| 3,667,376 |
| 24,244,999 |
| 727,350 |
| 1,051,658 |
| 1,779,008 |
D |
| 10% |
| 8,823,284 |
| 3,164,178 |
| 11,987,462 |
| 1,198,746 |
| - |
| 1,198,746 |
E |
| 30% |
| 2,435,111 |
| 2,010,053 |
| 4,445,164 |
| 1,333,549 |
| - |
| 1,333,549 |
F |
| 50% |
| 1,718,727 |
| 1,671,879 |
| 3,390,606 |
| 1,695,303 |
| - |
| 1,695,303 |
G |
| 70% |
| 611,648 |
| 1,360,348 |
| 1,971,996 |
| 1,380,397 |
| - |
| 1,380,397 |
H |
| 100% |
| 3,232,551 |
| 6,731,606 |
| 9,964,157 |
| 9,964,157 |
| - |
| 9,964,157 |
Total |
|
|
| 281,816,017 |
| 23,443,689 |
| 305,259,706 |
| 17,099,625 |
| 1,689,498 |
| 18,789,123 |
(1) Includes current and past-due operations.
(2) The additional allowance is recognized based mainly on the expected realization of the loan portfolio, in addition to the current minimum regulatory requirements.
(3) The total loan portfolio includes the value of a credit of R$78,213 (12/31/2018 - R$88,556) Bank and R$80,594 (12/31/2018 - R$89,935) Consolidated, related to the adjustment to fair value of loans that are being hedged, recorded in accordance with Article 5 of Circular Letter 3,624 of the Bacen of December 26, 2013 and are not included in the note of the risk levels (Note 6.b.VI.a).
f) Changes in Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
| 01/01 to |
| 01/01 to |
| 01/01 to |
| 01/01 to |
|
|
|
|
|
|
|
|
|
|
| ||||
Opening Balance |
|
|
|
|
| 16,734,154 |
| 15,867,217 |
| 18,789,123 |
| 17,461,974 | ||
Allowances Recognized |
|
|
|
| 2,527,986 |
| 2,815,277 |
| 3,013,446 |
| 3,291,151 | |||
Write-offs |
|
|
|
|
|
|
| (2,656,501) |
| (2,658,107) |
| (3,102,602) |
| (3,006,298) |
Closing Balance |
|
|
|
|
| 16,605,639 |
| 16,024,387 |
| 18,699,967 |
| 17,746,827 | ||
Recoveries Credits (1) |
|
|
|
|
| 456,898 |
| 505,120 |
| 445,751 |
| 552,427 | ||
(1) It is recorded as financial income in the items: lending operations and leasing operations. Includes results of assignment without recourse, related to the prior operations written off, as losses amounting the value to R$12,981 (2018 - R$65,394) Bank and R$12,981 (2018 - R$85,903) Consolidated.
Individual and Consolidated Financial Statements – March 31, 2019 50
g) Renegotiated Credits
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Renegotiated Credits |
|
|
|
|
| 13,940,569 |
| 13,811,093 |
| 15,361,454 |
| 15,021,047 | ||
Allowance for Loan Losses |
|
|
|
|
| (7,872,376) |
| (7,764,696) |
| (8,230,845) |
| (8,065,913) | ||
Percentage of Coverage on Renegotiated Credits |
| 56.5% |
| 56.2% |
| 53.6% |
| 53.7% | ||||||
h) Loan Portfolio Concentration
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 | ||||
Loan Portfolio and Credit Guarantees (1), Securities (2) and Derivatives Financial Instruments (3) | Risk |
| % |
| Risk |
| % | |||||||
Largest Debtor |
|
|
|
|
| 3,497,313 |
| 0.9% |
| 3,679,300 |
| 0.9% | ||
10 Largest |
|
|
|
|
|
| 28,039,023 |
| 7.1% |
| 26,626,231 |
| 6.8% | |
20 Largest |
|
|
|
|
|
| 43,599,943 |
| 11.0% |
| 42,775,942 |
| 10.9% | |
50 Largest |
|
|
|
|
|
| 71,961,271 |
| 18.1% |
| 69,956,141 |
| 17.9% | |
100 Largest |
|
|
|
|
| 93,639,096 |
| 23.6% |
| 92,337,154 |
| 23.6% | ||
(1) Includes installments of credit to builders/developers.
(2) Refers to debentures, promissory notes and certificates of real estate receivables - CRI.
(3) Refers to credit of derivatives risk.
9. Foreign Exchange Portfolio
|
|
|
|
| Bank/Consolidated | ||
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
Assets |
|
|
|
|
|
|
|
Rights to Foreign Exchange Sold |
|
|
|
| 63,846,878 |
| 67,730,808 |
Exchange Purchased Pending Settlement |
|
|
|
| 59,641,181 |
| 39,564,763 |
Advances in Local Currency |
|
|
|
| (230,044) |
| (109,179) |
Income Receivable from Advances and Importing Financing (Note 8.a) |
|
|
| 110,184 |
| 101,894 | |
Currency and Documents Term Foreign Currency |
|
|
|
| 95,643 |
| 85,102 |
Total |
|
|
|
| 123,463,842 |
| 107,373,388 |
Liabilities |
|
|
|
|
|
|
|
Exchange Sold Pending Settlement |
|
|
|
| 68,655,983 |
| 72,067,100 |
Foreign Exchange Purchased |
|
|
|
| 55,352,550 |
| 34,403,569 |
Advances on Foreign Exchange Contracts (Note 8.a) |
|
|
|
| (5,907,588) |
| (6,125,308) |
Others |
|
|
|
| 106 |
| 102 |
Total |
|
|
|
| 118,101,051 |
| 100,345,463 |
Memorandum Accounts |
|
|
|
|
|
|
|
Outstanding Import Credits – Foreign Currency |
|
|
|
| 1,453,138 |
| 1,580,005 |
Confirmed Export Credits – Foreign Currency |
|
|
|
| 537,644 |
| 194,823 |
Individual and Consolidated Financial Statements – March 31, 2019 51
10. Securities Trading and Brokerage
|
|
| Bank |
|
|
| Consolidated |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Assets |
|
|
|
|
|
|
|
Financial Assets and Pending Settlement Transactions | 467,325 |
| 562,324 |
| 468,787 |
| 569,457 |
Clearinghouse Transactions | - |
| - |
| - |
| 107 |
Debtors Pending Settlement | 119,899 |
| 179,853 |
| 422,829 |
| 455,041 |
Stock Exchanges - Guarantee Deposits | 276,306 |
| 110,830 |
| 276,305 |
| 110,830 |
Others (1) | 896,255 |
| 775,356 |
| 896,255 |
| 775,356 |
Total | 1,759,785 |
| 1,628,363 |
| 2,064,176 |
| 1,910,791 |
Liabilities |
|
|
|
|
|
|
|
Financial Assets and Pending Settlement Transactions | 212,259 |
| 714,564 |
| 219,408 |
| 721,169 |
Creditors Pending Settlement | 173,601 |
| 105,839 |
| 406,987 |
| 485,082 |
Creditors for Loan of Shares | - |
| - |
| 246,508 |
| 359,622 |
Clearinghouse Transactions | - |
| - |
| 36,502 |
| 140,052 |
Records and Settlement | 1,770 |
| 1,370 |
| 3,425 |
| 2,638 |
Others | 16,000 |
| 11,725 |
| 16,007 |
| 11,734 |
Total | 403,630 |
| 833,498 |
| 928,837 |
| 1,720,297 |
(1) Refers to deposits used as guarantee for derivatives transactions made with customers in the counter market.
11. Deferred Taxes
a) Nature and Origin of Recorded Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
| 12/31/2018 |
| Recognition |
| Realization |
| 03/31/2019 |
Allowance for Loan Losses | 11,717,258 |
| 1,014,401 |
| (1,252,105) |
| 11,479,554 | |||||
Reserve for Legal and Administrative Proceedings - Civil | 1,359,671 |
| 136,703 |
| (144,820) |
| 1,351,554 | |||||
Reserve for Tax Risks and Legal Obligations | 1,191,066 |
| - |
| (81,276) |
| 1,109,790 | |||||
Reserve for Legal and Administrative Proceedings - Labor | 1,867,983 |
| 171,832 |
| (203,074) |
| 1,836,741 | |||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 2,459,145 |
| 541,830 |
| (623,844) |
| 2,377,131 | |||||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 383,413 |
| - |
| (124,919) |
| 258,494 | |||||
Accrual for Pension Plan (2) | 1,109,912 |
| 11,676 |
| - |
| 1,121,588 | |||||
Profit Sharing, Bonuses and Personnel Gratuities | 410,087 |
| 171,173 |
| (404,590) |
| 176,670 | |||||
Other Temporary Provisions (3) | 3,053,032 |
| - |
| (294,707) |
| 2,758,325 | |||||
Total Tax Credits on Temporary Differences | 23,551,567 |
| 2,047,615 |
| (3,129,335) |
| 22,469,847 | |||||
Tax Losses and Negative Social Contribution Bases | 478,528 |
| 40,185 |
| - |
| 518,713 | |||||
Social Contribution Tax - Executive Act 2,158/2001 | 417,464 |
| - |
| (55,332) |
| 362,132 | |||||
Balance of Recorded Deferred Tax Assets | 24,447,559 |
| 2,087,800 |
| (3,184,667) |
| 23,350,692 | |||||
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
| 12/31/2018 |
| Recognition |
| Realization |
| 03/31/2019 |
Allowance for Loan Losses |
|
| 13,146,128 |
| 1,292,818 |
| (1,444,543) |
| 12,994,403 | |||
Reserve for Legal and Administrative Proceedings - Civil |
|
| 1,470,536 |
| 168,755 |
| (179,784) |
| 1,459,507 | |||
Reserve for Tax Risks and Legal Obligations |
|
| 1,994,094 |
| 11,989 |
| (102,857) |
| 1,903,226 | |||
Reserve for Legal and Administrative Proceedings - Labor |
|
| 1,994,195 |
| 192,744 |
| (212,344) |
| 1,974,595 | |||
Adjustment to Fair Value of Trading Securities and Derivatives (1) |
|
| 2,461,985 |
| 541,831 |
| (624,845) |
| 2,378,971 | |||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) |
|
| 427,108 |
| 194 |
| (131,625) |
| 295,677 | |||
Accrual for Pension Plan (2) |
|
| 1,119,330 |
| 11,787 |
| - |
| 1,131,117 | |||
Profit Sharing, Bonuses and Personnel Gratuities |
|
| 452,046 |
| 185,545 |
| (445,325) |
| 192,266 | |||
Other Temporary Provisions (3) |
|
| 3,252,443 |
| 105,582 |
| (328,569) |
| 3,029,456 | |||
Total Tax Credits on Temporary Differences |
| 26,317,865 |
| 2,511,245 |
| (3,469,892) |
| 25,359,218 | ||||
Tax Loss Carryforwards |
|
| 928,752 |
| 55,271 |
| (35,084) |
| 948,939 | |||
Social Contribution Tax - Executive Act 2,158/2001 |
|
| 417,463 |
| - |
| (55,331) |
| 362,132 | |||
Balance of Recorded Deferred Tax Assets |
|
|
| 27,664,080 |
| 2,566,516 |
| (3,560,307) |
| 26,670,289 | ||
Individual and Consolidated Financial Statements – March 31, 2019 52
(1) Includes tax credits IRPJ, CSLL, PIS and Cofins.
(2) Includes tax credits IRPJ and CSLL, adjustments on plan benefits to employees as mentioned Note 3.n.
(3) Composed mainly by administrative provisions nature.
On March 31, 2019, has deferred tax assets not registered in assets in the amount of R$308,062 (12/31/2018 - R$259,824) in the Bank and R$380,020 (12/31/2018 - R$318,155) in the Consolidated, whose expectation of achievement exceeds 10 years.
The accounting record of the deferred tax assets in the Santander Brasil financial statements was made at the rates applicable to the expected period of its realization and is based on the projection of future results and a technical study prepared pursuant to CMN Resolution 3,059/2002, with the amendments to the Resolution CMN 4,441/2015.
b) Expected Realization of Recorded Tax Credits
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
| 03/31/2019 |
|
| Temporary Differences | Tax Loss |
| Total | ||
Year |
| IRPJ | CSLL | PIS/Cofins | Carryforwards | CSLL 18% | Recorded |
2019 |
| 2,768,847 | 1,670,909 | 50,069 | 518,713 | 264,462 | 5,273,000 |
2020 |
| 3,860,810 | 2,329,293 | 66,758 | - | 97,670 | 6,354,531 |
2021 |
| 4,174,721 | 2,464,575 | 66,758 | - | - | 6,706,054 |
2022 |
| 1,270,242 | 763,822 | 25,946 | - | - | 2,060,010 |
2023 |
| 503,840 | 305,613 | 12,341 | - | - | 821,794 |
2024 to 2026 |
| 891,041 | 555,534 | 37,024 | - | - | 1,483,599 |
2027 to 2029 |
| 388,647 | 235,288 | 27,769 | - | - | 651,704 |
Total |
| 13,858,148 | 8,325,034 | 286,665 | 518,713 | 362,132 | 23,350,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
| 03/31/2019 |
|
| Temporary Differences | Tax Loss |
| Total | ||
Year |
| IRPJ | CSLL | PIS/Cofins | Carryforwards | CSLL 18% | Recorded |
2019 |
| 3,149,620 | 1,889,334 | 50,664 | 603,722 | 264,462 | 5,957,802 |
2020 |
| 4,281,185 | 2,574,346 | 67,552 | 101,065 | 97,670 | 7,121,818 |
2021 |
| 4,550,799 | 2,685,620 | 67,545 | 70,331 | - | 7,374,295 |
2022 |
| 1,398,750 | 839,768 | 26,730 | 67,680 | - | 2,332,928 |
2023 |
| 1,005,366 | 577,339 | 13,126 | 10,818 | - | 1,606,649 |
2024 to 2026 |
| 902,001 | 560,561 | 37,408 | 95,323 | - | 1,595,293 |
2027 to 2029 |
| 408,982 | 244,600 | 27,922 | - | - | 681,504 |
Total |
| 15,696,703 | 9,371,568 | 290,947 | 948,939 | 362,132 | 26,670,289 |
|
|
|
|
|
|
|
|
Due to differences between accounting, tax and corporate, expected realization of tax credits should not be taken as indicative of future net income.
c) Present Value of Tax Credits
The present value of the tax credits recorded is R$21,036,203 (12/31/2018 - R$22,054,923) in the Bank and R$23,989,051 (12/31/2018 - R$24,785,205) in the Consolidated, calculated according to with the expectation of realizing the temporary differences, tax loss carryforwards, negative social contribution tax, Social Contribution 18% - MP 2,158/2001 and the average funding rate, projected for the corresponding periods.
Individual and Consolidated Financial Statements – March 31, 2019 53
12. Other Receivables - Other
|
|
| Bank |
|
|
| Consolidated |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Notes and Credits Receivable (Note 8.a) |
|
|
|
|
|
|
|
Credit Cards | 24,973,454 |
| 25,811,419 |
| 25,105,386 |
| 25,955,382 |
Receivables (1) | 19,213,046 |
| 21,190,997 |
| 22,491,307 |
| 24,622,606 |
Escrow Deposits for: |
|
|
|
|
|
|
|
Tax Claims | 5,093,097 |
| 5,035,103 |
| 6,903,413 |
| 6,834,114 |
Labor Claims | 2,226,453 |
| 2,038,755 |
| 2,359,824 |
| 2,155,863 |
Others | 1,181,300 |
| 1,154,478 |
| 1,429,046 |
| 1,361,530 |
Contract Guarantees - Former Controlling Stockholders (Note 22.i) | 522,677 |
| 525,155 |
| 601,003 |
| 605,638 |
Recoverable Taxes | 3,513,345 |
| 2,897,838 |
| 4,407,542 |
| 3,864,816 |
Reimbursable Payments | 184,285 |
| 168,933 |
| 208,911 |
| 191,469 |
Salary Advances/Others | 72,726 |
| 79,297 |
| 249,574 |
| 141,553 |
Employee Benefit Plan (Note 34) | 250,007 |
| 223,302 |
| 301,661 |
| 273,281 |
Debtors for Purchase of Assets (Note 8.a) | 490,465 |
| 472,642 |
| 490,465 |
| 472,642 |
Receivable from Affiliates | 28,134 |
| 32,532 |
| 15,379 |
| 18,796 |
Others | 791,644 |
| 986,999 |
| 1,534,883 |
| 1,832,436 |
Total | 58,540,633 |
| 60,617,450 |
| 66,098,394 |
| 68,330,126 |
(1) It consists of operations with credit assignment characteristics substantially composed of "Confirming" operations with companies subject to credit risk and analysis of loan losses by segment in accordance with the Bank risk policies.
13. Dependences Information and Foreign Subsidiary
Branches:
Cayman
The Grand Cayman Agency is licensed under the Banks and Fiduciary Companies Act and is duly registered as a Foreign Company with the Registrar of Companies in Grand Cayman, Cayman Islands. The agency is therefore duly authorized to carry out banking business in the Cayman Islands and is currently engaged in fund raising business in the international banking and capital market to provide credit lines to Banco Santander, which are then extended to Banco Santander clients' for financing working capital and foreign trade. It also receives deposits in foreign currency from corporate clients and individuals and provides credit to Brazilian and foreign clients, primarily to support commercial operations with Brazil.
Luxembourg
On June 9, 2017, Banco Santander obtained authorization from the Brazilian Central Bank to set up an agency in Luxembourg with a capital of US$1 billion, with the objective of complementing the foreign trade strategy for corporate clients (large Brazilian companies and their operations abroad) and offer financial products and services through an offshore entity that is not established in a jurisdiction with favored taxation and that allows for the increase of funding capacity. The opening of the agency was authorized by the Minister of Finance of Luxembourg on March 5, 2018. On April 3, 2018, after the reduction of the capital of the Cayman Agency in the equivalent amount, the value of US$1 billion was allocated to capital of the Luxembourg branch.
Subsidiary:
Banco Santander has a subsidiary in Spain, Santander Brasil, Establecimiento Financiero de Credito, S.A. (Santander Brasil EFC), to complement the foreign trade strategy for corporate clients - large brazilian companies and their operations abroad - and offer products and financial services through an offshore entity that is not established in a jurisdiction with favored taxation.
Individual and Consolidated Financial Statements – March 31, 2019 54
The summarized financial position of dependency and foreign subsidiary, converted at the exchange rate prevailing at balance sheet date in the financial statements include (without eliminating transactions with related parties):
| Grand Cayman Branch (3) |
| Luxembourg Branch (3) |
| Santander Brasil EFC (3) | ||||||
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Assets | 95,085,937 |
| 92,861,348 |
| 14,401,816 |
| 11,193,937 |
| 3,597,332 |
| 3,588,365 |
Current and Long-term Assets | 95,085,937 |
| 92,861,348 |
| 14,401,816 |
| 11,193,591 |
| 3,597,332 |
| 3,588,365 |
Cash | 2,838,771 |
| 4,810,743 |
| 80,363 |
| 27,433 |
| 220,122 |
| 172,752 |
Interbank Investments | 9,866,435 |
| 18,932,358 |
| 1,532,488 |
| 2,507,169 |
| 1,706,640 |
| 1,731,210 |
Securities and Derivatives Financial Instruments | 62,121,748 |
| 47,969,178 |
| 684,158 |
| 543,737 |
| 37,341 |
| 62,226 |
Lending Operations (1) | 11,921,543 |
| 13,620,719 |
| 11,991,424 |
| 8,053,459 |
| 1,534,771 |
| 1,559,244 |
Foreign Exchange Portfolio | 5,700,167 |
| 5,449,633 |
| 77,866 |
| 27,384 |
| - |
| - |
Others | 2,637,273 |
| 2,078,717 |
| 35,517 |
| 34,409 |
| 98,458 |
| 62,933 |
Permanent Assets | - |
| - |
| - |
| 346 |
| - |
| - |
Liabilities | 95,085,937 |
| 92,861,348 |
| 14,401,816 |
| 11,193,937 |
| 3,597,332 |
| 3,588,365 |
Current and Long-term Liabilities | 45,095,361 |
| 47,276,437 |
| 10,306,476 |
| 7,184,013 |
| 147,762 |
| 43,037 |
Deposits and Money Market Funding | 4,788,790 |
| 6,778,080 |
| 617,205 |
| 525,047 |
| 28,751 |
| 29,165 |
Funds from Acceptance and Issuance of Securities | 4,957,822 |
| 4,451,782 |
| 47,098 |
| - |
| - |
| - |
Borrowings (2) | 14,731,550 |
| 16,095,088 |
| 8,821,153 |
| 6,581,247 |
| - |
| - |
Foreign Exchange Portfolio | 5,646,177 |
| 5,397,345 |
| 76,860 |
| 27,542 |
| - |
| - |
Debt Instruments Eligible to Compose Capital (Note 20) | 10,000,532 |
| 9,782,372 |
| - |
| - |
| - |
| - |
Others | 4,970,490 |
| 4,771,770 |
| 744,160 |
| 50,177 |
| 119,011 |
| 13,872 |
Deferred Income | 156 |
| 136 |
| - |
| - |
| 17,281 |
| 14,375 |
Stockholders' Equity | 49,990,420 |
| 45,584,775 |
| 4,095,340 |
| 4,009,924 |
| 3,432,289 |
| 3,530,953 |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
Net Income | 628,094 |
| 494,216 |
| 63,261 |
| - |
| (543) |
| 22,189 |
(1) Refers mainly to lending and export financing operations.
(2) Borrowings abroad regarding financing lines to exports and imports and other lines of credit.
(3) The functional currency is Real (Note 3.b).
Individual and Consolidated Financial Statements – March 31, 2019 55
14. Investments in Affiliates and Subsidiaries
a) Amount of Shares or Quotas Owned, Direct and Indirect Participation
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
| Quantity of Shares or Quotas Owned (in Thousands) |
| Direct |
| Consolidated | ||
Investments | Activity |
| Common Shares and Quotas | Preferred Shares | Participation |
| Participation | ||
Controlled by Banco Santander |
|
|
|
|
|
|
|
|
|
Santander Leasing S.A. Arrendamento Mercantil (Santander Leasing) | Leasing |
| 11,043,798 |
| - |
| 78.57% |
| 99.99% |
Santander Brasil Administradora de Consórcio Ltda. (Santander Brasil Consórcio) | Buying Club |
| 95,349 |
| - |
| 100.00% |
| 100.00% |
Banco Bandepe S.A. (17) | Bank |
| 3,589 |
| - |
| 100.00% |
| 100.00% |
Banco RCI Brasil S.A. | Bank |
| 81 |
| 81 |
| 39.89% |
| 39.89% |
Aymoré Crédito, Financiamento e Investimento S.A. (Aymoré CFI) | Financial |
| 287,706,670 |
| - |
| 100.00% |
| 100.00% |
Santander CCVM | Broker |
| 14,067,673 |
| 14,067,673 |
| 100.00% |
| 100.00% |
Santander Corretora de Seguros, Investimentos e Serviços S.A. (Santander Corretora de Seguros) (7) | Other Activities |
| 7,184 |
| - |
| 100.00% |
| 100.00% |
Getnet S.A. (19) | Payment Institution |
| 69,565 |
| - |
| 100.00% |
| 100.00% |
Sancap Investimentos e Participações S.A. (Sancap) | Holding |
| 12,728,211 |
| - |
| 100.00% |
| 100.00% |
Santander Brasil EFC | Financial |
| 75 |
| - |
| 100.00% |
| 100.00% |
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. (current name of Atual Companhia Securitizadora de Créditos Financeiros)(5) | Recovery of Defaulted Credits |
| 357,594 |
| - |
| 100.00% |
| 100.00% |
Santander Holding Imobiliária S.A. | Holding |
| 24,500 |
| - |
| 100.00% |
| 100.00% |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.) (8) | Tecnology |
| 45,371 |
| - |
| 100.00% |
| 100.00% |
Rojo Entretenimento S.A. (9) | Other Activities |
| 7,417 |
| - |
| 94.60% |
| 94.60% |
BEN Benefícios e Serviços S.A. (BEN Benefícios) (11) | Other Activities |
| 90,000 |
| - |
| 100.00% |
| 100.00% |
Esfera Fidelidade S.A. (16) | Other Activities |
| 10,001 |
| - |
| 100.00% |
| 100.00% |
Controlled by Aymoré CFI |
|
|
|
|
|
|
|
|
|
Super Pagamentos e Administração de Meios Eletrônicos S.A. (Super Pagamentos) | Payment Institution |
| 90,724 |
| - |
| - |
| 100.00% |
Banco Olé Bonsucesso Consignado S.A. (Olé Consignado) (6) | Bank |
| 261,359 |
| - |
| - |
| 60.00% |
Banco PSA | Bank |
| 105 |
| - |
| - |
| 50.00% |
Banco Hyundai Capital Brasil S.A. (current name of BHJV Assessoria e Consultoria Empresarial Ltda.) (10) | Bank |
| 150,000 |
| - |
| - |
| 50.00% |
Controlled by Santander Leasing |
|
|
|
|
|
|
|
|
|
PI Distribuidora de Títulos e Valores Mobiliários S.A. (current name of Santander Finance Arrendamento Mercantil S.A.) (PI DTVM) (12) | Leasing |
| 182 |
| - |
| - |
| 100.00% |
Controlled by Sancap |
|
|
|
|
|
|
|
|
|
Santander Capitalização S.A. (Santander Capitalização) | Capitalization |
| 64,615 |
| - |
| - |
| 100.00% |
Evidence Previdência S.A. | Private Pension |
| 12,591,172 |
| - |
| - |
| 100.00% |
Individual and Consolidated Financial Statements – March 31, 2019 56
|
|
|
|
|
|
|
| 03/31/2019 |
|
| Quantity of Shares or Quotas Owned (in Thousands) |
| Direct |
| Consolidated | ||
Investments | Activity | Common Shares and Quotas | Preferred Shares | Participation |
| Participation | ||
Controlled by Atual Serviços de Recuperação de Créditos |
|
|
|
|
|
|
|
|
Return Capital Serviços de Recuperação de Créditos S.A. (current name of Ipanema Empreendimentos e Participações S.A.) (15) | Collection and Recover of Credit Management | 140 |
| - |
| - |
| 70.00% |
Controlled by Return Capital Serviços de Recuperação de Créditos S.A. (current name of Ipanema Empreendimentos e Participações S.A.) (19) |
|
|
|
|
|
| ||
Return Gestão de Recursos S.A. (current name of Gestora de Investimentos Ipanema S.A.) (15) | Resources Management | 11 |
| - |
| - |
| 100.00% |
Jointly Controlled Companies by Banco Santander |
|
|
|
|
|
|
|
|
Cibrasec Companhia Brasileira de Securitização (Cibrasec) (1) | Securitization | 4 |
| - |
| 9.72% |
| 9.72% |
Norchem Participações e Consultoria S.A. (Norchem Participações) | Other Activities | 950 |
| - |
| 50.00% |
| 50.00% |
Estruturadora Brasileira de Projetos S.A. - EBP (EBP) (1) (7) | Other Activities | 3,859 |
| 2,953 |
| 11.11% |
| 11.11% |
Gestora de Inteligência de Crédito S.A. (Gestora de Crédito) (4) | Credit Bureau | 3,560 |
| 3,560 |
| 20.00% |
| 20.00% |
Campo Grande Empreendimentos Ltda. (14) | Other Activities | 255 |
| - |
| 25.32% |
| 25.32% |
Jointly Controlled Companies by Santander Corretora de Seguros |
|
|
|
|
|
|
|
|
Webmotors S.A. (2) | Other Activities | 366,182,676 |
| - |
| - |
| 70.00% |
TecBan - Tecnologia Bancária S.A. (TecBan) | Other Activities | 743,944 |
| - |
| - |
| 19.81% |
PSA Corretora de Seguros e Serviços Ltda. (PSA Corretora de Seguros) (3) | Insurance Broker | 450 |
| - |
| - |
| 50.00% |
Jointly Controlled by Sancap |
|
|
|
|
|
|
|
|
Santander Auto S.A. (18) | Other Activities | 7,500 |
| - |
| - |
| 50.00% |
Controlled by Getnet S.A |
|
|
|
|
|
|
|
|
Auttar HUT Processamento de Dados Ltda. (Auttar HUT) | Other Activities | 3,865 |
| - |
| - |
| 100.00% |
Integry Tecnologia e Serviços A.H.U Ltda. (Integry Tecnologia) | Other Activities | 76,276 |
| - |
| - |
| 99.99% |
Toque Fale Serviços de Telemarketing Ltda. (Toque Fale) | Other Activities | 6,050 |
| - |
| - |
| 100.00% |
Controlled by Webmotors S.A. |
|
|
|
|
|
|
|
|
Loop Gestão de Pátios S.A. (Loop) (13) | Other Activities | 23,243 |
| - |
| - |
| 51.00% |
Controlled by TecBan |
|
|
|
|
|
|
|
|
Tbnet Comércio, Locação e Administração Ltda. (Tbnet) | Other Activities | 381,522 |
| - |
| - |
| 100.00% |
Controlled by Tebnet |
|
|
|
|
|
|
|
|
Tbforte Segurança e Transporte de Valores Ltda. (Tbforte) | Other Activities | 375,576 |
| - |
| - |
| 100.00% |
Controlled by Olé Consignado |
|
|
|
|
|
|
|
|
BPV Promotora de Vendas e Cobrança Ltda. | Other Activities | 6,950 |
| - |
| - |
| 100.00% |
Olé Tecnologia Ltda. | Other Activities | 450 |
| - |
| - |
| 100.00% |
Affiliate of Banco Santander |
|
|
|
|
|
|
|
|
Norchem Holdings e Negócios S.A. (Norchem Holdings) | Other Activities | 1,679 |
| - |
| 21.75% |
| 21.75% |
Individual and Consolidated Financial Statements – March 31, 2019 57
b) Value of Investments
|
|
|
|
| Adjusted Stockholders' Equity |
| Net Income (Loss) Adjusted |
| Investments Value |
| Equity Accounting Results | ||||||
|
|
|
|
|
|
| 03/31/2019 |
| 01/01 to |
| 03/31/2019 |
| 12/31/2018 |
| 01/01 to |
| 01/01 to |
Controlled by Banco Santander |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Santander Leasing |
|
|
|
|
|
| 5,789,996 |
| 46,251 |
| 4,549,433 |
| 4,520,381 |
| 36,341 |
| 57,947 |
Banco Bandepe S.A. |
|
|
|
|
|
| 4,165,832 |
| 124,870 |
| 4,165,832 |
| 4,193,144 |
| 124,870 |
| 47,451 |
Santander Brasil EFC |
|
|
|
|
|
| 3,432,290 |
| (543) |
| 3,432,290 |
| 3,530,953 |
| (543) |
| 22,189 |
Santander Corretora de Seguros |
|
|
|
|
|
| 2,665,735 |
| 107,931 |
| 2,665,735 |
| 2,556,667 |
| 107,931 |
| 89,006 |
Aymoré CFI |
|
|
|
|
|
| 2,450,372 |
| 369,350 |
| 2,450,372 |
| 2,191,024 |
| 369,350 |
| 211,396 |
Getnet S.A. |
|
|
|
|
|
| 2,296,561 |
| 131,208 |
| 2,296,561 |
| 1,916,271 |
| 127,247 |
| 92,641 |
Banco RCI Brasil S.A. |
|
|
|
|
|
| 1,236,454 |
| 37,972 |
| 493,226 |
| 474,285 |
| 15,147 |
| 17,239 |
Santander CCVM |
|
|
|
|
|
| 617,756 |
| 22,212 |
| 617,764 |
| 595,575 |
| 22,212 |
| 10,264 |
Sancap |
|
|
|
|
|
| 470,855 |
| 35,372 |
| 470,855 |
| 435,968 |
| 35,291 |
| 27,414 |
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. |
|
|
|
|
|
| 377,346 |
| 7,691 |
| 377,346 |
| 269,655 |
| 7,709 |
| 6,678 |
Santander Brasil Consórcio |
|
|
|
|
|
| 364,952 |
| 46,837 |
| 364,952 |
| 318,115 |
| 46,837 |
| 33,282 |
Goodwill on the Acquisition of Residual Participation of Getnet S.A. (19) |
|
|
|
|
|
| - |
| - |
| 1,178,661 |
| - |
| - |
| - |
Others |
|
|
|
|
|
| 933,522 |
| (409) |
| 511,757 |
| 468,739 |
| (1,528) |
| (14,250) |
Total |
|
|
|
|
|
|
|
|
|
| 23,574,784 |
| 21,470,777 |
| 890,864 |
| 601,257 |
|
|
|
|
|
|
| Adjusted Stockholders' Equity |
| Net Income (Loss) Adjusted |
| Investments Value |
| Equity Accounting Results | ||||
|
|
|
|
|
|
| 03/31/2019 |
| 01/01 to |
| 03/31/2019 |
| 12/31/2018 |
| 01/01 to |
| 01/01 to |
Jointly Controlled Companies Directly and Indirectly by Banco Santander |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TecBan |
|
|
|
|
|
| 420,574 |
| 8,369 |
| 83,316 |
| 81,658 |
| 1,658 |
| (1,884) |
Gestora de Crédito |
|
|
|
|
|
| 295,021 |
| (466) |
| 59,004 |
| 59,099 |
| (93) |
| (1,865) |
Webmotors S.A. |
|
|
|
|
|
| 161,548 |
| 13,055 |
| 113,083 |
| 103,945 |
| 9,138 |
| 6,873 |
Norchem Holdings |
|
|
|
|
|
| 96,920 |
| 675 |
| 21,080 |
| 20,933 |
| 147 |
| 162 |
Cibrasec |
|
|
|
|
|
| 75,482 |
| 397 |
| 7,337 |
| 7,298 |
| 40 |
| (185) |
Norchem Participações |
|
|
|
|
|
| 52,883 |
| 673 |
| 26,442 |
| 26,105 |
| 336 |
| 388 |
EBP |
|
|
|
|
|
| 33,482 |
| 266 |
| 3,720 |
| 3,690 |
| 29 |
| (1,082) |
Santander Auto |
|
|
|
|
|
| 15,233 |
| 122 |
| 7,616 |
| - |
| 61 |
| - |
PSA Corretora |
|
|
|
|
|
| 2,481 |
| 72 |
| 1,241 |
| - |
| 36 |
| - |
Others |
|
|
|
|
|
| - |
| - |
| 5,265 |
| 14,024 |
| - |
| 109 |
Total |
|
|
|
|
|
|
|
|
|
| 328,104 |
| 316,752 |
| 11,352 |
| 2,516 |
Individual and Consolidated Financial Statements – March 31, 2019 58
(1) The Bank has a participation of less than 20%, and there is no control block in Cibrasec, and business decisions are taken jointly by the stockholders.
(2) Although participation exceeds 50%, in accordance with the stockholder' agreement, the control is shared by Santander Corretora de Seguros and Carsales.com. Investments PTY LTD (Carsales).
(3) In accordance with the stockholders' agreement, the control is shared by Santander Corretora de Seguros and PSA Services LTD.
(4) Company incorporated in April 14, 2017 and it is in the pre-operational phase. Pursuant to the stockholders' agreement, the control is shared among stockholders who hold 20% of its share capital each (Note 36.i).
(5) At the Extraordinary General Meeting held on March 23, 2018, a capital increase of R$150,000 was approved, through the issuance of 145,419,292 (one hundred forty-five million, four hundred nineteen thousand and two hundred ninety-two) new common shares, nominative and without par value, the share capital of R$120,000 increased to R$270,000. The shares issued in the capital increase were fully subscribed by the stockholder of Banco Santander. In addition, the Extraordinary General Meeting issued the denomination change of the company to Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. At the AGM held on March 31, 2019, a capital increase of R$100,000 was approved, through the issuance of 92,174,394 ( ninety-two million, one hundred seventy-four thousand and three hundred ninety-four) new common shares, nominatives and without per value, the share capital of R$270,000 increased to R$370,000. The shares issuance in reason of capital growth was fully subscribed by shareholder Santander.
(6) Stockholders representing the entire share capital of Olé Consignado, at the Extraordinary Shareholders' Meeting held on February 9, 2018, approved the increase in the capital of Olé Consignado in the amount of R$120,000, from the current R$400,000 to R$520,000, through the issuance of 57,089,392 (fifty-seven million, eighty-nine thousand, three hundred and ninety-two) common, nominative and non-par value shares fully subscribed and paid-in by the stockholders on the date of the AGE in proportion to their respective stockholdings. The capital increase was approved by the Central Bank in an order dated March 15, 2018.
(7) According to its Bylaws, EBP was formed in order to carry out projects to contribute for the brazilian economic and social development for the period of 10 years. After the conclusion of the timetable set EPB closes its activities this year of 2018. The dissolution of its rights and liquidation were aproved in the EGM held on january 29, 2018. The Company is in the process of liquidation.
(8) Company acquired on February 28, 2018, on the same date, Produban Serviços de Informática S.A. was changed to Santander Brasil Tecnologia S.A. (Note 36.f). At the Extraordinary Shareholders' Meeting held on March 19, 2018, the capital increase of Santander Brasil Tecnologia SA (currently known as Produban Serviços de Informática SA) was approved in the amount of R$4,000, through the capitalization of the reserve for equalization of dividends, without changing the number of shares, the capital stock being increased from R$91,048 to R$95,048, represented by 45,371,225 (forty-five million, three hundred and seventy-one thousand, two hundred and twenty-five) common shares, nominative and without par value.
(9) Investment transferred from non-current assets held for sale in June, 2018.
(10) The pre-operating company BHJV Assessoria e Consultoria em Gestão Empresarial Ltda., was incorporated on April 11, 2018 and transformed into Banco Hyundai Capital Brasil S.A. on December 13, 2018. Aymoré CFI, a wholly-owned subsidiary of Banco Santander , has the effective operational control of the company (Note 36.j). At the EGM held on February 19, 2019, a capital increase of R$200,000 was approved, through the issuance of 200,000,000 (two hundred million) new common shares, nominative and without par value, the share capital of R$100,000 increased to R$300,000. The shares issued as a result of the capital increase were fully subscribed by the shareholders Aymoré Financiamentos FI in the amount of R$100,000 and Hyundai Capital Services Inc. in the amount of R$100,000.
(11) Company incorporated in June 11, 2018 (Note 36.e). At the EGM held on March 27, 2019, a capital increase of R$49,999 was approved, the share capital of R$45,001 increased to R$90,000, through the issuance of 44,999,000 (forty-four million nine hundred ninety-nine thousand) new common shares, nominative and without par value. The shareholder Banco Santander subscribed a totality of new shares issued and paid in the shares corresponding 100% of share capital increase.
(12) At the EGM held in May 3, 2018, the shareholders of Company approved its change into a securities distributing company, and the change of its corporate name to SI Distribuidora de Títulos e Valores Mobiliários S.A. The change process was approved by Bacen in November 21, 2018. At an Extraordinary General Meeting held on December 17, 2018, SI Distribuidora de Valores Mobiliários SA approved the change of its corporate name to PI Distribuidora de Títulos e Valores Mobiliários SA. The amendment process was approved by Bacen in January 22, 2019 (Note 36.k).
(13) Investment acquired in September 25, 2018 (Note 36.d).
(14) Participation resulting from the credit recovery from the Banco Comercial and Investimentos Sudameris S.A. incorporated in 2009 by Banco ABN AMRO Real S.A., which in the same year was incorporated into the Banco Santander (Brasil) S.A. currently partner of Campo Grande Empreendimentos Ltda. The partners are conducting the procedures for extinction of the company, whose depends on the sale of a property. Once it has been sold, the liquidation of the company and each partner will receive its share of the equity.
(15) At the EGM held in July 12, 2018, was approved the change of its corporate name of Ipanema Empreendimentos e Participações S.A. to Return Capital Serviços de Recuperação de Créditos S.A. At an AGM held on July 12, 2018, was approved the change of its corporate name Gestora de Investimentos Ipanema S.A. to Return Gestão de Recursos S.A.
(16) Company incorporated on August 14, 2018 with the beginning of its activities in November 2018 (Note 36.c).
Individual and Consolidated Financial Statements – March 31, 2019 59
(17) At an AGE held on December 7, 2018, a capital increase of R$2,000,000 was approved , the share capital of R$2,787,689 increased to R$4,787,689 through the issuance of 1,405,667 (one million four hundred five thousand six hundred sixty-seven) new common shares, nominatives and without par value. The shareholder Banco Santander subscribed the fully of new common shares issued and pain-in the shares corresponding 50% of the capital share increase, being set that subscribed shares and outstanding of paind-in will be realize in term of one year counting since approving date of capital increased by Bacen.
(18) Insurance company incorporated on October 9, 2018, through transformation of the corporate vehicle L.G.J.S.P.E. Empreendimentos e Participações S.A., submitted to Susep to obtain authorization to operate. In accordance with the shareholders' agreement, the control is shared by Sancap and HDI Seguros S.A. (Note 36.h).
(19) In February 25, 2019, Banco Santander acquired the Minority Shares totality of GetNet S.A., corresponding 11.5% of share capital of GetNet S.A., conform “Purchase and Sale Contract’s of shares and others deals of GetNet S.A.” with approving by Bacen in February 18, 2019. (Note 36.b)
Individual and Consolidated Financial Statements – March 31, 2019 60
15. Fixed Assets
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
|
|
| Cost | Depreciation | Net | Net |
Real Estate |
|
|
|
|
| 2,470,204 | (749,693) | 1,720,511 | 1,737,134 | ||
Land |
|
|
|
|
| 653,135 | - | 653,135 | 653,135 | ||
Buildings |
|
|
|
|
| 1,817,069 | (749,693) | 1,067,376 | 1,083,999 | ||
Others Fixed Assets |
|
|
|
|
| 12,827,531 | (8,631,093) | 4,196,438 | 4,088,273 | ||
Installations, Furniture and Equipment |
|
|
|
|
| 3,901,325 | (2,155,851) | 1,745,474 | 1,571,414 | ||
Data Processing Equipment |
|
|
|
|
| 3,576,478 | (3,108,418) | 468,060 | 445,450 | ||
Leasehold Improvements |
|
|
|
|
| 3,982,065 | (2,533,372) | 1,448,693 | 1,498,849 | ||
Security and Communication Equipment |
|
|
|
|
| 815,601 | (573,558) | 242,043 | 252,152 | ||
Others |
|
|
|
|
|
|
| 552,062 | (259,894) | 292,168 | 320,408 |
Total |
|
|
|
|
|
|
| 15,297,735 | (9,380,786) | 5,916,949 | 5,825,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
|
|
| Cost | Depreciation | Net | Net |
Real Estate |
|
|
|
|
| 2,670,807 | (779,158) | 1,891,649 | 1,909,959 | ||
Land |
|
|
|
|
| 686,520 | - | 686,520 | 686,520 | ||
Buildings |
|
|
|
|
| 1,984,287 | (779,158) | 1,205,129 | 1,223,439 | ||
Others Fixed Assets |
|
|
|
|
| 14,141,153 | (9,454,810) | 4,686,343 | 4,588,533 | ||
Installations, Furniture and Equipment |
|
|
|
|
| 4,024,489 | (2,180,689) | 1,843,800 | 1,669,541 | ||
Data Processing Equipment |
|
|
|
|
| 3,813,881 | (3,214,969) | 598,912 | 582,191 | ||
Leasehold Improvements |
|
|
|
|
| 4,052,432 | (2,583,833) | 1,468,599 | 1,516,040 | ||
Security and Communication Equipment |
|
|
|
|
| 1,691,572 | (1,213,203) | 478,369 | 496,475 | ||
Others |
|
|
|
|
|
|
| 558,779 | (262,116) | 296,663 | 324,286 |
Total |
|
|
|
|
|
|
| 16,811,960 | (10,233,968) | 6,577,992 | 6,498,492 |
16. Intangibles
Bank | |||||||||||
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
|
|
| Cost | Amortization | Net | Net |
Goodwill on Acquired Companies |
|
|
|
|
| 26,419,016 | (26,148,414) | 270,602 | 283,474 | ||
Other Intangible Assets |
|
|
|
|
| 9,724,588 | (6,497,297) | 3,227,291 | 3,296,078 | ||
Acquisition and Development of Software |
|
|
|
|
| 6,369,161 | (5,068,959) | 1,300,202 | 1,314,786 | ||
Exclusivity Contracts for Provision of Banking Services |
|
|
| 3,033,941 | (1,151,548) | 1,882,393 | 1,933,538 | ||||
Others |
|
|
|
|
|
|
| 321,486 | (276,790) | 44,696 | 47,754 |
Total |
|
|
|
|
|
|
| 36,143,604 | (32,645,711) | 3,497,893 | 3,579,552 |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated | |||||||||||
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
|
|
| Cost | Amortization | Net | Net |
Goodwill on Acquired Companies |
|
|
|
|
| 29,147,852 | (27,247,961) | 1,899,891 | 793,430 | ||
Other Intangible Assets |
|
|
|
|
| 10,394,655 | (6,913,146) | 3,481,509 | 3,525,818 | ||
Acquisition and Development of Software |
|
|
|
|
| 6,912,835 | (5,402,276) | 1,510,559 | 1,517,731 | ||
Exclusivity Contracts for Provision of Banking Services |
|
|
| 3,033,941 | (1,151,549) | 1,882,392 | 1,933,538 | ||||
Others |
|
|
|
|
|
|
| 447,879 | (359,321) | 88,558 | 74,549 |
Total |
|
|
|
|
|
|
| 39,542,507 | (34,161,107) | 5,381,400 | 4,319,248 |
Individual and Consolidated Financial Statements – March 31, 2019 61
17. Funding and Borrowings and Onlendings
a) Deposits
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Without |
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
| Maturity |
| Months |
| 12 Months | Months | Total | Total |
Demand Deposits |
| 18,144,081 |
| - |
| - | - | 18,144,081 | 20,531,035 | ||
Savings Deposits |
| 46,211,153 |
| - |
| - | - | 46,211,153 | 46,068,346 | ||
Interbank Deposits |
| - |
| 2,590,692 |
| 3,256,194 | 297,524 | 6,144,410 | 6,579,524 | ||
Time Deposits (1) |
| 84,952 |
| 50,798,734 |
| 69,437,265 | 66,171,661 | 186,492,612 | 185,907,537 | ||
Total |
|
|
| 64,440,186 |
| 53,389,426 |
| 72,693,459 | 66,469,185 | 256,992,256 | 259,086,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
| Without |
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
| Maturity |
| Months |
| 12 Months | Months | Total | Total |
Demand Deposits |
| 17,939,781 |
| - |
| - | - | 17,939,781 | 18,831,579 | ||
Savings Deposits |
| 46,211,153 |
| - |
| - | - | 46,211,153 | 46,068,346 | ||
Interbank Deposits |
| 262,725 |
| 660,807 |
| 1,900,659 | 285,469 | 3,109,660 | 3,065,406 | ||
Time Deposits (1) |
| 94,733 |
| 50,812,630 |
| 69,257,903 | 64,930,657 | 185,095,923 | 184,098,307 | ||
Other Deposits |
| 5,913 |
| - |
| - | - | 5,913 | 8,606 | ||
Total |
|
|
| 64,514,305 |
| 51,473,437 |
| 71,158,562 | 65,216,126 | 252,362,430 | 252,072,244 |
(1) Considering the maturities established in the respective applications, there is the possibility of immediate withdrawal, in advance of maturity.
b) Money Market Funding
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months | Months | Total | Total |
Own Portfolio |
|
|
| 89,661,608 |
| 271,666 | 87,526 | 90,020,800 | 89,308,822 | ||
Government Securities |
|
|
| 82,389,573 |
| 84,207 | 31,379 | 82,505,159 | 82,331,057 | ||
Debt Securities in Issue (1) |
|
|
| 6,202 |
| 142,251 | 17,015 | 165,468 | 216,684 | ||
Others |
|
|
|
|
| 7,265,833 |
| 45,208 | 39,132 | 7,350,173 | 6,761,081 |
Third Parties |
|
|
| 4,527,820 |
| - | - | 4,527,820 | 15,200,913 | ||
Linked to Trading Portfolio Operations |
| 2,605,697 |
| 1,070,706 | 16,553,234 | 20,229,637 | 32,440,445 | ||||
Total |
|
|
|
|
| 96,795,125 |
| 1,342,372 | 16,640,760 | 114,778,257 | 136,950,180 |
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months | Months | Total | Total |
Own Portfolio |
|
|
| 84,260,621 |
| 216,822 | 56,147 | 84,533,590 | 85,178,225 | ||
Government Securities |
|
|
| 76,988,586 |
| 29,363 | - | 77,017,949 | 78,200,460 | ||
Debt Securities in Issue (1) |
|
|
| 6,202 |
| 142,251 | 17,015 | 165,468 | 216,684 | ||
Others |
|
|
|
|
| 7,265,833 |
| 45,208 | 39,132 | 7,350,173 | 6,761,081 |
Third Parties |
|
|
| 4,527,820 |
| - | - | 4,527,820 | 14,200,914 | ||
Linked to Trading Portfolio Operations |
| 2.605.697 |
| 1,070,706 | 16,553,234 | 20,229,637 | 32,440,445 | ||||
Total |
|
|
|
|
| 91,394,138 |
| 1,287,528 | 16,609,381 | 109,291,047 | 131,819,584 |
Individual and Consolidated Financial Statements – March 31, 2019 62
c) Funds from Acceptance and Issuance of Securities
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months | Months | Total | Total |
Real Estate Credit Notes, Mortgage Notes, |
| 11,492,792 |
| 27,576,689 | 33,637,605 | 72,707,086 | 70,109,242 | ||||
Real Estate Credit Notes - LCI (1) |
|
|
| 4,384,613 |
| 9,309,573 | 13,325,654 | 27,019,840 | 27,159,984 | ||
Agribusiness Credit Notes - LCA |
|
|
| 4,898,830 |
| 7,161,188 | 1,836,670 | 13,896,688 | 11,925,018 | ||
Treasury Bills - LF (2) |
|
|
| 2,209,349 |
| 11,105,928 | 17,952,904 | 31,268,181 | 30,720,861 | ||
Guaranteed Real Estate Credit Notes - LIG (3) |
| - |
| - | 522,377 | 522,377 | 303,379 | ||||
Securities Issued Abroad |
|
|
| 397,414 |
| 1,475,627 | 3,133,147 | 5,006,188 | 4,516,647 | ||
Eurobonds |
|
|
| 397,414 |
| 1,475,627 | 3,133,147 | 5,006,188 | 4,516,647 | ||
Funding by Structured Operations Certificates |
| 557,491 |
| 694,314 | 1,474,958 | 2,726,763 | 2,646,215 | ||||
Total |
|
|
|
|
| 12,447,697 |
| 29,746,630 | 38,245,710 | 80,440,037 | 77,272,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
|
|
|
|
|
| Up to 3 |
| From 3 to | Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months | Months | Total | Total |
Exchange Acceptances |
|
|
| 88,285 |
| 451,010 | 782,077 | 1,321,372 | 1,318,895 | ||
Real Estate Credit Notes, Mortgage Notes, |
|
|
|
|
|
|
| ||||
Credit and Similar Notes |
| 12,095,979 |
| 28,663,380 | 36,033,293 | 76,792,652 | 73,631,474 | ||||
Real Estate Credit Notes - LCI (1) |
|
|
| 4,384,612 |
| 9,309,573 | 13,325,654 | 27,019,839 | 27,159,982 | ||
Agribusiness Credit Notes - LCA |
|
|
| 4,898,830 |
| 7,161,188 | 1,836,671 | 13,896,689 | 11,925,018 | ||
Treasury Bills - LF (2) |
|
|
| 2,812,537 |
| 12,192,619 | 20,348,591 | 35,353,747 | 34,243,095 | ||
Guaranteed Real Estate Credit Notes - LIG (3) |
| - |
| - | 522,377 | 522,377 | 303,379 | ||||
Securities Issued Abroad |
|
|
| 397,414 |
| 1,475,627 | 3,133,147 | 5,006,188 | 4,516,647 | ||
Eurobonds |
|
|
| 397,414 |
| 1,475,627 | 3,133,147 | 5,006,188 | 4,516,647 | ||
Funding by Structured Operations Certificates |
| 557,491 |
| 694,314 | 1,474,958 | 2,726,763 | 2,646,215 | ||||
Total |
|
|
|
|
| 13,139,169 |
| 31,284,331 | 41,423,475 | 85,846,975 | 82,113,231 |
(1) LCI are fixed income securities linked with mortgages and guaranteed by mortgage-backed securities or liens on property. On March 31, 2019, they have maturities between 2019 and 2026.
(2) The main features of the Treasury Bills are the minimum period of two years, minimum notional of R$300 and permission for early redemption of only 5% of the issued amount. On March 31, 2019, its maturities dates are between 2019 and 2025. (12/31/2018 - with maturity between 2019 and 2025).
(3) LIG are fixed income securities linked with mortgages and guaranteed by the issuer and by a pool of real estate credits separated from the other assets of the issuer. On March 31, 2019, they have maturities until 2022. (12/31/2018 - with maturity until 2021).
|
|
|
|
|
|
|
|
|
|
| Bank/Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
Eurobonds |
| Issuance |
| Maturity |
| Currency | Interest Rate (p.a) | Total | Total | ||
Eurobonds |
| 2017 |
| 2019 |
| USD | LIBOR 3M + 1.00% | 195,323 | 194,243 | ||
Eurobonds |
| 2017 |
| 2024 |
| USD | 6.9% to 10.0% | 631,719 | 639,275 | ||
Eurobonds |
| 2018 |
| 2019 |
| USD | Zero Coupon to 9.0% | 750,175 | 855,035 | ||
Eurobonds |
| 2018 |
| 2019 |
| USD | LIBOR 3M + 0.95% | 19,495 | 19,386 | ||
Eurobonds |
| 2018 |
| 2019 |
| USD | LIBOR 1M + 1.50% | 199,123 | 197,055 | ||
Eurobonds |
| 2018 |
| 2020 |
| USD | Up to 3.5% | 639,889 | 34,776 | ||
Eurobonds |
| 2018 |
| 2024 |
| USD | 6.6% a 6.7% | 1,197,752 | 1,211,361 | ||
Eurobonds |
| 2018 |
| 2025 |
| USD | 9.0% | 1,276,279 | 1,287,821 | ||
Others |
|
|
|
|
|
|
|
|
| 96,433 | 77,695 |
Total |
|
|
|
|
|
|
|
|
| 5,006,188 | 4,516,647 |
Individual and Consolidated Financial Statements – March 31, 2019 63
d) Money Market Funding Expenses
|
| Bank |
| Consolidated |
| 01/01 to | 01/01 to | 01/01 to | 01/01 to |
| ||||
Time Deposits (1) (2) | 2,037,478 | 2,259,982 | 2,037,940 | 2,259,838 |
Savings Deposits | 527,368 | 496,906 | 527,368 | 496,906 |
Interbank Deposits | 141,225 | 242,390 | 49,040 | 80,581 |
Money Market Funding | 2,824,119 | 3,875,553 | 2,753,907 | 3,549,573 |
Upgrade and Provisions Interest and Pension Plans and Capitalization | - | - | 29,560 | 26,526 |
Acceptance and Issuance of Securities | 1,769,545 | 1,014,435 | 1,829,305 | 1,068,908 |
Others (3) | 141,871 | 148,436 | 162,810 | 167,955 |
Total | 7,441,606 | 8,037,702 | 7,389,930 | 7,650,287 |
(1) In the Bank and Consolidated, includes the record of interest in the amount of R$157,770 (2018 - R$123,862), related to the issuance of the Debt Instrument Eligible to Tier I and II Capital (Note 20).
(2) Includes exchange variation incomes in the amount of R$296,717 in the Bank and Consolidated (2018 – expenses with exchange variation in the amount of R$431,570 in the Bank and consolidated).
(3) Includes exchange variation expense in the amount of R$499,447 in the Bank and Consolidated (2018 – income with exchange variation in the amount of R$300,820 in the Bank and Consolidated).
e) Borrowings and Onlendings
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
| Up to 3 |
| From 3 to |
| Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months |
| Months |
| Total |
| Total |
Foreign Borrowings |
|
|
| 9,578,007 |
| 33,399,528 |
| 2,565,802 |
| 45,543,337 |
| 34,305,601 |
Import and Export Financing Lines |
|
|
| 4,621,563 |
| 20,611,060 |
| 202,421 |
| 25,435,044 |
| 24,960,596 |
Other Credit Lines |
|
| 4,956,444 |
| 12,788,468 |
| 2,363,381 |
| 20,108,293 |
| 9,345,005 | |
Domestic Onlendings |
|
|
| 1,101,594 |
| 2,891,132 |
| 8,953,243 |
| 12,945,969 |
| 13,267,246 |
Total |
|
|
| 10,679,601 |
| 36,290,660 |
| 11,519,045 |
| 58,489,306 |
| 47,572,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
| Up to 3 |
| From 3 to |
| Over 12 |
|
|
|
|
|
|
|
| Months |
| 12 Months |
| Months |
| Total |
| Total |
Domestic Borrowings |
|
|
| 12,620 |
| 34,115 |
| 35,089 |
| 81,824 |
| 96,570 |
Foreign Borrowings |
|
|
| 7,872,225 |
| 33,399,528 |
| 2,565,802 |
| 43,837,555 |
| 32,574,976 |
Import and Export Financing Lines |
|
|
| 4,621,563 |
| 20,611,060 |
| 202,421 |
| 25,435,044 |
| 24,960,596 |
Other Credit Lines |
|
| 3,250,662 |
| 12,788,468 |
| 2,363,381 |
| 18,402,511 |
| 7,614,380 | |
Domestic Onlendings |
|
|
| 1,101,594 |
| 2,891,132 |
| 8,953,243 |
| 12,945,969 |
| 13,267,246 |
Total |
|
|
| 8,986,439 |
| 36,324,775 |
| 11,554,134 |
| 56,865,348 |
| 45,938,792 |
In the Bank and Consolidated, the export and import financing lines are funded by foreign banks, for foreign exchange transactions purposes, related to export bills discounting and export and import pre-financing, with maturity until 2022 (12/31/2018 - through 2022) and subject to financial charges corresponding to exchange rate changes plus interest ranging from 0,6% p.a. to 8,84% p.a. (12/31/2018 - 0.5% p.a. to 9.5% p.a.).
Domestic onlendings - official institutions are subject to financial charges corresponding to the TJLP, exchange variation of the currency basket of the BNDES, or US dollar exchange variation, plus interest rate in accordance with the operating policies of the BNDES System.
Individual and Consolidated Financial Statements – March 31, 2019 64
18. Tax and Social Security
|
|
| Bank |
|
|
| Consolidated |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Deferred Tax Liabilities | 3,345,141 |
| 2,963,046 |
| 3,877,846 |
| 3,477,059 |
Provision for Taxes and Contributions on Income | - |
| - |
| 369,419 |
| 320,595 |
Taxes Payable | 552,702 |
| 1,199,448 |
| 861,784 |
| 1,846,776 |
Total | 3,897,843 |
| 4,162,494 |
| 5,109,049 |
| 5,644,430 |
a) Nature and Origin of Deferred Tax Liabilities
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
| 12/31/2018 |
| Recognition |
| Realization |
| 03/31/2019 |
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 898,976 |
| - |
| - |
| 898,976 | |||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 1,968,659 |
| 371,417 |
| - |
| 2,340,076 | |||||
Excess Depreciation of Leased Assets |
|
|
| 5,515 |
| - |
| (5) |
| 5,510 | ||
Others |
|
|
|
|
| 89,896 |
| 10,683 |
| - |
| 100,579 |
Total |
|
|
|
|
| 2,963,046 |
| 382,100 |
| (5) |
| 3,345,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
| Consolidated |
|
|
|
|
|
| Recognition |
| Realization |
| 03/31/2019 | ||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 963,016 |
| 21,990 |
| (1) |
| 985,005 | |||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 2,034,554 |
| 372,799 |
| (7,281) |
| 2,400,072 | |||||
Excess Depreciation of Leased Assets |
|
|
| 310,163 |
| 5,644 |
| (3,498) |
| 312,309 | ||
Others |
|
|
|
|
| 169,326 |
| 15,473 |
| (4,339) |
| 180,460 |
Total |
|
|
|
|
| 3,477,059 |
| 415,906 |
| (15,119) |
| 3,877,846 |
(1) Includes IRPJ, CSLL, PIS and Cofins. | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Expected Realization of Deferred Tax Liabilities |
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
| Temporary Differences |
|
| ||||
Year |
|
|
|
|
| IRPJ |
| CSLL |
| PIS/Cofins |
| Total |
2019 |
|
|
|
|
| 149,671 |
| 88,976 |
| 28,927 |
| 267,574 |
2020 |
|
|
|
|
| 206,552 |
| 122,818 |
| 38,570 |
| 367,940 |
2021 |
|
|
|
|
| 206,552 |
| 122,818 |
| 38,570 |
| 367,940 |
2022 |
|
|
|
|
| 186,657 |
| 111,707 |
| 34,958 |
| 333,322 |
2023 |
|
|
| 180,026 |
| 108,004 |
| 33,753 |
| 321,783 | ||
2024 to 2026 |
|
|
| 540,078 |
| 324,018 |
| 101,265 |
| 965,361 | ||
2027 to 2029 |
|
|
| 403,313 |
| 241,963 |
| 75,945 |
| 721,221 | ||
Total |
|
|
| 1,872,849 |
| 1,120,304 |
| 351,988 |
| 3,345,141 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
| Temporary Differences |
|
| ||||
Year |
|
|
|
|
| IRPJ |
| CSLL |
| PIS/Cofins |
| Total |
2019 |
|
|
|
|
| 229,812 |
| 97,320 |
| 29,415 |
| 356,547 |
2020 |
|
|
|
|
| 291,908 |
| 134,048 |
| 39,220 |
| 465,176 |
2021 |
|
|
|
|
| 266,320 |
| 134,302 |
| 39,215 |
| 439,837 |
2022 |
|
|
|
|
| 238,766 |
| 118,597 |
| 35,620 |
| 392,983 |
2023 |
|
|
| 230,177 |
| 113,719 |
| 34,398 |
| 378,294 | ||
2024 to 2026 |
|
|
| 643,100 |
| 341,080 |
| 103,168 |
| 1,087,348 | ||
2027 to 2029 |
|
|
| 425,538 |
| 254,759 |
| 77,364 |
| 757,661 | ||
Total |
|
|
| 2,325,621 |
| 1,193,825 |
| 358,400 |
| 3,877,846 | ||
Individual and Consolidated Financial Statements – March 31, 2019 65
19. Subordinated Debts
Consist of securities issued according to Bacen rules, which are used as Tier II of the Capital Regulatory for calculating operating limits, according to the mature and proportion defined by CMN Resolution 4,192 of March 1, 2013, and the amendments introduced by Resolution 4,278 of October 31, 2013.
Bank/Consolidated | |||||||
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
Subordinated Deposit Certificates | Issuance | Maturity (1) | Amount (Million) | Interest Rate (p.a.) | Total |
| Total |
Notes (2) | January - 14 | No Maturity (Perpetual) | R$3,000 | 7.375% | - |
| 4,906,880 |
Notes (2) | January - 14 | January - 24 | R$3,000 | 6.000% | - |
| 4,978,728 |
Total |
|
|
|
| - |
| 9,885,608 |
(1) Subordinated time deposits issued with the payment of interest rate and principal at the end of the term.
(2) On December 18, 2018, the Bank issued approval for the repurchase of the notes issued on January 29, 2014, this approval led to the reclassification of these instruments from the Debt Instruments Eligible to Compose Capital to Subordinated Debt (Note 20).
20. Debt Instruments Eligible to Compose Capital
Details of the balance of Debt Instruments Eligible to Compose Capital referred to the issuance of equity instruments for the composition of Tier I and Tier II of Regulatory Capital due to the Capital Optimization Plan, are as follows:
Bank/Consolidated | ||||||
|
|
|
|
| 03/31/2019 | 12/31/2018 |
Debt Instruments Eligible to Compose Capital | Issuance | Maturity | Amount (Million) | Interest Rate (p.a.) (2) | Total | Total |
Tier I (1) | November - 18 | No Maturity (Perpetual) | US$1,250 | 7.250% | 5,011,149 | 4,895,197 |
Tier II (1) | November - 18 | November - 28 | US$1,250 | 6.125% | 4,989,383 | 4,887,175 |
Total |
|
|
|
| 10,000,532 | 9,782,372 |
(1) Interest paid semiannually, as of May 8, 2019.
(2) The emissions were made through the Cayman Agency and there is no incidence of Income Tax at Source.
On November 5, 2018, the Board of Directors approved the issuance of the equity instruments, which was held on November 8, 2018. Such issuance was in the form of Notes issued in US dollars, US$2,5 billion, for payment in Tier I and Tier II of Reference Equity. The offer of these notes was made outside Brazil and the United States of America, for non-US Persons, based on Regulation S under the Securities Act, and was fully paid in by Santander España, controlling shareholder of Banco Santander Brasil. On the same date, the Board of Directors approved the redemption of the Tier I and Tier II notes issued on January 29, 2014, in the total amount of U$2,5 billion (Note 25.e).
The specific characteristics of Notes issued to make up Tier I are: (a) Principal: US$1,250 billion (b) Interest Rate: 7.25% p.a; (c) no maturity (perpetual); (d) Periodicity of payment of interest: semiannually from May 8, 2019.
The specific characteristics of Notes issued to make up Tier II are: (a) Principal: US $ 1,250 billion; (b) Interest Rate: 6.125% p.a.; (c) Maturity Term: on November 8, 2028; and (d) Periodicity of payment of interest: semiannually, as of May 8, 2019.
Notes have the following common characteristics:
(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand in excess of such minimum value
(b) The Notes may be repurchased or redeemed by Banco Santander after the fifth anniversary as of the date of issue of the Notes, at the sole discretion of the Bank or as a result of changes in the tax legislation applicable to the Notes; or at any time, due to the occurrence of certain regulatory events.
On December 18, 2018, the Bank issued approval for the Notes to comprise Tier I and Tier II of Banco Santander's Reference Equity as of such date, as well as the repurchase of the notes issued on January 29, 2014, this approve grants in the instrument’s reclassification on the line Debt Instruments Eligible to Compose Capital (Note 20).
Individual and Consolidated Financial Statements – March 31, 2019 66
21. Other Payables – Other
|
|
| Bank |
|
|
| Consolidated |
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Provision Technical for Capitalization Operations | - |
| - |
| 1,987,376 |
| 1,874,147 |
Provision Technical for Pension Operations | - |
| - |
| 1,858,016 |
| 1,797,008 |
Payables for Credit Cards | 23,528,180 |
| 24,618,008 |
| 31,313,003 |
| 37,420,024 |
Provision for Tax Risks and Legal Obligations (Note 22.b) | 4,056,681 |
| 4,079,141 |
| 6,286,636 |
| 6,294,007 |
Provision for Legal and Administrative Proceedings - | 6,580,604 |
| 6,688,400 |
| 7,142,736 |
| 7,231,458 |
Provision for Financial Guarantees (Note 21.a) | 204,314 |
| 201,411 |
| 204,314 |
| 201,411 |
Employee Benefit Plans (Note 34) | 3,386,857 |
| 3,328,319 |
| 3,416,848 |
| 3,357,653 |
Payables for Acquisition of Assets and Rights | 21,564 |
| 21,409 |
| 21,564 |
| 21,409 |
Reserve for Tax Contingencies - Responsibility of | 515,664 |
| 518,061 |
| 593,990 |
| 598,544 |
Reserve for Legal and Administrative Proceedings - Responsibility of | 7,013 |
| 7,094 |
| 7,013 |
| 7,094 |
Accrued Liabilities |
|
|
|
|
|
|
|
Personnel Expenses | 1,430,718 |
| 1,833,323 |
| 1,575,676 |
| 2,017,845 |
Administrative Expenses | 195,629 |
| 338,599 |
| 354,973 |
| 499,948 |
Others Payments | 110,662 |
| 51,307 |
| 171,319 |
| 132,988 |
Creditors for Unreleased Funds | 860,488 |
| 986,678 |
| 860,488 |
| 986,678 |
Provision of Payment Services | 492,552 |
| 548,134 |
| 492,552 |
| 548,134 |
Suppliers | 595,830 |
| 546,702 |
| 1,444,565 |
| 1,427,014 |
Others (1) | 5,495,664 |
| 4,661,095 |
| 8,079,786 |
| 6,627,499 |
Total | 47,482,420 |
| 48,427,681 |
| 65,810,855 |
| 71,042,861 |
(1) As of December 31, 2018, it includes the effects described in Note 34.a,related to the reduction of present value of actuarial obligations.
a) Provision for Financial Guarantees
The classification of the guarantees operations for the constitution of provision is based on the estimate of the involved risk. It happens due to the quality evaluation process applied to the clients and operations, using statistical model based on quantitative and qualitative information or on specialized credit analyst, which allow them to be classified according their default probabilities, based on internal and market´s objective variables (bureaus), previously identified as predictive of default probability. After this evaluation, the operations are classified according to the provisioning ratings, having as reference the Resolution CMN 2,682/1999. Based on the results of this analysis, amounts related to operations’ coverage are registered as provision considering the type of the guarantee, according to the requirements of Resolution CMN 4,512/2016.
Bank/Consolidated | |||||||
|
|
| 03/31/2019 |
|
|
| 12/31/2018 |
Type of Financial Guarantee | Balance Guarantees Provided |
| Provision |
| Balance Guarantees Provided |
| Provision |
Linked to International Merchandise Trade | 275,805 |
| 2,883 |
| 1,200,293 |
| 4,376 |
Linked to Bids, Auctions, Provision of Services or Execution of Works | 4,414,947 |
| 11,742 |
| 4,651,584 |
| 13,822 |
Linked to the Supply of Goods | 1,181,457 |
| 1,957 |
| 1,385,573 |
| 2,519 |
Linked to the Distribution of Securities by Public Offer | 111,439 |
| - |
| 129,000 |
| - |
Guarantee in Legal and Administrative Proceedings of Fiscal Nature | 13,804,043 |
| 121,642 |
| 14,083,538 |
| 121,620 |
Other Guarantees | 40,230 |
| 1,911 |
| 48,359 |
| 928 |
Other Bank Guarantees | 13,371,935 |
| 64,179 |
| 14,182,366 |
| 58,146 |
Other Financial Guarantees | 3,897,515 |
| - |
| 2,818,561 |
| - |
Total | 37,097,371 |
| 204,314 |
| 38,499,274 |
| 201,411 |
Individual and Consolidated Financial Statements – March 31, 2019 67
Changes in Allowances for Financial Guarantees
Bank/Consolidated | |||||||
|
|
|
|
| 01/01 to |
| 01/01 to |
Balance at Beginning |
|
|
|
| 201,411 |
| 312,373 |
Constitution (Note 30) |
|
|
|
| 5,361 |
| 8,240 |
Reversal (1) (Note 30) |
|
|
|
| (2,458) |
| (95,037) |
Balance at End |
|
|
|
| 204,314 |
| 225,576 |
(1) Corresponds to the honored bond, change in rating and provision recorded in the allowance for doubtful accounts.
22. Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security
a) Contingent Assets
In the Bank and Consolidated, on March 31, 2019 and December 31, 2018, no contingent assets were registered (Note 3.q).
b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature
|
|
|
|
|
|
|
|
|
| Bank |
|
|
| Consolidated |
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
| 03/31/2019 |
| 12/31/2018 |
Reserve for Tax Contingencies and Legal Obligations (Note 21) |
| 4,056,681 |
| 4,079,141 |
| 6,286,636 |
| 6,294,007 | ||||||
Accrual for Legal and Administrative Proceedings - Labor and Civil (Note 21) |
| 6,580,604 |
| 6,688,400 |
| 7,142,736 |
| 7,231,458 | ||||||
Labor |
| 3,463,702 |
| 3,543,801 |
| 3,763,356 |
| 3,829,975 | ||||||
Civil |
| 3,116,902 |
| 3,144,599 |
| 3,379,380 |
| 3,401,483 | ||||||
Total |
|
|
|
|
|
|
| 10,637,286 |
| 10,767,541 |
| 13,429,372 |
| 13,525,465 |
c) Change in Accrual for Judicial and Administrative Proceedings and Legal Obligations
Bank | ||||||||||||||
|
|
|
|
|
|
|
| 01/01 to |
|
|
|
|
| 01/01 to |
|
| Tax |
| Labor |
| Civil |
| Tax |
| Labor |
| Civil | ||
Balance at Beginning | 4,079,141 |
| 3,543,801 |
| 3,144,599 |
| 4,279,109 |
| 3,240,115 |
| 2,241,047 | |||
Recognition Net of Reversal (1) |
| (6,975) |
| 7,096 |
| 32,928 |
| (662) |
| 152,609 |
| 91,552 | ||
Inflation Adjustment |
| 35,603 |
| 20,351 |
| 69,499 |
| 37,460 |
| 155,304 |
| 62,334 | ||
Write-offs Due to Payment |
| (51,088) |
| (107,547) |
| (130,124) |
| (9,454) |
| (182,575) |
| (101,127) | ||
Balance at End |
| 4,056,681 |
| 3,463,702 |
| 3,116,902 |
| 4,306,453 |
| 3,365,453 |
| 2,293,806 | ||
Escrow Deposits - |
| 1,360,086 |
| 1,176,606 |
| 609,647 |
| 1,149,409 |
| 590,682 |
| 482,831 | ||
Escrow Deposits - Securities |
| 17,269 |
| 19,755 |
| 25,366 |
| 19,555 |
| 15,224 |
| 9,518 | ||
Total Escrow Deposits (2) |
| 1,377,355 |
| 1,196,361 |
| 635,013 |
| 1,168,964 |
| 605,906 |
| 492,349 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated | ||||||||||||||
|
|
|
|
|
|
|
| 01/01 to |
|
|
|
|
| 01/01 to |
|
|
|
| Tax |
| Labor |
| Civil |
| Tax |
| Labor |
| Civil |
Balance at Beginning |
| 6,294,007 |
| 3,829,975 |
| 3,401,483 |
| 6,999,881 |
| 3,457,092 |
| 1,867,621 | ||
Recognition Net of Reversal (1) |
| 3,253 |
| 28,852 |
| 68,230 |
| 9,049 |
| 162,381 |
| 111,288 | ||
Inflation Adjustment |
| 56,537 |
| 25,484 |
| 70,922 |
| 63,149 |
| 162,699 |
| 71,281 | ||
Write-offs Due to Payment |
| (67,161) |
| (120,955) |
| (161,254) |
| (17,445) |
| (195,219) |
| (128,740) | ||
Change in the Scope of |
| - |
| - |
| - |
| 14,210 |
| 93,726 |
| - | ||
Others |
| - |
| - |
| - |
| - |
| (118) |
| (164) | ||
Balance at End |
| 6,286,636 |
| 3,763,356 |
| 3,379,380 |
| 7,068,844 |
| 3,680,561 |
| 1,921,286 | ||
Escrow Deposits - | 2,417,843 |
| 1,248,160 |
| 617,096 |
| 2,622,270 |
| 628,536 |
| 497,492 | |||
Escrow Deposits - Securities |
| 18,325 |
| 19,755 |
| 25,366 |
| 20,822 |
| 15,224 |
| 9,518 | ||
Total Escrow Deposits (2) |
| 2,436,169 |
| 1,267,915 |
| 642,462 |
| 2,643,092 |
| 643,760 |
| 507,010 | ||
(1) Tax risks include the constitutions of tax provisions related to lawsuits and administrative proceedings and legal obligations, recorded in the headings tax expenses, other operating income and other operating expenses IR and CSLL.
(2) Refers to the amounts of collateral deposits, limited to the amount of the provision and do not include escrow deposits related to possible and / or remote contingencies and recourse deposits.
Individual and Consolidated Financial Statements – March 31, 2019 68
d) Provisions for Contingent Civil, Labor, Tax and Social Security
Banco Santander and its subsidiaries are involved in lawsuits and administrative proceedings related to tax, labor, social security and civil arising in the normal course of its activities.
The provisions were constituted based on the nature, complexity, lawsuits historic and company´s assessment of lawsuit losses based on the opinions of internal and external legal advisors. The Santander has the policy to constitute provision of full amount in risk of lawsuits who’s the result of loss assessment is probable. The legal obligation of tax and social security were fully recognized in the financial statements.
Management understands that the provisions recorded are sufficient to meet legal obligations and losses from lawsuits and administrative proceedings as follows:
e) Lawsuits and Administrative Proceedings related to Tax and Social Security
Main lawsuits and administrative proceedings related to legal obligations, tax and social security
PIS and Cofins - R$1,857,295 Bank and R$3,677,867 Consolidated (12/31/2018 - R$1,841,342 Bank and R$3,646,102 Consolidated): Banco Santander and its subsidiaries filed lawsuits seeking to eliminate the application of Law 9,718/1998, which modified the calculation basis for PIS and Cofins to cover all revenues of legal entities and not only those arising from the provision of services and sale of goods. Regarding the Banco Santander Process, on April 23, 2015, a STF decision was issued admitting the Extraordinary Appeal filed by the Federal Government regarding PIS and denying the follow-up to the Extraordinary Appeal of the Federal Public Prosecutor regarding Cofins. Both appealed this decision, without any success, so that the suit relating to Cofins is defined, ruling the judgment of the Federal Regional Court of the 4th Region of August 2007, favorable to Banco Santander. Pursuant to the STF, Banco Santander's PIS and the PIS and Cofins of other subsidiaries are pending final judgment.
Increase in CSLL Tax Rate - R$109,533 Consolidated (12/31/2018 - R$108,489 Consolidated): the Bank Santander and its subsidiaries are discussing the increase in the CSLL tax rate, from 9% to 15%, established by Executive Act 413/2008, subsequently converted into Law 11,727/2008, as from April 2008. In 2018, given the classification of success and unfavorable scenario in the Courts, we opted to pay the amounts discussed.
Main lawsuits and administrative proceedings with probable loss risk
Banco Santander and its subsidiaries are parties in lawsuits and administrative proceedings related to tax and social security matters, which their risk of loss are classified as probable, based on the opinion of legal counsel.
Provisional Contribution on Financial Transactions (CPMF) on Customer Operations - R$733,620 (12/31/2018 - R$729,913) Bank and Consolidated: in May 2003, the Federal Revenue Service issued a tax assessment against Santander Distribuidora de Títulos e Valores Mobiliários Ltda. (Santander DTVM) and another tax assessment against Banco Santander Brasil S.A. The tax assessments refer to the collection of CPMF tax on transactions conducted by Santander DTVM in the cash management of its customers’ funds and clearing services provided by Banco to Santander DTVM in 2000, 2001 and 2002. Based on the risk assessment of legal counsel, the tax treatment was accurate. Santander DTVM had a favorable decision at the Board of Tax Appeals (CARF). Banco Santander had a unfavorable decision and was considered responsible for the collection of the CPMF tax. Both decisions were appealed by the respective losing party to the highest jurisdiction of CARF. In June 2015 , Bank and DTVM had obtained a non favorable decision at CARF. On July 3, 2015 Bank and Produban Serviços de Informática S.A. filed lawsuit aiming to cancel both tax charges on the period ended on March 31, 2019 amounting R$1,469.9 million. Based on the evaluation of legal advisors, were consisted provision to the probable loss.
Social Security Contribution (INSS) - R$275,380 Bank and R$275,388 Consolidated (12/31/2018 - R$273,225 Bank and R$273,233 Consolidated): Banco Santander and its subsidiaries are involved in administrative and judicial proceedings regarding the collection of income tax on social security and education allowance contributions over several funds that, according to the evaluation of legal advisors, do not have nature of salary.
Tax on Services (ISS) - Financial Institutions - R$195,041 in the Bank and R$211,330 in the Consolidated (12/31/2018 - R$212,535 in the Bank and R$228,403 in the Consolidated): Banco Santander and its subsidiaries discuss administrative and legal requirements , by several municipalities, of the payment of ISS on various revenues arising from operations that are usually not classified as services (Note 22.h).
f) Lawsuits and Administrative Proceedings of Labor
These are lawsuits filed by labor Unions, Associations, Public Prosecutors and former employees claiming labor rights they believe are due, especially payment for overtime and other labor rights, including retirement benefit lawsuits.
For claims considered to be similar and usual, provisions are recognized based on the payments and successes historic. Claims that do not fit the previous criteria have their provisions constituted according to individual assessment performed, and provisions being constituted based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel.
Individual and Consolidated Financial Statements – March 31, 2019 69
g) Lawsuits and Administrative Proceedings of Civil
These contingencies are generally caused by: (1) Lawsuits with a request for revision of contractual terms and conditions or requests for monetary adjustments, including supposed effects of the implementation of various government economic plans, (2) lawsuits deriving of financing agreements, (3) lawsuits of execution; and (4) lawsuits of indemnity by loss and damage. For civil lawsuits considered common and similar in nature, provisions are recorded based on the average of cases closed. Claims that do not fit the previous criteria are provisioned according to individual assessment performed, and provisions are based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel.
The main processes with the classification of risk of loss as probable are described below:
Lawsuits for Indemnity - seeking indemnity for material and emotional damage, regarding the consumer relationship on matters related to credit cards, consumer credit, bank accounts, collection and loans and other operations. In the civil lawsuits considered to be similar and usual, provisions are recorded based on the average of cases closed. Civil lawsuits that do not fit into the previous criteria are provisioned according to the individual assessment made, being the provisions recognized based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel.
Economic Plans - they referred to lawsuits filed by savings accountholders, related to supposed inflation purge arising from the Economic Plans (Bresser, Verão, Collor I and II), based on the understanding that such plans violated acquired rights relating to the application of inflation indexes on Saving Accounts, Lawsuits Deposits and Time Deposits (CDB). Provisions arising from such lawsuits are recorded based on the individual evaluation of loss made by external legal consultants.
The Banco Santander is also party in public class lawsuits on the same matter filed by consumer rights organizations, Public Prosecutor’s Offices and Public Defender’s Offices. The provision is made for the lawsuits with the classification of risk as probable, based on the individual execution orders. The STF is still analyzing the subject and has already ordered the suspension of all the procedures except those that were not already decided in courts or in phase of definitive execution. There are decisions favorable to banks at the STF with regard to the economic phenomenon similar to the savings accounts, as in the case of monetary restatement of time deposits - CDB and agreements (present value table).
However, the Supreme Court´s jurisprudence has not come to a conclusion regarding the constitutionality of the norms that changed Brazil’s monetary standard. On April 14, 2010, the STJ was recently decided that the deadline for the filing of civil lawsuits that argue the government's purge is five years, but this decision has not been handed down on the lawsuits yet. Thus, with this decision, a majority lawsuits, as they were filed after the period of five years is likely to be rejected, reducing the values involved. Still, the STF decided that the deadline for individual savers to become party on the public civil litigations, is also five years, counted from the final unappealable sentence. Banco Santander believes in the success of the arguments defended in these courts based on their content and the legal basis.
At the end of 2017, the General Union Law (AGU), Bacen, Institute of Consumer Protection (Idec), the Brazilian Front of the Money savers (Febrapo), the Brazilian Banks Federation (Febraban) have signed an agreement with the purpose to close all lawsuits related to Economic Plans.
The discussions focused on the definition of the amount that would be paid to each person according to the outstanding balance in the saving account. The total amount of the payments will depend on the number of the additional clients, and also on the number of money savers that approved in the courts the existance of their account and balance in the birthday date of the indexes changes. The term of agreement negotiated between the parties was submitted to the STF which approved the terms of the agreement.
Recently, the STF ordered the suspension of all economic plan (in the country), for two years considering the judicial homologation.
The Management considers that the accrued provisions are due to charge interest in accordance with the plans, including considering the agreement approved by the STF.
h) Civil, Labor, Tax, and Security Social Liabilities Contingent Classified with Loss Risk as Possible
Refer to lawsuits and administrative proceedings involving tax, labor and civil matters classified by legal counsels with loss risk as possible, which they were not recorded.
The tax lawsuits classification with loss risk as possible totaled R$23,473 million in Consolidated, being the main lawsuits as follow:
INSS on Profits or Results (PLR) - Bank and the subsidiaries have several lawsuits and administrative proceedings arising from questioning tax authorities in connection with the taxation for social security purposes of certain items which are not considered to be employee remuneration. As of March 31, 2019, the amounts related to these proceedings totaled approximately R$5,163.3 million.
Individual and Consolidated Financial Statements – March 31, 2019 70
Tax on Services (ISS) - Financial Institutions -Banco Santander and its subsidiaries discuss administrative and legal requirements, by several municipalities, of the payment of ISS on various revenues arising from operations that are usually not classified as services. On March 31, 2019, the amounts related to these proceedings totaled approximately R$3,061.9 million.
Unapproved Compensation - The Bank and its affiliates discuss administrative and legal proceedings with the Federal Revenue Office to grant tax relief with credits arising from overpayments. On March 31, 2019, the amounts related to these proceedings totaled approximately R$2,602.1 million.
Goodwill Amortization of Banco Real - the Federal Tax Office of Brazil issued infraction notices against the Bank to require the income tax and social payments, including late charges, for the period of 2009. The Tax Authorities considered that the goodwill related to acquisition of Banco Real, amortized for accounting purposes prior to the merger, could not be deduced by Banco Santander for tax purposes. The infraction notice was contested. On July 14, 2015, the Police Judging RFB decided favorably to Banco Santander, fully canceling the tax debt. On November 10, 2016, the appeal was filed, prompting the Bank to lodge an appeal with CARF, which is awaiting judgment. On March 31, 2019, the balance was approximately R$1,387.4 million.
Credit Losses - Bank and its subsidiaries challenged the tax assessments issued by the Federal Revenue Services claiming the deduction for credit losses because they fail to meet the relevant requirements under applicable law. As of March 31, 2019, the amount related to this claim is approximately R$1,049.8 million.
Use of CSLL Tax and Negative Tax Loss -Tax assessments issued by the Federal Revenue Service in 2009 for alleged undue compensation of tax loss carryforwards and negative basis of CSLL, as a consequence of tax assessments drawn up in previous periods. Judgment is pending at the administrative level. As of March 31, 2019, the amount was R$1,030.5 million.
Goodwill Amortization of Banco Sudameris - the Tax Authorities have issued infraction notices to require the income tax and social contribution payments, including late charges, relating to tax deduction of amortization of goodwill from the acquisition of Banco Sudameris, related to the period of 2007 to 2012. Banco Santander timely presented its appeals, which are pending. On March 31, 2019, the amounts related to these proceedings totaled approximately R$619.9 million.
IRPJ and CSLL - Capital Gain - the Federal Tax Office of Brazil issued infraction notices against Santander Seguros, successor company of ABN AMRO Brasil Dois Participações S.A. (AAB Dois Par), charging income Tax and Social Contribution to related base year 2005. The Federal Tax Office of Brazil claims that capital gain in sales of shares from Real Seguros S.A and Real Vida Previdência S.A. by AAB Dois Par should be taxed by the rate of 34% instead 15%. The assessment was contested administratively based on understanding that tax treatment adopted at the transaction was in compliance with tax laws and capital gain was taxed properly. The administrative lawsuit is awaiting trial. The Banco Santander is responsible for any adverse outcome in this lawsuit as former Zurich Santander Brasil Seguros e Previdência S.A. stockholder. As of March 31, 2019, the amount related to this lawsuit is approximately R$301.7 million.
The labor claims with classification of loss risk as possible totaled R$423 million in Consolidated, excluding the lawsuits below:
Semiannual Bonus or PLR - refers to Labor claim filed in 1998 by the Banespa Retirement Association (AFABESP) claiming the payment of the semi-annual bonus contemplated in Banespa's regulation, to be distributed as long as there is a profit and provided that it is approved by the board of directors. The Bonus was not paid in 1994 and 1995, since Banespa did not make a profit these years. Partial payments were made from 1996 to 2000, as approved by the Board of Executive Officers. The statute clause was eliminated in 2001. The Regional Labor Court and the Superior Labor Court ordered that Banco Santander, as successor of Banespa, pay this semi-annual bonus for the period from 1996 to the present date. On March 20, 2019, a decision of the Federal Supreme Court (STF) rejected the extraordinary appeal filed by the Bank. Restitution by Santander Brasil was filed to reverse the decision in the main proceedings and to suspend the execution of the proceeding, an injunction was granted determining the suspension of the execution of the decision rendered in the main action files. Based on the opinion of our legal advisors, Management classifies the risk of loss as possible. The current court ruling does not define a specific amount to be paid by the defendants.
Readjustment of Banesprev retirement complements by the IGPDI - lawsuit filed in 2002 in Federal Court by the Association of Retired Employees of the Banco do Estado de São Paulo S.A. - Banespa, requesting the readjustment of the retirement supplementation by the IGPDI for Banespa retirees who have been admitted until May 22, 1975. The judgment granted the correction but only in the periods in which no other form of adjustment could be applied. The Bank and Banesprev have appealed this decision and although the appeals have not yet been judged, the Bank's success rate in this matter in the High Courts is around 90%. In Provisional Execution, calculations were presented by the Bank and Banesprev with "zero" result due to the exclusion of participants who, among other reasons, are listed as authors in other lawsuits or have already had some type of adjustment. The amount related to this claim is not disclosed due to the current stage of the lawsuit and such disclosure may impact the progress of the claim.
The liabilities related to civil lawsuits with classification of loss risk as possible totaled R$1,462 million in Consolidated, being the main lawsuits as follow:
Individual and Consolidated Financial Statements – March 31, 2019 71
Indemnity Lawsuit Arising of the Banco Bandepe - related to mutual agreement on appeal to the Justice Superior Court (STJ - Superior Tribunal de Justiça).
Indemnity Lawsuit Related to Custody Services - provided by Banco Santander at an early stage which was not handed down yet.
Lawsuit Arising from a Contractual Dispute - the acquisition of Banco Geral do Comércio S.A. on appeal to the Court of the State of São Paulo (TJSP - Tribunal de Justiça do Estado de São Paulo).
i) Other Lawsuits Under the Responsibility of Former Controlling Stockholders
Refer to tax, labor and civil lawsuits, in the amounts of R$515,664, R$213 and R$6,800 (12/31/2018- R$518,061, R$327 and R$6,767) in the Bank and R$593,990, R$213 e R$6,800 (12/31/2018- R$598,544, R$327 e R$6,767) in the Consolidated, respectively, recorded in other financial liabilities (Note 21) which the responsible people were the former controlling stockholders of the Bank and acquired companies. Based on the agreement signed, these lawsuits have guaranteed reimbursement from part of the former controllers, whose respective duties were recorded in other receivables - others (Note 12).
23. Stockholders’ Equity
a) Capital
According to the by-laws, Banco Santander's capital stock may be increased up to the limit of its authorized capital, regardless of statutory reform, by resolution of the Board of Directors and through the issuance of up to 9,090,909,090 (nine billion, ninety million, nine hundred and nine thousand and ninety) shares, subject to the established legal limits on the number of preferred shares. Any capital increase that exceeds this limit will require stockholders' approval.
The capital stock, fully subscribed and paid, is divided into registered book-entry shares with no par value.
Thousands of Shares | ||||||||||||
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
| 12/31/2018 |
|
| Common |
| Preferred |
| Total |
| Common |
| Preferred |
| Total |
Brazilian Residents |
| 83,326 |
| 108,990 |
| 192,316 |
| 82,043 |
| 107,699 |
| 189,742 |
Foreign Residents |
| 3,735,369 |
| 3,570,846 |
| 7,306,215 |
| 3,736,652 |
| 3,572,137 |
| 7,308,789 |
Total |
| 3,818,695 |
| 3,679,836 |
| 7,498,531 |
| 3,818,695 |
| 3,679,836 |
| 7,498,531 |
(-) Treasury Shares |
| (13,628) |
| (13,629) |
| (27,256) |
| (13,317) |
| (13,317) |
| (26,634) |
Total Outstanding |
| 3,805,067 |
| 3,666,208 |
| 7,471,275 |
| 3,805,378 |
| 3,666,519 |
| 7,471,897 |
b) Dividends and Interest on Capital
According to the Bank’s bylaws, stockholders are entitled to a minimum dividend equivalent to 25% of net income for the year, adjusted according to legislation. Preferred shares are nonvoting and nonconvertible, but have the same rights and advantages granted to common shares, in addition to priority in the payment of dividends at a rate that is 10% higher than those paid on common shares, and in the capital reimbursement, without premium, in the event of liquidation of the Bank.
Dividend payments have been calculated and paid in accordance with Brazilian Corporate Law.
Prior to the Annual Stockholders Meeting, the Board of Directors may resolve on the declaration and payment of dividends on earnings based on: (i) balance sheets or earning reserves showed in the last balance sheet; or (ii) balance sheets issued in the period shorter than 6 months, since the total of dividends paid in each half of the fiscal year shall not exceed the amount of capital reserves. These dividends are fully attributed to the mandatory dividend.
The highlight of interest on capital in the year ended in March 31, 2019 and December 31, 2018, are described below:
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
| In Thousands |
|
|
| Brazilian Real per Thousand Shares/Units | ||||
|
|
|
| of Brazilian Real |
| Common |
| Preferred |
| Units | ||
Interest on Capital (1) (2) |
|
|
|
|
| 1,000,000 |
| 127.5853 |
| 140.3438 |
| 267.9291 |
Total |
|
|
|
|
| 1,000,000 |
|
|
|
|
|
|
(1) Established by the Board of Directors in March 29, 2019, Common Shares - R$108.4475, preferred - R$119.2922 e Units - R$227.7397 net of taxes and will be paid in May 28, 2019, without any remuneration for monetary restatement.
(2) The amount of interest on stockholders' equity will be fully charged to the mandatory minimum dividends to be distributed by the Bank for the year 2019.
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
| In Thousands |
|
|
| Brazilian Real per Thousand Shares/Units | ||||
|
|
|
| of Brazilian Real |
| Common |
| Preferred |
| Units | ||
Interest on Capital (1) (6) |
|
|
|
|
| 600,000 |
| 76.3304 |
| 83.9634 |
| 160.2938 |
Interest on Capital (2) (6) |
|
|
|
|
| 600,000 |
| 76.4956 |
| 84.1451 |
| 160.6407 |
Interest on Capital (3) (6) |
|
|
|
|
| 600,000 |
| 76.4985 |
| 84.1484 |
| 160.6469 |
Interim Dividends (4) (6) |
|
|
|
|
| 2,880,000 |
| 367.4149 |
| 404.1564 |
| 771.5713 |
Interest on Capital (5) (6) |
|
|
|
|
| 1,920,000 |
| 244.9433 |
| 269.4376 |
| 514.3808 |
Total |
|
|
|
|
| 6,600,000 |
|
|
|
|
|
|
Individual and Consolidated Financial Statements – March 31, 2019 72
(1) Established by the Board of Directors in March 27, 2018, Common Shares - R$64.8808, preferred - R$71.3689 and Units - R$136.2497 net of taxes. Were paid in April 26, 2018, without no remuneration for monetary restatement.
(2) Established by the Board of Directors in June 26, 2018 and paid as of as July 27, 2018, without no remuneration for monetary restatement.
(3) Established by the Board of Directors in September 28, 2018, Common Shares - R$65.0237, preferred - R$71.5261 and Units - R$136.5498 net of taxes. Were paid in October 26, 2018, without no remuneration for monetary restatement.
(4) Established by the Board of Directors in December 28, 2018, Common Shares - R$312.3027, preferred - R$343.5329 and Units - R$655.8356 net of taxes. Were paid in October 26, 2018, without no remuneration for monetary restatement.
(5) Established by the Board of Directors in December 28, 2018. Were paid as of as February 26, 2019, without no remuneration for monetary restatement.
(6) The amount of interest on capital and interim dividends will be fully charged to the mandatory dividends for the year 2018.
c) Reserves
Net income, after deductions and statutory provisions, will be allocated as follows:
Legal Reserve
According to Brazilian corporate law, 5% to the legal reserve, until it reaches 20% of the share capital. This reserve is intended to ensure the integrity of capital and can only be used to offset losses or increase capital.
Capital Reserve
The Bank´s capital reserve consists of: goodwill reserve for subscription of shares and other capital reserves, and can only be used to absorb losses that exceed retained earnings and profit reserves; redemption, reimbursement or acquisition of shares for the Bank´s own issue; capital increase; or payment of dividends to preferred shares under certain circumstances.
Reserve for Equalization Dividend
After the allocation of dividends, the remaining balance if any, may, upon proposal of the Executive Board and approved by the Board of Directors, be allocated to reserve for equalization of dividends, which will be limited to 50% of the share capital. This reserve aims to ensure funds for the payment of dividends, including as interest on own capital, or any interim payment to maintain the flow of stockholders remuneration.
d) Treasury Shares
In the meeting held on November 1, 2018, the Bank’s Board of Directors approved, in continuation of the buyback program that expired on November 1, 2017, the buyback program of its Units and ADRs, by the Bank or its agency in Cayman, to be held in treasury or subsequently sold.
The Buyback Program will cover the acquisition up to37,753,760 Units, representing37,753,760 common shares and37,753,760 preferred shares, or the ADRs, which, on December 31, 2018, corresponded to approximately 1% of the Bank’s share capital. On December 31, 2018, the Bank held 362,227,661 common shares and 390,032,076 preferred shares being traded.
The Buyback has the purpose to (1) maximize the value creation to stockholders by means of an efficient capital structure management; and (2) enable the payment of officers, management level employees and others Bank’s employees and companies under its control, according to the Long Term Incentive Plans. The term of the Buyback Program is 12 months counted from November 6, 2018, and will expire on November 5, 2019.
Bank/Consolidated | ||||||||||||
Shares in Thousands | ||||||||||||
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Quantity |
| Quantity |
|
|
|
|
|
|
|
|
|
| Units |
| Units |
Treasury Shares at Beginning of the Exercise |
|
|
|
|
|
|
| 13,316 |
| 1,773 | ||
Cancellation of ADRs (1) |
|
|
|
|
|
|
|
|
| - |
| - |
Shares Acquisitions |
|
|
|
|
|
|
|
|
| 3,338 |
| 15,815 |
Payment - Share-Based Compensation |
|
|
|
|
|
|
| (3,026) |
| (4,272) | ||
Treasury Shares at Beginning of the Exercise |
|
|
|
|
|
|
| 13,628 |
| 13,316 | ||
Subtotal - Treasury Shares in Thousands of Reais |
| R$ 520,267 |
| R$ 460,550 | ||||||||
Issuance Cost in Thousands of Reais |
| R$ 2,410 |
| R$ 882 | ||||||||
Balance of Treasury Shares in Thousands of Reais |
| R$ 522,677 |
| R$ 461,432 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost/Share Price |
|
|
|
|
|
|
|
|
| Units |
| Units |
Minimum Cost |
|
|
|
|
|
|
|
|
| R$ 7.55 |
| R$ 7.55 |
Weighted Average Cost |
|
|
|
|
|
|
|
|
| R$ 30.69 |
| R$ 28.59 |
Maximum Cost |
|
|
|
|
|
|
|
|
| R$ 49.55 |
| R$ 43.84 |
Share Price |
|
|
|
|
|
|
|
|
| R$ 43.97 |
| R$ 42.70 |
Individual and Consolidated Financial Statements – March 31, 2019 73
e) Consolidated Stockholders’ Equity - Unrealized Income
The consolidated stockholders’ equity is reduced mainly to unrealized income of R$19,734 (12/31/2018 - R$2,788) and long-term incentives of R$2,442 (12/31/2018 - R$1,706). In the first quarter of 2019, there were realized results in the amounting of R$249 (2018 - R$977).
f) Non Controlling Interest
|
| Stockholders’ Equity |
| |||||
|
| 03/31/2019 |
| 12/31/2018 |
| 01/01 to |
| 01/01 to |
Banco RCI Brasil S.A. (Note 14) |
| 743,221 |
| 714,671 |
| (22,824) |
| (25,977) |
Olé Consignado (Note 14) |
| 517,223 |
| 463,407 |
| (53,816) |
| (30,224) |
FI RN Brasil - Financiamento de Veículos (Note 2) | 201,081 |
| 301,707 |
| (4,281) |
| (5,685) | |
Getnet S.A. (Note 14) |
| - |
| 249,007 |
| (3,962) |
| (12,038) |
Banco PSA (Note 14) |
| 160,010 |
| 155,399 |
| (4,611) |
| (3,961) |
FI Direitos Creditórios RCI Brasil I (Note 2) |
| 36,652 |
| 63,454 |
| (837) |
| (4,311) |
Santander FI SBAC |
| 65,542 |
| 62,595 |
| (944) |
| (950) |
Banco Hyundai Capital Brasil S.A. |
| 151,332 |
| 51,072 |
| (249) |
| - |
Rojo Entretenimento S.A. |
| 7,015 |
| 7,015 |
| - |
| - |
Return Capital Serviços de Recuperação de Créditos S.A. | 804 |
| 1,155 |
| (514) |
| (134) | |
Santander Leasing (Note 14) |
| 450 |
| 447 |
| (4) |
| (6) |
Total |
| 1,883,330 |
| 2,069,929 |
| (92,042) |
| (83,286) |
24. Operational Ratios
In July 2008 came into force the rules on regulatory capital measurement by the Standardized Approach of Basel II. On 2013 was issued a set of Resolutions and Circulars, aligned with the recommendations of the Basel Committee on Banking Supervision. These rules were repealed by CMN Resolution 4,192 and 4,193 which took effect from October 2013, establishing the model for calculating the minimum Regulatory Capital requirements, Tier I and Common Equity Tier I. These Resolutions states that the composition of the Regulatory Capital is done through equity, subordinated debt and hybrid capital instruments.
As required by Resolution CMN 4,193/2013, the requirement for PR in 2018 was 11.0%, composed of 8.625% of Reference Equity Minimum plus 1.875% of Capital Conservation Additional. Considering this additional, PR Level I increased to 8.375% and Minimum Principal Capital to 6.875%.
For the base year 2019, the PR requirement remains at 10.5%, including 8.0% of Minimum of Reference Equity and a further 2.5% of Capital Conservation Additional. The PR Level I reaches 8.5% and the Principal Capital Minimum 7.0%.
As a continuation the adoption of the rules established by CMN Resolution 4,192/2013, as of January 2015, came into force the Prudential Conglomerate, defined by CMN Resolution 4,280/2013.
The index is calculated on a consolidated basis based on the information of Consolidated Prudential, as shown below:
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
| 12/31/2018 |
Tier I Regulatory Capital |
|
|
|
|
|
|
|
|
| 65,272,175 |
| 61,476,715 | ||
Principal Capital |
|
|
|
|
|
|
|
|
|
|
| 60,261,026 |
| 56,581,518 |
Supplementary Capital (Note 20) |
|
|
|
|
|
|
|
|
| 5,011,149 |
| 4,895,197 | ||
Tier II Regulatory Capital (Note 20) |
|
|
|
|
|
|
|
|
| 4,989,383 |
| 4,887,175 | ||
Regulatory Capital (Tier I and II) |
|
|
|
|
|
|
|
|
| 70,261,558 |
| 66,363,890 | ||
Credit Risk (1) |
|
|
|
|
|
|
|
|
|
|
| 368,652,729 |
| 358,955,592 |
Market Risk (2) |
|
|
|
|
|
|
|
|
|
|
| 40,200,400 |
| 39,231,773 |
Operational Risk |
|
|
|
|
|
|
|
|
|
|
| 46,526,950 |
| 42,375,554 |
Total RWA (3) |
|
|
|
|
|
|
|
|
|
|
| 455,380,079 |
| 440,562,919 |
Basel I Ratio |
|
|
|
|
|
|
|
|
|
|
| 14.33 |
| 13.95 |
Basel Principal Capital |
|
|
|
|
|
|
|
|
|
|
| 13.23 |
| 12.84 |
Basel Regulatory Capital |
|
|
|
|
|
|
|
|
| 15.43 |
| 15.06 | ||
Individual and Consolidated Financial Statements – March 31, 2019 74
(1) Exposures to credit risk subject to the calculation of the capital requirement using a standardized approach (RWACPAD) are based on the procedures established by Circular Bacen 3,644, dated March 4, 2013 and its subsequent complements through the wording of Circular Bacen 3,174 of August 20, 2014 and Bacen Circular 3,770 of October 29, 2015.
(2) Includes portions for market risk exposures subject to variations in rates of foreign currency coupons (RWAjur2), price indexes (RWAjur3) and interest rate (RWAjur1/RWAjur4), the price of commodities (RWAcom), the price of shares classified as trading portfolios (RWAacs), and portions for gold exposure and foreign currency transactions subject to foreign exchange (RWAcam).
(3) Risk Weighted Assets.
Banco Santander, quarterly discloses Pillar III information relating to risk management, Regulatory Capital and Risk Weighted Assets. A report with further details of the structure and methodology will be disclosed on the website www.ri.santander.com.br/ri.
Financial institutions are required to maintain investments in permanent assets compatible with adjusted regulatory capital. Funds invested in permanent assets, calculated on a consolidated basis, are limited to 50% of adjusted regulatory capital, as per prevailing regulation. Banco Santander classifies for said index. The Bank is in compliance with the requirements aforementioned.
25. Related Parties
a) Key Management Personnel Compensation
The Board of Directors' meeting, held on March 27, 2019 approved, in accordance with the Compensation Committee the maximum global compensation proposal for the directors (Board of Directors and Executive Officers) overall amounting to R$400,000,000.00 (four hundred million reals) for the 2019 financial year, covering fixed remuneration, variable and equity-based and other benefits. The proposal was approved by the Ordinary General Meeting (OGM) accomplished on April 26, 2019.
a.1) Long Term Benefits
The Bank, likewise Banco Santander Spain and other companies controlled by Santander Group, develops long-term compensation programs-tied to the performance of the market price of its shares, based on the achievement of certain goals (Note 34.f).
a.2) Short Term Benefits
The table below shows the salary of Board of Directors and Executive Board and refers to the amount recognized as an expense and paid in the year ended March 31, 2019 and 2018, by Banco Santander and its subsidiaries to their directors for their positions in Banco Santander and other companies in the Santander Conglomerate.
The amounts related to Variable Remuneration and Share-based Remuneration will be paid in subsequent periods.
|
|
|
|
|
|
|
|
|
|
|
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed Compensation |
|
|
|
|
|
|
|
|
| 22,751 |
| 22,051 | ||
Variable Compensation - in cash |
|
|
|
|
|
|
| 10,924 |
| 11,282 | ||||
Variable Compensation - in shares |
|
|
|
|
|
|
| 10,057 |
| 8,964 | ||||
Others (1) |
|
|
|
|
|
|
|
|
|
|
| 9,825 |
| 17,015 |
Total Short-Term Benefits |
|
|
|
|
|
|
| 53,557 |
| 59,312 | ||||
Variable Compensation - in cash |
|
|
|
|
|
|
| 9,587 |
| 8,963 | ||||
Variable Compensation - in shares |
|
|
|
|
|
|
| 8,885 |
| 8,964 | ||||
Total Long-Term Benefits |
|
|
|
|
|
|
| 18,472 |
| 17,927 | ||||
Total |
|
|
|
|
|
|
|
|
|
|
| 72,029 |
| 77,239 |
(1)In the first quarter of 2018, the Management of Banco Santander decided to provision and settle in advance certain benefit, which was practiced by the Bank's liberality, remaining in 2019, the other benefits.
Additionally, in the first quarter of 2019, charges were collected on Management compensation in the amount of R$8,952 (2018 - R$9,138).
Individual and Consolidated Financial Statements – March 31, 2019 75
b) Contract Termination
The termination of the employment relationship of managers for non-fulfillment of obligations or voluntarily by the employee does not give right to any financial compensation and its acquired benefits will be settled.
c) Lending Operations
The Bank and its subsidiaries may carry out transactions with related parties, in line with the legislation in force as set forth in articles 6 and 7 of Resolution 4,693/18 CMN, article 34 of Law 6,404/76 "Law of Corporations" and the Policy for Transactions with Related Parties of Santander published on the Investor Relations page.
1. The following is considered as related parties of the Santander Financial Institutions in respect of each of them individually:
| · | its controllers, natural or legal persons, under the terms of art. 116 of the Law of Corporations; |
| · | its directors and members of statutory or contractual bodies; |
| · | in relation to the persons mentioned in items (i) and (ii), their spouse, companion and relatives, consanguineous or the like, up to the second degree; |
| · | natural persons with qualified equity interest in their capital; |
| · | corporate entities with qualified equity interest in their capital; |
| · | legal entities in whose capital, directly or indirectly, a Santander Financial Institution has a qualified shareholding; |
| · | legal entities in which a Santander Financial Institution has effective operational control or preponderance in the deliberations, regardless of the equity interest; and |
legal entities that have a director or member of the board of directors in common with a Santander Financial Institution.
d) Ownership Interest
The table below shows the direct interest (common and preferred shares):
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares in Thousands |
|
|
|
| 03/31/2019 | ||||||||||
|
|
|
|
|
|
|
|
|
| Preferred |
| Total | ||
|
|
|
|
|
| Common Shares | Preferred |
| Shares |
| Total |
| Shares | |
Stockholders' | Common Shares |
| (%) |
| Shares |
| (%) |
| Shares |
| (%) | |||
Sterrebeeck B.V. (1) | 1,809,584 |
| 47.4% |
| 1,733,644 |
| 47.1% |
| 3,543,228 |
| 47.3% | |||
Grupo Empresarial Santander, S.L. (GES) (1) | 1,107,673 |
| 29.0% |
| 1,019,645 |
| 27.7% |
| 2,127,318 |
| 28.4% | |||
Banco Santander, S.A. (1) | 521,964 |
| 13.7% |
| 519,268 |
| 14.1% |
| 1,041,232 |
| 13.9% | |||
Employees | 3,945 |
| 0.1% |
| 3,948 |
| 0.1% |
| 7,893 |
| 0.1% | |||
Directors (*) | 4,765 |
| 0.1% |
| 4,765 |
| 0.1% |
| 9,530 |
| 0.1% | |||
Others | 357,136 |
| 9.4% |
| 384,938 |
| 10.5% |
| 742,074 |
| 9.9% | |||
Total Outstanding | 3,805,067 |
| 99.6% |
| 3,666,208 |
| 99.6% |
| 7,471,275 |
| 99.7% | |||
Treasury Shares | 13,628 |
| 0.4% |
| 13,628 |
| 0.4% |
| 27,256 |
| 0.3% | |||
Total | 3,818,695 |
| 100.0% |
| 3,679,836 |
| 100.0% |
| 7,498,531 |
| 100.0% | |||
Free Float (2) | 361,081 |
| 9.5% |
| 388,886 |
| 10.6% |
| 749,967 |
| 10.0% | |||
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares in Thousands |
|
|
|
| 12/31/2018 | ||||||||||
|
|
|
|
|
|
|
|
|
| Preferred |
| Total | ||
|
|
|
|
|
| Common Shares | Preferred |
| Shares |
| Total |
| Shares | |
Stockholders' | Common Shares |
| (%) |
| Shares |
| (%) |
| Shares |
| (%) | |||
Sterrebeeck B.V. (1) | 1,809,583 |
| 47.4% |
| 1,733,644 |
| 47.1% |
| 3,543,227 |
| 47.2% | |||
GES (1) | 1,107,673 |
| 29.0% |
| 1,019,645 |
| 27.7% |
| 2,127,318 |
| 28.4% | |||
Banco Santander, S.A. (1) | 521,964 |
| 13.7% |
| 519,268 |
| 14.1% |
| 1,041,232 |
| 13.9% | |||
Employees | 2,986 |
| 0.1% |
| 2,987 |
| 0.1% |
| 5,973 |
| 0.1% | |||
Directors (*) | 3,930 |
| 0.1% |
| 3,930 |
| 0.1% |
| 7,860 |
| 0.1% | |||
Others | 359,242 |
| 9.4% |
| 387,045 |
| 10.5% |
| 746,287 |
| 9.9% | |||
Total Outstanding | 3,805,378 |
| 99.7% |
| 3,666,519 |
| 99.6% |
| 7,471,897 |
| 99.6% | |||
Treasury Shares | 13,317 |
| 0.3% |
| 13,317 |
| 0.4% |
| 26,634 |
| 0.4% | |||
Total | 3,818,695 |
| 100.0% |
| 3,679,836 |
| 100.0% |
| 7,498,531 |
| 100.0% | |||
Free Float (2) | 362,228 |
| 9.5% |
| 390,032 |
| 10.6% |
| 752,260 |
| 10.0% | |||
(1) Companies of the Santander Spain Group.
(2) Composed of Officials and Others.
(*) None of the members of the Board of Directors and the Executive Board holds 1.0% or more of any class of shares.
Individual and Consolidated Financial Statements – March 31, 2019 76
e) Related-Party Transactions
Santander has a Policy for Related Party Transactions approved by the Board of Directors, which aims to ensure that all transactions typified by the policy to take effect in view of the interests of Banco Santander and its stockholders. The policy defines the power to approve certain transactions by the Board of Directors. The planned rules also apply to all employees and officers of Banco Santander and its subsidiaries.
Operations and charges for services with related parties are carried out in the ordinary course of business and under reciprocal conditions, including interest rates, terms and guarantees, and do not entail greater risk than the normal collection or have other disadvantages.
Beginning in 2018, transactions and balances with key management personnel are shown. The main transactions and balance are as follows:
|
|
| Bank | |
| Assets | Income | Assets | Income |
| (Liabilities) | (Expenses) | (Liabilities) | (Expenses) |
|
| 01/01 to 03/31/2019 | 12/31/2018 | 01/01 to 03/31/2018 |
| 03/31/2019 | |||
Cash | 433,877 | - | 1,402,413 | - |
Banco Santander Espanha (2) | 388,008 | - | 1,342,685 | - |
Others | 45,869 | - | 59,728 | - |
Interbank Investments | 57,759,374 | 1,128,851 | 64,268,736 | 1,101,938 |
Aymoré CFI (3) | 40,105,439 | 750,329 | 39,943,867 | 771,221 |
Banco Santander Espanha (1) (2) | 1,597,857 | 31,653 | 6,583,716 | 27,277 |
Banco RCI Brasil S.A. (3) | 2,722,880 | 45,015 | 2,880,143 | 26,079 |
Olé Consignado (3) | 11,584,475 | 250,922 | 11,156,948 | 242,919 |
Others | 1,748,723 | 50,932 | 3,704,062 | 34,442 |
Securities | 359,655 | 5,419 | 354,237 | 380,819 |
Santander Leasing (3) | 359,655 | 5,419 | 354,237 | 380,819 |
Derivatives Financial Instruments - Net | (641,951) | (667,968) | (196,540) | (160,342) |
Real Fundo de Investimento Multimercado Santillana Crédito Privado (Fundo de Investimento Santillana) (4) | 27,745 | (15,670) | 266,027 | 4,969 |
Abbey National Treasury Services Plc (Abbey National Treasury) (4) | - | - | - | 4,300 |
Banco Santander Espanha (2) | (692,352) | (178,790) | (520,953) | (139,295) |
Santander FI Amazonas (3) | (30,124) | (359,356) | (13,509) | 111 |
Santander FI Hedge Strategies (3) (Note 2) | 613,550 | (38,050) | 558,195 | 63,070 |
Getnet S.A. (Note 12) (3) (7) | (2,792) | (4,499) | - | - |
Santander Hermes Multi Créd Priv Infra Fundo de Invest | 36,083 | 27,571 | 7,889 | - |
Santander FI Diamantina (3) | (594,061) | (99,199) | (494,189) | (93,497) |
Key Management Personnel | - | 25 | - | - |
Interfinancial Relations | 9,311,293 | 887 | 10,131,786 | 130 |
Getnet S.A. (Nota 12) (3) (7) | 9,299,421 | 394 | 10,118,599 | - |
Banco RCI Brasil S.A. (3) | 2,984 | - |
|
|
Santander Leasing (3) | 11,872 | 493 | 13,187 | 130 |
Loan Operations | 18,344 | 108 | 3,216 | 647 |
Cibrasec(5) | 28 | 13 | - | 647 |
Key Management Personnel (12) | 18,316 | 95 | 3,216 | - |
Dividends and Bonuses Receivables | 394,321 | - | 251,091 | - |
Aymoré CFI(3) | 254,919 | - | 161,419 | - |
Banco RCI Brasil S.A.(3) | - | - | 24,842 | - |
Banco Bandepe(3) | 127,500 | - | - | - |
Getnet S.A.(3) | - | - | 52,948 | - |
Others | 11,902 | - | 11,882 | - |
Trading Account | 362,882 | 755 | 191,740 | 152 |
Abbey National Treasury(4) | - | - | 87,260 | 83 |
Banco Santander Espanha(2) | 362,882 | 755 | 104,480 | 69 |
Foreign Exchange Portfolio - Net | (196,359) | (45,209) | 376,468 | 63,969 |
Banco Santander Espanha(2) | (196,359) | (45,247) | 376,045 | 63,969 |
Banco Santander México (4) | - | - | 423 | - |
Key Management Personnel | - | 38 | - | - |
Income Receivable | 936,242 | 517,871 | 926,771 | 460,247 |
Zurich Santander Brasil Seguros e Previdência S.A.(8) | 888,026 | 458,319 | 880,920 | 403,498 |
Zurich Santander Brasil Seguros S.A.(8) | 48,216 | 59,552 | 45,851 | 56,749 |
Receivables from Affiliates | 26,019 | 172,505 | 9,689 | 231,837 |
Santander Capitalização S.A. (3) | - | 2,306 | - | 65,501 |
Aymoré CFI (3) | - | 122,674 | - | 118,069 |
Santander CCVM (3) | - | 12,631 | - | 18,827 |
Santander Brasil Consórcio (3) | 345 | 4,451 | 225 | 2,295 |
Getnet S.A. (3) (7) | 22,152 | 17,513 | 6,111 | 14,398 |
Others | 3,522 | 12,931 | 3,353 | 12,747 |
Other Receivables - Others | 540,477 | 98,197 | 47,756 | 15,005 |
Banco Santander Espanha(2) | 506,834 | - | 7,159 | 6,972 |
Santander Capitalização S.A.(3) | 25,194 | 79,506 | 30,332 | - |
Banco Santander International(4) | - | 8,533 | - | 5,416 |
Key Management Personnel | 7,367 | 56 | 3,118 | - |
Others | 1,082 | 10,102 | 7,147 | 2,617 |
Deposits | (7,622,171) | (239,433) | (9,888,643) | (269,147) |
Santander Leasing(3) | (188,995) | (3,474) | (185,539) | (107,341) |
Banco Santander Espanha(2) | (13,300) | - | (77,919) | (2,213) |
Aymoré CFI(3) | (2,436,854) | (88,332) | (3,504,136) | (87,797) |
Zurich Santander Brasil Seguros e Previdência S.A.(8) | (216,353) | - | (234,249) | - |
Santander Brasil Gestão de Recursos Ltda.(4) | (252,255) | (3,654) | (190,674) | (1,271) |
Sancap(3) | (100) | (1) | (99) | (198) |
Santander Brasil Asset Management Distribuidora de Títulos e Valores Mobiliários S.A (Santander Brasil Asset)(4) | (19,618) | (302) | (18,639) | (276) |
Webmotors S.A.(10) | (677) | (7) | (1,509) | - |
Fundo de Investimento Santillana(4) | (1,329,949) | (16,782) | (1,151,399) | (29,224) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.)(3)(9) | (31,368) | (774) | (75,898) | (53) |
Banco RCI Brasil S.A.(3) | (89,710) | (516) | (36,871) | (1,259) |
Santander Corretora de Seguros(3) | (18,210) | (87) | (10,228) | (1,690) |
Santander Securities Services Brasil DTVM S.A.(4) | (421,748) | (7,065) | (427,209) | (5,764) |
Santander Brasil Consórcio(3) | (1,568) | (16) | (1,778) | (1,063) |
Santander FI Hedge Strategies(3) (Note 2) | (1,453,451) | (112,634) | (1,789,627) | (28,475) |
Santander Capitalização S.A.(3) | (10,256) | - | (5,434) | - |
Santander CCVM(3) | (11,904) | - | (32,877) | - |
Santander Securities Services Brasil Participações S.A.(4) | (58,936) | (893) | (58,968) | (1,119) |
Super Pagamentos(3) | (76,020) | (957) | (71,501) | (684) |
Santander Holding Imobiliária S.A.(3) | (2,134) | - | (220) | - |
Getnet S.A.(3) | (175,938) | - | (1,720,075) | - |
Key Management Personnel | (43,714) | (596) | (37,873) | - |
Others | (769,112) | (3,343) | (255,921) | (720) |
Repurchase Commitments | (5,287,605) | (70,530) | (5,131,434) | (327,460) |
Santander FI Financial(3) | - | - | (500,000) | (156,231) |
Santander Leasing(3) | (1,400,229) | (21,206) | (1,300,319) | (137,875) |
Santander FI SBAC(3) | (2,867,069) | (35,779) | (2,131,912) | (14,147) |
Santander FI Guarujá(3) | (380,638) | (2,937) | (249,538) | (2,143) |
Santander FI Unix(3) | (328,720) | (4,977) | (324,715) | (4,895) |
Key Management Personnel | (1,735) | (8) | (838) | - |
Others | (309,214) | (5,623) | (624,112) | (12,169) |
Funds from Acceptance and Issuance of Securities | (103,030) | (1,443) | (96,133) | - |
Key Management Personnel | (103,030) | (1,443) | (96,133) | - |
Borrowings and Onlendings | (1,976,529) | - | (1,989,845) | - |
Banco Santander Río S.A. (4) | (262,477) | - | (259,220) | - |
Banco Santander México (4) | (8,270) | - | - | - |
Santander Brasil EFC(3) | (1,705,782) | - | (1,730,625) | - |
Dividends and Bonuses Payables | (765,073) | - | (3,928,017) | - |
Banco Santander Espanha(2) | (118,550) | - | (609,159) | - |
Sterrebeeck B.V.(2) | (403,055) | - | (2,071,055) | - |
GES(2)(4) | (241,760) | - | (1,242,259) | - |
Banco Madesant - Sociedade Unipessoal, S.A. (Banco Madesant)(4) | (216) | - | (1,112) | - |
Key Management Personnel (11) | (1,492) | - | (4,432) | - |
Payables from Affiliates | (79,210) | (203,603) | (33,180) | (145,832) |
Produban Servicios Informáticos Generales, S.L. (Produban Servicios) (4) | - | - | - | (10,530) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.) (3) (9) | (147) | (107,700) | (5,032) | (74,618) |
Ingenieria de Software Bancário, S.L. (Ingeniería) (2) | - | - | - | (12,862) |
Santander Corretora de Seguros (3) | (9,063) | (25,595) | (6,057) | (15,221) |
Banco Santander Espanha (2) | (5,036) | (1,173) | (7,806) | (15,137) |
Getnet S.A. (3) | (4,878) | (8,242) | (2,660) | (5,665) |
Santander Securities Services Brasil | (4,321) | (11,834) | (4,291) | (11,642) |
Santander Global Technology, S.L., SOCI | (40,536) | (38,759) | (7,116) | - |
Others | (15,229) | (10,300) | (218) | (157) |
Debt Instruments Eligible to Compose Capital | (10,000,532) | (175,187) | (19,126,845) | (104,979) |
Banco Santander Espanha (2) (6) | (10,000,532) | (175,187) | (19,126,845) | (104,979) |
Donations | - | (4,000) | - | (3,900) |
Fundação Sudameris | - | (4,000) | - | (3,900) |
Other Payables - Others | (3,880,430) | (347,434) | (408,100) | (243,840) |
TecBan (10) | - | (78,947) | - | (69,876) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.) (3) (9) | - | (64,871) | - | (82,066) |
Getnet S.A. (3) | (3,540,530) | (132,043) | (33,321) | (71,223) |
Key Management Personnel | (339,900) | (62,173) | (374,637) | - |
Others | - | (9,400) | (142) | (20,675) |
Individual and Consolidated Financial Statements – March 31, 2019 77
|
|
| Consolidated | |
| Assets | Income | Assets | Income |
| (Liabilities) | (Expenses) | (Liabilities) | (Expenses) |
|
| 01/01 to 03/31/2019 | 12/31/2018 | 01/01 to 03/31/2018 |
| 03/31/2019 | |||
Cash | 653,999 | - | 1,575,165 | - |
Banco Santander Espanha (2) | 608,130 | - | 1,515,437 | - |
Others | 45,869 | - | 59,728 | - |
Interbank Investments | 1,597,857 | 31,747 | 6,583,716 | 27,289 |
Banco Santander Espanha(1)(2) | 1,597,857 | 31,747 | 6,583,716 | 27,289 |
Derivatives Financial Instruments - Net | (720,519) | (210,307) | (182,833) | (141,777) |
Fundo de Investimento Santillana(4) | 27,745 | (15,670) | 266,027 | 4,969 |
Abbey National Treasury(4) | - | - | - | 4,300 |
Banco Santander Espanha(2) | (748,264) | (194,662) | (448,860) | (151,046) |
Key Management Personnel | - | 25 | - | - |
Loan Operations | 18,344 | 113 | 3,216 | 647 |
Cibrasec(5) | 28 | 13 | - | 647 |
Key Management Personnel (12) | 18,316 | 100 | 3,216 | - |
Trading Account | 362,882 | (29,254) | 191,740 | 43,009 |
Banco Santander Espanha(2) | 362,882 | (29,254) | 104,480 | 42,926 |
Abbey National Treasury(4) | - | - | 87,260 | 83 |
Foreign Exchange Portfolio - Net | (196,359) | (45,209) | 376,468 | 63,969 |
Banco Santander Espanha(2) | (196,359) | (45,247) | 376,045 | 63,969 |
Banco Santander México (4) | - | - | 423 | - |
Key Management Personnel | - | 38 | - | - |
Dividends and Bonuses Receivables | 14,548 | - | 14,548 | - |
Webmotors S.A(10) | 14,548 | - | 14,548 | - |
Income Receivable | 970,246 | 765,628 | 959,726 | 646,537 |
Zurich Santander Brasil Seguros e Previdência S.A. (8) | 922,030 | 686,696 | 913,875 | 572,531 |
Zurich Santander Brasil Seguros S.A. (8) | 48,216 | 78,931 | 45,851 | 74,006 |
Receivables from Affiliates | 506 | 658 | 1,432 | 2,936 |
Isban Mexico, S.A. de C.V.(2) | 122 | - | 122 | - |
Santander Global Technology, S.L., SOCI | 192 | - | 192 | - |
Santander Securities Services Brasil DTVM S.A.(4) | - | 555 | 927 | 874 |
Others | 192 | 103 | 191 | 201 |
Other Receivables - Others | 579,134 | 12,589 | 41,837 | 16,508 |
Banco Santander Espanha(2) | 571,767 | (22) | 38,719 | 6,972 |
Banco Santander International(4) | - | 8,533 | - | 5,416 |
Santander Securities Services Brasil DTVM S.A.(4) | - | 2,127 | - | 1,580 |
Banco Santander - Chile | - | - | - | 339 |
Key Management Personnel | 7,367 | 104 | 3,118 | - |
Others | - | 889 | - | 1,934 |
Deposits | (2,494,979) | (31,305) | (2,394,667) | (40,582) |
Banco Santander Espanha(2) | (42,051) | - | (107,084) | (2,213) |
Zurich Santander Brasil Seguros S.A.(8) | (16,419) | - | (36,599) | - |
Isban Brasil S.A.(4) | - | - | - | (90) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.)(3)(9) | - | - | - | (215) |
Santander Brasil Gestão de Recursos Ltda.(4) | (252,255) | (3,654) | (190,674) | (1,271) |
Fundo de Investimento Santillana(4) | (1,329,949) | (16,782) | (1,151,399) | (29,224) |
Santander Securities Services Brasil DTVM S.A.(4) | (421,748) | (7,065) | (427,209) | (5,764) |
Santander Securities Services Brasil Participações S.A.(4) | (58,936) | (893) | (58,968) | (1,119) |
Gestora de Inteligência de Crédito(5) | (89,184) | (1,987) | (126,988) | (371) |
Key Management Personnel | (43,739) | (596) | (37,889) | - |
Others | (240,698) | (328) | (257,857) | (316) |
Repurchase Commitments | (1,735) | (8) | (838) | (579) |
Fundo de Investimento Santillana(4) | - | - | - | (579) |
Key Management Personnel | (1,735) | (8) | (838) | - |
Funds from Acceptance and Issuance of Securities | (103,030) | (1,443) | 96,133 | - |
Key Management Personnel | (103,030) | (1,443) | 96,133 | - |
Borrowings and Onlendings | (270,747) | - | (259,220) | - |
Banco Santander Río S.A. (4) | (262,477) | - | (259,220) | - |
Banco Santander México (4) | (8,270) | - | - | - |
Dividendos e Bonificações a Pagar | (765,073) | - | (3,928,017) | - |
Sterrebeeck B.V.(2) | (403,055) | - | (2,071,055) | - |
GES(2)(4) | (241,760) | - | (1,242,259) | - |
Banco Santander Espanha(2) | (118,550) | - | (609,159) | - |
Banco Madesant(4) | (216) | - | (1,112) | - |
Key Management Personnel (11) | (1,492) | - | (4,432) | - |
Payables from Affiliates | (65,340) | (63,452) | (34,385) | (87,497) |
Banco Santander Espanha(2) | (5,118) | (1,173) | (7,990) | (15,041) |
Produban Servicios(4) | - | - | - | (10,822) |
Isban Brasil S.A.(4) | - | - | - | (3,979) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.)(3)(9) | - | - | - | (31,051) |
Ingeniería(2) | - | - | - | (13,716) |
Santander Brasil Asset(4) | (14,477) | (452) | (14,476) | (450) |
Santander Securities Services Brasil DTVM S.A.(4) | (4,321) | (11,834) | (4,291) | (11,642) |
Santander Global Technology, S.L., SOCI | (40,536) | (39,072) | (7,116) | - |
Others | (888) | (10,921) | (512) | (796) |
Debt Instruments Eligible to Compose Capital | (10,000,532) | (175,187) | (19,126,845) | (104,979) |
Banco Santander Espanha(2)(6) | (10,000,532) | (175,187) | (19,126,845) | (104,979) |
Donations | - | (4,363) | - | (4,810) |
Santander Cultural | - | - | - | (750) |
Fundação Sudameris | - | (4,000) | - | (3,900) |
Fundação Santander | - | (363) | - | (160) |
Other Payables - Others | (362,216) | (164,750) | (403,287) | (125,180) |
Isban Brasil S.A.(4) | - | - | - | (26,270) |
Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A.)(3)(9) | - | - | - | (5,435) |
Ingeniería(2) | - | - | - | (9,145) |
Aquanima Brasil Ltda.(4) | - | (6,634) | - | (6,634) |
TecBan(10) | - | (78,947) | - | (69,876) |
Key Management Personnel | (344,164) | (72,055) | (384,724) | - |
Others | (18,052) | (7,114) | (18,563) | (7,819) |
(1)Refers to investments in foreign currency (overnight) with maturity on April 01, 2019 and interest rates of 2.37% p.a. (12/31/2018 - with maturity on January 02, 2019 and interest rates of 2.38% p.a.) maintained by the Banco Santander Brasil and its Grand Cayman Branch.
(2)Controller - Banco Santander is indirectly controlled by Banco Santander Spain (Note 1 and 26.d), through its subsidiary GES and Sterrebeeck B.V.
(3)Direct or indirect controlled by Banco Santander.
(4)Direct or indirect controlled by Banco Santander Espanha.
(5)Jointly Controlled - Banco Santander.
(6)Refers to the portion acquired by the Controller with the PR Optimization Plan carried out in the first half of 2014.
(7)Corresponds to receivable values related to the Acquiring business.
(8)Significant Influence of Banco Santander Espanha.
(9)Company acquired on February 28, 2018, on the same date, Produban Serviços de Informática S.A. was changed to Santander Brasil Tecnologia S.A. (Note 36.f).
(10)Jointly Controlled - Santander Corretora de Seguros.
(11) Of the total dividends approved in 2019, R$5,540 is allocated to the Key Management Personnel, with the amount of the provision being paid.
(12) The balance with key management personnel refers to operations contracted before the term of the mandates.
Individual and Consolidated Financial Statements – March 31, 2019 78
26. Income from Services Rendered and Banking Fees
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Asset Management | 168,917 | 196,479 | 250,818 | 251,567 |
Checking Account Services | 905,306 | 794,841 | 909,548 | 797,608 |
Lending Operations and Income from Guarantees Provided | 234,592 | 287,044 | 324,321 | 385,526 |
Lending Operations | 99,874 | 130,534 | 189,603 | 229,016 |
Income Guarantees Provided | 134,718 | 156,510 | 134,718 | 156,510 |
Insurance Fees | 589,044 | 529,668 | 739,150 | 662,103 |
Cards (Debit and Credit) and Acquiring Services | 1,088,695 | 855,402 | 1,608,889 | 1,340,168 |
Collection | 374,567 | 372,107 | 375,367 | 373,357 |
Brokerage, Custody and Placement of Securities | 138,679 | 120,542 | 191,755 | 161,538 |
Others | 56,933 | 67,504 | 129,011 | 162,400 |
Total | 3,556,733 | 3,223,587 | 4,528,859 | 4,134,267 |
27. Personnel Expenses
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Compensation | 925,238 | 925,206 | 1,050,063 | 1,022,260 |
Charges | 358,583 | 404,705 | 414,231 | 445,149 |
Benefits | 328,245 | 331,709 | 371,345 | 361,630 |
Training | 10,988 | 10,297 | 12,099 | 11,243 |
Others | 2,222 | 2,314 | 2,812 | 2,323 |
Total | 1,625,276 | 1,674,231 | 1,850,550 | 1,842,605 |
Individual and Consolidated Financial Statements – March 31, 2019 79
28. Other Administrative Expenses
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Depreciation and Amortization (1) | 514,079 | 487,637 | 649,632 | 617,341 |
Outsourced and Specialized Services | 473,603 | 416,274 | 588,927 | 515,193 |
Communications | 94,804 | 97,220 | 100,704 | 103,571 |
Data Processing | 590,141 | 488,158 | 581,859 | 518,070 |
Advertising, Promotions and Publicity | 94,023 | 82,183 | 132,521 | 99,417 |
Rentals | 188,187 | 175,116 | 194,402 | 180,616 |
Transportation and Travel | 34,105 | 33,010 | 42,711 | 40,352 |
Financial System Services | 59,922 | 60,327 | 76,482 | 78,313 |
Security and Money Transport | 158,752 | 153,914 | 159,448 | 154,275 |
Asset Maintenance and Upkeep | 52,180 | 58,543 | 55,435 | 59,471 |
Water, Electricity and Gas | 56,149 | 48,223 | 57,694 | 49,322 |
Materials | 10,925 | 12,674 | 11,997 | 13,298 |
Others | 120,119 | 88,137 | 201,096 | 136,649 |
Total | 2,446,989 | 2,201,416 | 2,852,908 | 2,565,888 |
(1) On March 31, 2019, includes goodwill amortization of R$13,281 (2018 - R$12,872) in the Bank and R$69,782 (2018 - R$69,372) in the Consolidated, held on time, length and proportion of the projected results.
29. Tax Expenses
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Cofins (Contribution for Social Security Financing) (1) | 472,931 | 444,687 | 632,468 | 580,016 |
ISS (Tax on Services) | 165,390 | 148,300 | 219,558 | 196,132 |
PIS (Tax on Revenue) (1) | 72,796 | 72,262 | 105,126 | 102,427 |
Others (2) | 50,509 | 48,354 | 72,035 | 69,308 |
Total | 761,626 | 713,603 | 1,029,187 | 947,883 |
(1) Includes the constitution of deferred taxes assets PIS and Cofins on adjustment to market value of securities and derivative financial instruments.
(2) Includes provisions updates for PIS and Cofins of Law 9,718/1998.
30. Other Operating Income
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Net Income Pension and Capitalization | - | - | 128,270 | 94,016 |
Reversal of Operating Provisions - Fiscal (Note 22.c) (1) | 13,028 | 10,536 | 9,139 | 897 |
Reversal of Provision for Financial Guarantees Provided (Note 21) | - | 86,797 | - | 86,797 |
Monetary Adjustment of Escrow Deposits | 109,296 | 107,068 | 131,041 | 140,595 |
Recoverable Taxes | 20,718 | 37,880 | 30,129 | 51,015 |
Recovery of Charges and Expenses | 307,248 | 314,240 | 241,962 | 244,409 |
Monetary Variation | 359,707 | - | 359,934 | 134 |
Others (2) | 219,183 | 420,843 | 263,488 | 457,682 |
Total | 1,029,180 | 977,364 | 1,163,963 | 1,075,545 |
(1) On March 31, 2018, includes the amount of R$51,215 in the Bank and R$52,606 in the Consolidated referring to the program of installments and cash payment of tax and social security debts established by MP 783/2017 and reissues (Note 22.c).
Individual and Consolidated Financial Statements – March 31, 2019 80
31. Other Operating Expenses
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Operating Provisions |
|
|
|
|
Labor (Note 22.c) | 7,096 | 152,609 | 28,852 | 162,381 |
Civil (Note 22.c) | 32,928 | 91,552 | 68,230 | 111,288 |
Credit Cards (5) | 879,559 | 457,852 | 720,805 | 477,275 |
Actuarial Losses - Pension Plan (Note 34.a) | 61,111 | 63,990 | 61,811 | 64,663 |
Legal Fees and Costs | 39,521 | 38,248 | 47,102 | 43,720 |
Serasa and SPC (Credit Reporting Agency) | 16,662 | 14,627 | 17,090 | 14,988 |
Brokerage Fees | 22,503 | 16,213 | 22,516 | 21,100 |
Commissions | 107,972 | 108,606 | 407,330 | 391,628 |
Provisions for financial borrowed guarantee (Note 21) | 2,903 | - | 2,903 | - |
Others (1) | 969,824 | 688,906 | 1,237,288 | 985,041 |
Total | 2,140,079 | 1,632,603 | 2,613,927 | 2,272,084 |
(1) On March 31, 2019 and 2018, mainly includes monetary restatement on provisions for judicial and administrative proceedings and legal obligations, provisions for the benefit guarantee fund and other provisions.
32. Non-Operating Income
|
| Bank |
| Consolidated |
| 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
| ||||
Result on sale of Investments | - | - | 2,467 | 6,265 |
Result on Sale of Other Assets | (3,855) | 1,705 | (6,470) | (2,979) |
Reversal (Recognition) of Allowance for Losses on Other Assets (1) | (8,056) | (3,675) | (5,895) | 681 |
Expense on Assets Not in Use | (12,415) | (4,986) | (12,574) | (5,021) |
Gains (Losses) of Capital | 494 | 582 | 419 | 620 |
Other Income (Expenses) | 24,495 | 8,601 | 22,534 | 12,989 |
Total | 663 | 2,227 | 481 | 12,555 |
(1) In 2019 and 2018, it mainly includes reversal of provisions for devaluations on real estate.
33. Income Tax and Social Contribution
|
|
|
|
|
|
|
| Bank | Consolidated | ||
|
|
|
|
|
|
|
| 01/01 to | 01/01 to | 01/01 to | 01/01 to |
|
|
|
|
|
|
|
| ||||
Income Before Taxes on Income and Profit Sharing | 4,721,012 | 4,284,672 | 5,351,981 | 4,854,246 | |||||||
Profit Sharing(1) | (426,990) | (438,265) | (468,440) | (466,304) | |||||||
Interest on Capital (2) | - | (600,000) | - | (600,000) | |||||||
Unrealized Income | - | - | 219,722 | 330 | |||||||
Income Before Taxes | 4,294,022 | 3,246,407 | 5,103,263 | 3,788,272 | |||||||
Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (5) | (1,717,609) | (1,460,883) | (2,041,305) | (1,704,722) | |||||||
Equity in Subsidiaries (3) | 356,346 | 270,566 | 4,541 | 1,132 | |||||||
Nondeductible Expenses, Net of Non-Taxable Income | 352,045 | 66,316 | 430,019 | 79,322 | |||||||
Exchange Variation - Foreign Branches | 81,884 | 92,749 | 81,884 | 92,749 | |||||||
Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises | (636) | (66,364) | (14,037) | (59,411) | |||||||
Effects of Change in Rate of CSLL (4) | - | - | 24,894 | 41,485 | |||||||
Other Adjustments Social Contribution Taxes 5% (5) | - | 80,044 | - | 69,102 | |||||||
Other Adjustments, Including Profits Provided Abroad | 32,492 | (10,079) | 137,922 | (4,580) | |||||||
Income and Social Contribution Taxes | (895,478) | (1,027,651) | (1,376,082) | (1,484,923) | |||||||
(1) The basis of calculation is the net income, after IR and CSLL.
(2) As of January 2019, pursuant to resolution 4.706, the amounts related to the declared capital remuneration must be recognized against the appropriate account of retained earnings, by the net amount of the tax effects.
(3) As a result of equity in subsidiaries are not included interest on capital received and receivable.
(4) Effect of rate differences for the other non-financial companies, which the social contribution tax rate is 9% .
(5) Temporary rate increase of CSLL from September 2015 to December 2018 (Note 3.s).
Individual and Consolidated Financial Statements – March 31, 2019 81
Foreign Exchange Hedge of the Grand Cayman Branch, Luxembourg Branch and the Subsidiary Santander Brasil EFC
Banco Santander operates two branchs, one in the Cayman Islands and one in Luxembourg, and a subsidiary called Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” (independent subsidiary in Spain) which are used mainly to raise funds in the capital and financial markets, providing credit lines that are extended to customers for trade-related financings and working capital (Note 13).
To protect the exposures to foreign exchange rate variations, the Bank uses derivatives and international funding. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (real) in foreign investments are nontaxable or deductible to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives are to protect the after-tax results.
Tax treatment distinct from such exchange rate differences results in volatility in "Operating Income before Taxation" and in the caption "Income Taxes". Following are the effects of the operations carried out, as well as the total effect of the Currency Hedge for the year ended in March 31, 2019 and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 01/01 to | 01/01 to |
R$ |
|
|
|
|
|
|
|
|
| ||
Financial Operations |
|
|
|
|
|
|
|
|
|
|
|
Result generated by the exchange rate variations on the Bank's investment in the Cayman and EFC Agency | 225,467 | 183,920 | |||||||||
Result generated by derivative contracts used as hedge |
|
|
|
|
|
|
|
| (396,760) | (350,707) | |
Tax Expenses |
|
|
|
|
|
|
|
|
|
|
|
Tax effect of derivative contracts used as hedge - PIS/COFINS |
|
|
|
|
| 18,449 | 16,308 | ||||
Income Tax and Social Contribution |
|
|
|
|
|
|
|
|
|
|
|
Tax effect of derivative contracts used as hedge - IR/CS |
|
|
|
|
|
|
|
| 152,844 | 150,480 | |
34. Employee Benefit Plans - Post-Employment Benefits
a) Supplemental Pension Plan
Banco Santander and its subsidiaries sponsor the closed pension entities for the purpose of granting pensions and supplementary pensions over those granted by the Social Security, as defined in the basic regulations of each plan.
I) Banesprev
Plan I: defined benefit plan fully sponsored by Banco Santander, it covers employees hired after May 22, 1975 called Participants Recipients, and those hired until May 22, 1975 called Participants Aggregates, who are also entitled to death benefits. This plan is closed to new entrants since March 28, 2005.
Plan II: defined benefit plan, constituted from July 27, 1994, effective of the new text of the Statute and Regulations of the Basic Plan II, Plan I participants who chose the new plan began to contribute to the rate of 44.9% stipulated by the actuary for funding each year, introduced in April 2012 extraordinary cost to the sponsor and participants, as agreed with the PREVIC - Superintendence of Pension Funds, due to deficit in the plan. This plan is closed to new entrants since June 3, 2005.
Plan V: defined benefit plan fully sponsored by Banco Santander, it covers employees hired until May 22, 1975, closed and paid off.
Supplemental Pension Plan Pré 75: defined benefit plan was created in view of the privatization of Banespa and is managed by Banesprev and offered only to employees hired before May 22, 1975, which its effective date is January 1, 2000. This plan is closed to new entrants since April 28, 2000.
Plan III: variable contribution plan, for employees hired after May 22,1975, previously served by the Plans I and II. This plan receives contributions from the sponsor and the participants. The benefits are in the form of defined contribution during the period of contribution and defined benefit during the receipt of benefit, if paid as monthly income for life. Plan is closed to new entrants since September 1, 2005.
Plan IV: variable contribution plan, designed for employees hired as of November 27, 2000, in which the sponsor only contributes to the risk benefits and administrative expenses. In this plan the benefit is set in the form of defined contribution during the period of contribution and defined benefit during the receipt of benefits in the form of monthly income for life, in whole or in part of the benefit. The risk benefits of the plan are in defined benefit. This plan is closed to new entrants since July 23, 2010.
Individual and Consolidated Financial Statements – March 31, 2019 82
Three plans (DCA, DAB and CACIBAN): additional retirement and former employees associated pension, arising from the process of acquisition of the former Banco Meridional, established under the defined benefit plan. The plans are closed to new participants prior to the acquisition of Grupo Bozano Simonsen by Banco Santander in November 1999 .
Plano Sanprev I: defined benefit plan, established on September 27, 1979, covering employees enrolled in the plan sponsor and it is in process of extinction since June 30, 1996.
Plan Sanprev II: plan that provides insurance risk, pension supplement temporary, disability retirement annuity and the supplemental death and sickness allowance and birth, including employees enrolled in the plan sponsor and is funded solely by sponsors through monthly contributions, as indicated by the actuary. This plan is closed to new entrants since March 10, 2010.
Plan Sanprev III: variable contribution plan covering employees of the sponsors who made the choice to contribute, by contribution freely chosen by participants from 2% of their salary. That the benefit plan is a defined contribution during the contribution and defined benefit during the receipt of the benefit, being in the form of monthly income for life, in whole or in part of the benefit. This plan is closed to new entrants since March 10, 2010.
II) Sanprev - Santander Associação de Previdência (Sanprev)
Closed-End Private Pension Entity (EFPC) that used to manage three benefit plans, 2 in the Defined Benefit modality and 1 in the modality of Variable Contribution, whose process of management transfer of these plans to Banesprev occurred in January 2017. According to Portaria 389 of PREVIC, of May 8, 2018, it was approved the closure of the authorization of operation of Sanprev.
III) Bandeprev - Bandepe Previdência Social (Bandeprev)
Defined benefit plan, sponsored by Banco Bandepe and Banco Santander, managed by Bandeprev. The plans are divided into basic plan and special retirement supplement plan, with different eligibility requirements, contributions and benefits by subgroups of participants. The plans are closed to new entrants since 1999 for Banco Bandepe’s employees and for others since 2011.
IV) Other Plans
SantanderPrevi - Sociedade de Previdência Privada (SantanderPrevi): it´s a closed-end private pension entity with the purpose of constitution and implementation of social security pension plans, complementary to the social security contribution, in the form of actual legislation.
The Retirement Plan of SantanderPrevi is structured as Defined Contribution and closed to new members since July 2018 as approved by PREVIC, with contributions shared between sponsors and plan participants. The appropriate values by the sponsors in the first quarter of 2019 was R$48,750 (2018 - R$21,654) in the Bank and R$49,969 (2018 - R$23,714) in the Consolidated.
It has 10 cases of lifetime income with benefits arising from the previous plan.
SBPREV - Santander Brasil Open Pension Plan: as from January 2, 2018, Santander started to offer this new optional supplementary pension plan for new employees hired and for employees who are not enrolled in any other pension plan managed by the Closed Entities Complementary Pension Plan of the Group. This new program includes the PGBL- Free Benefit Generation Plan and VGBL-Free Benefit Generator Life managed by Icatu Seguros, the Open Entity of Complementary Pension Plan, which are open for new accessions, with similar characteristics to SantanderPrevi's plan. the instituting / stipulating companies and the participants in the plans.
The appropriated values by the sponsors in the first quarter of 2019 were R$1,097 in the Bank and R$1,284 in the Consolidated.
Individual and Consolidated Financial Statements – March 31, 2019 83
Determination of Net Actuarial Assets (Liabilities)
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (22,132,844) |
| (4,248) |
| (1,433,319) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 20,147,508 |
| 4,455 |
| 1,927,672 |
|
|
|
|
|
|
|
| (1,985,335) |
| 207 |
| 494,353 |
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 642,636 |
| 207 |
| 494,353 |
Deficit |
|
|
|
|
|
|
| (2,627,972) |
| - |
| - |
Amount not Recognized as Assets |
|
|
|
|
|
|
| 421,575 |
| 207 |
| 492,112 |
Net Actuarial Asset on December 31, 2018 (Note 12) |
|
|
|
|
|
|
| 221,061 |
| - |
| 2,241 |
Net Actuarial Liability on December 31, 2018 (Note 21) |
|
|
|
|
|
|
| (2,627,972) |
| - |
| - |
Payments Made on the Actuarial Liabilities (Note 31) |
|
|
|
|
|
|
| 4,571 |
| - |
| (89) |
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| - |
| - |
| 78 |
Net Actuarial Asset on March 31, 2019 (Note 12) |
|
|
|
|
|
|
| 225,633 |
| - |
| 2,292 |
Revenues (Expenses) Recorded on the Actuarial Liabilities (Note 31) |
| (61,108) |
| (3) |
| - | ||||||
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| 6,340 |
| - |
| - |
Net Actuarial Liability on March 31, 2019 (Note 21) |
|
|
|
|
|
|
| (2,682,739) |
| (3) |
| (62) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (3,914,503) |
| 504 |
| 1,406 |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 2,961,579 |
| 463 |
| 246,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (20,406,653) |
| (4,149) |
| (1,349,265) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 18,426,652 |
| 4,502 |
| 1,806,540 |
|
|
|
|
|
|
|
| (1,980,001) |
| 353 |
| 457,275 |
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 620,842 |
| 353 |
| 457,275 |
Deficit |
|
|
|
|
|
|
| (2,600,843) |
| - |
| - |
Amount not Recognized as Assets |
|
|
|
|
|
|
| 453,120 |
| 353 |
| 455,057 |
Net Actuarial Asset on December 31, 2017 |
|
|
|
|
|
|
| 167,722 |
| - |
| 2,218 |
Net Actuarial Liability on December 31, 2017 |
|
|
|
|
|
|
| (2,600,843) |
| - |
| - |
Payments Made on the Actuarial Liabilities (Note 31) |
|
|
|
|
|
|
| 3,458 |
| - |
| 53 |
Net Actuarial Asset on March 31, 2018 |
|
|
|
|
|
|
| 171,180 |
| - |
| 2,271 |
Revenues (Expenses) Recorded (Note 31) |
|
|
|
|
|
|
| (63,827) |
| (4) |
| (159) |
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| 6,791 |
| - |
| 8 |
Net Actuarial Liability on March 31, 2018 |
|
|
|
|
|
|
| (2,657,879) |
| (4) |
| (151) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (3,673,160) |
| 489 |
| 1,122 |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 2,083,333 |
| 526 |
| 265,169 |
Individual and Consolidated Financial Statements – March 31, 2019 84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (22,575,065) |
| (4,248) |
| (1,433,319) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 20,774,590 |
| 4,455 |
| 1,927,672 |
|
|
|
|
|
|
|
| (1,800,475) |
| 207 |
| 494,353 |
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 856,831 |
| 207 |
| 494,353 |
Deficit |
|
|
|
|
|
|
| (2,657,306) |
| - |
| - |
Value Unrecognized as Asset |
|
|
| 587,377 |
| 207 |
| 492,112 | ||||
Net Actuarial Asset on December 31, 2018 (Note 12) |
|
|
|
|
|
|
| 271,040 |
| - |
| 2,241 |
Net Actuarial Liability on December 31, 2018 (Note 21) |
|
|
|
|
|
|
| (2,657,306) |
| - |
| - |
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| - |
| - |
| 78 |
Revenues (Expenses) Recorded on the Actuarial Asset (Note 31) |
|
| 5,673 |
| - |
| (89) | |||||
Net Actuarial Asset on March 31, 2019 (Note 12) |
|
|
|
|
|
|
| 276,713 |
| - |
| 2,292 |
Revenues (Expenses) Recorded on the Actuarial Liability (Note 31) |
|
| (61,808) |
| (3) |
| - | |||||
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| 6,483 |
| - |
| - |
Net Actuarial Liability on March 31, 2019 (Note 21) |
|
|
|
|
|
|
| (2,712,632) |
| (3) |
| (62) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (3,886,966) |
| 504 |
| 1,406 |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 2,998,607 |
| 463 |
| 246,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (20,820,416) |
| (4,149) |
| (1,349,265) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 19,043,606 |
| 4,503 |
| 1,806,540 |
|
|
|
|
|
|
|
| (1,776,810) |
| 353 |
| 457,275 |
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 847,464 |
| 353 |
| 457,275 |
Deficit |
|
|
|
|
|
|
| (2,624,273) |
| - |
| - |
Value Unrecognized as Asset |
|
|
| 637,557 |
| 353 |
| 455,058 | ||||
Net Actuarial Asset on December 31, 2017 |
|
|
|
|
|
|
| 209,906 |
| - |
| 2,218 |
Net Actuarial Liability on December 31, 2017 |
|
|
|
|
|
|
| (2,624,273) |
| - |
| - |
Revenues (Expenses) Recorded on the Actuarial Asset (Note 31) |
|
| 4,416 |
| - |
| 53 | |||||
Net Actuarial Asset on March 31, 2018 |
|
|
|
|
|
|
| 214,322 |
| - |
| 2,271 |
Revenues (Expenses) Recorded on the Actuarial Liability (Note 31) |
|
| (64,500) |
| (5) |
| (159) | |||||
Contributions effected on the Actuarial Liabilities |
|
|
|
|
|
|
| 6,973 |
| - |
| 7 |
Net Actuarial Liability on March 31, 2018 |
|
|
|
|
|
|
| (2,681,800) |
| (5) |
| (152) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (3,701,232) |
| 489 |
| 1,122 |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 2,136,456 |
| 526 |
| 265,169 |
Individual and Consolidated Financial Statements – March 31, 2019 85
Opening of gains (losses) actuarial from experience, financial assumptions and demographic hypotheses:
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Experience Plan |
|
|
|
|
|
|
| (768,039) |
| (107) |
| (34,121) |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (802,060) |
| (117) |
| (51,369) |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (1,570,099) |
| (224) |
| (85,490) |
Return on Investment, Return Unlike Implied Discount Rate |
|
|
|
|
|
|
| 1,282,101 |
| 59 |
| 79,462 |
Gain (Loss) Actuarial - Asset |
|
|
|
|
|
|
| 1,282,101 |
| 59 |
| 79,462 |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| 74,727 |
| 180 |
| 6,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2017 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Experience Plan |
|
|
|
|
|
|
| 660,088 |
| (793) |
| 8,312 |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (1,448,316) |
| (219) |
| (92,500) |
Changes in Demographic Assumptions |
|
|
|
|
|
|
| 146 |
| - |
| - |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (788,082) |
| (1,012) |
| (84,188) |
Return on Investment, Return Unlike Implied Discount Rate |
|
|
|
|
|
|
| 206,950 |
| 66 |
| 89,876 |
Gain (Loss) Actuarial - Asset |
|
|
|
|
|
|
| 206,950 |
| 66 |
| 89,876 |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| (40,056) |
| 947 |
| (3,893) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Experience Plan |
|
|
|
|
|
|
| (769,489) |
| (107) |
| (34,121) |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (819,689) |
| (117) |
| (51,369) |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (1,589,178) |
| (224) |
| (85,490) |
Return on Investment, Return Unlike Implied Discount Rate |
|
|
|
|
|
|
| 1,264,568 |
| 59 |
| 79,462 |
Gain (Loss) Actuarial - Asset |
|
|
|
|
|
|
| 1,264,568 |
| 59 |
| 79,462 |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| 110,828 |
| 180 |
| 6,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2017 |
|
|
|
|
|
|
|
|
|
| Santander- |
|
|
|
|
|
|
|
|
|
| Banesprev |
| previ |
| Bandeprev |
Experience Plan |
|
|
|
|
|
|
| 678,684 |
| (793) |
| 8,312 |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (1,464,969) |
| (219) |
| (92,500) |
Changes in Demographic Assumptions |
|
|
|
|
|
|
| 146 |
| - |
| - |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (786,139) |
| (1,012) |
| (84,188) |
Return on Investment, Return Unlike Implied Discount Rate |
|
|
|
|
|
|
| 180,216 |
| 66 |
| 89,876 |
Gain (Loss) Actuarial - Asset |
|
|
|
|
|
|
| 180,216 |
| 66 |
| 89,876 |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| (12,744) |
| 947 |
| (3,893) |
Individual and Consolidated Financial Statements – March 31, 2019 86
The table below shows the duration of the actuarial obligations of the plans sponsored by Banco Santander:
Plans |
|
|
|
|
|
|
|
|
|
|
| Duration (in Years) |
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
| 12/31/2017 |
Banesprev |
|
|
|
|
|
|
|
|
|
|
|
|
Plan I |
|
|
|
|
|
|
|
|
| 11.35 |
| 11.26 |
Plan II |
|
|
|
|
|
|
|
|
| 11.73 |
| 11.51 |
Plan III |
|
|
|
|
|
|
|
|
| 9.39 |
| 9.03 |
Plan IV |
|
|
|
|
|
|
|
|
| 14.00 |
| 13.86 |
Plan V |
|
|
|
|
|
|
|
|
| 8.87 |
| 8.82 |
Pré-75 |
|
|
|
|
|
|
|
|
| 9.62 |
| 9.57 |
Meridional DCA, DAB e CACIBAN |
|
|
|
|
|
|
|
|
| 6.37/5.79/6.79 |
| 6.41/5.82/6.87 |
Sanprev |
|
|
|
|
|
|
|
|
|
|
|
|
Plan I |
|
|
|
|
|
|
|
|
| 6.47 |
| 6.46 |
Plan II |
|
|
|
|
|
|
|
|
| 10.83 |
| 10.94 |
Plan III |
|
|
|
|
|
|
|
|
| 9.66 |
| 9.46 |
Bandeprev |
|
|
|
|
|
|
|
|
|
|
|
|
Plan Básico |
|
|
|
|
|
|
|
|
| 9.57 |
| 9.46 |
Plan Especial I |
|
|
|
|
|
|
|
|
| 6.70 |
| 6.75 |
Plan Especial II |
|
|
|
|
|
|
|
|
| 6.52 |
| 6.61 |
SantanderPrevi |
|
|
|
|
|
|
|
|
|
|
|
|
SantanderPrevi |
|
|
|
|
|
|
|
|
| 7.30 |
| 7.20 |
b) Health and Dental Care Plan
Cabesp -Caixa Beneficente dos Funcionários do Banco do Estado de São Paulo: entity that covers health and dental care expenses of employees hired until Banespa privatization in 2000, as defined in the entity's bylaws.
HolandaPrevi’s Retirees (current corporate name of SantanderPrevi): for the health care plan Retirement has lifetime nature and is a closed group. In his termination the employee should have completed 10 years of employment with Banco Real and 55 years of age. In this case it was offered the continuity of health care plan where the employee pays 70% and the Bank pays 30% of the monthly payment. This rule lasted until December, 2002 and after this period that the employee got terminated with the status Retired Holandaprevi, he pays 100% of the health plan monthly payment.
Former Employees of Banco Real (Retiree by Circulares): it grants entitlement to healthcare to former employee of Banco Real, with lifetime benefit it was granted in the same condition as the active employee, in this case, with the same coverage and plan design.
Eligible only for basic plans and premium apartment, if the beneficiary chooses for the apartment plan he pays the difference between the plans plus the co-participation in the basic plan. Not allowed new additions of dependents. It is subsidized in 90% of the plan.
Bandeprev’s Retirees: health care plan granted to Bandeprev’s retirees as a lifetime benefit, for which Banco Santander is responsible for subsidizing 50% of the benefits of employees retired until November 27, 1998. For whom retired after this date, the subsidy is 30%.
Officer with Lifetime Benefits (Lifetime Officers): lifetime health care benefit granted to a small closed group of former directors coming from Banco Sudameris, being 100% subsidized by the Bank.
Free Clinic: health care plan (free clinic) is offered for a lifetime to retirees who have contributed to the Foundation Sudameris for at least 25 years and has difference in default if the user chooses apartment. The plan is only offered in standard infirmary where the cost is 100% of the Foundation Sudameris.
Life Insurance for Banco Real Retirees (Life Insurance): granted for Retirees Circulars: indemnity in case of Natural Death, Disease Disability, Accidental Death. The subsidy is 45% of the value. It is a closed group.
Life Insurance Assistance Boxes (Life Insurance): included in the bulk of the life insurance in December 2018 the insurance of the retirees of the DCA, DAB and CACIBAN plans. This insurance was granted to retirees of the former Southern Bank, coverage was according to the choice of retiree at the time of joining the benefit. The Bank's allowance is 50% of the premium amount for the holder and some retirees have the spouse clause bearing 100% of the cost. It is a closed mass.
Additionally, it is assured to retired employees, since they meet to certain legal requirements and fully pays their respective contributions, the right to be maintaining as a beneficiary of the Banco Santander health plan, in the same conditions for healthcare coverage, taken place during their employment contract. Banco Santander provisions related to this retired employees are calculated using actuarial calculations based in the present value of the current cost.
Individual and Consolidated Financial Statements – March 31, 2019 87
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
| 03/31/2018 |
|
|
|
|
|
|
|
| Cabesp |
| Other Plans |
| Cabesp |
| Other Plans |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (3,916,072) |
| (700,347) |
| (4,176,476) |
| (701,551) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 3,981,705 |
| - |
| 3,579,117 |
| - |
|
|
| 65.633 |
| (700.347) |
| (597.359) |
| (701,551) | |||||
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 65,633 |
| - |
| - |
| - |
Deficit |
|
|
|
|
|
|
| - |
| (700,347) |
| (597,359) |
| (701,551) |
Amount not Recognized as Assets |
|
|
|
|
|
|
| (65,633) |
| - |
| - |
| - |
Net Actuarial Asset on December 31, 2018 and 2017 (Note 12) |
|
|
|
|
|
|
| - |
| - |
| - |
| - |
Net Actuarial Liability on December 31, 2018 and 2017 (Note 21) |
|
|
|
|
|
|
| - |
| (700,347) |
| (597,359) |
| (701,551) |
Net Actuarial Asset on March 31, 2019 and 2018 (Note 12) |
|
|
|
|
|
|
| 22,082 |
| - |
| - |
| - |
Contributions Effected |
|
|
|
|
|
|
| 22,082 |
| 12,563 |
| 13,855 |
| 8,214 |
Revenues (Expenses) Recorded |
|
|
|
|
|
|
| (375) |
| (15,893) |
| (15,020) |
| (16,593) |
Net Actuarial Liability on March 31, 2019 and 2018 (Note 21) |
|
|
|
|
|
|
| 21,708 |
| (703,678) |
| (598,523) |
| (709,930) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (827,174) |
| (181,993) |
| (603,804) |
| (213,839) |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 558,673 |
| - |
| 619,635 |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 03/31/2019 |
|
|
| 03/31/2018 |
|
|
|
|
|
|
|
| Cabesp |
| Other Plans |
| Cabesp |
| Other Plans |
Conciliation of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Actuarial Obligations |
|
|
|
|
|
|
| (4,088,724) |
| (700,347) |
| (4,350,305) |
| (701,551) |
Fair Value of Plan Assets |
|
|
|
|
|
|
| 4,157,250 |
| - |
| 3,728,084 |
| - |
|
|
| 68.526 |
| (700.347) |
| (622.221) |
| (701,551) | |||||
Being: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superavit |
|
|
|
|
|
|
| 68,526 |
| - |
| - |
| - |
Deficit |
|
|
|
|
|
|
| - |
| (700,347) |
| (622,221) |
| (701,551) |
Amount not Recognized as Assets |
|
|
|
|
|
|
| (68,526) |
| - |
| - |
| - |
Net Actuarial Asset on December 31, 2018 and 2017 (Note 12) |
|
|
|
|
|
|
| - |
| - |
| - |
| - |
Net Actuarial Liability on December 31, 2018 and 2017 (Note 21) |
|
|
|
|
|
|
| - |
| (700,347) |
| (622,221) |
| (701,551) |
Net Actuarial Asset on March 31, 2019 and 2018 (Note 12) |
|
|
|
|
|
|
| 22,656 |
| - |
| - |
| - |
Contributions Effected |
|
|
|
|
|
|
| 22,656 |
| 12,563 |
| 14,198 |
| 8,214 |
Revenues (Expenses) Recorded |
|
|
|
|
|
|
| (473) |
| (15,893) |
| (15,766) |
| (16,593) |
Net Actuarial Liability on March 31, 2019 and 2018 (Note 21) |
|
|
|
|
|
|
| 22,183 |
| (703,678) |
| (623,790) |
| (709,930) |
Other Equity Valuation Adjustments |
|
|
|
|
|
|
| (839,216) |
| (181,993) |
| (586,155) |
| (213,839) |
Actual Return on Plan Assets |
|
|
|
|
|
|
| 577,483 |
| - |
| 651,971 |
| - |
In the first half of 2019, there was an increase in the cost contribution established for a post-employment benefit plan, which is calculated as a percentage of the total monthly compensation of associates. The increase in the contribution resulted in a decrease in the past service cost, due to changes in the plan. The envisaged changes resulted a reduction in the present value of the obligations of the defined benefit plan, which is supported by actuarial valuations.
Opening of actuarial gains (losses) by experience, financial assumptions and demographic assumptions as of December 31, 2018 and 2017, valid for March 31, 2019 and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank |
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
| 12/31/2017 |
|
|
|
|
|
|
|
| Cabesp |
| Other Plans |
| Cabesp |
| Others Plans |
Experience Plan |
|
|
|
|
|
|
| (167,818) |
| 91,588 |
| (211,610) |
| (75,069) |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (304,427) |
| (59,742) |
| (318,642) |
| (49,136) |
Changes in Demographic Assumptions |
|
|
|
|
|
|
| - |
| - |
| - |
| - |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (472,239) |
| 31,847 |
| (530,253) |
| (124,205) |
Return on Investment, Return Unlike Implied Discount Rate | 282,012 |
| - |
| 284,146 |
| - | |||||||
Gain (Loss) Actuarial - Assets |
|
|
|
|
|
|
| 282,012 |
| - |
| 284,146 |
| - |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| (50,792) |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
| 12/31/2017 |
|
|
|
|
|
|
|
| Cabesp |
| Other Plans |
| Cabesp |
| Others Plans |
Experience Plan |
|
|
|
|
|
|
| (171,399) |
| 91,588 |
| (228,327) |
| (75,069) |
Changes in Financial Assumptions |
|
|
|
|
|
|
| (317,208) |
| (59,742) |
| (331,149) |
| (49,136) |
Changes in Demographic Assumptions |
|
|
|
|
|
|
| - |
| - |
| - |
| - |
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| (488,606) |
| 31,847 |
| (559,476) |
| (124,205) |
Return on Investment, Return Unlike Implied Discount Rate | 307,048 |
| - |
| 303,504 |
| - | |||||||
Gain (Loss) Actuarial - Obligation |
|
|
|
|
|
|
| 307,048 |
| - |
| 303,504 |
| - |
Change in Irrecoverable Surplus |
|
|
|
|
|
|
| (52,604) |
| - |
| - |
| - |
Individual and Consolidated Financial Statements – March 31, 2019 88
The table below shows the duration of the actuarial obligations of the plans sponsored by Banco Santander as of December 31, 2018 and 2017, valid for March 31, 2019 and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Duration (in Years) |
Plans |
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
| 12/31/2017 |
Cabesp |
|
|
|
|
|
|
|
|
|
|
| 14.16 |
| 13.02 |
Bandepe |
|
|
|
|
|
|
|
|
|
|
| 14.73 |
| 14.47 |
Free Clinic |
|
|
|
|
|
|
|
|
|
|
| 11.04 |
| 10.88 |
Lifelong Directors |
|
|
|
|
|
|
|
|
|
|
| 8.63 |
| 8.49 |
Circular (1) |
|
|
|
|
|
|
|
|
|
|
| 11.72 and 10.68 |
| 12.40 and 10.15 |
Life Insurance |
|
|
|
|
|
|
|
|
|
|
| 7.82 |
| 7.64 |
(1) The duration 11.72 (12/31/2018 – 12.40) refers to the plan of Former Employees of Banco ABN Amro and 10.68 (12/31/2018 - 10.15) to the plan of Former Employees of Banco Real.
c) Management of Plan Assets
The main asset categories as percentage of total assets of the plan were the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bank/Consolidated |
|
|
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
| 12/31/2017 |
Equity Instruments |
|
|
|
|
|
|
|
|
|
|
| 4.8% |
| 4.6% |
Debt Instruments |
|
|
|
|
|
|
|
|
|
|
| 94.6% |
| 94.6% |
Real Estate |
|
|
|
|
|
|
|
|
|
|
| 0.3% |
| 0.4% |
Others |
|
|
|
|
|
|
|
|
|
|
| 0.3% |
| 0,4% |
d) Actuarial Assumptions Adopted in Calculations
The actuarial assumptions adopted in the calculations as of December 31, 2018 and 2017, valid for March 31, 2019 and 2018, are as follows:
|
|
|
|
|
|
|
|
|
|
| Bank/Consolidated |
|
|
|
|
|
|
|
|
| 12/31/2018 |
| 12/31/2017 |
|
|
|
|
|
|
|
| Pension | Health | Pension | Health |
Nominal Discount Rate for Actuarial Obligation |
|
|
|
|
|
|
| 9.1% | 9.3% | 9.5% | 9.7% |
Rate Calculation of Interest Under Assets to the Next Year |
|
| 9.1% | 9.3% | 9.5% | 9.7% | |||||
Estimated Long-term Inflation Rate |
|
|
|
|
|
|
| 4.0% | 4.0% | 4.0% | 4.0% |
Estimated Salary Increase Rate |
|
|
|
|
|
|
| 5.0% | 5.0% | 5.0% | 5.0% |
Boards of Mortality |
|
|
|
|
|
|
| AT2000 | AT2000 | AT2000 | AT2000 |
e) Sensitivity Analysis
The assumptions regarding rates related to the cost of medical care have a significant effect on the amounts recognized in the income statement. The change of one percentage point in health care cost rates would have the following effects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sensibility |
|
|
|
|
|
|
|
|
|
| 12/31/2018 |
|
|
| 12/31/2017 |
|
|
|
|
|
|
|
| (+) 1.0% |
| (-) 1.0% |
| (+) 1.0% |
| (-) 1.0% |
Effect on Current Service Cost and Interest on the Actuarial Liabilities |
| 69,961 |
| (62,469) |
| 57,001 |
| (63.510) | ||||||
Effect on the Present Value of Obligations |
| 761,619 |
| (680.061) |
| 597,410 |
| (665,700) | ||||||
Individual and Consolidated Financial Statements – March 31, 2019 89
f) Share-Based Compensation
Banco Santander has long-terms compensation plans linked to the market price of the shares. The members of the Executive Board of Banco Santander are eligible for these plans, as well as other members selected by the Board of Directors, whose selection will take into account seniority of the group. For the Board of Directors members in order to be eligible, it is necessary to exercise Executive Board functions.
f.1) Local and Global Program
Below are the long-term compensation programs and their technical features.
Program |
| Plan |
| Liquidity Type |
| Vesting Period |
| Period of Exercise/Settlement |
Local |
| SOP 2013 (1) |
| Banco Santander Brasil Shares | Jun/2013 to Jun/2016 |
| from 06/30/2016 to 06/30/2018 | |
Local |
| Long-Term Incentive Plan - Private Ultra High (2) | Money |
| Dec/2017 to Dec/19 |
| On March/20 and March/21 | |
Global |
| Global Long-Term – ILP CRDIV - Granted 2015 (3) (4) | Santander Global Group Shares | 2015 to 2016 |
| In 2019 | ||
(1)The Units amount to be exercised by the participants was determined according to the result of a Bank performance parameter: Total Return to Shareholder (RTA) and adjusted by the Risk-Weighted Asset Return (RORWA) and budgeted in each fiscal year. The final achievement of the plan was 89.61%.
(2It aims the growth and profitability of the Private business and the recognition of the Participant's contribution.
(3) Subject to the achievement of the Santander Group's RTA performance indicator, comparing the Group's performance in this indicator with respect to the main global competitors.
(4) Plans do not cause dilution of the Bank's share capital, since they are paid in shares of Bank Santander Espana
a) Fair Value and Plans Performance Parameters
i. Private Ultra High
Each participant has a target in Reais, if the indicators are reached, the target will be applied on the reference value, the first, paid in March 2020 and the second in March 2021.
Phase 1 (Reference Value) |
|
Phase 2 (Calculation of Cash Incentive) |
BAI (Earnings Before Private Segment Income Tax) 2017 |
| BAI 50% |
MOL - 25% (Private Ultra High Segment Net Margin Indicator) | ||
AUM - 25% (Private Ultra High Segment Assets Under Management Indicator) |
ii. Long-Term Incentive Global Plan CRDIV - Grant 2015
The targets of shares agreed to each participant will be obtained through the application of the coefficients in two stages: initially for eligibility verification (2015-2016) and a second time to calculate the due number of shares (2016, 2017 e 2018).
Phase 1 |
| Phase 2 |
RTA versus Competitors |
| RTA versus Competitors |
ROTE (Return on Tangible Capital) of the Bank versus Budget | ROTE Bank versus Budget | |
|
| Employee Satisfaction |
|
| Clients satisfaction |
|
| Business Link vs. Budget |
Each executive has a target in Reais, which was converted into shares of the Santander Group (SAN) for a price of R$17,473, which will be delivered in 2019, with a restriction of one year after delivery.
|
| Number of Shares |
|
| Date of Commencement of the Period | Date of Expiry of Period |
|
| Granted | Employees | |||
2nd Long -Term Incentive Global Plan CRDIV - | 1,775,049 | 2016 | Executives | Jan-15 | Dec-18 | |
Balance Plans on December 31, 2018 | 1,775,049 |
|
|
|
| |
b) Impact Results
The impacts on income are recorded in the Personnel Expenses line, as follows:
|
| Bank |
| Consolidated | ||||
Plan |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
| 01/01 to 03/31/2019 |
| 01/01 to 03/31/2018 |
Long-Term Incentive - Private Ultra High |
| - |
| 2,935 |
| - |
| 2,935 |
Global Long – Term – ILP CRDIV - Granted 2014 and 2015 |
| - |
| 1,298 |
| - |
| 1,319 |
Individual and Consolidated Financial Statements – March 31, 2019 90
f.2) Referenced Variable Remuneration in Shares
On September 29, 2015, the Board of Directors approved the proposed new incentive plan (deferral) for payment of the variable compensation of directors and certain employees, which was approved in EGM of December 14, 2015.
The approval of the last proposal of the incentive plan (deferment) to pay the variable remuneration of administrators and certain employees occurred on October 25, 2016, as approved by the EGM held on December 21, 2016.
In this proposal, certain requirements for future deferred payment of a portion of the variable compensation due to its managers and other employees were considered, considering the long-term sustainable financial bases and adjustments in future payments based on the risks assumed and the changes in the cost of capital.
The variable Banco Santander compensation plan is divided into two programs: (i) Collective Identified and (ii) Collective Unidentified. The impacts on income are recorded in the Personnel Expenses line, as follows:
|
|
| Bank | Consolidated | ||
Program | Participant | Liquidity Type | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 | 01/01 to 03/31/2019 | 01/01 to 03/31/2018 |
Collective Identified | Members of the Executive Committee, Statutory Officers and other executives who assume significant and responsible risks of control areas |
50% in cash indexed to 100% of CDI and 50% in shares (Units SANB11) | 8,400 | 3,551 | 9,498 | 3,131 |
Unidentified Collective | Management-level employees and employees who are benefited by the Deferral Plan | 100% cash indexed to 100% of CDI | 13,209 | 16,025 | 13,713 | 15,429 |
35. Risk Management Structure
Banco Santander in Brazil follows the model based on a prudent risk management. It has specialized management structure for each risks listed below, as well as an area that carries out the Integrated Risk Management of the Group, disseminates Risk Pro Culture, manages risk self-assessment and controls Risk Appetite (RAS) - which is approved by the Board of Directors -, atending the requirements of the local regulator and the international good practices, aiming to protect capital and ensure business profitability.
The fundamental principles that rule the risk governance model are:
· All employees are responsible for the management of risk;
· Senior Management Engagement;
· Independence of risk control and management functions;
· Comprehensive approach to management and control of risks;
· Risk management and control must be based on timely, accurate and sufficiently granular management information.
A. Credit Risk
The credit risk management is based on accompaniments of credit portfolio and new credit operation indicators. Considering the economic scenario, profitability and defaults projections are estimated under control of appetite for risk. These projections are the basis for a redefinition of credit policies, which affect both the credit evaluation for a specific customer as customers with similar profile.
Another relevant aspect is the preventive management of credit, which is fundamental in maintaining the quality of Banco Santander's portfolio. The monitoring of the customer portfolio is a daily routine of the entire commercial area, with the support of the central areas.
To measure the quality of a client’s or facility’s credit, the Bank uses its own models score/rating, made by Metodology and independent Validation areas.
On credit restructuring and recovery the Bank uses specific collection teams, which may be:
• Internal teams specializing in with direct action against defaulting clients with delays exceeding 60 days and more significant amounts; and
• External partners specializing in collecting, notifying and filing high-risk clients.
Individual and Consolidated Financial Statements – March 31, 2019 91
Sale of non-performing loans portfolio is a recurrent part of the recovery strategy (only credit rights), but the Santander may maintain relationships and transactional means with assigned clients.
Besides, the bank constitutes provision in accordance with the current legislation of Bacen and National Monetary System (Note 8.e).
B. Market Risk Management
The management of the market risk consists on developing, measuring and monitoring the use of limits previously approved in internal committees, relevant to the value at risk of the portfolios, the sensitivities arising from variation in market data (interest rates, indices, prices, exchange rates, etc.), liquidity gaps, among others, which might affect the positions of Banco Santander's portfolios in the various markets where it operates.
C. Operational Risk and Internal Controls
Santander's operational risk management model is based on the market best practices and its premise is to evaluate, monitor, control and implement improvements to reduce exposure to risks and losses, in line with the risk appetite approved by the Board of Directors and we adopted the definition of the Basel Committee and Brazilian Central Bank for operational risk. Our governance model is based on the three lines of defense and has people, structures, policies, methodologies and tools to assure support the proper operational risk management.
The Internal Controls Model is based on the methodology developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), covering the strategic, operational, financial disclosure and compliance components and allows compliance with the requirements of regulators BACEN, CVM, B3, SUSEP and SarbanesOxley - SOX (Security Exchange Commission).
D. Compliance and Reputacional Risk Management
Compliance risk management has a proactive focus on this risk, policies, implementation of process, including monitoring, training, Consulting, risk assessment and corporate communication of rules and laws to be applied to each businesses area of the Banco Santander.
E. Unit for the Prevention of Money Laundering and Financing of Terrorism
Area responsible for promoting the development of the prevention of money laundering and combating the financing of terrorism in the different business units, as well as responsible for the guidelines of the Bank's customer acceptance policy, establishes regulations, procedures and acculturation related to the subject monitors the risks inherent in the products and transactions carried out.
F. Social and Environmental Risk
Banco Santander’s Social and Environmental Responsibility Policy (PRSA), which complies with National Monetary Council Resolution 4,327/2014 and the SARB 14 self-regulation issued by Febraban, establishes guidelines and consolidates specific policies for social-environmental practices used in business and stakeholder relations. These practices including social and environmental risk management, impacts and opportunities related themes, such as, adequacy in the concession or use of credit, supplier management and analysis of the social and environmental risk which is carried out through the analysis of the socio-environmental practices of wholesale and segment Empresas 3 retail clients, that have limits or credit risk greater than BRL5 million and are included in one of the 14 sectors of social and environmental attention. In other to mitigate operational, capital, credit and reputational risk. Since 2009 Santander is Equator Principles signatory, which standards are applied in order to mitigate social and environmental risks when financing big projects.
The commitments assumed in the PRSA are detailed in others Bank policies, such as, the Anti-Corruption Policy, Supplier Relationships and Homologation Policies and Social-Environmental Risk Policies, besides that the Private Social Investment Policy, which aims to guide the strategy of this topic and present guidelines for social programs that strengthen this strategy.
G. Structure of Capital Management
Santander adopts a robust governance that supports all processes related to effective capital management in order to:
• Clearly define the functions of each team involved in capital management;
• Ensure that the capital limits established in management, risk appetite and the Risk Identification Assessment (RIA) are fulfilled;
• Ensure that the actions related to the institution's strategy consider the impacts generated in the capital allocation;
• Ensure that the Senior Management actively participates in capital management and that it´s recurrently informed about the behavior of capital indicators.
Santander Brasil has a director responsible for capital management, appointed by the Board of Directors. Furthermore, there is an institutional policy of capital management, which serves as a guideline for calculation, management, control and reporting of the Capital, fulfilling all the defined requirements for a capital management structure established in the Resolution 4,557/2017.
Individual and Consolidated Financial Statements – March 31, 2019 92
For further information, see the "Risk and Capital Management Structure - Resolution nº. 4,557 / BACEN" in "Corporate Governance" and "Risk Management" athttps://www.ri.santander.com.br/
36. Corporate Restructuring
Several social movements were implemented in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander.
a) Put option of equity interest in Banco Olé Bonsucesso Consignado S.A.
On March 14, 2019, the minority shareholder of Banco Olé Bonsucesso Consignado S.A. (Olé Consignado) formalized its interest to exercise the put option right provided in the Investment Agreement, executed on July 30, 2014, to sell its 40% equity interest in the capital stock of Olé Consignado to Aymoré CFI. The closing of the transaction is conditioned to implementation of the proceedings set forth in the Investment Agreement.
b) Acquisition of residual equity interest in Getnet S.A.
On December 19, 2018, Banco Santander and the Minority shareholders of Getnet S.A. executed an amendment to the Shares’ Sale and Purchase Agreement and Other Covenants of Getnet S.A., in which Banco Santander commits to acquire all of the Minority shareholders’ shares, corresponding to 11.5% of Getnet S.A. capital stock, per the amount of R$1,431,000. The acquisition was approved by Bacen on February 18, 2019 and closed on February 25, 2019, as a consequence Santander Brasil has become the holder of 100% of the shares representatives of the capital stock of Getnet S.A.
c) Formation of Esfera Fidelidade S.A.
On August 14, 2018, Esfera Fidelidade was incorporated, with equity fully owned by Banco Santander. Esfera Fidelidade will act in the development and management of customer loyalty programs. On November 26, 2018, Esfera Fidelidade had its capital stock increased in the amount of R$10,000, amounting the full share capital of R$10,000, divided into 10,001,000 (ten million and one thousand) nominative common shares without par value, entirely held by Banco Santander. The company started its operation in November 2018.
d) Investment in Loop Gestão de Pátios S.A.
On June 26, 2018, Webmotors S.A., company with 70% interest indirectly owned by Banco Santander, signed an investment agreement with Allpark Empreendimentos, Participações e Serviços S.A. and Celta LA Participações S.A., in order to acquire an equity interest corresponding to 51% of the capital stock of Loop Gestão de Pátios S.A., through capital increase and issuance of new shares of Loop to be fully subscribed and paid-in by Webmotors. Loop operates in the segment of commercialization and physical and virtual auction of motor vehicles. On September 25, 2018, the transaction was completed with increase of the capital stock, in the amount of R$23,900, through issuance of shares representing 51% of equity interest in Loop, which were fully subscribed and paid-in by Webmotors.
e) Formation of BEN Benefícios e Serviços S.A.
On June 11, 2018,BEN Benefícios,with equity fully owned by Banco Santander,was incorporated, toact in the supply and administration of meal, food, transportation, cultural and similar vouchers, via printed or electronic and magnetic cards.
In the EGM held on August 1, 2018, BEN Benefícios had its capital increased in R$ 45,000, passing the capital stock to the amount of R$ 45,001, divided into 45,001,000 (forty-five million and one hundred thousand) registered common shares without par value, fully owned by Banco Santander.
In the EGM held on March 27, 2019, Santander Brasil approved the capital increase in the amount of R$44,999, totalizing R$90,000 of capital stock distributed into 90,000,000 (ninety million) common shares without par value, fully held by Santander Brasil.
BEN Benefícios started its activities in the first quarter of 2019.
f) Acquisition of Isban Brasil S.A. and Produban Serviços de Informática S.A.
On February 19 and 28, 2018, Banco Santander purchased, respectively, the totality of shares of Isban Brasil, formerly held by Ingeniería de Software Bancário, S.L., and of Produban Serviços de Informática, formerly held by Produban Servicios Informáticos Generales, S.L., for the amount of R$61,078 and R$42,731, respectively. The parties involved in the transactions had Banco Santander, S.A. (Santander Spain) as common indirect controller, being such transactions carried-out under market conditions. At the EGM held on February 19, 2018, was approved the capital increase of Isban Brasil in the amount of R$33,000, through the issuance of 11,783,900 (eleven million, seven hundred and eighty-three thousand and nine hundred) shares, without par value, entirely subscribed and paid in by Banco Santander. On February 28, 2018, the company Isban Brasil was merged into Produban Serviços de Informática S.A. and on the same date, Produban Serviços de Informática had its corporate name changed to Santander Brasil Tecnologia S.A. In continuity, on February 28, 2018, Produban Servicios Informáticos Generales, S.L. (currently named Santander Global Technology, S.L.) approved themerger of the spin-off share of Produban Serviços de Informática into Produban Brasil Tecnologia e Serviços de Informática Ltda. (currently named Santander Global Technology Brasil Ltda.).
Individual and Consolidated Financial Statements – March 31, 2019 93
g) Sale of equity interest in BW Guirapá I S.A.
On December 22, 2017, Santander Corretora de Seguros, Cia. de Ferro Ligas da Bahia - Ferbasa SA and Brazil Wind S.A. executed agreement for the sale of 100% of the shares issued by BW Guirapá I S.A. held by Santander Corretora de Seguros and Brazil Wind to Ferbasa. The basic price of the total sale was R$414,000, and an additional amount of up to R$35,000 may be paid if future targets stipulated in the Contract are met. As of January 1, 2018, this investment was written-off and, as a consequence, the assets and liabilities of BW Guirapá I and its subsidiaries were no longer consolidated by Banco Santander. On April 2, 2018, the transaction was concluded.
h) Formation of Santander Auto S.A.
On December 20, 2017, Banco Santander and HDI Seguros S.A. (HDI Seguros), executed documents to form a partnership for the issuance, offering and sale of auto insurance, in a 100% digital way, through creation of a new insurance company - Santander Auto, to be held 50% by Sancap, a company controlled by Banco Santander, and 50% by HDI Seguros. On February 2, 2018 the partnership was approved by the Administrative Council of Economic Defense (Conselho Administrativo de Defesa Econômica – CADE), on April, 30, 2018, was approved by the Brazilian Central Bank and, on May, 15, 2018, SUSEP's prior approval was obtained. On October 9, 2018, through transformation of the corporate vehicle L.G.J.S.P.E. Investments and Participations S.A., Sancap and HDI Seguros formed Santander Auto S.A., with capital of R$15,000. On January 9, 2019, Susep granted to Santander Auto the authorization to operate insurance throughout national territory.
i) Formation of Gestora de Inteligência de Crédito S.A.
On April 14, 2017, the definitive documents necessary for the creation of a new credit bureau, Gestora de Inteligência de Crédito, were signed by the stockholders, whose control will be shared among the stockholders who will hold 20% of the its share capital each. In the EGM held on October 5, 2017, the capital increase of Gestora de Crédito was approved in the total amount of R$285,205, so that the capital stock increased from R$65,823 to R$351,028. The Company will develop a database with the objective of aggregating, reconciling and processing registration and credit information of individuals and legal entities, in accordance with the applicable standards, providing a significant improvement in the processes of granting, pricing and directing credit lines. The Bank estimates that the Company will be fully operational in 2019.
j) Formation of Banco Hyundai Capital Brasil S.A.
On April 28, 2016, Aymoré CFI and Banco Santander executed with Hyundai Capital Services, Inc. (Hyundai Capital) the necessary documents for the formation of Banco Hyundai and an insurance brokerage company with the purpose to provide, respectively, auto finance and financial and insurance brokerage services to clients and dealers of Hyundai in Brazil.
On April 11, 2018, the parties incorporated, with an equity interest of 50% held by Aymoré CFI and 50% held by Hyundai Capital, a non-operational entity named BHJV Assessoria e Consultoria em Gestão Empresarial Ltda. On May 8, 2018, Aymoré CFI and Hyundai Capital took resolution on the conversion of BHJV Assessoria into the non-operational joint-stock corporation named Banco Hyundai Capital Brasil S.A., as well as the capital stock increase in R$99,995, passing to the amount of R$100,000, divided into 100,000,000 (one hundred million) nominative common shares without par value. On December 13, 2018, the incorporation procedure of Banco Hyundai Capital Brasil S.A. was concluded.
In the EGM held on February 19, 2019, the shareholders of Banco Hyundai approved the capital increase in the amount of R$200,000, summing the total value of R$300,000 distributed into 300,000,000 (three hundred million) common shares without par value, held in the proportion of 50% by Aymoré CFI and 50% by Hyundai Capital.
On February 21, 2019, the authorization to operate granted by Bacen for the functioning of Banco Hyundai was published in the Federal Official Gazette. The expectation is that Banco Hyundai will start to operate in the first semester of 2019, being set that Aymoré CFI holds the effective operational control of this entity.
k) Creation of PI Distribuidora de Títulos e Valores Mobiliários S.A.
On May 3, 2018, Santander Finance Arrendamento Mercantil S.A., an indirectly controlled subsidiary of Banco Santander, was converted into a distribution company of bonds and securities and had its corporate name changed to SI Distribuidora de Títulos e Valores Mobiliários S.A. The conversion process of approved by Bacen on November 21, 2018. On December 17, 2018, SI Distribuidora de Títulos e Valores Mobiliários S.A. had its corporate name changed to PI Distribuidora de Títulos e Valores Mobiliários S.A., being the corporate name change process approved by Bacen on January 22, 2019. The company started its operations on March 14, 2019.
Individual and Consolidated Financial Statements – March 31, 2019 94
37. Other Information
a) The co-obligations and risks on guarantees provided on behalf of clients, recorded in compensation accounts, amounted to R$39,439,926 (12/31/2018 - R$40,396,524) in the Bank and R$39,702,128 (12/31/2018 - R$40,761,287) in the Consolidated.
b) The total amount of Santander Conglomerate investment funds and assets under management is R$1,920,221 (12/31/2018 - R$1,896,689) and the total amount of investment funds and assets managed is R$207,335,403 (12/31/2018 - R$200,366,262) recorded in compensation accounts.
c) The insurance contracted in effect on March 31, 2019, the global bank, fires, vehicles and other, have coverage amount of R$1,779,131 (12/31/2018 - R$1,779,131) in the Bank and R$1,786,863 (12/31/2018 - R$1,786,863) in the Consolidated and global bank, was hired insurance with coverage amount of R$496,125 (12/31/2018 - R$496,125) in the Bank and Consolidated, may be used alone or together, provided they do not exceed the contracted amount. In addition, on March 31, 2019 there are other current policies related to other assets in the amount of R$7,615,565.
d) In March 31, 2019 and December 31, 2018, there were no active related operations and obligations for active related operations.
e) Clearing and Settlement Agreements - CMN Resolution 3,263/2005 - Banco Santander has an agreement for the compensation and settlement of obligations under the National Financial System (SFN), signed with individuals and legal entities, whether or not members of the SFN, resulting in in greater guarantee of financial settlement, with the parties that have this modality of agreement. These agreements establish that the payment obligations to Banco Santander arising from credit and derivative operations, in the event of default by the counterparty, will be offset against Banco Santander's payment obligations to the counterparty.
f) Other Obligations - Banco Santander rents properties, mainly used for branches, based on a standard contract which may be cancelled at its own criteria and includes the right to opt for renewals and adjustment clauses, classified as operating lease. The total of the future minimum payments of non-cancellable operating leases is shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03/31/2019 | 12/31/2018 |
Up to 1 Year |
|
|
|
|
| 694,417 | 670,553 | |
Between1 to 5 Years |
|
|
|
|
| 1,467,119 | 1,435,970 | |
More than 5 Years |
|
|
|
|
| 178,250 | 167,868 | |
Total |
|
|
|
|
|
| 2,339,787 | 2,274,391 |
Additionally, Banco Santander has contracts with no maturity date determined, totaling R$712 (12/31/2018 - R$674) corresponding to the monthly rent contracts with this feature. Payment of operating leases recognized as expenses in the first quarter of 2019, were at the valued of R$176,716 (2018 - R$172,769).
Monthly rental contracts will be adjusted on an annual basis, as per prevailing legislation, at Market General Price Index (IGPM) variation. The lessee is entitled to unilaterally rescind the agreement, at any time, in accordance with contractual clauses and legislation.
Individual and Consolidated Financial Statements – March 31, 2019 95
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
For purposes of compliance with Article 25, § 1, VI, CVM Instruction 480, of December 7, 2009, the Executives' of Banco Santander (Brasil) S.A. (Banco Santander or Company) declare that they have discussed, reviewed and agreed to the Financial Statements under the BRGAAP criterion of Banco Santander, which includes the Independent Auditors' Report on the Financial Statements under the BRGAAP criterion of Banco Santander for the period ended on March 31, 2019, and the documents that comprise them, being: Management Report, balance sheets, income statement, statement of changes in equity, statement of cash flows, statement of value added and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No. 6,404, of December 15, 1976 (the Brazilian Corporation Law), the rules of the Central Bank of Brazil in accordance with the model of the National Financial System Institutions Accounting Plan (COSIF) and other applicable regulations and legislation. These Financial Statements and the accompanying documents were the subject of an unqualified report of the Independent Auditors and a recommendation for approval issued by the Company's Audit Committee.
Members of Banco Santander´s Executive Board on March 31, 2019:
Chief Executive Officer
Sérgio Agapito Lires Rial
Senior Vice-President Executive Officers
José de Paiva Ferreira
Vice-President Executive Officer and Investor Relations Officer
Angel Santodomingo Martell
Vice-President Executive Officers
Alberto Monteiro de Queiroz Netto
Alessandro Tomao
Antonio Pardo de Santayana Montes
Carlos Rey de Vicente
Jean Pierre Dupui
Juan Sebastian Moreno Blanco
Manoel Marcos Madureira
Mário Roberto Opice Leão
Patrícia Souto Audi
Vanessa de Souza Lobato Barbosa
Executive Officers
José Roberto Machado Filho
Officers without specific designation
Alexandre Grossmann Zancani
Amancio Acúrcio Gouveia
André de Carvalho Novaes
Carlos Aguiar Neto
Cassio Schmitt
Claudenice Lopes Duarte
Daniel Fantoni Assa*
Ede Ilson Viani
Elita Vechin Pastorelo Ariaz*
Franco Luigi Fasoli*
Germanuela de Almeida de Abreu
Gilberto Duarte de Abreu Filho
Gustavo Alejo Viviani
Individual and Consolidated Financial Statements – March 31, 2019 96
Igor Mario Puga
Jean Paulo Kambourakis*
José Teixeira de Vasconcelos Neto
Leopoldo Martinez Cruz
Luis Guilherme Mattos de Oliem Bittencourt
Luiz Masagão Ribeiro Filho
Marcelo Malanga
Marino Alexandre Calheiros Aguiar
Nilton Sergio Silveira Carvalho
Rafael Bello Noya
Ramón Sanchez Díez
Ramon Sanchez Santiago
Reginaldo Antonio Ribeiro
Roberto Alexandre Borges Fischetti*
Robson de Souza Rezende
Rodrigo Cury
Sérgio Gonçalves
Thomas Gregor Ilg
Ulisses Gomes Guimarães
(*) Members of the Company’s Board of Officers appointed in the Board of Directors’ meeting held on March 27, 2019. The appointed officers shall take office upon authorization granted by the Central Bank of Brazil, pursuant to the applicable regulations.
Individual and Consolidated Financial Statements – March 31, 2019 97
(Free Translation into English from the Original Previously Issued in Portuguese) | |
| BANCO SANTANDER (BRASIL) S.A. AND SUBSIDIARIES |
In order to comply with the provisions of article 25, paragraph 1, item V, of the Instruction of the Securities and Exchange Commission (CVM) 480, of December 7, 2009, the members of the Executive Board of Banco Santander (Brasil) S.A. or Company) declare that they have discussed, reviewed and agreed to the Financial Statements under the BRGAAP criterion of Banco Santander, which includes the Independent Auditors' Report on the Financial Statements under the BRGAAP criterion of Banco Santander for the period ended on March 31, 2019, and the documents that comprise them, being: Management Report, balance sheets, income statement, statement of changes in equity, statement of cash flows, statement of value added and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No. 6,404, of December 15, 1976 (the Brazilian Corporation Law), the rules of the Central Bank of Brazil in accordance with the model of the National Financial System Institutions Accounting Plan (COSIF) and other applicable regulations and legislation. These Financial Statements and the accompanying documents were the subject of an unqualified report of the Independent Auditors and a recommendation for approval issued by the Company's Audit Committee.
Members of Banco Santander´s Executive Board on March 31, 2019:
Chief Executive Officer
Sérgio Agapito Lires Rial
Senior Vice-President Executive Officers
José de Paiva Ferreira
Vice-President Executive Officer and Investor Relations Officer
Angel Santodomingo Martell
Vice-President Executive Officers
Alberto Monteiro de Queiroz Netto
Alessandro Tomao
Antonio Pardo de Santayana Montes
Carlos Rey de Vicente
Jean Pierre Dupui
Juan Sebastian Moreno Blanco
Patrícia Souto Audi
Manoel Marcos Madureira
Mário Roberto Opice Leão
Vanessa de Souza Lobato Barbosa
Executive Officers
José Roberto Machado Filho
Officers without specific designation
Alexandre Grossmann Zancani
Amancio Acúrcio Gouveia
André de Carvalho Novaes
Carlos Aguiar Neto
Cassio Schmitt
Claudenice Lopes Duarte
Daniel Fantoni Assa*
Ede Ilson Viani
Elita Vechin Pastorelo Ariaz*
Franco Luigi Fasoli*
Germanuela de Almeida de Abreu
Gilberto Duarte de Abreu Filho
Gustavo Alejo Viviani
Igor Mario Puga
Individual and Consolidated Financial Statements – March 31, 2019 98
Jean Paulo Kambourakis*
José Teixeira de Vasconcelos Neto
Leopoldo Martinez Cruz
Luis Guilherme Mattos de Oliem Bittencourt
Luiz Masagão Ribeiro Filho
Marcelo Malanga
Marino Alexandre Calheiros Aguiar
Nilton Sergio Silveira Carvalho
Rafael Bello Noya
Ramón Sanchez Díez
Ramon Sanchez Santiago
Reginaldo Antonio Ribeiro
Roberto Alexandre Borges Fischetti*
Robson de Souza Rezende
Rodrigo Cury
Sérgio Gonçalves
Thomas Gregor Ilg
Ulisses Gomes Guimarães
(*) Members of the Company’s Board of Officers appointed in the Board of Directors’ meeting held on March 27, 2019. The appointed officers shall take office upon authorization granted by the Central Bank of Brazil, pursuant to the applicable regulations.
ir
Individual and Consolidated Financial Statements – March 31, 2019 99
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: April 29, 2019
Banco Santander (Brasil) S.A. | ||
| By: | /S/ Amancio Acurcio Gouveia | |
Amancio Acurcio Gouveia Officer Without Specific Designation | ||
| By: | /S/ Carlos Rey de Vicente | |
Carlos Rey de Vicente Vice - President Executive Officer | ||